2012, a New Year and perhaps a brighter one? As I’m sure you’ve guessed from my lack of posts, in the last quarter of 2011 I found it increasingly difficult to find anything bright to write about current housing design and planning matters. Housing starts and completions in England were drifting downward through each of the first three quarters of 2011 and it seems unlikely that the fourth quarter will be different. I’m afraid I don’t see 2012 being any different, not even with the stingy incentives the government can afford, because demand is so weak. That won’t change for a while, given the weak outlook for the economy resulting in a lack of confidence coupled with the lack of cheap mortgage finance. I fear that the government’s tinkering with the planning system is just that and will do little other than make negotiating the planning system an even more obscure and risky pastime.

However there is still a housing market out there, and personally there is a bright spark on the horizon. My first development, The Chapel at Abbey Place Faversham is reaching completion, so I have personally contributed to CLGs housing starts statistics for the third quarter of 2011. I am very much looking forward to seeing those figures translated into housing completion statistics in the first quarter of the current year, not to mention sales statistics in my Profit and Loss!

Please do have a look and if you sign up on our website, I promise to invite you to our launch weekend, which we hope will be towards the end of February.

All the best for 2012 and if you are looking for a stunning one or two bed flat, located in a beautiful and historic Kentish market town a mere 60 minutes from London, you know where to look!

My apologies for the gap since my last post; this was partly due to a family bereavement but mostly due to boredom with the debate (see here or here for example) over NPPF. Clearly the “general presumption in favour of sustainable development” represents a return to pre-1984 and is at least a shift in emphasis if not a radical change in direction. The rest of the document appears to be little more than a précis of the current PPSs and PPGs, so much so that the PINS has suggested there are only eighteen policy changes besides the “presumption”, few if any of which will have a major impact on the ability of the planning system to enable the sustainable development we need.

The aim of NPPF is to simplify the planning system and clearly fewer words in policy might help a little. However it is clearly a mistake for Messrs Osborne and Pickles to conflate policy and guidance, as they do in the second paragraph of their recent joint letter. Whilst the NPPF might reduce central policy to 50 pages, all of the helpful guidance produced in the last fourteen years, such as By Design, Manual for Streets, Building for Life, Code for Sustainable Homes etc, will remain vital tools to assess whether proposals meet the broad policy objectives. For example, NPPF reaffirms that “Good design is indivisible from good planning” and the chapter on ‘Design’ repeats much of the similar chapter in PPS1. I don’t suppose that the guidance on what was “good design” last year is no longer intended to apply this year.

So overall I can see little either to cheer or despair about in the draft NPPF. Instead, as with the Localism Bill, it is difficult to see how the NPPF will significantly change the planning system. Firstly, in itself, a presumption in favour of sustainable development changes only the burden of evidence (the council have to demonstrate harm to refuse a proposal, rather than the applicant demonstrating compliance with policy to entitle him to approval). In reality developers will still have to convince an Inspector at appeal that their proposal is “sustainable” and I am sure they and their expert witnesses will continue to use the existing reams of guidance to organise their evidence. It is not quite fair for CPRE/National Trust et al to suggest the NPPF alone will result in concreting over swathes of the countryside, which current policy protects: it won’t and anyway current policy doesn’t offer any significant additional protection over NPPF.

What they should be much more concerned about is DCLGs recently published statistic confirming that more than 70% of the Local Authorities do not yet have a Core Strategy in place. Paragraph 26 of the Draft NPPF requires Local Authorities to maintain an “… Up-to-date Local Plan… which is consistent with this Framework“. It goes on to state, “In the absence of an up-to-date and consistent plan, planning applications should be determined in accord with this Framework“. So, when the NPPF is adopted, in 70% of the country one might argue that much of the extant ‘saved’ Local Plan can be ignored! Whilst I don’t suppose Local Authorities will simply roll over and accept that their Local Plan is irrelevant, I am sure there will be much fruitful debate at appeal as to how relevant a Local Plan might be when it fails to include a presumption in favour of development, as none of them do currently (incidentally, I see that Adrian Penfold of British Land agrees with me on this). Once NPPF is adopted and until Local Authorities address the current lack of up-to-date Local Plans, it will be much easier to obtain planning permissions for questionable proposals in the wrong places.  Whilst this might result in the potential for more homes (albeit in the wrong places and of questionable ‘sustaianability’), on balance, this is probably not a good thing.

Secondly, I don’t understand how Messrs Osborne and Pickles think that their tinkering with the planning system will result in more new homes actually getting built.  At the moment, the only significant providers of new housing are housebuilders.  For the last two decades, they have been responsible for well over 80% of annual completions, whilst in those two decades, state intervention, channelled through Housing Associations and HCA/ Housing Corporation, has never produced more than 30,000 new homes, about 13% of the number of new homes we need (see DCLG Housing Stats).  This is not likely to change given that HCA’s budget has been halved.  As anyone in housebuilding can tell them, housebuilders match their start rate to their sales rate.  Sure you need planning permission before you can start and that’s why housebuilders maintain a pipeline in the form of a land bank of between two and four years anticipated supply.  But the principle rule remains “Don’t build it until you can sell it”.  Messrs O and P hold up the paltry housing completions figure for 2010 as proof that Labour’s top-down targets didn’t work, when in reality it simply reflects that housing transactions stood at about half their pre-crash rate (see figure 2 on page 5).  The press is awash with stories about how difficult it is to secure a mortgage and the National Housing Federation sponsored Oxford Economics report demonstrates how home ownership rates are falling as it becomes increasingly unaffordable to first-time buyers.  Grant Shapps response to this latter report is surprisingly thin and doesn’t mention the proposed changes to planning as one of the measures aimed at increasing access to the housing market (possibly because it isn’t!).  Even if the proposed policy tinkering might make the planning system easier and faster, it would not result in more homes being built, since the number built reflects the number sold. 

