Accommodating New Demand for School Places from New Housing
Housing and Planning Minister, Brandon Lewis has written to Council Chief Executives to reiterate that increasing the supply of housing and providing high quality school places for every child are amongst the Government’s top priorities, in response to concerns about the funding of new school places.
The letter makes clear that where major housing developments create a need for new school places then Councils should look to secure appropriate funding from developers. Education contributions can often be the most costly element of the package of s106 contributions handed over to Councils to mitigate the impact of development and can place significant financial burdens on developers before a brick has even been laid.
The letter emphasises that when setting the timing of contributions Councils should consider the views of the developer and that where there are genuine viability concerns over paying upfront, the Council should be flexible. If possible Councils should consider supporting the Free Schools programme to deliver the places, as the upfront funding is provided by Central Government.
Sometimes the only solution to more school places is to provide a new school, but the cost of doing so would not be covered by the contribution from a single development. The letter sets out that in such circumstances the Free School programme could bridge the gap. Where the demand for more school places comes from existing demographic pressures, then Councils must fund the required expansions themselves and not rely on developer contributions.
What is clear is that the Government remains committed to both delivering more housing and providing high quality school places to match. Lack of school places cannot be a reason to refuse development and Councils are expected to use all the funding options available to them to provide the school places needed to support housing growth.
March 2016 Budget Headlines for Housing and Planning
The 2016 Budget, much like previous budgets, highlighted the Government’s measures to speed up the planning system to bring forward new housing and increase home ownership.
Measures announced in the Budget include:
- Launch of the Starter Homes Land Fund prospectus to help deliver at least 30,000 Starter Homes
- £60m of the receipts from higher rates of Stamp Duty on second homes and buy-to-let residential properties to enable community-led housing developments, including through Community Land Trusts, in areas where second home ownership is particularly high.
- Measures to speed up the planning system, including a reduction of the number of stages developers must go through to get planning permission and to ensuring the delivery of local plans by 2017.
- Supporting construction of a new wave of garden towns and cities, with the potential to deliver over 100,000 homes, boosted by a more Compulsory Planning Order reforms to help bring this about. The Government aims for new villages and market towns of 1,500 to 10,000 homes.
- Local authorities will work with Central Government to find land for at least 160,000 more homes, helping to support the Government’s policy on estates regeneration.
The Government said “further reform is needed to deliver the Government’s commitment to deliver 400,000 affordable housing starts by 2020-21, while continuing to protect the green belt.”
The Government also said it proposes “to move to a more zonal and ‘red line’ planning approach, where local authorities use their local plans to signal their development strategy from the outset and make maximum use of permission in principle, to give early certainty and reduce the number of stages developers must go through to get planning permission”.
The Government aims for all local authorities to have a local plan in place by 2017 which reflects some of the announcements in the budget but how this will be put in place remains to be seen.
The Greater Manchester Spatial Framework
The Greater Manchester authorities are leading the way on the production of a joint spatial plan (the Greater Manchester Spatial Framework – GMSF). The intention is that this will provide the overarching development plan for the 10 Greater Manchester authorities, with individual local plans for each district sitting below this. The Greater Manchester authorities recently consulted on Draft Strategic Options and have also recently published a map of the GMSF area and the site suggestions submitted during the consultation period.
Gladman, along with other key players in the housing and development industry, are keen to ensure that the ambitious visions set out in the GMSF Draft Strategic Options document are turned into a reality. Specifically, we are urging the Greater Manchester Combined Authority (GMCA) to ensure the plan proposes a sufficient scale of housing in line with the full objectively assessed needs (FOAN) for the area and importantly that the right types of homes are planned for in the locations they are needed. The Housing the Powerhouse Campaign was formed in 2015 to raise awareness of the issues facing Greater Manchester and seek to ensure the GMSF is an ambitious plan which matches the vision of Greater Manchester as the engine of the Northern Powerhouse. The campaign group is made up of a number of housebuilders, investors and developers alongside the Home Builders Federation and the Greater Manchester Chamber of Commerce.
