April 2012 Archives
Over the past couple of months a figure of 56 affordable housing starts across the whole of London has been bandied about for the 6 months between 1 April 2011 and 30 September 2011. The figure was released by the HCA towards the end of last year (link) and specifically looks at the number of starts, by its definition the point at which the contractor takes possession of the site, enabled under the new Affordable Homes Programme, which replaced the National Affordable Housing Programme. So far, so good. However, to use this figure as the total number of affordable starts in the capital for the period is just plain wrong. Despite this, however, the story was quickly seized upon by journalists, which solicited an equally brisk response from us (blog post) back in November. The figures just didn't seem right.
Those watching the Mayoral debate on BBC1 on Sunday night would have seen Brian Paddick lambast Boris Johnson using the same figure of 56 social starts. He also made a point of saying "these aren't my figures, these are official government statistics" and he's not wrong, they are. Who can blame those in favour of a change of Mayoral reign to use these 'official' figures against Boris and those in charge of delivering affordable housing in the capital? (just like the Red Brick, here)
So if the figure
isn't 56, what is it? To be absolutely sure you would have to visit every
new-build residential development that had planning consent in the whole of
London to see if it had indeed started. Just to be on the safe side you'd
probably take a picture of it as proof of physical construction start. And that
is exactly what we do. Here at LRR we track every residential development of 5
units or more in inner London and 10 units or more in outer London. We monitor
them all from the planning stage right up until completion with sales and
marketing information. We site visit every single scheme whether it's private,
social, shared ownership or mixed-tenure to see when construction starts and
completes and photograph the evidence and we'll do that at least twice a year. All
this is stored in a database that has been updated daily since 1996. To get the
accurate figure for social starts in the capital between 1 April 2011 and 30 September 2011 took us 5 seconds. That search revealed that a total of
144 schemes (not units) with a social housing element started construction
between those dates, making the real figure around
Further proof comes from the following large developments we visited, (with the social element in brackets). All of these started between April and September last year.
Silwood Estate (146), Greenwich Reach (344), New Festival Quarter (148), Canning Town - East City Point (227), Waterside Park (131), Barham Park Estate (187), King's Cross Central (260).
What does this all mean? Well our comprehensive data is unmatched. We're independent and comment on the market objectively. All our site visiting over the course of the year complies a picture of the market. What's started, what's completed and what's halted? Who's building and where are they building? Where are people buying? Where are developers struggling to sell and which RSL's are bulk buying unsold stock? These are all questions, plus many, many more that are answered by the Red Book; the London Residential Research yearly publication on residential development in London, across all 33 boroughs.
For more information on the Red Book and to request an executive summary go here.
The Red Book launches on May 15, 2012 with a breakfast briefing, looking at the key headlines from the market. This is also when subscribers (free) and anyone else (willing to part cash) can get their hands on a copy. Register your attendance here.
Please note: For clarity, just to drill down a bit further:
LRR says - between April and September 2011 (inclusive) 4,200 social units started construction in the capital. By social units we mean both intermediate housing and social rented accommodation. The preferred split in these two types of affordable housing is 70:30 favouring social rent. Developers will sometimes push for a greater percentage of intermediate housing and our figures show that the actual achieved split is closer to 65:35. Applying this to the overall figure of 4,200 social starts and we get a final figure of:
4,200 overall social starts between April and September 2011 (inclusive)
- 2,730 units were for social rent
- 1,470 units were for intermediate housing (shared ownership)
In the news at present is the furore regarding Newham Council's attempt to offload more than 500 tenants away from the borough because its unable to find them private accommodation.
But Newham is not the only London council to embark on this process - click here to read more.
We've all heard about the recent NPPF, which was published just a few weeks ago and came in to play immediately. The updated version from the original draft was also largely welcomed across a wide range of sectors. The main argument for the changes were for planning to become more streamlined; the removal of multiple documents in the form of Planning Policy Statements and Planning Policy Guidance in to one single document of just 50 pages.
What does this mean though for housing and specifically housing in London? Well yesterday I went along to the good people at the NLA for an event on these changes titled 'NPPF: Planning for growth' to try and find out. Guest speakers ranged from government departments and representatives from local authorities (Westminster, Camden, Enfield), along with developers (Berkeley, Derwent) and consultants/architects (AECOM, DPP, GL Hearn, Drivers Jonas Deloitte, bptw, Berwin Leighton Paisner) as well as CABE and English Heritage.
The event kicked off with a keynote address from Steve Quartermain; Chief Planner at the DCLG who spoke at length on what has probably been the most contentious aspect, that of the 'presumption in favour of sustainable development'. He stated that the 'presumption', "is positive and designed to make things happen" but also stressed point 14, which states permission will be granted, 'unless any adverse impacts of doing so would significantly and demonstrably outweigh the benefits', not a charter then to concrete over the countryside...
Another point mentioned throughout the day was that the NPPF is designed to bring about a 'change in mindset', with local communities deciding on how they want their areas to develop. The 2011 Localism Act designed with bottom-up principles at its heart, is also the main theme within the NPPF. Quartermain stated it is 'essentially about working to a plan'. It is now in the communities' hands to set their local plans and to work to them. 'Local plans are the cornerstone of the system'.
Bob Robinson of DPP highlighted that 25 out of the 33 London boroughs had Core Strategy's in place and being worked to (local plans). Two however are still working to pre-2004 UDPs. Other councils across the country are still using plans from 1997 apparently. When asked about government targets for house building Quartermain stated that there wasn't any. It's not as if previous targets had in any way worked anyway is it? It's up to local planning authorities to set their own targets within local plans. What sustainable development means is also for each LPA to decide, which makes sense. Every area or community is different to the next.
Another point which features in the 50 page document is viability. What does this mean? Well it means less affordable housing probably. Point 173 states that requirements such as affordable housing should be taken into account of the normal cost of development to 'provide competitive returns to a willing land owner and willing developer to enable the development to be deliverable'. Speakers on the day mentioned the inflexibility of CIL being another argument for developers to build less affordable housing.
Essentially however, what I took most from the event is that the NPPF will have a limited impact upon London. Most LDAs already have pro-growth local plans in place. The new National Planning Policy Framework is a material consideration to their own local plans, designed to put greater pressure on councils to keep them up-to-date. All of this however remains just words. The new NPPF has been designed to bring more clarity over the long-term which most agree probably will. However in the short-term don't be surprised if things slow up with more decision making done by appeal. Developers will test the boundaries of what the new policies mean and how they are to be interpreted. These decisions are then likely to set precedents.
Just this Tuesday in fact, Councillors in Bermondsey refused a payday loan scheme recommended for approval by planners, with the interpretation of the NPPF apparently at the centre of the 1-hour discussion. Cllr Mark Gettleson declared: "Someone has to test the NPPF and it might as well be us." (london-se1.co.uk)
The London residential market is closely monitored by EGi’s team of dedicated experts, from the planning and construction pipeline to sales and pricing, we cover the whole of the capital, all 33 boroughs.
Don’t miss an opportunity, find pre-planning, stalled and oven ready sites.
Residential Update – August 2012
We take a look at the inner boroughs at the mid-year point from the applications and permissions in the planning pipeline, the starts and completions in the construction pipeline and ending with a flavour of the sales and pricing situation.
Red Book Executive Summary – May 2012
An in-depth review of the current state of the London residential development market across all 33 London boroughs from planning and construction pipeline to sales and pricing.