New National Planning Policy Framework places emphasis on housing delivery

The UK Government published a draft new National Planning Policy Framework (NPPF) for consultation in early March 2018 which builds on themes set out in the housing White Paper “Fixing our broken housing market”. The NPPF sets out national planning policies as guidance for local planning authorities and decision-takers, both in drawing up development plans and in respect of decision making about planning applications. Draft updates to national Planning Practice Guidance were also published at the same time.

The revisions to the existing NPPF as set out in the draft new NPPF are comprehensive. This article focusses on those amendments specific to the provision of housing.

Housing delivery

The draft new NPPF sets out that a standard methodology will be used for assessing housing need utilising the UK Government’s household forecasts adjusted for local house prices and local earnings. Any calculation will also have to take into account needs which cannot be met within neighbouring local authority areas. This will be relevant to developers who may seek to justify an application for development of unallocated land.

A new focus has also been put on identifying small sites to make up 20% of overall land supply for housing. A small site is one which is half a hectare or less. Commentators have noted that this is a high percentage of small sites and may be difficult to deliver and more costly on a proportionate basis for developers to build out in comparison to larger sites.

Local planning authorities are also encouraged to apply time limits for implementing planning permissions which are less than the current default period of three years, with the purpose of encouraging development to come forward sooner. The draft new NPPF proposes that two year time periods may be applied providing that this does not affect the viability or deliverability of a project. Shorter time periods may be particularly onerous for developers who will have only a short period of time to let construction contracts and appoint other contractors to deal with the discharge of conditions and site preparation prior to implementation. This may also limit the ability of a landowner seeking to add-value to their property by gaining planning permission, to secure a sale post-planning permission before a planning permission expires.

Sustainable development

Where the housing delivery test indicates that delivery of housing by a local planning authority has been substantially below the housing requirement over the previous three years or where the local planning authority cannot demonstrate a five year housing supply, the draft new NPPF states that the presumption in favour of sustainable development will apply.

From 2020 the presumption will apply where delivery is below 75% of the local planning authority’s housing requirement following the carrying out of a housing delivery test under the housing delivery measurement rule book which is also due to be published. This will determine whether a local planning authority which has provided less than 95% of its housing requirement over a three-year period must prepare an action plan to address the delivery shortage.

Affordable housing

Local planning authorities will be required to set strategic site allocation policies dealing with infrastructure requirements and minimum affordable housing levels which they consider to be viable on each site. This implies that the amount of affordable housing may vary from site to site rather than the flat policy requirements that apply across sites. As it will be the local planning authority’s responsibility to assess viability at the plan making stage, it will be important for developers and landowners to engage closely with this process to ensure that the affordable housing requirements set for strategic sites are indeed viable.

Affordable housing policies will not be applied to small sites of half a hectare or less or where 100% of the units on a site are provided as Build to Rent or other specialist accommodation including student accommodation.

Developments of ten dwellings or more are to have at least 10% affordable housing subject to a number of exceptions.

The definition of affordable housing has also be extended to include affordable rent at 20% below local market rents or in accordance with UK Government rent policy, Build to Rent schemes (which has formal national policy recognition for the first time), Start Homes, Discounted Market Housing, and other affordable housing routes provided for sale “that provides a route to ownership for those who could not achieve home ownership through the market”.

We note that in respect of Build to Rent, this forms part of the housing mix for which local planning authorities must plan. The draft new NPPF expects that tenancies should be offered for three years or more to provide long term stability to tenants.

The draft new NPPF also provides scope for development of affordable housing in the Green Belt where there is no substantial harm to openness. However there is a general emphasis in the draft new NPPF that development should be on brownfield land and that measures such as brownfield registers should be used to enable this.

Viability

If a development proposal meets the policy criteria for affordable housing which have been established at the plan-making stage to be viable, there will be no need for them to carry out further viability assessment at the planning application stage.

Despite this both the draft new NPPF and draft National Planning Practice Guidance set out that viability assessment may still be required at the planning application stage under certain circumstances for example where a developer proposes to develop a site which has not been allocated in a development plan.

Preparation of planning application

The terms of the draft new NPPF will be relevant to planning applications that are currently being worked up with a view to submission in the next few months, by which time the new NPPF is expected to have been published.

Comment

The draft new NPPF sets out a series of carrots and sticks to encourage the delivery of housing especially affordable housing and new housing types in the UK market such as Build-to-Rent. Some of these steps such as introducing viability assessments at the plan-making stage will place an additional burden on the resources of local planning authorities and developers and landowners will have to be even more closely engaged in the site allocation process to ensure that local planning authorities are fully informed as to the issues and costs relevant to individual sites.

The introduction of reference of Build to Rent in the draft new NPPF is encouraging as it is a recognition that this is a sector with housing which is subject to different viability issues due to the investment model that underpins it. A note of caution though is that the definition of Build to Rent is different to that in the draft London Plan which has recently been published for consultation, meaning that the policies need to be carefully considered in their entirety.