What the chancellor's proposed planning policy changes mean for practitioners

Further planning policy reforms signalled in this week's Budget as part of the government's expanded target for new home creation have drawn a cautious reaction from the industry.

New homes: fresh planning changes on the way to help boost delivery
New homes: fresh planning changes on the way to help boost delivery

Another round of consultation is in the offing as ministers attempt to further fine-tune the planning system to deliver 300,000 net additional homes by the mid 2020s. The latest moves, flagged up in chancellor Philip Hammond’s Autumn Budget, include deallocation of stalled sites, off-plan releases for discounted homes, minimum density standards and permitted development rights to demolish commercial properties and replace them with new homes.

The notion of taking allocated sites out of local plans where "there is no prospect" of a planning application being made has raised the most eyebrows. Commentators warned that this "use it or lose it" approach could undermine faith in the development plan system and lead to a welter of litigation over the meaning of "no prospect", without doing anything to boost delivery. Matthew Spry, senior director at consultancy Lichfields, said it would be an "unnecessary measure aimed at an illusory problem". Where sites are not coming forward, he said, it is generally because of practical barriers to implementation that the parties should be aiming to resolve together.

David Rolinson, chairman of consultants Spawforth, pointed out that deallocation would require time-consuming local plan reviews. "Allocated sites should be available, achievable and suitable in the first place, so there seems no merit in this proposal. Landowners will simply apply for planning permission to safeguard the allocation," he warned. Claire Dutch, head of planning at lawyers Hogan Lovell speculated that owners may not even need to go that far. "Would correspondence from a potential developer confirming an intention to submit an application be enough?" she wondered. "Proving that there is no prospect of an application for the allocated use would be difficult, so it may be hard for a council to tip the statutory balance in favour of granting consent for an alternative non-allocated use, especially when the need for housing is a material consideration," she added.

"Surely if land is suitable for housing in an area of housing need, there are better options for action against a recalcitrant landowner than deallocation, such as compulsory purchase," said Simon Ricketts, a partner at law firm Town Legal. Planning Officers Society chairman Mike Kiely commented: "Any site allocated in a plan has been through a certain amount of scrutiny as to whether it is deliverable, so what’s the benefit of removing it from the plan? We should have better and clearer powers for councils to intervene in that situation."

Consultation is also promised on a "new policy" whereby councils would be expected to grant housing permissions for unallocated sites on condition that a "high proportion" are offered for discounted sale to firsttime buyers or for affordable rent. Bidwells planning partner David Bainbridge said the suggestion, if implemented, cuts to the heart of the plan-led system. "It could become a material consideration of considerable weight, or it could be seen as just an extension of the existing affordable housing exceptions policy. I suspect it would lead to little change in delivery of new homes. It’s a weak substitute for the Starter Homes initiative," he said.

But Ricketts said that reopening the policy encouragement previously envisaged for Starter Homes is "potentially very significant". Hogan Lovell senior professional support lawyer Kathryn Hampton said the move would "actively encourage" speculative housing proposals. "Rather than being a replacement of the Starter Homes requirement, it looks like an additional measure," she said. Simon Neate, a director at consultants Indigo Planning, said the government would have to make clear which planning constraints would be outweighed by the policy and what constitutes "a high proportion" of discounted homes.

The government will also be canvassing views on introducing minimum densities for housing development in city centres and around transport hubs. "It could be back to the future for minimum densities, which the government removed with much fanfare in 2010. Previous experience suggests setting minimum density standards is a blunt tool," said Spry.

Neate said minimum density could have a "positive impact" on housing delivery where the infrastructure and built environment can support it, but warned against hard-and-fast rules: "There will often be good reason for departing from standard minima." Bainbridge voiced concern over a return to the old days of Planning Policy Statement 3, saying this led to some higher-density housing that was not always respectful of the local context. "Density guidance should be left to local planning authorities, who know their areas," he said.

Finally, the Budget has revived the prospect, first floated by former planning minister Branfdon Lewis two years ago, of new permitted development rights to demolish office buildings and replace them with new homes. This time round, the government is to consult on such rights for "commercial" buildings – a potentially wider definition. "I assumed the original proposal had been abandoned because of the obvious problems in defining the range of issues that would require prior approval," said Ricketts. "It will be vital to see the precise parameters, but this will be of great interest to developers and to commercial property owners, as it could have an immediate effect on value."

Stephen Morgan-Hyland, a planning director at Lichfields’ Manchester office, said there is "significant potential" for underused commercial properties to make a contribution towards housing supply through demolition and rebuild. "Continuing changes in the demand for and the way in which commercial space is used means that there will almost certainly be an ongoing supply of sites for which the most logical future is for residential use," he said.

Kiely argued that office space is still the most likely candidate for demolition and rebuild. "Industrial conversion hasn’t taken off because it’s the wrong sort of space, although office conversion is also a sub-optimal solution. There are loads of difficulties with converting or rebuilding big buildings in congested town centre locations," he said.

Kiely suggested that it would make more sense to pursue housing rebuilds on commercial sites through the planning permission in principle route, allowing site-specific issues to be considered through the technical details consent procedure. "Prior notification would only allow for a limited list of considerations, which runs the risk of omitting matters that could be disastrous on complex sites," he argued.

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