On 21 July, experts from various divisions of Leaders Romans Group presented to the local development industry in the Thames Valley.
As ever, our briefing was extremely well attended and resulted in some interesting conversations on the state of the local market.
Jason Farrimond, Associate Director Land & New Homes at LRG presented some of the headline stats in relation to the residential sales market.
Key points were:
- Net sales in Q2 2023 are down compared to Q2 last year – but substantially less than the media would suggest, at 9%.
- Likewise, although the average sales price dropped, it was by 6.4% – again, less than much of the commentary suggests
- Despite a noticeable drop in applicant registrations (-25%) and viewings (-16%) LRG is registering over 1,600 new applicants every week.
- The second quarter of 2023 saw a steady improvement on Q1 despite interest rate rises and the challenges caused by the stubborn inflation rate.
- New offers on LRG’s new homes sales increased by in 6% in July compared to May. And across the wider LRG network net sales were up by 11% and instructions were also up by 8%.
- Furthermore, cancelled sales continues to track almost 20% lower than 2022.
There are positives in this market – for the serious buyer (we are seeing far fewer speculative buyers/sellers), for the cash buyer (unencumbered by challenging mortgage rates, these buyers are in a strong position), for first time buyers and upsizers (with more incentives available and some realignment of prices, there’s potential for a larger property).
The popularity of new homes remains high: LRG’s New Homes team has had a busy quarter, agreeing sales on over 150 plots (a positive comparison to Q2 2022), and with consistent headline prices at 98%. The team also added 21 new developments to the pipeline that we anticipate will launch later this year.
With the headquarters of LRG’s Land team and planning consultants (Boyer) located in our Crowthorne House office in Wokingham, we are able to offer unparalleled advice on land use, development and the increasingly challenging planning environment.
Ian Barnett, National Land Director at LRG gave a briefing on the local land market.
Noting that the land market, due to the very long-term nature of land deals, changes slowly relative to planning and residential sales, Ian raised some points of substantial interest.
The key issue impacting on land availability (and thus planning, new homes development, house price and rents) is the Green Belt. And the Thames Valley feels the impact of the Green Belt more so than most.
That said, not all of the Thames Valley falls in the Green Belt and the Green Belt does not preclude development outright. LRG’s Land team, together with Boyer, have successfully brought forward Green Belt land through local plans in Berkshire.
The challenge, said Ian, is unconditional sites, specifically those stalled because of increased interest rates.
Furthermore there is a log-jam in strategic sites coming through the strategic planning system, with some options expiring. Importantly, landowners need to think to the not-too-distant future and the potential impact on the land market of a Labour Government requiring that sites are purchased by the Government at reduced rates under CPO.
The eighteen months (maximum) to the general election is a long time in land allocations and negotiations – landowners wishing to sell at a good price should not be determined by the current challenges on the basis that there may be further challenges to come.
Karen Charles is an Executive Director of Boyer and Head of Boyer Wokingham, based at LRG’s Crowthorne House.
Karen’s presentation about planning in the Thames Valley was framed in the context of the housing crisis: primarily the fact that the cost of home ownership and private rent remains very high, pricing many out of the market including, importantly, key workers.
Karen stated that the means of delivering the much-needed homes, with the necessary variety of tenures, rested with delivering more homes. Her visuals demonstrated why this is particularly challenging in the Thames Valley: local constrains include Green Belt, Areas of Outstanding Natural Beauty, Special Protection Areas (i.e. Thames Basin Heaths), Special Areas of Conservation (i.e. Chiltern Beechwoods), and areas of nitrate neutrality and high flood risk.
Karen discussed the impact on of the Government’s Brownfield First policy, which while well-intended, is insufficient to deliver the requisite number of homes. She also gave her thoughts on the Levelling Up Select Committee’s response to the Levelling Up and Regeneration Bill and the impact of the local elections on local plans in Berkshire. Each of these issues will be covered in future posts.
Finally, Karen noted that promoting housing growth is not one of Rishi Sunak’s priorities: ‘From what we saw in the proposed changes to the NPPF and Levelling Up and Regeneration Bill, the priority seems to be appeasing the Conservative backbenchers who largely and traditionally represent more affluent and less urban areas, are promising to protect the countryside and remove ‘forced’ housing targets.’
In contrast, Karen says, ‘Labour have seen an opportunity to differentiate themselves from the Conservatives by being the party who promises to deliver more homes. Their widespread slogan of being ‘Builders not Blockers’ may gain some support from those who strive to get on, or move up, the housing ladder and should be good for the housebuilding sector.
‘Sir Keir Starmer has promised planning reform – although he is currently a little light on what this means. But he does back mandatory housing targets and growth.’
In summary, ‘Securing planning permission for housing has always been difficult, but it feels more difficult than ever at the moment.
‘But Boyer is never dissuaded from pursuing housing allocations and planning permissions where there is a planning case to do so.’ And with a great track-record of achieving planning consents – including in the Green Belt, Boyer is playing an important part in addressing the regional housing crisis.
Ananya Banerjee – Director and Head of Design at Boyer – addressed the recent Thames Valley breakfast on the subject of ‘beauty’.
Going back a couple of years it would have been surprising to hear a presentation on masterplanning dominated by such a spurious, subjective and contextual topic.
But, as a result of the work of the Building Better, Building Beautiful Commission and ensuing changes to planning guidance – not to mention a recent call-in by the Secretary of State – ‘beauty’ is central to all proposed developments.
Ananya raised some interesting questions – What is beauty? Why has beauty become so political? How do we implement beauty in new developments in a way that is broadly understood and appreciated? How do we defend beauty when planning consent depends on it?
One answer – though perhaps not a universally welcomed one, is the idea of a ‘beauty calculator’. Ananya will be addressing this interesting idea a in future post.