Tag Archives: housing

Planning Ahead – Planning news, views and insight – November 2018

This month: Letwin on land banking, Malthouse ignores ONS stats, upwards extensions, HRA borrowing cap and TCPA’s tips on affordable housing

Malthouse calls for “more, better, faster” as Gov ignore latest population stats
Government will not change housing targets despite official statistics predicting lower household growth than previously thought, it was confirmed… Read more
Onwards and upwards for extensions?
The government has launched a fresh consultation on permitted development rights (PDR) for upwards extensions… Read more
TCPA proposes 13 steps to deliver truly affordable housing
The planning system is failing to deliver affordable homes in the country’s poorest areas, a new report claims… Read more
Government lifts HRA borrowing cap
In one of the biggest announcements from this year’s Conservative Party conference, Theresa May presented government’s plans to remove… Read more
Letwin Lets Rip in Build Out Review
Oliver Letwin MP’s new report confirms house builders do not land bank, and sets out a number of measures to speed up housebuilding… Read more
Budget 2018 Special
Hammond’s highly-anticipated pre-Brexit budget was slightly underwhelming from a housing and planning perspective. However, he did admit… Read more

Local Plan updates
Chelgate Local brings you Local Plan updates for Aylesbury Vale, Basildon, Brentwood, Central Beds, Chelmsford, Chiltern and South Bucks, Dacorum, East Herts, Epping, Epsom and Ewell, Harlow, Medway, Milton Keynes, Mole Valley and many more…

Chelgate Local invites you to our Breakfast Briefing on the Role of County Councils
We welcome you to attend our breakfast briefing on the shifting role of county councils in planning, with a focus on Hertfordshire.

We will hear from local politicians, housing associations and developers on how county councils are playing a far greater role in the planning of infrastructure and larger developments.

Come along on 7th December, 8-10am in St Albans. Email vshirley@chelgate.com to reserve your spot, places are limited!

TCPA proposes 13 steps to deliver truly affordable housing

By Daniel Fryd, Senior Consultant

Despite positive moves to get councils building, the planning system is failing to deliver affordable homes in the country’s poorest areas, a new TCPA report suggests.

The responsibility for building affordable homes is now firmly in councils’ courts following the Prime Minister’s move to lift the Housing Revenue account borrowing cap. Make no mistake – scrapping the borrowing cap is a huge move which means councils finally have the freedom they have been crying out for to significantly boost affordable housing supply.

According to a new research paper from the TCPA, however, the scale of the housing crisis is so severe that despite the new freedom for councils to build, the planning system will continue to fill the gap through requiring developers to build affordable housing within new developments.

With a woeful 2% of councils achieving their full affordable housing target through the planning system, there is clearly a long way to go and further changes needed before we see a genuine uplift in supply. Getting councils building is only one part of the solution.

Affording “affordable” homes

To unpick the problem with affordable housing you have to take a step back.

Speak to young people looking to get on the housing ladder about ‘affordable housing’ and you face the same questions: what does ‘affordable’ actually mean? Affordable to whom?

The fact the new NPPF now links affordable housing to market rates, especially in high value areas like London, simply means it in is line with the price of other homes which are broadly unaffordable for young people.

The TCPA report ‘Planning for Affordable Housing’, released just weeks before Budget 2018, draws on this as a key theme in the report, suggesting the definition of affordable homes should be amended in the NPPF to be based on a measure of local income instead of being pegged to an arbitrary proportion of market rates.

Linking provision of affordable homes to market rates, rather than local incomes, can lead to a situation where councils cannot set their own rents based on local incomes to ensure they meet local need.

13 steps to build affordable homes

Drawing on this, ‘Planning for Affordable Housing’ puts forward 13 recommendations to improve the planning system to deliver affordable housing, including an overarching recommendation for Government to set a target for the number of new affordable homes the country needs, and a strategy for how to achieve this figure.

Key recommendations include reform of viability assessments to ensure developers build affordable homes after planning approval, reform of land value capture to remove the ‘hope value’ of land and the rescinding of permitted development rights, which delivers no affordable.

None of these proposals are likely to prove popular with developers, however. The viability system is heavily relied on by developers building homes in expensive areas of high demand (i.e. the entire South East), in order to make their investment feasible.

Land value capture reform has proven unpopular in discussions held by the HCLG committee with developers and planners – Ian Fletcher, director of real estate policy at the British Property Federation (BPF), highlighted that “Crudely applied reform… will deter much-needed private sector investment into housing delivery and our town and city centres.”

