Acorn laments plight of smaller housebuilders

Two directors from Acorn Property Group have laid bare the issues facing small and medium-sized housebuilders in the UK planning system. In a letter to secretary of state for communities and local government Sajid Javid, John Skok and Duncan Powell say that politics is trumping planning, leading to rejections and higher house prices. They say this is making development less viable, and explain in detail how much planning delays have cost them on a scheme-by-scheme basis. Dear Sajid Javid As I am sure you are aware, 15 housebuilders built 50% of all new homes in the UK in 2015 and 20 housebuilders built 65%. The bulk of these houses are built on greenfield sites and do little for the regeneration of brownfield land use agendas. We are a medium-sized residential-led property development company with projects throughout the south of the country. The vast majority of our schemes range from 10-100 units and are regeneration based on brownfield land. We expect to build approximately 500 units in 2017 and would have done the same this year if it wasn’t for planning delays. We are exactly the type of housebuilder that a number of recent government and industry reports and articles have highlighted as having a huge role in increasing the number of houses built in this country. Acorn is trying to achieve this, but is being beaten back at the first hurdle by politics in planning. By way of example I would like to describe how three typical recent planning applications made by Acorn have been handled [see right]. Our conclusion as a housebuilder is that the planning system is hopelessly ineffectual and fundamentally flawed… These issues are becoming so critical that it is surely only a matter of time before a developer or other body sues a council over time delays and creates a precedent for others to follow. The planning system as it stands adds tens of thousands to the cost of every single house that is provided in this country. In our examples above the cost of the planning applications will mean that homeowners are significantly out of pocket for no good reason. On Lee Bay the application cost us £400,000 and together with interest and other charges represents £20,000 per house, this means that the house prices will have to increase by £20,000. I am sure you will agree this is madness.” Yours sincerely John Skok, group operations director Duncan Powell, group planning director * Text abridged. Read the full letter below Acorn’s planning travails Corsham, Wiltshire • Application for 31 homes, 35% affordable, on Corsham outskirts. • Worked with council and statutory consultees with public consultation. • Full officer recommendation for approval. • Turned down unanimously on 26 October 2016 by committee “without any valid reason”. • To date, preparation, submission and consideration has cost £300,000 over 25 months, 19 of which were in the planning system. This equates to £15,000 per unit. Lee Bay, North Devon • Application for 20 homes, public beachfront open space and subsidised café. • Site of redundant hotel on the North Devon coast, vacant for 11 years. • Engaged with local planners, community and consultants for scheme 10% smaller than hotel. • Received full officer recommendation for approval. • Went to committee on 6 October 2016. Protest at meeting so loud “one committee member actually stated that although they could see no planning reason to refuse the scheme and in his eyes it appeared fine, he would vote to refuse it anyway”. • Local objections factually incorrect and addressed in technical submission. • To date, preparation, submission and consideration has cost £400,000 over 27 months, 17 of which were in the planning system. Former council offices, North Quay, Weymouth • Office to residential conversion • Prior approval for 56 flats refused on 29 November 2016. • “Members and vocal minority objectors ignored the planning system and pressurised officers.” • Appeal now lodged with cost and extended charges added to house price. Chillington, South Devon (live application) • Live application for 65 homes on greenfield site with 35% affordable, and retirement living. • Progressed in local plan as council preferred development site. • Acorn anticipates application will receive planning officer support, but considerable local objection without valid planning reasons, “just simple nimbyism”. • To date the preparation, submission and consideration has cost £216,000 over 18 months and total cost is expected to be £5,143 per home. The problem is politics Acorn says committees are “reacting to vociferous objectors regardless of the facts” and ignoring their responsibility to consider schemes in their position as a planning authority. It says committee members are incapable of making decisions that are not related to local votes, while the professional opinions of authority planning experts are ignored. “The problem of committees acting inappropriately is endemic and is making a mockery of the planning system,” the letter says. Letter to Sajid Javid – full text   The planning system from a non-plc developer’s perspectiveIt has been suggested by a friend of mine, and colleague of yours, Richard Harrington, MP for Watford, that we drop you a line to describe to you directly some of the experiences we as a housebuilder have recently had with the current planning system. As I am sure you are aware, 15 housebuilders built 50% of all new homes in the UK in 2015 and 20 housebuilders built 65%. The bulk of these houses are built on greenfield sites and do little for the regeneration of brownfield land use agendas. We are a medium- sized residential-led property development company with projects throughout the South of the country. The vast majority of our schemes range from 10-100 units and are regeneration based on brownfield land, although we do also build some housing on greenfield land. We expect to build approximately 500 units in 2017 and would have done the same this year if it wasn’t for planning delays. We are exactly the type of housebuilder that a number of recent government and industry reports and articles have highlighted as having a huge role in increasing the number of houses built in this country. Indeed, recently Gavin Barwell stated: “I think we are too dependent on a small number of large housebuilders, so we need to broaden the range of the people who are doing the building”. Acorn is trying to achieve this, but is being beaten back at the first hurdle by politics in planning. By way of example I would like to describe how three typical recent planning applications made by Acorn have been handled. 