Benefits Of UK Brownfield Sites Investment Opportunities
There are several types of land you can invest on in the UK but Brownfield sites are the most popular and they offer the best investment opportunities. Here is why
Getting residential planning for Brownfield sites is easier
The real value of any piece of land in the UK lies in its planning permission. Without approved planning, sites are virtually worthless. Currently, it is easier to get residential planning for Brownfield sites because UK government wants all of them to be repurposed into mass homebuilding to curb the imminent accommodation crisis caused by shortage of homes.
More than 3 million homes have to be developed by 2030 and the Brownfield sites have to be used up first. So, it is difficult for their planning to be rejected. It may be much more difficult to get planning permission for other types of land. Needless to planning is the real deal.
When using Brownfield sites, necessary infrastructure is already there because the sites were once in use. Developers don’t have to pay for the connection of some utilities like phone lines, water and electricity. Most of the sites already have access to different means of transportation so new roads and rail lines are not needed. The whole funds can be dissipated into building of residential apartments alone.
This means that allocated funds will be used to build more apartments on Brownfield sites. Most Brownfield sites are located in urban areas so there is easy access to material and human resources. For these reasons, developers will do anything and everything to buy off Brownfield sites once their planning permission is ready.
Since there is much more demand on Brownfield sites they generate higher returns than other types of land and so they offer more profitable investment. Brownfield sites yield between 20 and 25 percent ROI. No other type of land generates so much return in the UK.
Profit on them is tax free
In a bid to promote the idea of repurposing Brownfield sites for homebuilding, government has made the profit on the investment tax free to investors that do not reside in the UK. This policy is to attract foreign investors. When you invest in Brownfield sites, your high profit is tax free. If you invest in other types of land, the negligible profit you make on it will be taxed.
Brownfield sites have more demand than other types of land in the UK. Sometimes, some Brownfield sites are sold out even before their planning is ready. This leads to quick return for you. Don’t you prefer to invest where your return will be generated within a short time and you can re-invest the capital again?
In addition to the points raised above, Brownfield sites investment has much less risk compared to other types of land. For more information contact Highgrove Consulting.