STOCKPORT TOWN CENTRE LIVING
DEVELOPMENT FRAMEWORK 1 MAY 2018 CONTENTS
The Vision for Town Centre Living in 01 5 Stockport
02 The Proposition for Change 13
03 What have we considered? 27
04 What needs to be done? 66
05 The Need For Intervention 72
06 Conclusions and Recommendations 77
2 INTRODUCTION
The purpose of this document is to provide SMBC with a strategy to enhance future residential development in Stockport. Stockport is one of the most successful local economies in Greater Manchester and with the role of town centres changing, there is now an opportunity to encourage residential development to create a thriving, resilient MANCHESTER IS A CITY and sustainable town centre. The growth of the role of town centre’s within Greater Manchester is critical in OF TOWNS ON A contributing to the growth of the conurbation in becoming world class. Stockport benefits from a rich historic, cultural offer, and with SMBC intervention, has an enhanced leisure, COLLECTIVE JOURNEY retail and commercial assets within the town. The town already has an established residential population, and there is now an opportunity for a balancing of the town TO WORLD CLASS centre’s housing offer. STATUS. STOCKPORT
The report forms a critical step for SMBC, as the opportunity to capitalise upon HAS A KEY ROLE TO Manchester’s economic and population growth and understand the vision of town centre living in Stockport, how this can contribute to the wider borough and Greater PLAY IN THIS Manchester conurbation, and accelerate housing development to meet the need of the population. The report has been informed by extensive direct and indirect research and MOVEMENT. is structured as follows: . The vision for future town centre living . How Stockport Living look? . What have we considered – data and stakeholder engagement analysis . What now needs to be delivered . The need for intervention . How to deliver it . Conclusions & Recommendations Overall this report seeks to provide SMBC with an understanding of what could be achieved in the town centre and a proposition for action.
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EXECUTIVE SUMMARY
This Development Framework sets out an ambitious vision for residential development in Stockport Town Centre. It will become a residential location of choice in South Manchester, which will grow into a vibrant and sustainable community and contribute to the overall success of the town centre and the borough. Stockport has undergone an incredible £1bn transformation in recent years and what makes the residential opportunity here so exciting is that Greater Manchester is setting its sights on becoming an truly international location. To achieve this, the conurbation requires world class town centres to complement and deliver growth. Stockport provides this via an incredible lifestyle offer by its access to attractive green spaces, an existing community with established amenity provision, authentic leisure and cultural assets and all in the context of unrivalled connectivity. This Framework suggests the town could provide 4,000 – 6,000 residential homes, which would house a population that would fundamentally redefine the town centre’s vibrancy and function, supporting local businesses. Despite these strong underlying fundamentals and the strength of the residential markets in South Manchester and the borough, the quality and scale of residential in the town centre remains limited. Stakeholders including developers, members, architects and residents all agree that the town has so much potential. And there are signs of change with a major scheme planning 200 homes at the Interchange in a truly revolutionary scheme incorporating over two acres of open space. This framework will be the catalyst to spreading the impact of this scheme and the high level of ambition across the town centre. The lack of variety in the existing offer provides SMBC with the opportunity to positively influence a period of significant new development. Research has found there is significant ‘hidden demand’ from occupiers for Stockport and with the right quality of homes, the prices required to deliver viability are realisable. The key is confidence and there will need for innovative developers and occupiers to take a fresh look at Stockport and commit to building and living in the town. The work undertaken which underpins this Framework has reflected upon a range of issues from open space, amenity provision, market knowledge, management of completed schemes, planning policy, viability, funding and public sector intervention. The conclusions are that challenges exist in all these areas but there are a range practical solutions that can start to build the confidence required to provide a catalyst to the market.
THE OVERRIDING PROPOSITION HAS 5 ASPECTS: 1. Direct intervention by SMBC to improve viability via a range of high and low resource intensive approaches 2. Exploring the opportunities of public sector powers to unlock land and development (as exemplified by the opportunity in Town Centre West) 3. A Town Centre Residential Design Guide to encourage a high quality and diverse set of homes to be delivered 4. Planning Policy support which dynamically moves with market conditions to ensure delivery of schemes that are good for Stockport 5. The provision of more open space to bolster the attraction of the town The components above will help change perceptions for stakeholders such as the community, developers and investors by helping with land assembly, viability, funding, design to create a sustainable and vibrant community. The Town Centre West case study below demonstrates how this proposition could drive forward delivery on a place basis. What is clear is that to Stockport will further develop a residential market in the coming years because the fundamentals are so strong and the perceptions of the town have changed. However, without intervention by SMBC and public sector partners, the rate at which it occurs and its quality are uncertain.
4 01 THE VISION FOR STOCKPORT
5 THE VISION FOR TOWN CENTRE LIVING IN STOCKPORT
STOCKPORT TOWN CENTRE WILL BE A RESIDENTIAL LOCATION OF CHOICE WITH A RESILIENT, VIBRANT COMMUNITY, OFFERING A HIGH QUALITY DESIGN ALL OF WHICH CONTRIBUTES TO THE WIDER SUSTAINABILITY, SUCCESS AND ROLE OF THE TOWN CENTRE.
6 COMPONENTS OF THE VISION The role of future world class town centres is focused around a plethora of functions and is not on a singular use. This mixture of uses contributes to creating a distinct destination and sense of place that continually attracts people. The figure below indicates the broad components which, when brought together in Stockport, will enhance the town centre as a place to live. STOCKPORT TOWN CENTRE A place to live Live. Work. Play. Connect.
Training & Exchange Night time Residential Developmen Leisure Transport Square economy t
Global Major Unique Cultural Greener Heritage Business Business Venues Heritage Living
Access Destination Quality of Craft Beer Life Music improvement Dining s
Independent Parks Retail 7 LIVING IN STOCKPORT TOWN CENTRE WILL BE A SUCCESS
The work of the framework has considered the overall vision for Stockport. To deliver this vision, we have considered how the key components of globally successful town centres are being delivered in Stockport and will continue to be. These factors are imperative for creating a successful town centre and enhance it as a location to live. Positively, Stockport already benefits from a number of amenities which will attract more people to live in the town centre, and continued momentum is required to establish the town centre as a successful town centre.
LOCATION OF CHOICE RESILIENT VIBRANT COMMUNITY HIGH QUALITY DESIGN . Connectivity . Intergenerational community . Rich cultural and heritage offer . Reflecting the local vernacular . Affordable . Complementary to existing . A place for all people . Enjoyable and attractive public . Accessible amenity population . Independent offer realm . Preferable lifestyle . Integration of communities Stockport town centre will be a residential location of choice with a resilient, vibrant community, offering a high quality design all of which contributes to the wider sustainability, success and role of the town centre.
SUSTAINABILITY SUCCESS ROLE OF THE TOWN CENTRE . Intergenerational communities . A place for people within and outside . Increase in the number8 of borough . Sustainable design residents choosing Stockport Town the borough . High quality amenities and open space Centre as a place for them . Encouraging a 16 hour day
THE GOOD LIFE - LIVING IN STOCKPORT
Stockport has a unique set of cultural and lifestyle amenities which already make it a fantastic place to live. These must be promoted more widely as part of a new residential offer to draw new residents into the town, supporting local retailers in the town centre.
9 UNRIVALLED CONNECTIVITY
Stockport benefits from unrivalled accessibility, which is a key pull factor for attracting residents. This will only be enhanced through the transformational delivery of the Interchange.
. In partnership with Transport For Greater Manchester, the development of Stockport Interchange will dramatically improve accessibility by bus by connecting the town centre and improving navigation around Stockport . Road improvements have unlocked access to the town centre from the surrounding suburbs therefore future proofing the centre . Wellington Road intersects Stockport Town Centre providing easy access to the M60 connecting the town to the major arterial routes in the North West . Stockport Train Station benefits from being located on the Manchester to London mainline with access to London within 2 hours . Manchester Piccadilly is accessible with 8 minutes and provides regular trains to other employment hubs in the North West
TRAIN Manchester 8 mins Liverpool 1 hr 20 mins Leeds 1 hr 20 mins To London STOCKPORT Birmingham 1 hr 25 mins TOWN CENTRE London 2 hrs
CAR Manchester Airport 15 mins Manchester City Centre 20 mins Warrington 30 mins Liverpool 50 mins Leeds 1 hour Birmingham 1 hr 30 mins 10 A DAY IN THE LIFE OF…
We see the Town Centre as being a multi-functional place for all, offering a place to live, work, play and visit... this will attract occupiers and residents. The figure below illustrates how a day in the life of Stockport Town Centre living could look.
Person Breakfast Mid morning Lunch Afternoon Evening
Walk in the park Lunch in the Produce Go to Hall Over 50s Stockport
Afternoon Plaza for a swim at the show Meet in the Market for a coffee and bridge leisure centre club
Wakes up in new Lunch at the Produce Hall Millennial apartment at the Morning Meeting in Seminar event at Interchange and grabs meeting Manchester Redrock a coffee downstairs on the way to Stockport Exchange
Young Family Drops Shopping Meet Family bike ride children at at friends around Vernon Park nursery in Merseywa for lunch Attends Foodie
the town y at Friday event at centre Redrock the Market Place
Wakes up in Walks to local artisan coffee Uses Town Visits RedRock to see modular home shop in the Underbanks and Participates in Attends young Centre WiFi to a film with friends Creative in the eats breakfast there. Logs into yoga class professionals check work grab a drink Underbanks. the WIFI and works remotely during lunch networking event Entrepreneur emails afterwards at Berretto Morning run to there for several hours. hour at the in collaborative Lounge. St Thomas Underbanks. work space
Recreation Ground.
11 WHAT COULD THE TOWN CENTRE DELIVER?
Based upon a town centre site analysis, we have applied varying densities to indicate where the 4,000-6,000 homes could be distributed and the varying levels of deliverability by area.
