Planning matters

On 2 May 2023, Welsh Government released a new position statement (‘Town Centres’) that offers up a series of actions and activities to support the ‘Town Centre First Policy’: a policy position integrated across existing national planning documents that seeks to focus the delivery of new development within town centres. But what was included in this position statement and what does it mean for the future of Welsh Town Centres? Current Town Centre Policy in Wales In recent years, Welsh Government has invested heavily in supporting Town and City Centres through a wide range of funding programmes. The most recent set of grants came last year when a further £100m of funding was be made available to support town centre regeneration between 2022 and 2025[1] (see table below for a full list of funding generated since 2014). This grant funding has been supported by strong planning policy in relation to town centres in Wales. ‘Town Centre First’ is a policy position that has been embedded into planning policy documents produced by Welsh Government (see Technical Advice Note 4[2]) and in 2021 this position was bolstered through the introduction and publication of the National Development Framework for Wales (Future Wales: The National Plan 20403) which makes it clear that the sequential test applies to uses other than retail, recognising that successful town centres are diverse in their composition, and more than just shops. The policy has also been worked into the previous and current iterations of Planning Policy Wales (Editions 10 and 11[3]), whose purpose is to set out the detail of land use policies in Wales. The ‘Town Centre First’ approach requires local authorities to put “the health and vibrancy of town centres as the starting point of locational decision-making”[4]. Although the policy has been a part of the wider planning framework within Wales for some time, its inclusion as a standalone policy (Policy 6) in the National Development Framework is a demonstration of further commitment to Welsh Town Centres. This is not least given that the policy requires Strategic and Local Development Plans to now identify (through a sequential approach) the most appropriate town centre locations for “significant commercial, retail, health, leisure and public service facilities”4. That said, local authorities should act pragmatically when applying the sequential test, and not refuse planning permission based purely only on a proposal being located outside of town centre, when sites in such locations are not suitable nor available. For those unfamiliar with Welsh planning policy, PPW and TAN4 broadly echo planning policy for town centres set out in the NPPF in England– though it also requires consideration of the qualitative and quantitative need for new development. In this context, Welsh local authorities are armed with a strong suite of planning policy tools (such as sequential and impact tests) to support town centre development and resist development in inappropriate locations or where a clear need cannot be demonstrated. However, despite the above supportive policy context for Town Centres in Wales, many centres have experienced well documented[5] challenges over recent years, and are still grappling with high levels of vacancy and low levels of property demand[6]. The Position Statement: ‘Town Centres’ It is against this background that Welsh Government issued a new position statement (Town Centres) on 2 May 2023 which identifies a series of actions and activities to be picked up through cross and local governmental interventions, beyond just the creation of new planning policy, that can support the delivery of the already embedded Town Centres First policy. The actions and activities can be split into three categories and are summarised as follows: 1. Town Centre First Policy Re-location Plan: The development of a long-term plan for the location of a diverse range of public services into town centres, supported by asset management strategies and governance structures of public bodies; Public Sector Spending: Development of a better understanding of the revenue and capital spending and procurement frameworks of key public sector institutions (eg health, education bodies) to ensure that they are aligned with the Town Centre First policy; and Housing Consortia: Establishment of ‘consortia’ of social landlords and private developers to support and encourage town and city centre living.   2. Policies relating to Out of Town and Connectivity Planning Power and Re-Use: Strengthening the implementation of the Town Centre First policy in planning, and empowering local planners to refuse developments which do not meet policy requirements and to plan for the adaptive re-use of out-of-town developments; Transport Plans: Ensuring that Regional Transport Plans take into account the Town Centre First policy; and, Sustainable Transport: Exploration of “demand management” schemes to support change in the way we travel, address carbon targets and support investment in sustainable transport.   