UK house prices could crash by as much as a fifth if Boris Johnson pursues a no-deal Brexit, and the biggest falls would be in London and Northern Ireland, a leading accountancy firm has said.
Reflecting the potentially vulnerable state of the property market as Brexit looms, KPMG said house prices would fall by between 5.4% and 7.5% across different regions next year if a new agreement with Brussels was not in place by 31 October.
The analysis of average house prices across the country showed no deal could trigger a nationwide decline of about 6% in 2020 and that and a drop of between 10 and 20% was “not out of the question” if the market reacted more strongly than expected….
Jan Crosby, the UK head of housing at KPMG, said Britain leaving without a deal would probably lead to a sharp drop in sales volumes as wary homeowners wait for the turbulence in the property market to clear. This in turn would “make government housing delivery targets impossible to achieve and slow new building across the sector”, he said.
Against a backdrop of falling owner occupation in Britain as first-time buyers find it difficult to get on the housing ladder, the government has promised to deliver 300,000 homes a year by the mid 2020s.
The ONS have produced a detailed set of sensitivity analysis on the differences between the 2014 and 2016 based household projections which will be bound to enflame debate about whether they should be used for strategic planning purposes.
Lets out one thing straight. The issue is not whether the 2016 figures are more accurate but that the dramatic drop from the 2014 based projections broke the system, requiring an emergency reset and reconsideration.
A key methodological change was the 2016 based projections only using 2001 and 2011 census data, whereas previous projections spread the data points for projections over 4 decades. What this did was instead of averaging out changes over the business cycles it straddled the abnormality of the Great Recession, where household formation was suppressed for economic reasons. Whilst this made the projections ‘more accurate’ in the short term it considerably reduced there utility for strategic planning purposes, where the long term assumption was that if you built homes to meet projections over the long term then households would form to fill them.
This assumption has come under increasing pressure over the years as a shortfall of homes has not only suppressed household formation but also birth rates.
Demographic drivers are clear in the analysis with subnational population projection changes rather than changes in HRR rates the main driver in many areas; which in itself is not necessarily an expression of less need because of the feedback effect of lack of housing on fertility and emigration.
We have known for years that the ONS emigration model was broken and overestimated student overstayers. It is no longer even used by the ONS as an official statistic.This is seems distorted figures for Oxford and Cambridge. However the underlying economic realities are the same. If an international student doesn’t overstay to fill a high skill job then it is more likely to be filled by an international graduate. This indeed is the story of the latest ONS adjustments to international migration figures with EU migrants made up for by non eu migrants. These international workers not necessarily staying in Oxford or Cambridge due to a lack of housing for them to fill. The figures may have overestimates students at CMOX but not necessarily people with a desire to live/work there.
It is clear then that the medium – long term future of strategic planning has to be based on a more integrated model of job led migration and commutes, using demography as an input to economic modelling rather than a substitute.
Something we have mentioned on this site many times is how the modern style of rolling examination and modification makes it extremely difficult to follow what has been going on unless you have been involved at every stage. It is like putting together a 2,000 peice jigsaw puzzle if you haven’t.
A good example is Bedford where the inspectors letter on main modifications make no reference to what the key issue of soundness is – the unexpected loss of a 4,500 units site, and the pragmatic response, a shortened plan period. Why not just say so?
Customer friendliness should be the number one criteria in designing plan examination portals. Document dumps are just not acceptable.
CONSERVATIVES are ‘aghast’ after Liberal Democrat and Green opponents delayed a critical development meeting until October – and said it could see Oxfordshire lose nearly £500m in government funding.
Last week, South Oxfordshire District Council (SODC) cancelled its cabinet and council meetings for September and pulled it back another month.
It said it needs to talk to the government about how it could keep funding for housing and infrastructure and delay its key Local Plan, which outlines where it wants building to take place.
That includes £218m of funding for the Didcot area.
The Conservatives controlled the council until May, when huge losses saw the Lib Dems and Greens take over.
In a letter sent to the SODC’s leader, Sue Cooper, Conservative councillors state: “The longer it takes the SODC administration to make a decision about or Local Plan, the more vulnerable all communities right across South Oxfordshire become to other unwanted developments.”
They continue: “We are aghast that your group is prepared to forgo the funding which will, amongst other things, address gridlock around Didcot; create a new river crossing at Culham; improve junctions at the Golden Ball Roundabout, and provide edge streets around Benson and Watlington.”
SODC passed its controversial Local Plan in December 2018 when the authority was controlled by the Conservatives.
But in January, the party suspended six of seven councillors who had voted against it.
Just one of the ‘Green Belt Six’ stood to keep their seat as a Conservative in May. Elizabeth Gillespie retained Garsington and Horspath but resigned as a Conservative a week later after an appeal into her elapsed suspension was rejected.