HIGHER HILLGATE TOWN CENTRE WEST Assumed lower density scheme to reflect adjacent areas being predominantly townhouses / terraces. We have identified c. 20- Assumed medium density scheme of 60 houses on deliverable plots and c. 30-80 houses are on apartments of c. 5-6 storeys, with constrained plots some c. 20 houses per acre townhouse schemes. On the basis of these assumptions, this area of the town centre could COVENT GARDEN VILLAGE accommodate the following: Assumed mixed density, with higher c. 600-800 houses deliverable density apartments of c. 150 houses c.2000-3,000 houses could be per acre reflecting c. 5-6 storey accommodated on sites which are apartment scheme, and lower constrained density townhouses / terraces. We have identified the c. 30-100 houses on deliverable plots, and c. 500-900 houses on constrained plots. CIVIC QUARTER Assumed higher density scheme of apartments of c. 5-6 storeys, with some c. 20 homes per acre townhouse schemes. On the basis of these assumptions, MARKET PLACE & UNDERBANKS this area of the town centre could Assumed lower density townhouse accommodate the following: scheme to reflect character and heritage STOCKPORT CENTRAL c. 400-700 homes deliverable of area, As this area is faced with c.1,500-2,700 homes could be Assumed higher density scheme of apartments topographical and heritage constraints, accommodated on sites which are of c. 150 houses per acre reflecting c. 5-6 we have identified only 20-70 houses that constrained could be deliverable, with c.150-300 storey apartment scheme. Area is more houses on constrained plots. constrained and therefore12 only c.400-700 houses are identified on constrained sites only. 02 THE PROPOSITION FOR CHANGE
13 THE PROPOSITION
SMBC has a bold Vision for the development of a Residential Offer in the Town Centre. However, it is clear that without intervention this will not happen quickly nor in the most appropriate way for the Town. Therefore, a targeted set of interventions are required with influence and drive this market forward
THE PROPOSITION AND WHAT IT ADDRESSES The table below outlines elements of the proposition and which constraints it is addressing:
Proposition Constraints being addressed
1. Direct Intervention to Improve Viability • Viability • Perceptions • Funding 2. Using Public Sector Powers to Unlock • Land Assembly Land and Development • Viability • Funding • Perceptions 3. A Town Centre Residential Design Guide • Design • Perceptions
4. Planning Policy Support Which Moves with • Planning policy Market Conditions • Viability • Perceptions
5. Provision of More Open Space • Open space and amenity • Perceptions
14 1. DIRECT INTERVENTION TO IMPROVE VIABILITY
INTRODUCTION Elsewhere, local authority development land has been committed to projects as equity, or subject to SOLUTION For Stockport as the local authority there are ground rents. Again this reduces the requirement to various levels of intervention they could consider. DIRECT DEVELOPMENT for a developer to fund the land price at the outset Stockport MBC, more than most authorities has Firstly, small changes around promotion of the and the authority then shifts their return to the ‘back been confident enough to take direct town, relationships, planning, design data sharing end’ of the development and takes a degree of risk. development risk. Subject to the design and etc are all key parts. quoting rents, the risks of residential However, to encourage actual development it is development (if the building is being built for likely that SMBC will have to go further by providing CONSTRAINT rent), can be lower then commercial as the supply of tenants can arguably be greater then financial grantees or direct support. At least for the . At present there is a viability gap in the sectors such as offices/industrial/leisure. first batch of schemes. Stockport residential market for new build Furthermore, the risks of reletting are often These types of mechanisms have been seen in the . This prevents private sector investment lower for a longer period as the lifecycle of commercial buildings can be much shorter than commercial sectors, in the North West, for some . Without precedents to ‘start the ball rolling’ residential. time. For example, the funding of the NCP car park development will be constrained to conversions. at Stockport Exchange was supported by a Council As SMBC have directly delivered in the past, guaranteed. Cheshire West and Chester Council the residential market may provide an opportunity to secure the output of high quality have provided purchase guarantees for their office WHY INTERVENE? development but at an affordable financial building and Stockport have gone further by directly . Even if SMBC was to fund schemes themselves return, relative to risk. taking development risk at Red Rock, Stockport the cannot deliver the entirety of the pipeline. Exchange Phase 2 and Aurora. . Therefore, private sector investment needs to These methods transfer either all or part of the be encouraged. development risk away from the developer or a CASE STUDY EXAMPLES . Without intervention the critical mass of private sector funder and this reduced risk allows a Rent Guarantee – Salford Council at transactions will not occur and therefore the lower level of profit to be taken, which allows the Greengate offices. schemed to be viable. Or in the case of direct market will lack the evidence and confidence to Option to purchase – Cheshire West and development by the council; affordable. deliver. Cheshire Council Other funding sources could include the GM Direct Development – Stockport Exchange, Housing Fund or Evergreen Fund. The advantage Red Rock and Aurora of these funds is that it may provide developers with funding that they can not normally access. Although Council guarantees may be required if the valuations do no confirm viability.
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1. DIRECT INTERVENTION TO IMPROVE VIABILITY DATA & MARKET KNOWLEDGE
CONSTRAINT LANDOWNERSHIP DATABASE Such information this could include are: . No awareness of opportunity that Stockport SMBC should maintain a list of sites with land . Achieved sales prices offers ownership details available for private sector . Rental prices . Lack of active market to promote potential sites developers to enable SMBC to quickly direct them . Sales rates to opportunities and marry them up with . Extent of viability gap could be overestimated landowners, who do not have the skills or . Time on market for rental properties . Landowners lacking knowledge/business case resources to develop the landholdings themselves. to support development . Purchaser type e.g. first time buyer, second To assist developers further, any technical time buyer, buy-to-let investor, cash buyer WHY INTERVENE? information submitted as part of planning . Number of enquiries by property type application could be made easily available to . Lack of Developer’s awareness means they . Land transactions developers. focus on other locations Other data to be collated could include: . Limited advisor market in the Town limits shared knowledge on sites that could be developed . Access data showing location of town centre uses from their point of starting their journey . Lack of sales and rental evidence for developers to understand the potential demand to secure funding as they cannot demonstrate CASE STUDY EXAMPLE catchment viability RICS Market Survey – used by banks / . Monitoring of new build houses delivered and investors, trusted SOLUTION tenure type Manchester Residential Market – Various KNOWLEDGE FORUM . Employer engagement to understand who advisor reports their employees are and where they come To assist developers, funders, valuers, feedback from. Liverpool Housing Report – City from the stakeholder engagement undertaken Residential highlighted the issue of the difficulty in accessing . Mobile phone data to show commuter and data to provide rental and sales evidence. To assist resident to shows demographic profile and Warrington Annual Property Review this, we recommend setting up of an agents forum, aggregated movements IPD – valuer input into database used by enabling a swapping of data to assist both local This data would need to be continually updated investor market agents of advising on sales and rental values and and then be available to valuers and to assist CBRE – Sector Research Reports sales rates. when valuing assets to secure finance. The Home Track – House price reports This could be similar to the RICS UK Market information can also be provided to developers Survey which is currently undertaken, which to enable them to quickly understand the surveys agents. Other data that can be analysed market, and assess development opportunities includes sources from HomeTrack and Rightmove, more quickly. which developers and investors frequently use. 16
1. DIRECT INTERVENTION TO IMPROVE VIABILITY RELATIONSHIPS WITH INVESTORS & SCHEME MANAGERS
CONSTRAINT SOLUTION SCHEME MANAGERS . Current market dominated by fragmented Managers are often letting agents with INVESTOR RELATIONSHIPS ownership of buy-to-let investors management teams but this market is evolving Investors will gravitate towards markets where they . Limited number of major investors looking who quickly with specialist companies now being can make their target returns, with the lowest level hold and manage entire developments formed. of risk. . Limited number of companies who provide high Relationships with these companies can bring Even if these parameters are met, they will only quality management offer benefits in terms of market information which is proceed with the schemes/partners where they critical to seeing schemes delivered by assuring
consider the prospects of agreeing a transaction investors of projected performance. It also helps WHY INTERVENE? are the strongest. identify new trends which could for the basis of new schemes. . Fragmented ownership of apartments in a single Point 1 regarding data, is key as this provides a block can lead to poorly managed properties funder the level of comfort about the local market. Also, strong relationships allows any problems in which can lead to poorly maintained property However, to convert this into transactions in developments to be quickly solved. More widely, if and potential stigma of streets / areas Stockport as opposed to other locations, a SMBC form relationships with managers there is relationship between key stakeholders in the Town the ability to start co-ordinating more community . Long term focused investors sought who are and the investors is recommended. interaction between new and existing residents in prepared to invest in high quality product and the Town. good management to create long term Stakeholders could range from developers, SMBC sustainable returns. officers, retained agents, the Mayor or GMCA, but they must all regularly be discussing the market . This delivers better quality schemes for the and opportunities in Stockport. CASE STUDY EXAMPLES short and long term Attracting major investors to the Town on a regular CBRE have shown how long term dialogue . Lack of good quality managers increases risk of basis will be difficult so these meetings are likely to with funders has focused funders on new blocks becoming unattractive to occupiers. require stakeholders to regularly seek meetings in markets and led to transactions . By attracting long term investors, this is likely to London or where it can be added to the agenda for Manchester has been highly successful at leverage further investment meetings regarding other interests they have in the attracting investment via dialogue through North West. their MIDAS team It should be remembered that the public sector is a CBRE’s residential funding transactions are major investor and relationships with key individual always supported by advice from best in is also beneficial here too. class management companies.
17 2. USING PUBLIC SECTOR POWERS TO UNLOCK LAND AND DEVELOPMENT
CONSTRAINT For the public sector to undertake this role, it The Mayor of Manchester has been granted functions to compulsory purchase land under following Acts: . Fragmented land ownership requires commitment to provide skilled resources to deliver development plots of scale . Section 17 of the Housing Act 1985 – allows for . Public resources (funding, skills, revenue which are attractive to the private sector. land to be acquired for housing purposes, finance) demonstrating a quantitative and qualitative Assembling sites is vital because without the . Capital Funding housing gain. development plots secured when market . Poor perceptions from investors, developers conditions improve, there is insufficient land for . Section 9 of the Housing & Regeneration Act and general public the private sector to develop. Therefore, the 2008 – allows for land to be acquired to improve WHY INTERVENE? public sector needs to take a long term the supply and quality of housing, secure approach to this necessary activity. This regeneration or development of communities or . Using public resources or powers to remove key replicates the way that many long term continued wellbeing, or contribute to the barriers to development of scale landowners behave such as the great London sustainable development and good design. Under Estates like Great Portland Estates and the . Accelerate transformation of this area by Crown Estate. this order, guidance indicates there may be continuing or generating momentum situations where land could be acquired to . Providing a catalyst to change of an area Where land acquisition by negotiation has been stimulate private sector investment, in the pursued and is not forthcoming, SMBC have absence of specific development proposals. . Targeting key land ownerships that are currently CPO powers as granted under Section 226 of preventing development Using Mayoral CPO powers offers SMBC the the Town and Country Planning Act 1990. opportunity to uses the resources of the Mayor to These powers allow for land to be acquired to promote the CPO. It also allows land to be acquired facilitate the carrying out of development, with SOLUTION no planning impediments in place. Development through the 1985 and 2008 Act, which local will contribute to the economic, social or authorities are unable to acquire under. It is deemed LAND ASSEMBLY & CPO environmental wellbeing of the area. that the most appropriate level of CPO should be Local authorities can directly attempt to assemble uses e.g. local rather than Mayoral. sites for development by negotiating with individual SMBC in certain circumstances could explore owners. This is a role which is often only possible the use of Mayoral CPO powers. These powers for the public sector because there is insufficient have been granted to the Mayor. return at the time of purchase for the private sector to make a sufficient return. Given the nature of town centres with highly fractional ownership, this task if often very difficult and resource intensive, therefore deters the private sector.
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2. USING PUBLIC SECTOR POWERS TO UNLOCK LAND AND DEVELOPMENT
MAYORAL DEVELOPMENT CORPORATION Mayoral Development Corporations are part of the Mayoral powers devolved to Manchester. At present, we understand there are no plans to utilise them, however it should be considered as part of a package of intervention tools. The purpose of Mayoral Development Corporations (MDCs) is to help drive regeneration and progress complex schemes. These powers ae similar to those granted to the London Mayor, and allows the Mayor to designate a mayoral development area, which enables a MDC to be established.
