Development consultancy: taking the long view

Property development at scale is a long term process which seeks to establish and create value: it takes many years in research, analysis and planning even before construction begins, and the resulting developments will probably last well into the next century. 

The essence of development consultancy

So the practice of development consultancy - which tends to serve substantial, complex, multi-partner projects - requires a long-sighted approach and an ability to predict and understand the broad impacts of future change alongside the relevance of more specific changes on specific projects.  

Francis Truss is a Partner in Carter Jonas’ Strategic Land team. His first degree in Economics, partnered with a postgraduate degree in Urban Real Estate Management and Development, gives him the breadth of understanding that is so fundamental to development consultancy. The Strategic Land team works across a range of clients, from the public sector to large-scale private landowners with diverse landholdings – and frequently partnerships between the two. The common factor is size and complexity: imagine the challenges of developing a scheme of 200 units and multiply that by at least 100 to understand the complexities of a 20,000 home mixed use scheme. Furthermore such schemes frequently involve changes to transport infrastructure and invariably cross administrative boundaries.  

Key components of development consultancy

“The key components of the role are research, financial analysis, forecasting and making recommendations based on those projections,” explains Francis. “It’s not just the schemes, but the clients’ motivations that vary considerably. So advice is always nuanced, based on the variables within the proposed development and the existing built environment, but also the client’s objectives – short and long term, financial and social. It’s necessary to take an objective view based on the best information available.” 

Understanding the future requires an understanding of the past and Francis has always been interested in how things change.  

“Placemaking is long term and continual,” he says. “We won’t know that we’ve done our job well for many years because success lies in having understood the potential for future change and having allowed for flexibility in response to future change.” 

Again, economics is at the core: not solely financial success, but broader issues such as making the best use of land, overall externalities and understanding home ownership patterns. 

Addressing land use and housing scarcity

On the subject of land use, Francis believes that the scarcity of suitable land will become an issue of even greater concern in the future. “The UK has continually failed to meet the 300,000 homes annual housebuilding target,” he says, “And the fact is that 300,000 is probably not enough, taking into account significant population growth and housebuilding shortfalls. Already 8.5 million people are defined as being inadequately housed and this number could grow if the housebuilding and population growth figures continue on their current trajectories.” 

How can the market respond to the housing crisis? “With housing affordability becoming an increasing issue – coupled with social factors such as a people having fewer children, later in life  - the continued rise in the Build to Rent market seems likely to remain.”  

And the shortage of land? “Aspirations to own large, detached homes runs against a desire to protect green land. Part of the answer is density. Meeting need for more housing requires a combination of understanding consumer preferences, balanced against the scarcity of land.  

Navigating political and development changes

“In town halls across the country, councillors are often incentivised to oppose development because of local pressure. This leads to the homeowner’s view being  often prioritised over that of the non-homeowner; when the non-homeowner isn’t resident in the local planning authority, the democratic system will invariably favour the homeowner”. 

So is there any potential to take out the politics? Just as the Labour party removed interest rates from government control in 1997, could the next government (whatever its political colour) do the same for planning and development? 

“There is certainly an argument in favour of deregulation,” says Francis. “Political uncertainty and the resulting delay significantly inflates the cost of development and therefore contributes to housing unaffordability. On this basis an argument could be made in favour of the ‘national good’ but people may feel that they were being dictated to, without any recourse”. 

“An option could be simplified planning zones and development corporations. One of the most successful areas for growth is Milton Keynes, enabled by the Milton Keynes Development Corporation over many decades. It’s encouraging to see the government talking of a similar approach in its plans for Cambridge, but success requires the policy framework to be clearer and to be rolled out more widely. 

“Development corporations work best if they have real power and financial resources. They can be locally-led but it’s hard for individual local authorities to do so – again because of the political realities and their resource constraints. Practically,  a regional or mayoral level approach is likely to be more achievable.” 

The fact that Milton Keynes is still growing after almost 60 years demonstrates the benefits of this long-term, politically neutral and flexible approach to large scale housing development. Whichever way you look at it, a short-term fix is rarely the best option: the long view is necessary for lasting success.