Category Archives: Developers/ Development

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26 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Planning System

Foreign money raised house prices 20% over 15 years

“House prices in Britain have soared by around 20 per cent in the past 15 years due to an influx of foreign money, according to a new study.
The research by King’s College London showed the average price is around £215,000 but would have been about £174,000 without the investment from overseas.

University researchers said the cash has also had a ‘trickle down’ effect to less expensive properties.

Money from abroad has impacted house prices mostly in the South East and major cities in the north, such as Liverpool, Leeds and Manchester.
But researchers warned there was no evidence the increase in foreign investment lead to an increase in housing building or in the share of vacant homes. …”

http://www.dailymail.co.uk/news/article-5543887/House-prices-rise-20-cent-15-years-pushed-influx-foreign-money.html

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25 Mar 2018

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Accountability, Developers/ Development, Hinkley C, Local Enterprise Partnership, Scrutiny, Transparency

Our Local Enterprise Partnership’s favourite project ringing alarm bells

Not what our nuclear-linked LEP board members want to hear:

“The UK nuclear regulator has raised concerns with EDF Energy over management failings that it warns could affect safety at the Hinkley Point C power station if left unaddressed, official documents reveal.

Britain’s chief nuclear inspector identified several shortcomings in the way the French firm is managing the supply chain for the £20bn plant it is building in Somerset.

Though not serious enough alone to raise regulatory issues, together they “may indicate a broader deficiency” in the way the company is run, concluded Mark Foy, chief inspector at the Office for Nuclear Regulation (ONR).

In October and November 2017, a team of 11 inspectors led by Foy visited the Hinkley site, EDF facilities in Bristol and Paris, and a French factory making parts for the plant.

The visits were triggered by the regulator’s concerns that EDF did not have sufficient oversight of the Creusot nuclear forge in France, where records have been found to be falsified.

A summary of the inspections, published by the ONR earlier this month, judged EDF’s supply chain management to be improving but below standard in some areas.

The full reports, released to the Guardian under freedom of information rules, paint a critical picture. They show that:

The ONR was concerned that EDF’s internal oversight and governance had not identified the shortcomings at the forge

Stuart Crook, Hinkley Point C managing director, admitted that EDF, not the ONR, should have spotted those shortcomings first

a lack of resources meant EDF did not undertake an internal audit of its quality control processes during 2017. Foy said this was “disappointing” as it might have picked up problems

On safety, the report said that: “Throughout this … inspection, themes have emerged that relate to both improvements in NNB GenCo’s [the EDF subsidiary building Hinkley] processes and to shortfalls in management system arrangements that, if unresolved, have the potential to affect safety.”

EDF’s own assessment of how it managed Hinkley’s supply chain had discovered shortfalls that could affect safety, the regulator found. The ONR also felt that the company’s plan for improving its self-assessment process was inadequate.

Moreover, they said that it was not clear who at EDF was managing quality control on the supply chain.

Interviews with EDF’s contractors for the Hinkley project, which include civil engineering groups Kier BAM and Bylor, also found that EDF had not done enough to pass on information about the failings at the Creusot forge to its suppliers.

However, the regulator said it was confident the company could make improvements ahead of the next key regulatory milestone for the power station, in August 2018. Overall, EDF was found to be operating within the UK’s exacting nuclear regulations.

“Current arrangements for the control of quality are judged, through ONR’s wider regulatory activities, to be appropriate at present,” said Foy.

Experts said the inspection’s conclusions were significant, as nuclear regulation language is usually restrained.

Paul Dorfman, of the Energy Institute at University College London, said: “Looking at this report with a practiced eye, you can see that the UK regulators are worried, and things aren’t necessarily going to get any better.

“In all things nuclear, safety is absolutely paramount. The fact that the UK nuclear regulator says that these problems could affect safety is very significant.”

EDF said it was already implementing improvement measures where required ahead of an increase in construction activity at the site. The company was also completing the outstanding internal quality assurance programme.

A spokesperson said: “The chief nuclear inspector’s report recognises that the current quality control arrangements for Hinkley Point C are appropriate.”

There are about 3,500 people working on the site at the moment, a number that is expected to peak at around 6,000 in 18 months, when construction is due to be at full throttle.

The power station should provide around 7% of the UK’s electricity and is due to switch on in 2025, though EDF has warned the project may run 15 months over schedule.”

https://www.theguardian.com/uk-news/2018/mar/25/nuclear-watchdog-raises-hinkley-point-c-concerns

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25 Mar 2018

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Accountability, Affordable and Social Housing, Cranbrook, Developers/ Development

Help-to-buy: now the crunch comes (for some)

Help-to-buy gave interest-free loans of 20% of new house value (40% in London) for 5 years. After that, loan repayment (currently 1.75%) kicks in. That 20% or 40% of home value is still owned by the government and any increase in the home’s value results in increased charges at the year 5 point. Early adopters of this scheme are now reaching this 5 year point. The government’s loan repayments will be in addition to mortgage payments and will rise with the cost of living (and at the same time many mortgage rates may rise if or when the bank rate increases).

Some buyers who have seen big gains in property value may be able to trade up and pay off the loan, but anyone who has seen static value or even a fall (many new houses were over-priced) will be in trouble.

