Weston abandons £300m Norwich development plans

Weston Homes had spent eight years working on its Anglia Square scheme, getting it through planning, but has now resigned itself to writing off £7.5m by walking away.

Demolition of the existing Anglia Square shopping centre has been due to start next month. 

Weston’s plans were set to deliver up to 1,100 new homes over the 4.6 hectare site as well as up to 8,000 sq m of retail, office and leisure floorspace and a community hall.

Resolution to grant planning was achieved in April 2023 – after a long journey. Earlier plans with a 20-storey tower were thrown out by the then secretary of state Robert Jenrick despite a public inquiry resulting in the planning inspector backing the scheme. Weston persevered and came back with new plans

Weston Homes said that there were seven separate factors impacting on the financial viability of the project, forcing it to withdraw: planning delays, Covid fallout, nutrient neutrality issues, Homes England red tape, build cost inflation, community infrastructure levy and new constraints imposed by the Building Safety Act.

The planning delays proved expensive. Weston Homes’ initial proposals for Anglia Square were granted local consent by Norwich City Council planning committee back in 2018 but Robert Jenrick decided to call it in and chose to overturn both the local planning consent and the inspector’s recommendation to approve. 

Weston Homes had to return to the drawing board and design a revised scheme to address the issues raised. There was then a further 12 months of local community and stakeholder consultation before the current project received a resolution to grant in April 2023.

Secondly, during the planning delays there was the economic fallout from the Covid-19 pandemic in 2020 and 2021, which impacted on the viability of the proposed office and retail space within the scheme.  

Thirdly, in March 2022 further delays to the scheme arose when a nutrient neutrality directive from Natural England blocked the building of new homes across Norfolk due to potential impact on nutrient levels in local wetland and waterways. Councils were told they could not give new housing schemes the go-ahead until mitigation measures were in place. 

This blockage was not reviewed until August 2023 when secretary of state Michael Gove announced that his department intended to rewrite the rules on nutrient neutrality, making Natural England’s rules guidance rather than directives. However, Gove has since backtracked on this announcement so Natural England’s directives still stand.

This meant that Weston Homes had to pay a £4m levy to Norwich City Council to ‘offset’ the risk to watercourses.

Weston Homes says that financial viability of the redevelopment of Anglia Square was always finely balanced, which is why the site was allocated £15m of ‘marginal viability funding from Homes England’s Housing Infrastructure Fund.  But this was not open-ended and came with a time limit. Due to these planning delays, Weston Homes breached these and was only able to draw down £7m of funding. Homes England has now offered a nine-month extension, which while very welcome, Weston said, would only go part way to help the funding being spent in time. 

The fifth factor is build cost inflation of more than 30% that has impacted on the initial estimates over the last 18 months.

Sixth, while Weston Homes welcome the Labour-led Norwich City Council cabinet approving a community infrastructure levy (CIL) exemption of £2.3m covering the first two phases of the development, there is still the remaining tax levy on the final two phases, which means that there will still be an additional £5.4m tax bill for scheme. According to the developer, this is not viable given the project finances. 

The final whammy was the design guidelines in the government’s Building Safety Act 2022,  resulting in the loss of 100 homes across the proposed scheme due to the required redesign of the various buildings.

Weston Homes has now had to write off a £7.5m loss in its report and accounts due to the costs spent on the design, redesign and community consultation over the seven years of delays during the planning process.

Bob Weston, chairman & managing director of Weston Homes says: “It is with deep regret that after eight years of hard work, substantial staff time and resources and some £7.5m of capital expenditure Weston Homes has been forced to cancel our plans for the redevelopment of Anglia Square. I am personally gutted to have to write off millions of pounds of company investment and not have a new scheme to show at the end of the venture. Weston Homes has bent-over-backwards to make this work and we have worked closely with Norwich City Council and the people of Norwich to try and realise a scheme that meets both local aspirations and is financially viable. I would like to add that throughout the eight-year process, Norwich City Council cabinet and officers have worked tirelessly to facilitate the redevelopment of Anglia Square.”

Bob Weston adds: “There are sadly no winners with this outcome. The city and people of Norwich, Weston Homes and Anglia Square are all victims of this deeply unfortunate situation. This was a development calculated to create circa 2,211 direct construction jobs, another circa 288 jobs in the completed retail and commercial premises, with the residents of the new housing calculated to spend up to £36.4 million per annum in the local Norwich economy. None of this will now happen. The core contributor to a lot of the issues in this saga is the Conservative government, which seems to have no understanding of the importance of supporting the housebuilding industry, regional cities and local communities in the UK.”

Mike Stonard, leader of Labour-controlled Norwich City Council, told the Eastern Daily Press: "This is a terrible blow for the city and many of our residents. The overall benefit of this scheme was clear – the comprehensive redevelopment would have transformed one of the most deprived areas of the city and one of the top 10pc of most deprived areas in the country.

“In real and practical outcomes, regeneration of this part of the city would have provided up to 1,100 much-needed homes, including affordable housing, along with job opportunities and the creation of public open spaces.

“The boost to the local economy was equally undeniable, with the estimated residential growth expected to bring in between £21.9m and £36.4m a year to the Norwich economy.

“Despite Weston Homes’ announcement, Anglia Square remains the most significant development opportunity in the northern part of the city and one of the council’s most important priorities for regeneration.

“We will do all we can to attract new developers, despite the current challenges of the UK economy which we are all living through."

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