Planning matters blog | Lichfields

Planning matters

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

In light of the Government’s recent review of the London Plan and the consultation on further changes to the NPPF,  the focus has been sharpened on the regions and their contribution towards meeting housing needs. The 20 largest cities and urban centres across England are already subject to an ‘urban uplift’, i.e. a 35% increase to their standard method housing need figures, but the proposed changes will result in the presumption in favour of sustainable development being triggered in respect of previously developed land where Housing Delivery Test performance drops below 95% in these local authority areas. The consultation also proposes to add significant weight to the delivery as many homes as possible on brownfield land, whilst taking a flexible approach to internal layout.
In the context of a challenging period for the residential development industry, the Build to Rent (BtR) market continues to go from strength to strength. Savills report that the sector generated £4.5 billion of investment during 2023 – the second highest year on record[1]. This asset class is often seen delivering homes at scale and regenerating brownfield land in many of our biggest towns and cities, but did it get any airtime as part of the raft of recent Government announcements? No, nothing.
However, in light of the new presumption in favour of previously developed land and the contribution BtR is making where many others are stuttering along, it seems fitting to understand what level of policy support there is for BtR across England, and in particular in those 20 largest cities and urban centres. Of course London takes top spot, and the policy picture for BtR in the Capital has been covered previously by colleagues Georgia Crowley and Adam Donovan (see here), but have the other 19 largest cities and urban centres caught-on?  
There are three national trends beginning to emerge from our analysis:
 
  • From our sample of the 19 largest cities and urban centre authorities outside of London, none have an ‘anti BtR’ policy position. However, the five southern urban uplift authorities are more likely to have an adopted or draft policy that explicitly supports BtR when compared to their seven counterparts in the Midlands and seven in the North of England. A case of following London’s lead with a policy pathway for BtR, or simply a reflection of longstanding BtR developer interest in these areas that has influenced policy formulation? Those five southern authorities have all either adopted local plans or begun work on a new plan in the last 5 years, whereas perhaps unsurprisingly, all six of the authorities with a local plan older than 5 years are either silent or have no explicit reference to BtR in their policy (Coventry, Derby, Hull, Newcastle, Stoke and Wolverhampton).
     
  • There are very few examples of adopted or draft policy that explicitly support BtR in the largest northern authorities, including some of the largest: Liverpool, Manchester, Leeds and Newcastle. This is somewhat at odds with experience on the ground, particularly in Manchester and Leeds, where there has been a buoyant BtR development market for some time.
     
  • Three of the top five largest cities or urban centres, Birmingham, Bristol and Sheffield, do have adopted policy that explicitly supports BtR. These big population centres are clearly open for BtR business, and Birmingham and Sheffield are bucking the policy trend when compared to other authorities in their respective patches.
     
Of the 19 largest cities (excluding London), only seven local plans provide positive support for BtR and five of these are located in the south of England (Bristol, Southampton, Brighton, Reading and Plymouth). Considering that BtR is well established in cities across the country, particularly in the northern cities of Manchester and Leeds, it is unhelpful that local policy is not keeping pace with the market to avoid mixed messages to BtR developers and investors about whether they are welcome or not. The often glacial local plan preparation and review process clearly doesn’t help matters, but given that the NPPF makes very little reference to BtR and contains no specific policy support, the most recent proposed changes from Government seem like a missed opportunity. As is often the case, the planning policy environment is failing to keep pace.
There is a real opportunity for a new government to get behind the residential development market nationally by specifically recognising and strengthening the role that BtR has in national planning policy – it is one of the few tenures that can be delivered on brownfield land at higher density, and in a viable way given its differing economic profile based on secure long term rental income. A national emphasis on the role that BtR can play in regenerating brownfield sites, and meeting the rental needs of the population who either chose not to purchase or are struggling to get onto the housing ladder, would then put the onus on local authorities to reflect this in their own local plans and ultimately assist in giving developers and investors confidence to bring forward new projects.
As uncovered by our recent ‘Planning for Rent’ insight work on the London policy position, development management policies within Local Plans rarely differentiate or provide flexibility for BtR schemes when compared to traditional open market tenure. This often results in a requirement for BtR planning applications to provide justification for departures from established residential policies which were designed for traditional ‘for sale’ schemes. With a lack of detailed national planning policy or guidance on BtR, save for the NPPF requiring Affordable Private Rent tenure rather than affordable homes for sale, it is left up to individual local authorities and their local plan to set the bar.
If not through the NPPF changes, the new national development management policies (NDMPs) facilitated through the Levelling Up and Regeneration Act 2023 do provide a potential vehicle to deliver a much clearer basis for BtR developments to come forward. The forthcoming NDMPs will override local plan policies where there is any conflict and therefore could provide a consistent picture at national level which in turn will mean greater confidence from the market.
With interest rates stabilising and costs of construction projected to fall, coupled with the exit of many Buy-to-Let landlords from the market (which will further deplete the availability of rental homes), now is the time to prime the national planning policy landscape so that there is a sure footing for the next wave of BtR development and investment. In our opinion, the role of BtR in the NPPF should be strengthened, and the NDMPs used to create a more level playing field for BtR design and development across England.
The NPPF consultation runs until 26 March 2024 and the first draft NDMPs remain subject to future consultation. If you are interested in preparing representations, or would like to discuss Lichfields’ track record in promoting BtR development in London and across the country then please get in touch.
  

