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Planning matters

Our award winning blog gives a fresh perspective on the latest trends in planning and development.

Time to re-purpose first generation student accommodation?
Student accommodation has become an important part of the country’s property sector, with a boom in delivery in recent years. In 2018/19, the proportion of bed spaces provided by the commercial sector has reached half of total stock, up from 39 per cent in 2012/13[1]. In 2018/19[2] over 2.35m people attended university in the UK, including nearly half a million international students and over 1.25m UK students living away from home during term time. Whilst the long-term impacts of COVID-19 on the student accommodation market are as yet unknown, more recently, the immediate implications have resulted in soaring vacancy rates and a potential drop-off in student intake for the new academic year, including from overseas students. This was cited in a letter from the British Property Federation to the Government on 8 April 2020[3] which stated: “In light of universities closing and students being unable to work, many accommodation providers are in a difficult position but are choosing to waive rents for the remainder of tenancies, at substantial financial cost. There is also considerable uncertainty as to how the crisis will affect the number of students attending UK universities in September. As a result of the global recession, uncertainty around term dates and application procedures, and the possibility of continued travel disruption there could be markedly fewer students arriving for the new term, from both the UK and particularly abroad.” Whilst there are differing views on if and when university towns and cities may reach saturation point in relation to student accommodation, and the long term implications of COVID-19, what is clear is that there is a continuing shift in terms of what students expect from their accommodation. It is well cited that the days of students living in dingy accommodation with small, sometimes shared rooms and facilities are gone. There is also a lot of discussion about whether purpose-built student accommodation (PBSA) will free up family homes if students are choosing PBSA over existing Houses in Multiple Occupation (HMOs)[4]. However, there is less discussion on how the demands of students continues to shape the PBSA market and what that means for the first generation PBSA; and it is this point that is explored within this blog. Between 2016/17 and 2018/19 across the UK there has been a 4% growth in student numbers living in PBSA, with the PBSA sector having a 22% share of the UK student accommodation market in 2018/19[5]. Newer PBSA stock is often located centrally within a town or city, often close to university campuses. The National Student Accommodation Survey 2019 found students live on average 20 minutes from their university[6]. This represents a clear benefit for students, compared to accommodation located on the periphery, in terms of convenience for both academic and social activity. This is often due to affordable values and availability of sites as developers tested the immature market. Indeed, planning policies such as Newcastle City Council’s Core Strategy and Urban Core Plan Policy CS11 supports this trend, setting out that: “Promoting lifetime neighbourhoods with a good range and choice of accommodation, services and facilities to meet varied and changing needs, will be achieved by…Focusing the provision of purpose built student accommodation within the Urban Core.” (Emphasis added). This means that any new PBSA schemes will be better located compared to those that have been built outside of the defined Urban Core. Newcastle Council’s ‘Maintaining Sustainable Communities SPD’ (2017) sets out a number of planning benefits of focussing the growth of PBSA in the Urban Core including: making the Universities more attractive to prospective students by offering a range of high quality, affordable accommodation in accessible locations; providing increased vitality to the city centre through the increase in student residents with the associated benefits arising from increased footfall and spending in shops and local services; reducing demand for existing HMOs in Article 4 areas and thereby encouraging their return to family dwellings; securing development on often vacant or under-utilised sites and bringing previous vacant upper floors of historic premises back into use; delivering a series of often striking architectural buildings that enliven the centre of the city; generates little day to day vehicular traffic, except at the beginning and end of term; limited amenity impacts on existing residential areas; the Council receives New Homes Bonus payments and planning obligation contributions provided by the PBSH sector…to be used on infrastructure projects related to the developments... (Para 3.18) The SPD further recognises that markets fluctuate and seeks to safeguard the Urban Core with Policy SC2 requiring that the design of PBSA schemes must ensure that it can be adaptable to alternative future uses. Newer PBSA typically boasts facilities such as 5G, en-suites, double beds and well-designed communal areas. As this becomes the norm in response to competition in the market, it means that significant changes are needed to bring older accommodation up to the standards expected by students today. Even if existing older stock is brought up to similar standards, their peripheral location remains. Therefore, if price points do not reflect this difference in location, maintaining high levels of occupancy is likely to become challenging and there is a risk that more peripheral schemes become obsolete. However, with these challenges comes opportunity. It is well documented that we are in the midst of a housing crisis; with a national ambition to deliver 300,000 new homes each year for families, first time buyers, renters, young professionals and older people. With strong demand across such a broad demographic comes a similarly broad housing requirement; meaning there is a need to deliver a range of house types, sizes and tenures in a variety of locations. Whilst the first generation PBSA may not be as centrally located to university campuses as newer PBSA, they are generally on the periphery of towns and cities, with good public transport links, existing infrastructure and some with car parking provided. So what does increased supply and the growing demands of a mature market and planning policy context mean for the first generation accommodation? There is a clear opportunity to repurpose older PBSA stock to better balance demand and supply whilst helping to meet the housing needs of a different, non-student, sector of society. This could include apartments for older people or young professionals alike; both of who typically seek well located and connected accommodation. Indeed, re-purposing an existing PBSA block would not have to be focussed on solely the young professional or solely a retirement scheme; there is clear merit in integrating the two to help form a balanced and mixed community. Lichfields has developed the Bedspace Model and Carepacity Toolkit to assist developers, operators, universities and local planning authorities in identifying opportunities for PBSA and housing for older people across the UK; being able to find sites as well as demonstrate the need and capacity for such development within a local area. We are also able to find sites or appraise existing sites that could benefit from being re-purposed to bring them into a more viable and attractive use. If you would like further information on our planning services, please do get in touch.   [1] NUS responds to accommodation cost survey 2018[2] HESA data[3] Supporting the student accommodation sector through COVID-19[4] Planning matters, Student accommodation[5] Lichfields analysis of HESA data[6] National student survey 2019  

