Letwin Lets Rip in Build Out Review

By Daniel Fryd, Senior Consultant

Somewhere in the middle of the Chancellor’s 95 minute Autumn Budget speech was a single line on the publication of Oliver Letwin MP’s ‘Independent Review of Build Out’ report.

Developers, we are told, ‘do not engage in systematic land banking’. That’s it then. One year on from the commissioning of the report in 2017, we are told something that has been painfully obvious to anyone who is remotely involved in the property sector.

So was the whole thing a waste of time? Not quite. To have that fact confirmed on a national stage by the Chancellor of the Exchequer to the general population, as well as to a media seemingly dead set on tearing down what are seen as nasty developers, is very useful. Some councillors may also listen.

‘Homogenous tenure’ root of slow build out

As trailed in his Interim Report, the key reason for slow build out of sites for housing is ‘homogenous’ tenure, Letwin tells us, suggesting there is too much space set aside for housing for market sale. His suggestion in response to this is that builders should be obliged to agree to a greater split in tenure if they are to receive Help to Buy monies or further Government support.

Elsewhere, there were some recommendations for a range of planning changes which will be interesting in terms of the modifications they could bring to housing delivery.

Greater powers for councils have been put forward to compulsorily purchase land at “around ten times existing use value” in order to provide the affordable homes the country needs. This is not likely to prove popular with land owners.

In order to drive longer-term delivery, Letwin also proposes giving local planning authorities in areas of high housing demand the powers to set areas within their local plans as land which can only be developed as single large sites.

Chiefly, he also recommends the formation of a National Expert Committee to advise local authorities on the interpretation of the tenure mix requirements for large sites and to take decisions on where the diversity requirements cause an appeal.

No pickup of land value capture 

Despite what was reported in the media last week, it looks like hopes of a radical move on land value capture have been parked for now.

The detail of the Budget red book says Government will introduce “a simpler system of developer contributions that provides more certainty for developers and local authorities, while enabling local areas to capture a greater share of uplift in land values for infrastructure and affordable housing.”

The reforms include simplifying the process for setting a higher zonal Community Infrastructure Levy in areas of high land value uplift and removing all restrictions on Section 106 pooling towards a single piece of infrastructure.

All in all, the Letwin Review has delivered what are broadly sensible recommendations to reform the planning system to help get houses built. Whether Government will act on these suggestions remains to be seen, as James Brokenshire MP and Kit Malthouse MP’s housing policy teams at MHCLG undertake further work before the Government responds in the new year.

Read more about the latest planning news:

  • Malthouse calls for “more, better, faster” as Gov ignore latest population stats – Read more
  • Onwards and upwards for extensions? – Read more
  • TCPA proposes 13 steps to deliver truly affordable housing – Read more
  • Government lifts HRA borrowing cap – Read more
  • Budget 2018 Special – Read more