Evidence from Simon Gale, Director Prosperity and Development Services, Rhondda Cynon Taf Council Planning

The challenge across South East Wales

• The need to respond to housing demand is relentless

• There is a gap between supply and demand, across all tenures

• Big builders and the ‘snow line’

• Large stalled sites / post-industrial legacy of sites

• The ‘demise’ of SMEs building houses

RCT Study into stalled sites

There is no overriding reason why sites become stalled:-

• Topography;

• The need for up front infrastructure;

• Contamination on brownfield site and “Abnormals” particularly from past coal mining;

• Personal reasons

• Too may risks not being quantified to give confidence to invest;

• Multiple land ownerships;

• Access to finance;

• No experience in making a planning application.

• Existing site values

There are some emerging broad themes.

• Some sites, particularly in the valleys are simply unviable because the cost of developing them is more than the current revenue.

• Small sites, which historically would have been built out by small, local builders have stalled because those small companies are struggling to access finance.

• Risk of the unknown is a barrier to investment in marginal sites.

• There are a number of sites that on paper are viable but need considerable upfront investment so that cash flow becomes a barrier.

Peak Cash Flow (see table 1 below)

• Key issue arising out of the viability study.

• Not usually picked up in traditional approaches to viability where the focus is on residual land value and profitability.

• Major issue for SME builders.

Table 1

Potential Solutions

· Maximising existing finance opportunities including Development Bank of Wales

· Joining up Landowners with SME developers

· Plot Shops

· Guiding SMEs through the planning system

· De-risking sites