The Letwin Review

The Letwin Review, published this week at the same time as the Autumn Budget, revealed quite bold plans for councils to compulsorily purchase land at a rate capped at “around ten times existing use value” in order to provide the affordable housing the market requires. This will be an interesting attempt to crack the nut of land value capture in a way which does not drive down land supply.

The removal of the HRA borrowing cap, as well as the announcements in this week’s Budget for an extra £650m for councils, and a further £500m of funding for the Housing Infrastructure Fund, to unlock 650,000 homes, will go some way to meeting the housing deficit.

Further measures and further planning changes are clearly still needed before we see a real uptick in provision, however.

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
Government lifts HRA borrowing cap – Read more
Letwin Lets Rip in Build Out Review – Read more
Budget 2018 Special – Read more

Malthouse calls for “more, better, faster” as Gov ignore latest population stats

By Daniel Fryd, Senior Consultant

Government will not change its housing need targets despite official statistics predicting lower household growth than previously thought, it was confirmed last week.

In a consultation report launched at the end of last week, just before the Budget and its slew of other reports was released, the Ministry of Housing, Communities and Local Government (MHCLG) set out its latest position on the standard methodology for calculating housing need. The 19-page consultation contained some fairly complex minor planning tweaks, but the main message was very clear: “lower household projections do not mean fewer houses need to be built.”

This will come as something of a blow to local authorities who have been dragging their heels on getting a local plan in place. Certain councils have been delaying their local plan agreement to meet the housing targets set out in the revised NPPF, in the hope that Government would revise down its housing target resulting from the new ONS figures.

Flawed figures

Back in July the ONS released 2016 household population statistics which suggested a drop in the projected population by 53,000 a year between 2018 and 2028. Areas such as Cambridge and Greater saw significant reductions.

To use these statistics to base house-building targets would be a mistake, the new MHCLG publication says however, and would only lead to fewer, larger households living in more expensive homes built in the wrong places.

Running until 7 December 2018, the consultation sets out how Government and councils should ignore the new projections and use the 2014 statistics as a basis for calculating housing need instead, resulting in a minimal change to housing targets.

What now?

The consultation proposes three key changes:

To set out how “2014-based data will provide the demographic baseline for assessment of local housing need”.
To clarify that ” the 2016-based projections do not qualify as an exceptional circumstance that justifies a departure from the standard methodology”.
In the longer term, to “review the formula with a view to establishing a new method” by the time the next projections are issued”.

Housing minister Kit Malthouse said: “We must tackle the historic shortage of new homes and restore the dream of ownership for the next generation.

“To do this we must build more and better homes, faster, and are committed to delivering 300,000 homes a year by the mid-2020s. These proposals maintain this commitment and crucially give stability and certainty for local authorities, so they can get on with the job of building the homes their communities need.”

Once MHCLG have digested the responses to the consultation and produced a final note in the new year, the move should put to bed the suggestion that revised household projection statistics mean lower targets for housebuilding should be introduced. There has been a lot of talk about hitting the 300,000 new homes a year point. Sticking to the 2016 projections will help make that a reality.

Read more about the latest planning news:

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
Letwin Lets Rip in Build Out Review – Read more
Budget 2018 Special – Read more

What came first, the chicken or the household projections?

By Vivienne Shirley, Senior Consultant

The Office for National Statistics (ONS) has released dramatically lower household number projections than previously forecast, causing quite a stir in the planning world.

The 2014 projection, calculated by the Department for Communities and Local Government (DCLG), stated the number of households would grow by 210,000 a year in England – resulting in 28 million homes by 2041. However, the ONS’s figures suggest there will only be 159,000 additional households each year, leading to 26.9 million by the same point.

So why such different numbers?

While the DCLG figures used demographic trends going back to 1971 to produce its figures, the ONS projections are based only on the time between 2001 and 2011. While a trend for households getting smaller can be seen from 1971 onwards, this stopped around 2001 – contributing to the lower household projections. The ONS also assumed a lower annual figure for net migration.

A fair approach?

The validity of the new timeframe has caused controversy, with many arguing that the ONS’s method of calculating household projections ‘bakes in’ a period when not nearly enough homes were built, forcibly curtailing the formation of new households.

Matthew Spry, senior director at property consultancy Lichfields, noted: “The number of households that have formed can only ever match the number of dwellings that there are for people to live in. Statistically a household cannot form if it doesn’t have an extra house to form into.”

