Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to the newest version of your browser.

Close

Your browser appears to have cookies disabled. For the best experience of Construction News, please enable cookies in your browser.

Welcome to the new Construction News site. As we have relaunched, you will have to sign in once now and agree for us to use cookies, so you won't need to log in each time you visit our site.
Learn more

Land control at Old Oak needed to stop developers using 'dark arts' of viability assessments

The chief executive of the company set up to manage the regeneration of west London’s Old Oak regeneration scheme says she wants to take control of housing delivery away from third-party developers. 

In an interview with Construction News, Old Oak and Park Royal Development Corporation CEO Victoria Hills described how developers used “the dark arts” of viability assessments to limit the level of affordable housing on sites.

Ms Hills said she was in discussion with government over the prospect of directly commissioning housebuilding from as early as 2018. If approved, the corporation could build homes itself or form a joint venture with a developer or housebuilder.

She said: “Commercial viability is one of those dark arts where developers are very clever at demonstrating that by the time they pay for their infrastructure costs and land assembly and planning, that there isn’t that much left for affordable housing, which is why the levels have been so low in London.

“But if you look at the transformation of the Olympic Park [also delivered through a mayoral development corporation] there is about 30 per cent affordable and that’s because they had control of the land and they were able to do things there.”

The complex west London brownfield site has a mixture of private and public landowners, with government owning around 70 per cent of the land.

Ms Hills said she wants as much control over the land as possible so that the OPDC can deliver a good proportion of affordable housing to the area, rather than leave it up to third-party developers.

Her comments followed a government announcement in January in which the prime minister pledged to directly commission at least 13,000 homes across five sites in a bid to increase affordable housing provision.

Of these, the government wants up to 40 per cent to be Starter Homes, which will be built on brownfield land and made available to first-time buyers under the age of 40 with a 20 per cent discount. The initiative is backed by a £1.2bn fund.

Old Oak was identified as the only London-based pilot site for direct commissioning.

Commenting on whether Old Oak would feature Starter Homes, Ms Hills said: “We will be looking to find out what commercially is the right thing to do [with direct commissioning] but it has to tick the box of government if they are going to be providing funding for these new Starter Homes.”

She added: “The government wants 30,000 Starter Homes by 2021 – started, not built… so we would need to be in the position to put some of the utilities for some of those early sites from about 2018/19.”

Overall the government wants to build 200,000 Starter Homes by 2020. They will be delivered through planning reforms, including the release of more public land and changes to section 106 agreements, which will remove planning authorities’ obligation to provide affordable rented homes, in favour of Starter Homes.

The full interview with Victoria Hills will be published tomorrow on www.constructionnews.co.uk.

CN Developer Forum

Victoria Hills is among the expert speakers (see below) lined up for the Construction News Developer Forum on 9 June.

The programme will include regional project presentations and Q&A sessions with high-profile developers around procurement and work pipelines.

This year’s Forum takes place at the Bloomsbury Hotel in London on 9 June.

Click here for full details of this year’s CN Developer Forum.

  • Roger Madelin, head of Canada Water Development, British Land
  • Bill Hughes, managing director, property, Legal & General
  • Graeme Craig, commercial development director, Transport for London
  • Scott Hammond, managing director, Essential Living
  • Andrew Locke, development director, Native Land
  • David Pringle, director, NOMA, Co-operative Group
  • Phil Wade, director, First Base

 

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions. Links may be included in your comments but HTML is not permitted.