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Is The NPPF Working?
I believe that the main purpose of the NPPF is twofold; first deliver sufficient planning permissions for new homes, and secondly (linked to the first) erode house prices through reduced land prices so that eventually homes become more affordable. Since the NPPF can never actually lay bricks and build houses, its success can only be measured against the number of planning permissions granted and land prices.
On any measure, the number of permitted housing plots has risen dramatically, now being some 275,000 pa and trending on an upward rate. However, one risk to this is the uncertainty that is created whenever major changes to the planning system are introduced and the inevitable hiatus which follows any significant shakeup.
Our own experience of the NPPF is positive: for example, we secured 4 planning permissions on 4 sites totalling 1200 dwellings last week alone, and this would empirically evidence first-hand the progress the NPPF has enabled. Two of the permissions (700 homes) were achieved locally at planning committee, with one providing a major financial contribution to enable the delivery of a long awaited major road scheme for a town. This is also the embodiment of localism whereby development provides local infrastructure which communities want and need. All these schemes will be delivering homes within the year, which is not something that can be said of almost any major Strategic Urban Extension.
In terms of house prices, the first stage to get through before “real” house prices start to stabilise is ensuring that land stabilises or falls in price. Our own experience from selling 1 or 2 sites weekly to both newly created or growing small/medium housebuilders, as well as major house builders, is that greenfield land prices have plateaued. A study by Knight Frank published a few weeks ago shows that greenfield development land values have dipped taking the annual change in prices to -4.9%. At this stage in every previous economic cycle, when house prices are rising at 8%, land would have been rising at treble this rate, not falling. This is counter-intuitive.
The NPPF is working and all house builders can, if they so choose, follow the trend and ramp up construction on these numerous newly approved housing sites.
However, we fully realise that it’s not quite as simple as “the number of approved plots” for the following reasons;
- Large sites of 700+ dwellings rarely deliver anything in under 6 years. Such schemes are unlikely to deliver homes in this Parliament.
- If housebuilders double production from, say,130,000 to 260,000 pa, and they all need a working stock of part built sites etc. (of say 3 years production), then this ‘work in progress’ stock of approved plots needs to rise from about 390,000 two years ago to some 780,000 in circa 2018 – when output will break through the quarter million figure. These extra 400,000 consents are in addition to the plots that are used up by each years’ construction of homes.
- Permissions must be where the need is, not where some Councillors would prefer to have them (someone else’s town – or a town with a different political colour to that of the one which controls a council).
- Smaller sites (up to 200) are ideal because they will deliver their homes in this Parliament. Such sites eminently suit the larger SME house builders, who typically have the entrepreneurial drive to double or treble output in the next few years, but the barrier to this is access to available and affordable permitted housing land. SMEs can play a pivotal role in increasing the delivery of homes. We are seeing an increase in the growth of the larger SMEs and we are currently selling more land to them.
So, is the NPPF working? Yes it is.
Affordable Housing Contribution, Unaffordable
The High Court has dismissed a challenge brought by Medway Council over a Planning Inspector’s decision to waive a developer’s commitment to pay over £1 million affordable housing contribution.
Byrne Estates originally received planning permission back in 2009 to build 332 flats and over 5,000 square meters of commercial space in the former Chatham Docks.
The developer agreed, as part of the Section 106 agreement, to make the £1 million contribution to the Council in three staged payments.
By mid-2014, the residential units had been completed and all but sold, whilst the commercial units remained a work in progress.
It was at this point that Byrne Estates were projected to make a £12.35 million loss on the scheme and subsequently submitted a viability appraisal to the Council, applying for the previously agreed affordable housing contribution to be removed from the agreement.
Medway Council failed to determine this application and the developers made an appeal to the Planning Inspectorate, who duly removed the affordable housing contribution.
The High Court ruling of Mr Justice Gilbart agreed with the developers and the Planning Inspector and concluded that “the developer had shown that the challenge must fail”.
Framework Delivers Housing Boost but Council Plan-Making Still Behind
New research published by Nathaniel Litchfield & Partners (NLP) shows that while the National Planning Policy Framework has helped to deliver a significant boost to planned housing numbers across England, more than two thirds of Councils do not have a Framework-compliant up-to-date plan.
