Planning matters

Last week the GLA adopted its Purpose-built Student Accommodation (PBSA) London Plan Guidance (LPG) which builds upon London Plan Policy H15. This is a document which those of us working in the PBSA sector have been eagerly awaiting. It is intended to facilitate and shape the next generation of London’s PBSA schemes.

London is suffering from a structural undersupply of PBSA accommodation relative to the growing full time-student population in the capital. Supportive GLA guidance could play an instrumental role in addressing this need. We give our verdict here on the LPG and whether it will help or hinder future PBSA schemes in the capital. 

A common planning issue encountered on some PBSA projects involves evidencing the need for student housing and demonstrating how PBSA can contribute positively to London’s mixed and balanced communities.

The LPG recognises the shortfall in PBSA supply against London’s burgeoning student growth and identifies the role of well-designed and appropriately located PBSA in meeting a defined need. It acknowledges the role of PBSA in meeting housing need on a ratio of 2.5:1 (in line with the London Plan). The role of PBSA in meeting housing need is twofold: (i) directly providing accommodation for students; and, (ii) indirectly alleviating pressure on traditional rented homes/HMOs (which could otherwise provide family sized homes to the wider market). This is explicitly acknowledged within the LPG.

The LPG also helpfully recognises the role PBSA can play in strengthening the capital’s mixed and inclusive neighbourhoods; helping diversify housing stock and contributing positively to vibrancy and character. It provides guidance on how to maximise the positive effects of student housing schemes in the context of overarching London Plan objectives.

The guidance discusses the wider economic and regenerative benefits of PBSA. It continues to position PBSA development as an important contributor to London’s knowledge economy; leveraging high-quality student accommodation to attract domestic and international students and, in turn, reinforcing and strengthening London’s world-class higher education offer.

The LPG’s explicit recognition of the pressing need for new PBSA, its contribution towards housing targets, its role in delivering mixed and balanced communities and its economic/regenerative benefits are all positive facets of the LPG. The guidance provides constructive material to strengthen the ‘benefits case’ supporting PBSA development in the capital.

It is important that PBSA is appropriately located, though locational considerations should be applied with flexibility reflecting the nuances of individual schemes. The LPG encourages positive planning for PBSA; directing student housing developments towards well-connected locations including metropolitan and town centres, the CAZ, Inner London Opportunity Areas and centres with high or medium residential growth potential. Helpfully, it also acknowledges that PBSA can also be appropriate outside these areas, where sites are well connected to university campuses, in medium to high PTAL areas or in Outer London Opportunity Areas.

London’s universities are disproportionately concentrated in central and inner London, particularly within the CAZ. PBSA development has typically been clustered in such locations. The LPG acknowledges that local-level concerns can be encountered regarding the dominance of PBSA in such areas, both spatially and in delivery pipeline terms. In our view, the spatial agglomeration of centrally located PBSA is partly a logical function of the expectation in Policy H15 for nominations agreements linking student housing to local higher education provider (HEP) campuses. Indeed, despite advocating against over-concentration, the LPG does also recognise the value of such clustering as opposed to the dispersal of PBSA schemes in certain Outer London locations remote from HEPs.

London Plan Policy H15 does not itself reference overconcentration of PBSA; however, in our experience it can often be cited by communities as a concern. The LPG suggests measures to address perceived over-concentration of PBSA (and by association dilution of conventional housing) both in Local Plan policy and in decision making. The guidance suggests, for example, that LPAs could introduce ‘thresholds of concern’ (i.e. ratios of PBSA to conventional housing stock); encourage separation distances between parallel/ cumulative PBSA schemes; or identify PBSA bedspace caps within a defined area to restrict overconcentration.

In the interest of developing mixed and balanced communities across London, it is of course important that PBSA (or any other single housing product/typology) does not become singularly dominant in a neighbourhood; however, the LPG guidance could be seen to give LPA’s free reign to introduce rigid and restrictive PBSA policy to limit an area’s student housing development. The GLA has helpfully set out the evidence required to support such policies, but it will be incumbent on PBSA developers and professional teams to actively monitor emerging Local Plans and guidance documents to ensure such thresholds do not curtail and stifle otherwise acceptable and beneficial new PBSA development.

As an aside, the LPG also recognises that positive local PBSA policy can facilitate a balanced housing stock. It notes that boroughs with a shortage of family homes should look to include policy advocating PBSA in Local Plans, cognisant of the benefits PBSA stock provides in releasing larger HMOs, which are often occupied by student sharers, back to the stock of single family dwellings.

