Cumbrian developer rows back on affordable homes

Thomas Armstrong, which has consent for 90 homes at Harras Moor, Whitehaven, wants to remove a planning condition stating that nine of the dwellings approved should be affordable.

With Sam Greig Planning and Site Evolution as key advisors, the Thomas Armstrong team has lodged an application to remove condition 14 of its consent at Harras Dyke Farm.

The scheme as approved is made up houses of between three and five bedrooms, including semi-detached and detached homes. Penrith architect Manning Elliott Partnership designed the scheme.

Site Evolution’s covering letter said that “additional costs have become evident in the period since site acquisition,” making development unviable if the affordable homes are to be factored in – these homes would be sold at a discount of 20% off the open-market value.

There are two planning consents in place, one for five homes and one for 85. Although the condition only relates to the second, larger permission, the development team said neither part is deliverable without the changes – hence its viability calculations are based on that whole number.

Thomas Armstrong’s team acknowledges that much of the site’s issues were known to it at the time of acquisition and were factored into both viability calculations and the price paid for the site.

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These included site remediation following historic open cast coal mining activity across a substantial proportion of the site, a deep capped mineshaft being on site, an extensive surface water drainage system taking upstream flows, several high-pressure large diameter adopted water mains, a Public Right of Way, overhead electricity cables and an electricity pylon.

Additionally, it was known that several off-site constraints would come into play, including a requirement to repair an existing off-site surface water drain, off-site foul sewer connection works, and off-site utility connection works.

However, the Armstrong team said that the “financial impact of three specific issues has changed considerably”.

Specifically, it said that additional ground remediation and improvement is needed, along with additional off-site sewer connections at Red Lonning industrial estate, as it has now been confirmed that part of the site is too low to drain by gravity to the foul collection point at Harras Road.

Additional off-site utility connection works are also required, with the conclusion being that “the combined additional and unexpected cost of these three issues has a significant impact on viability of the development”.

In a table submitted by Site Evolution, the cost of additional infrastructure works is estimated at more than £1.1m. Total development costs have risen from an initial £22m to almost £23.5m according to the firm’s estimate.

At the outset, developer profit was estimated at 17%, a number now estimated at less than 12% with the affordable homes and around 13% with their replacement by open-market dwellings.

Site Evolution said that the developer has sought to minimise development costs and maximise sales value to retain project viability, but that calculated viability is significantly below original expectations and threatens project delivery.

As the site has already been acquired by TAL (Thomas Armstrong Ltd), there is a “certain degree of commitment” to delivery, however this is threatened by “underlying global, national and regional economic conditions” making construction costs unpredictable and the sales environment weak, despite underlying demand.

Summing up, the firm said that “removal of the planning condition is a prerequisite to delivery of current development proposals by TAL in the near future”.

Documents relating to the request can be viewed on the Copeland section of Cumberland Council’s planning portal with the reference 4/25/2116/0G1.