Blog: Community Right-to-Buy can offer opportunities for developers
Many housebuilders and property developers hold an unfortunate perception around the extension of Community Right-to-Buy, introduced by the Scottish Government last year.
Under the Land Reform (Scotland) Act 2016 community bodies have an opportunity to register a Right-to-Buy over commercial sites, including lands and buildings. Previously community Right-to-Buy was limited to mostly rural land, but the extension to commercial property means that highly valued yet under-utilised land in our cities can be obtained by communities.
Community Right-to-Buy is pre-emptive right, meaning that community bodies who are successful in registering their Right-to-Buy a property are entitled to first refusal if and when the land is put on the market but does not require the owner to sell like a compulsory purchase. The registered interest lasts for five years, but can be re-registered upon expiry.
Some organisations hold a view that allowing communities priority will limit access to land, both brownfield and industrial, which is ripe for much needed development to deliver the homes Scotland desperately needs. There are of course potential threats, such as interfering with market advertised sales to developers or potential for reduction of transfers and requirement to “reverse” the purchase. In addition, planned developments could be stalled by a group of activists with no real ability to fund a purchase registering an interest.
However, there are opportunities for developers who can work with communities to deliver sites which meet the needs of both.
For community bodies, the right to acquire the property can just be the first step of a long process of potential development. While it is possible to apply for funding from a limited government pot, this is limited to a total of £10 million with each claim being entitled to a maximum of £1m, meaning that public funding is limited. In addition, acquiring the site is just the beginning of what can be a long and expensive development process, particularly in commercial property. Groups can also lack the expertise needed to plan and carry out large scale development.
Developers, however, have the resources and knowhow to develop homes and other amenities. Many communities want the right housing which meets their needs, and while developers can be brought in to develop it others can get on with building the other amenities which will make developments more attractive.
Delivering these kinds of multi-use sites by working with a community to deliver solutions which actually work holds a great deal of potential for developers, and can make the end result more affordable for all involved.
For example, the proposed development of the Royal Hospital for Sick Children (Sick Kids) in Edinburgh, which a local community development trust is attempting to acquire under community right-to-buy, includes a variety of facilities for the community’s use, including affordable housing, healthcare, infrastructure, cafes and venues on the one site.
Where developers recognise the desires of a community, listen and work with them to deliver it, everybody has the potential to benefit. Community Right-to-Buy should not be immediately dismissed by developers, who should instead look at the opportunities of delivering a site in partnership.
- Andrew Leslie is a senior solicitor at Gillespie Macandrew LLP.