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Brownfield land registers and ‘permission in principle': Lichfields’ essential guide
UPDATE. 28 July 2017:  The Government has now published planning practice guidance regarding brownfield registers and permission in principle A new route to planning permission for housing-led development on some - but not all - previously developed sites What are the headlines of the Housing and Planning Act 2016’s new secondary legislation for brownfield land registers - and for ‘permission in principle’ for housing-led development on some register sites? New regulations mean that all local planning authorities (LPAs) must publish a brownfield land register (BLR) before the end of 2017.  Part 1 of the BLR will be for sites categorised as ‘previously developed land’ (as per the National Planning Policy Framework’s glossary definition), that also satisfy a long list of complex criteria relating to ‘suitability’ and ‘availability’ for new homes, and the ‘achievability’ of housing development – see further questions and answers below. And a new, separate Order means that sites entered in Part 2 of the same register will be granted ‘permission in principle’ (PIP) for the housing-led development described in each individual entry (see our previous blog for details of the legislative background).  These are the combined effects of the new secondary legislation that follows on from the Housing and Planning Act 2016’s ss150 and 151) - the Town and Country Planning (Brownfield Land Register) Regulations 2017 (BLR Order) and the Town and Country Planning (Permission in Principle) Order 2017 (PIP Order). Both have been made and laid, and come into force in mid-April (on 16 and 15 April respectively).  Once a Part 2 site has PIP, and ‘technical details consent’ (TDC) has subsequently been applied for and granted, the site has an implementable planning permission (again, see our previous blog). How can sites be included in brownfield land registers? Previously developed land that also satisfies a long list of criteria must be included in Part 1 of a BLR; that land will also be listed in Part 2, if the LPA decides to ‘allocate it for residential development’, having followed a series of required procedures. Subject to some exemptions (see below), LPAs will have to include a previously developed site in their register’s Part 1, if it is: 1. 0.25 hectares or larger, or capable of supporting at least 5 dwellings;2. ‘Suitable’ – i.e. allocated in a development plan document (e.g. a local plan), benefiting from planning permission or PIP for residential development, or the LPA considers it suitable for residential development having considered any adverse impact on the natural environment, the local built environment (including heritage assets), local amenity and any ‘relevant’ representations (i.e. from third parties);3. ‘Achievable’ – i.e. based on publically available information and any relevant representations, the authority’s opinion that the site will come forward within 15 years; and4. Available – either all the owners of the site, or the developer in control of the land have expressed an intention to develop (or sell, in the case of an owner(s)*) the site within the 21 days before the entry date on the register, or the LPA considers that there are no ownership or other legal matters that might prevent residential development (again, based on publically available information and any relevant representations). The LPA may also choose to include sites smaller than 0.25 hectares and not capable of supporting dwellings.  Before Part 1 is published, LPAs may also chose to ‘carry out procedures (including consultation) as they see fit’, and if they do so, they must take into account representations received. Sites in Part 1 of the BLR ‘must’ then be included in Part 2, if the LPA has ‘decided to allocate the land for residential development’; no indication is given of any suggested decision-making procedure.  So, the actions of a developer or owner(s) can lead to inclusion of a site in Part 1 of the BLR, but not in Part 2 - and there is no mention of any mechanism, or right of appeal that could ‘force’ an LPA to consider the merits of including a site in Part 2, and thus grant it PIP. What must each BLR site entry include? The full details of what must be included in each entry in Parts 1 and 2 are set out in Schedule 2 of the BLR Order. Amongst the information that must be included on each entry in the register is the scale of any non-housing development.  It is not clear whether it is intended that the amount of floorspace has to be stated, or whether the ‘scale’ of development would have to be as defined in the Town and Country Planning (Development Management Procedure) (England) Order 2015 (DMPO) for the purpose of a reserved matters application (i.e. ‘the height, width and length of each building proposed within the development in relation to its surroundings’).  If it were to be the latter, this seems to be at odds with the intention of PIP, for it to be a simple ‘red line’ decision.  