1. Corsham, Wiltshire. Ref: 15/11544/OUT We applied for 31 dwellings with 35% affordable housing on a site on the outskirts of Corsham, directly behind an existing housing estate and next to a railway line, on land made up of fill from early 20th century railway tunnel excavations. The site could comfortably be described as infill land which already contains a number of dwellings and was perfect for more. It is exactly the kind of site that needs to be brought forward to provide housing while still protecting genuine open countryside. We worked very closely with Wiltshire Borough Council and all statutory consultees and undertook a detailed public consultation programme. We received full officer recommendation for approval with no objections from any statutory consultees. On 26 October 2016 the committee turned us down unanimously without any valid reason. To date the preparation, submission and consideration of the application has cost us £300,000 over 25 months, 19 of which were in the planning system. Whatever the rights and wrongs are of this planning application this process has cost £15,000 per open market unit and with interest and all the holding charges it has probably added £20,000, and the families that want to move into those houses are going to have to pay that. With an appeal now lodged, yet more cost will be incurred (both planning and holding costs) which again will have to be added to the cost of the house. I believe in the background these planning costs are a significant aspect of house cost inflation that is being ignored by the government. 2. Lee Bay, North Devon. Ref: 59766 A redundant hotel sitting in a beautiful part of the North Devon coast which has laid vacant for 11 years and blights a highly attractive waterfront in the AONB. Previously a resolution to grant for a scheme significantly larger than the existing building had been given but was not pursued as the leisure facilities, restaurant, fractionally owned apartments and holiday restricted homes proved unviable with no interest in that location. Acorn engaged with the local planners, local community and local consultants and applied for 20 dwellings and the expansion of a local car park, public beachfront open space and the construction at a subsidised rate of a beach café for us by the public. It was a stunning scheme and around 10% smaller than the existing building. The application was considered by North Devon’s planning committee on 6 October 2016 with full officer recommendation for approval, but the protest at the meeting by locals was so loud that one committee member actually stated that although they could see no planning reason to refuse the scheme, and in his eyes it appeared fine, he would vote to refuse it anyway. This is despite years of work where we examined and satisfied every possible angle (employment, tourism, holiday homes etc). The scheme was refused by the committee, due again to nimbyism, at its strongest. Worst of all is that the objections made by locals were factually incorrect and had already been addressed in the technical submission made with the application, but all committee members heard were the vociferous objections and consequently chose politically to side with that rather than review the evidence in front of them that justified the officer support. To date the preparation, submission and consideration of the application has cost us £400,000 over 27 months, 17 of which were in the planning system. 3. Former council offices, North Quay, Weymouth Ref: WP/16/00745/OFF Despite overwhelming evidence proving the current B1 office use of the building (including the council’s acknowledgement in their own planning application) and no technical objections, our prior approval for residential conversion to 56 apartments was nevertheless refused by the council on 29 November 2016. Yet again, this is members and vocal minority objectors simply ignoring the planning system and pressurising officers. The result of this is a significant delay to appeal, including a case for costs against the council, all of which amounts to no housing being delivered despite the good intentions of clear government policy. As with Corsham, an appeal has now been lodged and the cost of this and extended site holding charges will be added to the apartment prices, contributing further to house price inflation. These three recent examples are a recurring theme on nearly all our sites which are constructed within or adjacent to a settlement (which clearly is most sites if sustainable development is to be achieved). Planning committees are reacting to vociferous objectors regardless of the facts and completely ignoring their role which is to consider schemes on a planning basis. Committee members are increasingly incapable of making any decision which won’t win them votes locally which means that if there is an prospect of a local election in the future that we as developers have literally no chance of a “fair hearing”. The professional opinions of local authority planning experts are simply being ignored. We consult extensively; we employ the best architects including recently Stirling Prize winners, and the best consultants. We are extremely patient, accommodating, and considerate developers and all to no avail. Other recent examples are: • Goonhavern, Cornwall – 45 dwellings at 50% affordable. Refused by committee despite full officer recommendation for approval. Approved at appeal. • Crantock – 37 dwellings at 54% affordable. Refused by committee despite full officer recommendation for approval. Dismissed at appeal because in the meantime a competing site that was well away from the