Jim Gleeson, senior policy officer at the Greater London Authority, put it even more bluntly when he criticised the ONS’s approach, tweeting: “This is like saying that when we cut bus services the number of people taking the bus falls so we should cut bus services more.”

Indeed the increasing number of young people living with their parents into adulthood would probably argue they would prefer to move out and form new households, but are prevented by sky-high house prices due to high demand and lagging supply. And it’s not just millennials who are affected. Data from listing site SpareRoom showed the number of individuals living in flat shares between the ages of 55 and 64 rose by 343% from 2011 to 2016 – again, it’s questionable if this is by choice.

Lower housebuilding targets?

Though some observers have embraced the new projections and claimed they prove the government’s aim of building 300,000 homes a year is too high, it is unlikely this figure will be lowered.

If the new projections are used as the basis for the Standard Method of calculating housing need, included in the revised NPPF, this would mean only 214,000 new homes each year – prolonging the trend of low house building and high prices, and continuing to bog down the formation of new households.

But the government said in July it will consult on changes to the standard methodology to address the fact the projections are not consistent with achieving 300,000 homes per annum, stating: “It should be noted that the intention is to consider adjusting the method to ensure that the starting point in the plan-making process is consistent in aggregate with the proposals in [last September’s] consultation and continues to be consistent with ensuring that 300,000 homes are built per year by the mid 2020’s.”

This is good news. Otherwise, we could risk entering a downward spiral where lack of houses impacts household projections, and these projections then further limit housebuilding – actively perpetuating the housing crisis.

Is Right to Buy heading in the wrong direction?

By Daniel Fryd, Senior Consultant

Just when it looked like ‘Voluntary Right to Buy’ was firmly buried in the long grass, Communities Secretary James Brokenshire dug it out earlier this month and announced £200m to revive it as a new pilot scheme.

The new scheme allows housing association tenants in the Midlands to register online to buy their home at a discount, with places allocated through a ballot closing on September 16.

While the news will certainly be welcome to a select few Housing Association tenants in the Midlands, its use in actually helping solve the housing crisis is much more uncertain.

The ‘dream of home ownership’

Right to Buy has long been touted by the Conservatives as a way to increase social mobility and provide social housing tenants with a route into ownership. Since 2010, the policy has allowed almost 94,000 households to buy up the council homes they have lived in at a discounted rate.

Voluntary right to buy (VRTB) for housing association properties was then put forward as a Conservative manifesto commitment in 2015. Since then, every Housing Minister has remained conveniently quiet on the policy, making no commitments while it largely faded from public consciousness.

It comes as a surprise then that the VRTB scheme, which can only assist the decline in social housing stock, has suddenly reappeared now: in the same week as a Social Housing Green Paper which allocated no new money for social housing and set no target for future housing numbers.

Over 66,000 council homes have been sold through RTB since 2012 with only 17,000 replacements, so new homes are desperately needed – not a further sell-off.

Government has stated money from homes sold under the pilot will be given to councils to fund one-for-one replacements, but councils are likely to be dubious given they have barely been able to replace 25% of the stock that has been sold off. Early reports from Inside Housing suggest around 3,000 homes will be sold across the Midlands under the Pilot, so there will be plenty of replacements needed.

Hope for council homes

It is not all bad news however. MHCLG released a wider consultation alongside the Social Housing Green Paper on allowing councils to set all RTB discounts locally and keep 100% of receipts from homes sold. This would allow councils across the country to reduce the discount and could help them lower demand if they need to retain some of their stock.

Following publication of the new NPPF, the Housing Revenue Account borrowing cap is also being raised “in areas of high affordability pressures” by up to £1bn over the three years from April 2019. This could give London councils under severe housing pressure like London Borough of Waltham Forest more capacity to replace homes sold under RTB.

The government has also abandoned the “high-value asset levy” policy, meaning councils will no longer have to worry about selling off their most valuable homes in the future, with little prospect of replacing them.

Moving ahead

145,000 new affordable homes are needed every year by 2031, according to the National Housing Federation, so each of these new policies are a positive step towards achieving this. Schemes like VRTB, meanwhile, will not help achieve this. It might even hinder it.

Which is why the government’s decision to press ahead with the VRTB pilot at this time seems bizarre. The Social Housing Green Paper’s new ‘1% ownership’ scheme for council tenants would have been the perfect replacement policy for Government to offer tenants as an opportunity to own their home.

