I issued the following press release this morning on behalf of the Trade Union and Socialist Coalition in Westmorland and Lonsdale (@SouthLakesTUSC):
TUSC says:
KENDAL NEEDS GENUINELY
AFFORDABLE RENTED COUNCIL HOMES
APPLY COUNCIL POLICY - OPPOSE THE STORY
HOMES “PHASE 4” PLANNING PERMISSION ON BRIGSTEER ROAD
TUSC1 in Westmorland and Lonsdale has submitted an objection to Story
Homes’ planning application for their proposed “Phase 4” of homes on Brigsteer
Rise in Kendal, based on a detailed analysis of the claims made by the
developer for the previous phases of this substantial development.
Our analysis2 shows:
·
Story
Homes were given permission to build the initial phases of the development even
though their plans failed to provide the amount of ‘affordable homes’ set out
in the council Core Strategy.
·
Agreeing
the developer’s proposed plans for Phase 4 would mean that the overall
development would be completed with 71.4% (157/220) open market properties and
only 28.6% ‘affordable housing’ (63/220) – of which just 32 – just one in seven
– would be ‘affordable rental’ properties.
·
The
developer has also been allowed to proceed with plans that fail to provide the
‘housing mix’ set out in the Core Strategy, building too high a proportion of its
bigger, more profitable, houses.
The Council accepted Story Homes’ claims that meeting its Core
Strategy would make the scheme commercially “unviable”. However, our analysis
suggests that the developer based this claim on income projections from house
sales that underestimated the actual income that will be generated. Story
Homes’ latest accounts for the year ending 31 March 2023 report that their “turnover
increased by 11.9% to £269.3m (2022: £240.7m) … Gross profit has increased to
£62.1m (2022: £59.0m)”.
Martin Powell-Davies, who completed the analysis for
Westmorland and Lonsdale TUSC said:
“Low-paid workers and their families see expensive developments
like Brigsteer Rise being built all around Kendal, but know that these are homes
that they cannot afford to live in. There’s a housing crisis in Westmorland. The
Council’s priority should be to provide genuinely affordable, sustainable, rented
council homes. It’s time that people’s
needs were put before developer’s profits”.
“Story Homes’ latest planning application for Brigsteer Rise should
be refused, at the very least unless they are prepared to complete their
development to a plan that ensures that the overall ‘housing mix’ and provision
of ‘affordable housing’ meets the levels set out in the Council’s Core
Strategy. However, given that even those homes deemed “affordable” in the plans
will, in reality, still be “unaffordable” to many local residents, the best way
to meet the needs of local people would be to reject this proposal entirely.
Instead, the Council should consult with local communities and trade unions
over how to deliver genuinely affordable homes and demand that the next
government, to be elected at some point in 2024, supports such a vitally needed
change in direction in housing policy.”
1 TUSC,
the Trade Unionist and Socialist Coalition, will be mounting an anti-cuts,
pro-public services challenge to all the main parties in the 2024 General
Election, including in Westmorland & Lonsdale.
2 The analysis & full objection submitted on behalf of TUSC can be downloaded from https://bit.ly/42dwprF but is also pasted below:
Objection to Planning Application
Number 2023/1061/FPA - 108 dwelling houses and associated infrastructure
(Brigsteer Rise, Phase 4) by Story Homes.
I wish to object to the planning application for the reasons
set out below:
Summary
As the Supporting Planning Statement submitted on behalf of
Story Homes makes clear, their application for further planning permission is
for “Phase 4 of the Brigsteer Rise development in Kendal”. In considering the
suitability of this application, the Council should reassess the previous
claims and arguments made by Story Homes in applying for planning permission
for the initial phases of this development.
As set out below, I believe in particular that the claims
about ‘viability’ made by Story Homes in documents in the earlier phases of
this development, specifically about the provision of ‘affordable housing’ and
‘housing mix’, need to be reconsidered.
On the basis of such an assessment, planning permission
should be refused, at the very least unless Story Homes are prepared to
complete the final phase of their development to a plan that ensures that the
overall ‘housing mix’ and provision of ‘affordable housing’ of the whole
development is at least in line with the Core Strategy.