Given that housebuilding is almost entirely dependent on the market, the only way to increase housing starts will be to increase demand.  For that to happen, either lending to individuals will need to become easier or we must embrace tenures other than home ownership.  At the moment our banks are struggling to rebuild and bolster their balance sheets and are avoiding additional lending, particularly risky lending on property with high loan to value rates (not surprising bearing in mind that’s what got them and us into this mess).  On the other hand, the dream of a “Home-Owning Democracy” has become so ingrained in our national psyche, that it seems improbable that any of the main political parties will drop policies, which promote it.  However, there are some signs that corporate money is beginning to find its way into residential rental property, particularly in London, and as the NHF/Oxford Economics report suggests, perhaps rental property is where real demand currently lies.  Would it be foolish to suggest that rather than tinker with planning, some fiscal stimulus of the residential rental market might be a much better way to get more housing delivered in the medium term?

I’ve recently read two pieces, which seem to me to confirm the direction of planning and housing policy.  The first is Jim Ward’s piece on Development Land prospects in Savills Residential Property Focus, 2^nd quarter.  As Jim puts it,

“The downturn in construction during the last six months highlights the risk that weakness in construction could lead to a return to recession.

 

This is why coalition policy has turned so dramatically in favour of promoting growth through the planning system. The strength of government statements on this point is remarkable, signalling that many of the previously flagged features of localism will play a secondary  role in how planning operates. All of this means the new planning system is heading away from the NIMBY’s charter that had been emerging through the early stages of the Localism Bill.”

Jim goes on to set out the various positive, if perhaps inadequate, steps the government has taken to encourage house building, such as the Hew Homes Bonus, FirstBuy and Community Infrastructure Levy.  He also highlights how the “general presumption in favour of sustainable development” will require Local Authorities to assess and set their own housing standards based on sound research and data (I’d give you the job Jim!) and to do it quickly, if they wish to retain control of planning decisions. 

The second is Chris Brown’s blog piece for Renewal and Regeneration.  Whilst a more negatively phrased piece than Jim’s, Chris rightly points out that the government’s current stance “…feel(s) like an organised attempt to dismantle the planning system and to allow market forces to dominate”.  Instinctively I have some sympathy Chris’s concerns that business interests will have the resources to get what they want, if the government really does dismantle planning as we know it, but until we get the detail on the National Planning Framework we cannot be sure.

DCLG have today published the long awaited definition of sustainable development or at least they say they have.  As far as I can, on a quick first reading, the document is not exactly clear on what is sustainable development but more of that when I’ve read it a second or even third time.

This strange story seems to set a very bad precedent. The City Corporation have agreed to threaten use of their draconian powers under section 237 of the Town and Country Planning Act 1990 to remove from certain third parties their natural right to light. The reason ostensibly is that the development might not proceed thereby frustrating a development that has planning permission and is needed to meet demand for office space in the City.

However even on a cursory reading, it is clear from the report to committee that the third party rights to light are likely only to delay the project, not to prevent it. The developers have already negotiated appropriate settlements with neighbours who they believed had injunctable rights, so clearly it is possible for settlements to be agreed with such neighbours. However, they haven’t yet negotiated with neighbours, who, following the Heaney judgement, might also have similar injunctable rights of light. Paragraph 23 of the report clearly states that timing is what is important to the developer; he had identified a number of tenants, who would need new accommodation in 2014, and in order to meet that requirement, the pre-let agreements would need to be signed no later than third quarter 2011. Paragraph 23 iii states;

Timing of the scheme is therefore key for satisfying the anticipated office demand in the City. Furthermore any institution that provides the finance required for the Development is very unlikely to commit to the Development while there is a risk of injunctions being served to prohibit construction. In order to capture the opportunity for substantial pre-lets and to meet the strategic need to provide prime office floorspace to meet the predicted demand, the programme for 20 Fenchurch Street must achieve practical completion by early 2014.

The first sentence is clearly not true, unless the Walkie Talkie is truly the only new development in London that can meet predicted demand. The real reason behind seeking this action is indicated by the highlighted sentence. What is at risk is not the development per se but rather the lucrative pre-lets that the developer has lined up and now may lose. The City Corporation have agreed to use their draconian powers so that the developer has a stronger position in negotiations with neighbours over the infringement to their rights caused by the building. I’m not sure I can see any valid planning purpose or public interest here. Instead it seems that the City Corporation has arbitrarily intervened on the side of the developer against its neighbours, to the benefit only of the developer.

Can we assume that the City Corporation might take similar action for any substantial development so that any infringement of Rights of light in the City could, through the use of section 237, be rendered merely a matter for compensation? I cannot see that Parliament intended section 237 to be used in that way but equally I cannot see why similar arguments could not be put forward to support use of section 237 pretty much anywhere else.

Or will the newly identified neighbours truly screw up the developers by applying for a judicial review? Clearly it is easier to negotiate compensation when you know you can prevent the development and the compensation is potentially significantly greater. I imagine that the City Corporation have cost the neighbours a lot of money, money that the developers have consequently saved, and there appears to be little, if any public benefit.

It all seems a little bit like what, according to certain reports, happens in China.

As if on cue, watch Planning Magazine’s interview with Richard McCarthy, the civil servant in charge of Localism. 

  

It seems the key to planning policy will remain the “local plan” (presumably the LDF in the absence of anything else!).  Neighbourhood Plans will simply add “colour” and possibly “go further” in terms of greater growth than set out in the Local Plan. 

Kind of confirms my take on the Coalition’s real approach to Localism.