Halton Delivery and Allocations Local Plan: Proposed Submission Draft

Soundness Representations

Taylor Wimpey UK Limited September 2019

© 2019 Nathaniel Lichfield & Partners Ltd, trading as Lichfields. All Rights Reserved. Registered in England, no. 2778116. 14 Regent’s Wharf, All Saints Street, London N1 9RL Formatted for double sided printing. Plans based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A 41529/04/CM/MWl 17748872v2

Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

Contents

1.0 Introduction 1 Purpose 1 Structure 2 Accompanying Documents 2

2.0 Policy CS(R)1: Halton’s Spatial Strategy 3 Introduction 3 Consideration of Policy 3 Test of Soundness 4 Recommended Change 4

3.0 Policy CS(R)3: Housing Supply and Location Priorities 5 Introduction 5 Consideration of Policy 5 Test of Soundness 6 Recommended Change 6

4.0 Policy CS(R)6: Green Belt 7 Introduction 7 Consideration of Policy 7 Test of Soundness 8 Recommended Change 8

5.0 Policy CS(R)7: Infrastructure Provision 9 Introduction 9 Consideration of Policy 9 Test of Soundness 9

6.0 Policy CS(R)12: Housing Mix and Specialist Housing 10 Introduction 10 Consideration of Policy 10 Test of Soundness 10 Recommended Change 10

7.0 Policy CS(R)13: Affordable Homes and Starter Homes 12 Introduction 12

Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

Consideration of Policy 12 Test of Soundness 12 Recommended Change 12

8.0 Policy CS(R)19: Sustainable Development and Climate Change14 Introduction 14 Consideration of Policy 14 Test of Soundness 14 Recommended Change 14

9.0 Policy RD1: Residential Development Allocations 15 Introduction 15 Consideration of Policy 15 Test of Soundness 16 Recommended Change 16

10.0 Policy RD4: Greenspace Provision for Residential Development17 Introduction 17 Consideration of Policy 17 Test of Soundness 17 Recommended Change 17

11.0 Policy RD6: Custom and Self Build Housing 18 Introduction 18 Consideration of Policy 18 Test of Soundness 18 Recommended Change 18

12.0 Policy C1: Transport Network and Accessibility 19 Introduction 19 Consideration of Policy 19 Test of Soundness 19 Recommended Change 19

13.0 Policy C2: Parking Standards 20 Introduction 20 Consideration of Policy 20 Test of Soundness 20

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Recommended Change 20

14.0 Policy C3: Delivery of Telecommunications Infrastructure 21 Introduction 21 Consideration of Policy 21 Test of Soundness 21 Recommended Change 21

15.0 Policy HE4: Green Infrastructure 22 Introduction 22 Consideration of Policy 22 Test of Soundness 22 Recommended Change 22

16.0 Policy HE9: Water Management and Flood Risk 23 Introduction 23 Consideration of Policy 23 Test of Soundness 23 Recommended Change 23

17.0 Policy GR1: Design of Development 24 Introduction 24 Consideration of Policy 24 Test of Soundness 24 Recommended Change 24

18.0 Policy GR2: Amenity 25 Introduction 25 Consideration of Policy 25 Test of Soundness 25 Recommended Change 25

Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

Appendices

Appendix 1 Site Location Plan Appendix 2 Technical Review of Whole Plan Viability Assessment Appendix 3 West Lancs Policy RS6 - ‘Plan B’ Sites

Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

1.0 Introduction Purpose

1.1 Lichfields is instructed by Taylor Wimpey (UK) Limited [TW] to make representations to the Halton Delivery and Allocations Local Plan [DALP]: Proposed Submission Draft Document (incorporating Partial Review of the Core Strategy) published for consultation by Halton Borough Council in August 2019.

1.2 These representations are made it the context of TW’s development interested in Halton, namely land at Chapel Lane, Widnes. A plan showing the location of the site is attached at Appendix 1.

1.3 It is a statutory requirement that every development plan document be submitted for independent examination to assess when it is “sound” as well as whether other statutory requirements have been satisfied (s.20(5) of the 2004 Act). By s.19 of the 2004 Act, in preparing a development plan document a local planning authority must have regard to a number of matters including national policies and advice contained in guidance issued by the Secretary of State. Such guidance currently exists in the form of the National Planning Policy Framework [the Framework] and the National Planning Practice Guidance [the Practice Guidance].

1.4 There is no statutory definition of “soundness”. However, the Framework states that to be sound a Local Plan should be: 1 Positively prepared – providing a strategy which, as a minimum, seeks to meet the area’s objectively assessed needs, and is informed by agreements with other authorities, so that unmet need from neighbouring areas is accommodated where it is practical to do so and is consistent with achieving sustainable development; 2 Justified – an appropriate strategy, taking into account the reasonable alternatives, and based on proportionate evidence; 3 Effective – deliverable over the plan period, and based on effective joint working on cross- boundary strategic matters that have been dealt with rather than deferred, as evidenced by the statement of common ground; and, 4 Consistent with national policy – enabling the delivery of sustainable development in accordance with the policies in the Framework.

1.5 In addition, the Framework1 states that:

“Plans and decision should apply a presumption in favour of sustainable development.

For plan-making this means that: a Plans should positively seek opportunities to meet the development needs of their area, and be sufficiently flexible to adapt to rapid change; b Strategic policies should, as a minimum, provide for objectively assessed needs for housing and other uses, as well as any needs that cannot be met within neighbouring areas, unless: i The application of policies in this Framework that protect areas of assets of particular importance provides a strong reason for restricting the overall scale, type or distribution of development in the plan area; or

1 The Framework 2019 - §11

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ii Any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies of this Framework taken as a whole.”

1.6 This report demonstrates that a number of the policies within the Local Plan require amendments in the context of the tests of soundness established by the Framework. Structure

1.7 The report provides detailed representations in relation to the following Local Plan policies. 1 Policy CS(R)1: Halton’s Spatial Strategy 2 Policy CS(R)3: Housing Supply and Locational Priorities 3 Policy CS(R)6: Green Belt 4 Policy CS(R)7: Infrastructure Provision 5 Policy CS(R)12: Housing Mix and Specialist Housing 6 Policy CS(R)13: Affordable Homes and Starter Homes 7 Policy CS(R)19: Sustainable Development and Climate Change 8 Policy RD1: Residential Development Allocations 9 Policy RD4: Greenspace Provision for Residential Development 10 Policy RD6: Custom and Self Build Housing 11 Policy C1: Transport Network and Accessibility 12 Policy C2: Parking Standards 13 Policy C3: Delivery of Telecommunications Infrastructure 14 Policy HE4: Green Infrastructure 15 Policy HE9: Water Management and Flood Risk 16 Policy GR1: Design of Development 17 Policy GR2: Amenity Accompanying Documents

1.8 Taylor Wimpey has commissioned Cushman and Wakefield to prepare a detailed review of Halton Borough Council’s Whole Plan Viability Assessment. This review accompanies these representations (Appendix 2) and its conclusions and recommendations inform the discussion and arguments set out in these representations.

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2.0 Policy CS(R)1: Halton’s Spatial Strategy Introduction

2.1 Policy CS(R)1 sets out the spatial strategy for Halton over the plan period and identifies the development requirements for the borough, the key areas for regeneration together with a delivery strategy.

Consideration of Policy

2.2 TW broadly supports the spatial strategy as set out in Policy CS(R)1 including the Key Urban Regeneration Areas. In addition, TW recognises the Council’s efforts to meet its identified Objectively Assessed Need [OAN] in full, in line with the Framework. Notwithstanding this, TW has concerns over the lack of consistency between the proposed housing requirement and the growth aspirations set out in the Mid-Mersey Strategic Housing Market Assessment [SHMA] and the Liverpool City Region [LCR] Strategic Housing and Employment Land Market Assessment [SHELMA]. TW also has concerns that the proposed OAN requirement will not fully support the vision and strategic objectives set out in the DALP.

Objectively Assessed Housing Need

2.3 The Framework clearly states that local authorities should use their evidence base to ensure their local plans meet the full objectively assessed needs of market and affordable housing. The Council has identified a housing requirement of 8,050 net additional dwellings, which equates to 350 dwellings per annum [dpa] over the plan period. This is based on the Government’s Standard Method using the 2014-based Household Projections, which identifies a requirement of 296 dwellings per annum [dpa]. As the Framework is clear that this is a ‘minimum’ requirement, the Council has incorporated a nominal increase to 350 dpa which is “in-keeping with previous delivery levels and supports the local economy” as set out in §7.27 of the DALP. Whilst TW welcomes the fact that the Council has increased its requirement above the OAN figure, it has concerns that this is still significantly below the figures set out in the SHMA and SHELMA.

2.4 The Publication version of the Plan used the much higher SHMA figure which had an allowance for economic need and identified the OAN to be 466 dpa. Furthermore, the SHELMA identified an OAN incorporating economic growth to be 565 dpa. Consequently, TW considers that there is currently a mis-alignment between the housing requirement and proposed economic growth aspirations set out in the DALP. Failure to fully align the housing requirement with the economic growth aspirations will lead to barriers to achieving this growth, and high levels of inward commuting. On this basis, it is considered that the Council should opt for a higher housing figure to encourage reasonable level of housing and economic growth in the Borough.

2.5 Taylor Wimpey reserves the right to comment on any future changes to the OAN requirement and associated evidence base.

Key Urban Regeneration

2.6 TW supports the areas identified for urban regeneration, supported by green field expansion. TW particularly supports the identification of North Widnes as an area for delivering greenfield expansion and further extension to the urban area to the north of Widnes.

2.7 Ensuring a sufficient housing supply will help to deliver a wider housing mix that is suitable to meet the market and affordable housing requirements of the local population. This will also help to support service provision and maintain the vitality of Widnes. In this context, TW

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supports the allocation of its site on Chapel Lane under Policy RD1. TW previously submitted a Delivery Statement with its representations to the Publication Version of the DALP which shows that the site at Chapel Lane would assist in the delivery of sustainable development within Halton, and would also provide economic, social and environmental gains in accordance with the Framework.

2.8 It is therefore requested that the Council continues to support the allocation of the site on account of its suitability, deliverability and sustainability and as it will assist the Council in meeting its OAN requirement.

Brownfield Focus

2.9 Whilst TW supports the strategy for Halton and the allowance made for an appropriate level of greenfield expansion, it requests that the prioritisation for re-using brownfield land does not impact, or limit, the delivery of sustainable development on identified greenfield sites. TW notes that the supply of previously developed sites is finite and should not prejudice the delivery of sustainable residential development on other suitable sites. It is also noted that these sites must be considered as ‘developable’ in the accordance with Annex 2 of the Framework. Test of Soundness

2.10 Whilst TW is broadly supportive of the spatial strategy, it considers that Policy CS(R)1 fails to meet the following tests of soundness because: 1 It is not justified: the development strategy fails to reflect the Council’s evidence base in its entirety and account for the growth aspirations in the SHELMA and SHMA. 2 It is not positively prepared: The delivery of housing will assist economic growth in the borough; in this respect the plan fails to take account of the SHELMA economic growth scenario OAN requirement. 3 It is not consistent with national policy: As currently worded, the Policy fails to align with the Framework which seeks to significantly boost housing supply. Recommended Change

2.11 In order to address the conflict detailed above, and ensure the policy criteria set out within Policy CS(R)1 are sound, TW requests that: 1 The Council reconsiders its OAN for the area, in the context of the economic growth aspirations of the LCR and use this as a basis for calculating its requirement and identify additional land to accommodate this housing requirement.

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3.0 Policy CS(R)3: Housing Supply and Location Priorities Introduction

3.1 Policy CS(R)3 sets out the quantum of new residential development required by the borough over the plan period, together with an indication of where development should be directed and recommended densities for development. Consideration of Policy

3.2 TW wishes to object to Part 1(a) of Policy CS(R)3 in line with comments made in relation to Policy CS(R)1 and the lack of consistency between the growth aspirations for the Borough and the proposed housing requirement. It is not clear why the Council is not pursuing a higher housing requirement which would deliver growth within the borough and replenish and improve the housing stock in Halton.

3.3 TW would note that the Framework advises that Local Plan policies and development strategies be reviewed at least every 5 years, and updated as necessary2. It would therefore be inappropriate for the Council to assume that its OAN requirement will not change over the plan period or indeed beyond.

3.4 TW supports the provisions in Part 3(iii) of the Policy and the identification of Strategic Residential Locations [SRL], in particular SRL8 (North West Widnes). TW also strongly supports the provision of Part 3(iv) which identifies the housing allocations within Policy RD1 as another source of housing supply. TW’s Chapel Lane site is identified within Policy RD1 and will significantly contribute to the overall housing supply.

5 Year Supply

3.5 TW supports Part 4 of Policy CS(R)3 and Council’s acknowledgement of the importance of maintaining a 5-year supply of deliverable land across the borough. However, TW requests that further information is provided as to how the Council intends to do this. TW therefore suggests that the Local Plan introduces a policy mechanism that allows for the release of ‘Plan B’ sites (such as adopted West Lancashire Local Plan Policy RS6) (see Appendix 3). This will ensure flexibility and accounts for the potential non-delivery of committed sites and any other shortcomings in its housing land supply.

Brownfield Land

3.6 Whilst TW broadly supports the principle of Part 5 of Policy CS(R)3 and its aspirations to deliver up t0 30% of new residential development on brownfield land, this should not be to the detriment of delivering sustainable development on identified greenfield sites. The supply of brownfield land is finite and has been maximised to meet the needs of the current plan period. The availability of such land towards the end of the plan period is likely to be significantly limited and will likely have a resultant impact upon the ability of the Council to meet the housing requirement in the latter years of the Plan period. The Council’s ability to achieve a 5- year supply of deliverable housing land, as required by the Framework3, is also likely to be compromised on this basis.

2 National Planning Policy Framework §33 3 National Planning Policy Framework §67

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Density

3.7 TW broadly supports the principles set out Part 6 of the Policy in relation to development density and acknowledges the Council’s efforts to ensure the efficient use of land. However, as currently worded, the Policy is unclear whether these densities will be applied to the net developable or gross area of sites. With regards to strategic sites, consideration needs to be given as to the provision of infrastructure and how this might impact on their development density. TW recommends that the Council should consider increasing the density requirements for sites that are required to provide community facilities and social infrastructure. This will ensure that land is being used efficiently and could in turn prevent viability issues arising in association with the cost of delivering infrastructure. Test of Soundness

3.8 TW considers that Policy CS(R)3 fails to meet the following tests of soundness because: 1 It is not justified: The development strategy fails to reflect the Council’s evidence base in its entirety and account for the growth aspirations as set out in the SHELMA. 2 It is not effective: Whilst TW supports the efficient use of land through increased development densities; further clarification is required as to whether these figures relate to the net developable or gross areas of sites. Recommended Change

3.9 In order to address the conflicts identified above an ensure that Policy CS(R)3 is sound, it is requested that the Council: 1 Provide clarification on the development density figures and whether these relate to the net developable or gross areas of sites. 2 Considers whether it would be appropriate to increase the development densities on strategic sites which are required to deliver social and community infrastructure.

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4.0 Policy CS(R)6: Green Belt Introduction

4.1 Policy CS(R)6 recognises the importance of the Green Belt and the role it plays in the borough. Consideration of Policy

4.2 TW broadly supports the principle of defining the Green Belt across the borough and acknowledges the Policy’s accordance with national policy. Notwithstanding this, TW notes that the Merseyside Green Belt boundary has not been amended since its original designation in 1983. Since this designation it is likely that the role and function of the Green Belt has changed and, in some areas, it no longer fulfils the Green Belt purpose in the context of the Framework4. TW considers it to be out of date, and therefore needs to be reconsidered.

4.3 Having completed a review of the evidence base, TW agreed with the findings of the Green Belt Exceptional Circumstances Paper. Within the report the Council considers that it is unable to meet its OAN requirement through development in the urban area or land outwith the Green Belt. It is therefore considered that there are ‘exceptional circumstances’ requiring the release of land from the Green Belt. TW fully supports the release of Green Belt to meet employment and housing needs over the Plan Period in line with §136 of the Framework.

4.4 With reference to the Chapel Lane site, TW has undertaken an assessment of the land against the five purposes of the Green Belt. TW fully supports the removal of the site from the Green Belt and its identification in Policy RD1. The results of our Green Belt assessment have been considered below:

To Check the Unrestricted Sprawl of Large Build-up Areas

4.5 The Site is bounded to the south and east by the urban area of Widnes and to the west by the farm and housing development which fronts onto Chapel Lane. In this context the Site is largely contained by development.

4.6 The northern boundary is defined by a shelterbelt, established hedgerow trees and a watercourse. As a consequence, when approaching Widnes from the north the Site is contained by existing development and landscape features. The provision of woodland planting along this boundary would provide complete visual separation and enclosure from the wider open countryside to the north.

4.7 The eastern part of the site is contained by Queensbury Way and is seen in the context of the housing development to the east of Queensbury Way. There is potential to consolidate the built development on Chapel Lane with the housing to the east in the future without detriment to Green Belt purposes.

To Prevent Neighbouring Towns from Merging into One Another

4.8 The Site does not conflict with this purpose; there is an existing minimum gap of 500m between Widnes and Cronton. There would be no reduction in the size of the gap as result of the release of the site given that the site represents an indent within the existing defined urban area. The release of the Chapel Lane Site would enable the maintenance of a 500m gap between Widnes and Cronton and enable the delivery of the landscape strategy for this area. Future development could be visually screened along the line of Alder Brook.

4 The Framework - §134

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4.9 The gap would remain effective to maintain the separation between the two settlements. Furthermore, the Halton Landscape Character Assessment does not identify that the land has any particular landscape importance which would add weight to any separation function. There is a stated strategy to increase woodland/tree planting in order to reinforce a sense of place in the landscape. This could be delivered through new landscape treatments at the boundary of new development. The development of the site could effectively deliver a new defensible boundary in this location.

4.10 In addition, the release of the Site from the Green Belt would have no adverse effect on the strategic gap between Widnes and Rainhill as the northern site boundary is 2.4km from Rainhill.

To Assist in Safeguarding the Countryside from Encroachment

4.11 The Site lies in the North Widnes farmland landscape character area. It is substantially contained by built development and landscape features. Whilst the site comprises agricultural land, it does not make a significant contribution to the open nature of the countryside. The flat landscape of the North Widnes Farmland area is identified in the Halton Landscape Character Assessment as an area for enhancement and restoration through increased woodland tree planting. This could be delivered through development of the site, and would both safeguard and enhance the character of the countryside.

To Preserve the Setting and Special Character of Historic Towns

4.12 Widnes does not comprise a nationally recognised historic town and there are no Listed Buildings in close proximity to the site nor is there a Conservation Area. Therefore, this Green Belt purpose is not relevant to the assessment of the land.

To Assist in Urban Regeneration by Encouraging the Recycling of Derelict and Other Urban Land

4.13 The release of the Site from the Green Belt would not prevent the recycling of derelict land and other urban land because the Council’s evidence base demonstrates that there is insufficient previously developed land to meet the housing needs of the community. The removal of this site from the Green Belt does not conflict with this purpose. Test of Soundness

4.14 TW considers that Policy CS(R)6 is sound. Recommended Change

4.15 TW considers that no further change to the Policy is required.

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5.0 Policy CS(R)7: Infrastructure Provision Introduction

5.1 Policy CS(R)7 identifies the importance of making use of existing infrastructure, the infrastructure requirement for new developments and the role of the Infrastructure Plan. Consideration of Policy

5.2 TW broadly supports Policy CS(R)7 and accepts that financial contributions may be required to mitigate the impact of development proposals on infrastructure and services. However, TW notes that the requirements for any financial obligations should still enable the development to be deliverable in accordance with the Framework.

5.3 With reference to Part 2 of Policy CS(R)7, TW considers that any requirement for financial contributions must be: fully justified and based on a credible and robust evidence base which identifies an actual need for facilities; reasonable in terms of the relationship to the development; and, not unduly restrictive so as to affect the viability and deliverability of the development. TW notes that any financial contributions sought should meet the tests as set out in the CIL Regulations [§122] and the Framework5:

• Necessary to make the development acceptable in planning terms;

• Directly related to the development; and,

• Fairly and reasonably related in scale and kind to the development.

5.4 TW requests that the Policy is updated to make reference to the aforementioned tests and that it is made clear that any financial contributions required by the Council will be considered in this context.

