In a day for burying Government announcements, Communities Secretary James Brokenshire revealed the new ‘National Planning Policy Framework’ (NPPF2) on 24th July, providing good news for build-to-rent developers and bad news for councils dragging their feet. Read Chelgate’s analysis of the key announcements below:
On a swelteringly hot final day before summer Parliamentary recess, housing and planning professionals across the country sat with ‘bated’ breath and awaited the various MHCLG announcements they had been promised.
The Social Housing Green Paper, the revised National Planning Policy Framework (NPPF), and the Rough Sleeping Strategy were all pledged for publication ahead of the summer recess at various points over the last few months. While we will have to wait until September for the other two, Communities Secretary James Brokenshire finally published the long-awaited NPPF2 on the day before recess, before promptly sprinting out of the MHCLG door on his summer holidays.
But while NPPF2 could be seen as a rather underwhelming compilation of minor changes which have been seen before, it does introduce important new policy on areas including the housing delivery test, small sites, housing design, and build to rent:
Build to Rent
For the very first time, Build to Rent (BtR) has been officially recognised by the government as its own specific asset class. Furthering the Government’s drive towards a greater tenure mix, local authorities will need to reflect the demand for purpose-built rented homes alongside social rent and private ownership in their policies and local plans.
Significantly, changes in NPPF2 now allow Build to Rent developments to count towards the total affordable housing allocation for an area, meaning BtR sites can provide new affordable private rent homes for an area, and ease the pressure on registered housing associations to build homes.
The change should allow councils to plan more effectively for provision of affordable housing, and allows them to draw on the typically more high-quality rental homes that BtR provide to meet their housing obligations.
This will be come as some small consolation for councils left with an increasing deficit in their housing stock thanks to Right to Buy, as purpose built BtR developments can be used to provide “affordable private rent” while councils concentrate on replenishing their stock.
Housing Delivery test
One of the key new policies to enforce the Housing Need methodology, and ensure performance against local plans, is the Housing Delivery Test. From November 2018 councils will be assessed against the numbers of homes that are built in their area, rather than how many homes they planned for but have not yet delivered. To ensure councils can no longer agree local plans which set wildly unachievable housing figures, the test penalises councils under-delivering over a three-year period.
While the policy will help MHCLG crack down on non-compliant councils failing to meet their land supply targets, councils have seen it as allowing developers to run riot. An outraged Lord Porter, Chairman of the LGA, pointed out that the test “punishes communities for homes not built by private developers”, and that national targets could see agreed local plans bypassed. If developers build less than 75% of the council’s target OAN target for new homes over three years, they will now benefit from a “presumption in favour of sustainable development.
Councils have long argued the slow build-out rate of developers has held back their delivery while they approve “nine out of 10 applications”. Developers have repeatedly contested this assertion, and while MHCLG has not committed itself either way, the findings of the Letwin Review at Autumn Budget should finally force the Government to take a policy stance on the issue.
January 2019 local plan deadline
Councils have been told for the first time they have until 24 January 2019 to submit their local plans if they want to be examined against the previous NPPF, using the old housing need figures.
Plans submitted after 24 January – exactly six months from NPPF2’s publication – will be examined under the new rules and will be held to the new housing need assessment.
Showing he practices what he preaches, the Communities Secretary has also made guidance around good design significantly more robust, in a move which could help bring an end to the days of faceless cheap developments. Recognising its importance for creating places which people want to live in and enjoy, NPPF2 places the creation of high quality buildings as ‘fundamental’ to the planning process.
Warning about how the “quality of approved development [can] materially diminish between permission and completion”, the new guidance sets out how local authorities should work with developers to ensure changes are not made to areas like materials on permitted schemes. While the viability and cost of materials is a perennial issue post-approval, the new guidance could see councils cracking down on changes.
Adopted neighbourhood plans should “demonstrate clear local leadership in design quality, with the framework allowing groups seeking such plans to truly reflect the community’s expectations on how new development will visually contribute to their area”.
While the draft NPPF, and Oliver Letwin’s initial findings, have promoted small sites as one of the answer to England’s housing woes, the new NPPF moves away from this. Previously the document stated that “small sites can make an important contribution to meeting the housing requirement of an area, and are often built out relatively quickly”.
Under the revisions to the plan, councils must accommodate 10 per cent of their housing requirement on small sites, as opposed to 20 per cent of sites which they would have had to deliver under the draft version. While the development of small sites is clearly still part of the solution for MHCLG, this move, and the reinstatement of the previously dropped Garden City principles, could signal a move back to larger strategic sites to deliver new homes.
Daniel Fryd, Senior Consultant