January Update

December was a hugely significant month for planning as the government introduced the English Devolution White Paper and the National Planning Policy Framework (NPPF) revisions. First to be announced was the NPPF revisions on the 12^th of December. The document outlines significant changes to the national and local planning decision-making process, benefiting developers and land promoters. The provisions aim to speed up the scrutiny and approval of planning applications by local planning authorities (LPAs) and address the national housing shortage. The Labour Government has instructed councils and LPAs to fast-track certain applications that align with the NPPF and local plan policies.

Shortly after, on December 16^th, the Secretary of State for Housing, Communities and Local Government, Angela Rayner MP, released the English Devolution White Paper. The paper outlines significant reforms to local government decision-making, including changes to the planning process. A key element of the reforms is the creation of ‘Strategic Authorities,’ which will be divided into two categories: Foundation Strategic Authorities (FSAs) and Mayoral Strategic Authorities (MSAs). The government prefers creating ‘partnerships’ that combine multiple local authorities across large areas, although the Secretary of State can designate a single authority as an FSA. The long-term goal is for all of England to have an MSA, with FSAs serving as a transitional step. These changes will be implemented through an English Devolution Bill in Parliament.

The NPPF revisions are perhaps unsurprising considering Labours clear ‘plan for change’ during the election and their ongoing focus on the housing shortage. However, it will be interesting to see how the English Devolution White Paper impacts the NPPF. Just like any major reforms, there are delays and difficulties but two major reforms within quick succession of one another is bound to stall progress in the short term. On the other hand, two significantly pro-development reforms will encourage swifter decision making and more efficient planning processes in the long term. Only time will tell of the true impact of these two reforms on the planning system and development, but processes as we know them are changing!

Inflation Rates – In November 2024, the Consumer Prices Index including owner occupiers’ housing costs (CPIH) increased by 3.5% compared to the previous year, up from 3.2% in October 2024. On a monthly basis, CPIH rose by 0.2% in November 2024, contrasting with a 0.1% decline in November 2023. Meanwhile, the Consumer Prices Index (CPI) saw a 2.6% rise in the 12 months to November 2024, up from 2.3% in October 2024.

Interest Rates – The Bank of England decided to keep interest rates at 4.75%, despite voicing concerns that the economy is performing worse than expected. Despite previous rate hikes, economic growth has slowed, and inflationary pressures remain subdued. The Bank acknowledged ongoing challenges and uncertainty impacting the economy but decided to hold the current interest rate. Significantly, three members out of nine member of the Bank of England rate-setting committee voted to reduce interest rates to 4.5% to stimulate economic growth. They were ultimately overruled.

GDP Growth – According to the CBI’s December report GDP growth for 2024 is now projected to be 0.9%, slightly down from the previous June forecast of 1.0%. For 2025, the growth forecast is downgraded to 1.6% from 1.9%, with further growth expected to slow to 1.5% in 2026. CBI Economic Forecast – December 2024 | CBI

Pound against the Euro – The US dollar surged to a two-year high against the euro and an eight-month high against the British pound last Thursday, following strong US jobs market data that boosted confidence in the economy. The pound, which had been the best-performing currency against the dollar last year, dropped 1.3% to $1.2354, its lowest since April, while the euro fell 0.9% to $1.0267, its lowest since November 2022.

House Market Resurgence – In positive news, UK house prices closed 2024 on a strong note, registering a 4.7% year-on-year increase in December, as per the latest Nationwide House Price Index. This growth demonstrates the market’s resilience, despite ongoing affordability pressures and elevated borrowing costs. Prices rose by 0.7% from November to December, building on a 1.2% increase the previous month (seasonally adjusted). Traditionally, December experiences a dip in activity due to the holiday season, but this year, the market surpassed expectations. The market’s resilience can be credited to declining inflation and improved mortgage rates.

Unemployment rates – The UK unemployment rate for those aged 16 and over was 4.3% in August to October 2024, higher than the estimates from the previous year and up from the last quarter. The number of job vacancies in the UK fell by 31,000 to 818,000 in September to November 2024, marking the 29th consecutive quarterly decline. However important to note that vacancies remain higher now than pre-pandemic levels despite the steady decline. Unemployment will be a significant area of focus as Kier Starmer has vowed to get ‘Britain working again’ and in his New Years address commented on the importance of ‘rebuilding the country’.

Bills in Parliament:

Assisted Dying Bill – The Terminally Ill Adults (End of Life) Bill, proposed by Labour backbencher Kim Leadbeater, was supported by MPs after over four hours of debate, passing with a vote of 330 to 275. However, there is still a long way to go before it becomes a law. The next stage of the bill involves a detailed review by a small group of MPs in committee. Following this, a report will allow MPs to propose amendments, which the Commons speaker will decide on for discussion and voting. A final vote will take place at the third reading, where MPs can revise their stance on the bill.
Leasehold and Commonhold Reform – The act provides benefits to leaseholders by simplifying and reducing costs for some in extending their lease or purchasing their freehold, and by increasing the standard lease extension term to 990 years. However, extending or purchasing a lease could be more costly for certain leaseholders. The act has become law but has yet to come into force. The law is expected to be enforced from Spring 2025.
Renters Reform Bill – The Renters’ Rights Bill aims to transform private renting by ending Section 21 ‘no fault’ evictions. It vows to improve the system for both the 11 million renters and 2.3 million landlords in England, providing renters with greater security and stability, allowing them to remain in their homes longer.
Water (Special Measures) Bill – Perhaps not surprising after the excessive water scandals in 2024, the Water (Special Measures) Bill is currently at committee stage. The bill will tighten the regulation, governance and special administration of water companies.
Mental Health Bill – The Mental Health Bill fulfils the government’s pledge to modernize mental health legislation, offering patients greater choice, autonomy, rights, and support while ensuring dignity and respect in treatment

Current Affairs Related to Housing:

Right to Buy Reforms The government are currently holding an open consultation on the Right to Buy Reforms. The consultation aims to gather opinions on reforming the Right to Buy scheme to make it fairer and more sustainable. It seeks to ensure long-term council tenants can still have the opportunity to own their homes, while reforming the scheme to protect social housing stock, increase council capacity, and support the government’s significant housebuilding goal. The consultation will close on the 15^th of January.
Affordable Housing A report by the Home Builders Federation (HBF) reveals that over 17,000 affordable homes are on hold due to uncontracted Section 106 units and a shortage of bids from housing associations. The report, Bid Farewell, highlights that at least 139 developments have stalled, with a lack of registered providers and a combination of economic and policy pressures exacerbating the issue.
New Housing Targets for Councils As mentioned previously, the revised NFFP as aimed to create a streamlined planning process. However, it has incidentally also placed new, some may say overwhelming, housing targets on local councils. The government has set councils a target of delivering 370,000 homes annually, with mandatory housing targets and a focus on building homes for social rent. As touched on previously, with local authorities going through major reform, it is somewhat difficult to see how planning can be prioritised and output can be increased, at least in the short term, when the very foundations of the councils are being changed.
Homelessness Crisis – New figures show that nearly 100 councils received more requests for emergency housing help from homeless refugees in the first nine months of 2024 than in all of 2023. In a press release from the Government on the 18^th of December, the Labour Government has vowed to Councils in England will receive nearly £1 billion in new funding next year to address, reduce, and prevent homelessness in their local areas.