Have a look at our December 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.
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Government’s Neighbourhood Plans Claim Rejected by the Courts
Back in December 2016, the then Housing and Planning Minister, Gavin Barwell, released a Written Ministerial statement which, amongst other things, declared made neighbourhood plans “that plan for a housing number that have on average planned for approximately 10% more homes than the number for that area set out by the relevant local planning authority.”
RTPI Concerned that OAN Methodology does not Consider Future Growth
The RTPI have expressed concerns that the new OAN methodology would simply entrench existing housebuilding patterns by failing to recognise the importance of employment projections or grown aspirations. The new OAN methodology was subject to consultation in September 2017, through which the concerns of the RTPI and other organisations were raised, mainly with regard to the lack of a forward looking approach and the failure to address the need for a mix of housing tenures and types.
Landbanking – Housebuilder Hits Back
Britain’s largest housebuilder, Barratt Developments, has published a report to disprove accusations from Secretary of State, Sajid Javid that housebuilders are piling up so-called land banks. The criticism centres on housebuilders allegedly seeking to secure additional profit by holding onto land with planning permission in order to speculate on land price increases.
The Value of Place – Turning NIMBYs into YIMBYs
Create Streets’ new report, ‘Beyond Location’, tries to answer the little discussed question of what we mean by the value of an actual neighbourhood and what actually drives that value by way of the inherent qualities of a place.
Local Plan Intervention – Sajid Javid Steps in Over Local Plan Failures
Communities Secretary, Sajid Javid, has said the government is prepared to take direct action and intervene in the local plan process at 15 local authorities across England in an effort to tackle the “broken” housing market.
Latest news from the sector
Countryside Confirms Excellent Year of Growth
The housebuilder saw total completions rise 28% to 3,389 homes against the equivalent period in 2016, on total adjusted revenue of £1,028.8 million, up 32%.Countryside Properties full year results for the year ending September 2017 has reported an “excellent” year of growth.
The group’s private average selling price declined as planned, to £430,000 from 2016’s £465,000 and the forward order book rose 8% to £242.4 million. The net reservation rate was above its target range at 0.84 reservations per open sales outlet (2016: 0.78) on an increased number of open sales outlets at 47 against 2016’s 43.
Ian Sutcliffe, Countryside’s group CEO, said: “With completions up 28%, 2017 has been another outstanding year of growth as our mixed-tenure model has met the demands of the housing market. We are pleased that the actions we have taken during the year to ensure our product meets the areas of strongest demand are delivering results.”
Crest Nicholson Record a Robust Market
Open market average selling prices improved 5.4% to £391,000, whilst underlying sales rates for 2017 (excluding PRS) averaged 0.77 sales per outlet per week against 2016’s 0.81. The housebuilder calculates that growth in revenues and reported sales for the year will be around 6-7% higher than 2016.Crest Nicholson have issued positive financial year updates, experiencing increases in overall housing unit completions, up 2.3% in 2017 (2,935 homes) against 2016, with average number of sales outlets also up 8.5% to 51. As of the end of October, Crest’s total forward sales were 13.6% ahead of 2016 at £391.4 million.
Stephen Stone, Crest’s CEO, said: “I am pleased to report yet another year of growth for the group. The business continues to increase the number of homes built and carries positive momentum into 2018 with strong forward sales.”
Demand continues to build at Barratt
Barratt have declared a “strong start” to their new financial year, spanning the period from July 1 to November 12 2017.
In addition, total forward sales grew 8.4% to a value of £2,876 million, equating to 12,843 plots compared to 11,733 plots in 2016.Robust demand was reflected in net private reservations per average week which rose to 268, against the 265 of the equivalent period in 2016. They also launched 79 new developments during the period, against 2016’s figure of 69, with the number of active outlets operating rising to 373 compared to 2016’s 370.
David Thomas, Barratt’s CEO, stated: “We have started the financial year strongly with a good sales rate, driven by customer demand for new homes and supported by an attractive lending environment. We remain committed to quality, build excellence and market leading customer service and are working hard to increase the supply of houses across the UK.”
The Outlook is Positive for Bovis
The housebuilder claims pricing remains “robust” and expects to deliver an increase in the average selling price for the 2017 financial year and also stated that their HBF Customer Satisfaction rating on completions since February 2017 has averaged 75% (equivalent to a 3-star rating) and they remain confident in attaining their medium term target of a 4-star rating.Bovis has described their annual financial progress as “encouraging” in a recent trading update, stating they are fully sold for their targeted 2017 completions, with an average sales rate over the period of 0.52, up on the first half year rate of 0.48.
Greg Fitzgerald, group CEO said: “We expect to have a net cash position of at least £100 million as at 31 December 2017. Trading is in line with expectations, the market remains strong and we are on track to deliver another disciplined period end.”
A Strong Second Half Statement by Taylor Wimpey
The volume housebuilder said that although their current total order book is slightly down on last year, at 8,751 homes (2016: 8,981), standing at around £2.2 billion against 2016’s £2.3 billion sales, rates for this second half of the year were 0.71 sales per outlet per week against the 0.70 achieved in the equivalent period last year.Taylor Wimpey recently announced that they performed “strongly” during the second half of 2017, though they are remaining “alert to the potential risks from heightened political and economic uncertainty”.
