Ebbsfleet Garden City finally developing
 

From:
https://www.telegraph.co.uk/business/2018/04/05/housebuilders-buy-land-1bn-worth-homes-ebbsfleet/

Housebuilders have bought land for £1bn worth of homes in the latest phase
of the development of the new Government-backed garden city at Ebbsfleet -
the largest land purchase since the project's inception.

Countryside Properties, Clarion Housing Group and Barratt Homes have struck
a deal to buy land for 2,900 homes from landowner Henley Camland, which
confirmed it had taken over the sites from original owner Landsec just last
week.

The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

Development of a new settlement at Ebbsfleet was first proposed by
then-chancellor George Osborne in his 2014 Budget speech. The garden city
will be the first in the UK for more than 100 years and was intended to
alleviate some of the housing shortage in the South East.

But the project has taken longer than expected to get off the ground: of
the 15,000 homes planned for site, only around 805 had been completed at
the start of this year.

The housebuilders have bought the land in an area called Eastern Quarry,
one of the three main ‘villages’ at Ebbsfleet, where three new schools,
shops and community facilities are also planned.

Iain McPherson, managing director at Countryside Properties, said the
development would offer “exceptional quality of life� thanks to its
transport links and the nearby Bluewater shopping centre.

Countryside is already developing an additional 800 homes at another site
within the wider development, while this will be Barratt’s fourth site
purchase at Ebbsfleet.

The viability of the site as a potential new settlement was given a boost
in 2007 when Ebbsfleet International railway station was opened, opening up
high speed services to Kings Cross St Pancras and Stratford, as well as
Eurostar services to Europe.

Earlier this week London mayor Sadiq Khan said that options to extend the
new Crossrail line to Ebbsfleet were “still being developed�, adding that
Transport for London had started discussions with Network Rail over using
existing track.

Ebbsfleet Garden City finally developing
 

In message
-sept
ember.org, at 07:20:24 on Fri, 6 Apr 2018, Recliner
remarked:

Countryside Properties, Clarion Housing Group and Barratt Homes have struck
a deal to buy land for 2,900 homes from landowner Henley Camland, which
confirmed it had taken over the sites from original owner Landsec just last
week.

The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

So that's about £350k per house; of which £100k is its share of the
land, another ~£100k for the construction of the house, plus £150k for
building the roads and drains, contributions towards schools and other
amenities, subsidies for "affordable" homes, and a small profit for the
developer.
--
Roland Perry

Ebbsfleet Garden City finally developing
 

"Roland Perry" wrote in message
...
In message
-sept
ember.org, at 07:20:24 on Fri, 6 Apr 2018, Recliner
remarked:

Countryside Properties, Clarion Housing Group and Barratt Homes have
struck
a deal to buy land for 2,900 homes from landowner Henley Camland, which
confirmed it had taken over the sites from original owner Landsec just
last
week.

The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

So that's about £350k per house; of which £100k is its share of the land,
another ~£100k for the construction of the house, plus £150k for building
the roads and drains, contributions towards schools and other amenities,
subsidies for "affordable" homes,

ITYF that the latter comes in at about 30K per house

and a small profit for the developer.

leaving a big profit for the developer

tim


--
Roland Perry

Ebbsfleet Garden City finally developing
 

In message , at 12:36:08 on Sun, 8 Apr 2018,
tim... remarked:
The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

So that's about £350k per house; of which £100k is its share of the
land, another ~£100k for the construction of the house, plus £150k
for building the roads and drains, contributions towards schools and
other amenities, subsidies for "affordable" homes,

ITYF that the latter comes in at about 30K per house

Can you show your working, in terms of the discount that's being offered
by the builder and the percentage of affordable homes on site?

and a small profit for the developer.

leaving

And the "the roads and drains, contributions towards schools and other
amenities"?

a big profit for the developer

What's the industry standard margin for this kind of development? A
quick google suggests that 20% would be regarded as "record breaking"
(although that's what I'd expect on a much smaller development).

