Martin Edwards offers a guide to the changes introduced by the Housing and Planning Act 2016
Key points
- The 2016 Act substantially amends existing legislation, and introduces a local authority duty to promote starter homes
- Persistent legislative change may not be the best way to meet the government’s housebuilding objectives
On 12 May the Housing and Planning Act 2016 (“the 2016 Act”) reached the statute book. When the bill was first published I examined some of its main planning proposals (see “The death knell for localism?”, EG, 7 November 2015, p94) in what appeared to be a hotchpotch of changes stemming from the government’s productivity plan, Fixing the foundations. Following the financial crisis, housebuilding in England fell to its lowest level in the post-war era. While the number of new home completions has risen from 108,000 in 2010-11, it only reached 124,000 in 2014-15, way below the annual estimated requirement of between 200,000 and 300,000. In the face of this prolonged housing crisis, the question must be posed: will the 2016 Act’s changes provide a solution?
As published, the bill extended to 145 clauses and 11 schedules, but the 2016 Act stretches to 217 sections and 20 schedules. The 2016 Act substantially amends existing legislation and each change must be viewed not just in the light of the government’s stated intention but also in the context of the relevant principal Act it amends. Much of the detail is to be set out in regulations, so the true picture may not emerge for some time. Also there remains a degree of uncertainty as to the true scope of those details.
Starter homes
Chapter 1 of Part 1 of the 2016 Act introduces two new duties on English local planning authorities: a general duty to promote the supply of starter homes when planning functions are being carried out; and a specific duty to do so in relation to decisions on planning applications. Section 1 sets out the purpose behind the chapter and section 2 contains the main definitions.
Starter homes are new dwellings only available for purchase by qualifying first-time buyers and made available at a price which is at least 20% less than the market value. A “qualifying first-time buyer” is anyone who is a first-time buyer, is between the ages of 23 and 40, and meets any other criteria specified in regulations made by the secretary of state (for example, relating to nationality).
“First-time buyer” has the meaning given by section 57AA(2) of the Finance Act 2003. The secretary of state is given wide regulation-making powers to amend and add to the criteria, to vary price caps and place restrictions on sales and lettings of starter homes. Section 3 provides details of what these restrictions may include.
Two models are identified: a “payment model”, whereby a person selling a starter home may be required to make a payment to a specified person on completion of the sale; and the “sales model”, requiring the seller to sell to another qualifying first-time buyer at a discount. Both models will be subject to a taper.
Section 4 requires local planning authorities to promote the supply of starter homes when carrying out planning functions, including plan making and determining planning applications. They will be obliged to have regard to any guidance issued by the secretary of state.
Section 5 contains a new duty regarding planning application decisions, aimed at ensuring that starter homes become a common feature of residential development, eg by mandating a particular number or proportion of starter homes on a site or the payment of commuted sums. A reporting mechanism will enable the public to see how their authority is delivering starter homes in its area and the secretary of state is given the power to issue compliance directions so that any local planning policy document incompatible with these duties is not taken into account when taking a relevant planning decision.
Further effects of the new legislation are outlined in the below.
Change is the only constant
The ink was barely dry on the 2016 Act when, six days later, the government announced in the Queen’s Speech that even more changes to planning law are likely, with the Neighbourhood Planning and Infrastructure Bill. Her Majesty said: “To support the economic recovery, and to create jobs and more apprenticeships, legislation will be introduced to ensure Britain has the infrastructure that businesses need to grow.” However, with major Acts passed in 2011, 2013 and now 2016, is persistent legislative change really conducive to economic recovery? Might the country benefit from a chance to absorb and adapt to these changes before having to face further ones?
These changes cannot be viewed in isolation either. A revised National Planning Policy Framework is imminent. Few can seriously question its success, but it was inevitable that it would require periodic revision.
Some might say that all these changes are just tinkering, but such a charge would be unfair. The planning system is a complex structure that has to deal with myriad competing interests in a crowded country with a growing population and a wealth of heritage and beautiful landscapes to preserve, and fine tuning is an inevitable and constant necessity. But the continued inability to deliver sufficient new homes to meet demand suggests that something more profound needs to change. Has the experiment in privatising social housing provision failed? Should the private sector housebuilders be left to get on with the job of providing new market homes while government oversees a parallel programme of social housebuilding? Or shall we just muddle on endlessly with no real solution in sight?
