Creating a More Prosperous Nation - Response
The Treasury have today announced major planning reforms to increase productivity set out in a 90 page 'blueprint' Fixing the Foundations: Creating a More Prosperous Nation. In summary, the changes include:
A revolution in the development of brownfield sites -
A new system of zoning will be introduced giving automatic planning permission for housing on suitable brownfield sites included in a new statutory register. Approval would be granted subject to the consideration of a 'limited number of technical details'. The Housing Bill includes provisions for the statutory register.
New powers in the Devolution Bill will be used to establish development corporations to deliver high density development in areas around commuter transport hubs. Unneeded commercial land will be released for housing.
Tougher action towards local authorities delaying plan making to deliver housing -
To ensure that local authorities are using their powers to get local plans in place and make homes available for local people, Government will intervene to have local plans drafted if local authorities fail to do so. League tables will be published, setting out local authority progress. Proposals will be brought forward to speed up the process of implementing or amending plans and to improve cooperation between local authorities on key housing and planning issues.
Ensuring housebuilding is not delayed by a slow and uncertain planning process, especially for small and medium sized businesses -
Local authorities who make 50% or fewer planning decisions on time are to be penalised. There will be sanctions for local authorities not processing smaller applications on time.
The introduction of a fast-track certificate process to establish the principle of development for minor proposals (so under 10 units).
Major infrastructure projects that feature housing elements could be fast-tracked through the Nationally Significant Infrastructure Regime.
Reduction of net regulation on housebuilders. The Government is not intending to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards.
Introduction of a new dispute resolution mechanism for S106 agreements.
More devolution of planning powers -
Stronger compulsory purchase powers are to be introduced to bring forward more brownfield land and devolution of planning powers, including powers over land, to the mayors of London and Manchester. In London, this will include more power over wharves and sightlines. Proposals will be put forward to allow the Mayor to call in planning applications of 50 homes or more.
To increase densities to help protect the ‘countryside’ building 'up' rather than 'out' '. Permitted development for upward extensions for a limited number of storeys up to the height of the adjoining building in London, subject to neighbouring residents not objecting.
The delivery of Starter Homes to be brought forward through the Housing Bill -
The Government is committed to deliver 200,000 Starter Homes for first time buyers by 2020 with a 20% discount for young first time buyers. Local authorities will need to plan proactively to deliver this objective, by for example by extending the current exception site policy (mostly affordable at the moment). Unviable or underused brownfield land currently used for retail, leisure and institutional uses would be prime targets for this. Every 'reasonably sized' housing site is to include a proportion of Starter Homes.
Communities will be enabled to allocate land for Starter Home developments, including through neighbourhood plans.
Starter Homes would be exempt from Community Infrastructure Levy, S106 contributions for other affordable housing, and tariff style general infrastructure funds. As a consequence further reforms to the CIL regulations are expected.
Further changes also include the extension of the Right to Buy to Housing Associations, and Buy to Let changes to tax relief.
HTA Design LLP Comment
Riette Oosthuizen, Planning Partner:
The changes announced today originate from the Treasury, exemplifying more centralist control over the outcomes of planning at local level. On one level there is huge transfer of power to elected Mayors in London and Manchester. On another, local planning authorities will be under much stricter scrutiny by central government, forcing them to invest limited resources in getting up to date plans in place. If all the changes are implemented, local planning authorities in London will have complete control over schemes only between 10 and 49 units, with the Mayor able to call in and make decisions on any scheme over 50 units or above. It remains to be seen whether the fast track certificate process for schemes under 10 units will indeed fast track housing delivery as they relate only to the 'principle' of development, rather than the detail. It is often the detail relating to schemes that takes time to negotiate.
There are a number of new measures to force local authorities to increase the speed of plan making and decision making. These are welcome in large part, in particular the focus on up to date local plans for housing and job delivery. Savills in their report ‘Beyond the election: what next for planning?’ (Spring 2015) found that 76% of English local authorities do not have a post-NPPF plan in place. This has led to a focus on getting planning approvals through appeals where sites are situated in areas without an up to date local housing supply or where local plans do not accord with the national planning principles of sustainable development.
There is some risk of over-simplification; delays in housing delivery are not only caused by delays in the 'planning process'; there are many sites with permission that do not get built. As of 31 March 2014, London's net housing pipeline consisted of over 240,900 consented homes. 54% of these are in schemes where construction has not started.
Planning is acutely political and the influence of local politicians are often underestimated in planning outcomes where schemes which have been positively recommended get refused at planning committee. The 'Productivity Plan' does not account for the importance of design considerations during planning as emphasised in the NPPF and the impact the negotiation of high quality complex schemes could have on the timing of the delivery of new homes.
We are supportive of the emphasis on developing 'up' rather than 'out' through brownfield intensification with associated higher densities. At HTA we have for some time promoted suburban intensification, and intensification around transport hubs, through our Supurbia project. However, the ‘Productivity Plan’ has a very clear message that the countryside will be protected. This is likely to focus attention further away from considering disfunctional green belt sites within London boroughs for their ability to deliver housing. It is important to tackle our housing crisis through a wide range of innovative solutions which may include green belt sites that no longer fulfil their original function, or employment land that is not used to its full potential through mixed uses.
