The housing industry reacts to the NPPF changes

Industry bodies have reacted to Prime Minister Theresa May’s proposed changes to the National Planning Policy Framework (NPPF), which is out for consultation until 10 May. The revised document urges developers to build houses more quickly, with measures to penalise them if they don’t “do their bit”. It also looks at clamping down on councils that the Government feel aren’t approving enough development.

Lewis Johnston, parliamentary affairs manager at RICS said:

“The planning changes announced today, under consultation, effectively mark the end of the localism experiment for housebuilding. In threatening to remove planning powers from councils who fail to deliver their target of new homes, the Prime Minister is suggesting local authorities bear at least some responsibility for the housing crisis. A variation of this charge has also been squarely levelled at private developers, who are accused of dragging their feet on developing land with planning permission, and are being urged to ‘do their duty to Britain’ or risk losing permissions in the future.

“Whilst we support measures to increase build out rates and push councils to deliver ambitious local plans, we believe the government is still missing the fundamental point about addressing the housing shortage.

“The real reason we no longer build enough homes to meet need is that councils no longer play any significant role in building new homes. Four decades ago local councils built 40% of all new homes, whereas now they contribute only a negligible amount. As RICS have previously proposed, this can only be rectified by giving councils more borrowing powers to build. The government needs to go much further than the tentative steps in the 2017 Budget and really lift the borrowing cap so councils can be a genuine player in housing again.

“Empowering councils in this way would be a better approach to delivering affordable homes than lambasting private developers. Urging them to ‘do their duty’ misses the point, and the task of delivering the affordable housing we need is not a role that fits them very well.

“Ensuring the right homes are built, and delivering the affordable homes that meet the needs of everyone, is vitally important for a functioning housing market.  We need action that doesn’t just tinker around the edges, but actually delivers all tenures the market needs.

“Ultimately, although this is another step in the right direction to address the supply and affordability issues within the housing market, we are still moving at an extremely slow pace.”

Ian Anderson, partner in Cushman & Wakefield’s Planning and Development team, commented: 

“Today’s draft National Planning Policy Framework (NPPF) sets out how the Government plans to step in and ‘turn up the heat’ on both local authorities and developers to account for the number of homes being delivered.

“The Housing Delivery Test is the most significant change – it will put councils under pressure to deliver more homes or face the prospect of developers getting the right to ‘build anytime anywhere’. But local councils will also be under added pressure too as the government takes local house prices into account for the first time when setting local housebuilding targets. This will put very significant pressure on fast-growing but expensive cities like Oxford and Cambridge.

“The government’s focus on good design and the importance of town planning is very positive, but there was no mention today of more money for local planning departments to deliver the very significant numbers of homes required in many areas across the country. One of the big delays housebuilders face is the capacity of the planning system to deliver new local plans and assess applications, and without more resources many local authorities will struggle to meet the challenges the Government has set for them.

“Although an ambitious and streamlined approach is to be welcomed, there is certainly a great deal of ‘stick’ and perhaps not enough ‘carrot’ for councils to get more planning permissions delivered. The big opportunity for planning reform is to increase housing density, particularly around train stations, and to make it as easy as possible for brownfield sites in town and city centres to be converted to residential.”

Helen Gordon, CEO at Grainger Plc. said:

“Changes to the current planning system to create a streamlined process to build rental homes faster are a welcome relief. Our ultimate aim, as the one of the UK’s leading landlords, is to provide premium quality homes for rent at accessible prices in key locations across the country.

“Today more proposals are put into place from last year’s housing white paper, including a nationwide standard for councils to plan how many new homes they need for rent. We welcome any revisions to the NPPF that encourage public bodies and local authorities to unlock more land for development, as this is key to building affordable homes across the country.”

Adam Jaffe at Investec Structured Property Finance said:

“While Mrs May speaks positively about tackling planning delays and reducing land-banking to try to increase housebuilding, these issues have been prevalent for many years and require direct action to make a difference.  The government can legislate to help these processes but real change has to come from within the industry itself.  Working together with government is the only way to create the housing supply that is so needed.”

