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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“Residents were woken by the sound of bulldozers”: in Lagos, gentrification can mean midnight demolition

A displaced family sits on make-shift structures after their home in the waterfronts was demolished last November. Image: Getty.

The ambitious plans produced by the Lagos state government to redevelop the most populous city in Africa are often lauded in Nigeria. Moving around in this buzzing yet often dysfunctional commercial capital is often tortuous, with thick traffic and poor connectivity problems across the city.

The current state governor, Akinwunmi Ambode, wants to remake the city’s image, turning it from a sprawling bottleneck of a city to a better structured and more functional one. But his plans to improve infrastructure and redevelop large parts of the city have had sinister consequences for swathes of the city’s population: the urban poor, who seem to have no place in Ambode’s vision.

The last few years have seen an alarming trend of state-backed destruction of small businesses, markets and especially informal housing settlements, “regenerating” areas with new expensive housing and development. Last year a large fishing community in Lagos informally called the ‘waterfronts’, housed over 300,000 people. But in the last five months, three rounds of demolitions have ruthlessly left more than 35,000 people homeless.

In November, the homes of over 30,000 people were destroyed by bulldozers. Last week a further 4,700 people were the victims of sudden midnight demolitions. According to residents, the destruction was supervised by state officials and police. A High Court ruling the previous January had said that previous demolitions by the state were “inhumane” and against the residents’ human rights, mandating all parties to enter mediation. All the same, residents were woken up by the sound of bulldozers which destroyed their homes, with no notice to collect their belongings.

Demolitions like this have become increasingly commonplace in Lagos, where land is scarce and valuable. By some estimates, over two thirds of people in Lagos live in informal housing settlements. And not only is there a premium on expensive housing projects; many of the state’s big infrastructure plans, like the desperately needed bridge connecting the Island to the mainland, cut through areas filled with such settlements.

After demolitions, many residents simply move to the outskirts of their destroyed communities or to other informal settlements. The cost of setting up shelters to live in is far more is feasible than formal housing costs.

Too often the government prefers to evict and demolish rather than mediate. It rarely provides assistance for tenants to move, or regulates and redevlops those areas with them in mind.  After a kidnapping near the waterfronts, the governor of Lagos, Akinwunmi Ambode, described the communities as “the abode of miscreants/street-urchins, kidnappers, touts, street traders and hawkers”. In his vision of a modern Lagos, slums and street sellers have little place.


A closing market

Government policies have also made it increasingly hard for the urban poor to work. In many settlement areas, small markets spring up to cater to the communities that live there. Small businesses also set up in other areas that aren’t approved, or in complexes rented from landlords who aren’t transparent with tenants about ownership disputes.

On side streets, women sell items laid on fabric or stools. And on the streets of Lagos, young men and women, and sometimes children, weave dangerously between impatient motorists: the gridlocks that hurt the city present a ready market for those selling anything from drinks and snacks, to underwear or household furniture.

Officially a ban on street trading has been in place in Lagos since 2003, but in the last year, in certain key areas, it has been more keenly enforced. Millions of families rely on street trading for income, yet its dangers and problems are clear. Here too, instead of reforming a system that millions of people rely on, the government wants to end it entirely. State officials have in the last year targeted key areas, arresting street sellers and confiscating their goods.

The government claimed that, after the ban, street traders would be able to access loans to start more formal businesses. But poor capacity, access and loan requirements have made it a out-of-reach for many traders.

Gentrification is a hallmark of major cities all over the world. But in Lagos, to many of the city’s poor, it’s manner is particularly violent and cruel.

The governor is keen to be the face of a new Lagos, attracting and administering new redevelopment projects. But he is not prepared to work out how to rehouse or compensate the people whose lives are being torn apart by such plans. He wants Lagos to be more ordered, for selling on the street to move into more regulated areas. But as the space for those areas diminishes to make way for shopping malls, and the costs outstrip people’s resources, there are many reasons why people aren’t selling there in the first place.

Regenerating and reforming Lagos is not a problem in itself. But the disregard for many of the people who live there is fuelling needless suffering.

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