British planning system changes should speed up housing delivery in an orderly fashion. But developers may be better at designing growth plans.
Two very important changes in how residential properties are developed in the UK have been implemented in the past few years. First, the Localism Act of 2011 enabled local communities to have a greater say in what is and is not built in their neighbourhoods. Secondly, the National Planning Policy Framework, published by the UK Department of Communities and Local Government in 2012, is widely regarded as a much-needed simplification of the process by which towns determine and implement their development objectives.
The backdrop to all this of course is the tension between a critical housing shortage in the UK and a long-standing culture of greenfield preservation. In other words, we need houses – more than one million residences to meet pent up demand of a growing population – and yet the country has long determined it wanted to avoid American-style suburban sprawl. Princess Anne herself has weighed in on this in support of the efforts of the Council for the Protection of Rural England, which advocates for incremental development on a small scale over large blocks of new homes, numbering in the thousands, in a single development.
The NPPF essentially tells local planning authorities that they need to think through and structure how development should unfold in their jurisdictions. It also expresses the need to enable development, as the housing shortage in the UK over the past decade and for some time to come, requires that new homes be built. Of course with all forms of development (including that driven by strategic land developers), there are opposing sides and differing opinions on how that should take place.
Which can mean that how development unfolds is a matter of influence. Ideally, good ideas lead the way – identifying where development will be smartest, where the municipality can benefit the most from new homes and new neighbourhoods. Under ideal conditions, new development will support the local economy and local infrastructure. Done right, everyone benefits.
So how are local planning authorities doing at this? The Department for Communities and Local Government provides the Strategic Housing Land Availability Assessment, a guide to determine where housing might make the most sense from a variety of perspectives (sustainability, economics, town centre vitality, transport, protection of Greenbelt lands, conservation of natural and historic environments, etc.). Presumably, the 48 per cent of local councils that had a plan written up by the end of 2013 used this and other guides to form their plans.
But this means that about 52 per cent of councils lack such a plan, even in 2014 (reportedly, about half of them are at work on something). Some say this leaves those un-planned areas subject to developers’ whims.
Further, it should be noted that many councils have out-of-date plans, based on pre-NPPF dictates. Those plans often do not take into account the critical housing shortage and the NPPF-driven requirement that the need to build be taken into account. That often is the reason why developers win on appeal, that the plans put forth were unrealistic and out-of-date.
Why are local councils failing to develop true, NPPF-compliant plans? According to a 2014 review of 109 local plans by TRIP (Targeted Research & Intelligence Programme) and Nathaniel Lichfield & Partners (an economic planning firm), “the key reason Plans have stalled is the policy requirement to meet objectively assessed needs with the housing target remaining the key battleground at examinations. Just over half of Plans propose less housing than had been proposed by former Regional Strategies, but a third of sound plans end up having to increase their target to pass examination.”
In other words, local councils are having trouble planning enough to alleviate the housing shortage. And in many of the districts studied by TRIP, a lack of information or out-of-date evidence plagued the plans that already exist.
Developers – such as joint venture partnerships of investors who buy and build on raw land – answer to market needs. Which means they do the work at assessing if new homes will sell. In all UK towns they still must get planning approval, then cover costs of new infrastructure demand (often through the Community Infrastructure Levy). What should be noted is that, as of April 2014, house building activity in the UK rose for 15 straight months while demand for property remained strong, according to data firm Market and the Chartered Institute of Purchasing & Supply.
House building continues to draw investors, such as those interested in strategic land (land that requires LPA approval for a use change). This is where the value of the land can increase considerably as it is prepared for development. Individuals who find the investment opportunity worthy of investigation should consult with an independent financial advisor to determine the weight and place of land investing in an overall wealth portfolio.