Welcome to the latest Granit Labs episode, our resource for commercial developers who want to stay in touch with the latest property development opportunities and options.
There is a lot of information available online, but some times it’s easier to listen than to watch or read. Our Granit Labs feature interviews with trusted experts we work with to help our clients realise profitable property developments. Each interview is 20-30 minutes long, so you can enjoy them over a coffee or a short journey in your ear pods.
In this episode Granit’s James Munro talks with Justin Owens of Silverleaf Group, a Croydon based investment and development firm.
Justin is a seasoned property developer and shares his experiences of working with the planning system, which has become particularly challenging since COVID-19 joined us. If you have an interest in property development and how to navigate the planning system, you should enjoy this conversation.
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If you are someone that prefers to read, we’ve got you covered. You can find a transcript of the interview exploring planning, the pandemic and property development opportunities in and around London below.
James
Hi this is James Munro, Director of Granit Architecture + Interiors. I’m here today with Justin Owens, director of Silver Leaf Group.
Silver leaf are a developer commercial developer based in South London and we’ve worked with them on several projects in Croydon.
And I’m going to be talking to Justin about the planning system, and particularly how the COVID pandemic has affected it.
Hi Justin, how you doing?
Justin
Hi James, I’m very well thank you. Thanks for having me today.
James
So you know, we’ve both worked a lot in Croydon and different parts of London, and winning a lot of work across the southeast.
It would be good to get your thoughts on how you think it’s been over the last year and a half particularly, I suppose from the perspective of dealing with planning departments.
I know from working together that we’ve had frustrations in the past with communication and I think this has only been exacerbated by the pandemic. And what are your thoughts on that?
Justin
It’s certainly been a very challenging period. In relation to that and it, it’s amazing. The disparity between different local authorities, different officers, you know, some are very well adapted to the new ways of working and are actually very good to work with. Others, not so much.
It’s very frustrating. We’ve got applications that are now kind of 12 months in. We’re resistant to appealing because that in itself is also a very unknown and slow process, so you’re sort of trapped in this position of trying to work with local authorities, but they tend to hide behind email. You don’t have any kind of phone dialogue or ability to contact them by phone.
And, it just makes life very challenging and difficult to try and secure planning permission.
James
Yeah, that’s completely aligned with our experiences across many boroughs in London; I think you’re right. You get some planners that are very, very good at managing their workload and communicating via email or phone, but it’s been very, very difficult to get hold of many of them; because their switchboards, just ring out. You can’t get a direct number for the planner and they won’t return your calls, so you’re relying wholly on email.
And as you know, they’re not most of not making site visits, either. Some of our sites being sort of open fields in the middle of countryside. So yeah, it’s very, very difficult, and I mean you are your own client, I suppose, but we’re obviously working with clients like yourselves and trying to explain that up front about what to expect and actually what’s out of our control is very, very difficult.
From a clients’ perspective, you know it’s risk, isn’t it? And you’re trying to manage their expectations with that risk profile.
Justin
Yeah, I think if you if you don’t have that experience of the planning system, generally you know it’s very difficult. You can be very quick to Google and think that a planning application should be determined in 8-13 weeks and it’s that simple and the reality right now is that I think you’re very fortunate if you do get a decision in the that time. Ultimately, as you say, it’s something that’s very much out of our control and it’s that’s fine.
There’s a balance of trying to encourage a response or some dialogue, but not also then aggravating a situation and annoying an officer where they then either go completely quiet on you or just issue a decision which isn’t in your favor without any conversation or talk to go with it.
So yeah, yeah, it’s very difficult.
James
And this is not all new, this still hasn’t come about from March 2020 onwards. It’s a lot of these problems have been there for many years to do, and it’s to do with resourcing and the way the planning system works.
But would you say that the pandemic has made it worse?
Justin
Absolutely. I think it’s exasperated at an existing situation, and again, I think this is whether you find such a difference between local authorities is that some are very collaborative in their approach, and they recognize that there’s a better outcome if they work with applicants and their agents and architects towards a common goal, whereas other local authorities take a much more sort of combative approach where it’s kind of you and us.
And it’s almost like this battle that you have to fight to try and win a planning consent, which they are they’re not overly willing to give you, and you know that, that’s something that I remember experiencing when I first started 20 years ago. You know, it was very much that kind of way, and there has been some shifts and changes with some local authorities where they recognise now that actually working with applicants in a reasonable way actually is a better way forward, and that there’s others, perhaps because of political influence and the way that the Council’s are run themselves, that still have that very much divide between them and applicants. And it’s just not very effective or efficient to work in that way, in my opinion.
