National
Assembly for Wales
Communities,
Equality and Local Government Committee
CELG(4)
HB 10
Inquiry
into barriers to home building in Wales
Response from : Bellway Homes Limited
With
reference to your letter dated 13th June 2013, which we
received via Wrexham County Borough Council in an email of
24th June inviting comments/submissions. Due to
resource constraints we can provide this letter and hope that it
assists the Inquiry. As it concerns barriers to delivering
new homes, a case study of our experience on a site we own in
Wrexham (off Watery Road close to the Town Centre) highlights a
number of key issues:
- We
acquired the freehold to this brownfield sustainable urban site
prior to the financial crisis;
- The
site was acquired as it benefitted from having outline planning
permission for residential development;
- We
therefore submitted Reserved Matters to secure detailed approval of
our development, being a mix of townhouses and an apartment
block. The local planning authority (LPA) sought a
contribution towards local education but did not evidence that
request: we paid a specialist consultant to assess the need for
such a contribution (given concerns over viability) and they
advised that it was not merited based upon existing capacity in
local schools. The LPA also requested a lift to serve the 3
storey apartment block but, as we had successfully secured planning
permissions elsewhere for comparable blocks without the cost of
providing lifts, we informed the LPA that this was not a
requirement;
- The
LPA refused our Reserved Matters on this basis so we had to appeal
that decision. On the day of the Appeal Hearing, the LPA
provided evidence (without prior notice) on education without any
opportunity for the Appellant to review this. The appeal was
dismissed on that basis;
- The
site remains undeveloped. We subsequently submitted a new
Reserved Matter application with all details as requested by the
LPA. This was done to avoid the original outline planning
permission from lapsing, thereby protecting the value of this
site;
- All of
the above has taken considerable time (circa 2+ years) and
money;
- At the
same time, the LPA were preparing their new Local Development Plan,
which the Inspectorate concluded (in 2012) was
‘unsound’ as it failed to accord with national planning
policy. Regarding housing, the Inspector had
‘fundamental concerns’ over ‘a significant
shortfall in the supply of housing which, if it were to be
addressed, would undermine the strategy of the Plan’, and
therefore the LPA had to withdraw the Draft Local Plan, with
further delay and expense to all parties concerned;
- The
LPA is now under pressure to release Greenfield sites, whereas our
own site is brownfield and within the existing urban area, but was
met with resistance from the LPA through the planning process (as
set out above);
- Given
the situation now faced by the LPA, we are hopeful that we can
agree to a viable development of our site in order to deliver much
needed new homes;
- What
we seek is this: an LPA who understands the economic realities of
development and is willing to work with the Developer to achieve
results. Where an LPA demonstrates this
‘culture’, it encourages us to ‘do
business’ with them as it greatly assists the planning
process and provides us with greater certainty;
- All
too often, however, we encounter LPAs who, for whatever reason, do
not see development ‘in the round’ and do not seek to
assist the Developer. In our case study, had the LPA
furnished us with evidence on the need for an education
contribution (which they could have done easily from their own
internal departments), much time and expense could have been
avoided. It may be due to a lack of trust in the private
sector (“You overpaid for the land so that’s your tough
luck”) or cultural differences (especially a mistrust of the
profit-motive). But whatever the reason, LPAs and Developers
need to work together in order to achieve viable development in
this challenging economic times;
- It
would assist if each LPA had a clear understanding of its
priorities as in cases where development is unable (based on
viability) to accord fully with LPA policies, the LPA needs to
decide what it wants to be delivered from a development. We
do not live in an ideal world and we find LPAs are often overly
protective of their policies (where they have them). To make
development viable / deliverable, below-policy delivery of
affordable homes and other contributions needs to be seriously
considered if regeneration / investment is to take
place;
- In
terms of land values, an obvious point to make is that Greenfield
development has less (abnormal) development costs than brownfield,
although commands a high purchase price. The offer we can
make on the latter must therefore reflect such costs and recent
experience is that that offer is frequently below
owner-expectation, and this has been a barrier to the redevelopment
of brownfield land. Where an LPA has a strategy that
prioritises such sites (and many do), this results in low delivery
rates;
- Density
– again, as a case study example, we acquired our site in
Wrexham and submitted Reserved Matters for a comparatively higher
density development of townhouses and apartments, which we built
prior to the financial crisis. Typically, this increased
floorspace which in turn enabled Developers to meet higher land
values/asking prices. However, since the Crisis of 2007, as
Developers cannot secure finance for such schemes and Borrowers
struggle to secure mortgages for apartments, such developments are
not being built which means for our site, we need to build a lower
density housing scheme which should sell, but which delivers less
floorspace and therefore makes viability a real concern. A
typical density of circa 30 dwellings per hectare is more common
currently, mainly family housing, but with affordable housing
policy at 20-30% of total development, etc, this can easily make
development not viable;
- An
absence of a planning framework, where an LPA has no adopted and
up-to-date development plan, also presents greater uncertainty to
development. Local planning has become more political in
recent years but the development plan needs to be a simple land use
plan for future growth, uncluttered by other considerations better
addressed through other means. Simplifying the plan-making
process, and resourcing LPAs so they can deliver them speedily,
will greatly assist;
- The
current plan-making system has a broad evidence-base, so that Plans
can be found Unsound if their evidence base is outdated. LPAs
need therefore to have the resources to prepare robust evidence,
but they also need to ensure that it reflects the realities of the
development industry. For example: most LPAs will consider
they have met this need by holding workshops etc and inviting
Developers but the truth is that Developers have experienced major
cuts in resources over recent years and have greater demands
elsewhere. The HBF fulfils part of this role, and that is
useful. Another example: LPAs will, in preparing their
housing land supply evidence, apply density standards that are
often too high (see above), thereby their studies conclude they
need less land to meet their housing needs. This is often
politically motivated to avoid Greenfield release, but fails to
meet the realities of the industry and the needs of the housing
market;
- Finally,
there needs to be a realistic understanding of the delivery of
housing sites and planning permissions. Too often LPAs claim
to have a robust level of housing ‘in the pipeline’
that doesn’t get built out at the assumed rate (due to the
reasons set out above) but they use this claimed supply position to
resist new development. Developers then spend significant
money seeking to demonstrate the LPA’s claim to be less than
robust in order to release sites for development;
- In
short, we seek an approach to new residential development that is
pro-active and pro-growth as well as realistic. Ideally a
partnership whereby LPAs, who have their own targets to meet, work
with Developers (whose objectives are also understood) to minimise
uncertainty and delay in order to deliver development that benefits
all parties in a transparent planning process.
I hope
that these comments, which are intended to assist the debate, are
helpful.
Simon Artiss
Planning
Manager