5.5 TW notes that the Council does not currently intend to pursue the introduction of a CIL Charging Schedule, however should the Council be minded to adopt a CIL in the future, they should ensure that this does not result in developments being subject to double counting and that this has been robustly tested through the Viability Assessment. If CIL were to be introduced the Viability Assessment would have to review the existing policy requirements that impact on the viability of developments.

Test of Soundness

5.6 TW considers Policy CS(R)7 to be sound provided the Viability Assessment is updated to provide a more robust justification for the requirements set out in the Local Plan and that the justification is updated to reflect the CIL tests identified in the CIL Regulations [§122] and the Framework.

5 The Framework 2019 - §56

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6.0 Policy CS(R)12: Housing Mix and Specialist Housing Introduction

6.1 Policy CS(R)12 sets out the type of affordable housing required on each site and the trigger for this and the mix of housing needed to meet identified need. Consideration of Policy

6.2 TW is supportive of the need to provide a range of homes to meet the local needs of the area but would note that other elements would feed into the provision of a suitable housing mix including viability, local aspirations and site characteristics.

6.3 TW is supportive of the flexibility allowed in Part 1 which states that a mix of property types should be required on sites of 10 or more dwelling, “unless precluded by site specific constraints, economic viability or prevailing neighbourhood characteristics.”

6.4 Part 2 states that proposals for new specialist housing for the elderly will be encouraged in suitable locations. However, neither the Policy or explanatory text makes it clear how this will be done. Whilst theSHMA recognises an ageing population, sufficient evidence is not provided which demonstrates a target number of new properties to be designed to meet the needs of older people. TW would note that all of its houses are adaptable to the needs of future residents and built to accord with the latest building regulations.

6.5 TW objects to part 3 of the Policy which states, “affordable housing provision in line with Policy CS(R)13 will still be required where the proposal for specialist accommodation provides self- contained dwellings”. It is not clear if this has been costed as part of the viability report, as such robust and clear evidence has not been provided to ensure that this requirement does not compromise the viability of development proposals.

6.6 In respect of Part 5, it is not clear how the Council will “encourage the delivery of homes which meet the Lifetime Homes standards”. Following the Government’s Housing Standard Review local plan policies should make reference to the optional requirements in the Building Regulations M4(2) and/or M4(3), rather than other standards to ensure consistency. TW has undertaken a review of the Viability Assessment (Appendix 2) and it does not appear that the costs of meeting the higher design standards have been adequately justified as the costs are based on 2015 data with no allowance for inflation. As a result, the Policy, as worded is not consistent with national policy and is not based on justified evidence. Furthermore, the statement is vague and it is not clear what the requirement is for developers to achieve this Policy. Test of Soundness

1 It is not effective: As worded Parts 2 and 5 of the policy are vague and ineffective. It does not make it clear how developments would be expected to provide elderly housing in terms of numbers. 2 It is not consistent with national policy: Reference to Lifetime Homes standards is not consistent with national policy. Recommended Change

6.7 In order to address the concerns raised above, TW would suggest the following change:

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1 Provide explicit targets for elderly housing/specialist accommodation based on a robust evidence base and ensuring that viability is not impacts upon. 2 Remove or amend Part 5 of Policy CS(R)13 and reference to Lifetime Homes standards.

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7.0 Policy CS(R)13: Affordable Homes and Starter Homes Introduction

7.1 Policy CS(R)13 sets out the requirement for the delivery of affordable housing to meet the current and future housing needs of the borough. Consideration of Policy

7.2 TW acknowledges the need to provide affordable housing however any such requirements should be based on a robust and sound evidence base which in particular demonstrates that viability is not affected. A review of the Local Plan Core Strategy suggests that historically there has been a significant undersupply in the delivery of affordable units which was evidenced in the SHMA 2011. The Council will need to adopt a positive and proactive approach to allocating additional sites in sustainable locations that can come forward in the short term to provide for a mix of market and affordable housing.

7.3 Notwithstanding this, having conducted a thorough review of the evidence base, TW is unable to find any evidence which justifies the need to provide 25% affordable housing units on new greenfield residential developments of 10 or more dwellings or on sites of 0.33ha or more. TW therefore objects to Part 1 of Policy CS(R)13 on the premise that is not justified or based on robust and sound evidence. As noted in Appendix 2, TW has reviewed the Viability Report and found that throughout the report it has overstated the viability of greenfield and Strategic Sites through the exclusion of abnormal costs and low benchmark land values. As a result, the affordable housing provision is not realistic or achievable or based on a robust evidence base.

7.4 TW objects to Part 3 of the Policy and the tenure split between affordable and intermediate housing (74/26%) which seems high. It is not clear in the evidence base that this is justified or based on appropriate viability testing.

7.5 In respect of the provision of starter homes, and to ensure consistency with national policy, the policy and reasoned justification should be expanded to make clear that Starter Homes will be considered to be an intermediate form of affordable housing.

7.6 In relation to Part 5(c) of Policy CS(R)13, TW supports the degree of flexibility the Council has taken which allows delivery to be achieved off-site or through financial contributions where it has been demonstrated that on site provision is not appropriate. Test of Soundness

7.7 TW considers that Policy CS(R)13 fails to meet the following tests of soundness because: 1 It is not justified: The provision for affordable housing is not based on robust and clear evidence nor has it been costed; the provision of 25% affordable units on greenfield developments is therefore unjustified. Recommended Change

7.8 In order to address the conflicts above and ensure that Policy CS(R)13 is sound, it is requested that the Council: 1 Update the viability report to reassess the affordable housing requirements and provide justification for the provision of 25% affordable housing to demonstrates that it will not impact on the viability and deliverability of sites.

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2 Amend the policy and associated justification to make clear that Starter Homes will be considered to be an intermediate form of affordable housing in line with the Viability Assessment.

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8.0 Policy CS(R)19: Sustainable Development and Climate Change Introduction

8.1 Policy CS(R)19 identifies the role that the design and construction of developments can play in minimising effects of climate change. Consideration of Policy

8.2 TW is committed to sustainable development and does not object to the need to minimise carbon emissions or include renewable or low carbon energy sources, where practical, however TW objects to the current wording of Parts 1, 3 and 4 of Policy CS(R)19.

8.3 Pat 1, 3 and 4 are vague and it is not considered that inclusion of these provisions is justified, or in accordance with national policy. It is not clear from the Policy how developers are expected to ensure the development is sustainable and appropriate to the location (Part 1), how they will incorporate energy efficient building design solutions (Part 3) or maximise local opportunities for district heating (Part 4).

8.4 It is considered that there is no justification in the Policy or explanatory text to justify these requirements above those required by applicable nationally described standards; nor is it adequately addressed as part of the viability report. Test of Soundness

8.5 TW considers that Policy CS(R)19 fails to meet the following tests of soundness because: 1 It is not justified: there is no evidence as part of the DALP to justify the requirements set out in Part 1, 3 and 4. 2 It is not effective: As worded Parts 1, 3 and 4 of the Policy are vague and ineffective. It fails to provide a threshold for achieving the requirements. Recommended Change

8.6 In order to address the conflicts above and ensure that Policy CS(R)19 is sound, it is requested that the Council: 1 Considers whether the policy is necessary and justified; and, 2 On the findings of the above, amend Parts 1, 3 and 4 of the Policy and the justification to provide a clear strategy as to how developers are to demonstrate energy efficient and sustainable design, and how the Council will implement it and at what point during the application process.

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9.0 Policy RD1: Residential Development Allocations Introduction

9.1 Policy RD1 identifies a number of different sites that are allocated to meet the borough’s housing requirement. As set out previously, TW’s interest at Chapel Lane, Widnes [Sites W4 & W5] has been identified for allocation, with the capacity to deliver 432 dwellings.

Consideration of Policy

9.2 TW strongly supports the allocation of Sites W4 and W5 for new housing and welcomes the Council’s acknowledgement that they are suitable, achievable and deliverable.

9.3 With reference to the comments made in Policy CS(R)1 and CS(R)3, TW has concerns regarding the lack of consistency between the economic growth aspirations and the proposed OAN housing requirement. In this regard, the Council has failed to identify sufficient land to meet the housing requirement of the SHELMA. The allocation and delivery of the site for residential development will therefore assist the Council in meeting the housing OAN requirement and help deliver the economic growth aspirations of the LCR.

Development Capacity

9.4 TW welcomes the Council’s acknowledgement that the land at Chapel Lane is suitable and deliverable in allocating it for residential development. As identified in the preceding paragraphs, the delivery of housing is important in order for the borough to meet its economic growth aspirations. The site is identified in the DALP as having a potential capacity of 432 dwellings, however it is not clear why this has reduced from 440 dwellings in the Publication Version.

9.5 Part 6 of Policy CS(R)3 seeks to ensure the efficient use of land with a minimum density of 30 dph and, “in more accessible locations such as those close to town districts or local centres of transport interchanges the presumption will be for development achieving densities of 40dph or greater”. The site is sustainably located on the edge of the urban area of Widnes which provides access to a range of services, facilities together with education and employment opportunities all within suitable walking distance.

9.6 The site benefits from connectivity to the strategic road network and public transport hubs and is well connected to the wider sub region. Cronton Road runs immediately to the north of site and connects directly to the M62 and M57 which provides access to the wider strategic road network. A bus service is in operation along Cronton Road which provides frequent access to Liverpool, Warrington, Widnes and Hough Green; Widnes train station is located 1.5km to the south east of the site and provides a frequent service to Liverpool and Manchester.

9.7 It is therefore considered that the site meets the criteria set out in Part 6 of Policy CS(R)3 and should therefore be afforded a higher development density. Furthermore, with reference to the comments made on Policy CS(R)3, it is requested that the Council considers increasing the density requirements on strategic sites on the premise that these will be required to make provisions for community facilities and social infrastructure. This will ensure that land is being used efficiently and could in turn prevent viability issues arising associated with the cost of delivering infrastructure.

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Deliverability

9.8 The Site is fully deliverable and is not constrained by any technical or environmental constraints that would prevent it coming forward for development or, that would impact on its net developable area. Furthermore, the site is being promoted by a national housebuilder capable of delivering residential development at the earliest opportunity following the adoption of the DALP; the site could be borough forward within the first five years of the plan period.

9.9 It is therefore requested that the Council continues to support the site and its allocation in the DALP on account of its suitability, deliverability and sustainability, and on the premise that it would make a significant contribution to meeting the OAN requirement. Test of Soundness

9.10 TW strongly supports the allocation of land at Chapel Lane for residential development on the basis that: 1 It is justified: As set out in the evidence base, there are ‘exceptional circumstances’ to justify the removal of land from the Green Belt; the site has the capacity to make a significant contribution towards meeting the housing OAN requirement for the borough. Recommended Change

9.11 TW does not consider the Policy requires any further changes.

Pg 16 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

10.0 Policy RD4: Greenspace Provision for Residential Development Introduction

10.1 Policy RD4 recognises the importance of providing greenspace and the contribution it makes towards health and wellbeing; the policy sets out the greenspace requirements for new residential developments.

Consideration of Policy

10.2 TW acknowledges the need for new residential development to make a contribution towards the provision of greenspace. TW broadly supports the provisions set out in the table identified in Part 1 of Policy RD4 on account of its accordance with national guidance, namely the Fields in Trust standards.

10.3 Furthermore, TW supports the inclusion of Part 4 of Policy RD4 and the degree of flexibility that that the Council has adopted whereby it will allow for off-site provision or financial contributions to be made where it can be demonstrated that there is no practical alternative.

10.4 Notwithstanding this, it is important that any financial contribution made meets the tests set out in the Framework6 and avoid causing undue impact on the cost of delivering units and, as such must be considered within the viability report. Test of Soundness

10.5 TW considers Policy RD4 to be sound provided clarification is provided in the viability report on the assumptions made in respect of the costs of greenspace provision. Recommended Change

10.6 TW consider that no further change to the Policy is required, provided further information is included within the viability assessment.

6 National Planning Policy Framework §204

Pg 17 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

11.0 Policy RD6: Custom and Self Build Housing Introduction

11.1 Policy RD6 sets out the importance of providing appropriate serviced plots for those who want to build their own homes. Consideration of Policy

11.2 TW strongly objects to Part 1 of Policy RD6 and the requirement for development of 20 or more units to provide serviced plots for the provision of custom and self-build dwellings.

11.3 TW has undertaken a review of the Viability Report which considers the requirement of Policy RD6, this is discussed in detail in the Technical Review in Appendix 2. The following provides a summary of the TW’s main concerns as set out in this Technical Review: 1 The plot values appear high at £100,000 (with no evidence to substantiate this) particularly in lower value areas such as Widnes and Runcorn; and there is no flexibility to account for plot-specific abnormal costs which will impact on value. 2 It is not clear if there is an actual housing need and demand in Halton for self-build units; TW considers that further evidence needs to be provided by the Council to support this Policy. 3 The Viability Assessment does not fully evidence that there is no impact on the viability of development and there is no robust delivery mechanism to address plots that have not sold as the development reaches completion.

11.4 The requirement set out in Part 1(d) of Policy RD6 would have significant implications on the delivery of strategic sites that are required to come forward in line with a masterplan or require phasing. Furthermore, the reference to plots being “offered to a Housing Associated at fair value” is vague and ineffective and considered to be too subjective. The Policy therefore conflicts with the Framework7 which requires policies that provide a clear indication of how a decision maker should react to a development proposal. Test of Soundness

11.5 TW considers that Policy RD6 fails to meet the following tests of soundness because: 1 It is not justified: The policy requirements are not based on robust and justified evidence. 2 It is not effective: As worded Part 1(d) of Policy RD6 is vague and ineffective. Recommended Change

11.6 In order to address the conflicts above and ensure that Policy RD6 is sound, it is requested that the Council: 1 Considers if the provision of self and custom build housing is necessary and justified and whether the requirement is based on robust and sound evidence. 2 Provide further evidence within the Viability Report which considers the financial implications of this policy requirement.

7 National Planning Policy Framework §16

Pg 18 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

12.0 Policy C1: Transport Network and Accessibility Introduction

12.1 Policy C1 seeks to encourage and enable a shift towards more sustainable modes of travel to ensure that a sustainable transport network is in place. Consideration of Policy

12.2 TW broadly supports the provision of Policy C1 and the need to encourage and facilitate sustainable travel.

12.3 Notwithstanding this, TW has concerns over the effectiveness of Part 15 of Policy C1 which states that “the Council will require the submission of a Travel Plan and a Transport Assessment or Transport Statement for developments proposals that are likely to generate significant number of trips.” As currently worded the policy is ambiguous in that it does not provide clear guidance on the threshold of development that will require the submission of a Travel Plan and a Transport Assessment or Transport Statement. It is therefore considered that the policy conflicts with the provisions of the Framework8. Test of Soundness

12.4 TW considers that Policy C1 fails to meet the following tests of soundness because: 1 It is not effective: As currently worded, Part 15 of Policy C1 is ambiguous and too subjective as it fails to provide a development threshold which requires the submission of a Travel Plan and a Transport Assessment or Transport Statement. Recommended Change

12.5 In order to address the conflicts above and ensure that Policy C1 is sound, it is requested that the Council: 1 Considers an appropriate development threshold that requires the submission of a Travel Plan and Transport Assessment or Statement.

8 National Planning Policy Framework §16

Pg 19 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

13.0 Policy C2: Parking Standards Introduction

13.1 Policy C2 considers parking standards within commercial and residential developments. Consideration of Policy

13.2 Whilst TW acknowledges the need to provide an appropriate quantum of parking proportionate to the proposed development, it objects to Part 1d which states that, development must take into account “an overall need to encourage the use of ultra low emissions vehicles”.

13.3 Firstly, this element of the policy is vague and it is not clear how developers will achieve this requirement. The justification (§10.11-10.12) details a requirement to incorporate facilities for charging plug-in and other ultra-low emission vehicles (in line with §105 of the Framework). However, §10.12 of the explanatory text does not provide further clarity on how this will be implemented, or how developers should allow “capacity to be built into new development to allow for upgrading or advances in technology”. It is not clear how many vehicle charging points are required to meet the policy requirement.

13.4 There is a significant cost to installing electric vehicle charging infrastructure in new developments; this is not adequately tested within the Viability Assessment. Furthermore, it is considered unreasonable to require residential developments to provide electric vehicle charging infrastructure as the take up of electric cars in the UK is still very uncertain due to the expense purchasing the cars in the first instance. It may also be the case that alternative forms of powering private transport becomes more prominent as research into relevant technology progresses.

13.5 Having completed a thorough review of the evidence base, TW is unable to identify a need for electric vehicle charging infrastructure into new developments; indeed any such requirement should be necessary, justified and based on robust and sound evidence. Therefore, TW requests that the full and realistic cost of installing vehicle charging infrastructure is considered in the Viability Assessment. Test of Soundness

1 It is not effective: The policy as worded is vague and ineffective as it does not provide a clear justification as to the number of charging points required on developments to meet the policy requirement or specify how developers should enable capacity to be built into new developments. Recommended Change

13.6 To address the conflict above and ensure the Policy is sound, it is requested that the Council: 1 Ensure the Viability Assessment takes account of the full cost of installing this infrastructure on large scale strategic sites. 2 Provide clarity to guide developers on the Council’s expectations for future proofing new developments as technology advances and account for this in the viability report.

Pg 20 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

14.0 Policy C3: Delivery of Telecommunications Infrastructure Introduction

14.1 Policy C3 sets out the importance of maintaining and implementing effective communications in the Borough and that this is essential to the development of the local economy. Consideration of Policy

14.2 TW considers that telecommunication infrastructure is an important part of the integrated development within an area. Whilst §112 of the Framework establishes that local authorities should seek to support the expansion of electronic communications networks, it does not seek to prevent development that does not have access to such networks.

14.3 Part R of the Building Regulations clearly sets the appropriate standards for high speed electronic networks. TW does not consider there to be justification for Halton to seek additional local technical standards above this requirement.

14.4 Any developer contribution would need to be fully viability tested. Test of Soundness

14.5 TW considers that Policy C3 fails to meet the following tests of soundness because: 1 It is not justified: there is no evidence as part of the Local Plan to justify this requirement. 2 It is not consistent with national policy: It is not consistent with the Framework or Building Regulations. Recommended Change

14.6 In order to address the conflicts above and ensure the Policy is sound, it should omit reference to developers being required to ‘deliver the necessary physical infrastructure to accommodate information and digital communications networks’ as part of the policy requirement.

Pg 21 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

15.0 Policy HE4: Green Infrastructure Introduction

15.1 Policy HE4 seeks to ensure that new development makes adequate provisions for the protection and enhancement of Green Infrastructure. Consideration of Policy

15.2 TW acknowledges the importance of providing an appropriate amount of green infrastructure to support new development and broadly supports the provisions as set out in Policy HE4.

15.3 TW supports the provision of Part 1 but would note that this cannot conflict with the Council’s requirement to increase housing density (Policy C(R)3) where Green Infrastructure would result in a significant loss of developable areas of the sites. In addition, TW considers that the requirements under Part 1 are too vague. It is not clear how development is expected to “address climate change” (Part 1b) for example.

15.4 TW would note that in respect of Part 3, any financial contributions as required to provide compensation for the loss of Green Infrastructure assets will need to comply with the CIL Regulations. Test of Soundness

15.5 TW considers Policy HE4 to be sound provided it clarifies Part 1 and provides specific suggestions for ‘addressing climate change’. Recommended Change

15.6 TW considers that further explanation is required in respect of Part 1b of Policy HE4.

Pg 22 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

16.0 Policy HE9: Water Management and Flood Risk Introduction

16.1 Policy HE9 required all development to manage flood risk from all sources and manage surface water sustainably. Consideration of Policy

16.2 TW is broadly supportive of Policy HE9, however it has concerns regarding Part 17 of the Policy which states that “new development will need to ensure there is adequate water supply, surface water, foul drainage and sewerage or waste water treatment capacity to serve the development.” TW’s concerns relate to the wording of the policy, in particular the reference to ‘adequate water supply’; this is particularly pertinent as neither the policy or explanatory text provides a definition as to what quantifies as an adequate water supply. It is therefore requested that the Council reconsiders the wording of Policy HE9 to ensure clarity or provides justification as to quantify the meaning of an adequate water supply. This will ensure that it does not conflict with the Framework9 Test of Soundness

16.3 TW considers that Policy HE9 fails to meet the following tests of soundness because: 1 It is not effective: As presently worded, the policy is too vague and does not quantify the term ‘adequate water supply’. Recommended Change

16.4 In order to address the conflicts above and ensure that Policy HE9 is sound, it is requested that the Council: 1 Amends the policy and justification to quantify the meaning of an ‘adequate water supply’.

