Residential Roundup - A Developer's Guide
It’s time to roundup the hottest topics in the wonderful world of residential development. Just what has caused the most ruckus in recent government policy releases I hear you say? Well allow me to review.
Competitive planning: Ready, set, process?
In January 2016 an amendment suggested at the third reading of the Housing and Planning Bill, by planning minister Brandon Lewis, would allow planning applications to be processed by ‘alternative providers’ if it receives Royal Ascent. These alternative providers would be assessed and pre-qualified by the government or local authority (LA), meeting certain rigorous criterion, to be capable of setting up shop as third party planning application processors. The notion behind such an idea is to alleviate the administrative pressure currently experienced by LA planners, therefore freeing up resources for determining planning applications faster within stifled public sector planning departments.
Many questions come to mind if this is to become a reality. Will the alternative providers be permitted to process and determine applications? Could we see differing fee scales for applications between the nationally set LA fees and the alternative providers? Would the introduction of such companies take pressure off LA’s and actually speed up the planning process? Will all this mean applicants are able to compare and choose between submitting to a LA or an alternative provider for planning application processing? Let’s look at the facts.
Firstly, the government has verified that the third party providers would be created merely to process planning applications. This would result in such pre-qualified companies potentially providing applicants with; pre-application advice, application registration and validation, convening with consultees and the community, organising and attending committee events and preparing application reports on behalf of the LA case officer for consideration. Therefore, the alternative providers are only to undertake the tasks deemed as ‘administrative application tasks’ on behalf of their client for the LA. The local authorities are therefore still, for now, responsible for the determination of planning applications.
Secondly, the suggestion of varying planning application fees between the different authorities has already been raised by the government, however ultimately the introduction of third party providers in this instance could see fees formulated by the alternative providers designed to compete with the existing national planning fees. When changes between planning application fees varying from LA to LA take place, things could start to become confusing with third party providers involved as well. The ‘alternative providers’ would introduce a competitive element to planning, like that seen with Building Regulations, which has been a proven success according to HBF.
In terms of speeding up application processing by utilising these new providers across the board, only time will tell. It could end up costing the client more and resulting in the same backlog, as at the end of the day, an administrative overhaul will not directly reduce the symptoms of the struggle during determination between committee members, the LA, Inspectorate and SOS.
Finally, the introduction of alternative providers would create a platform for applicants to choose their preferred planning application processor. The government’s idea behind providing a choice of suppliers is to strengthen and build an elite planning profession through competition. As a client if you were to pay competitive rates and receive bad service it is not often you would return for more, therefore dividing the strong from the weak creating competition. Perhaps there will be a comparison website established offering a framed picture of Greg Clark free with every confirmed contact, maybe pondertheplanner.com?
Initially alternative providers will be trialled in certain areas of the country for a set period, then research will be formulated to understand the trends if the Housing and Planning Bill receives Royal Ascent - possibly by early summer 2016.
Could this be a further move in the increasing privatisation of planning?
Starter for 10 (or 20?)
Affordable housing is mentioned both within the proposed changes to the NPPF and the Housing and Planning Bill, with the most striking element being the inclusion of ‘starter homes’ into the definition of an affordable housing type with the proposed NPPF changes. So what’s that all about?
Though the sub-definition of starter homes is still being formalised and their details drafted, at present the starter home initiative would provide a 20% discount on the first home being purchased by someone under the age of 40. Both the Labour party and charity Shelter have expressed concerns to the government that actually this 20% discount in most areas of the country would ironically result in this new type of affordable housing - being unaffordable for constituents, based on national average annual income taken from local area demographics.
Also queried was the age restriction, why should age matter? The present lack of qualification perimeters for starter homes at present, such as income multipliers, local constituent qualification or an in need list alongside this new affordable housing type could prevent such starter homes reaching those who really need affordable housing. Perhaps such measures should be introduced to ensure that starter homes escape the grasp of those who were not from the locality moving into an area where existing local residents needed affordable housing. If controls aren’t introduced we could witness gentrification and further shortfall in affordable housing.
The catchment for provision of starter homes on proposed application sites as a sub-genre of affordable homes in terms of size or type of development is yet to be defined within this proposed NPPF definition amendment. It is for the moment suggested to be 15% on qualifying sites which will be of a certain size, yet to be determined.
Time will tell if qualifying constraints are introduced alongside the discount, though seemingly this could become the least onerous affordable housing type for developers.
Brucey bonuses for New Homes?
Central government has presented suggestions to reduce the time period for payments to councils delivering new homes, calculated through differences between council tax registrations from each year comparatively, from over six years to four. At the moment this is advocated through the New Homes Bonus Consultation. If it were reduced to four years, councils would have to grant more permissions for residential developments over a shorter period to earn the maximum pot of cash.
Some councils which are presently performing well in relation to New Homes Bonuses may not be cashing in on this for much longer. Further amendments include disqualifying councils from New Homes Bonus payments where they cannot demonstrate an up to date, valid Local Plan strategy for development by 2017. This could spell bad news for some local authorities if they are currently preparing a new plan and their production trajectory takes them past 2017.
In addition to this, the New Homes Bonus Consultation also proposes the reduction of payments for homes allowed on appeal. At the moment, where developments are granted planning permission on appeal, councils are currently receiving the same reward as when development takes place that the LA has permitted. This means that bonus payments may not reflect positive decisions to allow development at LA level or reflect the additional costs and delays for applicants arising as a result of the appeal process.
One of the reasons the government is proposing to reduce the payments rather than withholding them altogether is that bonuses are intended to benefit the community and so it is felt that local people should not necessarily be penalised due to poor decisions made by their LA. Moreover, it is not always the LA who are at fault when a planning application ends up at appeal.
It is hoped that these proposed reductions will result in LAs working with developers more effectively to address issues which could have previously resulted in an application being refused. Perhaps stricter regulations to New Homes Bonuses could ultimately see Planning Committees that have historically opposed LA recommendations for approvals voting in favour of more residential planning applications.
For the time being, sit back and keep your eyes peeled as we’ll update you throughout the year as the various consultations evolve.
But if you’ve got any questions on anything we’ve discussed above, feel free to comment below or fire us a tweet – we always love to hear from you.