in association with

PULL OUT AND KEEP

Strategic landInsight guide

WELBECK LAND’S MARTYN BOWES ON

WORKING WITH LPAS

COLLABORATION IS KEY TO STRATEGIC

SITE PROMOTION

IS MMC THE FUTUREFOR FASTER HOUSING

DEVELOPMENT ?

We have to think smart to ensure genuine placemaking and build homes for the future Given the breadth and

depth of the work we do at Smith & Williamson, we are in the unique position of working with or advising businesses in every part of the sector and at every stage of the development cycle. For instance, we have a long history of advising

large landed estates on their tax affairs and broader strategies, but we also work with strategic land promoters and master developers who are bringing land to market and then right through to the sales process. As a result, we understand the tax challenges facing all parties involved in strategic land, which can be extremely complex and in some cases a deciding factor in whether landowners and developers can come together in partnership.

However, our experience also means that we understand the wider challenges facing the sector, not least those related to the fight back against Covid-19. That said, it should be recognised that given the lengthy time frames involved, strategic land projects are, if not immune, then certainly shielded from the storms currently raging against the wider economy.

No matter the extreme times we find ourselves living in, I still find it fascinating how important it is to get everything right from the beginning, whether that is pulling together the right site with the right landowners or navigating the planning system.

The latter can, of course, be notoriously tricky, particularly where a planning authority does not look favourably on development. However, as the feature opposite makes clear, strategic land is no longer the combative sector it once was. Planning authorities and strategic land promoters are increasingly working collaboratively.

The huge potential of strategic sites is also exciting. That is not only in terms of their ability to provide thousands of new homes, although given the state of the housing crisis that is clearly important. It is also that the sheer scale of development allows developers to provide truly sustainable and engaging places in which to live, work and play.

For instance, there is a growing awareness of the importance of ensuring that developments promote wellbeing (see p7), whether through green spaces and other measures to boost biodiversity or cycle lane provision. The same is true for placemaking – scale allows for upfront investment in social infrastructure and skills development (p7).

Finally, strategic sites are also perfect for the use of modern methods of construction (p6). Some sites are so big and have such lengthy construction programmes that it actually

makes sense to build small manufacturing facilities on site, which can be supported by larger factories elsewhere. That has the potential to bring down costs and potentially enable projects to deliver

higher volumes of affordable housing while still making a sensible return.

What’s not to like? Jacqueline Oakes, partner, assurance and business services, Smith & Williamson

propertyweek.com2 05|06|20

Insight guide Strategic land

Huge amounts of innovation are hidden in the sector. The industry must showcase what’s really going on

The days when the relationship between developer and LPA was seen as a combatative one are gone

It’s all very well ticking boxes with the LA, but if you don’t bring the community with you, you’ll struggle

Strategic sites offer huge potential

NEIL

MIT

CHEL

L/SH

UTTE

RSTO

CK

Zoe ThomasPartner, business tax, Smith & Williamson

Mark WebbPartner, business tax, Smith & Williamson

Robert SmithHead of strategic land, Carter Jonas

Jason LownesPartner, Rapleys

Insight guide Strategic land

propertyweek.com 05|06|20 3

Good local relationships form solid foundations for strategic land sites

Negotiating the planning system can be tricky for any developer or housebuilder, but the

challenges for promoters of strategic land are in a different league. Promoters can be seen as working against the planning system rather than with it by seeking to gain permission for sites not allocated in a local planning authority’s (LPA’s) local plan. The potential for conflict is obvious.

However, many strategic land promoters and the consultants they employ say that the situation has changed and both sides are now far more likely to work together collaboratively.

So, to what extent has gaining planning permission for strategic sites become less combative? And how can promoters and their advisers best engage with the planning system?

Robert Smith, head of strategic land at property

consultancy Carter Jonas, admits that for a long time promoters and LPAs were seen as having diametrically opposed interests. “Strategic land always used to be perceived as an ‘us and them’ game,” he says. “In the past, the developer always seemed to have a combative relationship with the LPA. Those days have well and truly gone. It was a ridiculous way to do things.”

Smith says that while LPAs and promoters may have very different objectives, they don’t have to be mutually exclusive. “The local authority has a job to do in trying to find sites for future housing, employment and so on,” he says. “Developers want to find land to develop. The two parties need to work together. There is a landowner involved as well, so it needs to be a collaborative approach.”

