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  • Mar 2017

The Source

Have a look at our March 2017 edition of The Source.

Welcome to the latest edition of “The Source” – prepared by the team at Gladman with the specific aim to inform you of current news and views in land & planning.

We’re pleased to extend this welcome to our many readers who have recently joined our continually expanding list of subscribers. Please use the links below to view all the back issues of “The Source” from the experts in the strategic residential development industry.

This Editions News...

local plansNo Purchase Necessary?

“Clearer, fairer and faster” – the three words the Government use to describe their aspirations for a reformed compulsory purchase process. February’s Housing White Paper is a trove of promises and goals for a better housing market, among them a pledge to improve compulsory purchase powers for local planning authorities in order to support the build out of stalled sites….

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White paper proposals: Using land efficientlyred

The White Paper criticises development that does not make good use of land, stating authorities and applicants need to be ambitious about what sites can offer.

The Government proposes to amend the NPPF to make it clear that plans and individual development proposals should, (in particular circumstances)…

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PlansBlockedGreen Belt and the White Paper

In 2015 we promised the British people that the green belt was safe in our hands and that is still the case” (Communities Secretary Sajid Javid).

With the Government seemingly recognising that the housing market is much more of a significant issue than it had previously admitted, many anticipated that the recently released White Paper would seek to bring about significant legislative change in relation to the protection of the Green Belt.

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Leasehold vs Freeholdneighbourhood plans

The leasehold property ‘trap’ has been featured in the press recently, with ITV news dubbing the situation ‘a national scandal’ due to the implications that leasehold property owners may face. Developers are increasingly selling new-build properties that would traditionally be sold freehold, as leasehold with ground rents and maintenance costs. While these costs seem small up front, they can be hiked up substantially over the course of the lease. Unlike the typical apartment Service Charge that covers the maintenance of communal areas, leasees see very little for their money.

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PlansBlockedHousing White Paper Delivery Test

The Government’s Housing White Paper proposes implementation of a Housing Delivery Test to ensure that under-performing authorities are suitably impelled to permit housing schemes through a policy and assessment mechanism.

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Cheshire East Council Backtrack of Neighbourhood Area Decisionneighbourhood plans

Cheshire East Council have been forced to backtrack on their decision to remove a proposed garden village out of the Handforth Neighbourhood Plan Area.

The Neighbourhood Plan which is being created to enable local residents to influence and to some extent determine the development in their locality was dealt a blow when Cheshire East Council objected to the inclusion of the emerging Local Plan allocation being included within the Neighbourhood Plan boundary and stated that the garden village is; “a completely separate entity and it makes sense not to include the scheme within the proposed Neighbourhood Plan”.

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Housebuilder News

Latest news from the sector

Image result for linden homes

Linden Homes is continuing to see “strong demand”, said housebuilding and construction business Galliford Try.

During the six months to December 31 2016, Linden, GT’s housebuilding arm, continued to make “significant progress” with its revenue rising 12% to £407.6 million against the equivalent period in 2015. Its completions rose to 1,491 units from 1,357 in the previous half year and the average selling price increased to £338,000 from £334,000.

In the six-month period, its rate of sale was 0.56 unit sales per outlet per week against the previous year’s 0.57 although Linden said that since the start of 2017, it had achieved a rate of sale of 0.70 unit sales per outlet per week. Additionally, their operating margin for the half year to December 2016 was 18.2%, up on the previous year’s 17.0%.

Peter Truscott, Galliford Try’s CEO, said: “Linden Homes continues to achieve margin improvement, including much improved overhead efficiency.

“Whilst we remain alert to potential uncertainties in the wider economy, we continue to see opportunity in all of our markets. We enter the new calendar year with strong order books with Linden Homes at record levels.

 

CALA Group says that it has delivered a “very strong” first half performance, and anticipates a fifth consecutive year of record revenues and profits.Image result for cala HOMES

Driven mainly by its growth strategy, the housebuilder’s net private reservations rose 24% to 610 during the six months to December 2016 with sales per site per week also increasing to 0.50 from 2015’s 0.45.

Revenue per site per week – which, according to the company is “a far more meaningful metric of CALA’s performance given the group’s size relative to that of its larger peers,” – increased 6% to £251,000.

Alan Brown, Cala’s Chief Executive, stated: “In line with our ambitious growth plans, we are certainly doing our bit to increase the supply of family homes across the UK. Our focus in 2017 remains on scaling up and optimising the operational efficiency of our eight regional businesses, to deliver sustainable growth and an annual capacity of up to 2,500 homes within four years”

“With the Housing White Paper the Government has made a clear statement that it is prepared to tackle the issues of concern to the housebuilding industry.”

 

Countryside

Redrow saw completions surge 13% year on year in the six months to the end of 2016 with the firm delivering 2,459 homes in the half year.

Redrow Chief Executive, John Tutte, revealed that the firm had updated its medium term target and now aimed to reach annual turnover of £1.9 billion in 2019 which, on an average selling price of around £300,000, would see more than 6,000 homes delivered in the year. Redrow has also recently acquired Radleigh Homes in the East Midlands.

Tutte said that the biggest challenge facing Redrow in achieving its growth strategy remains skills, “particularly if we lose foreign labour” and in regards to the Housing White Paper acknowledged that: “I welcome the pressure that is being put on local authorities to put a realistic plan in place.”

 

Housing completions at Bellway in the six months to the end of January 2017 are up 6.5% on last year at 4,462 (2016 – 4,188) as the firm reports positive market conditions.

