Is bigger always better?

With increasing political pressure to move away from Greenfield sites, a number of local plan consultations are focusing their efforts on large, flatted town centre schemes, with one SE Authority looking to bring forward over 2,000 new homes via flats.

 

Given the greenlight from the local authorities and the falling values of offices and retail, a number of corporate investors and landowners are looking to capitalise on this, seeking planning for large flatted schemes, but are they viable, and will they ever get built?

 

The painful lessons learnt at Grenfell have resulted in much needed adjustments to Building Regulations and a second staircase requirement, but this has driven up the cost of developing over 18m (roughly 5-6 stories) and that’s on top of the jump in cost of building materials we’ve seen over the past 3 years.

 

This combination has resulted in many schemes even in the southeast proving unviable, with the existing use value often outweighing any potential development value. Where high rise flatted schemes do come forward many will not provide affordable units, as the provision on site affordable is often further adding to already strained viabilities. This in turn takes away the provision of affordable units in precisely the arears they are in highest demand.

 

Unfortunately, even with a reduced affordable housing level, many brownfield developments still won’t come forward. Many Local authorities are now looking nervously at their reliance on these sites to meet their housing delivery targets.

 

Over the past 12 months we have seen lower density schemes of either low rise flats or more traditional housing generating higher land values, and in town centre locations where sites are constrained, alternative uses such particularly in care and retirement are driving higher land values – in these cases, bigger wasn’t better!