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29 Nov 2016

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Affordable and Social Housing, Barratt Homes, Developers/ Development, Land banking, Persimmon, Taylor Wimpey

“The Economist” finds circumstantial evidence for land banking by developers

THE average price of a house in Britain has doubled since 2000, as supply has lagged behind demand. Successive governments have aimed to put up 250,000 dwellings a year, but none has done so since 1980. Some blame housebuilders for this sorry state of affairs. The firms are accused of “land banking”, hoarding undeveloped plots to push up prices. Last month Sajid Javid, the communities secretary, told builders to “stop sitting on land banks, delaying build-out: the homebuyers must come first.”

There is plenty of unused land. The Local Government Association, which represents councils, recently identified sites for half a million homes in England which had been given planning permission but were yet to be built. Three of the largest builders, Persimmon, Taylor Wimpey and Barratt, have 200,000 plots of land that are “ready or close to ready” for development, according to an official report. Last year in England permission was granted for 250,000 housing units—enough to meet the target—but only 140,000 got under way.

To some, all this looks like anti-competitive behaviour by the big developers, eight of which build over half of Britain’s houses. A report from Sheffield Hallam University found that in 2012-15 the biggest private housebuilders increased construction by a third, but their profits trebled.

The builders protest that their critics misunderstand the economics of housing. Some land banking is inevitable: in order to show shareholders that their business has viable prospects, builders need a stock of land for future development. Builders’ profits have risen partly because they acquired land when it was cheaper than it is now, and the price of houses has increased.

Furthermore, the builders say, they are victims of bureaucracy. Even after planning permission is granted, there are conditions to meet, such as outlining plans for flood defences. “Back in my day, you only had to tell the council the colour of the bricks you planned to use,” says Ian Burnett of United Living, a property firm. Planning departments have shed staff following deep cuts to councils’ budgets. The lag between receiving planning permission and building being completed has risen by 12 months since 2007.

All this does not entirely exonerate the builders. Lately the government has become keener on large-scale housing developments. They tend to be farther from NIMBY-ish residents, and local authorities find it easier to manage one big project than lots of small ones. But they can give large builders local monopolies. To maximise profits on a plot, the builder may ration supply, putting up houses gradually rather than completing them all at once.

There is circumstantial evidence of this process at work. One study in 2014 looked at sites in London where more than 500 homes were earmarked and found that it was rare to build more than 100 of them a year. Research by Nathaniel Lichfield and Partners (NLP), a consultancy, suggests that as the size of a plot goes up, the annual rate of building gets relatively smaller. One development of 3,000 homes near Winchester, managed by two firms, saw only 526 constructed in six years, according to NLP (the companies insist they are developing the sites without delay).

These problems are not intractable. Councils could allocate smaller plots to a bigger range of builders, making the drip-drip style of construction more difficult. Andrew Lainton, a planning consultant, says that an obligation to build within a given deadline could be attached to planning permission. And ministers could get their own houses in order: one of the biggest hoarders of land suitable for residential development is government itself.

Source: The Economist, 24 November 2016 via Timekeeper newsfeed

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East Devon Watch

Posted on

26 Nov 2016

Posted under

Affordable and Social Housing, Barratt Homes, Developers/ Development, Persimmon, Taylor Wimpey

Greedy housebuilders make billions while getting taxpayer subsidies – yet fail thousands of homeless families

The Chancellor has been blasted for giving more taxpayer subsidies to greedy housebuilders – who rake in billions while making the homes crisis worse.

In his Autumn Statement, Philip Hammond ploughed another £1.4bn into the affordable homes programme as well as £1.7bn for developers building on public sector land.

Yet the biggest builders – Persimmon, Taylor Wimpey, Barratt and Berkeley Group – have all missed affordable housing targets set by councils in recent years, while watching profits soar.

They even plan to pay out £6.6bn in extra shareholders’ dividends by 2021, the Bureau of Investigative Journalism found.

Now housing experts are questioning why builders need subsidies when the top four raked in more than £2bn in pre-tax profits last year – with their bosses getting immensely rich.

Eight directors of major housebuilders together earned £230m in the past five years.

Meanwhile, the number of homeless families in temporary accommodation in England has risen 45% since 2010 to 73,120.

Two bosses, Tony Pidgley and Rob Perrins, of Berkeley, have taken £141m in pay and share sales since 2011. They have shares totalling £440m.

MPs and campaigners have accused the top firms of keeping housing supply low to drive up prices.

The big four built 50,000 houses between them in the past year, but are sitting on 450,000 empty building plots.

Joanna Kennedy, chief of housing advice firm Z2K, said: “Only a fool would imagine the big volume builders work in the national interest.”

Shadow Housing Minister John Healey said: “We need much tougher rules. Non-developing firms should forfeit planning permission.”

The big four are all in the Home Builders Federation, who told us: “House building is a high risk business.”

http://www.mirror.co.uk/news/uk-news/greedy-housebuilders-make-billions-getting-9342409

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East Devon Watch

Posted on

26 Nov 2016

Posted under

Affordable and Social Housing, Devolution, Local Enterprise Partnership

Most LEP money going to areas other than south west

Autumn Statement 2016 – Cities, regions, and nations

3.49 Local infrastructure – The government will award £1.8 billion to Local Enterprise Partnerships (LEPs) across England through a third round of Growth Deals.

