As land prices soar in regenerated areas, social landlords must compete with private developers for housing sites. Josephine Smit reports on one housing association's success at doing this in the once grotty,now groovy, city of Brighton
"Some of the sites we would have done, we now can't afford," says David Wilkinson, regeneration and new initiatives director at Downland Housing Group. "Rising prices are pushing us onto more smaller sites and more individual houses."

Downland is just one of many housing associations that played a key part in the regeneration of Britain's newest city, Brighton & Hove, but are now finding themselves victims of that regeneration's success. They are seeing more and more sites snapped up by private residential developers as land prices soar beyond its reach.

Wilkinson talks wistfully of a site in Brighton's Finsbury Road on which Chichester-based Downland and other housing associations had once set their sights. It's now being developed into private flats designed by Conran & Partners. They will sell for £250,000 each.

With such key sites lost to private developers, Downland must apply all the land-buying skills it has honed over a decade in order to produce a planned 50 homes a year in Brighton from its regeneration activities, often on schemes of just a handful of units. It also has a 30-unit rolling programme of acquisition and renovation of individual houses, relying primarily on Housing Corporation and local authority grant to fund its activities.

Some of its sites come from the local authority, but Wilkinson's three-strong team scouts for land just like a private developer. "We have established a network of contacts to help us pick up sites," says Wilkinson. Wilkinson's early career as a planner has given him both a good contact list and a good knowledge of the sites on his patch, and the association has extended its contacts through such measures as sponsoring a conference by regional business organisation Sussex Enterprise. This helped to generate links with businesses that might have vacant properties above shops.

"Brighton has always had a lack of suitable sites," says Wilkinson. "We've picked up the sites that the private developers didn't want to do. The risks have been enormous, but we've never had a site that's gone wrong." Downland, which currently manages 15,000 homes in East and West Sussex, Kent, Surrey and Hampshire, takes on sites where existing planning consents cry out for renegotiation, ownership titles are unclear, land is contaminated and rights-of-light issues with adjoining landowners have to be untangled.

"We have to spend a good deal of time exploring the constraints so that we know what is what, and then we pass as much risk as possible on to the contractor," says Wilkinson. "We have a standard feasibility model, which looks at the risks, and we have an internal project appraisal process." The project appraisal can be short-circuited if the housing association has to act quickly to buy a site. "If I saw a site this afternoon and liked it, I would go straight to the chairman. I have had same-day approval," says Wilkinson.

Care has to be taken to ensure that a site bought at the right price remains viable as it works its way through the often-protracted planning process. When schemes are delayed, they may span several total-cost indicator periods (the basis for Housing Corporation grants), the mix may change and building costs may rise.

Recently, Brighton & Hove council set a 40% affordable housing quota under section 106 agreements for private developers. This will feed more sites through to housing associations, and Downland is already working on several such schemes. "Section 106 only really works if the developer comes to you to establish a partnership early," says Wilkinson. He accepts that planning gain could provide more of the association's sites in the future, but doesn't believe that will stifle his department's land-buying skills.

"I think we are better than the private developers," he says. "We like to operate in our own right and we have got a number of projects that involve acquiring redundant industrial sites. And if the housing market turns down, the private developers will be coming to us to offload their sites."

David Wilkinson’s land-buying tips

  1. Make a decent site investigation
  2. Be prepared to look at the small schemes – often that is what regeneration is about
  3. Be prepared to commit the resources
  4. Set up processes so you can respond quickly when you see a good land prospect
  5. Don’t believe what people tell you – for instance, when they say they own a site.

Viaduct Road

Viaduct Road (above) is typical of the small sites that Downland is now taking on, but few private developers would dream of competing for this kind of challenge. The site, a terrace of Victorian shops, faces a busy road junction, is backed by existing properties and is big enough for just four houses. The “bookends” of the terrace – a pizza takeaway and a house in private ownership – had to be retained. After some negotiation with the local authority owner, the site was leased on a 125-year agreement and the association opted not to refurbish the terrace, but to demolish and rebuild between the bookends. The scheme has taken a long time to get through planning, and Downland put a lot of time and effort into negotiating party wall issues. Before: run-down terrace of Victorian shops, previously occupied by squatters
After:
three three-bedroom houses and one four-bedroom house
Development period:
27 months so far
Build period:
nine months scheduled, due for completion next April
Finance:
£366,4479 Housing Corporation grant
Build team:
Employer’s agent, Tuffin Ferraby Taylor; architect, Miles Broe; structural engineer, Bedford & Eccles; contractor, Integra.