Chelgate Local Newsletter – April 2019
This month: Spring Statement, MHCLG musings, Housing Delivery Test and London development slumps
Housing blooms in Spring Statement
By Kasia Banas, Consultant
While mostly overshadowed by the Brexit debates and votes, this year’s Spring Statement included a number of important housing announcements. The new package is part of government’s wider strategy to deliver 300,000 a year by the mid-2020s and includes new infrastructure funding, reforms of parts of the planning system and increasing energy efficiency of new builds.
The Chancellor confirmed that £3 billion will be available in loans to housing associations, to facilitate delivery of 30,000 new homes across the country through an Affordable Homes Guarantee Scheme. The funds will come from the £8 billion of housing guarantees announced in his 2017 Autumn Budget. It also includes £1 billion for small and medium enterprise housebuilders in the private sector which will open to applications from banks in April.
Housing Infrastructure Fund
£717 million from the Housing Infrastructure Fund will be used to support the delivery of homes at sites across London, Oxfordshire, Cambridge and Cheshire. In addition, a declaration between the government and local authorities in the Oxford to Cambridge growth arc was published. It includes a list of steps to be taken in the next 12 months, such as completing a study of new or expanded settlements in the arc and an independent chair to a Cross-Arc Advisory Group will also be appointed. According to the document, it has not been decided yet whether a “spatial vision” for the Oxford to Cambridge growth corridor will be developed.
In response to Sir Oliver Letwin’s review of build-out rates, the government will publish new planning guidance on timely delivery of large sites. This will include the recommendation of increasing diversity in range of homes on sites of more than 1,500 dwellings. However, once again, there was no mention of extending councils’ powers to allow them to capture land value uplift.
Accelerated Planning Green Paper
A new ‘Accelerated Planning Green Paper’ will also be published to speed up decision-making within the planning system. The new measures will include greater capacity and capability, performance management and procedural improvements and follow Rosewell Review’s recommendations to reduce the time taken to conclude planning appeal inquiries.
The government confirmed the changes to permitted development rights including upwards extensions to deliver additional homes and relaxation of use class rules to boost declining high streets. The Housing Secretary, James Brokenshire stressed however, that new rights would have to deliver homes that “respect the design of the existing streetscape, while ensuring that the amenity of neighbours is considered”. There is still no decision on proposals to allow office demolition for new homes.
Future Homes Standard
A Future Homes Standard will be adopted by 2025 to ensure that the new homes are built with the latest green technology, making them energy and cost efficient. The announcement echoes Prime Minister’s commitment to the Clean Growth Grand Challenge mission which aims to reduce the energy use of new build property by half by 2030. Consultation on the new standard is expected to take place later in the year.
Voices from the sector
While the announcements relating to new funding gained a lot of coverage and received a general support from the sector, Melanie Rees, head of policy at the Chartered Institute for Housing, said the statement was “another missed opportunity to get us closer to building the homes that we need”. She was joined by Adam Morton, policy leader at the NHF who agrees that “funding is only part of the solution”. He claims that despite their readiness to deliver homes, housing associations need more access to cheaper land. Polly Neate, chief executive of Shelter criticised expansion of permitted development rights. In her view, this deregulation will lead to a loss of thousands of potential social and affordable homes as planning authorities will have no way of getting developers to commit to Section 106 agreements.
London sees slump in residential development
By Vivienne Shirley, Senior Consultant
Only five of London’s 33 boroughs met their targets for housing need during 2017-18, with twenty delivering less than half, according to Knight Frank’s latest London Residential Development Report.
Whilst Mayor Sadiq Khan set the capital the target of building 66,000 new homes annually, already lower than the government’s housing need figure of 72,407, just 31,723 additional dwellings were built – less than half the number required.
This represents a 13% drop on the year before, largely due to a slump in the number of offices converted to residential accommodation under permitted development rights (PDR). These fell by 52%, suggesting most suitable space has already been converted since the introduction of PDR in 2013. However, this figure could lift again once the government’s proposals on extending PDR for upwards extensions, confirmed in the Spring Statement, come into place.
