What do housebuilders and landowners need to consider when developing larger sites?

The Savills Blog

What do housebuilders and landowners need to consider when developing larger sites?

The government’s commitment to delivering new homes together with recent planning reforms mean there remains plenty of opportunity for housebuilders considering larger sites for development.

Of course, bigger schemes are not without their challenges. Larger sites typically take longer to gain consent, require significant funding to install supporting infrastructure and can have very different build-out rates depending on factors such as location, market strength and range of tenures.

However, when planned correctly with the support and input of key stakeholders, larger schemes of 1,000+ homes can be an effective way to help deliver sustainable growth – with a mix of housing, employment and green space alongside associated services such as new roads, schools and community facilities.

 

What makes a site suitable for a large development?

Many local authorities are considering larger, sustainable communities in order to meet the government’s housing targets.

Deliverability and infrastructure requirements are key. As well as new homes, major developments need investment in highways, schools, healthcare, utilities and public open space.

The size of the site therefore needs to be sufficient to accommodate a range of infrastructure and in some cases it may be necessary to bring together multiple landowners. In these circumstances it is essential to enter into a collaboration and equalisation agreement to ensure everyone is treated fairly – even with differing land uses across the development.

Access to existing services – such as transport links and availability of utilities – is also important, while land with few legal restrictions and low technical constraints is preferrable, in many cases helping to reduce timescales and costs.

Landowners should ensure any unregistered land is registered, that vacant possession can be delivered when necessary and that there are no restrictions on the title that could affect any proposed development.

 

What are some of the key considerations for developers and landowners?

The scale and potential impact of larger developments mean the schemes are more likely to be Local Plan led rather than speculative, making it essential to have support from key stakeholders.

It is crucial to understand the site’s planning policy position before considering larger developments. For example, does it sit in a strategic growth area, is it within the green belt or does it impact a National Landscape or Site of Special Scientific Interest (SSSI) that will have planning constraints?

To that end it is important – where possible – to align the aims of the development with strategic consultees such as the local planning authority, county council, environmental bodies and local community. Stakeholder engagement is very important and early consultation can help the planning process.

Other questions to consider include:

  • Is there sufficient local demand to warrant building a significant number of new homes?
  • What are the Section 106 affordable housing funding requirements?
  • Is there sufficient capacity and resource – i.e. skilled labour – to support delivery?
  • What will be the impact on local infrastructure and community facilities?

By their very nature larger developments take years to complete, with the first homeowners moving in before the scheme is finished. Consequently, housebuilders should consider staggering projects to ensure required infrastructure is delivered alongside the first tranche of new homes.

Larger sites can also often involve more than one housebuilder, with funding for associated works sourced from multiple organisations and agencies. It’s therefore important to understand delivery timescales and to know exactly where investment is coming from and when it will be available. As seen from the example of Beaulieu Park below, when coordinated successfully this can help to foster a sense of community and aid delivery and viability.

 

Large sites in practice

Beaulieu Park in Chelmsford is an award-winning scheme often used as an example of high quality placemaking on a large scale. Upon completion the entire masterplan will comprise 3,600 homes – with 1,900-2,000 homes already built and occupied.

Conceived as a sustainable urban extension, it comprises a mix of traditional and contemporary new homes located in a series of individually designed neighbourhoods linked by an extensive network of parkland and open spaces with new health and sports facilities, local shops, schools and community facilities.

Early infrastructure delivery helped residents feel part of an established community, with a multi-million pound investment package from various parties that included funding for a new train station with connections into Chelmsford and London, an express bus route and a relief road.

Larger schemes that have faced slower progress than anticipated tend to be those where placemaking has not been as strong and homes have been built ahead of essential services and amenities. Funding and viability issues can also arise if economic conditions change over the lifespan of a project.

 

Final thoughts

With sales rates still under pressure, build costs remaining elevated and wider economic uncertainty weighing on confidence, developers are increasingly selective about the sites they pursue.

But if the UK is to meet its ambitious housing targets then a range of different sized developments will be required – from smaller bespoke schemes of 75-200 units to bigger projects of 1,000+ homes that include garden neighbourhoods and new towns.

To ensure the sustainable delivery of large sites, they need to be located in the right place, have the support of key stakeholders, guarantee a degree of S106 affordable housing to meet demand and secure long-term funding to unlock necessary infrastructure.

 

Further information

Contact Rebecca Kirwan or Tom Sharman

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