£556 million of this will go to the North of England,
£392 million to LEPs in the midlands,
£151 million to the east of England,
£492 million to London and the south east, and
£191 million to the south west.

Awards to individual LEPs will be announced in the coming months. This funding of local infrastructure will improve transport connections, unlock house building, boost skills, and enhance digital connectivity. The government will give mayoral combined authorities powers to borrow for their new functions, which will allow them to invest in economically productive infrastructure, subject to agreeing a borrowing cap with HM Treasury. The government will also consult on lending local authorities up to £1 billion at a new local infrastructure rate of gilts + 60 basis points for three years to support infrastructure projects that are high value for money.

3.50 English devolution – The government remains committed to devolving powers to support local areas to address productivity barriers. The government will continue to work towards a second devolution deal with the West Midlands Combined Authority and will begin talks on future transport funding with Greater Manchester. The government will transfer to London, and to Greater Manchester, the budget for the Work and Health Programme, subject to the two areas meeting certain conditions, including on co-funding. The government has also confirmed the Greater London Authority’s (GLA) affordable housing settlement, under which the GLA will receive £3.15 billion to deliver over 90,000 housing starts by 2020-21, and will devolve the adult education budget to London from 2019-20 (subject to readiness conditions). The government will continue to work with London to explore further devolution of powers over the coming months.

3.51 Regional productivity – The government has published a strategy setting out an overall approach to building the Northern Powerhouse, through addressing the key barriers to productivity that the region faces. The government will also publish a Midlands Engine strategy shortly.

3.52 Northern Powerhouse Investment Fund and Midlands Engine Investment Fund – The Autumn Statement confirms the arrangements for these funds, and the British Business Bank will make its first investments from the Northern Powerhouse Investment Fund in early 2017 to support local SMEs and its first investments from the Midlands Engine Investment Fund shortly after.

3.53 Scotland – The government will work with local partners and the Scottish Government towards a city deal for Stirling. The government has confirmed funding for city deals in Aberdeen and Inverness, is making progress towards a deal with Edinburgh, and will consider proposals for a deal with the Tay cities once they are brought forward, meaning all Scottish cities have the opportunity to agree a city deal. The government is also continuing to work with the Scottish Government to implement the Scottish Government’s fiscal framework and new powers set out in the Scotland Act 2016. (37)

3.54 Wales – The government is making good progress in discussions with local partners and the Welsh Government on a city deal for the Swansea Bay City Region. It will also consider options for a growth deal in north Wales and looks forward to receiving proposals from local partners. The government is also continuing to support the implementation of the £1.2 billion city deal for the Cardiff Capital Region, which was agreed in March.

3.55 Northern Ireland – The government continues to work closely with the Northern Ireland Executive towards the introduction of a Northern Ireland rate of Corporation Tax, subject to the Northern Ireland Executive demonstrating it has placed its finances on a sustainable footing.”

Remember, that small amount of money for the south-west has to be shared with:

Swindon and Wiltshire LEP
West of England L
Dorset
Cornwall …

… Devon and Somerset

Not quite the Mighty Boosh then, our LEP!

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East Devon Watch

Posted on

26 Nov 2016

Posted under

Affordable and Social Housing, Developers/ Development, EDDC, Housing (local), Knowle/Honiton/Exmouth relocation, Local Plan, PegasusLife

EDDC and Knowle – reasons for refusal of PegasusLife planning application – but will a new HQ sway councillors?

A letter from Michael Temple, Sidmouth

“Compare and Contrast

The highly controversial PegasusLife application for Knowle is to be decided at 10.30 am on Tuesday 6 December in the Council Chamber at Knowle, Sidmouth.

Readers might like to compare it with other recent PegasusLife applications:
1. Bath (assisted living): refused: “excessive and incongruous height”, “harmful impact upon surrounding heritage assets”, “nearby listed buildings undermined”, “the excessive tall building fails to respect its context”, “harmful impact on character and appearance of surrounding conservation area”.

Bristol (Nuffield Hospital site) – officers can’t support due to “excessive bulk and massing”, “doesn’t relate to surrounding context”, would “dominate the townscape”.

Wilmslow: refused: “too large, too high, no affordables”.

Harpenden (retirement flats) – refused due to “height (20.7 metres)”, “lack of privacy for neighbours”, “footprint 28 degrees greater than existing buildings”, “visually intrusive”, “residents’ parking would spill onto neighbouring roads”.

Knowle, Sidmouth (assisted living – or second homes?) – officers approve.

The East Devon District Council’s planning officer, departing from the Local Plan and its planning strategies, claims the the “benefits” to Sidmouth outweigh the harm to an English-Heritage listed building.

“Benefits”? Could he mean

the overbearing, intrusive impact on the park and neighbourhood of an excessively high, out-of-scale massed development?

the loss of heritage buildings and public assets like the Council Chamber where so many people met recently over the proposed hospital bed cuts?

the loss of weekend parking to this tourist town?

the loss of about 100 jobs?

the blot on Sidmouth’s skyline?

the loss to the public of the park’s fine lawn prospect?

the lack of a contribution towards affordable housing?

possible downtown drainage overflow during flash floods?”

