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Solace blog

26th November 2015

First published on Inside Housing online 3 November 2015, www.insidehousing.co.uk/7012560.article

The Housing and Planning Bill got its second reading on Monday – legislation that the government hopes will provide the building blocks to create a million new homes across England and Wales by 2020.

But the pace of change means many authorities are now being forced to re-think the role they play in the housing market – and are also under huge pressure to put in place the necessary statutory frameworks to enable local developments and construction to get underway.

A substantial body of work lies ahead. If authorities are deemed too slow, they face intervention from the Communities and Local Government Department.

Much depends on the capacity of local government to secure the release of land and grant planning permissions. Cuts in planning and development departments are already affecting their ability to deliver at a local level.

A key requirement is to dispose of high-value vacant council houses that can help fund the building of more affordable homes.

This puts an onus on authorities to facilitate and drive the delivery of entry-level properties.

To increase the overall housing supply, authorities will also need to introduce a register for brownfield land, to help achieve the target of getting Local Development Orders in place on 90% of suitable sites by 2020.

This will include the ‘Right to Build’ – a measure that requires local planning authorities to support custom and selfbuilders registered in their area in identifying suitable plots of land to build or commission their own home.

The housebuilding industry argues that it is held back by red tape, local planning delays and the slow release of public sector land.

The bill, therefore, provides for ‘permission in principle’ (‘PiP’) to be granted for land allocated for development.

The Communities Secretary would be able to grant unconditional PiP directly – with full planning permission being approved by councils through a ‘technical details consent’.

New Pressures

Several other clauses propose new powers for government intervention.

When a council is considered to be failing to put a development plan document in place, the communities secretary will be able to revise the document or order the council as to how to proceed.

Time limits can also be set for local authorities to decide whether or not to designate a neighbourhood planning area

– with residential development plans refused if they don’t include enough Starter Homes.

New performance criteria could also mean planning powers being removed if local authorities are seen to be slowing housing development by not providing permissions in a timely and efficient manner.

The last 20 years of moving housing away from local authorities has not worked and there is now acceptance that the tide needs to turn.

Local authorities are coming back as the leaders for driving housing – but in a different way.

Local authorities will end up having a wider role in the housing agenda and own a diverse portfolio of housing.

These will necessitate a range of direct ownership, development vehicles, and partnerships – managing the problem of affordability through an increased supply of both ‘social’ and ‘market’ units.

The new model is about having greater power and flexibility to fund housing (and other infrastructure) on a commercial and local basis – such as devolution deals, increased borrowing and the ability to retain business rates.

Registered providers will need to examine whether or not their business plans can sustain the drop in social rents and the Pay to Stay rules.

The income fall may be too much for some, and they may need to start cutting costs.

Those associations that do not have a development programme – or are only set-up to develop a small number of new homes – may need to enter into agreements with larger associations that can do this for them.

Inevitably, there will be less available traditional social housing (homes at below the market rent with security of tenure) as associations are given greater flexibility in how they use or dispose of their stock, and more people own their homes.

For everyone in the sector, the next five years will be a period of considerable change – but it remains to be seen whether or not it’s enough to resolve the so-called ‘housing crisis’.

By Jonathan Turner and Matthew Waters, Partners, Bevan Brittan, Solace Business Partner