The benefit of MDCs are that they are locally controlled, whilst having the following powers of Urban Development Corporations: . Can enable planning powers if granted by the local planning authority . It can be a local planning authority and possesses planning powers . It can raise money through S106 and CIL contributions . It provides a single point of contact for developers, investors, landowners, businesses MDCs have been used in London for strategic regeneration projects, namely Old Oak Common and Park Royal Development Corporation and London Legacy Development Corporation, and in the Tees Valley, with the establishment of the South Tees Development Corporation. MDCs are typically regeneration focussed, for shorter-life regeneration schemes. The use of public powers and funding can help to stimulate the market, addressing constraints such as: . Land assembly of sites of scale . Targeting investment . Bringing together public sector partners . Resourcing CPOs
19 3. TOWN CENTRE RESIDENTIAL DESIGN GUIDE
TARGETED CONSTRAINT The benefits of Design Review Panels include: PREPARATION OF TOWN CENTRE . Poorly designed new product . Identifying cost effective measures that would RESIDENTIAL DESIGN QUALITY enhance the design of buildings (i.e. quality of . Lack of guidance to developers GUIDE materials/ architectural features); . Lack of consensus on “good design” by The NPPF attached significant weight to design, . offers expert views that take account of a wide members / officers including using design codes where they could range of complex issues, and so helps to help deliver high quality outcomes. However, it . Lack of variety of housing product to meet achieve sustainable development. demand is clear that design policies should avoid . looks at schemes in context, and can challenge unnecessary prescription or detail and should
the design brief or the assumptions that lie concentrate on guiding the overall scale, WHY INTERVENE? behind the project. density, massing, height, landscape, layout, . Poor design quality can prevent the uplift in . gives planners, developers and their design materials and access of new development in value teams confidence that they have had the best relation to neighbouring buildings and the local possible independent advice on design quality area more generally. Whilst, it is proper to . Developers require up-to-date guidance to promote or reinforce local distinctiveness, assist with pre-application discussions and . supports and encourages good design and innovative proposals. planning policies and decisions should not . Ensure residential new build development attempt to impose architectural styles or contributes to wider town centre regeneration . identifies poorly designed schemes at an early particular tastes and they should not stifle and marketing of Stockport stage, when substantial changes can be made innovation, originality or initiative through with a minimum of abortive time. unsubstantiated requirements to conform to . offers opportunities for continued learning, certain development forms or styles. SOLUTION particularly about how to assess design quality, In terms of enhancing quality and increasing to the people observing the review process. Establish Design Panel Review awareness of design among developers it is There would be a cost associated with introducing . It is proposed that an independent Design considered that a residential quality guide could a design panel on all large-scale developments in Review Panel be established by SMBC for large be a very useful tool. The document should be Stockport however, it is considered that these scale projects in the town centre. Design concise and visual in order to maximise its use would be off-set by the improvement in quality of Review is an established method of promoting by developers and investors. SMBC officers schemes/ planning applications resulting on cost good design and represents an impartial, cost- and members should be involved with savings later in the process. effective and efficient way to improve the quality formulating the design guide. of schemes.
20 3. 3. TOWN CENTRE RESIDENTIAL DESIGN GUIDE
STATUS OF THE RESIDENTIAL QUALITY CONTEXTUAL ANALYSIS: GUIDE - Physical Assets including topography, River It is proposed that the document would remain a ‘live’ interim Mersey, key views Guidance document within the context of the existing Core - Historic assets including Mill Buildings, The Plaza, Strategy and UDP having received an endorsement from The Viaduct SMBC Cabinet. The Council has started the process of preparing a Local Plan and the Residential Quality Guidance - Cultural assets such as silk, hat making, brewing should be referred within the future design policy. - Excellent connections • Description of distinctive character areas CASE STUDY EXAMPLE • High level design principles, posed as . Manchester Residential Quality questions, for each character area including: KEY PRINCIPLES Guidance – This award winning - Scale, materials, movement, public realm etc. guidance strikes a balance between The key principle of the Residential Quality Guidance should specifically addressing the be to strengthen local distinctiveness, in time, guiding the - Best practice examples of what is sought distinctiveness of Manchester whilst creation of a ‘Stockport vernacular’. • Mechanisms for ensuring good quality design also allowing for architectural innovation (useful for assisting with educating In the interest of not stifling development in the town centre, and expression. the central tenet of the Guide should be to drive the quality of developers): . South Yorkshire Residential Design development schemes and apply unnecessary burdens to - Design and Access statements Guide – adopted as a best practice developers/ investors. - High Quality Drawings guide for South Yorkshire councils on The document should be concise and encourage innovation, - Value Engineering/ Cost Efficiencies well designed and sustainable housing ‘educating’ developers and investors as to what is expected developments it is used to help - Consultation by SMBC. The key principles that could be covered by the appraise the quality of new housing Design Quality Guide include: - Contacts proposals • Purpose of the Guide – Deliverability - Pre-app • Vision for the Town Centre - Design Panel
21 4. PLANNING POLICY SUPPORT WHICH MOVES WITH MARKET CONDITIONS
CONSTRAINT SOLUTION 2. OFFICE TO RESIDENTIAL ARTICLE 4 . Extensive guidance for developers NOTICE 1. PRE-APPLICATION ADVICE/INVESTOR . Investigate the use of targeted Article 4 . Stretched capacity of officers CONFIDENCE/ HOUSING GROWTH FORUM Direction to manage the conversion of low . Challenges around viability . The Council should look to improve investor quality office to residential conversions. . S106 contributions can be unviable confidence on the back of the suggested Town . It is important to note that there are two types Centre vision and build and maintain . Limited pooling of S106 of Article 4 Direction, ‘immediate’ and ‘non- collaborative partnerships. . Limited control over office to residential immediate’. An immediate Article 4 direction . It proposed that the Council create a Town conversions takes effect either immediately following it Centre Residential Development Forum that being made, or at any other time within one
brings together key stakeholders including year of being made. A ‘nonimmediate’ Article 4 WHY INTERVENE? landowners, developers and investors to direction takes effect after a period of not less generate interest in future opportunities and . The wide-ranging set of guidance for developers than one year after being made, but not longer explore potential delivery models to increase the can deter them from pursing sites as they are than two years. The main difference is that if supply of high quality housing. unable o quickly understand the local authority the Article 4 takes effect less than one year approach. . The added benefit of establishing a Town from being made the Council is liable to Centre Residential Development Forum would compensate affected landowners. After one . Difficulty to provide amenities and open space to strengthen relationships between senior year, there is no compensation. as the planning authority is restricted on the SMBC representatives and the development number of S106 contributions it can pool . A decision would need to be taken as to the industry, enabling increased dialogue and ‘face urgency of the Article 4 direction, assessing . Recent conversions of offices to residential has time’. This all supports the work the Council is whether an immediate Article 4 direction is led to issues of poor quality product, limited doing to market opportunities in the Town necessary due to the extent of loss (or potential impact on uplifting rental/sales values and Centre through the Prospectus. loss) of employment space irrespective of potential future issues relating to fractured compensation liabilities, or whether a non- ownership. immediate Article 4 direction to avoid compensation is more appropriate. . The Article 4 Direction would need to be
supported by a justification underpinned by national planning guidance and evidence base.
22 4. 4. PLANNING POLICY SUPPORT WHICH MOVES WITH MARKET CONDITIONS
3. S106 POOLING/ COMMUNITY It is therefore suggested that the Council monitor The principal focus of the SRF would be the INFRASTRUCTURE LEVY/ STRATEGIC closely the Government’s consultations on S106 promotion of high quality residential INFRASTRUCTURE TARIFF pooling, CIL and SIT with a view to funding two development with the aim of catalysing new significant areas of open space to cater for improvements in the local area. The town centre In the Chancellors Autumn Budget 2017, the new and existing residents of the Town Centre. SRF would provide the vision for town centre Government announced that the Department for This would release developers from the obligation residential development but would be primarily Communities and Local Government would launch a of providing on-site open, instead pooling focussed on delivery and included practical consultation on detailed proposals for the following contributions to create and maintain new proposals which addressed matters such as measure: comprehensive open space/ amenities. phasing and funding. . Removal of restrictions on section 106 pooling towards a single piece of infrastructure (in certain circumstances such as in low viability areas, or 4. PREPARATION OF A TOWN The SRF would provide contextual analysis for where significant development is planned on CENTRE SRF OR SRF’S FOR the town centre; highlight specific development several large sites). areas, delivery approaches, phasing, DISTRICTS . Speeding up the procedure of setting and revising infrastructure requirements, funding and CIL. It is proposed that a Strategic Regeneration delivery partners. From this, specific . Allowing LPAs to set rates which better reflect the Framework (SRF) be prepared by SMBC together development briefs or masterplans with uplift in land values between a proposed and with landowners and other key stakeholders, for existing use. parameters and key components could be . Changing indexation of CIL rates to house price the town centre to stimulate the delivery of high prepared. quality residential development. inflation (instead of build costs). . Giving Combined Authorities with statutory plan- This SRF would set the spatial framework for The SRF would be beneficial because: making functions the option to levy a Strategic Stockport Town Centre or specific areas within it, Infrastructure Tariff (SIT) which could be used to within which investment can be planned and a) It would further support the planning policy fund both strategic infrastructure (as the Mayoral guided in order to make the greatest possible framework for the town centre, as set out in CIL does for Crossrail in London), and local the current UDP / Core Strategy ; and infrastructure. contribution to the town’s social, economic and environmental objectives, which would help inform b) It could act as a marketing document for The removal of S106 pooling restrictions in Stockport the development of the future Local Plan. The investors, providing a degree of certainty as Town Centre would present the Council with an endorsed SRF would become a supplementary to what would be considered acceptable by opportunity to collect additional planning obligations planning document and a material consideration in the Council. towards a single piece of infrastructure, such as open the determination of planning applications. space provision.
23 CASE STUDY: SRF GLA & LONDON BOROUGH OF CROYDON
In the 1960’s, Croydon was a prime business location within the capital. However, over the past 30 years the Boroughs economic role in Greater London has declined, in part due to reduced demand for back of house office space and the emergence of Canary Wharf as a key business destination. This resulted in a period of decline in the number of people working in central Croydon and an increase in vacant office accommodation. In a bid to arrest this decline, Croydon was identified as one of 33 opportunity areas by the Mayor of London, and an Opportunity Area Planning Framework (OAPF) was produced jointly by the Mayor, Transport for London (TfL) and LBC. The key aim of the OAPF was to promote the residential development of 7,300 new homes in order to revitalise the centre of Croydon and capitalise on the excellent rail and transport links to London and the wider South East. As shown below, the OAPF sits within a comprehensive suite of strategic planning guidance which sets the vision and the strategic framework for the area in the London Plan and Core Strategy, and also more delivery focused guidance contained in the OAPF and 5 Masterplans.
The 5 Masterplans prepared by LBC built on the Example of the Use of SRFs as Part of the Local Planning Framework vision for the Croydon Metropolitan Centre in collaboration with major landowners, developers and public-sector partners. The masterplans focussed on delivery and included practical proposals which addressed matters such as phasing and funding. LBC sought to concentrate new public realm projects on the gaps in the network in order to integrate regeneration across the centre. Over £50m of funded public realm infrastructure investment has been made to date with an emphasis on: . High streets; . Reconnecting peripheral areas with regeneration in the centre; . Creating simple, legible public realm network to reinforce positive first impressions; . Providing a high-quality setting to attract investment. This approach has proven to be successful with a number of high quality schemes coming forward including the Whitgift Shopping Centre, Morello Quarter, Ruskin Square and Taberner House.
