Spodden Valley financiers nationalised
Date published: 13 October 2008
The bank which holds a mortgage charge on the Spodden Valley site has been nationalised.
In a move described in the media as one that "fundamentally changes the nature of banking", Gordon Brown decided that the Government has to take a majority shareholding in The Royal Bank of Scotland (RBS) after he found it was in a more vulnerable state than had been thought.
The bank will in effect be state-run with Government-appointed board members put in place. However, speaking on Radio 4's Today Programme, Chancellor Alistair Darling suggested that the government has taken a commercial decision to rebuild the bank's financial position and that control of day to day operations will be at 'arms length'.
According to the Land Registry, the Royal Bank of Scotland have held a mortgage charge on the Spodden Valley site against MMC Developments Ltd and Rathbone Jersey Ltd since late 2004.
The vast 72 acre Spodden Valley, site of the former Turner Brothers Asbestos factory, once the largest asbestos textile factory in the world, was sold a few months earlier, in April 2004, by the Administrator of Federal Mogul for £6,250,000.
A controversial planning application to build more than 600 homes in the Valley remains firmly on hold but MMC Estates have publicly stated that they remain committed to the application.
A new Conceptual Site Model has been discussed with Rochdale planners and the TBA Working Party alongside the possibility of new testing and site analysis.
Since Countryside Properties PLC pulled out of the deal in 2007 the planning application has been the responsibility of MMC Estates via agents Knight Frank.
However, in an assessment of the credit crunch, another part of the Knight Frank organisation has made a bleak assessment of "brownfield" (previously developed) land values.
Jon Neale, head of development research at Knight Frank, believes that such sites will have difficulty finding a developer in the current economic climate.
He said: “Over the past year, developers have put their land acquisition activities on hold, which has dramatically reduced demand for sites – by as much as 60 per cent in some parts of the country.
“Developers have found it almost impossible to access finance to buy land, while the pronounced slowdown in the sale of new homes has prompted them to reconsider the size of their future needs. Indeed, many are selling sites to raise cash and bolster their balance sheets, which has dramatically increased the supply of land on the market, further depressing values.
“There is evidence that many other vendors have not yet come to terms with the changed market conditions, and have unrealistic expectations of what price their site can achieve, particularly if it was bought at the top of the market.”
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