Sherford (and Cranbrook) slightly on the rocks?

One of the firms involved in building the huge new town at Sherford near Plymouth [and Cranbrook] has issued a profit warning causing concern that the construction sector is in decline

Bovis Homes, one of Britain’s biggest housebuilders, is part of the Sherford Consortium alongside Linden Homes, and Taylor Woodrow [as in Cranbrook].

… The announcement, which preceded a 4.8 per cent fall in the Bovis Homes share price, was seen by analysts as a blow for the construction sector as it heads into 2017.

Bovis Homes denied the slowdown was due to any Brexit effect following the UK’s referendum decision to leave the EU.

… But completions in the second half of 2016 fell by one per cent to two per cent, year-on-year.

Meanwhile, GDP data has shown that construction generally is now in a “technical recession” with output down 1.1 per cent in Q3 2016. … “

http://www.plymouthherald.co.uk/construction-industry-jitters-after-sherford-firm-issues-profit-warning/story-30018069-detail/story.html

“Downbeat Bovis to fall short of home build target”

“Bovis Homes Group PLC (LON:BVS) has cautioned new house sales this year will be lower than expected due to completions in December falling short.

The total for the year will now be between 3,950 to 4,000, with slower than predicted building times pushing 180 homes due to complete into the next trading year.

Total revenue in 2016 will still top the £1bn mark, but now be in a range between £1.04bn and £1.06bn ((£945mln) with profits within the previous forecast range of £160mln to £170mln (2015:£160.1 mln).

Prices this year have risen 10% from 2015’s £231,600, driven by improved mix and increased underlying market pricing, Bovis added.

Shares fell 3.5% to 825p.”

Source: Proactive Investors newsletter

Axminster and Cranbrook – slums of the future says Councillor Hull whilst Councillor Moulding says – nothing

At EDDC’s full Council Meeting on 21 December, venerable Axminster Lib Dem councillor Douglas Hull asked members to support a statement criticising the standards of the big national housebuilders.

He said the “little boxes” they were building in places like Axminster and Cranbrook were so appalling that they were creating “the slums of the future”

He circulated a local newspaper story of a young Axminster couple whose new purchase was so “ticky tacky” as to be virtually uninhabitable.

There was some tut tutting and the Chief Executive stepped in to say he would write to the offending companies, and Douglas was very grateful.

Interesting that Tory Axminster councillor Andrew Moulding had nothing to say about the problem.

But then he is a guiding light in Cloakham Lawns Social and Sports Club which has very cordial relations with Bovis!

“Builders make billions as housing crisis escalates”

… Multi-million pound executive pay
The rewards enjoyed by bosses are significant.

As well as their £141m wages, Tony Pidgley and Rob Perrins of Berkeley are also sitting on shares in the company worth £440m.

They are not alone. Two executives at Persimmon, another of Britain’s biggest house builders, have shares worth at least £105m as part of their company incentive plan.

Our investigation – published days after the Chancellor Philip Hammond announced more than £5bn of government money would be spent increasing affordable homes and speeding up house building – also shows that Taylor Wimpey CEO Peter Redfern has been paid more than £24m in the past five years. …

… Planning documents kept secret
Previous in-depth reporting by the Bureau highlighted how the UK’s planning system allows developers to reduce their affordable homes targets while keeping their justifications secret.

Developers carry out financial viability assessments for their proposed developments, which often conclude that meeting the affordable housing targets set by local authorities would reduce their profits to a point that the scheme would be worth their while. However those assessments are kept confidential, with even councillors unable to see them.

In order to make sure schemes goes ahead, the local authorities typically reduce their targets or accept payment from the developer in lieu of the affordable homes. That money is supposed to be invested into social and community projects, or the council’s own affordable housing schemes. …

https://www.thebureauinvestigates.com/2016/11/27/uk-housing-crisis-house-prices

Important High Court decision on the residual impact of development

“The High Court recently rejected a challenge to refusal of planning permission for 650 homes in Cheltenham. The ruling is important on the issue of residual cumulative impacts of development, writes Ashley Bowes.

Mr Justice Holgate has refused Bovis Homes and Miller Homes permission to proceed to challenge the decision of the Secretary of State to withhold planning permission for 650 new homes in Cheltenham, finding the claim to be “unarguable”.