Early Adopters and the Late Majority: A Review of Local Plan Progress and Housing Requirements found that, based on the 84 adopted post-Framework plans, total planned housing requirements have exceeded household projections by 19%. Whilst positive, the report makes clear that in almost 50% of cases the uplift in housing requirement was as a result of Inspector recommendations.
NLP’s research shows that despite it being in force for four years, less than a third of Councils outside London have a Framework-compliant up-to-date plan adopted. With the Government pledging to intervene where a Council has not produced a Local Plan by early 2017, the research identifies 21 areas where the Government could produce plans on the Council’s behalf.
Urban Development Land Prices Buck Downward Trend
The latest residential development land index for the last quarter of 2015 has been released by Knight Frank. The index tracks the performance of residential land values across England, providing a snapshot of broad trends in the development land market.
Greenfield development land prices dipped for the fourth consecutive quarter, taking the annual change in prices to -4.9%. However, this trend is reversed when looking at the prices of mainly brownfield land in key cities. A 2.5% increase in the final three months of the year took annual growth for urban development land sites to 11.9% reflecting the highly regionalised nature of the present housing market.
To read more please see Grainne Gilmore’s report at: UK Residential Development Land Index.
Scottish Government Launches Package of Measures to Increase Housebuilding
The Scottish Government has announced a series of measures to increase the delivery of new homes across all tenures.
They include a £50million infrastructure fund to unlock strategically important sites by addressing financing and infrastructure issues holding back delivery, powers for Scottish Ministers to call in all planning appeals for housing proposals of more than 100 units, and the exploration of new financing mechanisms to expand mid-market rented developments.
Alongside this the Scottish Government is in the process of conducting a wide-ranging review of the Scottish planning system. Draft proposals were published in February and following a period of public consultation a panel will make recommendations to Ministers in May, with a response expected by the end of the year.
The draft proposals, which aim to help the preparation of development plans by providing clarity around housing and infrastructure requirements, have prompted concerns about ‘unexpected consequences’ from industry body Homes for Scotland.
Not Sitting Well – Housebuilders Hit Back at Accusations of Land Hoarding
The house building industry has come under fire in recent months after an analysis by The Guardian revealed some of the nation’s biggest housebuilders possess enough land to accommodate over 600,000 homes. With the UK in the grip of an increasingly dire housing crisis, the findings have raised many questions (and fuelled even more accusations) on just why the housebuilders appear to be “sitting on” this abundance of land.
Taylor Wimpey, who were found to control around 184,730 of the plots (approx. 31%), has recently rejected accusations that it has been hoarding land to cash in on rising property prices. Taylor Wimpey UK Land Director Jennie Daly, responding to the question on whether there was indeed an incentive for developers to hoard land, commented that “the housebuilding model does not sit well with land hoarding”. With land being such a valuable commodity, housebuilders are “incentivised to get building because only through building will we get a return”.
Nevertheless, there are still disparities between plots with planning permission and plots under construction. Taylor Wimpey was found to have built 12,454 homes in 2015, despite owning 75,000 plots with planning permission. Further to this, the Local Government Association (LGA) published research earlier this year that found, across England, there were 475,647 homes in England with planning permission but have not yet been built.
While the findings have been touted by the LGA as “conclusive proof that the planning system is not a barrier to housebuilding”, housebuilders have retorted that the crux of the disparity is the difference between a ‘granted’ and ‘implementable’ permission.
Regardless, the UK’s housing crisis continues, and only time will tell if the Government’s pledges to propel the delivery of market and affordable housing by 2020 will help to rectify the situation.
Utilities Infrastructure Delays Housebuilding
A report by the Housing and Finance Institute has made a series of recommendations for speeding up the delivery of new housing.
How to Build More Homes, Faster focusses on how to improve the provision of adequate utilities infrastructure and how to increase build-out rates on permitted sites. It found that the performance of utilities companies in some areas is delaying housing growth and that the speed of delivery on one site does not always reflect the actual market opportunity for homes in an area.
Recommendations include a single utilities watchdog and providing public sector loans and other financial support conditional on faster build-out rates.
CPRE: Brownfield Sites Quicker to Develop than Greenfield
Research into the viability of brownfield land development has been published by the Campaign to Protect Rural England (CPRE). The report analyses development projects within a sample of 15 urban and urban-rural fringe local authorities across England, comparing the speed of residential development on brownfield with greenfield sites, once granted permission.
