Planning matters

Our award winning blog gives a fresh perspective on the latest trends in planning and development.

The new London Plan: policy preview

The new London Plan: policy preview

Giorgio Wetzl 13 Sep 2017
This has been quite a busy summer for London Mayor Sadiq Khan; while many of us were (rightly) enjoying some time off work, the Greater London Authority and the Mayor released a plethora of documents which will play important roles in shaping London’s future. Furthermore, these publications provide a very clear policy preview of the new London Plan due to be published in November. In the last few months, the Mayor has published (in draft) his statutory Transport (TS), Health Inequality (HIS), Environment (ES), and Housing Strategies (HS) [1]. He’s also issued the final version of his Affordable Housing and Viability Supplementary Planning Guidance (SPG) [2], his vision for a night-time economy [3], and a tourism vision for London (through London & Partners) [4]. The Mayor has also announced investment and funding allocations to increase the delivery of affordable housing in the capital [5], as well as releasing the preliminary draft charging schedule for the Mayoral Community Infrastructure Levy to fund Crossrail 2 (the so-called ‘MCIL2’) [6]. Finally, he released commissioned reports on the impact of overseas buyers on London’s housing market [7], London’s industrial land demand [8], and an office policy review [9]. For those with a little experience and knowledge of London planning matters, this deluge of material comes as no surprise, as the most important strategic document for the city’s development, the new London Plan, is set for publication in draft by the end of the year. As speculation on its content grows, it is possible to preview the draft document’s policies, as many references are made to them, and heavy hints have been spread across all of this summer’s publications.   New Plan, brand new proposals The Mayor has provided us with some very clear insights on brand new policy that he is considering incorporating in the draft London Plan. First, the Mayor aims to embed his ‘new approach to securing affordable homes through the planning system within the draft London Plan’ (Policy 4.2A HS), meaning that the 2017 Affordable Housing and Viability SPG’s 35% threshold approach will become development plan policy and, therefore, have strengthened status (see Lichfields blog for details). Other parts of the SPG will also be incorporated in the new draft London Plan, including: London Living Rent (‘the Mayor’s draft London Plan will support councils, housing associations, and other developers in the delivery of homes let permanently at London Living Rent levels’ – Para 4.23 HS; see Lichfields insight for details); and support for Build to Rent (‘to encourage the development of the sector, the Mayor will embed the BtR pathway approach in his draft London Plan’ – Para 3.75 HS) Second, the Mayor is also minded to ‘give a clear presumption in favour of appropriate residential development on small sites, including specific borough level targets for this type of development’ (Para 3.21 HS); as part of this, the Mayor will include details referring to ‘working with councils to promote the use of Permission in Principle on small sites’ (Para 3.83 HS). This is an interesting policy proposition, and it could potentially lead to an increased contribution to housing delivery from smaller developers and housebuilders. However, the potential for implementation success lies also with the London Boroughs, as all of the stakeholders need to be convinced that Permission in Principle actually does offer effective advantages when compared to other existing planning routes, particularly outline permission (see Lichfields blog for details on Permission in Principle). The draft Environment Strategy also offers some interesting previews of the content of the new London Plan, including the intention to introduce ‘the Agent of Change principle […] through the new London Plan and puts the noise mitigation requirement onto the person or business responsible for making the change rather than penalising existing businesses’ (Policy 9.2.2a – box 35 ES). Other planning-related proposals will be considered for inclusion in the new Plan, such as ‘a requirement to consider the overall suitability of a site (and its design layout) for the proposed end use in terms of exposure to pollution’ (Proposal 4.1.1c ES). Other notable new environmental policies include: ‘all new large-scale developments in London are ‘Air Quality Positive’ and maintain Air Quality Neutral requirements for all other developments’ (Proposal 4.3.3a ES) and ‘fracking is prevented in London’ (Proposal 6.2.2d ES). On the latter, I am not sure that this is a necessary policy – surely there is no real appetite for shale gas development, given its character and the high cost of land in the capital – but it would be a clear political symbol, if nothing else.   New Plan, slightly amended (but still old) policies The Mayor has provided additional details on how he will change some of the policies/ requirements/ standards in the current Plan (published in March 2016) [10]. Among these, the Housing Strategy states his intention to ‘fully revise and update the list of London’s Opportunity Areas’ in the new draft London Plan to maximise the number of new homes that largest housing-led regeneration initiatives could deliver’ (Para 3.16). Also in the Housing Strategy is a reference to the inclusion of a specific policy which will clarify that ‘affordable homes demolished as part of estate regeneration projects should be replaced on a like for like basis’ [the same will apply to homes sold under the Right to Buy] and adds, ‘this means that homes for social rent must be replaced with homes at similar levels’ (Policy 4.3D). This represents a subtle but important change when compared to the current London Plan’s reference to estate renewal and the need to provide ‘at least an equivalent floorspace of affordable housing’, when redevelopment of affordable housing is proposed. Other policy tweaks are to include: ‘more ambitious requirements for sustainable drainage in relation to new development’ (Proposal 8.2.3a ES); the strengthening of ‘the consideration of the impact of planning on health and health inequalities’ (Objective 3.2 HIS); and the possible development of ‘new parking standards […] to ensure car-lite development’, with the aim of restricting ‘car parking provision within new development, with those locations more accessible to public transport expected to be car free’ (Proposal 76 and related guiding principles TS). These expanded requirements, in addition to the new affordable housing contributions (35% threshold) and the revised MCIL2 that the Mayor is currently implementing, will potentially lead to an increased burden overall for developers and housebuilders.   