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East Devon Watch

Posted on

24 Nov 2016

Posted under

Affordable and Social Housing, Austerity cuts, Inequality, Infrastructure

Budget reality check: housing and infrastructure

Interesting that when talking about geographical inequities in the budget, the writer speaks only of the north and not the south-west.

“… As for housing, Whitehall policies remain dictated by the all-powerful builders’ lobby, craving state subsidies to increase demand and push up prices in the south-east. Hammond pledged £1.4bn for 40,000 “affordable” homes, which appears to be just £35,000 each. This is despite overwhelming evidence that Britain’s key housing resource is buried in the inefficient distribution of what is already built. The need is for smarter regulation of the existing housing stock, not more subsidy. On that, the modest new controls on rental fees are at least welcome.

Hammond had sadly inherited his predecessor’s infatuation with the great god, infrastructure. To George Osborne it was nothing short of Stalin’s “electrification of the Soviet Union”. This is despite the fact that most infrastructure is code for investment demanded by the private sector from the public sector. It is a welfare state for capitalist fast-learners.

To any chancellor, infrastructure is a gift. It is headlines today, and postpones payment until tomorrow – if not the day after. A Centre for Policy Studies report excoriates the wildness of this spending. It points out that half of China’s boom in infrastructure is now reckoned to harm growth. In Britain state capital spending is virtually uncontrolled, because it is buried in future debt. Hospital PFIs have saddled the nation with a staggering £200bn in debt. The McKinsey consultancy estimates rail projects on average go 44% over budget, and exaggerate their benefits by 50%.

Hammond this week boasted he would spend £1.1bn on roads, a genuinely pressing need. But it is ludicrously paltry, at one fiftieth of what he is about to spend on a single, upmarket railway line, the glamorous HS2. There are a dozen more worthwhile rail projects languishing. How can Hammond possibly tell health carers or the poor he is penniless? Infrastructure is political eye candy.

In his speech the chancellor rightly drew attention to the “damaging imbalance in economic growth across the whole country”. He went further, adding that “no developed economy has such a gap between its capital city and its second and third cities”. So what does he mean to do about it?

The latest Legatum prosperity index puts Britain near the top at creating prosperity, but not so good at sharing it. This is despite a not ungenerous welfare state. The reason is that sharing is not just about fiscal transfers. It reflects a deep imbalance of the country’s economic geography.

Nothing the government does is relieving this imbalance. Cities in the north of England are among the most poverty-stricken in western Europe. Their jobs flee to the south-east, followed by their young. Their local government is as indigent as their population. Media hysteria about housing and health is in reality about housing and health in the capital.

If the northern economy is depressed, London’s must be the most overheated in Europe. Yet Hammond heats it even more. He tips housing subsidies into the south-east. He spends ever more on transport in the south-east. He does nothing to decentralise public sector employment to the north. Subsidies for universities, charities and the arts are concentrated on London.

The government’s four megaprojects – Heathrow, HS2, the Oxford-Cambridge expressway and the forthcoming Crossrail 2 – are massive, and all in the south-east. They hurl public money at the wealthiest parts of the country. This merely piles pressure on housing, schools and welfare in the south-east. As for HS2, every study of high-speed rail indicates that it benefits the richer end of the corridor.

Britain’s greatest historical investment in housing and welfare is in the towns and cities of the north of England, Wales and Scotland. Houses lie empty, schools unused. Unless the government intends this to go to waste, rotting into a dependency culture and dragging down the rest of the economy, it must find ways to revive it.

Making it easier for Birmingham to get to London is not a national priority, getting fast from Manchester to Leeds is. Crossrail is not a priority, cross-Pennines is. Boosting London’s outbound tourism with more runways is not a priority, boosting northern tourism is. London does not need more bridges, the north’s ports most certainly do.

Hammond should tax London more heavily and the north more lightly. He should move London’s universities and research institutes to the provinces. He should beautify northern cities. This has nothing to do with Brexit, except that rebalancing the economy is an essential response to Brexit’s challenge. Relying on London as the nation’s workhorse is fair neither on London nor on the provinces. It is certainly not sensible.

https://www.theguardian.com/commentisfree/2016/nov/24/philip-hammond-britain-regional-imbalance-risky-autumn-statement

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East Devon Watch

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19 Nov 2016

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Affordable and Social Housing

“How to keep house prices low forever”

“Imagine a world in which the price of housing stopped rising as predictably as a hydrogen-filled balloon. And imagine a country in which houses would be just as affordable in 10 years’ time as they were 10 years ago. There would be no race to buy a home, no fear that prices would accelerate faster than you can save up for the deposit. Houses would cease to be a means of profit, and instead become just a place to live.

But this is no John Lennon-inspired fantasy. It is about to come to fruition in the East End of London, in an extraordinary experiment. For the first time, future property prices will be tied to the rise in wages.

In a couple of weeks the first of 23 families will move in to an old mental health hospital in Tower Hamlets that has been converted into flats. They will pay a third of market value. When they come to sell, the price they are allowed to charge will be limited by the increase in local wages, as measured by the Office for National Statistics.