Those whose homes have not increased in value face “a ticking time bomb” according to the think-tank Resolution Foundation.

Wonder how Cranbrook residents who took advantage of the scheme feel now?

And was this consequence foreseen by government or borrowers?

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24 Mar 2018

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Affordable and Social Housing, Developers/ Development, Planning System, Sleaze

Weasel words on affordable housing from the government’s minister

Sajid Javid faces battle over 4% affordable homes in Sainsbury’s scheme

“The housing secretary, Sajid Javid, is facing a legal challenge after he approved a 700-home housing scheme by the supermarket chain Sainsbury’s, which includes just 4% affordable housing.

The 29-storey development in Ilford, east London, will be built in a borough that has a stated policy that 50% of all new homes should be affordable. It estimates it needs an extra 15,000 affordable homes in the next 15 years, but Javid backed a scheme with just 27 affordable homes. The rest are expected to be sold for about £400,000 for a two bedroom flat.

The London mayor, Sadiq Khan, branded the approval “outrageous” and said 4% was a “disgraceful” contribution. Labour’s shadow housing secretary, John Healey, said it was “a clear case of ministers backing private developer profit over the homes that local people need”.

A local residents group Ilford Noise is now preparing to request a judicial review of the decision after Javid accepted Sainsbury’s claim that the scheme would not be viable with any more affordable units. Javid’s report concluded: “There is no good reason to dispute the agreed conclusions of the financial experts.”

The decision came just weeks after Javid gave a speech insisting it is “totally unacceptable” for developers to claim they cannot afford to meet affordable housing promises.

He said: “It cheats communities of much-needed housing and infrastructure and gives new development a bad name.”

But in this case, where Sainsbury’s never promised more than 4%, he has allowed the developer to hugely undershoot the local target. …”

https://www.theguardian.com/society/2018/mar/23/sajid-javid-faces-battle-over-4-affordable-homes-in-sainsburys-scheme

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22 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Scrutiny, Transparency

“Manchester council to publish files used to bypass affordable housing quotas”

“Manchester city council has voted to make public the secret documents used by developers to bypass affordable housing quotas.

Analysis by the Guardian earlier this month showed that developers behind almost 15,000 new homes given the green light by the council’s planning committee in the past two years all managed to avoid including any affordable housing in their developments.

In many cases, developers submitted confidential viability assessments to successfully argue that their projects would not go ahead if they were to offer even one flat for affordable rent or sale. Just 65 of the 14,667 units analysed by the Guardian made any concessions to affordability, being pitched as shared ownership properties.

Over the past year councillors on Manchester city council’s planning committee have become increasingly frustrated that they are being asked to approve huge new developments – some containing 1,500 market-rate, luxury apartments – without being able to scrutinise the viability assessments.

‘We said it wasn’t acceptable’: how Bristol is standing up to developers
On Wednesday councillors voted to require viability assessments for developments of more than 15 units where less than 20% of the development is affordable housing as part of the planning process and for these to be public.

After the unanimous vote, all information submitted for the documents (including commercially sensitive information) will also now be made available to members of the planning committee and other relevant members of the council in advance of determination of the planning decision.

The motion read: “This council notes that developers have often used viability assessments to avoid their obligations to provide affordable housing and where this happens, it can damage public confidence in the planning process. Labour councils in Greenwich, Bristol and Lambeth have improved transparency by making their viability assessments public. “This council believes that the developers who make money from building in our city have an obligation to make a fair contribution to providing affordable housing.”

Last November Bristol became the latest city to force developers to be transparent by publishing viability assessments. Bristol’s mayor, Marvin Rees, believes that it sends a signal to developers: “We’re a great city to do business in – but we want the right kind of money.”

https://www.theguardian.com/cities/2018/mar/21/manchester-council-to-publish-files-used-to-bypass-affordable-housing-quotas

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21 Mar 2018

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Accountability, Accountable Care Organisation, Developers/ Development, Planning System, Rural communities

“Barn conversion developments `could heap more pressure on rural infrastructure´ “

“A potential surge in barn conversion homes could heap more pressure on rural schools and roads in England, the Local Government Association (LGA) claims.

The LGA fears that changes to permitted development regulations, which come into force on April 6, may trigger a dramatic increase in the number of conversions.

It said currently, landowners can convert agricultural buildings into three new homes without the need for planning permission, but changes will soon allow conversions of individual agricultural buildings into five new homes.

The LGA said this means an increasing number of larger agricultural to residential conversions could take place without having to get planning permission or contributing towards local services, infrastructure and affordable housing.

It said there has already been a 46% jump in residential conversions from agricultural buildings in England in recent years.

In 2015/16 226 homes were created from agricultural buildings and in 2016/17 this figure was 330, it said.

Councillor Martin Tett, the LGA’s housing spokesman, said: “Councils want to see more affordable homes built quickly and the conversion of offices, barns and storage facilities into residential flats is one way to deliver much-needed homes.

“However, it is vital that councils and local communities have a voice in the planning process.

“At present, permitted development rules allow developers to bypass local influence and convert existing buildings to flats, and to do so without providing affordable housing and local services and infrastructure such as roads and schools.”

