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Local Plan Delivery & Viability Study

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Local Plan Delivery & Viability Study Local Plan Delivery & Viability Study Pre consultation draft. This report has been prepared for circulation following the 19th February 2020 viability consultation. It is an early working draft setting out the proposed methodology, modelling and assumptions (and not including results). It is inevitable that some of these will change as a result of the consultation. February 2020 PRE-CONSULTATION DRAFT Shropshire Council Local Plan Delivery and Viability Study – February 2020 Important Notice HDH Planning & Development Ltd has prepared this report for the sole use of Shropshire Council in accordance with the instructions under which our services were performed. No other warranty, expressed or implied, is made as to the professional advice included in this report or any other services provided by us. This report may not be relied upon by any other party without the prior and express written agreement of HDH Planning & Development Ltd. Some of the conclusions and recommendations contained in this report are based upon information provided by others (including the Council and consultees) and upon the assumption that all relevant information has been provided by those parties from whom it has been requested. Information obtained from third parties has not been independently verified by HDH Planning & Development Ltd, unless otherwise stated in the report. The conclusions and recommendations contained in this report are concerned with policy requirement, guidance and regulations which may be subject to change. They reflect a Chartered Surveyor’s perspective and do not reflect or constitute legal advice and the Council should seek legal advice before implementing any of the recommendations. No part of this report constitutes a valuation and the report should not be relied on in that regard. Certain statements made in the report may constitute estimates, projections or other forward-looking statements and even though they are based on reasonable assumptions as of the date of the report, such forward looking statements by their nature involve risks and uncertainties that could cause actual results to differ materially from the results predicted. HDH Planning & Development Ltd specifically does not guarantee or warrant any estimate or projections contained in this report. HDH Planning & Development Ltd Clapham Woods Farm Keasden, Nr. Clapham Lancaster. LA2 8ET [email protected] 015242 51831 / 07989 975 977 Registered in England Company Number 08555548 Issued By Signed 17th February RS Drummond-Hay MRICS ACIH PRE-CONSULTATION DRAFT 2020 Director THIS DOCUMENT HAS BEEN FORMATTED FOR DOUBLE SIDED PRINTING COPYRIGHT © This report is the copyright of HDH Planning & Development Ltd. Any unauthorised reproduction or usage by any person other than the addressee is strictly prohibited. 2 PRE-CONSULTATION DRAFT Shropshire Council Local Plan Delivery and Viability Study – February 2020 Tables of Contents Important Notice ................................................................................................................ 2 1. Introduction .................................................................................................................. 7 Scope ................................................................................................................................ 7 Report Structure ................................................................................................................ 7 HDH Planning & Development Ltd (HDH) .......................................................................... 8 Caveat ........................................................................................................................... 8 Compliance .................................................................................................................... 8 Metric or Imperial ............................................................................................................. 10 2. Viability Testing ......................................................................................................... 11 2019 National Planning Policy Framework ...................................................................... 11 Planning Practice Guidance ............................................................................................ 12 Section 1 - Viability and plan making ............................................................................ 13 Section 2 - Viability and decision taking ....................................................................... 15 Section 3 - Standardised inputs to viability assessment ............................................... 16 Section 4 - Accountability ............................................................................................. 18 Community Infrastructure Levy Regulations and Guidance ............................................. 19 Wider Changes Impacting on Viability ............................................................................. 20 Low Cost Home Ownership ......................................................................................... 21 First Homes Consultation ............................................................................................. 22 Affordable Housing ...................................................................................................... 22 Environmental Standards ............................................................................................. 22 Biodiversity .................................................................................................................. 23 Viability Guidance ............................................................................................................ 23 3. Methodology .............................................................................................................. 27 Viability Testing – Outline Methodology ........................................................................... 27 Limitations of viability testing in the context of the NPPF ................................................. 28 The meaning of Landowner Premium .............................................................................. 28 Existing Available Evidence ............................................................................................. 30 Stakeholder Engagement ................................................................................................ 31 Viability Process .............................................................................................................. 32 Additional Profit ............................................................................................................... 34 4. Residential Market ..................................................................................................... 37 Shropshire’s Residential Market ...................................................................................... 37 National Trends and the relationship with the wider area ............................................. 38 The Local Market ............................................................................................................. 43 Newbuild Sales Prices ................................................................................................. 52 Price Assumptions for Financial Appraisals ..................................................................... 58 Ground Rents .............................................................................................................. 60 Build to Rent .................................................................................................................... 60 Affordable Housing .......................................................................................................... 65 Affordable Housing Values ........................................................................................... 66 Social Rent .................................................................................................................. 66 Affordable Rent ............................................................................................................ 67 Intermediate Products for Sale ..................................................................................... 70 Grant Funding .............................................................................................................. 70 Older People’s Housing ................................................................................................... 70 3 PRE-CONSULTATION DRAFT Shropshire Council Local Plan Delivery and Viability Study – February 2020 5. Non-Residential Market ............................................................................................. 75 National Overview ........................................................................................................... 75 Non-Residential Market ................................................................................................... 75 Offices ............................................................................................................................. 76 Industrial and Distribution ................................................................................................ 77 Retail ............................................................................................................................... 78 Hotels .............................................................................................................................
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