Too much paper, too little housing?

David Jarvis Associates has studied the Housing White Paper published last week. Whilst there are some welcome proposals, in our view it:

  • Is not bold;
  • Is not radical;
  • Contains many recommendations already covered in existing legislation;
  • Lacks detail in many respects; and
  • Is not the solution the industry needs to significantly boost housing delivery.

The Government’s commitment to recycling appears to be alive and well following publication of the Housing White Paper (HWP) earlier this week. Whilst the development industry has been lobbying for full-scale surgery to housing and planning policy in order to significantly boost the supply of housing, the White Paper instead offers a sticking plaster. Whilst it contains some welcome proposals, a “bold, radical vision” it is not.

What is possibly most depressing about the long-awaited document is the singular lack of any meaningful decisions on what is actually required to significantly boost housing supply (where have we heard that phrase before?). Instead the HWP includes a series of re-hashed suggestions, the majority of which are already included (with slightly different wording) in the NPPF, or a number of woolly phrases such as “under review”, “committed to exploring” or “continue to support” etc. which do little or nothing to actually address the problem head-on. It is worth noting that much of the required detail has been put back to be consulted on at a later date, so it should be that certain areas become clearer in time. However, this does beg the question why it took so long for the HWP to be published when many decisions have merely been kicked into the long grass?

The Paper identifies three specific reasons for this long-standing situation – namely, not enough LPAs having a local plan in place with the right housing need identified; developers are not building fast enough; and reliance on too few housebuilders to actually deliver the housing. There is one very important problem missing from this list, and which has been a perennial issue for decades, namely a lack of significant public sector house-building. We will discuss this in more detail below. Taking each of the identified problems in turn, we comment as follows:

Planning for the right homes in the right places

It is here that the bulk of the “recycling” has taken place. The industry knows, and has known for many years, that plan-making is slow, expensive and bureaucratic. The NPPF sought to address this in 2012 by introducing a number of measures to try and speed up the plan-making process; the HWP merely re-states a number of these measures, whilst inferring that they are somehow new. A few obvious examples:

  • Plans should be kept “up to date” and reviewed regularly – NPPF paragraphs 14, 153 and 157 already make this clear, and indeed a review every five years is relatively standard practice, given the need for LPAs to maintain a five-year housing land supply.
  • Statement of Common Ground (SoCG) – this is intended to strengthen the existing duty-to-cooperate (DtC) requirement that already exists, based on evidence from the Local Plans Expert Group that the DtC is not working in many areas. However, LPAs are already expected to “work together” on meeting housing requirements and indeed joint plans are now becoming more commonplace. Therefore,  it is unclear how the Government expects the SoCG to improve the situation substantially.
  • Meeting identified housing requirement unless other NPPF policies provide reasons for not doing so, or where adverse impacts would significantly and demonstrably outweigh the benefits – already referred to in the NPPF (paragraphs 14 and 47)
  • Brownfield and small-sites development – the HWP here looks to re-state the obvious through an intention to alter the NPPF to emphasise the use of suitable brownfield and small “windfall” sites within settlements for homes. Such a presumption is used by the vast majority of LPAs already and so it is difficult to see how this will make any significant difference to supply.
  • New communities – a clear flavour of the month with the Government at the moment, but certainly not a new invention. Reference to new settlements and “Garden Cities” appears in the NPPF already (para. 52). However, we would agree that, provided the Government’s appetite for these continues, such new settlements would clearly make a positive contribution to housing supply in the longer term.

One potential shining beacon within the fog of repetition is the reference to the standardised approach to the assessment of housing requirements. Such an approach is to be welcomed, as this has been one of the key reasons for protracted and/or delayed plan Examinations in recent years. However, what the HWP gives with one hand, it appears to take away with the other through reference (para 1.14) to Councils being able to use an alternative  methodology where they can “justify” it, thus potentially defeating the whole purpose of introducing a standard approach. The Government intends to set out precisely what such “justification” might be at a later date, so watch this space…

Perhaps unsurprisingly, given the clear manifesto pledge, the Government has totally shied away from making any radical change to Green Belt policy. If anything, the HWP looks to strengthen the Green Belt by requiring LPAs to only consider the alteration of Green Belt boundaries where all other options have first been exhausted, and to put forward compensatory measures to offset any loss. Reference is also made to the potential to seek higher financial contributions, presumably from developers building housing on the released Green Belt land. It is not clear what this is intended to achieve – if the land has been released by the LA through a proper plan-led process, why should developers then be penalised for delivering what is obviously much-needed housing? – although it could in theory be put towards the “compensatory improvements” to remaining Green Belt land. Could this make such developments less viable? A cynic could say this might be the idea…

Building Homes Faster

A considerable number of measures are put forward in this chapter, which seek to highlight what the Government sees as a serious disconnect between the plan-making process, the grant of planning permission and through to homes actually being built. The Government appears to favour the stick over the carrot, with regard to persuading developers and LPAs to “up their game” in terms of housing delivery.  Amongst the measures put forward are:

