The Housing White Paper – will it help to build homes faster?
On 7 February this year, the DCLG finally published its long-awaited Housing White Paper ‘Fixing our broken housing market’. Sajid Javid assures us this brings about ‘radical, lasting reform’ and a ‘new, positive mindset to house building’. Blame for the broken market is placed entirely on low rates of house building, and the planning process is considered one of the main reasons for a lack of supply.
While the consultation period is still open (it will end on 2 May), we look at three key initiatives the Government believes will help to deliver more homes faster: –
- Speeding up the local plan process
- An annual assessment of 5-year housing land supply
- An honest assessment of objectively assessed need
Speeding up the local plan process
The White Paper identifies the failure to have up-to-date local plans in place as a key factor behind the country’s current housing crisis. Why are plans so important? They provide certainty as to where homes should, and should not be built, so that development is planned and not the result of speculative applications.
The Paper notes that over 40% of LPAs do not have an up-to-date plan and, even where plans are in place, they may not be recognising and planning for the homes that are needed.
In my 10 years’ experience working in local government, if I have learned one thing it is that plan-making takes a long time. There are a number of reasons for this, for example the plan itself is usually too long; there is not a clear evidence base; and the LPA’s over-cautious approach can result in protracted pre-submission consultation.
In broad terms, the Government intends to:
- simplify and streamline the Local Plan process to speed up plan making;
- establish new powers of intervention to ensure that every authority has an up-to-date plan in place.
The Government has also indicated that it will remove the expectation that areas should be covered by a single local plan. Instead, it will set out the ‘strategic priorities’ that each area should plan for, with flexibility over how to achieve these. At the same time, it intends to strengthen expectations about keeping plans up-to-date by requiring them to be reviewed regularly and updated at least every five years.
Plan-making may currently take too long, but it is never going to be an overnight process. While regular reviews sound like a good thing, it remains to be seen whether this new requirement will help to reduce the cost, time and red tape associated with the Local Plan process. Nor is it currently clear that allowing local authorities to have more than one plan – presumably with multiple examinations and the prospect of multiple legal challenges – will help to streamline the process.
The ability for the Government to compel sluggish local authorities to produce up-to-date plans makes sense, but whether these powers will be effective will presumably depend on the strength of the sanctions available to the Government in the event of non-compliance.
An annual assessment of 5 year housing land supply
The National Planning Policy Framework (NPPF) requires local planning authorities to identify and keep up-to-date a deliverable 5-year housing supply. Without this, even recently adopted planning polies for the supply of housing will be considered out-of-date. As a result, planning permission can be granted for housing which is not accordance with planning policy.
The White Paper does not signal any real change to 5-year supply policy, which it describes as having been ‘an effective, but blunt tool’ that has led to an increase in planning by appeal. To reduce this effect, the Government is proposing to amend the NPPF to give local authorities the opportunity to have their housing land supply agreed on an ‘annual basis’ and fixed for a one year period (i.e. relevant plan policies will be assumed to be up to date for the ensuing year). The intention is to create more certainty about when an adequate land supply exists.
The Paper is light on how this new policy will delivered in practice. It anticipates that guidance will set out more detail on how the 5-year land supply must be calculated. Such guidance would be welcome, as concerns remain.
Unhelpfully, the White Paper does not provide a methodology for calculating the five-year supply. There is also a question mark over how long the process, which requires LPAs to hold discussions with developers as well as other interests such as infrastructure providers, will take. Timescales are extremely tight for a meaningful consultation exercise, and the process depends on the extent to which developers engage with the Planning Inspectorate in making an assessment of the supply figure. If they do not engage, there is every reason to examine the robustness of the housing supply figure at appeal in which case the whole purpose of the proposal is undermined.
It is proposed that those authorities who opt for the new one-year fixed rule should be required to maintain a 10% buffer on their 5-year housing land supply. There is no explanation or context provided for this proposal. On the face of it, this would inevitably decrease the number of planning permissions because, in the case of those authorities that are currently 20% authorities, it will increase their prospects of being able to show a 5 year housing land supply.
An honest assessment of objectively assessed need
The White Paper refers to some local authorities being able ‘to duck potentially difficult decisions’ on delivering housing requirements for their area by coming up with their own methodology for calculating their objectively assessed need (OAN). The importance of an ‘honest’ assessment of such need is identified.
Clearly, if you want to plan properly for required housing growth, you have to have an accurate calculation of need. Equally, it is essential for assessing a 5-year housing land supply. Local authorities are well aware that the higher the OAN, the greater the pressure there will be to find housing for their area and the harder it may be to show the existence of a five year supply. So, some authorities promote unrealistically low figures.
The White Paper suggests that arguments over OAN and its calculation have been a factor in making plan-making slow, expensive and bureaucratic and anticipates the introduction of a more standardised approach from April 2018. It does not set out what this approach is likely to be and, furthermore, such an approach will not be mandatory although there will be incentives for its adoption.
Of course, only time will tell whether the White Paper will speed up housing delivery. Much of the Paper relates to amendments to the current planning regime which will, inevitably, take time not only to enact but also to take effect. While, in my view it does not necessarily take bold steps towards ‘radical’ reform, it does try to put in place tangible measures and requirements for driving forward housing growth.