“Land values funding row set to throw Axminster masterplan and relief road plans into chaos”

As reported by Owl a week ago:
https://eastdevonwatch.org/2019/11/29/axminster-master-plan-back-to-the-drawing-board-but-dont-upset-the-developers/

“A row over land values is set to scupper a masterplan that would see more than 800 new homes and the long-awaited relief road for Axminster built.

The Axminster North East Urban Extension masterplan for 850 homes was adopted in January, and also includes employment land, open spaces and community facilities.

It also included the £16.7m north-south relief road that aims to end the severe congestion, pollution and HGVs having to travel on the existing road that runs through the centre of the town.

East Devon District Council had successfully bid for a £10m Homes England Housing Infrastructure Funding (HIF) grant that would be used to help fund the delivery of the crucial new relief road, only for the government agency to change their mind and turn the grant into a loan. …

Outlining the situation in his report, Mr Freeman says that the land owners have been contacted but are unwilling to reduce their expectations.

The Crown Estate who own their land outright advised that the value attributed to their land is fixed by what they actually paid and cannot therefore be renegotiated, he said, adding the land owners whose land is optioned to Persimmon Homes were not willing to entertain this option, stating that if they could not realise their expected values they would simply continue to farm the land and await a more attractive offer in the future. …”

https://www.devonlive.com/news/devon-news/land-values-funding-row-set-3608294

“Bovis Homes bracing for investor backlash over plans to hand bonuses to bosses of up to 200% of their salary”

“Bovis Homes is bracing for an investor backlash over plans to hand bonuses to bosses of up to 200 per cent of their salary.

Shareholders will have the chance to vote on the proposal today as they meet to decide on the housebuilder’s £1 billion takeover of the residential arm of construction firm Galliford Try.

Backlash: Shareholders will have the chance to vote on the pay proposal

The acquisition will make Bovis Britain’s fourth-largest housebuilder, potentially producing up to 12,000 homes a year.

If the takeover and pay scheme is approved, bosses would be able to earn long-term performance share bonuses of up to 200 per cent of their salary – up from 150 per cent previously – as well as cash bonuses of up to 150 per cent of their salary – up from 100 per cent.

Bovis has said the pay deal is justified because the combined business will be trickier to run and that it is in line with the wider industry.

But shareholder advisory group ISS has flagged ‘significant concerns’ and urged investors to vote against the changes.”

https://www.thisismoney.co.uk/money/markets/article-7744319/Bovis-Homes-bracing-investor-backlash-plans-hand-bonuses-bosses.html?ito=rss-flipboard

Axminster ‘Master Plan’ – back to the drawing board but don’t upset the developers!

See pages 12-18 here:

https://democracy.eastdevon.gov.uk/documents/g1348/Public%20reports%20pack%2009th-Dec-2019%2010.00%20Strategic%20Planning%20Committee.pdf?T=10

What a mess! Houses but no road?

Recommendations:

“That Members:

1. Accept that it is not going to be possible to progress with the Housing Infrastructure Fund bid as things stand and that the offer is likely to be withdrawn unless Homes England change their position on land values

2. Re-engage the consultants for the Axminster Urban Extension Masterplan to:

a) review options to enable as much of the development in the masterplan to proceed accepting that this would be ahead of delivery of the relief road in its entirety
b) update the viability of the project to reflect the latest cost estimates and funding position
c) consider the re-phasing of the development in light of the failure of the HIF bid

3. Agree that a Housing Delivery Action Plan be produced to consider how to bolster the housing land supply position in the district and that this be considered by Strategic Planning Committee alongside a revised Axminster Masterplan.”

Greendale wants a hot-shot Property Manager – preferably with experience of Local Plan and Greater Exeter Strategic Plan

Interesting Job Vacancy for a VERY expanding and expansionist company recently noted by Owl … Greendale Group are looking to appoint a Group Head of Property to join their team based at Greendale Business Park.

Seeing they are “developing future exciting and ambitious growth plans” are the residents prepared… Owl thinks maybe they will be now!

According to the Advert which was closed to applicants closed a few weeks ago, so let’s see who gets the job which seems a step-up for a planning officer, for example! The ad states:

“The Greendale Group is a successful family company which boasts a diverse range of businesses including the Greendale Business Park, Greendale Farm Shop, a large working farm (2,000 acres), a fishing business (23 vessels), Exmouth Marina, as well as several other investments in both commercial and residential property across the South West.

The Company is currently developing future exciting and ambitious growth plans. This key role has responsibility for all the Group’s property interests including the Greendale Business Park and reports directly to the MD and will be pivotal in ensuring the company realises its future potential.

