Conor Leyden 12 April 2017

‘Oven-ready’ development

‘Oven-ready’ development

If there’s one thing we can all agree on from the government’s Housing White Paper it is that England’s housing system is broken.

The root cause of this lies in the fact that for more than 30 years we have not built enough homes in England to meet demand. The pressure is now growing on local authorities to help the government meet its housebuilding objectives. As a result, the effective regeneration of local authority estates is becoming increasingly important.

In November 2016 the Campaign to Protect Rural England (CPRE) announced its findings from 53 councils in the government’s brownfield register pilot scheme. They discovered that more than 270,000 homes could be built on previously developed land across the country.

Meanwhile, it has now been revealed that more than three-quarters of English councils are signed up to the government’s One Public Estate programme, which aims to rationalise and release thousands of acres of public sector land in order to build a further 25,000 homes and cut council running costs by £98m.

Oven-ready

Developers who may want to buy brownfield land from local authorities are most interested in ‘oven-ready’ sites. An ‘oven-ready’ site is one that has been packaged and pre-prepared for construction, allowing builders to get their spades in the ground sooner and developers to put homes up for sale more quickly.

For brownfield sites of this type, this means offering land for sale which has had contaminants removed already and has achieved outline planning permission. By creating sites that are ‘oven-ready’ councils can not only speed up the process with which new homes are created but they can also maximise the value of their land assets.

A perceived obstacle to the development of brownfield sites is the costs associated with remediating previously developed land assets. Local authorities with multiple sites in their portfolios may have limited understanding of individual land values, and the scale of the remediation work required on each site. This sounds like a challenge for local authorities, but with the right help it should be viewed as an opportunity for councils to unlock as much value from their land as possible.

As a contaminated land and geotechnical consultant, and specialist remediation contractor, one of our main roles is to provide integrated strategies to help local authorities assess and evaluate their landbanks and to navigate the planning conditions attached to contaminated brownfield land.

Over the past 20 years, we have tackled brownfield land of all descriptions, including cost-effectively cleaning sites that were previously thought to be economically undevelopable. As a business, we aim to reduce the costs that councils face when remediating land by between 50% and 90% to help increase the viability of residential construction.

One of the fastest growing areas of business we are now seeing is in detailed upfront site investigation. This can help to determine any potential liabilities in local authority land banks, and to enable councils to identify and prioritise the most suitable parcels of land for development.

The larger the bank of land a local authority has, the more important it is for them to fully understand both the value they have locked away in the land and the potential liabilities they have by owning the land. Future land sales and purchases will be affected by any inherited liabilities relating to that land such as ground contamination and flood risk.

Prioritising which sites to develop

The best way to do this for each site is to carry out desk-based work in the first instance. By taking a look at the site history you can investigate pertinent risks from former landfill sites, areas of mining, flood risk, previously published ecological surveys and land values. More detailed desk-based work on the risk from shallow coal mining, flood risk constraints and ecological constraints can then be undertaken if a potential risk is ascertained.

Understanding the difficulties each parcel of land faces means local authorities can better quantify the value of their land bank, prioritise which pieces of land to bring forward first, and understand where targeted remediation work can add the most value.

Once the preliminary investigations have been carried out and the most promising parcels of land selected, local authorities should commission a detailed site investigation to provide a comprehensive view of both geotechnical and contaminated land risks.

The remediation of land may not be as extensive or as expensive as councils initially believe, and may not even be necessary at all. If land remediation is required, it is important to keep the work in perspective and to seek a second opinion if you are not happy with the solution.

Sometimes additional investigation work and risk assessment can de-risk a site so that minimal or even no remediation is required.

An initial feasibility appraisal of a site can help local authorities by highlighting potential abnormal development costs and providing considered and reasoned ways of mitigating these.

Ground investigation is by no means a high cost activity. The LK Group’s data shows that ground investigation costs rarely exceed 1% of a total development contract value, and typically the costs are between 0.2% and 0.5%. As such it is hugely worthwhile investing in thorough site investigation, to provide certainty for prospective buyers.

As a business, which specialises in tackling the land remediation projects that others will not, we are well placed to advise on the minimisation of costs. As a result, we were able to remediate one of the most polluted sites in Lancashire for one our clients and saved them 90% of the cost of cleaning that site in order to get it ‘oven-ready’.

One of the main considerations of remediation is to minimise waste to landfill, and maximise the re-use of suitable site resources while causing minimal disruption to local communities and the environment.

For example, in some projects there may be scope to utilise recycled aggregates generated on-site for re-use in construction of roads. This is a sustainable approach, reducing disposal to landfill by providing a product that may otherwise have to be imported at cost to the client.

With local authorities now facing renewed pressure to bring forward their land assets for development, as well as reductions in funding, it has never been more important for them to maximise the value of their land assets and put in place a strategy to make sure as much of their estate as possible is ‘oven-ready’.

Conor Leyden is managing director of The LK Group.

This feature first appeared in Local Government News magazine. Click here to sign up to your free copy.

 
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