An important objective of the Housing the Powerhouse Campaign is to avoid a London-style housing crisis in Greater Manchester, which could develop if there are not enough homes planned for in the right places in the region. There are significant fears that Greater Manchester is following the pattern of London, in so far as housing supply is not keeping up with demand, leading to increasing affordability pressures and a lack of choice, quality and competition in the housing market. The GMSF provides a once in a generation opportunity to address this, to ensure that these issues are tackled head on and that the housing needs are provided for.
Local Plan Expert Group Results
The findings of the Local Plans Expert Group (LPEG) was presented to ministers on 16 March 2016, and is currently open for representations; Report to the Communities Secretary and to the Minister of Housing and Planning.
Established in September 2015 the LPEG is a panel of members established by the Communities Secretary of State, Greg Clark, and the Housing and Planning Minister, Brandon Lewis, to help streamline the local plan-making process, considering how it can be simplified with the aim of reducing the amount of time it takes for local authorities to get a plan in place.
The report lists a series of recommendations, key points include:
- Incentivising local authorities to generate timely local plans or local plan reviews, combined with intervention measures whereby if a planning authority with no local plan has not submitted a local plan for examination by the end of March 2017, its existing relevant development plan policies for the supply of housing will be considered to be out of date, and a further deadline of March 2018 where a post NPPF local plan has not been produced.
- The report recommends that DCLG should commission an update of the 2010 study of Housing Market Areas (HMA) boundaries to reflect the latest statistical evidence, with a greater focus on planning collaboratively across boundaries.
- A new approach to calculating OAN is advocated; the report emphasises a market signal approach as opposed to an economic led approach.
- The report recommends plan makers to consider further growth beyond the FOAN by considering a ‘policy on’ alignment with job growth in setting their housing requirement where this is greater than housing need. A market signals uplift should be welcomed, however it needs to be considered in further detail.
- There is a lack of guidance of where homes should be provided in a local authority. This may give rise to a potential situation where the additional market signal uplift is not directed to locations where the market response is required, but to the larger less affluent and more affordable towns. Uplifts for market signals need to be directed to locations where the uplift is required. .
The report makes a positive move towards reforming plan making, however more work is needed.
A Rational and Obvious Conclusion?
The widely anticipated High Court decision of Mr Justice Jay was handed down on the 16th March 2016 and offers some much needed clarification on how to approach the issue of ‘sustainable development’ within paragraph 14 of the NPPF.
The challenge was brought by Cheshire East Borough Council, who argued that a Planning Inspector should have dismissed an application for 60 dwellings at Kent’s Green Farm, Winterley, on the grounds that they had failed to correctly interpret the planning policies set out in the NPPF and in particular, their provisions in respect of ‘sustainable development’, as set out within paragraph 14.
They further went on to claim that a separate assessment of the sustainability of the proposed development is required before deciding whether paragraph 14 is engaged and if the proposals are found to be ‘sustainable’.
The Judge was minded to reject the arguments put forward by the Council and agree with the Inspector, dismissing the appeal, stating that the interpretation of sustainable development put forward by Cheshire East BC was fundamentally erroneous and would “place an almost insurmountable hurdle against development being sustainable”.
Mr Justice Jay contends that the concept of sustainable development is the foundation of the NPPF and paragraph 14, in essence, offers guidance on how conflicting issues can be considered and inform the balancing exercise required by decision makers to come to a reasoned conclusion.
He further goes on to dismiss the Council’s claim that a free standing assessment on sustainable development is necessary, stating;
“The whole point of paragraph 14 is to lead decision makers along a tightly defined and constrained path, at the end of which the decision must be: is this sustainable development or not?”
It is now reasonable to assume that the Judgment offered by Mr Justice Jay should be enough to significantly reduce the number of LPA’s seeking to resist the uneven balance that paragraph 14 of the NPPF brings to decision making.
A Court of Appeal decision with significant consequences for the interpretation of out-of-date housing policies has been handed down.
