Notes from a small island getting smaller

Welcome to an era of both small-sized and small-minded Government.

Recent Government announcements suggest an administration that has elected to give up on plan-led growth, eschewing some of the system’s more sensible characteristics – such as five-year housing land supplies – and instead promising a new ‘National Planning Policy Framework prospectus’ by Christmas and a new NPPF by April 2023 that will bake in a number of new principles that is likely to constrain new supply, explored within this fantastic piece by Zack Simons here. Regardless of its contents, we already think there is little to no chance of the Government meeting its own timetable…..

How far we have fallen. Let’s examine why planning for growth and housing matters in the first place, according to this article by the LSE on long-term trends. Note this quote was from 2014 and affordability versus household income has further declined since:

“Over the last 40 years, house price growth in the UK has been faster than in any other OECD country and has far outstripped earnings growth. Consequently, a ‘housing affordability crisis’ has developed. The homeownership rate has been in decline since the turn of the millennium, falling from 69.6% in 2002 to 63.6% in 2013.

The ratio of London house prices to average UK house prices has increased substantially since the 1970s. The price-to-income multiple in the Greater London area in 2014 was 8.5; for the UK as a whole, it was 5.0. The UK’s planning system is the main cause of the affordability crisis, especially in London and the South East. Despite population growth and rising real incomes, construction of new housing has been decreasing steadily since the 1970s, leading to a substantial housing shortfall.”

Let’s kick the affordability ladder a bit further away from the young, eh readers? In reality however, it is even worse than that.

Park Hill in Sheffield – 1960s housing made good; what are the chances of seeing similar schemes in future?

The letter sent by Michael Gove as Secretary of State with responsibility for planning to local authorities ahead of the publication of the Prospectus suggests giving Councils more wriggle room to plan for far fewer homes than objectively assessed housing need numbers suggest. It includes the frankly criminal statement that “we will be clear that local planning authorities are not expected to review the Green Belt to deliver housing.” Read our evergreen piece on why this is a spectacularly poor piece of judgement here.

“We warned you about those rebels”

Storing up problems

This creates two key problems. A policy vacuum will exist between now and the adoption of a new NPPF; some local authorities such as Horsham have adopted to delay their Local Plan process until progress has been made and we would expect others to follow suit in the run up to Christmas…

The bigger problem is longer-term in nature; the measures (eventually) introduced could lead to the decimation of the local plan process itself, as expressed within this article. It is fair to say readers that we have a lot of sympathy with this argument and if it’s allowed to go unchecked, creates a zero-sum game where precious few benefit:

– Councils no longer plan for growth or even meet five-year supply, creating a throttle in supply (see a recent example of planning for far fewer homes than required in Worthing). This acts as a prop for existing consented land to further increase in value, increasing pressures on housebuilders and their supply chain to maintain affordability at a time of an apparent cost of living crisis.

– The response of developers or promoters is understandable: if plans aren’t made to allocate sites within previous rules, then they will be encouraged by advisors to put in ‘departure’ applications.

“Save our tennis courts” is a new one on us

– When these applications become public, groups of local people will formally oppose these applications, using invective similar to recent examples here and here.

– These applications are refused at Committee whereby the promoter developer then goes to appeal, with local opposition campaigns gear up in parallel.

– The applications more often than not will succeed owing to lack of available housing supply. MPs, Councillors and the public subsequently moan about the planning system; local confidence in democracy and development dwindles; MPs and Councillors then campaign on anti-development tickets and the cycle repeats.

What could this lead to?

In short, the plan-led system becomes an appeal-led system that:

1) Increases planning costs for all involved;

2) Increases the cost of land in at least the short to medium-term;

3) Reduces development certainty and strategic planning; and

4) Further erodes confidence in the overall planning system.

Is this any way to treat one of the great social challenges of the age? Absolutely not – and we’ll be making our views plainly understood during the NPPF consultation period and in any other discussions with Ministers over forthcoming weeks.

Michael Gove: In for a very difficult few weeks