9 The Framework 2019 - §16

Pg 23 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

17.0 Policy GR1: Design of Development Introduction

17.1 Policy GR1 seeks a high standard of design in new development that respects the character and protects the visual amenity of the area. Consideration of Policy

17.2 TW acknowledges the importance of ensuring that new developments are of a high quality and that they respect the local vernacular and character of the surrounding area. In this respect TW broadly supports the principles of Policy GR1, however it objects to Part 5 of the Policy which states “all major development proposals involving the construction of new buildings must demonstrate how sustainable design and construction methods will be incorporated to achieve resource efficiency and resilience to climate change in accordance with CS(R)19.”

17.3 It is not clear from Part 4 of the Policy as to how developers are expected to demonstrate the use of sustainable design and construction methods. TW notes that the justification also fails to provide a clear and robust strategy as to how the Council will impose this and at what point during the application process. The Policy therefore conflicts with the Framework10.

Test of Soundness

17.4 TW considers that Policy GR1 fails to meet the following tests of soundness because: 1 It is not effective: As currently worded, Part 4 of the Policy is too vague and does not provide a clear strategy as to how developers are expected to demonstrate sustainable design and construction methods, how this will be implemented and at what point in the planning application process. Recommended Change

17.5 In order to address the conflict above and ensure the Policy is sound, it is requested that the Council: 1 Considers whether the Policy (in particular Part 4) is necessary and justified; and 2 On the finding of the above, amend Part 4 of the Policy and the justification to provide a clear strategy as to how developers are to demonstrate the use of sustainable design and construction methods and, how the Council will implement and at what point during the application process.

10 The Framework - §16 and §125

Pg 24 Halton Delivery and Allocations Local Plan: : Proposed Submission Draft

18.0 Policy GR2: Amenity Introduction

18.1 Policy GR2 sets out the importance of good planning to ensure that an appropriate standard of amenity exists between existing and future occupants for all types of land and buildings. Consideration of Policy

18.2 TW supports the provisions set out in Policy GR2 and recognises the importance of delivering high quality developments which have been designed and laid out to ensure that a good standard of amenity is maintained. Notwithstanding this, it is important that any policy requirements relating to amenity, design and layout of new developments is in accordance with national guidance and building regulations.

Test of Soundness

18.3 TW considers Policy GR2 to be sound. Recommended Change

18.4 TW considers that no further change is required to the Policy.

Pg 25

Halton Delivery and Allocations Local Plan: : Appendix 1 Site Location Plan

Appendix 1 Site Location Plan

Halton Delivery and Allocations Local Plan: : Appendix 2 Technical Review of Whole Plan Viability Assessment

Appendix 2 Technical Review of Whole Plan Viability Assessment

Halton Borough Council: Whole Plan Viability Assessment

Technical Note

PREPARED ON BEHALF OF: TAYLOR WIMPEY AND REDROW HOMES

September 2019 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Table of Contents

1. Introduction 3

2. Non-Technical Summary 4

3. Financial Viability in Planning: Conduct and Reporting (May 2019) 6

4. Overview and Relevant Policy / Guidance 8

5. Halton Whole Plan Viability Assessment – Key Issues 10

6. Conclusions 35

Page 2 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

1. Introduction

This note is provided on behalf of Taylor Wimpey and Redrow Homes and summarises Cushman & Wakefield’s comments and recommendations in respect of the viability appraisal inputs and assumptions adopted in the Halton Borough Council (HBC) Whole Plan Viability Assessment (May 2019) prepared by HDH Planning & Development (hereinafter referred to as ‘HDH’).

This note has been prepared in accordance with the RICS Professional Statement Financial Viability in Planning: Conduct and Reporting (1st edition) dated May 2019. This document sets out mandatory requirements on conduct and reporting in relation to financial viability assessments (FVAs) for planning in England to demonstrate how a reasonable, objective and impartial outcome should be arrived at. It also aims to support and complement the government’s reforms to the planning process announced in July 2018 and any subsequent updates.

Sections 2.1 to 2.14 of the Professional Statement set out fourteen mandatory reporting and process requirements for all FVAs and representations prepared on behalf of, or by applicants, reviewers, decision-makers and plan-makers. We confirm that this note has been carried out in accordance with Sections 2.1 to 2.14 and the relevant mandatory reporting requirements are set out in Section 3 of this note. Before outlining these requirements, we first provide a non-technical summary of this note in accordance with Section 2.11 of the Professional Statement.

Page 3 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

2. Non-Technical Summary

Given the increased importance of the Local Plan viability assessment in the decision-making process, it is imperative that the adopted assumptions are realistic and market-facing to ensure that the viability of development is accurately tested. This will support the setting of reasonable and deliverable policy requirements and will help to reduce the number of site-specific viability assessments at the application stage in accordance with the aspirations of the PPG for Viability.

In April 2019, C&W submitted a Representation to the pre-consultation draft version of the Whole Plan Viability Assessment where we highlighted a number of issues associated with the assumptions adopted by HDH. We made appropriate recommendations as to how the assumptions could be adjusted to produce a more robust and market-facing viability assessment which would result in more accurate viability testing and the setting of realistic and deliverable plan policies.

However, many of the identified issues have not been addressed within the revised Whole Plan Viability Assessment. Therefore, both we and our clients remain of the opinion that key assumptions are still inappropriate and/or insufficiently evidenced and do not reflect a market facing position. We summarise the key issues which we have identified in the table below:

Viability Assessment Input / C&W Comments Assumption Development Typologies Densities for brownfield site typologies are overstated. Blanket revenue assessment – same revenues assumed Market Housing Revenues across entire district rather than differentiating values by location / value area. Affordable Housing Revenues Revenues for all tenures are overstated. Standard build costs are overstated. Standard Build Costs Contingency applied to standard build costs only. Brownfield site abnormal costs are understated. No abnormal costs assumed for greenfield or strategic Abnormal Costs sites. No sensitivity analysis carried out on the abnormal cost assumptions. Insufficient cost allowances to satisfy all emerging policy requirements. Local Plan Policy Requirements Proposed greenspace requirements not deliverable on many site typologies. Developer’s Profit Developer’s profit on market housing is understated. BLVs are understated. HDH state that all abnormal costs should be deducted from the BLV which would result in very low or zero BLVs. Benchmark Land Value (BLV) No evidence provided to justify different BLVs for greenfield and brownfield sites. Blanket BLV assessment – same BLVs assumed for greenfield and brownfield sites across entire district rather than differentiating the BLVs by location / value area. Insufficient evidence to illustrate that the self-build policy will not adversely impact on viability. No evidence provided to demonstrate that there is actual Self-Build Policy need / demand for self-build units in Halton. Robust delivery mechanism required if the policy is implemented.

Page 4 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

In our opinion, if the current inputs are adopted, the Whole Plan viability assessment will not provide an accurate or robust assessment of site viability and will result in policy requirements being set at unrealistic levels. This will lead to delays in sites being brought forward for development and housebuilders / landowners will incur costs in challenging the inaccurate assumptions at the application stage and negotiating more reasonable policy requirements based on the true viability of the site.

We highlight paragraph 35 of the National Planning Policy Framework which sets out the tests of ‘soundness’ when examining Local Plans. In our opinion, the Local Plan will not be effective or justified if it is based on the current Whole Plan Viability Assessment.

Furthermore, if applicants are unsuccessful in challenging the assumptions, particularly the very low benchmark land values assumed by HDH, there is a significant risk that the Whole Plan viability assessment will constrain the supply of land and new development in Halton as landowners will simply have no incentive to release their sites for development.

We therefore respectfully request that our comments are given appropriate consideration in the consultation process. We believe that the suggested amendments will help to support a more robust and market-facing Whole Plan viability assessment which does not compromise site deliverability.

Page 5 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

3. Financial Viability in Planning: Conduct and Reporting (May 2019)

Below we set out the other relevant mandatory reporting requirements under Section 2 of the RICS Professional Statement Financial Viability in Planning: Conduct and Reporting (1st edition) dated May 2019. 2.1: Objectivity, Impartiality and Reasonableness Statement

We confirm that this note has been prepared by a RICS member who has acted with objectivity, impartiality, without interference and with reference to all appropriate available sources of information. 2.2: Confirmation of Instructions and Absence of Conflicts of Interest

Our formal terms of engagement are appended to the rear of this report.

We are currently advising, and have previously advised both Redrow Homes and Taylor Wimpey on various site-specific FVAs in support of planning applications for residential development. We have also previously advised both parties in respect of representations to area-wide viability assessments.

However, we do not consider that any conflict of interest, or risk of conflict of interest, arises as a result of the interests which we have disclosed. 2.3: No Contingent Fee Statement

In preparing this note, no performance-related or contingent fees have been agreed. 2.4: Transparency of Information

Our clients have provided us with a range of supporting information from their sites within Halton and neighbouring authorities which we have utilised to supplement our comments on the key issues we have identified in the Whole Plan viability assessment.

The provided information is commercially sensitive and cannot be disclosed for confidentiality reasons. The data presented within this note has therefore been anonymised however further details can be shared with the Council if required. 2.5: Confirmation Where the RICS Member is Acting on Area-Wide and Scheme-Specific FVAs

As outlined above, we are currently advising, and have previously advised both Redrow Homes and Taylor Wimpey on several site-specific FVAs in support of planning applications for residential development. We have also previously advised both parties in respect of representations to area-wide viability assessments.

In addition, we are currently advising on the emerging Warrington Local Plan viability assessment. We have also recently submitted representations in respect of the affordable housing policy requirements in the emerging Lancaster Local Plan.

Again, however, we do not consider that any conflict of interest, or risk of conflict of interest, arises as a result of the interests which we have disclosed. 2.6: Justification of Evidence

All inputs into this note have been reasonably justified as explained in further detail throughout this document. 2.10: Engagement

We confirm that we have advocated, and will advocate reasonable, transparent and appropriate engagement between the parties at all stages of the viability process.

Page 6 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

2.14: Timescales

We confirm that adequate time has been allowed to produce this note having regard to the scale of this particular project.

We further confirm that this note has been carried out in accordance with Section 4 – Duty of Care and Due Diligence of the Professional Statement and that full consideration has been given to the matters referenced in Section 4.

Page 7 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

4. Overview and Relevant Policy / Guidance

The revised National Planning Policy Framework and Planning Practice Guidance (PPG) for Viability have shifted focus away from site-specific viability assessments towards viability testing at the plan- making stage. As such, it is crucial that the inputs utilised in the Whole Plan Viability Assessment are robust and market-facing to ensure that the viability of development is not over- or understated, and policy requirements are therefore set at an appropriate level.

Importantly, the PPG for Viability was updated in May 2019 to emphasise the need for meaningful engagement between plan makers and industry stakeholders when preparing viability assessments. Paragraph 4 of the PPG states that plan makers will:

“…engage with landowners, site promoters and developers and compare data from existing case study sites to help ensure assumptions of costs and values are realistic and broadly accurate…. Plan makers may then revise their proposed policy requirements to ensure that they are creating realistic, deliverable policies”.

We strongly believe that such engagement is crucial to ensure that plan policies are realistic and deliverable. If the market-facing data and evidence provided by industry stakeholders is disregarded during the consultation periods, the viability assessment will not represent an accurate assessment of viability. This will have significant implications for the deliverability of the plan, as explained in further detail throughout this note.

In April 2019, C&W submitted a Representation to the pre-consultation draft version of the Whole Plan Viability Assessment where we highlighted a number of issues associated with the assumptions adopted by HDH. We made appropriate recommendations as to how the assumptions could be adjusted to produce a more robust and market-facing viability assessment which would result in more accurate viability testing and the setting of realistic and deliverable plan policies.

However, many of the identified issues have not been addressed within the revised Whole Plan Viability Assessment and we believe that key assumptions remain inappropriate and/or insufficiently evidenced. The key issues which we have identified can be grouped under the following nine headings:

• Development Typologies

• Market Housing Revenues

• Affordable Housing Revenues

• Standard Build Costs

• Abnormal Costs

• Local Plan Policy Requirements

• Developer’s Profit

• Benchmark Land Value

• Self Build Policy

At present, both we and our clients hold significant concerns that the proposed assumptions within the Whole Plan Viability Assessment will result in inaccurate viability testing as certain inputs have been set at unrealistic levels, meaning that the viability of development will be positively overstated. Consequently, policy requirements will be set at an unrealistic and unachievable level which will compromise site deliverability.

Page 8 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

This will have significant implications at the application stage as developers will have no choice but to submit site-specific viability assessments which provide a true representation of development viability and which counter the inaccurate assumptions currently adopted by HDH. This will result in time and cost delays for both applicants and the local planning authority (LPA), and will slow the delivery of important new homes in the Halton district.

Furthermore, if applicants are unsuccessful in challenging the very low benchmark land values currently assumed within the Whole Plan Viability Assessment, there is an additional risk that landowners will choose not to release their land for development as there is simply no incentive to do so. This will further undermine housing delivery in Halton over the next plan period.

Accordingly, within this note we comment on the assumptions adopted by HDH and we provide evidence to support more realistic and market-facing inputs to inform the Whole Plan viability assessment. This will support accurate viability testing and the setting of appropriate policy requirements to ensure site deliverability is not compromised.

We again highlight paragraph 35 of the National Planning Policy Framework and reinforce that in our opinion, the Local Plan will not satisfy the tests of ‘soundness’ if it is based on the current Whole Plan Viability Assessment.

Page 9 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

5. Halton Whole Plan Viability Assessment – Key Issues

Within this section of the note, we comment on the key issues which we have identified within the Whole Plan viability assessment. We have structured our comments in accordance with the nine headings referenced at paragraph 4.5.

Development Typologies

In order to assess site viability across Halton, HDH adopt seven different site typologies for the purposes of the viability assessment, reflecting different sized greenfield and brownfield sites, and they formulate an assumed scheme for each site based on their assumptions in terms of density, site coverage, housing mix and unit sizes.

We have reviewed the assumed schemes for each typology and we believe that HDH’s assumptions in respect of medium and large brownfield site typologies do not reflect a market-facing position. According to HDH’s assumptions, the approximate density for the brownfield sites equates to c. 18 units per net acre and the approximate site coverage (net saleable area per net acre) equates to c. 17,200 – 17,400 sq. ft. per net acre across the different brownfield typologies.

Based on our widespread market experience and analysis, we consider that the assumed density is towards the upper end of densities we would expect to see on a mid-large brownfield site however the coverage is overstated. We would typically expect to see a coverage in the range of c. 14,000 – 16,000 sq. ft. per net acre for a mid-large brownfield site.

A higher coverage could be achieved if the scheme included a greater proportion of flatted units (HDH currently assume c. 15-20% flatted units) and/or 2.5 / 3 storey units. However, HDH do not specify their assumptions in terms of the number of 2.5 / 3 storey units within the assumed housing mix. We would ask HDH to clarify their assumptions in this respect to enable us to analyse if the assumed schemes are realistic, would actually physically fit on site and would be acceptable in planning terms.

Importantly, by assuming a high density and a very high site coverage, HDH are overstating the viability of the brownfield site typologies. As such, we would recommend that HDH reassess the scheme assumptions for the brownfield site typologies to ensure a more realistic density and coverage, and that site viability is not overstated.

Market Housing Revenues

The second key issue we have identified is the market housing revenues assumed within the HDH viability assessment. HDH adopt seven different site typologies as outlined above and they assume different market housing revenues for each typology.

However, HDH assume the same market housing revenue for each site typology across the entire borough rather than differentiating values by location. This is an inappropriate approach to assessing revenues for the Whole Plan viability assessment which does not reflect market realities and will result in highly inaccurate viability testing in lower value areas for the reasons detailed below.

Firstly, there is a wealth of evidence presented in HDH’s viability assessment which clearly illustrates that residential values vary significantly across the borough. For example, at Appendix 5 of their report, HDH present various maps of average house prices for different house types across Halton which show a clear differentiation in values. It is apparent that more affluent areas, such as the settlements to the north of Widnes and the Sandymoor area in Daresbury, have achieved higher values in contrast to the lower value areas such as Hale and Riverside. To illustrate this point, one map extract from the HDH report is presented overleaf:

Page 10 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Page 11 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Importantly, HDH clearly acknowledge this spatial variation in pricing, stating that “the geographical differences in prices are illustrated in the following maps showing the median price by ward” (para 4.24). We therefore question why HDH have adopted a ‘blanket’ approach to assessing revenue by assuming the same market housing revenue for each site typology across the borough when they have identified and acknowledged the clear locational variation in values.

Figure 4.5 within the HDH report further supports this position where a graph of the median asking prices in Runcorn and Widnes is displayed based on Rightmove data as at March 2019. This graph is shown below:

Again, the data points to a clear difference in value between the two areas with higher average asking prices in Widnes when compared to Runcorn. In terms of values by house type, the difference for flats, terraced and semi-detached houses is greatest at over c. £250 psm / £23 psf according to HDH’s own data. Therefore, to reflect the market evidence, there must be a difference in the assumed market revenues across Halton.

HDH then go on to assess the new build housing market and at Tables 4.2 and 4.3 of their report, HDH present Land Registry Average Price Paid Data by Year for new build houses within Halton. Once again, the evidence suggests a distinct difference in average new build values between Runcorn (c. £176,000 / £208 psf) and Widnes (c. £236,000 / £215 psf).

Accordingly, HDH have provided their own widespread and compelling evidence to suggest that different market housing revenues should be assumed both between Runcorn and Widnes and within these settlements to ensure the value profiles of different localities are appropriately reflected in the Whole Plan viability assessment. If this approach is not adopted, the conclusions HDH draw from their assessment will be inaccurate.

To reinforce the latter point, overleaf we present a summary of recently achieved sales values from a range of new build schemes within the Sandymoor, Preston Brook and Castlefields areas which we have collated as part of another instruction in Halton. We note that all schemes are situated within relatively close proximity to one another, being no more than c. 2 miles apart:

Page 12 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Average Average Scheme / Location Transactions Achieved Achieved Date Range Developer Value (£) Value (£ psf) The Meadows, Wharford Lane, Sandymoor 71 £250,723 £226 Jan 17 – Nov 18 Sandymoor, WA7 1QU (Morris Homes) Lea View, Village Street, Sandymoor, Sandymoor 49 £335,773 £213 Feb 17 – Aug 18 WA7 1XF (David Wilson Homes) Shephards Fold, Chester Road, Preston Brook 22 £254,452 £238 Dec 17 – Nov 18 Preston Brook, WA7 3AX (Morris Homes) Bridgewater Gardens, The Castlefields 60 £149,569 £185 Jan 17 – Jul 18 Barge, WA7 1NP (Keepmoat Homes)

As the above data demonstrates, new build sales values vary significantly between the schemes in Sandymoor (c. £250,000 – £335,000 / £213 – £226 psf), Preston Brook (c. £254,000 / £238 psf) and Castlefields (c. £150,000 / £185 psf) despite there being only c. 2 miles distance between the settlement areas. The data therefore highlights how values can change quite markedly over a short distance which must be considered when determining appropriate revenues within the Whole Plan viability assessment.

HDH’s final source of evidence is new build asking prices as at March 2019 which are presented at Table 4.4 of their report. Again, this data illustrates a clear variation in average asking prices at the currently active new build schemes across Halton which range from £2,059 psm / £191 psf to £3,000 / £279 psf (albeit the latter is a small, more exclusive development which would command higher values). HDH state that “the analysis of these shows that asking prices for newbuild homes vary, very considerably, starting at £135,995 and going up to £450,000” (para 4.31, C&W emphasis added).

In summary, HDH have presented an array of evidence which suggests that values within the borough of Halton vary both between the two major settlements of Widnes and Runcorn and also within these settlement areas. This is further evidenced in the Review of CIL Potential Final Draft Report (DTZ November 2014) prepared on behalf of HBC whereby six different value areas were assumed in the viability appraisals to reflect the variation in achievable house prices. The assumed sales revenues ranged from £130 psf to £220 psf as shown below:

Source: Review of CIL Potential Final Draft Report (DTZ November 2014)

The above approach of varying the revenue assumptions is similar to that adopted in other recent Local Plan / CIL viability assessments including Cheshire West and Chester and Cheshire East.