James
No, it’s not. And I mean this is something that we’ve all known about for a long time and one of the government’s response at national level is to try and relax planning laws with things like the prior approval and permitted development being extended and things like that.
What do you think? I mean in my view it’s not making a huge amount of difference to most of what you and I do in residential development with private clients and commercial clients and it’s sort of addressing the wrong problem.
You know that approach is to regulate it or certain parts of it, but it’s not actually addressing the problem of resourcing, and as you say, this collaborative approach in the planning councils would, would you agree with that?
Justin
Yeah, absolutely. I think it’s sort of fluffing around the edges of a much bigger problem, and ultimately that there is a funding issue for planning departments, certainly and they really need to be kind of ring fenced and supportive by government so that monies that are going into councils are actually going to these departments rather than them being sidestepped into something else, but perhaps they’ve got a more pressing need in their eyes, so I think there is definitely a funding issue, but I think we’ve also got to recognize as a country, really, that developers are needed, house builders are needed.
We’ve got to address this issue. It’s been kicked down the road for so long now that no one really wants to get to grips with it and deal with it. And not all house builders or developers are these kind of horrible, nasty people.
We are passionate about what we do. We have strong feelings about what we do. We want to deliver housing that’s of quality and provide new homes to people so that they have somewhere to live, ultimately. And there always seems to be this kind of perception that developers and Councils are in collusion to do something untoward.
And you know, it’s simply not the case. Actually, that collaborative approach generally provides better results at the end, and a better quality of product.
That’s and that’s something that we really need to sort of embrace more than scrutinize too hard or be pessimistic about. Certainly, I’m not saying that we should just have free reign and it is definitely something that should be monitored.
But you know, if you’re looking at the majority, the majority of times that you see a collaborative approach the outcome is better.
James
Yes, I couldn’t agree more. I’m actually on a bit of an anecdotal story related to that. I’ve been talking to a potential client who, he’s actually a cameraman who worked on Grand Designs program for 20 years.
But he, because of his knowledge of contemporary design, he’s been invited onto several planning committees to offer a sort of perspective on what design is, and you know where you’re dealing with committee members who don’t necessarily understand what they’re looking at. He’s able to explain that to them in layman’s terms, and I think that’s a really important point about you need those that are going to push people and sort of explain what good design is and what difference it can make to communities and not to fear development.
Whether it’s adding to a listed house and the conservation area, or putting in 50 homes into an inner-city borough. If you know it can be for the better good not just about a developer making profit? I mean we’re all going to make a living, but yeah, it’s been tarnished, hasn’t it? That image, and I think the work that you do definitely addresses that because your PR is very much about creating great quality developments that are going to be there for you know a long time and you’re place making. I think, that’s the phrase I would use.
Justin
Interestingly inland homes have started a petition to essentially ask government for committees to have qualified members who make the decisions and I fully support that approach. I think it’s one of the huge failings of the planning system and that’s not meant as disrespect to members. They’re there to to obviously represent their residents. But ultimately they are making key decisions on development and you need to be of an informed position to do that.
And design is always a very, very topical debate at committee, and particularly if you do something that is perhaps contemporary. We’ve obviously promoted a number of contemporary schemes, and certainly when we step outside the London boroughs, particularly, they’re not very well received, generally because most members don’t like or understand contemporary design.
I think they’re kind of resistant to it because of that, and quite often you see sort of views on design come forward and result in determinations of applications and that really shouldn’t be the case. You know what someone personally feels about a scheme or whether they like.
Contemporary design now design is subjective, as is everything, so you shouldn’t be personally making those decisions that you’re there to design or to take the advice of officers who are qualified, experienced, understand, design and if they support the scheme and they are happy to design something that should then really be allowed through at committee.
James
Yeah, so on that note. So have you found there was a backlog with many other committees because they were unable to meet and then they’ve been doing it via Zoom. Have you noticed a big impact on your schemes going to committee and being sort of pushed out?
Justin
Is that what you mean, why they’re taking so long is that part the problem. So some councils, yes, some councils no. I mean I think the virtual committees actually in some ways helped because they could be perhaps a bit more frequent. They’re easier to organize and administer.