24 5. OPEN SPACE & AMENITY
CONSTRAINT . The viability gap reduces the level of S106 . Consideration could be given of the timing of when open space provision can be made. For example, a contribution phased plan for delivery of open space which is delivered after the initial interventions have delivered a . Limited policy base with contribution sought only step change in sales / rental values, prior to delivering open space provision and/or after a threshold of for open space net additional dwellings has been delivered. Overall, SMBC will deliver open space as part of the overall Framework to support the existing and additional residential population. WHY INTERVENE? Future Need . Existing amenities put under greater strain We have attempted to calculate the open space requirement based upon the additional dwellings. Once through influx of new residents quantity standards are established, they can be used to calculate how much open space provision per 1,000 people is required to strategically serve development growth areas in the future. Based on Guidance . Existing residents of the town centre are published by Fields In Trust (FIT) and the National Society of Allotment and Leisure Gardeners (NSALG) negatively affected by reduced accessibility to the following open space need may be generated by an additional 3,000- 5,000 dwellings in the town services centre using an average household occupancy of 2.3 people per dwelling (Census 2011): . The attractiveness of the town centre is reduced Typology Quantity standard (ha per Open Space requirement (hectares) due to quality of the public realm and amenity 1,000 population) being reduced Parks and Gardens 0.8 (FIT) 5.52 – 9.2 Natural and semi-natural 1.80 (FIT) 12.42 – 20.7 Amenity greenspace 0.60 (FIT) 4.14 – 6.9 SOLUTION Allotment 0.25 (NSALG) 1.72 – 2.87 Provision for children and young people 0.25 (FIT) 1.72 – 2.87 . In conjunction with the design guide, the local authority can encourage creative / innovative Total 25.52 – 42.54 solutions to provide high quality amenity and sustainable design to residents, such as through CASE STUDY EXAMPLE – BURNLEY roof garden, greening of roofs, renewable . Rethinking Parks is a joint Nesta, Heritage Lottery Fund and Big Lottery Fund England programme energy sources and communal space. to find, support and test new approaches to raising income or reducing costs for public parks in the Developers could be recognised for their face of an increasing funding gap. The programme comprised 11 projects including Burnley ‘Go To contribution to the wider community. The Park’ . S106 contributions could be pooled to maximise . Burnley ‘Go to the Park’ is an approach that combines new ways of lowering maintenance costs with the impact, creating larger scale qualitative and a specialist volunteering programme to maximise volunteers’ contribution to parks upkeep. The quantitative improvements to open space Burnley model combines six key elements, each of which could be adapted elsewhere, including provision of land under SMBC ownership, such introduction of meadow management into heritage parks; woodland management and timber as at Stopford House Piazza or Hopes Carr production; conversion of annual bedding to perennial planting; development of bee populations in scheme. This must however comply with CIL parks; creation of ‘Volunteer in Parks’ programme, and commercial crop production on parks’ Regulations. perimeters. 25 . Burnley ‘Go to the Park’ realised savings of £67,480 in the first year of operation (2014/15). These are projected to rise to £117,000 by 2020/21.
CASE STUDY APPLICATION - TOWN CENTRE WEST
SITE FOR UP TO 3,000 UNITS Indicative King Street West area The King Street West area of Stockport is a key gateway to the town It benefits from access to the natural asset of the River Mersey, the historic landmark provided by the viaduct and exceptional transport links via the Transport Interchange, M60 and train station. However, the area currently underperforms and could provide a significant quantum of residential and business space for the town. . Land parcels of scale – land assembly tools could be used to create viable and attractive development plots. Currently in fragmented ownership of 551 titles. . Rich historical assets – offering a distinctive residential offer . Unrivalled connectivity – improving by the delivery of the Transport Interchange and proposed Station expansion and the possible arrival of Metrolink . Public sector land ownerships – allowing public sector stakeholders to work together collaboratively . Existing attractive amenities – the River Mersey, adjacent Hollywood Park and primary school already in the area . Adjacent to Edgeley – an established residential area . Funding opportunities – with funding from the Housing Infrastructure Fund approved in principle for Weir Mill, with potential for further funding to assist schemes through public sector means. Delivery tools to consider . Transformational development – being delivered by the Transport 1. Direct Intervention to Improve Viability – Working with public sector Interchange incorporating residential houses 2. Explore the opportunities for the use of Public Sector powers - CPO . Accessible to attractive town centre amenities - being walkable to 3. A Design Guide – Encouraging an authentic design theme Merseyway Shopping Centre 4. Consider planning policy support – Potential use of an SRF
5. Provision of more open space – Links to River Mersey and Hollywood Park
26 03 WHAT HAVE WE CONSIDERED?
27 THE WORK UNDERTAKEN TO INFORM THE FRAMEWORK A range of elements have been targeted, which have been analysed to understand the opportunities and constraints for delivering the vision. To inform the analysis, we have sourced quantitative data, undertaken extensive site visits, engaged with a variety of stakeholders and considered other case study examples. This has enabled a robust understanding, the findings of which have been analysed under the following categories to inform the framework.
AVAILABILITY OF LAND KEY STAKEHOLDERS DELIVERABILITY & VIABILITY Construction Existing Supply Land Assembly Developers Architects Cost & Price The Target Members Residents Planning Policy Market
AMENITY PROVISION & NEEDS FUNDING Social Public Sector Private Sector Open Space Infrastructure Support Funding
28
03 WHAT HAVE WE CONSIDERED? (A) AVAILABILITY OF LAND
03
29 DETAILED ANALYSIS OF STOCKPORT TOWN CENTRE’S LAND SUPPLY
Stockport town centre has an establish residential population and it has a significant number of opportunity sites which could deliver housing, which are predominantly facing some level of constraint.
We have undertaken an analysis of the town centre to understand where the residential development could occur in the town centre, and what is preventing sites being brought forward for development. We have defined the town centre boundary through physical barriers, and what residents of the town centre and borough would recognise as the town centre, rather than the adjacent areas of Edgeley, Offerton and Lancashire Hill. To understand where the town centre residential development could be delivered, we have divided the town centre into the distinct quarters. Within these areas, we have assessed the developability of plots for residential development, both new build and conversion. This analysis is indicated on the map adjacent, with red demarcating plots unsuitable for development, amber plots are those that have constraints but may be suitable, and green sites are suitable for development but are yet to be delivered. The blue areas indicate existing residential areas and plots which are already being considered for residential development. A key target therefore is to progress the green sites, and understand why they have not been progressed for residential development already. This is attributable to the following factors: . Fragmented land ownership making land assembly difficult . Landowner value aspirations . Sales and rental tone not sufficient for viable scheme due to abnormal costs
30 LAND ASSEMBLY Stockport suffers for fragmented ownership and therefore alleviating this will be key to delivering a town centre offer of scale.
FRAGMENTED OWNERSHIPS The history of the development of the town centre is such that land ownership is fragmented, due to the density of development and changing interests of town, as it has developed over time. As shown in the RAG analysis, there are varying sizes of potential development plots which have been assessed, however this has not taken into consideration any title constraints which can be in the form of: . Freehold / leasehold interests . Easements . Restrictive covenants . Unknown landowners and unregistered land . Access issues and ransom strips Alongside these legal issues, the size of the development plots themselves are reduced, which can make delivering schemes of scale difficult due to land assembly challenges.
For illustration, the average scheme sizeAverage is identified acreage in the of table below: Location scheme Capacity Type of developer
Suburban 5 - 15 acres+ 50-250 houses PLC housebuilder
Regional and national developers and Manchester City Centre <1 acre 1.5 acre 100-300 houses funds
0.9 acres – based upon RAG Scale is too low to attract higher quality Stockport Town Centre analysis developers
The plot size in Stockport is constrained to generate the scale of scheme that would attract larger developers. Overall, these issues can make development difficult in the town centre as the viability is constrained as values do not support the higher density schemes, and therefore land assembly is required to unlock sites and attract higher quality developers to deliver new houses in the town centre.
31
03 WHAT HAVE WE CONSIDERED? (B) KEY STAKEHOLDERS
03
32 STAKEHOLDER ENGAGEMENT METHODOLOGY
In order to formulate a robust understanding of the varying constraints and opportunities facing residential development, CBRE heavily consulted a variety of consultees over a period of four months. The benefit of this engagement was that it has helped to shape the framework from a variety of perspectives of stakeholders involved in the development process. The following stakeholders were identified and consulted, through a variety of presentations and workshops, which enabled a detailed discussion: . Developers . Architects . SMBC officers . Members . Residents
Discussion was focused along the following themes: . The vision for Stockport Town Centre Living . The perception of the town centre residential market . The opportunities of Stockport . The constraints preventing the achievement of the vision . The tools that could be used to assist delivery . The purpose and principles of a Design Guide
The following section summarises the discussions by stakeholder groups.
33 STAKEHOLDER ENGAGEMENT: DEVELOPERS FORUM
Developers were positive about the opportunity for new build development, which can appeal to a wider group of purchasers. Improvement in the quality and sales values is required to improve viability.
THE THEMES FROM THE DEVELOPER WORKSHOP WERE AS FOLLOWS: . The general perception of Stockport Town Centre is that new development needs to be delivered in the town centre. Viability is an issue and consideration should be given to comparable schemes to see how developers have taken rental and sale values and dealt with the viability gap. . The residential offering needs to be good quality accommodation which attracts the widest potential occupier profile. This acts as a catalyst for a bigger site with a wider mix. There are lots of sites in Stockport that can be redeveloped and the type and location of the preferred stock needs to be investigated. . Stockport Town Centre has a high quality retail offer, while there is a variation in quality with respect to residential property. Stockport Town Centre has huge potential for a mix use offer that needs to be unearthed. . Design is key and therefore Stockport needs to flexible in its approach to provide a wide mix of accommodation in order to maintain its identity. . It was felt the tenure offer and housing choice needed to be diversified in the town centre to make it accessible to the wider market . Office to residential conversions can be of high quality, as they can offer modern quality accommodation. . Stockport has an extensive planning framework with regards to S.106 provisions which makes development challenging when set against current values. To improve viability, a workable approach where there could be more scope for SMBC to de-risk development through S.106, funding etc. . In was suggested that a red lined action area where there is no S.106 within a particular area could be identified in order to alleviate time and cost and allow developers to focus on delivering a high quality product. . The key to successful development is to produce a masterplan, identify sites and work with developers. Deferring S.106 could be beneficial as it aids return on capital which is the driver as opposed to selling land cheap. . Stockport Town Centre should seek to introduce commercial and retail elements to residential developments where possible . To build a storey around future residential development in Stockport, the following stages are required. Firstly, a communication and marketing stage is required which builds confidence in the occupier market. In turn this will help with the second stage which is to attract developers to the town.
34 STAKEHOLDER ENGAGEMENT: ARCHITECT FORUM
Architects were positive about the opportunity and Stockport’s distinctive character areas. Feedback encouraged higher quality new build development, with more guidance suggested to be provided, this could be delivered in the form of a Design Guide to improve quality across the town centre.
THE THEMES FROM THE ARCHITECTS WORKSHOP WERE AS FOLLOWS: . Good ‘branding’ of the town centre would be crucial as is the understanding of why people wish to live there. . High quality design and materials should be key in the delivery of new homes. . Deliverability is key and the elements that need to be addressed include viability, requirements of developers, ensuring consistency of approach, parking provision, the Wellington Road divide, river access, and green space provision. . A clear vision for residential in the town centre is key. This should build upon both existing and under utilised areas based on physical, historical and cultural assets as well as Stockport’s excellent connectivity and socio-economic context. . The use of a Strategic Development Framework, or similar, for the character areas of the town centre could set context, establish development parameters and guide proposals in these locations. . Design guides are a useful document, however, there needs to be a balance between setting enforceable standards and not stifling development. A design guide would also increase awareness of design and the councils aspirations and encourage investors to develop high quality schemes in the town centre. . The calibre of developers in Stockport is of a good standard, however, larger cities attract the best architects and as a result these architects may miss great opportunities in Stockport. . In order to meet the needs of Stockport, developers need to focus on a diverse range of dwelling sizes, types and tenure. However, it is important that the target market is established. . Building upon Stockport's vibrant town centre would be beneficial to all inhabitants. . Given that there is a less pronounced disparity between rental values, thought should be given to how affordable housing is addressed in the town centre, especially in light of the high proportion of existing affordable housing in the town centre.