That approach should involve everyone with a stake in a place. “My advice on strategic land is to

have early and broad engagement with local authorities, including members, mayors, enterprise partnerships – any stakeholder that has a say in shaping the future of the area,” says Smith. “Engage early and invest in the pre-application process.”

Positive relationshipsSuch an approach should lead to more positive relationships, which are essential, given how long strategic sites can take to develop. “LPAs are under pressure in terms of resources and will respond as much as human beings as planning officers – smashing them over the head or being non-collaborative isn’t going to go down well,” says Smith.

“Some authorities are more responsive than others, but they all have a job to do. Strategic land is one way of helping them solve the future of their housing and employment needs. There are

times when confrontation will occur, but the best way to deal with that is to share information. If you’re talking about a scheme where getting consent will take between five and 10 years and then you’ve got a 25-year delivery period; it’s a hell of a long time.”

David Jackson, head of planning at Savills, adds that after a decade of cuts to local authority funding, planning departments need support. “With strategic land, there is much more of an important working relationship to be established with local authority partners because they are looking for the right sites to allocate,” he says.

“They have limited resources to do all of the due diligence on all of the sites put to them. Part of our function is to say ‘we’ve done that due diligence and tested the site, these are the analyses we’ve undertaken and

propertyweek.com4 05|06|20

TP B

ENNE

TT

here’s the evidence’. We are trying to help LPAs by finding the sites where the right type of development can take place.”

Jason Lowes, partner at consultancy Rapleys, adds that getting an LPA on board is only half the battle. “The second prong is bringing the local population along as well,” he says. “It’s all very well ticking boxes with the local authority and planning officers, but if you don’t bring the community with you, then you will struggle.

“Sites can be controversial and the benefits of development can get lost. The perceived costs of development can become the only thing that people want to discuss.”

Of course, not all promoters choose to work with LPAs and get their sites allocated in local plans. An alternative strategy is to identify LPAs without a five-year housing land supply that are vulnerable to having the decision overturned on appeal if they reject an application.

Engaging with the processWhile recognising that such a route is an option, Savills’ Jackson sees engaging with the plan-making process as the smarter option in most circumstances.

“The preferable approach is to have a local plan process that works,” he says. “That process gradually sieves down the number of sites to the preferred options. As you engage in that process you get greater certainty in terms of your site’s status and your spending on promotion can be tailored to risk that exists through the process.

The closer you get to the site being allocated, the more willing you are to incur costs. If you go down the appeal route, you are incurring a lot of costs and there are risks in that appeal process.”

Housebuilder Countryside favours a collaborative approach. Its business model involves assembling sites through long- term options, not actually buying them until it has won planning permission, then producing an indicative masterplan and talking to LPAs.

Andrew Taylor, director and head of planning at Countryside, says those early conversations are an opportunity to build trust by pointing to the success of previous schemes. For instance, in 2008, Countryside’s Accordia scheme in Cambridge became the first housing scheme to win the Stirling Prize.

“We sell ourselves in initial conversations as a company that wants to create both value and legacy,” says Taylor. “We talk about the quality of places we create. That’s a different pitch to some other people. Also, a lot of landowners we deal with have been there for a long time and also want to secure a legacy for the areas. We take councils to our existing schemes to show how we approach things. It’s about saying ‘this is what you get if you choose Countryside’.”

The point is to get the council to accept that a site should be included in its next local plan, rather than appear to be critical of an existing plan.

“We’re not down on the current local plan – it’s about saying ‘we’re here to support you’,” says Taylor. “Hopefully that approach pays dividends in them accepting that they need development and can

choose who they work with. We take a supportive stance at the public enquiry [into the new plan], helping out if extra work needs to be done.”

Taylor says he is always aware that Countryside’s projects tend to be very long in the making and cordial relationships will make everyone’s lives easier. “If you annoy a council and make enemies on day one, it isn’t a positive start to the relationship,” he says. “You’ve got to go through the local plan process, gain planning permission, do all the reserved matters and so on, so forming a positive relationship is always really important.”

Coronavirus impactNigel Hugill, executive chair at master developer Urban & Civic, agrees that building positive relationships is essential. He also believes LPAs are likely to be better disposed towards strategic site promoters as a result of the coronavirus emergency. This is partly due to the number of homes such sites can deliver, but Hugill also believes the virus will lead to a desire for less dense, more self-reliant communities – and that the planning system will respond.

“The level of planning consents will drop quite considerably this year, so as local authorities look at how they are going to balance things up I think they will favour large sites,” he says. “Local resilience will become the new priority. You can build in things like allotments, local supply chains and farmers’ markets on strategic sites in a way that you can’t on infill sites.”