The thorny issue of what policies count as ‘relevant policies for the supply of housing’ as set out in paragraph 49 of the Framework has been considered six times by the High Court, with varying conclusions. The case of Richborough Estates Partnerships LLP v Cheshire East Borough Council and the Secretary of State for Communities and Local Government (heard together with Suffolk Coastal District Council Appellant and Hopkins Homes Limited) offered the chance to gain much-needed clarity on the matter.
The case revolved around whether the Council’s Green Gap policy represented a relevant policy for the supply of housing that should be given reduced weight due to the lack of a five-year housing land supply, in line with paragraph 49 of the Framework.
The Judgment concluded that paragraph 49 should be interpreted widely and that ‘relevant policies’ should not be limited to those policies that simply ‘provide positively for the delivery of new homes in terms of numbers and distribution or the allocation of sites’. Instead, ‘relevant policies’ were also those:
“Whose effect is to influence the supply of housing land by restricting the locations where new housing may be developed – including, for example, policies for the Green Belt, policies for the general protection of the countryside, policies for conserving the landscape of Areas of Outstanding Natural Beauty and National Parks, policies for the conservation of wildlife or cultural heritage, and various policies whose purpose is to protect the local environment in one way or another by preventing or limiting development. It reflects the reality that policies may serve to form the supply of housing land either by creating it or by constraining it – that policies of both kinds make the supply what it is.”
In bringing in policies relating to Green Belts, AONBs etc., the Judgment greatly widened the range of policies that fall within the ambit of paragraph 49.
A further useful clarification the Judgment made was to make clear that the phrase ‘should not be considered up-to-date’ in paragraph 49 meant the same as ‘out-of-date’ in paragraph 14.
Crown House Developments v Wychavon District Council
This issue’s coverage of interesting Judgments continues with Crown House Developments v Wychavon District Council, handed down by Mr Justice Coulson earlier this month.
In early 2014, Wychavon District Council failed to determine an outline planning application for 32 dwellings at Walcot Lane, Drakes Broughton. Crown House Developments subsequently appealed against non-determination and the case was brought in front of Mr Michael Boniface at a one-day Hearing in July 2015.
The sustainability of the appeal site was the main matter for consideration at the Hearing. Policy GD1 of the Council’s Local Plan sought to place all new development either within the development boundaries or on allocated sites. The appeal site was neither within the settlement boundary or allocated, but the Appellant put forward that Policy GD1 was out-of-date by virtue of the fact the Council’s Local Plan only planned for development up to 2011.
Mr Boniface differed with the Appellant on this point. He applied full weight to GD1, noting the policy was saved via saving direction issued in 2009, and that it was broadly in line with the NPPF. In addition to this, it was established that both parties agreed Wychavon District Council could demonstrate a five-year supply of deliverable housing land. However, the Inspector ultimately found the benefits of the scheme to outweigh the ‘limited’ harm when undertaking the planning balance. The appeal was therefore approved and outline planning permission was granted.
Plainly aggrieved by the decision of the Inspector, Wychavon District Council sought to challenge the decision under 288 of the Town and Country Planning Act 1990. If left to stand, the decision would set a precedent for unallocated sites beyond settlement boundaries, a precedent Wychavon District Council would undoubtedly deem undesirable. It was the view of the Council, as the claimant, that Mr Boniface gave less weight to GD1 than he should have done, erred in law in failing to apply the approach to decision-taking set out in s.38(6) of the 2004 Act, and created two incorrect presumptions regarding sustainable development and boosting the housing supply.
When assessing the Council’s claims, Mr Justice Coulson considered the seven principles of the ‘proper approach’ to s.288, set out in paragraph 19 of the Judgment of Mr Justice Lindblom in Bloor Homes East Midland Ltd v SSCLG (2014), as well as his approach to the case of Ivan Crane v SSCLG and Another (2015).
Mr Justice Coulson rejects the criticisms of the claimant, stating:
48. … But in my Judgment, the s.38(6) test was in substance the exercise that he performed, and he gave proper weight to the presumption in favour of sustainable development as a material consideration, but not more. Accordingly, the criticism is one of form and not substance.