Given that even those homes deemed “affordable” in the plans will
nevertheless be, in reality, “unaffordable” to many local residents, the
Council has a duty to at least insist that its own Core Strategy policies are
applied in full. However, the best way to meet the needs of local young people,
low-paid workers, and their families, would be to reject this proposal entirely
and to instead begin a process of consultation with local communities and trade
unions over how to deliver genuinely affordable, sustainable, secure, publicly
owned and democratically controlled rented housing within Kendal and the
surrounding areas.
Core
Strategy
The Supporting Planning Statement submitted on behalf of
Story Homes itself refers to the following aspects of the South Lakeland Core
Strategy:
Policy CS6.2 – Dwelling Mix and Type requires new development to offer a
range of housing sizes and types, taking account of the housing requirement of
different groups of society, including the need to deliver low-cost market
housing as part of the overall housing mix.
Policy CS6.3 – Provision of Affordable Housing requires provision of no less
than 35% affordable housing on schemes of nine dwellings or more. … Exceptionally, a lower requirement for affordable
housing will be acceptable where there is clear evidence that it would make the
development unviable.
The proposed planning application, particularly when
considered over all four phases of the development, does not match these
aspects of the Core Strategy and so should be rejected as it stands.
Previous Planning Committee papers have also referred to the recommendations
of South Lakeland District Council’s 2017 Strategic Housing Market Assessment:
The Planning Committee Report for the meeting of Thursday, 26 August 2021 (para 5.55)
noted that the proposed mix of
market housing in the latest iteration of the applicant’s layout was “clearly
a very poor match to the expectations of the SHMA”. The proposal
submitted by Story Homes for the initial phases was nevertheless accepted.
However, this should not be allowed to happen again in the light of the
analysis below (which I believe is correct from the evidence available on the
planning portal) summarising the proposed housing mix for all four phases of
the development in total:
Open Market Homes
The analysis shows that, if the Council allows Story Homes to
proceed with its plans, the Brigsteer Road development will be heavily skewed
towards properties of 4 -bedrooms or more, completely ignoring the
recommendations of the SHMA:
Low Cost Ownership
The analysis shows that, if the Council allows Story Homes to
proceed with its plans, the Brigsteer Road development will again be a “poor
match” to the SHMA, particularly giving no opportunity for low cost ownership
of one-bedroom properties:
Affordable
Rented Homes
The analysis shows that, if the Council allows Story Homes to proceed with its plans, the Brigsteer Road development will also be failing to meet the need for larger families to have access to affordable rented accommodation, with very little provision being provided for properties with more than two bedrooms:
I would also note that the Strategic Planning Committee paperwork for the meeting of 19 September 2023 (page 27) contains a request from the Housing Strategy Team based on “feedback from registered providers and their tenants” that the “Branford type house … the default 2 bedroom type offered by Story Homes” is too small in size. The Team asks if “this 71m2 model … is potentially replaced with a larger 2 bedroom property that would provide a more sustainable family property i.e. a 2 bed 4 person criteria. (79m2 )”. The 6 ‘Branford’ homes in the table above suggest this request has been largely ignored.
Social Need before Developer Profit
The reason for Story Homes wishing to skew the overall housing
mix of the development towards larger homes for open market was also made clear
in the Planning Committee papers for the initial phases of the development (Thursday,
26 August 2021, para 5.59). There it is explained that “the replacement of some
of these larger units with smaller units would reduce overall GDV [Gross
Development Value, the revenue anticipated from a completed development scheme],
and have an adverse impact on scheme viability.”
The Council should not allow a developers’ wish to increase
its profits to override both social need and its own strategic policies. The
argument that the developer must be allowed to enforce a greater GDV or “scheme
viability” is at risk is not one that should be accepted. I shall return to the
specifics of Story Homes financial position below.
Provision
of “Affordable Homes”
Under current legislation, the definitions of "Affordable
Housing" are already insufficient. For example, many low-paid residents know
that rents set “at a rent of up to 80 per cent of local market rent” are not
genuinely “affordable” to them. Nor will many have the required income to access
“low cost ownership” and even those that do then have to face meeting the costs
of both mortgage and rental payments. Council strategy should therefore instead
focus on providing genuinely affordable social housing.