Other factors suppressing housebuilding include weak sales activity. Patrick Gower, Residential Research Associate at Knight Frank, commented, “The market faces structural challenges that are suppressing long-term sales activity, including stretched affordability, tighter mortgage regulations introduced in the wake of the financial crisis, and patchy house price growth.”
Activity has been dampened further amid the uncertainty caused by Brexit, with sales in Q3 2018 down 12% on 2017 as buyers waited for greater clarity about Britain’s future EU relationship as the March departure date approached – that wait now looks set to continue for at least a few more weeks. While Knight Frank’s data indicates pent up demand for new homes, with the ratio of new prospective buyers to homes available at the highest level in four years, many developers are holding off on starting new schemes until sales activity picks up.
Brexit is also at least partly the culprit for the rising costs faced by developers, which have increased by 14% in the three years to January 2019. This includes labour and material costs, with the cost of imports driven up by the weak pound. Over a quarter of London’s construction workforce come from other EU countries, with one fifth saying they have considered leaving the country due to Brexit uncertainties in a recent survey.
Delivery may well fall yet further judging by the planning and construction pipeline. Applications for 20+ private units continued to drop by more than 10,000 since 2014 to 40,461, while the number of 20+ units that started construction in 2018 was 23,130 – a decline of 32% since 2015. With the number of homeless deaths in the capital continuing to rise, and all 32 London boroughs among the top 45 local authorities with the highest per capita spend on temporary accommodation, government may need to consider stepping in to build urgently needed social housing while private developers wait for the Brexit uncertainty to pass.
MHCLG musings, CaMKoX and land value
By Vivienne Shirley, Senior Consultant
Chelgate attended the latest annual planning update by Cambridge University Land Society, promising an afternoon of timely topics and high-profile speakers.
The event kicked off with a keynote by Simon Gallagher, Director of Planning at the Ministry of Housing, Communities and Local Government (MHCLG). He noted that having published the new National Planning Policy Framework (NPPF) last year, the focus has now turned to implementation – though he warned there will be yet more supplementary guidance on diversification, design and housing need assessments coming shortly. Already stretched and under-resourced councils may not be thrilled at the prospect of more change and bureaucracy.
He stressed the Ministry is keen to keep having discussions on where the NPPF is working well, and where it is not. It is also consulting on how to improve the community infrastructure levy (CIL) system, with amendments due to be brought forward shortly, and how to encourage ‘gentle densification’ through extending permitted development rights (PDR).
Simon conceded there is consensus across the country that planning decisions take far too long, with a lack of public trust in the system. MHCLG will release a green paper later this year focused on accelerating decision-making, following Rosewell’s recent report. MHCLG is also looking at how to quicken the S106 process, helping improve the often-fraught dynamic between local authorities and developers and ‘get stuff built’.
Next up was the CaMKoX Arc with Professor Tom Holbrook, 5th Studio, Alexander Jan from Arup Economics, Dr Helka Kalliomäki, and Robbie Owen of Pinsent Mason. They spoke about the challenges presented by such a major infrastructure project in a complex, multi-layered governance and policy environment, not helped by local resistance. Alexander suggested a top-down approach such as an Act of Parliament could be the way to go, as with the Olympics. Meanwhile, Robbie made the case for a National Policy Statement (NPS), an idea now with MHCLG for consideration, which could help to underpin and deliver the Arc. Professor Holbrook talked about the practical and design issues with deciding how best to accommodate 1m new homes and associated infrastructure, while Dr Kalliomäki drew on international comparisons. The overall message seemed to be that we shouldn’t expect any progress for a long time while these various issues are tackled.
Andy von Bradsky, who has recently taken on the newly-created role of Head of Architecture at MHCLG, then took to the stage. He stressed the government’s commitment to building better, as well as more, buildings, as attested by the Building Better, Building Beautiful Commission, which will try to tackle the challenge of poorly designed homes. He noted upcoming new planning practice guidance will include strengthened design direction, with garden communities and Healthy New Towns playing vital roles. The government will also promote community-led development and modern methods of construction (MMC), with hopefully a move towards a national policy for design in the future. However, as Roy Pinnock of Dentons pointed out later on, the tension between high levels of delivery and high-quality design will no doubt continue.