Responsibilities:

• Management of commercial and residential portfolios across the business including the Greendale Business Park covering all aspects of property management: marketing, lettings, rent reviews, debt control, planning consent, insurance, maintenance and property improvements.
• Leading strategic expansion and development plans for the business including responsibility for overseeing planning applications.
• Reporting to the Board on key financial performance of the property portfolio.
• Identifying and developing projects to maximise commercial utility of property across the business including evaluating joint venture agreements, option agreements, promotion agreements and similar where appropriate.
• Appointing and managing consultants and advisors as required including architects, planning consultants, engineers, contractors, solicitors, agents and other professionals.
• Liaising with external stakeholders including local authorities and other statutory bodies.
• Preparation and delivery of property budgets and property maintenance programmes.
• Manage all areas of the Company’s property requirements including identifying property requirements for other parts of the Group’s business (for example, farmland and fishing).

Requirements:

• Professional Membership of the Royal Institute of Chartered Surveyors (RICS) – ideally Chartered.
• Significant experience of managing a diverse range of properties/tenants at a strategic level.
• Track record of building strong working relationships with local authorities and statutory bodies.
• Knowledge of the Greater Exeter Strategic Plan / East Devon Local Plan would be highly beneficial.
• Highly commercial, excellent negotiation skills and the ability to influence at all levels.
• Highly organised and efficient.
• Strong IT skills (advanced Excel).

The role of Group Head of Property offers a highly competitive salary and benefits package which includes a basic salary, bonus and company car allowance. If you are an experienced property professional seeking a new, challenging and exciting opportunity, this could be the right role for you.”

New hotel allowed on A3052 – convenient for Westpoint, Crealy and Greendale

Interesting that EDDC would have refused it but delayed too long so the decision was taken away from them.

“A new 130-bedroom hotel will be built on the site of a caravan and camping park just outside Exeter.

Hill Pond Caravan and Camping Park successfully appealed against the non-determination by East Devon District Council over their plans to build a new L-shaped hotel on the site of the existing park just off the A3052.

The site is adjacent to the Hill Barton Business Park, and is across the A3052 from Exeter City’s training ground and Crealy Adventure Park, and near to Westpoint.

Planning inspector Andrew Spencer-Peet in his report said that the economic benefits of the new hotel were evident, it would address the acknowledged current shortfall of holiday accommodation in the area, and the benefits of the proposal carry sufficient weight to justify allowing the appeal scheme. …” …

East Devon District Council had issued a report that said they would have resolved to refuse planning permission, had the decision not be taken away from them by the appeal against non-determination.

Issuing their ‘would have’ refused notice, council planners said there was an absence of robust evidence of need and demand for a hotel in the location and it hadn’t been demonstrated that there was such an un-met need for the hotel, there could be a departure from the local plan.

But Mr Spencer-Peet, announcing his decision last week, allowed the appeal, subject to 15 conditions being met.

https://www.devonlive.com/whats-on/whats-on-news/new-hotel-plans-approved-site-3583765

Retirement flats – the big con

Tens of thousands of families have seen their inheritances decimated after elderly relatives paid inflated prices for new retirement homes that have collapsed in value, an investigation by The Times has found. Prices of retirement flats in developments built by some of Britain’s biggest housebuilders have plummeted by up to 90 per cent in the face of costly annual management charges and ground rents.

Analysis of Land Registry data suggests that £3 billion could have been wiped from the value of retirement homes built between 2001 and 2015. In one case, a flat bought for £197,000 in 2009 from builder McCarthy & Stone, a FTSE 250 company, was sold for only £26,000six years later. The owner, Miriam Savage, was paying £8,200 a year in service charges and ground rent to the managing agent.

The losses often become apparent to families only when their loved ones die and they try to sell their home. There are 150,000 retirement flats in the UK. They don’t have full-time nurses but most have communal areas and features to help residents live independently. There is often 24-hour telephone support or wardens on site.

The properties are sold as leaseholds with the freeholds bought by the highest bidder. The freeholder collects an annual ground rent and appoints an agent to run the development. These companies have been accused of levying excessive fees and charges and leaving facilities to fall into disrepair.

Sebastian O’Kelly, of betterretirementhousing.com, said: “These flats routinely plummet in value and the reason is the leasehold system. The freeholder and property manager still get their ground rent and service fees irrespective of price. It’s deplorable that families are pouring money into these purchases, often in desperation, only to see their value evaporate.”

Retirement home builders say the value of the properties is not just financial. They say they reduce loneliness and the burden of maintenance and increase safety and security. McCarthy & Stone points out that since 2010 it has not allowed outside companies to manage its sites and this is protecting values.