Hugill adds: “There is an element of people pulling together and the ability to foster that in new communities is greater. If you put 100 houses on a little infill site, there isn’t much you can do about adding allotments or anything else. So, I think there will be pressure on density. The desire for independence and access to green spaces will be very strong.”

It seems that negotiating the planning system has become a far more collegiate business for strategic land promoters in recent years. And once the world emerges blinking from the coronavirus pandemic, the trend towards ever greater urbanisation and densification could well be reversed. In such a situation, strategic land’s time in the sunshine may have arrived.

Insight guide Strategic land

Property Week caught up with Martyn Bowes, partner and finance director at Welbeck Land, to find out how the company approaches strategic land promotion How do you define strategic land at Welbeck?We are a land promotion business with a strong focus on strategic land. Land promotion is the promotion of land through the English planning system to secure a valuable consent by virtue of a change of use for the benefit of the community, landowners and our investors.

Strategic land is a subset of that and its most defining characteristics are that it sits outside of a defined settlement boundary, is generally unallocated in planning terms and will involve not just considering existing planning policy, but how planning policy will evolve locally and nationally over time.

So, it carries a risk premium and to mitigate that risk we have to combine careful site selection with building a multi-site portfolio across a variety of planning authorities. We’re not a master developer that is trying to develop four sites of 4,000 units each. We would rather do 80 sites of 200 units. What is your approach to gaining planning permission?The best way forward is to get a site allocated in a local plan. Some of our competitors have different strategies, but our approach is very much to pursue policy-based promotion. We like to engage early on and work collaboratively with planning authorities. We do not normally go for a confrontational approach. We like to form a good and constructive relationship. Do you find that is normally possible?The opportunity to do that

exists now because local plan coverage has improved significantly.

There are more plans in place and under review, which means we can participate throughout the consultation process. So, we’re well placed to engage, whether that’s through a neighbourhood plan or local plan review process.

Looking back, it was far more problematic previously because of the lack of adopted plans, which led to very expensive appeal processes. We see an appeal as a last resort. What are you looking for in a site?Good sites that are free of constraints or have constraints that are manageable and would add to a local authority’s land supply. They should also be sites that the community and local authority would support through the plan making process.

How long does it usually take to gain a permission?I’m not sure there is such a thing as a typical land promotion timeline. Having said that, if I look at our database of sites, the average would be between two and five years. That’s from initiating the promotion to securing a consent. Then there is a three to six month marketing and sales process. And then it would probably take another three months to complete the sale contract. So, it’s around three to six years in total. Do you ever end up having to appeal a planning authority’s decision?It’s not that we never appeal. However, our appeal volumes are relatively low compared to most of our competitors. That is all to do with site selection and the planning strategy. If we do appeal, we’re pretty certain of our prospects of success.

Appealing is expensive and carries a risk premium. It should only be done if we think the members of a planning committee are erring in their judgement. We don’t appeal on an opportunistic basis. How are you coping with the coronavirus restrictions?Thankfully, a lot of what we do can be done remotely. It’s not ideal or optimal, but we can do it. At the moment, we are fully operational and are still bidding for new sites. Land promotion is a long-term game, but events will slow down what is already a slow process.

Local authorities are quite understandably focused on other things at the moment. And our customers, housebuilders, are reacting to the situation by shutting down construction sites. They’re trying to complete sales in the pipeline, but we are expecting people to tread very carefully as we emerge from this in terms of buying land.

With good reason, everything takes a long time when it comes to strategic land, but at the moment that is more of a blessing than a curse.

propertyweek.com 05|06|20 5

Q&A Martyn Bowes Partner and finance director at Welbeck Land

Insight guide Strategic land

propertyweek.com6 05|06|20

In recent years, the virtues of modern methods of construction (MMC) have been regularly extolled by speakers at property and

construction events. The received wisdom is that construction must ‘modernise or die’, as the title of consultant Mark Farmer’s 2006 industry review puts it.

MMC is something of a misnomer, as the concept of manufacturing large chunks of buildings in a factory and slotting them together on site dates back as far as the 1950s, when many prefabricated homes were built at breakneck speed.

These prefabs were considered superior to traditionally built homes, but the public soon came to regard them as inferior. There was some truth in that view and it has taken until the last decade for interest in prefabrication to return, albeit rebranded as MMC. And that interest is particularly pronounced when it comes to large strategic sites.

