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Housing policy: planning rules in the spotlight

The government has been on the receiving end of some rather brutal criticism in recent weeks, with certain political commentators suggesting that the ongoing focus on Brexit has taken policymakers' eyes off far more important domestic balls like housing, health and education. Whether this negative narrative is entirely accurate or just the opinion of journalists starved for copy, Prime Minister Theresa May responded in dramatic fashion, announcing her long-term vision for the future of housing in the UK. In a widely publicised speech, she said that the country's housing market was broken, that it reinforced social inequalities, and that young people were absolutely right to resent the lack of affordable homes. Her mission, says Mrs May, is to reset the market so that it works for everyone, and the central plank of her policy is to reform planning rules. Accordingly, the government has published a draft National Planning Policy Framework which, if implemented in full, would transform the way we go about building homes in England. In this Nethouseprices piece, we set out the background to the reforms and evaluate the response.


Housing - or more specifically, the housing crisis - has come to the political forefront during the past few years, with parties of all hues agreeing that action is needed to repair the market. While there is a general consensus that inflated house prices in the UK are the key obstacle to homeownership, there is some debate around the question: why does residential property in this country cost so much? Analysts have offered various explanations. The extent of property speculation in some locations is afforded some of the blame, and, to be truthful, the buy-to-let sector has its critics, too. But the real issue is the imbalance between supply and demand. In other words, there aren't enough houses to meet our current requirements, an economic phenomenon which will inevitably push prices upwards.

This conclusion raises yet more questions, of which the most obvious is: why is there such a shortage of homes? There is a certain amount of political finger-pointing, with parties accusing each other of neglecting housing while in government. Some commentators point to the purportedly immigration-driven population explosion of the past ten years. But planning problems are typically considered to be the true "enemies" of development. The main arguments are that:

- Our planning laws are archaic, complicated and open to arbitrary interpretation
- The regulatory framework applying to the Green Belt needs both modernisation and liberalisation
- Councils indulge so-called "NIMBY" local residents who object to new homes being built in their neighbourhoods
- Once granted permission to build houses on land, developers take too long to deliver the promised properties, often because they are waiting for prices to rise and for the venture to become more profitable.

The draft National Planning Policy Framework, says Mrs May, addresses these complaints.

Key points

The document is lengthy and complex and we will address the finer details in a future column. But the major points - at least from the perspective of the media and most property pundits - are that:

- Councils will be penalised for overly draconian, unreasonable refusal of planning permission
- Property developers will be penalised for land banking when their motivations are purely financial.


The response to the Prime Minister's speech was mixed. As ever, the industry and media welcomed the renewed focus on housing, but the overall feeling seems to be that, when you analyse the measures, they are effectively a restatement of many of the policy points outlined in last year's White Paper. Several observers also took the view that the government hasn't gone as far as it might have done, certainly when the rhetoric preceding the latest publication hinted at genuinely radical reform. Resetting the Green Belt, by way of an example, hasn't happened.

Not everyone agrees that the document is a damp squib, though. In fact, it was met with barely concealed fury in some quarters. Why? Well, there are two major groups opposing the proposals:

1. Local authorities

Councils, predictably enough, feel that they are being made a scapegoat for the country's housing shortage. Reacting to the announcement, Gary Porter, Conservative chair of the Local Government Association, said that it was entirely inappropriate to blame local authorities for holding up vital house-building programmes. He said that people "can't live in planning permission." Around nine out of every ten planning requests are actually approved and developers, goes the argument, need to start using the permission they have been granted. Councils, Mr Porter added, should also be given extra powers to begin their own building projects.

The other sticking point is that councils obviously need to tread a careful political line when granting planning permission. This isn't to say that they should endlessly indulge NIMBYism, but there is a cogent argument that they are probably better placed than central government to assess what developments are in the local community's best interests. Certainly, according to the naysayers, it's hard to square the government's much-vaunted commitment to localism with a measure that would transfer planning powers from local councils to Whitehall.

2. Developers

Developers are no more ready to shoulder the blame for the UK's lack of homes than local authorities, arguing that, where they have planning permission, they use it and that land banking is a relatively rare practice. The Home Builders Federation, for instance, said that, having gone to the expense of buying land and seeking planning permission, very few builders can afford to "sit on" their investment. They need to make it pay as soon as possible, and this means building houses. In a sense, it seems that developers feel they are being treated as part of the problem, rather than as an important part of the solution.

Whatever the rights and wrongs of the policies, the debate is sure to continue in the coming weeks.

We will be discussing the detail of the draft National Planning Policy Framework in a future issue. In the meantime, however, you can read the text of the consultation at:

The team at Nethouseprices hopes that you have found this feature interesting. Coming up soon: ONS index of house prices in the UK, our guide to great places to live, and much more.
You can also sign up to our newsletter and join Nethouseprice’s community of over 190,000 members who get regular property tips, relevant offers and news, click here

Source: 12.03.18

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