Anderson: looking to inpsire confidence among investors

Anderson’s police check plan given cautious welcome

Neil Tague

Liverpool property professionals have given a cautious welcome to the plans announced by Mayor Joe Anderson for developers and landlords to undergo police checks on the submission of planning applications.

The scheme will be voluntary and the council is to looking to introduce the plans from the autumn, with Merseyside Police carrying out the checks.

Anderson’s plan comes on the back of a year in which the city has come under fire for a series of stalled schemes, where developers with little track record have advanced projects through planning and in some cases started on site before running into problems.

Several such projects have used funding secured from overseas investors buying off-plan, and although there is as yet no official implication of criminality in any specific case, it is felt that international perceptions of Liverpool have taken a hit among potential investors.

Anderson said: “We want people to have confidence that the schemes taking place in our city are going to be delivered. We already work very hard with any developer or investor who comes to the city and wants to talk to us.

“Liverpool is very much open for business. However, most private sector schemes have absolutely no involvement from the council, except to grant planning permission. So we want to ask developers to put themselves forward voluntarily for a police check in order to give both their investors, and the city, confidence in the strength of their scheme.

“The fact this scheme would be voluntary reflects the weakness of Government policy in this area. Government legislation very tightly controls what our planning system can and cannot do and practically reduces the council to a bystander with very little ability to shape and control our city.

“In some situations one bad apple, like we have seen recently, can give the wrong impression about our city, against the other 99% of successful projects. I think this is a good way of collecting more information about developers behind schemes so that their investors can make a more informed choice.”

Steve Parry, managing director of Ion Developments, said that he approves in principle but can see weaknesses. He told Place North West: “The idea of increased diligence on developers should be encouraged, particularly those developers undertaking projects using private investors cash to undertake schemes, not just in Liverpool, but anywhere this model is operated.

“Legitimate developers will be happy to undergo police checks as part of the planning process. However, this is unlikely to be the solution to the problem of unscrupulous developers, as generally the planning consent applies to the land rather than the developer and so it would not be difficult to get around such checks.”

Although the possibility of those with criminal backgrounds simply using proxies to front projects is clearly present, professionals in the city seem in the main to be positive about the proposal. One developer said that he had previously lost out on sites to contenders “waving excess amounts of cash” and that “anything that will act as a disincentive is to be encouraged”.

Elliot Lawless, managing director of Elliot Group, said: “It’s important to note that this is a relatively minor issue in a market that functions very well – but if an initiative like this reduces the problem further then it’s a good thing. So long as we’re not getting tied up in red tape, I think the whole development sector will get behind it.”

Likewise Dougal Paver, managing director of Merrion Strategy, said: “Provided the process is efficient and easy then I can’t imagine respectable developers would be too troubled by this. It’s a bit like CCTV cameras: if you’re not up to anything, why would you be bothered?

“The key is avoiding making this too intrusive or bureaucratic. Permission to undertake a quick check on the relevant computer should be sufficient, you’d hope.”

Not everybody is so optimistic. One professional told Place North West: “I think the horse has bolted. This is a knee-jerk reaction to those stalled projects, and could even be a negative in highlighting further that these things have happened here.

“I have some sympathy, because there is a limit to what any council can do legally. But what they can and should do is be stronger on sites where they can exercise control, as landowner or joint venture partner, and they haven’t done that in the past – we’ve been aghast at some decisions. There needs to be a tightening-up of who the council engage with.”

The council pointed out that there are more than 180 live schemes worth more than £3bn currently on site in Liverpool, but that it is aiming to be an “exemplar city” in planning.

Chief constable Andy Cooke said: “Merseyside Police have been working with all councils within Merseyside in order to assist planning applications to ensure that buildings can go ahead and that our communities are free from crime.”

For Parry, the issue requires legislative action at central Government level: “The real issue here is the fact that investments in property of this type are largely unregulated. This results in a much higher risk to individual investors who part with large sums of money based upon the developer’s sales pitch in the hope that they will get the levels of returns that are ‘guaranteed’ or ‘assured’ by the developer.

“Often the promised returns are higher than are sustainable. Investors probably also need to be reminded that higher returns normally reflect higher risk.

“This is a national issue that needs an intervention by the Government to introduce a regulatory structure similar to other investment classes. This would hopefully provide some protection to investors and would discourage opportunists from getting involved in the development industry and prevent some of the problems that we are currently seeing.”

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