Further planning reforms announced in Budget

The Chancellor of the Exchequer delivered the Government’s budget for the coming year with a key headline being the end of austerity.

The budget involved enhanced investment in areas such as health, schools and defence. In addition, the budget (and accompanying documents) has implications for the operation of the planning system (with an emphasis of housing delivery).

Five key policy announcements will have a material impact on future planning for housing and the high street:

  • Consultation on permitted development rights to allow upward extensions and demolition of commercial properties and replacement with housing. The consultation seeks views on the maximum height that could be allowed under permitted development (suggested at five storeys although could be higher for free-standing blocks of flats) and whether the height of neighbouring buildings or the prevailing height in the area is the determinative height).  In addition, the consultation seeks views on the methodology for achieving demolition of commercial buildings and replacement with housing, including how to secure planning obligations for affordable housing and / or infrastructure.
  • Simpler planning contributions system including higher CIL in areas of high land value uplift and removing the pooling restrictions.  In addition, the Government is intending to remove the restriction on S106 not being used for infrastructure identified for CIL (Regulation 123 Lists) as well as allowing monitoring fees to be included. Furthermore, powers to introduce a Strategic Infrastructure Fund by combined authorities will be brought forward.
  • Greater power to neighbourhood plans to deliver low-cost housing and ensure that policies are not overruled by local planning authorities.
  • Support for the high street including consultation of greater flexibility for changes of use, including establishing a mixed-use model.
  • Several measures that offer some short-term relief for business rates was included in the Chancellor’s autumn budget however the benefit for business rate payers in real terms remains questionable.

In addition, the Oliver Letwin MP Review on build out rates was published with several recommendations for Government. The key area identified in his report related to large developments delivering over 1,500 new homes on one site, particularly in areas of high housing demand. He concludes that the greatest barrier to increasing build out rates is the homogenous offer by housebuilders and absorption rates for similar products. As such, he proposes that on larger sites, greater variety is proposed either by housebuilders themselves, or by local authorities taking charge of the development and creating locally-led masterplans that guide development.

Finally, in terms of monetary increases, a further £500m is allocated to the Housing Infrastructure Fund with announcement that circa £290m is allocated to increasing the capacity of the Docklands Light Railway and £675m for the Future High Street Fund (mainly focused on improving physical infrastructure and land assembly).

The Ministry of Housing, Communities and Local Government is consulting on the various proposed measures and this ends on 14 January 2019. If you wish to discuss any of the matters raised in this note, please refer to your GL Hearn contact.