Budget 2017: reaction

Planning has been collating all the news and reaction on the key planning-related announcements in chancellor Philip Hammond's 2017 Budget.

16:11 Anita Rivera, head of planning at law firm Mishcon de Reya, said: "Today's Budget revealed some insight into potential changes to the Community Infrastructure Levy (CIL). The removal of restrictions on pooling of s106 contributions may make sense "where the authority is in a low viability area or where significant development is planned on several large strategic sites", however it cannot and should not lead to 'double dipping', which results in a development proposal being subject to both CIL and s106 payments. The absence of carefully structured parameters to prevent this will merely serve to erode the confidence of developers. This, combined with the government's intention to enable charging authorities to "set rates which better reflect the uplift in land values between a proposed and existing use" means ever-increasing debates about how to carry out and objectively assess financial viability appraisals and, most importantly, results in an ever-tighter squeeze on funds available to provide affordable housing as any planning gain 'uplift' will be further caught by CIL". 

16:06 Ian Fletcher, director of real estate policy at the British Property Federation, said: "We look forward to working with government on its land value uplift proposals. While we understand government wants to maximise the amount of money coming in to pay for infrastructure, this has to be done in a transparent way. Government must also ensure that developers are fully consulted on from the very beginning. The Community Infrastructure Levy (CIL) is currently perceived as a problem and unless it becomes a more transparent tool, it could hamper investor and developer confidence. We would like to see any reform learn from the original [London] Mayoral CIL, which is widely seen as a success by both the public and private sectors."

15:57: Matthew Good, planning director (housing & economics) at WYG said: "The build-out review, to be chaired by Oliver Letwin, could have far-reaching consequences, explaining the gap between permissions and housing completions, and making recommendations for closing it. The recommendations will need to be thought through carefully; any threat of a ‘use it or lose it’ approach, or other penalties, may actually have the effect of reducing, not increasing supply. This is because developers will be less willing to take a risk on sites deemed as marginal if such a threat hangs over them."

15:55: Alan Brown, chief executive of housebuilder CALA Group said: "The idea of yet another review into whether housebuilders are landbanking is incredible. Wherever we have a planning consent, we get on and build as quickly as we can as tying up lots of capital in large swathes of land with no houses on them simply isn’t in our financial interests. Instead of launching into another bout of naval gazing around this area, the chancellor should have done more to unpick the logjam that exists at a local authority level where planning departments remain under-resourced and planning continues to be used as a political football for local authorities resulting in excessive planning delays."

15:50 London mayor, Sadiq Khan said: "The government’s most astonishing failure today is on housing - today’s measures will not even paper over the cracks. The chancellor did not announce a penny of extra grant for affordable housing in London – even though we know the current spending is less than a fifth of what we need. Everyone knows we need councils to be able to build more, but there was no commitment that any councils in London will be given the powers to do so. This government is all talk and no action on housing".

Lord Adonis, chairman of the government’s National Infrastructure Commission, welcomed the chancellor’s plans to support future growth in the Cambridge-Milton Keynes-Oxford Growth Arc, building on the Commission’s recommendations last week to help deliver one million homes and jobs in the area by 2050. Lord Adonis said: "I’m pleased that the chancellor plans to accept our recommendations for supporting the Cambridge-Milton Keynes-Oxford Arc, which could deliver one million homes and jobs by 2050 in one of the most economically-important parts of the country. Today’s measures are therefore a positive step – but they should be the start of a longer-term concerted effort to enhance our infrastructure network, which can help boost economic growth and support communities across the country."

Country Land and Business Association president, Tim Breitmeyer said: "Another budget has gone by without making simple changes to tax and planning policy that could make a big difference. We welcome the increase in the number of small sites in local plans and the further funding for the Home Builders Fund. We also look forward to participating in the review to be led by Oliver Letwin into the buildout rates of land with planning permission for housing. It is important that we remove any barriers to getting homes built. We will, however, strongly resist the suggestion of blanket changes to policies on compulsory purchase of land for house building. This should only ever be a last resort. Councils should be focused on establishing effective partnerships with local landowners not seeking to forcibly remove their property."