35
STAKEHOLDER ENGAGEMENT: PLANNING FORUM
The overriding theme from a workshop with SMBC Planning Officers was that planning is fundamental to the transformation of the town centre. Higher quality design was encouraged alongside providing the infrastructure to support new residents.
THE THEMES FROM THE WORKSHOP WITH SMBC PLANNING OFFICERS WERE AS FOLLOWS: . It is important to understand what the current aspiration is for the town centre as it is not currently defined. Aligned to this, it is important to define specific policy areas within the town centre in order to avoid gentrification. . It has been highlighted that members and local residents have concerns over high density developments in Stockport Town Centre. The reason for this is that Stockport is a town centre that is competing with major cities such as Manchester. . Quality of recent office to residential conversions has been questioned in some cases. . A key issue is that developers are discounting sites on viability grounds before pursuing schemes through planning. . Stockport has challenging topography and is a small area compared to city centres, making Stockport expensive to develop. Therefore building at scale is important in terms of reducing costs. . Reflecting local character, such as heritage assets and topography, would be important in delivering the right product. A Design Guide touching on this matter had previously been discussed and researched but never published. . The Council needs a vision for the target market in the town centre and as such what infrastructure needs to be provided alongside new housing. The tenure mix, type and density to be encouraged would depend on the location of the sites. . In terms of planning obligations, the current policies are flexible enough to give Officers and Members discretion subject to an appropriate viability argument. However, there are concerns about recreational and open space provisions in Stockport where the policy is less flexible. . The Council should focus on the quality rather than the quantum of open space and should look to create a strategy to ‘pool’ open space contributions to create larger high quality open space. . A ‘policy hook’ could be introduced into the emerging Local Plan and an SPD could be prepared which is easier to update.
36
STAKEHOLDER ENGAGEMENT: MEMBERS
Members recognised the importance of encouraging residential in the town centre, which would add to the vibrancy and sustainability. Amenity provision is essential to prevent detrimental impact on existing residents and ensure resilience of the town centre.
MEMBERS CBRE have presented four times in total to both the Central Area Planning Area Committee and Scrutiny Committee over November 2017 to February 2018. The summary of these discussions is indicated below: . A repopulation of the town centre is required to support the wider intervention being undertaken by SMBC and sustainably reuse land . A diversification of the tenure type in the town centre is required to provide a balanced, sustainable mix of tenures . The town benefits from excellent accessibility, and consideration is needed relating to the appropriate car parking requirements for future schemes. . The green space in the town centre contributes to the attractiveness of the town centre and liveability for residents, however further enhancement is required to support an increase in residential numbers in the town centre . Future development should be responsive to Stockport’s demand, heritage and reflective of its accessible location . High quality design is essential for future schemes . Some properties suffer from poor maintenance and design, which requires improvement. It was suggest improved management of buildings and amenity space was essential as part of new development in the town. . Amenities to support the new resident population should be strongly considered and land identified for schools, doctors and dentists.
37 STAKEHOLDER ENGAGEMENT: RESIDENTS
Residents enjoyed living in the town centre and benefitted from access to amenities and recent enhancement to the town’s leisure, shopping and food and drink offer. Concerns were raised relating to security and health provision.
RESIDENTS At one of the presentations for the Scrutiny Committee, four town centre residents were in attendance. The questions from members sought to understand the following: . What they enjoy about living in the town centre . What could be improved . What their opinions were for encouraging more town centre living
The following summarises the comments received: . The town centre is convenient, with amenities nearby. It offers a vibrant, safe location with increased leisure, bars and restaurants opening which is exciting. . The town benefits from excellent accessibility, offering train, bus and shuttle bus services, enabling residents to not require a car. . The green space both within their scheme and within the town centre is an asset. . The intervention by SMBC in the town centre was viewed positively, for bringing people back into Stockport and generating jobs . Residents of the town centre are a mixture of ages, with recently more families being accommodated in the existing affordable housing stock . Some properties suffer from poor maintenance which requires improvement . It was observed that more young people would want to live in the town centre if there was a housing product and more amenities for them. It was also identified that the town centre lacked a community facility for teenagers. . Improvement is needed beyond current intervention to improve safety of residents at night and families. . Current doctor and dentist provision requires improvement as it was perceived there was a lack of NHS spaces.
38
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
03
39
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
DEMAND 03
40 DEMOGRAPHIC ANALYSIS Stockport is facing a 10% growth of its over 65s by 2026, with a declining engine room of working age groups. However, nearly half (47%) of Manchester’s current population is aged 20-44 years. This presents a real opportunity for Stockport to attract some of this young demographic.
Stockport’s Population PEOPLE
Stockport currently has a population of 291,439.
The demographic composition is currently fairly evenly +15,669 spread between age groups. However, it is projected that Stockport’s population will increase by 15,669 (10%) people between 2016 and 2026.
Manchester’s Population This population change is set to produce an increase of 9.7% in older generations, aged 65 years+.
Manchester’s population is comprised of nearly 50% aged 20-44 years. This poses a significant opportunity for Stockport to attract a proportion of these toward Stockport Town Centre living.
65+ Population Growth in Stockport 68,345
64,429
58,771
TODAY 2021 2026
41 POTENTIAL DEMAND
Of the workforce in Stockport, 33% do not live in the area and commute to work. Stockport has the opportunity to attract these workers to live in the town centre. Key to making a change here will be lifting perceptions of the town as a place to live.
The overall commuters in Stockport is estimated at 106,400. Of the workforce, 67% of people both live and work in Stockport. However, significant proportions commute from Manchester (11%) and surrounding authorities (22%). The number of those who commute totals approximately 34,700 – a large group who already work in the Borough and could also be attracted to live there too.
42 SOCIO-ECONOMIC ANALYSIS
Stockport is an established rental and first time buyer market, with 6,734 aspiring or actual first time buyers, however these are predominantly located adjacent to the town centre, indicating that the location is not an established owner occupier location.
FINANCIAL / ECONOMIC
Within Stockport there are a total of 67,000 renters and first or second time buyers who could be attracted to live in the Town Centre, subject to providing the appropriate mix of tenure and product type.
The location of the rental hubs is underlined in the adjacent map, with a large proportion being concentrated around the A6. £1,664 The rental hub in SK1 comprises 26% of the population and includes young people renting in low cost interim housing. There is an opportunity to move these renters from poorly managed, older stock into new, higher quality rental and sales products, and offer a modern sales product £989 for aspiring first time buyers.
Number of Number of £1 People First/Second Time Renting Buyers ,6
Stockport 29,000 38,000 64 SK1 & SK3 5,400 6,700
43
SOCIO-ECONOMIC ANALYSIS
Stockport has a high proportion of ‘Aspiring Homemakers’ who do are not currently able to fulfil their aspirations of renting or buying higher quality housing product due to lack of appropriate stock.
FINANCIAL / ECONOMIC
In SK3, there are a total of 4,549 (24%) ‘Aspiring Homemakers’ who are first time buyers, pre-family couples, attracted to new developments, which are limited and are slightly scattered between the town centre and the more affluent suburbs.
In addition to a further 2,185 (18%) in SK1, there are 6,734 overall. The prevalence of this group within the locality, represents an opportunity to shape/tailor housing supply/delivery to capture demand. £1,664
£989
£1 The map highlights the prevalence of these ‘Aspiring Homemakers’ who are already living in the Borough and therefore need the market to respond to their aspirations by providing the appropriate housing stock. The location of the rental hubs is also underlined above, ,6 with a large
Ultimately, there is an existing, sizable rental and first time buyer market in Stockport, 64 however the majority of these are located outside the Town Centre.
Manchester is experiencing a growing affordability issue which Stockport could capitalise upon by providing a more affordable product in comparison.
44 THE EVOLVING TOWN CENTRE MARKET Stockport already has an existing community, key to building this community further will be the attraction of new residents from across Greater Manchester and beyond. Key elements will be lifestyle, perception, quality of product and sense of community.
THE EVOLVING TOWN CENTRE RESIDENTIAL MARKET The town centre residential market should not be viewed as static, and will be constantly evolving as the interventions are implemented. The intervention tools should react to the market as it changes to ensure momentum is maintained. We have also considered the target occupiers and how they are attracted to an emerging residential area. Based upon the experience of city centre reurbanisaton, generally first new residents in an area are attracted by the lifestyle amenities, connectivity, affordability and housing product. The benefits of the location are such that it outweighs the concerns over safety, image, social networks. These inhabitants are generally younger with higher disposable incomes, singles and couples. Manchester is seeing families and older generations living in the city centre now, as the market became established, social ties are created, and people choose to remain living in the city centre due to the benefits it offers. As people progress through life, their amenity needs change, such as requiring schooling and healthcare provision. As evidenced in Manchester, with families and older generations choosing to live in the city centre later than the early adopters, the additional amenities are delivered later to reflect the changing demographic mix and their needs. In the case of Stockport, whilst there is an existing population, consideration should be given of the future population and their needs over time to enable a mixed community which can grow and encourages social activity. Overall, the new residents of Stockport will help to establish the perception of the town centre as a residential location of choice, and therefore interventions should consider how the town centre market will evolve over time and make provision for the needs of the additional population.
WHO COULD LIVE IN STOCKPORT? We have used Experian socio-economic classifications to analyse the contributing pull factors of groups to Stockport. The analysis of this is on the following page.
45 THE EVOLVING TOWN CENTRE MARKET
THE EVOLVING TOWN CENTRE RESIDENTIAL MARKET The table below indicates the attributes that “pull” residents to live in the town centre, based upon the Experian socio-economic classification. We have identified where Stockport already benefits from the existing factors which would attract residents, however what requires improving is the image and housing product of the town centre. The factors which attract older residents and families are established residential market healthcare and schooling, and established social networks.
Early residents Pull factors to requirements and be improved attributes Stockport upon for new Will be established as
has residents market matures
Experian
Classification Description (Experian)
Commutabilit y Lifestyle Amenities Affordability tojob Nearby Highquality housing product of Image Stockport Established residential market Social networks Schooling Healthcare amenities City Prosperity Ambitious 20 and 30-somethings renting expensive apartments in highly commutable areas.
Aspiring Young singles, graduates, couples and pre-family newcomers seeing value, attractive Homemakers new developments, with some wanting space to grow
Rental Hubs Motivated and dynamic singles and couples seeking vibrant in commutable locations or nearby to jobs
Domestic Well-qualified older singles with incomes from successful professional careers in good Success quality housing
Urban cohesion Older residents and thriving families that have strong cultural ties, who own small homes
Solo Retirees Senior singles whose reduced incomes are satisfactory in their affordable but pleasant owned homes
46
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
SUPPLY 03
47 HOUSING SUPPLY
Stockport has an existing town centre population of 1,600 households, however it is dominated by social housing (56%) which significantly differs from the wider borough.
