Back to Blog
11 November 2009
The Thames Gateway is the number one regeneration project in the UK and probably in Europe too, and therefore it is very important not just to London and the South East, but nationally too. However the biggest constraint to progress currently in the Gateway is the state of the housing market.
Developers will not start projects unless they can be sure of sales. Many sites are large and complex and are burdened with large upfront capital costs and this is all the more reason why developers and investors will think twice before commencing a project. Therefore many schemes in the Gateway won’t get underway until market conditions improve. Most of those projects that are in progress have been slowed down to reflect current sales rates and that is certainly true of our schemes in the Gateway.
The benefit of Kickstart
Some projects are being helped by the government through the HCA and others where they are prepared to bear some of the upfront risks and indeed such intervention is often welcome. Initiatives such as Kickstart, where phase one of funding is now complete, are very welcome and it is beneficial to everyone who’s concerned with keeping new housing supply moving. I was pleased therefore to see HCA Director, David Edward’s recent comments in Building about their continued commitment to the Gateway.
Confidence in the Gateway
I regard the current setback in the Thames Gateway as being relatively short-term. My confidence in the Gateway has not waned and the long-term prospects are still very good.
Whilst we are experiencing this period of slowdown we can nevertheless continue with the preparatory works and then developers will be ready to go once sales prospects improve. Considerable emphasis therefore needs to be placed by public sector bodies on important infrastructure works such as highways investment around Ebbsfleet Valley. Such preparatory work should be progressed now rather than waiting until development programmes can be speeded up.
Learning the lessons
There will no doubt be a number of schemes that will have to be planned rather differently. Lessons learnt from recent years include the fact that too many schemes have been designed to too high a density with a predominance of flats. My concern has always been that this is not conducive to the creation of sustainable communities the success of which, from a social viewpoint, requires a balanced mix of house types and tenures creating a broad spectrum of price ranges and buying options. All stakeholders will need to be very conscious of this issue.
The move away from mono housing types is all to the good, I believe, and from it we’ll get more balanced and superior development solutions. The lessons learnt in recent years must not be forgotten in planning future schemes.
Sustainable solutions
The current pause also gives developers and others time to think how best to include environmental objectives into future schemes. The regulatory demands have of course not gone away in the recession. We need to research how we can best achieve more sustainable developments and move forward with solutions that will have a lasting and positive impact, rather than a potential maintenance nightmare if we do not use proven systems.
Need for public/private partnerships
It is inevitable in my opinion that there will need to be more private and public sector partnering arrangements in place in the future. This will be necessary as funding for development won’t be as readily available as in past years. Banks and funders generally will be more cautious and new funding methods will have to be seriously considered as Savills Research has recently pointed out. This is why I believe public/private partnerships will be the most appropriate way for development programmes to be enhanced in the future.
The key constraint
Funding for homebuyers continues to be the most major constraint in selling homes. Many people who want to buy simply can’t. Hopefully the strict lending criteria will ease a little, but it will not return to the sort of free and easy mortgage funding that has caused some of our recent problems.
Meeting the vision
The Thames Gateway will no doubt make a significant contribution to housing supply in London and the South East of England and where it not to happen it would bring about much greater pressure for development in these regions. We must therefore work with renewed vigour to ensure the vision and the objectives for the Gateway are met.
Enjoy this post? Get more like it by subscribing to my blog either by clicking on the RSS feed link at the top right of the page or by emailing group@cpplc.com
Back to Blog
Information correct as at 11/11/2009