Planning matters

As much as Donald Trump would like to deny it, climate change is a real problem, caused by the increased levels of carbon dioxide in the atmosphere thanks to our extensive use of fossil fuels, deforestation and our intensive farming methods. These are the key factors causing the greenhouse effect which traps heat, warming the earth up and causing new weather patterns which are affecting animal and human habitats (www.wwf.org.uk). We know that this is having a detrimental effect on a myriad of animal species and even humans but what effects will our warmer, wetter planet have on our cultural heritage?

I would like to be able to tell you that these effects are still a few years away and we have time to prepare, but I would be lying. You will have seen the chaos caused by storms in the UK over Christmas and the New Year: in short, climate change is already affecting our historic places.

Strong winds during Storm Frank were responsible for the collapse of the north jetty of Birnbeck Pier in Weston-super-Mare. The Grade II* listed pier is the only one in Britain which leads to an island. Built in 1867, it was closed in 1994 and has been deteriorating ever since. Although it was not unexpected, its sorry state should not be taken as evidence that it was bound to collapse anyway. Hurricane force winds of 120mph battered the coastal town leaving many without power.

Heavy rain in Scotland led the wall of Category B listed Poosie Nansies pub in Mauchline, Ayrshire to collapse. Listed both for its architectural interest and its associations with Robert Burns, it took 25 firefighters to stop the rest of the building from disintegrating.

The storms also led to extensive flooding and Category A listed Abergeldie Castle in Aberdeenshire (next door to the Queen’s Balmoral Estate) nearly fell into the River Dee. Severely elevated water levels eroded the river bank, undercutting the foundations and forcing the Baron of Abergeldie (whose family have owned the estate since 1482) to evacuate. Built around 1550, the distinctive Scottish tower house retains many of its original features but where the river bank was once 60ft distant from the building, it is now just 5ft. Work to shore up the bank is ongoing.

Coastal erosion is also a significant heritage issue. Not a new one, but an issue that is certainly getting worse. Grade II listed Cavell Tower on the Dorset coast was saved from falling into the sea in 2006. Although this has had a substantial effect on the building’s setting, it was considered to be the only way to save the building from certain collapse. The tower was built in 1830 and had to be moved back from the cliff edge by 25 metres to stop it from toppling over the edge.

The National Trust has warned that this could be the fate of many more of our coastal landmarks, thanks to rising sea levels and the erosion of the coast. St Michael’s Mount in Cornwall, Formby’s dunes near Liverpool and the entire fishing village of Porthdinllaen in north west Wales are just a handful of the 70 sites that the Trust have identified as being under threat.

Of course these problems aren’t confined to the British Isles. Medieval Mårup Church on the Jutland coast of Denmark is on the brink of falling into the sea and was partially dismantled in 2008 to save it from complete destruction. In 1793, the church was 500 metres away from the coast, today it is just nine. Coastal measurements suggest that the rate of erosion is rapidly increasing and many coastal sites in Arctic regions have already been lost, such as the Østterikeren research station on the island of Jan Mayen, built in 1882.

Global warming is also responsible for mudslides in Guatemala that destroyed the ruins of World Heritage Site Quirigura. If that seems too far away to be relevant, Westminster Palace, the Tower of London and Kew Gardens may all have disappeared by 2080 because sea level rise in the Thames Estuary will cause larger, higher tides.

Historic buildings in general will suffer from increased ground level moisture because they are more porous than modern buildings (whc.unesco.org).

Migrating pests could cause new problems for timber structures; flooding causes moisture and evaporation issues such as mould growth and an increase in stormy weather will cause structural damage (whc.unesco.org).

I’m not suggesting that one pub is more important than hundreds of people made homeless by devastating weather conditions, or that a pretty Danish church should take precedence over an entire inhabited village falling into the sea. I just want to point out that climate change has an effect on many different aspects of our lives and it doesn’t just mean sunnier summers and warmer, windier winters, it means losing entire species, massive tracts of land and a fair few nice old buildings too.

