Planning: Much anticipated evolution of national policy with a clear focus on housing delivery

The over-arching presumption in favour of sustainable development remains, alongside the anticipated measures to speed up local plan making and strengthened protections for the Green Belt.

The revisions place greater emphasis on the need for local authorities to demonstrate joint working and effective co-operation when preparing new local plans, while ensuring that difficult political decisions are made to ensure that at least the identified minimum housing and development needs are met. Measures are included to require that plans are updated every five years – a tough challenge given that only half of all authorities have been able to produce a plan since the NPPF was first published in 2012.

Savills Head of Planning David Jackson comments: “The industry now has the certainty of having the revised NPPF in place. The changes are subtle, and clearly focused on ensuring further stepped increases in housing delivery, by local authorities acting in co-operation.”

On local plans, Jackson says, “The objective of complete plan coverage ‎has yet to be achieved. Undertaking reviews within five years is likely therefore to be an ongoing challenge for local authorities.” 

Owing to the imposition of new housing delivery requirements, it seems probable that more pressure will be placed on the application and appeal system. The NPPF re-introduces into policy that prematurity will seldom be a reason to refuse a planning application, which is likely to be welcomed by the development industry.

Overall, the NPPF revision continues the thread of localism and support provided to the creation of neighbourhood plans. It is notable, for example, that neighbourhood plans are provided precedence where these are the most recently adopted plan. 

The NPPF revision follows over two years of public and stakeholder engagement, which commenced with the Local Plans Expert Group reporting in 2016, moving onto the Housing White Paper in 2017 and Draft NPPF in March. Some might argue that many of the recommendations and representations made did not filter through to the final version, though this might indicate the Government’s priority not to stifle innovation with local plan making.

Creating a 'sound' local plan‎:

A subtle but important change is in assessing local plan soundness. A local plan must now simply be 'an' appropriate strategy rather than ‘the most appropriate’. The intention of the change is to make it easier (and quicker) for local authorities to produce a plan. The challenge for the system will be to ensure that the quality of outcomes is maintained in terms of the sustainability and suitability of the resulting spatial strategies.

Jonathan Dixon, associate director in the strategic housing team at Savills comments: “It has been the case that local plan examinations have lasted far too long, we hope that reform to the tests of soundness will help with speedier preparation and adoption outcomes.” 

The NPPF revision also actively encourages joint plan-making, which where there exists a political will should speed up plan coverage. 

Green Belt:

The Government continues to place great emphasis on the protection of Green Belt. New procedures have been put in place which require all other ‘reasonable’ options, for example urban regeneration, to be fully investigated before any Green Belt is released at the time of plan production. Notably however, it will be possible to amend Green Belt boundaries via Neighbourhood Plans (if first led by a strategic policy in a local plan) and it appears that the NPPF offers encouragement for the sustainable re-use of previously developed land in the Green Belt where identified affordable housing needs can be met. 

Charlie Collins, director in the Savills strategic housing team comments: “The revised NPPF may, on its face, continue the long-standing Government policy of strict development controls in the Green Belt. It may, however, actually make it easier to progress planning application proposals on previously developed land in the Green Belt, at the expense of plan-led approaches to Green Belt release.” 

Housing Need:

The NPPF revision confirms the introduction of the backward-looking Housing Delivery Test (‘HDT’) from November 2018, in addition to the established forward looking five-year housing land supply. This measure is intended to actively ensure that local authorities deliver on housing need, with additional penalties for failure. The revision allows authorities that can demonstrate a five-year supply to confirm and protect this position by publishing a position statement (for independent examination). It will be interesting to see if authorities have the will to dedicate the resources to this process, especially given the tightening of the definition of ‘deliverability’, albeit not as much as hoped for. 

Whether the revised NPPF will really help to ‘fix our broken housing market’ hinges on its definition of housing need. The revised NPPF puts into policy a standardised approach for assessing housing need. It replaces one of the most complex and contentious parts of plan making (Strategic Housing Market Assessments - SHMA) with a simple calculation, and it has been adopted essentially as proposed in a previous consultation (Planning for the Right Homes in the Right Places, September 2017). It notes, however, that there is still the option for local authorities to produce a SHMA in ‘exceptional circumstances’.

The move to a simpler system is welcome, but as we have previously argued (see our Policy Response) this new method may not fully achieve its aims. The most significant potential flaw lies in setting a cap on housing need increases based on existing plan policies. This means that, particularly in the places with the greatest housing need - ie in the south and east of England - the planning system will continue to plan for fewer homes than are actually required to solve the housing affordability crisis.

The likelihood of the system planning for 300,000 new homes (the Government’s target since the Budget / autumn statement) is further jeopardised by the release of new population projections (in June), which are substantially lower in many areas due to methodological changes introduced by the ONS. The previous estimate of housing need (published with the consultation documents in Sept 2017) was circa 267,000 – the new projections have the potential to reduce this by tens of thousands.‎ The Government might have to update its guidance in the PPG to ensure that the past under-delivery of homes (and consequent effect on housing delivery projections) can be mitigated. 