Robert Grigg, managing director of Property Finance at Hampshire Trust Bank commented:

“Britain’s housing crisis is undoubtedly one of this Government’s greatest challenges and while we welcome the continued focus on the UK housing market through consultations like this, we believe more action needs to be taken if we are to reach the target of increasing housing supply to 300,000 a year by the mid-2020s. In order to try and meet these targets, we need housebuilders of all sizes to be building. While support for local house building almost doubled between 2010 and 2016 (29% to 57%), the Government needs to do more to support small and medium sized (SME) housebuilders. SME housebuilders don’t hoard land but often miss out on opportunities due to the endless red tape that binds them, mainly due to the costly and lengthy planning process, and this is having a significant impact on their business development plans. We urgently need the Government to deliver on its pledges made in today’s papers to reduce red tape and streamline the planning process for SME housebuilders, enabling them to build more much-needed homes.”

Justin Neal, partner and head of Real Estate at Gordon Dadds, said:

“The Prime Minister’s speech on housing is ‘a new build’ in the right direction, but we should be careful! Whilst house builders may delay in building new homes, the substantial cost of obtaining planning, in both time and money, is a major stumbling block. If this can be improved, it would: (a) speed up the planning process and reduce appeals; (b) reduce costs and encourage planning applications – in simple terms, if a developer has two parcels of land it may only be able to afford to make an application on one at a time.

“Whilst there is an argument certain planning applications should remain with the Local Authority, there is a consensus that other applications, such as those for new homes, should be referred to a central and expert planning department, which may be split regionally.”

Carl Dyer, head of Planning at Irwin Mitchell commented:  

“I hope to goodness that Theresa May is better briefed on Europe than she is on planning.  She has clearly not thought this through properly.

“She wants developers and communities to co-operate more. The problem is that most communities want development in other communities. Everyone wants housing; but they want in the next ward or borough; not theirs.

“She starts from a premise that developers are land banking. Someone should tell her that her government has asked Oliver Letwin to investigate whether that is true, and it would be sensible not to make pronouncements on the subject until he has reported on the facts. (Unless Mrs May has already decided what his findings are to be, irrespective of the facts he finds.)

“She is talking of taking build out rates into account when granting planning permissions. This is flatly contrary to the premise that planning  permissions are not personal: they run with the land. And many developers don’t have build-out rates, because they sell the land on to house builders – many of whom don’t want to be involved in the planning system: they outsource that risk, so that they can buy “oven-ready” sites from developers.

“She talks of wanting to cut red tape; then totally contradicts herself by saying she wants to make it harder to get permission. Developers only are able  to “game” the system because the system is so badly broken.

“And nothing in the consultation draft out this week is going to change that.

“Much of the existing document survives virtually unchanged. While it has been “reordered” into different chapters, many paragraphs are retained verbatim with different numbers. There is nothing radical or really new: only policy proposals which have already been trailed.

“We have a new term for what used to be “Starter Homes”: “Entry level housing”, which looks very similar. It is to be prioritised. So we still have planning policy chasing first time buyers. Which is a pity, because you could provide more homes for more people with less resources and less land if you targeted elderly down-sizers, who would release their homes onto the market.

“So yes, we have a new definition of Entry Level Housing, but still no comprehensive definition of retirement housing.

“The proposal to exclude specialist housing (including for the elderly) from affordable housing requirements is welcome.

“But this whole review could have attempted so much more.”

Anthony Aitken, head of Planning at Colliers International commented:

“It seems rather ironic that housebuilders were criticised in the NPPF announcement for not building enough homes and were asked to ‘do their duty’ to achieve this aim. This does not strike me as the means to motivate the housebuilders to address this crisis – it seems to be more a case of direct criticism without understanding the wider factors. The consultative NPPF could have suggested that the green belt, as a land use, needs to be reviewed nationally, as its founding reasons in 1947, need to be reassessed to meet societies modern needs, namely ‘housing our population’.

“In order for us to push forward, there should be greater resource for local authorities to complete local plan reviews timeously. Suggested penalties via the removal of local plan powers for authorities who do not produce timeous local plans has been long heralded, but until enacted, this remains ‘all talk and no action.

“The reasons for planning permission not being implemented timeously to deliver new homes are a combination of lengthy legal agreements often taking years to conclude or pre-commencement conditions being so extensive, it again takes years to work through these to get on site. The Letwin Review will comment on this matter later this week.

“The government has clearly failed to ‘do its duty’ in providing clear guidance on how 300,000 houses per annum are to be delivered in England, with green belt policy unaltered, no new resource for the public sector to advance local plans or determine applications, encouragement of neighbourhood plans which seek to thwart residential development and no penalties for local authorities who fail to plan. Each provide barriers to quick development for housebuilders to progress sites and build more homes. The consultation on the NPPF was clearly a missed opportunity!”