Welcome to the third edition of ‘The Source’ – prepared by the Strategic Land Team at Gladman with the specific aim of better informing you with regard to current news and views in land & planning.
Court Overturns Government Policy Exempting Small Sites from Affordable Housing Contributions
The widely reported High Court decision of Mr Justice Holgate quickly led to the deletion from the Planning Policy Guidance (PPG) of the paragraphs which had excluded developments of 10 units or less from affordable housing contributions and other tariff based contributions.
Aside from this headline consequence, the very detailed judgment also restates the importance of taking into account consultation responses when preparing or changing policy (para’s 144-161). This may have implications for councils preparing new local plans, particularly when substantial changes are proposed during the Examination process.
Separately, the judgment may also have an impact on some local authorities’ housing land supply position, with those reliant upon a recent surge of small sites (which had only become viable when freed from an affordable housing requirement) having to reassess their evidence.
Objectively Assessed Housing Need – Responding to Market Signals
It is now over three years since the requirement to adjust the Objectively Assessment of Need (OAN) to address market signals came into being. It is an issue that decision makers have felt unable or unwilling to grapple with – until now that is!
At local plan examinations for both Uttlesford and Eastleigh, the examining Inspectors have suggested that an additional 10% should be added to the component of housing need in order to address issues of affordability, therefore increasing the housing requirement to over deliver new homes to help reduce house prices and rents.
Some developers have been arguing that the OAN should be adjusted to address “unaffordability” for some time, but this is one of the first times Inspectors have grappled positively with the issue and included an uplift to address local authorities problems of affordability. Moreover, it appears that some local authorities are themselves also planning positively; Nathaniel Lichfield & Partners have prepared a housing requirement assessment on behalf of Canterbury City Council as part of its evidence base for a new local plan, which proposes a 20% uplift to the housing requirement in an attempt to address affordability issues.
One of the core planning principles of the National Planning Policy Framework (NPPF) requires that “plans should take account of market signals, such as land prices and housing affordability, and set out a clear strategy for allocating sufficient land which is suitable for development in their area, taking account of the needs of the residential and business communities.” It is compelling that the principle of such an uplift has now been examined and established – therefore the only real debate should now be around how large the component should be, particularly given that the Office for National Statistics (ONS) has recently confirmed that the housing affordability gap is growing.
Simply choosing to compare an authority with a selected list of other local authorities that have similarly expensive housing markets, and then claiming to not have a problem with affordability, does not address the large underlying problem. Furthermore it fails to comply with the fundamental principle set out in the NPPF.
If local authorities appear to have affordability issues compared to other authorities in the same housing market area (which can be demonstrated by rent rises, house price rises, building land prices, affordability ratio, etc), or affordability that is worse than the national average, then should these local authorities choose not to include a component in their OAN to address the issue, there would seem to be a powerful argument that the plan would be unsound.
Private Rented Accommodation is Not Affordable Housing
Much time at examinations of local plans is often spent debating whether some of the objectively assessed need for affordable housing can be accommodated in the private rented sector. In a recent judgment Mr Justice Hickinbottom ruled that “…private rental accommodation is not affordable housing; and the Inspector was entitled to ignore the fact that state-subsidised accommodation in the private rental sector might in practice keep people who would otherwise be accommodated in affordable housing off the streets.” This reinforces the need for councils to identify in full their affordable housing need before making policy decisions about how much, where and by which tenure (as defined in the NPPF) affordable housing will be provided.
House Builder News
Starter Homes Initiative
The Government has launched a £26 million fund to help house builders deliver exemplar homes under its starter home initiative, it announced on 10 August 2015.
Offering a boost to the initiative (under which the government aims to build 200,000 discount homes for first-time buyers under the age of 40 by 2020) Communities Secretary Greg Clark has introduced the fund for small house builders, developers, councils and housing associations to “demonstrate a range of high quality homes that will be available to first time buyers,” … “This competitive fund will build homes that will clearly show the wide range of new properties that will be available for first-time buyers as they take their first step on the housing ladder.”
The Government followed with the statement that this initiative “will pave the way for the first wave of starter homes and show aspiring young home owners the different types of properties they can come to expect from the scheme.” The funding will be used to buy brownfield sites for the starter homes, with the money from the sale of the sites going back to the Government.
Also announced was a pot of up to £10 million for local authorities to prepare more brownfield land for the development of these homes.
Bellway Boost in Sales
Bellway sold a “record number” of homes during the year ending July 31 2015, it announced on 7 August 2015.