Amongst the buyers are Rachael and Nathaniel Evans and their young son Griffin. Despite their joint income of £33,000, and savings of nearly £70,000, they have been unable to afford anything in the area. But now, thanks to the local Community Land Trust (CLT), they will soon be moving into a home of their own.

“It is amazing. It is life-changing for us,” says Nathaniel, who has lived in Tower Hamlets all his life. “I imagine walking into the flat and thinking, ‘this is ours,’ and we don’t have to leave.”

But the wage link is significant. When Rachael and Nathaniel eventually decide to sell, their property’s value will not have gone up in line with the market. Typically, wages have risen by less than 2% a year over the last decade, dipping as low as 0.7% as recently as June 2014. At the same time, despite a few dips, house prices have soared by up to 9%, easily outpacing wages.

If that trend continues, the relative value of their flat will decline, making it hard for them to move elsewhere. As a result, linking house prices to wages requires a very different attitude, says Calum Green, co-director of the London CLT. “These homes should be considered homes, not assets,” he tells the BBC. “It should be a place where you want to live for many, many years. It’s not all about ladders and working your way up. …”

http://www.bbc.co.uk/news/business-37941426

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East Devon Watch

Posted on

17 Nov 2016

Posted under

Affordable and Social Housing, Austerity cuts, Developers/ Development

More/fewer unaffordable/affordable homes

“Fewer affordable homes were built in the past year than any time in the past 24 years, while there was a 52% fall in the supply of new homes in just 12 months.

Builders put the finishing touches to 32,110 affordable homes in England in the year to the end of March 2016, compared with 66,600 over the previous year, according to figures from the Department for Communities and Local Government (DCLG).

Of those, just 6,550 – about 20% – were for social rent, which critics say is the only truly affordable housing tenure, with the rest made available to rent or buy at “affordable” rates of up to 80% of market value.

Critics said the figures were disastrous, and called on the government to do more to encourage housebuilding. They come as the proportion of households that own a property is at a 30-year low and rising house prices have driven the cost of buying a home to more than 10 times the average salary in a third of England and Wales.

“The Tories have made ‘affordable housing’ a meaningless term”

Neal Hudson, a property market analyst for Savills, said the fall came as no surprise after 2014/15’s figures were inflated by developers racing to use up funds as the government’s previous affordable housing programme came to an end. Funds for a new programme were initially much lower, until more cash was released in last year’s autumn statement, he said.” …

https://www.theguardian.com/society/2016/nov/17/number-of-affordable-homes-built-in-england-slumps-24-year-low

Or, as George Osborne is alleged to have said: “Why should we build social and affordable homes? The people in them vote Labour”

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East Devon Watch

Posted on

7 Nov 2016

Posted under

Affordable and Social Housing, Barratt Homes, Developers/ Development, Land banking, Persimmon, Planning System, Taylor Wimpey

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2 Comments

Channel 4 “Britain’s Housing Crisis” – notes

476,000 outstanding GRANTED planning permissions not commenced.

28% rise in planning permissions, 10% more completed homes.

Average delay from granting planning permission to starting construction up from 21 to 32 months.

Developers build out big sites very slowly to maximise profits says MP Clive Betts.

Oxford – most unaffordable city – land is being hoarded says Ed Turner, Oxford Councillor and a housing spokesperson for the Local Government Association. Developers “making a fast buck”.

Big developers have made serious money –

Persimmon profits up from £638 MILLION – up 34% on the previous year.
Taylor Wimpey £604m – also up 34%
Barratt Homes – £682m – up 45%

(these 3 builders provide a quarter of all new homes, the eight next largest more than a half, small builders around a quarter). In the 1980’s small builders built two-thirds of homes each year.

Community Secretary Javid talks the talk but isn’t walking the walk – said he wants to “break the stranglehold of developers”.

Home Builders Association – weasel words – 30% more new homes in last 2 years, industry not sitting on land banks – no reason why they would delay. Nothing their fault.

Reporter puzzled by that statement – it includes existing houses turned into multiple flats and shops converted to housing. Official government data shows in 2013 133,000 new homes built – lowest figures in over half a century. 2015 – 152,000 new homes – up only 14% over 2 years NOT 30% and from a very low base. Over this summer housebuilding actually fell.

Javid “determined to do something about it”!

Small builders feel shut out – no land particularly in London, only small sites available. Developers have too cosy a relationship with councils says one small builder. Public sector land is not being released to small builders.

Last year the Big 3 house builders completed 44,360 homes and had planning permission to build a further 200,823 homes. They have strategic land holdings that could accommodate a further 278,600 more homes.

“Option agreements” are common – paying landowners if planning permission is granted – but only they can buy the land – no-one else.

A farmer near Gatwick told his story – first approach “a chat” to sell an option for exclusive development. They offered £275m which the farmer rejected, saying the developer already has land nearby they can develop. But options are not always recorded by the Land Registry so it is hard to know who controls such land.

So what is Javid going to DO, asked the reporter – a White Paper next month – we can’t have a market dominated by big suppliers, more small developers needed. But no idea how he is going to do it!

Reporter pointed out that the big house builders are major donors to the Tory party.

