A green light for development?

New housing developments in our area are set to become more attractive to builders as Central Beds Council seeks to change the amount of money developers have to pay as compensation to existing communities.

In the past, when developers built new houses, they had to pay what was known as ‘Section 106’ money to Central Beds, which would then be spent on infrastructure and other projects in the local community affected, such as roads and community buildings e.g. the proposed new hall for Potton will be part-funded by money generated from the planned Biggleswade Road development.

However, the system is to be replaced with the Community Infrastructure Levy (CIL). The council are proposing to split Central Beds into 3 zones with the same CIL charge applied on every development in each zone as opposed to the old system where the amount levied on a developer was agreed on a case-by-case basis1. You can see the appeal for the council’s planning department.

CIL-Charging schedule2

It doesn’t take a genius to work out which area might be more appealing to build in! And what concerns me is that Potton, Biggleswade and Sandy, and its surrounds, are in Area C.

CIL-Ward Map

If you look at the map showing the whole of the region, the area around Biggleswade, Sandy and Potton will require a lower CIL contribution for developers than not just the nearby areas of Central Beds but ALL surrounding local authorities. You can see it on the map of all the neighbouring authorities as a blue island surrounded by green. It’s a bit like having a big flag up saying ‘Build here!’.

CIL-Map

I feel it is no coincidence the far flung corner of the county is being singled out again, when the local development plans do not suggest there is a desire for more development.

The council says  “charges reflect the differences in sales values for houses that can be achieved in each of the areas” i.e. average house prices in Area C are lower so developers might make less money so they’re being offered offered a lower CIL as an incentive to build there.

But…I dug out some numbers3 for house prices for the areas Central Beds have shown on their map. As you can see on the graph there isn’t a huge amount of difference between the three zones. Indeed, some in Area A (e.g. Slip End) are actually cheaper than many in Area C and some in Area C (e.g. Dunton) are more expensive than most in Area A ! So the figures don’t really support their argument. Meanwhile, the area to the south of Luton appears to be in zone A with relatively little justification. The map of recent new builds shows the lowest growth in number of houses is Caddington but yet it is in Area A meaning a very high CIL, discouraging development.

CIL - Average house prices text updated

CIL - Updated land registry

CIL - housing per ward

It’s also worth noting that with CIL, only 15% 4 of the development money will go to the parish/town council in the community affected. The rest will be kept by Central Beds and used where the council sees fit.

With the old system, the money had to be spent in the area in question. Council officers – who are apolitical – decided on what that money could be spent. With CIL, the vast majority of the money being collected will go into a central pool and the decision as to where it will be spent will be taken by councillors so it can become a political decision. So for example, a big development could be built on the edge of Sandy or Biggleswade and 80% of the developer’s contributions could be spent in Leighton Buzzard.

The council is also stating it will charge 5% of all CIL fees as an administration charge which won’t have to be spent on infrastructure!

So what can we do?

Central Beds Council is obliged by the government to listen to what we say and is running a consultation until 24th August but it…

– doesn’t give us the opportunity to comment on whether councillors or officers decide how CIL is spent.

– won’t let us say whether 15% of the money going to the parish/town council in the area is right.

– doesn’t allow us to comment on the council’s 5% levy of all fees.

– won’t mean the council is obliged to change anything even if everyone who replied to the consultation opposed it.

But you CAN comment on whether you think it’s right that developers would have to pay far less to develop around Biggleswade, Sandy, Potton and other local villages. In my opinion, there is no inherent reason the council must have CIL contributions that vary across Central Beds. They could have the same contributions everywhere.

So go to: http://www.centralbedfordshire.gov.uk/surveys/CIL/cil.htm

And let them know what you think.

The questions which allow comment are questions 15 and 18. Question 14 makes mention of the ‘draft charging schedule’. That is the table of rates mentioned above (and attached) which shows how different CIL levies are offered for different areas.

Please share this far and wide, it doesn’t just affect Potton, Biggleswade and Sandy and the surrounding villages but all parts of Central Beds.

