Contaminated Land and Brownfield Remediation 22 nd September 2009

1. Brownfield Remediation and House Building : An Economic Outlook Ian Heasman, Brownfield Remediation Manager Taylor Wimpey UK Ltd Contaminated Land and Brownfield Remediation 22nd September 2009

2. Contents • The Economic Outlook and the Housing Market • Brownfield Remediation Market • Financial and Regulatory Market Drivers • Remediation in a Brownfield Finance Context • Conclusion

3. The Economic Outlook and the Housing Market

4. UK Economic Outlook • Consensus building on an end to the UK recession • While there are still concerns about stagnation or a W-shaped recovery, business confidence is building • Global Picture: China and India economies moving ahead, Japan, France and Germany all out of recession in Q2 2009, US recession appears to be ending

5. UK Economic Outlook • Tight credit constraints • Huge public debt – tax rises and public spending cuts needed but will put brakes on recovery • Unemployment still set to rise

6. Housing Starts and Completions June 2009 Source: CLG Housing Statistical Release August 2009

7. Housing Price • Nationwide: House prices rose for a fourth month running • Average cost of a home rose by 1.6% in August to £160,224. • Prices now 3.2% higher than at the beginning of the year, although still 14.4% below peak in October 2007 • Increases due to: • Increased economic optimism • Slow down in new build (supply limitations) • Very low interest rates (BoE base remains 0.5%)

8. Housing Market Improvement in some UK regions – particularly London and the SE – but held back by: • Availability of mortgage finance • Continuing concerns over aspects of the recession such as unemployment “In the first half of 2009, trading conditions improved significantly. We saw stable conditions in the UK, achieving increased sales rates and stable pricing”. Taylor Wimpey Interim Trading Statement for six months to June 2009

9. Land Market 2008 / 09 2011 Need to increase outlets House builders are looking to buy land again Right location, right price What happened What's Next

10. Cash Flow Revenue Spend Remediation Roads Sewers Pre-acquisition Site Preparation Construction Acquisition

11. Political Outlook • Tories: committed to increasing housing numbers • Abolition of Regional Spatial Strategies and housing targets • Polices based around ‘localism’: local decision making • Cost cutting: Quangos? • Provision of regional and sub-regional infrastructure • Serious concerns within the house building industry as to how new policies would work in practice

12. Outlook for House Builders • Slow but consistent growth from a low base • Land constraints – lack of available outlets and difficulty in getting sufficient outlets open quickly – reduced workforce and capital expenditure • Macro-economic concerns remain but are reduced • Concern about planning hiatus during possible government change

14. Brownfield Remediation Market

15. Brownfield Remediation Market • 2008/2009 Survival! • Internal Reviews – Lean and Mean • Increase in brownfield inquires over last 3-4months – not yet resulting in many new substantive contracts • Anticipate remainder 2009 and much of 2010 to remain tough – but easing significantly afterwards

16. Recession Changes • Certainty/Risk Management • Liability Management Cost Management Time • Cash Flow • Tax Efficiency Risk Quality and Control

17. High Cost Boom Zone Physical Quick Slow Chemical Bust Zone Thermal Biological Low Cost Money Light -Time Heavy Remediation Incineration Anytime Zone MNA Phytoremediation

18. High Mobilisation Costs High Running Costs Low Mobilisation Costs Low Operation Costs Remediation and Cash Flow Cash Flow– the balance of cash being received and paid by a business Spend Time

19. Financial and Regulatory Market Drivers

20. Planning Drivers • 60% of dwellings on previously-developed land Target Remains • 79% 2008 (77% 2007) (CLG) • Brownfield first sequential test