Whilst they’ve been stopped by government and now obviously normal service has returned, I think they did serve a good purpose, and if anything, actually in some cases helped residents to participate and watch committees because I think a lot of residents that now know how committees work and that they can attend, they can speak, and that sort of fuels that whole feeling of oh, it’s developers and councils in collusion. It’s all behind closed doors.
It’s not, you know. Committees are open forums where people can attend and watch they can object and speak and it’s not hidden away. These decisions aren’t made behind closed doors when they’re put in that forum. But yes, some councils have struggled, I think. They haven’t really had the technology in place prior to COVID to pivot across easily, so it’s then taken a long time for them to get that in place, get members to understand how that technology works as well, because you need to be relatively tech savvy to do that, and you’re suddenly saying to some of these committee members, you know you’ve got to have a laptop and Zoom or Teams or whatever it is and it if they if they’re not used to using that sort of technology, it’s another hurdle for them to overcome, so yeah, it has definitely caused some delays and you know it’s some London local authorities which we are finding extremely difficult to come to get committee dates on for applications that have been in through a number of months.
James
Yeah, I can guess which one you’re thinking. The other thing I want to run past you was about Pre-apps. This is sort of a full planning application where once the planning officer has actually had time to look at the information and consider it, and perhaps with some input from Conservation Officer, or Highways, they then will give you another sort of a little bit of feedback. And rather than then having an opportunity to discuss it in detail, they will say, right, you now need to put it in a pre app to discuss the current application. I don’t know if you have come across this?
So, you have obviously a current running planning application, which then gets extended. You then have to persuade your clients to pay an additional fee for this, on the basis that it’s non-binding but it may or may not influence the outcome or what you do with it.
With that sort of current running planning application, I mean it’s clearly about money and resourcing and I can understand, for a smaller, smallish domestic or a one-off house on the side, you know the fees on that are not huge, so if you look at that as a number of hours, it’s clearly limited and you know, perhaps they should charge more in the first place. But you say you’ve had this as well. What’s your experience of that?
Justin
So I mean some local authorities now have stopped the pre app service because they haven’t got the resource to deal with it. So you know, basically they just force you to put an application in blind in the hope that what you’re doing is what they want to see, and then you have to just wait for the officers to come back to you, which is typically on kind of week, seven days. Yeah, I could tell you your fate of success or failure at that point.
I don’t quite understand that because it can be counterproductive because, ultimately, you’re then just loading the planning system front end with loads of applications where you’re repeatedly trying concerns that they’re not very clearly expressing to you, and you know that that sort of steps back to that whole collaborative approach. If you if you’re not collaborative and you’re not really communicating with each other, you’re then just really relying on experience of that local authority. If you have any to try and navigate your way to a point where they find it acceptable.
We’ve got lot of other local authorities where now they want at least two or three preapps with you before you submit an application and one in particular, you’re talking between £3000 – £5000 of preapp so the cost burden of that is absolutely horrendous for what is a relatively small scheme or development, and then we’re also finding that.
We’ve had a number of cases more recently where pre app advice hasn’t necessarily been consistent with their decision making in the wider area, and therefore that advice doesn’t always follow the correct policy basis, but it’s almost like, well, we’ve got these policies, but now we don’t really want to follow those policies, because we shouldn’t have passed them through. Yes and so now we’re going to kind of reverse them when we want to, because it suits us, but then not when it suits you. So, you then end up in this really ambiguous kind of area.
James
Yeah, I mean I don’t know what the discussions are you have with your architects you’re working with on on a scheme you must do on a sort of a project-by-project basis. But we certainly take the approach with some Councils; let’s just get planning out application and running and at least then you have someone addressing something whereas we’ve had pre apps that have in terms of 4, 5, 6 months, if we can actually get a response, you know you could have had three pending applications in period.
Justin
Yeah, I mean I agree we actually now, whilst we’ve historically found quite a lot successfully the appropriate process, we’re now at a point where it’s kind of making that decision.
Do we bother with the pre app process? Is it going to add value? Is it going to save time and will the response?
We get actually be something we can then rely on and use to take forward.
And I think we’re probably now at a point where it’s like. Well, actually we should just submit an application and see what response we get, because actually it will be probably a better response in terms of the detail and the position than we would at a pre app, which of course as you say, is nonbinding without prejudice. So even the advice you get, you can’t wholly rely on and we’ve had instances where they’ve you turned us down and just saiud, Well, sorry it’s without prejudice and it’s just an officer’s view.
