Our National Land Network and Planning, Development and Regeneration team operate extensively across the UK, offering expert advice on a variety of sites with potential for residential development. As part of this, we regularly keep up to date with emerging trends, Government initiatives and planning reform that could impact the way residential development is secured and developed.

On 10 January 2022, the Built Environment Committee published its investigation into the demand for new housing in the UK and how barriers to meeting this demand could be overcome. We have reviewed the findings, and set out the potential implications on planning reform, planning policy and housing delivery across England.

Background

The Report sets out that the “national housing crisis” has been exacerbated by uncertainty and a lack of clear direction within the planning system. This is clearly not fresh news but the Report highlights that whilst the government have set an ambitious target for 300,000 homes per year (net additions) and one million new homes by 2024, this target will remain unmet if barriers to building new homes are not addressed. 

As such, their report, ‘Meeting Housing Demand’ provides a package of proposals to address the critical undersupply of homes and help deliver much needed housing.

Key Takeaways

Housing Types and Tenure

The Committee are calling for the Government to reform ‘Right to Buy’, to enable the replenishment of social housing stock.  The Governments home ownership schemes inflates prices by more than its subsidy value, particularly in areas where help is most needed.  Therefore these schemes do not provided overall good value for money and it would be better if the Government were to spend more on increasing social housing stock.  The committee also outline that the Government should set out what proportion of funding for the Affordable Homes Programme it believes should be spent on homes for social or affordable rent.

Specialist Housing

The Committee recognise there is an increasingly prevalent need to provide specialist housing for the elderly.  This is necessary if the housing market is to be sustainable in the coming years as by 2025, one in four people in the UK are set to be over 65.  It is suggested by the Built Environment Committee, that the Government must take a coordinated approach to the issue of later living housing, between departments and the NPPF.  Data from the 2021 census will also provide an update to current assessments of demographic shifts including an ageing population and patterns of migration in light of Covid-19 and Brexit, and this could potentially influence National Policy.

Planning Risk

It is apparent that much uncertainty about the future of the planning system and the delays to planning reforms has had a significant effect on housebuilding.  For instance, the roles of Small and Medium-sized enterprises (SMEs) within the planning system have collapsed.  If housing demand is to be met through SMEs, there is a need for reduced planning risk such as making smaller sites available. The Built Environment Committee has recommended that wider adoption of Home’s England ‘master developer’ model, where larger sites are built out by a number of different housebuilders, would help SME bid for more secure developments.

Land Availability

The availability of land is a significant barrier to meeting housing demand and whilst building on brownfield appears an attractive solution to make sure we meet housebuilding targets, building on brownfield land is not a ‘silver bullet’, especially as the availability of brownfield land is disproportionally in areas with less pressure on the housing market.  The Committee have suggested a solution which would see more homes built on land surrounding railway stations.  As housing surrounding hubs of employment tend to be the most unaffordable, rail links provide the fastest means of access to larger cities.  Research for the Centre for Cities has concluded that as much as 47,000 hectares and as many as 2.1 million homes could become available if all land within 800m of any stations within 45 minutes of a major city in five city-regions were to be released for development. Whilst this would take some Green Belt land, the proportion would be small. 

Section 106 Agreements

Whilst Section 106 Agreements and Community Infrastructure Levy help deliver infrastructure and social housing, the current system adds complexity and uncertainty. The government have proposed a new fixed-rate all-encompassing Infrastructure Levy to replace Section 106 Agreements. Whilst this proposed levy will supposedly by simpler and more transparent, the Built Environment Committee are concerned that the new Infrastructure Levy could have some of the same disadvantages as the Community Infrastructure Levy.

Local Plans

Currently, more than half of local planning authorities do not have an up-to-date local plan which makes it impossible to have a plan led system. To tackle this, the Built Environment Committee supports the Government’s proposals to get all authorities to make local plans within 30 months of any new legislation.  However, meeting this target will require more planning skills and resources within local planning authorities.

What policy and legislation changes could be on the horizon?

• Help to Buy to end, or be replaced by an alternative scheme designed to tackle the issue of housing affordability at the development stage, rather at purchase stage.
• An emphasis on Specialist Housing and accommodation suitable for older persons within the NPPF, placing greater planning weight for planning decisions.
• The Planning White Paper to set out more streamlined planning process in the latest reforms, as suggested in our latest Residential Development Survey to replace the “challenging, time consuming and costly” system.
• Targeted Green Belt release around rail stations and transport nodes, with a series of ‘Pilot Schemes’ to be trialled.
• The replacement of Section 106 and the Community Infrastructure Levy (CIL) to a single new levy to give developers more certainty.
• More money to LPA’s and a hard deadline of 30-months for Local Plans.

Summary

The Built Environment Committee’s inquiry puts a stark challenge to the Government, to make serious and impactful changes to ensure new homes can be built to help meet demand. 

The Government’s response is expected on 10 March 2022 and we will provide a client update then.

For more information, please contact a member of our Planning, Development and Regeneration team.