North Hertfordshire and Stevenage Councils Final Report

Transcription

North Hertfordshire District Council
&
Stevenage Borough Council
Affordable Housing
Financial Contributions – Small Sites
August - September 2008
Report for the consideration of North Hertfordshire District Council
& Stevenage Borough Council
This does not constitute Council Policy.
Prepared by
55 West Street
Chichester
West Sussex
PO19 1RU
01243 771304
www.adamsintegra.co.uk
North Hertfordshire & Stevenage Councils – Financial Contributions Study
CONTENTS
Executive Summary
ii
1.
Introduction
1
2.
Methodology
4
3.
Financial Contributions Methodology and Results
13
4.
Conclusions and Recommendations
23
FIGURES
Figure 1:
Summary of Value Points and Property Types
5
Figure 2:
Indicative Financial Contributions in lieu of Affordable Housing
17
APPENDICES
Appendix I -
Financial Contributions in lieu of on-site provision
Appendix Ia -
Average Residual Land Value as Percentage of GDV on Sites
of 0% Affordable Housing
Appendix II -
Planning Obligation Assumptions
Appendix III -
Supplementary Property Values Report - North Hertfordshire
District & Stevenage Borough
Adams Integra – August 2008 (Ref: 08704)
i
EXECUTIVE SUMMARY
Background
•
North Hertfordshire District and Stevenage Borough Councils are progressing
their Local Development Framework Core Strategies and associated
Development Plan Documents. Those will set out their planning policy
framework for the plan period – including on planning-led affordable housing.
•
At present, the Councils’ policy proposals seek to deal with affordable
housing through a requirement for its provision on-site above a site size
threshold of 5 new dwellings.
•
The Councils have asked Adams Integra to investigate the potential (in terms
of development viability) for all sites to contribute towards meeting affordable
housing needs through the use of a financial contribution mechanism in-lieu
of on-site affordable housing from the smallest sites.
•
This study builds on a development viability overview study conducted by
Adams Integra for the Council in 2007. It uses the same methodology as that
previous study, but with updated assumptions where those have been
considered appropriate.
The Exercise
•
Developer-type appraisals were again carried out - this time across notional
sites of 1 to 4 units at 6 Value Points that reflect the range of new build values
seen across North Hertfordshire District and Stevenage Borough.
Development viability was tested by fixing assumptions and then comparing
the outcomes on a relative basis at 0%, 10%, 20%, 30% and 40% affordable
housing equivalent (via a financial contribution rather than on-site provision).
•
A methodology has been suggested for calculating financial contributions in
lieu of on-site affordable housing on sites of 4 units or fewer and appraisals
carried out to test the viability of such proposals. The methodology is formula
based, and the same approach could apply to larger sites in exceptional
cases where a financial contribution in lieu of on-site affordable housing is
appropriate and robustly justified.
•
The property values information has been updated from the 2007 study
through further desktop research during July and August 2008.
•
We reiterate that key considerations taken into account in the assessment of
viability are developer’s profit and landowner’s sale price. If profit levels fall
below a certain point then developers may be unwilling to take the risk of
developing a site or unable to secure funding. Equally, if the price offered by a
ii
developer to a landowner for a site is too low, the landowner may decide not
to sell and instead continue with, or pursue, an existing or higher value land
use.
•
An increase in the percentage of affordable housing on a site will inevitably
reduce the overall sales revenue a developer can expect to receive
(compared to a site with a lower percentage of affordable housing). This is
because the revenue received from affordable homes is significantly lower
than from market sale units. Therefore, much like wider planning
infrastructure requirements, a financial contribution towards affordable
housing provision will be viewed as a cost to development schemes. This cost
is generally passed on to the landowner by way of reduced land value, since
particular development profit levels need to be maintained. This is why the
consideration of development viability is a key aspect of affordable housing
policy development, to ensure that site supply is not unduly affected.
The Key Outcomes and Conclusions
•
Increasing the proportion of affordable housing sought impacts on residential
development viability. The reduction in Residual Land Values (RLVs) across
the notional sites tested ranged from 9% to 64% depending on Value Point
and proportion of affordable housing sought (the greatest impacts seen at the
lowest Value Points with the highest (40%) proportion of affordable housing
requirement considered).
•
The results of the appraisals carried out for collecting financial contributions in
lieu of on-site provision suggest that a 10% to 20% affordable housing
equivalent could be workable in viability terms on sites producing fewer than
5 new dwellings. There is no reason why smaller sites should not make a
carefully judged contribution. There are, however, factors to be considered
which suggest the benefit of seeking a reduced equivalent proportion on such
sites – on the basis of an extension of the sliding scale approach which
Adams Integra put forward in the 2007 study.
•
Purely in viability terms we are therefore able to support a policy whereby the
Councils seek financial contributions equivalent to:
o
between 10 - 20% proportion of affordable housing on sites of
between 1 and 4 units
applied as a target and clear basis for the early stages review of sites by
landowners and developers, and thus a target basis for negotiations to seek
to deliver.
•
All policy positions would need to be kept under review in light of delivery
experiences, as a part of the Council’s ongoing monitoring of a range of inter-
iii
related factors such as site supply, housing market trends, needs and local
affordability. That process should be linked with contingency planning – in the
event that the monitoring work points to adjustments being made to the
approach. Viability will also need to be considered relative to wider planning
obligations if those increase in the future.
•
The Councils will need to consider the detail of application. This would include
whether the approach would be relevant to all new dwellings, or to net
numbers of new dwellings. Our assumption is that the approach would not
apply to replacement dwellings. Clarity on all such aspects would be needed.
iv
1
INTRODUCTION
1.1
Background
1.1.1
Both North Hertfordshire District Council and Stevenage Borough Council are
producing their Local Development Frameworks (LDFs), in line with the
requirements of the Planning and Compulsory Purchase Act 2004. Through a
number of key policies, the LDF will guide and control the future use and
development of land over the plan (LDF) period.
1.1.2
The Councils are currently progressing with their Core Strategies and
Development Plan Documents (DPDs), the Preferred Options papers for
which have been through a period of consultation from September 2007. The
strategies include the Councils’ approach to the provision of affordable
housing through the planning system, by the established route of requiring
suitable private developments to include a proportion of integrated affordable
homes. The Councils are now preparing for the submission (to Government)
stage of their Core Strategies.
1.1.3
The proposed policies are as follows:
(North Hertfordshire District Council) will secure the provision of affordable
housing on sites in accordance with the criteria below and at the following
levels1:
Size of site (gross dwellings)
Minimum % of dwellings which
must be affordable
5 – 9 dwellings
10 – 14 dwellings
15 – 24 dwellings
25 or more dwellings
20%
30%
35%
40%
North Hertfordshire District Council require an affordable housing tenure split
of 65% social rented and 35% other forms.
(Stevenage Borough Council’s) preferred option is to deliver a full range of
homes and address existing imbalances2:
40% of new homes to be affordable with provision split 80% social rented and
20% other forms. Stevenage Borough expects to introduce the same sliding
scale as detailed for North Hertfordshire above.
50% of new homes will be market homes.
1
2
North Hertfordshire District Council – Core Strategy Preferred Options Paper (September 2007)
Stevenage Borough Council - Core Strategy Generic Development Control Policies (September 2007)
1
10% will be more expensive homes defined broadly (and not yet formally
agreed) as a detached home in a suburban location with at least 3-4
bedrooms, 2 bathrooms and 2-3 reception rooms.
1.1.4
To help inform the proposed affordable housing policies within the Core
Strategy, the Councils commissioned Adams Integra to carry out an
affordable housing development viability overview study3 to examine how the
development viability of market housing sites is affected by policy options for
affordable homes. The Councils’ policy proposals require affordable housing
from sites of 5 or more dwellings but as drafted at present require no
contribution to affordable housing below this point.
1.1.5
In Stevenage Borough small sites (sites of 1-4 units) represent approximately
10% of completions (both gross and net) which equates to 131 completions
out of 1,364 completions between 2001 and 2008 (this excludes replacement
dwellings).
1.1.6
In North Hertfordshire between 2001 and 2008 there have been 638 gross
completions on small sites (1-4 units) out of a total of 4,483 equating to
approximately 14% of the supply (Note: North Hertfordshire figures include all
replacement dwellings and so figures are not directly comparable with
Stevenage Borough Council figures discussed above).
1.1.7
The supply of housing from these small sites is an important component
towards the overall delivery of housing in the District and Borough. As such,
Adams Integra has been asked to look at the likely financial viability of all
sites contributing to the provision of affordable housing. Rather than providing
the housing on-site, the Councils propose to collect a financial contribution
from sites below the on-site affordable housing threshold.
1.1.8
The North Hertfordshire and Stevenage Strategic Housing Market
Assessment (August 2008)4 identified an annual need shortfall of 642 homes
in North Hertfordshire District and 606 homes in Stevenage Borough.
1.1.9
Adams Integra’s report investigates and assesses the impact on land values
and therefore viability of potentially removing affordable housing thresholds
altogether and requiring a financial contribution towards affordable housing
sought from all private (market sale) residential sites across North
Hertfordshire District and Stevenage Borough.
1.1.10 The study examines the variations in approximate development and therefore
land values within both Local Authority areas and the implications of these are
included in the assessment of site viability and delivery. The context for this is
3
4
Adams Integra – Affordable Housing Development Viability Study (2007)
David Couttie Associates - North Hertfordshire and Stevenage Strategic Housing Market Assessment (August 2008)
2
that (gross) development value (GDV) is determined by the potential and
constraints a particular site has, which in turn drives the resulting land value.
1.1.11 We have again used our assessments of the impact of varying affordable
housing requirements on residual land value as our measure in putting
forward to the Councils our judgements and guidelines. This means that, as
with the wider study, we have compared the impact of possible alternative
policy approaches with the current policy position. So we have reviewed the
impact on approximate land values of increasing the percentage of affordable
housing sought from zero to a range of potential future affordable housing
equivalent proportions on sites of between 1 and 4 units.
1.1.12 This study is set in the context of the original development viability study
carried out in 2007 and should be read with that study in mind. The
methodology for that study is not repeated in detail here.
3
2
METHODOLOGY
2.1
Introduction
2.1.1
This study builds on the report produced in 2007 by Adams Integra in relation
to North Hertfordshire District and Stevenage Borough’s Local Development
Framework Core Strategy affordable housing policies. This study investigates
the impact of reducing the affordable housing threshold below the currently
proposed level of 5 units, by collecting a financial contribution from all smaller
developments towards the provision of affordable housing.
2.1.2
The methodology used to investigate development viability is as set out in the
2007 Adams Integra Study and will not be repeated again here. The key
difference is that for this study, we are testing the impact of collecting financial
contributions from notional sites of fewer than 5 units rather than looking at
on-site affordable housing provision.
2.1.3
The schemes are not actual developments but for the purposes of this study
concentrate on notional housing development reflecting scenarios that best
match how the policy requirements of the Council would operate. However,
research into local property prices across North Hertfordshire and Stevenage
was reviewed to produce realistic sales and therefore development values for
the appraisal modelling. This reflects the process carried out for the 2007
study too.
2.1.4
So, this study uses the same methodology as the 2007 study but instead of
assuming affordable housing on-site within the development appraisals, an
allowance is made as a financial contribution (cost to the scheme) only. The
indicative financial contribution levels are calculated based on the
methodology used within the 2007 study and as set out again below.
2.2
Property Values
2.2.1
As with the original study, research into residential property prices across the
two Council areas, on a detailed localised basis, was undertaken to determine
realistic residential development (property sales) values for each appraisal
model (see Appendix III – Supplementary Property Values Report). Rather
than divide the District and Borough into settlement areas, it was decided to
keep to a range of Value Points which represented the variety of typical new
build values across both Local Authority areas. The results of our property
values research informed our checking of these Value Point judgements
against our previous work. The Value Points methodology allows the results
of this study to be used independently of location and, more usefully, by
approximate development (sales) value. The range of new build Value Points
which were determined through this research is the same as for the original
study; shown in Figure 1: “Summary of Value Points and Property Types”
below.
4
2.2.2
Here we will only summarise the key elements of the review process
undertaken during July and August 2008. Appendix III sets out this important
aspect of the work in detail. In essence, for this update study we have carried
out a fresh desktop review of the pricing of new build schemes currently
underway and being marketed within North Hertfordshire and Stevenage. We
have also reviewed the marketing prices and “subject to contract sale” prices
of all properties on the market at the time of carrying out the research. That
information has been compared with its equivalent from our 2007 research.
To further inform the values overview, we have considered and refer to
market reporting from the Land Registry, Royal Institution of Chartered
Surveyors (RICS) and CLG.
Figure 1: Summary of Value Points and Property Types
<<<<<<<<<< Typical Value Range
>>>>>>>>>>>>>>
Unit
Type
Value
Point
1-Bed Flat
2-Bed Flat
2-Bed House
3-Bed House
4-Bed House
£ /sq m
Value
Point 1
Value
Point 2
Value
Point 3
Value
Point 4
Value
Point 5
Value
Point 6
£132,600
£171,600
£197,600
£223,600
£262,600
£2,600
£142,800
£184,800
£212,800
£240,800
£282,800
£2,800
£158,100
£204,600
£235,600
£266,600
£313,100
£3,100
£173,400
£224,400
£258,400
£292,400
£343,400
£3,400
£188,700
£244,200
£281,200
£318,200
£373,700
£3,700
£204,000
£264,000
£304,000
£344,000
£404,000
£4,000
2.2.3
The range of values set out in Figure 1 above is still thought to be reasonably
representative of the range of new build values seen within the North
Hertfordshire District and Stevenage Borough areas.
2.2.4
A comparison of the re-sale and new build data within Stevenage continues to
suggest a dual property market. In Stevenage, new build values appear to be
relatively strong compared to the resale market (when like-for-like property
type comparisons are made). In North Hertfordshire, relative to the overall
market, new build values are not so strong – there is more blurring of values.
Overall, however, the values across North Hertfordshire still appear generally
strong.
2.2.5
The overall market (predominantly re-sale) data appears to indicate that,
when compared to the data collected for the 2007 study (collated early
summer 2007), there has been little change in asking prices overall for either
Stevenage Borough or North Hertfordshire (see Appendix III). This trend is
also reflected in the new build asking prices. The Land Registry data for
Hertfordshire as a whole confirms this trend with average house prices
marginally higher in July 2008 than May 2007 (the date of the research for
this update compared to the previous study – see Appendix III).
5
2.2.6
2.2.7
We must acknowledge, however, the impact of current market conditions not
only on sales values but also sales volumes which are down sharply from the
same period 12 months ago. During the study period, there was extensive
reporting at all levels of a weaker and uncertain property market. These
conditions have certainly become more established with many market
commentators expressing views that the market downturn may be longer
lasting than first thought. There are still wide ranging views on how deep the
downturn may get, but nonetheless current characteristic features of the
downturn to be noted in the context of this study include:
•
Some house builders reporting reduced margins overall.
