Planning matters

Laos was swapped for London, Panama for Plymouth and Malaga for Manchester. An unprecedented number of holiday goers around the UK sprung into the domestic holiday market during the COVID-19 pandemic. Short term lets listed on sites such as Airbnb and Booking.com provided holiday makers with the perfect staycation opportunity. However, as the Government looks to understand the Short Term Lets market in England, how should the balance be struck between the entrepreneurial hosts and the cities and places who host them?

The Government has recently published a call for evidence regarding the creation of a tourist accommodation registration scheme in England. The purpose of the consultation, which continues until 21 September 2022, is to compile a library of evidence concerning short term holiday lets in England. Representations have been requested across a number of fields that offer an insight into topics such as:

1. The current market size and shape to the perceived opportunities; and,
    
2. The perceived opportunities and challenges that prolific short term let operator-agents such as Airbnb and Booking.com create for the general housing market.
    

The consultation also seeks comment on the effect of potential policy interventions on the supply of short-term accommodation. In Scotland, planning policy was introduced in 2021 to help continue to forge effective relationships between short term let properties and the places that host them. Edinburgh is first Scottish council to consider introducing the short term let controls offered by Scottish Government and this was documented last year in our blog Scotland’s First Short-Term Let Control Area: Consultation on New Rules for STL’s in Edinburgh. A similar mechanism has also been introduced within ‘Rent Pressure Zones’ (RPZs) in Northern Ireland where short term lets are required to have planning permission.

 

Short Term Lets are not a new phenomenon. Traditional holiday cottage websites and booking portals have been a mainstay for holiday goers for years but new technologies now mean that anyone can book, and more importantly, anyone can turn their extra space into a hosting business in minutes.

In January 2022, A research briefing to the House of Commons provided an insight into the rapid growth of short term lets as a popular solution for visitor accommodation. The graph below demonstrating the meteoric rise in listings posted on Airbnb prior to the COVID-19 outbreak, with a 240% increase in the number of listings in the UK between 2016 and 2020. The report highlighted that outside of London, there is no limit to the number of days a property can be let out on a short-term basis. The report also noted that 58% of listings on Airbnb in the UK are for an entire home rather than a room or shared room within a home. Other short term let organisations such as Sykes Holiday Cottages experienced a 91% increase in enquires from individuals looking to list their home with the operator during the first quarter of 2021.

 

 

The strengthening of the market for domestic holidays, and the demand for short term holiday lets has had a direct impact on the wider housing market. Prospective investors have found themselves competing against – and often out-competing – local people to purchase property, the price of which has been forced up as a consequence of an increase in demand for popular holiday destinations. Ultimately, as more homes are bought up for the purpose of short-term lets, the net supply of housing for local people in an area has fallen. In areas where the demand for short term lets has been particularly acute, this has deepened the housing crisis.

Given the demand for holiday accommodation and the ability of investors and outside buyers to commonly outperform local people in a constrained, high price housing market, many areas have become flooded with short term holiday lets. This has shifted the character and socio-economic make up of towns and some city areas. In planning terms, a change in the way that a building is used or its operation can often equate to a material change in the character and use of the property. Whilst a ‘material changes of use’ would, in most cases, require planning permission, short term lets in England currently do not.

Regulation currently exists in England only in London. In the capital, the 2015 Deregulation Act states that hosts are not permitted to rent their property for more than 90 days without obtaining a licence through the local council (via submission of a planning application). Many think that it is time that policy stretches across the country, especially as some popular holiday destinations have an even larger proportion of Short Term Lets to standard tenure properties than London. For example, Woolacombe and Croyde each have the highest concentration of Airbnb properties per 100 in the country (23), higher than some of the most popular London boroughs (15/100).

The key with regulation is balance; tourism accommodation is essential for a developing and growing economy both in urban and rural areas. However, as soon as unregulated tourist accommodation begins to impact the ability for local people to meet their housing needs then intervention may be needed to help accommodate the interests of all parties.

Airbnb and other short term let platforms have made it easier than ever for the general population to both rent out their property and find a place to stay beyond the walls of a hotel room or traditional holiday rental agencies. They offer important benefits to holiday makers and the economy of their destinations and it is important that the benefits of the short term let market are not lost in the undercurrent of the price and supply issues mentioned above. However, a balance must be struck between the needs of local people and visitors, recognising that the displacement of local communities – as a result of house price inflation caused by increased competition for accommodation as more people seek to purchase properties for holiday rentals – can have a heavy social and economic cost.