Some families have concerns about how properties are sold. One complained that a 88-year-old relative was sold a flat while her daughter was on holiday. When the woman died, the flat wouldn’t sell. Land Registry data shows the average loss of value for flats in the block is £74,000.

The Times looked at nearly 500 retirement flats in 15 developments built between 2001 and 2015. Almost 80 per cent of the homes sold since their first purchase had fallen in value with an average loss of £38,846. The analysis suggests that flats built since 2010 have fared better with only 37 per cent experiencing losses. But one McCarthy & Stone flat built in 2015 lost £45,000 in value when it was sold this year. In the past four years McCarthy & Stone has made profits of £383 million.

Mr O’Kelly said: “The situation may be improving as builders move to being service providers but these companies successfully lobbied government to retain ground rents on retirement sites, which doesn’t encourage the belief they have a long-term interest.”

This week Churchill Retirement Homes donated £150,000 to the Tories. The company is run by Spencer and Clinton McCarthy, the sons of John McCarthy, the co-founder of McCarthy & Stone. There is no suggestion that the donation was linked to the decision to exempt retirement home providers from a ban on ground rents. Spencer and Clinton McCarthy have been Tory supporters for ten years.

The industry says the sale of freeholds funds communal areas and without this system flats would cost more.

Sources at McCarthy & Stone insist it is a different company to the one that developed homes pre-2010. FirstPort is responsible for maintaining the developments built before 2010. It said that nine out of 10 customers say its properties improve their quality of life. It added: “Independent research by the Elderly Accommodation Counsel in 2019 found that new retirement properties typically increase in value. The vast majority of our managed properties increase in price on resale and they are more than just places to live.”

“The billionaire and the 219 tiny flats: a new low for rabbit-hutch Britain?”

“Campaigners have piled in to criticise plans drawn up by a billionaire property tycoon to cram more than 200 tiny flats into an office building in north London. They describe it as a “human warehouse” that would be filled with people living in “cramped single-occupancy shoeboxes” like “rabbits in hutches”.

Amid claims that some of the planned flats would be as small as 15 sq metres – that’s less than 13ft by 13ft for residents’ entire living space – some locals say the proposal is one of the most shocking examples yet of the phenomenon known as office-to-residential conversion. A typical Premier Inn hotel room is 21 sq metres, while national space standards state that the minimum floor area for a new one-bedroom one-person home is 37 sq metres.

It was 10 years ago that, while London mayor, Boris Johnson pledged an end to “hobbit” homes in the capital, but examples of rabbit-hutch developments keep coming, and one leading architect told Guardian Money: “We’re heading towards the so-called ‘coffin homes’ in Hong Kong.” …”

https://www.theguardian.com/money/2019/nov/23/the-billionaire-and-the-219-tiny-flats-a-new-low-for-rabbit-hutch-britain?CMP=Share_iOSApp_Other

The reality of estate rentcharges – inability to sell a home

As in Cranbrook, and possibly other areas of East Devon. In Cranbrook, the town council is taking on these charges and includes it with the precept, so everyone in the town pays for them whether they are part of thse developer’s estates or not.

“‘Freehold charges cost us our dream home’

Peter Kirby and Jen Tweedle, with children Amelia and Zac, say they’ve been told their house could be unsellable
“To be honest we were absolutely devastated by it. You would never buy a house without being able to sell it again”.

Jen Tweedle is talking about the moment she and her fiancé Peter realised why their house sale fell through over the summer.

Their buyers couldn’t get a mortgage after discovering Jen and Peter’s new-build, freehold property was subject to an estate rentcharge.

Peter said: “We lost the sale and our dream house… and that was very disappointing.”

What is an estate rentcharge?

An estate rentcharge is imposed when private developers build housing estates that the local authority won’t “adopt”, meaning councils won’t pay for the upkeep of public spaces or roads on that estate, or pay for things such as street lighting.

When that’s the case developers – or once any building works are finished, residential management companies – establish the charge to pay those bills.

But some residents have criticised this process, saying they have very little control over the charges and that there’s not enough transparency about exactly what they’re paying for.

In addition to this, crucially, if homeowners fall 40 days behind on their payments, the law on estate rentcharges allows developers, or management companies, to take possession of a property to ensure they get the money they’re owed.

Although this is extremely rare, the fact that the legal right exists can put potential buyers off and leave mortgage providers unwilling to lend on properties subject to rentcharges.

However, the Home Builders Federation says rentcharges are the fairest way to make sure communal areas are paid for and maintained.

‘Unsellable’

In Peter and Jen’s case, their potential buyers couldn’t get a mortgage agreed because the home was subject to an estate rentcharge.