•
A slow-down in the rate of construction of new homes.
•
Incentives being offered more often - such as stamp duty/5% deposit
paid/mortgage payments contributions/fixtures and furnishings/part buy or
pay part later deals, and perhaps others – dependent on prospective
purchaser’s position together with marketing experience and sale potential
of particular plots, etc.
•
Some use of guide pricing alone, or even no advertised pricing, but
widespread/open pricing reductions are not being advertised on a regular
basis to our knowledge. Some schemes still selling well, with slower
sales/most difficulties perhaps typically being experienced with larger
flatted schemes. This is linked to a commonly expressed feeling, more
widely, that too many flats have been built in many places in recent years.
•
Some developers considering offers from RSLs for expanded affordable
housing quotas on sites, or even entire schemes for affordable.
•
Some reports of some developers pulling out of schemes, and delaying
starts or slowing scheme progress.
•
Thus, extended development periods in some cases, with a knock-on
effect of impacted sales progress because there is less for purchasers to
see. Purchasers are far less likely to purchase off plan given uncertainty
over values movements.
•
Fewer investment buyers active in some instances.
•
Towards the end of the study period, reports of some house builders and
others involved in the industry reducing staff numbers very significantly.
In terms of study methodology, the current uncertainties are very difficult to
reflect. In our view, however, it would be impractical for a Local Authority to
move affordable housing and perhaps other viability-related planning
6
obligations targets in response to what could be short-term market conditions
and adjustments. It would also fail to create clarity or an equitable situation.
The use of a range of Value Points enables us to see how residual land
values (and thus likely scheme viability) change as the market values of
properties vary.
2.2.8
As the property prices report at Appendix III indicates, one of the principal
concerns with the market currently is the volume of sales being achieved
rather than simply with sales values. Sales volume is difficult to reflect in
financial viability terms. It may affect developers’ views on risk levels, and it
may affect development and finance periods. These will, in any event, be sitespecific factors. The trend, which has become quite established now, may
ultimately have more bearing on prices, and we may see this as the very
recent figures filter through to the Land Registry.
2.2.9
In our view the key messages for Local Authorities in this situation are the
need to monitor the market and housing delivery outcomes and trends locally,
and respond to those through contingency measures and reviewing policy
longer term. This is also about adopting what should be the established
practical and flexible approach to secure delivery of all housing types, with an
emphasis on adaptability particularly in the very short term. We are aware
that both North Hertfordshire District and Stevenage Borough Councils
undertake monitoring of house prices through internet searches and estate
agent liaison.
2.2.10 Given the current downturn in market conditions, the property market and its
next direction is particularly difficult to assess at the moment - both in a wider
sense and more locally. By looking at a range of values to drive our
appraisals, however, this study can be used in a way which enables the
review of varying viability outcomes in response to value levels as those vary.
As such the property pricing research has led us to the conclusion that the
value points range used for the original study should be maintained, but that
under current market conditions it is likely that greater numbers of scheme
instances will more frequently fall into the lower parts of the overall Value
Points range.
2.2.11 For the original study it was determined that the majority of new build values
were seen between Value Points 2 and 4 within both Local Authority areas,
with low occurrences of Value Point 1 levels.
2.2.12 For this study, although the research shows values similar to those 12 months
ago, it is likely that values at the lower end of the range will be seen more
often (especially in the short term) with fewer examples of the higher end
values. The following is necessarily highly indicative but gives an idea of the
values relationships between the settlements (new build only) – the Property
Values Report in Appendix III goes into more detail:
7
o
Stevenage – most new build values lie between Value Points 2-3 but with
more occurrences of Value Point 2 levels than previously seen.
o
Old Town in Stevenage is likely to be the main exception where values
seem to range between Value Points 2-4.
o
In North Hertfordshire, Hitchin and Letchworth appear to have the highest
new build values in the range between Value Points 3-5, again with more
occurrences of Value Point 3 levels than seen before.
o
Baldock and Royston in North Hertfordshire appear, typically, to have
lower values in the range between Value Points 1-2 with values more
often being seen at Value Point 1 than observed previously.
2.2.13 For rural North Hertfordshire we have no new build values data but bearing in
mind the strength of the re-sale values in the rural areas we consider that it
can be assumed those new build values again would at least be in line with
Hitchin/Letchworth levels, but again with lower values (relatively) seen more
often than previously.
2.2.14 As with the 2007 study, this has not been a statistical exercise, but has
involved the making of judgements based on the range of information
reviewed.
2.3
Model Scenarios and Site Size
2.3.1
To test the impact on development viability of collecting a financial
contribution towards affordable housing on small sites below the on-site
affordable housing threshold we have appraised sites from 1 to 4 units in size,
across all Value Points.
2.3.2
Each appraisal assumes that all housing built on the site will be for private
(market) sale and that there will be a cost to the developer via a calculated
financial contribution in-lieu of providing on-site affordable housing.
2.3.3
For this study each site comprised 3-bed houses only (assuming 86sq m
gross internal area) to allow us to compare the impact of the financial
contribution whilst all other assumptions remained static:
1 x 3-bed houses
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
All tested at all Value Points at 10%, 20%, 30% and 40% affordable housing
equivalent.
8
A similar exercise could be carried out in relation to other property types but,
from our wider experience including the previous study, we would expect it to
show the same results trends and lead to the same findings.
2.3.4
To calculate the financial contribution for the affordable housing we followed
the same methodology as that set out in the 2007 study. At each point we
appraised a range of affordable housing proportions of 10%, 20%, 30% and
40% so that we could see how results varied over this scale, and then
consider with the Councils the potential to align this thinking to an extension
of a sliding scale approach. Such an approach could also reduce the abrupt
step in requirements once the on-site affordable housing threshold takes
effect. This would help optimise overall contributions towards meeting
affordable housing needs by seeking some level of provision from the
numerous small windfall sites which in the past have made up a large
proportion of the Local Authorities’ housing delivery pattern (See Chapter 1).
2.3.5
There is no particular reason why smaller sites should not contribute
appropriately, when larger sites are doing so and are not necessarily any
more viable. In essence, in all of our calculations for such studies we find no
reason for stating that smaller sites are more or less financially viable than
larger ones. Hence there is no viability reason why smaller sites should not
make a carefully judged level of contribution towards meeting affordable
housing needs as an extended policy approach.
2.3.6
This approach, if implemented, would effectively mean a further lowering of
thresholds but with financial payments being made in lieu of an on-site
requirement on sites within the relevant size range.
2.4
Other Key Assumptions
•
Dwelling Sizes
3-bedroom Houses at 86 square metres (gross internal area).
•
Base Build Costs
Houses: £1,100/m²
accommodation).
(applied
to the
gross
internal
area
of the
Build cost figures have been taken as an indicative base level, supported
by our discussions with developers and others, whilst also taking account
of a range of information from the RICS’ BCIS (Building Cost Information
Service) data.
There will always be a range of opinions on, and methods of, describing
build costs. In our view we have taken a reasonable view which lies within
the range of figures generally discussed for typical new build schemes
rather than high spec or complex schemes which might require particular
construction techniques. As with many aspects there is no single
9
appropriate figure in reality, so a judgement on some form of benchmark
is necessary.
We are aware that the developer’s base build costs can be lower than our
above base cost figures, and also that the BCIS tends to indicate lower
figures. In contrast however, there is much said about costs being higher
than this, often in the context of RSLs procuring new housing through
contractors and developers. So a view needs to be taken, and then
monitored, tested and updated as informed by the experience of site
specifics, negotiations and (from the affordable housing perspective) in
light of funding availability and affordability for occupants.
There is no land cost element at all allowed for within this particular
assumption, as will be clear from the wider text.
The areas of sustainable development, environmental standards (such as
the Code for Sustainable Homes) and renewable energy aspirations are
also developing quickly. The Councils will need to consider this as policy
and site-specific proposals advance, in the context of reviewing viability
periodically, and the overall negotiated approach.
These have been updated since the original study to take into account
potential increased costs and an element of increased environmental
performance (e.g. Code for Sustainable Homes requirements). For
example, achieving Code Level 3 has been approximated to cost an extra
£50 per sq m (based on CLG - July 20085 report and assumes medium
case scenario for flats and terraced houses).
5
•
Developer’s Profit
15% of GDV (i.e. of Gross - or total - Sales Value). It must be
acknowledged that this can vary. Our modelling assumes this level
because, in our experience, this is around the industry normal minimum
level and is a reasonable point at which a “default” view/initial negotiating
stance might be taken by a Local Authority, particularly for the type of
schemes indicated in this study. It coincides with the default position
within the Housing Corporation’s Economic Appraisal Tool. Note that
Gross Development Value means total development value – the value of
the scheme when completed (receipt level to the developer).
•
Architect’s Fees
3.5% of build costs
•
Consultants’ Fees (e.g. engineer, planning supervisor, project manager)
3.0% of build costs
DCLG – Cost Analysis of the Code for Sustainable Homes (July 2008)
10
•
Contingencies
3.0% of build costs
•
Insurances
2.5% of build costs
•
Marketing and Sales Fees
1.5% of Estimated Gross Development Value.
•
Legal Fees on Sale
£400 per property
•
Finance (build)
7.5% on above costs effectively applied for half the build period (usual
convention as the whole build cost is not financed for the whole build
period). This is an increase of 0.5% from the 2007 study due to the
uncertainty over finance in the current market. At the time of writing, after
a series of minor movements, the Bank of England Base Rate has been
kept at 5% following the most recent committee meeting outcomes. On
fixing our assumptions in the early study stages we decided to increase
our finance rate assumptions in response to the daily “credit crunch”
reporting (on the reduced availability and associated likely terms of
finance) as the study progressed, we considered this approach to be
further validated and therefore to remain appropriate.
•
Build Period
6 months for all schemes
•
Land Survey Costs
£500 per unit.
•
Site Preparation
£4,000 per unit (based on uncomplicated basic site clearance for
uncontaminated brownfield sites with no abnormals).
•
Legal Fees on Land Purchase
0.5% of land value
•
Planning Application costs
£335 per dwelling. This is an increased amount from the 2007 study.
•
Stamp Duty Land Tax
Between 0% and 4% depending on residual land value.
•
Infrastructure Payments
Variable – see Appendix II
11
The Planning Obligations costs used are the same as those for the
original study. These are shown in Appendix II and were provided by
North Hertfordshire District Council from its Planning Obligations SPD.
They were agreed by both Councils to be used as the basis for the study.
Although the planning obligations will be subject to price indexation, the
values used in this study were those used at the time of the study last
year. As this study states, this is a key area that will need to be monitored
in terms of the overall burdens on sites.
Please note that these are the figures used in the appraisals, but are not
necessarily representative across all new residential developments as
each site will need to be assessed on its own merits. The same
comments apply here as mentioned in the context of build costs and
sustainable development, at pages 8 and 9 above. The Councils will need
to be mindful that while per plot/unit planning obligations costs increases
of less than say £3-5,000 may not normally have a significant additional
impact on the viability outcomes (subject to all normal caveats on site
specifics), larger increases in overall burdens would need to be reviewed
in the context of site viability and impact on the deliverability of targets.
This message is reinforced from the previous study. It is intended only as
a general comment and does not form part of any recommendation. The
intention is to reinforce the link between viability and all cost items, as well
as development values.
•
Finance related to land purchase
7.5% on land survey, planning costs, legal fees on land purchase and
residual land value over build time plus a 26 week lead-in period, as these
land related costs are a burden on the scheme for an extended period,
estimated here.
As this is a relative exercise aimed at determining the likely effect of the
Council’s potential policy positions, a key factor is consistency between
assumptions used for modelling scenarios while the affordable housing
assumptions are varied. Specific assumptions and values for our
notional schemes may not be appropriate for any particular actual
development. As with the original work we are confident, however,
that our assumptions are reasonable in terms of making this viability
overview and thus in the context of the Councils considering clear
policy targets. The study is not intended to be used in any other or
wider context.
12
3
FINANCIAL CONTRIBUTIONS METHODOLOGY and RESULTS
3.1
Financial Contributions Methodology
3.1.1
It was agreed with the Councils’ officers that Adams Integra would use the
same methodology set out in the 2007 study and test the viability of such an
approach. This does not preclude the Councils from adopting a different
methodology. The methodology we discuss and propose in this section is
rooted in the same type of process that has driven calculations and informed
negotiations for other Local Authorities. The suggested calculation seeks to
equate the financial contribution to the land value of the relevant dwelling
plots (those that would have been made available for on-site affordable
housing).
3.1.2
It is beyond the remit of this study to comment on the planning policy scope or
wider merits of an approach to seek financial contributions towards meeting
affordable housing needs from the smallest sites, but to inform only on the
development viability aspects. There are potential practical advantages of
requesting financial contributions from the smallest sites rather than adhering
to on-site provision. There can be issues with affordability, integration,
management and the like in relation to providing affordable housing on small
sites. This policy approach could have practical merits with those issues in
mind. If those concerns are removed through the use of financial contributions
in lieu of on-site provision, then dependent on the scale of the payment being
appropriately judged there is unlikely to be a pure financial viability issue –
subject as normal to any existing/alternative use barriers and the normal
negotiation process where necessary.
3.1.3
We recognise that other Local Authorities are exploring the scope for and
issues with, lower thresholds and/or financial contributions from smaller sites
in a similar way and at the time of writing, so far as we are aware there is no
clear planning policy guidance which steers on the acceptability of this type of
approach. However, Inspectors of LDF documents will be considering the
soundness of this type of approach. Having worked in South Hams, we are
aware that a similar approach received support from the Inspector there
following Examination in Public of an Affordable Housing DPD. This was in
the South Hams context, where following his binding recommendations 1
dwelling schemes will not contribute, so the Councils will find it useful to
monitor other such developments and to consider how those compare and
have local relevance to North Hertfordshire and Stevenage.
3.1.4
The results from the appraisals carried out on this basis, are set out within
Appendix I. We will not describe them in detail here.
3.1.5
Compared with previous national advice under Circular 6/98 and PPG3 (now
rescinded), PPS3 gives more scope for the consideration of thresholds lower
13
than the “national indicative minimum” of 15 it sets out, related to local
circumstances “where viable and practicable”.
3.1.6
Policy guidance should clarify to landowners and developers how the
Councils would apply their approach regarding financial contributions in-lieu
of affordable housing and on what basis calculations would be made.
3.1.7
The following paragraphs will cover the financial contribution topic in outline. It
is an area of the Councils’ potential approach that would need to be
developed in detail through affordable housing Supplementary Planning
Documents, or possibly a Development Plan Document.
3.1.8
Before outlining our thinking in more detail, it is worth considering other
approaches briefly.
