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Planning matters

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Groundhog Day – let’s talk about unimplemented permissions, again
There are few topics that can command the same media attention as housing. One might think that the level of interest, scrutiny and desire to overcome the challenge would mean new reports and analysis would reflect how far the conversation should have come, with ‘nuance’ as the watchword. But, alas, it appears not. One story that does the rounds every year or two is what the Local Government Association calls ‘unimplemented permissions’. In its latest iteration, the LGA claims that more than 400,000 homes have been granted permission but have been left unbuilt and that they are taking longer to build those homes too. The implication to this is threefold: 1. planning is not the problem in housing delivery; 2. housebuilders are likely to be landbanking; and 3. the government may need to take a more interventionist role. But in the name of nuance – and before we rush to designing policy solutions – we should understand a bit more about the analysis. The data the LGA uses is from Glenigan, a firm that provides planning data on all development in the UK. Importantly, Glenigan mostly tracks schemes through the planning system and have a network of stakeholders and partners but what they do not do is visit every site to see precisely how many have been built. Back in 2016 – the last time this analysis was undertaken and released – it meant that units on sites that were not fully complete would be classed as ‘unimplemented’ i.e. a site of 1,000 units that was 99% complete would have all units counted as ‘unimplemented’. This year, they have estimated the number of ‘unimplemented units’ on site by using the median construction time of projects with similar characteristics (project size, type and region) completed in 2015/16 and 2016/17, assumed that no units were completed during the first 16 weeks of a project and that unit completions were evenly distributed across the remainder of the construction phase. This is certainly an improvement to the methodology – which is welcome – but the analysis still doesn’t highlight key considerations which are vital if we are to create useful and effective policy. Our extensive analysis from 2017 on this topic drew two key conclusions. First, even if we set aside the specific and detailed issues the LGA has not considered, it is still a relatively small number of units considering three factors: 1. the number of homes built each year; 2. the length of time the different sizes of sites take to build out; and 3. the number of sites in the pipeline required to signal to investors that developers are worth investing in. Secondly, given that differently-sized sites take different timescales to plan and build, and that every site has unique ‘build profile’ that extends into the future - i.e. not all units on site are built in the year they are granted permission – it is entirely understandable that there would be ‘unimplemented units’ and, indeed, in a period when output is increasing after a slump the ratio between permissions and dwellings completed each year will naturally increase. Recognising this build-out profile, our analysis uses two different housebuilding scenarios to show that there needs to be a stock of units with permission to sustain housebuilding in the future and this stock would initially increase at a faster rate than supply in order build the pipeline necessary to match increased targets. With this in mind, our modelling showed that a stock of between 0.9 and 1.1 million units would be required to ramp up future housebuilding to hit 300,000 homes per year by the mid-2020s (Figure 1) – a target subsequently adopted by the Chancellor. This leads one to conclude the LGA figure of 423,000 unimplemented units is a sign not of landbanking but of an urgent need for more permissions. Figure 1: Trajectory of Permissions and Output  Source: Lichfields analysis   Image credit: Columbia Pictures Corporation


Will brownfield land registers solve Greater Manchester’s housing crisis?
