Housing is high on the political agenda

The planning system needs to accelerate housing delivery. As the General Election approaches, political differences on how this can be achieved will come to the fore.

28 March 2014, Words by Savills Research

 

The planning system needs to accelerate housing delivery. As the General Election approaches, political differences on how this can be achieved will come to the fore

It is widely recognised that England faces a substantial housing shortage. The three main parties are all in favour of building more homes to meet the needs of a growing population and to encourage economic growth.

However, there is always a big gap between the politicians’ objectives and their ability to deliver, and, with an improving economy and the return of growth to the housing market, this is more apparent than ever.

Planning reforms

The planning system is frequently criticised for being a constraint on growth, and major planning reforms over the last four years have sought to address this.

There have been many: for example, financial incentives for local communities to accept housing development; neighbourhood planning, to encourage communities to direct growth in ways that meet local aspirations; removing some changes of use to housing from planning control; and the rejuvenation of Community Infrastructure Levy to provide funds for infrastructure.

Arguably, the most significant reform has been the publication of the National Planning Policy Framework (NPPF) in 2012, with its presumption in favour of sustainable development, its requirement that all local planning authorities (LPAs) should maintain a five-year supply of readily developable housing land, and its imposition of a duty to co-operate between local planning authorities.

Opinions differ as to how successful these measures have been, but there was a 22% increase in the number of homes approved in the 12 months following the introduction of the NPPF, and there has been a perceptible shift in sentiment within the housebuilding industry, with developers beginning to have more optimism about securing planning permissions.

The growth agenda

In this report we have focused on the South East, South West and East of England regions. In addition, we also look at a separate case study of the Yorkshire ‘Golden Triangle’.

Our research compares the number of homes planned locally post NPPF with previous regionally set targets. It also assesses how these locally set figures match the requirement for new homes as the population grows.

Although the NPPF encourages LPAs to take a positive attitude towards growth, our analysis reveals that very few have embraced a growth agenda and planned for more housing – of the 50 LPAs with an adopted or advanced stage post- NPPF local plan we have assessed, only 15 (30%) are planning to deliver more homes than under the previous regionally-led regime.

This reflects many factors, including pressure by local interests to limit the development of housing; the existence of environmental constraints (with flood risk recently having come to the fore); and policy considerations, including the presence of Green Belt.

The role of the ‘duty to co-operate’ has yet to become clear, with a number of LPAs having been criticised by the Inspectors examining their development plans. Over £2bn has been paid to LPAs under the New Homes Bonus scheme, rewarding them for delivering housing, but this incentive does not generally seem to be sufficient to overcome the forces acting against development.

CIL should provide funds for infrastructure, and thus help to make development acceptable, although as a development tax, it will also in some cases render development unviable.

More changes are on the way. Among the reforms outlined in the Autumn Statement is the proposal to make it a statutory requirement for LPAs to produce development plans, and one to create a specialist Planning Court to address Judicial Reviews with greater efficiency. The 2014 Budget Speech heralded some further permitted development rights.

It appears that a Labour-led Government would be inclined to retain most of the reforms of the last four years, and Ed Miliband has revealed a ‘national aspiration’ for building 200,000 new homes a year by 2020 (half as many again as are currently being built, but only half of what Kate Barker recommended the last Labour Government to achieve). All three established political parties have voiced strong support for the building of New Towns (or ‘Garden Cities’).

 
 

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Jim Ward

Jim Ward

Director
Residential Research and Consultancy

Savills Margaret Street

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Susan Emmett

Susan Emmett

Director
Residential Research

Savills Margaret Street

+44 (0) 203 107 5460