The big house builders are not impressed by talks of fines for not starting new builds more quickly. The bloke from their association said that if you start restricting the house building industry they will react by reducing output. The reporter asked if that was a threat – the spokesperson denied that. He said that, if the big builders had to forfeit land with planning permission but not started, house builders will restrict the flow of planning applications.

Land banking taxes may be needed says reporter, as the system is broken.

Nasty.

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East Devon Watch

Posted on

4 Nov 2016

Posted under

Accountability, Affordable and Social Housing, Developers/ Development, EDDC, Knowle/Honiton/Exmouth relocation, PegasusLife

Comments

1 Comment

EDDC isn’t like John Lewis (“Never knowingly undersold)!

Letter in today’s Sidmouth Herald:

Cllr Barlow rightly castigates the developers of the 36 Churchill homes for their measly offer towards affordable homes in the light of the profits likely to be made. How much more profit will PegasusLife make from 115 apartments at Knowle, but in this case without any payment at all towards affordable homes? What is more, EDDC have, I believe, “knowingly undersold” the site, including parts of the public park, to pay towards an unnecessary re-location, so that PegasusLife are likely, according to some estimates, to make a net profit of around £26 million. And because of the inadequate care to be provided, this development will very likely put great strain on already threatened local health services. Or does PegasusLife expect most of the apartments to become second homes for the extremely wealthy, as there is apparently nothing apart from cost to prevent this? Either way, is this what Sidmouth needs?

Readers may also like to know that, since they sent in their objections to the Knowle development, well over 50 new documents have been submitted by PegasusLife (in August and on 27 October). Some of these contradict earlier and misleading artist-impressions and show new details and changes including drainage problems upon which people may wish to comment. Comments should reach the planning department by November 11 as the application is likely to be put to the Development Management Committee on December 6.

Michael Temple Sidmouth

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East Devon Watch

Posted on

1 Nov 2016

Posted under

Accountability, Affordable and Social Housing, Developers/ Development, Development Management Committee, EDDC, Housing (local), Knowle/Honiton/Exmouth relocation, PegasusLife, Transparency

Residents want clarification of Knowle housing designation

An EDDC spokesperson says it will be up to the DMC to decide classification but then says there are legal aspects to be considered.

The DMC are laypersons- surely they are not qualified to take such decisions?

“District chiefs have yet to decide how the use of a proposed 115-home retirement community at Knowle should be classified.

The Knowle Residents’ Association this week called for clarity on the matter. Householders say that, if the development ends up classed as ‘C3’ – housing – developer PegasusLife will need to either include ‘affordable’ homes on-site, or pay towards them.

If it is care accommodation [C2], the group says the development will be even further from the 50 homes the site is allocated in East Devon District Council’s (EDDC) Local Plan.

Residents’ association chairman Kelvin Dent said the group is ‘amazed’ the authority has not decided what use class the development falls into. He added: “Our view is that the application is akin to housing – albeit with the occupants of the proposed apartments being able to purchase a package of care to suit their needs.

“Under planning law, this equates to a C3 use and PegasusLife will be obliged to provide social housing as part of their development or to make a substantial financial contribution towards the social housing that Sidmouth desperately needs and support for the local community.

“We look forward to receiving confirmation from EDDC that they agree and will be helping local young people to find a home.”

A spokeswoman for EDDC – which intends to relocate from the Knowle HQ to Exmouth and Honiton – said officers had been working on the basis that the development’s use would be C2.

She added: “However, officers have been considering whether the form and layout of the proposed development and the manner in which it is proposed to operate would constitute a C2 use or not.

“In considering this issue, officers have been, and continue to consider, the views expressed by residents and relevant case-law.”

The spokeswoman said the officers’ conclusions on PegasusLife’s application will likely be presented to EDDC’s development management committee (DMC) on December 6. The agenda will be published 10 days beforehand.

She added: “Ultimately, a decision on this issue is for the members of DMC to make.”

http://www.sidmouthherald.co.uk/news/residents_call_for_clarity_over_future_knowle_use_1_4756297

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East Devon Watch

Posted on

31 Oct 2016

Posted under

Affordable and Social Housing, Developers/ Development, Development Management Committee, EDDC, Section 106, Sidmouth/ Sidford/ Sidbury

Make millions, pay peanuts … EDDC says that’s fine

“Town councillors have reiterated their opposition to Churchill Retirement Living’s plans to demolish Green Close, in Drakes Avenue, and build 36 sheltered housing apartments for the elderly.

They said the housing stock for older people cannot keep growing without also creating homes for nurses and carers to look after them – and argued the developer could cut into its 30 per cent operating profit margin to pay for it.

Planning committee members suggested Churchill should pay at least £360,000.

Councillor Ian Barlow, committee chairman, told the Herald: “Churchill’s profit margin is the one of the highest in the industry.

“They say they can’t pay more than £41,000 or it won’t be profitable – but those 36 homes are probably going to be worth £6-7million.

“Churchill is making a profit and taking it out of the town. They’re bringing in older people who will use the facilities, but they’re barely putting anything into the pot.”

The £41,000 referred to is a ‘section 106’ payment – cash that is meant to mitigate the impact of developments and fund improvements such as ‘affordable’ housing. The contribution depends on factors such as the size and number of dwellings being built.

