Planning matters blog | Lichfields

Planning matters

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

In light of the Government’s recent review of the London Plan and the consultation on further changes to the NPPF,  the focus has been sharpened on the regions and their contribution towards meeting housing needs. The 20 largest cities and urban centres across England are already subject to an ‘urban uplift’, i.e. a 35% increase to their standard method housing need figures, but the proposed changes will result in the presumption in favour of sustainable development being triggered in respect of previously developed land where Housing Delivery Test performance drops below 95% in these local authority areas. The consultation also proposes to add significant weight to the delivery as many homes as possible on brownfield land, whilst taking a flexible approach to internal layout.
In the context of a challenging period for the residential development industry, the Build to Rent (BtR) market continues to go from strength to strength. Savills report that the sector generated £4.5 billion of investment during 2023 – the second highest year on record[1]. This asset class is often seen delivering homes at scale and regenerating brownfield land in many of our biggest towns and cities, but did it get any airtime as part of the raft of recent Government announcements? No, nothing.
However, in light of the new presumption in favour of previously developed land and the contribution BtR is making where many others are stuttering along, it seems fitting to understand what level of policy support there is for BtR across England, and in particular in those 20 largest cities and urban centres. Of course London takes top spot, and the policy picture for BtR in the Capital has been covered previously by colleagues Georgia Crowley and Adam Donovan (see here), but have the other 19 largest cities and urban centres caught-on?  
There are three national trends beginning to emerge from our analysis:
 
  • From our sample of the 19 largest cities and urban centre authorities outside of London, none have an ‘anti BtR’ policy position. However, the five southern urban uplift authorities are more likely to have an adopted or draft policy that explicitly supports BtR when compared to their seven counterparts in the Midlands and seven in the North of England. A case of following London’s lead with a policy pathway for BtR, or simply a reflection of longstanding BtR developer interest in these areas that has influenced policy formulation? Those five southern authorities have all either adopted local plans or begun work on a new plan in the last 5 years, whereas perhaps unsurprisingly, all six of the authorities with a local plan older than 5 years are either silent or have no explicit reference to BtR in their policy (Coventry, Derby, Hull, Newcastle, Stoke and Wolverhampton).
     
  • There are very few examples of adopted or draft policy that explicitly support BtR in the largest northern authorities, including some of the largest: Liverpool, Manchester, Leeds and Newcastle. This is somewhat at odds with experience on the ground, particularly in Manchester and Leeds, where there has been a buoyant BtR development market for some time.
     
  • Three of the top five largest cities or urban centres, Birmingham, Bristol and Sheffield, do have adopted policy that explicitly supports BtR. These big population centres are clearly open for BtR business, and Birmingham and Sheffield are bucking the policy trend when compared to other authorities in their respective patches.
     
Of the 19 largest cities (excluding London), only seven local plans provide positive support for BtR and five of these are located in the south of England (Bristol, Southampton, Brighton, Reading and Plymouth). Considering that BtR is well established in cities across the country, particularly in the northern cities of Manchester and Leeds, it is unhelpful that local policy is not keeping pace with the market to avoid mixed messages to BtR developers and investors about whether they are welcome or not. The often glacial local plan preparation and review process clearly doesn’t help matters, but given that the NPPF makes very little reference to BtR and contains no specific policy support, the most recent proposed changes from Government seem like a missed opportunity. As is often the case, the planning policy environment is failing to keep pace.
There is a real opportunity for a new government to get behind the residential development market nationally by specifically recognising and strengthening the role that BtR has in national planning policy – it is one of the few tenures that can be delivered on brownfield land at higher density, and in a viable way given its differing economic profile based on secure long term rental income. A national emphasis on the role that BtR can play in regenerating brownfield sites, and meeting the rental needs of the population who either chose not to purchase or are struggling to get onto the housing ladder, would then put the onus on local authorities to reflect this in their own local plans and ultimately assist in giving developers and investors confidence to bring forward new projects.
As uncovered by our recent ‘Planning for Rent’ insight work on the London policy position, development management policies within Local Plans rarely differentiate or provide flexibility for BtR schemes when compared to traditional open market tenure. This often results in a requirement for BtR planning applications to provide justification for departures from established residential policies which were designed for traditional ‘for sale’ schemes. With a lack of detailed national planning policy or guidance on BtR, save for the NPPF requiring Affordable Private Rent tenure rather than affordable homes for sale, it is left up to individual local authorities and their local plan to set the bar.
If not through the NPPF changes, the new national development management policies (NDMPs) facilitated through the Levelling Up and Regeneration Act 2023 do provide a potential vehicle to deliver a much clearer basis for BtR developments to come forward. The forthcoming NDMPs will override local plan policies where there is any conflict and therefore could provide a consistent picture at national level which in turn will mean greater confidence from the market.
With interest rates stabilising and costs of construction projected to fall, coupled with the exit of many Buy-to-Let landlords from the market (which will further deplete the availability of rental homes), now is the time to prime the national planning policy landscape so that there is a sure footing for the next wave of BtR development and investment. In our opinion, the role of BtR in the NPPF should be strengthened, and the NDMPs used to create a more level playing field for BtR design and development across England.
The NPPF consultation runs until 26 March 2024 and the first draft NDMPs remain subject to future consultation. If you are interested in preparing representations, or would like to discuss Lichfields’ track record in promoting BtR development in London and across the country then please get in touch.
  