49. For all these reasons, I reject the criticisms of the Inspector and reiterate that, in my view, he applied the right test and took into account all relevant material considerations. There can be no question of unlawfulness or Wednesbury irrationality.
The Council’s application to quash was dismissed, and we now await the implications of this Judgment on future housing applications in the District.
Bellway Homes have reported robust half year results, with their pre-tax profit rising 42.6% during the six months to January 31 2016, against the equivalent period last year. The housebuilder’s pre-tax profit totalled £226.6 million at the end of the period.
Home sales increased 11.6% to 4,188; the number of private homes sold rose 17.4% to 3,644 homes, representing 87% of the total. Housing completions for the full year are expected to lift by “at least” 10%. Bellway’s FY 2015 completions totalled 7,752 homes.
Bellway’s average selling price rose 17.3% to £257,280, partly due to the sale of high value apartments in London boroughs.
The full year average selling price is anticipated to be 10% higher than in FY 2015 (July 31 2015 – £223,821).
The trading environment has since remained positive for Bellway in all parts of the country, with the company achieving a 37% improvement in average reservations to 209 per week from February 1 to March 13 2016, against the equivalent period in 2015.
Countryside Properties issues shares
Crest Nicholson and Kier Group have announced strong performances, with William Rucker, Crest’s Chairman, commenting that the housing trading environment “continues to be positive”. At Crest’s AGM [17 March] Rucker said that the housebuilder’s sales up to March 11 “have been correspondingly strong”.
Crest’s cumulative forward sales revenues rose 16% to £311 million against the equivalent period last year, mainly due to a “higher Average Selling Price in the sales mix”. Rucker said that this momentum had continued in the six weeks since its preliminary results announcement, during which time the date for the EU referendum was announced.
“This robust level of sales underpins the board’s confidence that the business is continuing to make good progress in delivering on its stated growth objectives,” Rucker added.
Reporting its half year results to 31 December 2015, Kier said that its residential division, Kier Living, had driven its good performance. The division’s operating profit rose to £6.6 million from the £0.8 million achieved at the end of December 2014.
Kier Living’s revenue rose 80% to £162 million against its H1 2014, with completions up 35% to 959 units.
Its private sales rate during the half year exceeded that achieved in 2014, at a rate of 0.7 units per trading site per week. Its private average selling price rose to £228,000 from the prior period’s £197,000.
John Anderson, Kier Living’s Executive Director, said: “This is a great set of interim results for Kier Living, and following the successful integration of Southdale, we’re on track to deliver expectations for the full year.”
“We have a strong forward sales position for 2016. Increasing our number of completions by 35% is a fantastic achievement and puts us well on our way to our target of 4,000 completions a year by 2020.”
New Home Customer Satisfaction Survey
The latest National New Home Customer Satisfaction Survey has revealed that 86% of home buyers are happy with the overall quality of their new home.
The results of the NHBC/HBF annual survey, in its 11th year, also showed that 85% would recommend their builder to a friend against the 86% of last year.
HBF’s Executive Chairman Stewart Baseley said that it was pleasing to see the result stabilise after the slight dip registered last year against 2012/13. During the 2012/13 period, 90% of housebuilders said they would recommend their builder.
Baseley said that the 85% result remained “credible and the industry should be justifiably proud. We’ve seen a significant increase in production in the past two years. We have to recognise that maintaining this result in the past year when we saw a 25% increase in housebuilding is important and significant”.
The survey covers the 12 months from October 2014 to September 2015. Fourteen housebuilders were awarded five stars for the period – the highest achievable accolade in the survey. This is a slight decrease on last year when 16 companies were crowned five-star housebuilders.
Retirement housebuilder McCarthy & Stone was a five star housebuilder for the 11th consecutive year.
The independently-verified survey was launched in response to the 2004 Barker Review of Housing Supply.