The saga into the authority’s Local Plan stretches back to March 2018. One proposed by former council leader John Cotton was rejected by his own authority and split the Conservatives.
But the party’s councillors said the one approved earlier this year represents ‘a fine balance between protecting our environment, providing new homes and unlocking money for desperately needed affordable social housing and for infrastructure to support residents and businesses.’
A lot of speculation in the press today that the review group will scrap it as the panel includes some critics. I note however the critics on the panel have all questioned it on rational cost-benefit grounds and are not doctrinal opponents. Let looks at the terms of reference.
For the whole HS2 project, the review should rigorously examine and state its view on:
whether HS2 Ltd is in a position to deliver the project effectively, taking account of its performance to date and any other relevant information
the full range of benefits from the project, including but not limited to:
- capacity changes both for services to cities and towns on HS2 and which will not be on HS2
- economic transformation including whether the scheme will promote inclusive growth and regional rebalancing
- environmental benefits, in particular for carbon reduction in line with net zero commitments
- the risk of delivery of these and other benefits, and whether there are alternative strategic transport schemes which could achieve comparable benefits in similar timescales
the full range of costs of the project, including but not limited to:
- whether HS2 Ltd’s latest estimates of costs and schedule are realistic and are comparable to other UK infrastructure
- why any cost estimates or schedules have changed since the most recent previous baselines
- whether there are opportunities for efficiencies
- the cost of disruption to rail users during construction
- whether there are trade-offs between cost and schedule; and whether there are opportunities for additional commercial returns for the taxpayer through, for example, developments around stations, to offset costs
- what proceeding with Phase 1 means in terms of overall affordability, and what this means in terms of what would be required to deliver the project within the current funding envelope for the project as a whole
whether the assumptions behind the business case, for instance on passenger numbers and train frequencies, are realistic, including the location and interconnectivity of the stations with other transport systems, and the implications of potential changes in services to cities and towns which are on the existing main lines but will not be on HS2
for the project as a whole, how much realistic potential there is for cost reductions in the scheme as currently planned through changes to its scope, planned phasing or specification, including but not limited to:
- reductions in speed
- making Old Oak Common the London terminus, at least for a period
- building only Phase 1
- combining Phases 1 and 2a
- different choices or phasing of Phase 2b, taking account of the interfaces with Northern Powerhouse Rail
the direct cost of reprioritising, cancelling or de-scoping the project, including but not limited to: contractual penalties; the risk of legal action; sunk costs; remediation costs; supply chain impact; and an estimate of how much of the money already spent, for instance on the purchase of land and property, could be recouped
whether and how the project could be reprioritised; in particular, whether and, if so how, Northern Powerhouse Rail (NPR) (including the common sections with HS2Phase 2b) could be prioritised over delivering the southern sections of HS2
whether any improvements would benefit the integration of HS2, NPR and other rail projects in the north of England or Midlands
any lessons from the project for other major projects
Three key points. Firstly as everyone acknowledges the key benefit is capciaty and there is no plan b to increase intercity capacity. Secondly the overuns have been on land aquisition primarily. This is a sunk cost. It is an application of the sunk cost fallacy to include these, the money cannot be recovered.
There is money within the (too low) Treasury cealing of 56 billion to get to Curzon Street but not phase 2a or 2b
However the cost benefit ratio only significantly increases when you get to Manchester, and potentially Liverpool and HS2 with a chord can cut travel time between Liverpool and Manchester by half an hour. We still dont yet have proper plans for Manchester Picadilly So extending 2a North of Manchester Airport would be impractical until the concept design of the NPR/HS2 interface at Piccadilly is finalised. The previous chancellor had pledged to look at a direct HS2 connection requiring a new station in Liverpool. However designs are at such an early stage that it would be impractical to include in 2a.
The review includes a number of measures oft touted in terms of improving CBA including termining at Old Oak in the short term, unlikely I think given sunk costs. Although the speed and headway (18 trains per hour) have been criticised as costly the UK has gained much greater experience of ‘digital railway’/japenese style signalling, and several examples of this will be in operation by the mid 2020s.
Two sections of the paper struck me.
whether there are opportunities for additional commercial returns for the taxpayer through, for example, developments around stations, to offset costs
There are several examples of where this is planned, at Birmingham Interchange for example and Taton. There are several more where it is possible at Old Oak (with a much more publicly led land acquisition strategy then planning including the Car Giant Site), at Calvert where it could interchange with East West Rail (providing there was additional terminal capacity in London) and at the proposed Garden Town at ROF Swynnerton where a maintenance depot and new junction to the M6 is proposed as well as reopening the rail link to Stoke. Half way between Brum and Manchester the strategic case is much the same as Calvert. All of these require additional accelleration/deceleration/passing lines (as proposed already at Birmingham Interchange and japenese style light trains (proposed anyway) – done together these could transform the business case, as like in Japan 25% of revenues could come from commuter traffic.