David Orr, chief executive at the National Housing Federation, said: "The big challenge for the nation remains the supply of new affordable housing. We share the government’s ambition of reaching 300,000 new homes a year, every year for the foreseeable future. Today’s package of measures are a good signal of intent from the chancellor. On their own, they may make an incremental difference but will not deliver a step change in the supply of new homes. Whilst the chancellor is right to say there is no silver bullet, a long-term supply of affordable land is the critical factor. We will need government to ensure that public land is used for housing and that private land is bought where it is needed to create new communities."

Iain Gilbey, planning expert at Pinsent Masons, said: "It’s positive to see a clear focus on housing in this Budget, however, to reach the target numbers set it’s unlikely government will be able to continue to avoid addressing the green belt ‘elephant’. Building on brownfield and unconstrained greenfield sites alone is not enough and although easing the current restrictions is politically difficult for a minority government, carefully regulated and planned release of well-located and lower quality green belt land must be considered as inevitable if the housing market, in economically strong areas, is to be ‘fixed’."

Antony Pollard, director in the economics team at Turley said: "In general terms the planning reforms show a clear move towards increasing the powers of government, with an example being the power to directly instruct local authorities to produce joint statutory plans. A commitment to consult on the strengthening of the Housing Delivery Test by setting the threshold at which the presumption in favour of development applies at 75% of housing delivery by 2020 is also welcomed. However, whilst the chancellor was clear to recognise the important role that the supply of new land will play in providing the homes, there was a clear statement that this would not be at the cost of losing protection of the green belt. The continued failure of the government to explore this issue means that the impact of reform is going to continue to be constrained. This is highlighted, for example, through the 15 authorities identified for intervention with 73% of these containing green gelt. The route the government takes to intervene in these plans will be closely observed."

15:19 More Budget coverage from Planning is now live.

Hammond announces extra £2.7bn for Housing Infrastructure Fund. Click here.

New town development corporations to kick-start five garden towns. Click here.

Government to 'strengthen' housing delivery test. Click here.

HCA to get new planning powers in expanded role. Click here.

Government plans to deallocate sites with no prospect of delivery. Click here.

15:16 Jason Lowes, partner in the planning team at consultancy Rapleys, said: "For all the hype that this would be a Budget to fix the housing system, the chancellor underwhelmed when it came to planning reform. Continuing protection of the green belt and making the best use of urban land has been one of the fundamental principles of the planning system for decades. As the chancellor closed the red box, the lack of any concrete commitment on reforming the planning system to bring forward the housing that the government says it wants to bring forward is a concern, and we are left wondering how this Budget was anything different to the many that have gone before."

15:03 Carl Dyer, head of planning at law firm Irwin Mitchell, said that today’s Budget "was as expected, the usual rattle of cans being kicked down the street, and of failed policies being recycled." He said: "The 300,000 homes a year target is an aspiration for the "mid-2020's. That figure needs to be seen in context: the 217,000 figure cited about house built this year includes 40,000 conversions.  The average for the last seven years has been 159,000 a year!"

14:59 Jay Das, planning partner at law firm Wedlake Bell, said: "The planning regime has once again become the focus of government targets in the Budget to address the shortage of housing. There will be further reviews to look at whether there is land banking with a threat of compulsory acquisitions if permissions are not implemented. These policies will be contentious and expensive and as such the decision has been put off to another day. Changes to planning policy to increase density in urban areas is likely to help. The chancellor’s proposal to remove stamp duty for properties under £300,000 (and on the first £300,000 for properties costing up to £500,000) for first time buyers is probably the single most decisive change which may boost housing activity in the UK in the short term."

