You may be aware of developers bringing the ‘top trump’ word to planning negotiations – viability. Used to negotiate down the aspirations of planning officers and the residents affected by the development. An example is Wolsey Grange where Taylor Wimpey argued that the application in its original form was not ‘viable’ so they had to increase the number of houses from 350 to 475.
In the EADT on 2nd March was a summary of Taylor Wimpey’s latest financial results. A brief summary is:
Pre-tax profits up 34.1% to £603.8million
Houses completed up 7.5% to 13,219
Ave. selling price up 8% to £230,000.
So an average of £45,676 profit per house or a return of 25% – which in any business is a pretty good rate.
If they achieve the same return on Wolsey Grange then they will ‘extract’ £21.7million of profit from the development – I think they must be working to a different definition of ‘unviable’ to the rest of us!