2022 was a year of political change. In the planning policy arena, potential changes were debated and discussed, but with the progress of the Levelling Up and Regeneration Bill still proving sluggish, they still seem some way off.
Change needed in existing policy
Issues on which new national policy is urgently required include nutrient neutrality and electrical capacity, which have created moratoriums in many London boroughs, and Green Belt reform.
The issue that repeatedly stymies any real change in Green Belt policy is public perception: the belief that it exists to protect the most valuable countryside. Green Belt designation is not a value judgement on the land in question; it is now an outdated policy, applied with a broad brush, which often restricts sustainable growth and thus increases house prices in some of the most housing-stressed areas of the country.
Reform is needed, not necessarily to eradicate Green Belt policy, but to change the public discourse around the matter and remove local and national political influence.
Carter Jonas has, through appeal, recently succeeded in gaining planning consent on Green Belt land. The scheme, which was for a care village, also included a country park, providing public access and contributing substantial environmental enhancements. But such examples are rare and without any shift in opinion, we are unlikely to see a meaningful change to national policy.
Emerging policy in need of change
There are policy areas within which change is imminent but could inadvertently impede development. This includes the Environment Act, specifically the requirement to provide a 10% biodiversity net gain (BNG) as well as the ‘beauty agenda’.
BNG will enhance the ‘sustainable’ qualities of development and bring about biodiversity enhancements. This is of course laudable. But with the requirement kicking in within a year, there is concern that some local policies, guidance and mechanisms for off-setting are substantially behind schedule as Local Plans stall.
Without these structures, development may in turn be delayed. Furthermore, the requirement to provide BNG may mean that more land is required to deliver new development, requiring further Local Plan allocations.
Carter Jonas recently undertook some research to understand the proportion of local planning authorities where BNG requirements have already been incorporated into local plans, where they are progressing through emerging local plans and where BNG appears in Supplementary Planning Documents (SPDs).
We found that the take-up in London was particularly slow: as of now, no London borough had an adopted BNG policy in its Local Plan – despite a relatively high proportion (85%) having declared a climate emergency.
And with strategic planning at a standstill in many local planning authority areas (due to issues including nutrient neutrality, resourcing and political uncertainty) many Local Plans are substantially delayed, resulting in a stalemate that this requirement may exacerbate.
‘Building beautiful’ is another well-intended change which has the potential to cause delay. Contentious from its outset, the subjectivity of ‘beauty’ has proven difficult to define or interpret. Despite its likely inclusion in the next version of the NPPF, legal advice is to avoid ‘beauty’ in written documentation because Planning Inspectors and others will struggle to assess what is ‘beautiful’.
New policy needed to bring about change
With the housing crisis intensifying, there is a growing need for more affordable housing and initiatives to help first-time buyers. But the First Homes policy has been largely ignored, particularly in the South East, fundamentally due to unaffordability.
In London, rented tenure products have remained a priority. The GLA issued a Practice Note in July 2021 stressing its preference for Social Rent and London Affordable Rent over First Homes. In March 2022, Camden became the first local authority to formally reject First Homes in its planning policy, setting a precedent for others to do the same. Camden stated that it would continue to prioritise the delivery of affordable housing at rents related to local incomes instead of First Homes.
This is unsurprising in high-value areas such as Camden. Recent schemes in the borough have starting prices of over £500,000, meaning a substantial discount would be required for homes to fall under the £420,000 price cap. Even so, buyers would require a hefty deposit and given the First Homes eligibility cap on a household income of £90,000, there is a limited market for those who can both qualify for and afford a home under the scheme. Research has shown that across London, just 12% of first-time buyer households would have the required income for an average two-bedroom flat under the First Homes scheme. In pricier boroughs such as Camden, this would be even lower.
Affordability is clearly an issue. In London, the average deposit for a first-time buyer stands at around £115,000 according to Halifax. Nationally, it is circa £54,000. This affordability problem has been exacerbated by soaring interest rates on new mortgages and the withdrawal of the number of mortgages offering over 90% loan-to-value (LTV).
As an ‘intermediate tenure’ (a form of affordable housing provided at a below-market cost but without the more substantial subsidy of social rent), First Homes can limit the provision of other types of affordable housing, such as Shared Ownership. Shared Ownership, however, is more accessible because a deposit and mortgage is only required on as little as 25% of the value. Requiring a deposit and mortgage on 70% of the value, First Homes are within the reach of fewer potential homeowners.
Nevertheless, in the few schemes that have started selling First Homes, they have reportedly proven very popular and attracted a lot of interest. Significantly, all these schemes have been outside London where homes are generally more affordable.
Conclusion
A year in which political change seemed to trump planning policy change ended with a substantial change to emerging policy. With the recent announcement that, under an amendment to the Levelling Up and Regeneration Bill, national housing targets will be advisory only, the implication is that if authorities can identify established planning constraints (for example Green Belt), they will be better able to ignore suggested targets and revert to delivering what they think is acceptable environmentally.
The problem, as we see it, is that this substantial amendment to the Levelling Up and Regeneration Bill will not have the necessary effect of increasing much-needed housing; instead, it will lead to a continuation of the housing crisis.