Stephen Ashworth, planning partner at Dentons, followed to talk about land value capture (LVC). He said we need to stop talking about value capture and start talking about ‘right pricing’, which can be helped through planning mechanisms and CIL. He stressed the only challenge is imagination – by coming up with clear and imaginative planning policies, we can clarify what costs developers are expected to pay for while making sure development remains viable. He warned that in some places, there is not enough land value to fund associated infrastructure, and it is important that government steps in where necessary to ensure there is good quality infrastructure across the UK.
The seminar finished with a lively debate on the need for PDR as a ‘shadow’ planning system in the absence of serious reform. Hard-hitting arguments such as the fact that only 30% of PD units meet national space standards just won out over the pro side, who pointed out 88,000 relatively affordable homes were created through PD in 2017. After a swift vote, it was on to refreshments and further debates!
Housing Delivery Test update
By Michael Hardware, Director of Planning and Property
In our last newsletter we talked about the Housing Delivery Test and the 100 or so local authorities which failed it. The test looked at housing need and housing delivery over the last three years and represented it as a percentage. Those with 95% or more obviously have nothing to worry about but those councils between 85% and 95% have now to produce an action plan to detail how they are going toe increase delivery. Those with less than 85% have also to add 20% to their housing supply and produce an action plan. Those below 25% would revert from the local plan to the NPPF and a presumption in favour of sustainable development – no councils failed this threshold.
The pressure is increased this November when the next set of figures are published when the bottom threshold is increased from 25% to 45%. This will capture a handful of councils – Savills estimates that around 16 LPAs would have failed last year’s Test had the threshold been at 45%. The real crunch will come next November when the bottom threshold is raised to 75%, which will capture a significant number of councils.
But councils have criticised this ramping-up of the bottom threshold as they have little or no control of the delivery of new homes, it is up to the developers to bring forward sites for development. This then takes us into the realms of why developers delay so long in bringing sites forward and the issue of land banking that Sir Oliver Letwin looked at last year.
He found no evidence that developers land banked, which is what the industry has always said: it is not in their interests to hold onto land once planning has been consented as most borrow to buy the land and are paying interest on that capital. Only by developing out the land the selling the homes can they release that capital to pay off the debt. The delays are mainly around reserved matters and then mobilising the project, which can both take a year or even two to conclude.
It is true that developers do control production to a degree – there is no point in flooding the market with new homes as that will just result in prices falling for everyone, which certainly would not be popular. The usual output is around 50 units per site so a typical 250-home site would built-out in five years.
Part of Sir Oliver’s recommendations to increase output was to provide multiple offerings addressing different segments of the market at the same time. These could include various affordable tenures, PRS, starter homes, open market and older peoples housing all at once. This certainly has some merit and the industry has been looking closely at this.
The Government is serious about achieving its 300,000 new homes per year and is ramping up the pressure on councils to get up-to-date local plans and to work with developers to deliver homes to meet their housing needs. It is ironic that the Government is pushing housing which impacts more in the Tory heartlands – politically, this may not go down very well at the next General Election assuming, of course, people’s minds are not still on Brexit.
Local Plan updates – April 2019
Ashford – On 21 February 2019 the council endorsed the Inspectors’ Report and the appended set of recommended Main Modifications to the ‘Local Plan to 2030’ and adopted the ‘Local Plan to 2030’ as part of the Development Plan for the borough.
Aylesbury Vale – The Council has received Inspector’s response to the points raised in their letter following the publication of his Interim findings. The Council is now finalising their onward timetable including when the proposed modifications to the Plan will be published for public consultation. The adoption of the Vale of Aylesbury Local Plan is planned to be in 2019.
Basildon – The Revised Publication Local Plan was submitted to the Secretary of State on the 28th of March 2019 for the Examination in Public.
Bexley – The Council is now consulting on the preferred approaches to the matters to be contained within the new Local Plan (Reg 18 consultation). Any comments must reach the Council by Sunday 31 March 2019.
