A Short Guide to the Housing and Planning Act 2016 and What to Expect
May, saw a raft of further changes to the planning regime. As part of the Government’s drive to increase housing provision, The Housing and Planning Act 2016 received Royal Assent on 12 May, closely followed by the Queen’s Speech on 18 May and further changes to come in the next year in the form of the Neighbourhood Planning and Infrastructure Bill. In this month’s Lawbite we take a whistle-stop tour of some of the major points to note.
The Government’s ‘flagship’ proposal. Much of the detail will follow in regulations, but the following is clear:
- New dwellings sold to first time buyers between 23 and 40.
- Discounted by at least 20% of open market value and subject to a cap of £450,000 in London and £250,000 outside London.
- Restrictions on early sale and tapering of discount if sold during that period (consultation suggested 5-8 years).
- Will be part of the affordable housing mix, with duty on Local Planning Authorities (LPAs) to promote them via s106 planning obligation agreements. Regulations may require LPAs to grant planning permission only where the Starter Homes requirement is met, subject to some exemptions, including rural exception sites.
- LPAs must report on implementation of the requirement. The Secretary of State can make a compliance direction where an LPA is failing in its duty to require Starter Homes or where a local plan policy is incompatible with the Starter Homes duty.
- Will be exempt from s106 obligations but Starter Homes do not meet the current requirements for automatic relief from CIL which apply to social housing. As very few LPAs have introduced discretionary relief, expect to see changes to the CIL Regulations to put Starter Homes on the same footing as shared ownership and rented social housing.
Although the definition of affordable housing in the NPPF has yet to be changed, consultation on changes at the end of 2015 proposed an amendment to cover Starter Homes. The likely implication is that any local plan policy requiring less than 20% affordable housing or specifying particular types of affordable housing will be non-compliant. Where policies require more than 20%, the LPA will only be able to require alternative tenures once the 20% Starter Home requirement has been met. Many, if not most, housing need assessments will therefore be rendered out of date. Expect to see increasing requirements that anything above the 20% be provided for rent as LPAs scramble to meet that need.
Affordable Housing Provision
Following hard on the heels of the Government’s victory in the West Berkshire case in the Court of Appeal on 13 May paragraphs were reintroduced into the PPG on 19 May dealing with the small site exemption from s106 obligations and vacant buildings credit. This means that:
- Affordable housing or tariff-style obligations may not be required on sites of 10 units or less (or five units or less in designated rural areas such as AONBs) with a combined gross internal area of 1,000m2 or less.
- The exemption does not apply to rural exception sites.
- On brownfield sites where vacant buildings are re-used or demolished, affordable housing requirements should be calculated on the increase in floorspace only, with the floorspace of vacant buildings off-set against the total floorspace to be provided.
- The PPG makes it clear that vacant building credit (VBC) does not apply automatically. LPAs must consider what the purpose of the policy is (to incentivise brownfield development) and will need to consider whether the buildings have been vacated only to enable redevelopment to take place, or whether planning permission has recently been granted or expired for substantially the same development. VBC will not apply where buildings have been abandoned.
The Court of Appeal in the West Berkshire case (R(on the application of West Berkshire District Council and Reading Borough Council) v Secretary of State for Communities and Local Government EWCA Civ 441) made it clear that these policies will not override the statutory requirement in s38(6) of the Planning and Compensation Act 2004 to determine an application in accordance with the development plan. The relevant paragraphs in the PPG will therefore form part of the “material considerations” which the LPA will need to consider when reaching a decision. This means that where there is an up to date development plan justified by robust evidence to support the policy, LPAs may still be able to require affordable housing and other s106 financial obligations on smaller sites and on brownfield sites in accordance with those development plan policies.
Brownfield Register and Permission in Principle
As with Starter Homes, the details requiring LPAs to keep registers of brownfield sites suitable for housing development will be contained in regulations yet to be made. The consultation suggests that:
- Brownfield registers will be required to follow a standard format, available on LPA websites, enabling manipulation of the data by users across LPAs.
- LPAs may only reject a site for inclusion on the register where there is no realistic prospect of the site being suitable for new housing. Sites historically allocated for other uses should be included, unless there is an allocation in an up to date development plan coupled with compelling evidence to support that allocation.
- 90% of suitable brownfield sites must have planning permission for housing development by 2020. Any LPA not meeting this requirement will be deemed not to have a five year housing land supply, whatever evidence to the contrary may indicate.
- Brownfield registers will provide the vehicle for the Government’s other major innovation – Permission in Principle (PIP), which may be granted by a Development Order (DO) for sites identified on the brownfield register or allocated in development or neighbourhood plans made or revised after the DO is brought in. PIPs are to be residential-led.
