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WHOLE PLAN & COMMUNITY INFRASTRUCTURE LEVY VIABILITY ASSESSMENT _______________________________________________ PREPARED ON BEHALF OF HAMBLETON DISTRICT COUNCIL By JUNE | 2019 TABLE OF CONTENTS ___________________________________________________________________ 1.0 INTRODUCTION ............................................................................. 1 2.0 PLANNING POLICY CONTEXT ........................................................... 6 3.0 METHODOLOGY ........................................................................... 16 4.0 OVERVIEW OF HAMBLETON .......................................................... 36 5.0 FINANCIAL APPRAISAL ASSUMPTIONS ........................................... 72 6.0 VIABILITY RESULTS AND POLICY IMPACTS ..................................... 92 7.0 PLAN VIABILITY AND DELIVERY .................................................... 136 Appendices Appendix 1 Stakeholder Presentation and Attendees Appendix 2 Stakeholder Comments Appendix 3 Responses to Stakeholder Comments Appendix 4 Analysis of Planning Consents Appendix 5 New Housing Developments – Sales and Asking Prices Appendix 6 CoStar Office Market Report Appendix 7 CoStar Industrial Market Report Appendix 8 Allocations Testing Assumptions Appendix 9 Quantity Surveyor Report Appendix 10 S106 Analysis 1.0 INTRODUCTION 1.0 INTRODUCTION _______________________________________________________________________ 1.1 Hambleton District Council (‘the Council’) is in the process of preparing a new Local Plan for the District which will guide development up to 2035. The new Local Plan will include a strategy for growth, detailed policies to deliver it and site allocations. It will set out how much land should be provided to accommodate new homes and jobs and where this should be located, alongside the need for associated infrastructure such as shops, community facilities, transport, open space, sport and recreation. The plan will also seek to protect and enhance the countryside, historic buildings and the character of the District’s market towns and villages. 1.2 The Local Plan is being prepared in two parts, as follows: Part 1: Spatial Strategy and Development Policies - A vision and objectives for the Plan Area containing both strategic policies to implement the strategy and detailed policies for determining development proposals. Part 2: Site Allocations - sets out details of sites where the development needs identified in Part 1 will take place and the form it will take. 1.3 The Council undertook public consultation on the Issues and Options stage of the plan during the early part of 2016. During October – December 2016 consultation took place regarding a Preferred Options version of the plan and a consultation on Alternative Sites and Local Green Space Designations was undertaken in April to June 2017. 1.4 A number of the Local Plan policies may impact on the viability of development and in accordance with the National Planning Policy Framework (NPPF) the Council needs to be satisfied that these policies do not undermine the delivery of the plan. Similarly the Council needs to be satisfied that the site allocations contained within the plan are deliverable and are not subject to such a scale of policy burdens that they are unable to be developed viably. 1.5 Alongside the preparation of the Local Plan, the Council is also intending to review its Community Infrastructure Levy (CIL) to help the delivery of the District’s known infrastructure needs. Page | 1 1.0 INTRODUCTION 1.6 In order to ensure a robust and realistic Plan a viability evidence base which assesses and tests the policies contained in the emerging Local Plan is required, this will also inform any revisions that are required to the current CIL charging schedule. Keppie Massie has been commissioned by the Council to establish the economic viability and deliverability implications of the emerging Local Plan policies and allocations. This is to ensure that they are realistic and can deliver sustainable development without putting the delivery of the Plan at risk. The study has been prepared to satisfy the tests of viability and deliverability laid down in the NPPF and the National Planning Practice Guidance (PPG). This report therefore provides an assessment of the overall viability of development in the District, considering the viability implications of emerging plan policies. It also provides a viability framework within which to consider the proposed site allocations. Ultimately the study provides conclusions about ‘whole plan viability’ and any adjustments that may be required to the existing CIL charging schedule. Format of Report 1.7 The report is presented to provide an overview of the Local Plan and its key policies, details of the study methodology, a property market commentary, the financial appraisal assumptions, the results of the viability testing and conclusions regarding Plan viability and delivery. 