14:58 Stephen Wilkinson, president of the Royal Town Planning Institute, said that the chancellor "has missed the chance to tackle the dysfunctional land market which is the fundamental cause of the housing crisis, when he could have introduced measures to capture the increase in land value for public good or make it easier for councils to compulsorily purchase land".

Wilkinson added: "Another inquiry into the discrepancy between planning permission level and building out rate is not what we need, the issue is a complex one which has been extensively reported on. We need firm action now as we are losing time, as prices may rise as an unintended consequence of the abolition of the stamp duty for first time buyers."

14:56 Lucy Thomas, partner at law firm Ashursts, says that developers "who were hanging their hats on the budget seeing a demise of the much maligned Community Infrastructure Levy" will be disappointed. "Instead of acting on the recommendations from the CIL Review Panel, the government is going to consult further and judging by the questions it intends to ask, looks as though it will complicate, rather than simplify, this burdensome tax on development," she said.

14:54 An office-to-resi demolition permitted development right has been mooted again. The Budget document's small print says the government will consult on introducing "a permitted development right to allow commercial buildings to be demolished and replaced with homes".

14:41 The first of our Budget stories is now live: The government will consult on proposals to remove section 106 pooling restrictions in some circumstances and make changes to the Community Infrastructure Levy (CIL) to allow town halls to set rates which 'better reflect the uplift in land values between a proposed and existing use', today's Budget has announced. Click here to read the article in full.

13:42 Hammond also says that new town development corporations will deliver five settlements in areas of demand pressure. He backs the findings of a National Infrastructure Commission report which called for one million homes in the Oxford-Milton Keynes-Cambridge arc. "Last week the National Infrastructure Commission published their report on the Cambridge-Milton Keynes-Oxford corridor," Hammond says. "Today we back their vision and commit to building up to 1 million homes by 2050."

13:42 Hammond says that an "urgent" review will look at the gap between planning permissions and housing starts, and will report in time for the spring Budget. The government will intervene if the review finds land withheld for commercial rather than technical reasons, Hammond says.

13:41 Chancellor also moots changes to planning rules, focusing on urban areas, making the best use of urban land and continuing to protect the green belt. Talks about building high-quality high-density homes in city centres and around transport hubs. Hammond adds that the government will ensure that councils in high-demand areas permit more homes for local first time buyers and affordable renters.

13:38 Quite a lot to digest there. Hammond announces £44 billion of capital funding, loans and guarantees to support housebuiding. Promises 300,000 net additions a year by the mid- 2020s. Hammond announces new money for the Home Builders Fund, a £630 million small sites fund to unstick the delivery of 40,000 homes, a further £2.7bn to more than double the Housing Infrastructure Fund, £400 million for estate regeneration and a £1.1 billion fund to unlock strategic sites, including new settlements and urban regeneration schemes.

13:31 Hammond: "Successive governments over decades have failed to build enough homes." But adds: "This is a complex challenge. There’s no single magic bullet."

13:28 Hammond says the government will address issue of empty properties: "We will give local authorities the power to charge a 100% council tax premium on empty properties"

13:27 Hammond touches on aftermath of ‘appalling events at Grenfell tower’. He says government will provide Kensington and Chelsea Council with a further £28 million for mental health services, regeneration support for the surrounding areas and a new community space for local residents.

13:21 West Midlands mayor Andy Street tweets that details of the second West Midlands devolution deal will be made public tomorrow.

13:08 Also in that clutch of announcements was a "discounted lending" scheme for councils for "high value infrastructure projects".

13:06 Hammond says that too much economic strength is concentrated in London. "We have to get all parts of the UK firing on all cylinders." Hammond confirms £1.7 billion Transforming Cities Fund, saying that half will be allocated to six areas with elected mayors - the rest open to competition.

Hammond also announces a second devolution deal with the West Midlands, and a new devolution deal with North of the Tyne. Hammond also announces £30m to trial new solutions on the TransPennine route to improve mobile and digital connectivity on trains.