[1] Savills UK | UK Build to Rent Market Update – Q4 2023

 

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Party Politics (Labour) – How aligned are Labour either side of the Severn Bridge?
The UK’s political landscape faces changes in 2024. The Prime Minister has indicated a general election will be held in the ‘second half’ of the year[1] and Wales’s First Minister has already confirmed his resignation, sparking a leadership race within Welsh Labour.
First up is the Labour (and Senedd) leadership race in Wales, between Vaughan Gething MS and Jeremy Miles MS. The result will be announced on 16 March. We do not yet know what either candidate will say about the development industry through their campaigning, but manifestos and promises will in due course be the subject of rigorous analysis. For now, perhaps, it is more fruitful to consider the broader (and possibly emerging) political picture within which this contest is to be run and its implications for the development sector.
Later this year the UK will see a general election. By-election results and polling indicate it is more likely than not to lead to a Labour Government for the first time in 14 years. In Wales, Labour has had control of the Senedd (formally Welsh Assembly), since devolution in 1998. With the next Welsh election not due until 2026 (accepting this might change under the new leadership), it seems increasingly likely that the Senedd and UK Parliament will be on the same political page for the first time since 2010.
But are they on the same page when it comes to development?

For the UK, the headlines are already out there. Labour’s ‘How not If’ statement of October 2023[2] lays the foundations for a way forward that captures a desire to promote growth, through:
 
  • Strengthening powers to approve homes in areas with out-of-date local plans;
     
  • Enforcing local housing targets;
     
  • Improving the speed of local plan making (including recruiting planners!);
     
  • Adding flexibility to the affordable housing program – acknowledging soaring interest rates and increasing uncertainty that harms delivery;
     
  • Increasing delegated approval powers to speed up decision making;
     
  • Introduce ‘off the shelf’ environmental mitigations – to cut down on surveys and costs;
     
  • Promote a raft of New Towns; and,
     
  • In urban centres, accelerate sustainable brownfield development.
Alongside this has been talk about opening up a discussion about Green Belt, with a view to releasing poorer quality land – so-called ‘grey belt’ – for development[3].
This direction of travel has sought to create a dividing line with the Conservative Government, solidified by the recent changes to the NPPF which – despite the Secretary of State’s long term plan for housing initiatives, and interventions on various local plans and in London and Cambridge and Leeds[4] – has been seen as a concession to backbench MPs that will lead to less development overall[5].
But what of Wales? Of course, the Welsh and English contexts are very different, hence why planning is a devolved matter, to allow, in theory, for a more nuanced approach to local issues. But if Labour does win the General Election and both UK and Wales are led by the same party, with shared political identities, then it is worth considering to what extent Welsh Labour’s current approach aligns with the Labour’s UK call to action, and perhaps offering food for thought for the Welsh leadership candidates on how they might shape their approaches to the housing and development sector:
 
