Delivery Partner Panel 3 - North East, Yorkshire & The Humber Lot, Cottingwood - St Georges Phase 1, Morpeth, Northumberland - Modification Notice

Description

Homes England's Cottingwood Phase 1 site at the former St Georges Hospital, Morpeth is a residential development delivering 260 homes with 15% affordable.  This was originally procured via Homes England's Development Partner Panel 3 (DPP3) during 2021/22.   The purpose of this additional contract notice is to provide explanation of a modification that has become necessary since the original contract was agreed.  The details of this modification are provided below.  
Please note that contract dates have been revised to reflect the updated timescale and the value has been increased to reflect the updated Gross Development Value (GDV).  Costs have increased to a higher degree resulting in the reduction in land value outlined in the additional details section. This notice and the previous notice do not disclose the land value for commercial sensitivity reasons.

Additional information: 
The purpose of this additional contract award notice is to fulfil transparency obligations necessary to validate the modification of the contract during its term.  The original award notice's reference was THCA001-DN536322-77438466.
The ground for this modification is 'the need for modification brought about by circumstances which a diligent contracting authority/entity could not foresee' (Regulation 72.1(c)). The land value, as assessed at the time of the tender, has reduced by 17.1% in net present value terms.  This change does not undermine the original award decision and is within 50% of the original tendered value permitted by this ground.
A Supplemental Agreement was exchanged between Homes England and BDW Trading Limited on 28th June 2024 to reflect the approved changes to the land price as a result of the macroeconomic impacts experienced since the Agreement for Lease was exchanged on 31st March 2022.  The macroeconomic impacts are principally cost inflation, which has outweighed forecast value growth, and a requirement to extend the build programme due to the current and projected delivery and sales pace.   
The impact on the land price has been mitigated by changes to other commercial terms.