SUPPLY The average Housing Tenure There are currently 1,600 houses within the town centre boundary, household which comprises postcodes SK1 and SK3. across the
Postcodes SK1 1 and SK1 2 are dominated by social rent (56%), with Borough 36% private rent and 14% owner occupied. Social Rent Private Rent Owner comprises Occupied 2.23 people. Compared to the wider Borough, postcodes SK1 & SK3 are more affordable locations, with higher proportion of private and social rent.
The average household size across the Borough is 2.23 people per household, however the existing housing stock does not make provision for this, with a high proportion of semi-detached properties in Stockport (41%).
This reflects the existing proportion of the population within the older age bracket and this matter will be exacerbated by the predicted growth in ageing population by 2026
However, the existing housing stock does not make provision for this, with a high proportion of semi-detached properties in Stockport Borough (41%).
1,600 houses
48
HOUSING SUPPLY
Stockport’s housing stock does not reflect the wider housing market and with a lack of new build houses being delivered, is at risk of not attracting key workers through its housing offer.
SUPPLY
Only 4% of housing stock in Stockport town centre is new build. This shortage of new build apartments does not meet the needs of the younger economically active demographic, which Stockport is well placed to attract due to affordability and good transport connectivity.
The lack of private rent and owner occupation in the town centre does not reflect the UK trend of growth in this sector.
There is a high proportion of office to residential conversions in the town centre. These are often constrained by their building fabric and does not tend to uplift house and rental pricing tone.
770 278 489 82% new build houses were houses with of houses that houses delivered office to outline or full have been since 1995 residential planning delivered since conversions permission 2015 are 49 granted since conversions 2015
TOWN CENTRE HOUSING DELIVERY
There has been a lack of new build supply in Stockport in the last 10 years, with 85% of houses delivered since 2015 being office to residential conversions, with a lack of private sector new build development.
TOWN CENTRE HOUSING DELIVERY 2007-2017 – PROGRESS Since the Government introduced the office (B1a) to residential (C3) permitted development (PD) rights in May 2013, 350 houses with the designated town In formulating potential planning interventions to achieve the vision set out in this centre (SK1) have been granted prior approval/ used PD rights from office to document it is important to understand the context of Town Centre housing delivery residential at the time of writing. For the period April 2013-March 2017, which over the past 10 years. correlates with the AMR period, this equates to 241 hosues or 60% of all residential approvals in the Town Centre over this period. NUMBER OF NEW DWELLINGS IN STOCKPORT TOWN CENTRE A key indicator in the Council’s Annual Monitoring Reports (AMR) is the number of Since 2015, 82% of houses consented that have been delivered have been new dwellings in Stockport Town Centre (SK1) granted planning permission and conversion properties. delivered during a specific monitoring year. CBRE has reviewed the data from the past 10 years which is presented in the graph below. Overall 1,157 dwellings were PLANNING OBLIGATIONS consented between 2006/07 to 2016/17, with 553 houses delivered, equating to It is difficult to calculate the received S106 constribution received for development in the town centre due to the availability of information. However, 48%. 400 the 2015/16 AMR provides a useful snapshot on the level of commuted sums received from planning applications.
350 Owing to the pooling restrictions on Section 106 agreements, the Council have become far more specific in terms of describing what the monies are to be 300 spent on. An example of this, in terms of play areas, is that specific types of infrastructure are being referenced as opposed to a general reference to the play area. As noted by the Council, this approach has ensured the longevity of 250 funding from commuted sums for children's and formal recreational facilities.
200 In 2015/16 the total amount of commuted sums received from planning applications was £435,319.83. The spend was split as follows: 150 • Children’s provision £74,693; • Children’s maintenance £37,063; 100 • Formal provision £160,553; • Formal maintenance £163,012. 50
0 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
No. dwellings consented (net) No. dwellings constructed 50
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
AFFORDABILITY 03
51 AFFORDABILITY ANALYSIS
Stockport Town Centre represents an affordable location both within the borough and in comparison to Manchester. It allows a renter sharing in Manchester to afford a 2 bedroom apartment by themselves. However there is a lack of suitable high quality product which can rival other parts of Greater Manchester. FINANCIAL / ECONOMIC Stockport Town Centre represents an affordable location to buy and rent in comparison to the wider Borough and neighbouring Manchester. Average
We would expect no more than 35% of monthly net income should be spent on Salary in rent. Based on a salary of £20,000, this equates to £492 per month available for Stockport rent. For those with a salary of £29,000, this increases to £670 per month, highlighting Stockport’s affordability. £26,634 In comparison to Manchester, accounting for a monthly season ticket cost of c.£66, this represents a significant saving for renters, who can afford a 2 per annum bedroom apartment by themselves in Stockport, rather than sharing in Manchester. Given the right choice of housing product, the monthly saving through renting in the Stockport market is likely to be an attractive alternative to those currently renting in Manchester. £989 Rental Levels
£1 ,6 64
52 AFFORDABILITY ANALYSIS
Stockport Town Centre represents an affordable location - average house prices in the Town Centre are considerably more affordable when compared to Manchester, the North West and the Borough.
FINANCIAL / ECONOMIC
Stockport Town Centre represents an affordable location to buy in comparison to the wider Borough and neighbouring Manchester.
Both average house prices and rents in SK1 and SK3 are significantly cheaper than those in the wider Borough, in Manchester and in the North West on average. Of particular note, the average house price in the Borough is greater than the average house price in both Manchester and the £1,664 North West respectively.
Recent achieved sales of converted flats in SK1 and SK3 illustrate a tone of £151 - £271 per sq. ft. £989
£1
,6 64
53 ANALYSIS POPULATION SOURCES OF DEMAND . Existing housing stock comprises a high proportion of semi detached and terraced housing which reflects some the those in the older demographic groups, something that will is likely to be . In SK3, there is a predominance of ‘Aspiring Homemakers’ (24%) who are first time buyers, or those aspiring to buy, pre-family couples, attracted to new exacerbated by the predicted growth in ageing population by 2026. developments which are limited and are slightly scattered between the town • The existing housing offer has a very limited supply of apartments and therefore does not attract centre and the more affluent suburbs. The prevalence of this group within the the younger demographic aged 20-45 who are typically attracted to this product. Attracting a locality, represents an opportunity to shape/tailor housing supply/delivery to younger, economically active population will serve to support the ageing population could be a capture demand from this captive audience and provide the right type of preference. housing product at an attractive price point in order to respond to their aspirations by providing the appropriate housing stock. This would enable • Analysis of the Manchester housing market highlights that it has a significant proportion of its those ‘Aspiring Homemakers’ to remain in the area, perhaps access the population within the 20-45 age range and its housing type (93% flats, 6% terraced and semi- housing ladder sooner or live in a home of higher quality when compared with detached and 1% detached) unlike that in Stockport, reflects the requirements of a younger competing nearby locations. The wider Stockport area also has a large demographic, thus attracting them to live in Manchester. proportion of ‘Aspiring Homemakers’ (13%) who would likely opt for the • In addition, the lack of private rent and owner occupation in the town centre does not reflect the UK relative affordability of Stockport Town Centre.
trend of growth in this sector. This is likely to particularly affect the younger demographic aged 20- • Edgeley for instance, is an affordable and well-connected location, making it 30, as the average first time buyer age in the North West is 29. Therefore by not providing this good location for first time buyers, however the area also has a high volume tenure choice to this younger demographic, it is likely this group would live elsewhere, other than of buy-to-let accommodation, which can often be poorly managed. In the town centre, where the stock provided matches their demand. providing a superior private rental housing product within the Town Centre, NEW BUILD RATES this may negate the demand for the lower quality buy-to-lets, which could therefore be released to the local first time buyer market. • New build rates in the area are very low. Only 4% of the existing housing stock is new build (i.e. under 22 years old), compared to the UK average of 10%. Due to the limited availability of new • Following an increase in recognition of the Town Centre as a place to live, the build properties, housing within the town centre is dominated by older stock and does not present high proportion of ageing population within the Borough may also be attracted a diverse housing product required to attract the demand. to live in the Town Centre albeit, this demographic may take longer due to dependence established local support networks. In the long term, Town • In addition, 82% of houses delivered since 2015 are conversions. The prevalence of conversions Centre living may become appealing particularly for empty nesters who are within the Town Centre means that the end product does not always meet demand in terms of looking to down-size, whilst being close to services and amenities. quality and specification often due to constraints as a result of the building fabric, again, not an appealing housing product for the younger demographic. • Manchester is experiencing a growing affordability issue which Stockport AFFORDABILITY IN STOCKPORT could capitalise upon by providing a more affordable product in comparison.
• Analysis of average sales and rental prices in Stockport Town Centre, the wider Borough, • Overall, there is an existing sizable rental and first-time buyer market in Manchester and the North West sets the Town Centre apart as an affordable place to live. Stockport, however the majority of these are located outside the Town Centre. These existing markets can be viewed as benefits and the foundation from • Further to this, the average salary in Stockport is £ 26,600. Of 26-30 year olds living and renting in which to grow the Town Centre market, subject to providing the correct Stockport, 27% earn a salary of £20,000 - £29,000 pa, while 15% earn £30,000 - £39,000 pa. We variety, quality and tenure of housing stock in order to make the Town Centre would expect no more than 35% of monthly net income should be spent on rent. Based on a salary an attractive location in which to live. of £20,000, this equates to £492 per month available for rent. For those with a salary of £29,000, this increases to £670 per month, highlighting Stockport’s affordability. 54
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
VIABILITY 03
55 VIABILITY & DELIVERABILITY
Stockport faces a viability gap, due to a higher cost of delivery than the sales values which generates minimal profit for private sector developers. 1. ‘PERFECT’ DEVELOPMENT - BUILD AND SELL DELIVERY Stockport has seen the majority of residential development delivered in the form of conversions for market housing, with predominantly new build housing delivered as affordable housing. This is attributable to the “viability gap”, which the town centre presents. The two charts demonstrate the consistent problem in Stockport and more widely, Greater Manchester’s town centres; many development opportunities have a higher cost of delivery than the sale(s) value. Furthermore, due to a lack of proven schemes there is concern over how quickly sales could be achieved. This adds a further layer of risk for developers and investors. This risk for the developers is reflected in the profitability of the scheme, and therefore the profit is eroded, reducing the viability and not achieving the required return on cost for the 2. STOCKPORT - HOW LONG TO SELL AND THE ‘GAP’? developer / investor. The two diagrams illustrate how (1) a ‘perfect’ development scenario looks and (2) the experience in Stockport’s town centres.
56 DEVELOPMENT COST
Higher density apartment new build development has a higher construction cost, and overall development cost is constrained by risk and land assembly, which if not supported by higher sales and rental values, makes schemes unviable.
In order to understand viability, it is important to have consideration of the key The diagram below provides an indication of how the total development cost components of development cost, and the effect these have on viability. breaks down by the key components. Generally the fixed costs are: The majority of development cost relates to construction cost. This varies . Construction Cost dependent upon the height of the structure, due to suitability and therefore . Professional Fees cost of materials. The image below indicates the cost of construction based upon number of storeys. As there is an increase in the number of storeys, the . Finance build cost increases, with it jumping as the dwelling type changes from two . Disposal Costs storeys to apartments. To enable higher density new build scheme to be The variable costs which reflect risk taken by the developer and site specific viable, it requires the sales price to increase relative to the cost. costs, including land and abnormal cost are those which can significantly affect the viability of the site for development. Therefore to unlock schemes and improve sites’ viability, the land cost and risk can be targeted to reduce the overall development costs, whilst also increasing sales values to unlock development. DEVELOPMENT COST
Construction cost
Professional Fees
Finance
Disposal Costs
Profit / Risk
Land Costs
£115 per sq.ft / £120per sq.ft / £125 per sq.ft / £135 per sq.ft / £1245 per sq.m. £1290 per sq.m. £1400 per sq.m. £1510 per sq.m.
