How will the new Labour Government address housing targets? It is unveiled in the consultation on the proposed NPPF reforms
After only a few weeks of the new Labour government taking power, they have published a consultation on the proposed reforms to the National Planning Policy Framework (NPPF) alongside a draft of the proposed NPPF. The consultation opened on 30 July 2024 and will run until 11:45pm on Tuesday 24 September 2024. Unsurprisingly, the proposals revolve around achieving the government’s 1.5 million homes target and delivering economic growth in accordance with the Labour Party’s manifesto. This article summarises the key proposed changes relating to the delivery of housing.
Standard method for assessing housing needs
Notably, the Government proposes to reverse changes to the NPPF made in December 2023, including through the removal of the wording in paragraph 61 which states that there may be exceptional circumstances justifying an alternative approach to assessing the housing need. It expects authorities to make “all efforts” to allocate land in line with their housing need as per the standard method, including optimising density, sharing need with neighbouring authorities (the duty to co-operate is to be strengthened) and reviewing Green Belt boundaries. Specific circumstances in which an alternative approach may be justified would be set out in Planning Practice Guidance.
The current standard method was introduced in 2018 with the intention of identifying the minimum number of housing that a local planning authority (LPA) should plan for its area, with the aim of totalling 300,000 homes nationally. Presently, the method:
- Sets the baseline by applying 2014 household projections (produced by the Office for National Statistics). These projections are then used to calculate the projected average annual household growth over a 10 year period.
- Incorporates an adjustment for housing affordability of the area using the most recent median workplace-based house price to median earnings ratio.
- Caps the level of increase. Where policies were adopted within the last 5 years, the local housing need figure is capped at 40% above the average annual housing requirement figure.
- Applies a 35% uplift to the top 20 cities and urban centres.
The new proposals seek to ensure local plans are ambitious enough to support the government’s housing commitment and includes three key changes:
- A baseline of 0.8% existing housing stock of the area (this is to better reflect the growth ambitions across the Midlands and the North).
- Application of an uplift using the workplace-based median house price to median earnings ratio based on the average affordability over the three most recent years for which data is available.
- Removal of the cap applied to the level of increase for housing and the urban uplift.
Brownfield v Grey belt v Green Belt
When reviewing Green Belt land, the government considers that the first step is to look at previously developed land (PDL). In addition to proposed amendments to the tests for limited infilling, the government is consulting on widening the definition of PDL to include hardstanding and glasshouses.
In addition, earlier this year, the Labour party set out a new definition of the ‘Grey Belt’ in order to help meet development needs. As anticipated, the draft NPPF introduces the concept of grey belt land and defines it as land in the Green Belt comprising PDL and any other land which makes a limited contribution to the five Green Belt purposes, but excluding areas or assets of particular importance (e.g. National Parks). In order to assist LPAs in determining whether land makes a limited contribution to such purposes, the government are seeking views on proposed guidance to be inserted into the glossary of the NPPF.
In line with the government’s commitment to housing targets, the proposals provide that acute housing and development pressures can expressly justify exceptional circumstances to review Green Belt boundaries and propose necessary alterations in order to meet those needs. Where it is considered that release of such land is necessary, LPAs should prioritise PDL in sustainable locations and then grey belt land in sustainable locations. Other sustainable Green Belt locations should be the last resort. Release of land is not supported where it would fundamentally undermine the function of the Green Belt across the area of the plan as a whole.
As it will take time for local plans to be reviewed, the government proposes new guidance that, where a LPA cannot demonstrate a 5 year housing land supply or is delivering less than 75% against the Housing Delivery Test, or where there is unmet commercial or other need, development on sustainable “grey belt” land will be supported in certain circumstances.
Finally, the consultation seeks views on the introduction of “golden rules” where major development takes place on land which has been released from the Green Belt or on sites in the Green Belt permitted through decision making. All schemes must include contributions for improvements to local or national infrastructure and the provision of new or improvements to existing green spaces that are accessible to the public. For those schemes which deliver housing, at least 50% must be affordable housing including social rent - developers will need to consider the resulting viability of schemes before putting in an application. Controversially, the government is also consulting on approaches to viability appraisals, including the setting of indicative benchmark land values for Green Belt land that is released and late-stage reviews.
Brownfield
The government have made it clear that brownfield should be prioritised in considering development of previously used land. As such, the draft revisions to the NPPF include at paragraph 122 (c) that development proposals on suitable brownfield land should be regarded as ‘acceptable in principle’.
Sustainable development
The government have included proposals to improve the operation of ‘the presumption’ in favour of sustainable development. It proposes to clarify that the presumption applies in decision-taking where policies for the supply of land are out-of-date (rather than the “most important” policies being out-of-date). This includes those policies that set an overall requirement and/or make allocations and allowances for windfall sites for the area and type of development concerned.
5-Year Housing Supply (5YHLS)
We previously wrote about the revisions to the NPPF in December 2023. Such revisions brought in a requirement for LPAs in the late stages of plan making to only demonstrate a 4-year housing land supply and the removal of the 5% and 10% buffers on top of LPA’s 5YHLS.
The government seeks to reverse these changes, describing them as “disruptive to the sector and detrimental to housing supply”. As such the draft changes to the NPPF would reintroduce the 5% buffer and scrap the 4-year housing land supply requirement. Instead, there will be a requirement for all LPAs (regardless of the status of their local plan) to demonstrate 5 years of deliverable sites for housing.
Changes are however proposed to allow consideration of adverse impacts to include consideration of policies relating to location and design and for securing affordable homes.
Developer Contributions / Affordable Housing
After almost 2 years since its first consideration, we can now officially say goodbye to the proposed Infrastructure Levy (IL). The government have made clear that it will not be implementing the IL, the framework for which was introduced in the Levelling-up and Regeneration Act 2023.
On affordable housing, the government’s proposals emphasise the importance of social rent over affordable housing ownership products. As such they propose removing the requirements to deliver at least 10% of the total number of homes on major sites as affordable home ownership and for 25% of affordable housing units secured through developer contributions to be First Homes. First Homes would remain an option for delivery, but whether this will be the end of First Homes will be seen in due course.
Conclusion
Overall, the proposed changes reflect the Labour government’s commitment to the delivery of 1.5 million new homes. Some of these proposals are bold (i.e the grey belt and green belt provisions) and as such are likely to come under scrutiny. Although, this article has only addressed the key changes affecting housing, the government have also included proposals to support the construction of modernised industries to support economic growth alongside changes to the Nationally Significant Infrastructure Project (NSIP) regime and promotion of a strategic approach to planning. We will review and report on such proposals in upcoming articles.