Below are the 14 housebuilders who achieved a five star rating for the 2014/15 period:
Churchill Retirement Living
Mactaggart & Mickel Homes
McCarthy & Stone
Of the 80,582 questionnaires sent to customers 45,342 were returned – a response rate of 56% which HBF and NHBC called an “outstanding response”.
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.
An Inspector has dismissed an appeal for 56 dwellings in Tredington, Stratford-upon-Avon, on the basis of a lack of settlement sustainability. Albeit, both the appellant and the Council agreed upon the lack of a demonstrable 5 year housing land supply, comparatively little weight was awarded to the issue. The Inspector awarded great weight to the sustainability shortcomings of the site and the potential adverse effects on the character and appearance of the settlement.
A scheme for 151 dwellings (hybrid application) in Laceby, North East Lincolnshire, has been dismissed at appeal, due to its proximity to an Intensive Livestock Unit (ILU) of pigs. The majority of the development would be within a 400m zone of the ILU in which local planning policy bans development of residential units. The Inspector states that not only would the location of the dwellings in this zone mean adverse effects on the proposed development, therefore creating unsatisfactory living conditions, but the residential development would also compromise the viability of the piggery due to complaints or threats of complaints by new residents. It was agreed that a 5 year land supply does not exist and that benefits would arise in that sense but this was not enough to outweigh the harm identified and the appeal was dismissed.
An appeal for 25 dwellings in Chichester District was dismissed by the Secretary of State in line with the Inspector’s recommendation. The Secretary of State concluded that due to the appeal site’s conflict with the Neighbourhood Plan and the ‘exercise of local choices in the allocation of sites therein to meet strategic need, the site did not constitute sustainable development despite its economic benefits garnering significant positive weight, while social and environmental benefits attributed moderate weight. In addition the Secretary of State agreed with the Inspector’s conclusion that the Council could demonstrate a 5 year supply and that the adopted Local Plan and Neighbourhood Plan policies should not be regarded as out of date.
The Inspector has allowed an appeal for 85 dwellings in Oakley, Basingstoke and Deane, after finding that despite the prejudice to the emerging Neighbourhood Plan, the imperative to boost the supply of housing in light of a lack of 5 year supply of housing land and the sustainability of the site, would not lead to material harm to the Neighbourhood Plan and therefore allowed the appeal.
An appeal for 15 dwellings in Loveclough, Rossendale, has been dismissed by the Inspector, due to the significant impact on the open countryside. The lack of a 5 year supply and the provision of housing on the appeal proposal was given little weight due to small contribution to the overall housing need in the district. The harm the appeal proposal would have on the open countryside surrounding the settlement and the design and scale of the development were given such weight to outweigh the lack of a 5 year supply. As a consequence, the appeal was dismissed by the Inspector.
An appeal for 9 dwellings in Thanington, Canterbury, has been allowed. Despite being located in the Canterbury Area of High Landscape Value, the benefits of the scheme were considered to outweigh this harm. Further the loss of open countryside was not outweighed by the provision of market and affordable housing in the context of a lack of 5 year supply of deliverable housing sites. The scheme was considered sustainable and the appeal allowed.
An appeal for 36 dwellings in Ticehurst, Rother District, has been dismissed. The appeal site, located in High Weald AONB, presented an unacceptable impact on the landscape and scenic beauty despite the council acknowledging they would need to allow development within the AONB to meet its housing requirement. The lack of 5 year supply did not outweigh this harm, or the detrimental impact the proposal would pose on the amenities of adjoining residential occupiers. The proposal therefore failed to meet the environmental and social roles of sustainable development.
An appeal for 60 dwellings in Sutterton, Boston Borough, has been dismissed. The council acknowledged they have a 2.7 year supply of deliverable housing sites, therefore the presumption in favour of sustainable development applied. However the Inspector took great issue with the resultant loss of open space; the attractiveness of the remaining open space, its quality and value to the community would be significantly diminished and presented harm. These factors were afforded substantial weight. Further weight was attached to the adverse landscape and visual impacts, harmful effects of construction traffic on existing residents and loss of BMV agricultural land. The disbenefits outweighed the benefits and the scheme was dismissed.
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