3.1.9
In order to establish or indicate payment levels, Local Authorities have
adopted a number of calculation methods. Usually these mean considering a
methodology which either:
•
Relates to the build cost of the affordable homes, or
•
Relates to the land cost element – allied to a nil-cost land approach to
on site affordable housing, or
•
Considers the difference between the open market sale revenue and
the affordable housing revenue for the relevant homes which would
have formed the on-site quota. This latter route may be more complex,
need more updating and be viewed as less market-related.
3.1.10 Some Local Authorities have continued using mechanisms which relate back
to the former Housing Corporation Total Cost Indicator (“TCI”) regime in some
way, or to RSL finance-driven models which link to how much finance RSLs
are able raise or grant/other subsidy they need based on dwelling type and
tenure assumptions.
3.1.11 Reference to TCIs is now outmoded. Furthermore, in our view such
methodologies relate less well to the market. In our experience
methodologies which relate more closely to the market-led provision that
flows from the planning obligations are preferable and more widely
understood.
3.1.12 In our view, the most appropriate route more generally may be to look at land
value. In essence this involves calculating how much it would cost to go
elsewhere and replace the land on which the affordable housing would have
been provided on-site. This is the basis we have assumed.
14
3.1.13 In summary, in carrying out viability appraisals on this principle we add the
relevant (estimated) land value and acquisition expenses associated with
acquiring an equivalent plot in the market elsewhere to the cost section of the
model. This is because we are assuming (for the purposes of this study) a
straightforward payment being made by the landowner (who may be the
developer) under the terms of a Section 106 agreement. This is in much the
same way as occurs with planning obligations for other infrastructure aspects
such as highways/transport, open space, education etc). So the methodology
assumes an additional planning obligations payment being made by the
developer, albeit from the increased Gross Development Value which results
from having no affordable housing on-site. In our opinion the calculation
should not (and this way it does not) seek to secure a level of subsidy beyond
that which the developer would provide on-site. PPS3 requires the
contribution secured to be “of broadly equivalent value” to that which would
have been secured through on-site provision.
3.1.14 We have advised other Authorities similarly. In our experience a property or
land value based calculation tends to be understood by landowners and
developers better than potentially more complex affordable housing finance
related mechanisms. A commuted sums methodology based on land value
links better to market reality and processes, and is simpler to take account of
in the early stages of site feasibility.
3.1.15 In practice, the Councils might not look to buy another site, but should in any
event have a strategy for monitoring, managing and spending these
contributions. That strategy could include providing a variety of more creative
affordable housing funding assistance to other local schemes, addressing
priority needs and contributing to sustainable communities aims - again as
required by PPS3.
3.1.16 We will now work through our calculation methodology, which is based on a
formulaic approach to approximating the land value that needs to be replaced
elsewhere, and then allowing also for the cost of acquiring and servicing that
land.
3.1.17 We start by taking the value of the land as if no affordable housing were
required on site, calculated as a percentage of the market sale value of a
property. This percentage would reflect the pre-affordable housing (0%)
residual land value results, as taken from this study (Appendix Ia). For this
purpose, and for consistency with the earlier work, we have applied a
proportion of 34.9% of the relevant property or properties Open Market Value
(OMV). This was derived from all relevant 0% affordable housing appraisals –
from sites in range 2 to 25 units – carried out for the 2007 study. An
allowance is added for acquisition and (potentially) for servicing costs that
would need to be borne in the case of replacing the land elsewhere in the
market.
15
3.1.18 In summary, the indicative payment figures (see Figure 2 below) are arrived
at by the following steps:
a)
Open market value (OMV) of relevant or comparative property
(depending on to what degree the formulaic approach is to be sitespecific, Borough/District-wide, etc.
b)
Multiply by the residual land value percentage. We have used 34.9%,
derived as above at 3.1.17 (note that it would be possible to look at
this in a variety of ways, including on a more site-specific basis).
c)
Add 15% of the result of a x b to reflect site acquisition and servicing
costs. This gives the per unit sum.
d)
Apply to the relevant site number and proportion (in this case 10%,
20%, 30% or 40%).
Worked example (to illustrate the suggested calculation):
(step a above) Scheme of 3 no. 3-bed houses selling at Value Point 3 =
£266,600 each.
Requirement for 20% equivalent affordable housing contribution (payment inlieu):
20% proportion means 0.6 unit for affordable housing (3 x 20%).
The per (whole) unit equivalent sum is then calculated as follows:
(step b) £266,600 x 34.9% = indicative land (plot) value for that unit £93,043.
(step c) Add 15% acquisition and servicing cost. £93,043 x 115% =
£107,000.
(At 20% target) scheme triggers requirement for 0.6 unit.
So indicative financial contribution would be:
(step d) £107,000 x 0.6 = £64,200
3.1.19 Figure 2 sets out the “per unit” indicative financial contributions which we
have arrived at on this basis, using our property size and wider assumptions.
These figures are as applied in Appendix I appraisals of notional sites of 1 to
4 units assuming 10%, 20%, 30% and 40% proportions of affordable housing
contributed. For the purposes of this study, we have looked only at notional
sites containing 3-bed houses and have highlighted the appropriate column
for clarity. The same approach would be used for all house types.
16
Figure 2: Indicative Financial Contributions In-lieu of Affordable Housing.
Figures Used as Basis for Appraisals (source: extracted from Appendix I)
Value
Point
1
2
3
4
5
6
Value
Point
1
2
3
4
5
6
1 Bed Flat
2 Bed Flat
OMV £
Indicative
£ payment
OMV £
Indicative £
payment
£132,600
£53,219
£171,600
£68,872
£142,800
£57,313
£184,800
£74,169
£158,100
£63,453
£204,600
£82,116
£173,400
£69,594
£224,400
£90,063
£188,700
£75,735
£244,200
£98,010
£204,000
£81,875
£264,000
£105,956
2 Bed House
3 Bed House
4 Bed House
OMV £
Indicative
£ payment
OMV £
Indicative
£ payment
OMV £
Indicative £
payment
£197,600
£79,307
£223,600
£89,742
£262,600
£105,395
£212,800
£85,407
£240,800
£96,645
£282,800
£113,502
£235,600
£94,558
£266,600
£107,000
£313,100
£125,663
£258,400
£103,709
£292,400
£117,355
£343,400
£137,824
£281,200
£112,860
£318,200
£127,710
£373,700
£149,984
£304,000
£122,010
£344,000
£138,064
£404,000
£162,145
3.1.20 The Councils could decide to further simplify the above type of approach with
District and Borough-wide single figures per property type. If this route were
preferred then an average or mid-range figure from the above could be
selected for each unit type. This would mean taking an average approach,
with the outcome more favourable from some sites than others. In the case of
local markets and typical value levels, as discussed, the point selected could
be the Figure 2 indicative contribution figures relating to Value Point 3, or
perhaps to Point 4. Point 3 would in our view be reasonably representative if
a “one size fits all” approach were to be set out in District and Borough-wide
guidance.
3.1.21 Alternatively, the approach could be worked up further to reflect a more local
residual land value percentage (rather than a District or Borough-wide
approach). This could then be applied to the property value in our formula.
With reference to that range of RLV outcomes (as a % of GDV) set out in
Appendix Ia, figures of 23.5% to 44.0% of GDV were indicated depending on
the strength of values on any given site. For this study, however, we applied a
figure of 34.9% of OMV being the average outcome (% of GDV remaining for
residual land value) from all previous relevant 0% affordable housing
appraisals – sites in the range 1 to 25 units.
17
3.1.22 Whether a District/Borough-wide or more location-specific route is taken will
depend on resource availability (in terms of the number of staff available to
carry out negotiations on the collection of financial contributions and the
monitoring of those). Overall, the Councils may feel that a “one size fits all”
simple guide to contribution figures by dwelling size would be the best
compromise in terms of clarity, resourcing and operation. We feel that would
serve well in terms of informing land owners’ expectations and supporting the
necessary negotiated approach.
3.1.23 Overall, this formulaic approach based on land value and selected one point
as a guide is felt to provide a sound basis. Whilst something more complex
and reflective of particular local area values and land residuals could be used
applying the same formulaic method, this fits with our overall feel for North
Hertfordshire and Stevenage values given their level and consistency. In
reality a replacement site, or scheme to be funded with the monies collected,
could be anywhere within the District or Borough boundaries given the Local
Authority-wide high affordable housing need, which perhaps again fits with a
“one size fits all” approach to this aspect.
3.1.24 The scenarios investigated here overlap with the on-site approach studied.
This provides the Councils with a range of options from which to formulate
affordable housing policy. The formulaic approach suggested could be
applied to a larger site (i.e. above the potential threshold for on-site affordable
homes provision) in exceptional circumstances. The relevant higher
proportion of affordable homes would be reflected in the calculation in such a
case.
3.1.25 The Councils may also wish to consider developing policy which can fairly
and effectively derive developer/landowner financial contributions towards
meeting affordable housing needs, on an equivalent basis, from the type of
very “upmarket” housing schemes. Such schemes may involve the
development of a single, or a very small number of, very large and valuable
homes. For example, a property type of 300 square metres (sq m) could very
broadly generate a development value of approximately three times that for a
more typical family home of say 100 sq m, and so on. Thus, in developing its
detailed approach, the Councils could consider a parallel mechanism allied to
property/development size to drive the formulaic type of approach to land
value equivalent that we have suggested.
3.1.26 This could start with considering the property size to be developed so as to
establish the equivalent number of more typical homes in terms of value. That
equivalent number could then be applied within the suggested formula (See
Note 1 below). Alternatively, there could be a straight calculation applying the
relevant affordable housing proportion to the size (sq m) and value (£/sq m –
as with our range of sales rates) – see Note 2 below.
18
By way of example:
Single large property developed at 300 sq m (as for example might
trigger affordable housing requirement currently through site area
criteria rather than site numbers)
1. 300sqm property in value terms is approximately equivalent to say 3
x 100 sq m properties:
Applying affordable housing proportion of 20% to 3 properties
would mean a contribution based on 0.6 of a 100 sq m property.
This aligns to 0.6 of our 4 bed property contribution of say £137,824
at Value Point 4 = contribution of £82,694.
2. Same 300 sq m market property – Adams Integra formulaic
approach applied:
@ sales rate say £3,400/sq m = selling price (GDV) £1,020,000
multiplied by suggested average RLV (% of GDV) 34.9% =
£355,980 (indicative land value for market property).
Plus 15% acquisition of and servicing of land = £409,377.
Multiplied by relevant affordable housing equivalent proportion,
again say 20% = contribution of £81,875.
3.1.27 In considering financial contributions calculations (particularly where, in lieu of
on-site provision on larger schemes, PPS3 states the benefit secured should
be of broadly equivalent value), Adams Integra’s view is that care should be
taken not to apply the approach inequitably. In this context the
appropriateness of effectively expanding the site size to add back in what
would have been the affordable housing content needs to be considered in
planning terms. Of course, if applied in such a way there would also be
additional viability impacts, to be tested, as compared with those modelled in
this study.
19
3.2
Results
3.2.1
Appendix I sets out the results of the appraisals carried out on sites of
between 1 and 4 units based on the methodology discussed above. The table
in Appendix I shows the results by Value Point (1 to 6) and at each point
shows the results of the appraisals where 0%, 10%, 20%, 30% and 40%
affordable housing equivalent financial contribution has been assumed. It also
details the financial contribution calculated as per the above methodology for
these notional sites.
3.2.2
The reduction in residual land value varies between 64% (from a 0% to a 40%
requirement) on a 1 or 2 unit scheme in Value Point 1 to approximately 9%
(from a 0% to 10% requirement) on a 2 unit scheme in Value Point 6 – the
range of results investigated.
3.2.3
The results follow the same general pattern as seen for the on-site appraisals
in the original 2007 study with viability improving from Value Point 1 through
to Value Point 6. The least viable of the appraisals are seen where a 40%
affordable equivalent is required at the lowest value points.
3.2.4
There appears to be little relative difference in terms of viability between a 1
unit scheme and a 4 unit scheme. The basic trend in the results show, as
expected, that the higher the financial contribution sought, the greater the
impact on residual land value.
3.2.5
However, on sites as small as these, the Councils will have to bear in mind
the actual sums of money likely to remain available for land purchase after
the introduction of a financial contribution. Although RLVs remain positive at
all value points, it is not possible to define definitive cut-off points where a
certain level of contribution will be viable, and where it will not. This is due to
a number of factors including landowner’s expectation, existing use and
potential alternative uses of a site. This also has to be viewed in the context
of site specifics. What one landowner finds acceptable as a payment for their
land will be different from another – this is especially true on small sites where
we could be discussing garden plots or residential redevelopment etc. In real
monetary terms, the residual value of land may reduce to the point whereby
landowners of small plots do not feel there is sufficient recompense. Equally,
where existing residential units are bought up and demolished to make way
for a larger number of units viability issues may occur. This is due to the high
existing use of the residential properties that have been demolished which
needs to be overcome before the new development can become viable – a
high enough RLV needs to be generated to finance the purchase of units
which are going to be demolished.
3.2.6
What we can do is make reasoned judgements on the relative impact of
increased financial contributions on a scheme. Although the results show
20
positive residual land values across all value points and at all proportions of
affordable housing contribution, between Value Points 1 and 2 in our view
there are likely to be viability difficulties where 30% or 40% equivalent is
assumed. Residual land values drop significantly at all value points but here
they approach minimal values and show very large decreases relative to the
0% (no affordable housing contribution) starting position. Where a 10% or
20% contribution is considered, results look more positive, with higher
residual land values (or smaller reduction compared to existing 0%
contribution policy).
3.2.7
Viability improves with increasing property (completed new build unit) values
as amounts available for land increase. By moving the same notional scheme
from Value Point 1 to 6 we see land value (RLV) increased significantly. This
applies both before and after affordable housing requirements are applied.
3.2.8
The exact relationship between the property values and the indicative
commuted payment levels in the particular scheme mix, affects results
relative to each other.
3.2.9
At Value Point 3, results improve so that with 10% or 20% financial
contribution, results are relatively strong. With increasing values, much
stronger results are seen overall. However, even with stronger values, say
from Value Point 4, some potential viability difficulties may be indicated if as
much as a 40% equivalent affordable housing proportion were sought.
Notwithstanding this finding, residual land values improve to the point where,
viability should be workable with a financial contribution not exceeding 20%
affordable housing equivalent. As with all aspects of such policy positions,
this is with the normal caveats applying (with regard to site specifics, being
allied to a target approach as with on-site provision, etc).
3.2.10 We consider that there are likely to be difficulties achieving a 30% or 40%
affordable housing equivalent financial contribution across North Hertfordshire
and Stevenage from these smallest sites on a regular basis. Given the
likelihood that increased occurrence of lower value point sales values will be
seen across the area in the current and short term market conditions, there
may even be difficulties achieving a 20% financial contribution with
guaranteed regularity. This is because although, from the evidence (Appendix
III), property values in Summer 2008 are at similar levels to those seen when
the previous study was conducted, sales volumes have dramatically reduced.