What happens next?

Regardless of what happens with the consultation, an Independent Inspector still gets to take a look, so it’s vital as many people respond as possible because an independent inspector will get to see comments made.

It’s worth doing as last year the council approved a Gypsy/Traveller site consultation and only withdrew it when an independent inspector criticised the plan citing many of the concerns made by the public during public consultation.

Central Beds have provided lots of supporting documents here for the consultation here:

http://www.centralbedfordshire.gov.uk/planning/strategic-planning/cil.aspx


Notes

1 Section 106 will still operate for social housing and for some specific measures, such as access roads or children’s play areas.

2  Full details here: http://www.centralbedfordshire.gov.uk/Images/Draft%20Charging%20Schedule%20Rates%20Final%20Draft_tcm6-67667.pdf

3 All my data from average house prices is from the Land Registry’s website for the financial year ending 2013/14. The reason it is for 2013/14 not 2014/15 is because I wanted to use exactly the same data the council did for their analysis. They used 2013/14 as when they did their research last year, this was the last complete financial year. I checked it against Rightmove data for the last 12 months and found the results (in terms of which areas were cheaper or more expensive than others) much the same.

I asked the council to explain how they came-up with the zones. They told me they commissioned a study by property consultants in 2014 and they have provided me with a copy. My main observations are:

i) Estimates of land values aren’t very recent e.g. a benchmark value of £330k/ha is given for development on greenfield sites but this is taken from a study by one property advisor, two years ago. Likewise, a figure of £650k-900k/ha is given for land in towns and villages and this is taken from a study by estate agents as far back as 2009-10. The report acknowledges “data from Land Registry shows that land for development… in Central Bedfordshire transacts at a variety of prices per hectare. This includes some substantial land holdings being transferred at prices considerably below the benchmarks used in the 2013 study, with examples dating from 2009 including 23ha being bought for £60,000/ha, another 23ha being bought for £100,000/ha and 7ha being bought for £200,000/ha. With one plot of land sold for £3 million per ha”. Despite these comments, estimates from 2013 and 2009-10 are used as part of the process to decide what the CIL contributions would be for each of the three areas.

ii) The consultants acknowledge they have tried to take account of ‘new builds’ in their report but only 1 in 8 properties sold in Central Beds last year were ‘new builds’.

iii) They acknowledge the local estate agents they spoke to had had few house sales to consider “and therefore it was difficult to come to a definitive view”.

iv) When considering variations in property prices across Central Beds, the report states the consultants used a third party to analyse land registry data on prices paid on new and existing houses and flats. A weighting was then applied to existing house sales to come-up with house price estimates in the different zones. They then adjusted for recent Rightmove prices and information based on face to face interviews with estate agents and email and phone consultations with house builders.

The council told me they could not show me a final adjusted property price figure per district as calculated by the consultants they used because they hadn’t been given one.

I also calculated the average price for the towns and villages in Area A as £273,665 while for Area C it was £193,734 which is a ratio of 1.4:1; hardly justifying the 3:1 ratio of CIL contributions from Area A to Area C. The attached table of figures shows all the data and the graph makes it really clear. For the graph I’ve only included districts where more than 10 houses were sold. By the way, the 1.4:1 ratio was the same when I checked the figures for a year later.

The graph showing average prices by district only shows districts where 10 or more property values were available for the year in question, to ensure the sample is large enough to be meaningful.

4  If a parish/town council has a Neighbourhood Plan in place, this rises to 25% but NONE of them do, to date, as a Neighbourhood Plan is a very detailed document which is very expensive (we’re talking tens of thousands) and extremely time-consuming to create. It’s not going to be ideal for parish councils. In addition, many councils have much cynicism towards these plans because it’s less than 10 years since since they were asked to produce parish/town plans which now have to be superceded.

Attached images

Table of proposed CIL rates

CIL rate map of our region

CIL rate map of Central Beds

Recent average property prices within each district

Recent housebuilding within each ward

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About adamzerny

Central Bedfordshire Councillor and Potton Town Councillor
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