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06/03/2017

Housing White Paper and Legal Update – Further Proposals For Reform

After much anticipation, the HWP, titled “Fixing our broken housing market” was published on 7 February 2017 alongside a consultation on its contents which closes on 2 May 2017. The aim of the HWP is to facilitate the delivery of more homes to address a well-established need. A number of the measures proposed to achieve this aim are discussed in this article.

Green Belt

Despite the HWP drawing on recent Department for Communities and Local Government (“DCLG”) statistics which reveal that only 11% of the land in England has been built on and that the 13% of land covered by Green Belt has remained at around the same level since 1997, the HWP does not clearly signal the strategic release of Green Belt land which was anticipated in the build-up to its publication. A report by the Adam Smith Institute in 2015 stated that around 1 million new homes could be built on just 3.7% of the Green Belt within walking distance of a railway station, but even such a small release of Green Belt has not been considered.

At present, the National Planning Policy Framework (“NPPF”) supports the Government’s desire to attach “great importance” to Green Belts and sets out that Green Belt boundaries “should only be altered in exceptional circumstances” during the local plan process. The NPPF confirms that inappropriate development (which includes the construction of new buildings unless the exceptions in paragraphs 89 or 90 of the NPPF apply) is harmful to the Green Belt and should not be approved except in “very special circumstances”.

The HWP proposes to “maintain existing strong protections for the Green Belt, and clarify that Green Belt boundaries should be amended only in exceptional circumstances when local authorities can demonstrate that they have fully examined all other reasonable options for meeting their identified housing requirements”.

In particular, the Government intends to amend the NPPF to make the following clear:

  • authorities should amend Green Belt boundaries only when they can demonstrate that they have examined fully all other reasonable options for meeting their identified development requirements, including:
    • making effective use of suitable brownfield sites and the opportunities offered by estate regeneration;
    • the potential offered by land which is currently underused, including surplus public sector land where appropriate;
    • optimising the proposed density of development; and
    • exploring whether other authorities can help to meet some of the identified development requirement.
    • where land is removed from the Green Belt, local policies should require the impact to be offset by compensatory improvements to the environmental quality or accessibility of remaining Green Belt land.
    • the Government also want to explore whether higher contributions can be collected from development as a consequence of land being released from the Green Belt.

The HWP also proposes:

  • allowing development on brownfield land in the Green Belt, but only where it contributes to the delivery of starter homes and where there is no “substantial harm” to the openness of the Green Belt;
  • amending the NPPF to make the following clear:
    • appropriate facilities for existing cemeteries are not to be “inappropriate development” in the Green Belt;
    • development brought forward under a Neighbourhood Development Order should not be regarded as inappropriate if it preserves openness and does not conflict with the purposes of the Green Belt;
    • where a local or strategic plan has demonstrated the need for Green Belt boundaries to be amended, the detailed boundary may be determined through a neighbourhood plan (or plans) for the area.

Therefore, despite not signalling an immediate release of Green Belt land for development, the HWP does propose amendment to the NPPF to make clear the “exceptional circumstances” where Green Belt boundaries may be amended.

In addition to the prospect of brownfield development in the Green Belt for starter homes, developers and landowners may welcome this clarity on “exceptional circumstances” (if and when it is translated into a revised NPPF) and this greater certainty could lead to more development being promoted in the Green Belt where the circumstances above apply. Of course, this additional wording also has the opportunity to spawn greater litigation and scrutiny of local plans which may directly conflict with the Government’s aim to ensure each area has a plan for development in its area.

In contrast to the failure to release Green Belt land for development, the HWP aims to support development of brownfield sites and a presumption is proposed that brownfield land should always be considered suitable for housing unless there are clear and specific reasons to the contrary (such as flood risk). This follows from the provisions in the Housing and Planning Act 2016 for the establishment of a brownfield land register and permission in principle for sites allocated on such a register.

Planning application fees

The HWP also includes provisions for local planning authorities (“LPAs”) to be able to increase their fees by 20% from July 2017 if they commit to investing this additional fee income in their planning department. A further increase of 20% may be allowed for those authorities who are “delivering the homes their communities need”, which presumably means meeting their objectively assessed need as calculated using an as yet unknown universal formula.

This is a step likely to be welcomed by the majority of developers who understand that the resourcing of LPAs is one of the key reasons why the planning system can be so ponderous and are willing to pay for a proper service from LPA planning departments.

Nevertheless, the investment of these fees is not presently linked to any targets for performance (although there are separate housing delivery targets) and perhaps a better approach would be a standardised form of planning performance agreement which guarantees the completion of certain key tasks by agreed deadlines, subject to the payment of an increased fee. This would be particularly welcome for EIA development where developers are rightly anxious to ensure LPAs consult on and deal with Environmental Statements properly. In such cases, we often find developers are willing to underwrite external legal costs to expedite the planning process and make sure a proper procedure is followed to reduce risks of legal challenge.

Planning conditions

The HWP reiterates the Government’s desire to ensure pre-commencement conditions can only be used with the written agreement of the applicant which is set out in the Neighbourhood Planning Bill (which is awaiting its third reading in the House of Lords as of the date of this article). The proposals envisage that where agreement cannot be reached, the LPA would either: change or remove the condition, allow the developer to comply with the condition following commencement of the development or refuse the planning application if it considers the pre-commencement condition necessary. This amendment opens up a “horse trade” between applicants and LPAs and in reality, there would be very few situations where a developer would be wise to decline to agree a pre-commencement condition and have their application refused for this reason alone.

The HWP also refers to the existing deemed discharge mechanism which we have found to be of limited use given the number of exceptions to the type of conditions that may benefit from this procedure.