This dominant market feature appears to be leading potentially to relatively
large discounts to sales prices from those advertised.
3.2.11 Therefore, although we would recommend a target of up to 20% affordable
housing financial contribution, the Councils will, in our view, have to place an
emphasis on adopting a practical approach to negotiations. This is an
approach which should be adopted in any event, but the current market
21
means focusing on this point. The Councils will need to bear in mind that in
the current market some sites may struggle to achieve these fairly modest
targets. They will be impacted by affordable housing policy for the first time
(typically the greatest viability impact). In addition it often means that the land
value generated by the small schemes placed on those smaller sites is
marginal when compared with existing or alternative use value.
3.2.12 This discussion does not alter our view that ambitious targets can and should
be set, based on the extent of need. We consider that it would be impractical
to adjust targets up or down on what could be a regular basis in response to
market movements or other particular viability issues. Such an approach
would not provide clarity.
3.2.13 Alongside the discussion above, North Hertfordshire’s preferred option is to
achieve a 20% on-site affordable housing target at 5 units. A financial
contribution equivalent to this (or potentially at 10% equivalent) beneath the 5
unit on-site threshold would therefore be an appropriate, more workable and
sustainable policy position than any higher target on smaller sites. As with the
on-site provision route, flexibility needs to be considered, with viability related
negotiations taking place in the context of the valuation and site-specific
issues as raised in this study. The positions wherever pitched will need to be
regarded as targets.
22
4
CONCLUSIONS, RECOMMENDATIONS and COMMENTARY
Viability principles as they affect smaller sites
4.1.1
Unless particular local characteristics (for example, in terms of site supply)
indicate to the Councils otherwise, from our findings here, as with all other
studies, we can see that on a like-for-like basis, site size alone is not a
determinant of viability. It is the impact of any new policy compared to existing
that has a greater effect on these smaller sites.
4.1.2
There is no right or wrong answer in terms of viability, to suggest which
threshold point would be viable and which would not. Thresholds have always
been arbitrary (for example, why would a scheme of 15 units provide
affordable housing but one of 14 not do so?). There may be lower risks, and
smaller planning obligations burdens on smaller sites but, conversely, there
might not the same opportunities for savings through economies of scale.
There are a range of factors which could well balance out or alter outcomes
either way dependent on the circumstances. The outcomes relate to site
specifics, crucially including value levels; it is simply not possible to say that a
smaller site will be more or less viable than a larger one.
4.1.3
Viability is principally value rather than site size driven. Notwithstanding this
general principle, however, there are two key features of typical smaller sites
which deserve consideration in relation to the proportions selected.
4.1.4
Firstly, in likely monetary terms, on smaller schemes the residual value of the
land may reduce to the point whereby owners of smaller sites will not feel
there is sufficient justification to release their land. As an example, if we are
envisaging the development of a garden plot for a 4 unit housing scheme, the
RLVs remaining after the application of a 30% or 40% policy may not be
strong enough to incentivise the owner to sell. Equally, where one or two
existing properties are required to be bought by a developer to create a larger
site for higher density housing, these will have relatively high “existing use
values” – i.e. their market value will be high prior to any development taking
place – these values need to be overcome before a proportion of affordable
housing/other infrastructure can also be accommodated.
4.1.5
Secondly, the sharpest viability impacts are predominantly on sites which
provide affordable housing contributions (whether on or off-site) for the first
time, as opposed to sites where an increased proportion is sought over that
already required. We consider that carefully judged policies relating to smaller
sites would be viable, and could be made workable from a practical point of
view. As with all such policies, their workability would depend to a large
extend on early knowledge of policies and appropriate land value
expectations on the part of landowners.
23
Potential issues with on-site delivery – smaller sites
4.1.6
In addition, practicalities of delivery on the very small sites may be more of an
issue than viability alone, for example scheme design/integration of affordable
homes with the market housing, sustainable management, dealings with
RSLs, marketing issues and perceptions, isolation of tenants, etc.
4.1.7
Relatively dispersed affordable housing stock can also result from an
affordable housing requirement on very small sites, which may be an issue for
RSLs from a management perspective, and this needs to be considered. Our
Local Authority and RSL clients and contacts have taken varying views on the
sustainability of this.
Key points - Recommendations
4.1.8
It is likely to be impractical to seek on-site affordable housing below 5
units. However, purely from practical and viability viewpoints we are
able to support lower/introductory proportions of affordable housing
being sought by way of financial contributions from sites of less than 5
dwellings.
4.1.9
A lower introductory proportion of 10% to 20% equivalent affordable
housing provides stronger results than with higher proportions. A key
way of reducing the large first time impact on smaller sites is to seek
lower such “introductory” proportions of affordable housing on sites
below the current policy threshold(s).
4.1.10 Therefore, respecting the sliding scale principle set out in our previous
study and with carefully judged contribution levels our results suggest
that a 10% to 20% affordable housing equivalent could be workable in
viability terms on sites of fewer than 5 units. We must highlight
however, the need to consider the wider planning policy framework and
whether that allows this scope. Forthcoming inspector’s decisions
should help to inform this further. We have looked at this in terms of
viability only.
Related commentary, advice and limitations
4.1.11 A 10% to 20% equivalent proportion from sites of 1 to 4 dwellings would
continue the graduated approach to requirements already being proposed for
sites of 5 or more (sliding scale). It would have a useful effect in aiding
viability again compared with higher proportions. The Councils may take the
view, however, that another different level of requirement could create a more
complex policy.
4.1.12 The Councils will wish to consider exactly how an expanded approach to
smaller sites might work and be set out in terms of detail. They will also need
24
to consider the drivers behind such an approach, wider evidence for it and
therefore the likely benefits from it – i.e. looking at local characteristics, needs
and site supply patterns for example.
4.1.13 As a part of considering the detail for application, the Councils will also need
to consider whether the principle would apply to sites of 1 or 2 dwellings plus.
We assume that it would not apply to replacement dwellings. As with all such
policy, there should be clarity as to whether it applies to all, or to net numbers
(i.e. after allowing for any existing dwellings on a site or within a conversion)
of new dwellings.
4.1.14 This study necessarily provides an overview of viability. It is not a substitute
for site-specific appraisals or intended to prejudice any such discussions.
Site-specific work would normally take precedence, based on more specific
information relating to the particular circumstances. This study is intended to
support North Hertfordshire District’s and Stevenage Borough’s policy
consideration processes, and should not be used for other purposes.
4.1.15 The residual land value (RLV) figures stated are indicative, based on the
notional schemes, development value and range of other assumptions Adams
Integra has used and explained.
4.1.16 The importance of considering existing and/or alternative use values,
amongst the wide range of variables discussed, has been acknowledged in
the study. This, again, is a highly site-specific factor. Commercial values are
very sensitive to location and it is not normally possible in this type of
overview exercise to provide specific viability advice as to whether certain
value levels will be outweighed by particular residential development
proposals. Site specifics will need to be considered, in light of the clear target
and practical, negotiated approach advocated in this report.
4.1.17 The study advises only in respect of viability and, where appropriate, practical
housing and development issues, based on our results and experience. It
does not deal with the wider issues and planning scope to pursue particular
policy options or approaches.
4.1.18 The study is necessarily based on a snap-shot in time, in terms of information
gathered and assumptions made.
4.1.19 We encourage the Councils to do their own monitoring of the local market
through routes such as the Land Registry and keeping an eye on the pricing
of developments locally, etc. This would assist with maintaining a feel for
development viability from the base point this study provides.
4.1.20 The housing market-led data, as for example used in the financial
contributions calculations, could be updated by reference to local house price
25
information trends from the Land Registry, such as we have reported in
Appendix III. With reference to the potential financial contributions route
(whether in lieu of affordable housing on sites of up to 5 dwellings or large
sites in exceptional circumstances), the Councils will also need to consider
indexing mechanisms for particular Section 106 agreements as there is often
a significant time lapse between the agreement and payment dates.
4.1.21 The Councils will also need to consider policy for the use of financial
contributions, where those are to be used and over what timescale through
SPD or similar.
4.1.22 It will also be important for the Councils to detail contingency plans in the
event of failure to meet affordable housing targets (potentially through shortterm worsening of housing markets).
4.1.23 Given that assumptions have been made on areas such as planning
obligations costs, movements in such factors should be borne in mind and the
study revisited or updated should those materially alter so as to affect the
relationship between values and costs. In the same way, the growing areas
of eco-friendly construction (for example the Code for Sustainable Homes),
renewable energy and other sustainability issues should be monitored –
regarding how they might affect development costs (and perhaps even values
in the longer term). If the Councils seek to bring in significant policies in such
areas, then those may well need to be considered in light of the collective
costs scenario and viability.
End of Main Report
Appendices follow
August - September 2008
26
Appendices
Appendix I -
Appendix Ia -
Average Residual Land Value as Percentage of GDV
on Sites of 0% Affordable Housing
Appendix II -
Appendix III -
North Hertfordshire District & Stevenage Borough
Property Values Report
27
Appendix I
Appendix I - North Hertfordshire District & Stevenage Borough Council Financial Contributions in lieu of on-site provision - Value Points 1 to 6: 0%, 10%, 20%, 30% & 40% Equivalent Affordable Housing Provision Sites Below 5 Units
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Scheme Size
1 House
2 Houses
3 Houses
4 Houses
Mix
1 x 3-bed house
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
Value Point
1-Bed Flats
1
2
3
4
5
6
£132,600
£142,800
£158,100
£173,400
£188,700
£204,000
Value Point 1
0% Affordable Equivalent
RLV (£)
RLV (% of GDV) Commuted Payment
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£53,975
24.1%
£8,974
£45,254
20.2%
£17,948
£36,533
16.3%
£26,923
£27,813
12.4%
£35,897
£19,092
8.5%
£107,949
24.1%
£17,948
£90,508
20.2%
£35,897
£73,067
16.3%
£53,845
£55,625
12.4%
£71,793
£38,184
8.5%
£160,305
23.9%
£26,923
£134,404
20.0%
£53,845
£109,600
16.3%
£80,768
£83,438
12.4%
£107,690
£57,276
8.5%
£213,739
23.9%
£35,897
£179,206
20.0%
£71,793
£144,672
16.2%
£107,690
£111,250
12.4%
£143,587
£76,368
8.5%
Value Point 2
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£67,188
27.9%
£9,665
£57,796
24.0%
£19,329
£48,405
20.1%
£28,994
£39,013
16.2%
£38,658
£29,622
12.3%
£133,032
27.6%
£19,329
£115,592
24.0%
£38,658
£96,809
20.1%
£57,987
£78,026
16.2%
£77,316
£59,243
12.3%
£199,547
27.6%
£28,994
£171,655
23.8%
£57,987
£143,762
19.9%
£86,981
£117,040
16.2%
£115,974
£88,865
12.3%
£260,688
27.1%
£38,658
£228,873
23.8%
£77,316
£191,682
19.9%
£115,974
£154,492
16.0%
£154,632
£118,487
12.3%
Value Point 3
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£87,007
32.6%
£10,700
£76,609
28.7%
£21,400
£66,212
24.8%
£32,100
£55,814
20.9%
£42,800
£45,416
17.0%
£172,274
32.3%
£21,400
£151,687
28.4%
£42,800
£131,099
24.6%
£64,200
£111,628
20.9%
£85,600
£90,833
17.0%
£253,191
31.7%
£32,100
£227,530
28.4%
£64,200
£196,649
24.6%
£96,300
£165,768
20.7%
£128,400
£134,886
16.9%
£337,588
31.7%
£42,800
£297,245
27.9%
£85,600
£256,902
24.1%
£128,400
£221,024
20.7%
£171,200
£179,849
16.9%
Value Point 4
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£106,827
36.5%
£11,735
£95,423
32.6%
£23,471
£84,019
28.7%
£35,206
£72,615
24.8%
£46,942
£61,211
20.9%
£211,517
36.2%
£23,471
£188,937
32.3%
£46,942
£166,357
28.4%
£70,413
£143,778
24.6%
£93,884
£122,422
20.9%
£310,866
35.4%
£35,206
£277,680
31.7%
£70,413
£244,495
27.9%
£105,619
£215,666
24.6%
£140,826
£181,797
20.7%
£414,488
35.4%
£46,942
£370,240
31.7%
£93,884
£325,993
27.9%
£140,826
£281,746
24.1%
£187,768
£242,395
20.7%
Value Point 5
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£125,380
39.4%
£12,771
£114,236
35.9%
£25,542
£101,826
32.0%
£38,313
£89,416
28.1%
£51,084
£77,006
24.2%
£245,694
38.6%
£25,542
£226,188
35.5%
£51,084
£201,615
31.7%
£76,626
£177,043
27.8%
£102,168
£152,471
24.0%
£368,541
38.6%
£38,313
£332,427
34.8%
£76,626
£296,314
31.0%
£114,939
£260,200
27.3%
£153,251
£228,707
24.0%
£486,322
38.2%
£51,084
£443,236
34.8%
£102,168
£395,085
31.0%
£153,251
£346,933
27.3%
£204,335
£298,782
23.5%
Value Point 6
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (£)
RLV (% of GDV)
£145,001
42.2%
£13,806
£131,719
38.3%
£27,613
£119,633
34.8%
£41,419
£106,217
30.9%
£55,226
£92,800
27.0%
£284,144
41.3%
£27,613
£258,116
37.5%
£55,226
£236,873
34.4%
£82,839
£210,309
30.6%
£110,452
£183,744
26.7%
£426,216
41.3%
£41,419
£387,174
37.5%
£82,839
£348,132
33.7%
£124,258
£309,090
30.0%
£165,677
£270,049
26.2%
£562,429
40.9%
£55,226
£510,910
37.1%
£110,452
£464,176
33.7%
£165,677
£412,121
30.0%
£220,903
£360,065
26.2%
Commuted
Payment (Per
Unit)
£53,219
£57,313
£63,453
£69,594
£75,735
£81,875
2-Bed Flats
£171,600
£184,800
£204,600
£224,400
£244,200
£264,000
Commuted Payment
2-Bed Houses
(Per Unit)
£68,872
£74,169
£82,116
£90,063
£98,010
£105,956
£197,600
£212,800
£235,600
£258,400
£281,200
£304,000
Commuted
Payment (Per
Unit)
£79,307
£85,407
£94,558
£103,709
£112,860
£122,010
3-Bed Houses
£223,600
£240,800
£266,600
£292,400
£318,200
£344,000
Commuted
Payment (Per
Unit)
£89,742
£96,645
£107,000
£117,355
£127,710
£138,064
4-Bed Houses
Commuted Payment
(Per Unit)
£262,600
£282,800
£313,100
£343,400
£373,700
£404,000
£105,395
£113,502
£125,663
£137,824
£149,984
£162,145
Commuted payment calculated by:
1. Taking average residual land value as percentage of GDV from all appraisals with zero affordable housing = 34.9%
2. Multiplying this figure by the open market unit value
3. Adding 15% on-costs
4. Multiplying this figure by the equivalent affordable housing percentage (20% in this example).
Example - 3 Unit Housing Scheme of 3 x 3-bed houses (Value Point 3):
3- bed houses at £266,600 x 0.349 =£93,043
£93,043+15% = £107,000
3 x 3-bed houses x 20% = 0.6 houses x £107,000 =£64,200
Commuted Payment = £64,200
Appendix I
Appendix Ia
Average Residual Land Value
as Percentage of GDV on
Sites of 0% Affordable Housing
Appendix Ia: Average Residual Land Value as Percentage of GDV on Sites of 0% Affordable Housing - North Hertfordshire District
& Stevenage Borough Council Viability Study
2 Houses
3 Houses
4 Houses
5 Houses
10 Flats
10 Houses
15 Flats
15 Houses
20 Mixed
25 Mixed
Average
Overall Average
Band1
26.1%
27.5%
27.7%
28.8%
23.8%
28.6%
23.5%
28.4%
25.9%
25.9%
26.6%
Unit
Band
1-Bed Flat
2-Bed Flat
2-Bed House
3-Bed House
4-Bed House
Band 2
29.4%
30.9%
31.0%
32.0%
27.3%
31.8%
27.1%
31.6%
29.2%
29.2%
29.9%
Band 3
33.8%
34.4%
34.4%
36.0%
31.5%
35.8%
20.7%
35.5%
33.2%
33.2%
32.9%
Band 4
37.4%
37.9%
38.5%
38.9%
35.1%
39.0%
35.1%
38.8%
36.6%
36.6%
37.4%
34.9%
Value Point
1
£132,600
£171,600
£197,600
£223,600
£262,600
Value Point
2
£142,800
£184,800
£212,800
£240,800
£282,800
Value Point
3
£158,100
£204,600
£235,600
£266,600
£313,100
Band 5
39.7%
40.8%
40.9%
41.6%
38.2%
41.8%
38.2%
41.6%
39.4%
39.4%
40.1%
Band 6
42.2%
43.2%
43.3%
44.0%
40.7%
44.1%
40.8%
43.9%
41.8%
41.8%
42.6%
Housing Mix
2 x 3-bed houses
3 x 3-bed houses
4 x 3-bed houses
3 x 3-bed houses; 2 x 2-bed houses
5 x 1-bed flats; 5 x 2-bed flats
5 x 2-bed houses; 5 x 3-bed houses
5 x 1-bed flats; 10 x 2-bed flats
5 x 2-bed houses & 10 x 3-bed houses
4 x 2-bed flats, 4 x 1-bed flats; 8 x 3-bed houses, 4 x 2-bed houses
5 x 2-bed flats, 5 x 1-bed flats; 10 x 3-bed houses, 5 x 2-bed houses
Value Point Value Point Value Point
4
5
6
£173,400
£188,700
£204,000
£224,400
£244,200
£264,000
£258,400
£281,200
£304,000
£292,400
£318,200
£344,000
£343,400
£373,700
£404,000
Appendix Ia
Appendix II
Planning Infrasructure Cost Assumptions - North Herts & Stevenage Councils
Private, Intermediate Affordable Tenures
North Herts & Stevenage
1-BF
2-BF
2BH
3BH
Community Centres/Halls
£236.88
£334.64
£334.64
£471.88
Leisure
£391.86
£553.58
£553.58
£780.61
Play Space
£372.96
£526.88
£526.88
£742.96
Pitch Sport
£183.96
£259.88
£259.88
£366.46
Informal Open Space
£201.60
£284.80
£284.80
£401.60
Sustainable Transport
£500.00
£625.00
£625.00
£937.50
Waste Collection
£71.00
£71.00
£71.00
£71.00
Total (District/Borough)
£1,958.26
£2,655.78
£2,655.78
£3,772.01
4BH
£577.16
£954.77
£908.72
£448.22
£491.20
£1,250.00
£71.00
£4,701.07
1-BF
£236.88
£391.86
£372.96
£183.96
£201.60
£500.00
£71.00
£1,958.26
Affordable (Social Rent Only)
2-BF
2BH
3BH
£334.64
£334.64
£471.88
£553.58
£553.58
£780.61
£526.88
£526.88
£742.96
£259.88
£259.88
£366.46
£284.80
£284.80
£401.60
£625.00
£625.00
£937.50
£71.00
£71.00
£71.00
£2,655.78
£2,655.78
£3,772.01
4BH
£577.16
£954.77
£908.72
£448.22
£491.20
£1,250.00
£71.00
£4,701.07
County
Primary
Secondary
Nursery
Childcare
Youth
Library
Total (County)
Total Planning Contribution
4BH
£3,415.00
£4,198.00
£539.00
£194.00
£78.00
£228.00
£8,652.00
£13,353.07
1-BF
£0.00
£0.00
£0.00
£0.00
£0.00
£51.00
£51.00
£2,009.26
2-BF
£2,043.00
£960.00
£290.00
£121.00
£18.00
£71.00
£3,503.00
£6,158.78
4BH
£6,957.00
£3,358.00
£1,046.00
£373.00
£77.00
£128.00
£11,939.00
£16,640.07
1-BF
£0.00
£0.00
£0.00
£0.00
£0.00
£102.00
£102.00
£2,060.26
2-BF
£573.00
£474.00
£112.00
£46.00
£11.00
£129.00
£1,345.00
£4,000.78
2BH
£1,127.00
£989.00
£224.00
£80.00
£20.00
£153.00
£2,593.00
£5,248.78
3BH
£2,745.00
£3,204.00
£453.00
£166.00
£59.00
£206.00
£6,833.00
£10,605.01
2BH
£2,043.00
£960.00
£290.00
£121.00
£18.00
£71.00
£3,503.00
£6,158.78
3BH
£3,880.00
£1,834.00
£610.00
£224.00
£38.00
£102.00
£6,688.00
£10,460.01
Source: North Hertfordshire District Council LDF Planning Obligations Supplementary Planning Document November 2006
Notes:
1.For the purposes of this study we have assumed no differences between flats and houses in terms of Waste collection.
2.Stevenage Borough planning obligation costs have been taken to be the same as North Herts.
3.For Sustainable Transport, given the notional nature of this study, an average of the Town Centre and "Other" areas figures has been taken.
Appendix II
Appendix III
North Hertfordshire District
&
Stevenage Borough
Property Values Report
Supplementary Property Values Report for Stevenage Borough and North
Hertfordshire District
Introduction
Adams Integra was asked to undertake additional work to supplement its previous (September
2007) viability overview study for North Hertfordshire District and Stevenage Borough Councils.
This was in the context of the Councils giving further consideration to policy positions which could
potentially seek to secure financial contributions from the smallest sites, i.e. those falling below the
threshold for on-site affordable housing provision. Thus all sites would contribute, and the further
viability study would concentrate on sites of 1 to 4 dwellings. In other cases, Adams Integra has
considered this type of approach as a possible extension to the sliding scale principle, which we
put forward in the 2007 study.
To inform this supplementary work, Adams Integra revisited the property values research it carried
out for the main, original study. This was again a key part of considering viability, particularly
bearing in mind the widely reported deterioration of the market over the last year.
In seeking to update our values research, firstly we looked at the Land Registry House Prices
Index to see what had happened to values according to that data – between May 2007 when the
initial research was carried out and July 2008 (at the point of fixing assumptions for this
supplementary study).
We carried out a similar review of property advertised as available on www.rightmove.co.uk to that
for the 2007 study.
Again in the same way, we reviewed available new build property (as at July 2008) and also
considered the latest RICS and CLG (Government’s Communities and Local Government
Department) market reporting.
This updated information and research is outlined below. This can only be a snapshot.
Housing Market Overview – July/August 2008
Land Registry
The Land Registry House Price Index for June 2008 (released 28 July 2008) showed for England
and Wales a monthly house price change of -1% (fall of 1%) and a change of the preceding year
of 0.1% (house price increase of 0.1%).
Other headlines of the Index were:
‘Accounting for seasonal adjustments, the data for June marks the tenth consecutive (monthly)
decrease in annual price change in England and Wales.’
‘This is sustained evidence of the weakening in annual growth rates that began approximately ten
months ago.’
1
Appendix III
‘The average house price in England and Wales now stands at £180,781, which is a decrease
from last month.’
Figures for the South East region showed a monthly change of -0.4% (so a greater decline for the
month) and an annual change of 1.3% (a marginally more positive picture than the one for
England and Wales overall. This put the average house price in the South East at £225,747.
Looking at the Index data for Hertfordshire, the most local available in this case, the figures
showed a monthly change of -0.5%, but an annual change still notably positive (when compared
with the England and Wales or South East figures) at 3.6%. This placed the Land Registry’s
average house price in Hertfordshire for June at £254,371, considerably higher than the England
and Wales, and South East overall levels.
It is possible to see this trend graphically represented at the Land Registry’s web-site, where the
month on month index changes, and thus house price movements, are indicated. The graphs
indicate that Hertfordshire prices peaked around March 2008, having risen notably from the Spring
of 2007 to that point, but then from March 2008 starting falling away notably – a trend which has
continued, and is ongoing.
The above figures are borne out by looking at Hertfordshire, for which in May 2007 the Index
stood at 188.7. For July 2008, the index is at 195. This represents a 3.34% increase in the index
from May 2007 to July 2008.
This more detailed information for Hertfordshire shows how the monthly change remained positive
through to March 2008, when it turned negative – with signs that the monthly rate of decline is
increasing.
This trend has had the effect of reducing the monthly reported annual house price change from 9
– 10% where it remained through the second half of 2007 quite steeply down over the last 6
months to the modest annual increase figure we see in the June figures for Hertfordshire (to just
over 3%, as above).
So the Land Registry data indicates Hertfordshire house prices marginally ahead of where they
were in May or July of 2007.
Headlines and figures sourced from Land Registry House Price Index June 2008
However, price information takes a while to filter through and be reported by the Land Registry.
Given what appears to be an established trend of declining house prices, it may be that the very
latest data, when available, will show local prices at best equivalent to their summer 2007 levels,
or perhaps even beginning to fall below those levels.
The Land Registry also gives details of how sales volumes vary, in this case expressed as the
numbers of sales completing monthly in Hertfordshire. Data for the two most recent months is not
used as part of this comparison due to the lag in the registration of sold properties.
2
Appendix III
The monthly sales volume for Hertfordshire rose to approximately 2,500 in early summer 2007, at
which level it plateaued in July and August 2007. Sales volumes then dropped steeply (by about
10%) in the early Autumn, recovered and stabilised around October and November, but then fell
away steeply through the winter into 2008. By January 2008 the volume was down to about 1100
sales per month, where it stayed (approximately) through to the May 2008 latest figures. So based
on the latest information, sales volumes have been running at about half their recent peak level.
Once again it is the new build values that are of key relevance to studying development viability,
given that such schemes are the supply source of the planning-led affordable housing being
considered. A view of those compared with the overall market represented by the Land Registry
data therefore needs to be considered to inform judgements behind the setting of assumptions for
such a study. Therefore, for this update Adams Integra undertook a review of new build property
available at the time. That work is contained later in this Appendix.
RICS
The July RICS (Royal Institution of Chartered Surveyors) Housing Market Survey was published
under the headline: ‘Tentative signs that housing activity may be nearing a floor’.
Key features noted were:
‘New buyer enquiries, agreed sales, and sales expectations post modest improvements.’
‘Sales to stock ratio indicates further price falls in the near term.’
A marginally reducing proportion (although still in excess of 85%) of chartered surveyors were
reporting falling house prices. ‘Completed sales per surveyor (over the last three months)
continued to fall, pulling down the ratio of sales compared to the stock of unsold property on the
market; so this key indicator of market slack (and a near term indicator of future price trends) fell
to 17.0 from 18.2. However, to put this number in context, it is still comfortably above the lows
seen in the early 1990s, when it briefly dropped to 11.4.’
‘In terms of the outlook, the July survey lends further support to the notion that activity may be
beginning to stabilise, albeit at a low level.’
The market comments section at the rear of the RICS monthly survey for July included a
contribution from a Hertfordshire agency stating: ‘We are busier, with more offers and sales
agreed, but still have problems holding chains together.’
RICS housing market survey United Kingdom, July 2008
CLG House price Index June 2008
This statistical release stated the following:
‘UK house prices were 0.6 per cent higher than in June 2007’
‘…..prices fell by 1.1% in the quarter ending June 2008. This compares with a fall of 0.1 per cent
for the quarter ending March 2008…’
3
Appendix III
In England, this meant the annual rise in prices ‘down from 3.1% in the year to May 2008, to 0.5%
(to the year) to June…’
‘The fall in UK prices between May and June 2008 can be attributed to decreases in average
prices for flats (3.6 per cent), semi-detached houses (0.9 per cent) and terraced houses (0.3 per
cent). The fall is offset by an increase in average prices for bungalows (0.8 per cent) and
detached houses (0.7 per cent).
The trends displayed in the index showed prices had risen marginally in the South East, London,
East and Yorkshire and Humberside. In all other English regions covered, prices were marginally
below their levels 12 months ago.
CLG House Price Index June 2008
Overview of Index data
The information reviewed above indicates house prices approximately where they were at
the time of our original study research (May 2007), but with latest information to filter
through, and this picture to be compared with our review of the local market (re-sale asking
prices trends) and updated new build scheme pricing information, where available, as
follows.
The significant decline in the volume of sales (and the effect that may well have on future
pricing) is clearly a major issue, more so than price levels in isolation.
Re-sale (overall market) Property – Stevenage Borough
The tables below show the marketing prices of various types of property within Stevenage
Borough. The data was collected from www.rightmove.co.uk. The values collected from
RightMove are necessarily largely asking prices (although some are “subject to contract” sale
prices) and as such it is likely that actual sales values will be lower.
For each of the wards there are two tables. Great Ashby is also included for reference purposes in
the same way. The first table shows the average price of each unit type and the second table
shows the data’s average, minimum, 1st quartile, median (2nd quartile), 3rd quartile and maximum
points to show the range of pricing and to allow manipulation of it.
Some cells are left blank as there was not enough data to provide a meaningful sample.