Braintree – The Local Plan examination is currently paused as work is undertaken on the additional evidence required by the Planning Inspector. According to the Local Development Scheme approved in January 2019, hearings for the Shared Strategic Plan (Section 1) are expected in Autumn 2019 and for Braintree District Specific Local Plan (Section 2) in Spring / Summer 2020.
Brentwood – Preparation of the Local Plan has reached the Publication stage. The opportunity to make representations on the soundness and legal compliance of the Local Plan closed on Tuesday 19 March 2019.
Bromley – The Local Plan for Bromley was adopted on 16 January 2019.
Broxbourne – Following Inspector’s Post Hearings Advice, an additional hearing has been scheduled for Tuesday 11 June 2019 in relation the Council’s Proposed Main Modifications regarding Brookfield. Any written statements must be received by the Programme Officer by midday on Friday 17 May 2019.
Cambridge and East Cambs – Following receipt of the Inspector’s modifications, East Cambridgeshire District Council voted to withdraw the emerging Local Plan at its February 2019 Council meeting.
Castle Point – In November 2018 the Council resolved to not proceed with the Pre-Publication Local Plan and is now in discussions with the Ministry of Housing, Communities and Local Government with regards to the next steps. It is likely MHCLG will give directions to overturn the council’s decision and proceed with the draft local plan submission, similar to the path taken at Thanet and Wirral.
Central Beds – Further additional evidence on the duty to co-operate, landscape, heritage and transport and an update to the Sustainability Appraisal was submitted by the Council on 28th January 2019 at Inspector’s request. Hearing Sessions will commence at 10am on Tuesday 21 May 2019.
Chelmsford – The Independent Examination hearing sessions took place in November and December 2018. The Council are in the process of assessing the implications that proposed main modifications would have on the policies, designations and maps contained within the Local Plan. These will be submitted for inspector’s agreement in due course.
Cherwell – A Partial Review of the adopted Cherwell Local Plan 2011-2031 (Part 1) is in preparation to help meet the unmet housing needs of Oxford. The Inspector resumed the Hearing Sessions on Tuesday 5th February 2019. The council is also preparing a Part 2 to the Adopted Local Plan 2011-2031 (Part 1) which will contain non-strategic site allocations and development management policies.
Chiltern and South Bucks – Chiltern District Council and South Bucks District Council are preparing a joint Local Plan for Chiltern and South Bucks Districts. The next stage in the process will be the publication of the Local Plan for consultation prior to its submission for an examination in public expected to take place in late May / early June.
Colchester – The Local Plan examination is currently paused as work is undertaken on the additional evidence required by the Planning Inspector. According to the Local Development Scheme approved in January 2019, hearings for the Shared Strategic Plan (Section 1) are expected in Autumn 2019.
Dacorum – A pre-submission Draft Plan is expected in August 2019 while the Council continues undertaking the Duty to Co-operate and public and stakeholder engagement.
Dartford – Regulation 18 public consultation was held in June/ July 2018. Public involvement in the next stage in drafting the Local Plan is expected in summer 2019.
Dover – Regulation 18 consultation is planned for July/August 2019, with adoption expected in February 2021.
East Herts – East Herts’ District Plan was adopted at an Extraordinary Council on the 23 October 2018.
Elmbridge – On 30 October 2018, a new Local Development Scheme was approved and sets out the work programme up to 2021. Regulation 18 consultation is now planned for August/September 2019.
Epping Forest – The Local Plan has been submitted for approval and Ms. Louise Phillips from the Planning Inspectorate has been appointed to carry out the independent Examination. The hearing sessions opened on Tuesday 12 February and will run until Thursday 23 May 2019.
Epsom and Ewell – Pre-Submission Public Consultation is planned for late 2019.
Folkestone and Hythe – The Council submitted their Places and Policies Local Plan to the Secretary of State on the 28th September 2018 for independent examination. The Planning Inspectorate has appointed Mr Jameson Bridgwater to oversee the examination process. The hearings will commence at on 14 May 2019.
