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Thames Gateway Boss Predicts 5 To 10-year Slump

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http://www.insidehousing.co.uk/story.aspx?storycode=6504680

The head of the body responsible for the regeneration of the Thames Gateway has issued a stark warning to MPs on the damage being done by the recession.

In a submission to an inquiry being carried out by the All Party Urban Development Group, the chief executive of the London Thames Gateway Development Corporation warns that the capacity to deliver physical regeneration in line with government aims will be ‘extremely limited for at least the next five to 10 years’.

Peter Andrews says the problems are particularly acute in the Thames Gateway area because of the planned volume of high-density housing. He states that the business model for this kind of development, which was largely reliant on pre-agreed sales based on the assumption that property prices would rise, is ‘effectively broken with no apparent replacement’.

He says the only construction work still continuing in the Thames Gateway is on projects that began before the autumn of 2007, or are supported by the public sector. In 2008/09 work has started on just six new sites, five of which involve housing associations as the lead developer. If they are all fully completed they will deliver 1,800 homes, against a government target of 40,000 by 2016.

Mr Andrews says few projects have been mothballed, but that ‘stalled sites’ where planning permission has been granted but no work is taking place, are increasingly common. He estimates there are now 10 of these, with approval for 7,000 homes.

The Corporation suggests a number of ways to address the problems:

* Preparing sites for an upturn in the market

* Setting up partnerships where the public sector contributes land in return for revenue from developers

* Scaling back planning gain aspirations

* Investing in the infrastructure of the Thames Gateway area

But it notes that these steps are ‘unlikely to bring about the scale of housing delivery required’, and calls on the government to set up a ‘fundamental review that grapples with the problems being faced by the house-building industry’.

The All Party Urban Development Group is carrying out an inquiry looking at the impact the recession has had on regeneration, and possible solutions. It is expected to report at the end of June.

How many other projects setup like this?

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Peter Andrews says the problems are particularly acute in the Thames Gateway area because of the planned volume of high-density housing. He states that the business model for this kind of development, which was largely reliant on pre-agreed sales based on the assumption that property prices would rise, is ‘effectively broken with no apparent replacement’.

Nice to see them admit they were building things that weren't actually designed to be lived in.

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The Corporation suggests a number of ways to address the problems:

* Preparing sites for an upturn in the market

* Setting up partnerships where the public sector contributes land in return for revenue from developers

* Scaling back planning gain aspirations

* Investing in the infrastructure of the Thames Gateway area

How about instead of trying to flood the market with cheaply built rabbit hutches sold on at an astronomical price, they build quality low density housing and sell it on for a small but reasonable profit?

Oh no that would be far too sensible wouldn't it? :rolleyes:

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