He continued: “Relaxations to ‘agri to resi’ permitted developments risk sparking significant increases in the number of new homes escaping planning scrutiny in rural areas.”

Housing Minister Dominic Raab said: “Through strengthening planning rules and targeted investment, we are ensuring we are building the homes the country needs as well as the local services needed by communities.

“In rural communities our changes will mean more flexibility on how best to use existing buildings to deliver much-needed properties.

“This is part of our ambitious plans to get Britain building homes again and ensure they are affordable for local communities.”

http://www.dailymail.co.uk/wires/pa/article-5525143/Barn-conversion-developments-heap-pressure-rural-infrastructure.html

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21 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Planning System, Rural communities

Effect of “viability loophole” on rural communities

“House builders are exploiting a legal loophole so they don’t have to build as many affordable homes in the countryside, claim campaigners.
Homeless charity Shelter and the Campaign to Protect Rural England (CPRE) analysed data they say shows that housing developers are shirking their responsibilities.

The two charities released their findings ahead of a speech by communities secretary Sajid Javid who is expected to outline government reforms to national planning rules.

Looking at eight rural councils over one year, the analysis shows that half the affordable homes that councils were required to build were lost when viability assessments were used.

Shelter and CPRE said their findings demonstrated that the housing crisis was not just confined to cities – but was having a serious impact in the countryside as well.

They said developers were using ‘viability assessments’ to argue that building affordable homes could reduce their profits to below around 20%.
This gave them the right to cut their affordable housing quota.
It meant developers were over-paying for land and recouping the costs by squeezing affordable housing commitments – a tactic often used by developers building big housing schemes.

Shelter and CPRE are calling on the government to use planning rules to stop developers from using this loophole to wriggle out of providing the affordable homes that communities need.

Similar research carried out by Shelter on housing lost to viability assessments in urban area paints a national picture of the affordable housing drought right across the country.

Shelter chief executive Polly Neate said: “We can see for the first time the true scale of our housing crisis – it’s not just blighting cities but our towns and villages too.

“Developers are using this legal loophole to overpower local communities and are refusing to build the affordable homes they need.”
Both charities said the government should use their current review of planning laws to close the loophole and give local communities the homes they required.

CPRE chief executive Crispin Truman said: “A lack of affordable housing is often seen as an urban problem, with issues of affordability in rural areas overlooked.

“It cannot be ignored any longer.

“Too much of our countryside is eaten up for developments that boost profits, but don’t meet local housing needs because of the “viability” loophole.”

Without adequate affordable housing, rural communities risked losing the young families and workers they needed to be sustainable, said Mr Truman.
The full report is available here.”

http://rsnonline.org.uk/community/loophole-means-fewer-affordabler-homes

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20 Mar 2018

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

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Taylor Wimpey bonus “slashed” from £1.08 million to £827,757 after leasehold scandal

“Housebuilder Taylor Wimpey has slashed 23pc from its directors’ bonuses in response to the scandal over punitive leasehold terms.

The company’s annual report shows that chief executive Pete Redfern received £827,757 through Taylor Wimpey’s executive incentive scheme (EIS), rather than almost £1.08m as originally planned.

Ryan Mangold, finance director, and James Jordan, legal director and company secretary, also received a 23pc cut in their bonuses for 2017.

Taylor Wimpey has come under fire for selling homes with leasehold terms which mean the ground rent payable by the homeowners doubles every 10 years. In some cases, this has made the houses unsellable.

The homebuilder said the scaling back of bonuses was a “meaningful and proportionate approach to take”, even though the leasehold issue had not directly inflated the bonuses last year.

Meanwhile, housebuilder Persimmon has confirmed that chief executive Jeff Fairburn will receive a total pay packet of £47m this year thanks to a generous long term incentive plan agreed in 2012 which came to maturity last year. His total bonus award was due to be around £100m over two years, although it was later reduced to £75m.

Mr Fairburn has said he will give some of the money to charity.”

https://www.telegraph.co.uk/business/2018/03/19/taylor-wimpey-slashes-bonuses-leasehold-scandal/

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18 Mar 2018

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Accountability, Affordable and Social Housing, Austerity cuts, Developers/ Development, Housing (local), Inequality

“100,000 low-cost homes have had rents hiked since 2012”

“Labour has unveiled plans to stem the loss of low-cost homes as new analysis reveals more than 100,000 social homes have been converted into a more expensive type of property in the last six years alone.

The party said it would scrap a policy introduced by the Conservative-Lib Dem coalition government in 2012 that forces housing associations and local councils to raise rents by an average of 40 per cent by converting social homes into “affordable homes”.

The announcement is the second to come out of Labour’s review into the future of social housing, which is likely to report in the coming weeks.

It comes as analysis seen by The Independent revealed the huge loss of social homes largely as a result of a change made by the coalition. …

While social rents are generally around 40 per cent of market value, affordable homes can cost up to 80 per cent of market rents, prompting criticism that in many parts of country they are out of the reach of people on ordinary incomes. …

The coalition made the conversion of low-cost social homes into affordable homes a key plank of its housing policy.

An official document from 2011 explaining the Government’s approach said: “The conversion of existing stock to affordable rent is a crucial element in generating additional financial capacity and it is anticipated that it will be integral to the offer that providers bring forward as part of their proposals for funding new supply.”

