I'm sure Ipswich is not unique but it appears, after conversation with a number of developers and commercial building contractors, that the banks are still reluctant to lend money for residential development in Ipswich.
Although the cost of building has become very competitive with margins for the contractor almost non-existent, the return generated by the sale of the completed property does not currently cover the building cost, or if it does it is only marginally on the positive side of break even which is insufficient to cover the risks involved. And as we can clearly see on the Waterfront the risk of non-completion is high and the chance of finding sufficient purchasers to 'sell' a complete block of apartments very low. Hence there has been no building activity on the northern quays since 2009. Across the river on the site previously occupied by Graham's Plumbers Merchants; Genesis Housing Association are currently contracted with ISG to build 600 units to add to their own housing stock, taking advantage of both the low cost of building, and of borrowing in the current climate and the increasing demand for rented accommodation. Three very tall cranes on this site at least give some indication that not all builders are at a standstill.
Developments of detached and semi-detached family homes carries less risk in that they are normally sold 'off plan' with the purchaser viewing a show-house rather than the actual property being purchased. But again there is an almost complete lack of activity. Charles Church - the quality division of Persimmon - are sitting on their hands at Ravenswood and although some building has taken place on the site of Hayhill allotments sales are according to Crest Nicholson 'slow'.
Landex Living built and sold all four units at Northfields off Valley Road (Ipswich Society Award winner 2012) and has started on a quality scheme of seven properties on the site of what was previously Park Road reservoir.
Meanwhile back on the Waterfront a contract to fit out The Mill, the 23 storey tower block which appears finished but is currently an empty shell, has been out for some time. A contractor has been selected but the banks are still reluctant to sign the contract; again the cost of fit-out pushed the boundary of acceptable financial risk.
The ultimate confirmation of the reluctance of banks to lend against building development in Ipswich came with confirmation that Tesco are pulling out of Grafton Way. Yes, it was a big scheme with a large store, integral flats and two hotels but if Tesco cannot make it work then who will?
Overall, Ipswich is awash with undeveloped sites from the former Tooks bakery in the north west to County Hall in the east and multiple sites around the Wet Dock and Stoke Bridge.