Council agrees disposal of Middlesbrough farmland for homes

The 71 hectare Newham Hall site near Coulby Newham, off the B1365 Stokesley Road, has been earmarked for development by Middlesbrough Council since its existing local plan was first drawn up in 2014.

In 2022 a report highlighted it as being among several “surplus, vacant and underutilised” council held assets which could be of benefit in the future in terms of creating new communities and “high quality places”.

The council’s executive approved the approach of the local authority acting as the “master developer” for the site, which means it will be financially responsible for bringing it forward for phased disposal and marketing.

A report said it was the council’s considered view that “best value” would be achieved by acting this way without third party involvement.

The disposal would be predicated on an open and transparent tender based competition with interested parties bidding competitively on the open market at regular planned intervals.

Before bringing the site to market Middlesbrough Council will also facilitate the upfront delivery of highway and electrical infrastructure. 

A timetable for the plans suggested that a planning application could be submitted in August with the site being marketed for sale via a formal competitive tender process in April next year.

The total amount of external funding to be committed to the project is calculated at £14.3m, which includes a combination of Government Levelling Up and Towns Fund grants – Levelling Up cash intending to pay for the delivery of a roundabout on the B1365 creating an access point into the southern aspect of the site – section 106 funding available for strategic highways improvements and accrued developer contributions.

The council will also contribute £4.1m of capital expenditure dedicated to housing growth.

The report, whose recommendations were agreed by the executive, said the overall budget for the infrastructure works, to be undertaken over a period of three years and adding in an extra ten per cent to insulate against rising construction costs, could amount to £18.4m.

It said Newham Hall was the council’s largest parcel of surplus land at 71 hectares, 42 hectares of which could be developed for approximately a thousand homes.

The report said: “Newham Hall is critical to the supply of land for housing development and is in turn critical for supporting economic growth in the town and the delivery of council services. 

“The disposal of the subject parcel of land is recommended in order to meet the council’s requirements to generate capital receipts and increase annually recurring council tax revenue streams. 

“Modelling of the site indicates that upon completion this would generate additional council tax income of approximately £2.5m per annum on completion, based on current council tax levels.”

The report revealed that the council had received three offers for the land, which has been let for agricultural use, but after taking advice from external property consultants Knight Frank it was deemed these did not demonstrate best value for money and a higher residual land value could be obtained.

It said: “It is proposed that Middlesbrough Council acts independently of third party involvement in disposing of this site. 

“This approach allows the authority to retain the greatest level of control and independence over the delivery of the site and the procurement of the necessary consultants. 

“It will allow the council to control the release of development parcels in a timely manner to ensure that the site’s disposal is proportionate to market demand and avoid oversupply. 

“It will also reduce the council’s reliance on third parties, protecting the council from political or economic shocks.”

The report said that Middlesbrough’s housing offer “needs to keep pace with the demands of the market”, adding: “The release and development of this suburban site will allow that to be achieved; stemming outward migration and making Middlesbrough a more desirable place to live, with a quantity of residential properties that will address the needs of a changing, growing and evolving population.”

It said that three and four bed detached properties would probably account for up to 75 per cent of the total property mix with smaller two bed properties accounting for ten to 15 per cent and bungalows and larger executive homes making up the remaining ten to 15 per cent.

Fifteen per cent affordable housing will also be provided on the site, which could take ten years to fully develop.

The report said not to sell the land would result in “significant financial implications” for the council, including no capital receipt and no council tax revenue growth. 

It would be contrary to its local plan and potentially leave the council open to “significant challenge” from the housebuilding industry if it were seen to constrain land supply.

Meanwhile, there would also be “significant abortive costs” resulting from due diligence work undertaken to date and the cost of legal proceedings relating to the cancellation of the farming tenancy. 

‘Not about selling the site’

Councillor Theo Furness, the executive member for regeneration, said the decision was “not about selling the site”, but “starting the build out” which would mean it was easier for developers to move in.

He said: “It’s about bringing forward investment and the infrastructure within the site.”

After the report was agreed by the executive panel, Mayor Chris Cooke proposed that the press and public be removed from the meeting so further elements – including valuations placed on the site and the offers received – considered ‘exempt’ could be discussed in closed session.

Councillors agreed in a show of hands with the Local Democracy Reporting Service abruptly being asked to leave.

Councillor Nicky Walker, the executive member for finance, said the public would understand that some things were commercially sensitive.

She said: “It’s the balance of the desire for transparency against the desire to get the best return on assets for the people of Middlesbrough.”