The change was made despite the Government’s own impact assessment making it clear that forcing the conversion of social housing into affordable housing would result in “greater costs to Government through increases in housing benefit”, although this was forecast to be offset by cuts to housing spending. …

At the same time as the change was made, Government funding for new social housing was ended entirely and instead diverted to fund “affordable” homes.

As a result, the number of new, Government-funded social homes has plummeted by 97 per year since 2010, with just 1,102 new homes completed last year – funded via existing programmes set up before 2010. …

About 102,000 homes have been converted since 2012, while around 60,000 have been sold to tenants under Right to Buy.

Only around 50,000 new social homes have been built in that time – the vast majority funded by housing associations. …”

http://www.independent.co.uk/news/uk/politics/labour-social-housing-policy-affordable-homes-100000-converted-coalition-government-a8256776.html

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16 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Land banking, Land Supply, Planning System

Developer refuses to build more homes

Guardian report:

“Theresa May is saying builders need to open up their land banks and develop more sites, while Berkeley is unwilling to aggressively ramp up production. With conditions in the capital starting to look more precarious, it’s easy to see why Berkeley has reservations. After all, adopting overly ambitious strategies just before the market turns has caught out many a builder over the years.

Its comments on the complexity of getting work started is a clear signal to the government that it believes the best way to move forward is not to churn through the land on its books, but to remove the red tape around the development process.

Property Week agree, saying that:

Berkeley Homes has positioned itself directly against prime minister Theresa May, by refusing to increase the number of homes it builds despite government threats to housebuilders to either build homes on their land or face planning blocks.

Sarah Gatehouse, real estate tax director at Grant Thornton, tweets that the ball is back in the PM’s court:

“Berkeley announces in trading update it won’t build more homes than forecast, citing high transaction costs, the 4.5 times income multiple limit on mortgage borrowing and prevailing economic uncertainty. What’s Theresa’s next move? #housing”

https://www.theguardian.com/business/live/2018/mar/16/housebuilder-berkeley-group-homes-building-government-wetherspoons-trade-war-business-live

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15 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Land banking, NPPF, Planning System

No overnight fix for housing say “Civic Voice”

Civic Voice is the national charity for the civic movement. It leads and supports civic societies as a national movement for quality of place, with people actively improving their towns, cities and villages and promote civic pride, speaking up for civic societies and local communities across England.

“Speaking during a meeting for Civic Societies, Civic Voice President, Griff Rhys Jones said “Whilst the Government wants to see `The right homes in the right places` the draft National Planning Policy Framework is so lacking in teeth to ensure that the policies will be delivered, and combined with under-resourced local councils, that we are very likely to end up with the wrong homes in the wrong places.”

Craig Mackinlay MP, Chair of the APPG [All Party Parliamentary Group] for Civic Societies said, “Does anyone genuinely believe that if you build more houses, house prices will come down?”.

Without knocking developers, who are part of the solution, I have to query whether they are doing all they can to help build the houses? I say to them, to get more affordable housing, we must build real affordable housing in sustainable locations where people want to live in towns and cities. If not, we have to look at other ways of building the homes we need. It is easy to think of headline figures, but we are talking about real people’s lives being impacted by the housing crisis.”

The draft National Planning Policy Framework was published on 6th March with the consultation running to 10th May. Civic Voice and the All Party Parliamentary Group for Civic Societies held a debate on 13th March to ask the question “Wil the NPPF review lead to the homes, the nation needs, being built? The panel included speakers from Royal Town Planning Institute and Campaign to Protect Rural England.

The debate highlighted issues including:

• England has not one housing market, but many. We need to be working towards having a plan-led system so that decisions are made locally as a one policy fits all approach does not work for the whole country. Context matters. We need a solution for Alnwick, Blackpool and London. And everywhere in between.
• To ensure we get plans in place, the planning system needs effective resources, particularly at local authority level, commensurate with the important role it plays. Planning is part of the solution not the problem.
• The panel supported the inquiry being led by Sir Oliver Letwin who has been charged by the Government to investigate why there is a gap between the number of planning permissions granted and the number of homes that are then built on those sites.
• It is pleasing that despite the constant attacks on the Green Belt, the draft NPPF review retains the current green belt policies. It was felt that the test for exceptional circumstances for when Green Belt can be released needs to be clarified.
• Let local authorities charge the planning fees they need to cover the costs they are spending on supporting the delivery of homes. The panel heard the example of one authority that made £500k loss on planning work in the previous year.
• The need to consider the VAT and Tax anomalies within the planning system around VAT or refurbishment. The group discussed ideas of taxation of property and how a Householder Tax could help use change and nudge behaviour.

Craig Mackinlay MP finished by saying, “We all have a role to play in finding the homes for our children and grandchildren. The APPG for Civic Societies will be holding further debates during the consultation period to raise awareness of the issues. We will then collect the findings together and meet with the Minister and share our findings about what the draft means for communities. I call on people to respond with evidence to the draft NPPF consultation and to share your thoughts with Civic Voice.”

