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London’s First Homes – left out in the cold?
First Homes, introduced by the Government into the Planning Practice Guidance in May this year, is a new type of discounted market sale housing – importantly, First Homes are classified as ‘affordable housing’ for planning purposes. This new tenure must be discounted by a minimum of 30% against market value and be sold to first time buyers based on specific eligibility criteria. The discount is retained in perpetuity, but the first sale price must be no more than £420,000 in London after the initial discount has been applied. First Homes are the Government’s preferred discounted market tenure and should account for at least 25% of all affordable housing units delivered through planning obligations. Whilst First Homes are now a material consideration when determining planning applications, the transitional arrangements set out in Christopher Pincher’s Written Statement mean that their inclusion is not mandatory until after 28 March 2022. On that basis, the statutory Development Plan remains the first port of call, and for London that means the newly adopted London Plan (2021) and the relevant Borough’s own Local Plan. The transitional arrangements dictate that Borough’s who have advanced the preparation of a new Local Plan do not have to incorporate the First Homes requirement (at least until an Inspector asks them to at Examination, or as part of a subsequent Local Plan Review). The new First Homes policy may seriously hinder Sadiq Khan’s commitment to boosting the provision of low-cost rented housing in London. In seeking to head this off at the pass, the Greater London Authority published a Practice Note in July 2021 setting out their position on the Government’s new First Homes affordable housing product – it includes a number of considerations that decision makers should bear in mind when determining planning applications in London. With a new mandate, the Mayor’s Practice Note has made clear that he will continue to favour the provision of other tenures of affordable housing, principally Social and London Affordable Rent, as well as London Living Rent.   According to Lichfields analysis, there are as many as 8 Borough’s in London that have sufficiently advanced draft Local Plans to mean they may not be required to consider First Homes until they are up for review in 5 years’ time. Of the Borough’s that haven’t sufficiently advanced preparation of a new Local Plan, 17 are Labour-led and could seek to avoid First Homes by relying on policies in the Mayor’s new London Plan, or even by seeking his intervention on strategic scale applications that are referable to City Hall. Financial viability remains an important planning consideration in London and this new tenure product could result in further downward pressure on the amount of affordable housing that schemes can viably deliver. The GLA Practice Note states that “in many cases, properties discounted by 30 per cent from market value are likely to exceed the £420,000 cap [in London]”. It goes on to say that “In many cases a discount to market value in excess of 30 per cent would be required to ensure that the cap was not exceeded. This would have a detrimental impact on development viability and the provision of other affordable tenures, particularly Social Rent and London Affordable Rent for which there is greatest need.” Given the London Plan’s evidence base [1]reports a need for 47% of new homes to be provided for low-cost rent tenure, and just 18% as intermediate products, the First Homes policy may seriously hinder the Mayor’s ability to deliver on his commitment to boost the provision of low-cost rented housing in London. The Practice Note advises that when giving weight to relevant Development Plan policies, First Homes and other material considerations, the decision makers should have regard to: “Affordable housing needs at a local and strategic level; The delivery of affordable housing by tenure against local and strategic targets; The deliverability and affordability of First Homes in a local and strategic context; The discount to market value required to enable First Homes to be provided at or below the £420,000 cap and the relevance of this to scheme deliverability and the provision of other affordable housing tenures; and All other relevant national and Mayoral requirements, including eligibility criteria, for First Homes and intermediate housing.” Clearly the Mayor’s relationship with Government is already strained, so whilst the Practice Note doesn’t rule out a role for First Homes in London, the content and tone both suggest that City Hall are attempting to kick it into the long grass, at least for now. With First Homes commanding a minimum 30% discount to market, and with the value cap set at £420k in London (after discount), delivering this new tenure could create significant viability problems for developers as they continue to balance other planning obligations and the costs of developing previously developed sites – it is a risk that the Mayor probably doesn’t want to run. That said, some developers may be starting to consider whether they can include First Homes as the entire intermediate element of their affordable housing quota as it might be marginally more viable in some locations. If developers are able to deliver policy-compliant quantum’s of affordable rented homes, then a case could be made for the intermediate element to be wholly First Homes – that strategy would rely on gaining local Borough support, demonstrating there is a need in that specific local context, as well as ensuring the product is ‘genuinely affordable’. This might be a strategy that is better received in Tory-led Boroughs too (albeit there are relatively few), and perhaps with smaller applications that are not referable to the Mayor. There is little evidence so far to indicate how First Homes will be received by London Borough’s and their communities on the ground, but we should start to learn more as they begin to be reflected in planning application submissions. In the meantime it may pay to look at how First Homes is working outside the capital – after all the pilot scheme was launched over the Summer by Robert Jenrick in Shirebrook, Bolsover  (remember him?!). Of course all of this conjecture assumes that First Homes survives longer than its predecessor, the failed ‘Starter Homes’ debacle, whilst our new Secretary of State for Levelling Up, Housing and Communities, Michael Gove, has not yet made any reference to First Homes in his new role – make of that what you will. Either way, my gut feeling is that First Homes are going to be left out in the cold by the Mayor, but watch this space.   [1] SHMA, 2017 Image credit: GRID Architects  

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Planning for climate change: Is London STILL leading the way?