57
03 WHAT HAVE WE CONSIDERED? (C) DELIVERABILITY & VIABILITY
PLANNING 03
58 PLANNING POLICY IMPACT
Stockport has been impacted by national legislation changes, particularly through permitted development rights. For developers, there is extensive planning policy guidance, produced in response to changing national planning policy guidance over the past 15 years.
PLANNING POLICY Changes in government agenda and planning policy has impacted on residential development in the town centre, both constraining and encouraging development. The diagram below highlights the key contributing factors that have affected town centre residential development in recent years. Overall, the diagram indicates the breadth of planning policy at a local level, which can lead to developer uncertainty over the local authority’s preference of the form of development.
LOCAL LEVEL STATUTORY DEVELOPMENT PLAN & NATIONAL LEGISLATION SUPPLEMENTARY PLANNING DOCUMENTS
PERMITTED DEVELOPMENT RIGHTS… for office / retail to POLICY UNCERTAINTY…The adopted development plan in Stockport, together residential conversion has led to Grade B office stock being with other material considerations, have guided development across the Borough converted to apartments. This has led to a loss of employment over the past 15 years. space and difficulty for SMBC to enforce additional measures to enforce high quality design, management and S106 contributions. However, some of this guidance is now 15 years old, and market conditions may no longer be aligned to this.
It also demonstrates that SMBC has been working to encourage residential PRESUMPTION IN FAVOUR OF SUSTAINABLE development in the town centre over the past 15 years. DEVELOPMENT… to ensure all development contributes to achievement of sustainable development
HOME OWNERSHIP …Government policy in recent years through PIPELINE PLANNING POLICY …GMSF and the new Stockport Local Plan are Help to Buy and Starter Homes is seeking to encourage home currently being prepared and will not be in place within the short term. ownership through various tenure types, moving away from social rent.
NPPF AND DEVELOPER CONTRIBUTIONS REVIEW… current consultation on the draft NPPF and “Supporting housing delivery though developer contributions” suggest non-negotiable S106 agreements, introduction of Strategic Infrastructure Tariffs, penalties for not having a five year housing land supply and to review the Local Plan every five years will affect the viability of schemes and where development activity will be targeted. 59
03 WHAT HAVE WE CONSIDERED? (D) AMENITY PROVISION & NEEDS 03
60 OPEN SPACE ANALYSIS
Stockport central area benefits from accessibility to a variety of open space, however there is an identified shortfall of some types.
OPEN SPACE AND AMENITY In the Open Space Assessment (August 2017) the Town Centre is Open Space in Stockport identified as being within the Central Stockport committee area. In Summary, it has the second greatest level of play provision per 1000 population in the borough at 0.05 ha, with Marple having the highest, and all of the borough’s civic space is located in Central Stockport, totalling nearly three hectares. The current sufficiency / deficiency in the central
area against FIT standards is presented in the table adjacent:
The Assessment provides a summary as to the sufficiency/ deficiency of each open space type, as set out below; . Parks and Gardens – There is currently a sufficiency of parks and gardens in the central albeit that deficiencies exist elsewhere in the Borough; . Natural and semi-natural greenspace - Application of the ANGSt walk times shows noticeable deficiencies across the Borough.
. Amenity greenspace - Against the FIT 6-minute walk time standard, gaps are noted to all analysis areas although quality is generally positive. . Play Provision - Application of the FIT quantity standard used in the SPR (0.25 ha per 1,000 population) identifies that Stockport is deficient in every analysis area in play provision. This suggests that additional
Open Space Type No. Size (ha) Current standard (ha Sufficiency/ forms of provision are required.
per 1,000 population) deficiency against FIT . Allotment - Current provision in Stockport falls below the national /NSALG standards standard provided by the National Society of Allotment and Leisure Parks and Gardens 15 110.10 1.87 1.07 Gardeners (NSALG). To meet this provision an extra 33 hectares of Natural and semi- 4 18.20 0.31 -1.49 allotment space is needed. natural greenspace Amenity greenspace 35 52.06 0.88 0.28
Provision for children 31 2.73 0.05 -0.20 and young people Allotments 6 7.74 0.13 -0.12 61 AMENITY PROVISION
The town centre has an existing health and education provision serving the current population however this is generally oversubscribed and will require enhancement with a growing population.
AMENITY PROVISION In addition to providing open space for existing and future residents, it is also important to understand the current provision of other public services, which attract and serve the existing population. As part of CBRE’s analysis, we have undertaken an initial study reviewing the following amenities, at the request of SMBC: . Education . NHS Dentist . NHS Doctors Our assessment of the current provision used the Local Education Authority list of schools and involved contacting the doctors and dentists within the town centre boundary to understand if they were accepting NHS patients. The table below indicates our findings:
Amenity Current provision Required ratio Education 17 nurseries Consideration should be given to providing new 21 Primary schools and extending the existing schools and Colleges 6 secondary schools 2 Colleges 3 specialist schools Dentist 28 dentists NHS data current estimated average provision: 7% accepting new patients 0.58 Full time GPs per 1000 35% of dentists are NHS dentists 0.36 full time dentists per 1000
Doctors 15 doctors surgeries
62
03 WHAT HAVE WE CONSIDERED? (E) FUNDING 03
63 PRIVATE SECTOR FUNDING
Stockport is attracting smaller and medium sized developers who are typically funding schemes through higher risk sources of funding, which affects quality of development. For residential development, there are various sources and combinations of finance that are used by developers. Overall, the combination of finance seeks to de-risk the delivery of the scheme and enhance the viability of a scheme. The types of finance and developer that uses these sources are indicated in the diagram below.
PLC HOUSEBUILDERS & UK FUNDS These developers and investors use equity to deliver schemes, due to being a higher quality developer, and typically choose sites with fewer barriers to development and therefore lower risk. These types of developers are targeting return on capital employed, therefore using their own equity ensures maximum capture of profit. In the case of a number of Manchester City Centre schemes, they can be forwarded funded by the purchaser, which tend to be institutional operators (L&G/M&G etc). Generally, the fund will pay a notional land value upfront, fund the development and then pay a balancing payment on completion (less a rolled up coupon). SOURCES OF FINANCE MANCHESTER DEVELOPERS 100% Other schemes may be enabled by debt from the main clearing banks. Recent anecdotal evidence highlighted a loan equating to in the region of 80% between 40% – 50% of the Gross Development Value of the scheme.
60% SMALL & MEDIUM SIZED DEVELOPERS
This type of developer has difficulty in accessing finance, as the schemes 40% are higher risk and the developer has limited equity. Therefore to enable delivery, the developer secures supplementary finance through pre-sales of the scheme, using deposits for the completed scheme and once at a 20% sufficient threshold, they are then used as a source of finance to cashflow the scheme. This source of finance is more transient and therefore 0% reflecting the greater risk, a poorer quality developer and consequently PLC Housebuilder & UK Manchester Developer Small & Medium Sized scheme is generally delivered. funds Developer
Equity Debt Deposits
64 PUBLIC SECTOR FUNDING
The public sector offers a variety of funding sources, however the criteria and timescales for securing funding can be difficult for some developers to access.
Public sector funding has sought to unlock development, contributing towards the Government’s agenda for stimulating the housing market to meet the minimum requirement of 200,000 homes per year. Intervention has targeting the following: . Public sector finance e.g. Greater Manchester Venture Pension Fund . Infrastructure contributions to improve viability e.g. Housing Infrastructure Fund . Mortgage guarantee and diversification of routes to home ownership e.g. Help to Buy, Housing White Paper . Prioritising redevelopment of brownfield sites e.g. NPPF . Town Centre regeneration e.g. Mayor of Manchester’s Town Centre Challenge . Grants towards affordable housing types to diversify housing tenure e.g. Homes England All of these funding sources and agendas seek to encourage the delivery of housing and purchase of the product, and have supported the delivery of housing. However, the funding does not encourage public sector delivery and instead places the onus on the private sector and Registered Providers, who are having to become more private sector minded recently. For grant support, the timing of the applications can be infrequent and there can be a lack of understanding of the funding sources available to developers and the strict criteria can at times lack flexibility to deliver sites which are constrained. This therefore has a knock-on effect for delivering more challenging sites in Stockport.
65 04 WHAT NEEDS TO BE DONE?
66 HOW TO SOLVE LAND AVAILABILITY ISSUES
Intervention is required to assemble land in fractional ownership to improve viability and develop schemes of sufficient scale. It should be considered how public sector powers can help deliver this.
After reviewing the data sources and stakeholder analysis, this section provides further interrogation of the five themes which are constraining development. The following tables provides a clear solution for the identified challenges affecting town centre residential delivery and suggests the tools that could be used to achieve the solution.
1. LAND AVAILABILITY
THEME KEY ISSUES SOLUTION DESCRIPTION POTENTIAL ACTIONS
Land Availability Multiple unwilling sellers and small For the land price developers can offer (and Actions to promote viability. fractional ownerships make land therefore make vendors willing), viability assembly difficult needs to improve. Direct intervention by public sector to assemble land by purchases. In turn, this would start to incentivise developers to assemble sites with fractional Alternatively, active encouragement for ownership. private sector to assemble land. i.e. inform market of the opportunities. However, this will not be possible in all instances an public intervention may be to be Consider CPO where ownerships cannot considered be assembled.
67 RESPONDING TO STAKEHOLDERS’ NEEDS
Solutions are required to improve the viability of scheme for developers, but also ensure the long term benefits for residents and visitors of the town centre through high quality design, management and access to amenities.
2. STAKEHOLDERS
THEME KEY ISSUES SOLUTION DESCRIPTION POTENTIAL ACTIONS
Stakeholders Developers recognise the potential of Stockport market is improving but Production of design guide (Architects / Stockport but struggle with viability interventions needed to build confidence and Developers) issues. There are other more address viability. Review of planning approach attractive opportunities for them to pursue due to clarity of returns, funder Refined planning approach required to build confidence and planning certainty. confidence but encourage good design, Current market dominated by poor management and the best developers to quality design and management. come to the town. Stakeholders Feeling that new developments must Open space and amenity provision needs to Open space investment and amenity (Members and integrate with existing community and be understood in the context of an growing strategy Residents) the amenity / open space must be population. provided. For residents, Stockport Enhancement of community promoted by must have a value proposition against New development should be well managed high quality management. other alternative locations. and community focused to help promote homes and lifestyle which is genuinely unique New residents encouraged to come to for south Manchester. Stockport to being catalytic change.
68 HOW TO UNLOCK VIABILITY?
Solutions to uplift sales and rental values whilst promoting high quality design and clear planning guidance with a flexible approach will provide more confidence to the private sector.