The key benefit in the rise of short term lets is the wider economic impact. In the UK, hosts listing property on Airbnb earnt more than £1.5 billion in 2021 with the wider short term let sector contributing even further to the economy. In addition, Airbnb predicts that worldwide it supports over 300,000 jobs, all of which are likely to be a part of the rebounding tourism industry within which short term lets play a vital role as one of the many contributors in propping up the sector.

Finally, the positive impact of short term lets on rural areas must not be overlooked. City breaks in the bright lights may be popular, but short term lets have offered a new lease of life to rural areas that lack high quality hotels and facilities. Now that there is an easy, convenient way to book accommodation ‘in the sticks’, many rural and coastal areas can reap the benefits of increased tourist trade. Drawing down economic investment from holiday makers remains a large part of economic and planning policy for the future as has been the intent of the Government’s Levelling Up and Regeneration Bill.

The task of striking the right balance between market freedom and strict regulation and enforcement in relation to the sensitive topic of short term lets is not easy. However, it is clear that some form of regulation is necessary to make short term lets safer and the communities that they are part of better able to cope with this growing sector.

Recently introduced regulations in Scotland and Northern Ireland have introduced areas where planning permission is required to run a short term let, with Northern Ireland further requesting that every short term let must obtain a licence from the tourism board. These interventions are helping to ensure that the provision of accommodation meets a high quality standard whilst addressing the need for planning decisions to be made to protect both the character and property market of an area.

But are these changes too little too late? In a market that has become increasingly saturated after the COVID staycation boom, will we continue to see an increase in short-term letting accommodation? If not, any regulation could only influence a fraction of the emerging market.

Planning has always been about regulation and with human habits and processes everchanging, planning as a regulatory tool must be adaptive and dynamic. The relaxation of some planning requirements during COVID represent a prime example of this. However, the introduction of new policy on short term lets – which is not something to be afraid of – has possibly slipped through the cracks. It is now a case of planning playing catch up.

11 May 2022 saw the publishing of the Government’s draft Levelling Up and Regeneration Bill (“the Bill”). The draft legislation contains details of the government’s proposed rental auction scheme for vacant high street premises.

As explained in my colleague Alison Bembenek’s blog (‘Levelling Up and Regeneration Bill – implications for high streets / town centres’) the Bill includes tools designed to help UK high streets. Part 8 of The Bill proposes new powers for local authorities to bring vacant premises in town centres back into use through rental auctions.

So what will these rental auctions comprise in practice and will the impact ultimately be positive for the health of our town centres?

 

The Bill allows local authorities to designate a street as a ‘high street’ if it considers that “the street is important to the local economy because of a concentration of high-street uses of premises on the street.”

The Bill defines what could be considered as a ‘high-street use’ and it is a long list! The uses include shops and offices, services to visiting members of the public, restaurants, bars, pubs and cafes, use for public entertainment or recreation, community halls and meeting places, and some manufacturing and industrial processes (albeit only if they can reasonably be carried out “in proximity to, and compatibly with” the other uses).

Whilst its helpful the Bill identifies a wide range of uses as being key components of the high street, it remains to be seen what other tools will help plan the high street in a more proactive manner.

Once designated, vacant units can be subject to local authority intervention if the local authority considers occupation would be beneficial to the local economy, society, or environment.  

A unit is classed as vacant if it has been continuously unoccupied for a year or, broadly, if it has been unoccupied for at least 366 days in the last two years.

A ‘local benefit condition’ must also be satisfied before the local authority can begin the process of compulsory re-letting of vacant premises. For example, if they consider that the occupation of the premises for a suitable high-street use is deemed beneficial to the local economy, society or environment. On the surface, this condition should be easy to satisfy, although the exact criteria of assessment has not been published yet.  

After satisfying the vacancy and local benefit conditions, an ‘initial letting notice’ should be served on the landlord of the premises.

This notice prevents the landlord from granting any tenancy or license for those premises (or entering into any agreement to do so) without the local authority’s written consent while it is in force (this can be up to 10 weeks) – though it does not apply to the grant of a tenancy agreed before the initial letting notice took effect.

