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Housing and Planning Act 2016: Headline changes

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29/06/2016

We reported, in some detail, on the Housing and Planning Bill as it passed through Parliament [1]. The Bill received Royal Assent on 12 May 2016. While much of the detail and some of the in-force dates still remain to be provided in secondary legislation, there are significant changes to housing and planning law brought about by the new Act which will be of interest to Local Authorities, land owners and developers, landlords, letting agents and tenants. In this briefing, Housing and Planning law experts Karl Anders and Richard Sagar highlight some of the key aspects of the Housing and Planning Act 2016 (the HPA 2016).

Culmination of controversial reforms

The HPA 2016 is the culmination of much debate and controversy. It introduces a range of housing and planning reforms which are intended to help more people to own their own home, to get the nation building new homes faster and to ensure that the way housing is managed is fair and fit for the future [2]. There is a large amount of new law in the HPA 2016 but much more detail remains to be implemented via subsequent Statutory Regulations. However, some of the key reforms can be summarised as follows.

Starter homes and self-build

One of the most hotly debated aspects of the HPA 2016 was the proposal that one in five properties in new residential developments should be starter homes, made available to qualifying first-time buyers under the age of 40 for at least 20% less than market value. The majority of the government’s starter homes proposals did make it through the Parliamentary ping pong and have been enacted [3]. However, full details as to exactly how the starter homes provisions will operate and, in particular, the restrictions and repayment requirements on resale, are to be set out in Regulations to be made by the Secretary of State. There are now, though, clear and specific duties on local planning authorities (LPAs) to promote the supply of starter homes and also to give planning permission to enough serviced plots of land in their area to meet the yearly demand for self-build and custom-build homes.

Rogue landlords and property agents

Under Part 2 of the HPA 2016, Local Housing Authorities (LHAs) may apply to the First Tier Property Tribunal for a ‘Banning Order’ of at least 12 months, which would prohibit a person convicted of a banning offence from letting a house or working as a letting or property management agent. LHAs are also required to maintain a database of persons convicted of banning offences. What actually constitutes a ‘banning offence’, however, is not specified in the HPA 2016 and will be defined by the Secretary of State in future Regulations.

The HPA 2016 also enables the First Tier Tribunal to grant a ‘Rent Repayment Order’ to tenants or to LHAs where a rogue landlord has committed one of certain housing offences (including unlawful eviction, violent entry, harassment and breach of a Banning Order).

Possession of abandoned premises

There is a new process enabling landlords to recover possession of premises let under assured shorthold tenancies (AST) that have been abandoned, without the landlord having to obtain a court order. Part 3 of the HPA 2016 affords landlords this option in cases where there is a specified level of rent arrears; where the landlord has served a series of warning notices; and where no tenant nor other named occupier or deposit-payer has responded. However there is a catch: following a landlord’s recovery of possession pursuant to this process, if a tenant can demonstrate to the County Court (within a 6-month time limit) a good reason for failing to respond to the warning notices, the AST may be reinstated.

New secured tenancies and changes to succession rights

The HPA 2016 amends the Housing Act 1985 so that any new secured tenancies must be for a fixed term of between two and ten years. In addition, prior to expiry of the fixed term, the landlord is required to decide whether to offer a new fixed term, whether to offer alternative accommodation, or whether to seek possession. The HPA 2016 also restricts succession rights in respect of ‘old’ secure tenancies in circumstances where the tenancy vests in a person other than a spouse or civil partner [4].

Extension of ‘Right to Buy’ and social housing generally

Another controversial feature of the HPA 2016 is the extension of the ‘Right to Buy’ scheme to Housing Association tenants [5]. This extension is to be funded in part by a new duty (already in force [6]) on LHAs operating a Housing Revenue Account to consider selling off their higher value housing stock when it becomes vacant.

Section 80 HPA 2016 also enables the Secretary of State to make Regulations about the level of rent that LHAs must charge to ‘high income’ tenants (with ‘high income’ also to be defined in future Regulations).

Sections 92 – 94 HPA 2016 include various measures aimed at reducing the regulation of social housing generally. One example is the abolition of a number of restrictions on the disposal of housing by private registered providers.

HMOs

There are heightened eligibility criteria for applicants to be able to let residential accommodation which are Houses of Multiple Occupation (HMOs) and also premises subject to selective licensing under Part 3 of the Housing Act 2004 (these include that the applicant must be legally entitled to remain in the UK and that they must not be insolvent) [7].

Additional enhanced tenant protections

The HPA 2016 also implements a number of additional tenant-protection measures, in furtherance of the government’s aim that the way housing is managed in the UK is fair. For example:

  • The Secretary of State may, by Regulations, impose duties on landlords to ensure that let properties comply with electrical safety standards. These provisions are to be enforceable by both residential tenants and LHAs.
  • Tenancy deposit scheme operators may be required to share scheme information with LHAs.  The aim being to help LHAs identify properties which should be licensed HMOs.
  • The Secretary of State may, by Regulations, require letting and/or property management agents to become members of a ‘client money protection scheme’ to protect landlords’ and tenants’ monies in the event of an agent going insolvent and to safeguard against theft or misappropriation by an agent.
Planning Permission in principle

The HA 2016 introduces the concept of ‘permission in principle’ (PiP) for housing-led development. Section 151 provides developers with greater certainty of planning permission at an earlier stage and is intended to speed-up the process by granting automatic planning permission for homes on LPA registers. It works alongside section 150, which requires LPAs to hold a register of various types of land, with the intention of creating a register of brownfield sites to facilitate unlocking land on which to build new homes. Once identified on the LPA’s brownfield register, it is envisaged proposals will benefit from a quicker, more streamlined application process. However, a secondary ‘technical details’ consent will still subsequently be required to achieve full permission and so that a development can proceed.

