Consultation on 'Changes to the Planning System'

The Government have already announced a consultation on the 'Planning for the Future' White Paper, due to run until 29th October 2020. Alongside this, they are also conducting the 'Changes to the Current Planning System' consultation, which is planned to close on 1 October 2020.

David Jones, MD/Head of Planning takes a look at the main proposals included in this consultation:

1. Changing the standard method to assess housing need

The proposed change to the  standard method will firstly involve changing the baseline so that it is whichever is the higher of either 0.5% of existing housing stock in each local authority or the latest projected average annual household growth over a 10-year period. Secondly to adjust for market signalling, using the current affordability ratio and change in affordability over the last 10 years.

Through applying these elements for a new calculation it results in a housing need of 337,000 homes per annum. This new method is designed to provide enough land to account for the drop-off rate between permissions and completions.

2. Increasing the level of First Homes (for first time buyers)

It is proposed that, where policy compliant, a minimum of 25% of on-site affordable housing contributions will be First Homes. Initially these will be secured through Section 106 agreements, but in the long term will be secured through the Infrastructure Levy proposed in the Planning for the Future White Paper.

3. Applying Permission in Principle to major development

The current system of Permission in Principle is limited to smaller development schemes. It is proposed to remove this restriction to extend Permission in Principle for a wider range of sites.  (Including major developments).

4. Increasing the affordable housing threshold

It is proposed to increase the threshold for a limited period of time to kick-start the economy and aid recovery from the COVID-19 pandemic. National policy guidance allows local authorities to seek affordable housing on sites of 10 homes or fewer, or with a site area less than 0.5 hectares. The consultation paper proposes increasing the trigger thresholds. Proposing that sites of 40 or 50 new homes will be exempt from providing affordable housing.

The site area threshold is also proposed to be increased, but details of this have not been released as of yet. This increase in the threshold will not apply to designated rural areas, in these areas the current threshold of 5 units or fewer, will be maintained.  

Commentary

It is our view that the proposed changes within this consultation paper would, if implemented, undoubtedly result in a flurry of applications below the 40 or 50 site affordable housing trigger.  As a simplistic measure of increasing the number of planning permissions delivered and potentially increasing housing supply it may work, this will however be at the cost of providing affordable housing,  in practice and until a satisfactory means is found to capture all land value uplift the main beneficiary is likely to be the landowner (or housing developer if they already own the land ) rather than the prospective homebuyer. 

Regrettably it does demonstrate a ‘disconnect’ in government thinking and a lack of understanding of the economies of housebuilding and land value.

Resolving the standard method to assess housing need is welcomed if this brings greater certainty,  evidence suggests that the constant tweaking of calculation methods for housing delivery have not yet found that sweet spot.

Increasing homes for first-time buyers is welcomed, although in practice, I question whether it really addresses affordability or indeed the overall supply of first-time buyer homes.

Finally Permission in Principle (PIP) has seen limited take-up since its inception for smaller sites,  whilst extending to include larger sites may seem compelling, in practice larger sites generally have far greater complexity meaning that either mission in principle would be of such limited value that landowners and developers are likely to opt for an outline application in preference to PIP.

David Jones is MD/Head of Planning at Evans Jones Ltd. If you would like any further information on the proposed planning reforms and how this might affect your development proposals, contact David on 0800 0014090 or david.jones@evansjones.co.uk