Reporting ahead of its preliminary results, due to be released on 13 October 2015, the house builder said that their housing completions during its financial year rose 13.2% to 7,752 against the equivalent period in 2014.
The Average Selling Price (ASP) of a Bellway home increased 5% to around £224,000 compared to last year, due to further changes in mix and “modest” underlying increases in sales prices. The strong growth in volume and ASP generated a lift of more than 18% in housing revenue to around £1,730 million.
During the year, Bellway took an average of 153 reservations per week, up on the 148 of last year. It said that the private sales rate picked up in the second half thanks to new site openings and Bellway’s ongoing investment in work in progress.
The company reported a “substantial” forward order book of 4,568 homes (2014: 4,363 homes) with a value of £1,087.9 million, a climb on the £924.3 million of last year.
Ted Ayres, Bellway’s CEO, expressed: “The group has continued to trade well, against a backdrop of favourable market conditions, delivering a record number of legal completions, whilst further adding to an already strong forward order book. We have made a substantial investment in attractive land opportunities and the group has the balance sheet and operational capability to invest further.”
Are Starter Homes Now Classed as Affordable Housing?
The Treasury published its proposals to increase productivity in the UK; ‘Fixing the foundations; Creating a more prosperous nation’
Tucked away in the text is a reference to future planning policy re-affirming that Section 106 contributions should not be sought for ‘other’ affordable housing in connection with proposals for starter homes exception sites. This is in connection with the proposals that the Government intend to bring forward in order to deliver their commitment and appears to imply that starter homes may fall within the ambit of ‘affordable housing’. It is possible that the NPPF/PPG may be amended in due course to reflect this.
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Interesting Appeal Decisions
At Gladman, we monitor all residential appeal decisions issued by the Planning Inspectorate, so as to better understand current interpretations of government planning policy.
The first two of the following decisions provide guidance on exactly what makes a sustainable village – could the solution be a shop, school, pub and public transport?
The last two decisions emphasise the importance of good design and its decisive role in the planning balance.
Small Cheshire East settlement deemed sustainable
A scheme for 18 dwellings in Wrenbury has been allowed because the scheme was sustainably located in a settlement with a school, shop, pub and railway station and the authority could not demonstrate a five year housing land supply. Provision of market, affordable housing and enhancement to the local community and economy outweighed the limited harm to the landscape.
Appellant: Hollyhead Estates Limited
Small AONB settlement considered unsustainable
The main issue in an appeal against West Dorset’s refusal of 17 dwellings in Bradford Peverell is whether the development is sustainable, having particular regard to its setting inside the Dorset Area of Outstanding Natural Beauty (AONB). The Inspector noted the council’s low housing land supply contributing towards the positive attributes of the site. However, the Inspector had difficulty recognising Bradford Peverell as a sustainable location for development since there are no shops or school and the settlement is approached by narrow roads without pavements. Ultimately, the damage to the AONB would outweigh the benefits and the appeal was dismissed.
Appellant: Mr & Mrs Elkins
Market dwellings and excellently-designed affordable retirement with care allowed in AONB
Despite Wychavon’s decision notice highlighting a failure to represent high quality and inclusive design, an appeal against refusal of 125 dwellings, including market houses and affordable retirement with care in Broadway, Worcestershire was allowed by the Inspector because of its design excellence.
The Inspector found that the proposed development would appear as a marginal expansion of a significant area of housing, much of which had been developed since the AONB was designated. The proposals would benefit the community and would not amount to substantial visual harm, indeed, the Inspector considered whether the effect on the local street scene and AONB would be neutral or positive. The big driver in this case however is the affordable housing with care, and the Inspector was satisfied that a desperate need for housing for the elderly population exists in the area, meaning the scheme met the exceptional circumstances required to allow major development in the AONB, set out at NPPF paragraph 116.
Appellant: Spitfire Property Group
Sandbach scheme design becomes determinative issue
Despite being considered a sustainable location for development and the absence of harm to the character and appearance of the area, a scheme for 13 dwellings in Sandbach has been dismissed because the proposed housing would result in an unacceptable internal and external environment for prospective residents. The Inspector concluded that the harm to the living conditions of future residents, particularly owing to the orientation of four plots in relation to a motorway acoustic screen, would conflict with the development plan and significantly and demonstrably outweigh the benefits of providing additional market and affordable housing.
Appellant: Chelmere Homes Limited
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