More detail here on the Transforming Cities Fund, announced earlier this week, here.

12:59 Chancellor announces a new £220m Clean Air Fund to provide support to local authorities as they draw up local air quality plans

12:56 Hammond pledges step up our support for driverless cars. "Our future vehicles will be driverless," he says. Hammond also announces a £400 million charging infrastructure grant for electric cars, as well as an extra £100 million for the plug-in-car-grant to help people buy battery electric cars.

12:15 How big an issue is land banking? Ahead of today’s Budget, research by property firm Savills suggests that, of the 1.5 million units consented in the last 5 years in England, Scotland and Wales, 100,000 – 120,000 consents can be considered to not be progressing. "This is amounts to 8 per cent of the total number of consents granted in that period, and is equivalent to less than half a year’s supply at current delivery rates," Savills says.

11:57 Ahead of today’s Budget, chancellor Philip Hammond said that the government wants to see annual housing delivery raised to 300,000 homes a year. That figure is much higher than the 217,350 net additions to the housing stock delivered in 2016/17 and higher even than the housing need figure of 266,000 set out in the recent consultation on the proposed standard method for assessing housing need.

11:27 Will today see the go-ahead for a "build up not out" plan? Press reports earlier this month suggested that the chancellor is "weighing up proposals to relax planning laws to enable houses and blocks of flats to be raised to the height of the tallest building or tree in the same area without the cost or delay of seeking council approval".

Earlier this year, plans for a permitted development right to make it easier for developers to add upward extensions to buildings (see consultation proposals below) were ruled out, after more than half of consultation responses believed a "one-size-fits-all" permitted development right to be "unworkable". "It was recognised that the complex prior approval that would be required to protect neighbours and the character and amenity of an area would result in a permitted development right that is no less onerous than a planning application," the government said in a document published alongside the February housing white paper.

10:57  A number of authorities with large amounts of green belt within their boundaries have serious affordability issues (see chart, below), but today’s Budget is unlikely to feature any changes to allow more homes to be built on the green belt, if press reports are to be believed. According to the reports, chancellor Philip Hammond has been arguing for the reclassification of some green belt land, but the Prime Minister has insisted that the green belt is not on the agenda for today’s Budget. 

10:10 One way for the chancellor to show that he’s serious about raising housing numbers to 300,000 a year would be to endorse the recommendations in a report last week by the National Infrastructure Commission, which said that the rates of housebuilding in the Cambridge-Milton Keynes-Oxford corridor "will need to double", delivering up to one million new homes by 2050, "if the arc is to achieve its economic potential". The report set out a range of measures intended to bring forward development opportunities ranging from "smaller-scale garden towns of around 10,000 homes through to new city-scale developments of up to 150,000 homes". Will the proposals be backed later today by the chancellor, or will he find the recommendations too hot to handle?

09:21 Alongside today’s anticipated high-profile housing announcements, the government is expected to publish its response to the review of the Community Infrastructure Levy (CIL).

09:10 Ahead of today’s Budget statement, the papers are predicting a series of measures to boost housebuilding. The Times says that Hammond "will give councils more flexibility to borrow cash to build council homes as part of today’s package to increase housebuilding to 300,000 a year". The paper says that the chancellor is "expected to announce a series of housing deals with local councils in which they receive more financial freedoms and planning flexibility in return for commitments to meet supply targets. He has resisted a more ambitious proposal to scrap borrowing caps across the sector, however, in favour of a more modest set of reforms to enable more social housing."

The Times also says that the chancellor will "launch an inquiry into whether housebuilders hoard land, waiting for it to rise in value, a tactic developers strongly deny. He will also pledge to clean up polluted industrial sites for housebuilding, build new roads to unlock land for housing and guarantee loans by banks to small housebuilders".

The Financial Times says that the Budget will see "no big reform of planning laws for the ‘greenbelt’ of protected area outside of London, but local authorities could be given more powers for compulsory purchase of land".

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