Have a look at our October 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 curent 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.
Autumn Policy and Legislation Changes
With the results from June’s snap general election seemingly causing a hiatus in the planning policy pipeline, the sector has been patiently awaiting news on the many initiatives presented in the Housing White Paper.
Help to Buy – Benefitting Buyers or Builders?
Redrow Homes have announced that they are looking forward to working with the government to consider the future of the Help-to-Buy scheme. Since former chancellor George Osbourne committed to helping buyers get on the housing ladder with a 5% deposit, Redrow has reported record profits every year.
Industry Takes Reins of Self Build while Government Backs Off
The British self-building world now has all eyes on Graven Hill in Bicester, Oxfordshire as it opens the first “plot-shop” in the country whilst Norfolk company, Beattie Passive has opened an on-site “flying factory” to build timber-framed homes to Passivhaus standard.
Small and medium-sized housebuilders still facing barriers to building.
The Federation of Master Builders (FMB) has recently undertaken the House Builders’ Survey 2017, this survey received a number of responses form small and medium-sized (SME) housebuilders.
Standardised OAN Methodology
Speaking in the House of Commons, Sajid Javid launched the government’s eagerly anticipated consultation on a standardised methodology for calculating OAN.
The government’s proposed approach is split into three stages. Stage one takes the most recent household projections as a baseline, with the indicative OAN’s included in the consultation, using the 2014 household projections as a starting point.
Latest news from the sector
Avant’s Innovative Initiatives
Avant Homes has launched new strategic initiatives to further accelerate its growth, as it looks beyond its immediate aim of achieving a £500 million turnover and 2,000 completions per annum.
The announcement of these initiatives follows the news in August that Avant had secured an enhanced £200 million banking facility to significantly increase its new land acquisitions in north east England, Yorkshire, the Midlands and the central belt of Scotland.
Avant also confirmed that it would open a fifth operating region to extend its presence in northern England and Scotland.
Since the announcement of its “record results” for the year ending April 30 2017, Avant has so far secured 1,220 home sales and £292 million of revenue for its 2018 financial year.
Revenue Keeps Rising at Keepmoat
Keepmoat Homes revenue increased by 25.7% to £423.2m (FY16: £336.6m), for the year ending March 2017.
The housebuilder reported that 2,924 homes were sold – an increase of 21% on the previous year. The average selling price increased from £139,000 to £145,000. The number of plots within its land pipeline increased by 19% to 28,544.
CEO, Peter Hindley, said: “The business performed in line with expectations in the light of continued strong demand for new housing and despite significant shifts in government policy. During the year, we continued to build our presence in new geographies and develop propositions for new sectors which will fuel further growth in the future.”
James Thomson, Executive Chairman, added: ”We are targeting to deliver over 4,000 much needed high quality, affordable homes for the UK during the next financial year.”
Kier’s Residential Results on the Rise
A strong residential performance has boosted Kier Group’s full year results, according to the company.
Reporting on the group’s financial year to end of June 2017, the company said that Kier Living’s revenue lifted 6% to £376 million against the equivalent period in 2016. The residential arm delivered 2,200 homes, up 3%, two thirds of which were mixed tenure units.
In the private housing business, revenue rose 5% to £174 million. The business achieved 748 private sale completions and is presently around 60% forward sold for the 2018 financial year.
John Anderson, Kier Living’s Executive Director, said: “Our blend of private and mixed tenure housing continues to serve us well and we’re making good progress on our goal of 4,000 completions a year by 2020.”
Linden Leaping Ahead
Linden Homes achieved “excellent revenue and margin growth” during the year ending June 2017. Completions during the period rose 7% to 3,296, revenue increased 11% to £937.4 million and its operating profit margin was 18.2% against 2016’s 17.5%.
Private average selling price lifted 6% to £354,000 but Linden said that it expected average selling prices to reduce over its strategy period to 2021: “reflecting increased standardisation and the mix shift away from the south east as we grow into new regions.”
The company added that although the EU referendum result and June’s general election triggered political instability, it was not detecting any material changes in its markets, with the company enjoying good trading conditions overall
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.