Churchill is proposing to build 36 apartments in place of the 23-bed Green Close care home, which was run by Devon County Council until cutbacks brought about its closure in 2014.

The planning committee, which met last week, ruled: “Members noted that a contribution of £41,208 had been offered by the applicant towards affordable housing. Members expressed the view that this was an insult to the community of Sidmouth and urged the local planning authority not to accept the offer.”

Cllr Barlow compared the Green Close proposal with the Sanditon development, on the plot of the former Fortfield Hotel.

The developer there built 29 apartments and made a £1.5million ‘section 106’ payment – 36 times what Churchill is offering.

Cllr Barlow said the firm can avoid a larger payment because it is creating sheltered housing, adding: “We’re concerned that a lot of places are being provided for the elderly, but there’s nowhere being built for younger people.

“If there’s no provision at the same time for a nurse or a carer to live, who is going to look after them?”

Churchill’s planning director, Andrew Burgess, told the Herald: “We are disappointed by Sidmouth Town Council’s decision, since we have been consulting the community and working with the planning authorities for several months to develop plans for an attractive and sustainable new retirement community that will bring benefits to local people and the local economy.”

He said the proposed affordable housing contribution is based on a detailed viability assessment, industry best practice and factors such as the market value of the site.

Mr Burgess added: “We will continue to work with the council and the local community to ensure we can deliver the high-quality specialist retirement accommodation that is urgently needed by older people in Sidmouth.”

The application has been recommended for approval by EDDC’s planning officers, who noted the ‘comparatively modest’ financial contribution.

The authority’s development management committee will decide its fate on Tuesday (November 1).”

http://www.sidmouthherald.co.uk/home/developer_s_offer_slammed_as_insult_to_sidmouth_1_4756271

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East Devon Watch

Posted on

30 Oct 2016

Posted under

Affordable and Social Housing

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1 Comment

“Wave of prefab homes planned to tackle UK housing crisis”

Second-class housing for second class citizens? Just watch the high-end house owners when one of these estates is planned in their back yard!

Lack of funding could scupper homelessness reforms, say MPs
Ministers are planning a new wave of prefabs in a drive to solve Britain’s housing crisis, it has been reported.

More than 100,000 pre-packed modular homes could be constructed as the government looks at ways to meet its target to provide a million new homes by 2020, according to The Sunday Telegraph.

A government white paper due out next month will include measures to encourage banks to lend to firms that construct the homes off-site before delivering them to their final destination, the paper said.

The initiative recalls the reconstruction drive which followed the second world war as prefabs sprung up across the country as the government sought to house families bombed out of their homes by the Germans.

While the prefabs of the 1940 homes were often a byword for poor quality, improvements in technology mean that such concerns are no longer an issue.

Ministers were said to have been impressed by the fact that some of the new generation of prefabs could be put up on site in as little as 24 hours, as well as the potential cost advantages.

The Sunday Telegraph quoted a government source as saying: “The first and most obvious advantage is speeding up the building of housing. There is pretty good evidence that if you did it at scale it is cheaper.”

http://www.theguardian.com/society/2016/oct/30/wave-of-prefab-homes-planned-to-tackle-uk-housing-crisis?CMP=Share_iOSApp_Other

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East Devon Watch

Posted on

29 Oct 2016

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Affordable and Social Housing, Developers/ Development, Persimmon, Taylor Wimpey

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Latest developer housebuilding scam: cost of converting a house lease to freehold

“When Clare Budgen bought her first house in Ellesmere Port in 2009 for £155,000 the last thing on her mind was the lease. Taylor Wimpey, the developer, arranged the lease on a 999-year basis, so what could the then 22-year-old possibly have had to worry about?

But just seven years later, when she looked into buying the freehold (to enable her to sell the home more easily in the future) she was astonished to find that, first, Taylor Wimpey had sold her freehold to another company, E&J Estates, and, second, it wanted £32,000.

Paula Richmond is in a similar boat. In 2015, she bought a four-bed house built by Taylor Wimpey in 2011 for £122,000, thinking she had bagged a bargain. Again, the original lease was for 999 years and with 995 more years to go, it was the least of her concerns. At the time, she understood that buying the freehold would cost no more than £2,000-£3,000. But, like Clare, she has found that her lease has been sold to E&J Estates by Taylor Wimpey and has been told by surveyors that she will have to pay up to £40,000 for the freehold – one-third of the house’s value. Paula can’t afford it and says “the house is almost unsaleable”, with solicitors warning potential buyers to stay away.

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Like thousands of others in England and Wales, buyers like Paula and Clare (not their real names) have been trapped by a controversial trend among developers to sell homes as leasehold when they previously would have been freehold. The buyers are given reassuringly long 999-year leases – usually it is leases of less than 60 years on flats that are a worry – but later find that buying the freehold is prohibitively expensive.

One surveyor Guardian Money spoke to in Manchester said a client had just been forced to pay £38,000 to buy the freehold on their recently built home, despite its long lease.

The trap for unsuspecting buyers comes from the escalation in ground rent in the small print of long leases. Initially, it looks affordable. The developer gives the buyer a 999-year lease, with the ground rent set, in Paula’s case, at £295 a year. The contract says the ground rent will double every 10 years. This may look innocuous – after all, most people move every seven to 10 years. But to the company that buys the freehold, the income is valuable….