  1. UK Labour has placed housebuilding at the heart of its mission to grow the economy, with a promise for “shovels in the ground and cranes in the sky” to deliver “more beautiful cities [and] more prosperous towns”. Labour has recognised that housebuilding can be a key economic driver and one where value capture can achieve investment in infrastructure with less calls on the public finances[6]. There has been no equivalent expression of support for boosting housebuilding as a vehicle for economic growth and home ownership from Welsh Labour so far
     
  2. As has been well documented, the Senedd abolished the requirement for a five-year land supply in 2020. As a result, LPAs in Wales set and monitor targets locally, with very limited enforcement for under delivery. The recent amendments to the NPPF have seen some softening in the five-year land supply requirement in England[7] - although still far from disapplied. However, Labour (UK) has pledged to reverse these NPPF changes and seeking to reinforce housing targets and strengthen the enforcement of delivery, – noticeably at odds with Welsh Labour’s approach.
     
  3. Setting housing targets in Wales remains to be determined through each individual LDP with household projections as the starting point. Household projections are essentially trend based so reflect past levels of housing delivery rather than provide an assessment of future needs. Whilst Welsh Government assessments of housing need include a policy uplift for affordable housing delivery no such adjustment is expected for market housing delivery. There is no indication that UK Labour would seek to fundamentally change the current approach in England, which sets central estimates of housing need targets to boost housing delivery (both market and affordable) in areas where houses are least affordable to account for past undersupply.
     
  4. UK Labour will focus on the delivery of all types and tenures of housing, including market housing with an explicit effort to “save the dream of home ownership”. By contrast, Welsh Labour’s focus, monitoring and targeting is based largely on the delivery of affordable housing and more narrowly defined, focused largely on social rent which is seen as a core tenure.
     
  5. UK Labour is proposing to invest in New Towns, whereas Future Wales (Wales’s National Development Plan) explicitly rules them out.
     
  6. Whilst UK Labour is suggesting it will support and enable development to proceed in areas with out-of-date local plans, Welsh Government has continued to prioritise the plan led system irrespective of whether an LDP is time expired. There is no effective sanction to secure continued housing delivery where an LDP is not being reviewed in a timely manner.
     
When it comes to determining how to deliver new homes and economic growth through development, Labour UK and Labour Wales appears to be promoting very different approaches. Indeed, right now the Labour-led Welsh Government appears almost to have a stronger policy alignment with the current UK Government, as crystallised by the Secretary of State’s recent NPPF changes. Accepting the principle of devolved powers, and a different economic, social and environmental context – can this political difference within one political party be sustained?  
This is perhaps something both Vaughan Gething MS and Jeremy Miles MS should be pondering, before considering how their Manifestos might address planning and development…  
 

[1]https://www.bbc.co.uk/news/uk-politics-67883242
[2]https://labour.org.uk/updates/press-releases/how-not-if-labour-will-jump-start-planning-to-build-1-5-million-homes-and-save-the-dream-of-homeownership/

[3] In his October Conference speech, Sir Keir Starmer MP said: ““And no, this doesn’t mean we’re tearing up the green-belt. Labour is the party that protects our green spaces. No party fights harder for our environment. We created the national parks. Created the green-belt in the first place. I grew up in Surrey.  But where there are clearly ridiculous uses of it, disused car parks, dreary wasteland. Not a green belt. A grey belt. Sometimes within a city’s boundary. Then this cannot be justified as a reason to hold our future back. We will take this fight on. That’s a Britain built to last.”

[4] See the SoS WMS here: https://questions-statements.parliament.uk/written-statements/detail/2023-12-19/hcws161

[5] See this commentary here: https://www.ft.com/content/1f0adb36-612d-4a34-bb0f-1643a841c417

[6] A link made in this Times article: https://www.thetimes.co.uk/article/starmer-knows-houses-can-rebuild-economy-9ntkwmfwl

[7]https://lichfields.uk/blog/2023/december/20/changes-to-5yhls-under-the-revised-nppf-not-great-not-terrible

 

 

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