Proposed reforms to National Planning Policy Framework
One of the big headline grabs of the Labour Party manifesto, was the target of delivering 1,500,000 new homes during their time in government – translating to around 300,000 per annum. Given the relatively low new start rates of housing development recorded by the ONS (most recent data Q1 2024: 29,820 starts vs Q1 2023: 44,940 (-34%), this seems an uphill battle.
The Government have taken their first major step towards making good on this pledge, by publishing their draft amendments to the National Planning Policy Framework (NPPF). We set out some key takes from the draft:
Reintroduction of housing targets – whilst introducing a new standard method of assessing housing need with an aim of redistributing housing allocations to areas where housing is least affordable.
Review the post-war Green Belt policy – introduction of a ‘grey belt’ definition: ‘Green Belt land which makes a limited contribution to the Green Belt’s purposes, as set out in paragraph 143 of the current NPPF.’
Delivering more affordable homes – not implementing the Infrastructure Levy as introduced in the Levelling-up and Regeneration Act 2023. Removing prescriptive rules on tenure split of affordable housing.
Increasing Planning Application Costs – Local planning authorities are often under resourced – rather than paying for this from taxation, Labour is proposing increased householder application fees from £258 – £528 per application (104% increase). Potential introduction of fees for listed building or TPO applications.
Revising Policy – There is a need for local authorities to revisit their housing allocations where the existing policy fails to meet new targets.
Support for commercial development – set criteria and identify strategic sites for investment: ‘Appropriate sites for commercial development which meet the needs of a modern economy should be identified, including suitable locations for uses such as laboratories, gigafactories, data centres, digital infrastructure, freight and logistics.’
John Birchall MRICS, Partner at Fenn Wright shares his thoughts: “I think many developers are understandably sceptical about the proposals. There has been widespread suggestion of reform for many years and the introduction of the NPPF saw a presumption in favour of sustainable development, including the provision of homes, commercial
development, and supporting infrastructure, which was heralded as revolutionary.Whilst the party have undoubtedly acted swiftly with the production of the consultation, the detail in many areas remains limited. From resourcing the change, to the actual practicalities of some of the proposed amendments, it is unclear how it will really work. I do think it’s easy to be negative, but plainly there is a desire to change things, which must be a good thing.
If Labour can successfully crack the ‘planning problem‘, we still have a massive hurdle to overcome with actual delivery – new house starts are down significantly and to successfully deliver 300,000 homes a year will need us to build homes at a rate we’ve not seen since the 1970s (source ONS), yet house building is much more complex and expensive than it was fifty years ago.
The reductions of new starts are driven by market forces, rather than necessarily the issue of land supply or planning constraints. New home values have plateaued over the past 2 or so years – and whilst they are now recovering, confidence amongst developers remains weak and viability is still a major problem for most development sites.”