…Campaigners say issues around leasehold properties will be top of the agenda for an all-party parliamentary group on leasehold and commonhold next month. It has attracted 43 MPs and lords, and is chaired by Labour MP Jim Fitzpatrick and Tory Sir Peter Bottomley. Members include Sir Keir Starmer, Emma Reynolds and Barry Gardiner.

Sebastian O’Kelly of support group Leasehold Knowledge Partnership says: “It is disgraceful that plc housebuilders are building leasehold houses that ordinarily – and until recently – would have had freehold title. This is an erosion of the wealth of ordinary people at the expense of the rich.

“Young people, after years of paying rent, finally buy a home and then find they are still, in fact, tenants – which is what a leaseholder is – with all the vulnerability that that implies.”

He adds: “The housebuilders are evasive over this issue and it beggars belief that the outrageous ground rent multiples come from household-name builders. There is no attempt to justify the adoption of leasehold tenure for these houses, which are not complex communal sites such as blocks of flats.

MP Justin Madders is calling for a ban on leasehold for estates of houses. “It is clear this system is being abused to drive huge profits at ordinary homeowners’ expense. There is no need for there to be leasehold properties, particularly those on an estate where the properties are mainly detached houses.

“They need to be banned – it may be a convenient way for developers to get extra profit from their building work, but once they get in the hands of these private equity companies the profit motive overrides any considerations that there are real people living in their homes, who are being asked to stump up eye-watering sums.”

http://www.theguardian.com/money/2016/oct/29/new-builds-house-buyers-leasehold-property-trap

Posted by

East Devon Watch

Posted on

20 Oct 2016

Posted under

Accountability, Affordable and Social Housing, Corruption, Planning System, Transparency

“‘Within hours of arriving, I was on a yacht with some investors, being asked to join the Freemasons’ “

“This week, the UK’s largest property event, the MIPIM conference, has opened in London. “#MIPIMUK is waiting for you,” tweeted @MIPIMWorld, the Twitter handle of the international organisation. Underneath was an image of exploding paintballs, overlaid with the words: “THE POST BREXIT BOOM – Are you ready?” …

… The conference this week will be a fairly sedate affair: property magnates with lanyards in expensive suits, stalls dedicated to the Midlands Engine and the Northern Powerhouse, tired corporate phrases like “driving innovation and diversification in the market” (tweeted out from that same MIPIM handle this morning), and so on.

The real fun is had at their annual event in Cannes, scheduled for mid-March, where estate agency professionals and wealthy investors cavort around five-star hotels and champagne receptions in the sunshine, while ruminating about the housing crisis many of them benefit from directly.

“Within hours of arriving, I was on a yacht with some investors, being asked to join the Freemasons,” one MIPIM attendee told me about his experience last year. Another described it as a “nonstop party” where she woke up one morning and couldn’t remember the name of the hotel she was staying in “until I looked at the monogram on my bespoke dressing gown”.

You meet some people who are involved in things that feel dodgy,” another property professional admitted.

“I work in property and I didn’t know about the layers of middlemen and secret deals that go on, particularly where London is concerned. Investors buy up flats before they’re built, then sell them on to other investors, but they don’t want the public to know they’re selling them again because that would drive down the price of the other units they own. So they pay off middlemen to do private deals with people they know, just to keep knowledge of the deals out of the public domain.” …

… Estate agents were happy to tell me that they’re seeing more foreign investors than ever offer to buy London flats traditionally expected to be taken by UK-based first time buyers “because their money goes twice as far now”, which is “great for business”. This is the “Brexit bubble” people feared would make the housing crisis worse after leaving the EU, and it’s fast becoming a reality. One presumes it’s why one of MIPIM’s main events this week is titled: “Extraordinary times, extraordinary returns?”.

Cast your eye over the speakers at MIPIM this week and there’s little to feel optimistic about. There’s Navid Chamdia, the UCL-educated head of real estate at the Qatar Investment Authority. He focuses “on direct acquisitions, joint ventures and co-investments in Europe” after spending 12 years at Ernst & Young “advising on the financing and delivery of over $10bn of global real estate and infrastructure projects”.

There’s Simon Mower, associate director at KPMG Debt Advisory who “has particularly strong experience in the real estate market… navigating the sector’s lender universe… structuring investment and development financing transactions for his clients.” There’s even one entertainingly named Mark Bourgeois.

Then, of course, there’s our astonishingly out-of-touch housing minister Gavin Barwell, who famously suggested that the solution to generational inequality was everybody’s rich grandparents skipping a generation with inheritance and giving the millions they’ve squirrelled away to their grandkids.

Barwell also made a speech two weeks ago in which he suggested the housing crisis could be tackled by making young people live in smaller rooms. “We want people to innovate – there are things the private sector is doing,” he told a fringe event at the Conservative conference. “I don’t know if anyone’s seen any of the schemes that Pocket [Living] have done where they’ve basically done a deal with the GLA [Greater London Authority] to get some flexibility on space standards. As a result they can offer a product well below market price.” A tarted-up way, of course, of saying Pocket Living has managed to twist the standards on what usually would be considered habitable.

For a government minister to openly celebrate this isn’t just irresponsible; it’s downright bizarre.

