Development Funding for Brownfield Sites

If you are looking for development funding to carry out a residential development on a brownfield site, what do you need to know?

What is a Brownfield Site?

The term Brownfield Site refers to land that is or was occupied by a property or permanent structure, which has become vacant, unused or derelict and has the potential for redevelopment. Because brownfield sites may have been used for industrial purposes in the past, there is always a risk that some contamination of the land has occurred.

Contamination on a Brownfield Site

If you are considering raising development funding in order to purchase a brownfield site for redevelopment, a condition of Planning Permission is likely to be a soil investigation survey. This will be undertaken to identify what levels of contamination currently exist and the concentration levels of individual chemicals if they are present. Undertaking a soil investigation can identify potential environmental risks and associated liabilities.

Many lenders will insist on a soil investigation being undertaken prior to any decisions about development funding being made. This will enable appropriate risk management strategies to be put in place as well as making an allowance within the figures for any site clearance that is required as part of the project.

Flood Risk

Not all brownfield sites are necessarily contaminated. Another consideration is the flood risk, as many sites defined as brownfield exist in higher risk flood areas. Climate change means that the risk of flooding could be considerably higher in the not-to-distant future. As part of your due diligence in raising development funding you should pay attention to the risk of flooding, and the local authority or the Environment Agency should be able to help you with risk assessment.

So why consider using a Brownfield site?

There is a government requirement that a large proportion of the new homes to be built in Britain by 2021 should be on brownfield land.

It is possible that you will attract favourable terms for your development funding if you are looking at a brownfield development. The Environment Agency encourages use of brownfield sites as a way of bringing more land into sustainable use and have gone on record as saying:

"Concentrating development on brownfield sites can help to make the best use of existing services such as transport and waste management. It can encourage more sustainable lifestyles by providing an opportunity to recycle land, clean up contaminated sites, and assist environmental, social and economic regeneration. It also reduces pressure to build on greenfield land and helps protect the countryside".

For more information about finding the right development funding for your particular project, apply online at www.diyfunding.co.uk.

Keith Park