Government vows to cut red tape around housebuilding
The Government has launched a new initiative aimed at reducing bureaucratic obstacles to housing growth, by giving developers a say on where “ineffective” rules and “heavy-handed enforcement” hinder the building of homes.
This review of procedures, named the Cutting Red Tape review, will see the Cabinet Office, Business Department and Department for Communities and Local Government (DCLG) working to “identify and remove unnecessary regulatory barriers to growth and associated costs to the housebuilding sector, while ensuring necessary protections are maintained.” It opened last week and will gather evidence until 13 January 2016.
The review aims to build on the work of the Housing Implementation Task Force, the ministerial committee set up in June 2015 to monitor and drive delivery of housebuilding. The Cutting Red Tape review aims to improve the planning process by seeking comments from developers, in particular smaller firms, in order to understand the barriers they face. The Government will then determine where EU and national rules are being too strictly enforced, consider whether the rules are themselves fit for purpose, and devise changes to the Construction, Design and Management Regulations.
Some measures could include:
- Reduction in the number and scope of pre-commencement conditions attached to planning permissions.
- Introduction of time limits for the completion of s106 agreements post committee resolutions to approve planning applications.
- Introduction of standard s106 clauses, particularly for affordable housing.
- Avoiding planning conditions which duplicate the role of statutory undertakers – for example avoid planning conditions requiring improvements to water treatment works or foul drainage modelling as this is covered by other legislation (see The Source – Edition 2)
- Introduction of time limits for discharging planning conditions and deemed approvals.
- Shortening of the statutory life of planning permissions and introduce a ‘use it or lose it’ provision.
Comments can be made at the Cutting Red Tape website, through Twitter: @CutRedTapeUK #CutRedTape, by email: firstname.lastname@example.org or by writing to: The Cutting Red Tape team, The Better Regulation Executive, Department for Business, Innovation and Skills, 1 Victoria Street, London SW1H 0ET.
Heritage Considerations Rebalanced?
An interesting Court of Appeal judgment issued on Thursday might provide a sign of rebalancing the implications of the Barnwell Manor judgment.
The ‘Mordue’ case relates to a planning permission which was granted on appeal for the erection of a single turbine at Towcester. The High Court, with Deputy Judge John Howell QC sitting, quashed the permission because the inspector failed to demonstrate in the reasons he gave that he had complied with his duty under Section 66 (1) of the Planning (LB&CA) Act 1990. The judge stated in quashing this decision that he was bound by the earlier Court of Appeal decision which we all know as Barnwell. However, the judge felt there was considerable tension between the Barnwell judgment and the much earlier House of Lords judgment in respect to SAVE BRITAINS HERITAGE (No.1 Poultry), and therefore granted the leave to appeal.
The Court of Appeal held that the decision in Barnwell did not require, without more additional consideration, a decision-maker to demonstrate compliance with s.66(1). The onus was upon a claimant (Third Party) to indicate that there is a positive indication that the decision-maker has not given the required considerable importance and weight to the importance of conserving a heritage asset. A decision-maker need only make a countervailing positive reference to the relevant duty in the reasons themselves, if there is such a positive indication.
The Court of Appeal also held that, given that the relevant part of the NPPF is to be read together, if an inspector refers to NPPF 134, then unless there is a positive indication to the contrary, the appropriate inference is that he has taken properly into account all of the relevant paragraphs of the NPPF.
Whilst this decision does not take away the need for the decision-maker to give any harm to a heritage asset considerable importance and weight, it should reduce the likelihood of a successful JR challenge in the future. Therefore, it could over time reduce the focus of third parties on relying upon heritage issues as a means to oppose a scheme. It may also impact on how the NPPF is interpreted, making it potentially more straight forward and easier to argue that the presumption in favour of sustainable development is maintained, if the outcome of the paragraph 134 test is positive.
The Unknown Knowns of Starter Homes
There remain unanswered questions around the Government’s proposed Starter Homes scheme, but what is known (or unknown) so far?
- The known knowns – We know that Starter Homes will be available to first time buyers under 40 at a 20% discount up to a maximum of £450,000 in London and £250,000 in the rest of England. The legislation is in place and will eventually entail substantial changes to how s106 agreements and planning for housebuilding is undertaken.
- The known unknowns – There remains uncertainty surrounding the regulations, such as how the 5 year restriction on reselling will be enforced to prevent purchasers turning a quick profit? E.g. what happens if the purchaser finds work elsewhere?
- The unknown knowns – But will the Starter Home scheme actually deliver on the Government target of 200,000 more homes in the four years up to 2020, especially given that none yet have planning permission?
Any questions should be directed to the DCLG at http://forms.communities.gov.uk/
Unintended consequences from Budget 2015
An article in the previous issue of The Source (6th Nov) identified the ‘Social Housing Changes impacting on Site Viability’. This matter was clearly also concerning Government, as 3 days later Brandon Lewis (Minister for Housing and Planning) issued a letter to all LPAs entitled ‘Impact of social rent changes on the delivery of affordable housing’. This recognised that the changes in Budget 2015 were slowing delivery in some cases and advised LPAs to expedite s106 Affordable Housing renegotiations, especially where the only change sought was to the tenure split.