3. DELIVERABILITY & VIABILITY
THEME KEY ISSUES SOLUTION DESCRIPTION POTENTIAL ACTIONS
Delivery and Multiple challenges around viability. A step change needed in sales and rental Support the best private sectors schemes Viability – Most notably that values and prices which makes schemes viable. which uplift price and build confidence. Development projected take up rates are currently Costs evidenced as being low. With better quality developments a higher price point can be established which would build confidence from occupiers and developers Delivery and Lack of new stock limits the ability to Diversification needed in the housing stock to A Design Guide can promote a diverse range Viability – Target attract the wide range of socio- attract these groups. However, care is of homes. Markets economic groups which Stockport needed as patterns of Town Centre growth can and should provide for: Singles, have generally shown that younger Viability support needed to help to key couples, young families, established generations are provided for first where the schemes be delivered. families and older generations. open market is left to deliver. Delivery and Current policy is dated which creates Planning should be clear and will need to Seek to improve dialogue before planning Viability - Planning inconsistencies and uncertainty for adapt to the market as is emerges in applications are submitted. developers. Stockport. In its current state the market is in its infancy and planning policy must help Consider use of planning frameworks to promote the correct type of development. provide certainty for parts of the Town Centre.
Local Plan update with support from frameworks.
Use of new Design Guide.
Consider phased planning obligation and using obligations to incentivise high quality management and ownerships.
69 PROVIDING AN ATTRACTIVE PLACE FOR ALL
A variety of amenity provision is required to attract and retain residents in the town centre in the form of open space, education, healthcare and lifestyle uses.
4. AMENITY & OPEN SPACE
THEME KEY ISSUES SOLUTION DESCRIPTION POTENTIAL ACTIONS
Open Space & At present, the Open Space Assessment To consider enhancement of quality and The Council should identify sites for open Public Realm indicates that there are shortfalls in / or quantity of open space and locations space, and timing of when this should be provision against some of the FIT of where this can be accommodated. delivered. standards. Active management of public realm and Consideration should be given as part of the An influx of additional population may open space to improve the quality and Design Guide to incorporate residents amenity have a detrimental impact, particularly on therefore use. space within the design of the dwellings. existing residents. This could make the town centre an unattractive place to live. Pooling of S106 contributions would allow the Council to provide a more substantial Potential poor management of public contribution rather than piecemeal pockets of realm and open space could lead to a open space. negative perception of an area. Health & Education Additional population will put a strain on Additional health and education places Pooling of S106 contributions could contribute NHS services and school places, to be provided, either through expansion towards delivery of additional services. detrimentally affecting the existing of existing schools and medical centres residents and reducing the attractiveness and / or new facilities. of the town centre for some demographic groups. Supporting uses The current provision of amenities which The town centre should be vibrant and Events and marketing strategy will assist in for supporting attracts people to live in the town centre night-time economy encouraged to offer contributing towards vibrancy. residential location could deter some potential residents as it amenities to residents for a 16 hour day may not provide the desired shopping / use. The Design Guide can include consideration leisure uses. The perception of safety in of influencing safety and passive surveillance the town centre when accessing the to improve evening access to amenities. amenities could also deter some demographic groups.
70 UNLOCKING ACCESS TO FUNDING
Improving awareness and working with the private sector to access funding to attract higher quality investors and developers, in conjunction with using public sector powers to improve viability.
5. FUNDING
THEME KEY ISSUES SOLUTION DESCRIPTION POTENTIAL ACTIONS
Funding and policy Despite strong UK Government To help landowners and developers access Create awareness of funding streams for support - Public policy support for housing funding a proactive approach is needed developers in Stockport and work alongside development and various financial whereby funding asks are established in them to compile strong bids which are ready packages. The lack of an active preparation for funding rounds. ahead of funding round calls. market means developers are rarely in a position to make The translation of UK policy to a local level is funding applications. Even when beginning to happen via the devolution they do, the lack of data will make agenda in GM. Use of these policies could be an application a struggle. of major benefit to Stockport. Funding – Private At present, the type of capital that To attract longer term investor such as owner Data about the town’s performance will help Funding invests in Stockport residential is occupiers, major UK funders etc, more build the business case for funders. generally from small sources such confidence is needed about long term returns as buy to let investors or and pricing of the completed houses. The Council could support funders by offering development finance houses who financial guarantees. This would help build are only supporting construction confidence as higher quality produce would be and do not retain their money in delivered. the town.
71 05 THE NEED FOR INTERVENTION
72 THE OPPORTUNITY NOT CURRENTLY BEING REALISED
As this framework has set out, Stockport is incredibly well set to support and delivery a vibrant and sustainable residential community.
WHY IS STOCKPORT TOWN CENTRE SUCH AN ATTRACTIVE OPPORTUNITY?
. LIFESTYLE - Stockport is an attractive place to live, with recent intervention improving it as a place to work, shop, connect and spend time. The town and wider borough has a rich cultural heritage, established affluent suburbs and green space, with the Peak District on its doorstep.
. CONNECTIIVTY - Stockport Town Centre is highly accessible with good road and bus links and a national railway station. Its connections into Manchester within 8 minutes and London within 2 hours make it a highly attractive location. This makes the town centre a natural commuter area.
. PRICE POINT - Manchester has growing affordability issues with annual sales price growth of 10% in December 2017. Stockport therefore represents an affordable place to live, with SK1 being £368pcm cheaper than Manchester and SK3 £434pcm cheaper.
. LOCAL DEMAND – The Stockport Borough has high demand for housing and there is hidden demand from singles, couples, first time buyers, families, people, particularly those within the 20-35 age bracket who require a more diversified choice of housing offer. Much of this demand may come from those currently renting homes which are inappropriate in terms of their size and location.
. NEW DEMAND - 34,700 people commute into the Borough to work from surrounding Boroughs, therefore there is an opportunity to offer a product to enable these commuters to live in the Town Centre.
. EXISTING COMMUNITY – Stockport Town Centre has an established residential and business community which provides instant amenity and attraction for new residents if it is fully understood and promoted.
73 WHY INTERVENTION IS REQUIRED?
Despite the strength of the opportunity in Stockport and positive stakeholder sentiment around the concept of Town Centre residential, there are a set of constraints which prevent the private sector developing high quality new build residential. KEY CONSTRAINTS TO OVERCOME The table below provides a summary of the key constraints which will require intervention to address.
Key Constraints Description
Land assembly Land in Stockport Town Centre, as is the case for many in the UK is highly fragmented. This limited unit delivery potential and harms viability. Viability There is currently an insufficient gap between the development costs and sales values of residential in Stockport Town Centre, which prevents the private sector taking development risk. Funding Due to the viability gap it is difficult to secure development finance of property investment finance. This puts a larger equity requirement on the Developer which increases the risk and therefore requires a larger return. Open space and Work to date suggests the additional open space is required to support a growing and amenity existing Stockport Town Centre population. Amenity provision is currently adequate but needs to be kept under review. Having sufficient provision of both is required to attract residents but equally placing an inappropriate cost burden upon the developers will further harm viability. Perceptions As Stockport Town Centre’s current offer of residential product is limited, it will not be considered by many as an option to live. Alongside the key strengths of the Town this perception needs to change. Planning The current set of planning policies have not been updated for many years and is not reflecting the needs of developer who need encouragement as they will already be taking on significant development risk. Design When viability is a challenge the trend in development is often poor quality buildings. For Stockport to build a reputation as a high quality place to live, good design must encouraged.
74 THE TYPES OF INTERVENTION
There are a variety of intervention tools available to SMBC who need to take a proactive role. These tools have been used by SMBC and by other local authorities in the UK.
To unlock the development potential for town centre living, a proactive role is required of SMBC to act in a number of different roles in order to achieve the vision.
There are a vast amount of intervention options available to SMBC as shown below, which have a particular focus on residential delivery, however this should be viewed in the wider context of the town centre vision and function, which should encompass leisure, retail, food and beverage, commercial uses and intervention.
Proactive Marketing and engagement Funding Direct Branding Trading land Joint Ventures with developers sourcing e.g. Development e.g. Manchester with planning e.g. Lewisham e.g. Manchester Preston e.g. Sheffield / Preston City Council
CPO Land ownership S106 e.g. Trafford Speculative Local Plan Policy database Rental contribution Council / MCC development Update Guarantee pooling e.g., Stockport
Land Assembly Development e.g. MCC Agreements Northern Prudential Design Guide B2B Engagement Gateway Borrowing New Skilled Staff e.g. Manchester e.g., Stockport
Maintenance of Direct Purchase public realm / open space Mayoral Database SRF Development Developer management e.g. Croydon Corporation Forums Management e.g. London strategy Events Strategy 75 e.g. New London Plan THE INTERVENTION SPECTRUM
The intervention tools allow SMBC to address the identified constraints by taking either high risk/high effort and low risk/low effort approaches. The ‘Intervention Spectrum’ diagram below provides a hierarchy of these approaches. It is expected that a mix of low effort and high effort interventions will be required.
INTERVENTION SPECTRUM The spectrum below is categorised into levels of intervention (1 to 4). The interventions are then categorised around the primary category that they seek to address. The key for which is show below:
Open space Land Viability Funding Perceptions Planning Design and amenity Assembly Maximum Effort Mayoral 4 CPO Direct Development Development Prudential Borrowing Rental Guarantees Corporation
Development Land Assembly by Funding sourcing Joint Ventures 3 Agreements negotiation
Maintenance of Active SRFs or Trading land with Local Plan Policy S106 contribution 2 public realm / engagement with Design Guide equivalent planning Update pooling open space landowners
1 Proactive Management Database Marketing and New Skilled Staff engagement with Events Strategy Developer Forums B2B Engagement company management Branding Minimum developers Effort
76 06 CONCLUSIONS AND RECOMMENDATIONS
77 6. CONCLUSIONS AND RECOMMENDATIONS
SMBC has significantly invested in the town centre recent years, all of which has sought to re-establish the town centre as a destination of choice for people to shop, work, visit, spend time and live. The balancing of the town centre housing offer will significantly contribute to the vibrancy, sustainability and resiliency of the town centre, supporting other SMBC investments.
Stockport town centre has an existing population, but the current housing market is not responsive to the hidden demand in the borough and across GM. Therefore the town centre has an opportunity that it is yet to address. The connectivity of the town and affluence of the borough allows the town centre to offer an affordable location for residents currently living either within or outside the borough.
To encourage more socio-economic groups to live in the town centre, a balancing of the housing product and tenure is required to meet the demand through new build product. This new build product should be high quality and be diverse to reflect demand and Stockport’s distinct culture and heritage.
With Manchester’s growth, Stockport should now see a residential market emerge, as evidenced by recent office to residential conversions in the town centre, however steps must be taken to attract the right type of development to ensure the future sustainability of the town centre.
The analysis undertaken indicates a capacity of 4,000 – 6,000 homes in the town centre, however this requires intervention to accelerate the programme of delivery. SMBC’s existing and future intervention in the town centre, will continue to support its vibrant, sustainable and resilient community.
Current analysis of the amenity of the town centre indicates a shortfall in provision in some areas for health, open space and education. Therefore, new development should not be detrimental to the existing population, and should complement the existing town centre offer and vision. In particular, amenity provision in terms of open space, health and education are services should be maintained and enhanced to support the existing residents and meet the demands of the future to ensure the town centre’s sustainability. Also, intervention to improve the amenity provision which contributes towards the vibrancy and 16-hour use of the town centre will significantly contribute to improving the attractiveness of the town centre as a residential location.
Our analysis has indicated there are a number of barriers which are preventing the delivery of the vision, therefore intervention by SMBC is required to meet current demand, ensure high quality schemes are delivered and improve viability. A series of interventions are required ranging from low level assistance to some financial support to catalytic schemes.
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