If the landlord requests the written consent of the local authority to let the property during the initial letting notice period, the local authority must give consent for letting if:

1. The term of the proposed tenancy, would begin within the period of eight weeks of the service of the initial letting;
    
2. The term of the letting would be at least one year; and
    
3. The tenancy would be likely to lead to the occupation of the premises for activity that involves the regular presence of people at the premises.
    

The local authority can serve a final letting notice if the premises have not been let within eight weeks (but before the initial notice expires). Once the final letting notice is served, the local authority may start the rental auction procedure.

A final letting notice will last for 14 weeks, during which the landlord cannot grant any tenancy or license of the premises or carry out works on them, without the local authority’s written consent.

In short, yes. The landlord has 14 days from the service of a final letting notice to serve a counter notice on the local authority. This must state that, if the final letting notice is not withdrawn, the landlord intends to appeal, and set out on what grounds the appeal would be brought.

Any appeal must be made to the County Court within 28 days of the counter notice. If no tenancy has been granted and no appeal made after a final letting notice has been served, the local authority can start the rental auction.

The Bill describes the rental auction as “a process for finding persons who would be willing to take tenancy of the premises… and ascertaining the consideration that they would be willing to give in order to do so.”

Separate regulations will set out the process, including how the “successful bidder” is identified. The devil will be in the detail as to how the process will ensure that the successful party is beneficial to the future health of the high street.

When there is a successful bidder, the local authority can enter into a tenancy contract with them for the tenancy of the premises. The contract will be the same as if it were entered into by the landlord of the premises. The Bill also explains that the contract may allow the tenant or landlord to carry out pre-tenancy works.

Lichfields will be closely monitoring the progress of the Levelling Up and Regeneration Bill, including any amendments proposed. Will high street rental auctions help to re-invigorate our high streets and create better co-operation between local authorities and landlords, or will they force premises to auction without finding a suitable long-term occupier?

As it currently stands, this measure would transform the powers of local authorities on the high street by binding landlords without their consent. Perhaps this threat of intervention will force landlords to act first. That said, there are questions around whether this tool will be effective at reoccupying premises that have been vacant for a number of years without attracting any interest. Those with high street properties will hope for a rebalancing of the scales so that they are given greater negotiating powers with local authorities as to whether their premises are up for auction. In theory the landlord could be forced to carry out works it does not want to, to facilitate a tenant that they have not chosen to occupy the premises – all under a contract that has been imposed upon them and at a rent that they otherwise may not have accepted. However, the Bill does state that “the local authority must have regard to any representations made by the landlord.”

At the moment, the high street rental auction seems like a relatively blunt tool. Indeed, some may take the view that, if it were that easy, landlords would be able to find suitable tenants for vacant premises for themselves. The tool has the potential to create tension between the shared goal of reviving town centres and the normal rights of property owners.

Please get in touch if you have any queries on this and we will be happy to help. Alternatively, you can visit the Lichfields website which includes a dedicated Levelling Up and Regeneration Bill Resource which is regularly updated and includes our analysis, insights and thought leadership on the Bill.

 

Initially funded by charitable giving and local fundraising, there has been a hospital in Leeds since 1767. So, for around 250 years, hospitals in Leeds have led the way in offering patients of the city and surrounding Yorkshire area the very best treatment and care. Since 1862 when the initial commitments were put in place by the Infirmary Board to build a new hospital in Leeds to meet the needs of a fast expanding industrial city, there have been far reaching changes to the level of understanding and knowledge of medical practice. Hand in hand with this change, we have seen the rapid evolution of hospital design and practice to reflect not only the needs of medical science, but also the wider health and wellbeing of the patients who use hospital services.

The Leeds General Infirmary as we know it today is made up of a medley of interlinked premises from the iconic Sir George Gilbert Scott designed buildings, commissioned in 1868, with notable additions including the modern Martin and Jubilee wing buildings, the latter accommodating a helipad used by the Yorkshire Air Ambulance. The condition and inflexibility of the healthcare estate (including also the St. James Hospital site located across the city, parts of which dates back to 1846) presents significant challenges in meeting 21st century healthcare needs.

The Leeds Teaching Hospital NHS Trust’s Hospitals for the Future Project is delivering two new hospitals in one building at the Leeds General Infirmary – one for adults and a new home for Leeds Children’s Hospital and the UK’s largest single-site maternity centre. the scheme is part of the Government’s commitment to build 40 new hospitals by 2030.