Lichfields recognises the importance of ensuring PBSA is appropriately located and does not dominate a neighbourhood; however, student housing plays a positive role in London’s communities, and it is rare that the proportion of PBSA will become so singularly dominant that it harms an area’s housing stock composition. In this context, it is critical that the LPG’s guidance on the spatial distribution and agglomeration of PBSA is implemented at the local level through well-evidenced policy or guidance, and that it is applied in a suitably flexible manner. It should not be allowed to unduly suppress otherwise acceptable PBSA developments and curtail their housing, economic and regenerative benefits.

PBSA can contribute meaningfully to place-making and regeneration objectives through a well-considered mix of uses, design and management strategy that serves to activate and enliven London’s neighbourhoods. The LPG acknowledges that incorporating publicly accessible uses, such as shops, services and community facilities, and open space, alongside PBSA, can contribute towards place-making objectives and capture student spending locally. Similarly, employment floorspace, including affordable workspace and co-working accommodation can be beneficial.

At Lichfields, we are well versed in managing PBSA-led mixed use schemes and producing bespoke PBSA community integration strategies to address these criteria and effectively communicate the benefits of complementary mixed use development including PBSA – one recent example being Devonshire Place, Southwark.

London Plan Policy H15 states that boroughs should seek to ensure that the maximum level of PBSA is secured as affordable student accommodation (ASA). Such provision can unlock the GLA’s fast-track affordable housing route, at levels of 35% ASA (or 50% ASA on public or industrial land).

Notwithstanding this, the LPG acknowledges that the inclusion of conventional C3 housing alongside PBSA can be acceptable on larger sites, and is often desirable. The LPG suggests that such mixed use schemes can be acceptable on sites where C3 housing delivery is subdued and on sites where C3 permissions have not been built out. The guidance identifies a number of considerations relating to the provision of, and the prospective balance between, ASA and C3 affordable housing.

On this basis, the LPG does provide scope to introduce C3 housing alongside PBSA, though the priority affordable component remains ASA. Indeed, the guidance states “it will rarely be acceptable for ASA to be entirely replaced by C3 affordable housing”. From our experience in the sector, however, the delivery of PBSA can unlock affordable C3 housing in a way that is unattainable through conventional private housing led schemes. The proportionally greater value of PBSA can cross-fund conventional affordable housing, which presents a greater strategic housing need than ASA. Whilst there is clearly a need for both ASA and C3 affordable housing across London, and the more flexible approach to affordable housing advocated in the LPG is a positive step, we wonder whether the guidance could have done more to facilitate and promote conventional affordable homes alongside PBSA – the benefits of mixed tenure development has of course been acknowledged in the recently proposed amendments to the NPPF.

Finally on affordable housing, the LPG recognises that ASA is not eligible for CIL relief. To overcome this, the LPG suggests boroughs may wish to consider applying nil or reduced CIL rates compared to market PBSA. This is helpful, though will clearly only take effect when a LPA updates its CIL charging Schedule.

The LPG provides qualitative guidance on design quality, functionality and inclusivity. It does not set specific design standards for PBSA development. The decision to not quantify explicit standards is considered appropriate and provides suitable flexibility as the PBSA sector in London continues to rapidly evolve and innovate.

The LPG is helpful with respect to inclusive design and meeting the needs of disabled students. Notably, it adopts a pragmatic approach that reflects the underlying need for this specialist accommodation, reducing the conventional C3 requirement for 10% wheelchair accessible dwellings (London Plan Policy D7) to 5% wheelchair accessible PBSA units, plus 5% adaptable accommodation. The GLA’s Wheelchair Accessible Student Accommodation Practice Note has been withdrawn in parallel; it is now superseded by the adoption of the LPG.

London Plan Policy H15 seeks to align PBSA provision with established need through the use of nominations agreements. The agreements establish the right of the signatory HEP to allocate students to a majority proportion of PBSA bedspaces within a development (including all ASA). Nominations agreements have historically been rigidly imposed, though certain boroughs are now applying greater flexibility, particularly where PBSA schemes are delivering wider benefits (notably affordable housing) or where a development is not directly connected to, or in the immediate vicinity of, a single HEP.

There can, however, be a tension between the requirement for nominations agreements which direct development to specific locations surrounding HEPs and local concerns relating to overconcentration of student schemes. Will the LPG’s continued insistence on nominations agreements accentuate this tension and limit otherwise acceptable PBSA schemes that are more remote from HEPs?

From our own experience, HEPs are often cautious when entering into nominations agreements due to the commercial liabilities involved, with a low appetite for financial risk resulting in nominations agreements being increasingly challenging to secure.

