Aim to make more profit from homes scheme fails
A LANDOWNER has failed in a bid to make more profit from a housing project in Gower, having argued that it wasn’t financially viable unless action was taken.
Chris Stevens has planning permission to knock down The Greyhound Inn pub, Oldwalls, and build nine houses, including four affordable ones.
The four affordable ones were to be handed over to a social housing landlord on completion, and the developer would only receive 42% of the cost of building them.
Mr Stevens then applied to Swansea Council to amend the planning agreement which set out this requirement. This would have meant the developer receiving 100% of the construction costs of the affordable units.
The argument advanced was that a realistic return on the land was no longer expected, given development costs, and that profits would be eroded further by abnormal costs – including the demolition of the former pub – and the use of high-quality materials in the houses.
Council planning officers assessed the figures provided by the applicant and concluded that building the nine houses as had been agreed would yield a profit of just over 15%. This margin, they said, was within the normal
‘‘ Even if the assessment had identified a profit level under 15%, the level of risk associated with a smaller-scale site of this nature at this location is considered to be low
- Council planning officers’ report
developer profit range of 15%-20% identified in national guidance. The officers also felt the applicant’s estimated £2.5 million sales price for the five open market homes was “conservative”, while the build costs provided were high.
Their report said: “Even if the assessment had identified a profit level under 15%, the level of risk associated with a smallerscale site of this nature at this location is considered to be low, with relatively straightforward abnormal cost elements and high confidence of strong open market sales values for new build detached dwellings in Gower, which are at a premium.”
The report also said that registered social landlords would not have been prepared to pay the full costs of the four affordable homes, even if the applicant had proven the development wasn’t financially viable. The council’s planning committee had approved the nine-home scheme by 1 vote in 2019.
Mr Stevens’s recent application to change the planning agreement led to two letters of objection, including from the Gower Society, which said fewer houses should be built there.