Posted by: Adam Roake | September 7, 2011

NPPF Blarney and Housebuilding

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?

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