village was approved as locals preferred it because it was far away from the village. This does not constitute sustainable development. • Ponsmere Hotel – redevelopment of derelict hotel for 37 dwellings. Refused by committee despite full officer recommendation for approval. Approved at appeal. The problem of committees acting inappropriately is endemic and is making a mockery of the planning system. While the appeal system exists to challenge such decisions the system is fundamentally unfit for purpose if most sites end up at appeal and members are simply refusing applications for no valid planning reason. Our conclusion as a housebuilder is that the planning system is hopelessly ineffectual and fundamentally flawed. The appeal system only allows appellants to recoup costs where a council has acted unlawfully and those costs do not get close to covering the real cost. These issues are becoming so critical that it is surely only a matter of time before a developer or other body sues a council over time delays and creates a precedent for others to follow. Funding and bias to big developers Although I am sure there are lots of “reasons” for this, the two that are more obvious to us on a practical day-to-day basis and which I believe you could deal with relatively simply are as follows: 1. The planning system is hopelessly underfunded. This makes it completely impossible for them to deal effectively with planning applications and impossible for them to retain good staff. Whether you outsource planning or simply put in place effective developer charging systems with appropriate business performance controls to ensure the money isn’t wasted we don’t know. 2. The whole planning process is so politicised that it is impossible for good planners to do their job. The vast majority of our applications are approved or refused on an almost entirely political basis. The three examples above were all refused due to local unfounded pressure groups and this uncertainty makes it impossible for developers of our size to operate effectively providing homes or indeed to operate profitably. You have to do something to protect the planners from local politics. This is even more prevalent around the time of any kind of local election where the whole planning system effectively freezes. An unintended consequence for the above is that the planning system is entirely biased in favour of large schemes on greenfield sites with little or no neighbours and national house builders. Only national housebuilders can afford to invest in planning applications where the outcome and timescale is at best arbitrary and at worst pointless and no more than a necessary precursor to a refusal and lengthy appeal process. The real cost of planning applications where one considers external consultants, internal management teams, funding costs, and other holding charges of land is astronomical and that is directly reflected in the house prices in this country. If one were to add the cost to the economy of the delayed economic activities and the delay in the delivery of housing, it is frightening. Ironically the result of these delays and costs is usually a reduction in affordable housing as schemes are no longer viable. In many cases sites where members have refused an application on political grounds then dragged it through the appeal process end up being approved with far fewer affordable units than if the original scheme had been approved in the first place. We have another live application in Chillington, South Devon (Ref: 0771/16/OPA) which we fear will go the same way. On this greenfield site we have applied for up to 65 dwellings with 35% affordable housing, an element of retirement dwellings at an extremely low sensitive density of around 22 dwellings per hectare. We have worked closely with the local borough council and local planners and despite the council progressing it in its emerging Local Plan as its preferred site, and us anticipating that the application will receive the full support of the planning officers, it is quite clear from the early meetings that there is considerable local objection without valid planning reasons, just simple nimbyism. Our concern is that this scheme will face the same result and without good reason. There is no valid planning reason why this scheme should not get planning, we have bent over backwards to provide a design that suits everybody, we have received recommendation from the planning officers and consultants and yet, pessimistically, we do not believe the committee will have the political will to grant permission. To date, the preparation, submission and consideration of the application has cost us £216,000 over 18 months and we expect the total cost to be £5,143 per open market dwelling. Even if we do achieve planning or don’t and have to go to appeal, that amount would probably double. Again, this is effectively a direct cost to the owner occupier and homeowner, which as mentioned previously cannot be in anyone’s interest. The planning system as it stands adds tens of thousands to the cost of every single house that is provided in this country. In our examples above re Corsham and Lee Bay the cost of the planning applications will mean that homeowners are significantly out of pocket for no good reason. On Lee Bay this application cost us £400,000 and together with interest and other charges represents £20,000 per house, this means that the house prices will have to increase by £20,000 (per house) and I am sure you will agree this is madness! I trust this letter is of interest and we will gladly meet with you if you wish to discuss these issues in greater detail and understand first-hand how the system is failing. We are also happy to contribute to any think-tank or DCLG-led committee/group setup to resolve these issues. The government’s stated target is to build one million homes by 2020. This is a worthy aspiration but I cannot see how the same can possibly be attained while the above friction between planning law and planning committees continues unchecked. Yours sincerely, John Skok, Group Operations Director Duncan Powell MRTPI, Group Planning Director