Have a look at our August 2016 Edition of The Source.
Confidence in housebuilding industry
Back in September 2015, government minister’s declared, in a powerful statement, that a million homes were to be built in England by 2020. However, during a Housing Conference in July 2016, Brandon Lewis denied the figure was ever an official target.
A report ‘Building more homes’ published by the House of Lords, states that; “Since the referendum on the UK’s membership of the European Union in June 2016, the Minister has effectively abandoned this target. Prior to the vote he warned that the target would be difficult to achieve if the UK voted to leave the European Union.”
However, according to the Home Builders Federation and leading housebuilders, “sales and reservations have not been affected by the EU referendum”, stating that housebuilders remain confident in the demand for housing and will continue to meet the need.
Gavin Barwell has now been appointed Minister of State for Housing and Planning and has reiterated the 2015 declaration, stating; “The need for new homes continues, as does our commitment to delivering 1 million of them by 2020. We are keeping markets under review, and My Right Honorable Friend, the Secretary of State, and I will meet the major housebuilders this week.”
Neighbourhood Plan Call-Ins
On 13th July, the Government updated the NPPG to alter the circumstances under which an appeal might be recovered.
The new criteria now states that recovery can occur at any stage of the appeal, even after the site visit, a hearing, or an inquiry has taken place.
The threshold for call-ins has also been raised to over 25 residential units (as opposed to 10), in areas where a qualifying body has submitted a neighbourhood plan proposal to the local planning authority, but where the relevant plan has not been made.
The following day, Gladman Developments was informed by the Planning Inspectorate that two of its appeals would be subject to call-in. This comes over half a year since written representations were submitted on Hixon, and a day after the decision had been chased by Stafford Borough Council. An appeal in Bassingham was also called in, again, over six months after the hearing had been held.
The call-in letter for Hixon cited the “latest iteration of Ministerial intent concerning appeals in areas where there is an advanced neighbourhood plan”.
What could have precipitated such a rule change to the PPG?
English Housing Survey Results Published
On 21st July 2016, the Office for National Statistic released the ‘English Housing Survey’. It revealed several interesting trends in home ownership over the last 12 months including some unsurprising but concerning increases in the average age and income of first time buyers.
The survey shows that the average age of first time buyers has increased in the last 20 years, from 30 to 33 years old – an all-time high for those getting onto the property ladder. It also demonstrated that between 1994-1995 and 2014-2015, the proportion of first time buyers aged 16-24 years declined from 23% to 10%, while the proportion aged 35-44 years increased from 11% to 20%.
In a similar way, the proportion of first time buyers that were single households halved to 14%, demonstrating that most first time buyers are having to buy as a couple or share with friends in order to buy their first property. And, despite average incomes of first time buyers increasing, a higher proportion require assistance from friends and family for a deposit. According to the survey, the median household income per year of a first time buyer was £43,000 in 2014/15, compared to less than £20,000 in 1994/1995. Whilst average annual salaries have obviously increased, this has been out-stripped by the increase in the cost of getting onto the property ladder as a first time buyer.
Clearly these latest statistics demonstrate that affordability is the biggest issue amongst the youngest age group in our society, when trying to get on the property ladder. Whilst this is no surprise, it is further evidence of the housing crisis continuing to grip those at the grass-roots end of the housing market. A link to the full report is here.
Home ownership falling
British cities are rapidly becoming increasingly unaffordable for potential buyers. “London has a well-known and fully blown housing crisis, but the struggle to buy a home is just as big a problem in cities across the North of England,” said Stephen Clarke, the Resolutions Foundation’s policy analyst.
The Resolution Foundation’s report, based on data from the Office for National Statistics’ Labour Force Survey (LFS), showed that in early 2016, 58% of households in Greater Manchester were homeowners, compared with 72% in 2003.
The Government’s English Housing Survey shows the total number of buyers has fallen by a third in 10 years. The Resolution Foundation found that home ownership in England peaked in 2003 at 71% of the population and had now dropped to just under 64%.