  1. Retaining the five-year housing land supply test, whilst giving LPAs the option of agreeing their Housing Land Supply on an annual basis and then fixing it for a one-year period, subject to providing a further 10% buffer on their overall five-year supply. It is unclear whether LPAs with a record of persistent under-delivery will be able to take advantage of this, given the current 20% buffer requirement in the NPPF. Also, if this needs to be “subject to consultation and examination”, how will this happen in  timely fashion, given current resourcing issues at LPA and Inspectorate level?
  2. Reaffirming the Written Ministerial Statement (December 2016) regarding protection of Neighbourhood Plan areas, even where authorities do not have a five-year housing land supply. Interestingly, the HWP is now consulting on whether or not Neighbourhood Plans need to have site allocations included within them, to be able to take advantage of this protection. More clarification is required on what is meant by “meeting their share of local housing need”.
  3. Increase planning fees by up to 40 per cent, subject to the additional funds being invested back into planning departments and subject to a strong record of housing delivery. Additional funding for LPAs is to be welcomed, as under-resourcing is a major problem currently. However, this has been attempted before, with no meaningful improvements in service.
  4. Provide £25m to LPAs in areas of high housing need to plan for new homes and infrastructure, and targeting the £2.3bn of Housing Infrastructure Fund at areas of greatest need – all well and good, but the need for authorities to bid for funding will add significant time and cost to the process, and may not help to deliver the required infrastructure to unlock housing in the short term.
  5. Look at charging for planning appeals to avoid “unnecessary appeals” – what is an “unnecessary” appeal? Why should appellants be penalised financially where, for example, a Planning Committee has refused an application against their officer’s recommendation? An utterly pointless and unfair suggestion in our view.
  6. Tackling the issue of delays caused by pre-commencement planning conditions – a particular bugbear for the development industry and any attempt to streamline the process is to be welcomed. However, the reference in the HWP is to the Secretary of State being able to prohibit conditions, suggesting this will only really bite for applications that go to Appeal, where Conditions are normally assessed/negotiated in greater detail anyway.
  7. Reform of CIL – as everyone in the industry is already aware, CIL is not working and an independent review has confirmed this. It will be reformed, with a new “hybrid” approach suggested. An announcement on this is expected in the Autumn Budget.
  8. Making build-out rate data more ’transparent’ including a proposal to make large housebuilders ‘publish aggregate information on build-out rates’; to have regard to the developer’s track record on delivery; encouraging LPAs to factor in the realism of delivery when determining an application; enhance Completion Notice and Compulsory Purchase Order procedures; consider reducing the default period for a material start from three years to two years  –  a series of measures to address the perceived “land banking” undertaken by developers, and a move away from the “use it or lose it” proposal mooted prior to publication of the HWP.
  9. A ‘Housing Delivery Test’ – a policy mechanism intended to ensure that housing delivery is keeping pace with requirements; where there is under-delivery, a tiered approach is put in place to address the issues. Our key concern here relates to when the presumption in favour of sustainable development kicks in, and the very low threshold at which the presumption bites at November 2018 (i.e. housing delivery falling below 25% of the requirement). Such a low initial threshold does not, in our view, provide enough of an incentive for LPAs to significantly boost housing supply in the short term.

Diversifying the market

This section does indicate the Government’s wish to move away from a reliance on home ownership, to include other forms of housing (e.g. Build to Rent). The Government also wishes to incentivise small and medium-sized housebuilders, and Housing Associations, to grow and make a more substantial contribution to housing delivery. However, much of the suggestions put forward will merely scratch the surface in terms of boosting delivery (15,000 starts in four years under the Accelerated Construction programme is hardly significant!).

Reference is made in this section to encouraging local authorities to build homes themselves, with a series of measures to support local authorities in this regard. In terms of Council housebuilding, the HWP refers to this providing a “small, but growing” source of new homes, with twice as many council homes built in the last five years than were from 1997 – 2010. However, this still only amounts to about 3.5% of all completions, a tiny fraction compared to the early 1970s. In our view, a substantial increase in local authority house building is required, if the Government is to get anywhere close to its dream of building 225,000 – 275,000 homes per annum. The HWP fails to meaningfully address this, seeking instead to continue reliance on the private sector to build us out of the problem.

Helping People Now

The key point here is that the Government has recognised that the mandatory Starter Homes requirement of 20% of all housing on sites over a certain size would impact on the delivery of other forms of affordable housing. Therefore, the intention is to set a clear policy expectation that housing sites of 10+ units (or in excess of 0.5ha) will deliver a minimum of 10% affordable home ownership units. This signals a move away from starter homes to a wider range of affordable homes, a move that is to be welcomed.

One note of caution relates to the acceptability of starter home-led development on vacant employment sites. Many such sites are likely to lie away from existing housing areas and there is a danger such a policy could introduce isolated “ghettos” at the expense of strong community cohesion.

In conclusion, in our view the HWP does not contain the radical proposals required to mend the “broken” housing market. The Secretary of State’s foreword refers to previous initiatives having “skirted around the edges” of this growing problem; in our view the HWP simply carries on this tradition and will not encourage the significant boost to housing supply that is desperately needed.

Responses to the HWP are required to be submitted by 2nd May 2017.

For more information please contact Andy Shepley

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