Planning Nutshells: A Housing White Paper that works for everyone?

The Government has set out its four step plan to fix Britain's broken housing market.  But will it work?  In this, the latest publication in our Planning Nutshells series, we look at the headline points and consider the White Paper's efficacy.

On a first read, it is apparent that those who were expecting more of a white knight than a white paper will be disappointed.  It does not provide all of the answers, but nor should it.  

Rather, it acknowledges the issues and invites those with knowledge of the industry to participate in shaping solutions; a refreshing approach and one which sits in marked contrast to the somewhat dictatorial stance of the previous administration.

The tone of the White Paper and some of the concessions made (most notably in relation to starter homes) indicate that this Government is not going to bulldozer through changes to suit its own political agenda, but is willing to take the bold step of formulating a carefully crafted, long-term-strategy, informed by those best placed to help shape it.  

It is also reassuring to see an acknowledgement that the piecemeal approach to reform of the past has not worked and that a long-term view is needed.

In terms of the proposals, the first three steps look at the longer term, whilst the final step examines what can be done now to help those in the greatest need.

Step 1 – Planning for the right homes in the right places

This initial step is all about making sure sufficient land is released in the right places and that such land is put to the best possible use, with the continuing involvement of local communities.

To achieve this goal, it is recognised that 'up-to-date, sufficiently ambitious plan[s]' are the key.  Without them, an area's full potential cannot be realised, so taking on board recommendations put forward by Local Plans Expert Group, it is proposed (amongst other things) that:

• Plans will be easier to produce, and the requirement that a single local plan is prepared will be abolished.  
• Spatial development strategies will re-emerge in order to allocate strategic sites in areas where there is a combined authority or an elected Mayor.
• A standardised approach to assessing housing need (or 'objectively assessed need') will be developed, to improve transparency, reduce complexity and shorten associated debates at local plan examinations.
• In the absence of an up-to-date plan, by April 2018 the standardised approach would be used to ascertain whether there is a five-year housing land supply.
• National policy should be strengthened to require local planning authorities to have their own policies addressing the housing requirements of groups with particular needs, e.g. older and disabled people.

But facilitating a speedier plan-making system is only part of the story.  Additionally, in formulating their plans, local authorities will be required to ensure that enough land is available in the right places.  To achieve this, they will be expected to:

• Have a clear strategy to maximise the use of suitable land.
• Accommodate their identified housing requirement, unless there is a strong policy presumption against this, or the adverse impacts would significantly and demonstrably outweigh the benefits.
• Apply a presumption that brownfield land is suitable for housing unless there are clear and specific reasons to the contrary.
• Have policies to support the development of windfall sites

And once sufficient land has been identified, local authorities will be expected to use it more efficiently.   To that end, it is proposed that they will:

• Avoid building at low densities when there is a shortage of land to meet an identified housing requirement.
• Address the scope for higher-density housing in urban locations.
• Ensure that density and form of development reflect the character, accessibility and infrastructure capacity of an area.
• Take a flexible approach in adopting and applying policy and guidance that could inhibit these objectives.

Other important proposals in this first chapter include:

• Making changes to ensure that all local authorities can dispose of their own land with the benefit of planning permission.
• Extending local authorities' flexibility to dispose of land at less than best consideration.
• Examining what additional powers local authorities need to play a more active role in land assembly (including to deal with ransom strips).
• Expecting local planning authorities to work with developers to encourage the sub-division of large sites.
• Encouraging the greater use of Local Development Orders and area-wide design codes.
• Amending national policy to make it clear when Green Belt boundaries can be amended.
• Allowing neighbourhood planning groups to obtain a housing requirement figure from the local planning authority.
• Expecting local and neighbourhood plans to set out clear design expectations, using tools such as design codes.

Additionally, we are likely to see the 'golden thread' unpicked from the NPPF, through the re-crafting of paragraph 14 and the presumption in favour of sustainable development.  The flowery language is to be replaced with plain English, a move which is to be welcomed, as is the proposal to clarify what "sustainable development" actually is.

So what does this mean in practice?  Well for now, nothing.  Before any of the proposals are taken forward, expect more talking.  A further round of consultation has opened to look at the suggested planning reforms. There will then need to be legislative changes, coupled with amendments to planning policy before the impacts of any of the proposals are felt.  It is perhaps telling that the previous administration's threat to intervene in the plan-making process by 2017 has not been repeated here.  In terms of time-scales for intervention, the White Paper is silent. 