The Next APPG for Civic Societies meeting will be on May 8th in Parliament, on the Historic Environment section of the NPPF. Civic Voice members will be sent further information to attend.”

https://civicvoice.org.uk

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14 Mar 2018

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Affordable and Social Housing, Developers/ Development, Inequality

Greater London sucks up £1 billion of Help to Buy cash

“A new breed of “five per centers” is taking over the new homes market in parts of London, according to a study published today.

Using the Government’s subsidised Help to Buy London scheme and a five per cent deposit to get on to the housing ladder, these buyers are now responsible for more than half of all sales of new homes in a “halo” of postcodes around the capital.

These hotspots are led by West Wickham, near Croydon. Some 85 per cent of the new homes sold there over the last two years were to buyers bolstered by a 40 per cent government equity loan.

The average price of a new home in the BR4 postcode stands at just under £421,000, up 14 per cent in the past two years.

Other Help to Buy hotspots identified in the research by Hamptons International include Becontree in Barking & Dagenham, where Help to Buy London has been used in 79 per cent of all new homes sales and prices have risen 27 per cent, and Rainham in Havering, where 71 per cent of new properties were bought under the scheme and prices have grown by 23 per cent.

The vast majority of the top 10 Help to Buy locations are in the outer suburbs, including Edmonton in north London, Erith in the east, Peckham in south London, and Feltham and Southall in west London. …”

https://www.homesandproperty.co.uk/property-news/record-1bn-in-help-to-buy-london-loans-handed-to-firsttime-buyers-a118536.html

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12 Mar 2018

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Affordable and Social Housing, Cranbrook, Developers/ Development, EDDC, Gypsy and Travellers, Phil Twiss, Planning System, Rural communities

Cranbrook will grow to 8,000 homes over 15 years

Owl says: and still it has no town centre and developers refuse to fund one!

“Feedback on how Devon’s newest town, Cranbrook, should grow and develop over the next 15 years, goes before councillors next week.

The Cranbrook Plan: Preferred Approach’ document sets out how the growth of the town up to around 8,000 households over the next 15 years will be achieved.

A community consultation ran for eight weeks from mid-November last year to early January and it gave residents of Cranbrook and its neighbouring communities the opportunity to comment on the proposals for the future of the town contained within the document ‘Cranbrook Plan: Preferred Approach’.

In addition to identifying land for new houses, the document also identified land for sport and community, economy and enterprise, schools, allotments and Gypsy and Travellers pitches. …

Outline planning permission for the first 2,900 homes at Cranbrook was issued in October 2010 followed shortly by the reserved matters for the first 1,100 homes in April 2011. Today there are approximately 1,700 households living at Cranbrook, equivalent to a population of around 4,000 people, but the Local Plan anticipates Cranbrook comprising approximately 7,850 new homes by 2031. This equates to a population of around 20,000 people meaning that Cranbrook will have quickly expanded to become the second largest town in the District.

The consultation revealed that there is a concern over relationship with properties at Broadclyst Station, who are keen to retain a separate identity, that the East Devon New Community partners say that the Treasbeare area could accommodate a minimum of 1,000 dwellings as opposed to the 800-950 stated in the masterplan, and that there should be a school in both of the Bluehayes and the Treasbeare area of Cranbrook..

On transport issues, the responses reveal that the delivery of a half-hourly rail service is a key ambition of the plan in order to encourage use of rail travel as an alternative to the car, but that despite the wishes of residents for the old A30, the B3174 London Road to remain as a bypass to developed, it is scheduled to be downgraded from its current status and to become an integral part of the town. …”

https://www.devonlive.com/news/devon-news/council-discuss-how-devon-town-1328118

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12 Mar 2018

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Accountability, Austerity cuts, Developers/ Development, East Devon Alliance, EDDC, EDDC HQ, Knowle/Honiton/Exmouth relocation, PegasusLife

EDDC “Council decision to sell HQ for £7.5M is worst deal ever, activists”

“Activists have branded a council decision to sell its HQ “the worst deal ever” for taxpayers.

East Devon District Council is selling its offices at Knowle in Sidmouth to Pegasus Life Ltd, one of Britain’s largest retirement housing developers, for £7.5 million.

The developable value of the site – divulged in a response to a Freedom of Information request in January-has been set at £50 million, with Pegasus Life Ltd set to make a £10 million profit.

Pegasus is owned by an American firm listed in the so-called Paradise Papers, 13.4 million confidential electronic documents relating to offshore investments that were leaked to German reporters last year. Offshore investments enable companies and individuals to shelter their wealth and avoid tax. They are legal.

Paul Arnott, chairman of the East Devon Alliance campaign group, said: “Why were councillors never told that our last great piece of family silver the Knowle – would be worth a massive £50 million after development?

“If any individual person in East Devon was told their prime location property could be developed and sold on for £50 million they’d never accept £7 million.”

In December 2016, the council’s planning committee rejected Pegasus Life’s planning application for 113 extra care units, but following a four-day inquiry into the developer’s appeal in November, a planning inspector gave the firm approval for the scheme which includes a café and swimming pool. Sidmouth has been allocated only 50 extra care homes in the council’s Local Plan.

The Alliance said it was an “exceptionally bad” deal, because, in accordance with the old land buyer’s rule of thumb, the landowner of a site should expect around a third of its developable value – in this case £16.5 million.
A council spokesperson said the deal was based on the site’s land value – in its current state. The site includes the buildings, terraces and top car parks.

