In order for a local plan to be considered sound paragraph 34 requires local authorities to ensure that the cumulative impact of the policies it contains does not undermine its deliverability. It is therefore essential that the viability assessment underpinning the local plan takes into account all the policy costs being imposed on development across the plan period and that benchmark land values are accurate. As such it will be necessary for the Council to consider the impact of the following costs which have been underestimated in the viability assessment.

Policy costs
The approach taken to First Homes in the viability assessment has bene to treat them as an affordable housing product with regard to costs and their risk profile. Whilst First Homes are an affordable housing product they are marketed and sold by the developer. As such the costs and risks related to the sale of such housing when considered in any viability assessment should reflect those for market housing and not affordable housing. In particular the return on such homes should be set at those for market housing and not the 6% return usually expected for affordable housing.

The Council are proposing a 20% net gain in biodiversity on all sites at a cost of £1,211 per unit for Greenfield sites and £289 per unit on brownfield sites. These costs are based on the impact assessment on biodiversity net gain produced by Defra. However, this assessment is based on scenario B and the assumption that the additional 10% net gain will be delivered wholly on site. Firstly, it cannot be assumed that the additional 20% net gain could be delivered wholly on site. An additional 10% of net gain would not necessarily follow this scenario with more offsite delivery being required. A higher degree of offsite mitigation is likely to be required in order to deliver a 20% net gain which will mean a far higher cost to the developer. If scenario C of the Government’s impact assessment is taken as a broad indication as to costs facing a developer, the proposed 20% net gain requirements could see costs rise significantly per hectare. If all of the additional 10% net gain above the proposed legislation being suggested by the Council had to be delivered offsite that could see costs rise by circa £60,000 per hectare, a considerable additional burden and one that could impact on the viability and deliverability of some sites.

Secondly, even if delivery could be achieved on site a higher net gain requirement would require more land reducing the developable area of a site, reducing the gross development value and site viability. This is an issue that does not appear to have been considered in the Government’s impact assessment nor by the Councils’ viability assessment.

The viability assessment includes a figure of £1,000 per electric vehicle charging point (EVCP) and £2,500 for a multi-charging point for every 4 flats. However, the HBF would consider this assessment as to the cost to be too low. Whilst the HBF accept that electric vehicles will form a key part of the Government’s strategy to reduce carbon emissions it is necessary for these to be properly considered with regard to their potential impact on the viability of new development. However, whilst the Viability Assessment assesses the cost of installing an electric vehicle charging point no allowance seems to have been made with regard to potential improvements to the electricity supply infrastructure that may be required to support the use these charging points.

The HBF and its Members have serious concerns about the capacity of the existing electrical network in the UK. The supply from the power grid is already constrained in many areas across the country. Major network reinforcement will be required across the power network to facilitate the introduction of EVCPs and the move from gas to electric heating as proposed in this local plan and under the Future Homes Standard. These costs can be substantial and can drastically affect the viability of developments.

If developers are funding the potential future reinforcement of the National Grid network at significant cost, this will have a significant impact on their businesses and potentially jeopardise future housing delivery. Following the Government’s announcement that all new homes with a parking space will be required to have a EVCP fitted from 2022 the details of this announcement are still to be set out in detail. However, the Government’s proposal from its consultation in EVCPs in 2019 was to automatically cap charges to developers for upgrading local electricity networks at figure of £3,600 per charge point so clearly the costs could be significant and should be included in the viability assessment.

Finally in relation to policy costs, the Councils’ viability assessment does not consider this policy can be delivered at no extra cost. However, this position fails to consider whether such measures will reduce the number of homes that can be delivered on site nor the potential need, as set out in the policy, for mechanical ventilation where passive or natural cooling mechanism cannot be delivered. It is important that these costs are factored into the viability assessment to ensure they are fully considered.

Land values
The HBF are concerned that the land values used in relation to brownfield sites appear to be low for an area with a strong economy. Evidence from the VOA published by the Government on land value estimates indicates that in 2019 industrial land was valued at £1,100,000 per hectare, edge of centre office space at £24m per hectare and out of town office space at £3.9m. All these are significantly higher than the £988,400 used in the viability assessment and will have an impact as to whether such sites are viable alongside all the costs being placed upon them by the Council. As such the land values for brownfield sites should be reconsidered and increased to reflect these higher existing use values for brownfield land in the Greater Cambridge area.