An appeal has been dismissed in the Forest of Dean for construction of 37 dwellings on the edge of Yorkley by Inspector Rachel Walmsley owing to impact on landscape character. While the Inspector noted the lack of housing supply and that paragraph 14 of the framework would be engaged it did not outweigh the harm to the landscape which, despite no specific landscape policies on the site itself, the inspector ruled would be significant and, combined with the moderate impact on highways dismissed the appeal.
Inspector B Bowker has allowed an appeal for 75 dwellings in Brailsford, Derbyshire Dales. Although the Inspector concluded that the Council can demonstrate a five-year housing land supply, this could not be given full weight due to the number of unresolved objections to the allocations and policies in the emerging local plan. Despite the Council’s Landscape Sensitivity Study 2016 considering the site as high to medium landscape sensitivity, due to the recent development around the site and the mitigation measures proposed for this development, the Inspector noted no harmful effect on the character and appearance of the surrounding area. The Inspector also notes several economic, social and environmental benefits making the development sustainable, meaning the appeal was allowed.
An appeal for 30 dwellings has been dismissed in the Guildford village of Normandy. The Green belt in which the site was located, was attributed significant weight, given the moderate harm it would have. Significant weight was ascribed to harm on character and appearance, especially in relation to the nearby Thames Basin Heaths SPA. Although Guildford Borough Council are unable to demonstrate a five year housing land supply the inspector advised that need alone was unlikely to outweigh the harm to the Green Belt and that it was not the place of an appeal to review the boundary of the green belt.
Inspector Zoe Raygen dismissed an appeal for up to 55 dwellings made by Family Housing Ltd in Melton. The main issues were whether the site was suitable for housing with particular regard to its accessibility and the effect on ecology. Ultimately, the inspector found that Queensway would not be an accessible location to accommodate the proposed scale of development. As a result, the proposal would not accord with the social and environmental roles which was given considerable weight in the decision. The inspector found that subject to a condition implementing the Biodiversity Enhancement Scheme, a suitable area of land would be provided to compensate for the loss of habitat on both sites. As a result the proposal would not conflict with paragraphs 109 and 118 of the Framework. Whilst the proposal would contribute towards helping address the alleged undersupply of housing, due to the lack of access, the proposal would not constitute sustainable development and the inspector dismissed the appeal.
The secretary of state has agreed with inspector Clive Hughes in approving this application for 560 dwellings in Felixstowe. Despite the impact of the scheme on the local landscape and character, the loss of agricultural land, and other impacts of the scheme, the lack of a 5 year housing supply in Suffolk Coastal, meant that the additional homes and contribution to affordable housing need outweighed these impacts, therefore the scheme was approved.
Inspector Keith Manning allowed an appeal for 69 dwellings made by Oakmere Homes against South Lakeland District Council. The main issues concerned whether a high proportion of affordable homes would unacceptably compromise intentions for a mixed and inclusive community; the effect of the layout on occupants’ living conditions by parking activity disturbance; and whether the information supplied allows adequate consideration of the effect on biodiversity, particularly on the River Kent tributary. The inspector found a local benefit would be early delivery of affordable housing and that the delay and risk in creating a more ideal spatial layout of affordable dwellings would not be justifiable. The inspector concluded that as parking arrangements were acceptable and biodiversity impacts could be mitigated the appeal should succeed.
Inspector D. M. Young dismissed an appeal for up to 21 dwellings made by Black Sheep Trading III Ltd against Milton Keynes Council. The main issue was the effect of the development upon the open amenity space, linear park and open countryside. The inspector found that the proposed development would not respond well to its context and would be harmful to character and appearance of the area. These conflicts with the development plan were significant factors weighing heavily against permission. The inspector noted that the appellant had not contested the Council’s housing land supply position but even if he were to find flaws in the figures, the positive attributes of the scheme in terms of housing supply would not outweigh the harm identified. Overall the inspector found that this was a case where the appellant had attempted to achieve too much on a site with significant constraints. For the reasons given above and taking into account of all other matters raised, the appeal was dismissed.