In truth, there is little in the HWP to address existing concerns regarding the imposition and discharge of conditions and nothing to deal with the delays caused by the apparent increased consultation of statutory consultees which continues to slow down condition discharges.

Infrastructure spending

The HWP looks to try to address the disconnect between infrastructure provision and housing by targeting a £2.3bn Housing Infrastructure Fund at the “areas of greatest housing need” and shall require LPAs to make the most of the opportunities for new housing which such infrastructure brings when funding is committed. This grant programme shall open to bids in 2017.

At a time of political and economic uncertainty following the decision to leave the European Union, this commitment to infrastructure is welcomed. It is well established that infrastructure projects can promote housing development and Howes Percival is involved in a number of schemes connected to the Norwich Northern Distributor Road and the East West Rail Link. However, the key as with most provisions in the HWP shall be in implementing changes which ensure the delivery of housing and infrastructure.

Use of compulsory purchase powers and completion notices

The HWP also indicates that the Government will prepare new guidance to LPAs following a separate consultation to encourage them to use CPO powers to support the build out of stalled sites, which may include auctions once possession of land has been taken.

Of course, a CPO may only be confirmed if certain tests are met which shall include proving that there is a reasonable prospect of the scheme underpinning the CPO going ahead and that there is some certainty regarding the funding of the scheme. There is significant doubt as to whether a proposed CPO of a stalled site would be able to satisfy the current tests for a CPO to be confirmed given that the reason the development has stalled may be due to funding or other uncertainty regarding the delivery of the scheme.

No requirement for LPAs to CPO stalled development sites is mooted and in the absence of this it appears that, save for the acquisition of certain troublesome areas of sites such as accesses or contaminated areas, this shall be little more than a last resort and a “stick” to try to compel developers to build out their sites. Indeed, the idea of determining compensation by virtue of an auction of part of a site which a developer or landowner has not been able to deliver is completely inconsistent with the current complex approach to assessing compensation for land compulsorily acquired.

The Government also propose to simplify and speed up the procedure for completion notices, which are rarely used at present. These proposals include removing the requirement for the Secretary of State to confirm a completion notice before it can take effect and allowing completion notices to be served on a site before the deadline for commencing development has elapsed but where works have begun to avoid developers making a “token” start on site. This amendment may make LPAs more confident in using completion notices but LPAs may be reluctant to do this if it means that they are no longer able to include the undeveloped part of a site in their housing land supply figures.

Public sector powers

The Government’s ambition to release surplus land with a capacity for 160,000 homes during the current Parliament is also enshrined in the HWP. New funding in the form of a £45m Land Release Fund is set out as further support for LPAs to achieve this aim.

The Government also wish to ensure LPAs can dispose of land with the benefit of planning permission which they have granted themselves, which is not currently possible outside a joint planning application or special purpose development vehicle. An extension to an LPA’s ability to dispose of land at less than best consideration is also suggested which will surely be criticised by those who view this as a shortcut to LPAs “selling the Crown jewels” to make their books balance in the short term.

Ultimately, more entrepreneurial LPAs with the associated land assembly powers necessary to deliver complicated sites could prove to be a real turning point in the battle against the housing shortfall, but it is doubted whether LPAs have the necessary resources and in-house skills to deliver this.

Following a review of the Homes and Communities Agency it is set to be relaunched this summer as “Homes England” with the purpose: “To make a home within reach for everyone” which includes working with LPAs. There is, therefore, an opportunity here for the more proactive LPAs to work directly with the relaunched central government body of Homes England to directly deliver development sites.

Garden towns and villages and New Town Development Corporations

The Government is already looking to support ten new garden towns and cities and fourteen new garden villages. This idea has already been criticised as a simply political announcement with numerous land ownership and planning issues to be overcome on each site and the social trend in modern times being towards living in established cities.

In the HWP the Government sets out its intention to legislate to create locally accountable New Town Development Corporations for local areas to use as a delivery vehicle if they wish to do so.

To succeed, in reality, these bodies need to be embraced by relevant LPAs in the area and also be given sufficient resources and planning and compulsory purchase powers to deliver such complex large scale developments.

Planning appeal fees

The Government shall also consult on introducing a fee for making planning appeals. It is proposed that this fee would be capped at £2,000 for an inquiry, presumably with smaller fees payable for appeals determined by hearings and written representations. A suggestion that this fee could be refunded in certain circumstances, including where an appeal is successful is also made in the HWP.

It is doubted that this fee would be prohibitive for the majority of developers, but will simply be seen as another cost to securing a planning permission.

It is also uncertain whether this fee shall be payable to the LPA or the Planning Inspectorate.

However, if these increased fees are used to shorten the current timescales for the registration of appeals and the issuing of decisions, developers are unlikely to strongly oppose the payment of these fees.

The Government’s next steps on the proposals in the HWP are eagerly anticipated and the consultation on changes to the NPPF to incorporate the changes discussed above and the mechanism for assessing an LPA’s objectively assessed need shall be at the forefront of changes moving forward. At present, the HWP could be treated as a material consideration for the determination of planning applications and appeals, but the weight to be given to it remains low in the absence of any concrete measures for reform in either legislation or formal policy.

Howes Percival’s planning team are running a series of planning update seminars in Leicester (14 March 2017), Cambridge (15 March 2017) and Norwich (16 March 2017) which shall include a summary on the implications of the HWP, supporting consultations and recent case law. Please contact Victoria Wozencroft - Leicester (victoria.wozencroft@howespercival.com), Harriet Green – Cambridge (harriet.green@howespercival.com) or Katrina Tipler - Norwich (katrina.tipler@howespercival.com) to book a place at any of these seminars.