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Housing and Planning Bill 2015-16

Print publication

19/02/2016

Background

Following the May 2015 General Election, the newly-elected Conservative Government announced several planning related proposals. These included commitments to letting local people“have more say on local planning and let them vote on local issues”; supporting locally-led garden cities and towns; encouraging delivery of much-needed housing and redevelopment of surplus brownfield land; and enhancing provision of business-led collaborative schemes and sustainable onshore windfarms.

In the subsequent Queen’s Speech, two new bills were announced to make the relevant changes to existing planning law. One of these, the Housing and Planning Bill 2015-16 (the Bill), is now steadily progressing through Parliament. Having been introduced into the Commons on 13 October 2015, the Bill has most recently transferred for the initial reading and debating stages in the House of Lords. It is expected to be passed in mid-2016, with the majority of the Bill applying to England only. In light of this, the third reading stage in the House of Commons (held on 12 January 2016) in fact saw the ‘English votes for English laws’ rules utilised for the first time. Parts of the Bill deemed to affect England only, could not be voted on by any MPs except those representing English and Welsh constituencies. Members representing Scottish constituencies were entitled to speak but not to vote.

Provisions

The Bill will introduce wide-ranging changes for the housing and development sectors, particularly in relation to the new Starter Homes (SHs) initiative.

Starter Homes:

  • The SH Policy involves properties being offered for sale at a discount of 20% below market rates, to purchasers who are first-time buyers and under 40 years of age, with the property not then being able to be sold or rented out for five years following acquisition (see further below).
  • All SHs must be new dwellings, constructed for use as a single dwelling and not previously occupied, or adapted for use as a single dwelling and not occupied since its adaptation. They must be available to purchase (either the freehold or leasehold interest in the building or part being available), but are to be sold up to a certain capped-value – £450,000 in London or £250,000 elsewhere.
  • In line with this, there is to be a change in national policy so ‘affordable homes’ no longer just means new homes available only to rent, but includes those that are available to buy. SHs will therefore be classed as ‘affordable homes’ for the purposes of s106 Agreements and with first-time buyers incorporated into the ‘affordable homes’ definition.
  • Councils are placed under a new legal duty to guarantee the provision of 200,000 SHs on all reasonably-sized new development sites. These would be offered to first-time buyers at the 20 per cent discount. As stated in the wording of the Bill: “An English planning authority must carry out its relevant planning functions with a view to promoting the supply of starter homes in England”.
  • The Secretary of State it to have the power to issue regulations so that planning authorities may only grant planning permission for residential development, of a centrally-prescribed description, if an established SHs requirement is met to defined levels. The regulations here may, for example, provide that permission is only granted if a party enters into a section 106 planning obligation to provide a certain number of SHs; or pays the local authority a sum which the authority will then use to provide the SHs.
  • The Secretary of State will be able to issue a ‘compliance direction’ to local authorities if the authority fails to undertake its SH functions. The relevant council will be instructed to pay no regard to policies contained in local development plan documents if they are incompatible with the SH Policy.
Planning reforms supporting small builders

A new duty will be placed on councils to assist with land allocation. Smaller developers will be able to buy sites in England with planning permission in place. The aim is for 20,000 custom and self-build homes a year to be built by 2020.

Rogue landlords

Councils will have the power to blacklist and, in certain instances, ban landlords who fail to abide by the law.

Recovery of abandoned premises

Those (including landlords) operating within the legislative framework will be given assistance to recover abandoned homes quicker.

Sale of council assets

Changes are to be introduced to ensure high-value council assets (including housing) are sold and so can be used to support people into home ownership.

Pay to Stay

New provisions will allow tenants on higher incomes, living in social housing, to have a rent that reflects their ability to pay. Others who require support are to continue to receive this at an appropriate level.

Local Plans

The Government will be provided with targeted powers to ensure all councils have Local Plans in place by 2017. The Mayor of London or a combined authority can be directed to prepare a development plan where the authority is not making progress.

Planning permission changes
  • New measures are to be introduced to ensure brownfield land is clearly identified and registered, so as to bring forward more land and allow new homes to be built quicker, but ensure protection for the green belt.
  • It is also proposed that large-scale housing projects, as defined, will be able to progress under the Nationally Significant Infrastructure Projects regime – bringing a streamlined application and decision-making process.
  • There is to be the introduction of a dispute resolution procedure for negotiations on section 106 Agreements. The aim is to ensure less time is expended on the preliminary negotiation process, with a higher number of agreements successfully concluded so as not to unduly delay the grant of planning permissions.
Compulsory purchase

Proposes changes to the right to enter and survey the land in relation to compulsory purchase, the use of force to do so and associated provisions.

Comment

The Bill is still at its early stages before being confirmed as law and receiving Royal Assent, with the possibility of further amendments and changes. The SH definition is not new and it follows that introduced in a written ministerial statement on the Starter Homes Policy during March 2015. The Bill does though extend the number of sites on which SHs can be built.

There remains a considerable amount of discretion with the Secretary of State to subsequently introduce regulations that link with the Bill – so as, for example, to amend the definition of or specify further characteristics to qualify as a ‘first time buyer’. The earlier ministerial statement stipulated that the homes could be sold at full market rates after five years. This latter detail is absent from the Bill. However, again, it is an element that the Secretary of State could provide for in future.

The ability for the Secretary of State to issue a ‘compliance direction’ to councils may ensure that implementation of the SH Policy is able to get underway promptly. It potentially means every council will not have to adjust its local plan, but can just disregard the relevant element of local policy which outlines the area’s full, objectively-assessed need for market and affordable housing.

The 20 per cent discount for SHs could create difficulties in certain locations. A large concentration of SHs in some areas may distort the market and reduce demand for full-price homes, but leave developers without any compensation for the 20 per cent discount that must be offered. While it may remove other section 106 obligations, as SHs can be provided as ‘affordable housing’, this will not necessarily always be advantageous. It is not clear from the terms of the Bill whether existing affordable housing requirements, within extant section 106 agreements, will be able to be converted to SHs. This may be clarified in the legislation itself as a result of later amendments or as part of subsequent regulations. Likewise, much may depend on the specific terms of the planning obligation/section 106 agreement in question.

Publication of the Bill has coincided with a number of other important changes in the sector, including:

  • agreement of the deal between the Government and housing associations to extend the Right to Buy to housing association tenants from next year (as mentioned above)
  • launch of the Own Your Home campaign
  • extension of the previously temporary permitted development rights, allowing conversion of underused office buildings to residential, subject to prior approval of certain matters. A Walker Morris briefing note on this change is available if required.

For further information or advice on the changes and their impact, contact the Planning & Environment team at Walker Morris.

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