Changes to the current system – consultation open now

The Government is seeking views on a number of short term changes to the planning system. The consultation closes in the evening of 1 October 2020.

Assessing housing need: The standard method for assessing local housing need is to be changed and used for plans created ahead of the fundamental changes to the system proposed through the White Paper.

Currently, the method takes the baseline of household projections using a 10-year average of the 2014-based national figures and adjusts the figures to take account of affordability, subject to a cap. This method is criticised for projecting past trends forward and for not reflecting more recent lower household growth projections. The Government however wants more homes in high demand areas to reflect emerging trends and consistency with a target of 300,000 homes per year.

The proposed new approach adopts a baseline of the higher of 0.5% of existing housing stock in each authority (so each area has to contribute to national growth proportionate to its size) and the latest ONS national household growth projections for the authority over 10 years (to reflect emerging trends). There will then be adjustments for affordability using the workplace-based median house price to median earnings ratio and for how affordability has changed over time.

This results in a national housing need figure of 337,000 on current data, 76% of which is in urban authorities. 141 authorities (excluding London boroughs) would have a change of over 25% when compared to the higher of what they have planned for or the current method. Transitional arrangements would apply, giving authorities close to submission or publication of plan a window to continue using the old method.

First Homes: Following consultation in February, the Government seeks views on the detail of its proposed changes. It intends to set out in policy that at least 25% of all affordable housing units should be First Homes (secured first through s106 and in time through a new Infrastructure Levy), predominantly on-site.

It is proposed that the value created by a “policy compliant” application should be calculated by reference to up to date published policy (based on discount from market price). This value would be reallocated to a new mix based around First Homes. 

The Government is consulting on two options. The first is for First Homes to replace other affordable home ownership products (eg shared ownership) as a priority. Where this results in First Homes units substituting for all such products, then the remaining 75% would be split between rental products in the ratio for those products as set out in the plan. If a policy compliant mix requires affordable home ownership products to exceed 25%, then the remainder of the home ownership products (above 25%) would be delivered, and the policy rental tenure mix secured for the remainder. The second option is to allow case by case negotiation which the Government is concerned would cause delay. The consultation covers potential exemptions, including build to rent schemes.

The Government considers that any necessary review of the tenure mix should be through a Local Plan review. Local Plans and neighbourhood plans submitted for examination within 6 months of adoption of the final policy need not require First Homes. Where significant work has been done on applications, the authority will have flexibility to accept alternative tenures.

The level of discount should be 30% from market price with discretion to increase this to 40% or 50% evidenced through the Local Plan.   It is not intended that CIL will be payable, with authorities encouraged to use discretionary affordable housing relief before the regulations are changed.

Under the controversial exception sites policy, it is proposed to allow small sites proportionate in size to the existing settlement (but without any size threshold)  to be brought forward outside the Local Plan providing First Homes for local buyers are delivered, alongside some market homes. In designated rural areas, the rural exception sites policy will apply.

Supporting SME developers: The Government is considering increasing the threshold for securing affordable housing contributions (currently set at developments of less than 10 units) to either 40 or 50 units, to facilitate delivery of small sites by SME developers. This will be for an initial period of 18 months during which the impact will be monitored. There will be provisions to prevent developers bringing forward larger sites in phases to avoid affordable delivery.

Permission in principle: This route was introduced in 2018 for certain brownfield and small sites, allowing 5 year “in principle” consents (free from conditions) ahead of “technical detail” approval (to which conditions may be attached). The Government wishes to extend this to major development (but not development subject to EIA, for which the threshold is generally 150 dwellings or more than 5 hectares, or habitats assessments), again to benefit SME developers who may struggle to raise the funding for a detailed application up front. Housing must occupy the majority of the site.

The Government is considering applying the same information requirements as present (ie minimum and maximum dwelling numbers plus plan at “in principle” stage), but subject potentially to a maximum height threshold in terms of number of storeys, although it notes that brings in design considerations at the initial stage. Publicity requirements would increase, and the consultation extends to the fees to be imposed. 

It seems that planning obligations would still be sought at the technical details stage, subject to the above thresholds, which may well reduce the value and certainty of the “in principle” approval at the initial stage.

Land contracts: Finally, the Government is also seeking before the end of October evidence of data on land control, including on how to identify and define contractual arrangements that lead to control over the purchase or sale of land.

This article was written by Claire Fallows, for more information, please contact her at claire.fallows@crsblaw.com.

This article is part of a Planning Reforms: The Second Wave newsletter, click here for more information.