Housing and Planning Bill – what does it mean for development?

On 25th November 2015, Chancellor George Osbourne delivered his Spending Review and Autumn Statement to the House of Commons. Within his speech, Osbourne committed to building 400,000 new homes by the end of the decade. Many questions have been raised over the capacity of land and the resources of Local Planning Authorities (LPA) and housebuilders available to successfully implement such a tall order.  The picture has become clearer as the Housing and Planning Bill progresses through the report stages in January.

Starter Homes

Part of the delivery vehicle for the planned rollout of housing is to enable unused commercial or retail land in the greenbelt to be used to develop Starter Homes. Starter Homes are to be sold at a reduction of open-market price by at least 20% to first time buyers under the age of forty. It is not clear whether Starter Homes will replace Affordable Housing or be encouraged alongside it. The scrapping of Affordable Housing would cause obvious upset for housing charities and Local Planning Authorities (LPAs) whereas running the two schemes side by side could reduce the viability of development in the eyes of some investors.

Concerns have been raised over the likelihood of successfully developing sustainable communities on sites which may be contaminated, are likely to have poor access to leisure and employment facilities and will require significant investment of social infrastructure and energy solutions.  With such a tall order to meet, there is a responsibility for planners to get involved from the outset.  Their technical skill is needed to ensure that the developments being built will have the resilience of existing towns and cities and can be established as places where people will want to live in.

There are strident arguments from some that the number of new homes proposed is too great for the country’s land capacity.  The government has already responded by announcing that ‘excess’ public land is available at five sites across southern England where it will directly commission small builders to construct thousands of new homes. There is, as yet, no government appetite to review the green belt to provide more space to build.

Starter Home

Extended Right to Buy

To overcome limited building space, the Spending Review gives the Right to Buy scheme scope to extend to a wider network, including housing association tenants in line with the government’s preference for affordable ownership over affordable rents. Plans have just been unveiled to redevelop one hundred council estates in the country by bulldozing socially rented properties and replacing them largely with affordable housing to buy. In planning terms, this counters the long established drive to make a mixture of tenures available within every new development in order to create diverse and sustainable communities.

There is no evidence to support the policy that increasing opportunities for property ownership will create genuine affordability for those now excluded from the property market.  It is difficult to visualize, even with an influx of 400,000 new homes by 2020, that house price inflation will reduce sufficiently for buying to become an option for those who currently share rented accommodation.

social housing 2

Shared ownership

With this in mind, the opportunity for shared ownership has been expanded within the 2015 review by changing current restrictions on who can buy a home through shared ownership. The changes would open up the opportunity to anyone who has a household income of less than £80,000 outside of London, or £90,000 within London. With funding for prospective owners being made more readily available, LPAs are expected to deliver sufficient housing across their towns and cities.

LPA ‘delivery test’ on housing supply

Accordingly, a test is proposed to ensure that planning authorities deliver permissions for the number of homes set out in the Local Plan. The consequences of failing this test are not yet clear but, on top of the existing requirement for LPAs to identify a five year supply of deliverable land, this measure will inevitably add pressure to already scarce council resources.  Although not addressed in the Spending Review, we assume that the funding gap will need to be plugged by the private sector whilst builders will increase their capacity way beyond current output.

Building capacity shortage and funding gap

Extended demand can only be good for the construction workforce and there is hope that the building required will create a meaningful range of construction apprenticeships.  The UK construction industry has experienced a succession of declining applications and completion rates for apprenticeship schemes over the past five years, not least due to the cost and availability of transport for apprentices to travel to sites. Local authority funding for public transport has, meanwhile, been massively cut by the reduced central grant to councils. The gap in building skills may, therefore, need to be met by overseas contractors.

The UK’s infrastructure deficit is currently estimated to be £500bn and, regardless of how attractive the UK transport network and energy industry may appear, international investors will expect a substantial return on their investments.   As the Spending Review made no major announcements in respect of funding models for infrastructure provision, the recently formed National Infrastructure Commission (NIC) will have to make a good case to drum up public support for likely unpopular decisions around public taxes and utility charges if new homes are to be well connected to the rest of the country.

Opportunity for planning

After years of battling conflicting policies to meet demand for housing, planners can only welcome the government priority to deliver housing in England.  There is no doubt that the planning system should be straightforward but planning for housing is not simply a question of numbers set centrally. Developers, communities and local politicians need to trust that new housing will be fit for purpose and place, and confident that their investment and support for new development will meet local needs and deliver balanced communities that meet the needs of the whole nation.

The planning system is focussed on approaching development holistically by integrating housing into wider strategies for transportation networks, healthcare facilities, environmental protection provision and business development opportunities in order to achieve economic growth and social wellbeing as a whole.  There are numerous opportunities to achieve new housing that meets these expectations, not least via the 475,647 unimplemented housing permissions reported by The Local Government Association on 7 January 2016. Unless amended through the parliamentary process, the central intervention currently embedded in the Bill, risks alienating the very people and interests who most need to be encouraged to deliver housing development.

 

 

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