How we build 300,000 of the right homes in the right places

We do not need a new planning system to build 300,000 of the right homes in the right places, we just need to enable deliverable permissions for the best practitioners, writes Rico Wojtulewicz, head of Housing and Planning Policy for the National Federation of Builders

The right home in the right place means something different to every person but for most, it needs to be affordable, accessible and well built. Yet, over the past three decades, it has become more difficult to meet that ambition.

Before 1990, house building was very different. Privately owned land was developed more liberally, councils were still building and many communities and estates were built by multiple housebuilders, all competing on price and quality.

Winning work on reputation, the house building industry worked closely with councils and local people, who told them what was needed and where. Because of local connections, they mostly built the right homes in the right places and were the engine of placemaking.

The ‘The Town and Country Planning Act 1990’ changed that by introducing a plan led system and making local planning authorities (LPA) the decision makers on land use. Market assessment by business was replaced by local authority knowledge, the professionalisation of planning permissions was firmly established and house builders became the tool, rather than the engine.

At first, culture change kept housebuilders relatively close to their local authorities but as time wore on and new policies were introduced, a clearer divide was established. Opportunities remained but they were increasingly won by developers and land promoters, who understood that they now needed to secure allocated sites in local plans, not build homes.

For housebuilders, the risk was now not in building a home people wanted to buy, but in competing for planning permission, whose location was determined by LPAs. Many housebuilders struggled with this and in 2007, after the financial crash, 80 per cent of the UK’s smaller builders had ceased trading, taking with them a skilled workforce, many of whom retrained or retired.

This had a profound impact on the entire housebuilding industry, as housing associations, councils, self-builders and cooperatives typically relied on smaller builders for their projects. With permissions and builders in short supply, the 2012 National Planning Policy Framework (NPPF) further distanced housing need from supply by requiring councils to keep unproven five year land supplies (5YLS).

In 2019, that unproven land supply has permitted over 423,000 homes, most of which are difficult to deliver or not full applications. This approach must change and by re-establishing market knowledge, reforming planning to focus on certainty and strengthening the regional economy, we can get above and beyond the 300,000 a year target.

Re-establishing market knowledge
Through digital surveying, working with the third sector, housebuilders, businesses and residents, LPAs must improve the detail and representation of their housing needs assessments. For too long, assessments have focused on social housing and neglected needs such as independent, supported, family and adaptable housing.

Making this information more accessible would also allow a broader range of players to meet local need, while ensuring that placemaking was more informed.

Reforming planning to focus on certainty

Councils identify a 5YLS and allocate sites for development but in order to meet targets, they have increasingly focussed on larger sites. Research by the House Builders Federation (HBF) confirms that since 200, permissioned site sizes have increased by 17 per cent.

Windfall sites supplement the 5YLS, yet they’ve been increasingly dominated by smaller builders, who struggle to be part of the five year strategy.

After many years of ‘placemaking’ with large sites, councils have run out of easy to deliver opportunities. Many have been left with controversial, undeliverable sites, supplying hundreds or thousands of homes but without the infrastructure to support them. This jeopardises a 5YLS. Councils then announce a ‘call for sites’, which is typically propped up by another large, difficult or phased development.

As well as increased funding for planning departments, the solution would be to work more closely with land owners, builders and homebuyers to build out our communities. Brownfield, infill, small, garage and garden sites would produce a surprisingly significant number of homes, therefore small site registers should be encouraged.

In London, the mayor has set a target of 24,573 homes a year on small sites, more than a third of the capitals required supply. It seems incredible that other councils, with less built up communities, could not accommodate the same, or higher proportion.

Building out isn’t just good for providing deliverable permissions of the right type, it frees up time to plan and invest in larger, strategic sites.

Permissions remain the single greatest challenge for housebuilders and despite often meeting planning policy, they can take many years to be granted, particularly if on windfall sites.

The following constraints stops shovels going in the ground and create unnecessary planning risks: pre-application meetings can cost many thousands and guidance is non-binding; since becoming individually chargeable, the number of planning conditions have increased by tens; it is normal for LPAs to suggest ‘extensions of time requests’ in the final days that conditions/reserved matters are discharged; many planning conditions, such as landscaping and material schedules, should not be conditioned as they are submitted early on in the application process; when developers identify and present housing need as evidence, it is typically dismissed out of hand; consultations with statutory bodies, such as water and highways, are delay ridden and bureaucratic, even when the builder has done their due diligence; and planning contributions need reform. For example, the standard charge Community Infrastructure Levy (CIL) was scheduled to replace negotiated Section 106, yet not all councils use CIL and section 106 is often charged alongside it.

By immediately tackling these concerns, all housing providers could avoid some of the unnecessary planning risks. This is a key component in making sure we have capacity in the land, design and build industry.

The government must also consider further powers being granted to LPAs, so they are more able to enable high priority need housing. However, they must not simply collect data as has happened with the selfbuild register, LPAs must deliver opportunities themselves and through the market.

The regional economy
With LPAs now the engine, the construction industry must be viewed as an economic and social catalyst. Small and medium sized businesses (SMEs) are our predominant rural employers and in construction, train four in five apprentices.

Regional business is also more likely to retain direct employment and support local supply chains. It is therefore vital that SMEs can compete on a level playing field in both site allocations and procurement. Councils must use their procurement powers to enable best practitioners, especially now the borrowing cap on council homes has been lifted.  

Government and local authorities must also be serious about taxation, reviewing how council tax and business rates are charged on new developments and checking whether fees on, for example, address allocations are proportionate.

By addressing the concerns raised, we will build 300,000 of the right new homes in the right places. Housebuilding capacity will also be strengthened but more importantly, so will placemaking. Substantial reforms will be needed but let’s make the current system efficient before a new one sets us fresh challenges.

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