Page 13 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

However, from their analysis, HDH surprisingly conclude that the data does not support the use of different values in different areas and HDH believe that any pricing differential between Halton and Runcorn is more strongly driven by site-specific environmental and contextual factors rather than location and market fundamentals.

The evidence presented by HDH clearly contradicts this assumption and the proposed blanket approach to assessing revenue does not adequately reflect local market characteristics. We emphasise that values can change quite significantly over a short distance depending on the nature of the particular location and the market characteristics in the locality yet HDH have fundamentally disregarded this consideration. By assuming the same market revenues across the entire borough, HDH have overlooked important locational differences in value and it is entirely unrealistic to assume that all sites of the same typology within the district will command the same values.

We understand that a Whole Plan viability assessment is a ‘high-level’ study and it is not practical to assume different revenues for every settlement within the region at the plan-making stage. However, we strongly believe that there is a need for a more nuanced approach than that currently adopted by HDH if the Whole Plan viability assessment is to accurately reflect site viability and policy requirements are to be set at a realistic level. Both we and our clients are concerned that the high-level blanket revenue assumptions across the borough for each site typology will result in highly inaccurate viability testing as the assumed revenues will simply not be achievable in certain areas. This will lead to more site-specific viability assessments in the majority of planning applications that come forward.

We would therefore recommend that more robust values are assumed using market-based evidence and that values are differentiated by location to appropriately reflect the different value areas across the Halton district. If this approach is not adopted and the proposed blanket revenues are assumed, this will lead to the viability of many sites being overstated and policy requirements will be set at an unrealistic and undeliverable level, particularly when combined with the overstated affordable housing revenue assumptions which we expand on under the sub-heading below.

It is also important to note that HDH have assumed a very high site coverage for the mid-large brownfield typologies as outlined above. Based on the assumed site coverage, the housing mix for each typology would have to include a number of 2.5 / 3 storey units. It is widely recognised that these house types achieve lower values when compared to standard 2 storey estate housing as purchasers do not pay full value for the second storey accommodation.

This is because purchasers show a preference for 2 storey units as the ground floor living accommodation will typically be larger. Purchasers also generally prefer one flight of stairs within their property rather than two due to the additional floor area taken by the extra set of stairs which reduces the useable floor space when compared on a pro-rata basis with 2 storey homes. In addition, the majority of purchasers prefer to walk up a single flight of stairs to the master bedroom and it is not always preferable for the master bedroom to be on the top floor or the living area to be at first floor level.

Therefore, purchasers do not pay full value for the second storey accommodation, and developers as a consequence do not fully value this accommodation. As such, it is common practice within the residential market to half the rate psf applied to the upper storey of a 2.5 / 3 storey property, meaning that the overall rate psf typically equates to a lower value when compared to 2 storey homes of a similar size.

It appears that the revenues adopted within all of HDH’s appraisals are on the basis of 2 storey housing with no differentiation in sales values for 2.5 / 3 storey units. Accordingly, the revenue assumptions for the brownfield site typologies are overstated and need to be adjusted to reflect the housing mix that would be delivered on site based on HDH’s assumptions in terms of density and coverage.

Page 14 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

We finally note that at paragraph 4.33 of their report, HDH acknowledge that the actual achieved sales prices are c. 5% less than asking prices based on the incentives and discounts typically offered by developers to secure sales. HDH had originally made an assumption of 2.5% to calculate the achieved prices within their pre-consultation draft viability assessment.

Despite acknowledging this change, HDH make only a very nominal adjustment (£50 per sq. m.) to the revenue assumptions for two site typologies and do not make any adjustments to their revenue assumptions for the other typologies. We would question why HDH have not made an appropriate adjustment to all of their revenue assumptions when they have acknowledged that their original 2.5% incentive / discount assumption was inaccurate.

Affordable Housing Revenues

The third key issue which we have identified relates to HDH’s assumptions in respect of affordable housing revenues which are set too high and do not reflect a market-facing position.

To determine the affordable housing revenues, HDH adopt a rent and capitalisation approach based on their opinion of achievable rental values for Social Rented and Affordable Rented units, and on the assumption of a 50% initial purchase for Intermediate units with 2.75% rent paid on the retained equity.

We note that HDH provide no evidence to justify the assumed capitalisation rates. Furthermore, HDH have allowed only 16% for management costs and repairs for Social Rented and Affordable Rented units. Based on the advice from our in-house Social Housing team and from reviewing valuations prepared by other affordable housing specialists, we see total management, repairs and maintenance costs more in the order of 25% of gross rent. If this higher cost assumption was applied, this would reduce the net rental income and the subsequent capitalised value of the Rented units, and may bring the value more in line with the market rate.

We have assessed HDH’s affordable housing revenue assumptions as a percentage of the equivalent OMV by taking the average of HDH’s market revenue assumptions across the seven site typologies which equates to c. £2,315 psm / £215 psf. On this basis, HDH have assumed the following affordable housing revenues as a percentage of OMV:

HDH Revenue Affordable Housing Tenure % of OMV Assumption

Social Rented £1,210 psm / £112 psf 52%

Affordable Rented £1,685 psm / £157 psf 73%

Intermediate - 70%

Based on our market experience and the information we have received from both currently active developers and a specialist affordable housing consultancy in the North West, we consider that the above revenues are set at an unrealistic level particularly for Social Rented and Affordable Rented dwellings. We have never seen Affordable Rented units achieve higher values than Intermediate units and we would ask HDH to evidence their assumed capitalisation rates as well as their assumptions for management costs, voids, bad debts and repairs.

In our extensive market experience, values for Social Rented units typically range between c. 35-45% of OMV, values for Affordable Rented units between c. 45-55% of OMV and values for Intermediate units between c. 60-65% of OMV. The only tenure which tends to command higher values is Discounted Market Housing where revenues can be set at c. 70-80% of OMV.

Page 15 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Given that HDH have valued the affordable housing on the assumption that all units will be transferred to a Registered Provider (see para 4.44 of the HDH report), the Intermediate products would not comprise Discounted Market Housing and so the revenue assessment for this tenure type is also generous based on our experience.

To provide further evidence to support our position, we refer to advice received on a confidential basis from a specialist affordable housing consultancy in the North West who have extensive experience acting on behalf of developers on the sale of affordable housing units within the region. This consultancy undertook analysis of their recent transactions for affordable housing units in the North West to identify the ratio of offers as a proportion of OMV, broken down by tenure and dwelling type for dwellings for rent and Shared Ownership (Intermediate units).

According to this analysis, most offers for rented units tended to range between 40% and 50% of OMV with the most recent transactions dropping beneath the previously considered ‘floor price’ of 40% OMV. On this basis, the consultancy considered that an allowance of 40% OMV represents an appropriate assumption in terms of potential revenue for rented dwellings. This is 33% below the revenue HDH have assumed for Affordable Rented units and 12% below the revenue HDH have assumed for Social Rented units.

Turning to Shared Ownership (Intermediate) dwellings, the consultancy stated that 65% of OMV is the maximum level of offer they have received for this tenure type across the North West. They further state that they have encountered many Registered Providers who have advised developers to assume 60% OMV for appraisal purposes in respect of Shared Ownership units and that they would be sceptical of assuming significantly more than 60% OMV for such units. Again, this is 10% below the revenues HDH have assumed for Intermediate dwellings.

It is also important to note that the percentages suggested above are broadly consistent with our recent dialogue with developers currently active in the North West market. For example, on a confidential basis, our client Redrow Homes has provided us with details of various offers received from Registered Providers for affordable housing units at a number of their sites in the neighbouring Cheshire West and Chester authority. The revenues for each tenure as a percentage of OMV are shown in the table below1:

Affordable Site A Site B Site C Site D Site E Average Housing Tenure Offers from Registered Providers as % of OMV Affordable 38% 37% 47% 49% 53% 45% Rented Shared 56% 51% 66% 56% 61% 58% Ownership

This data indicates that the offers our client has received for Affordable Rented units range from c. 37% – 53% of OMV (overall average of 45% of OMV) and for Shared Ownership units range from c. 51% – 66% of OMV (overall average 58% of OMV).

Taylor Wimpey have also provided us with the offers received from two Registered Providers for the affordable housing units on one of their sites in the neighbouring Cheshire West and Chester authority again on a confidential basis2:

1 Sites have been anonymised for confidentiality reasons. Further details on each site can be shared with the Council if required. 2 As above.

Page 16 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Affordable Housing Tenure Registered Provider 1 Registered Provider 2

Offers from Registered Providers as % of OMV

Social Rented 52% 45% Shared Ownership (blended offer for all units) 52%

In addition to the above, another established regional housebuilder recently confirmed that they typically receive offers at c. 40-45% of OMV for Affordable Rented units and c. 60-65% of OMV for Shared Ownership units. Taken together, this information therefore further suggests that the revenue assumptions adopted by HDH are unrealistic and do not reflect market realities.

Moreover, we note that there is already a significant quantum of social housing within the Halton district which would likely depress demand from Registered Providers and the offer levels for affordable housing units.

In summary, we believe that the above data clearly illustrates that HDH have overstated the affordable housing revenues within the Whole Plan viability assessment, which, in turn will result in the viability of development being overstated, particularly when combined with the inflated market housing revenue assumptions for certain areas of the borough as outlined above.

Accordingly, we would recommend that the assumed affordable housing revenues are revisited and more appropriate assumptions are adopted to ensure accurate viability testing and the setting of realistic policy requirements.

Standard Build Costs

The fourth key issue which we have identified relates to HDH’s assumptions in respect of standard build costs. In our opinion, the costs are set too high and do not reflect the market position for new build residential schemes in this location.

To determine the total standard build costs for the residential units, HDH adopt the BCIS Lower Quartile figure for each different house type (terraced, semi-detached, detached, apartments) to assess the base build cost. HDH then add assumed site costs (eg. external works, roads, drainage and services) at 10 – 15% of base build cost depending on site size and density.

Whilst we consider the BCIS database to represent an appropriate source to assess the base build costs given that it is an independent, nationally recognised database maintained by the RICS and is based on actual construction costs for completed schemes, we disagree with the methodology adopted by HDH to determine the standard build costs as their approach results in an inflated build cost position.

Firstly, it is important to note that the BCIS figures are generally not reflective of established national / regional housebuilder base build costs. This is because the BCIS datasets are predominantly based on Register Provider Fixed Price contracts (from smaller contractors for smaller schemes). The BCIS figures therefore include an embedded contractor’s profit which should be removed when assessing build costs for all but the smaller sites as we understand that established housebuilders typically perform the main contractor’s function internally. In addition, the BCIS figures do not reflect the economies of scale which can be achieved by established developers on mid-large sized sites.

Accordingly, when assessing base build costs for residential development sites, it is standard practice to adjust the BCIS Median / Mean figure downwards for all but the smaller sites and to then add back allowances for external works, standard estate roads and sewers, and plot service connection costs to determine the ‘all-in’ standard build costs. This position is often equal to or slightly below the starting BCIS Lower Quartile figures.

Page 17 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Whilst HDH’s approach of adopting the Lower Quartile figures rather than the Median / Mean figures somewhat overcomes the above issues, the current Lower Quartile figures are still too high particularly for detached houses and require adjustment to reflect a market-facing base build cost position.

For example, taking the BCIS Lower Quartile figure for semi-detached housing (generally) as at March 2019 which equates to £1,037 psm / £96 psf (Table 7.1 of the HDH report), and adding a 15% allowance for site costs as assumed by HDH, the total standard build cost figure would equate to c. £111 psf. If the same calculation is undertaken for detached houses, the total standard build cost figure would equate to c. £125 psf. This is considerably above the standard build costs we have experienced on other confidential work in respect of land tenders, expert witness and Red Book valuations on behalf of housebuilders and bank lenders for example.

In addition, we have monitored and analysed the standard build costs which have been accepted on a range of viability assessments for residential development sites across the North West. This analysis is attached at Appendix 1 (sites have been anonymised for confidentiality reasons) and illustrates that the average ‘all-in’ standard build cost across the six sites equates to c. £102 psf after indexation to May 2019 (the date of the viability assessment).

These costs were assessed by an experienced quantity surveyor acting on behalf of the LPA’s and were accepted by other viability appraisers working across the North West. We therefore believe the analysis provides strong evidence of standard build costs for residential development sites in the Halton district particularly given the relatively comparable market housing revenues.

In further support of our position, we have recently been provided with build costs from an established North West developer for a site with market revenue expectations of approximately £250 – £260 psf. The housebuilder’s ‘all-in’ standard build costs for this scheme equated to c. £110 psf before contingency and professional fees. We would expect a lower specification and achievable market revenues at sites within the Halton area and therefore lower standard build costs.

As illustrated by the above brief summary, we believe that HDH have overstated the standard build costs within the Whole Plan viability assessment particularly in respect of detached houses. The build costs represent a key component of the viability assessment and it is therefore critical that the assumptions are robust and market-facing. Importantly, the overstated base build costs mean that HDH have not allowed sufficient room for an appropriate abnormal cost assumption to be included in their viability appraisals as explained in further detail in the following section of this report.

We would therefore recommend that HDH reassess their base build cost assumptions and adjust the adopted figures to a lower level in order to arrive at a reduced and more market-facing position for the total standard build costs.

Additionally, we note that HDH have applied contingency to the standard construction cost only. We believe this is an incorrect assumption and contingency should be applied to the total standard build costs, abnormal costs and professional fees.

Abnormal Costs

Another fundamental error we have identified within the HDH viability assessment relates to the abnormal cost assumptions. HDH have assumed no abnormal costs for all large-scale Strategic Sites and greenfield sites, and HDH have made a token allowance of only 5% of base build costs for abnormal costs for brownfield sites.

Page 18 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

We would strongly emphasise that if a reasonable abnormal cost assumption is not included in the HDH viability assessment, the value of the assessment is highly limited as the findings do not provide a true reflection of market realities and site viability.

Indeed, from our widespread market experience and work with both landowner and developer clients, we have yet to come across any greenfield site with no abnormal costs and for HDH to assume that greenfield sites will not incur abnormal costs is entirely false. In fact, these sites often have higher abnormal costs when compared to brownfield sites due to the need to address issues such as drainage, ground levels, abnormal foundations and the enabling infrastructure required to facilitate development of the site.

To further illustrate this point, on a confidential basis, our clients have provided us with the abnormal costs they have incurred on a range of greenfield and brownfield sites over the previous three years within the Halton district and neighbouring authorities. The sites range from small greenfield sites delivering less than 20 units up to larger-scale sites providing in excess of 250 units. The abnormal costs for each site are set out below:3

Abnormal Greenfield / Abnormal Site Total Units Costs Per Net Brownfield Costs Per Plot Acre Site 1 Greenfield 273 £600,000 £51,000 Site 2 Greenfield 272 £458,000 £36,000 Site 3 Greenfield 28 £275,000 £30,000 Site 4 Greenfield 100 £315,000 £52,000 Site 5 Brownfield 18 £707,000 £77,000* Site 6 Greenfield 280 £243,000 £15,000 Average 162 £433,000 £43,500

*Extensive demolition costs involved

Moreover, we have monitored the abnormal costs we have experienced on a range of residential development sites across the North West (25 in total) as part of previous land disposals, expert witness work and viability assessments we have recently been involved in, with the abnormal costs across the 25 sites ranging from c. £120,000 - £540,000 per net acre / c. £10,000 – £50,000 per plot. This data includes abnormal costs submitted by developers for both greenfield and brownfield sites. The overall average abnormal cost across the 25 sites equates to c. £248,000 per net acre / £19,000 per plot.

In addition, we recently disposed of a large greenfield site at Sandymoor (c. 20 net acres) on behalf of a public sector client where the abnormal costs in each developer’s bid ranged from c. £12,000 - £25,000 per plot. We have also recently acted on the disposal of two other greenfield sites in Sandymoor (c. 13 net acres and c. 3.25 net acres respectively) where the abnormal costs were thoroughly scrutinized by highly experienced quantity surveyors who assessed the costs at c. £27,000 per plot for the larger site and c. £36,000 per plot for the smaller site.

Accordingly, the above information and data clearly illustrates that HDH’s assumption of no abnormal costs for greenfield sites is both misleading and highly inaccurate, and significantly overstates the viability of these sites. Moreover, there would undoubtedly be abnormal costs associated with the

3 Sites have been anonymised for confidentiality reasons. Further details on each site can be shared with the Council if required.

Page 19 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 development of the Strategic Sites tested in the study particularly for the enabling infrastructure required to prepare the sites for large-scale residential development.

HDH claim that strategic infrastructure costs are included under the ‘S106 Contributions and the costs of infrastructure’ heading where an allowance of £2,500 per unit is assumed to cover these costs. It is entirely incorrect to assume that strategic infrastructure costs would be covered by S106 contributions; these are separate costs which should be costed separately. We provide further comment on the assumed S106 costs in the following sub-section of this note as we consider this figure to be low and insufficiently evidenced.

In any case, the allowance of £2,500 per unit is clearly insufficient to account for strategic infrastructure costs to unlock large-scale sites for development, as well as the numerous other commuted sum payments often required towards education, sustainable transport and any other site-specific mitigation required to make the scheme acceptable in planning terms. Indeed, both the abnormal cost data presented above, and the industry best practice guidance in the Harman Report (2012), which recommends strategic infrastructure costs of £17,000 – £23,000 per plot (c. £19,600 - £26,600 per plot after indexation to May 2019), clearly illustrate that HDH’s cost allowance is unrealistic.

In respect of brownfield sites, taking the HDH assumption of 5% of base build cost for abnormal costs and assuming an average unit size of 950 sq. ft., the total assumed abnormal costs for brownfield sites would equate to c. £4,500 per plot (when using the current BCIS Lower Quartile figure for estate housing (generally)). As the above data illustrates, this is far too low and does not reflect market realities which again results in the viability of development being fundamentally overstated.

We would therefore strongly recommend that appropriate abnormal costs, including a sufficient allowance for strategic infrastructure costs, are included within the viability assessment for all site typologies. If such costs are not included, the assessment will significantly overstate site viability and policy requirements will consequently be set at unrealistic and unachievable levels.

As outlined above, we believe that the standard build costs assumed by HDH are too high and should be reduced to a more market-facing position with appropriate adjustments for site size and density, as HDH already part recognise within their viability assessment. This would help to enable a more reasonable abnormal cost assumption to be built into the appraisals at say c. £20,000 per plot.

Importantly, however, we emphasise that the abnormal costs will vary for different sites and it is not possible to accurately reflect such costs at the plan-making stage by adopting a single average abnormal cost assumption for each site typology. Therefore, it is essential that a sensitivity analysis is carried out on the average abnormal cost assumption to assess the impact on viability should the abnormal costs vary, which will inevitably be the case for many sites. If this analysis is not undertaken, it is highly unlikely that the Local Plan viability assessment will reduce the number of site-specific assessments.

Local Plan Policy Requirements

Within Section 8 of their report, HDH set out the emerging Local Plan policies which will impact on the viability of development and they outline their assumptions to test these policy requirements. We have identified various issued associated with HDH’s assumptions in respect of certain policy requirements which are summarised below.

Firstly, there are numerous emerging policy requirements relating to transport and infrastructure provision. HDH state that the assumed S106 cost of £2,500 per unit covers the costs to meet all of the following policy requirements:

• Infrastructure Provision

Page 20 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

• Sustainable Transport

• Green Infrastructure

• Transport Network and Accessibility

HDH state that the S106 cost allowance of £2,500 per unit “is in line with the Council’s expectation for future payments” (para 7.34). However, no evidence is provided to demonstrate that this assumption is robust and we consider this figure to be low based on the S106 costs we have experienced in other authorities across the North West. Importantly, HDH have also incorrectly included site-specific strategic infrastructure costs within the S106 cost allowance which makes the assumed figure of £2,500 per unit even more unrealistic. In many instances, as shown by the cost data presented in the preceding sub- section, the site-specific strategic infrastructure costs will far exceed £2,500 per unit before contributions towards the above policy requirements are considered.

