Is EDDC gearing up for even greater development for 5-year Local Plan review?

All Local Plans have to be reviewed every five years. Though it is likely that the next Local Plan won’t be very local as “Greater Exeter” will almost certainly be what is put forward, East Devon being only one part of it.

Now it seems the current Local Plan didn’t go to plan!

The number of new homes being built in East Devon has dramatically dropped, government data has revealed.

In total, 620 new properties were completed by private developers and housing associations in 2016/17.

But this is more than 250 homes fewer than were built in 2013/14, 2014/15 and 2015/16 – where an average of 836 new properties were finished each year.

In the last decade, a total of 4,690 properties have been built and completed in the district and more than 12,600 new homes were finished across Devon. …

http://www.sidmouthherald.co.uk/news/number-of-new-homes-being-built-in-east-devon-dramatically-drops-1-5155038

In fact 2013/14 and 2014/15 and 2015/16 were the result of the years during which the developer free-for-all took place when EDDC had no Local Plan and no 5 year land supply so we had a situation where, under government rules, developers could build any amount of houses practically anywhere. So it’s hardly surprising there was a boom.

So, it now appears that, in fact, the number of houses EDDC had expected to see built this year haven’t materialised.

That could mean that more will be front-loaded to a revised (probably Greater Exeter) plan. And/or the whole area might be back to not having a 5-year land supply so it will be a developer free-for-all – again.

What is VERY interesting is that around 37% of all new homes in the whole of Devon have been built in East Devon in the last decade.

Perhaps time for other parts of Greater Exeter to take the strain in the coming decade?

Tourism, new roads and more second homes is not the answer for Cornwall

” … Cornwall is a major tourist area, but its economy is one of the weakest in Europe. EU investments, together with “matched funding”, have injected around £1.5bn into the region, but this has had little impact on raising GDP.

One of the biggest stumbling blocks has been the perception by successive governments that the Cornish economy is synonymous with tourism, with its focus on unskilled, low-paid and part-item employment.

Cornwall is being directed to build 52,500 houses before 2020. A large proportion of these will be bought as holiday homes or by people retiring to Cornwall. This large-scale “immigration” has vastly distorted the housing market. People employed in tourism cannot afford these houses. Perhaps Cornwall’s perversity in delivering a very large pro-Brexit vote was because there are so many middle-class retired incomers who are putting stress on the social and health services .

Tourism is supposed to generate billions of pounds, but very little of this “sticks” in Cornwall because much of it goes to the major supermarkets, which employ unskilled people on low pay.

Government (and the Cornish will not forget the Brexiters’ claims that EU funding would be replaced by central government) must encourage high-value opportunities, such as those within the digital industries that are beginning to grow in Cornwall. And perhaps government should improve the social and health services, digital connectivity and rail and air infrastructure, rather than pumping more money into roads that primarily serve tourists.

Dr Ben Dobson
Crantock
Newquay”

https://www.theguardian.com/business/2017/aug/13/letters-tourist-areas-need-investment-in-jobs-not-just-better-roads

Second home owners – very wealthy

For graphs, see original article

“Homes sweet homes – the rise of multiple property ownership in Britain
http://www.resolutionfoundation.org

When is a house not a home?

Increasingly often, it turns out. Be it a holiday cottage for weekend getaways, a pied-à-terre in the city, a flat rented out for a bit of extra income, or an empty shell of bricks and mortar working harder for your savings than an ISA possibly could – multiple property ownership is rising. An important and symbolic feature of the shifting patterns of wealth accumulation in 21st Century Britain, here we explore how multiple property ownership is changing, who owns the second homes, and what the policy implications of these trends are.

The rise of the second home owners

The 21st Century rise in multiple property ownership is set against a backdrop of the overall decline in home ownership over the past 15 years.