“We bought our house [in Oxfordshire] back in July 2016 and we were informed by the estate agent there’d be a service charge which, coming from London, we weren’t worried about,” Peter says.

“Basically we weren’t told by our solicitor or by our estate agents what an estate rentcharge actually meant in terms of the law”, Jen adds.

She’s also unhappy at how they were treated by the developers, their solicitors and estate agent, and how they didn’t even find out their rentcharge might be a problem until they tried to sell.

“The sudden surprise of it all, the fact that the term ‘your house is unsellable’ was thrown at us… you would never buy a house to not be able to sell it again.”

For now, Peter and Jen have taken their home off the market and will look again in the new year.

“We have to be resigned to the fact that this problem may reappear.

“Probably about £2,500 has already been paid out and we still need to pay solicitors another £1,500 hoping they will be able to sell our house, we don’t know.

“Maybe our house is unsellable.”

Beth Rudolph, a director of the Conveyancing Association, says the failure of house sales due to estate rentcharges is becoming more common.

“Just yesterday a developer refused to vary the terms of a rentcharge that the lender had confirmed was not acceptable to them because of the risks to themselves and the borrower,” she says.

“We need the government to intervene to change the law so that someone cannot effectively lose thousands of pounds because they forgot to pay a £6 rentcharge.

“We would absolutely expect that any rentcharge owner should be able to recover arrears of payments in the normal debt collection way, but not to be able to grant a long lease or possess the property.”

‘Fairest way’

Andrew Whitaker from the Home Builders Federation says because of cuts to local authority budgets many local councils just don’t have the money to adopt estates like they would have in the past.

“As part of a development we [developers] build places – not just homes. So things like parks, shared spaces, roads,” he says.

“In the past we used to hand all of this to the local authority and they’d maintain it in the future. Because of cuts and local authority budgets being strained they are less keen to do this.

“They still need maintaining and the fairest way to do this is to establish an estate rentcharge.”

https://www.bbc.co.uk/news/business-50519066

Why are only half of Cranbrook residents using the soon-to-close doctors surgery?

Could it be the transient nature of renters in the town? Or no effort to sign people up? Or its poor location?

Whoever heard these days of doctors complaining they don’t have enough patients!

“Cranbrook residents are hoping to find out more about the future of its GP surgery which is at threat of closure due to low patient numbers, staffing problems and financial problems.

Access Health Care (AHC), which runs Cranbrook Medical Centre in Younghayes Road, has revealed it will not be extending its contract which is due to expire on March 31, 2020.

It is not known what will happen to the centre after that time, but Devon’s Clinical Commissioning Group has assured it is working on potential solutions.

AHC, which operates five Plymouth GP surgeries, as well as Cranbrook Medical Centre and Exeter’s Clock Tower Surgery for the homeless and vulnerably housed, has stated the following reasons for not renewing the contract.

Currently only around 3,500 of the 6,500 residents at Cranbrook are registered

AHC cannot recruit the necessary GPs and nurses to provide the service required

The location of the surgery

A lack of government funding per patient to run an effective GP service” …

https://www.devonlive.com/news/devon-news/residents-await-outcome-cranbrook-gp-3563934

More Tory fake news – this time on housing policy

The Sun has this headline:

“Labour in La La Land

Jeremy Corbyn will force Brits to sell land at a fraction of the price so he can go on huge housebuilding drive’

https://www.thesun.co.uk/news/10389467/corbyn-seize-property-housebuilding-drive/

The reality:

Labour’s plan is for land to be sold to councils and developers at its value BEFORE planning permission can be applied for rather than as, at present, being sold AFTER planning permission has been granted.

That won’t please East Devon Green Party candidate Henry Gent, who currently stands to make millions of pounds on the option he has given to Persimmon to build hundreds of houses on his farm land.

If Corbyn gets his way, he would get only the agricultural value of the land – making it significantly cheaper to build houses.

They published their ideas in June 2019:

Click to access 12081_19-Land-for-the-Many.pdf

Kicked-out Tory Oliver Letwin understood the problem, but stopped short of offering a solution:

“Under the 1961 Land Compensation Act, councils are not permitted to buy agricultural land at its current value; instead they must pay a speculative “hope value”, based on the value of the land with permission to develop the site. That can easily make land more than 100 times more expensive than its actual worth. In his review of build-out rates (the report about the problem of land-banking that concluded that land-banking wasn’t a problem…), Oliver Letwin suggested that the residual land value of large sites should be capped at about 10 times their existing use value. Clearly better than paying 100 times the value – but does it go far enough?”

https://www.bdonline.co.uk/opinion/its-not-just-labour-thats-getting-behind-a-land-value-tax-/5099426.article

So this is both fake news and OLD news!