New plan, old policies The latest version of the current London Plan is a stunningly long, 441-page document. From what we know so far, it is already seeming inevitable that the new London Plan will incorporate many of the proposals and policies already included in the 2016 edition – not surprising, given its strategic nature. This is the case for many of the ‘new London Plan’ references included in the different draft mayoral strategies; the policies and proposals are not new. For example, although not providing any detail, the Transport Strategy refers to the need for ‘protecting industrial land through the London Plan’ (Proposal 15b). The same draft Strategy also mentions that although the new London Plan is still in preparation, this is likely to show that ‘the city’s growth potential is concentrated in the Central Activities Zone (CAZ), within its town centres and Opportunity Areas; there will also be growth potential from the managed intensification of suburban areas’ (Chapter 5b). None of the above is at all surprising; the same goes for the reference in the ES to the protection of ‘Green Belt, Metropolitan Open Land and publicly accessible green space’ (Proposal 5.1.1), and the introduction of ‘a zero carbon standard for non-residential buildings in the London Plan from 2019’ (Proposal 6.1.4a), as both of these strategic goals are in the current Plan. In the same way, throughout the Housing Strategy there are references to the ‘Mayor’s housing targets for councils’ (Policy 3.1A), which will be based on a revised Strategic Housing Land Availability Assessment (SHLAA) – the same process as now. Probably a bit more surprising, particularly given the many calls for additional flexibility and potentially revision, is the intention to maintain ‘existing space standards’ and to ‘ensure that any further national reviews of standards take into account London’s circumstances’ (HS, Para 5.14).   First comes planning (the strategy), then comes implementation The above preview is a (not so) brief overview of the policies and proposals the Mayor has decided on, or is considering for inclusion in his new London Plan that will be launched for consultation later this year. The spatial development strategy will be part of the capital’s development plan and set the scene for London’s future development over the next 20-25 years, therefore all of its content needs to be carefully planned and considered throughout. Quite naturally there are high expectations; many stakeholders wish to see certain policy wording or particular proposal which could boost/ improve their sector. Personally, there are three features I would like to see incorporated in the new London Plan. First, a clear focus on the implementation strategy for its policies and proposals, possibly mirroring the Affordable Housing and Viability SPG model; strategic goals are important, but how those objectives will be delivered, and how they will produce effective changes, are both crucial for success; Secondly, improved readability of the document, to make it accessible to as many Londoners as possible and to effectively open up the debate about future development strategies for the city; and Thirdly, consideration to uses/functions other than housing given throughout. Housing, particularly affordable tenures, is clearly the number one priority in London at the moment and, accordingly, should be given the necessary consideration; however, this should not lead to overlooking the importance of other land uses (such as employment – including industry and affordable workspaces - and town centre uses), in guaranteeing London’s future success. An ambitious strategy is a good starting point, but making it work is what really matters in the end.    Footnotes [1] Transport Strategy - https://consultations.tfl.gov.uk/policy/mayors-transport-strategy/user_uploads/mts_main.pdf // Health Inequality Strategy - https://www.london.gov.uk/sites/default/files/draft_health_inequalities_strategy_2017.pdf // Environment Strategy - https://www.london.gov.uk/sites/default/files/les_full_version.pdf // Housing Strategy - https://www.london.gov.uk/sites/default/files/london_draft_housing_strategy.pdf[2] Affordable Housing and Viability Supplementary Planning Guidance 2017 - https://www.london.gov.uk/sites/default/files/ah_viability_spg_20170816.pdf[3] A vision for London as a 24-hour City - https://www.london.gov.uk/sites/default/files/24_hour_london_vision.pdf[4] A Tourism vision for London - http://files.londonandpartners.com/l-and-p/assets/london_tourism_vision_aug_2017.pdf[5] ‘Mayor strikes deal for 50,000 new affordable homes’ - https://www.london.gov.uk/press-releases/mayoral/record-17bn-deal-for-new-homes // ‘Mayor invests in more than 1,000 “Pocket homes” for first-time buyers’ - https://www.london.gov.uk/press-releases/mayoral/sadiq-invests-25m-in-pocket-homes[6] MCIL2 Preliminary Draft Charging Schedule - https://www.london.gov.uk/sites/default/files/mcil2_pdcs.pdf[7] The role of overseas investors in the London new-build residential Market, LSE London - https://www.london.gov.uk/moderngovmb/documents/s58640/08b2b%20LSE%20Overseas%20Investment%20report.pdf // Overseas Investors in London’s New Build Housing Market, University of York and Centre for Housing Policy - https://www.london.gov.uk/moderngovmb/documents/s58641/08b2c%20University%20of%20York%20data%20report.pdf[8] London Industrial Land Demand Study 2017 - https://www.london.gov.uk/sites/default/files/ilds_final_report_june_2017.pdf[9] London Office Policy Review 2017 - https://www.london.gov.uk/sites/default/files/london_office_policy_review_2017_final_17_06_07.pdf[10] London Plan, March 2016 - https://www.london.gov.uk/sites/default/files/the_london_plan_2016_jan_2017_fix.pdf