We would therefore ask HDH to provide clear justification that the assumed cost allowance for S106 contributions (and not strategic infrastructure costs which should be costed separately) is realistic and that the cost is sufficient to comply with all of the above policy requirements. In particular, we would recommend that a clear breakdown of the costs for complying with each policy requirement is provided in order to verify HDH’s assumption.

If this evidence is not provided and/or the cost allowance is proven to be insufficient in reality, it is crucial that policy requirements in respect of affordable housing are able to flex to offset any higher developer contributions required to comply with other policy requirements. Without this flex in policy, there is a significant risk that development viability will be fundamentally compromised and sites will not come forward for development.

The emerging Local Plan also includes various policy requirements relating to high quality design and sustainable development. In respect of the design policies, HDH state that these polices “are quite normal and do not add to the costs of development over and above those reflected in the BCIS figures adjusted for Halton” (para 8.25) yet, again, HDH do not provide any evidence to justify this assumption.

In particular, we note that the emerging Local Plan requires developments to consider Building for Life 12 principles and to incorporate energy efficient design solutions. The standard build cost for a residential unit would not include the costs associated with satisfying higher quality design requirements and energy efficiency measures such as the provision of PV panels as referenced by HDH at paragraph 8.26.

Accordingly, we would strongly recommend that HDH include sufficient costs (supported by appropriate up-to-date cost evidence on meeting the higher design / sustainability standards) within their viability assessment in order to satisfy these policy requirements. We mention that these additional costs will impair site viability and HDH are currently overstating viability without including the requisite development costs.

It is also important to note that HDH argue that building to higher sustainability standards does result in higher values (para 8.27). Based on our experience, purchasers in lower value areas are unlikely to pay any premium for energy efficiency measures and it is only in higher value areas that such measures may increase achievable sales values which would help to offset the additional costs.

We believe it is incorrect for HDH to assume that building to the higher standards would result in higher values across all areas of the Halton district. This assumption again serves to overstate the viability of development particularly when considering that HDH have not allowed sufficient costs within their viability assessment to meet the higher standards.

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Under the ‘Managing Pollution and Risk’ policy heading, HDH acknowledge that the provision of SUDS to satisfy this policy requirement can add to the costs of the scheme. HDH state that such costs are included in the 5% abnormal cost allowance for brownfield sites. On greenfield sites, they assume that SUDS will be incorporated into the green spaces and be delivered through soft landscaping within the wider site costs.

We strongly disagree with this assumption. Within the previous sub-section of this note, we have already clearly demonstrated that the 5% abnormal cost allowance for brownfield sites is insufficient whilst it appears that HDH have not allowed for any costs to deliver SUDS on greenfield sites. At present, therefore, the development costs adopted by HDH within the viability assessment are clearly understated and we would again recommend that an appropriate, fully evidenced cost for SUDS is included in the viability testing for both greenfield and brownfield sites.

We again mention that the additional costs associated with satisfying this policy requirement will further impair the viability of development particularly when combined with the cost impact of the other policy requirements detailed within this sub-section.

Under the ‘Greenspace Provision for Residential Development’ policy heading, HDH state that the requirements for greenspace are incorporated within the modelling however it is not clear what (if any) costs have been assumed to deliver the greenspace standards. The provision of green / open space including children’s play areas, amenity greenspace and so on is a common abnormal cost on residential development sites to ensure that the scheme satisfies local planning policy requirements. We would therefore ask HDH to clarify their cost and modelling assumptions for complying with this policy requirement.

Furthermore, based on HDH’s assumptions in respect of net developable area for different site sizes (Table 9.6), the proposed greenspace requirements could not actually physically be delivered on site in many of the scenarios tested.

For example, taking HDH’s density assumption of 35 units per hectare / 14.16 units per net acre for Large Greenfield and Medium Greenfield site typologies, and assuming an average household size of say 2.4 people per unit, each typology would yield a population of c. 34 people net acre. Under Policy RD4, a greenspace provision of 1,798 m2 per net acre (0.44 acres) would be required. On this basis, the policy requires a maximum developable area of 69% across all Large Greenfield and Medium Greenfield site typologies.

As shown in Table 9.6, HDH have adopted a gross:net area assumption of 70% or more depending on site size, meaning that the proposed greenspace policy requirement is not actually deliverable on many of the site typologies assessed by HDH. Accordingly, the results of the viability assessment for these sites do not reflect a policy compliant position and hence the true viability impact of the proposed policy requirements has not been tested by HDH.

Even if the density assumption is reduced to 30 units per hectare / 12.14 units per net acre as per HDH’s assumptions for the majority of the Strategic Sites, the maximum developable area would equate to 72% which is only achievable on sites of 5 hectares or more according to HDH’s gross:net assumptions in Table 9.6

HDH acknowledge that some of their gross:net assumptions do not align with the current drafting of policy RD4 (paragraph 9.16). However, we emphasise that it is crucial to accurately test the viability of emerging policy requirements at the plan-making stage if policy requirements are to be set at a realistic and achievable level. We would therefore request that HDH amend their gross:net area assumptions and/or the greenspace requirements in the current draft policy are amended so that the proposed policy

Page 22 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 requirement can actually be delivered on site and the resulting viability implications can be accurately assessed.

In relation, we note that part 6 of Policy CS(R)3: Housing Supply and Locational Priorities will require a minimum density of 30 dwellings per hectare / 12.14 units per acre on individual sites. Our clients object to the proposed minimum density requirements for the reasons detailed within their overall representations and we note that the proposed greenspace requirements make this density assumption unachievable.

For example, to build 30 homes at the minimum density of 30 units per hectare / 12.14 units per acre would require 2.471 acres of developable land. If the same assumptions set out at paragraph 5.88 above are applied in terms of average household size, a greenspace provision of 1,541 m2 per net acre (0.38 acres) would be required. On this basis, 30 dwellings would need to be built on 2.851 acres of land which equates to a density of 10.5 units per acre.

Under the ‘Parking Standards’ policy heading, HDH state that they have assumed a cost of £300 per unit for electric vehicle charging facilities and that a standard of one charging point per house has been modelled. HDH do not provide any evidence to justify these assumptions and we would again request that such evidence is provided to demonstrate that the appraisal inputs are robust.

Finally, within their viability assessment, HDH have included costs associated with meeting the emerging policy requirement in respect of Lifetime Homes / Accessible and Adaptable space standards and they adopt costs for meeting these standards from the Housing Standards Review – Final Implementation Impact Assessment (DCLG, March 2015).

If HDH are to adopt the costs from this data source, the costs need to be indexed to the date of the viability assessment (May 2019) to account for cost inflation since March 2015. According to the latest BCIS General Building Cost Index, cost inflation between March 2015 and May 2019 equates to c. 12.5%.

Developer’s Profit

A further key issue we have identified within the HDH assessment is the developer’s profit assumptions. The market housing profit assumption of 17.5% of GDV is too low and would not provide a sufficient return to incentivise development in the Halton district. A range of supporting evidence is provided below to clearly illustrate that a developer’s profit (operating margin including overheads) of 20% of market housing GDV is a more appropriate position with a lower profit only justifiable if the scheme is particularly low risk and market conditions are favourable at the point of the assessment.

Firstly, as demonstrated in the tables below, several recent planning appeal decisions support a profit level of 20% of GDV where the applicants each provided market facing evidence to support the adopted figure. We highlight the following Planning Inspectorate appeal decisions and recent CIL Charging Schedule examinations, including examinations after the introduction of the PPG for Viability in July 2018, whereby a developer’s profit of 20% of GDV for market housing has been deemed appropriate: CIL Charging Schedule Examinations

Developer's Profit (including CIL Report Date Reference Examiner Para. Overheads) for Private Housing Waverley 28/09/2018 PINS/R3650/429/9 Philip Staddon 39 20% of GDV Gloucester, Elizabeth C 31/07/2018 PINS/B1605/429/1 34 20% of GDV Cheltenham Ord

Page 23 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

and Tewksbury William Cotswold 05/06/2018 PINS/F1610/429/1 19 20% of GDV Fieldhouse Basingstoke 20/02/2018 PINS/H1705/429/5 Louise Nurser 30 20% of GDV and Deane Tamworth 13/02/2018 PINS/G4240/429/7 Yvonne Wright 27 20% of GDV Michael Warwick 23/10/2017 PINS/T3725/429/6 13 20% of GDV Hetherington Cheshire West 15/06/2017 PINS/A0655/429/5 Mike Hayden 29 20% of GDV and Chester Bradford 20/12/2016 PINS/W4705/429/8 Louise Nurser 28 20% of GDV

Appeal Decisions

Developer's Planning Profit (including Appeal Case Appeal Date Reference Para. Inspector Overheads) for Private Housing Brendan Selby 02/11/2016 APP/N2739/S/16/3149425 40 20% GDV Lyons Martin Hampshire 02/03/2016 APP/B1740/W/15/3130227 12 20% GDV Andrews Shinfield 08/01/2013 APP/X0360/A/12/2179141 Clive Hughes 44 20% GDV

Further to this, from our experience, few volume housebuilders will sanction a land purchase which does not show a minimum of 20% profit on GDV. This is evidenced from the following schedule of gross profit margins and operating margins as extracted from recent company accounts:

House Builder Gross Margin Overheads Operating Margin

Bellway 25.80% 3.80% 22.00% Persimmon 27.80% 3.00% 24.80% Taylor Wimpey 24.80%* 4.70%* 20.80% Redrow 25.00% 5.50% 19.50% Average 25.85% 4.25% 21.80% * 2015 Figures Source: Housebuilders Annual Statements 2016/2017

House Builder Gross Margin Overheads Operating Margin

Bellway 25.85% 3.50% 22.35% Persimmon 30.05% 3.50% 26.55% Taylor Wimpey 26.00% 4.90% 21.10% Redrow 24.40% 5.00% 19.40% Average 26.60% 4.25% 22.35%

Source: Housebuilders Annual Statements 2017/2018

House Builder Gross Margin Overheads Operating Margin

Bellway 25.50% 3.40% 22.10%

Page 24 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

House Builder Gross Margin Overheads Operating Margin

Persimmon 31.70% 2.75% 28.95% Taylor Wimpey 26.30% 4.90% 21.40% Redrow 24.40% 4.50% 19.90% Average 27.00% 3.90% 23.10%

Source: Housebuilders Annual Statements 2018/2019 All figures in the above tables have been rounded to the nearest 5 basis points.

Furthermore, it is important to note that various market and policy factors have resulted in increased development risk over the preceding 12 months which further indicate that a higher profit level of 20% is entirely justifiable in current conditions.

Firstly, it is widely acknowledged that there has been a general slowdown in the residential market as a result of affordability issues and the increasing uncertainty driven by the ongoing Brexit negotiations. Brexit-related sentiment is negatively impacting on purchaser confidence, demand and house prices across the UK as reported by the RICS in their recent Residential Market Surveys over previous months.

Moreover, there is still no clarity regarding the terms of a Brexit deal and if indeed a deal will be agreed. We would caution that a disruptive Brexit has the potential to further adversely impact on buyer confidence and demand which would increase the sales risk.

Secondly, there have been key policy changes since March 2018 particularly the Help to Buy reforms commencing from 2021 whereby regional price caps will be introduced and the scheme will be limited to first time buyers only. Perhaps most significantly, the Government has confirmed that the Help to Buy scheme will end in 2023 with no confirmation that any new policies will be introduced to replace the scheme.

As reported by the National Audit Office in their recent publication ‘Help to Buy: Equity Loan Scheme – Progress Review’ (dated June 2019), the Help to Buy scheme has been a key driver of activity in the new build sales market. According to the report, the scheme has supported a substantial number of new build house purchases (c. 38% of all new build sales) with the number of new build property sales per year increasing by c. 70% since the scheme was introduced in 2013. Evidently, therefore, the scheme is crucial in supporting demand for new homes by providing financial assistance to help prospective homeowners obtain a mortgage.

As such, the impending restrictions, followed by the removal of the scheme, have the potential to significantly impact on the new build residential market by reducing purchaser demand for new housing. Many new build residential units within Halton will be delivered when the restrictions are introduced and after the Help to Buy scheme has ended. In our opinion, this significantly increases the sales risk associated with the delivery phase and further justifies a higher profit level than that assumed by HDH.

Therefore, having considered the supporting appeal decisions, CIL examinations and the housebuilder profit margins, together with current residential market conditions, we believe a developer’s profit (including overheads) of 20% of market housing GDV is fully justified to ensure development remains attractive and deliverable in the Halton district. We therefore recommend that HDH adopt a more market- facing position and alter the developer’s profit assumption within the Whole Plan viability assessment.

Benchmark Land Value

A further key issue we have identified is the benchmark land values adopted within the Whole Plan viability assessment. To determine the benchmark land values, HDH adopt the EUV plus premium

Page 25 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 approach (EUV+) in accordance with the PPG for Viability which is welcomed. When adopting this approach, it is crucial that the premium to the landowner adequately reflects the development potential of the land and the hope value any reasonable landowner would see in their site.

HDH assume benchmark land values of c. £191,000 per gross acre for greenfield sites (based on an EUV of c. £9,000 per acre and a premium of 20 x EUV) and c. £170,000 per gross acre for brownfield sites (based on an EUV of c. £142,000 per acre and a premium of 20%).

We note that HDH have increased the assumed benchmark land values from those adopted in their April 2019 pre-consultation draft viability assessment where benchmark land values of c. £110,000 per gross acre and c. £146,000 per gross acre were assumed for greenfield and brownfield land respectively.

We have assessed the revised benchmark land values assumed by HDH on a per net acre basis for each strategic site and each site typology using the areas stated in HDH’s appraisals (Appendix 11) as shown in the table below:

Gross Area Net Area BLV per BLV per Net Site Typology BLV (Acres) (Acres) Gross Acre Acre

Strategic Sites Site 1 44.92 31.43 £8,590,050 £191,218 £273,298 Site 2 95.73 67.01 £18,304,650 £191,218 £273,149 Site 3 51.84 36.30 £9,913,050 £191,218 £273,094 Site 4 69.41 49.99 £13,272,525 £191,218 £265,512 Site 5 105.19 73.64 £20,114,325 £191,218 £273,160 Site 6 47.20 33.90 £9,024,750 £191,218 £266,200 Site 7 35.56 26.12 £6,799,275 £191,218 £260,324 Average £191,218 £269,248 Greenfield Typologies Large Greenfield 300 30.25 21.18 £5,783,400 £191,218 £273,105 Large Greenfield 150 15.12 10.60 £2,891,700 £191,218 £272,787 Large Greenfield 75 6.62 5.29 £1,266,300 £191,218 £239,469 Medium Greenfield 40 3.14 2.82 £600,075 £191,218 £213,024 Medium Greenfield 20 1.56 1.41 £297,675 £191,218 £211,346 Medium Greenfield 12 0.89 0.89 £170,100 £191,218 £191,218 Average £191,218 £233,492 Brownfield Typologies Large Brownfield 300 23.52 16.48 £3,998,400 £169,972 £242,598 Large Brownfield 150 10.30 8.23 £1,751,400 £169,972 £212,847 Large Brownfield 75 5.14 4.13 £873,600 £169,972 £211,701 Medium Brownfield 40 2.45 2.20 £415,800 £169,972 £189,070 Medium Brownfield 20 1.21 1.09 £205,800 £169,972 £189,287 Medium Brownfield 12 0.67 0.67 £113,400 £169,972 £169,972 Average £169,972 £202,579

As the table illustrates, the assumed benchmark land values adopted by HDH range from c. £200,000 - £270,000 per net acre (on average) for the strategic sites and the different site typologies.

Firstly, we do not agree with the differentiation in benchmark land values for greenfield and brownfield land. HDH do not provide any evidence to illustrate that a landowner of a greenfield site would be willing to release their land for a lower value than the owner of a brownfield site.

Page 26 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Secondly, in our opinion, the adopted land values are still too low particularly for the mid-high and higher value areas of the district where these values would not provide a sufficient incentive for a landowner to release their sites for development. This is particularly the case given that HDH’s values are based on the assumption of no abnormal costs. We provide further comment on this key issue in the following paragraphs of this report.

If benchmark land values are set at the level assumed by HDH, not only will the viability of development be overstated and policy requirements set at unrealistic levels, there is also a significant risk that development would stall in Halton as landowners would not bring their sites forward for development. This is because all site-specific viability assessments in Halton would have to be based on the benchmark land values adopted at the plan-making stage as set out in the PPG for Viability, with the onus on the applicant to successfully challenge the unrealistic land value assumptions at the decision- making stage.

To further support our argument, we highlight the benchmark land values adopted in other Local Plan / CIL viability assessments across the North West which we have reviewed as shown below*:

• Cheshire West and Chester CIL Economic Viability Study (October 2015): £150,000 – £500,000 per net acre

• Cheshire East CIL Charging Schedule Viability Assessment (August 2017): £150,000 – £650,000 per net acre

• West Lancashire Local Plan Viability Assessment: Methodology and Assumptions Consultation (October 18): £150,000 – £500,000 per net acre

*The adopted values vary depending on the Value Area of the site.

To benchmark against the other studies on a ‘like-for-like’ basis, we have taken the average of HDH’s market revenue assumptions across the seven site typologies which equates to c. £2,315 psm / £215 psf and we have compared against the benchmark land values adopted in similar Value Areas in the other recent area-wide Local Plan / CIL viability assessments in the North West. This analysis is shown below:

Local Plan / CIL Viability Value Area / Assumed Sales Benchmark Land Value Assessment Values

Cheshire East CIL Viability Mid Value Areas Assessment £350,000 per net acre £210 psf sales values (Aug 2017)

Cheshire West Local Plan Part 2 Mid Value Areas £350,000 per net acre Viability Assessment (Dec 2017) £215 psf sales values

West Lancashire Local Plan Viability Assessment: Outer Skelmersdale, Up Holland £300,000 per net acre Methodology and Assumptions £210 psf sales values Consultation (Oct 18)

As the table illustrates, the benchmark land values adopted in other viability assessments are above those assumed by HDH based on their average market housing revenue assumptions. This provides good supporting evidence to suggest that the benchmark land values assumed by HDH are too low.

We also draw attention to the benchmark land values adopted in the Review of CIL Potential Final Draft Report (DTZ November 2014) which are referenced by HDH and are set as follows:

Page 27 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Although the report is somewhat dated and was prepared prior to the revised NPPF and PPG for Viability, these land values are still far above the values currently proposed by HDH and, in our opinion, represent a more realistic assessment of benchmark land value for development land in Halton. We also note that development land values have only increased since November 2014 as shown in the graph below from the latest Savills Residential Development Land Market Report (July 2019):

Source: Savills (2019)

The continued long-term trend of increasing land values only serves to support higher benchmark land values than those assumed in the CIL Report.

Importantly, we note that the CIL Report assumes different benchmark land values for the different value areas within the Halton district which is a similar approach to that adopted in other Local Plan / CIL viability assessments we have reviewed as shown at paragraph 5.116 above. In contrast, HDH assume a single benchmark land value for all greenfield and brownfield sites across the region.

This mirrors the HDH ‘blanket’ approach to assessing revenue as outlined above and again we believe it is vital that a more nuanced approach is adopted, with higher benchmark land values applied to higher value areas and vice-versa. This is crucial to ensure that the viability assessment is market-facing and more accurately reflects the value of development land across the Halton district.

Furthermore, and perhaps most importantly, at paragraph 7.17 of their report, HDH state that all abnormal costs should be deducted from the assumed benchmark land values to ‘balance’ the abnormal costs on both sides of the appraisal. This would result in much lower benchmark land value figures than

Page 28 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

those currently assumed by HDH and would undoubtedly tip the benchmark land values past the point of providing a sufficient incentive to the landowner to release their site for development.