According to Robert Smith, head of strategic land at consultancy Carter Jonas, the industry needs to embrace any idea that will help it deliver enough new homes to ease the UK’s housing crisis. “We need to build houses – a lot of them – and we need to build them quickly,” he says. “So, we need a wider approach to the way we deliver housing, from working with SMEs, local developers and MMC, as well as traditional forms of housebuilding.”

Smith adds that large strategic sites are “absolutely ideal” for MMC. Indeed, it often makes more sense for housebuilders that specialise in strategic land to invest in their own manufacturing plants or even build mini-factories on site, such is the scale of some developments.

“If you take many of the large public sector sites, like the Defence Infrastructure Organisation’s airbases where some of the sites can be promoted for very large

schemes, you could feasibly from an economic perspective deliver MMC from an onsite facility supported by offsite facilities as well, and deliver that alongside traditional methods to deliver large volumes of housing.”

One housebuilder that has adopted MMC is Countryside, which has invested in a factory in Warrington that started full-scale

operation in March last year. According to a spokesman for the company, the adoption of MMC has “improved our efficiency as a national housebuilder, providing record

levels of new homes”. He adds: “We realise the importance of adopting new methods of building homes across the UK and are constantly looking at ways in which we can innovate our processes.”

Adoption of MMCThe spokesman adds that Countryside is progressing plans to build a second factory later this year. “Naturally, we expect further enhancements to our modular housing production line to enable us to help secure the supply of

development and increase our productivity levels,” he says. “By setting up a second factory, we plan to service a new geographical area of the country and ensure we are replicating these benefits across our business model. On average, by constructing offsite we save 15% on costs as opposed to purchasing from an external supplier.”

Master developer Urban & Civic is at an earlier stage of adopting MMC, and it is something the company is interested in as executive chair Nigel Hugill explains. “One likely consequence of [the Covid-19 pandemic] is that a lot of European labour will go home and that was already a concern for the industry,” he says.

Construction costs“As a consequence, MMC could become more integrated into the supply chain. In the short term, it is not likely as there are other priorities, but we have been working with one of the modular providers and were about to start running some first units [before the outbreak],” adds Hugill.

In addition to potential labour shortages, a key driver of the move towards MMC is that it lowers the cost of construction as a result of the efficiencies it creates. “If you distil what MMC is about,

it’s about speeding up delivery and reducing the overall cost of development,” says Smith. “Both of those, frankly, could free up finance and reduce the impact of interest on funding over time because it reduces the timeframe.”

In theory, this could lead to the provision of higher volumes of affordable housing. However, it would require the public sector to fully understand the savings involved and make greater demands on developers. “If you are a developer, you have to get planning because if you don’t you cannot release value,” says Smith.

“You have to do whatever you can to get planning. Whether as a developer you should be bound to go beyond policy-compliant affordable housing is a political and moral question, but as a business and from a planning perspective you don’t have to. But if the government introduced a policy to increase affordable housing on schemes, then the use of MMC would be one way of doing it,” he adds.

The housebuilding sector might be mostly shut down for the time being but once lockdown is lifted, it will need to operate as efficiently as possible and, in all likelihood, using an even smaller pool of talent. In such circumstances, MMC can only become more appealing.

MMC speeds up delivery and

reduces the overall cost of development

Robert Smith, Carter Jonas

XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

How MMC can boost housing deliveryInsight guide Strategic land

IIn recent years, wellbeing has risen up the agenda from a planning perspective – and authorities in Greater Cambridge

have been keen to grasp it. The first consultation stage of the Greater Cambridge Local Plan lists wellbeing and social inclusion as a central priority, alongside climate change, great places and biodiversity.

What’s more, the language of the plan is changing. We made more than 40 representations during the issues and options consultation, all referencing improving health and wellbeing. The focus was on reducing commuting, providing community infrastructure and open space, promoting sustainable travel, encouraging the development of healthy, affordable homes, and tackling climate change. Developers are responding by putting wellbeing at the heart of their proposals.

While it can be promoted on any site, urban extensions and new settlements are particularly well suited to maximising health and

wellbeing. Large developments offer the physical and financial scope to build in a broad spectrum of so-called ‘health determinants’. Play spaces, schools, green spaces, community buildings, health hubs, libraries and accessibility that prioritises pedestrians and cycle travel are all critical elements and can be cross funded by commercial elements of a scheme.

Due to their scale, new towns can support a higher level of facilities, such as country parks, BMX tracks, indoor sports facilities and secondary or special needs schools, plus a broad range of

housing – all found in Northstowe and Cambourne in Cambridgeshire.