Whilst much of the industry looks on as the Housing and Planning Bill makes its way through Parliament (NLP's breakdown of what you need to know), eyes in the Thames Valley are firmly fixed on the many local authorities who have either commenced, or are about to commence, consultations on their Local Plans.

In 2014, the Oxford Strategic Housing Market Assessment (SHMA) was published and concluded that over 100,000 new homes are needed in Oxfordshire between 2011 and 2031. This was followed in 2015 by the publication of the Central Bucks Housing and Economic Development Needs Assessment (HEDNA) which identifies a need for 43,000 homes in the central Buckinghamshire area between 2013 and 2033. Finally, a presentation on the Berkshire SHMA (as it still has not been published in final form) showed a need of 112,010 homes between 2013 and 2036. The result is a ‘policy off’ local authority identified housing need over a 25 year period in the central Thames Valley area of 261,570 homes. Following scrutiny of the evidence base and application of any policy drivers (e.g. more growth associated with employment) this figure could increase further.

With the requirement for local authorities to have ‘produced’ a Local Plan by early 2017, the Thames Valley authorities are all in the midst of Local Plan preparation, with a myriad of approaches. In the case of West Oxfordshire the Council chose to produce a new Plan which did not meet the need identified in the SHMA, without consultation with its neighbours and so it has been sent back to the drawing board.

Aylesbury Vale District Council (DC) consulted on its emerging Local Plan at the end of 2015, and included not less than 9 different options for meeting housing need in the (relatively unconstrained) District. More recently, Chiltern DC and South Bucks DC are consulting on a Joint Local Plan with 12 different options for meeting their need, including strategic Green Belt releases. As it stands there are now 9 local authorities in the wider Thames Valley area having recently (since October 2015) undertaken, who are undertaking, or are about to undertake consultations on emerging Local Plans. Those of note are as follows:

Many of these authorities have a number of National Planning Policy Framework (NPPF) footnote 9 constraints, most notably the Green Belt and AONB. Whilst some local authorities such as Aylesbury Vale and Wokingham are mostly outside the Green Belt, others- such as RBWM and Chiltern - are heavily constrained by it. Whilst the ‘constrained’ authorities may look to the adjoining councils to assist in meeting this need, the significant level of housing need may mean that the few ‘unconstrained’ authorities simply cannot take all of the unmet need of the others. Furthermore, it may be less sustainable (as considered in the Cambridge Inspector’s report) and potentially more environmentally harmful to meet the need in this fashion, as opposed to strategic Green Belt releases in the ‘constrained’ authorities.

What the West Oxfordshire example shows is that for those local authorities that seek to identify housing need unilaterally, or that hope that requirements will lessen over time, they are unlikely to find success with their new Plans. Instead, local authorities should be looking to this challenge as an opportunity to positively plan for their area’s needs over the next 20 years, by tackling the problem head on. Strategic Green Belt release could result in a net benefit by delivering properly planned settlements. Moreover, in these times of local authority austerity, more housing equals more revenue for councils, through both New Homes Bonus and Council tax, coupled with more local workers and shoppers to boost local economies.

A ‘head in the sand’ approach will not make the problem go away; those brave enough to meet the challenge could instead be creating tomorrow’s communities today.

Over recent years, development viability and its role in the planning system has become increasingly important – paragraph 173 of the National Planning Policy Framework (NPPF) states that ‘pursuing sustainable development requires careful attention to viability and costs in plan-making and decision-taking’. The underlying concept is that planning policies and planning permissions which place burdensome obligations on development are reducing rates of delivery, in particular the delivery of new homes.

In this context, a recent DCLG letter re-emphasises an important principle when it comes to viability assessments and the (re)negotiation of s106 obligations. Despite dismissal of an appeal for 112 dwellings, Islington Council submitted a ‘letter before claim’ to the Secretary of State in anticipation of judicial review of the decision focussing on the Inspector’s application of affordable housing policies.