It is highly likely that the proposal to allow upward extensions on existing buildings as permitted development would cause concern amongst local authorities, unless this measure would come with lots of exclusions such as Conservation Areas and or proximity of Listed Buildings.
The forthcoming Housing Bill is to include the idea of the statutory register for brownfield land "to help achieve the target of getting local development orders (LDOs) in place on 90 per cent of suitable brownfield sites by 2020". The 'Productivity Plan' seems to go a step further with the proposition of a zonal system rather than LDOs. It would be interesting to see which proposal is adopted as the Housing Bill progresses. Whilst LDOs have been around for a very long time to encourage development without the need for planning permission, it has until very recently hardly been used by local authorities and in particular not for encouraging housing delivery. LDO's can be accompanied by Design Codes giving local authorities more certainty over the quality of homes that would be delivered. LDOs cannot be used in areas where Environmental Impact Assessment is necessary. It would be interesting to see more in relation to the Government's view on how the zonal system would work and to what extent local authorities would have a view over design quality of new homes in such areas. New EIA regulations apply to all housing developments over 150 units or 5 hectares, so it would also be interesting to see if the zonal system would apply to sites requiring EIA.
There is often a reason why brownfield land is left undeveloped, such as large scale contamination or problems with accessibility requiring investment in infrastructure to unlock potential. As such, the
'limited number of technical details' that will be considered may be of some concern.
The focus on Starter Homes is welcome. The Government’s Starter Homes Design (March 2015) sets out exemplar Starter Home schemes, however it is important to balance that with planning policy aspirations for other new models of housing that address specific housing needs, such as Custom Build and PRS. It is important to maintain a focus on good quality well designed homes that will stand the test of time. Different sites may require different approaches to housing. Some sites may be best suited for PRS only.
Earlier this year, on the 2nd of March, the Government introduced a new national Starter Homes exception site planning policy for England (through a Written Ministerial Statement) to make it easier to secure planning permission from local planning authorities for Starter Homes on under-used or unviable commercial or industrial land not currently identified for housing. Under used or unviable commercial or industrial land could be a very important source of housing. However, the 'Productivity Plan' only makes reference to retail, leisure and institutional land, not industrial land. This is a shame as in our view there is huge untapped potential in London to look at intensifying employment land to allow for young people who are part of emerging small start up business interested in working, living and selling in the same place.
Rory Bergin, Sustainable Futures Partner at HTA Design LLP said the following in relation to the proposed reduction in net regulation on housebuilders:
This is a major backward step for the UK housing sector. Instead of leading from the front we will be laggards at the rear, losing out to foreign competition and unable to sell higher skills or technologies at home or abroad. Despite reiterating support for zero-carbon homes many times this Government is now backtracking on promises made and undermining the huge efforts already made by industry to prepare the ground for this important step in housing quality. Consumers will lose out by getting lower quality homes that will be more expensive to heat, and UK plc will need to find alternative ways of achieving the same emission reductions elsewhere.
Mike De'Ath, Partner:
In relation to Right to Buy extension to Housing Associations:
This will strike at the heart of how a number of Housing Associations have structured their finances in a ‘post grant’ environment. Long term debt finance and bonds have been available to enable development activities to continue based on the certainty of income the sector enjoys making it a safe place for investors. The loss of stock clearly reduces income and may bring Associations perilously close to loan covenant default, meanwhile units are unlikely to be replaced by new development due to increased costs as. Meanwhile regeneration projects will be further impacted by the increase in leaseholders and freeholders who may be able to purchase a discounted home on an estate but are unable to contribute to the costs of upkeep or renewal. A further concern is the phenomenon of RTB properties returning to rental by the purchaser, creating un regulated and often lower standards of management of this stock.
In regard to Buy to let changes to tax relief:
If tax relief is not allowed on interest paid on mortgages many ‘Mom and Pop’ landlords will find there is little or no return on their investment. I can only imagine this will either result in increased rents [and likely rent arrears] or sale of properties purchased for rental by individuals and small landlords. As this sector housing benefit many dependant people and families, I expect that this will add to demand and Council waiting lists and indeed the demand for temporary homeless accommodation. It may also speed up the migration of those on low income away from high value areas. Mixed communities may soon become consigned to the placemaking history book.
Under the national Starter Homes exception site policy, Starter Homes will: be offered by the developer to only first time buyers under the age of 40 wishing to own and occupy a home at a discount of at least 20% below their open market value; have a maximum discounted sales price of £250k outside London (£450k in London) to ensure that the Starter Homes are in reach of the typical young first time buyer; have resale and letting restrictions requiring the property, if sold, to be sold at a discount for 5 years after the first sale and not to be let until five years of owner-occupation by the purchaser; and be well-designed.