Urban extensions are also well placed to bring wider community benefits. For instance, Darwin Green, Barratt’s 2,600-home urban extension of Cambridge, includes a new 50ha park with children’s play and youth facilities, a community hall, and schools serving Darwin Green residents and addressing deficiencies in adjoining areas.

Healthy living and wellbeing must be a driving principle of development to promote healthy communities, improve economic productivity and reduce health and

social care costs. Developers need to learn from what has already been tried to understand what makes a difference.

For instance, they should properly engage with the community from day one – promoting wellbeing through development requires the community to feel a sense of ownership. Community infrastructure also needs to be delivered in a timely manner so that residents can use it early on, while health impact assessments can help bring clarity. Finally, thought needs to be given to the specific health needs in an area – a one size fits all approach is insufficient.

With the government squarely behind the Oxford-Cambridge Arc opportunity area, the prospect of building many new towns and urban extensions is upon us. Greater Cambridge is demonstrating how development can be done in the best interests of people’s health and wellbeing. Juliet Clark is an associate, planning, at Bidwells

Getting community engagement right is an essential part of effective placemaking on any project.

On strategic sites, the stakes are even higher and developers need to go even further.

After all, strategic sites can be controversial, so ensuring that local people feel part of a project is not just the right thing to do – it is business critical.

While some developers regard community benefit as just an obligation, many others genuinely want to give something back to the community and take their role as placemakers very seriously.

Businesses around the world are starting to look at their ESG responsibilities and adapt the way they work accordingly. The property sector is no exception.

From a development perspective, there is a need to fully understand what a place needs. That involves talking to councils and local people and identifying what problems they have and how they can be resolved. It is more meaningful than trying to hit a local employment target in a supplementary planning document that may well have been arbitrary when it was drawn up. It is about taking a qualitative rather than a

quantitative approach.For instance, I am working

with L&G on a major project in partnership with Bath & North East Somerset Council. By talking to the council, we identified that the area has a disproportionate number of middle-aged people being made redundant. We set up a Midlife MOT scheme to help them retrain and get back into work. We also realised that the group was particularly

vulnerable to mental health issues, so we asked the designer of the MoD’s Mind Fit programme to provide some training. The council said the feedback was incredible.

Similarly, I am working for Sellar on its Paddington Square development (pictured) and we did a lot of work early on talking to local people. It turned out there were a lot of single parents in the area, so we have decided to create a crèche either within the development or nearby and use that to help people back into work.

The point is that focusing on need rather than numbers produces better outcomes. Those target numbers will still be there, but in my experience if you seek to solve specific problems, the numbers look after themselves. And that is genuine placemaking. Tom Storey is director of Storey Consulting

propertyweek.com 05|06|20 7

The art of developing wellbeing

Engagement vital in placemaking

Developers should engage with the community from day one

Juliet ClarkBidwells

Focusing on need rather than numbers produces better outcomes

Tom StoreyStorey Consulting

Insight guide Strategic land

propertyweek.com8 05|06|20

Insight guide Strategic land

In association with: If you are interested in working with Property Week Client Solutions please contact Niki Kyriacou partnerships director Tel: +44 (0)20 8253 8692 Email: niki.kyriacou@propertyweek.com

Project management: Sian Wilde Reporting: Adam BransonDesign: Lee Tiplady Sub-editing: Melissa D’Mello; Phil Petty

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

Pre-planningapplication

Outline planssubmitted

Outline plansgranted

Reservedmatters

Detailed planssubmitted

Reservedmattersgranted

Detailed plansgranted

Application process Full permission

Num

ber o

f uni

ts

Housebuilder Master developers Strategic land promoters

Other private sector Local authority Registered provider

Consents by site size

Supply pipeline

0

50,000

100,000

150,000

200,000

250,000

Up to 250 homes 250-500 homes 500-1,000 homes 1,000+ homes2012 2013 2014 2015 2016 2017 2018 2019

Source: Savills (correct as of April 2020)

Num

ber o

f uni

ts

Smith & Williamson LLP is part of the Smith & Williamson Group. Smith & Williamson is a leading financial and professional services group providing a comprehensive range of services including tax & accountancy to private clients and their business interests. Smith & Williamson LLP is regulated by the Institute of Chartered Accountants in England and Wales for a range of investment business activities. A member of Nexia International. Smith & Williamson Holdings Limited 2020. Ref: 74920lw