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Budget 2014 - housebuilding, planning and infrastructure

25 March 2014

The Chancellor's 2014 budget contains policies of relevance to developers of and investors in property. We summarise the main themes in brief below:

  • Housebuilding - The Help to Buy equity loan scheme is extended to March 2020, and could potentially apply to custom build.  No change to the mortgage guarantee scheme, which will continue to December 2016 as planned. A £500 million Builders Finance Fund aimed at SMEs is intended to unlock schemes of 15 to 250 units. Bids from private developers are to be invited for a £150 million fund for regeneration of large housing estates, working alongside local authorities. At a smaller scale, and controversially, the Government will consult on giving self-builders the 'right to a plot' from Councils and access to a £150 million repayable fund. Perhaps of concern regarding viability, the Government remains committed to implementing zero carbon homes from 2016 - see our separate article on construction standards. 
  • Strategic infrastructure & schemes - Consideration is being given to accelerating delivery of HS2 and to substantial redevelopment of Euston. The Mersey Gateway Bridge will benefit from a Government backed guarantee to investors. Proposals are to be developed to extend the overland rail to Barking Riverside to facilitate delivery of new homes there. The regeneration of Brent Cross is under the spotlight. Ebbsfleet Garden City is to be created, with capacity for up to 15,000 new homes on brownfield land, driven by an urban development corporation backed by up to £200 million funding. With a more localist flavour, by Easter, a prospectus on how local authorities can develop local proposals for new garden cities is expected - and keenly awaited. There are continued tax incentives for Enterprise Zones, £100 million funding for Greater Cambridge transport and infrastructure through a Gain Share mechanism and a city deal with Glasgow. Investment in flood defences will increase. Additional land worth £1.5 billion is to be released following the Government's Strategic Land and Property Review.
  • Permitted development - Authorities may well be concerned to hear of proposals to overhaul and extend (yet again) permitted development rights. As can be seen from our article on changes to permitted development rights, recent changes have involved an increased role for the 'prior approval' mechanism, whereby permitted development rights are qualified by the requirement to seek approval of specific matters. Ministers have previously expressed concern that some authorities are using the mechanism to impose controls beyond the specific matters referred to in the legislation. A review of permitted development rights is therefore announced, acknowledging the three tier system that now exists (full permitted development, prior approval and planning permission). In addition to the changes referred to above, there will be consultation on a wider "retail" use class, permitting changes of use from warehouses and light industry to residential and enabling businesses more scope to extend car parks, loading bays etc. within their sites.
  • And more - Of concern to many will be the announcement of a pilot scheme for passing a share of the benefits of development directly to individual households - we query whether this will increase the burden on developers or be funded through community infrastructure levy. A new planning court will be launched on 6 April 2014 to fast track planning disputes. The outcome of the Government's consultation on changes to the major infrastructure project planning regime is expected shortly. 

Whilst the Budget contains a number of proposals and commitments, it is pleasing after recent upheaval that the planning system itself escapes largely unchanged. However, with election year looming, no doubt planning, housing and infrastructure delivery will remain high on the Government's agenda.

This article was written by Claire Fallows.

For more information please contact Claire on +44 (0)20 7427 1046 or claire.fallows@crsblaw.com