Another section struck me.
different choices or phasing of Phase 2b, taking account of the interfaces with Northern Powerhouse Rail
The description of 2a is misleading as North of Crewe and the link to Sheffield are both described as 2b. However the eastern arm is projected to cost twice as much as the link to Manchester. Large part of this is due to a costly and slow link to Sheffield City Centre when there are several cheaper options. Also the choice of a Sheffield station needs to be taken at the same time as how it would interface with Northern Powerhouse Rail, for example a link through to Sheffield Victoria then eastwards to the Woodhead Tunnels, though the diasdvantage of this is the loss of a Braford alignment. Leeds and Braford are so close though a fast metro style link makes much more sense than a HSR link as the headway impact on including a Bradford (or Rochdale) links are crippling of the business case.
if you want to rapidly massage the CBR than the easiest thing to do to delay phase 2b north of Taton for 5 years as well as North of Manchester Airport, compensating whilst announcing NPR/HS3 with links to Sheffield and Liverpool, though delayed by 2-3 years whilst the precise alignment and connection details are finalised. This could save around 20 billion in current spending committments for the project. At the same time announce land value capture programs at Old Oak Common, Birmingham International, Calvert, Taton and Swynnerton . Each one of which could yield around 5 billion (3 billion after local infrastructure) adding 15 billion to the benefits pot. #
Both of these together bring the project within the Treasury cost envelope.
A very interesting read
Of course the New Zealand System is based on resource management which the draft statement says has not been focussed enough around spatial planning, or social and economic considerations.
Current processes for public participation tend to favour wealthier property owners over others (in particular younger, non-English speakers, ethnic minorities, the less educated and renters)….
Some planning decisions on urban development appear to consider only the effects on the natural environment or specific amenity considerations, and not how the urban environment meets the social, economic and cultural needs of people and communities. Many decisions
focus on the adverse effects of development, and do not adequately address its benefits (including for future generations). This can have a local and national impact…
The Government intends to introduce objectives and
policies in the NPS-UD that would:
• emphasise that amenity values can change over time, with changes in communities and their values, and through the opportunities urban
• shift the current perception that urban development only has negative effects on amenity for individuals, to also recognise that it can enhance amenity for other people and communities
• emphasise that local authorities should consider amenity values for current and future communities.
Current planning reflects a bias towards the status quo and away from change….
Part of the reason for the current constrained supply of housing and continuing unaffordability is the limited choice and variety of well-integrated, higher-density housing. A lack of higher density housing fuels higher prices across entire cities, not just where intensification might
Often higher-density housing is not developed in a way that enhances the urban environment – in the right quantity, type or location that supports affordable living to meet the diverse needs of people and communities.
One cause is a political bias towards local propertied interests. Restrictions on intensification often reflect the interests of current property owners (who may not want change in their neighbourhood) over the needs of the wider community – for example renters, new home
buyers, social housing providers and future generations. These groups are prevented from living in homes close to the best job options, services and amenities. They are also less likely to live in areas easily accessible by public and active transport. Those most affected are people on
low, medium and even above average incomes, particularly young people, working families, Māori and Pacific people. As a result they spend more on transport to get to high-demand
The document could be improved n a number of ways. It could replace the term ‘urban development’ with ‘Urban Living’ as pioneered in Bristol to emphasise the positive qualities a well planned urban environment has on people and the planet. Secondly it should make clear that urban living is essential in the transition to a zero carbon society.
The story of strategic planning since the 2004 Act has been in large part an innovation of new styles of plan facing the harsh reality of contact with the Planning Inspectorate.
Now the results of the NEGC and West of England examinations into new style joint strategic plans offers an opportunity reflection similar to that following the unsoundness fining of the first core strategy for Stafford.
Although strategic planning has seen an inevitable revival the reason why it has not been welcomed with open arms is that in England we have never got the structure or geographical level of strategic planning right. Numerous messing around with local government structures always short of a comprehensive form has led to a messy combination of strategic plan structures covering districts, unitaries, counties and combined authorities. Though we have moved beyond the weak duty to cooperate to an effective duty to plan strategically there is still no consensus on what the new style strategic plans should look like or do.
When some of the first of the large new unitaries were created such as Cornwall and Wiltshire they adopted a core strategy approach with allocations plans coming along later. The problem was this first generation of plans was highly variable in quality in terms of settlement structure and policy (stop gap solutions) and leading to a delay of 5-7 years between core strategy adoption and allocations adoptions.
Far from advancing on from the problems of Structure Plans/Local Plans they repeated them.