What are the procedures that must be followed before land may be entered in Part 2 of the BLR? Before entering a site in Part 2 of a BLR, the LPA must: 1. Display a site notice for at least 21 days;2. Display specified information on their website (the details of which are set out in Art 6(4) of the BLR Order);3. Take into account representations received, having served notice or publicised the intention to include land in Part 2;4. Undertake specific notification/consultation requirements for sites within 10m of railway land, or where the LPA considers that residential development would constitute development that requires consultation with the county planning authority, the Mayor of London or other parties (as identified in the table in Schedule 4 to the DMPO); and  5. Serve notice on a neighbourhood forum or parish council, where they have previously requested to be notified. Is there any previously developed land that cannot be granted PIP in a BLR? Yes. Where the residential development of land might be likely to have significant effects on the environment under Schedule 1 environmental impact assessment (EIA) development, that land cannot be included in Part 2 of the BLR.  However, we would question whether this situation would arise given the non-residential categories of development that constitute Schedule 1 EIA development. Land that might be Schedule 2 EIA development if developed for housing cannot be entered in Part 2 unless the LPA has the information required to support a screening opinion and has specified the maximum number of dwellings that the land can support, and this information - together with any other relevant information - is sufficient for the LPA to adopt a screening opinion that concludes that the potential residential development will not be EIA development. Similarly, the LPA may include land where the maximum net number of dwellings might be considered ‘habitats development’, if it has specified the maximum number of dwellings that the land can support and is satisfied that development limited to that size would not have an effect on a European site (as defined in the BLR Order). At what point is PIP granted? PIP is granted when the BLR takes effect and otherwise, when it is revised to include the land in question (see s59A(4) of the Town and Country Planning Act (TCPA) 1990). The 73 councils that have piloted brownfield registers are likely to be quicker off the mark in publishing the now-required versions, as they will only need to check if the sites in their beta registers meet all of the legal requirements, decide whether additional sites should be added, and carry out the necessary procedures before formally publishing their BLR. Can PIP be granted for the conversion of buildings to housing-led development? Yes; PIP development includes material changes of use. What happens once PIP is granted? Following PIP, the developer or landowner(s) has five years (or a different time period determined by the LPA)  to seek TDC, the approval of which will mean that the site has full planning permission. The legal procedure for TDC is set out in s70 (2ZZA-2ZZC) of the Town and Country Planning Act 1990. National planning practice guidance (PPG) is likely to be updated to provide more details on process, most probably with guidance not dissimilar to that set out early last year in DCLG’s ‘Technical consultation on implementation of planning changes’, outlining the nature and scope of TDC applications (see our previous blog once again, for a summary). How long will sites stay on BLRs? LPAs are required to review their BLRs every year, and where sites no longer meet the required criteria they must be removed.  But the dwelling range for each site, and the scale of development, cannot be altered as part of the annual review. It is not clear whether a site must be removed from Part 2 for a short period after its PIP expires and then added back in, in order to trigger a further PIP. Given that a site must be capable of development within 15 years to be considered available, one can conclude that there will be a mechanism to ‘repeat’ a BLR PIP after one for the same site has expired. Has all the legislation necessary for this type of PIP to lead to a planning permission been made/ laid, ready to come into force in mid-April – and is there any guidance yet?   No, not yet: yes for a BLR PIP, but not for TDC. For example, there has not been any amendment to the fee regulations as yet. It is very likely that PPG updates will be published by/ in mid-April (which LPAs would have to ‘have regard’ to, according to 59A (12) TCPA 1990). This guidance will, we hope, be particularly helpful in providing examples of exactly what the ‘publically available information’ is, that will inform: whether or not a site is suitable, available and achievable in providing new homes; indicate how impact on heritage assets is to be considered in the absence of a detailed design; and how the development plan might influence the time limit of PIP. Subject to the yet-to-be-published Government response to consultation responses received on PIP and TDC in last year’s ‘Technical Changes’, we expect the PPG changes to largely reflect the Government's intentions set out at the time. Will BLR PIP become commonplace? We don’t know yet. LPAs are required to include certain sites in Part 1 of a BLR, but they can then decide whether or not to grant PIP for those sites. Most LPAs will have a strategic housing land availability assessment (SHLAA) that they can use, or update and then use, to meet the statutory duty and timetable for Part 1 of the register. There is however then no statutory requirement to consider whether or not to ‘move’ a site to the register’s Part 2. In the absence of an application fee, we would suggest that LPAs are unlikely to want to/ be able to resource such decisions unless either relating to  council-owned land, or to sites benefitting from external funding (e.g. the Starter Homes Land Fund). Thus even where owners and developers provide the necessary information to promote a site's ‘move’ to Part 2, there is no mechanism to ‘force’ the LPA to grant PIP via the BLR.  