CONTINUE READING

Are we finally starting with starter homes? Lichfields’ essential guide
Around this time last year, starter homes were the ‘hot topic’ in planning and housing environments, as the Conservative Government of David Cameron was fully committed to delivering its Manifesto pledge to build 200,000 starter homes by 2020. The Parliamentary debate was so heated that it almost sparked a constitutional crisis between the two Houses, with the Lords lamenting the lack of detailed provisions in the-then Housing and Planning Bill and the Government complaining about the inferences of peers over a clear electoral commitment; by way of reminder, there were six ping-pong stage debates between the two Houses, and starter homes (together with the Right to Buy extension) were the most contentious matter. Since then, there have been many changes; without detailing many of them, two seem particularly relevant to starter homes: the new DCLG Secretary Sajid Javid (together with his Housing and Planning Minister Gavin Barwell) and the publication of the Housing White Paper. In this blog we try to understand whether the Theresa May’s Government has provided some answers to the questions and uncertainties that we highlighted in our essential guide to starter homes around a year ago, when the Housing and Planning Bill was enacted.   What’s new? The answer is simple: the Housing White Paper. The holistic policy document published by DCLG in February 2017 touches on wide-ranging topics to try to find effective ways to increase housing supply; starter homes are also featured, after having been almost completely ‘off the radar’ since the Housing and Planning Bill’s enactment. The White Paper (finally) provides some additional details and more certainty around starter homes and their related complexities, referring in particular to: the introduction of a household income cap of £80,000 (or £90,000 in London); the requirement for buyers to have a mortgage in place (covering at least 25% of the total cost); the length of the repayment period (i.e. the tapered approach): 15 years; the commitment to commence the general duty of councils to promote the supply of starter homes (section 4 of the Housing and Planning Act 2016); and the decision to not introduce a mandatory starter homes requirement for certain developments, and the intention to clarify a policy expectation that housing sites deliver a minimum of 10% affordable home ownership units. The length of the repayment period and the decision not to introduce a mandatory starter homes requirement address some (but not all) of the uncertainties around starter homes - particularly those that were of concern to lenders and local authorities. Furthermore, the decision to introduce a household income cap and the mortgage requirement seems a sensible move to guarantee that these starter homes effectively benefit those who need them the most, and to discourage those ‘who would simply wish to sell on quickly to secure financial uplift’.   Old (but still valid) uncertainties Among all the uncertainties we previously highlighted, probably only one (although multi-faceted) remains, relating to discount repayment and market price estimates. Specifically, the three key questions that are still unanswered are: How will the 20% discount on market price be assessed and, particularly, how will market prices be calculated for different areas within the same local authority or ward, for example? How will the discount repayment be calculated in relation to the tapered approach, when a starter home is sold within the first 15 years (as house prices are not fixed over time): would the repayment be based on the initial market price or on the market value at the time of selling? Who would the ‘specified persons’ be, to receive the starter homes discount repayment (as detailed in s3(1)(a) of the Act), as this ‘may be the Secretary of State, a local planning authority in England or any other person’? These might seem to be just technicalities, but the answers to these questions are likely to affect the future of what seems an already-watered down starter homes regime.   