UK planning trapped in time loop
Copyright: David Lawson – first published Property Week May 2007
The latest solution to providing more homes, PPS3, came into force last month with a familiar message: local authorities must provide a five-year supply of housing land. If they can’t, there should be a ‘presumption in favour of development’. That is a return to the Eighties when Michael Heseltine – the last planning minister who seemed to positively revel in the job – pledged to ‘release development locked up in planners’ filing cabinets’. It didn’t last for long. Another round of reforms decided that housing land must be identified in local plans. NIMBY councils manipulated that rule to clamp down on development and we are now paying the price with a persistent shortage and soaring values.
They are still fighting, despite the return of Heseltine’s Law. Planners have scoured the land for every nook and cranny to include in a potential five-year supply, often including ‘windfalls’ – sites that may emerge from nowhere. But developers are hitting back, pointing out that PPS3 insists potential land must be ‘thoroughly tested and deliverable’, which should rule out such sites.
Gareth Capner of consultant Barton Willmore is feeling a distinct sense of déjà vu. His firm won its spurs in the Eighties by going to court to enforce Heseltine’s Law. Twenty years later it is back on the job, insisting that some councils are manipulating figures to hide shortages. One landmark victory has been won against the notoriously restrictive Hart District Council after planning minister Ruth Kelly overturned an appeal inspector and approved 170 Barratt homes at Harley Witney in Hampshire. Barton Willmore succeeded by showing a land shortage once speculative sites were stripped away.
Capner is encouraging others to be just as aggressive in attacking planners’ figures. This would not mean carte blanche for all development, he says. Schemes still need to meet strict rules on issues such as design, mix of tenures and sustainability. But councils should no longer be able to pick estimates of land supply from the air. He is hoping for a similar success in a decision from Kelly expected next month [JUNE] over an appeal over proposals for 2,500 homes at Filton Airfield, Bristol. PPS3 came out part way through the hearings and the consultant was able to present evidence that the local council faced a shortage of 5,000 homes once windfalls were ignored.
Another battle started this month for an even more significant site at the Queen Elizabeth Barracks in Fleet. Taylor Woodrow wants to build more than 1,000 homes in this historic former Army base. Local planners believe this is overdevelopment and are fighting for much lower figures.
Capner feels the campaign has already been well rehearsed as he is up against the same district council responsible as at Hartley Witney. Ironically, the barracks site was put forward as part of the land stock to justify refusing permission there, even though development has been rejected. ‘Sometimes I get the feeling when dealing with planners nowadays of being trapped in a Franz Kafka novel,’ he says.
Land prices and quality of homes could decline as PPS3 reduces the minimum size of schemes under which affordable homes must be provided from 25 to 15. This will squeeze developers’ profits, cut the amount they can pay for land and temp them to cut corners on quality, says Andrew Hunt, a valuation specialist at property consultant Allsop’s northern office.
Suburban and rural land of up to 2 acres is most at risk as city centre sites already tend to be above the threshold because of higher densities. Small developers face greater pressure as housebuilders with construction teams do not have to worry about contractors’ profits. Margins are hit by affordable homes, which are normally sold at a discount to social landlords. But cash flow is also affected, as they have to be built before private housing, says Susan Hawker, a planning specialist at lawyer Wedlake Bell.
Larger social landlords welcome the increasing stock of homes but smaller ones may find it uneconomic to manage a few units on these schemes, so it is likely they will be allocated for shared ownership rather than renting, says Hunt. Hawker has a more wide ranging criticism, pointing out that the measures run counter to government plans for more social housing, as reduced margins could make it more attractive to use land for commercial and industrial buildings.