Britain has the smallest homes in Europe at an average of 500sqft for a one-bedroom flat and Pocket Living sells 400sqft flats – about the size of the average American sitting room, or the average UK hotel room – starting at £250,000.

This week, Gavin Barwell will speak at MIPIM alongside Marc Vlessing, chief executive of Pocket Living, whose background is “in City corporate finance”. If that doesn’t speak volumes about the housing crisis, the Government and the property professionals who pull the strings across the UK, I don’t know what does.”

http://www.independent.co.uk/voices/mipim-housing-crisis-markets-insiders-what-they-say-london-conference-property-magnates-a7369621.html

Posted by

East Devon Watch

Posted on

19 Oct 2016

Posted under

Affordable and Social Housing, COVOP, Developers/ Development, National Planning Policy Framework, Police (local)

Community Voice on Planning Conference report

“Community Voice on Planning (CoVoP) held its first conference in Leeds on Saturday 15th October – with the conference title being “NIMBY – reality or slur”. I attended – not to find out if I am one, but to explore the background as to why e.g. media, so immediately, and regularly, calls on those concerned with current planning matters to defend themselves against being NIMBYs.

The conference had a diverse content, which explored fully the mess that is the current planning system, and the very poor outcomes generated by planning law that is simply not fit for purpose.

An opening letter was read from Clive Betts MP, chair of the Communities and Local Government Committee. This committee has nothing to do with government, but acts as scrutineer of the Department of Communities and Local Government (DCLG) re policies, administration and spending. One of their recent calls has been for Gavin Barwell MP (new Housing and Planning Minister) to respond the the DCLG-commissioned Local Planning Expert Group’s recommendations on planning. This includes a statement that Leeds’ and Bradford’s Core Strategy housing targets are more than 500 houses per year over-provisioned.

Andrew Wood from CPRE presented some complex ideas about greenbelt use for housing and seemed to be suggesting a deal-based planning arrangement where housing needs were met by very selective use of greenbelt sites where fully assessed and sustainable use and requirement had been carried out. He developed the idea that greenbelt is one of the last planning policy tools that local authorities have to control patterns of development, but stated the obvious threats to existing greenbelt boundaries.

Jenny Unsworth from Congleton asked the question “Does the National Planning Policy Framework 2012 (NPPF) work?” Through a well presented summary of planning milestones, leading towards the position in her own area, Jenny demonstrated that planning reality in Congleton is the same in Leeds and Bradford – and very much anywhere else in England. Her key point was that the workings of the NPPF and Localism were at opposite ends of the planning spectrum. She also reminded us that excessive and undelivered housing numbers were resulting in 5-year land supply failure, leading to local authority plans being automatically out of date. It therefore followed that planning had become an ad hoc system defined by appeals, rather than a plan-led one, as sought by the NPPF. No surprises to find her answer to the question to be “No”.

Julie Mabberly, Chair of CoVoP, and planning activist in Oxforshire, ridiculed the extraordinary basis for setting housing numbers that is the Objectively Assessed Housing Needs system. She described the system as from the pages of “Alice in Wonderland” and demonstrated through various slides that a finger-in-the-air figure for housing need became inflated (and totally un-achievable) through a series of speculative additions to housing need, that also included double-counting. Her summary was that OBJECTIVE housing needs assessment was anything but that.

Dr Quentin Bradley, from Leeds Beckett University set out the controlling influence of developers, and in particular the significance of land price and hoarding of land, in respect of affordable housing provision. Dr Bradley suggested that the current structure of both the land and housing markets contribute to a shortage of housing being built, and the affordable housing build ratio that comes out of that. He argued that with the present structure in place, building more homes alone will not solve the crisis.

Dr Hugh Ellis from the Town and Country Planning Association set out the significant role planning has played in the formation of the nation’s built housing since the Association’s formation some 120 years ago. In particular Dr Ellis considered the outcomes of the planning of garden cities in comparison to the broken system that is currently in place.

A pleniary session concluded the conference, introduced by WARD chair, Dr. David Ingham. He referred to the stimulation given to the WARD group in respect of the old order, from DCLG, based on the adoption by Bradford of its flawed Core Strategy, some of the policies of which have been written by the very Inspector who declared it sound. Dr Ingham also called for more MP input at Westminster to change planning law, and thanked in particular, Greg Mulholland MP, for his long support to WARD over the last 7 years of campaigning and for his work in Parliament to change planning law.

The panel of 3 MPs, which also included Paul Sherriff MP and Jason McCartney MP, showed their understanding of a broken planning system and their attendance at this conference, with Greg Mulholland, is proof of that.

My view from this remains unchanged, and that is before I went into the conference I was sure the current planning system is not fit for purpose. I came out with more evidence that that is exactly the case. With an appeal-led planning system for the largest housing sites now in place, the NPPF has totally failed to deliver the housing that is needed, or of the right type and in the right places. The result of this is the great threat to the precious greenbelt. If protecting that makes me a NIMBY then I am proud to stand up and be labelled as that.

Martin Hughes, Treasurer of WARD, Chair of Yorkshire Greenspace Alliance”

http://wardyorkshire.org/latest-news/ward-attends-leeds-covop-conference

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