The concept of strategic plans created on a broad brush scale with broad locations on a key diagram on a non map base came from the PAG report in the 60s. It was the model for the structure plan. Structures plans were slow to produce and the transition to allocations not much quicker.
After the 2004 act it became clear that core strategies were not getting the job done in terms of bringing strategic sites forward. Even before the NPPF came out the ministry made it clear that strategic sites could be allocated in strategic plans.
The trade off that strategic plans face is between simpler plans more quickly produced at a high level and plans that give certainty on allocation of land. The latter requires lines on maps. Lines that define policy such as Green Belt and allocate land.
The concept of the spatial development strategic was explicitly PAG based, not being on a map base and not able to define policy areas or allocate site according to current law. Though footnote 15 on page 9 hints that the law would be changed (following the GMSF issues). So even if an SDS is agreed you cant break ground on strategic sites until an allocation plans comes along to implement the Green Belt changes in the SDS and draw lines on a map.
The problems of the West of England solution to the trade off between simplicity and certainty is to return to a pure PAG approach of ‘broad locations’ likely to spread fear across whole counties as to where these might be and without the opportunity to pursue landscape led and design led solutions to mitigation, natural capital and infrastructure. It is a discredited 60s style of planning that wont work. Broad locations dont exist on a higher plane from the geography of roads, rail lines and topography they create places.
There are solutions to the simplicity/certainty trade off and we perhaps see them best in the new Cheshire unitaries. Where we have as a first stage strategic plans defining strategic growth locations and refining the Green Belt, allocations of numbers to broad locations of small towns, villages, clusters of villages. And then followed swiftly by allocations plans to define smaller scale sites. Note they are unitaries of an appropriate functional regional scale.
The lesson to be learned, If you are a small scale authority outside joint arrangement just produce a single simple local plan. If you are a large unitary outside joint arrangement do the Cheshire two stage approach.
If you are a large joint planning area then do the two stage approach – allocating strategic sites in the joint plan, and make your governance arrangements as unitary like as possible. If you dont all of the evidence so far suggests crude political disagreements will either unacceptably delay the plan or lead to it failing at examination for not having strategy options distorted by raw local political interference, of the Not in My Term of Office variety.
Chalfont St Peter Parish Council have blasted the proposed Local Plan, saying that one local scout camp will be forced to close should the proposals be approved.
The Council claim that the proposed construction of 200 homes in the open greenbelt land located next to the Paccar Scout Camp will have massive implications on the group.
They claim that the Paccar Scout Camp will be ‘driven out’ if the proposals go ahead, given the possible safeguarding problems that building 200 new properties could cause.
Although the main failing of new style strategic plans so far had been on failure to look at reasonable alternatives, once they have taken a step backwards and done so through a new SEA there is no guarantee that one strategy only will pull clear of the rest.
A good example is North Essex where the SEA concludes that the preferred strategy and one incorporating elements (more development East ofColchester) of the opponents preferred approach score roughly equally.
Look at the soundness test in the NPPF
Justified – an appropriate strategy, taking into account the reasonable
alternatives, and based on proportionate evidence;
Note no longer the ‘most appropriate strategy’. Providing that there is not on strategy which has significantly more environmental effects than another it is perfectly possible for more than one to pass the hurdle.
Then what is the role of the EIP panel – well if the strategy preferred passes this test it has to be found sound. It is not the panels job to have a beauty contest of strategies. which might come to a surprise to opponents of the preferred strategy. At the end of the day the choice between strategies where significant environmental effects are avoided/mitigated is a job for elected politicians not keyboard warriors or land promoters.
Of course this is partially to do with the relatively weak and subjective goals achievement matrix type scoring used, and the lack this far of good land-use/transport wide area models which assess carbon impact. Im sure these will improve and will help justify.
Hence I think the attention will switch among oppositionist to challenging the justification given by cllrs towards one strategy than other. I dont think justifications such as West Somerset/Bolton wouldn’t countenance any Green Belt Sites and Stockport said they had enough would justify as land use planning considerations as it would lead to weighted and unfair consideration between alternative sites in terms of their objective environmental impacts.
Of course when leaders start pandering to Keyboard Warriors Chief Planning get suspended
Graham Butland, the leader of Braintree District Council, said: “Clearly there are feelings that run high.
“I don’t believe that there is the amount of opposition that some are trying to tell us. Someone mentioned keyboard warriors. I think it is a lot like that.
“I think we have to resolve.
“No-one wants housing. The people who lived in White Court didn’t want Great Notley.
“Now it’s all part of one community.
“But what is important, and I’m delighted that some of the younger councillors spoke, because this is what this is about.
“I’m one of the lucky generation who picked the right time to be born when it was automatically assumed that when you were in your mid twenties and got married you would buy a house.
“And if you didn’t there was sufficient council housing to rent.”