Succeeding in viability negotiations - Harborough District Council

Harborough is the quintessential rural district often ranked as one of the best places to live in England. It is a great place to live and work with most people enjoying a high quality of life. However, house and land prices are the highest in Leicestershire and many residents struggle to get on the housing ladder or even access a suitable and affordable rented property.


Between 2011 and 2018 the council identified a policy need for 30-40 per cent of all new housing to be affordable. Between 2011 and 2018 consents have been given for almost 6,000 dwellings but due to viability issues permission has only been secured for 1,000 affordable units of which 500 have been built. This equates to just 16 per cent against a target of 30-40 per cent.

A recently drafted Housing and Homelessness Prevention Strategy sets out a corporate commitment to increasing the delivery of affordable housing. The new Local Plan identifies a need for 40 per cent of all new homes to be affordable (206 units a year) between 2011 and 2031. This is a significant increase on current targets.

The council have also started to build houses and successfully redeveloped garage sites. They are currently redeveloping a further site for 28 dwellings – 50 per cent of which will be affordable and intend to explore land and partnership options to build up to 500 further dwellings and are planning in house capacity to enable this.


Project aims and objectives

Harborough District Council participated in the Housing Advisors Programme to support the way they approached viability negotiations – exploring the potential to bring this in-house as part of their new commercial assets team and also building on changes to the NPPF around ‘viability’. The aim was to build the capacity in house to undertake appraisal work on developer submissions of viability to appraise them and provide recommendations to allow for planning determinations.


The role of the LGA Housing advisors

The adviser spent an initial day on site understanding the council’s position and issues they face and to gain an understanding of the local market. This included scoping the extent of viability work needed by the council to deliver the new Housing and Homelessness Prevention Strategy, and support the commercial assets team in establishing land and partnership arrangements.

The project included a review of the policy base and a detailed evaluation of the current viability contract involving a review of previous advice and related planning decisions. A desktop analysis of the current viability position in Harborough including the Local Plan viability report prepared by external consultants was undertaken.

An assessment of the option of providing viability support in house and provide a comparison with the procurement options of support from external consultants was undertaken.  The conclusion and recommendation was that an external contract should be procured and that key officers be trained to actively manage the contract.


Outcomes

A report was produced providing a detailed evaluation of the existing contract. Support was provided for the procurement of the viability contract and training was undertaken on viability to equip officers with the skills necessary to actively manage the contract.

This training was widened to include a number of other local authorities in Leicestershire and covered the basics of residual valuation and its application to policy and development management.


Learning for local authorities

The challenges for local authorities in delivering affordable housing require an understanding of development viability to ensure that local housing strategies are successfully implemented. Developers continue to test adopted policy requirements through the planning process and local authorities require the skills and knowledge to support their position.

The lessons from this project are that staff need to be equipped with the necessary skills to procure expert viability support and most importantly to actively manage the resultant contracts.


Contact

Tom Day
Service Manager
Community Partnerships
Harborough District Council

Tel: 01858 821278   

Email: t.day@harborough.gov.uk