Transport for London (TfL) has confirmed earlier plans to maximise land assets owned by this influential public body. During these times of austerity TfL is not the only public body looking to maximise its land assets and we should expect around 300 acres of land being made available for redevelopment over the next 10 years. It was also confirmed that 200 acres of this quota will be situated in the highest value travel zones one and two.
What will be built on the development land?
There are plans to build homes, shops and offices on the development land being made available by TfL. These projects will be completed with the help of various partners the identity of whom should be confirmed in the New Year. The 300 acres of land consists of 75 individual sites with phase 1 of the project requiring between three and six specialist firms. It is unclear at this moment in time whether the initial 50 sites comprising phase 1 will be complemented by a further 25 at a later stage or whether the additional 25 will be sold off in arm’s-length transactions.
When you bear in mind the vast majority of the potential development land is situated in London this is prime development property.
How much will TfL raise from future property projects?
It is estimated that phase one of the redevelopment programme will bring in around £1.1 billion which TfL will use to make up for any potential central government funding shortfalls. All of the funds raised from future property developments will be ploughed back into the London transport network at a time when the population is expected to increase from a record 8.6 million to 10 million by 2030. While some would argue that a £1.1 billion capital injection (expected by 2025) is but a fraction of the overall TfL budget of between £8 billion and £10 billion per annum it will at least help to take some pressure off ongoing austerity. Interestingly a further £2.3 billion will also fall into the coffers of TfL from “other commercial activities” during the period.
Is the target of 10,000 new homes in London feasible?
When you bear in mind the expected increase in the London population in the short, medium and longer term an additional 10,000 new homes in London will not solve the problem but will certainly help in the short term. However, we can only hope that the process is not overly politicised as there are already questions about who could actually afford these new homes. If you look at the average cost of property in London perhaps this is a fair question?
There is also pressure being placed upon local authorities to inject an “affordable element” into these newbuild properties for those looking to climb aboard the property ladder. Whether this is possible remains to be seen although the authorities could use local planning regulations to at least make part of the developments “affordable to the masses”. However, an affordable property price in London is very different to other areas of the UK.