One only hopes that the discussions conclude and solutions are implemented before we have yet another change in Government and a resultant shift in priorities once again.

Step 2 – Building homes faster

Assuming that careful plan-making has the desired effect of allocating sufficient sites to accommodate the identified need, the next challenge is getting the plan allocation converted into a planning permission and doing so in a reasonable time frame.  For too long, the excessively bureaucratic nature of this step in the development process has been blamed for the housing crisis.

So what does the Government suggest should be done to slash through the red tape?  In short, it proposes to:

• Deal with problems associated with demonstrating a five-year land supply by allowing local authorities the opportunity to have their housing land supply agreed on an annual basis and fixed for a one-year period.  It is hoped that this will reduce rates of appeal, with resultant time and cost savings, and prevent neighbourhood plans from being undermined.
• Increase planning fees by 20% from July 2017, with the possibility of a further 20% increase for those authorities who are delivering the homes their communities need.  This is viewed, at least in part, as a solution to the problems of under-resourced planning departments.  It is interesting to note that the other method mooted by the previous administration of dealing with a lack of resourcing (the outsourcing of planning work to third parties) gets no mention in the White Paper.
• Consult on charging a fee for making planning appeals with a view to deterring 'unnecessary' appeals and 'wasting taxpayers' money'.  The big question here being, how is an 'unnecessary appeal' determined?

And once planning permission has been secured, it is imperative that consents are transferred into homes at a faster pace than present.  Given the laws of supply and demand, that is no mean feat.  Proposals to address this thorny issue and support developers to build out more quickly include:

• Adopting a more co-ordinated approach across Government to make sure infrastructure is provided in the right places at the right time to unlock housing delivery, utilising the £2.3bn Housing Infrastructure Fund to target areas of greatest housing need.
• Tackling unnecessary delays caused by planning permissions through the utilisation of powers in the Neighbourhood Planning Bill to prohibit conditions that do not meet the national policy tests and restrict the imposition of pre-commencement conditions where they are not agreed by the applicant.
• Looking at whether other measures in addition to the deemed discharge mechanism for planning conditions (introduced in 2015) could be used to streamline the process further.
• Rolling out the Government pilot scheme which streamlines the licensing system for managing great crested newts.
• Examining the options for reforming the CIL and section 106 system (as set out in the document prepared by the CIL Review Team published alongside the White Paper) with a promise that an announcement will be made in the Autumn budget.
• Consulting to ascertain whether large housebuilders should be required to publish aggregate information on build-out rates.
• Amending national planning policy to encourage local authorities to consider how realistic it is that a site will be developed, when deciding whether to grant planning permission for housing development on sites where previous permissions have not been implemented.  
• Seeking views on whether an applicant's track record should be taken into account when determining applications for housing development, in relation to large-scale sites and major developers.
• Reducing the timescale for implementation of planning permissions from three years to two.
• Speeding up the completion notice process by the introduction of two changes to the existing regime, so that confirmation by the Secretary of State is not required and that service of the notice can take place before the commencement deadline has elapsed, with a view to preventing a token start on site.
• Preparing new guidance to encourage the use of compulsory purchase order powers on stalled sites, including the use of auctions to establish an unambiguous land value.
• Introducing a new housing delivery test, to ensure that local authorities are held accountable for the number of new homes delivered in their area.  Where homes are delivered below target, various measures are proposed depending on the scale of the failure, including utilising the presumption in favour of development.

But how effective will all this be?  In terms of the planning process, some fairly blunt instruments could potentially be wielded, but it is questionable whether anything will actually come of them.

Looking for example at the completion notice process, unless the compensation regime is also altered, local authorities are not likely to use this power.  It also seems to be at odds with the Government's plans to outlaw planning conditions which require a development to be carried out in its entirety.  In fact, by using these powers and in effect cancelling permissions, workloads at planning departments could increase as new permissions would have to be applied for in order to continue building, or else sites would remain partially built out and underutilised.

Similarly, reducing the life of a permission to two years is unlikely to do much other than encourage a token start on site (something the Government is keen to discourage) or cause more permissions to lapse, again with the potential to increase workloads in planning departments as authorities are forced to process multiple applications for the same site.  Encouraging the use of compulsory purchase order powers in this regard is unlikely to result in a significant uptake in their use, given the time and resources required to use this remedy of last resort.