4
Appendix III
MARKETING PRICE OF PROPERTY IN STEVENAGE BOROUGH
Bandley Hill
Detached
Semi-Detached
Terraced
Flats
1 Bed
£102,485
2 Bed
£198,380
£177,496
£135,995
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£102,485
£135,995
£189,115
£210,086
£304,993
Minimum
£85,995
£129,995
£174,995
£179,995
£275,000
3 Bed
£278,500
£229,817
£198,485
4 Bed
£305,989
£317,500
£275,000
1st
Quartile
£96,461
£129,995
£179,984
£188,975
£288,734
Median
£104,475
£139,995
£184,975
£214,500
£302,500
3 Bed
£289,950
£208,748
£176,759
4 Bed
£279,950
£239,975
£207,832
1st
Quartile
£94,363
£135,500
£159,961
£174,950
£206,248
Median
£104,995
£137,500
£159,995
£179,995
£231,748
3rd
Quartile
£110,499
£139,995
£191,246
£224,225
£316,250
Maximum
£114,995
£139,995
£220,000
£278,500
£350,000
3rd
Quartile
£123,746
£159,995
£164,995
£189,995
£269,588
Maximum
£177,000
£223,950
£179,999
£289,950
£279,950
Data Sourced from: www.rightmove.co.uk – July 2008
Bedwell
1 Bed
Detached
Semi-Detached
Terraced
Flats
£110,876
2 Bed
£179,999
£156,375
£155,379
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£110,876
£155,379
£158,737
£186,405
£230,566
Minimum
£79,950
£119,950
£120,000
£154,950
£160,000
5
Appendix III
Chells
1 Bed
Detached
Semi-Detached
Terraced
Flats
£110,418
2 Bed
#DIV/0!
#DIV/0!
£175,398
#DIV/0!
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£110,418
#DIV/0!
£175,398
£205,947
£282,440
Minimum
£99,995
£0
£159,995
£165,000
£219,950
3 Bed
£269,998
£231,990
£189,829
4 Bed
£313,989
£287,250
£226,650
1st
Quartile
£102,495
#NUM!
£169,995
£174,999
£237,375
Median
£107,995
#NUM!
£173,500
£189,950
£307,475
3 Bed
£263,543
£241,481
£231,414
4 Bed
£325,514
-
1st
Quartile
£162,995
£179,950
£229,950
£297,450
Median
£162,995
£189,995
£239,950
£328,500
3 Bed
£272,475
£286,225
£197,750
4 Bed
£358,743
£323,300
£202,500
1st
Quartile
£117,450
£139,950
£175,000
£189,950
£320,000
Median
£119,973
£139,950
£175,000
£234,950
£345,000
3rd
Quartile
£109,975
#NUM!
£179,245
£231,238
£314,999
Maximum
£139,995
£0
£200,000
£279,950
£330,000
3rd
Quartile
£184,995
£196,213
£264,950
£356,246
Maximum
£194,995
£215,000
£300,000
£375,000
3rd
Quartile
£146,246
£139,950
£175,000
£274,975
£365,000
Maximum
£225,000
£139,950
£175,000
£330,000
£385,000
Great Ashby
1 Bed
Detached
Semi-Detached
Terraced
Flats
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
-
2 Bed
£191,216
£172,186
Overall
Average
£172,186
£191,216
£242,988
£325,514
Minimum
£154,950
£174,950
£199,950
£269,950
Longmeadow
Detached
Semi-Detached
Terraced
Flats
1 Bed
£143,724
2 Bed
#DIV/0!
#DIV/0!
£175,000
£139,950
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£143,724
£139,950
£175,000
£239,974
£326,527
Minimum
£109,950
£139,950
£175,000
£174,950
£195,000
6
Appendix III
Chells Manor
1 Bed
2 Bed
3 Bed
4 Bed
5 Bed
-
£249,973
£339,669
-
£187,789
£235,623
-
-
-
£201,647
£244,997
-
Detached
Semi-Detached
Terraced
Flats
-
-
Overall
Average
Minimum
1st
Quartile
Median
3rd
Quartile
Maximum
1-Bed Flat
-
-
-
-
-
-
2-Bed Flats
-
-
-
-
-
-
2-Bed Houses
£191,111
£179,950
-
-
-
£209,995
3-Bed Houses
£236,481
£164,995
£222,500
£244,995
£249,995
£299,995
4-Bed Houses
£315,757
£209,995
£269,995
£319,995
£379,995
£399,950
5-Bed Houses
-
-
-
-
-
-
3 Bed
£268,317
£178,734
4 Bed
£326,990
£320,000
1st
Quartile
£109,950
£160,000
£189,950
£189,371
£321,250
Median
£109,995
£160,000
£195,000
£219,975
£332,475
Data Sourced from: www.rightmove.co.uk – May 2007
Martinswood
1 Bed
Detached
Semi-Detached
Terraced
Flats
£110,981
2 Bed
£208,738
£184,970
£160,000
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£110,981
£160,000
£195,533
£224,955
£325,825
Minimum
£99,995
£160,000
£174,950
£174,995
£275,000
3rd
Quartile
£114,995
£160,000
£205,000
£261,121
£343,738
Maximum
£119,995
£160,000
£220,000
£295,000
£350,000
7
Appendix III
Old Town
1 Bed
Detached
Semi-Detached
Terraced
Flats
£132,764
2 Bed
£320,000
£239,277
£218,733
£168,324
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£132,764
£168,324
£236,239
£269,094
£337,132
Minimum
£104,995
£129,995
£199,950
£189,950
£239,950
3 Bed
£314,967
£257,474
£229,106
4 Bed
£312,475
£289,983
£252,475
1st
Quartile
£122,748
£159,995
£206,250
£197,950
£298,713
Median
£129,995
£162,000
£219,975
£279,950
£342,475
3 Bed
£235,679
£194,478
4 Bed
£249,983
£209,906
1st
Quartile
£105,495
£132,500
£179,995
£199,950
Median
£113,500
£139,950
£197,475
£219,950
3 Bed
£201,855
4 Bed
£404,278
£254,963
£229,986
1st
Quartile
£107,475
£134,984
£166,248
£184,950
£230,000
Median
£110,000
£141,473
£189,950
£189,995
£300,000
3rd
Quartile
£132,973
£179,995
£246,213
£320,000
£361,238
Maximum
£174,995
£209,995
£340,000
£365,000
£400,000
3rd
Quartile
£114,995
£144,995
£221,213
£242,475
Maximum
£116,995
£149,950
£259,950
£265,000
3rd
Quartile
£113,748
£143,484
£193,500
£211,200
£382,475
Maximum
£122,995
£144,995
£199,950
£295,000
£475,000
Pin Green
1 Bed
Detached
Semi-Detached
Terraced
Flats
£109,756
2 Bed
£139,479
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£109,756
£139,479
£202,489
£220,836
Minimum
£94,950
£130,000
£168,995
£179,500
Roebuck
Detached
Semi-Detached
Terraced
Flats
1 Bed
£111,484
2 Bed
£199,950
£192,317
£165,830
£139,848
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£111,484
£139,848
£182,056
£201,855
£317,983
Minimum
£104,950
£132,950
£164,995
£177,500
£199,950
8
Appendix III
Shephall
1 Bed
Detached
Semi-Detached
Terraced
Flats
£98,988
2 Bed
£164,863
£161,519
£149,613
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£98,988
£149,613
£162,188
£197,787
£279,881
Minimum
£86,000
£148,950
£142,995
£149,950
£174,950
3 Bed
£256,617
£235,761
£187,477
4 Bed
£330,240
£289,982
£214,965
1st
Quartile
£96,211
£149,363
£145,995
£169,995
£209,973
Median
£101,495
£149,750
£156,495
£187,995
£279,995
3 Bed
£215,817
£187,104
4 Bed
£193,311
1st
Quartile
£98,734
£157,463
£174,995
£189,950
Median
£104,950
£170,000
£189,950
£195,000
3 Bed
£290,833
£251,087
£181,036
4 Bed
£321,663
£182,495
1st
Quartile
£109,500
£139,950
£167,984
£179,950
£184,995
Median
£125,000
£139,950
£172,473
£202,495
£289,995
3rd
Quartile
£104,495
£150,000
£164,963
£224,995
£334,950
Maximum
£104,995
£150,000
£250,000
£309,950
£449,950
3rd
Quartile
£104,995
£182,463
£199,950
£199,950
Maximum
£139,995
£195,000
£240,000
£210,000
3rd
Quartile
£129,950
£139,950
£175,625
£250,000
£325,000
Maximum
£139,950
£139,950
£184,995
£470,000
£349,995
Data Sourced from: www.rightmove.co.uk – Jul 2008
St. Nicholas
1 Bed
Detached
Semi-Detached
Terraced
Flats
£104,523
2 Bed
£195,000
£166,970
-
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£104,523
£171,642
£191,637
£193,311
Minimum
£84,995
£154,950
£164,995
£175,000
Symonds Green
Detached
Semi-Detached
Terraced
Flats
1 Bed
£120,870
2 Bed
£177,473
£170,833
£139,950
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£120,870
£139,950
£171,940
£221,325
£265,996
Minimum
£99,950
£139,950
£149,995
£159,950
£179,995
9
Appendix III
Woodfield
1 Bed
Detached
Semi-Detached
Terraced
Flats
£235,000
2 Bed
£210,000
£179,986
£154,950
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£235,000
£154,950
£185,989
£269,260
£376,771
Minimum
£225,000
£154,950
£165,000
£219,950
£269,950
3 Bed
£287,978
£262,970
£253,725
4 Bed
£430,295
£285,950
£276,200
1st
Quartile
£230,000
£154,950
£169,950
£241,213
£279,995
Median
£235,000
£154,950
£189,995
£269,950
£309,995
3rd
Quartile
£240,000
£154,950
£195,000
£279,984
£465,000
Maximum
£245,000
£154,950
£210,000
£370,000
£740,000
10
Appendix III
STEVENAGE BOROUGH –
Indicative values hierarchy and asking price analysis 2008
Average Asking Prices Analysis – Stevenage Borough
Rank
1 Bed Flats
2 Bed
Flats
2 Bed
House
3 Bed
House
4 Bed
House
All
Properties
£235,000
£143,724
£132,764
£110,981
£111,484
£154,950
£170,995
£139,950
£168,324
£172,186
£160,000
£139,848
£185,989
£189,823
£175,000
£236,239
£191,216
£195,533
£182,056
£269,260
£243,935
£239,974
£269,094
£242,988
£224,955
£201,855
£376,771
£318,951
£326,527
£337,132
£325,514
£325,825
£317,983
£313,698
£256,633
£255,110
£250,034
£245,989
£210,798
£210,182
8
9
10
11
12
13
Woodfield
Manor
Longmeadow
Old Town
Great Ashby
Martinswood
Roebuck
Symonds
Green
Bandley Hill
Chells
Shephall
Pin Green
St Nicholas
£120,870
£102,485
£110,418
£98,988
£109,756
£104,523
£139,950
£135,995
£149,613
£139,479
-
£171,940
£189,115
£175,398
£162,188
£171,642
£221,325
£210,086
£205,947
£197,787
£202,489
£191,637
£265,996
£304,993
£282,440
£279,881
£220,836
£193,311
£203,999
£203,421
£202,142
£200,702
£179,690
£166,631
14
Bedwell
£110,876
£155,379
£158,737
£186,405
£230,566
£166,001
-
Overall
£115,818
£153,233
£183,451
£216,653
£305,725
£214,894
(highest
to
lowest)
Settlement
1
2
3
4
5
6
7
Average Asking Price Analysis –
Stevenage Borough
1 Bed Flat
-
2 Bed Flat
-
£153,233
2 Bed House
Terraced
Semi-Detached
£175,761
£202,120
3 Bed House
4 Bed House
£115,818
Detached
£233,316
Terraced
£196,716
Semi-Detached
£244,097
Detached
£278,798
Terraced
£221,537
Semi-Detached
£280,850
Detached
£354,783
The above shows some variation to the exact positioning of the hierarchy of price levels when
compared with the 2007 research. Variations will be bound to occur with regard to this picture
being dependent on the type of property for sale at any point in time. The same applies with all
such data presented in this appendix.
However, the general pattern of which are typically the more and less expensive areas with the
Borough is consistent with that seen in 2007. Whilst Old Town was seen as the most expensive
previously, it remains towards the top of the hierarchy along with Manor, Woodfield, Great Ashby
(although Great Ashby is outside the Borough boundary) – common with the previous findings.
Again as previous, Bedwell, St Nicholas, Pin Green and Shephall are shown to be typically the
least expensive areas of the Borough.
11
Appendix III
MARKETING PRICE OF PROPERTY IN NORTH HERTFORDSHIRE
DISTRICT
The tables below show the marketing prices of various types of property within North Hertfordshire
District. The data was collected from www.rightmove.co.uk. The values collected from RightMove
are necessarily largely asking prices (although some are “subject to contract” sale prices) and as
such it is likely that actual sales values will be lower.
For each of the settlements there are two tables. The first table shows the average marketing
price of each unit type and the second table shows the average, minimum, 1st quartile, median
(2nd quartile), 3rd quartile and maximum pricing points show that the range can be seen and to
allow manipulation of the data.
Some cells are left blank as there was not enough data to provide a meaningful sample.
Baldock
Detached
1 Bed
2 Bed
£249,950
3 Bed
£330,924
4 Bed
£414,337
Semi-Detached
£190,430
£246,283
£316,413
Terraced
£195,136
£256,344
£348,300
Flats
£138,358
£193,768
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
Overall
Average
£138,358
£193,768
£197,453
£274,565
Minimum
£109,950
£129,995
£149,995
£159,950
1st
Quartile
£121,995
£172,473
£174,975
£214,950
Median
£129,950
£184,995
£184,950
£249,950
3rd
Quartile
£145,000
£209,975
£219,950
£307,450
Maximum
£209,950
£289,950
£279,950
£665,000
4-Bed Houses
£387,562
£229,950
£325,000
£350,000
£450,000
£695,000
Hitchin
1 Bed
Detached
Semi-Detached
Terraced
Flats
£128,645
2 Bed
£326,665
£235,822
£210,285
£186,288
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£128,645
£186,288
£219,955
£275,339
£434,310
Minimum
£85,000
£119,950
£149,950
£164,995
£235,000
3 Bed
£373,395
£271,000
£233,674
4 Bed
£470,094
£363,682
£407,474
1st
Quartile
£115,000
£150,000
£190,000
£215,000
£349,995
Median
£125,000
£179,995
£210,000
£250,000
£399,995
3rd
Quartile
£139,950
£199,995
£240,000
£320,000
£485,000
Maximum
£244,950
£339,950
£365,000
£749,500
£750,000
12
Appendix III
Letchworth
1 Bed
Detached
Semi-Detached
Terraced
Flats
£119,098
2 Bed
£281,842
£188,500
£183,931
£157,592
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£119,098
£157,592
£198,096
£243,367
£425,322
Minimum
£92,000
£124,950
£147,500
£135,000
£225,000
3 Bed
£398,813
£264,392
£200,920
4 Bed
£457,017
£350,710
£243,725
1st
Quartile
£109,995
£139,994
£169,961
£185,995
£319,995
Median
£120,000
£149,973
£182,495
£210,000
£375,000
3 Bed
£262,490
£243,237
£196,303
4 Bed
£388,282
£314,785
£211,489
1st
Quartile
£119,998
£143,749
£179,996
£199,950
£249,996
Median
£135,000
£159,973
£189,973
£219,995
£347,250
3rd
Quartile
£127,500
£168,746
£198,750
£278,746
£499,999
Maximum
£166,000
£265,000
£365,000
£850,000
£799,950
3rd
Quartile
£145,000
£165,375
£209,338
£249,995
£405,625
Maximum
£194,950
£210,000
£249,995
£335,000
£650,000
Royston
1 Bed
Detached
Semi-Detached
Terraced
Flats
£136,316
2 Bed
£225,000
£204,048
£186,403
£156,251
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£136,316
£156,251
£192,395
£226,895
£352,305
Minimum
£107,500
£114,995
£149,950
£150,000
£174,995
The following table has been repeated from the original study for clarity as to rural settlements’
inclusion.
