Planning For Change: Changes To The Current Planning System Consultation

Background

Separately published for consultation at the same time as 'Planning for the Future' is a further document 'Changes to the Current Planning System' which sets out proposed short-term changes to improve the efficiency of the current planning system. These are the short term reforms the Government is proposing to make to improve the efficiency of the system in certain areas and support economic recovery. The consultation paper can be viewed at https://www.gov.uk/government/consultations/changes-to-the-current-planning-system and is open for consultation until 1^st October 2020.  Implementation of the changes is not confirmed but we would expect this to follow quickly in the Autumn through to early 2021 depending on the feedback received.  This should be monitored. The main proposals are:

• Changes to the standard method for assessing local housing need.
• Securing First Homes, sold at a discount to market price for first time buyers, including key workers, through developer contributions until the transition to a new system.
• Temporarily lifting the small sites threshold below which developers do not need to contribute to affordable housing, to up to 40 or 50 units to support SME builders following the impact of Covid-19 on the economy.
• Extending the current Permission in Principle (PiP) to major development so landowners and developers now have a fast route to secure the principle of development for housing on sites without having to submit detailed plans first.

These offer the most immediate impact on the system compared with the medium-long term ambitions of the White Paper. Our article on that consultation can be viewed here.

Standard method for assessing local housing need

The current method comprises a baseline of household projections which are then adjusted for affordability and capped to limit the increase for a specific area. However, these household projections have attracted criticism as they can result in artificially low projections in some places, where overcrowding and concealed households suppress the numbers.The new method will take into account a percentage of existing housing stock levels, which takes into consideration the number of homes that are already in an area. This will make allowances for diverse housing needs in all parts of the country. The aim of this new method is to allow the Government to hit its target of delivering 300,000 new homes a year, and a more appropriate distribution of homes.This is seen as very much a temporary measure in advance of the more wide ranging and binding reforms proposed in the White Paper.  It will have an immediate impact though as the revised method will increase the national housing need, with the Paper citing that 141 authorities will have a change of over 25% compared to the current method.  There are also detailed transitionary measures proposed given the impact this will have on those in the middle of preparing Plans.  These need to be checked in detail compared with any current Local Plan Reviews you are involved with.

Delivering First Homes

The Government has proposed that a minimum of 25% of all affordable housing units secured through developer contributions should be First Homes which is a new form of Affordable Housing to support first time buyers. Initially these will be secured through S106 planning obligations but, as stated in the White Paper, these will be potentially abolished and so these would subsequently be secured through the newly proposed Infrastructure Levy.The proposed minimum discount for First Homes should be 30% from market price which will be set by an independent registered valuer.  This could be increased to 40% or 50% based on Local Plan evidence.The Paper proposes a series of options for introducing this new tenure in existing policies.  One option includes First Homes replacing other affordable home ownership products.  This appears to have a knock on effect on social rented which may be resisted by certain Authorities who prioritise that particular form of affordable housing reflected in their own local needs and objectives.  Build to Rent's exemption from providing affordable home ownership products is still being considered in terms of the introduction of First Homes. One thing to watch on First Homes is that they do not currently fall within the categories of social housing in the Community Infrastructure Levy Regulations 2010, so as to qualify for the exemption from the levy. The Government is proposing to amend the Regulations, but until that occurs the levy would be applied to First Homes. We assume the amendment will be made by the time the First Homes legislation or policies come into effect. There are transitionary arrangements again with emerging Local Plans and Neighbourhood Plans that are submitted for Examination within 6 months of this new policy being enacted not needing to be changed to reflect the First Homes policy requirements.

The Small Sites Threshold

To provide help to SMEs during the current coronavirus pandemic, the Government has already introduced legislation to give local authorities more flexibility by allowing them to defer and stagger Community Infrastructure Levy payments. This will enable local planning authorities to support SMEs who are struggling with cashflow.Support for SMEs has been further extended by proposing to increase the size of schemes where affordable housing is to be sought.  This will be introduced for an initial period of 18 months with the small sites threshold proposed to be to 40 or 50 new homes through changes to national planning policy.  If this does proceed following the consultation period, a decision will be made via the introduction of a Written Ministerial Statement in the Autumn.This is likely to be much welcomed as a boost to housing delivery by SME developers.  We do however expect opposition to it from Local Authorities who rely on schemes on this scale to meet their affordable housing needs.  Such resistance was previously seen when the small site threshold was changed before so it will be interesting to see if this emerges again.

Extension of the current Permission in Principle regime

By proposing to remove the restriction in the current Permission in Principle (PiP) regulations on major development, this will allow a PiP application to be submitted for a wider range of sites and in turn increase the speed at which housing development can occur. As some restrictions will remain (such as those relating to EIA and Habitats) PiP will not be suitable for sites capable of delivering over 150 dwellings or more than 5 hectares.  For commercial development, the consultation proposes to remove the 1,000 sq m limit for commercial development floorspace.The paper also identifies that the Government is soon to publish a national Brownfield Land Register map which will automatically record those sites suitable for housing.This measure is proposed to be introduced as a means of supporting economic recovery and making it easier to secure the principle of development on a site before more costly detailed design is undertaken.  This is a useful reform of the PiP process which was first introduced in 2017 but has not been used as much as the Government expected due to the current size limitations.  This is very much a precursor to the much wider reforms in the White Paper and is perhaps getting us all used to this new approach to two-stage approach to planning. As a means of increasing certainty when sometimes the only other option is an informed pre-application discussion with a Local Planning Authority this appears to be a useful short term reform for certain types and scale of development.

Next Steps

Compared with the White Paper, this is a far more detailed and practical consultation paper. The changes will also be introduced sooner as they are more focused on encouraging economic recovery.  We are therefore likely to see announcements on the implementation of the measures soon after the consultation period has closed through to early 2021.We will keep you updated as the changes occur and advise on any implications.  In the meantime, we would be pleased to advise further on any of the proposed reforms that are of interest and/or concern.

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Mark Harris Director 0345 404 4102mark.harris@freeths.co.uk

Robert Bruce Partner 0345 128 6958robert.bruce@freeths.co.uk

Paul Brailsford Partner 0345 050 3676paul.brailsford@freeths.co.uk

Liz Young Associate 0345 050 3677liz.young@freeths.co.uk

Natalie Bullin Legal Assistant 0345 404 4198natalie.bullin@freeths.co.uk

Stephanie Gozney Associcate 0345 166 6293stephanie.gozney@freeths.co.uk