Brokenshire is pressing ahead, however, and the pilot scheme will run until spring 2020 when MHCLG will decide whether to roll the scheme out to the rest of the country.

If the Midlands councils involved really can find a way to replace every single home they sell by 2020, then perhaps the scheme will prove itself successful. If not, the Government should muster the courage to chalk the policy up as a failure and get on with the job of building more homes, not selling them off.

Social Housing Green Paper introduces League Tables and “springboard”

By Kasia Banas, Consultant

Following months of delays and anticipation, a ‘new deal’ for social housing residents has been launched by the Secretary of State for Communities, James Brokenshire. But despite a raft of new Ministers working on the plan and promises from former Communities Secretary Sajid Javid that the paper would deliver “more of the right homes built in the right places”, the announcements in today’s paper have fallen somewhat flat with housing associations.

Launching the paper yesterday, James Brokenshire said that “Providing high quality and well managed social housing is a core priority for this government”, and that the “green paper offers a landmark opportunity for major reform to improve fairness, quality and safety for residents living in social housing across the country.”

Key proposals in the green paper include:

A league table for Housing Associations, with performance indicators ranking how well they handle repairs and complaints.
A shared ownership scheme that would allow tenants to buy as little as 1% of their property each year
Measures to make the complaints process more efficient and give tenants more tools in dispute resolution and compensation seeking, such as new mediation opportunities
New powers for the Regulator of Social Housing to ensure quality and good management of social homes
Dropping the proposals to introduce fixed term tenancies and letting councils “to continue to have choice” over their use of them

In their efforts to support more people into home ownership, the government is proposing a policy that would allow new buyers of shared ownership homes to staircase up their ownership in purchases of just 1% of their home each year.

This commitment may however be slightly at odds with the government’s objective of addressing social housing stigma, as it could be seen to reinforce the perception of home ownership being superior to living in social housing. The new shared ownership scheme could also be the first step in the government’s move away from the ‘voluntary right to buy’ proposals, on which there continues to be a deafening silence.

Expanding supply

Elsewhere the Social Housing Green Paper scrapped plans to make councils sell off their highest value homes, as well as removing Lifetime Tenancies for social tenants. It is also proposing raising the housing borrowing cap for local authorities and reforming Right to Buy receipts, so they can be held for longer than the current three years and used alongside the borrowing cap increase.

Reception from the sector

The sector was quick to react to the announcements, with David Orr at the National Housing Federation endorsing the government’s proposals, while others including Shelter and the Joseph Rowntree Foundation have been less flattering. The lack of any actual commitments to new funding for affordable homes, or a target on how many new homes are needed, have been the main criticisms levelled at the government today.

Despite the government’s refusal to commit to build more affordable homes, the need for them is apparent than ever. More than 66,000 council homes have been sold under the Right to Buy scheme since 2012, while just 17,911 replacements have been started or acquired, according to Local Government Association statistics.

Cllr Judith Blake, Local Government Association Housing spokesperson, said: “This green paper is a step towards delivering more social homes but it is only a small step, compared with the huge and immediate need for more genuinely affordable homes.”

The publication seems to suggest that priority has been given to stronger resident involvement, protection for tenants and tackling stigma over increasing supply of low-cost rented homes. It is quite a departure from the paper’s initial objective, outlined by then Housing Secretary Sajid Javid, who said that central to the paper would be finding a solution to getting “more of the right homes built in the right places”. This is likely to be a result of the many personnel reshuffles in the Ministry since the announcement of the green paper in September last year.

Consultation

The release of the green paper starts a consultation process on the proposals that will run until 6 November 2018. In addition, another consultation has been launched into how councils spend the money from Right to Buy sales to boost council housing numbers, with proposals to simplify the process councils undergo to replace properties sold under Right to Buy and build the affordable homes their communities.

Please find further information here about how we can help with your projects.

New NPPF ends Government summer policy drought

by Daniel Fryd, Senior Consultant, Chelgate Local.
This article was also published on Pub Affairs.

In a day for burying Government announcements, Communities Secretary James Brokenshire revealed the new ‘National Planning Policy Framework’ (NPPF) on 24th July, providing good news for build-to-rent developers and bad news for councils dragging their feet. Read Chelgate’s analysis of the key announcements below:

On a swelteringly hot final day before summer Parliamentary recess, housing and planning professionals across the country sat with ‘bated’ breath and awaited the various MHCLG announcements they had been promised.