Again, for the purposes of this exercise only, rural settlements have been grouped together to
enable analysis of the data. The settlement grouping can be seen in the table below, and is the
same as assumed for the 2007 study. Eight settlements (displayed in the last column) did not
provide any property pricing information at the point of the 2007 research. Those which provided
information for the original research were updated for this supplementary work; the final column
(‘No Data’) settlements were not investigated this time.
13
Appendix III
Core
Settlements Pop. North-East
Pop. North-West
Baldock
9,866
1,660
Bygrave
Hitchin
30,851 Barkway
656
Graveley
Letchworth
32,932 Barley
659
Hinxworth
136
Kings Walden
Royston
14,570 Clothall
161
Holwell
316
Knebworth
Nuthampstead
139
Ickleford
Reed
290
Newnham
Rushden
242
Pirton
Sandon
493
Weston
965
Therfield
539
3 Bed
£486,314
£356,044
£335,000
4 Bed
£634,926
£429,967
£427,475
1st
Quartile
£149,950
£159,973
£221,238
£382,375
£465,000
Median
£149,950
£159,995
£335,000
£425,000
£577,475
3 Bed
£429,433
£291,421
£234,987
4 Bed
£625,864
£574,975
-
1st
Quartile
£209,973
£268,749
£475,000
Median
£214,995
£310,000
£550,000
Ashwell
Pop. South
271
Pop. No Data
Codicote
1,731 Kimpton
1,848 Offley
89
Preston
1,217 St.
Pop.
3,161
Caldecote
20
2,113
Hexton
134
957
Kelshall
149
4,433
Langley
164
1,307
Lilley
374
Radwell
106
481
Ippollyts
2,014
St. Paul's Walden
Wymondley
1,110
Wallington
1,205
159
Rural Settlements (North East)
1 Bed
Detached
Semi-Detached
Terraced
Flats
£149,950
2 Bed
£397,500
£272,500
£312,488
£163,298
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£149,950
£163,298
£323,744
£442,111
£579,362
Minimum
£149,950
£159,950
£195,000
£220,000
£299,950
3rd
Quartile
£149,950
£164,973
£386,250
£485,000
£649,950
Maximum
£149,950
£169,950
£495,000
£745,000
£1,300,000
3rd
Quartile
£297,498
£353,750
£750,000
Maximum
£499,950
£850,000
£1,000,000
Rural Settlements (North West)
1 Bed
Detached
Semi-Detached
Terraced
Flats
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
-
2 Bed
£409,975
£274,995
£208,723
-
Overall
Average
£275,691
£342,239
£618,035
Minimum
£199,950
£214,950
£329,500
-Data Sourced from: www.rightmove.co.uk – July 2008
14
Appendix III
Rural Settlements (South)
1 Bed
Detached
Semi-Detached
Terraced
Flats
£125,179
2 Bed
£274,950
£293,323
£212,701
£176,371
1-Bed Flat
2-Bed Flats
2-Bed Houses
3-Bed Houses
4-Bed Houses
Overall
Average
£125,179
£176,371
£227,867
£355,214
£495,636
Minimum
£119,995
£135,000
£179,950
£199,995
£279,950
3 Bed
£418,820
£356,892
£271,852
4 Bed
£537,042
£419,867
£334,875
1st
Quartile
£124,711
£144,000
£194,950
£284,998
£375,000
Median
£125,000
£169,995
£199,998
£345,000
£469,950
3rd
Quartile
£125,625
£184,950
£241,250
£415,000
£599,950
Maximum
£129,995
£340,000
£499,950
£595,000
£895,000
15
Appendix III
NORTH HERTFORDSHIRE DISTRICT HIERARCHY Indicative values hierarchy and asking price analysis
Average Asking Prices Analysis - North Hertfordshire District
Rank
1 Bed Flats
2 Bed
Flats
2 Bed
House
3 Bed
House
4 Bed
House
All
Properties
1
2
3
4
5
6
Rural NE
Rural NW
Rural S
Baldock
Letchworth
Hitchin
£149,950
£125,179
£138,358
£119,098
£128,645
£163,298
£176,371
£193,768
£157,592
£186,288
£323,744
£275,691
£227,867
£197,453
£198,096
£219,955
£442,111
£342,239
£355,214
£274,565
£243,367
£275,339
£579,362
£618,035
£495,636
£387,562
£425,322
£434,310
£465,080
£420,227
£334,233
£258,502
£254,799
£250,769
7
Royston
£136,316
£156,251
£192,395
£226,895
£352,305
£229,113
-
Overall
£127,859
£173,241
£215,679
£275,068
£439,323
£271,426
Average Asking Price Analysis –
North Hertfordshire District
1 Bed Flat
-
2 Bed Flat
-
£173,241
2 Bed House
Terraced
Semi-Detached
£202,974
£225,879
3 Bed House
4 Bed House
£127,859
Detached
£309,316
Terraced
£217,641
Semi-Detached
£275,250
Detached
£389,167
Terraced
£325,296
Semi-Detached
£362,988
Detached
£478,011
As seen with the 2007 research, the rural settlements dominate the property pricing hierarchy with
settlements in the rural areas of North Hertfordshire being consistently the most expensive. The
lower number of flats typically found in the rural areas tend not to fit this values pattern however.
Royston remains generally the least expensive place in which to buy in North Hertfordshire. This
updated research indicates values in Hitchin, Letchworth and Baldock to be at similar levels,
whereas previously we had found Hitchin to have typically the highest values of the North
Hertfordshire larger settlements.
16
Appendix III
COMPARISON BETWEEN ASKING PRICES MAY 2007 and JULY 2008
The two tables below show the 2007 and 2008 asking price data we gathered. The first table
makes this comparison for Stevenage Borough; the second for North Hertfordshire District. This
helps us consider the direction and strength of the local market alongside the other information
reviewed.
Average Asking Prices Analysis – Comparison - Stevenage Borough
Settlement
1 Bed Flats
2 Bed Flats
2 Bed House
2007
2008
2007
2008
2007
2008
Bandley Hill
£113,996
£102,485
£139,996
£135,995
£175,488
£189,115
Bedwell
£108,738
£110,876
£138,482
£155,379
£161,236
£158,737
Chells
-
£110,418
£147,498
-
£173,996
£175,398
Great Ashby
-
-
£171,969
£172,186
£185,772
£191,216
Longmeadow
£114,997
£143,724
£139,973
£139,950
£185,000
£175,000
Manor
£124,950
-
-
£170,995
£189,823
£189,823
Martinswood
£110,708
£110,981
£157,982
£160,000
£176,860
£195,533
Old Town
£136,822
£132,764
£179,980
£168,324
£228,484
£236,239
Pin Green
£115,754
£109,756
£133,973
£139,479
-
-
Roebuck
£121,248
£111,484
£136,871
£139,848
£189,973
£182,056
Shephall
£111,225
£98,988
£132,995
£149,613
£170,419
£162,188
St Nicholas
Symonds
Green
£120,599
£104,523
£130,497
-
£169,975
£171,642
£126,451
£120,870
£155,600
£139,950
£196,245
£171,940
Woodfield
Overall
Settlement
-
£235,000
£179,995
£154,950
£184,995
£185,989
£118,002
£115,818
£153,218
£153,233
£185,481
£183,451
3 Bed House
Overall
4 Bed House
2007
2008
2007
2008
2007
2008
Bandley Hill
£192,997
£210,086
£286,234
£304,993
Bedwell
£189,761
£186,405
£225,000
£230,566
Chells
£197,212
£205,947
£252,484
£282,440
Great Ashby
£235,803
£242,988
£340,697
£325,514
Longmeadow
£215,755
£239,974
£331,241
£326,527
Manor
£243,935
£243,935
£318,951
£318,951
Martinswood
£214,582
£224,955
£312,997
£325,825
Old Town
£276,534
£269,094
£357,048
£337,132
Pin Green
£196,583
£202,489
£200,987
£220,836
Roebuck
£201,195
£201,855
£339,578
£317,983
Shephall
£186,732
£197,787
£279,995
£279,881
St Nicholas
Symonds
Green
£179,457
£191,637
£190,496
£193,311
£176,427
£166,327
£195,432
£231,775
£232,025
£260,546
£195,916
£263,151
£174,181
£225,405
£183,337
£164,289
£203,421
£166,001
£202,142
£245,989
£255,110
£256,633
£210,798
£250,034
£179,690
£210,182
£200,702
£166,631
£233,524
£221,325
£312,485
£265,996
£194,879
£203,999
Woodfield
£293,879
£269,260
£356,585
£376,771
£322,706
£313,698
Overall
£213,674
£216,653
£318,924
£305,725
£212,386
£214,894
Aage
Asking Prices Analysis – Comparison - Stevenage Borough
17
Appendix III
Average Asking Prices Analysis – Comparison – North Hertfordshire District
Rank
Settlement
1 Bed Flats
2 Bed Flats
4 Bed House
2007
2008
2007
2008
2007
2008
1
2
3
4
5
6
Rural S
Rural NW
Rural NE
Royston
Letchworth
Hitchin
£144,470
£147,982
£134,345
£121,475
£142,913
£125,179
£149,950
£136,316
£119,098
£128,645
£149,892
£190,388
£174,995
£158,508
£155,457
£191,735
£176,371
£163,298
£156,251
£157,592
£186,288
£509,184
£566,574
£507,438
£342,603
£415,612
£417,946
£495,636
£618,035
£579,362
£352,305
£425,322
£434,310
7
Baldock
£163,819
£138,358
£178,291
£193,768
£365,397
£387,562
Rank
Overall
Settlement
£138,808 £127,859
2 Bed House
£174,871 £173,241
3 Bed House
£433,775 £439,323
Overall
2007
2008
2007
2008
2007
2008
1
2
3
4
5
6
Rural S
Rural NW
Rural NE
Royston
Letchworth
Hitchin
£219,515
£251,223
£245,893
£201,921
£180,958
£219,332
£227,867
£275,691
£323,744
£192,395
£198,096
£219,955
£352,655
£439,306
£372,289
£232,560
£252,081
£245,904
£334,233
£420,227
£465,080
£229,113
£254,799
£250,769
£352,655
£439,306
£372,289
£232,560
£252,081
£245,904
£334,233
£420,227
£465,080
£229,113
£254,799
£250,769
7
Baldock
£184,100
£197,453
£236,519
£258,502
£236,519
£258,502
-
Overall
£208,236
£215,679
£267,007
£271,426
£267,007
£271,426
On comparing the 2007 and 2008 figures it can be seen that there is a high level of consistency
between asking prices between these two points in time. It must be acknowledged that these are
asking prices, but this lends support to the overall picture gleaned from the Land Registry in
particular that prices in July 2008 were at about the same level as in May 2007. There are
variations in exact trend between settlements and property types, which would be expected as all
such comparisons are dependent on the make up of available or sold property at any given point
or over any given period.
In rounding up our views, we will consider the potential variation from asking price to sale price in
the current market, particularly for new build property which is of key relevance to the planning-led
supply of affordable housing.
18
Appendix III
New Build Pricing
For this supplementary work, the new build pricing information was collected through desktop
research.
A review of new build marketing prices of all available unit types at the time of the study across
the two Local Authority areas again enables us to underpin our judgements on the value levels for
the range of dwelling types to be used in our appraisal modelling.
The results of the new build pricing research, as set out in the following tables, helped us to
consider whether the 6 Value Points used in the 2007 study remained appropriate. Those
represented the overall range of values we considered was predominantly seen across the two
Local Authority areas. As a variety of property values is seen in most areas, the results of this
research can be used independently of location where approximate sales values can be
estimated.