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Planning Practice Guidance on housing for older people
Last week Government published new Planning Practice Guidance (PPG) on housing for older people and disabled people. This is a positive step, as it recognises that providing housing for older people is critical and that it needs to be considered from the early stages of plan-making through to decision taking. This recognition is particularly welcome given that (as our research: "Solutions to an age old problem: Planning for an Ageing Population" shows whilst nearly a quarter of the population will be aged over 65 in Great Britain by 2036, only 7% of Development Plans in England, Scotland and Wales include land allocations for housing for older people. It is well documented that there is a clear need for housing for older people. The planning system plays a fundamental role in ensuring this need is met. However, the new guidance remains loose on critical issues, leaving it open for LPAs to decide: whether or not to allocate sites for specialist housing for older people in their Development Plan Documents; the use class a particular development may fall into; and whether to monitor delivery through the Annual Monitoring review process. These are three key areas that our research highlights need clear and stronger guidance to aid the delivery of the right amount and type of housing for older people in the right places. Taking each in turn, our research highlights that whilst 60% of Development Plans identify a general need for housing for older people, only 14% have a specific policy relating to a requirement for need and only 7% actually include any land allocations specifically for this use. This can make it difficult for developers of older people’s housing to compete with general housing developers when bidding for land. Including allocations in Development Plans would provide more certainty for both the Local Planning Authority and developers alike. Whilst PPG states that LPAs do not have to allocate sites for housing for older people, the PPG sets out that LPAs should provide clear policies to address the housing needs of older people. This includes how proposals for different types of housing for these groups will be considered. Lichfields' Carepacity Toolkit can assist in demonstrating the need for housing for older people and our research sets out how the planning system can help facilitate the delivery of housing for older people. In turn this can assist in identifying sites to be allocated to meet the identified need, or indeed brought forward through a planning application. In relation to Use Classes, the PPG acknowledges there are many types of housing for older people but does not include a definitive list. Nor does it provide any definition of what type of housing for older people falls in Use Class C2 and which better aligns with Use Class C3. As highlighted in our research, this causes uncertainty and can have financial implications for developers. Our review of 23 appeal decisions for older people’s accommodation in 2019 showed that there are many different factors that are taken into consideration in relation to what Use Class an older peoples housing development falls within and the conclusion on an appropriate use class often proved critical to the outcome – for example whether or not an affordable housing contribution should be provided. Our appeal review also demonstrated the importance of fully addressing the planning balance as a whole, over and above demonstrating the need with 17 of the appeals being dismissed (totalling 588units) with refusal reasons including: Eight - related to design and amenity Two - related to affordable housing Three - related to impact on countryside / Green Belt Four – related to policy conflict (employment allocation, rural exceptions, lack of community support, no evidence of need). Where five year housing land supply (5YHLS) was cited: three LPAs had no 5YHLS and were still dismissed two LPAs had a 5YHLS, one being allowed and one dismissed. This review demonstrates that there are many factors that help determine what Use Class a scheme falls into and it is not clear cut. Design and amenity remain important with many inspectors considering massing, amenity space for residents and impacts on neighbours. Turning to monitoring, only 16% of LPAs in England and Wales monitor delivery of housing for older people. Given the critical need to ensure that enough good quality housing for older people is provided to meet the growing ageing population’s need, it is vital that, as an industry, we monitor delivery to ascertain whether the need is being met. PPG refers to this but again does not make it a requirement. To conclude, whilst the new PPG is a positive step in the right direction, acknowledging the clear role that the planning system has in the delivery of housing to meet the needs of our growing ageing population, it does not go far enough. It should be made abundantly clear to LPAs that it is a requirement rather than an expectation that Local Plans identify and allocate sufficient land to meet the housing needs of older people.

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