Moving council operations to Honiton, with a satellite office at Exmouth Town Hall, has a budget of £10 million and is being funded out of the council’s coffers and a Public Works Loan Board loan.

The council spokesperson said that “from day one”, council running costs would reduce significantly when it leaves the Knowle and during its first full year of operations at Honiton it will save £135,000, with savings increasing year-on-year.

The Alliance pointed out that because the proposed complex is considered to be a residential/care home development, as opposed to a general residential development, the developer is not required to pay Section 106 money towards providing community services. The developer is only contributing £12,000 to improve access/footpaths to the site from adjacent parkland.

However, the developer could have to comply with what is known as an overage clause: If more than a 20% profit is made from the development, the council will be entitled to 50% of any profit made over and above the 20%, to a maximum of £3.5 million.

A council spokesperson, said: “We have carried out due diligence on Pegasus Life Ltd and are satisfied that they are an established and successful company suitably financed, capable of delivering the promised development and able satisfy their contract with the council.

“Selling the Knowle and moving offices is key to continuing to serve our communities. Services to our communities are what matter, not the vanity of paying to stay in an outdated and expensive building.

Pegasus Life Ltd bosses did not comment when asked whether any of the profit of its Sidmouth development could end up in tax havens. However, Howard Phillips, its chief executive, said: “We pride ourselves on the quality of our developments and the sensitivity of our designs to ensure they fit in with the area’s achitectural vernacular.

“The UK is in the middle of housing crisis and local authorities need to make cohesive eve plans that meet the needs their local towns. This includes provision for people over 60.”

Source: Western Morning Newz

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11 Mar 2018

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Accountability, Developers/ Development, Sleaze

Another developer scandal – with George Osborne needing to explain himself

“More than a dozen property schemes in the north of England that were promoted to investors in Asia – in one case by former chancellor George Osborne – have either stalled indefinitely or collapsed outright, a Guardian Cities investigation has found.

Hundreds of investors claim to have lost money to an increasingly popular property model known as “buyer-funded development”. In these schemes, rather than go to banks, developers finance projects using multiple small investors’ deposits – which can be up to 80% of the value of the unit.

But, according to some investors, money has been taken without the units being delivered. Some describe losing their life savings and say they have approached police for help recovering their funds.

Others say they believed the developments were somehow state-guaranteed because they were promoted as investment opportunities by officials from local or national government.

The development was one of several projects in the north of England promoted to overseas investors by Osborne during a 2015 “trade mission” to China. Osborne told the Liverpool Echo that he was working as a “tag team” with the city’s mayor, Joe Anderson, to persuade individuals to invest in the scheme.

However, the development has since been mired in problems, with little sign of progress at the construction site. Amid increasingly serious complaints by investors and several missed deadlines, Liverpool city council commenced legal action against the developer last year and said it had referred the scheme to the National Crime Agency.

Last July North Point Global announced it would seek to offload all of its property developments because its brand was “tainted and damaged beyond salvage” as a result of criticism by the council and reporting by the Liverpool Echo, which has covered its developments extensively. …”

[The article continues with many other examples of promised deals gone bad]

https://www.theguardian.com/cities/2018/mar/11/collapsed-uk-property-schemes-foreign-investors-george-osborne

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9 Mar 2018

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Affordable and Social Housing, Developers/ Development, Economy

More houses? Maybe not: “UK construction output falls at fastest rate in six years in January”

Construction output suffered its biggest monthly drop in six years, figures for January show, confirming that the sector’s recession drags on into this year.

The Office for National Statistics reported that UK builders’ work volumes fell by 3.4 per cent in the month, the largest month-on-month decline since June 2012.

There were deep drops private commercial construction work on the previous month as well as in private housing, which will concern ministers who are trying to drive up constriction rates.

On a year-on-year basis total construction output fell by 0.5 per cent, worsening from the 0.2 per cent rate of contraction in December.

http://www.independent.co.uk/news/business/news/construction-output-january-ons-builders-a8247086.html

and

“The sector was feeling as flat as a pancake in February with falls in new orders for the second month in a row, and with just a marginal rise in overall activity, as ongoing political and economic uncertainty shouldered the blame,” said Duncan Brock of the Chartered Institute of Procurement & Supply.

Civil engineering activity contracted at its sharpest pace for five months, according to the latest survey.

Housebuilding was also weak again, putting it on track for its weakest three-month performance since the third quarter of 2016. …”

http://www.independent.co.uk/news/business/news/uk-building-construction-february-2018-pmi-purchasing-managers-index-a8236086.html

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8 Mar 2018

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Accountability, Conflict of interest, Developers/ Development, Lobbying, Monitoring Officer, Scrutiny, Standards Committee, Transparency

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“Westminster councillor resigns after receiving nearly 900 gifts and hospitality packages in six years”

Owl says: what is happening to Westminster council’s Monitoring Officer, Leader and Standards Committee? Nothing, so far.

And NO-ONE should be Chair of a Planning Committee for SEVENTEEN years!

“The deputy leader of Westminster city council has stepped down after it was revealed he had received nearly 900 gifts and hospitality packages over six years.