Home ownership in England has fallen to its lowest level in 30 years as the gap widens between earnings and property prices. “We have this sense now that house prices have become detached from people’s earnings” said Matthew Whittaker, chief economist from the Resolution Foundation.
The fall in ownership corresponds with a rise in renting from private landlords. The research also suggests that rents at record highs and rising house prices are making it increasingly difficult for many aspiring buyers to save enough for a meaningful deposit. The proportion of private tenants rose from 11% in 2003 to 19% in 2015; in Greater Manchester, rising from 6% to 20% over the same period.
Review of the Scottish Planning System – July Update
Following the June 2016 Source article on the “Review of the Scottish Planning System”, Kevin Stewart, the Scottish Minister for Housing and Local Government, has provided a timely response to the ‘ Empowering Planning to Deliver Great Places‘ report.
July saw the initial ministerial responses, setting out a mixture of immediate actions and long-term areas for review, with ministers seemingly committed to an “ambitious but practical programme of planning reform”. MSP, Mr. Stewart has stated that they “welcome the positive report produced by the panel… [are] impressed that public and private interests in planning are willing to work together and with government to make changes happen. We must now work together to ensure our planning system is best placed to support economic growth and housebuilding”.
Ministers intend to further consider the recommendations of the review panel in more detail over the summer and autumn and are aiming to publish detailed proposals for change in a White Paper due in autumn or winter of this year.
Undoubtedly, there remains a question as to whether or not the system needs reform, but the political momentum is building and so it is imperative that all those involved in the Scottish Planning System ensure that they are well positioned to influence any changes, engaging with the process as it continues and evolves.
Taylor Wimpey – “no meaningful change to date” since EU referendum
Reporting on its half year results to July 3rd 2016, the volume housebuilder said that trading over the past month was at a “normal seasonal range” with a net private sales rate of 0.65. Since June 24th, “early forward confidence indicators” amongst home purchasers along with continued competitive mortgage lending had been encouraging, reflecting faith in the resilience of the housing market. The housebuilder is closely monitoring customer confidence.
During the six month period, Taylor Wimpey’s pre-tax profit lifted 12.1% to £266.6 million against the same half period in 2015. Total completions rose 3% to 6,019 homes, with the total average selling price rising 5.8% to £238,000. The private average selling price climbed 7.3% to £266,000, with homes benefiting again from a focus on better quality locations, Taylor Wimpey said.
As of July 3rd 2016, the company’s order book represented 8,683 homes against 8,120 homes on June 28th 2015, increasing 16% in value to £2,156 million.
Pete Redfern, Taylor Wimpey’s Chief Executive Officer said: “One month on from the EU referendum, current trading remains in line with normal seasonal patterns. Customer interest continues to be high, with a good level of visitors both to our developments and to our website.
Whilst it is still too early to assess what the longer term impact from the referendum result on the housing market may be, we are encouraged by the first month’s trading and by continued competitive lending from the mortgage providers as well as the positive commentary from government and policymakers.”
Countryside Properties – demand for housing has remained strong following Brexit
Giving an update on the 13 weeks from 1st April 2016 to 30th June 2016, the housebuilder said that following the referendum result, it witnessed an “immediate increase” in its cancellation rates. However, these have now returned to normal levels, with cancelled homes reselling well since, “often at higher prices”.
During the 13 weeks, Countryside’s completions climbed 29% to 583 units against the equivalent period in 2015, with the private average selling price increasing 7% to £348,000.
Sales rates remained “healthy” at 0.76 net sales per active outlet per week, increasing from 0.72 last year. Countryside’s opening of sales outlets also climbed by 37%.
While it remains too early to tell what the longer term impact of the EU referendum on consumers could be, Countryside said that demand for housing had stayed robust with “good mortgage availability, affordability and continued political support for the sector”.
It added that it remained on course to deliver expectations for the current year and was confident that the group was well positioned for growth over the medium term.
Ian Sutcliffe, Countryside`s Group Chief Executive Officer said; “We are pleased with the progress made year to date. Despite some fluctuations in the market as a result of the EU referendum, we continue to see robust visitor levels and sales reservations.
