Taylor Wimpey (TW) are the third largest house builder in the UK. Their Pre-tax profit before exceptional items rose 34.1% from £450m to £603m to the year ending December 2015. After tax Taylor Wimpey made £489.80 million in 2015, up from £374.40 million in 2014.
In 2014 TW said it would pay out a special dividend of £250 million to investors over the next two years from its growing cash pile.This has now been extended to the end of 2018 & TW will pay shareholders £1.3 billion pounds by the end of 2018.
TW are developing the former Shorncliffe Garrison Site and intend to build up to 1200 homes.
In 2014 GVA for and on behalf of TW submitted their financial viability assessment to SDC. Ben Gering SDC head of Major Projects, dealt with the assessment.
At Para 9.5 of the GVA Report it makes it clear that TW overpaid for the land at Shorncliffe Garrison according to a industry insider who assesses financial viability assessments.
In the GVA Report there are two models at para 10.43, it states: ‘Based on the total development costs including finance on land of approximately £191 million, when deducted from the GDV of £215.3 million, this produces a profit of £24.2 million. This equates to 11.3% of GDV.’
In the next paragraph GVA state: ‘This indicates that planning policy scheme is not viable and could not be delivered.’
GVA sought an alternative scheme whereby the number of affordable homes to buy or rent was reduced. The alternative scheme reduces affordable homes to buy and /or rent from 30% (360 homes) to 17.7% (216). So a loss of 144 affordable homes to rent or buy.
By reducing the total number of homes by 144, TW expected profit grew from £24 million to £41 million.
The Conservatives have called for relaxations of the requirements on developers to provide “affordable” housing, making the case that releasing them from this “planning gain” burden under Section 106 agreements can re-start bogged down schemes by making them financially viable again. This is evident at Shorncliffe Garrison site, where 144 ‘affordable’ homes to rent or buy have been lost.
All this when Taylor Wimpey are a cash rich company and shelving out over 4 years (2014 -2018) £1.3 billion to shareholders.
The loss of affordable homes to buy or rent here in Shepway is a growing problem as it is nationally. In the meantime TW sit on 184,730 plots of land based on information disclosed in the companies’ last financial results. This know as landbanking.
Put simply, land banking is the practice of owners of land that could have homes built on it sitting back and watching the value of the land grow until such time as it can be built on more profitably, sold on at an inflated price to someone else or just sat on as an asset interminably. By exploiting the under supply of homes and rocketing prices of land in across the UK in this way, such land owners are making fortunes out of a crisis they could help solve.
Toby Lloyd, head of policy for the housing charity Shelter, said’Developers do need a pipeline of future sites – but when housebuilding is still stubbornly low and landbanks are this large it is a signal of how dysfunctional our housebuilding system is.These are private companies so it’s reasonable for them to seek profits. But when their profits are so high we should be questioning why the government is directing subsidies towards developers to build barely affordable starter homes and away from providing the genuinely affordable housing we so desperately need.”
As both house prices and rents continue to soar once again, the loss of 144 homes at Shorncliffe Garrison Site and a loss of 220 homes on the Folkestone Seafront Development and lossess at the Nickolls Quarry Site from 315 to 210, demonstrate affordable housing either to rent or buy in Shepway is not deemed a priority by SDC who have failed to build any social housing in the last 20 years.
Just on these three sites alone, four hundred and sixty four (464) affordable homes to rent or buy in the district will not be built. Meanwhile TW continue to landbank 184,730 building plots and shareholders continue to receive dividends to the value of £1.3 billion. Is this a good thing? We’ll leave you to decide that.