The challenge was of particular note for its analysis of paragraph 32 of the National Planning Policy Framework, which provides that development should be prevented if the “residual cumulative impacts of development are severe”.
The Inspector had concluded at IR,225 that:

“Whilst I can agree therefore that the development should not need to solve all existing unrelated transport problems, the existing or future “in any event” situation on the highway network, is not an unrelated problem which evaluation of the proposed development ignore. It is a related problem which is highly pertinent to the evaluation of the current appeal proposal”

He went on to have regard to the guidance in DfT Circular 02/2013, paragraph 9 which provides:

“Development proposals are likely to be acceptable if they can be accommodated within the existing capacity of a section (link or junction) of the strategic road network, or they do not increase demand for use of a section that is already operating at over-capacity levels, taking account of any travel plan, traffic management and/or capacity enhancement measures that may be agreed …”

Mr Justice Holgate was not persuaded that the Inspector and Secretary of State arguably erred in law by taking into account of the existing highway situation when resolving the paragraph 32 NPPF questions.

In particular, the Judge noted that it would be open to a decision taker to rationally conclude that a given development could wash its own face in highway impact terms, but due to existing over capacity, the residual cumulative impacts of the development could be severe.

Whilst the decision that the claim is not arguable does not create binding authority on the meaning of para.32 NPPF, it does provide an interesting insight into the breadth of discretion open to a decision taker when resolving whether the residential cumulative impacts of development are severe.

Ashley Bowes is a barrister at Cornerstone Barristers. He acted for the successful Interested Parties (Leckhampton with Warden Parish Council and Leckhampton Green Land Action Group Ltd, instructed by Richard Stein at Leigh Day) before the High Court, and on behalf of Leckhampton Green Land Action Group Ltd before the planning inquiry.”

Notes
Appeal decision letter reference: LAND AT KIDNAPPERS LANE, LECKHAMPTON, CHELTENHAM APP/B1605/W/14/3001717

Case reference: Bovis Homes Ltd & Miller Homes Ltd v SSCLG (CO/3029/2016) (2 September 2016).

http://localgovernmentlawyer.co.uk/index.php?option=com_content&view=article&id=28286%3Aresidual-cumulative-impacts-of-development&catid=63&Itemid=31

Bovis Homes Victims Group Facebook page

As featured on today’s Spotlight lunchtime news:

https://www.facebook.com/groups/BovisVictimsGroup/

including a number of homebuyers in Devon.

Closed group – membership by request.

Bovis too poor to buld affordable homes in Seaton …. yet

“Bovis Homes posts 18% increase in revenue to £412m as UK market remains solid despite Brexit vote

Housebuilder says it is still too early to judge the impact of the vote to leave the European Union….”

http://ukdaily.ddns.net/news/bovis-homes-posts-18-increase-in-revenue-to-412m-as-uk-market-remains-solid-despite-brexit-vote

And Owl still can’t understand how Tesco paid for raising the site years ago yet Bovis says it is bearing the cost …

Did Bovis buy the site INCLUDING the cost of raising it several years earlier and, if so, why?

And why is every develipment site costed separately, not taking into a ccount the developers profits as a whole?

It seems just about any and every site can be shown to make a loss so that affordables are unaffordable, yet all these unaffordable site seems to make bigger and bigger profits for developers when added together! Strange that!

Bovis and Seaton affordable housing – a long and winding road

Below is a report of the original discussion EDDC had in July 2013 about affordable housing on the (then) Tesco site. It should be notec that, though “overage” was discussed and apparently agreed at this meeting, the requirement was subsequently dropped, though no explanation was given for this:

“… Tesco has petitioned for the removal of all the affordable housing on its site to make it more saleable, as it has many problems associated with the infilling of the site which mean that only certain types of houses can be built and fewer of them.

“What I say below is a personal opinion only and reflects my layperson understanding of the debate.

The DMC heard from myself [Sandra Semple] and Paul Arnott: there were no representatives of the town council in attendance. District Councillor Peter Burrows was in attendance earlier in the day as a member of the DMC but left before this item. District Councillor Steph Jones appeared in her capacity as Deputy Portfolio Holder for Housing.