15% of £350k is close to £50k, which neatly gives £100k again for the
non-residential infrastructure, community contribution, and loss made on
the affordable houses (which I'd expect to be changing hands at about
£250k).
--
Roland Perry

Ebbsfleet Garden City finally developing
 

"Roland Perry" wrote in message
...
In message , at 12:36:08 on Sun, 8 Apr 2018,
tim... remarked:
The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

So that's about £350k per house; of which £100k is its share of the
land, another ~£100k for the construction of the house, plus £150k for
building the roads and drains, contributions towards schools and other
amenities, subsidies for "affordable" homes,

ITYF that the latter comes in at about 30K per house

Can you show your working, in terms of the discount that's being offered
by the builder and the percentage of affordable homes on site?

and a small profit for the developer.

leaving

And the "the roads and drains, contributions towards schools and other
amenities"?

a big profit for the developer

What's the industry standard margin for this kind of development? A quick
google suggests that 20% would be regarded as "record breaking" (although
that's what I'd expect on a much smaller development).

15% of £350k is close to £50k, which neatly gives £100k again for the
non-residential infrastructure, community contribution, and loss made on
the affordable houses (which I'd expect to be changing hands at about
£250k).

Benchmark profit 17.5% to 20% of GDV, at the lower end for large sites. So
on a £350k house with 17.5% profit on GDV, this would be a profit of £52,500
near enough. (Profit on GDV is akin to a 'finding the original quantity'
calculation - 50k profit would be 50/(350-50) = 16.6%, 60k would be
60/(350-60) = 20.6%

Anything significantly below this figure and the developer is likely to go
to viability to get planning obligations reduced.

James

Ebbsfleet Garden City finally developing
 

In message , at 21:57:30 on Mon, 9 Apr
2018, James Heaton remarked:

a big profit for the developer

What's the industry standard margin for this kind of development? A
quick google suggests that 20% would be regarded as "record breaking"
(although that's what I'd expect on a much smaller development).

15% of £350k is close to £50k, which neatly gives £100k again for the
non-residential infrastructure, community contribution, and loss made
on the affordable houses (which I'd expect to be changing hands at
about £250k).

Benchmark profit 17.5% to 20% of GDV, at the lower end for large sites.
So on a £350k house with 17.5% profit on GDV, this would be a profit of
£52,500 near enough. (Profit on GDV is akin to a 'finding the original
quantity' calculation - 50k profit would be 50/(350-50) = 16.6%, 60k
would be 60/(350-60) = 20.6%

Anything significantly below this figure and the developer is likely to
go to viability to get planning obligations reduced.

Thanks, and for highlighting the difference between margin and markup.

I got my original 20% figure from a developer who was charging what I
thought was somewhat under the market price for houses on a small (~8)
fill-in development. He said that the way they worked, was add up all
the land and build (and community) costs, apply the 20%, and then see
whether they sold or not.

If they flew off the "shelf" (aka bought-off-plan) then they'd still
make their 20%, plus have reduced ongoing marketing costs. If they
hadn't sold by the time they were completed, then generally they
wouldn't reduce the price, but hold tight until the local market caught
up with them.

Fast forward to 2010's, and I see a slight variant on that strategy,
which is perhaps what's happening at Ebbsfleet/Northstowe on a slightly
larger scale, is build a relative small Phase 1, and see how they sell
before starting on Phase 2 (or I've even seen a Phase 1a).

One estate near me was started in 2005, and they've only just begun
Phase 5 (plots 550-620), and by the look of it there's another five
years[1] before they do the last houses, followed by the final bits
[assuming they ever do] like the 'Village Hall' and so on

[1] About 300 more in future phases, including 100 in suspiciously-named
"windfall" which I presume is packing them in tighter, and with less
green space, than when the project was first conceived^H^H sold to
the planners.
--
Roland Perry