While the share of British adults in families with any property wealth fell 8 per cent in between 2000-02 and 2012-14, the share with multiple property wealth increased by nearly one-third (30 per cent). In 2012-14 four-in-ten adults had no wealth in property at all, but one-in-ten had wealth in multiple properties (5.2 million adults, up 1.6 million since the turn of the century). These twin trends – fewer people with any properties and more with many – underpin the growing concentration of housing assets that is fuelling the recent increase in overall wealth inequality.

Disregarding mortgage debt (because of difficulties in identifying which properties mortgages are secured against), the assets held in second or additional properties had a gross value of £760 billion in 2012-14 (adjusted to 2017 prices) – that’s 15% of the £5.2 trillion held in gross property wealth overall. This equates to an average of £150,000 per adult with multiple sources of property wealth, a 20 per cent increase since 2000-02. With average net total wealth just over £200,000 in 2012-14, and typical (median) wealth just £84,000, owning multiple properties clearly represents a huge wealth boost.

Not only can multiple property ownership boost wealth – which is important for living standards over lifetimes and particularly in retirement – it also has the potential to boost incomes in the here-and-now, because these properties can be rented out. Consistent with recent growth in the private rented sector (which is provided by a mix of commercial institutions and private landlords), the proportion of adults in the UK receiving income from other property as landlords doubled between 1998-99–2000-01 and 2013-14–2015-16 – from 1.7 per cent to 3.4 per cent. Previous research suggests that the typical annual rental income among this group was around £6,000 in 2008-10 – more than a quarter of typical salaries at the time – underscoring the difference such a source of income can make to living standards.

Who owns multiple properties?

So multiple property ownership remains a minority sport, but one growing in popularity and with the potential to significantly boost wealth and income. It’s therefore right to ask who does it. Three key features stand out:

1. They are mainly baby boomers and members of generation X
Half (52%) of all the assets held in additional properties is held by the baby boomers, born 1946-65, and a further quarter (25 per cent) by generation X, born 1966-80. But of course we might expect this – wealth varies hugely over the life-cycle and peaks around retirement age. And as the name suggests, the thing about the boomers is that there are lots of them.

The chart below overcomes these challenges by showing average gross additional property wealth across all adults in successive birth cohorts and at different ages. What’s striking is the doubling of additional property assets for those born in the 1940s compared to the cohorts before them when they were the same age – it seems the oldest in society today never really got into the second homes game in a big way. All generation X and baby boomer cohorts then improve on their predecessors at the same age. However, the older millennials – those born in the 1980s – are the first cohort on record to under-shoot predecessors on additional property asset – they have less than half the amount that those born in the 1970s had at age 26.

The inescapable conclusion is that those in prime age and early retirement today have so far been the big winners from the rise in second home-owning.

2. They are overwhelmingly rich and wealthy

Owning additional property is sometimes depicted as a common way for typical workers to shore up savings or for ordinary folk to boost their pension with rental income. But situating multiple property owners and private landlords within the wealth and income spectrums makes them seem far from ordinary. 88 per cent of additional property owners are in the top half of the wealth distribution, and 79 per cent of adults with rental income from other property are in the top half of the income distribution. Around one third of each are in the top decile of their respective distributions.

Of course, you could argue that these comparisons to all other adults are a bit unfair. For example, we know that additional property assets are concentrated among the baby boomers who are currently at peak wealth-holding age. By the same token, the common argument that rent from other property is a way of boosting pension incomes means we might expect it to only really be a relevant consideration in retirement, when incomes are now slightly higher and people are less likely to be poor.

However, the additional property owners and landlords look particularly well off even within these groups. For example, over four-fifths (82 per cent) of baby boomer second home owners are in the wealthiest half of their generation. And more than four-fifths (81 per cent) of pensioner landlords are in the top half of the pensioner income distribution. The clear message is that both across society as a whole and among their peers, those drawing on wealth or income from additional properties are disproportionately rich and wealthy.