Setting the housing requirement at a level above the calculated standard need (perhaps, for example, in response to strong employment growth or a new piece of infrastructure) is allowed but not encouraged, whereas planning not to meet local housing need will be allowed in exceptional circumstances, once it’s been thoroughly tested for soundness at examination. This may perpetuate the lack of coordination between local planning and national spending on infrastructure projects or Homes England funding for particular sites (see Planning: new measures to increase delivery), which is a major opportunity missed. However, the NPPF revision does seek to tackle the issue through a requirement to ‘deal with’ and ‘not defer’ effective cooperation between authorities, which will mean in practice that unmet housing needs will have to be met somewhere. 

The new housing need numbers only tackle one aspect of the ‘housing crisis’. They simply target net additional homes and getting this number above the standard housing need figure will be an easy way to get a plan through the public examination process. But they have nothing to say about the need for gross development activity and potentially the replacement of existing homes through the regeneration of urban areas. In many parts of the midlands and north of England the issues are much more complex than can be expressed simply as a shortage of homes. A more comprehensive approach would go beyond housing targets and pro-actively plan how to make places thrive, both economically and socially.

The Government's commitment to ensuring housing delivery is exemplified by the policy consideration for imposing a planning condition providing that development ‘must begin’ within a set timescale. This is a completely new measure which reflects the Government’s will to speed up delivery following the Letwin Review. 

Read: Savills Briefing Note: Forecasting 2017/18 Housing Supply

Viability & Affordable Housing:

The NPPF revision confirms the shift in the importance of viability testing, ensuring local plans are tested for viability as an upfront process rather than leaving it to the planning application stage. This will particularly affect planning applications submitted soon after the adoption of a local plan. Some flexibility is provided for to allow changes in site specific circumstances to be taken into account, however this requires a change in circumstances since the local plan adoption to be demonstrated.
In respect of affordable housing, the NPPF broadens the definitions of tenures, including discounted market sale (set at 20%). For the first time, a national minimum affordable housing requirement is introduced of 10% (on-site), but crucially with notable exemptions for Build to Rent and specialist accommodation. This is likely to be welcomed by the development industry.

Jonathan Steele, head of housing in the Savills planning division, comments: “As well as certainty the industry needs more flexibility to deliver increased housing levels. The changes to affordable housing definitions and recognition of other tenures such as exemptions for Build to Rent should provide the policy framework to bring forward a wide range of housing. This flexibility needs to be translated into local policy swiftly through local plans.” 

Garden Villages / New Settlements and Delivery: 

The NPPF revision re-introduces references to Garden Village Principles, dropped from the earlier draft. The policy continues to note the important role for larger scale strategic development‎. Importantly, the Glossary makes clear that the definition of 'deliverable' in the context of five-year housing land supply cannot automatically extend to larger sites with outline permissions / local plan allocations. 'Clear evidence' is required to demonstrate delivery. This might lead to local plans including a greater mix of smaller scale and larger scale sites. 

Jonathan Steele comments: “There has to be an ongoing role for a mix of development site scales, as small, medium and large sites make an invaluable contribution to local housing need. We welcome the policy recognition for Garden City Principles (Garden Villages) which when properly planned can contribute the most to 10-15 year housing delivery.” 

Design and Density:

The NPPF revision seeks to secure a step change in urban design quality and also ensuring the effective use of land, notably in the context of protecting the Green Belt.

Charlie Collins comments: “Good design is always to be welcomed, however when read alongside the stricter Green Belt release tests, the policy on urban regeneration and density is going to require the application of a careful balance of priorities, particularly within historic townscapes. We are likely to see greater impetus towards ever taller buildings.”

Further, the NPPF includes strong encouragement for local authorities to be proactive, use compulsory purchase powers and utilise Brownfield Land Registers to bring about regeneration, adopting ‘minimum density standards’. The Government is keen that public sector land is properly and effectively utilised and also that unallocated but previously developed land is used to meet development needs.

On Transition:

There is a notable difference in the approach to plan making and decision taking. The NPPF revision takes effect immediately, except for local plans submitted for examination for which it takes effect from mid-January 2019. This will create a peculiar situation whereby the old 2012 NPPF will, in effect, live on for a number of years in local plans already submitted for examination. Depending on the impact of the new NPPF, some local authorities may seek to submit their local plans promptly so as to be tested under 'old rules'.

Rural:

The NPPF revision also provides plenty of cause for optimism for those considering development projects in rural areas. Headline announcements include a requirement for local planning authorities to direct at least 10% of new homes on small sites, support for employment related development in rural areas and specific support for open market housing delivery to help deliver affordable housing sites in the countryside.

In Conclusion:

The Government remains committed to concise national policy, which actively seeks a presumption in favour of sustainable development which should be welcomed by the industry. Arguably there is now an even greater set of tools available to require delivery, ensure regeneration and a competitive increase in the land made available for development needs – on the basis that this is not at the expense of the Green Belt, nor poor design.