Planning Law solicitor discusses proposed changes to planning

Planning Law solicitor, Jo Lilliott discusses key proposed changes to the current planning system published by the Government.

In late summer, at the same time as publishing its consultation on “Planning for the Future”, the Government published a consultation on measures that are likely to be of more immediate effect--- ‘Changes to the Current Planning System’ ---to improve the efficiency of the system in certain areas and support economic recovery.

The consultation ended on 1^st October 2020 and measures will probably be brought in quite quickly after the close of the consultation; time will tell however. In the meantime, here is a reminder of the proposals and some comments.

Changes to the standard method for assessing local housing need

The current method comprises a baseline of household projections which are then adjusted for affordability and capped to limit the increase for a specific area.

The changes aim to allow the Government to hit its target of delivering 300,000 new homes a year, and a more appropriate distribution of homes but are seen as a temporary measure in advance of the more wide ranging and binding reforms proposed in Planning for the Future.

Delivering First Homes

So, what are First Homes. Here are some key points: -

• 25% of all Affordable Housing are to be First Homes. On-site delivery of First Homes is anticipated in most cases, but the consultation recognises that there may be off-site contributions towards affordable housing, of which a quarter of the contribution (whether all or partly cash) should be used to deliver First Homes.

• The minimum discount for First Homes will be 30% but could be as much as 40% or 50% depending on local plan policy. The level of discount will not lead to a variation in the percentage of First Homes to be provided – e.g. a 50% First Homes discount would not mean 15% of the affordable homes could be First Homes, instead of 25%.

• First Homes will be for first time buyers with a local connection to the area or key workers or serving or recently retired members of the Armed forces only

• There will be restrictions on future sales. The full discount would be retained in perpetuity by placing restrictive covenants on the homes.  However, if the owner defaulted on their mortgage the lender would receive the home without the covenant and the discount would be lost.

• The Government intends that First Homes will be prioritised over any other affordable home-ownership products referred to in any tenure mix set out in development plans.    The consultation seeks views on how the remaining 75% of Affordable Homes should be determined in light of local plan policy, exemptions, discount levels and exception sites.  An example included in the consultation is that where a policy requires 20% shared ownership, 40% affordable rent and 40% social rent, a policy compliant scheme would provide 25% First Homes; 37.5% affordable rent and 37.5% social rent.

• To avoid the purchase of “exceptionally expensive” property being subsidised, caps on the market value of a property that could benefit from the First Home discount will be put in place; £450,000 in London and £250,000 elsewhere in England.

• Prioritisation of those with local connections and first-time buyers (and others who are eligible for First Homes) will be time-limited, falling away after three months.

• The CIL Regulations would need to be amended (before they are abolished) to provide a CIL exemption for First Homes. Draft regulations to exempt ‘First Homes’ from the Community Infrastructure Levy were laid in Parliament on 28 September. The regulations will now be subject to Parliamentary scrutiny. If approved, they will come into force on 16 November 2020

• Current planning applications or pre-applications that have been subject to detailed discussions on tenure mix will be able to proceed as agreed, but LPAs “should consider whether First Homes could be easily substituted for another tenure, either at 25% or a lower proportion”.

It is currently proposed that First Homes will be secured via Section 106 Agreements with the government providing standard drafting for this purpose. That will be subject to change following the consultation on the possible replacement of S106 agreements by an Infrastructure Levy—all part of the Planning for the Future consultation.

The Government also acknowledges that there will be costs associated with administering the scheme and will provide new burdens funding, if required. It is considering whether LPAs can charge developers and purchasers fees that reflect administration costs.

The Small Sites Threshold

Support for small and medium builders (SMEs) has been extended by proposing to increase the size of schemes where affordable housing is to be sought.  This will be introduced for an initial period of 18 months with the small sites threshold proposed to be increased from 10 units to 40 or 50 units and from 0.5 hectares to an as yet undecided site area threshold through changes to national planning policy.  The consultation also notes that “rural local authorities secure greater proportions of their housing supply as affordable on average when compared to urban local authorities” and so this increase in the site area threshold will not apply to designated rural areas, in these areas the current threshold of 5 units or fewer, will be maintained.

If this does proceed following the consultation period, it will come in quite quickly as a decision will be made via the introduction of a Written Ministerial Statement in the Autumn.

Extension of the current Permission in Principle regime

This proposal will allow a Permission in Principle (PiP) application to be submitted for a wider range of sites then at present and in turn increase the speed at which housing development can occur.

Potential Schedule 2 EIA development, including large sites capable of delivering more than 150 dwellings and/or of more than 5 hectares would not be able to apply for PiP unless the application were accompanied by a screening opinion concluding the proposal was not EIA development.

For commercial development, the consultation proposes to remove the 1,000 sq m limit for commercial development floorspace.

This is a reform of the PiP process which was first introduced in 2017 but has not been used as much as the Government expected due to the current size limitations.

PiP is not a planning permission; it is part one of a two stage process that grants planning permission. The second stage is technical details consent, which on larger developments, may not necessarily be easily achieved. The granting of technical details consent means that the site has planning permission; this is the key difference between outline planning permission and permission in principle.

The determination period for a PiP on application is five weeks and includes a 14-day consultation period with public and statutory consultees. The Government considers these timescales ensure “a speedy decision by the local planning authority”.  However, as a result of extending the scope of PiP to major developments the Government is considering amending the scope of information required and the publicity requirements placed upon the local planning authority. 

The relevant matters which should be assessed by a local planning authority in a PiP application are location, land use and the amount of development. The Government is considering adding a height parameter in terms of the number of storeys, as an additional matter to be assessed.  This would add to the complexity of the determination of the application by bringing design issues into the PiP process

As larger developments are proposed to fall within the scope of PiP on application, the Government is keen to give the public a greater opportunity to comment, perhaps by requiring a press notice but there is no reference to neighbourhood notification. Currently local planning authorities need to advertise PiP applications on their website and by posting a site notice.

The Government is keen to revise the cost to applicants of submitting an application for PiP downwards, in order to make the process more attractive to developers, particularly on larger sites and as an alternative to an outline planning application. As part of this push, the Government proposes to introduce further clarity and guidance on the purpose, process and benefits of PiP.  The consultation states that ‘it seems some local planning authorities continue to make decisions on Permission in Principle based on detailed matters, such as transport access, when these should only be taken into consideration at the technical details consent stage.’  As such, the Government envisages new guidance to ensure that local planning authorities only take into account the matters specified by the Regulations. 

That was a brief reminder of what the Government sees as the measures that need to be brought in quickly to give the economy a boost.  We will update you further.