To illustrate the impact on land value, we have applied a modest abnormal cost assumption of £10,000 per plot / £140,000 per net acre (assuming an average density of 14 units per net acre) to HDH’s assumed benchmark land values, and we have then applied a more reasonable assumption of £20,000 per plot / £280,000 per net acre. Applying these abnormal costs would reduce HDH’s assumed benchmark land values to a very low value and/or negative position as shown below:

BLV per Net Acre BLV per Net Acre Gross BLV per Net Area BLV per Net Assuming £10k Assuming £20k Site Typology Area BLV Gross (Acres) Acre per Plot per Plot (Acres) Acre Abnormal Costs Abnormal Costs

Strategic Sites

Site 1 44.92 31.43 £8,590,050 £191,218 £273,298 £133,298 -£6,702

Site 2 95.73 67.01 £18,304,650 £191,218 £273,149 £133,149 -£6,851

Site 3 51.84 36.30 £9,913,050 £191,218 £273,094 £133,094 -£6,906

Site 4 69.41 49.99 £13,272,525 £191,218 £265,512 £125,512 -£14,488

Site 5 105.19 73.64 £20,114,325 £191,218 £273,160 £133,160 -£6,840

Site 6 47.20 33.90 £9,024,750 £191,218 £266,200 £126,200 -£13,800

Site 7 35.56 26.12 £6,799,275 £191,218 £260,324 £120,324 -£19,676

Average £191,218 £269,248 £129,248 -£10,752

Greenfield Typologies

Large Greenfield 300 30.25 21.18 £5,783,400 £191,218 £273,105 £133,105 -£6,895

Large Greenfield 150 15.12 10.60 £2,891,700 £191,218 £272,787 £132,787 -£7,213

Large Greenfield 75 6.62 5.29 £1,266,300 £191,218 £239,469 £99,469 -£40,531

Medium Greenfield 40 3.14 2.82 £600,075 £191,218 £213,024 £73,024 -£66,976

Medium Greenfield 20 1.56 1.41 £297,675 £191,218 £211,346 £71,346 -£68,654

Medium Greenfield 12 0.89 0.89 £170,100 £191,218 £191,218 £51,218 -£88,782

Average £191,218 £233,492 £93,492 -£46,508

Brownfield Typologies

Large Brownfield 300 23.52 16.48 £3,998,400 £169,972 £242,598 £102,598 -£37,402

Large Brownfield 150 10.30 8.23 £1,751,400 £169,972 £212,847 £72,847 -£67,153

Large Brownfield 75 5.14 4.13 £873,600 £169,972 £211,701 £71,701 -£68,299

Medium Brownfield 40 2.45 2.20 £415,800 £169,972 £189,070 £49,070 -£90,930

Medium Brownfield 20 1.21 1.09 £205,800 £169,972 £189,287 £49,287 -£90,713

Medium Brownfield 12 0.67 0.67 £113,400 £169,972 £169,972 £29,972 -£110,028

Average £169,972 £202,579 £62,579 -£77,421

If HDH’s approach is followed, in many instances a landowner would receive a very low or zero value for their sites. This does not accord with the PPG for Viability and such values will not provide any landowner with sufficient incentive to release their land. As a consequence, development will stall as sites will have abnormal costs.

Page 29 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

We acknowledge that the PPG for Viability states that the benchmark land value should reflect the implications of abnormal costs. However, if these deductions lead to land values which mean landowners will not sell, then this conflicts with the PPG.

As outlined above, all residential sites will have abnormal costs (even those sold as a fully serviced plot by a master developer as even these sites require bespoke plot abnormal costs eg. abnormal foundations, and you cannot ignore the abnormal costs (eg. remediation) which have been incurred by the master developer), with some higher than others depending on the site-specific characteristics and condition of the ground.

Accordingly, the adopted benchmark land values must reflect an element of abnormal costs and only in circumstances where abnormal costs are particularly high should the benchmark land value be adjusted to reflect these costs.

If HDH’s approach of deducting the abnormal costs from the benchmark land value is to be adopted, the benchmark land values must be set at a realistic level to allow for abnormal costs to be deducted and for the resultant benchmark land values to remain at a reasonable level which provides landowners with a sufficient incentive to release sites for development.

In further support of our position, it is also worth highlighting the sample of recent net residential development land transactions from within the borough presented by HDH at Table 6.2. The comparables vary in terms of development proposals (to include apartments and standard estate housing schemes), size and location which is reflected in the wide range of achieved values. Importantly, HDH do not investigate the abnormal costs associated with each site. However, the average net land value excluding the outliers equates to c. £400,000 per gross acre and c. £28,000 per plot.

Accordingly, the average net land value after deduction of site-specific abnormal costs is c. 109% greater than the assumed benchmark land value for greenfield sites before any site-specific abnormal costs, and c. 135% greater than the assumed benchmark land value for brownfield sites with only a nominal allowance for abnormal costs. This differential would be even greater once the actual site abnormal costs are deducted from HDH’s assumed benchmark land values and shows that the land values do not align with the market evidence.

In summary, therefore, we believe the evidence we have presented illustrates that the benchmark land values adopted by HDH are too low. Furthermore, HDH have adopted a simplistic approach whereby they do not differentiate the land value by value area, meaning that the viability of sites within many areas of Halton will be significantly overstated based on the assumed benchmark land values.

In terms of HDH’s assumptions for establishing the benchmark land value for brownfield sites, we believe the assumed EUV for industrial land is too low having regard to HDH’s own evidence they have presented and the advice we have obtained from our in-house industrial agents. For example, we highlight the CoStar industrial land data presented by HDH at Appendix 9 of their report which suggests average industrial land values of c. £355,000 per acre according to the HDH analysis. This is considerably above the EUV of c. £141,000 per acre assumed by HDH.

In addition, we have consulted our in-house industrial agents who have extensive experience of industrial land values in the North West region. We are aware that market conditions in the industrial sector are currently very strong with favourable supply / demand dynamics and our agents have advised that the EUV of industrial land in the Runcorn / Widnes area is currently c. £225,000 – £250,000 per acre.

Turning to the greenfield / agricultural land value assumptions, we are in agreement with the EUV of c. £9,000 per acre however we consider that the premium assumed by HDH is insufficient to incentivise a

Page 30 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 landowner to release their land for development particularly if the assumed value does not reflect any abnormal costs.

To provide evidence to determine the premium to which the landowner is reasonably entitled, we firstly refer to a Secretary of State judgment pertaining to the matter of benchmark land value dated 20th March 2015 relating to Pinn Court Farm, Exeter (Reference: APP/U1105/A/13/2208393). In paragraph 16 of the Secretary of State Determination, he stated that:

“On the basis … the landowners would receive about 20 times the agricultural land value but the Secretary of State agrees with the Inspector that this would be insufficient to incentivise the landowner to sell”

This is in reference to the Inspector’s decision dated 22nd December 2014, at paragraph 162:

“In view of the lower value of agricultural land in comparison with residential land, it is reasonable to expect a substantial uplift in order for the landowner to be willing to sell.”

And further at paragraph 168, whereby the Inspector concluded that:

“On the basis … the landowners would receive about 20 times the agricultural land value. However, in my opinion this would be insufficient to incentivise the landowner to sell, based on the best available comparable evidence.”

Consideration has to be given to this Secretary of State decision, and we would conclude that if the previously suggested benchmark of 20 times agricultural value was insufficient, then the benchmark land value must be approximately 25 to 30 times or more of the agricultural value to incentivise a landowner to release their land.

In addition, we have also had regard to the landowner premiums adopted in other area-wide CIL viability assessments which were accepted and have been found sound by Inspectors at the Examination stage, including studies undertaken after the publication of the revised PPG for Viability in July 2018.

In the Waverley Borough Council CIL Charging Schedule Examination Report (September 2018), the Examiner accepted a benchmark land value for agricultural land in excess of 20 – 30 times EUV in order to provide an appropriate premium to incentivise landowners to release their sites for development.

Additionally, in the Cotswold District Council CIL Charging Schedule Examination Report (June 2018), the premium adopted in the viability assessment of 20 x agricultural EUV was deemed unrealistically low by the Examiner. He asserted that a benchmark land value of £700,000 per hectare / £283,000 per acre was necessary to ensure that landowners do not become unwilling to sell their land for residential development, equating to 28 x agricultural EUV.

We acknowledge that the assessment of benchmark land value is a difficult issue and the PPG does not provide sufficient detailed guidance as to how the premium above EUV should be determined. The premium is a subjective assessment based on market experience and dialogue with stakeholders currently active in the market.

Nevertheless, we strongly encourage all LPA appointed consultants to engage with landowners, site promoters and developers to understand, in light of the significantly higher value of residential development land with planning permission in comparison to current EUVs, if a benchmark land value of c. £60,000 – £130,000 per net acre (based on abnormal costs of c. £10,000 per plot) would be sufficient to incentivise a landowner to release their land for development. If the abnormal costs are higher than £10,000 per plot, which will undoubtedly be the case for many sites, the benchmark land value will fall to a negative figure as shown in the table at paragraph 5.124.

Page 31 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

As emphasised above, we believe these benchmark land values are far too low and will result in the viability of development being significantly overstated. Policy requirements will subsequently be set at an unrealistic and undeliverable level which will lead to delays in sites being brought forward for development due to the need for time-consuming and protracted viability negotiations at the application stage.

Furthermore, both we and our clients are highly concerned that if such low benchmark land values are adopted within the Whole Plan viability assessment, landowners will have no incentive to bring sites forward for development which will fundamentally constrain the delivery of new homes in the local area. This, in turn, will impact on the ability of the LPA to meet their required housing delivery targets which increases the risk of the presumption in favour of sustainable development being introduced in Halton.

Self Build Policy

At paragraphs 10.70 – 10.75 of their viability assessment, HDH comment on the potential for introducing a self-build policy within Halton. HDH conclude that it is unlikely that proposed policy requirement for 5% self-build units on sites of 20 units or more will adversely impact on viability.

We have identified several issues associated with HDH’s assumptions in respect of self-build units. Firstly, HDH state that a review of plots for sale in the wider area suggests that small infill plots achieve values ‘generally around £100,000 but can be less than this at around £75,000’. HDH do not appear to have provided any supporting evidence to substantiate these comments as we cannot locate the data from their review of plots in the wider area.

In our opinion, a plot value of £100,000 is extremely high particularly in the lower values areas of Halton such as west of Widnes and parts of Runcorn. Furthermore, this value assumes no plot-specific abnormal costs which would need to be deducted to calculate the actual net receipt from the plot sale.

HDH suggest that by aggregating this plot value across the entire site, the land value would be in the order of c. £1,200,000 per acre. Evidently this is an entirely flawed assumption as land does not transact at this level of value in the Halton area.

In addition, we have reviewed the appraisals attached at Appendix 11 of the viability assessment and we cannot identify if and where the self-build units have been included in the appraisals for sites of 20 units or more. There is no clarity regarding the values and costs assumed by HDH for the self-build units nor the resulting impact on viability.

At present, therefore, HDH have not provided sufficient evidence to substantiate their assumptions for the self-build units and it appears that HDH have not actually tested the viability of this policy requirement but have undertaken a high level analysis only, from which only high level conclusions can be drawn.

Accordingly, we would ask HDH to provide detailed evidence to justify their assumptions in terms of self- build plot values and costs, and to provide the viability appraisals including the 5% self-build units to demonstrate that this policy requirement will not adversely impact on development viability. Only with this information can the reasonableness of this policy requirement be assessed.

Secondly, and perhaps most importantly, there is a significant question as to whether there is actual housing need and demand for self build units in Halton. Perhaps, in the more affluent locations, there may be purchaser interest however we would ask both HDH and the Council to provide firm evidence of the need for self build units within Halton before introducing any requirements for self-build units on residential sites.

Thirdly, if HDH can prove that there will be no adverse impact on viability using robust evidence and the self-build policy is to be implemented, there needs to be a robust delivery mechanism which includes

Page 32 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 clear provisions to address the scenario in which the self-build plots have not sold as the site nears practical completion.

If self-build plots are pepper-potted throughout the site, a developer could be left with vacant building plots dispersed throughout their site with no end user. The practical implementation of this policy therefore needs careful consideration to ensure no adverse impact on residential developers. We believe there is a risk that the self-build policy may deter developers from acquiring land in the district with subsequent implications for the supply of new housing.

Community Infrastructure Levy

HDH state that one purpose of the Whole Plan viability assessment is to review the scope for introducing CIL in Halton. Based on the results of the assessment, HDH recommend that the Council’s affordable housing targets are lowered. As such, HDH state that they are not pursuing the introduction of CIL as this would require lower affordable housing targets to be considered.

Both we and our clients are in agreement with this conclusion, and we would emphasise that if CIL is introduced in Halton in the future, this would negatively impact on site viability and would require other policy requirements to be reduced including those for affordable housing. Affordable Housing Policy Recommendations

Based on the findings of the viability assessment, HDH recommend the following affordable housing targets across the Halton district:

• Brownfield sites – 0%

• Strategic sites – 20%

• Greenfield sites – 25%

In our opinion, the 0% affordable housing target for brownfield sites is appropriate however we still emphasise that HDH have overstated the viability of these sites for the reasons detailed throughout this note, including the very low abnormal cost allowance and the assumed low benchmark land values for brownfield sites. Accordingly, we believe that in many instances, there may still need to be a flex in other policy requirements in order to facilitate the delivery of brownfield sites across the Halton district.

As demonstrated throughout this report, we believe that HDH have fundamentally overstated the viability of Strategic Sites and greenfield sites, particularly through the exclusion of abnormal costs for these site typologies and the assumed low benchmark land values.

Based on the findings of our analysis, we consider that the affordable housing targets for Strategic Sites and greenfield sites are not realistic or achievable. This is because the targets have been determined based on a viability assessment which adopts inappropriate and/or insufficiently evidenced cost and revenue assumptions which do not reflect a market facing position. As a consequence, the viability of development has been significantly overstated and the affordable housing targets have been set at an unrealistic level.

We believe that if such targets are imposed, there is a significant risk that the delivery of strategic and greenfield sites across Halton will be compromised which will have subsequent implications for housing supply and meeting local housing need.

We would therefore strongly recommend that the affordable housing policy requirements are reassessed once HDH have appropriately addressed the issues raised within this note. This will enable HDH to

Page 33 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019 produce a more accurate and realistic assessment of site viability which will facilitate the setting of more reasonable and achievable policy requirements which do not compromise site deliverability.

Page 34 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

6. Conclusions

To conclude, both we and our clients believe there are numerous issues associated with the assumptions and inputs currently adopted in the HBC Whole Plan viability assessment prepared by HDH.

Given the increased importance of the Local Plan viability assessment in the decision-making process, it is imperative that the adopted assumptions are realistic and market-facing to ensure that the viability of development is accurately tested. This will support the setting of reasonable and deliverable policy requirements and will help to reduce the number of site-specific viability assessments at the application stage in accordance with the aspirations of the PPG for Viability.

As illustrated throughout this report, however, it is evident that there are numerous unrealistic assumptions currently adopted within the HDH viability assessment which do not reflect a market-facing position, particularly the approach to assessing market housing and affordable housing revenues, the understated abnormal cost assumptions and the understated benchmark land value assumptions.

In our opinion, if the current inputs are adopted, the Whole Plan viability assessment will not provide an accurate or robust assessment of site viability and will result in policy requirements being set at unrealistic levels. This will lead to delays in sites being brought forward for development and housebuilders / landowners will incur costs in challenging the inaccurate assumptions at the application stage and negotiating more reasonable policy requirements based on the true viability of the site.

Furthermore, if applicants are unsuccessful in challenging the assumptions, particularly the very low benchmark land values assumed by HDH, there is a significant risk that the Whole Plan viability assessment will constrain the supply of land and new development in Halton as landowners will simply have no incentive to release their sites for development.

We therefore respectfully request that our comments are given appropriate consideration in the consultation process. We believe that the suggested amendments will help to support a more robust and market-facing Whole Plan viability assessment which does not compromise site deliverability.

Signed for and on behalf of Cushman & Wakefield Debenham Tie Leung Limited

Derek Nesbitt, MRICS APAEWE Hannah Gradwell, MRICS Partner Surveyor RICS Registered Valuer RICS Registered Valuer +44 (0)161 455 3790 +44 (0)161 455 3772 [email protected] [email protected]

Date: September 2019

Page 35 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Appendix 1 – C&W Standard Build Costs Analysis – Housing Viability Assessments North West

Page 36 C&W Build Cost Analysis - Housing Viability Assessments North West

Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Date of Viability Assessment May-16 Date of Viability Assessment Jul-16 Date of Viability Assessment Aug-17 Date of Viability Assessment Apr-18 Date of Viability Assessment Apr-18 Date of Viability Assessment Sep-18 Unit Numbers 182 Unit Numbers 70 Unit Numbers 146 Unit Numbers 199 Unit Numbers 75 Unit Numbers 197 Total sq ft 243,632 Total sq ft 58,532 Total sq ft 125,114 Total sq ft 190,954 Total sq ft 88,751 Total sq ft 211,834 Average Unit Size 1,339 Average Unit Size 836 Average Unit Size 857 Average Unit Size 960 Average Unit Size 1,183 Average Unit Size 1,075 Average Market Housing Revenues n/a Average Market Housing Revenues £180 Average Market Housing Revenues £200 Average Market Housing Revenues £207 Average Market Housing Revenues £221 Average Market Housing Revenues £213 Land Registry HPI NW Growth - Land Registry HPI NW Growth 9% Land Registry HPI NW Growth 4% Land Registry HPI NW Growth 4% Land Registry HPI NW Growth 4% Land Registry HPI NW Growth 1% Indexed Avg Market Housing Revenues n/a Indexed Avg Market Housing Revenues £196 Indexed Avg Market Housing Revenues £207 Indexed Avg Market Housing Revenues £215 Indexed Avg Market Housing Revenues £230 Indexed Avg Market Housing Revenues £214 Cost Element £ per sq. ft. Cost Element £ per sq. ft. Cost Element £ per sq. ft. Cost Element £ per sq. ft. Cost Element £ per sq. ft. Cost Element £ per sq. ft. Base Build Cost inc. Prelims £67.80 Base Build Cost inc. Prelims £68.90 Base Build Cost inc. Prelims £85.50 Base Build Cost inc. Prelims £79.27 Base Build Cost inc. Prelims £74.40 Base Build Cost inc. Prelims £75.22 Ext. Works within Curtilage (inc. garages) £8.13 Ext. Works within Curtilage £6.05 Road Site Works £6.56 Ext. Works within Curtilage £6.14 Ext. Works within Curtilage £7.39 Ext. Works within Curtilage £4.77 Standard Roads and Sewers £8.60 Standard Roads and Sewers £11.85 Foundations £2.63 Standard Roads and Sewers £9.00 Standard Roads and Sewers £11.90 Standard Roads and Sewers £11.24 Utilities (Services) £2.68 Utilities (Services) £4.29 Utilities (Services) £2.63 Utilities (Services) £3.74 Utilities (Services) £3.03 Utilities (Services) £3.33 Garages and Car Ports £1.26 Garages £3.69 Garages £4.46 Garages £3.81 All In Standard Build Costs (psf) £87.21 All In Standard Build Costs (psf) £92.35 All In Standard Build Costs (psf) £97.31 All In Standard Build Costs (psf) £101.84 All In Standard Build Costs (psf) £101.18 All In Standard Build Costs (psf) £98.37 Cost Inflation based on BCIS General BCI 11% Cost Inflation based on BCIS General BCI 11% Cost Inflation based on BCIS General BCI 6% Cost Inflation based on BCIS General BCI 3% Cost Inflation based on BCIS General BCI 3% Cost Inflation based on BCIS General BCI 1% Indexed All in Standard Build Costs (psf) £97.06 Indexed All in Standard Build Costs (psf) £102.33 Indexed All in Standard Build Costs (psf) £102.77 Indexed All in Standard Build Costs (psf) £105.31 Indexed All in Standard Build Costs (psf) £104.63 Indexed All in Standard Build Costs (psf) £99.48

*The above costs are before contingency and professional fees Overall Average (£ psf) (Indexed to May 2019) £102 Halton Borough Council: Whole Plan Viability Assessment Cushman & Wakefield Technical Note September 2019

Appendix 2 – Terms of Engagement

Page 37

CUSHMAN & Ill 1111111 WAKEFIELD Services Schedule - Consultancy

Type of Instructions: Viability Assessment

Initial Representation to Halton Borough Council Whole Plan Viability Assessment pre- Property Details: consultation draft

The Client has instructed C&W to: Client Instructions: (a) Provision of initial representation to Halton Borough Council Whole Plan Viability Assessment pre-consultation draft

Included in the Services are:

(a) Initial representation on behalf of Redraw Homes Limited in respect of Halton Borough Council's Whole Plan Viability Assessment pre-consultation draft Excluded from the Services are: (a) making any enquiries of local or any other authorities or any investigation of title relating to a Property; Scope of Services: (b) investigation of the history of a Property or adjoining properties or establishing the possibility of the existence or contamination of, in or near, a Property; (c) management of a Property, including without limitation, any security, insurance, maintenance or repair arrangements; (d) making any structural survey or testing any services at a Property; and (e) the provision of valuation advice (any information provided by C&W in respect of a potential rent or premium is not intended to be, and will not represent, any formal opinion of value)

£1,000. Fees: This fixed fee does not include VAT and incidental expenses which shall also be payable in accordance with the Terms of Business.