1.8 For ease of reference the report is structured based on the following sections: Section 2 – Planning Policy Context 1.9 This section provides an overview of the strategic policies and the development management policies which could impact on viability and delivery. In addition a summary of the site allocations is provided. Section 3 – Methodology 1.10 This section outlines the methodology that has been adopted for the study and the viability assessments, together with the rationale for the development scenarios tested. Section 4 – Overview of Hambleton 1.11 This section provides general information about the social and economic characteristics of Hambleton, together with an overview of the residential and commercial property markets. Section 5 – Financial Appraisal Assumptions 1.12 This section outlines the key assumptions that have been made in preparing the financial assessments including details of how specific Local Plan policies have been addressed. Page | 2 1.0 INTRODUCTION Section 6 – Viability Results and Policy Impacts 1.13 This section provides an overview of the results of the viability testing together with a commentary on the results and also the impact of the Local Plan policies on viability. The viability of the proposed allocations is also considered. Section 7 – Plan Viability and Delivery 1.14 Within Section 7 conclusions are provided about the key policies that have implications for economic viability and the viability and deliverability of the Hambleton Local Plan. Keppie Massie 1.15 Keppie Massie is an established firm of Chartered Surveyors and Property Consultants with offices in Liverpool, Manchester, Glasgow and London and is at the forefront of development economics, regeneration and strategic development. It is regulated by the Royal Institution of Chartered Surveyors (RICS). In September 2004 Keppie Massie opened a Residential division called Keppie Massie Residential. 1.16 The Practice deals with all major aspects of commercial and residential property consultancy including valuation, development, development economics, cost consultancy advice, investment, strategic land assembly, compulsory purchase, investment and development funding, S106 negotiations and affordable housing policy and provision, landlord and tenant advice, regeneration, national and local taxation, insolvency advice, acquisition, disposal, agency and property management. 1.17 We have extensive experience in the preparation of Local Plan and CIL Viability Assessments, and have provided studies for many Local Planning Authorities including the following: o Knowsley – Local Plan Viability Assessment o Sefton – Local Plan and Site Allocations Viability Assessment o High Peak – Local Plan Viability Study (including site allocations) o Fylde – Local Plan and CIL Viability Study o Hyndburn – Development Management DPD Viability Study o Barrow – Local Plan Viability Study (including site allocations) o Wyre – Local Plan Viability Study (including site allocations) o Staffordshire Moorlands – Local Plan and CIL Viability Study (including site allocations) o Cheshire West and Chester – CIL Viability Assessment and then subsequent Local Plan Part Two Viability Assessment o Allerdale – Site Allocations DPD and CIL Viability Study o Liverpool City Council – Local Plan Viability Study (including site allocations) Page | 3 1.0 INTRODUCTION o West Lancashire – CIL Viability Assessment o Cheshire East – CIL Viability Assessment o Mansfield – Local Plan Viability Assessment Update o St Helens – Local Plan Viability Assessment 1.18 Keppie Massie is also currently preparing Local Plan Viability Assessments for Rossendale, Wirral and West Lancashire Councils. 1.19 The Practice has extensive knowledge and experience in dealing with viability in relation to development management matters and provides advice to many Local Planning Authorities across the North and Midlands. We have also been appointed by Lancashire County Council to provide development viability advice to Lancashire Enterprise Partnership, Preston City Council, South Ribble Council and Lancashire City Deal. Timeline 1.20 Following consultation by the Council in relation to the Preferred Options Version of the Plan we were commissioned at the beginning of 2017 to start the preparation of a Viability Assessment as part of the Local Plan Evidence Base. 1.21 The initial property market research was undertaken during the spring and summer of 2017. This research was used to compile our transactional and construction cost evidence base for the District and inform our initial assumptions for the viability testing. As part of the