Councillors were warned Borders housing market ‘extremely delicate’

EXCLUSIVE by EWAN LAMB

A comprehensive list of ‘weaknesses’ and ‘threats’ linked to the proposed purchase of the 109-acre Lowood estate to accommodate the construction of hundreds of new homes was presented to members of Scottish Borders Council by their own firm of consultants before the £11 million deal was sealed.

The report from specialists Ryden, considered in private in May 2018, warned the local authority: “The residential development market within the wider Scottish Borders region remains extremely delicate”.

A heavily redacted copy of the document entitled: Strategic Advice & Appraisal In respect of Tweedbank Expansion Melrose Scottish Borders makes interesting reading in light of recently published claims that the housing element of the so-called masterplan was ‘unviable and undeliverable’.

This week Not Just Sheep & Rugby, and local Borders newspapers reported on a previously confidential 64-page submission to SBC from consultants Jones Lang Lasalle (JLL) which also examined proposals for up to 400 houses on the highly attractive Lowood land. That report, prepared for Middlemede Properties, owners of the adjoining Upper Pavilion Tweed salmon fishing beat, concluded such a residential project did not stack up commercially with developers likely to make a significant loss.

However, SBC told the Border Telegraph the damning JLL report had not been shown to councillors because it had not been submitted in time. The council added: “The viability of development at Lowood Estate was thoroughly reviewed in a series of subsequent technical reports that formed the basis of the recommendations made to councillors in private on May 31, 2018. The report considered by Members in March 2018 contained detailed analysis including a thorough consideration of market conditions which went significantly beyond the scope of the JLL report.”

The Ryden appraisal was one of the papers available to councillors at their meeting last May. The censored version of the Ryden report was released by SBC to Middlemede’s lawyers who submitted a Freedom of Information request asking for it.

The consultants warn in their report: “The residential development market within the wider Scottish Borders region remains extremely delicate.

“A lack of development lending coupled with restricted funding via the Scottish Government has produced a position where Registered Social Landlords struggle in many cases to demonstrate the viability of proposed development in order to meet latent need. The same is true for many mainstream developers who are often uninclined to consider opportunities within the Scottish Borders themselves.

“In considering the wider marketplace, we would expect that the transport nodes associated with the new Borders Railway are likely to become the area’s most capable of seeking to attract developers. The market has not shifted sufficiently to see the volume builders commit to these locations at the present time. Once again, we would reiterate that we appreciate that the Scottish Borders Council are taking a longer term strategic view.

“At the present time, mainstream house builders remain selective in terms of postcodes and settlements and have continued to focus on existing legacy and land banked land parcels with acquisitions tending to be in established locations. There is a recognition at this point in time that the private sector is unlikely to commit speculatively in major volumes within the Scottish Borders.”

The Tweedbank masterplan suggests 25% of the houses to be built on Lowood should be affordable homes. But the Ryden report hints that this proposal might be changed to make the building plots more attractrive to developers.

The report says: “An alternative option would be for the Council to consider reducing the percentage of affordable housing required to be provided at the Lowood Estate or, alternatively, enabling this to be provided off-site.”

And Ryden also warn: “Clearly the Scottish Borders Supplementary Guidance on Housing refers to the subject site with an indicative site capacity of 300 units. This suggests a notional density of development at somewhere in the order of 20 units per hectare (8 units per acre).

“This is relatively low density and a mainstream developer is likely to seek to drive profitability by increasing the scale and mass of future development. Dependent upon the stance of the local planners, then there may well be a desire to engage with the planning authority with a view to delivering a greater number of houses over the longer term. We are aware of examples elsewhere where densities have been close to 30 to 35 units per hectare (12 to 14 units per acre) if an appropriate mix of terraced, semi-detached and detached dwellings are to be considered.”

When asked for their reaction to the Ryden report, JLL told Not Just Sheep & Rugby: “The Ryden report is a fair representation of the challenges that the Lowood site faces.

”The Ryden report is heavily redacted but, notwithstanding this, it seems to be suggesting that housing density needs to be higher, which in our opinion would further exacerbate the over-development issues facing the Lowood site.  The report also seems to be suggesting that to help viability, more standardised housing should be considered in place of more innovative upscale design.  This would, in our view, go against the high quality design objectives that were set in the Supplementary Guidance for the site and indeed not achieve the design quality aspired to in the Proctor Matthews Architect's Masterplan for Tweedbank.

”Moreover, the report also seems to be suggesting that a further step required to ensure viability is that consideration could be given to not providing affordable housing on the site.  This would, if progressed, further undermine the Council's aspirations for a balanced masterplan for Tweedbank.