James
Yeah, exactly yeah. Something else I wanted to touch on with you is it’s the New London plan.
I think we’re trying to understand the implications of it. One thing it’s trying to address is to do with overheating, and there’s been a kind of a number of high-profile cases of new student flats overheating. You know, getting to 40–50-degree Celsius internal temperatures so it is something that’s being addressed in the New London plan and sort of linked to building regulations. Talking to a number of consultants that we work with who do sort of thermal modeling and help with SAP and SAP will probably be outdated soon, but you know that that sort of calculation.
They’re saying that it’s something that probably we’re all going to have to address much earlier in the process. Probably pre planning and so from your perspective as a developer that means more investment at the point where you are at highest risk.
I mean that and I can’t sit well with you, but I mean there I think there are ways of addressing that and and perhaps it comes back to some collaborative working again and and knowing how to design with the basic parameters, getting those rights. The software that we use, Archi CAD is very good at sort of that modeling and getting those basic parameters right in terms of overheating, and so I just wonder what your thoughts were on on that.
Or perhaps other elements of the London plan that are coming through and its fire safety is a big one as well.
Justin
Yeah, I mean, we’ve got a scheme that come actually reuires us to procure a fire statement on because the local authority we’re dealing with has asked us to provide one due to the new local plan coming in.
I actually can’t find a consultant to provide one in under three months because they are all so swamped with work and this.
I think partly stems from the whole cladding crisis and issues that they’re having to deal with on that side, there’s a massive resource issue, so the new sort of London plan has come in with these requirements and the need for these; there’s different reports to be submitted, but you can’t actually get anybody to provide them because there’s just a a shortage of fire engineers that that have the ability or, or you know, work capacity to provide it so that in itself is a challenge, and I think there’s other aspects of the London plan that have come in that have presented similar issues and challenges.
I think the other thing we’ve sort of found is that highways as an example, we sort of found that London boroughs generally were pushing towards less car parking on site, car free development, and that was quite a strong agenda, and it’s actually seems to have taken quite a big step back now where they’re now wanting more parking on site.
Particularly where public transport methods aren’t necessarily as accessible. I always find PTAL is a bit of a, uh, a blunt tool to use as an assessment for transport, and if you provide a detailed transport assessment that actually demonstrates that the reality is better than the PTAL would suggest, then there should be some flexibility, but you know these local authorities that we’re dealing with a very different view and it’s very black and white in terms of PTAL, regardless of what information you put into support, so you then get that struggle between maximizing the opportunity of the site and providing the you know optimum amount of housing on there.
But now you are not necessarily able to do that because it’s becoming driven by the parking that you’ve got to provide, which is very space hungry within a site, particularly in urban areas.
Where you’ve got more constraints and smaller areas of land, and so obviously that’s a new challenge, that just seems to have been pulled out the hat at the last minute, and that that you know it’s been taken forward. So, I think it is it. The London plan is sort of almost created a lot of immediate problems and challenges that some people aren’t necessarily aware of, and I think it’s the speed in which local authorities have suddenly leapt on it and started kind of driving those policies without any kind of communicative advanced warning to general applicants, really.
And I think you know there’s a lot of people have been caught out where they’ve been preparing applications. Put them in the new local plan is come in.
Whilst that’s being determined and the officers are now turning round so well actually doesn’t comply with XY and Z. You’d need to kind of almost redesign this scheme and that is hugely frustrating and disappointing for applicants. Yeah, we’ve actually had a couple of live applications where they’ve asked us for the fire reports.
So you know, after validation 5-6 weeks into one of them, I mean, luckily it was something we were able to do ourselves in-house. It wasn’t so complicated that we needed a consultant.
James
I think it’s yeah, I mean they’re all trying to play catch up the councils with the policy and their validation requirements are not all being implemented at the same time, so you got to check I think, but it’s certainly more work for us as architects at planning stage and we were talking about that in the office the other day. Whether it is going to affect our resourcing and the fees that we need to charge and how do you know?
For as a commercial developer, how do you manage that risk? But you’ve got so much more to you know if you think about doing a basement.
I mean any borough now it’s incredibly onerous that you know basic impact assessments, source surveys, flood risk, you know you. You could spend 20-30 grand on consultants’ fees just on those sort of reports alone before you even have a consent. It’s incredibly onerous for a developer, I’m sure.