However, its clear such renegotiations are not going to be a one way street for developers. The Government’s response to legal action launched by Islington Council makes clear that the overpaying for land is a factor which will be taken into account.
Despite the importance renegotiation may now play in ensuring delivery, research by the University of Reading earlier this year question whether Planners are sufficiently versed in development appraisal and finance to be able to ensure the correct outcome.
Boost to Neighbourhood Planning
A Challenge Fund has been launched by the DCLG to allow LPAs to help deliver neighbourhood plans, signalling the deliberate strengthening of community planning.
The fund is a £600,000 resource to help LPAs pilot the integration of neighbourhood planning as part of their planning service and potentially delegating planning decisions to neighbourhood planning groups.
The perception that local authority planning departments are incompatible with and not supportive of community planning as it undermines their role may be improved as local planners start to depend upon residents, although it is expected that delegation would be appropriate solely for small scale matters.
CPRE v HBF – housing targets “set up to fail”; insufficient brownfield to meet needs
The new report from Campaign to Protect Rural England (CPRE), published 16th November and pointedly titled ‘Set up to Fail’, took aim at purportedly “flawed” government rules on how housing targets are set using “arbitrary and inflated” aspirations rather than genuine need, allowing builders to develop greenfield sites instead of brownfield. The CPRE report also claimed that allocated greenfield sites go undeveloped and house prices rise, whilst developers are not punished for not developing allocated sites.
This was followed up by a letter to The Times from CPRE Chief Executive, Shaun Spiers (20th Nov), arguing that the impact assessment introduced in the Housing and Planning Bill could prevent brownfield land from contributing to tackling the housing crisis. Mr Spiers pointed out DCLG had dismissed its independent and rigorous estimate of the potential for 1 million new homes on suitable brownfield as “wildly over-optimistic”, whilst admitting that it has no “robust” estimate of its own to guide policy.
On The Times letter page the following day, John Stewart of the Home Builders Federation (HBF) hit back at CPRE for continuing “to promote the myth that our housing supply crisis can be solved on brownfield land”. He cited the sequential approach in PPG3 between 2000 and 2007 which prioritised brownfield land before greenfield: “yet despite a housing boom, annual brownfield use barely changed, greenfield land use continued to fall and housing completions rose solely through higher densities.”
In response (25th Nov) Mr Spiers accepted that CPRE “never said that the country’s housing need can be met entirely through building on brownfield land”, but, “that too much greenfield land is being developed as these sites go to waste”. He adds: “If [the HBF] really wants to help solve the housing crisis, it should urge [housebuilders] to increase output on the many sites for which they hold planning permission – and use their growing landbanks”.
Whether housing sites are allocated or not, greenfield and brownfield land will still be needed to meet the country’s overwhelming housing need, alongside the multi-pronged approach enabled by government planning policy – whether it be deemed consent for office-to-residential conversions, brownfield development or greenfield – some provided by market housing developers, some by Local Authorities and some by Social Housing Providers.
Affordable Housing Delivery to fall
Despite the clear push from Government to increase affordable housing delivery, the sum total of its recent changes might in fact be the opposite.
The Office for Budget Responsibility’s (OBR’s) Press Conference introduced their economic and fiscal outlook on 25th November 2015 where OBR Chairman, Robert Chote, warned of a predicted slump in affordable housing delivery over the next two years as a direct result of two government measures. Primarily, the July Budget forced housing associations to cut social rents by 1% annually for 4 years. Secondly, the Autumn Statement (25th Nov) announced cuts in capital grants to housing associations in 2016-18 with the majority of money now targeted at shared ownership rather than social renting.
The OBR does however predict that housing associations, one of the most significant contributors to property stock, will increase social housing provision post-2018, but housebuilding will still be “lower over the Parliament as a whole than it would have been in the absence of both the July and November measures.”
The Government appear focused on the delivery of Starter Homes by housebuilders to pick up some of the slack.
House Builder News
National housebuilder, Barratt has stepped up to the challenge laid down by the Policy Exchange in its early 2015 report; ‘Garden Villages: Empowering localism to solve the housing crisis’. Whilst the Policy Exchange report proposed a public sector led model based around the former New Town Development Corporations, Barratt’s report recommends a private sector led delivery mechanism called a Garden Village Creation Company, which would see ‘garden villages’ of up to 5,000 homes delivered by major housebuilders without public finance.
Their vision is set out in a report titled: ‘Places for all ages: delivering the future garden village’. The report suggests changes to the NPPF to ensure a strategic approach extending beyond the initial planning and development stages.
Crest Nicholson has continued to grow its housing volumes, building 2,725 units in the year ending October 31 2015, an increase of 8% against 2014.
Giving an update ahead of its preliminary results in January, the housebuilder said that in line with its strategy, its open market selling price climbed 10% to £309,000 during its financial year. Underlying sales rates for the year rose 10% on last year to 0.90 per outlet per week. Crest also increased its average number of sales outlets by 5% to 44.
