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David Cameron's housing plans could boost First Property

Speaking ahead this week’s Housing and Planning Bill, Cameron said the permitted development rights program will be made permanent
David Cameron's housing plans could boost First Property
Cameron said his ambition is to build 1mln new homes by 2020. Picture:Shutterstock

David Cameron’s decision to make the permitted development rights program permanent could benefit First Property (LON:FPO) but its chief executive is remaining grounded for now.

Yesterday, the Prime Minister said the temporary rule, which allows companies to turn unused office space into town and city centre flats without applying for planning permission will be made permanent.

Cameron said: “My government will do everything it can to help people buy a place of their own – at the heart of this is our ambition to build 1mln new homes by 2020.”

Almost 4,000 conversions were granted between April 2014 and June this year and so far First Property has used the scheme to create 665 affordable flats.

Speaking ahead this week’s Housing and Planning Bill, Cameron said key to the initiative will be local authorities, which must show a plan for housing creation by 2017.

Ben Habib, chief executive of First Property, said: “If the temporary legislation is simply made permanent without any bells and whistles attached, that’s extremely positive for First Property Group.”

He added: “What I fear though is that, in making it permanent, the government may attach certain conditions for example that local authorities will have the right to determine whether or not to grant permission.”

Any conditions that allow the local authorities to use a subjective judgement “compromises the legislation” he said.

At the moment, the company has not applied for any new contracts, but continues to monitor the market.

Its last PDR property was sold earlier this year and until the legislation has been set out in full, it will not contractually commit itself.

“The government has been extremely slow and I don’t want to over-egg it until we have clarity and I don’t know when that will come” Habib said.

Meanwhile, in Poland and Romania, he said rents continue to rise, with tenancies being renewed as soon as they come up.

Habib said the company is borrowing money at around 2-3% while maintaining returns of around 10%.

Shares rose half a penny to 41.3p today.

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