Dispute resolution procedure for Section 106 Agreements

A dispute resolution procedure for Section 106 Agreement negotiations has been introduced.  The aim is that less time will be spent on the preliminary negotiation process, with a higher number of agreements successfully concluded and avoiding undue delay to the grant of permissions.  Again much is to be detailed under later Regulations,.  Ultimately, the responsibility will lie with an applicant or LPA to decide if they think a ‘resolver’ is required to help deal with outstanding issues.  The Secretary of State is then under a duty to appoint such a person if s/he thinks the LPA would grant permission if satisfactory obligations were entered into.  However, s/he will also be able to decline to appoint in certain circumstances.

Once necessary information has been obtained, it is envisaged the resolver will prepare a report and issue this to the parties involved:

  • identifying unresolved issues;
  • indicating the steps taken since his/her appointment to resolve the issues;
  • outlining any areas of agreement that have been reached in the interim; and
  • making recommendations as to appropriate terms.

After the report has been issued, there are certain expectations on the parties involved:

  • Where an agreement is concluded in accordance with either (1) the report’s recommendations or (2) executed before the end of the prescribed period with the LPA as a party or happy with its terms, the LPA cannot refuse the planning application on a ground relating to the appropriateness of the agreement’s terms.
  • Where the report records an agreement that planning obligations will be entered into or recommends planning obligations be given but no agreement is actually executed, the LPA must refuse the application.
  • The LPA must have regard to any report prepared.

One important point to note here is that, while the resolution process is underway and until the resolver’s fees/costs have been paid (1) the applicant cannot undertake a section 78 appeal; and (2) the LPA cannot refuse the application.

Additional planning changes in Part 6 HPA 2016

HPA 2016 provides that Regulations may be introduced to impose restrictions/conditions on the enforceability of planning obligations entered into to provide affordable housing and to stipulate that prescribed descriptions of development must contribute affordable housing.  In particular, it is envisaged this would allow restrictions or conditions vis-a-vis the size, scale or nature of the site and proposed development to which affordable housing planning obligations could relate.  It seems likely this is to reinforce the provisions regarding affordable housing provision on small sites (i.e. 10 units or less) that form current government policy [8].

A much awaited development within the HPA 2016 is the new provision allowing certain housing projects to progress under the NSIP regime.  So where there is housing development which satisfies the definition of ‘related housing development’ (i.e. it involves construction/extension of 1+ dwelling and is on the same site or close to an English NSIP project), this will be able to progress under the regime.  This allows for a streamlined application and decision-making process, of which housing development could not previously take advantage.

Another controversial and interesting element of the HPA 2016 is the possibility for alternative providers (i.e., not LPAs) to progress planning applications.  The Secretary of State now has the power to begin pilot-schemes assessing the practicability and desirability of introducing competition into the processing of applications.  This would be in situations where an applicant specifically chooses for the LPA not to process their application.  While this will not involve alternative providers in the actual determination of applications, Regulations will be able to stipulate that where an alternative provider has processed one application, it must do so for all related applications.  It will be interesting to see whether this leads to more widespread and permanent changes.

WM Comment

The provisions of the HPA 2016 are wide-ranging and, in some cases, ambitious. It will take some time for all of the provisions to be implemented by future secondary legislation and then for the new reforms and regimes to bed in. It is too soon to draw any conclusions as yet and it remains to be seen whether the HPA 2016 will achieve its stated aims of getting Britain building and improving housing quality and quantity in the future.

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[1] https://www.walkermorris.co.uk/publications/in-brief-walker-morris-legal-update-february-2016/housing-and-planning-bill-2015-16/;https://www.walkermorris.co.uk/publications/abandoned-properties-and-rogue-landlords-new-laws-proposed-in-the-housing-and-planning-bill-2015-16/;https://www.walkermorris.co.uk/publications/newsflash-lords-seek-limit-starter-homes-proposals/; https://www.walkermorris.co.uk/publications/in-brief-walker-morris-legal-update-february-2016/planning-permission-in-principle/
[2] Source: Government press release 13 May 2016.
[3] Sections 2 – 8 HPA 2016.
[4] In those circumstances any periodic tenancy is brought to an end immediately after vesting, at which point a five-year fixed term secure tenancy arises instead. Ibid sections 118, Schedule 7 and 120, Schedule 8.
[5] See our earlier briefing.
[6] Ibid section 76.
[7] Ibid section 125.
[8] As per recently reinstated elements of the National Planning Practice Guidance, Ministerial Note and the latest case law.

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