3. Joined Up Delivery: Placemaking Plans: Ensuring that the Transforming Towns Programme is targeted at the places where it can support transformational opportunities and under a placemaking plan which has been developed locally; Specialist Body Functions: Development of options to support the delivery of specialist support, including the future remit of the Design Commission for Wales; and Climate Considerate: Identification of opportunities to ensure Green Infrastructure and nature-based solutions, using circular economy principles, are embedded, and prioritised in decision-making when undertaking works in public spaces within town centres. Position Statement and Planning Highlights The statement looks to support the longer term and more joined up planning of urban centres, through providing a series of planning and non-planning focussed cross-governmental and sector-specific actions, that can help ensure a Town Centre First approach is taken by both the public and private sectors well before proposals are appraised against national policy. Some of the actions within the statement seem to be more geared towards the planning industry, and noteworthy amongst these are: The encouragement of Placemaking Plans for local adoption; Supporting the adaptive re-use of out of centre developments; and Supporting Local Authorities to refuse inappropriate development. It is encouraging that the position statement looks to support local Councils in ways that go beyond the financial support provided in recent years, as alluded to above. Some Welsh councils have very clear city centre regeneration programmes, such as Swansea[7], while others, including Wrexham[8], have specific town centre focussed supplementary planning documents or masterplans, that recognise the challenges facing city and town centres. However, this is far from universal and many Councils are yet to properly acknowledge and lead the drive to repurpose their Town Centres in order to address their changing role and function. The position statement recognises that this is the case and that more targeted support, including a greater emphasis on Placemaking Plans and officer empowerment, is required to support the Town Centre First policy position. The position statement’s reference to the re-use of purpose built out of town centre developments may also present opportunities and it will certainly be interesting to understand if and how current policy positions can be adapted to support and encourage change.   A ‘Town Centre First’ Approach Beyond Planning Besides the planning focussed highlights, this position statement offers a whole host of cross-sector actions to support what is considered to be a key policy tenet for Welsh Government (given its specific inclusion as Policy 6 within the Future Wales: National Plan 2040) outlined above. These interventions, actions and proposals Planning policy and top-down Welsh Government intervention are only two aspects of a complicated matrix of policy, plans and stakeholders that influence the development of our Town Centres. The statement is seeking systemic change to ensure that a Town Centre First approach is taken at every stage of the built environment development process, acknowledging the importance of climate considerations in urban centres and the complexities of public sector spending. It is ambitious; but if effective could enable a pro-active rather than re-active approach to town centre planning and regeneration.   Where From Here? The Next Steps The actions set out within position statement are intended to support the overarching intentions of Town Centre First policy and now a timeline and demonstration of how each action would be implemented and prioritised is needed. These actions could be achieved through alterations to national or local policy or via the reporting and monitoring of consequential development management decisions including their impacts on physical development and overall town centre health and vitality indicators. As part of exploring the actions, it will also be important to re-consider how town centre boundaries are drawn. The successful implementation of Town Centre First policy and some of the future plans outlined within the position statement will be reliant on correct and appropriate town centre boundaries. These need to be flexible enough to contract, and alternative uses supported where vacancy levels may be higher, but also allowed to grow as commerce in successful town centres flourishes. In the event, a combination of effective policy and focussed grant funding, supported through the actions in Welsh Government’s recent position statement, could be the trick to helping to revive high streets across Wales.   [1] Transforming Towns Fund, Welsh Government [September 2022] [2] Technical Advice Note 4, Retail and Commercial Development [November 2016] [3] Planning Policy Wales, Edition 11 [February 2021] [4] Future Wales: The National Plan 2040 – Policy 6 – Town Centre First, p. 71 [February 2021] [5] Lichfields Blog: Broadening Horizons – Retail and Leisure Post Covid [April 2023] [6] Welsh Retail Consortium Figures from their Recommendations to the Welsh Budget [November 2021] [7] See Swansea Council City Centre Improvement Schemes and Strategies Page here [8] See Wrexham Town Centre Masterplan [Adopted April 2016]    

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: The current market size and shape to the perceived opportunities; and,  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.   The prevalence of Short Term Holiday Lets 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.     Why is regulation being proposed? 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. Recognising the importance of short term holiday Lets 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. What could regulation look like? 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. If you deliver holiday schemes of any scale, Lichfields is happy to work with you to progress both your project and shape the future of short-term holiday lets regulation in England.