UK Housing Spotlight: a Planning Perspective

The UK planning framework is often seen as an obstacle to housing delivery, but whilst practitioners have grown weary from a series of legal and policy reforms introduced by successive governments, very little has been done to improve things from a macro perspective.

Will the experience be any better this time?

The Government’s current target is to deliver 300,000 additional homes by the mid-2020s with much of that growth expected to come from the London Region. The Mayor of London’s draft London Plan (published for consultation on 1 December 2017) sets a target of around 65,000 homes a year, a significant increase from the previous plan figure of 42,000. Part of the strategy is to get developers building at higher densities in the suburbs, by scrapping previous limits, and with an overall target of 50% affordable homes.

It is acknowledged that a step-change in delivery is needed. On 5 February 2018 the Prime Minister chaired the inaugural meeting of the Housing Implementation Taskforce which is intended to emphasis the key role of all Government departments in helping to fix the broken housing market. Homes England (created January 2018) will play a key role in driving forward change. Planning reform will be at the core of these initiatives, along with a number of other key imperatives:-

• Increasing housing land supply;
• Public sector land sales;
• Tackling the practice of “land banking”;
• Increasing house-building skills;
• Infrastructure delivery

The chief task of the planning system is how to strike a fair balance between public and private interests, but this leaves a tricky tightrope to walk for those involved in planning decision-making and housing delivery. Political discord is easily capable of thwarting even the best made plans, and in the wake of Brexit and Grenfell it appears that many local communities are kicking back with a stronger voice – witness, for example, the recent rejection by elected Members of Delancey’s Elephant and Castle centre re-development scheme in Southwark on 16 January, despite an officer recommendation for approval. This has now sparked frantic discussions over the level of affordable housing and other key commitments offered by the developer.

The bare statistics show that this is not just an isolated instance. We are currently seeing a rising number of planning refusals in London where reportedly more than a quarter of all schemes were refused in the last quarter of 2017. That figure was hovering somewhere around 12-14% in the first half of the decade. There is a knock-on effect too with increasing amounts of officer time being spent on appeals, with inquiries on average taking 47 weeks to reach a decision.

These timescales stretch out further with the risk of legal challenge at the back-end of the process, such as the recent judicial review brought by crowd-funded local community litigants against the Haringey Development Vehicle initiative. This was intended to be an innovative partnership vehicle to bring about widespread development on sites in the council’s ownership, including the proposed delivery of up to 6,400 homes, alongside a private sector partner (Lendlease). Even though the claim was initially rejected by the court, there is a possibility of further appeals.

But if this trend simply echoes the general mood of the nation right now, in which distrust of politicians and ‘big business’ is greater than ever, then how will the nation’s housing crisis ever be solved?

In a recent article “Build to Rent: Will this scheme solve the Housing Crisis?” we commented on the possible role of Build to Rent (BTR) schemes to deliver housing schemes on the scale needed to fix the nation’s mess. There have been calls in some quarters for a statutory definition of BTR, and support in planning and financial terms, in order to recognise BTR as a separate asset class. Defining and promoting BTR in the National Planning Policy Framework (and related Planning Policy Guidance) could also provide a lift.

According to a recent article by Jonathon Ivory (Managing Director of Atlas Residential) as published in the Property Chronicle, this is a nascent sector which is likely to reach consolidation and maturity from an investment perspective in 2018. However, the overall contribution to delivery is still small (around 100,000 units so far), and there are concerns that since developers will be targeting ‘premium’ renters, land values could suffer in years to come as higher numbers of such units come flooding onto the market.

We are also seeing large transformative schemes in retirement living at the luxury end of the market. In October 2017 Apache Capital Partners and Audley Group, the UK’s leading provider of luxury retirement villages, announced a new joint venture partnership to deliver only London’s second retirement village, overlooking Clapham Common, with a promise of a number of similar schemes to come.

If none of this solves the current malaise, then perhaps it is time for something more radical to emerge?

There are clear signs that all political parties are looking hard at the system of compulsory purchase and compensation. There is a current review being undertaken by the CLG Commons Select Committee’s land value capture inquiry, whilst Labour has announced its plans for a new English Sovereign Land Trust. These initiatives are directed at how public authorities can buy up sites at much closer to their existing use value by stripping out “hope” value.