New uncertainties At this point, and having seen the removal of the mandatory starter homes requirement, the elephant in the room relates to how likely it is that starter homes are to become an effective part of affordable housing mixes. Starter homes potentially have intrinsic complexities for developers, such as in drawing a distinction between starter and market homes within their own schemes, or in relation to territorial discrepancies (particularly around Greater London’s outer boundary); plus, they are a new product that has not been piloted or properly tested - thus they could be more risky and in reality, too uncertain to implement. As a consequence, developers might prefer to stick with more familiar, tried and tested affordable housing tenures, such as shared ownership or affordable rent instead. The Government seems aware of this risk and, accordingly, has pushed forward some of the more ‘light-touch’ measures consulted on in relation to starter homes and, in particular, brownfield land developments, to try fostering the delivery of starter homes (and not reneging on the Manifesto commitment?). Specifically, the White Paper confirms the intention to amend a change to the NPPF to allow ‘more brownfield land to be released for developments with a higher proportion of starter homes’; this will be achieved through: Allowing any ‘starter home-led development’ proposal on employment land sites that have been vacant, unused or unviable for a period of five years (and that are not strategic employment sites) to be considered ‘favourably’; Expanding the starter homes exception site policy to include additional forms of underused brownfield land, such as leisure centres and retail uses; and Allowing development on brownfield land within the Green Belt, if this ‘contributes to the delivery of starter homes and there is no substantial harm to the openness of the Green Belt’. It is yet to be understood whether any of the above measures will be an effective means of delivering starter homes, and additional details will be crucial in understanding their potential impacts; by way of example, what will be considered as a ‘higher proportion of starter homes’?   What’s next? Four steps are yet to come: HPA-related Regulations, new Planning Practice Guidance and the Government’s response to the White Paper consultation. A Commencement Order is needed to bring into force the general duty on councils to promote the supply of starter homes (s4 of the HPA) and the other relevant starter homes-related sections (ss1-8 HPA). Regulations are needed ‘to finalise the starter homes definition and monitoring provisions’. Regulations will be also required for clarifying the detailed operation of the restricted period (i.e. the tapered approach), and incorporating the details of the mortgage requirement. Planning Practice Guidance will be required to detail the operations of the council duty to promote starter homes and (probably) to highlight the way house prices and repayments should be assessed. The Government’s response to the White Paper consultation will hopefully clarify whether the proposed requirement for a ‘minimum of 10% of all homes on individual sites [to be] affordable home ownership products’ will be included in national planning policy. In terms of timeframe, a letter written by Lord Bourne of Aberystwyth (DCLG Under-Secretary) this January states that the two starter homes-related Statutory Instruments planned at the time were ‘expected to come into force in Summer 2017’. However, it’s worth noting that the letter preceded the White Paper’s publication and stated that the Statutory Instruments were expected to deal with ‘[…] the starter homes requirement on suitable, reasonably sized sites […]’; this might mean that the changes that occurred in the month between the letter and White Paper’s publication could imply a different (i.e. possibly delayed) timescale. Finally, the Housing White Paper subtly updates the 200,000 starter homes target (stated both in the Conservative Election Manifesto and by David Cameron’s Government); the expectation is now ‘to help over 200,000 people become homeowners by the end of the Parliament’*. As explained in the following paragraph, this takes into consideration other affordable home ownership tenures ‘like shared ownership’ and homeownership support programmes such as Help to Buy and Right to Buy. What a difference a year makes for starter homes! * This may now be impossible given the call for a General Election…  

CONTINUE READING