Other key changes introduced by the 2016 Act
The main planning changes are to be found in Part 1, “New homes in England”, which provides the statutory framework for the delivery of starter homes and includes new obligations on local authorities to meet demand for custom-built and self-built homes; Part 6, “Planning in England”, which makes a number of discreet changes to the English planning system; and Part 7, “Compulsory purchase”, which applies to both England and Wales and aims to make the compulsory purchase regime clearer, fairer and faster.
Self-build
Amendments are made in Chapter 2 to the Self-build and Custom Housebuilding Act 2015, which introduced a duty on planning authorities to compile and maintain registers of people seeking land for self-build and custom building. Various definitions in the 2015 Act are amended and a new duty will require authorities to grant sufficient suitable development permissions (both planning permissions and permissions in principle) on serviced plots of land to meet local demand, although an authority will be able to apply for an exemption from that duty.
Neighbourhood planning
Part 6 contains the main changes to the English planning system. A new power is given to the secretary of state to require a planning authority to designate all of the area in a neighbourhood area application if it meets prescribed criteria or has not been determined within a set period. Both the Town and Country Planning Act 1990 (“the 1990 Act”) and the Planning and Compulsory Purchase Act 2004 are amended to enable the secretary of state to impose timetables in relation to neighbourhood development orders and plans and to intervene in the neighbourhood planning referendum process at the request of the parish council or neighbourhood forum.
There are various amendments to the process for preparing neighbourhood plans and local development documents and new intervention and default powers introduced. Section 143 amends the 1990 Act to enable the secretary of state (or the mayor) to prepare a local development scheme for an authority that has failed to do so and direct the authority to bring the scheme into effect, thus deterring a local planning authority from dragging its plan-making feet. However, some might view this as the very antithesis of localism. Amendments are also made to the mayor of London’s planning powers, especially in relation to applications that might have an impact on wharves on the River Thames or key London sightlines.
Permission in principle
Section 150 and Schedule 12 introduce the concept of “permission in principle” by inserting section 58A into the 1990 Act. It will apply to housing-led development and involves a two-stage process. First “permission in principle” may be granted based on allocations in qualifying documents and plans and registers (valid for five years) or on direct application to the local planning authority (valid for three years). The latter route is intended to be limited to minor housing-led development. Conditions cannot be imposed at this stage, but they can on the second stage, the “technical details” consent. Section 70 of the 1990 Act will be amended, inserting a new subsection (1A) enabling a planning authority to grant or refuse permission in principle. Overall this new concept does not look that different from outline planning permissions.
Other planning changes
The 2016 Act introduces a duty on authorities to compile registers of brownfield land suitable for housing, but this may be widened to include other categories of land, such as small sites. Subtle changes are also to be made to the permitted development rights regime to enable certain aspects of a permitted development right to be delegated to the local planning authority so that local conditions and sensitivities can be taken into account. This is a curious change as it seems to be adding complexity, rather than simplifying, the planning regime.
Poorly performing authorities will be concerned by section 153 and its extension of the right for developers to apply directly to the secretary of state for permission for major development, thus bypassing the local authority. Section 154 will enable a local planning authority to ask the secretary of state to make a “planning freedom scheme”, relaxing the planning regime in its area for a limited period, if the secretary of state is satisfied that additional homes will result. Section 154 amends the 1990 Act so that potential financial benefits of some development proposals are made public when an application is being considered and new provisions are aimed at ensuring that information about the effect of a development on any neighbourhood plan is addressed in any officer’s report.
Section 158 and Schedule 13 introduce a new method for resolving disputes over draft planning obligations that delay the final grant of permission. How frequently this will be used is hard to assess as the mere threat of using this method could break any deadlock. Changes will also be made to restrict or place conditions on the enforceability of planning obligations in relation to affordable housing, potentially undermining their efficacy.
The nationally significant infrastructure project regime is to be expanded so that housing can be included alongside the infrastructure project when located on the same site or close by provided that there is some functional or geographical link between the two.
New powers are introduced to enable pilot schemes to test the benefits of introducing competition into the processing of planning applications (as highlighted in EG, 16 April 2016, p109).
Compulsory purchase
Part 7 makes a number of changes to the existing compulsory purchase system. Existing rights of entry to survey are amended, timetables for order confirmation are to be established and amendments are made to existing arrangements for general vesting declarations, gaining possession after notice to treat, compensation claims and the power to override existing easements and restrictive covenants.
Martin Edwards is a barrister at Cornerstone Barristers