The company saw good demand for its homes throughout the summer and into the autumn. Sales rates since June averaged 0.80 sales per outlet per week, it said, an 8% improvement on the equivalent period in 2014.
Stephen Stone, Crest’s CEO, said: “A growing and sustainable housing market in the South of England has underpinned Crest Nicholson’s good sales rates and overall performance. The strategy to grow unit volumes and average sales prices by investing in good quality locations is progressing well and we remain on track to hit our targets of £1billion of revenue by 2016 and £1.4billion of revenue and 4,000 homes by 2019.”
Taylor Wimpey is the latest housebuilder to report the continuation of strong housing market conditions.
Giving an update to the City the volume housebuilder said that its sales rates for the year to date had reached 0.76 sales per outlet per week, compared to 0.66 during the equivalent period last year, “as we saw the strong sales rate of the second quarter continue through the traditionally slow summer period and into the autumn”. Sales rates for the second half to date increased 22% to 0.73 against 2014.
During 2015 so far, Taylor Wimpey operated from an average of 301 outlets, slightly down on the 306 achieved a year ago. The housebuilder said that outlets were generally closing a little earlier than planned, thanks to higher than expected sales rates.
The firm also said that it was fully sold for its targeted 2015 completions. As of November 8 2015, it was around 27% forward sold for its anticipated 2016 private completions, with its current total order book representing 8,546 homes against the 7,814 achieved during the week ending November 9 2014.
Pete Redfern, the company’s CEO, said: “We have seen an excellent summer selling season strengthen further in the autumn period, with customer confidence high and demand underpinned by rising real wages and good access to a wide range of mortgage products”… “Against this backdrop, we are reporting record order book levels and expect to deliver an improvement in operating profit margin of over 200 basis points in 2015 and a return on net operating assets of over 25%.”
Interesting Appeal Decisions
At Gladman, we monitor all residential appeal decisions issued by the Planning Inspectorate, to better understand current interpretations of government planning policy.
Unjust refusal leave no option but to allow
An appeal for 55 residential units has been allowed in South Somerset, where the inspector found the main reasons for refusal were either unjust or could be mitigated – specifically, concerns for hospital patients’ privacy, sustainability with regards to distance from facilities and impact on highway safety. There was also no demonstrable 5 year housing land supply, so once the scheme was deemed sustainable and other drawbacks could be mitigated at reserved matters, the inspector had no reason not to allow the appeal.
Green Gap found void
Despite the inspector finding that a development of 150 dwellings would not be an “inconsiderable” development within the Green Gap between two settlements, the Gap would remain effective without any negative effects on landscape character beyond the local vicinity. The need to deliver housing in an authority lacking a 5 year land supply along with other social and economic benefits led to the appeal being allowed.
Proposal would harm relationship
An appeal for 32 dwellings in Leigh Sinton, Malvern Hills was dismissed since the benefits of the scheme (market and affordable housing in a sustainable location with less than 3.5 years housing land supply and the economic benefits to local businesses) were outweighed by the substantial harm to the open character area between Leigh Sinton and Malvern as the proposal would extend significantly in to open countryside and would fail to meet the objectives of local plan policies.
Aromas down new homes
An appeal for the development of 14 dwellings has been refused in Torridge, despite the council being unable to demonstrate a 5-year supply of housing. The scheme was unable to comply with the Framework definition of sustainability due to its effect on the environment and character and the likely reliance future occupants would have on the private car. The inspector also found that the development would cause harm to the character and appearance of the open countryside, and believed its proximity to the local sewage works would compromise the living conditions of any future occupants.
Rural housing already abundant in Daventry
An appeal for 13 dwellings in Yelvertoft, Daventry District Council was dismissed as it was deemed that the scheme was not environmentally sustainable. The social and economic benefits were acknowledged by the inspector, who awarded them moderate weight. However the inspector stated that the loss of open countryside at a time when “the overall requirements for housing need in rural areas are more than met elsewhere” demonstrably outweighed the benefits of building on the proposed greenfield site. It was concluded that the proposal was contrary to policies in the Daventry District Local Plan and the adopted West Northamptonshire Joint Core Strategy, as well as principles of the framework regarding suitable locations for residential development and the countryside.
Bradford housing shortfall outweighs listed farmsteads
An appeal for up to 220 dwellings in Thackley, Bradford Metropolitan Borough, was allowed in light of the council conceding that it could not demonstrate a five year housing land supply. The inspector found that the farmland site was mainly surrounded by built development, though as a wider area of open land. Within the development some open space would be provided adjacent to the main road frontage which helped persuade the inspector that it would not be visually harmful. Furthermore the inspector concluded that the rural feel of parts of the site were also diluted by existing development and views of the development would be screened by existing trees.
The inspector believed that much of the appeal site was probably only associated with the setting of one of two grade II listed farmsteads. The scheme would divorce the site from any of its agricultural connections thereby justifying the claim that development would cause harm to the listed building’s setting. However, the effect of development on the second farmhouse had already been diminished by recent residential development such that overall the impact on the other farmhouse would be less than substantial.
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