Budgeting for more planning changes
Today’s Budget announcement by Chancellor Philip Hammond, represented the latest step in the government’s quest to ‘fix our broken housing market’ and included both promises relating to additional investment and further planning reforms to try and drive housing growth.
The key announcements from today’s budget include:
- Additional funds to support the delivery of housing and infrastructure
- Proposed reforms of the CIL regime
- Lifting of the SDLT threshold for first time buyers to £300,000
- Further consultations ahead as to how to change the planning system
On the financial side a further £15.3 billion is to be made available to support housing delivery and a further £204 million will be used to fund innovation and training in the construction sector.
On the policy front, further planning reform is pledged to “ensure more land is available for housing, and that better use is made of underused land in our cities and towns”.
What does this mean?
What the Budget hints at is an increasingly interventionist approach from government, signalled by the speech given last week by the Secretary of State for Communities and Local Government, which threatens intervention in 15 areas where there is no up-to-date local plan in place.
Additionally, the Budget indicates that the government is looking at bring in policy changes will look to drive up the proportion of homes offered as discounted sale for first time buyers or affordable rent; increase housing density by introducing minimum densities in city centres and around transport hubs; supporting greater use of compulsory purchase powers for site assembly; and supporting the conversion of retail, employment and commercial land for housing.
The restriction of Section 106 pooling is to be reviewed (and potentially removed, at least in some cases) and there are proposals to make the CIL regime more flexible to allow for it to be revised thereby making it easier to respond to market changes. Additionally, there is the prospect of giving Combined Authorities and planning joint committees with statutory plan-making functions the option to levy a Strategic Infrastructure Tariff to fund strategic and local infrastructure.
Whilst this has already happened in London for some time (through the Mayoral CIL) the desire to seek further financial payments from developers towards infrastructure is unlikely to be welcomed by many developers and may have a significant consequence on viability in some areas.
Strategic planning is also at the heart of the government’s desire to invest in the Cambridge-Milton Keynes-Oxford corridor, both through the provision of significantly enhanced transport links and the delivery of significant numbers of new homes, including 100,000 new homes in Oxfordshire.
Given that significant swathes of Oxfordshire form part of the Green Belt, this seems at odds with the Government’s oft repeated mantra that they will “protect the Green Belt” (which again finds its way in to the Budget).
With financial incentives to work jointly to plan over a wider area, and a push towards prescribed minimum densities, it would appear that the government have fully abandoned the localism agenda and are instead seeking inspiration from government policy 15 years ago.
Use it or Lose it
Land banking again comes under scrutiny, with a review panel being set up to look at the “significant gap between housing completions and the amount of land allocated or permitted” and the potential introduction of powers that remove allocated land from a plan “if there is no prospect of a planning application being made”.
However, in a bid to speed up development where planning permission has been granted, the Government are also to consult on removing the exemptions from the deemed discharge of planning conditions. This will undoubtedly be welcomed by developers, who are often frustrated by delays in discharging planning conditions, but may also meet resistance from local authorities wary of the loss of control.
Investing in Infrastructure
In financial terms, the government is to rename the Homes & Communities Agency as Homes England and provide £1.1 billion for them to work alongside private developers to develop strategic sites, including new settlements and urban regeneration schemes. Quite why the HCA needs to rebranded to carry on work which, as far as I can see, it has already been doing, is anyone’s guess.
Regionally, in addition to the funding and political support for the Oxford-Milton Keynes-Cambridge corridor, further financial support is pledged to the West Midlands, the enhancement of the Coventry-Leamington Rail Corridor and a pilot manufacturing zone in the East Midlands (which will apparently be subject to reduced planning restrictions).
Additional investment in enhanced flood defence, upgrading rail facilities in the south east, and road repair has also been promised.
Raising the SDLT threshold – will it pay off in the long run?
Last, and by no means least, the Chancellor has permanently raised the price at which SDLT applies to a property to £300,000 for first time buyers – which is great, if you happen to be a first time buyer poised and ready to buy your first house. Over the longer term, however, I suspect that this may simply lead to a rise in house prices. It also does little to help those people who are currently a long way from having the necessary funds to buy their first home, so it may be that whilst this pledge grabs the headlines, it doesn’t actually do a great deal to improve the prospects of a great many people seeking to get on the first rung of the property ladder.
What happens next?
From a planning perspective, attention will now switch to the forthcoming revision of the National Planning Policy Framework (NPPF) which is currently expected in the early part of 2018 and which may give flesh to some of the ideas which have been espoused in the Budget.
Whilst a number of measures are to be consulted upon, it remains to be seen whether they subsequently come forward and deliver meaningful improvements to the planning system, or whether many of the ideas in the budget prove to be nothing more than an attempt to garner some positive press for a beleaguered administration.
What should you be doing now?
For developers, the key now will be to carry on. The reduction in stamp duty will provide, at least a short term, boost to the housing market.
Looking further ahead, it remains a case of waiting for the detail, in the form of the revised NPPF and any legislative changes before meaningful changes to the planning system will likely take effect.