New build property marketing prices in Stevenage Borough
Address
Property Type
Houses
Walkern Road, Stevenage
Price
19
Incentives
Stevenage
Borough
4 bed detached
£389,995
5 bed detached
£439,995
5 bed detached
£429,995
5 bed detached
£424,995
5 bed detached
£399,995
Great Ashby, Stevenage,
Hertfordshire SG1 6AW
Burleigh Park, Haycock
Round, Great Ashby,
Stevenage, Hertfordshire,
SG1 6GS
Developer/Agent
Connells
Bovis Homes, Central
Region
3 bed
£286,995
3 bed
£284,995
3 bed terrace
£279,995
3 bed terrace
£276,995
3 bed terrace
£269,950
4 bed detached
4 bed detached
3 bed detached
£289,950
£269,950
£246,000
3 bed semi
detached
£214,950
3 bed semi
detached
£214,950
Mortgage Subsidy
available for 3 years if
you reserve this
summer. Stamp duty
paid on selected plots
Croudace Homes
Appendix III
Burleigh Park, Cotswold
Drive, Great Ashby,
SG1 6GT
Whitehorse Lane, Great
Ashby, Stevenage,
Hertfordshire, SG1 6NJ
Great Ashby Way,
Stevenage, SG1 6NH
Great Ashby Way,
SG1 6DT
The Plantation, Walkern
Road
2 bed terrace
2 bed terrace
1 bed terrace
1 bed terrace
2 bed terrace
3 bed detached
£206,950
£204,950
£139,950
£139,950
£204,950
TBR
3 bed semi
detached
£214,950
3 bed semi
detached
£214,950
3 bed detached
3 bed house
£234,950
£224,950
3 bed semi
detached
£214,950
1 bed terrace
£149,950
3 bed terrace
Price upon
application
3 bed detached
Price upon
application
2 bed terrace
Price upon
application
5 bed detached
£399,950
5 bed detached
£379,950
3 bed semi
detached
£219,950
3 bed semi
detached
£219,950
2 bed semi
detached
£188,950
2 bed semi
detached
£188,950
3 bed terrace
£279,995
Flats
Sacombe Mews,
Stevenage, SG2
Woolners Way,
Stevenage, SG1
20
Croudace Homes
Croudace Homes
Croudace Homes
Croudace Homes
Connells
Stevenage
Borough
2 bed apartment
£315,000
3 bed apartment
£275,000
2 bed apartment
£250,000
1 bed apartment
£235,000
1 bed apartment
£230,000
1 bed apartment
£205,000
2 bed apartment
£214,950
2 bed penthouse
£189,950
2 bed apartment
£189,950
2 bed apartment
£187,500
Putterills, Land &
New Homes
Higgins Homes
5% assisted deposit,
flooring included
Appendix III
The Plantation, Walkern
Road, Stevenage
The Pavilion, Nokeside,
Stevenage, SG2
Cuttys Lane, Stevenage
Brick Kiln Road,
Stevenage
The Monet at Great
Ashby, Stevenage,
Hertfordshire SG1 6AW
Knott Close, Stevenage,
Hertfordshire, SG1 6NP
21
2 bed apartment
£179,950
1 bed penthouse
£169,950
2 bed apartment
£145,000
2 bed apartment
£145,000
1 bed apartment
£130,000
1 bed apartment
£130,000
1 bed apartment
£125,000
1 bed apartment
£120,000
2 bed apartment
£184,995
2 bed apartment
£170,000
2 bed apartment
£170,000
2 bed apartment
£165,000
2 bed apartment
£165,000
2 bed apartment
£165,000
2 bed apartment
£165,000
Shared Ownership:
40% share for
£58,000
Affinity Sutton
Shared Ownership:
40% share for
£52,000
Shared Ownership:
40% share for
£50,000
Shared Ownership:
40% share for
£48,000
Connells
Shared Ownership:
£68,000 for a 40%
share
Shared Ownership:
£66,000 for a 40%
share
Affinity Sutton
1 bed apartment
£148,000
1 bed apartment
£148,000
1 bed apartment
£145,000
1 bed apartment
£145,000
1 bed apartment
£145,000
1 bed apartment
£145,000
2 bed flat
2 bed flat
2 bed flat
2 bed flat
£194,995
£189,995
£184,995
£184,995
Connells
2 bed apartment
£159,950
Connells
2 bed flat
£169,995
Shared Ownership:
£59,200 for a 40%
share
Shared Ownership:
£58,000 for a 40%
share
Bovis Homes, Central
Region
1 bed apartments
£129,950
Croudace Homes
2 bed apartments
£160,000
Affinity Sutton
Stamp duty paid on
selected plots
Shared Ownership:
£64,000 for a 40%
share
Appendix III
2 bed apartment
£249,995
2 bed apartment
POA
2 bed apartment
£221,995
2 bed apartment
POA
2 bed apartment
POA
2 bed apartment
POA
1 bed apartment
POA
2 bed apartment
£199,995
2 bed apartment
POA
2 bed apartment
£179,950
1 bed apartment
£149,950
2 bed apartment
£135,000
Old Town, Stevenage
2 bed flat
£62,000
Your Move
Pinetree Court, Stevenage
1 bed flat
£189,995
Kings Group
Vincent Place, High
Street, Old Town,
Stevenage, SG1
Putterills, Land &
New Homes
Shared Ownership
Property
Prices per m²
Although we did not gather any price per ft² / m² directly from developers on this occasion, we
were able to approximate floor areas from some plans provided with sales information.
A sample exercise on the Woolners Way scheme, for example, suggested the following:
Indicative £/m²
2 bed apartment
Marketing
Price
£214,950
2 bed penthouse
£189,950
£3,454
2 bed apartment
£189,950
£3,454
2 bed apartment
£187,500
£3,409
2 bed apartment
£179,950
£3,272
1 bed penthouse
£169,950
£3,541
Property type
22
£3,838
Appendix III
A similar exercise in respect of available properties at two other locations showed the following:
Location
Walkern Road,
Stevenage
Great Ashby,
nr Stevenage
23
Marketing
Price
Indicative £/m²
4 bed
detached
£389,995
£3,120
3 bed
£286,995
£3,189
3 bed
£284,995
£3,167
3 bed terrace
£279,995
£3,256
3 bed terrace
£276,995
£3,221
3 bed terrace
£269,950
£3,139
Property type
Appendix III
New Build Property Values in North Hertfordshire District
Address
Property Type
Price
Developer/Agent
Incentives
North Herts
Rural S
Houses
No houses for sale at this time
Flats
No flats for sale at this time
Rural NW
Houses
Flats
Rural NE
Houses
Flats
Royston
Houses
Orchard Way, Royston
3 bed detached
£274,995
William H Brown
Stamp duty paid
Flats
Heathside Court,
Baldock Road, Royston
2 bed apartment
2 bed apartment
2 bed apartment
2 bed apartment
2 bed apartment
£203,000
£167,000
£180,000
£180,000
£148,000
William H Brown
Precious Court,
Melbourn Road,
Royston
2 bed apartment
£159,995
William H Brown
George Lane, Royston
2 bed apartment
1 bed apartment
1 bed apartment
1 bed apartment
£155,000
£135,000
£135,000
£135,000
William H Brown
Letchworth
Houses
Norton Road,
Letchworth
24
4 bed detached
4 bed detached
4 bed detached
4 bed detached
3 bed terrace
2 bed terrace
2 bed terrace
2 bed terrace
2 bed terrace
2 bed terrace
£549,000
£539,950
£539,950
£499,950
£299,950
£249,950
£249,950
£249,950
£249,950
£249,950
Miller Homes
Appendix III
2 bed terrace
2 bed terrace
£249,950
£244,950
5 bed detached
£539,950
4 bed detached
£499,950
3 bed terrace
£299,950
2 bed terraces
£335,000
Satchells
3/4 Bed Mews
£389,950
Wheatley Homes
Ltd
Eastern Way,
Letchworth Garden City
3 bed detached
£249,950
Connells
Letchworth Garden City,
Hertfordshire
2 bed
penthouses
£249,500
2 bed apartment
2 bed apartment
2 bed apartment
2 bed apartment
2 bed flat
2 bed flat
£219,950
£215,950
£199,950
£190,950
£219,950
£169,950
Hertfordshire
Hertfordshire
Norton Way North,
SG6
Satchells
Flats
Norton Road,
Letchworth
Hertfordshire
2 bed apartment
£209,950
Country Properties
Miller Homes
Satchells
Wheatley Homes
Ltd
Norton Way North,
SG6
Hertfordshire
1 bed apartment
From
£149,950
Wheatley Homes
Ltd
2 bed apartment
2 bed apartment
1 bed apartment
£177,000
£159,950
£127,500
Country Properties
Carpets Fitted
Throughout. Stamp
Duty & £500.00
towards Legal Fees
Paid.
Carpets Fitted
Throughout. Stamp
Duty & £500.00
towards Legal Fees
Paid.
Hitchin
Houses
Hitchin, Hertfordshire
4 bed detached
St. Johns Road, Hitchin,
Hertfordshire, SG4
3 bed terrace
From
£415,000
Land & New
Homes
4 bed terrace
£319,950
Connells
Meridian Mews,
Walsworth Road,
Hitchin
Fairfield Park, Hitchen
Road, Stotfold, Hitchen,
Hertfordshire, SG5 4JH
25
£549,995
Your Move
2 bed semi
detached
£247,950
Connells
2 bed semi
detached/terrace
Price in
the region
of
£209,995
Stamford Homes
Stamp duty paid.
Legal fees paid.
Choice of carpets &
curtains. Mortgage
arrangement fee &
valuation fee
refunded on
completion, plus
£500 per month
towards your
mortgage for 1
year.
Appendix III
2 bed semi
detached/terrace
2 bed semi
detached/terrace
2 bed semi
detached/terrace
3 bed semi
detached/terrace
4 bed town
house
4 bed town
house
4 bed semi
detached/terrace
Price in
the region
of
£219,995
Price in
the region
of
£219,995
Price in
the region
of
£224,995
Price in
the region
of
£229,995
Price in
the region
of
£284,995
Price in
the region
of
£315,000
Price in
the region
of
£349,995
Flats
Cedar Dell, St Andrews
Place, Hitchin
2 bed apartment
From
£254,950
Connells
Bucklersbury, Hitchin,
Hertfordshire
Development of
31 luxury
apartments
From
£245,000
Country Properties
2 bed flat
From
£235,000
2 bed flat
From
£176,000
1 bed flat
From
£174,000
1 bed flat
From
£132,000
2 bed apartment
£225,000
1 bed apartment
From
£149,950
2 bed apartment
From
£199,950
Connells
1 bed apartment
£154,950
Connells
New Mercia, Walsworth
Road, Hitchin
Griffin Court, Stevenage
Road, Hitchin
Stevenage Road,
Hitchin
Meridian Mews,
Walsworth Road,
Hitchin
Walsworth Road,
Hitchin
26
Savills New Homes
Connells
1 bed apartment
£139,950
Connells
1 bed apartment
From
£150,000
Connells
Stamp duty paid.
Legal fees paid.
Choice of carpets
and curtains, plus
mortgage
arrangement fee
and valuation fee
refunded on
completion. Subject
to terms and
conditions.
Appendix III
Imperial Place, Bridge
Street Hitchin, SG5 2DF
1/2 Bed
Apartment
2 bed apartment
Fairfield Park, Hitchen
Road, Stotfold, Hitchen,
Hertfordshire, SG5 4JH
2 bed apartment
1 bed apartment
£18,750
(12.5%
Share)
2 bed apartment
£22,500
(12.5%
Share)
2 bed flat
From
£234,950
Riverside Court, Grove
Road, Hitchin,
Hertfordshire
Queen Street, Hitchin,
Hertfordshire SG4 9TT
From
£189,950
to
£294,950
Price in
the region
of
£169,995
Price in
the region
of
£169,995
Gladedale
Shared equity
scheme
Stamford Homes
AssetTrust Housing
Shared Ownership
Pegasus
Retirement Homes
Baldock
Houses
Flats
Knights Court, Weston
Way, Baldock, SG7
2 bed duplex
apartment
£249,950
2 bed duplex
apartment
£249,950
2 bed apartment
1 bed apartment
From
£164,950
Putterills, Land &
New Homes
From
£149,950
Prices per m²
Again, although we did not gather any price per ft² / m² directly from developers for this desktop
based supplementary work, we were able to approximate floor areas from some plans provided
with sales information.
A sample exercise on the following schemes, for example, suggested the following:
Property type
Marketing
Price
2-bed flat
£159,995
£3,800
2-bed flat
£155,000
£3,300
Norton Road,
Letchworth
4-bed house
£549,000
£3,420
Norton Road,
Letchworth
2-bed house
£249,950
£3,845
Norton Road,
Letchworth
2-bed flat
£215,950
£3,130
Location
Precious Court,
Royston
George Lane,
Royston
27
Indicative £/m²
Appendix III
Summary and Outcomes for values and viability overview
Supplementary research into property prices across Stevenage Borough and North Hertfordshire
District, was undertaken through desktop work to supplement and update our previous information
and understanding of pricing in the local market. This again helped to determine realistic
development values for the further appraisal modelling carried out. Rather than divide the Borough
and District into neighbourhood areas, it was again decided to consider the range of values seen,
and assess whether our range of values assumptions used in the 2007 study remained
appropriate. Once again, the blurring of values between, and even within, some neighbourhoods
and areas makes it difficult to rank areas in terms of property values on any consistent or reliable
basis. By ‘banding’ values or creating a ‘range of Value Points’, we can therefore consider the
appraisal results independently of location and, more usefully, by the approximate value levels
which may be seen across the two Local Authority areas.
Taking an overview of the updated research, we consider that the range of Values Points applied
previously, as re-confirmed in the table below, remains relevant as at July 2007. The value ‘points’
are determined by looking at the full range of values and making informed judgements as to
reasonably how many Value Points to model. An allowance has been made for the size of units
modelled in this study. In addition, extremely high value units have not been included as these
skew the results.
We consider that values at the point of our update research and appraisals are broadly similar to
those seen last year. They would have increased in the intervening period, but have now slipped
back again.
However, current signs are that values are continuing to decline, albeit relatively modestly in
locations such as this when compared with local markets that are inherently less strong. The local
area offers attractive housing locations with good access to facilities, rural areas and employment
– including commuting to London and other centres.
With the very low level of activity in the market (now sustained low sales volume), the general
theme of much of the market reporting is that that will not help price recovery.
The market is very difficult to assess. It is not possible to say with any precision what a typical
reduction from asking price to sale price may be. This will be highly dependent on the particular
scheme and developer. Incentives are generally being offered ahead of price reductions – which
we are not seeing universally and often not on an open, advertised basis. Developers need to try
to protect headline prices as far as possible, whilst also trying to secure ongoing sales.
Subject to these comments, which are not in any way unique to North Hertfordshire District and
Stevenage Borough, in our estimate marketing prices are being reduced by say 5 to 15% to
achieve sales, depending on the scheme specifics and incentives package offered, etc. It is
possible that as more recent sales price figures recorded for example by the Land Registry flow in
to the available data, we will see more adjustment to the overall picture seen here of
approximately equivalent prices between Spring/Summer of 2007 and Summer 2008. We would
see prices fall below those earlier levels assumed for the 2007 study.
28
Appendix III
Currently, new build values appear to lie in the range of Value Points 2 to 5 typically. The
examples we considered in a little more detail above suggested a range of Points 3 to 5, but as
asking prices. In our view this means that a typical new build scheme for the area may well have
shifted down our scale of points slightly. For example, a typical scheme being marketed at, say,
Value Point 3 to 4 may be achieving values in the range of Points 2 to 3. This potentially means
more occurrences of lower value schemes than seen previously (noting that lower value is a
relative term in the context of Hertfordshire values).
This points to more caution when considering viability in the short term, at least while these
uncertain market conditions prevail. Based on this, and acknowledging that development costs
have typically risen, we do not feel that it amounts to any radical reassessment of development
viability when considered at this overview level. What it may well mean is an increased emphasis
on the Council’s practical, adaptable approaches to ensure all round housing delivery during this
challenging time; and an emphasis on monitoring of experiences and delivery, coupled with
contingency planning.
The above will be considered further during and after the carrying out of the additional appraisals.
Confirmation of range of range of Value Points, as per 2007 study:
Value
Point 1
Value
Point 2
Value
Point 3
Value
Point 4
Value
Point 5
Value
Point 6
1-Bed Flat
£132,600
£142,800
£158,100
£173,400
£188,700
£204,000
2-Bed Flat
£171,600
£184,800
£204,600
£224,400
£244,200
£264,000
2-Bed House
£197,600
£212,800
£235,600
£258,400
£281,200
£304,000
3-Bed House
£223,600
£240,800
£266,600
£292,400
£318,200
£344,000
4-Bed House
£262,600
£282,800
£313,100
£343,400
£373,700
£404,000
£2,600
£2,800
£3,100
£3,400
£3,700
£4,000
Unit
£ / sq m Equivalent
29
Appendix III

North Hertfordshire and Stevenage Councils Final Report

Transcription

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