 

The Trust employs 20,000 staff and each year and within the city provides care for more than 130,000 inpatients across 2,000 beds and coupled with this sees more than 100,000-day case patients each year and annually delivers over 1.15m outpatient appointments. Across two A&E Departments, the Trust’s sees over 200,000 ambulance attendances and over 200 air ambulance visits in addition to those who self-present at A&E.

With a clear clinical strategy, a process of reconfiguring the estate has now begun. Lichfields obtained outline planning permission in 2020 for the Gilling Dodd designed new Leeds hospital development, and as part of a wider architectural and technical team led by Perkins & Will, Penoyre Prasad and Smidt Hammer Lassen architects, is now working towards the submission and approval of detailed proposals which will see the delivery of a leading, internationally renowned state of the art facility to deliver clinical needs and research throughout the 21st Century.

The development will bring together specialist paediatric and maternity services, which are currently spilt across the city. Centralising the services under one roof for the first time will keep families together and enable the Trust to provide integrated family care. Patient care and wellbeing is at the centre of the design with all wards orientating toward the outdoors, maximizing exposure to daylight and good views. Green spaces are an important part of the design, including a new public plaza outside the hospital and garden terraces throughout, with planting inspired by the regional environment.

The new hospitals development will also seek to improve access for patients, staff and visitors as well as supporting the redevelopment of a large city centre site that will open up local communities that are currently separated by the impermeability of the hospital buildings, consolidating also parking through the creation of a new multi storey car park which will provide for an increase in the number of car parking spaces available for patients.

Cutting-edge twin technology will be used to track the building’s energy performance and other technology will reduce administrational processes helping to increase the amount of time medical and care staff can spend with patients. With embedded systems and controls the new hospitals will be SMART buildings. Sustainability sits at the heart of the new hospitals’ design, aiming for net zero operational carbon and minimising embedded carbon, conservation of resource and the use of nature-based design solutions, the new hospitals will adopt an approach which could never have been contemplated even in more recent times, certainly not in the earlier days of medical care in the city.

The new hospitals development proposals are part of a much larger redevelopment and economic regeneration opportunity for Leeds. The new hospitals and existing infirmary is located within the city centre in the heart of the Leeds Innovation Arc, which is a strategic intent of the Leeds Teaching Trust, the University of Leeds, Leeds Beckett University and Leeds City Council to use their knowledge, assets and partnerships as a catalyst to accelerate innovation and economic growth throughout the city.

Those parts of the existing hospital estate at the infirmary now outdated and which will become vacated will create a unique regeneration opportunity. The additional benefit of safeguarding those buildings of conservation importance for future uses including the Sir George Gilbert Scott listed buildings. The ambition is to create a new world-class hub for health research and life sciences, but there is the potential for business, residential and hotel accommodation, resulting in economic regeneration and employment benefits.

The Leeds city region has much to look forwards to, with an exemplar standard of hospital design and medical provision to the latest technological standards. The development will also act as a catalyst for regeneration, attracting new med tech and related research to the Leeds Innovation Arc, with the added benefit of safeguarding repurposed buildings of conservation and heritage importance.

Lichfields has built an enviable track record assisting in the delivery of significant healthcare projects all around the UK and is proud to be helping deliver the Leeds General Infirmary enhancements and those at St James’ Hospital. Some 100 years after the concept for the Leeds General Infirmary, Lichfields was itself established and now 60 years later, we work on the most prestigious proposals providing local knowledge and innovation in delivery of schemes across the sectors, no more so than within the healthcare sector.

After 60 years of success in the planning and development industry, we now look forward to a more sustainable future, as we work towards becoming a net zero carbon business. The pandemic has been a poignant reminder of our wider social responsibilities and our need to support a better and more resourced and modern health service.

We look forward to another 60 years of creating high quality environments for future generations!

 

Renown for being amongst the hottest and driest places on earth, California’s Death Valley is also famous for periodically bursting into life with a “super bloom”. This explosion of golden wildflowers relies on exactly right combination of heavy rains followed by warm temperatures and lighter rain showers. In an area that is as inhospitable as Death Valley, this blend of conditions is not a common occurrence. The super bloom takes place once a decade.

Just as it is with the super bloom, household growth in any area depends on the presence of the right combination of factors: in this case relating to demographic, housing and economic considerations. Fortunately, the conditions for household growth do not just occur once a decade although the decennial census does provide an opportunity to review the scale of change that has occurred and inform projections of future trends.