Anticipated Expenses: N/A

Please see attached our Cushman & Wakefield Terms of Business (UK) - Version 2.01 Terms of Business: (May 2018)

Version 1.01 (April 2017) No.1 Marsden Street Manchester, M2 1HW Tel +44 (0) 161 236 9595 Fax +44 (0) 161 228 7097 cushwake.com

Brigid Dodds Taylor Wimpey Strategic Land Washington House Birchwood Park Warrington Cheshire WA4 6GR

15 August 2019

Dear Brigid,

Halton Borough Council Whole Plan Viability Assessment

We are delighted that you have chosen Cushman & Wakefield to work with you in relation to the above matter. The schedule to this letter details the services we will provide, the basis of our appointment, our fees and anticipated expenses, together with other information relevant to our services (the "Services Schedule" and together with this letter, the "Engagement Letter").

Enclosed are our standard terms of business containing exclusions and limitations on our liability and detailing our respective obligations (the "Terms of Business") which, together with the Engagement Letter, comprise the terms of our engagement (the "Engagement"). Please take a moment to check that you are happy with the contents of the Engagement Letter, the Services Schedule and the Terms of Business and understand the basis of the Engagement.

I will have overall responsibility for the provision of our services to you, assisted by Hannah Gradwell, MRICS. Hannah will be your first point of contact on this matter.

I should be grateful if you would return a signed and dated a copy of the Engagement Letter as soon as possible to confirm that you accept the basis of the Engagement. Please be aware that your continuing instructions in relation to this matter will amount to your acceptance of the terms of the Engagement. If there is any matter that requires clarification please do not hesitate to contact me.

Yours sincerely,

Derek Nesbitt, MRICS APAEWE Partner RICS Registered Valuer For and on behalf of Cushman & Wakefield Debenham Tie Leung Limited Direct: +44 (0)161 455 3790 Mobile: +44 (0)7747 008426 [email protected]

Cushman & Wakefield Debenham Tie Leung Limited, 125 Old Broad Street, London EC2N 1AR. Registered in England & Wales with registration number 02757768. Regulated by RICS. Cushman & Wakefield Debenham Tie Leung Limited is an appointed representative (FRN: 481082) of DTZ Insurance Services Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 477013). VAT No. GB 466425139.

Acceptance of Cushman & Wakefield Engagement Letter and Terms of Business

I have read the Engagement Letter (including the Services Schedule and incorporating the Cushman & Wakefield Terms of Business (Version 2.01 – May 2018) and hereby accept the terms and confirm this Engagement.

______Date: ______18/09/19 ______Brigid Dodds Strategic Land and Planning Manager For and on behalf of Taylor Wimpey Strategic Land

CUSTOMER INFORMATION FORM

COMPANY & VAT INFORMATION

Company or Entity: LLP  PLC – Listed  Local Central Government  PLC – Not Listed  Limited  Private Individual  Overseas Registered Company  Private Unlimited Company  Partnership  Registered Charity  Pension Scheme  Sole Trader  Trust  Full Trading Name:

Full Address:

Company Registration No:

VAT No:

Company Registered Address:

Contact Name:

Contact Telephone No:

Email Address:

ACCOUNTS PAYABLE INFORMATION

Address (including postcode):

Contact Name:

Contact Telephone No:

Email Address:

Purchase Order Number (if

applicable):

SPECIFIC BILLING INSTRUCTIONS (Please use this section to identify any specific billing requirements):

Services Schedule – Consultancy

Type of Instructions: Viability Assessment Technical Note

Property Details: Halton Borough Council Whole Plan Viability Assessment

The Client has instructed C&W to:

Client Instructions: (a) Provide a technical note on the Halton Borough Council Whole Plan Viability Assessment to inform Taylor Wimpey’s overall representation to the Halton Local Plan

Included in the Services are: (a) Written technical note on the Halton Borough Council Whole Plan Viability Assessment Excluded from the Services are: (b) VAT and reasonable project related disbursements; Scope of Services: (c) Assumed that all existing and required supporting information will be provided by Taylor Wimpey at nil cost; (d) Assumed that all supporting technical work undertaken by third party consultants as required will be contracted and paid for by Taylor Wimpey; and (e) The provision of valuation advice (any information provided by C&W in respect of a potential rent or premium is not intended to be, and will not represent, any formal opinion of value).

Fees: This fixed fee does not include VAT and incidental expenses which shall also be payable in accordance with the Terms of Business.

Anticipated Expenses: N/A

Please see attached our Cushman & Wakefield Terms of Business (UK) - Version 2.01 Terms of Business: (May 2018)

Version 1.01 (April 2017) 1 Cushman & Wakefield Terms of Business (UK)

referenced and/or attached to the Engagement Letter shall 1. Client Engagement form part of it; 1.1 The Client appoints C&W to provide services on these Terms "Fees" means the amounts specified as payable in the of Business and the terms set out in the Engagement Letter. Engagement Letter, or otherwise calculated in accordance Each Engagement Letter forms a discrete contract with the Engagement Letter; incorporating the latest version of these Terms of Business that have been provided to the Client (together an/the "Intellectual Property Rights" means patents, trade marks, "Engagement"). design rights, applications for any of the foregoing, copyright, database rights, trade or business names, domain names, 1.2 The entire scope of the services to be provided as part of an website addresses, whether registrable or otherwise, Engagement ("Services") is set out in the Engagement (including applications for and the right to apply for Letter. Nothing shall bind C&W to perform any role or function registration of any such rights), know how, methodologies, other than as is documented in the Engagement Letter. and any similar rights in any country whether currently 1.3 The Client shall provide all necessary co-operation to enable existing or created in the future, in each case for their full each member of the C&W Group to discharge its obligations term, together with any renewals or extensions; in respect of all Applicable Laws, particularly those pertaining "Relief Event" means: (i) any delay or failure by the Client or to 'know your client', anti-money laundering and the a person acting on its behalf to perform any obligation of the prevention of other financial crimes, and data protection. Client under an Engagement; (ii) the failure of any Each of the Client and C&W agrees that it shall comply with assumption set out in the Engagement Letter; and (iii) any all Applicable Laws in performing its obligations in relation to other event specified in the Engagement Letter; the Engagement. "RICS" means the Royal Institution of Chartered Surveyors; 1.4 C&W may sometimes require input from third parties to perform all or part of the Services. Where C&W intends to "Services" means the services to be provided to the Client subcontract to a third party, C&W will seek the Client's by C&W as part of the Engagement, as specified in the consent before so subcontracting. The Client consents to the Engagement Letter; use of other members of the C&W Group and C&W Affiliates "Service Materials" means all those works, and all to provide all or part of the Services, and no further Intellectual Property Rights in works, that are created, notification need be given in relation to such use. Except provided, or which arise exclusively in the course of the where C&W contracts third parties directly (otherwise than as provision of the Services to the Client; the Client's agent), in which case it shall be liable in particular "Terms of Business" means the terms set out in this for any breach of C&W's data protection obligations under document; and Clause 7 that is caused by an act, error or omission of its sub- "Value Added Tax" means value added tax as provided for processor, C&W shall not be responsible for supervising or in the Value Added Taxes Act 1994 and subordinated monitoring the performance of third parties. legislation made under it, or any similar sales or turnover tax 2. Definitions and Interpretation in any jurisdiction. 2.1 In an Engagement the following terms shall have the 2.2 Unless the context otherwise requires or the contrary following meanings: intention appears, any reference to an enactment includes "Applicable Law" means all applicable laws, regulations, that enactment as amended or replaced, together with any regulatory requirements and codes of practice of any relevant subordinate legislation made under that or any other jurisdiction, as amended and in force from time to time; applicable enactment; and any reference to an English legal term includes, in respect of any jurisdiction other than "C&W" means the member of the C&W Group that is a party England, a reference to what most nearly approximates in to the Engagement Letter; that jurisdiction to the English legal term. "C&W Affiliate" means a third party licenced by a member of 2.3 Other than for notices to be given, references to "written" or the C&W Group to trade using the Cushman & Wakefield "in writing" include e-mail. The words "including" and "in brand; particular" and any similar words or expressions are by way "C&W Group" means DTZ Worldwide Limited (company of illustration and emphasis only and do not operate to limit number 9073572) and any of its subsidiaries (within the the generality or extent of any other words or expressions. meaning of section 1159 of the Companies Act 2006); The words "subsidiary" and "holding company" have the "C&W Materials" means all those materials owned by C&W meanings given in Section 1159 of the Companies Act 2006 and its licensors, and all Intellectual Property Rights owned (and Clause 2.2 shall not apply in relation to this sentence). by C&W and its licensors, whether before or after the date of The headings in these Terms of Business are for the Engagement, but excluding the Service Materials. convenience only and do not affect their interpretation. "Client" means the addressee(s) of the Engagement Letter 3. Fees, Expenses, and Payments and excludes any third party who pays or may be responsible Fees for paying any part of the Fees; 3.1 In consideration of the provision of the Services, the Client "Client Materials" means all those materials owned by the shall pay the Fees. The Fees, or the method of calculating Client and its licensors, and all Intellectual Property Rights them, shall be as set out in the Engagement Letter. owned by the Client and its licensors, but excluding the Service Materials. 3.2 Fees stated shall be exclusive of Value Added Tax which, where applicable, shall be charged to the Client at the "Engagement Letter" means the letter issued by C&W to the prevailing rate. The Client agrees to pay to C&W any Value Client and identified as the engagement letter, which shall set Added Tax in relation to the provision of the Services out particular Services to be provided by C&W together with provided that C&W has supplied a valid tax invoice as other terms and conditions that shall form part of the required by Applicable Law. Engagement. Where the context permits, documents cross

Version 2.01 (May 2018) 1 Cushman & Wakefield Terms of Business (UK)

Expenses 3.9 C&W may require payments to be made on account before 3.3 The Client shall reimburse all out of pocket expenses and commencing or completing all or part of the Services. In disbursements properly incurred by or on behalf of C&W in specifying on-account payments C&W may have regard to the performance of the Services ("Expenses") up to five the nature and context of Services to be performed, and the hundred pounds (£500) per quarter. Before incurring any likely timing and amounts of Expenses to be incurred. Expenses that would result in that limit being exceeded, C&W 3.10 C&W may, by giving written notice to the Client, suspend shall seek the Client's consent, in which case those further Service provision if any sum is not paid to C&W within the Expenses shall also be payable. Expenses may be invoiced period specified at Clause 3.5, until all outstanding sums at the same time as the Fees, or quarterly in arrears, at have been paid in full in cleared funds. C&W's discretion. 3.11 After completing an Engagement, C&W shall be entitled to 3.4 The Client shall reimburse all marketing costs which shall, keep any Client materials held by it while sums payable to it where relevant, be handled as follows: by the Client remain outstanding. (a) C&W will inform the Client of any marketing costs 3.12 C&W may search the Client's record at credit reference proposed to be incurred on its behalf. C&W will agencies for the purposes of verifying the Client's identity and provide cost estimates for any initial marketing to assess whether the Client is able to fulfil its payment campaign in the Engagement Letter, and further obligations in relation to the Engagement. proposals if additional marketing is required. Client Monies (b) Cost estimates will be best estimates or based on 3.13 C&W handles client monies in accordance with RICS rules actual quotations from suppliers. Final costs may and regulations. differ from estimates provided. Advertising and printing rates provided will be from the publishers' rate 4. Client Obligations cards current at the date of the marketing proposals. 4.1 The Client shall, as soon as reasonably practicable following The Client shall pay any additional sum charged by a request, provide all information, assistance, approvals, and the suppliers for the correction of mistakes in artwork consents reasonably requested by C&W in relation to the or other advertising material not caused by the performance of C&W's obligations in connection with the suppliers. The individual printer or supplier's terms will Engagement. The Client shall ensure that all information apply to all Client work placed with it. All costs are provided by or on behalf of the Client shall be complete and gross and C&W will retain the usual trade discounts accurate in all material respects, and notify C&W as soon as offered by newspapers, periodicals or other media reasonably possible on becoming aware that any information suppliers. is incomplete, inaccurate or misleading. (c) The Client shall instruct all suppliers directly. In the 4.2 The Client acknowledges that C&W: (i) is entitled to rely upon event that C&W agrees to instruct any such supplier, the completeness, accuracy, sufficiency and consistency of C&W may require advance payment of anticipated any information supplied to it by or on behalf of the Client; costs to be incurred on the Client's behalf. Where the and (ii) shall have no liability for any inaccuracies contained sum paid on account exceeds the actual costs in any information provided by or on behalf of the Client incurred, such excess shall be repaid to the Client unless otherwise stated. without interest once all invoices and accounts have 4.3 All estimations made by C&W are based on depth and quality been finalised and settled. Where the marketing costs of information provided by the Client and the Client shall not exceed the sum paid, the Client shall pay the amount be entitled to assume that C&W has performed an inspection. of any difference to C&W immediately on request. The Client must take this into account in relation to all figures, (d) The Client shall reimburse all marketing costs incurred calculations, and advice. on its behalf as and when the costs are incurred, 4.4 The Client shall check and confirm the accuracy and irrespective of completion of the transaction to which completeness of any property particulars prepared by C&W, the Services relate. and shall confirm that they are not misleading. The Client Payment undertakes to notify C&W immediately if any particulars are 3.5 C&W's invoices are payable from the date of each invoice, or become inaccurate or incomplete. and are due for payment within fourteen (14) days. C&W may 5. Measurements charge the Client interest on any amounts due but which have 5.1 Where C&W is required to measure a property, it will do so in not been paid within this period (whether before or after accordance with applicable measuring practices relevant to judgment) at three percent (3%) per annum above the Bank the property. If the Client requires C&W to adopt a particular of England base rate from time to time. Interest shall run from measuring practice, it shall specify the same in writing before the date of the invoice until all outstanding sums have been work starts. The Client acknowledges that the floor areas paid in full in cleared funds. contained in any report are approximate and if measured by 3.6 The Client shall pay all sums by electronic bank transfer to C&W will be within a two percent (2%) tolerance either way. the C&W bank account detailed in an invoice. C&W is unable In cases where the configuration of the floor plate is unusually to accept payment by cash or cheque. irregular or obstructed, this tolerance may be exceeded. 3.7 The Client shall pay all sums payable to C&W in relation to 5.2 C&W is unable to measure areas to which it does not have the Engagement without set-off and free of any deduction. access, in which cases floor area may be estimated from 3.8 If the Client is required by Applicable Law to make any plans or by extrapolation. Where land or site areas are deduction from any payment then it shall increase such measured, all areas will be approximate and will be measured payment to ensure that C&W receives the same amount as it from plans supplied or Ordnance Survey plans, rather than would have received if no deduction were required. being checked on site.

Version 2.01 (May 2018) 2 Cushman & Wakefield Terms of Business (UK)

6. Confidentiality (iii) service providers appointed by a 6.1 The Client consents to C&W announcing that it is providing member of the C&W Group to support or has provided the Services to the Client and using the C&W's business administration and Client's name in publicity. However, C&W shall not publish infrastructure (as identified here and any details of any proposed or actual transaction (other than updated from time to time) those which are publicly available) without prior consent, who are committed, by means of a written contract such consent not to be unreasonably withheld or delayed. with C&W, to protect the Data to the standard required 6.2 The Client shall keep confidential and not disclose to any by this Clause 7. other person (whether before or after termination or expiry of the Engagement): (i) any information received by it in respect If the Client objects to any sub-processor under of the methodologies and/or technologies used by C&W in providing the Services; (ii) the details of the terms on which Clause 7.2(d) on reasonable grounds relating to the C&W provides the Services; and (iii) any other information in protection of personal data, then either C&W will not respect of C&W's business activities which is not publicly appoint the sub-processor or the Client may elect to available. suspend or terminate the Engagement upon written 6.3 C&W shall, during the period commencing on the date of the notice to be given not later than thirty (30) days after Engagement and ending two (2) years following the earlier of such objection has been notified to C&W in writing; the termination or completion of the Services, keep (e) only cause or permit Data to be transferred outside the confidential and not disclose to any other person (whether European Economic Area: before or after termination or expiry of the Engagement) any (i) to those persons identified under Clause 7.2(d) information in respect of the Client's business activities which or otherwise with the Client's prior consent (not comes into its possession as a consequence of C&W to be unreasonably withheld or delayed); and providing the Services and which is not publicly available. 6.4 A party shall not breach this Clause 6 by disclosing (ii) taking such measures as are necessary to information, to the extent reasonably necessary: ensure the transfer is in compliance with applicable data protection law (such as (a) where required to do so by Applicable Law or order of ascertaining that the recipient benefits from an the courts, or by any securities exchange or regulatory EU Commission finding of adequacy of or governmental body to which such party is subject protection for personal data transferred from the or submits, wherever situated (whether or not the European Union or has otherwise agreed requirement for information has the force of Applicable European Union standard contractual clauses Law); or on data processing in countries outside the (b) to the professional advisers, insurers, auditors and European Economic Area); bankers of such party. (f) notify the Client without undue delay and provide 6.5 C&W shall not breach this Clause 6 by disclosing information reasonable information and cooperation on becoming to members of the C&W Group or C&W Affiliates in aware of a breach of data security which would be connection with the Engagement. notifiable under applicable data protection law; 7. Data Protection & Data Handling (g) notify the Client without undue delay (and in any event provide reasonable and timely assistance to the Client Data Protection (at the Client's expense)) to enable the Client to 7.1 The Client appoints C&W as a data processor in relation to respond to: (i) any request from a data subject to personal data which is the subject of each Engagement and exercise any of its rights under applicable data in respect of which the Client is a data controller (the "Data"). protection law; and (ii) any other correspondence, 7.2 In processing Data pursuant to an Engagement, C&W shall: enquiry or complaint received from a data subject, (a) unless otherwise requested by the Client in writing, regulator, or other third party in connection with the process the Data only to the extent, and in such processing of the Data. manner, as is necessary for the provision of the (h) C&W shall make available to the Client such Services, except where otherwise required by any EU information as is necessary to demonstrate its (or any EU Member State) law; compliance with this Clause 7 and, if required, shall (b) ensure that appropriate technical and organisational permit the Client (or its appointed third party auditors measures shall be taken to protect the Data from (i) who are subject to strict obligations of confidentiality accidental or unlawful destruction, and (ii) loss, and whose identity has been agreed with C&W) to alteration, unauthorised disclosure of, or access to, conduct an audit to confirm its compliance, provided Data; that the Client gives reasonable notice of its intention to audit, conducts its audit during normal business (c) ensure that any person whom it authorises to process hours, and takes all reasonable measures to prevent the Data shall be subject to an actionable duty of unnecessary disruption to C&W's operations. The confidence; Client may not exercise this right more than once in (d) only cause or permit Data processing to be sub- any twelve (12) month period except as required by contracted to: instruction of a competent data protection authority. (i) sub-contractors in accordance with Clause 1.4; (ii) members of the C&W Group and C&W Affiliates 7.3 Where the Client is a public authority for the purposes of the and each of their professional advisers, insurers, Freedom of Information Act 2000 ("FOIA") as amended from auditors and bankers; and/or time to time, the Client shall notify C&W of that fact at the start