Whilst stating that judicial review was not necessary due to the appeal’s dismissal, DCLG’s response confirms that it is the Secretary of State’s ‘unambiguous position’ that ‘land or site value … should reflect policy requirements and planning obligations” and advises that the Council should apply this position in respect of viability in future applications.

This DCLG letter sets out the principle that overpaying for land is not considered to be an acceptable position on which to (re)negotiate reduced planning obligations. It has implications for both developers and landowners and requires an appreciation from both that Section 106 obligations must form an intrinsic part of the land acquisition process – leaving issues relating planning policy to land value and development content to the application stage is likely to be too late. Alongside this, councils must be prepared to provide more detail and certainty at the pre-application stage with regard to likely s106 contributions, in order to inform land negotiations and minimise viability-based challenges further down the line.

Challenges based on viability are no doubt partially down to a more cautious approach to development funding in the recent past and the restricted availability of finance following the economic downturn, which has squeezed margins and necessitated developers maximising profitability on sites. In parallel the slow progress of some Local Plans across the country has led to a policy vacuum when it comes to planning obligations in many local planning authorities (LPAs), with 57% of local authorities currently making decisions without a post-NPPF adopted Local Plan[1]. Such a vacuum helps create the opportunity to challenge out-of-date policy requirements, many of which were evidenced and adopted in a very different economic climate.

Both the Coalition and Conservative Governments have supported developers in challenging the content of s106 obligations on sites which they consider to be unviable - initially this was introduced as a means of renegotiating planning obligations which had been agreed pre-recession. However, the ability to appeal against unviable affordable housing obligations that was introduced in 2013 is to be extended to 2018, as set out in last year’s Spending Review and Autumn Statement. The NPPF requires that the cumulative burden of planning obligations should not ‘threaten’ viability and this has been the subject of much debate at local plan examinations across the country.

Confirmation of the Secretary of State’s ‘unambigious’ position establishes a clear need for a firm understanding of planning requirements and obligations to inform the purchase of both short-term and strategic land. NLP is well-placed to provide landowners, agents and developers with insight and advice on the likely terms of planning obligations, so as to be able to assist fully in land negotiations from the outset.

According to DCLG (on 9 March), the technical consultation on starter homes will be launched ‘imminently’ - or ‘shortly’.

Some details of the matters it will cover have now been revealed.

Views will be sought on:

It has also been made clear that some key lenders are yet to be convinced on being mortgagees for starter homes (their concerns may relate for example to the sale price on repossession, before the 5 years have expired). DCLG recognises that some lenders ‘may only come on stream later’.

DCLG is understood to currently be working on ‘Scheme Design Guides’ for:

• LPAs
• Developers
• Lenders

The RICS is currently working on guidance on local market valuations.

By the end of 2016, DCLG is currently saying that all starter homes legislation, policy and guidance should be in force/ in place – alongside the previously-announced funding to support delivery.

The majority of enquiries we have received from clients regarding current proposed legislative and policy changes relate to starter homes.  Key questions are:

Under the Housing and Planning Bill 2015-2016 (‘The Bill’) there will be a statutory duty for local planning authorities (LPAs) to provide starter homes on yet-to-be defined sites.  This would be in parallel with local authority (LA) requirements for affordable housing set out in development plans.

Subject to any transitional arrangements in secondary legislation, the proposed statutory duty for LPAs to require starter homes would in effect override development plan policies, and thus affordable housing would have to be provided in accordance with the development plan only if it remains viable after starter home provision (and other planning obligations, which may include another new statutory duty, for providing self-build and custom build housing) are taken into account.  Therefore starter homes do not need to be defined as affordable housing, although the government proposes to amend the National Planning Policy Framework (NPPF) so that this will be the case.

If the NPPF is amended to include starter homes in the definition of affordable housing, then no affordable housing contribution should be sought by an LPA for the starter home element of a development, subject potentially to a transitional period for areas with an adopted plan.

