Is it quicker to build homes on large sites, or small?

Too slow, guys. Image: Getty.

The associate director of planning consultancy Nathaniel Lichfield & Partners explains why large new housing sites aren’t a silver bullet.

Most people now agree that we need to build significantly more homes than we currently do – and the government wants planning to think big in how it goes about achieving this objective.

With its “locally-led” garden towns and villages agenda, and last December’s consultation on proposed changes to the National Planning Policy Framework to encourage new settlements, local planning authorities and developers are being encouraged to look closely at bringing forward large-scale housing development projects.

On paper, this emphasis on large sites is useful: with just one site of several thousands of homes, a district can meet a significant proportion of its housing requirement. Moreover, their sheer size can stimulate the local economy and drive innovation as the site and infrastructure are developed.

However, large sites are not a silver bullet. Their scale and complexity mean that they take time to plan and require significant upfront capital investment. Furthermore, there is a need to be realistic about how quickly they can deliver new homes – such sites are not immune to the challenges and risks of the market.

Our latest research report, Start to Finish, analyses the lead-in times, planning period and delivery phases of housing sites. Here are our key findings.


Planning period

Before any homes can be built on-site, an outline or full planning application needs to be submitted and planning permission (followed by reserved matters approval for outline applications) has to be granted. A Section 106 obligation will generally need to be entered into. Pre-commencement conditions need to be discharged before any development start on-site. 

Our research shows that both the planning period (from application to decision), and the period of time between permission being granted and the first home being built, depends on the complexity of the site, which frequently correlates with its size.

And the larger the site, the longer the planning application determination period. Sites outside of London of between 100 and 499 units take, on average, 2.5 years – at least half the time required for sites of over 1,000 units – reflecting differing levels of site complexity.

By contrast, smaller sites take longer to deliver the first home after planning approval. This period of development takes just over 18 months for sites – outside of London – of under 500 units; but, perhaps surprisingly, this is significantly quicker on larger sites – in particular, on the largest 2,000+ dwelling sites, the time period from planning to first completion was under a year. This could be because larger sites may more often have larger housebuilders on board by the time an implementable permission is secured, thus be able to mobilise resources quicker.

Planning period by site size. Source: NLP analysis.

Housing delivery rates

It is widely recognised that build rates on sites are dictated by the number of sales outlets and market absorption rates. Self-evidently, large sites will frequently have more than one housebuilder building and selling homes. The larger the site, the greater the number of different housebuilders on-site and the faster the delivery rate. 

Based on our research, we found that, on average, sites of 100 to 1,000 units will typically deliver 60 units each year, while sites of 2,000 or more will deliver over 160 units per annum.

However, it is worth noting that while larger sites have a higher delivery rate due to the number of additional outlets, they take longer to plan and start on-site. There is also significant variation from the average: some sites can be quicker, others slower. And there are fluctuations from year to year.

Housing delivery by site size. Source: NLP analysis.

Our analysis shows that markets really do matter for housing delivery rates. Using estimates of land value with residential planning permissions at local authority level – as a proxy for market demand and economic strength – relatively stronger markets tend to have higher delivery rates.

This raises an important point about absorption rates: in stronger areas, housebuilders are able to build homes at a faster rate and sell them at the value they expect.

Housing delivery rates and market strength. Source: NLP analysis.

Where viable, housing sites with a larger proportion of affordable homes deliver more quickly. For both large and small-scale sites, developments with 40 per cent or more affordable housing have a build rate that is around 50 per cent higher, compared to developments with less than 10 per cent affordable housing.

The relationship between affordable housing provision and delivery rate is complex and rests on a variety of factors including viability and the level of grant or subsidy available to housing associations. On large sites, securing affordable housing “sales” can benefit housebuilder cash flow by providing financial certainty, which can be beneficial, particularly early on in a larger scale development.

However, it does demonstrate that – where viable – a tenure mix that extends beyond just housing for sale can help overcome the natural limitations associated with absorption rates. So the introduction of self-build and private rented properties might similarly increase rates of development.

Affordable housing provision and housing delivery. Source: NLP analysis.

If we are serious about achieving the Government’s target of one million homes built by 2020 – or indeed, deliver the 300,0000 per year that are needed – we need to recognise that it is about much more than just having a headline number of units in plan allocations or with planning permission. We need to understand trajectories of development: the length of time it takes for sites to come forward and the rate at which they deliver homes.

Every site is different, and there is a need for local authorities to understand the barriers and drivers of delivery in their area, seek to allocate appropriate housing sites in response and then closely monitor their progress.