Justin
Yeah, it’s probably one of our biggest challenges from a commercial point of view, because as you say, you know planning the planning process is not cheap, and particularly then I end up having sites going to appeal, which is a very slow process, but you know plenty of additional costs that comes with that as well.
And I think local authorities know that to an extent, so they use that as leverage sometimes to you know to try and push you into a certain position because they appreciate and understand that you have commercial pressures of your own to contend with, and you know, perhaps the local level consent for a smaller scheme is a is a more viable option at that moment.
James
OK, and I suppose I just want to finish off just talking very briefly about the market itself and what it’s been doing. Where you see it going in the next two, two years or so and and from your perspective, you know when you are looking at a site appraisal. You’re not looking at the market now you’re looking at trying to predict what is going to be when they come to the to the market. You know when you’re selling those clouds, all those houses. I just wondered in terms of your business model; you know what you look at you looking at mix of things or is there sort of an ideal size or development? I mean one developer I’m talking to at the moment has dismissed the number of sites we put forward to them because of the length of time it takes to sell.
One off houses, for instance as compared to flats, and he said, you know, if it takes another 6 to 12 months to sell a house and that house is at 1.2 million. Say you know the borrowing on that basis, so you’re better to have four flats selling it £400 to £500,000. So yeah, I’m really interested to hear you know what your thoughts are and without giving out all your trade secrets. Or you know where do you think you’re going with your business?
Justin
As a business, we’ve generally been quite diverse in the type of products and sites that we deal with. So we have everything from a single house through to you know larger schemes. 40-50 apartment units, so we sort of spread ourselves a little bit in terms of the type of product that we offer and the schemes that we involve ourselves.
I mean certainly COVID is brought about a, I think, a reassessment of people in how they live, what they want from life, what they want from their living environment and pre COVID I think people were quite happy to just have a base because they spent a lot of time out and ultimately, we’re driven by convenience over anything else.
So if they could minimize their travel time to work or to their friends, or to you know, places to socialize, et cetera, that that would override, perhaps wanting bigger space or getting better value for money and a larger property? That’s pretty much spun round completely, and I think you know the fact that people can work remotely now and work from home has just opened up the opportunity for them to perhaps go out a little bit further from cities and come. Take advantage of getting more space and having perhaps you know gardens and things like that. So, I think that trend will continue in the shorter term.
I think longer term I think we are we are ultimately going to return back to pre-COVID life as much as it can be, and I think that once that happens, the benefit of being close to work and being in the thick of it will, that that will return. And I think people will want to come back to the areas that they perhaps moved away from. As a result, I think once we’ve seen perhaps a little bit more stagnant, growth in the London areas, and huge growth in the kind of out of London, Surrey, Sussex, and so on.
I think that that will balance out in the to the medium term when some normality is returned and hopefully COVID isn’t so much of a problem for us all. But I think the other thing we’ve done certainly is everything that we had consent on or were putting in for planning application stage, we completely reassess the layouts of all of those properties to ensure that the current market demands or what we perceive to be future market demand. So I work from home space, perhaps not.
You know, if you had a small 4 bed, then make that actually a large 3 bed because the price someone is willing to pay for that and having that luxury space is probably the same obviously.
The work from home space is critical given where we are with everything, and people need to work from home much more.
Now and then, just ensuring that kind of shared communal spaces and private amenity spaces are of the highest quality that we can provide, because that’s a huge attraction for people now. And it it’s so critical to the way that we live and we will do moving forward, and to be honest, I think that actually this is some of the positives that come out of the whole COVID situation is that it will improve the quality of housing it will get rid of the, I guess more questionable borderline housing that has has been passed or is coming forward and it drives developers to refocus and really drill down into the detail and the quality of what they’re offering and how that works in real life. Justin
James
Do you think that means what you’re saying is that the buyers are becoming more discerning they’re asking for more?
Justin
Yeah, I think the expectation is has certainly changed and ultimate.
Justin
Really, it’s good. You know we need to be pushed as developers as house builders. We need to be pushed and we need to do the best that we can.
And the only way that truly happens is if the buyers do it. Because if buyers don’t buy products, developers sit up and listen and ultimately change what they’re doing. So you know the reality is it is for buyers to tell us what they want and for us to obviously understand our market and research that.
And COVID has caused us and made us as developers, I think, reconsider what we offer and, the style and type of product that we offer.
James
Justin, it has been really interested in talking to you. Thank you for all your insights into the planning system and the current market.
Justin
Nice, thanks very much for having me. It’s been great.
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