The LPG does provide some flexibility around nominations agreements. It encourages s106 obligations to require ‘reasonable endeavours’ to secure nominations agreements covering the majority of student bedspaces, including all ASA (i.e. over 50% of net bedspaces). The LPG provides clear guidance on what is meant by ‘reasonable endeavours’ and how this can be evidenced. This includes details of constructive engagement, timelines, accommodation strategies and any suitable proxies.

In the event that a nominations agreement cannot be secured, the LPG allows for a fallback cascade mechanism of direct lets to be secured via the S106. Where applicable, this would apply to all unlet and un-nominated market rate bedspaces. Nominations agreements can also contain cascade mechanisms that could be invoked if a HEP is not able to nominate all allocated bedspaces by the end of the summer holiday period (by 31 August). Such a mechanism will enable HEPs to manage the risk of any unforeseen demand downturns.

In the absence of a nomination’s agreement for ASA, the LPG also clarifies that (as a last resort) the fallback position would be for the provider to allocate according to need, with an appropriate audit trail of the allocation strategy to be provided to the LPA on request.

Further guidance is also provided in the LPG on how best to evidence interest and discussion from HEPs during pre-application engagement on projects. For example, the guidance discusses how ‘letters of comfort’ and evidence that a PBSA scheme meets an institution’s requirements can assist in pre-application discussions and encourage LPAs to support the principle of PBSA.

Finally, the LPG provides guidance on a new process for applying to become an approved proxy for nominations agreement purposes. This will apply to charitable organisations and other collectives. We envisage such proxy engagement will be most beneficial for smaller schemes, essentially brokering the nominations process to lessen the disproportionate administrative burden encountered by smaller developments in securing such agreements. The GLA has prepared a document covering process and eligibility criteria for proxy organisations and collectives.

The LPG’s additional clarity and detail on nominations agreements is certainly helpful. However, we do feel that it misses an opportunity to endorse greater flexibility in the application of nominations agreements to ensure development is not stymied. The guidance could have encouraged nominations agreements in appropriate circumstances in London, whilst also allowing a greater proportion of PBSA schemes without nominations agreements, perhaps where locational considerations support a more open approach to direct lets and/or to incentivise the delivery of wider planning benefits, including mixed tenure developments and C3 affordable housing on site.      

 

     

In summary, London is facing a pressing need for well designed, effectively managed and suitably located PBSA accommodation. The latest generation of PBSA schemes have an important role to play in meeting an evidenced housing need, strengthening mixed communities and supporting London’s knowledge economy and globally renowned HE offer. The need for PBSA in London is greater than supply and the planning system has an important role to play in fostering and facilitating new PBSA schemes.

The GLA’s new PBSA LPG helpfully recognises this need and acknowledges the benefits that can be generated by PBSA schemes. Many aspects of the LPG are logical and helpful, providing clarity and detail to assist in the practical application of London Plan Policy H15. For instance, the guidance actively supports PBSA schemes in the right location and recognises the economic and regenerative benefits of student housing. It highlights the place-making attributes of PBSA and its prospective role in developing vibrant, mixed and sustainable communities across the capital. It strikes the right balance between clarity and flexibility in terms of design measures and accessible units. The LPG also includes some constructive guidance on the scope for mixed use schemes combining PBSA and affordable housing, and it provides further detail on the application of nominations agreement.

There are, however, some elements of the LPG which remain overly restrictive and certain aspects which could be more progressive. The measures suggested to address perceived over-concentration of PBSA in an area could, for example, give LPA’s ammunition to rigidly inhibit otherwise acceptable PBSA schemes. Similarly, given the opportunities for PBSA to unlock other uses and benefits for example C3 affordable housing delivery, the guidance could have done more to facilitate mixed tenure sites and conventional affordable homes alongside PBSA. We also feel that the LPG misses an opportunity to endorse more flexible approaches to nominations agreements in the right circumstances.

Perhaps these are points which could be addressed in the forthcoming new London Plan, but until then it is important to remember that the LPG is guidance, not policy or law, so is not a strict rulebook but should be treated as a material consideration in the planning process.

After much delay and anticipation, the report of the Older People's Housing Taskforce was published on 26^th November. It brings together a range of important research and what older people want from their housing and how older people’s housing (OPH, also termed Later Living Homes or ‘LLH’) operates within the planning system to make recommendations for how Central Government, Local Government, developers, providers and other stakeholders can help meet the needs and demands of our ageing population.