CIL reform could yield significant results and the recommendations of the CIL Review Team that all development makes a moderate payment towards the infrastructure requirements of their area (via a low level Local Infrastructure Tariff (or LIT)), coupled with larger sites making additional contributions through the section 106 system, seems sensible.  However, it is disappointing that we will be forced to wait until the Autumn before any further announcements are made in this regard.  Given the work undertaken to date, it seems that this is one area where progress could be made in the shorter-term.

Step 3 – Diversifying the housing market

Step 3 looks at strategies aimed at releasing the perceived strangle-hold volume housebuilders have on the market, so as to encourage new entrants and more innovate ways of delivering housing.  

Proposals include:

• Partnering with small and medium-sized firms.
• Encouraging the greater use of custom built homes.
• Attracting more institutional investment in the private rented sector.
• Encouraging the use of family friendly tenancies of three years or more, to give tenants greater certainty.
• Supporting housing associations to build more including by setting out a rent policy for social housing landlords that will help them to borrow against future income.
• Encouraging local authorities to make a return to housebuilding.
• Relaunching the Homes and Communities Agency as Homes England in the summer.
• Encouraging more homes to be constructed off-site using more modern methods of construction, including modular and factory built homes.

In this regard, it is pleasing to see that a more balanced approach is now being taken in respect of the housing market, with an acknowledgement that all tenure types have a role to play, rather than the view of the Cameron administration that home ownership should take precedence.

The clear backing of the Build to Rent sector is also to be welcomed, as is the separate Build to Rent consultation which should help shape changes to the NPPF to support the sector and local planning authorities alike.  

Step 4 – Helping people now

The Government acknowledges that steps 1 to 3 of its plan are, by necessity, long-term in nature and that it will take some time to see large-scale improvements in the housing market.  Therefore step 4 is intended to be an initial quick-fix, utilising tools that can be put in place in the short term to start to alleviate the most acute effects of the current crisis.

To this end, various products to help people save for a home will be rolled out or continued, including Help to Buy and Lifetime ISAs and Help to Buy Equity Loans.  

One of the most encouraging aspects of step 4 is the shift made in relation to starter homes.  When compared to the scheme as originally proposed, significant movement has been made.  An income cap will now be applied as one of the grounds to ascertain eligibility and a 15 year repayment period will operate, as oppose to the five year period the previous administration was pushing for.  It is also reassuring to see that common sense has finally prevailed in respect of the mandatory starter homes requirement.  This has now been scrapped and instead, local authorities will be able to set their own level of delivery for starter homes, alongside other affordable products in accordance with local need.  

The expectation is that a minimum of 10% of all units will be provided as affordable housing on sites of 10 units or more, with a much wider definition of affordable housing proposed to be included in the NPPF.  The wider definition envisages that alongside traditional forms, starter homes, discounted market sales and affordable private rented housing will all be acceptable forms of affordable housing.  The cynic might say that this will allow the Government to claim it has significantly increased the delivery of affordable homes, but a diverse range of housing products is good news for all.

The White Paper also notes the government's support for the Homelessness Reduction Bill, which promises to significantly reform England's homelessness legislation and provides that new models to support those who are the hardest to help, including those who are vulnerable or at risk of homelessness, will be explored.

Concluding thoughts

The word 'consultation' and its derivatives feature no less than 175 times in the White Paper, so is it a case of a little less talk a little more action?  Probably not.  For too long, the housing market has been crying out for an administration that is prepared to make the big decisions, not the headline-grabbing ones, a Government willing to de-politicise the process and to listen to those in the know, rather than one intent on driving through its own, ill-informed, vote-manipulating agenda.  The concessions on starter homes, the key changes proposed to the NPPF later this year and simplification of processes such as plan-making and planning gain indicate that we might just have that.

But as always, the devil is in the detail and given that yet more consultation is now taking place, we will have to wait for some time to see what that detail will be.

The Government notes that everyone involved in politics and the housing industry has a moral duty to tackle the broken housing market head on.  This is indicative that we now have a responsive Government who is prepared to sit up and listen to the industry.  While it has a receptive audience, all sectors of the industry should do what they can to make their voices heard and be confident that their views will be used to turn around the housing market.