Across the 580 projects analysed the overall average timescales for both types of site from the granting of permission to completion concluded that brownfield sites were developed quicker; 92 weeks against 121 weeks for greenfield. Finding that brownfield sites were faster from permission to completion was consistent for all site sizes.
The report however does not explore how long the sites have been in the planning process or what was excluded from S106 contributions to overcome viability concerns, and nor are the house types explored. In the case of apartments, the needs of families are not being met.
Of the authorities analysed many of their Housing Strategies are heavily reliant on the delivery of previously developed land (York, Southampton, Leeds, Leicester, Coventry). An increased sample size of authorities would increase confidence in the reports results and give a greater, nationally representative result.
The report lists several recommendations to prioritise brownfield development. Development of brownfield land should be encouraged, however meeting the Government’s objective of boosting significantly the supply of housing cannot solely be achieved through brownfield development, sustainable greenfield development is often the key for an authority to meet their housing need.
The Importance of Meeting Housing Demand
A court of appeal decision has been handed down and offers further clarification on the importance of meeting housing demand.
Mr Justice Gilbart backed the Planning Inspector’s decision to approve a Fairview New Homes Ltd development of 56 homes at Dartford in Kent on the grounds that Dartford Borough Council have a persistent and poor record of under delivery.
The Council originally refused the permission, against the advice of its officers, predominantly over concerns that the houses would be too close together and would negatively impact and detract from the open green space and feel of the site.
The Inspector and High Court Judge were however, both minded to note that Dartford Borough Council’s plan for long-term delivery of housing was ambitious and given the persistent under delivery seen in recent years, the contribution of the scheme to housing need in the locality, outweighed any impact it might have on the area’s character and appearance.
In rejecting the Council’s challenge to the Inspector’s decision, the High Court found that the reasons given could have left the Council in no doubt as to why such rational conclusion had been reached during the appeal process.
25% Rise in Completions for Countryside Properties
Countryside Properties’ housebuilding division has “performed well,” the company has announced, with total completions rising 25.3% during its half year against the equivalent period in 2015.
During the six months from October 1 2015 to March 31 2016, the firm, which floated in February, completed 292 units within its housebuilding arm. The private average selling price climbed 18.1% to £782,000 on H1 2015, due to an improved sales mix and price growth.
Countryside said that it was continuing to open new sales outlets within 50 miles of London, with customer demand remaining strong, “particularly in the price range below £600,000”.
Its partnerships division – in which it completes urban regeneration projects with local authorities and housing associations – yielded total completions of 803 homes during the period, up 12.2%. The private ASP in its partnerships division rose 41.9% to £298,000.
The company said that it was “firmly on track” to achieve its medium term target of more than 3,600 completions per year.
Ian Suttcliffe, Countryside’s Group CEO, said: “Trading has been strong, with excellent growth in the first six months of our current financial year.”
Housing Association Merger Creates New Top Four Housebuilder
L&Q, The Hyde Group and East Thames are set to merge, with the new organisation planning to deliver 100,000 new homes across London and the south east.
The proposed merger of the three housing associations will create one of the country’s top four largest housebuilders, the organisations said, at an investment level of £25 billion over the next ten years and with the ability to deliver 35,000 more homes than each company could have achieved alone.
The new company will also be the country’s largest affordable homes provider, the London organisations added. Half of the 100,000 new homes will be for people on lower incomes, with a split of 25,000 affordable homes available for first time buyers, 25,000 for affordable rent and the remaining 50,000 for market rent and sale. The new organisation will also be the manager of 135,000 homes.
The merger will also mean the creation of other facilities and functions, including a new training academy. This will offer nationally accredited apprenticeship schemes, and “greater career development opportunities” for staff.
East Thames’ care expertise will see the creation of a large care and support subsidiary, and investment in a new offer for vulnerable and older people. East Thames will become a subsidiary of the new company.
The merged firms said that the merger would deliver efficiency savings of £50 million within five years.
David Montague, L&Q’s CEO, said: “Our plans will allow us to tackle the housing crisis head on, driving greater efficiency, building more homes, creating beautiful new places and sustainable, independent communities. At the heart of our united mission will be the continued provision of affordable homes for those in need.”