Members of the committee appeared strongly of the view that Tesco was going a step too far. They particularly disliked the comment from the company’s agent that if EDDC did not agree to what they wanted, they would appeal. Some thought this was unacceptable pressure. One member of the committee noted that no affordable housing has been built in Seaton for many, many years and if this reduction was allowed other developers in the town would think they should have the same treatment.

Mr Freeman (I forget what title he has these days) pointed out that there was a mistake in calculations in the documentation (not sure whose fault) and that whereas it had been stated that the company might sustain a loss of over £2 million if affordable housing were included, the real amount on the figures provided was more like £750,000.

It was suggested that this application was a good candidate for EDDC’s new policy of “overage” and here I get a little fuzzy about what they mean – and to be fair so did some of the members of the committee. However, what it appears (to me) to be is that yes, Tesco will be allowed to take out the affordable housing BUT EDDC will put in place an overage clause which says that when the potential loss has been recovered (i.e. after the £750,000 loss has been taken into account – or whatever the correct figure is) then EDDC will take a percentage of the profit thereafter. This means, as I understand it, that, say, Tesco sells the site for £5 million, then they ignore the first £750,000 and the remaining profit is then split between EDDC and Tesco. The EDDC lawyer in attendance could not remember what the percentages agreed were but I have looked it up and the default allowed in the new policy is 50% each but EDDC has the option to increase this percentage if it sees paperwork which shows that the profit could be extremely high.

This only applies to the current planning application. If the site is still vacant when the current planning application runs out then everything has to be renegotiated including the S106 agreements and percentage of affordable housing.

Throughout the afternoon several members of the committee (perhaps with an eye to the next election) said that the economic climate was improving and that this meant that Tesco has less to worry about.

https://sidmouthindependentnews.wordpress.com/2013/08/21/seaton-eddc-votes-to-share-the-profits-with-tesco-but-no-affordable-housing-on-the-site/

Development Management Committee defers Bovis Seaton affordables decision to study viability figures

East Devon’s Development Management Committee has refused to approve an application from Bovis to build extra houses on the Tesco regeneration site at Harbour Road. It decided instead to bring the matter back to its next meeting to look more closely at the viability assessment for Affordable Housing.

Members were surprised when officers said that they were free to look at the viability assessment, although it will not be made publicly available.

This setback for the developers came after the DMC’s chairman, David Keys, and the Council’s Development Officer, Ed Freeman, recommended approval of an extension of the ‘zero relaxation’ for affordable housing (which means NONE at all in the huge project) in March, without bringing the matter to the Committee or informing the town council of the application.

However, it transpires that Bovis had already applied for extra houses on the site, and said no affordable housing should be included because the scheme overall was still £6 million in the red.

But as Seaton ward member Jim Knight asked the DMC, why would they be building these additional houses if the site was not profitable?

The issue came to DMC only because of the persistence of Seaton Town Council, supported on the DMC by Councillor Peter Burrows who insisted that the matter be on the DMC agenda.

The Chair of Seaton’s planning committee, Martin Shaw, argued that the viability assessment for the new application, which linked it to the viability of the scheme as a whole, was flawed because it did not take account of the improved density of the development. He questioned whether the District Valuer had been fully informed when he signed off the viability assessment.

DMC members on all sides expressed concern. Independent leader, Ben Ingham, said that for a long time Seaton had not had enough new housing, but now that it was coming on stream, Seaton people could not afford to buy the houses being built.

Conservative councillor Simon Grundy said ‘We need to stop being treated like children over this matter. The Town council seem to have got a lot closer on this than we did.’

Axminster – evidence for the need for regeneration? Seaton – booming?

New Bovis home “The Canterbury” style 4-bed home at Axminster – £367,995

New Bovis home “The Canterbury” style 4-bed home at Seaton – £385,000

Source: View from newspaper property section pages 36 and 38, 21 June 2016

Seaton Town Council on the warpath as EDDC attempts to slip no affordables on the Tesco (Bovis) site under the radar

Full details here:

Click to access Planning%20agenda%2009.05.16.pdf

Fish, smell, rotten … EDDC.