[1] Savills UK | UK Build to Rent Market Update – Q4 2023

 

CONTINUE READING

A Leap Forward for Co-Living

A Leap Forward for Co-Living

Adam Donovan & Ben Kelway 01 Mar 2024
Lichfields' initial view on the GLA’s new Large-scale purpose-built shared living London Plan Guidance February 2024
For those of us working in the co-living sector, Thursday 29th February not only stood out as being a ‘leap-day’ but also as the date on which the GLA published the Large-scale purpose-built shared living London Plan Guidance for adoption.
Following the publication of the first draft in January 2022, the document has been long awaited and, for what is a relatively new form of residential in the UK, a lot has happened in the co-living sector in the meantime. The last two years have seen a significant increase in the number of schemes being opened and many more are in the planning pipeline to deliver the ‘second-generation’ of co-living developments.
So does the new guidance represent a leap forward for co-living?
Well, to take a slight step back, it is fair to say that the draft guidance was met with some concern from co-living developers and operators. It was not necessarily supported by the evidential data which has become available in the last two years and did not apply the degree of flexibility necessary for a new, frequently innovative, form of residential living.
Having worked collaboratively with the industry in the intervening period, including many of the major co-living developers such as Halcyon, the Second Generation Shared Living Consortium and Local Authorities, the GLA has produced a document which goes a long way to meeting these concerns. We are pleased to see that many of the issues raised in relation to the previous document have been addressed and the Guidance now provides a robust and suitably flexible framework which will support the delivery of many of the co-living schemes Lichfields is working on and many others across the capital.
As with the original draft, the document is quite detailed in places and there is a lot to consider in the design and development of schemes. We have pulled out what we consider to be some of the LPG’s most significant points, and provide Lichfields’ perspective on the practical application of the guidance.

 

Locational Requirements

  • London Plan Policy H16 encourages co-living in areas “well-connected to local services". The guidance helpfully expands on this and specifically identifies which areas will be more suitable for co-living, including the CAZ and Inner London Opportunity Areas, Metropolitan and Major town centres, all areas with a PTAL of 5 or 6 and Inner London areas with a PTAL of 4, and other town centres with high or medium growth potential. These are all areas where we have seen an increase in demand for co-living developments and the guidance firmly supports the delivery of schemes in these areas.

Housing Need

  • When submitting planning applications for co-living schemes, it is typical to demonstrate how the development will meet housing need. The LPG recognises that co-living can contribute an element of housing choice and contribute towards housing supply at a ratio of 1.8:1. It also provides more information around how co-living can contribute positively to well-designed, mixed and inclusive neighbourhoods and what should be considered when assessing these developments. The LPG’s approach to housing need is positive. It supports the principle of co-living development and provides clarity on the approach to assessing need and bringing forward schemes.

  • However, the Guidance goes on to advocate caution in the ‘clustering’ of co-living (relative to conventional housing) in certain locations and which could have a negative impact on creating mixed and inclusive neighbourhoods. Where this is the case, LPAs, with appropriate evidence, could introduce policies to restrict overconcentration of co-living, or in the absence of policy seek to limit clustering on a case by case basis.

  • We consider that whilst there may be challenges around the location of co-living developments in the preparation of Local Plans, the additional recognition of the benefits to neighbourhoods and local housing mix are positive. Equally, the introduction of a more standardised approach to assessing the impact of co-living in relation to housing needs will assist applicants and local authorities in the assessment of schemes. The Guidance reinforces the need for co-living developers to get involved at the plan making stage.

