With the housing market in the UK suffering a toxic combination of chronic undersupply and rising wage to cost ratios of house prices, the Department for Communities and Local Government has sought to intervene in order to speed up the planning process and the build times for house-builders. They will also provide a £13bn fund for small-house builders to re-energise the small developers of the market that were ravaged by the 2008 recession. In addition, Local Authorities will be given power to take action against developers who have failed to build properties once planning permission has been granted.
The Government’s housing policy is focused at the local level and much of the emphasis is placed on building homes where homes are most needed and empowering the Local Authority to provide incentives and enforcement to ensure those homes are built.
The main strands are:
- Local Authorities will need to produce a new Local Plan. Ah, the groans from the back. Yes, I’m afraid, yet another Local Plan. The Government are attempting to meet the complaints of developers by requiring Local Authorities to take stock of their housing need, find sites suitable for development and obtaining information about those sites. We’ve heard that somewhere before, although the Government research points to the fact that many Local Authorities either didn’t produce Local Plans or, if they did, they failed to follow them.
- Local Authorities will have to streamline the planning process and the Government has promised to fund improvements in speed and quality with which planning cases are handled (perhaps taking it out of the hands of Local Councillors on Planning Committees may be a good start, although this is not suggested by the Government). This will be funded by an increase in planning fees by 20% from July 2017.
- Local Authorities will have to support local developers rather than hinder them, including assisting developers with planning conditions and a joint approach with developers as to community infrastructure. It’s also mooted that the Local Authorities will enter into more joint projects with developers and provide funding.
- Local Authorities will be given power to ‘hold developers accountable’ for the delivery of new homes, although the Government’s White Paper does not yet specify how that’s to be achieved. It’s been raised that Local Authorities will be encouraged to use compulsory purchase where build-out of a site has stalled. In addition, Local Authorities will have to consider the likelihood of sites being built out when considering planning permission including what the developer’s track record is like.
- For the small and medium sized developers out there, there is good news in the fact that Local Authorities will be asked to support small plot developments and higher density housing on existing residential plots, even if those plots are not within the Local Authority’s plan. Because of this, there is opportunity for small and medium sized developers to take advantage of the new housing policy.
The Government’s new housing policy promises a lot, and if all the Government’s promises come to fruition, then there should be a rosy future for developers and the associated industries with a lot of money to be made. It doesn’t seem to address problems of undersupply of land (a particular problem in the city of Bristol), although we may see that dealt with through the Local Authorities’ new Local Plans. Also, although there is funding to be made available to small and medium sized developers, it can never replace that true driver of the UK housing and development market: availability of credit. Watch this space…
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