Turner Morum LLP have, on behalf of Welbeck Land, reviewed the Greater Norwich Local Plan, Interim Viability Study, prepared by NPS group (November, 19) and have identified a number of comments which are outlined below.
Whilst there is general support for the approach adopted and the collaborative approach that the GNLP Team are seeking to adopt, there is concern that the assumptions made within the Viability Study in relation to, amongst other things, sales values, build costs and benchmark land values are too generic and not backed up by comparable evidence. Further evidence on this is provided below.
In addition, there is concern that the typologies used within the Viability Study are both too general and do not reflect the allocations within the draft GNLP. For example, the largest size development appraised within the Viability Study is 600 units, notwithstanding the fact that a number of the carried forward allocations / preferred sites are well in excess of this figure. These larger sites are likely to require the more significant infrastructure obligations i.e. primary schools and health centres, so an assessment of viability and the implications for deliverability is key. To ensure a more robust and realistic approach we would suggest that site specific viability studies are undertaken of a selection of the preferred sites of varying sizes.
As part of this work, consideration should be given to whether it is unviable for some of the larger strategic sites, which have high infrastructure costs associated with their delivery i.e. schools and health centres, to pay the Community Infrastructure Levy, in addition to the policy requirements of the Local Plan. The potential for infrastructure costs which are specific to larger strategic sites to be secured by Section 106 planning obligations, in order to ensure that such sites are deliverable and, importantly, that there is certainty regarding the delivery of the infrastructure, should be explored. This approach, which has been adopted by Mid Suffolk District Council, is entirely consistent with the Community Infrastructure Regulations (2019).
General Comments
• The document has adopted average market revenues of £279 per ft2 for Wymondham, which is considered too high. Based on market evidence the figure should be £250 per ft2.
• The affordable rent values are included at 60% of Open Market Values (OPV) averaging £168 per ft2 , which we believe is too high. Based on recent evidence we would suggest that this figure should be between 45%/50% of open market value.
• The intermediate units (Affordable Homes Ownership) are included at 75% of OMV averaging £212 per ft2, which we believe is too high. Based on recent evidence we would suggest that assuming a shared ownership model, the figure should be between 65% of open market value.
• The Interim Viability Study document is vague about what the Affordable Housing units are intended to be. However, the GNLP Viability Assessment Paper (2018) is clear that standard intermediate housing are the intended units.
• A figure of only £193,000 per net acre for strategic infrastructure is included whereas, based on experience of similar viability assessments, this should be approximately double. The approach is to include 20% on-top of BCIS for all external and strategic infrastructure costs, although 10% (as a minimum) would be required for plot externals costs – which leaves the remaining 10% for strategic infrastructure costs.
• The GNLP analysis does not apply contingency or professional fees to the externals works of strategic infrastructure costs – which is a significant figure that would be further increased if strategic infrastructure cost were included
• The allowance for finance costs, which are equivalent to juts 1.0% of GDV/ 1.3% of scheme costs, is very low. Based on comparable viability assessments, these costs should be double.