It is well-known that Greater Manchester is not immune from the national housing crisis. Going forward, the first draft Greater Manchester Spatial Framework’s (GMSF) housing target is still considered too low by many observers (including ourselves). However, at least it has confronted the issue of Green Belt release. Greater Manchester’s Mayor Andy Burnham campaigned on, and has delivered on this matter through his review of the draft Framework, and it will be covered in the much anticipated, upcoming 2nd draft of the GMSF. Whether this represents the promised “radically changed” approach to make more use of the city region’s brownfield sites, and reduce the impact on the Green Belt, we will have to wait to see. New rules in force since last April mean that all local planning authorities (LPAs) had to publish a brownfield land register before 31 December 2017. Nationally, Lichfields’ analysis shows that only approximately half of English local planning authorities have published their brownfield land registers (BLR); the registers tend to simply include sites identified in strategic housing land availability assessments/ allocated housing land. This is possibly related to, and symptomatic of, the slow delivery of local plans, with patchy coverage at best nationally and a similar development planning pattern across Greater Manchester too. As part of Lichfield’s analysis highlighted in this blog, we focus on the Mayor’s stated aim of tackling the city region’s ever-growing housing crisis with the re-use of brownfield sites. How will the GMSF make better use of brownfield land, and how realistic is this policy approach? Publication of the region’s registers in December 2017 provides some insight on this issue. To be fair, all 10 Greater Manchester authorities have published their registers, reflecting their wider regeneration aspirations and the drive to maximise the re-use of brownfield land for housing-led development. In total 1,314 PDL sites have been identified across Greater Manchester which collectively have the capacity to deliver around 100,100 new homes over the next 15 years. How many of these are deliverable without significant public sector investment will be interesting to see. It is by any measure a significant number, but it only helps to crystallise the case for retaining the Green Belt around Greater Manchester or not; the number of homes on BLR sites equates to only around 44% of the draft GMSF housing target of 227,200 new homes up to 2035. Many within the industry considered this aspiration to be too low already, identifying how it failed to serve aspirations for economic growth and the Northern Powerhouse agenda. Irrespective of this, we all have to grapple with where the other 127,100 or more homes will be built. It is also fair to say there is a mixed picture across Greater Manchester in terms of distribution of brownfield land. Figure 1 below compares the quantity of brownfield land to the previous draft GMSF requirement. Only Manchester, Salford and Bolton can deliver over half of their target. Six local authorities (Bury, Oldham, Rochdale, Stockport, Tameside and Trafford) can only deliver less than 30% of their requirement. Figure 1: Brownfield land register proposed dwellings compared to the previous draft GMSF’s requirements   Source: GMSF, MHCLG The capacity gap in Trafford (86%) and Stockport (88%) is very substantial to say the least. So what does this mean for the future spatial strategy, and what are the consequences? How are Trafford’s and Stockport’s (and others’) needs to be met, without further increasing the affordability gap and the pressure on house prices. The previous draft GMSF identified a series of greenfield sites - predominately from the Green Belt - that would be required to meet need, contributing some 63,850 dwellings overall. Since it was formally adopted in 1984, the Greater Manchester Green Belt boundary has largely remained unaltered and it is a highly controversial topic - hence the Mayor’s review of the first draft GMSF. However, even if one adds all of the potential GMSF allocations to the BLR sites, the total falls a long way short of housing targets. Taking Greater Manchester as a whole, BLR sites and potential GMSF allocations will only deliver 72% of the city region’s housing requirement overall. Again the picture is highly variable, with Bolton and Bury close to achieving their requirement, but others, including Trafford and Tameside, having significant shortfalls. Figure 2: Total GMSF allocation & proposed brownfield land register units compared to the previous draft GMSF requirement Source: GMSF, MHCLG Furthermore, when considering the identified allocations, the GMSF has focused primarily on a few very large sites coming forward to meet the shortfall in supply. This results in inevitable pressure on infrastructure in key communities. We will have to wait and see how the 2nd draft GMSF responds to these issues, but it may for example include a broader range of sites, of different sizes and locations in order to de-risk the delivery issues and problems associated with not achieving the housing requirement. Brownfield land is one step towards meeting the requirement, and key questions will remain around delivery, and how long term requirements are to be met.   However, as demonstrated in Figure 3, there remains a shortfall of 63,245 homes to meet even the first draft GMSF housing target.  Regardless, the 227,000 GMSF requirement still remains well below the level of housing necessary to address housing pressure and the under-delivery that the city region has experienced over the years, even before considering the long-term economic growth needs of the conurbation at the heart of the Northern Powerhouse. Figure 3: Identified housing shortfall Source: GMSF, MHCLG Conclusion Whilst there is much to be welcomed in the Greater Manchester local authorities publishing their BLRs before the deadline, it seems that the re-use of brownfield land for housing can only be part of the solution. Even if every one of these sites were to come forward as intended, the local authorities still need to identify land for more than 127,100 homes just to meet the GMSFs conservative targets. If less land is to be removed from the Green Belt, there remains significantly more deliverable sites that will have to be found to meet need. This is even before a debate as to whether a target of 227,200 is suitably ambitious for a great conurbation such as Manchester, that should be driving the economy of the North in the Northern Powerhouse agenda.   Image credit: A.P.S. (UK) / Alamy Stock Photo