Why the pandemic may make it harder for councils to defend their housing land supply positions

The impact of the Covid-19 pandemic on housing delivery and viability is likely to make it more difficult for local authorities to demonstrate that their five-year land supply is robust, consultants and councils suggest.

Development sites: pandemic has stalled construction (Pic: Getty)
Development sites: pandemic has stalled construction (Pic: Getty)

The Covid-19 pandemic has affected just about every corner of British life and debates about local authority's housing land supplies are no exception. Last month, planning inspector Christina Downes dismissed an appeal by land promoter Welbeck Strategic Land against Wokingham Council's refusal of its plans for 118 homes in the countryside at Finchampstead in Berkshire. What makes it significant is that it is thought to be the first time the impact of the Covid-19 lockdown on land supply has been addressed in an appeal decision.

After the public inquiry concluded earlier this year, Downes asked the parties involved about the impact that the coronavirus crisis would have on delivery of Wokingham's five-year housing pipeline. Like all local planning authorities, the Berkshire unitary is obliged under the National Planning Policy Framework (NPPF) to demonstrate that it has sufficient "deliverable" sites to accommodate its housing needs for five years. This must be backed up, the NPPF says, with clear evidence of the "realistic prospect" that housing will be delivered on the land in question within five years. Councils unable to prove they have a five-year pipeline of deliverable sites will open them up to a challenge by applicants on the grounds that their local housing policies are out of date, triggering the NPPF's presumption in favour of sustainable development or 'tilted balance'.

Based on the evidence submitted, Downes wrote in her appeal report that it did "not seem unreasonable" that the appellant had argued the effects of the pandemic on local housing construction rates would last for three to six months. On this basis she said, 168 homes should be removed from the authority's land supply. Even after shaving off these units, Downes judged that Wokingham was still able to demonstrate that it had enough sites to meet 5.2 years of its housing requirement.

While the recalculation did not sway the outcome of this particular decision, experts said it points to a potential reduction in local authorities' housing land supply positions in order to take into account of the pandemic's likely impact on site deliverability. Alex Roberts, director in the strategic planning research unit at consultancy DLP Planning, said the recent recommencement of construction work by many volume housebuilders would help remedy the immediate hit to deliverability identified in Downes' report.

The bigger problem though for councils' land supply positions, pracitioners said, is the wider ramifications of the gathering economic downturn on housing delivery. "This will impact on the economy generally and people's propensity to purchase new homes," according to Jonathan Dixon, planning director at consultancy Savills.

An analysis of the impact of Covid-19 on housing land supply, carried out by planning consultancy Lichfields, highlights the immediate impact on delivery of housebuilders running out of funds as well as the risk of a housing market downturn unwinding the viability of some existing permissions and allocations.

"Developers will be examining individual sites and individual permissions to assess whether they can still be delivered or whether it is worthwhile pursuing," said Dixon. Any house price falls will raise questions over whether sites in the five year pipeline, remain viable in post-Covid market conditions, said Roberts, even those with detailed planning permission. Previously, local authorities would be "pretty confident" that such sites could be defended, but a lot of them "have now come into question," he added.

Nicky Linihan, housing lead for local authority body the Planning Officers Society, agreed that councils will find it harder to prove that their existing five-year pipeline is deliverable given changed circumstances. "When applying the approach to deliverability as set out in the 2019 NPPF within the context of the Covid-19 crisis and the effect this is likely to have on delivery rates, as indicated in the inspector's decision letter, it is going to be harder for some local planning authorities to be able demonstrate that they have a five-year housing land supply."

Linihan argued that it would be unfair to penalise councils for a lack of delivery due to factors outside of their control. "If the current crisis is slowing down the trajectory of delivery, it's not the local authorities' or local community's fault," she said. "It is going to potentially open the door through the tilted balance for sites to come through outside of the plan making system and that's not in anybody's interest including the development industry."

There are signs that some councils are already raising concerns about this issue with ministers. Last last month, South Oxfordshire Council wrote to the housing secretary Robert Jenrick asking for "flexibility" in meeting the five year housing land supply requirement during the pandemic. The letter said: "Many builders in this area have stopped or adjusted work on the larger housing sites so it will be more difficult to keep up with the currently required level of delivery to achieve a five year land supply against our submitted local plan."

"Every local planning authority and inspector considering a housing proposal in which supply is an issue will have to consider the effects of Covid-19," said Chris Young QC, a planning barrister at No 5 Chambers, who acted on behalf of Welbeck in the Wokingham case. "Any local authority which wants to be confident in its five-year supply should be undertaking a comprehensive interrogation of its pipeline," said Dixon.

This will particularly the case for those councils facing significant housing appeals, said Nick Paterson-Neild, a partner in consultancy Barton Willmore's Reading office. And it will involve local planning authorities contacting developers to find out the impact of the gathering downturn on their sites, he suggested. The pinch will be felt most acutely by councils at the margin of their five-year supply and those authorities reliant on a small number of large sites as opposed to a more diverse pipeline, said Matthew Spry, a senior director at Lichfields.

Commentators agreed that developers are now likely to have more leverage when seeking to prove that councils lack a five-year supply. However, applicants will have to do more than simply flourish the Covid card to prove that a pipeline is out of date, said Roberts, adding that they will have demonstrate whether the sites contained are actually on track for delivery or not.

Spry said councils will be able to assess the impact of the current crisis on the deliverability of sites as part of the regular updating of assessments that they carry out. But the restrictions on movement, which have been in place over the last month and a half, have made monitoring difficult to conduct, he acknowledged. "A lot of monitoring involves getting in the car and counting chimney pots," he said.

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