New approach to viability will 'suppress land market', planning lawyer tells conference

The government's latest changes to its viability assessment guidance will have the effect of 'suppressing the land market', the Planning for Housing conference was told yesterday.

Ian Gilbey speaking at the Planning for Housing conference yesterday
Ian Gilbey speaking at the Planning for Housing conference yesterday

Ian Gilbey, partner and head of planning and environment at law firm Pinsent Masons, told the conference that the approach in the latest rewrite of Planning Practice Guidance of establishing existing use value plus a developer’s premium as the starting point for viability assessments would lead to "short term pain for long term gain".

Gilbey said the new rules were ushering in "a period of uncertainty", but it was likely that the new approach would "be likely to embolden local authorities to refuse to grant planning permission where a developer or landowner is relying only on market data" to establish a site's benchmark land value for the purpose of a viability assessment.

The new approach would "drive a more transparent approach", Gilbey said. But he also said it would "have the effect of suppressing the land market, suppressing the release of sites and slowing the amount of housing and affordable housing which is delivered".

"So it will be short term pain for long term gain", he said.

Harriet Fisher, developer contributions team leader at the Ministry of Housing, Communities and Local Government, said the new guidance would give local authorities more confidence to challenge applications where developers are not complying with planning policy requirements.

"Particularly if the developer was invited to engage at the plan-making stage and they said the site was deliverable, then it gets to the planning applications stage and they do a u-turn on that, the local authority needs to be able to hold them to account," she said.

Fisher said the new approach was based on "an expectation that the industry will engage in the plan-making process", and that it would only work if developers "engage in the setting of those policy requirements".

She added that the ministry would produce an outcome from the recent consultation on the future of developer contributions "in due course".

Speaking at the same session, Tony Mulhall, associate director of the Royal Institution of Chartered Surveyors, said recent case law suggested that policy requirements should be "reflected" in viabilty assessments, rather than "slavishly adhered to".

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