John Callcutt, author of The Callcutt Report, gave measured grounds for optimism to leaders of the real estate industry in a recent speech.

Callcutt told attendees of the Davies Arnold Cooper Real Estate Seminar on Sustainability that the current regulatory burden placed on developers by sustainable development regulations had made the cost of development unviable. He pointed to the thousands of planning applications that had been granted for urban redevelopment where no work has been started as evidence of the inability of developers to develop urban residential sites viably.

Callcutt said that the added cost of regulation - estimated to be adding 12.5% to costs or £20 sq ft - has made urban development unviable.

Callcutt called for a new model for the industry, one where “mature partnerships” between public and private sectors replace the current one. Callcutt believes that without the public sector providing the services and infrastructure necessary to support quality of life in urban living, private developers will never be able to make regeneration work profitable.

Callcutt suggested that for inner city urban regeneration to succeed the Government would need to commit billions of pounds to infrastructure investment. The ultimate aim of this would be to ensure that the social and economic environment of the development provides the quality of life to make it attractive to residents in the long term.

He said: “We are in for a difficult time and if a recession hits we are in for a very difficult time. We need to use the current period productively. If we fail we will reap a very bitter harvest indeed.”