Robert Davis, a Tory councillor, was the chair of the borough’s planning committee until last year.

He has stepped aside as deputy leader and cabinet member for business, culture and heritage as an independent QC investigates his conduct.

Councillor Robert Davis has referred himself to the City Council’s monitoring officer and has decided to stand aside as Deputy Leader and Cabinet Member for Business, Culture and Heritage while the investigation is undertaken,” said Nickie Allen, the leader of Westminster City Council.

“Our residents need reassurance that the planning process is not only impartial, but is seen to be impartial,” she said, adding she had “asked the council’s chief executive to look at all aspects of the decision-making process to ensure planning is, and is seen as, an independent and impartial process.”

The Guardian revealed Mr Davis had received gifts and hospitality invitations 893 times over the last six years, which frequently came from property developers who were seeking planning permission.

Gifts and hospitality packages worth more than £25 must be declared and some of the items and invitations received by Mr Davis exceeded the figure.

The Cambridge graduate is the longest serving member of the council, having been elected in 1982. He was voted Conservative councillor of the year in 2014 and given an MBE in 2015 for his service to local and government planning.

“I think it’s important to recognise Robert Davis remains a candidate for the May election,” Adam Hug, leader of the Labour Group, told The Independent. “He remains a councillor.

“This move has been described as standing aside, with a clear view that if no legal wrongdoing is found he may return to his post. As he remains a candidate it is clear that the Tories believe what is known and not disputed is acceptable for them.”

He added: “Westminster Tories knew this was going on, did nothing for decades, and it is clear that unless legal wrongdoing is found, he may return to his post.”

In a statement, Mr Davis said: “Due to the ongoing interest and wrongful assertions regarding my time as chairman of planning I have decided to step aside from my roles as deputy leader and cabinet member for business, culture and heritage whilst the council investigates.

“In 17 years as chairman of planning committees which granted hundreds of applications and resulted in the council receiving substantial sums for affordable housing, public realm and other public amenity, I have at all times acted with the independence and probity required by my role.

“My desire to rigorously declare all meetings and hospitably, regardless of its nature, underpins this transparency and independence. It is trite to confirm that within these 17 years, I have got to know many of the developers and associated professionals who work in the city and help to develop Westminster into one of the most important economic centres in the country and home to over 280,000 people. Any suggestion or implication that I have done anything other than to further the interests of the city and its residents are baseless and strenuously denied.”

http://www.independent.co.uk/news/uk/politics/westminster-councillor-robert-davis-gifts-hospitality-bribery-investigation-corruption-planning-a8245626.html

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7 Mar 2018

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Accountability, Blackhill Quarry, Clinton Devon Estates, Developers/ Development, Local Plan, NPPF, Rural communities, Scrutiny, Sustainability, Woodbury

Blackill Engineering Extension – is this an excuse to drive a new industrial site into the heart of the Pebblebed Heaths?

These days most large developers pay for pre-application advice before submitting a planning application. A recent Freedom of Information request has uncovered the advice that was offered to someone (name redacted) seeking such advice on proposed business units at Blackhill Quarry, Woodbury in early October 2017.

Specifically this proposal was for the erection of AN ADDITIONAL industrial building to support the existing business, Blackhill Engineering, being operated form the site together with the erection of FIVE ADDITIONAL industrial buildings for use by other businesses.

In summary the advice given was that this would not comply with the protective policies that cover this sensitive site. A much stronger employment benefit case regarding the expansion of the existing business to justify a departure from these policies would be needed. The five speculative industrial buildings would not justify a policy departure.

On 20 December 2017, within three months of this advice, planning application 17/3022/MOUT was submitted for outline application seeking approval of access for construction of up to 3251 sqm (35,000 sq ft) of B2 (general industrial) floor space with access, parking and associated infrastructure.

The accompanying justification reads:

“There is considerable and clearly identified need for the existing business at Blackhill Engineering to expand as a result of that business having grown considerably over recent years and with its existing premises now at full capacity. The provision of additional facilities on the application site would allow the company to continue its expansion and so deliver additional economic and employment benefits to the local area…. With the winding down of the existing quarry use of the site, there is a short and fortuitous window of opportunity in which to address BESL’s growth requirements with the reuse of an area of former minerals processing site….It is a crucial part of both local and national employment strategy to protect existing businesses and to encourage their expansion. If approved, the scheme would allow the existing business not to only remain at the site but also to expand. The resulting investment will enable a substantial increase in the provision of highly skilled jobs in the area, increased training opportunities for apprentices and added value to the local economy. Furthermore, the expansion of the Blackhill Engineering will help reinforce the vitality of its parent organisation…”

So, is this application all about the needs of Blackhill Engineering to expand, having already designed flood defence gates for New York City Hospital, worked for the European Space Agency and the pier at Hinkley Point, which in October seemed to require only one building; or more about Clinton Devon Estates trying to generate rent from a new industrial park? Restoration provides no income.

For those interested here is the detailed pre-application advice, given on an informal basis and without prejudice, in about half the words:

“The extant planning permission on the site requires a restoration and aftercare scheme to be implemented following cessation of the quarrying operations. As part of this condition, alternative schemes (subject to planning permission) can be considered but two policies are of particular relevance:

East Devon Local Plan- Strategy 7 – Development in the Countryside.

