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07/08/2017

Report: Sharma's top priorities

Words: Laura Edgar

As we look to the immediate and long-term future, new housing and planning minister Alok Sharma has a lot on his plate – a housing shortage (market, affordable and social), a lack of supporting infrastructure, and a growing skills shortage that is expected to get worse with Brexit.

What should Sharma’s priorities be? The Planner spoke to a number of planning and housing professionals to find out.

Resources

Not surprisingly, adequate resources for local planning authorities tops the list.  

Richard Blyth, the RTPI’s head of policy, pointed to the institute’s research that suggests that many planning authorities are “surviving on the goodwill and professional integrity of their officers but this may not be sustainable in the longer term”.

“We need greater investment in planning services to ensure we are able to deliver the homes, schools, hospitals and other major infrastructure this country needs.”

Property consultancy Daniel Watney LLP, the Federation of Master Builders (FMB), the New Local Government Network (NLGN) and property consultancy Rapleys are all in agreement.

Although the industry needs policy stability, Charlotte Goodrum, associate partner at Daniel Watney, said one area that should see change is funding. 

“Local authority planning departments are massively under-resourced, and whether it’s through higher fees or more funding from government, they need additional cash if Britain is to get the homes and infrastructure it needs.”

In order to build housing of all types and tenures, with more affordable and social housing across the country, the NLGN wants to see planning departments “properly resourced”. This would enable councils to deliver not just the number of homes needed, but also high-quality, healthy, attractive communities where people want to live, said Claire Porter, head of external affairs at the NLGN.

Rent/Build to Rent

The housing white paper included changing the planning system to support the growth of build to rent, something Matt Willcock, development director at PLATFORM_, a developer and operator of private rented housing, said should be a key focus, alongside delivering housing white paper proposals overall.

He said there are billions of pounds of institutional capital looking to move into the UK rental market that could deliver thousands of new quality homes.  However, “planning and development risk is something few institutions are willing to take on”. 

“Amending the National Planning Policy Framework (NPPF) to encourage councils to proactively plan for private rental housing, and to give build to rent its own affordable housing classification, will go some way to making them more comfortable with actually building the homes themselves, as many insurers and pension funds did at the turn of the 20th century.” 

Housing associations will satisfy a significant part of the housing need and at the same time provide affordable housing, said Fergus Charlton legal director at law firm TLT. 

The business model for housing associations relies on their ability to borrow cheaply and readily against their receipts but “recent changes to the rent regime have presented some challenges here”. 

“The minister would do well to move quickly to provide clarity over future rent levels so that housing associations can continue to maximise their delivery potential,” he added.

Land value

Margaret Baddeley, planning director at planning consultancy Lichfields, said in the long term it could help the planning system to evolve if the government researched the impact of ideas such as land pooling, as well as looking at how land value capture could have a positive impact on providing infrastructure. 

She said it is “widely acknowledged” that Community Infrastructure Levy (CIL) and Section 106 have issues providing infrastructure and affordable housing. 

“Using land value capture is the single most useful instrument to channel value generated by development towards infrastructure and housing without incurring more public debt"

For Baddeley, both could be remodelled in the interim, “particularly CIL because of the ongoing unintended consequences of its overly complex methodology – and also because having to pay the levy can impact on affordable housing”.

To understand the potential impact of policies like land pooling, land value capture and zoning, comprehensive analysis needs to be undertaken to consider costs and benefits.

Although interesting, “the key thing to understand first would be if and how any of them could work with or affect the existing planning regime, and then if they would work, how there could be a smooth transition to their introduction”, she added.

Blyth said new sources of funding for infrastructure need to be looked at so that it can be built at the speed and scale the country needs.

“Using land value capture is the single most useful instrument to channel value generated by development towards infrastructure and housing without incurring more public debt.”

Tool for calculating OAN 

At the time of going to print, the government had not published a consultation on a standardised mechanism for calculating Objectively Assessed Need (OAN). Charlton noted that councils and developers needed to be able to confidently rely on housing supply policies in the local housing plan.

The standardised mechanism for objectively calculating housing numbers identified in the housing white paper is “central” to housing policies. 

“The minister should swiftly begin the consultation on this mechanism, what it is and how it works.”

Baddeley said such an approach would mean local authorities wouldn’t have to work for so long on calculating their OAN and then working out their housing target, only for it to be questioned by inspectors, landowners and applicants. 

“Calculating OAN and then working out housing requirement are the elements of local plan-making that slows the progress of the whole thing.”

Small sites

FMB chief executive Brian Berry also nodded to the housing white paper as something Sharma should focus on, particularly the availability of small sites.

“FMB research shows that limited availability of small sites and difficulty in getting planning for these is the most significant barrier to growth for SME house builders. The white paper set out a number of measures designed to address this, most radically proposing that 10 per cent of sites allocated within local plans be sites for fewer than 10 units.”

Although a good start, this would only present a limited number of opportunities. For the FMB, the policy can and should go further, so 10 per cent of all allocated plots are on small sites.

“This would ensure a steady pipeline of small sites which have been effectively de-risked.”


Other considerations for Sharma

  • Lifting the borrowing cap and allowing councils to keep 100 per cent of the receipts from the Right to Buy sales Local Government Association
  • Heritage wasn’t mentioned in the housing white paper and while the “UK grapples with delivering new homes and infrastructure it should not lose sight of the past” – Dean Clifford, co-founder of heritage developer Great Marlborough Estates
  • Retaining places for people to work a sustainable distance from where they live “will require some imaginative thinking by developers and local authorities. The government and Mr Sharma need to be actively encouraging and facilitating this”  Jason Lowes, partner in the planning team at Rapleys
  • “Devolving more planning powers to give city-regions more control over the types of homes being built would be a good first step for the new minister” – James Blakey, planning director at rental developer and operator Moda Living

Read about RTPI research:

Investing in delivery

Land value

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