Research has noted for some time now that the UK falls well short of meeting its need for OPH, with the Taskforce confirming again that “the UK is significantly far behind other developed countries in delivering the volume of stock required”. Clearly, planning plays a central role in delivering the homes we need. Whilst the National Planning Policy Framework has specifically referred to older people’s housing needs as far back as its inception in 2012, our research ‘Solutions to an Age Old Problem’ (originally published in 2019, and subsequently updated in 2024) has found that the pace of progress in local plans to address these needs has been somewhat underwhelming. Unsurprisingly, the role of planning therefore features heavily throughout the taskforce’s report and its recommendations.

Whilst most plans now address older people’s needs in their evidence base (albeit with varying levels of consistency and detail), our research found there is a lack of follow-through within local plans; many do no create positive policy environments which support and encourage the delivery of OPH, most do not set clear targets, many do not reflect OPH needs within strategic allocations or in standalone allocations, and fewer than half of authorities monitor delivery of OPH. Figure 1 summarises the findings of our research in terms of how older people’s needs are considered in various parts of the plan-making process, based on when those plans were adopted.

One of our findings – related to the lack of allocation of sites for OPH and the issues this can create – was directly mirrored in the report ‘Research into Patterns and Trends in Planning Applications for Older Persons Housing’ (herein ‘the planning report’) which accompanied the Taskforce’s main report, which stated “unlike general housing, most Local Plans do not make specific allocations for OPH, meaning that schemes either have to compete with general housing for sites, or try and gain permission on sites either not identified or not allocated for residential development.” The planning report also noted some of the other planning barriers, including competition with open market sites, urban design factors (with scale and massing needed for viable schemes potentially conflicting with design policies) and the broader difficulties associated with pursuing schemes on unallocated sites.

In this context, it is somewhat concerning that the planning report highlighted a worrying trend that the number of planning applications for OPH has actually halved in less than 10 years, from around 250 in 2015 (of which around 190 were approved and 60 were refused) to around 120 in 2023 (c.80 approved, 40 refused).

Consequently, the number of units approved per year has fallen from a peak of around 7,000 in 2016 to under 4,000 in 2023 – well short of the 30-50,000 per year that the Taskforce estimates is needed. This clearly raises questions as to whether the current policy environment is positive enough to bring forward OPH, reaffirming the observations we made in our research. Worryingly, the planning report also observes that OPH is more likely to be refused than general housing, with 72% of applications for OPH being approved compared with 81% for housing (on sites of 10 or more units).

It comes as no surprise, then, that planning features strongly within the Taskforce’s report – one of the recommendations of the OPH Taskforce is to ‘strengthen planning policies’ and it gives a range of ways this can be done (Figure 2). It notes that the system needs to address the question of use class, create consistent guidance on addressing need, improve awareness of the benefits of providing OPH, and appropriately incorporate OPH into plan-making. Its recommendations are shown in Figure 2, many of which mirror the recommendations we made in Lichfields’ own research earlier this year.

The Taskforce also recommends “a long-term national strategy for OPH/LLH” which it says is ‘vital’ to drive delivery. This might include a national target, which would need to be ‘ambitious’ and ‘translated to a local level’; encouragingly, 83% of Taskforce developers surveyed said they thought it would encourage more supply and 37% thought it would encourage new entrants into the market.

It is difficult to overstate the benefits associated with the delivery of OPH; they are discussed at length in the Taskforce’s report, and range from personal to wider societal benefits to the housing market, health care system and more. The importance of diversification in increasing housing delivery is also well-documented, and specialist housing is a relatively untapped market which is unlikely to compete with other general housing products. This means increasing delivery of housing for older people would clearly go a significant way to helping support the Government target of delivering 1.5m homes in this Parliament (and furthermore, the planning report also showed that OPH applications take less time to be determined than general housing schemes – around 11 months compared to 17 months for schemes of 50-100 units). In turn this would also release a significant amount of housing (particularly family housing) back into the market, and reduce pressures on the health and social care system arising from people living in homes which do not meet their needs (indeed, this is the basis for the Taskforce’s recommendations that Central Government ‘rewards’ high performing authorities). With all these benefits, enabling greater delivery of OPH would seem like a no-brainer.

Stakeholders will eagerly await the Government’s response to the Taskforce’s recommendations, but when it comes to planning policy it’s clear that some significant changes are needed to see the country delivering anywhere near it’s true need for housing for older people. With the recent NPPF making minimal changes to the way in which housing for older people is dealt with in plan-making, we could see further changes to the NPPF if the Taskforce’s recommendations are acted upon. The Taskforce is clear that Central Government needs to set clear expectations of local planning authorities, and provide the policy framework and guidance to support, educate and incentivise local authorities to enable delivery of OPH through using both ‘carrots’ and ‘sticks’. With only more and more people in old age, quick action is needed to reverse the declining trend in planning applications and approvals, to deliver the homes our older people need.