3. They are concentrated in the South of England

We don’t know where the additional properties are, but analysis of where those receiving rental income from them are based shows a particularly high prevalence in the regions that make up the south of England, as the chart below shows. Nearly six-in-ten landlords (59 per cent of the total) are found in the four regions where it is most common: the South West, South East, East of England and London. Unsurprisingly, these are the areas where incomes and average wealth are highest (and in the case of the South West in particular, a higher concentration of older adults will also contribute to this pattern).

A case for action?

In sum, holding assets in more than one property has grown in recent decades, and can be a huge boon to both wealth and incomes. The second home owners are mainly adults in prime age or early retirement, are rich and wealthy even among their peers, and are most likely to be living in the south of England. Of course there are individual exceptions, but stepping back to the big picture: if you were painting an image of society’s affluent, this would be it.

Given that younger generations are failing to accumulate wealth at anything like the rate of their predecessors, and that we have a housing crisis that manifests itself in concerns about security and quality for those renting from private landlords, this state of play seems far from optimal. And to be fair, this is one aspect of the shifting patterns of wealth accumulation in 21st Century Britain that policy makers have woken up to in recent years, with attempts at action. Stamp duty surcharges on second homes were introduced last year, and reduced mortgage tax relief for those engaged in buy-to-let came in this April.

These steps have pros and cons, but there’s a case for thinking even more broadly – from implementing the commitment to tackle empty homes in the recent housing white paper, to greater regulation of private landlords and increased security of tenure to shore up tenants’ position. And from a taxation perspective, the reality of a larger second home owning group, made up largely of older, very affluent people cannot be ignored as we wrestle with the public finance pressures of an ageing society. These are options and challenges our Intergenerational Commission will continue to explore, because from the perspective of many of Britain’s real ordinary folk who still desire to own their home but find doing so increasingly out of reach, one house would be enough.”

http://www.resolutionfoundation.org/media/blog/homes-sweet-homes-the-rise-of-multiple-property-ownership-in-britain/

Comments on Parish’s “build prettier-looking houses” plea

These comments – neither by Owl – on an article by Parish (see below, today) pretty much nail it!

“1. Neil, why have you deliberately not mentioned building suitably priced housing, so that young local families can still live in the small towns and villages in which their families reside? You are just making sure that any houses built within 10 miles of your over priced country pile, doesn’t devalue your property.

2. Another MP making noises in anticipation of the autumn parlimentary disaster, won’t save your seat when it all hits the fan.”

http://www.devonlive.com/homebuilders-must-be-held-to-account-and-an-independent-ombudsman-formed-neil-parish-mp-column/story-30481265-detail/story.html

Parish slags off Sherford new town (Plymouth) but not Cranbrook


Cranbrook


Seaton


Axminster


Sherford

Owl says: it rather sticks in the craw when a long-time MP criticises his own party for things he has never before stood up for after having watched ticky-tacky boxes going up all over his constituency with never a word.

Your party, your fault, your buck Mr Parish.

“… Local people must be given the tools and encouragement to create their own design codes and plan the sort of development they want. Not only will it improve the quality of housing stock, it gives people a stake in their community and a sense of civic pride in new developments. …”

http://www.devonlive.com/homebuilders-must-be-held-to-account-and-an-independent-ombudsman-formed-neil-parish-mp-column/story-30481265-detail/story.html

In East Devon! You must be joking – or living on another planet!

Developer Bovis too poor to finish Axminster estate – and “steep slopes” came as a surprise (and Owl says ‘I told you’!)

Owl predicted problems with this development LONG ago:
https://eastdevonwatch.org/2016/04/04/axminster-regeneration/

Recall the site was acquired below market value when Axminster Carpets got into difficulty.