Pro-PIP LPAs might consider assessing potential Part 2/PIP sites as an appropriate way of using receipts from the July 2017 (loosely) ring-fenced increase in planning application fees, but where councils are currently struggling to meet performance criteria for the determination of planning applications, this is less likely. Some owners and developers might consider seeking judicial review (JR) of a decision not to move a site to Part 2 of the BLR, but where no assessment has taken place (i.e. a site has not been considered by the LPA for PIP at all), it is not easy to see where any statutory duty, i.e. the correct procedure, would not have been followed – this being a requirement of JR. Will BLRs, PIP and TDC boost housing land supply and the delivery of new homes? Overall, BLR PIP and the subsequent TDC could ultimately make a not insignificant contribution to the various ways of obtaining planning permission for both the principle and detail of new housing projects - of all sizes - on brownfield sites. But in a world of cash-strapped planning departments, while BLRs will have to be prepared and published within the next 9 months or so, the sites that are included in their Part 2s may be few and far between – at least in this initial round of registers. *Note that in the BLR Order, 'owner' only includes a party with at least a 15 years leasehold interest in the land, i.e. significantly longer than the 7 year period that requires a tenant to be notified of a planning application.

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From demand to supply: the rise of ‘build to rent’
With newspaper headlines on the plight of ‘generation rent’, the proliferation of TV adverts for landlord’s insurance and debate on the ‘housing crisis’, most will be aware that private renting is on the increase. Since 1991 the proportion of households privately renting has been steadily increasing and approximately 20% of English households now live in the private rental sector (PRS), up from 9% in 1991. Despite significant and growing demand for housing in the PRS, most properties are still owned by part-time landlords and the sector is overwhelmingly made up of second-hand stock, with few new homes designed specifically for PRS tenants. This is in contrast to many European countries and the USA, where a significant number of homes are built specifically for the needs of private renters, often at scale and in the single ownership of an institutional investor - much like many prime commercial properties in the UK.This is now beginning to change. In October 2015, British Property Federation (BPF) research found that over 21,000 dwellings (including 14,276 in London) specifically designed for private renters and aimed at the institutional investment market (or ‘build to rent’) had planning permission in the UK. By the February 2016 update of these figures planning permissions for build to rent had surged to over 30,000 dwellings, a 47% increase in just five months. Since the New Year, investment in the sector has continued apace with the likes of L&G and U + I announcing significant new investment and RBS allocating £1bn to fund ‘build to rent’ development. While permissions for ‘build to rent’ dwellings are small in comparison to ‘for sale’ housing, in the prevailing brownfield-first policy context they are important. Despite increasing housing starts in 2015, new housing supply is still lagging significantly behind housing need. With no immediate prospect of substantial Green Belt review, both Sadiq Khan and Zac Goldsmith as London mayoral candidates have recently affirmed their commitment to this political sacred cow, development on brownfield sites will need to intensify.‘Build to rent’ is well suited to this challenge. There is minimal overlap between would-be buyers and tenants and so such developments can be delivered alongside traditional ‘for sale’ housing without directly competing with it. The BPF research has also suggested that delivery rates for ‘build to rent’ could significantly exceed those of ‘for sale’ developments. Furthermore, the timescales for returns on PRS investments are much longer term than ‘for sale’ housing and this means investors retain a strong, long term interest in the local area. Such schemes therefore potentially can be a significant bonus and boost to regeneration and estate renewal projects, increasing the speed of delivery and ensuring that a powerful advocate for an area’s regeneration remains in place after homes are developed and the initial media attention