Joe Sarling is associate director of planning consultancy Nathaniel Lichfield & Partners. This article was originally posted on the firm’s blog

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Where actually is South London?

TFW Stephen Bush tells you that Chelsea is a South London team. Image: Getty.

To the casual observer, this may not seem like a particularly contentious question: isn’t it just everything ‘under’ the Thames when you look at the map? But despite this, some people will insist that places like Fulham, clearly north of the river, are in South London. Why?

Here are nine ways of defining South London.

The Thames

Image: Google Maps/CityMetric.

It’s a curvy river, the Thames. Hampton Court Palace, which is on the north bank of the river, is miles south of the London Eye, on the south bank. If the river forms a hard border between North and South Londons, then logically sometimes North London is going to be south of South London, which is, to be fair, confusing. But how else could we do it?

Latitude

You could just draw a horizontal line across a central point (say, Charing Cross, where the road distances are measured from). While this solves the London Eye/Hampton Court problem, this puts Thamesmead in North London, and Shepherd’s Bush in South London, which doesn’t seem right either.

Image: Google Maps/CityMetric.

And if you tried to use longitude to define West and East London on top of this, nothing would ever make sense ever again.

The Post Office

Image: Wikimedia Commons.

Some people give the Post Office the deciding vote, arguing that North and South London are defined by their postcodes. This does have some advantages, such as removing many contentious areas from the debate because they’re either in the West, East or Central postcode divisions, or ignoring Croydon.

But six of the SW postcodes are north of the river Thames, so we’re back to saying places like Fulham and Chelsea are in south London. Which is apparently fine with some people, but are we also going to concede that Big Ben and Buckingham Palace are South London landmarks?

Taken to the extreme this argument denies that South London exists at all. The South postcode region was abolished in 1868, to be merged into the SE and SW regions. The S postcode area is now Sheffield. So is Sheffield in South London, postcode truthers? Is that what you want?

Transport for London

Image: TfL.

At first glance TfL might not appear to have anything to add to the debate. The transport zones are about distance from the centre rather than compass point. And the Northern Line runs all the way through both North and South London, so maybe they’re just confused about the entire concept of directions.

 

Image: TfL.

But their website does provide bus maps that divide the city into 5 regions: North East, South East, South West, North West and the Centre. Although this unusual approach is roughly speaking achieved by drawing lines across and down the middle, then a box around the central London, there are some inconsistencies. Parts of Fulham are called for the South West region, yet the whole of the Isle of Dogs is now in North East London? Sick. It’s sick.

The Boundary Commission

One group of people who ought to know a thing or two about boundaries is the Boundary Commission for England. When coming up with proposals for reforming parliamentary constituencies in 2011, it first had to define ‘sub-regions’ for London.

Initially it suggested three – South, North East, and a combined North, West and Central region, which included Richmond (controversial!) – before merging the latter two into ‘North’ and shifting Richmond back to the South.

In the most recent proposal the regions have reverted to North Thames and South Thames (splitting Richmond), landing us right back where we started. Thanks a bunch, boundary commission.

The London Plan

Image: Greater London Authority.

What does the Mayor of London have to say? His office issues a London Plan, which divides London into five parts. Currently ‘South’ includes only Bromley, Croydon, Kingston upon Thames, Merton, Sutton, and Wandsworth, while the ‘North’ consists of just Barnet, Enfield, and Haringey. Everywhere else is divvied into East, South or Central.

While this minimalist approach does have the appeal of satisfying no-one, given the scheme has been completely revised twice since 2004 it does carry the risk of seismic upheaval. What if Sadiq gets drunk on power and declares that Islington is in East London? What then?

Wikipedia

 

Image: Wikimedia Commons/CityMetric.

The coordinates listed on the South London article lead to Brockwell Park near Herne Hill, while the coordinates on the North London article lead to a garden centre near Redbridge. I don’t know what this means, so I tried to ring the garden centre to see if they had any advice on the matter. It was closed.

Pevsner Guides

Image: Wikimedia Commons/CityMetric.

Art historian Sir Nikolaus Pevsner might seem an unlikely source of help at this juncture, but we’ve tried everything else. And the series of architectural guides that he edited, The Buildings of England, originally included 2 volumes for London: “The Cities of London and Westminster”, and “everything else”. Which is useless.

But as his successors have revised his work, London has expanded to fill 6 volumes: North, North West, East, The City, Westminster, and South. South, quite sensibly, includes every borough south of the Thames, and any borough that is partly south of the Thames (i.e. Richmond). And as a bonus: West London no longer exists.

McDonald’s

I rang a McDonald’s in Fulham and asked if they were in South London. They said no.

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