The very least that the Council should do is to at least
insist that the Brigsteer Road development complies with its Core Strategy requirement
“of no less than 35% affordable housing” on schemes of this size.
As the analyses above show, agreeing the proposed plans for
Phase 4 would mean that the overall development would be completed with 71.4% (157/220)
open market properties and only 28.6% ‘affordable housing’ (63/220) – of which just
32 – just one in seven – are affordable rental properties.
The absolute minimum requirement for any planning permission
to be agreed for Phase 4 should be to insist that the developer reduces the
number of open market properties by at least 14 and instead builds them as
“affordable homes”. This would at least increase their number to 77 – 35% of
the total – at least just then meeting the Core Strategy requirement of “no
less than 35%”.
However, the best way to meet the needs of local young
people, low-paid workers, and their families, would be to reject this proposal
entirely and to instead begin a process of consultation with local communities
and trade unions over how to deliver genuinely affordable, sustainable, secure,
publicly owned and democratically controlled rented housing within Kendal and
the surrounding areas.
The Council should also approach the new government, to be elected
at some point in 2024, to seek their support for such a change in approach to
housing development.
Development
Viability
Story Homes will undoubtedly object that any requirement to
provide more “affordable homes” will make their development “unviable”. After
all, this is the argument that they have made ever since the first stages of
the planning process for the Brigsteer Road development.
The Planning Committee papers for Thursday, 26 August 2021 (para
5.13) point out that the Core Strategy allows for the 35% requirement for
affordable housing to be breached – although only “exceptionally” – “where
there is clear evidence that it would make the development unviable”. And Story
Homes claimed that they faced just such “exceptional circumstances”, insisting
that they could only afford to go ahead with 20.5% of affordable homes in the
initial phases of the development. In fact, their consultants, Grasscroft
Development Solutions (GDS), suggested that, in doing so, Story Homes were proposing
“a very generous commercial decision which has been arrived at in spite of the
scheme viability" (para 5.32). Such a claim should not have been accepted
and certainly should not be when considering the current planning submission
and the overall mix and affordable homes provision across all phases of the development.
In 2021 (para 5.43), GDS proposed that the total sales
revenue would be £27.38M, made up from £25.785M from the sale of 70 open market
units and £1.60M from the 18 ‘affordable units’. GDS estimated the total
construction costs to be around £23M, leaving a profit on Gross Development
Value of 15.97% (£4,373,042). Cumbria County Council’s valuer (para 5.45) was
reported as estimating a higher profit on GDV of 18.09% (£4,961,104).
I think it will come as a shock to the many local tenants and
residents struggling to pay their rents and mortgages that the Council papers
(para 5.44) reported that current National Planning Guidance considers a 15 –
20% profit to be “a suitable return to developers”. Are the Council again going
to agree that the ‘requirement’ for the developer to be able to report a multi-million
pound profit is of greater importance than the requirement to provide genuinely
affordable homes to local people?
What was
the actual sales revenue?
How much has the actual sales revenue been compared to what the
Council was initially told? To provide at least an initial answer to that
question, I have conducted a rough analysis of the house prices currently being
advertised on the Story Homes website and/or through online estate agent
archives.
It suggests that the actual revenue that might be expected to be generated from the sale of the 70 open market homes might be £32.375M. If so, that would be £6.59M more than the £25.785M estimated by GDS in 2021. Certainly, rather than accepting the claims made by a developer at face value, councillors should conduct a clear review of the claims made about commercial viability in 2021.
Story Homes Annual Report
One final bit of research that councillors might want to
carry out is to examine the latest Annual Report for Story Homes Limited, which
was recently uploaded onto the Companies House website.
The Strategic Report for the year ending 31 March 2023 states
that “during the year, there were 915 homes sold (2022: 846). Turnover
increased by 11.9% to £269.3m (2022: £240.7m) in line with the business
returning to a normal year following the Covid-19 pandemic. Gross profit has
increased to £62.1m (2022: £59.0m). The retained profit after tax for the year
was £24.3m (2022: retained profit after tax of £23.6m)”.
The notes to the financial statements also record that “the
highest paid director received remuneration of £882,430 (2022: £531,230)”.
Do these accounts present a picture of a company in such “exceptionally” difficult circumstances that it is simply “unviable” to provide affordable homes?
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