Long Term Mooring Price Review for Sites Within the Kennet & Avon Group
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RE-PRICING OF 12 MONTH MOORING PERMITS 2015 MOORINGS AREA REPORT FOR LONDON Introduction This report provides the rationale for mooring price decisions for 2015. VAT is payable at the rate set by the government for the date when the permit is purchased. Profiles of privately operated sites in the area are appended. We researched and compared their prices with the Canal & River Trust rates to inform our judgements, but because this data is commercially sensitive it has not been included. Local market overview The London group has been defined as sites broadly within the M25 area but also includes the Rivers Lee and Stort which partly extend beyond this boundary, along with a length of the Grand Union Canal in similar circumstance. It also includes the Rivers Thames and Wey (not Trust waterways). There is some diversity of product within the area, from narrowboats and small cruisers found predominantly on the Grand Union, Regents Canal and Lee & Stort, to Docklands and the tidal Thames, frequented by large sea-going craft. There is also a mixture of mooring uses – leisure, ‘pied à terre’ and residential mooring sites. Including Canal & River Trust directly managed moorings, the London market area has approximately 2800 moorings on the GU Canal, Paddington Branch, Slough Arm, Regents Canal, Rivers Lee and Stort and London Docklands. We estimate that there are circa 4,000 moorings within the local market not managed by the Trust; these include those located in marinas along the tidal Thames, the non-tidal Thames and the River Wey. Given the predominantly urban nature of the of the market area, and high land values coupled with the prospect of greater profitability from land-based developments, the creation of new large-scale mooring sites continues to be relatively unattractive to landowners. Creation of small-scale moorings by third parties is gradually increasing, though few have proceeded to implementation at this time. An agreement was made in 2014 for an online development consisting of 5 residential berths on the Regent’s Canal, with discussions currently ongoing for an additional two locations on this same waterway which will provide a total of 11 further residential berths. The Trust are currently developing schemes for the creation of four new directly managed mooring sites, which will see a further approx. 20 new berths in the region in 2015/16. The supply of moorings has not increased greatly since 2012. Consequently demand pressure on moorings, particularly those in central areas, remains very high. London 2015 Page 1 of 12 As acknowledged in the GLA Report of 2013 (‘Moor or Less’: Moorings on London’s Waterways - http://www.london.gov.uk/mayor-assembly/london-assembly/publications/moor-or-less-moorings-on-london- s-waterways) the housing market in the Capital, with record levels of house prices and rents, is increasingly leading to residing on the waterways being seen as a more affordable option for living in London. The Trust’s National Boat Check in 2014 highlighted that since 2007 the number of boats on the Trust’s waterways in London (either with or without a home mooring) has grown by 1,000 – an increase of 50%. With a relatively static provision of long term moorings in the region over this time frame, this huge increase in the numbers of craft has consequentially increased demand for available berths (even if only a small fraction of boat owners without a home mooring are actively looking to secure a long term berth). The Central area sees demand far outstripping supply, as demonstrated by the auction results. Any vacancies that have arisen have been allocated via the mooring auction system, where berths on the Regent’s Canal and Limehouse Cut routinely exceeded the published Guide Price, in some instances exceptionally so. Considering the wider area however, some sites consistently achieve above the Guide Price while others persistently have berths unallocated. It is clear that location is key. At a limited number of mooring sites where boats are permitted to be sold on the mooring, there is continued evidence of a premium beyond the value of the craft being achieved1. These premiums are a continued indication that the value of the mooring is greater than that being reflected in the annual mooring fee. Between craft being sold on the mooring and the infrequency of residential berths being vacated, some of the Trust’s directly managed sites have seen few or no vacancies become available over the past three years. Locally, where vacancies have occurred, we have drawn on the auction results in reaching our 2015 pricing decision. The table below summarises the results of auctioned berths from 2012. Despite