Last year Lichfields published a series of blogs examining various climate change issues. The first in this series explored London’s response to date on the climate change crisis and reviewed the recent findings of the CCC’s 2020 report to parliament. Almost one year on, climate change continues to be at the forefront of both public and government consciousness. This blog provides an update on London’s progress in achieving its Net Zero Target, in the context of a newly adopted London Plan and recovery from the Covid-19 pandemic. Before the pandemic, the need to tackle the climate crisis was a policy priority both in London and across the UK[1]. However, the economic and social context for climate action has changed in importance in the past year and it is recognised that pursuit of low-carbon can support economic recovery. From this, policy proposals and funding packages are now being framed as a means to create jobs, promote a “green recovery” from Covid-19 and help the UK meet its revised 5-yearly carbon budgets and achieve its net-zero emissions target. Over the past few months a number of key events have taken place including the Leaders Summit on Climate (22nd and 23rd April) and the 2021 G7 Summit (11th – 13th June) paving the way for vital UN climate talks at the COP26 summit, hosted by the UK in November 2021. Hosting these talks is a major responsibility and gives the UK more influence on the climate commitments of other countries. The power of our example is crucial and the Prime Minister has announced radical new climate change commitments that will set the UK on course to cut carbon emissions by 78% by 2035 and will require more electric cars, low-carbon heating and renewable electricity. The need to make progress was given emphasis by the recent publication of the IPCC Report[2]. The government is under pressure to back up this ambitious new target with investment and robust policies and to put the foundations in place for reaching Net Zero. It is doing so in the face of some domestic political challenge over the costs this might incur on poorer households and for managing public spending[3], and criticisms over the geo-political management of the issue in the run up to COP26[4]. Latest policy response In the last year, several key policy documents have emerged at the National level, including the Planning for the Future White Paper (August 2020) and the Ten Point Plan for a Green Industrial Revolution (November 2020). The latter sets out the Prime Minister’s ambitious plan for a ‘green industrial revolution’ and covers clean energy, transport, nature and innovative technologies, with the headline-grabbing announcement of a ban on new petrol and diesel cars from 2030. Whilst many welcomed the plan’s ambition and the Government’s recognition that tangible action is required to meet society’s Net Zero aspirations, the RTPI stressed that “only by investing in local authority planning teams would a localised framework be established to ensure investment is properly integrated into the built and natural environment”. This was recognised to some extent in the White Paper, which cited planning as having a central role in addressing climate change. However, its proposals did not require local plans to pursue carbon emission reductions in line with the Net Zero target under the Climate Change Act, nor did it address how national and local climate targets will inform the new local plans and planning decisions under the new system. In an effort to attempt to strengthen climate change considerations in local plans, the revised NPPF (2021) includes a change to the wording of the “presumption in favour of sustainable development” for plan making, and now requires plans to “mitigate climate change and adapt to its effects” (para. 11a). Whilst this might beef up the NPPF’s climate change policies, key conclusions from our previous blog were that the Net Zero Target is only achievable if it is embedded and integrated across all levels of policy and investment. There is still some way to go in ensuring that national policy is supporting and enabling local authorities to align their local development plans with national objectives. Recent policy proposals have demonstrated a centralisation of planning policy consideration on topics that affect the climate, which disempowers the ability to consider those issues at the local level. What’s going on in London? The pandemic has impacted London significantly, with the widespread (if temporary) emptying of offices prompting new commuting behaviours and changes to lifestyle. Headlines last year showed a dramatic fall in carbon emissions during lockdown – demonstrating that it is possible to reduce emissions in a short period of time. However, these reductions are largely linked with the slowing of the economy. In response to the pandemic, The GLA has produced a London Recovery Programme[5] which intends to ‘tackle the climate and ecological emergencies and improve air quality by doubling the size of London’s green economy by 2030 - accelerating job creation for all.’ Sadiq Khan has also spoken about the possibility of a Green New Deal for the city that will ‘increase access to green spaces, support active travel and zero emission fleets to eradicate air pollution, help adapt to climate change and deliver better health.’ These strategies are supported by the London Plan which was published on 2 March 2021.[6] Key headlines from the plan, relating to climate change, include the redefinition of zero carbon, requiring new buildings to meet at least 35% reduction of carbon on site with at least 10% (housing) and 15% (non-housing) from energy efficiency (paras. 9.2.5-9.2.7). This demonstrates how reducing energy requirements could be achieved through good design. The plan also introduces the regulation of embodied carbon levels in proposed buildings, requiring all major developments to be Net Zero Carbon by 2030. Its welcome policies mean all new developments must “calculate whole lifecycle carbon emissions through a nationally recognised assessment and demonstrate actions taken to reduce them” (Policy SI 2, Part F). In the context of the now adopted London Plan, the response of Boroughs (in terms of climate emergency declarations and the target dates for reaching net zero emissions) has varied (as shown below). London headline figures 29/33 (88%) London Boroughs have declared a climate emergency. 24/29 (82% of those that have declared) have set targets to become carbon neutral earlier than the UK/London Plan target. Only 2 boroughs have allowed themselves until 2050 to reach carbon neutral. The boroughs that haven’t declared a climate emergency are all outer London boroughs. Whilst most London Boroughs have now made significant commitments to net-zero carbon, it is not yet clear how the reduction targets are to be implemented. We are beginning to see London Boroughs advancing beyond these first steps of recognising the climate crisis by developing strategies to reduce emissions and create on the ground change. LB Greenwich has consulted on its Greenwich Carbon Neutral Plan (2020) which includes the principle of reducing emissions from new buildings, by committing to “strengthen the Local Plan by 2021 to deliver zero carbon development – through adopting a tiered carbon off-set price via SPD; increasing planning officer capacity to negotiate higher sustainable standards in new development; and evaluating options for a Local Plan review”. Similarly, LB Merton’s Climate Strategy and Action Plan (2020) links to the existing Strategic Objectives and Core Strategy planning policies of the Local Plan which features climate and carbon policy requirements, but also identifies the need to draft Local Plan policies in line with the London Plan: including net-zero carbon development for new buildings and reducing embodied carbon. Whilst London Boroughs do appear to be progressing their Climate Strategies/policies, there is still a long way to go and it will need a continuing commitment and development of expertise at city and borough level. The presence of the Mayor of London as a regional planning authority as part of a compact-city approach to strategic planning means that London, unlike anywhere else in the UK, has its own regional plan and the opportunity to develop robust planning policies, setting strong standards to inform and guide the policy approaches of the 33 London Boroughs. But is it the case that London is leading the way, or are local authorities elsewhere in the UK making significant progress without the backing of an additional tier of governance? Our forthcoming research on the UK-wide response of local authorities to climate change will explore place-based responses to the Climate Emergency across the UK. [1] As evidenced by the introduction of the Committee on Climate Change (‘CCC’) (2008), the UK’s commitment to the UN Paris Agreement and the legislation of a Net Zero emissions target of 2050[2] The report and its background appendices is available here: https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/[3] The Office for Budget Responsibility estimated the total cost to the UK of reaching net zero by 2050 could reach £1.4trillion. The National Infrastructure Commission says the poorest tenth of households will pay an extra £80 a year in bills by 2050, the richest tenth an extra £400. HM Treasury is reviewing the costs of the overall programme.[4] https://www.politico.eu/article/boris-johnson-climate-problem-conservative-government-cop26/[5] https://www.london.gov.uk/sites/default/files/recovery_programme_overview.pdf[6] https://www.london.gov.uk/sites/default/files/the_london_plan_2021.pdfImage credit: @Aquobex via Twitter  

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