ebbs away.Considering the above, it is no surprise that ‘build to rent’ has attracted political interest. Since Sir Adrian Montague’s Review of the barriers to institutional investment in private rented homes (2012), ‘build to rent’ has garnered increasing political support, including reference in the Mayor of London’s Housing Covenant (2013) and the establishment of the Government’s build to rent fund. This has also begun to translate into planning policy; the 2015 Further Alterations to the London Plan set out the requirement for Local Development Frameworks to provide “positive and practical support to sustain the contribution of the Private Rented Sector in addressing housing needs and increasing housing delivery”. The Mayor’s Housing SPG, published 15 March 2016, fleshes out what this support entails under the heading ‘Build to Rent’: Housing Mix: policies requiring larger units as part of the housing mix “could be applied flexibly to ‘built to rent’ schemes” in central or highly accessible locations (para. 3.3.11); Viability: the SPG notes that in some cases due to “distinct economics of the sector”, ‘build to rent’ will not be able to support the same level of affordable housing as ‘for sale’ development. The SPG advises that provided a scheme is secured for private rent for a fixed period through a covenant (in the s.106 or other legal agreement) reduced affordable housing provision, where justified with a viability assessment, would be acceptable provided that a ‘clawback’ mechanism was in place to secure additional contributions if any dwellings were sold outside of the long term PRS market. It notes the ‘clawback’ period should be a minimum of 15 years (paras. 3.3.6 to 3.3.8); Affordable Housing: intermediate rent, which qualifies for mandatory CIL relief, can be delivered in place of traditional affordable housing (para. 3.3.10). This is beneficial to ‘build to rent’ developers as it allows the retention of single ownership and management. This new guidance is broadly helpful, however, it primarily captures what has already been going on, and while formally setting this out in planning policy is no doubt useful, some obstacles remain. Minimum space standards, contained in the London Plan (and other development plans) are not always particularly  suited to ‘build to rent’ development which is primarily aimed at young professionals, who move more often, and have usually accumulated less ‘stuff’. The Housing SPG does, tantalisingly, advise that Boroughs are “encouraged to work proactively” with ‘build to rent’ developers “recognising its distinct economics and, where appropriate, design requirements” (para. 7.6.7), but minimum space standards are not explicitly addressed. ‘Build to rent’ developments are well-tailored to the needs of occupiers and often include additional communal facilities such as meeting rooms, dining rooms, ‘spare’ bedrooms for guests, hire shops, gym and leisure facilities. If reduced floorspace can be justified, having regard to the overall design of the development and the intended end users, a flexible interpretation of space standards makes sense. It would after all be somewhat perverse if the rigid enforcement of high minimum space standards for the relatively few people who live in new homes stymied the creation of the new supply which may ultimately help to address the chronic overcrowding of many existing (much less well-maintained or spacious) rental properties.‘Build to rent’ is of course no cure-all, there is only so much available brownfield land and while the end product will not be in competition with ‘for sale’ housing, competition for land will remain. It also does nothing to address the supposed generational inequity in the overall housing market, with the involvement of big institutional funds the tenant is still more or less paying someone else’s pension.These caveats aside, the rising role of ‘build to rent’ is significant, turning hitherto latent demand for high quality, purpose built accommodation into new supply which can be delivered alongside, and not in competition with, ‘for sale’ housing.  The majority of permissions (and vast majority of completions) have been in London, and with cupboards in Clapham (allegedly) commanding the same rent as three bedroom houses in Cumbernauld this is perhaps no great surprise. However, build to rent developments are also being planned in Bristol, Manchester, Leeds and Liverpool - clearly suggesting that building to rent is not simply a symptom of the chronic undersupply and high rents which characterise the London market. Such schemes can be delivered rapidly with investors retaining a long term interest in the building and surrounding area. With new housing development being directed towards brownfield sites and housing estates, these attributes mean ‘build to rent’ is likely to play an important role in the delivery of much needed new homes over the coming years, particularly if the remaining obstacles can be ironed out.NLP is currently assisting a number of clients in delivering new homes for rent and looks forward to working on more projects in this expanding sector over the coming years. If you have any questions, please contact us.  

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