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 allowed an appeal for 81 dwellings in Long Itchington, Stratford on Avon, after determining that the proposal fell within the definition of sustainable development. Despite a fellow Inspector, during the Core Strategy Examination, stating that the Council could demonstrate a 5 year supply of housing, Phillip Major, the Inspector in this appeal came to the conclusion that indeed the Council fall short of a 5 year supply of housing and therefore it is appropriate to engage Paragraph 14 of the NPPF. A neighbouring David Wilson Homes development was also enough to convince the Inspector that there would be limited impact on the character and appearance of the area. Economic and social benefits arising from the development were also offered significant weight and the appeal was ultimately allowed
A site for 1,500 dwellings in Brockworth, Tewkesbury, was called-in to the SoS, who agreed with the Inspector to allow the proposal. The main issue raised by the appellant was the harm the proposal would have on the setting of the Green Belt, to which substantial weight was given. However, the contribution to the depleting 5 year supply, the provision of 40% affordable housing and the agreement in the JCS of its allocation for development, outweighed the impact upon the Green Belt. Government policy does state that it is unlikely that an unmet need is unlikely to outweigh impacts upon the Green Belt; however, special circumstances were given to this case. The special circumstances, alongside the conformity with the emerging JCS allocation, resulted in the SoS agreeing with the Inspector’s conclusion to approve the application for 1,500 dwellings to the north of Brockworth.
An appeal for 300 dwellings in Edenbridge, Sevenoaks, has been allowed. It transpired during the appeal that Sevenoaks Council’s case was based on the perception of nuisance of the additional traffic presented by the proposal, rather than the actual impact. These concerns were allayed in the Inspector’s eyes by provision of a pinch point and reduction in speed limit. The proposed development was found to have substantial positive weight in its social role and moderate positive weight in terms of its economic and environmental roles. Therefore it was considered to represent sustainable development and was allowed.
The Inspector, Lesley Coffey, dismissed an appeal for 164 dwellings in Preston on the grounds of visual and character impact. The appeal site is located on a previously dismissed site, however the previous application was for considerably more dwellings and loss of all of the Area of Major Open Space (AMOS); therefore the previous dismissal was given limited weight. The main issue lay with the loss of the AMOS and the impact this would have on the character of the adjacent neighbourhood areas. The visual prominence of the site would be heightened with the loss of vegetation on-site and would alter the neighbourhood character of the surrounding residential areas as a consequence. Furthermore, the proposal defines that a 18-hole golf course will be reconfigured as part of the scheme; however, the proposed layout of the course was deemed unsafe and claimed not to be economically viable either. The Inspector went on to agree with the Council’s methodology of spreading out the backlog and shortfall across the rest of the plan period and applying a 5% buffer; such a methodology equated to a 5 year housing land supply being demonstrated and agreed upon by the Inspector. The Inspector did note the scheme’s benefit of providing much needed affordable housing, a short-term economic boost to the area and the biodiversity measures proposed would enhance existing flora and fauna. The significant harm and loss of open space as a result of the scheme, however, outweighed the benefits.
An appeal for 14 dwellings in South Somerset has been allowed. The council refused the application on the basis that it did not comply with Policy SS2 of the Local Plan; a policy setting out five criteria for development in rural settlements. The Inspector found that two of the criteria related to housing supply and, as South Somerset Council are currently unable to demonstrate a supply, are out of date. The only criteria that the Inspector agreed it failed to meet was to ‘generally have support of the local community’. However, the Inspector does not believe that development that would otherwise be sustainable should be prevented solely by local opposition; especially as the appellant carried out extensive community engagement and made appropriate changes. Other benefits of this scheme such as housing shortfall contribution and improvement of the local drainage system were enough to outweigh any harm caused by failure to totally comply with policy SS2.
Concern was mentioned about ‘equality of arms’ during a hearing for a 66 dwelling appeal in Sevenoaks. The appellant fielded a large amount of witnesses and were represented by Queen’s Counsel, whereas the other interested parties were not represented. However the Inspector noted that being represented in some form is not uncommon at a hearing and made her best efforts to ensure a fair case was heard. The main issues in this appeal to demolish existing buildings and erect new dwellings and office space were: the impact on the character and appearance of the area; living conditions of existing and future residents; whether the scheme should provide affordable housing; and whether the housing type was appropriate for the area. The Inspector concluded that affordable housing did need to be provided in this instance (albeit a lower percentage than policy suggests) and that some of the properties would have rooms which breach advisory daylight standards; though these are advisory standards and not requirements. The other issues were dismissed by the Inspector and the appeal allowed.
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