And it seems that Bovis has its own troubles:
https://eastdevonwatch.org/2017/04/30/bovis-slow-down-will-hit-east-devon-hard/

Although again Owl drew attention to another problem affecting house sales on the site:
https://eastdevonwatch.org/2016/12/23/axminster-and-cranbrook-slums-of-the-future-says-councillor-hull-whilst-councillor-moulding-says-nothing/

So, it’s hardly surprising we find that Bovis blames everyone but themselves for their so- called plight – though its directors are probably not too worried about their bonuses:
http://www.constructionenquirer.com/2017/06/21/new-bovis-homes-boss-buys-extra-2m-shares/

“HOUSE building on the Bovis Homes Cloakham Lawn estate could cease unless planning conditions are removed or eased.

Bovis Homes says the scheme is in the process of stalling and, unless it can be brought back into viability, the company will have “no option but to cease work and mothball the development”.

But Axminster Town Council feels it is an attempt by the developer “to wriggle out of its commitments”, with district councillor Ian Hall saying: “‘Trying it on’ comes to mind.”

Bovis Homes has submitted a planning application to East Devon District Council (EDDC) to vary the Section 106 agreement (a set level of affordable housing and contributions towards the local infrastructure and facilities).

The development includes permission for up to 400 dwellings, and the company celebrated the second anniversary of its on-site sales office in September last year.

But a summary of an independent viability assessment, produced by chartered surveyor Belvedere Vantage Ltd, says: “The local market in Axminster has proved very difficult, with interest in the first phase of the development having slowed significantly, resulting in a large number of completed unsold ‘standing units’.”

The summary also referred to a number of physical constraints at the site, and “potential abnormal costs” associated with the constraints, which started to become clear during detailed site investigations after outline planning permission had been given.

Constraints include areas with very steep slopes, a flood plain boundary, two distinct drainage catchments, a watercourse running through the site, the need to maintain access to existing leisure facilities.

The negative impacts, including an inability to plan the scheme effectively, of a tree preservation order are also mentioned.

Axminster Rural district councillor Ian Hall, having declared an interest as he is the chairman of Cloakham Lawn Sports Centre (a Bovis Homes tenant), said in a formal response: “I have absolutely no sympathy.

“This land was purchased by Bovis for £2.9m cheaper than the market price when the failing Axminster Carpets Ltd was winding up.

“Bovis representatives (who were the strong arm of Bovis during the purchase of the land) were very aware of the agreements and were more than happy to proceed with the bargain of the decade.

“I am not one to make unnecessary fuss, although, on this issue, I will not compromise.

“ ‘Trying it on’ comes to mind.”

The independent viability assessment is confidential because it contains commercially sensible information, which is not included in the publicly available summary.

Axminster Town Council has requested more detailed confidential information and, in its formal response to EDDC, said: “The town council objects to this application, which appears to be an attempt by the developer to wriggle out of its commitments.

“There is insufficient information on which to make a well-reasoned response.”

The town council requested a meeting with EDDC and the developer so that it would be able to “respond in the light of more detailed, commercially confidential information”.

The town council also requested a site meeting in the company of a planning officer.

Town clerk Hilary Kirkcaldie said EDDC replied it could not share confidential information, but had appointed an independent viability consultant.

EDDC also expressed a willingness to host a site visit, which is yet to be arranged.

In her formal response to the application, EDDC housing strategy officer Melissa Wall said: “We are disappointed that the applicants have not approached the council before submitting their application to vary the S106 contributions to discuss their viability concerns.

“We are open to suggestions regarding changing the tenure and numbers of affordable units in order to assist viability.

“We are hopeful that agreement can be reached between the council and the applicant to ensure that the development can support some form of affordable housing.”

Bovis Homes would not say how many houses have been built and how many are under construction – nor would the company comment on Councillor Hall’s claims.

A spokesperson said: “We cannot comment on live viability applications but we will continue to work closely with the local authorities to deliver the new development at Axm- inster, which is providing much-needed new homes as well as an economic boost and jobs for the area.”

https://www.viewnews.co.uk/housing-development-axminster-stop/

Outsourcing kills democracy

“Outsourcing of public services began in the 1980s, a central feature of the drive to roll back what neoliberalism casts as a bureaucratic, inefficient state. Its proponents claimed the involvement of private providers would increase cost-savings and efficiency, and improve responsiveness to the “consumers” of public services. Thirty years later, the value of these contracts is enormous – more than £120bn worth of government business was awarded to private companies between 2011 and 2016, and their number is increasing rapidly. At least 30% of all public outsourcing contracts are with local authorities.

