More Than Just ideas

17th August 2020

Changes to the Current Planning System

Parallel with the Planning for the Future white paper, the Ministry of Housing, Communities & Local Government (MHCLG) have published for consultation a series of ‘shorter term’ measures to improve the effectiveness of the current system ahead of any fundamental reform. The proposed changes include:

  • Changes to the standard method of assessing local housing need.
  • Securing First Homes through developer contributions.
  • Temporarily lifting the small sites threshold for affordable housing provision.
  • Extending the current Permission in Principle to major development.

In many respects these changes can be considered ‘radical’ and are certainly a much needed and highly anticipated stimulus for developers and the construction industry during this time.

Changes to the standard method of assessing local housing need relate to proposals for land supply reforms put forward by the Planning for the Future white paper (read more here). Under the new approach, a percentage of existing housing stock levels will be introduced, blended with housing growth projections. In addition, the introduction of an affordability adjustment is proposed, as well as the existing approach which considers absolute affordability. Perhaps the most welcomed of the proposals by the development industry is the removal of the cap limiting the level of increase for individual authorities.

We reported back in April 2020 on the original consultation that introduced the concept of First Homes, which has now progressed to the next stage with more detail provided. It is proposed that First Homes, which applies a 30% discount to the market sale prices for first-time buyers, will need to make up a minimum requirement of 25% of the total affordable housing units secured through developer contributions through Section 106 agreements. The proposals build upon a desire to encourage the stock of housing for those seeking to make the first step on the property ladder.

In a more direct response to the impact of Covid-19, MHCLG have proposed to temporarily lift 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 as the economy recovers. Such a move will likely ‘unlock’ a number of sites which otherwise would have been unviable, whilst opening them up to a range of potential developers.

The final proposal relates to extending the current Permission in Principle to major development, the idea being that landowners and developers will have a fast route to secure the principle of development for housing on sites without having to work up detailed plans first. The ability to establish the principle of development will hopefully assist in the funding of developments at an early stage, however the reality of course is that approval of full details will still need to be achieved later.

The proposals, which remain out for consultation until the 1st October 2020, look to make changes that will have a significant benefit in boosting the delivery of housing, most notably the lifting of the small site’s threshold. Hopefully such proposals can be brought into force swiftly to deliver the desired benefits at this critical time. Unlike the white paper, the proposals put forward here appear more tangible and realistic to deliver.

Please contact Associate Jamie Wallace for more information about these proposals.

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