Our strong product offering in good locations, together with a partnership business with added flexibility and resilience, positions us well to deal with any change in market dynamics. We remain on track to deliver expectations for the current year and our strategy remains unchanged”.
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 appeal for 61 dwellings in Swanley, Kent has been allowed due to the socio-economic benefits outweighing the minimal environmental and social harms. Local concerns were raised involving existing residents’ perception that the development would result in excessive noise and disturbance. The Inspector afforded this little weight as the proposal would accord with paragraphs 109 and 123 of the NPPF which seek to avoid development giving rise to significant adverse impacts. Furthermore, there were a number of environmental barriers prohibiting the supply of housing sites in the district, namely sizeable areas designated as Green Belt or AONB. The council agreed that there remains a pressing need for both housing and affordable housing in the area and both parties agreed that the evidence base supporting the Core Strategy was out of date as it was not based on the NPPF. Alongside the above points and the inability for the council to provide a tested five year housing land supply (5YHLS) figure, the appeal was allowed.
An appeal for 32 dwellings has been allowed in Ettington, Stratford-on-Avon, with only Policy PR1 of the District Local Plan Review 1996-2011 in dispute and given significant weight. PR1 states all development proposals should respect and where possible, enhance the quality and character of the area. The emerging Core strategy was also given significant weight with adoption anticipated for 11th July 2016. The development included 11 affordable dwellings and was in keeping with its setting. The 5YHLS land supply was deemed as 5.8 years by the Core Strategy Inspector but disputed by the appellant towards 4.25 years. The Inspector did not consider the matter further as it was not the determinative in the case. In conclusion the development represented a sustainable development and was approved as it was in accordance with the development plan.
An appeal for up to 169 dwellings in Long Hanborough, Oxfordshire, has been allowed. Given that both parties agreed that West Oxfordshire Council cannot demonstrate a 5YHLS, the Inspector afforded little weight to both the relevant adopted and emerging policies. Concerns regarding the visual impact of the development were dismissed, with the Inspector finding that the site’s close relationship with existing housing would mean that the development would not appear overly intrusive. Paragraph 23 concludes that the development which has views of a Grade I listed Church, “would not appear as an overly intrusive adjunct to the village structure”. The provision of Public Open Space and a GP facility were also afforded significant weight along with the provision of 35% affordable housing. Issues surrounding the population increase were, in the eyes of the Inspector, mitigated by the sustainability credentials of Long Hanborough. The appeal was allowed.
An appeal for 13 dwellings in Eynsham, Oxfordshire, was allowed despite being located within a Conservation Area. It was concluded that the social benefits, including provision of jobs during the construction phase, affordable housing and benefits to the economy supporting local services, outweighed the limited harm to the character and appearance of the conservation area. Although the proposal would result in erosion of an open space which contributes to the character of the Conservation Area, the inspector found that the location of the development and the benefits it would bring would represent sustainable development and this outweighed the harm.
An appeal in in East Hanney, Oxfordshire, for 200 dwellings was refused on grounds of incursion into the open countryside. The Inspector recognised that bullet point 4 of NPPF paragraph 14 was engaged due to an out-of-date development plan with out-of-date housing figures being in place. The Inspector went on to discuss the potential sustainability of the appeal site. Despite the benefit of 200 dwellings contributing to a lacking 5YHLS, the isolated nature and large scale of the scheme led the Inspector to conclude that the environmental impacts of the scheme would be too severe and would not outweigh the social and economic benefits.
An Inspector has dismissed an appeal for 28 two-storey dwellings in Hedon, East Riding, as the appeal scheme did not constitute sustainable development according to the Framework. Despite acknowledging the site is in an accessible location and that the ecological value could be enhanced, great emphasis was put on the harm that would be caused to the setting of the Conservation Area. Socially, although new housing would be provided, the benefit in this regard was found to be limited due to the size of the dwellings proposed and the absence of a planning obligation to secure the delivery of affordable housing. Taking the social and environmental matters into account, the benefits of the scheme are limited and of insufficient weight to outweigh the significant harm that would be caused to the Conservation Area. Therefore, the appeal was dismissed.
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