Unlike government, private companies have no duty to provide for any public interest; the laws of the market mean their primary motive must be to maximise returns for shareholders. Questions have been raised about whether corruption or “misuse of public office for private gain” contributed to the Grenfell disaster; but the nature of outsourcing public services means that even the most well-meaning politicians can enter into contracts that result in severe detriment to the public, in both financial and human terms, without any crime having been committed.

The relationship between local councils and companies bidding for contracts is usually highly unequal. Local government funding cuts have caused a reduction in resources dedicated to providing scrutiny and oversight. The Audit Commission, previously responsible for scrutinising local authority contracts, has been abolished. The private companies involved, often huge multinationals, have significant advantage over local authorities in terms of technical knowledge and negotiating experience.

If it’s hard for councillors to evaluate and oversee these contracts it is nigh on impossible for the people using and experiencing services to apply scrutiny to the contracts governing their delivery. “Commercial confidentiality” is frequently cited as a reason for not disclosing the information necessary to assess contract content – and services, when delivered by the private sector, are not subject to the rules on freedom of information that apply to local government.

Attempting to use opportunities promised in legislation when the Audit Commission was abolished, residents in Lambeth, London, recently undertook a “peoples’ audit” of the councils accounts. The resident audit group included highly experienced finance professionals, who spent hundreds of hours chasing information requests and working their way through poor quality data. The published report claims to have identified numerous instances of inadequate governance of contracts, including questionable valuations of council property and land, systematic overcharging and billing for work that wasn’t carried out. The report calculates financial losses that run into millions.

In the London borough of Haringey, council leaders are planning the highest value local government-private sector contract in history. It was never presented in any manifesto on which voters could express their opinions or make their voices heard. The deal involves placing £2bn worth of council homes, property and land into a new “development vehicle” that will demolish and rebuild vast swaths of the area. This new entity will be 50% owned by private company Lendlease, a multinational property company with a turnover of billions of dollars.

Lendlease has form when it comes to contracts with the public sector. Its redevelopment of the Heygate estate in Southwark initially promised 500 social homes, that number reduced to just 82 in the final plan – only 20 have so far been built. It has made millions of pounds from its contracts with Southwark council.

Five years ago the company admitted fraud in government contracts in the US. Three years ago an Australian local government deal resulted in the authority being hundreds of millions of dollars out of pocket. In 2016, the company was named in an investigation into noncompliance with building regulations in Melbourne, Victoria, for using highly flammable cladding on a public hospital construction project, although subsequently Lendlease has offered to replace the cladding in the spring at no charge to the taxpayer, and says test panels were successfully installed in May.

In Haringey, local campaigners have found it almost impossible to examine the content of the Lendlease contract. Senior councillors have ignored the overview and scrutiny committee’s advice against the deal, and campaigners now plan to challenge it via judicial review. Although the councillors responsible for agreeing the deal may no longer be in power come next May’s local elections, its consequences will outlive many political careers. Any future council wanting to reverse the deal will be breaking the terms of the contract, and that is likely to incur financial penalties which will impact heavily on all the borough’s residents. So where is the accountability?

Less than 90 years after the right to vote was extended to all men and women in the UK regardless of wealth, the practice of outsourcing government services to private companies is rendering democracy ineffective, particularly for those most affected. While we could attempt again to insert more transparency and accountability into these opaque agreements, it may just be simpler, and more cost-effective, to return responsibility for government provision where it belongs – back in-house – with the people elected to represent us.”

https://www.theguardian.com/commentisfree/2017/aug/10/outsourcing-killing-local-democracy-britain-stop-it