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of the Engagement. The Client shall notify C&W within five 8.2 Subject to Clause 8.3, the provision of the Services is for the (5) business days of receiving a request pursuant to the FOIA Client's benefit only and no part of any Document produced requesting information which relates to the business by C&W for the Client shall be reproduced, transmitted, arrangements between C&W and the Client and/or any copied or disclosed to any third party without the prior written information C&W has provided to the Client at any time consent of C&W. C&W shall not be liable to any third party (whether or not in connection with the Engagement). In placing reliance upon any such Document. recognition of the fact that C&W may be providing the Client 8.3 The Client may permit other persons to use C&W's with confidential or commercially sensitive information, the Documents only with C&W's written consent and where such Client agrees to consult with C&W and take into account other persons have entered into a written agreement with C&W's views on all such requests, giving C&W reasonable C&W in relation to such use ("Reliance Letter"). C&W notice to respond, before making any decision on whether expressly disclaims any tortious duty of care (e.g., in any particular information should be disclosed. negligence) to any third party in relation to any Document 7.4 The Client shall be responsible for C&W's reasonable and provided in connection with an Engagement, and the Client properly incurred charges in producing any documentation shall not permit any person to rely upon such Document which the Client requires in order to comply with a request for unless that person has first entered into a Reliance Letter. disclosure under the FOIA. For the avoidance of doubt, the Any limitation on C&W's liability set out in the Engagement Client, not C&W, shall liaise with such third party. shall apply in aggregate to the Client and any party entering Data Handling into a Reliance Letter. 7.5 The Client shall use all reasonable procedures to seek to 8.4 Where the Client provides a copy of a Document to another ensure that any materials provided to C&W in any electronic person, or permits a person to rely upon a Document, the format are virus free, and shall be responsible for using Client indemnifies and holds harmless C&W from and against appropriate firewalls and anti-virus software. The Client shall any liability arising out of that person's use or reliance on that not disclose any special categories of data to C&W except by Document except where a Reliance Letter has been entered express written agreement. into by such person. 7.6 Subject to the remainder of this Clause 7, the Client 8.5 Where the Client acts on behalf of a syndicate or in relation authorises C&W to communicate with any person C&W to a securitisation, the Client agrees that it is not entitled to reasonably requires in providing the Services. C&W may pursue any greater claim on behalf of any other person than release to such person any information reasonably necessary it would have been entitled to pursue on its own behalf had to perform the Services and which it has obtained during the there been no syndication or securitisation. Engagement. C&W shall not be liable for any use made of 9. Service Quality that information. 9.1 In carrying out the Services, C&W shall exercise the 7.7 Unless otherwise instructed in writing by the Client to destroy reasonable care and skill to be generally expected of a or return the Data (or any copies thereof) on termination of competent provider of services similar in scope, nature and the Engagement, C&W keeps its Engagement files, including complexity to the Services. the Data, for six (6) years after issue of C&W's final invoice. 9.2 In the event that the Client is dissatisfied with the provision of The Client consents to the deletion and destruction of all the Services by C&W it must refer such complaint in the first Engagement files upon the expiry of that period unless the instance to the C&W representative named in the Client has requested in writing the return of Client papers or Engagement Letter in accordance with the provisions of documents during that period. C&W shall not be liable for any C&W's complaints procedure current at the time of the loss arising out of the destruction of documents occurring complaint. C&W shall supply to the Client a copy of the more than six (6) years after the date of final invoice. C&W complaints procedure upon the request of the Client. shall be entitled to retain Data to the extent required by any EU (or any EU Member State) law. 9.3 No implied terms shall apply under and/or in connection with the Engagement, and no other express warranties are given 7.8 If requested by Client, C&W shall provide reasonable - all such terms are expressly excluded to the extent cooperation to the Client (at Client's expense) in connection permitted by Applicable Law. with any data protection impact assessment and any consultation with the Client's data protection authority that 9.4 C&W is certified as ISO9001:2008, ISO14001, and may be required under applicable data protection law. OHSAS18001 compliant. In this Clause 7, “EU Member State” shall be deemed to 10. Conflicts of Interest and Anti-Corruption include the United Kingdom. 10.1 C&W maintains conflict management procedures designed to 7.9 A copy of C&W’s Privacy Notice can be found here. govern actual or potential conflicts of interest. If the Client becomes aware of a possible conflict, it shall inform C&W 8. Documents and Reliance immediately. If a conflict arises, then C&W will decide, taking 8.1 C&W will take reasonable care in the preparation of any account of legal constraints, relevant regulatory rules and the research, data, report or advice ("Documents") provided as clients' interests and wishes, whether it can continue to act part of the Services. Any opinions expressed in them for both parties (e.g., through the use of ethical walls), for one constitute C&W's judgement, and data upon which this only, or for neither. Where C&W does not believe that any judgement is based are believed to be correct as at the date potential or actual conflict can be managed appropriately and of the Documents (but may be subject to change during the in accordance with C&W policy (available upon request), it life of the project and beyond and as new information will inform all clients affected and consult with them as soon becomes available). C&W reserves the right to change the as reasonably practicable as to the steps to take. underlying data, and its opinions, without prior notice in the 10.2 The Client acknowledges that C&W may earn commissions light of revised market opinion and evidence, but shall not be and referral fees, and may charge handling fees connected required to update any Document already provided. to the services that it performs, and agrees that C&W shall be

Version 2.01 (May 2018) 4 Cushman & Wakefield Terms of Business (UK)

entitled to retain them without specific disclosure. C&W will be limited in all circumstances to an amount equal to the not accept any commissions or referral fees in circumstances lesser of: where it is of the reasonable belief that they would (a) five (5) times the Fees paid or payable by or on behalf compromise the independence of any advice that it provides. of the Client to C&W in relation to the Engagement; or 10.3 It is not C&W policy to provide any services for financial gain (b) two million pounds sterling (£2,000,000). either directly or through connected persons, to a prospective 11.4 Subject always to Clauses 11.2 and 11.3, where an purchaser or tenant in respect of a property for which C&W is Engagement involves C&W being appointed as part of a instructed as agents by the seller/owner, until unconditional project team, liability for loss and/or damage arising under or contracts have been exchanged. C&W will notify the Client if in connection with the Engagement shall be limited to that it is instructed by a prospective purchaser or tenant to provide proportion of the Client's loss and/or damage which it would such services where the Client is the seller/owner. be just and equitable to require C&W to pay having regard to 10.4 C&W and the Client each confirms that it will not, and will the extent of C&W's responsibility for the same and on the procure that its employees will not, knowingly engage in any basis that: activity which would constitute a breach of applicable Anti- (a) all other Client consultants and contractors shall be Bribery & Corruption Laws. C&W confirms that it has in place deemed to have provided contractual undertakings, a compliance and training programme designed to ensure on terms no less onerous than those set out in the compliance with the terms of applicable Anti-Bribery & Engagement, to the Client in respect of the Corruption Laws. performance of their services in connection with the 10.5 For the purposes of this Clause 10, "Anti-Bribery & project; Corruption Laws" means the Bribery Act 2010, the US (b) there are no exclusions of or limitation of liability nor Foreign Corrupt Practices Act 1977 and any other applicable joint insurance or co-insurance provisions between legislation prohibiting bribery and corruption involving public the Client and any other party referred to above; and or private persons. (c) they shall be deemed to have paid to the Client such 11. Liability and Insurance proportion which would be just and equitable for them 11.1 Notwithstanding any contrary provision, neither party limits or to pay having regard to the extent of their excludes its liability in respect of: responsibility. (a) any death or personal injury caused by its negligence; 11.5 No actions or proceedings arising under or in respect of the (b) any fraud or fraudulent misrepresentation; or Engagement or documents signed in connection with it shall be commenced against C&W after six (6) years after the date (c) any statutory or other liability which cannot be limited of the final invoice in relation to the Engagement. or excluded under Applicable Law. 11.6 C&W shall effect and maintain, during the Engagement and 11.2 C&W shall not be liable for any: for a period of six (6) years after issue of C&W's final invoice, (a) indirect or consequential loss (even where the parties professional indemnity insurance with a limit of indemnity of are aware of the possibility of any such loss at the date £10 million provided always that such insurance remains of the Engagement); available at commercially reasonable rates, together with (b) loss of profits or revenue of the Client generally; such other insurance as is required to be maintained in (c) loss of goodwill, reputation or opportunity; accordance with Applicable Law. (d) loss of or corruption of data, or loss resulting from the 11.7 Further to Clause 1.2, nothing appoints or obliges C&W to act Client's receipt of information, data, or as an External Valuer as defined under the Alternative communications supplied or sent by C&W Investment Fund Managers Directive ("AIFMD") legislation, electronically; or its equivalent under local law. C&W expressly disclaims any responsibility or obligations under AIFMD and/or its (e) pure economic loss suffered by the Client or persons equivalent unless expressly agreed in writing by C&W. Where other than the Client arising out of a tortious duty of C&W provides valuation advice to an entity that falls within care, whether in negligence or otherwise; the scope of AIFMD ("Fund"), its role will be limited solely to (f) acts or omissions of third parties (other than where providing valuations of property assets held by the Fund. contracted directly by C&W otherwise than as the Responsibility for the valuation function for the Fund and the Client's agent); or setting of the net asset value of the Fund will remain with (g) delay caused by its duty to comply with legal and others. C&W's Document will be addressed to the Fund for regulatory requirements (such as anti-money internal purposes and third parties may not rely on it. C&W's laundering checks), aggregate liability howsoever arising out of such instruction is in each case arising out of or in connection with an limited in accordance with these Terms of Business. Engagement or any breach or non-performance of it no 11.8 C&W shall not be responsible for the management of any matter how fundamental (including by reason of negligence property the subject of an Engagement, and shall have no or breach of statutory duty). The parties agree that each of other responsibility (such as for maintenance or repair) in sub-clauses (a) to (g) (inclusive) above are separate terms relation to nor shall C&W be liable for any damage occurring and are intended to be severable. to any such property. 11.3 C&W's total aggregate liability arising under or in connection with an Engagement or any breach or non-performance no matter how fundamental (including by reason of negligence or breach of statutory duty) in contract, tort or otherwise shall

Version 2.01 (May 2018) 5 Cushman & Wakefield Terms of Business (UK)

12. Termination of providing the Services to the Client and performing its other 12.1 Either party may terminate the Engagement upon not less obligations in relation to an Engagement. than thirty (30) days written notice, for convenience without 13.3 C&W and its licensors shall retain all right, title and interest in cause and to the C&W Materials. The Client and its licensors shall 12.2 Either party may terminate the Engagement at any time on retain all right, title and interest in and to the Client Materials. written notice, either immediately or following such notice 14. Non-Solicitation period as it shall see fit if the other party: 14.1 Neither party shall (except with the other party's prior written (a) is in material breach of the Engagement, and such consent) directly or indirectly solicit or entice away (or attempt breach is irremediable; to solicit or entice away) from the employment of the other, (b) commits any remediable material breach of the any employee or contractor working on an Engagement, and Engagement and fails to remedy such breach within a shall not offer employment to any employee working on an period of thirty (30) days from the service on it of a Engagement, for a period of six (6) months following the end notice specifying the material breach and requiring it of any involvement by that person with an Engagement. This to be remedied (or, having so remedied, subsequently shall not prohibit a party from offering employment to an commits a similar breach within the next thirty (30) employee or contractor of the other who has responded to an days); or advertising campaign open to all comers and not specifically (c) ceases or threatens to cease to carry on business, is targeted at any of its employees or contractors. found unable to pay its debts within the meaning of the 14.2 In the event that a party breaches Clause 14.1, the other party Insolvency Act 1986 section 123, has an shall be entitled to be paid compensation of six (6) months' administrator, receiver, administrative receiver or salary or fees of the employee or contractor concerned. The manager appointed over the whole or any part of its parties agree that this is a genuine pre-estimate of loss taking assets, enters any composition with creditors into account the cost of recruitment and training of staff, and generally, or has an order made or resolution passed is agreed on a commercial basis between the parties. for it to be wound up (otherwise than in furtherance of 15. Notices any scheme for solvent amalgamation or solvent reconstruction) or undergoes any similar or equivalent 15.1 Any notice or other information to be given by either party to process in any jurisdiction. the other under the terms of an Engagement shall be given by: 12.3 C&W may terminate the Engagement immediately upon written notice if the Client has failed to pay an invoice within (a) delivering it by hand; or thirty (30) days of the date of such invoice. (b) sending it by pre-paid registered post, 12.4 On termination of the Engagement, the Client shall pay to to the other party at the address given in Clause 15.3. C&W: 15.2 Any notice or information sent by post in the manner provided (a) Fees for the Services it has performed (on a pro rata by Clause 15.1(b) which is not returned to the sender as basis having regard to the Fees payable for the undelivered shall be deemed to have been given on the completion of the Engagement, the expected duration second day after it was so posted; and proof that the notice of the entire Engagement and the Services performed or information was properly addressed, pre-paid, registered prior to termination, unless otherwise specified); and posted, and that it has not been returned to the sender, (b) any Expenses properly incurred in accordance with shall be sufficient evidence that the notice or information has Clause 3.3, and marketing costs incurred in been duly given. accordance with Clause 3.4, on or before the effective 15.3 The address of either party for service for the purposes of this date of the termination; and Clause 15 (but excluding legal proceedings) shall be that of (c) where the right is exercised by the Client, any its registered or principal office, or such other address as it additional sums set out in the Engagement Letter as may last have notified to the other party in writing from time being payable upon termination. to time. Notices to C&W must be addressed to EMEA General Counsel to be valid. 12.5 If a party, acting in good faith, exercises a right of termination, its subsequent failure or refusal to perform all or any of its 16. No Waiver, Partnership or Joint Venture current or future obligations in connection with an 16.1 No waiver of any right in connection with an Engagement Engagement shall not be a breach of an Engagement (including rights to sue for breach) shall operate or be (whether repudiatory or otherwise). construed as a waiver of any other or further right whether of 13. Intellectual Property a like or different character, or be effective unless in writing duly executed by an authorised representative of the affected 13.1 All Service Materials shall vest in the Client on creation. C&W party. The failure to insist upon the performance of the terms, hereby assigns the Service Materials to the Client together conditions and provisions of the Engagement, or time or other with the right to sue for and recover damages or other relief indulgence granted by one party to another, shall not act as in respect of the infringement of any Service Materials by a a waiver of any breach, as acceptance of any variation, or as third party. In relation to future copyright, this shall take effect the relinquishment of any right in connection with the as a present assignment of future rights. Engagement, which shall remain in full force and effect. 13.2 The Client grants to C&W a worldwide, fully paid-up, non- 16.2 Each right or remedy of a party to an Engagement is without exclusive, transferable (to a member of the C&W Group) prejudice to any other right or remedy of that party. licence to use, copy and modify the Client Materials and Service Materials to the extent necessary and for the purpose 16.3 The Engagement shall not be interpreted or construed to create an association, joint venture or partnership between

Version 2.01 (May 2018) 6 Cushman & Wakefield Terms of Business (UK)

the parties, or to impose any partnership obligation or liability governed by both the Arbitration Act 1996 and the Rules of upon either party. Controlled-Cost Arbitration of the Chartered Institute of Arbitrators (2014 Edition), or any amendments thereof, which 17. Force Majeure and Relief Rules are deemed to be incorporated by reference into this 17.1 If either party is prevented or hindered from performing any clause. The seat of the arbitration shall be England. of its obligations in connection with an Engagement by 21.2 Clause 21.1 shall not prohibit a party from applying to the reason of circumstances outside its reasonable control, that court, and shall not require such party to serve notice prior to party ("Claiming Party") shall as soon as reasonably applying, for interim injunctive relief. possible serve notice in writing on the other party specifying the nature and extent of the circumstances preventing or 21.3 Each Engagement and any dispute or claim arising out of or hindering it from performing its obligations. in connection with it or its subject matter or formation (including non-contractual disputes or claims) are governed 17.2 Subject to the Claiming Party serving notice in accordance by and shall be construed in accordance with English law. with Clause 17.1, the Claiming Party shall have no liability in The parties submit to the non-exclusive jurisdiction of the respect of any delay in performance or any non-performance English courts for all purposes relating to and in connection of any such obligation (save for any payment obligation which with each Engagement and any such dispute or claim. shall continue in full force and effect), and the time for performance shall be extended accordingly to the extent that 22. Third Party Rights the delay or non-performance is due to such circumstances. 22.1 To the extent that any loss, damage or expense is suffered or 17.3 The Client agrees that C&W shall be excused from its failure incurred by a member of the C&W Group, the parties agree to perform or delay in performing any affected obligation in that such loss, damage or expense shall be deemed to be the connection with the Engagement to the extent that such loss, damage or expense of C&W, and such loss shall be fully failure results from a Relief Event. C&W shall be entitled to a recoverable from the Client as if the loss, damage or expense reasonable extension of time in relation to any affected was suffered or incurred by C&W directly. obligation, and to recover reasonable additional costs 22.2 Provided that Clause 22.1 remains valid and in full force and incurred by it, as a result of a Relief Event. effect, no term of the Engagement is intended for the benefit 18. Illegality/Severance of a third party and the parties do not intend that any term of the Engagement shall be enforceable by a third party either If any provision is declared by any competent court or body under the Contracts (Rights of Third Parties) Act 1999 or to be illegal, invalid or unenforceable under the law of any otherwise. If Clause 22.1 for any reason is or becomes illegal, jurisdiction, or if any enactment is passed that renders any invalid or unenforceable, then the rights under each provision illegal, invalid or unenforceable under the law of any Engagement shall be enforceable by any member of the jurisdiction, this shall not affect or impair the legality, validity C&W Group. or enforceability of the remaining provisions relating to an Engagement, nor the legality, validity or enforceability of such 23. Entire Agreement provision under the law of any other jurisdiction. 23.1 The Engagement constitutes the entire agreement and 19. Assignment and Novation understanding between the parties relating to the transactions contemplated by or in connection with it and the 19.1 Neither party may at any time, without the prior written other matters referred to in the Engagement and supersedes consent of the other party (such consent not to be and extinguishes any other agreement or understanding unreasonably withheld or delayed), assign all or any part of (written or oral) between the parties or any of them relating to its rights and/or obligations relating to an Engagement. the same. Notwithstanding the previous sentence, C&W may assign/novate (as applicable) all or any part of its rights 23.2 Each party acknowledges and agrees that it does not rely on, and/or obligations in connection with an Engagement to any and shall have no remedy in respect of, any promise, other member of the C&W Group, without the Client's prior assurance, statement, warranty, undertaking or written consent. representation made (whether innocently or negligently) by any other party or any other person except as expressly set 19.2 Each Engagement shall inure to the benefit of, and be binding out in the Engagement. The Client's sole remedy in relation upon, the parties' successors and permitted assignees. to any act or omission of C&W relating to or in connection 20. Further Assurance with the Engagement shall be for breach of contract. Each party shall at all times from the date of the Engagement 24. Miscellaneous Terms Letter, on being required to do so, at its own expense do or 24.1 Each party warrants and represents that it has power to enter use reasonable endeavours to procure the doing by any into the Engagement and that it has obtained all necessary necessary third parties of all such acts as may be required to consents and/or approvals to do so. give full effect to the terms of the Engagement including the execution and delivery of all deeds and documents. 24.2 The Client agrees that C&W shall be entitled to rely upon instructions given by any employee or other representative of 21. Governing Law and Dispute Resolution the Client, and any person holding themselves out as having 21.1 In the event of a dispute arising out of or connection with an the authority to give such instructions. Engagement, a party contemplating instigating legal 24.3 Where the Client comprises two or more persons their liability proceedings shall notify the other party of that fact not less in relation to the Engagement shall be joint and several. than fourteen (14) days before issuing such proceedings. 24.4 Clauses 1.1, 2, 3, 4.2, 4.3, 6, 7.6, 8, 9.3, 10.4, 11, 12.4, 12.5, Either party may, upon receipt of notice or otherwise, apply 13 to 16 (inclusive), 18 and 20 to 24 (inclusive) of these to the President or the Vice President, for the time being, of Terms of Business shall survive termination of the the Chartered Institute of Arbitrators, for the appointment of a Engagement. single arbitrator, for final resolution. The arbitration shall be

Version 2.01 (May 2018) 7 Cushman & Wakefield Terms of Business (UK)

24.5 The Client agrees and acknowledges that the Engagement is between the Client and C&W, and that the Client shall have no right to make any claim against any member (partner), director, employee, agent, or contractor of C&W or any member of the C&W Group or any C&W Affiliate.

24.6 In accordance with the Provision of Services Regulations 2009, C&W is required to make available certain information

to Clients which can be found here. 24.7 In accordance with Section 54, Part 6 of the Modern Slavery

Act 2015, details of the measures C&W has taken to ensure that slavery and human trafficking is not taking place in its supply chains or in any part of its business can be found here.

Cushman & Wakefield Terms of Business (UK) (Version 2.01 – May 2018)

125 Old Broad Street, London EC2N 1AR cushmanwakefield.com Regulated by RICS

Version 2.01 (May 2018) 8 Halton Delivery and Allocations Local Plan: : Appendix 3 West Lancs Policy RS6 - ‘Plan B’ Sites

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