Gravesham – After reviewing responses received to Regulation 18 (Stage 1) Part 1 Site Allocations, the council is gathering further evidence and together with the consideration of responses received will prepare Regulation 18 Part 2 consultation documents which will be consulted upon in Autumn 2019.
Guildford – The Council has received the Local Plan Inspector’s Draft Report which will be presented to the Council for consideration of formal adoption before May 2019.
Harlow – The Harlow Local Development Plan was submitted to the Secretary of State for examination in public on 19 October 2018. David Reed BSc DipTP DMS MRTPI has been appointed by the Secretary of State to undertake the independent examination of the Plan. Provisionally the Examination hearing sessions are taking place between 26 March and 4 April 2019.
Havering – Following the hearings which took take place between the 9th and 19th of October 2018, the examination was suspended to allow the Council to complete the required additional work. The reconvened examination is due to take place on Wednesday 29 and Thursday 30 May. The inspector expects to advise of revised matters and issues and guidance notes by 16 April.
Hertsmere – The council is undertaking targeted public and stakeholder engagement in preparing the plan (Reg 18). Issues and options consultation is expected in March 2020.
Maidstone – New Local Plan was formally adopted at Full Council on 25 October 2017. The Council is already preparing its review, with a Regulation 18 – scoping/options consultation planned for summer 2019.
Maldon – The Secretary of State Approved the Maldon District Local Development Plan on 21 July 2017. A review is to be completed by 2022.
Medway – The council published updated Local Development Scheme in December 2018. Regulation 19 – Publication of draft plan is planned for Summer 2019.
Milton Keynes – Plan:MK, the local plan setting out how Milton Keynes will grow until 2031, was approved for adoption by full council in March 2019.
Mole Valley – Reg. 18 Preferred Options consultation to take place in June 2019 (delayed by May 2018 local elections), and Reg. 19 in Winter 2019/20.
North Hertfordshire – Following the hearing sessions into the Local Plan, the Inspector published his proposed Main Modifications to the plan and the accompanying Sustainability Appraisal. Consultation on the Main modifications runs from Thursday 3 January to Thursday 11 April 2019.
Oxford City – On 22 March 2019, Oxford City Council submitted the Oxford Local Plan 2016-2036 to the Planning Inspectorate. The Planning Inspectorate will now assign an Inspector for examination.
Reigate and Banstead – Following the examination hearings, consultation on the Main Modifications will run from 6 March 2019 until 18 April 2019.
Rochford – Preferred Options Document public consultation (Regulation 18) is planned for October/November 2019.
Runnymede – The Council submitted the Plan to the Secretary of State on 31st July 2018, and hearing sessions took place in November 2018 and February 2019. On 22nd March the Council published an update note concerning progress of the outstanding work on Highways matters at the Inspector’s request. The Stage 3 hearings are provisionally scheduled for the week commencing 15 July.
Sevenoaks – On 26th March, full council voted to approve the submission of the draft Local Plan, without amendment, to the Government’s Planning Inspectorate. It will submit the plan shortly, with adoption expected in Autumn 2019.
Southend-on-Sea – Issues and Options consultation will finish April 2nd 2019, with Preferred Approach consultation estimated to take place in Winter 2019/2020.
South Northamptonshire – On 13th February a Planning Inspector, GJ Fort BA (Hons) PGDip LLM MCD MRTPI, was appointed to conduct the examination into the soundness of the submitted plan. Hearing dates have not yet been announced.
South Oxfordshire – The council undertook a Regulation 19 consultation from 7 January to 18 February 2019, with a view to submit to the Secretary of State in Spring 2019.
Spelthorne – The Council invited comments on the draft Site Selection Methodology, with the consultation finishing 28 January 2019. Consultation on Preferred Options (also Reg. 18) is scheduled for June-July 2019.
St Albans – On March 21st 2019 the council approved its draft local plan for submission to the government.
Stevenage – On 25th March 2019 the secretary of state lifted the holding direction given in November 2017, enabling the council to move forward with its local plan following a 16-month pause. The council can now consider the Main Modifications proposed in the Inspector’s Report, received October 2017.