The amendment to the definition of affordable housing in the NPPF will have an impact on adopted development plans and development plan preparation.  Development plans may be drafted/ amended to set out the local starter home requirement, and the proportion of the affordable housing (i.e. the tenure split) that starter homes should comprise as a consequence.  Where a review of the development plan is required, the government currently suggests that a six to twelve month transition period to amend policies will be sufficient.  In the interim, LPAs will perhaps assess the acceptability of the level of starter home provision proposed in a scheme against the available population data for 18-40 year olds.

Once the NPPF is amended, and the development plan updated to reflect it (circa 9-15 months from now), the same starter homes provision could both meet the LPA’s (then) statutory duty to provide starter homes on certain sites, and comply with development plan policy.

The community infrastructure levy (CIL) will not be payable if the CIL Regulations 2010 further are amended to provide exemption or relief for starter homes (which is expected).

Developers can pursue schemes for/ including starter homes now, proposing that they will be in lieu of affordable housing.  Whether the starter homes were to be on sites allocated/ not allocated for housing, or on the starter homes exception sites defined in planning practice guidance (PPG), they would remain CIL-liable, unless a charging authority has zero-rated such homes.

Exemption from CIL would only be as a consequence of future CIL Regulation amendments. If on an exception site, the LPA should not seek affordable housing contributions, in line with the 2 March 2015 Ministerial Statement and planning obligations section of the PPG.  And if the NPPF is amended as proposed, the national policy approach would be that these homes would themselves be affordable housing and would therefore be exempt from affordable housing contributions.

The Housing and Planning Minister has already encouraged LPAs to take a positive approach to the renegotiation of s106 obligations with an affordable housing requirement.  Once the NPPF’s new definition of affordable housing is in place, this renegotiation could include providing starter homes instead of/ as well as tenures currently defined as affordable housing.  Prior to revisions to the NPPF, the current consultation document is a material consideration but one that carries limited weight, as no draft policies have been set out and responses not yet received nor published.

Therefore a developer may have difficulty convincing an LPA that the starter homes’ contribution is so material, and its inclusion in a development proposal so worthwhile, that it should be provided e.g. at the expense of affordable housing contributions, and potentially other infrastructure contributions (either not covered by CIL or where there is no charging schedule in place).

Where a development plan is up to date, and its affordable housing requirements are evidence-based (on objectively assessed need), seeking to renegotiate a s106 to include starter homes is less likely to succeed.

Ultimately an LPA’s willingness to accept this line of argument will vary significantly from council to council, depending on how concerned each LPA is about the need for/ the future difficulty of securing tenures that fall within the current definition of affordable housing.

If starter homes become affordable housing, many residential sites for/ including starter homes will have a good prospect of success on application/ appeal.

Prospects of success will improve when the proposed policy change and legislative amendments take effect/ come into force, meaning that if an LPA does not accept starter homes as affordable housing now, the prospects of success for amending extant permissions by way of a s106BA application by the summer may well be good.

Another legislative change to consider is clause 143 of the Bill which seeks to provide the Secretary of State (SoS) with a power to restrict, or impose other conditions on, the enforcement of planning obligations in relation to affordable housing ‘in certain situations’. Our interpretation is that regulations could, for example, restrict enforcement action if a developer constructs and sells starter homes in lieu of a different tenure agreement in a s106 obligation.  It is not clear at present whether such powers would apply to planning obligations relating to planning permissions granted prior to the regulations coming into force.

If the Housing and Planning Bill 2015-16 gains Royal Assent in April, the starter homes sections of the Act could commence, and secondary legislation come into force, that month.  The secondary legislation may however not come into force until October, 2016.

New developments providing starter homes as affordable housing following an amended NPPF definition are likely to have similar timescales.   The revised NPPF and amended affordable housing definition will probably be put in place in the spring (i.e. by the end of June), at which point the inclusion of starter homes as a form of affordable housing, consistent with the revised NPPF, would be a material consideration.