localised variances, the evidence available indicates overall demand for moorings continues to be strong, exceptionally so in central areas. If the growth of use of London’s waterways for residential purposes continues, even if at a slower rate than has been seen thus far, this demand is anticipated to increase. Analysis of auctioned vacancies Total Auctions Total Total No. Current (inc. Relists) Successful of Site Name Capacity Since April 2012 Auctions Bidders Blackwall Basin 27 7 7 19 Engineers Wharf 23 47 12 20 Batchworth 28 11 9 26 Springwell Towpath 31 9 8 30 Uxbridge Towpath 14 8 6 10 Browns Meadow 21 26 13 19 Cowley North Offside 28 14 10 14 Cowley North Towpath 28 14 5 11 Cowley South 18 8 1 2 Willow Wren Wharf 27 22 9 13 Three Bridges 7 1 1 2 Brentford Island 37 35 15 30 Andersons Wharf 3 3 3 14 Stonebridge South 43 8 7 22 Millwall Outer Dock 13 3 3 4 Ice Wharf Marina 25 2 2 11 Fife Terrace 4 2 1 7 Moorhen Marina Leisure 41 21 11 17 Moorhen Marina Residential 41 21 4 9 1 For example, adverts in autumn 2014 for a 70 FT boat at a Trust site in the London Borough of Islington suggests a difference of some £80,000 between the asking price and the asset value of the boat (without the mooring). London 2015 jw rev final.docx Page 2 of 12 Pricing Conclusions Information available from other mooring site operators shows that the Trust is not in a dominant position within the market area – it has a relatively small share of the overall mooring market in the region. Despite data available from other operators being more extensive at the top end of the market on and off the Trust’s network, we have been able to make reasonable comparisons relevant to our simpler mooring sites too. The majority of prices have been increased by between 2.5% (inflationary rate) and 5%, which we believe is in line with private operators on and off the Trust’s network. An extremely small number of mooring sites in exceptional circumstances are seeing no increase for 2015/16. At a number of sites, primarily in the Central area, prices are planned to increase above 5%, however with good reason based on the results of market analysis. Challenges to Pricing Decisions We have made the pricing recommendations below based on a thorough review of auction results and local knowledge. It is our policy, set at Board level, to set prices which reflect market rates and to compete fairly with private operators. The Trust has neither powers nor duty to provide subsidised moorings. If you feel that the price decision made for your mooring site is unjustified having read this report, we ask that you write to the Head of Direct Managed Moorings explaining why you think it is the case. Please explain the reasoning for your challenge including evidence such as price and descriptions of nearby privately operated mooring sites. We will not amend the price without this evidence. We will consider your representation and respond in writing within two working weeks. If you are not satisfied with the response, you may request that the matter is dealt with through our formal complaints procedure. London 2015 jw rev final.docx Page 3 of 12 Pricing Conclusions The table below summarises our site-by-site conclusions across the area. Prices include VAT @ 20%. 2014 Price from Site Name Notes on pricing decision Price April 2015 Popular offside private site with garden plots. One vacancy sold at guide. Taking into account the differences in facilities and the immediate environment this price is currently under the market rate. Cassio Bridge Lock £107.70 £113.09 Nearest comparable competitor charges considerably more (£150+ per meter), but does have the benefit of all relevant facilities. Increase to reflect major work. Lovely location and lots of interest in the site. Offside rural site, should be in line with Cassio prices though consideration needs to be given for lack of nearby Common Moor £94.79 £104.27 services. Nearest comparable competitor charges considerably more (£150+ per meter), but does have the benefit of all relevant facilities. This is a private basin (off the main line) with water, electric, land and garden plots and is highly sought after. No auctions at site. Nearest comparable competitor charges considerably more, but Chess Basin £114.55 £117.42 does have the benefit of all relevant facilities. Based on comparisons drawn, current fee is identified as below market rate Popular site, nine vacancies selling well at auction. Seven berths sold well above guide with Batchworth Lock £96.30 £101.12 average prices per metre £105. Nearest comparable competitor charges considerably more but does have the benefit of all relevant facilities. Large site, little churn. Six berths in two years sold at auction all achieving well above guide (2-6 Springwell Towpath £88.85 £93.29 bidders on each vacancy).