This blog – the second in our series on the initial release of 2022 census data – considers the changing household trends in Wales and seeks to understand the implications of this for future housing need.

 

Between 2011 and 2021, the number of households in Wales grew by 3.4% from 1.3 million to 1.35 million. This shows that actual household growth has slowed substantially from the 7.7% increase experienced between 2001 and 2011. It also equates to approximately half the level of household growth that has been experienced in England since the last census. A comparison with population growth, however, shows that there has been a disproportionately high level of household formation in Wales. This is an important but unsurprising trend which replicates that seen between 2001 and 2011 (albeit at a lower level) and underlines the extent to which new households are forming from within the existing population as well as resulting from population growth.

The implication of the rates of population and household growth is that Wales has seen a 1.9% decline in average household size over the past decade to 2.35 in 2021. This contrasts to the situation in England where average household size increased 0.3% to 2.41 in 2021 (compared with 2.4 in 2011). This decline in household size reflects a continuation of long-term trends in response to a range of social trends. It underlines the continued need for housing to attract and retain working age population but it is important that falling average household size is not conflated with the need for smaller dwellings. The provision of a range of housing types and sizes is essential to tackling the reduction in the number of working age and younger people – a significant challenge in Wales that was discussed in our previous blog post.

 

 

Breaking down household change across local authorities reveals a more nuanced picture. Despite experiencing the highest population growth (accounting for 95% of the total population growth for Wales between 2011 and 2021) and being the only four counties not to suffer a decline in working age populations, Cardiff, Bridgend, Newport, and the Vale of Glamorgan only accounted for 40% of the total household growth in Wales – although three of these authorities (Bridgend, Newport, and the Vale of Glamorgan) were amongst the top five in terms of the level of household growth since the last census (along with Monmouthshire and Merthyr Tydfil). Despite experiencing the second highest population increase in the country (4.7%), the number of households in Cardiff increased by just 3.3%.

This shows that despite strong economic prospects in these four authority areas and their attractiveness for younger people, household formation is falling behind and cannot keep up with population growth. Reasons for this include a failure to deliver sufficient new homes, the relative (un)affordability of housing in these areas, and the potential (un)suitability of the housing stock for newly forming households. These issues were particularly pronounced in Cardiff and Newport which were the only local authorities in Wales to experience an increase in average household size since the last census.

Three counties experienced negative household change: Gwynedd (-2.6%), Ceredigion (-2.1%) and Blaenau Gwent (-0.4%). This reflects the trend of these being the only authority areas to experience population decline since the last census.

When looking at the change in household sizes by authority, there are significant differences across the country. As set out above, there were only two local authorities – Cardiff and Newport – which experienced an increase in average household size (both by 1.3%). The previous blog noted that these were the two areas that experienced the biggest rate of population growth. This suggests that existing households have absorbed more of the influx of people, rather than population growth facilitating new household formation. By contrast, all other local authorities experienced a reduction in household sizes. The biggest decrease was in Merthyr Tydfil (6%) where there was a 0% change in population, with significant reductions also in Monmouthshire, Caerphilly, Ceredigion and Pembrokeshire. The population of Monmouthshire and Pembrokeshire increased slightly since the previous census but each of the other areas with the most significant level of decline in their average household size also experienced a loss of population since 2011. All of these authorities experienced a decline in young people and working age population and a significant increase in the number of people over the age of 65. These population trends help to explain the household patterns that have occurred as younger people tend to live in larger households (either in shared homes or families) than those of retirement age who typically live in couples or alone.

 

It is instructive to consider how these trends relate to housing delivery in Wales. When comparing average housing delivery against Local Development Plan requirements, a clear pattern of under-provision emerges. Only one Welsh authority exceeded its housing target and the national average for Wales was less than 50%, as ten local authorities delivered less than half of their identified requirements.

These levels of delivery are likely to have had direct implications on the population and household trends that have been seen since 2011. Under-delivery of housing can have consequences in terms of the demographic profile of an area, as well as its social and economic wellbeing.

Whilst some may see census results in respect of limited rates of household growth as justification for less housing, the wider social trends and reflection in population demographics discussed in this blog series convey a different story. Boosting population growth and retaining younger age groups through the supply of housing will support a larger workforce and will inevitably offer social and economic benefits to Wales and individual local authorities. To do so there needs to support for a future step-change in housing delivery.