Bellway reports a substantial forward order book comprising 4,487 homes (2016 – 4,434). The strong trading performance is expected to result in an operating margin of around 22% while the firm has made “significant” investment Countrysidein land with £380 million spent on land and land creditors (2016 – £315 million).

The firm reports robust customer demand with the purchase of a new home remaining affordable supported by a competitive mortgage environment and the Help to Buy scheme. This demand, together with an ongoing programme of site openings, has helped Bellway achieve a reservation rate of 166 homes per week (2016 – 156), an increase of more than 6% compared to the same period last year.

The average selling price of private completions rose by more than 4% to £291,000 (2016 – £279,053) following investment in higher value locations over recent years.

Ted Ayres, Chief Executive, said: “Bellway has delivered another strong half year result, increasing both the number of legal completions and the value of the forward order book. Market conditions remain positive and accordingly Bellway is continuing to invest in a controlled manner, both in land and work in progress”.

Interesting Appeal Decisions

At Gladman, we monitor all residential appeal decisions issued by the Planning Inspectorate, to better understand current interpretations of government planning policy.

Insufficient Affordables Costs Scheme


An appeal for 21 units in Tillingham, Maldon, was dismissed, despite seeming fairly logical; the main reason being insufficient provision of affordable housing. The application proposed 25% affordable housing, but this was in conflict with Development Plan Policy H9, which requires 30% to be affordable units. The inspector attached great weight to this, which despite causing no urbanising effect to the countryside, no harm to the character and appearance of the conservation area, outweighed all benefits, leading to dismissal of the appeal.

Key Policy Overrides Aylesbury’s Lack of 5YHLS


A mixed-use development, inclusive of 300 dwellings, adjacent to Soulbury, Aylesbury Vale was dismissed on the grounds of conflict with a policy in the Local Plan. The inspector noted that Aylesbury Vale have a dubious relationship with assessing their housing need in recent years and agreed with the appellant that the council are yet to publish a Full Objectively Assessed Need that has been tested through the examination process. In many circumstances, this fact would lead to an approval of an appeal scheme. However, policy GP35 was up for debate to ascertain whether the policy was exclusively related to housing. The inspector considered that the environmental qualities of the policy meant the sole purpose wasn’t simply preventing development and attributed great weight to become the ultimate factor in dismissal of this appeal. Furthermore, the location of the site on a steep slope in the clay lands landscape area, contributed to the refusal.

Maldon’s Landscape is Kryptonite to Housing Growth


An application for 50 dwellings from Millwood Designer Homes in Maldon District was dismissed by Inspector Nick Fagan. The inspector recognised that Maldon could demonstrate a 5 year housing land supply and therefore gave weight to the policies within the adopted Local Plan. While the inspector stated that there was a need for affordable housing and that Maldon was a sustainable location, it did not outweigh the effects to the landscape and character of the area. The inspector went on to say that the development would cause an urbanising effect and impact the beauty of a sensitive area of countryside, for the these reasons the application was dismissed.

Somerset Settlement Can’t Find Workable Site for Growth


An appeal for 45 dwellings in Bath and North East Somerset was dismissed by the inspector who found that the proposal would have a significant impact on the rural landscape, which provides a degree of separation between the urban settlement and the wider rural landscape. Furthermore, the development would have a significant impact on the setting of a heritage asset, Lynch House, and therefore fails to conserve or enhance the historic environment. While the settlement had not found a location for its 50 designated dwellings and requires affordable housing, the inspector stated that it would not outweigh the impact on the heritage asset or landscape and therefore dismissed the appeal.

Openness of Settlement in Need of Development would be Ruined by Development


Inspector Lesley Coffey has dismissed an appeal for 98 dwellings in Yetminster, West Dorset, which claims a 4.9 year supply, against a 4.3 year supply claimed by the appellant. The difference relates to 13 disputed sites, which were each considered during the inquiry. The inspector concluded that the supply should be reduced by 403 dwellings, leaving West Dorset with a 4.63 year supply. Residents of Yetminster had concerns on pedestrian safety along Ryme Road with the increased amount of traffic the development would bring. However, the inspector determined that the proposed decreased speed limit, with the permissive path, Scraps Way, next to the road that the development would benefit pedestrians walking that route. The proposed development would lie outside the Defined Development Boundary, therefore, conflicting with Local Plan policy SUS2, although this is considered out of date due to the lack of a five year land supply. Despite this, the inspector believes there would be an adverse impact to the landscape and character of Yetminster. The development would be seen from several viewpoints, which are regularly used by pedestrians and would ruin the openness this land contributes to Yetminster’s distinct character. For these reasons the appeal was dismissed.

SLA is Outweighed by Maidstone’s Inadequate 5YHLS


An appeal for 30 dwellings in Yalding, Maidstone Borough has been allowed after the inspector concluded that the council are unable to demonstrate a five year housing land supply. The inspector decided that the impact of the scheme on the area was not significant enough to warrant dismissal. This is despite the proposal changing the character of the area from rural to urban, as the site in its undeveloped state forms a rural backdrop to the settlement. This is reflected by the site’s designation within the adopted Local Plan as a special landscape area and within the separate Yalding Farmlands Character Area as being an important landscape area. Furthermore, the inspector decided that the scheme would be visible from the public right of way and existing residential, both adjacent to the site. However, the inspector ultimately concluded that this harm to the landscape character and appearance was outweighed by the council’s lack of five year housing land supply meaning the scheme was approved.

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