- Applications for PIP may be permitted for housing on small sites (minor development). Such applications may only be granted or refused. No conditions may be imposed.
- A PIP will last for five years, or three years if granted by the LPA.
- A PIP will set out the parameters for development: location, uses and minimum and maximum amounts of residential development. Once granted it will establish the principle of housing development on that site.
- Development will not be permitted until technical details consent is obtained. All technical details must be included within one application, in accordance with the PIP and are likely to comprise a design statement and an impact statement (dealing with contamination, flood risk etc and mitigating measures).
- Technical details applications will be subject to shorter determination periods.
Securing PIPs on brownfield register sites via DOs is probably the only realistic way that many LPAs will meet the 2020 planning permission for housing deadline. However, given how little detail will be required, it is difficult to say at this stage what advantage a PIP will have over a site allocation, particularly given the radically different housing numbers that different layouts can produce.
Local and Neighbourhood Plans
The Act gives the Secretary of State greater powers to intervene to require an LPA to get on with making a plan. Coming into effect on 25 May was the power to issue a temporary direction to an LPA not to take a step to adopt a development plan whilst he considers whether to intervene. The first exercise of this came on 26 May, when he directed Birmingham City Council not to adopt its local plan after the Inspector recommended it do so. At issue is the release of Green Belt land for 6,000 new houses in the Sutton Coldfield constituency of Andrew Mitchell MP, who reportedly requested the call-in. This is despite the local plan being nearly 40,000 homes short of its Objectively Assessed Need.
Changes to the PPG on 19 May also made clear that Inspectors are to do everything to ensure that a plan is not withdrawn or found unsound. Thus, the PPG now requires Inspectors to give LPAs every opportunity to address concerns regarding soundness, to suspend or partially suspend a hearing to enable concerns to be addressed and to fully engage with and work proactively with LPAs. Inspectors are also encouraged to require LPAs to commit to early reviews to overcome concerns over soundness. The revisions, of course, reflect what has been happening in practice for some time, but illustrate the Secretary of State’s concern to get plans in place.
The Secretary of State will also have the power to make regulations requiring LPAs to be more proactive in the neighbourhood planning process, setting timescales and requiring designation of neighbourhood areas.
A neighbourhood forum may also require that the LPA consult it on planning applications. Whilst not yet in force and the effective date still to be appointed, once introduced, this will place neighbourhood forums on the same footing as parish councils as potential statutory consultees.
Further changes to make the LPA duty to support neighbourhood plan groups more transparent and to improve the process for the review and updating of plans have been promised in the Queen’s Speech, via the Neighbourhood Planning and Infrastructure Bill.
Dispute Resolution: s106 Obligations
The Act will introduce the ability to apply to the Secretary of State to appoint a person to determine the terms where s106 obligations cannot be agreed.
- This will only apply where agreement on the terms of the s106 is the only matter preventing the grant of planning permission.
- The appointed person having recommended terms, the LPA may not then refuse permission because it disagrees with those terms.
- A prescribed period will be set during which the parties must enter into the s106. If this is not done, the LPA must refuse the application.
Whilst seemingly attractive, this last provision may deter some from going through the mediation process for fear that the LPA will delay and then refuse the application in any event. Of course, such action may count against the LPA at any subsequent appeal, particularly if a developer offers a completed unilateral undertaking in the recommended terms. How much use will be made of these provisions, which are not yet in force, remains to be seen therefore.
Alternative Providers to Process Applications
The provisions as enacted provide for regulations to be made for the designation of pilot areas to test the practicality of introducing competition in the processing of applications.
- The pilot will run for no more than five years after the Regulations are first made.
- The Secretary of State must review the pilots and report to both Houses of Parliament.
England-wide alternative provision, as occurs with Building Regulations approvers, consequently appears to be some way off yet.
The Act introduces changes to the CPO process following consultation last year.
A further consultation this year focussed on the compensation ‘code’ which the courts have repeatedly called for reform of. The Queen’s Speech indicated that these measures will come forward in the Neighbourhood Planning and Infrastructure Bill, yet to be published.
Neighbourhood Planning and Infrastructure Bill
Aside from the measures highlighted above, the Queen’s Speech also indicated that we can expect measures to:
- Restrict the use of pre-commencement conditions to those absolutely necessary by requiring additional justification for their imposition
- Help for local authorities to bring forward new settlements in the form of garden villages, towns and cities.
Recent years have seen almost continual ‘tinkering’ with the planning system and that looks set to continue. Much of the detailed implementation of the provisions of the Housing and Planning Act has been left to Regulations and we will provide updates on the implications as these are published. There is more to come in the shape of the Neighbourhood and Planning Bill, but the direction of travel is clear: to increase the provision of housing, preferably on brownfield land, and in the form of home ownership.
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