Pete Redfern, Taylor Wimpey’s CEO, said: “Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets” and “we have continued to see stability in trading patterns.”
McCarthy and Stone Turn to Bungalows
Chief Executive, Clive Fenton, has dubbed the market ‘difficult’, stating in The Telegraph that: “Our full year completion volumes were in line with the prior year despite some headwinds as a result of the increased level of uncertainty in the secondary market.” For example, immediately after the Brexit vote, they slowed down building due to market concerns but have recently boosted building and aiming to build 3,000 homes a year in the next few years.McCarthy and Stone’s revenue rose by 4% to £635.9m in the year to 31stAugust, whilst their pre-tax profit fell by 1%. The retirement housebuilder does not benefit from any government policy designed to boost demand for new homes but rely on the second-hand market to sell its homes. The retirees to whom it sells its homes usually must sell in order to downsize and as the level of transactions has slowed, the company has suffered as a result.
The company is also working with housing association Places for People to help diversify the model by building rental retirement homes. Mr Fenton has recognised this as: “a very big and undersupplied market”, as well as noting that the company were looking to bring back bungalows, the supply of which has recently slowed as buying land for them is not as profitable.
Analysis has shown that McCarthy and Stone’s performance demonstrates how precarious the market can be without schemes such as Help to Buy. With diversification, they are rising to the challenge and, with growth in construction, sales are expected to grow and outweigh market challenges.
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 for 12 dwellings in Ascot, Windsor and Maidenhead was allowed despite being located within the Green Belt and a made neighbourhood plan area. The proposal was allowed as the council are currently unable to demonstrate a five year housing land supply, the openness of the Green Belt would be preserved and that the council will need to review and redraw Green Belt boundaries in any event, so the inspector allowed the appeal.
An appeal for 97 houses by Gleeson Developments was dismissed despite Barnsley being unable to demonstrate a 5-year housing land supply. The inspector found that the appellant’s affordable housing provisions were inadequate and the necessary financial contributions had not been met. It was also determined that the proposed driveways were unsafe; the gravel used could result in serious accident for a pedestrian or cyclist. There were also concerns about their appearance and the detrimental impact on character should the driveways be unkempt. It was therefore concluded that despite the LPA only demonstrating 4.01 years in deliverable housing sites, this proposal would represent an unsustainable form of development and should therefore be dismissed.
Inspector Kenneth Stone has allowed an appeal for 94 dwellings in Newport, Uttlesford after grappling with impact on character and appearance of Newport and safe operation of the highway network. The inspector found that development outside the settlement limits would result in harm to the overall landscape character and street scene. The harm, whilst weighing against the proposal, would be limited and localised by the contained nature of the site. Council and appellant agreed that no five year housing land supply existed and that it most likely sits between 3.1 and 4.2 years. Issues of noise, flooding, best agricultural land, living conditions and locational sustainability were all somewhat dismissed by the inspector and not considered harmful in the planning balance.
An appeal for 30 dwellings has been allowed in Chipping Campden by Inspector JP Roberts after determining that there would be limited harm to the AONB. While Chipping Campden is completely washed over by AONB, the council accepts that some development will have to take place due to the town being a “Principal Settlement”. The Inspector acknowledged that the council can demonstrate a 5 year supply of housing, but that due to the scheme being 50% affordable housing would help accommodate the shortfall in the area. The Inspector concluded that the scheme was small scale and that the impact on the AONB would be very limited whilst benefits outweighed the impacts and allowed the scheme.
Inspector Cullum Parker has allowed an appeal for 25 dwellings and Doctor’s Surgery in Great Bentley, Tendring. The Council argued that the scheme was not sustainable however the Inspector stated that “whether the appeal site is on one side or the other of a settlement boundary line is not definitive of the sustainability of the proposal” and found the appeal site is sustainable. The Council went on to state that they could only demonstrate a 4.6 year supply and therefore the tilted balance was applied. It was concluded that the benefits of the scheme outweighed the limited impacts and so the appeal was allowed.
An appeal in Pensilva has been dismissed by Inspector JP Roberts for construction of 46 dwellings. The main issue addressed by the applicant was the footpath linking the site to local services, since the development did not have control of the land in question it could only use adopted highways to produce a footpath. Turning his attention to the highway, the inspector deemed the footpath too narrow to be safe to use as a pedestrian access. While the Inspector noted the economic and social benefits of the scheme through construction and affordable housing, it was stated that “the highway safety shortcomings are so severe that they outweigh all other considerations” and therefore dismissed the appeal.
An appeal against Derbyshire Dales for 14 dwellings in Doveridge was dismissed by Inspector Gareth Wildgoose after giving consideration to consistency with locational and housing supply policies and impact on character and appearance. The inspector found no reason to take a different view to previous inspectors who found a demonstrable 5 year housing land supply. Saved Policies H4 and SF4 relating to housing supply were considered out of date in the Council’s original decision, but the inspector found this approach incorrect and stated that saved policies should not be regarded as out of date simply because the Local Plan is time expired. In this instance, the proposal contradicted both saved policies and emerging policies in relation to the location and supply of housing. Ultimately, the appeal site and its immediate surroundings made too great a contribution to the character and setting of Doveridge by their contribution in transitioning to the countryside around the settlement. The inspector found that this would significantly outweigh the benefits of the appeal which was therefore dismissed.