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26 February 2016

Housing and Planning Bill: implications for housing delivery

The Housing and Planning Bill is currently before the House of Lords. When enacted, it will introduce a number of measures intended to boost housing delivery and home ownership. The Housing and Planning Bill includes a number of provisions to assist housing delivery and, in particular, increase home ownership for younger generations. Alongside the new legislation passing through Parliament, the Government has also consulted recently on changes to the National Planning Policy Framework (NPPF Consultation), about which we reported in our last newsletter. Please see here for the article

Starter homes

The Bill brings in a statutory duty for English local planning authorities (LPAs) to promote the delivery of starter homes (please see the attached article for the full definition, but, in summary, these are new homes, available to first time buyers who are aged under 40 years only, which homes are sold at a discount of at least 20% to market value and are capped at £450,000 inside Greater London and £250,000 outside Greater London).

The NPPF Consultation proposed that starter homes would be classed as affordable housing. This is controversial, as a buyer would not have to be in need of affordable housing and the Government suggested that the units could be sold at full market value after 5 years – a departure from traditional requirements that affordable housing must be kept as such in perpetuity, except in limited circumstances.

Much detail on the proposed changes, however, will be set out in secondary legislation, on which a technical consultation is expected from the Department for Communities and Local Government (DCLG) shortly. The Government is expected to require a certain proportion of starter homes (or a commuted sum to be paid to the LPA to provide them) on all suitable reasonably-sized housing developments. It remains to be seen how much discretion LPAs will have to vary the quantum on a site by site basis.

The Bill requires LPAs to compile compliance reports on the provision of starter homes. Where the statutory duty is not being met, the Secretary of State may make a compliance direction requiring policies which are incompatible with the duty not to be taken into account in relevant planning decisions. The Bill would also give the Secretary of State (or the Mayor of London for London boroughs) wide powers to promote or to direct LPAs to make necessary changes to development plan documents.

Housing on brownfield land

The NPPF Consultation considers extending the exception site policies, to bring in a presumption in favour of starter homes on unviable or underused commercial and employment land and strengthen the presumption in favour of housing development on brownfield land.

Alongside the above, the Bill brings in both the need for LPAs to keep a register of brownfield land which is suitable for development and the ability to give it permission in principle. The development would then be subject to technical detail consent. Development Orders are expected to set limits on the size of developments for which permission in principle can be granted. However, the brownfield register is intended to be a vehicle for granting permission in principle for new homes on small brownfield sites to encourage brownfield development and assist smaller developers in obtaining funding.

The Government’s ambition is for 90% of brownfield land which is suitable for housing, to have planning consent by 2020. This figure may be overly ambitious, not least as the clean-up costs of some brownfield sites would be too significant for developers to take them forward and as some landowners might not want to sell their employment-generating land.

Housing in major infrastructure projects

The Bill proposes to extend the remit of Development Consent Orders (DCOs) (which grant permission for nationally significant infrastructure projects) to include an element of housing development. This would mean the provision of some housing which is functionally linked to the infrastructure project (such as homes for key workers during the operation of the infrastructure), as well as housing where there is no functional link, but instead a close geographical proximity between the housing and the associated development. A briefing note was published by DCLG in October on the proposed guidance which will limit the quantum of housing. This sets the maximum number of permanent homes which may be granted consent within a single DCO at 500 dwellings and in some locations a lower amount or none at all would be appropriate.

Final thoughts

The legislative changes proposed in the Bill (and the policy changes proposed for the NPPF) should provide several bridges to cross existing gaps in the housing delivery system. The new types of affordable housing (including starter homes) will allow developers to seek greater flexibility in the provision of affordable housing for their schemes. Some LPAs may however try to retain a certain amount of social or affordable rented to meet housing needs.

The increase in presumptions in favour of development now proposed should move housing development some of the way back to the pre-1991 (pre-plan-led) planning system, which (as Kate Barker set out in her review of Land Use Planning) “operated with a presumption in favour of development, which only a strong public interest test could override”. The proposed changes should help housing delivery, so long as sufficient numbers of contractors can be found to build out the consents and so long as the economy stays strong.

This article was written by Helen Hutton. For more information please contact Helen on +44 (0)20 7203 5314 or