The Social Housing Green Paper, the revised National Planning Policy Framework (NPPF), and the Rough Sleeping Strategy were all pledged for publication ahead of the summer recess at various points over the last few months. While we will have to wait until September for the other two, Communities Secretary James Brokenshire finally published the long-awaited NPPF2 on the day before recess, before promptly sprinting out of the MHCLG door on his summer holidays.

But while NPPF2 could be seen as a rather underwhelming compilation of minor changes which have been seen before, it does introduce important new policy on areas including the housing delivery test, small sites, housing design, and build to rent:

Build to Rent

For the very first time, Build to Rent (BtR) has been officially recognised by the government as its own specific asset class. Furthering the Government’s drive towards a greater tenure mix, local authorities will need to reflect the demand for purpose-built rented homes alongside social rent and private ownership in their policies and local plans.

Significantly, changes in NPPF2 now allow Build to Rent developments to count towards the total affordable housing allocation for an area, meaning BtR sites can provide new affordable private rent homes for an area, and ease the pressure on registered housing associations to build homes.

The change should allow councils to plan more effectively for provision of affordable housing, and allows them to draw on the typically more high-quality rental homes that BtR provide to meet their housing obligations.

This will be come as some small consolation for councils left with an increasing deficit in their housing stock thanks to Right to Buy, as purpose built BtR developments can be used to provide “affordable private rent” while councils concentrate on replenishing their stock.

Housing Delivery test

One of the key new policies to enforce the Housing Need methodology, and ensure performance against local plans, is the Housing Delivery Test. From November 2018 councils will be assessed against the numbers of homes that are built in their area, rather than how many homes they planned for but have not yet delivered. To ensure councils can no longer agree local plans which set
wildly unachievable housing figures, the test penalises councils under-delivering over a three-year period.

While the policy will help MHCLG crack down on non-compliant councils failing to meet their land supply targets, councils have seen it as allowing developers to run riot. An outraged Lord Porter, Chairman of the LGA, pointed out that the test “punishes communities for homes not built by private developers”, and that national targets could see agreed local plans bypassed. If developers build less than 75% of the council’s target OAN target for new homes over three years, they will now benefit from a “presumption in favour of sustainable development.

Councils have long argued the slow build-out rate of developers has held back their delivery while they approve “nine out of 10 applications”. Developers have repeatedly contested this assertion, and while MHCLG has not committed itself either way, the findings of the Letwin Review at Autumn Budget should finally force the Government to take a policy stance on the issue.

January 2019 local plan deadline

Councils have been told for the first time they have until 24 January 2019 to submit their local plans if they want to be examined against the previous NPPF, using the old housing need figures.

Plans submitted after 24 January – exactly six months from NPPF2’s publication – will be examined under the new rules and will be held to the new housing need assessment.

Good design

Showing he practices what he preaches, the Communities Secretary has also made guidance around good design significantly more robust, in a move which could help bring an end to the days of faceless cheap developments. Recognising its importance for creating places which people want to live in and enjoy, NPPF2 places the creation of high quality buildings as ‘fundamental’ to the planning process.

Warning about how the “quality of approved development [can] materially diminish between permission and completion”, the new guidance sets out how local authorities should work with developers to ensure changes are not made to areas like materials on permitted schemes. While the viability and cost of materials is a perennial issue post-approval, the new guidance could see councils cracking down on changes.

Adopted neighbourhood plans should “demonstrate clear local leadership in design quality, with the framework allowing groups seeking such plans to truly reflect the community’s expectations on how new development will visually contribute to their area”.

Small sites

While the draft NPPF, and Oliver Letwin’s initial findings, have promoted small sites as one of the answer to England’s housing woes, the new NPPF moves away from this. Previously the document stated that “small sites can make an important contribution to meeting the housing requirement of an area, and are often built out relatively quickly”.

Under the revisions to the plan, councils must accommodate 10 per cent of their housing requirement on small sites, as opposed to 20 per cent of sites which they would have had to deliver under the draft version. While the development of small sites is clearly still part of the solution for MHCLG, this move, and the reinstatement of the previously dropped Garden City principles, could signal a move back to larger strategic sites to deliver new homes.

To find out more, and to see how we can help you, get in touch at mhardware@chelgate.com or 020 7939 7989.

Tag Archives: housing

Planning Ahead – Planning news, views and insight – November 2018

TCPA proposes 13 steps to deliver truly affordable housing