Planning Law Speed Read – June 2017
30th June, 2017
Welcome to Ward Hadaway's planning law Speed Read. The aim of our bite-sized bulletins is to keep you abreast of the 'hot' topics and key legal issues relevant to you.
Our planning experts are on hand to discuss in further detail what effects they could have for you and your organisation.
What does the new Government mean for Planning and Development?
Several weeks have passed since the General Election but there is still great uncertainty regarding to how the Government will move forward following the Conservatives losing their overall Parliamentary majority. What will be the effect on planning and development?
Firstly, and perhaps most critically, most of the policies contained in the White Paper (and subsequent Conservative Party manifesto) are supported by Labour also. One example of this is the commitment to building 1 million homes during the life of the Parliament.
A second reason is the appointment of former Housing Minister Gavin Barwell as Theresa May’s Chief of Staff following his failure to be re-elected to Parliament. His continued involvement in Government could suggest that Mrs May wishes to retain much of her party’s policy with regard to planning.
Despite the optimism that the White Paper will remain intact, some proposals may be used as bargaining chips to enable Government to push through any major proposals that do not currently have cross-party support. There have even been suggestions that the main opposition to the policies contained in the White Paper may come from the Conservative Party itself.
Some proposals, such as the introduction of permitted development rights for exploratory fracking or the introduction of tests to establish when green belt development may be permitted, will be staunchly opposed by Conservative MPs in rural seats. This will require the Government to work with the opposition, perhaps by taking on some of their policies in order to get their backing.
Whatever the outcome regarding the proposals in the White Paper, it is unlikely that any decision will be made soon. The hiatus caused by the election in addition to the appointment of a new Housing Minister (which we will cover next month), who may want to look again at the reform suggested in the White Paper, could cause substantial delays in reaching agreement and formulating policy – a situation that could be compounded by yet another leadership contest if Theresa May leaves Number 10.
There could even be a knock-on effect at a local level as many local plans will not be adopted until after the revised NPPF is published, which could be more than a year away.
A change to CPO powers?
Last September the Secretary of State for Communities and Local Government, Sajid Javid, blocked a Compulsory Purchase Order (CPO) request by Southwark Council that would require the last remaining residents of the Aylesbury Estate to sell their properties to allow for regeneration of the estate.
In giving his decision, Mr Javid stated that the CPO would breach the residents’ human rights. Mr Javid also claimed that the authority had failed to take reasonable steps to acquire the land by agreement in addition to failing in its public sector equality duty.
This decision was met with mixed reactions. Campaigners hailed the decision as a ‘land-mark victory’, whereas developers and local authorities felt that the Secretary of State had tilted the balance too much in favour of human rights.
Council representatives argued that this decision forced councils to assess CPO compensation on more than just the open market value of a property, and required a new test to be made that gave compensation at an enhanced value based on a broader test of valuation.
The decision to block the CPO has recently been quashed following a successful challenge by Southwark Council.
It is interesting to note that Mr Javid chose not to defend this case and had consented to the judgment. Therefore, Mr Javid will be forced to make a new decision on this following a public inquiry.
Are affordable homes truly affordable?
Around two thirds of authorities in England claim that they have a severe need for affordable housing in their area, according to the Association for Public Service Excellence (APSE).
Despite this, last year construction of affordable housing hit a 24-year low. This, according to the research from APSE, could be down to the viability test in the National Planning Policy Framework (NPPF) which 61% of local authorities find a hindrance.
Even fewer social rented houses are being built with only 6,550 being built in 2016, compared with 38,680 in 2012.
This has often been attributed to a perceived governmental bias towards affordable rented housing.
This problem is likely to be compounded by much of the Government’s funding going towards shared ownership, discount market or starter homes.
According to Shelter, these homes will only be affordable for people on the National Living Wage in 2% of English local authority boundaries. A new proposed definition of affordable housing in the NPPF could see the number of social rented houses drop further, although this is likely to be delayed until Summer 2018.
More worryingly, APSE claim that the updated definition will erode the ability of the poorest people in society to buy or rent their own home because affordability will be linked to market value rather than household income.
Many are calling for a firm agenda to be set by the Government by which local authorities will truly assess the housing needs of their area.
A ‘one size fits all’ approach that is benchmarked against market values will inevitably have its limitations.
White Paper Focus – Diversifying the Market
Following the General Election and the Queen’s Speech, we expect that many of the proposals in the White Paper will be retained.
Therefore, we continue our focus on the White Paper reforms and this month take a look at what the Government has said about a lack of competition and innovation and how that limits the supply of new homes to be constrained.
The White Paper sets out a number of proposals aimed at supporting new developers, encouraging innovation and supporting new investors in the hope that these will improve the amount, choice and quality of new housing.
The proposals include:
- Assisting small and medium-sized builders to increase their capability and market share by providing access to the £3 billion Home Building Fund, with access to £1 billion of short-term loans and £2 billion in long-term loans. This is in response to the number of homes being built by small and medium-sized builders dropping to 18,000 in 2015;
- Introducing an Accelerated Construction programme aimed at partnering with small and medium-sized developers to develop surplus public sector land. These partnerships will also aim to develop sites faster than larger developers can, leading to 15,000 housing starts in the next 5 years;
- Supporting off-site building and other manufacturing techniques in order to speed up house building, reduce costs and encourage innovation. The Government proposes to increase the ability for developers to fund off-site built homes in the same way as they do on-site builds;
- Collaboration with the British Business Bank to encourage investment in small and medium-sized developers;
- Publicising Government schemes such as the Help to Buy Equity Loan among small and medium developers to encourage its use;
- Consideration and support of methods to modernise building techniques in order to reduce cost, reduce timescales and generate confidence in the sectors ability to develop, potentially leading to further outside investment;
- Where appropriate, sell publicly owned sites with outline planning permission in order to reduce the uncertainty and risk surrounding a site thereby encouraging smaller developers to invest in a site;
- Support custom-build properties in which a buyer designs the layout of the property whilst the builder secures planning permission and purchases the site. This allows for greater certainty as the site is sold prior to being built. The Government claims that these properties are often built to higher standards and more quickly than other homes, using more innovative methods of building; and
- Ensure exemptions from CIL Liability for self-built properties remain until more comprehensive reforms to the system can be established. This will remove some of the financial burden on people wishing to build their own homes.
Therefore, the proposals may represent a Governmental push for the diversification and modernisation of the housing market.
Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.
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