 

Space Standards

  • Critical to the success of the Guidance, and a key point made during the consultation on the initial draft, is the introduction of flexibility in the application of space and amenity standards. The Guidance states, “some flexibility in the assessment of LSPBSL applications against these recommended benchmarks may be applied to the design, scale and provision of these facilities in consideration of the site’s location and context, or other scheme-specific factors where it is demonstrated that qualitatively good design outcomes are being achieved.” It also allows for amenity space to be seen in the context of room sizes, so that where rooms are smaller, a higher quantum of communal space may be provided.

  • This flexibility is welcome as it avoids the ‘one size fits all’ approach which has often been applied in the past. Co-living schemes have the ability to develop a range of sites, in all locations and for differing markets. The ability to flex the design to respond to these changing factors is key.

  • Of particular note, the LPG’s communal space requirement has been reduced to reflect the economies of scale in larger developments. Schemes of up to 100 residents have a benchmark requirement of 4sqm per resident. However, schemes larger than 100 and 400 units require proportionately less communal space per additional resident - 3sqm and 2sqm per additional resident respectively.

Table 3.1 LSPSL LPG

 

Room Sizes

  • The minimum (18sqm) and maximum (27sqm) room sizes, and related accessible unit sizes, from the draft document have been retained in the adopted Guidance. Co-living schemes typically fall within this range. However, it is important to avoid the assumption that the larger the unit the better quality the accommodation. The 27sqm maximum is provided to prevent the units becoming marketed or used as self-contained housing as has been the case for some developments in London.

  • Of note and new to this version of the LPG is the recognition that some larger units may be suitable for occupation by couples.

 

External Space

  • The importance of external space is , quite rightly, emphasised in the LPG in recognition of the role in plays in wellbeing, urban greening and biodiversity. The provision of high quality external spaces, often in the form of terraces in the most desirable parts of the building, is something which co-living can provide in ways traditional residential accommodation may not. For example, a roof level terrace with views of London which is accessible to everyone in the building is a significant benefit which can be delivered in co-living schemes and this approach is supported by the Guidance.

Table 3.4 LSPSL LPG

 

Affordable Housing

  • London Plan Policy H16 requires co-living developments to make a payment in lieu contribution towards the provision of new C3 off-site affordable housing. However, in accordance with the Draft Affordable Housing Guidance published last year, the LPG now recognises that in some cases the on-site provision of C3 affordable housing could be acceptable. Increasingly, we are seeing Local Authorities encouraging the delivery of on-site affordable housing, where it is possible, as it is seen as a tangible planning benefit. Further guidance on this matter is expected.

 

Cycle Parking

  • The LPG adopts a bespoke approach to cycle parking, requiring 0.75sqm per person and importantly introducing flexibility which can be applied based on site location and where onsite shared bicycle schemes are provided. We are seeing the introduction of schemes with innovative cycle sharing facilities which can provide a range of cycle types for residents as part of their rent. The approach taken by the guidance will foster this innovation and allow schemes to respond to the requirements of tenants as well as location.

 

Inclusive Building Design

  • The LPG introduces additional guidance on the importance of ensuring that buildings are design to meet the needs of people with a range of disabilities and impairments. This goes beyond wheelchair access and includes mobility, sensory, dexterity and learning difficulties and how this can be addressed in design. The LPG’s recognition that co-living has an important role to play in providing homes for a wide and diverse population is a positive feature of the adopted document.

 

So in summary, the adopted LSPBSL Guidance represents a significant evolution from the previous draft. Many of the changes will be welcomed by the industry. This is particularly the case in terms of the LPG’s clear support for the principle of co-living in the right location, the clarity it provides on assessing housing need, its emphasis on a design-led approach, the more appropriate and better-evidenced standards it sets and the inherent flexibility encouraged in the application of those standards.
It is clear to Lichfields that well designed and appropriately located co-living developments have a central role to play in meeting London’s pressing housing need, diversifying the capital’s housing stock and strengthening its communities. The planning system must foster and facilitate these developments. We are encouraged to see that the GLA’s LPG firmly recognises these opportunities and provides a logical and flexible framework to support the delivery of co-living schemes. It will be interesting to see how the market responds
So the leap-day did indeed produce a leap forward for London’s co-living sector.

 

CONTINUE READING