Local authorities across the country will appreciate the themes in the ‘Planning Investment’ article in Government Business Magazine (vol 23.1, pages 26/27), a commentary we totally support. See our response on page 27.
Keep Reading >In a recent case, Islington Council has welcomed confirmation from the government that the value of land should reflect planning requirements. It comes amid growing concern that developers and landowners are manipulating the development viability process to build fewer affordable homes. Islington and other councils have seen that developers sometimes disregard planning policies about building affordable homes when bidding for land. They later claim they cannot afford to build affordable homes because they have paid so much for the land. However, in a recent letter to Islington Council, the government legal department said it is the Secretary of State’s “unambiguous policy position” that “land or site value… should reflect policy requirements”.
Keep Reading >
We aim to deliver policy compliant schemes via S106 Planning agreements for on-site community facilities and/or Community Infrastructure Levy contributions for off-site provision. While education and transport are the usual priorities, for most authorities, a wide range of community needs can be addressed, and in particular, affordable housing, on or off-site.
Delivering Affordable Housing is a major objective. Not only is the need for Affordable Housing acute in many areas, the issue is getting worse, especially since February 2011 when government funding was sharply reduced. Further government changes in 2015 including extending the right to buy and the Starter Homes initiative, have made affordable housing delivery more difficult. The effect on development viability can be considerable and we scrutinise carefully developers’ claims to reduce affordable provision. There are however new affordable housing initiatives and in some cases, applicants can be encouraged to consider different options in order to deliver more affordable units.
For more information on new approaches to funding and delivering affordable housing IN PERPETUITY and WITHOUT GRANT, email us. marshc@suspc.uk. Nb. We only help local authorities.
Reviewing Financial Viability statements on behalf of local planning authorities is our core business. While financial viability models are relatively simple, financial inputs to appraisals are not. Market conditions, build costs, profit margins, affordable housing values, lending criteria and in particular, land values, are all in a constant state of flux. Assessments are always site specific, unique at any point in time. Understanding development appraisals is the key and that’s where we help Councils get the best results for the community.
For an introduction to Development Appraisal calculations, see here. Some authorities have issued similar Guidance. It is essential that all Councils do so. If you need help, email us. – marshc@suspc.uk
The combination of poor property market conditions (2008-2012) and a sharp reduction in Government funding for affordable housing, resulted in many development proposals failing to be policy compliant. Councils were, and continue to be under pressure (despite an improving market), to accept proposals with reduced affordable housing and/or planning obligations/CIL on the grounds of viability. One result was the invention of so-called Flexible Planning Agreements, especially on larger phased schemes, in which the Planning Agreement would include Review Mechanisms, to enable, in the right financial circumstances, the authority to claw back some or all of the affordable housing / community infrastructure shortfalls in the latter stages of the development. We have extensive experience of such mechanisms.
For the background to Flexible Agreements, see the attached paper, definitive at the time but much copied by Councils since.
We do of course have many current examples – about 20 in the last 12 months! Let us know.
Again, if you need help, email us. marshc@suspc.uk
Not surprisingly with so many changes, training for members and officers is crucial and we have provided education events on Viability issues for Councils for over 30 years. We are always pleased to help authorities deliver updates at little or no cost and will continue to do so. We are currently completing several Viability Training events via Anglia University for all Councils in East Anglia, for the third year, and will continue.
If your Council officers and/or members need an update, let us know.
Viability studies are of course no longer limited to site specific appraisals. Increasingly from Affordable Housing Viability studies to CIL assessments to Whole Plan reviews, Strategic Viability studies have become an important part of Plan Preparation, and we have been heavily involved in such work for many years, either in our own right or jointly with other specialists. If we can help, email marshc@suspc.uk
The most recent demonstration of the pressures that Councils have been under to accept less than policy compliant development proposals, (especially since the Growth and Infrastructure Act), has been developers with consent and signed planning agreements, seeking to re-negotiate those contractual commitments to reduce affordable housing and/or planning obligations. We have been much involved with such cases and can share that experience with authorities as and when required.
While local planning authorities are always our client, the applicant invariably pays our fees, in the same way that Councils’ legal expenses in preparing planning agreements are also a development cost. Strategic financial appraisals such as CIL studies are a direct cost to the authority and estimated individually.
Chris Marsh FRICS MRTPI DipTP DipCP is Managing Director of Christopher Marsh and Co.Ltd (Sustainable Property Consultants) and as a Chartered Surveyor and Chartered Town Planner has been heavily involved in research and consultancy projects for many years with a particular emphasis on Planning Obligations and Affordable Housing, client’s including Central Government, the GLA, the Audit Commission and the RICS. He was part of the Government advisory team reviewing/ reforming Planning Obligations and formulating Circular 05/05, and co-authored the Audit Commission guidance.
He has over 35 years professional experience, mainly as an advisor to a wide range of public sector clients. The Practice specialises in negotiating planning and development packages on behalf of public bodies and has been involved in over 360 major schemes since 1985, including the Prince of Wales’ Poundbury development, the Future of Greenwich Riverside and the Millenium Dome (recently revised, Sept 2015), Cricklewood/Hendon Regeneration, the relocation of Arsenal FC, West of Stevenage, Heathrow Terminal 5, the London Eye, Wembley Regeneration, Woolwich Arsenal, the Kidbrooke Estate, Barking Riverside, the Olympic Games, the growth areas in London Thames Gateway, West Northants DC, Ashford BC, and many others across the country.
The Practice focuses on advice to planning authorities on planning obligations and affordable housing policies in Development Plans and/or preparing Supplementary Planning Documents; carrying out affordable housing / CIL viability studies, assisting in determining / maximising appropriate Obligation and Affordable Housing packages and especially as the Independent Assessor, to review developer’s financial appraisals where the applicants claim a proposal cannot afford its consequential infrastructure/Obligations and/or affordable housing. Wherever possible, the rationale is to facilitate development projects that meet both the applicant and the authority’s expectations.
Together with Denton Sapte Wilde, the Practice initiated Review Mechanisms in Planning Agreements in 2006/7, subsequently adopted by many Authorities, and now widely practised.