Garden Cities? A pipe dream says GVA

Monday, 04 February 2013

New research by leading commercial property consultant GVA has revealed that the market is unable to deliver large scale housing schemes without greater support from the public sector.

The report identifies 40 urban extension sites and new settlement schemes (above 3,000 units) which could deliver up to 250,000 new homes in the South and South East of England. However, it also highlights a range of challenges holding up the delivery of these developments and suggests a number of action points for Government.

The crisis facing the housing market is well-documented - recent figures point to the need to build 240,000 units a year, whilst the market is currently only delivering 110,000 units. The Government has made a number of statements setting out its support for the principle of large scale residential developments – ‘New Garden Cities and Suburbs for the 21st Century’ - a concept which is enshrined in the National Planning Policy Framework and the national housing strategy.

The research identifies two main corridors of large scale residential development potential. Firstly running along the M11/A14 from the East of London to Cambridge (87,250 new homes) and second from Cambridge to Oxford (84,430 new homes). It identifies seven local authorities which have proposals or allocations for over 10,000 new homes through urban extension sites.

However, according to the analysis, many of these large suburban extension and residential Greenfield sites face a range of complex challenges, causing delays to delivery which requires public sector intervention. While many schemes face multiple hurdles, the research cites the largest single cause for delay as infrastructure costs (halting delivery of around 80,000 homes) the local housing market (30,000 new homes) followed by the planning process (10,000 new homes) and political opposition (7,000).

The report concludes by highlighting a number of areas that Government needs to address in order to progress its ‘Garden Cities and Suburbs’ agenda. This includes considering a new form of public sector funding guarantee for infrastructure, to ensuring there is greater stability in the planning system, simplifying public funding streams, and directing the public sector to take on a more proactive management role.

It advocates a role for the HCA in leading and facilitating the delivery of potential Garden cities and in stepping in to relieve the existing log jam amongst the larger schemes.

Gerry Hughes, Senior Director at GVA, comments: “A definitive position needs to be taken by Government on facilitating and enabling these larger schemes, and indeed Garden Cities if they are to be nothing more than a pipe dream. In my view this means giving the HCA a clear delivery mandate to make Garden Cities happen in chosen locations and in freeing up the log jam of large housing schemes that our work has demonstrated.

Bashing the planning system has been a diversionary tactic for long enough. Planning is not the principal problem. The Government has to find a way of enabling the necessary funding of infrastructure either by direct public sector funding or by acting as funding guarantor to de-risk delivery.”

Iain Gilbey, Senior Planning Partner with Pinsent Masons comments: "This report is timely and comes at a point when public sector intervention coupled with private sector determination, must be harnessed to deliver the scale of housing development that this country now requires.

“Government has an important role to play in using the statutory planning and funding powers at its disposal (and encouraging local government to do the same) to firstly and importantly de-risk or forward fund strategic infrastructure delivery and secondly to step in and assist with land assembly, to ensure that schemes can achieve the required critical mass for delivery."

The findings of report will be presented at a seminar hosted jointly by GVA and Pinsent Masons on Tuesday 5th February, where experts from across the house-building sector will debate the challenges and possible solutions to the delivery of large-scale housing schemes. Guest speakers at the event include: Chris Tinker, Regeneration Chairman and Group Board Director, Crest Nicholson PLC and Gareth Blacker of the Homes & Communities Agency.

For further information on the report findings please contact Gerry Hughes, Senior Director at GVA on 020 7911 2653. Or visit: www.gva.co.uk/research