This strategy states that development in the countryside “will only be permitted where it is in accordance with a specific Local or Neighbourhood Plan policy that explicitly permits such development”. In this instance, there is no local or neighbourhood plan which would permit the proposal and, therefore, it is considered that it would not comply with Strategy 7.

East Devon Local Plan- Policy E5 – Small scale Economic Development in Rural Areas.

This policy states that the expansion of existing businesses designed to provide jobs for local people will be permitted where

1. it involves the conversion of existing buildings. Or

2. if new buildings are involved, it is on previously developed land. Or

3. if on a greenfield site, shall be well related in scale and form and in sustainability terms to the village and surrounding areas.

In this instance, the Local Planning Authority recognise the previously developed nature of the site, however, in the ‘Glossary of Terms’ section of the Local Plan (which echoes those contained in the National Planning Policy Framework) previously developed land specifically excludes land that has been developed for minerals extraction or waste disposal by landfill purposes where provision for restoration has been made through development control procedures.

Accordingly, the land would be considered as greenfield.
In terms of Policy E5, as the site would not be well related in sustainability terms to Woodbury or surrounding areas, the proposal would be contrary to policy.

However, if sufficient justification can be made in terms of the needs of the existing business being operated from the site to expand into an additional building, then the economic benefits may outweigh the environmental harm, of the unsustainable location as a departure from the Local Plan.

For this purpose, an economic benefits statement would need to be submitted as part of an application.

The five speculative units being located in an unsustainable location would not be acceptable.”

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7 Mar 2018

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Accountability, Affordable and Social Housing, Baker Estates, Developers/ Development, EDDC, Honiton/ Gittisham, Housing (local), Planning System

“How Bristol is standing up to developers”

East Devon developers do not disclose their viability agreements – EDDC thinks they should remain confidential because they contain “commercially sensitive information” yet Bristol disagrees and publishes theirs.

Baker Estates in Honiton have been allowed to reduce the number of affordable properties, using such a confidential document.

“Last autumn, campaigners scored an unprecedented victory. The target was “viability assessments”: dossiers produced by housing developers to justify the amount of affordable housing – or lack thereof – in their developments, and which are frequently used during the construction process to shrug off previous commitments.

“Developers were saying, ‘We can’t afford to put 30-40% affordable housing in here,’ to make the profits they are legally entitled to,” says Louise Herbert, spokesperson for Bristol-born tenants union Acorn. “But all of their numbers – how much they projected to sell the houses for, how much they bought the land for – were redacted.”

Acorn, along with the Bristol Cable media co-operative, campaigned for the full release of these files. Following a public outcry, the council voted to make the viability assessments public.

Now, Herbert says, the public can examine these assessments themselves, and make sure that more affordable housing is built in their areas.

In response, Andrew Whitaker, planning director at the Home Builders Federation (HBF), argues that those without formal training “may feel that the figures set out in such assessments are ‘too high’ or ‘too low’ and make representations and decisions accordingly, rather than based on the evidence.”

For now, it’s too soon to tell if publishing the viability assessments has achieved change in Bristol. But it’s a small step that could point the way for cities such as London, where viability assessments remain pervasive, or Manchester, where in contravention of the city’s own guidelines, none of the nearly 15,000 planned new developments have any provision for affordable housing.

Bristol’s mayor, Marvin Rees, believes that it sends a signal to developers: “We’re a great city to do business in – but we want the right kind of money.”

Councillor Paul Smith agrees. “Housing can’t be left to the market if you want to meet the housing needs of the whole city,” he says. “There are 500 families in temporary accommodation, 100 people sleeping rough on the streets, huge numbers who are inadequately housed, and people living in poor-quality, high-rent accommodation.”…

https://www.theguardian.com/cities/2018/mar/07/bristol-housing-developers-affordable-property

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7 Mar 2018

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Accountability, Affordable and Social Housing, Developers/ Development, Planning System, Sleaze

McCarthy & Stone demands exemption from ground rent charges

“The market leader in developing retirement homes has urged the government to exempt it from plans to reduce ground rents on new long leases to zero.

McCarthy & Stone used a trading update for the first half of its year to say that it was working in a state of uncertainty and wanted “swift clarification” on the new rules.

Last summer the government said that it would ban the sale of new houses on a leasehold basis and was setting all ground rents on long leases to zero, including on newly built flats.

McCarthy & Stone, which controls 70 per cent of the retirement housing market, specialises in flats and sells most of them leasehold, with the freehold sold to private companies. It argues that this allows it to afford more land to build more homes for the elderly.

The ground rent charged by the private investors starts at about £450 per year and rises in line with the retail prices index every 15 years. Last year McCarthy & Stone made 4 per cent of its revenue, about £27 million, by selling freeholds to investors.

Clive Fenton, chief executive, said: “We believe that there is a strong case for a very specific exemption for the retirement housebuilding sector and we are seeking swift clarification.

“Until this is received, we continue planning to mitigate the potential impact on the business, including maintaining discipline around our cash position and adopting a more measured approach to securing land.” First-half revenue is expected to be broadly flat from the previous year at £240 million.”

Source: Times (pay wall)