Surrey Heath – The Draft Surrey Heath Local Plan Issues and Options/Preferred Options Consultation finished on 30th July 2018, and the Pre-submission Consultation is scheduled for June 2019.
Swale – The Council has recently published its Local Development Scheme which sets out the timetable for preparing the next Local Plan, with plans to hold Reg. 18 consultation in Oct – Dec 2019.
Tandridge – The Council has submitted its local plan to the Planning Inspectorate for examination and Inspector Philip Lewis BA (Hons) MA MRTPI was appointed to conduct the examination in January, with hearing dates to be announced shortly.
Tendring – Tendring, Braintree and Colchester’s Local Plan share an identical Section 1, which was considered through a joint examination in public in 2018. This has currently been paused by the Planning Inspector to allow the North Essex Authorities to carry out further work, including the Sustainability Appraisal Methodology Consultation that ran from 14 December 2018 until 1 February 2019, and the Inspector’s letter is expected at the end of 2019. Tendring-specific policies and allocations can be found within Section 2 of the Local Plan, which will be finalised following Section 1 and is expected to be submitted in 2020.
Thanet – The Council submitted the draft Local Plan to the Secretary of State on 30th October 2018 for independent examination. Hearing dates are scheduled for April-May 2019.
Three Rivers – Potential Sites Consultation ran between 26 October and 7 December 2018. Publication stage is planned for Autumn 2019.
Thurrock – Reg. 18 (Issues and Options Stage 2: Spatial Options and Sites) took place in July 2018. Reg. 19 was planned for September 2019 but has been delayed following the publication of the revised NPPF.
Tonbridge and Malling – The council submitted its local plan to the secretary of state on 23rd January 2019 and Inspectors were appointed. In the latest correspondence between the Inspectors and the council, the council agreed to submit the remaining documents and evidence by the 29th March 2019.
Tunbridge Wells – Preferred Options Reg. 18 consultation is completed. Consultation on a Pre-Submission Local Plan (Reg. 19) will take place from 30th March 2020.
Uttlesford – The plan was submitted on 18 January 2019 to the Secretary of State and provisional dates for hearing sessions have been set for w/c 1 July 2019 and w/c 15 July 2019.
Vale of White Horse – Following the examination, the Schedule of Proposed Draft Main Modifications are published for a 6 week period of consultation from 18 February until 1 April 2019.
Watford – Issues and Options consultation ran from Friday 7 September to Friday 19 October. First draft local plan is expected in Autumn 2019.
Waverley – The council is completing additional work on the Local Plan Part 2 and it is expected that the Reg. 19 Consultation will take place in June/July 2019, with submission in Winter 2019.
Welwyn Hatfield – Stage 5 of the hearing sessions took place on 6-7th November 2018. The Stage 6 hearing sessions which were provisionally set for early December 2018 are now likely to take place in Autumn 2019. Following a request from the Inspector, the council held a further call for sites ending 4 February 2019. On 25 February, the Inspector wrote to the council requesting a more detailed timeline for the examination’s future timetable.
Woking – Site Allocations DPD consultation (Reg. 19) ran until 17 December 2018 and submission to Secretary of State is expected in June/July 2019.
Wycombe – Submitted for public examination in March 2018 and the final scheduled hearing session took place on September 26th. The consultation on proposed modifications ran from 13 February 2019 and to 27 March 2019. Following the close of the consultation all representations received will be passed to the Inspector for consideration.
May Breakfast Briefing on Oxford-Cambridge Growth Curve
Come and hear the latest about the Oxford-Cambridge Growth Curve at our breakfast briefing seminar in Milton Keynes. Speakers include the Mayor of Cambridge and Peterborough, the Leader of Cherwell District Council and Chair of The Arc Leaders Group, and Bidwells.
The Government has shown much enthusiasm for joining these two esteemed world-leading university towns with much promised including new rail and road links and one million new homes. How all this will be delivered, and how it will be managed, is not so clear.
Presentations will be followed by a panel discussion, and a full networking breakfast will be provided.
Join us on Wednesday 8th May, from 8:00am – 10:00am, at Jurys Inn Milton Keynes. Email Kasia on email@example.com to register.