The revised NPPF was published on 24 July 2018
Some five months on from first consulting on the draft Framework, the Government has now finally published its response in conjunction with the updated policy document. The very first sentence in the Government’s response paper states that ‘our broken housing market is one of the greatest barriers to progress in Britain today’ and ‘…we need to build many more of the right homes in the right places, whilst protecting the environment and providing the facilities and opportunities communities need.’
In response to this challenge the new Framework proposes several key changes, predominantly focussed on plan making, housing supply and development density. Following the consultation feedback review the draft has largely survived unchanged. This briefing provides a concise overview of the key changes and an analysis of the important implications for the development industry.
The Presumption in Favour of Sustainable Development
The Presumption has been refined, according to the Government, in order to be clear about its scope and how it is intended to be applied. It is evident that the changes have been made to take account of the many legal cases that have debated its application for decision taking.
Of particular interest are the footnotes to para 11, which confirm that for decision taking, where policies most important for determining applications are out of date, permission should be granted unless the site is protected from development or where the adverse impacts would significantly and demonstrably outweigh the benefits. This presumption will now include, for housing schemes, situations where there is no 5 year supply or where the Housing Delivery Test (HDT) has not been met (the Government has published in parallel to the updated Framework, a ‘Housing Delivery Test Measurement Rule Book’).
Annex 1 confirms that the HDT will apply from the day following publication of the first HDT results in November 2018. To determine whether delivery of housing was substantially below the requirement is based on the following measures:
‘a) November 2018 indicate that delivery was below 25% of housing required over the previous three years;
b) November 2019 indicate that delivery was below 45% of housing required over the previous three years;
c) November 2020 and in subsequent years indicate that delivery was below 75% of housing required over the previous three years.’
There are also important caveats to the presumption in relation to Neighbourhood Planning set out at paragraph 14. The Framework states that in situations where housing proposals conflict with a Neighbourhood Plan, then this would result in adverse impacts that are not capable of outweighing the benefits, if all the following 4 criteria are all met:
‘a) the neighbourhood plan became part of the development plan two years or less before the date on which the decision is made;
b) the neighbourhood plan contains policies and allocations to meet its identified housing requirement;
c) the local planning authority has at least a three year supply of deliverable housing sites (against its five year housing supply requirement, including the appropriate buffer as set out in paragraph 73); and
d) the local planning authority’s housing delivery was at least 45% of that required over the previous three years.’
Preparing and Reviewing Plans
The Framework confirms that local plans should be reviewed at least once every 5 years with the first review taking place no later than 5 years from adoption. It makes clear that relevant strategic plan policies will require updating once every 5 years if the local housing need figure has changed ‘significantly’ or earlier review if housing need is expected to change ‘significantly in the near future.’ Importantly, the Government’s consultation responses explains what a significant change entails:
- Where a plan has been adopted prior to a standard method being implemented and the housing number is significantly below the updated calculation; or
- The number has been subject to a cap where the standard method has been used.
The Framework now dedicates a four page section to this topic with a focus on the importance of pre-application engagement and front loading, however the requirement for applicants to enter into pre-application discussions remains non-mandatory.
National policy now sets out practical guidance on the issue of prematurity (which did not exist in the Framework previously) and how this should be considered in the context of the presumption. This is a clear signal that the Government does not believe that prematurity should be utilised as a reason to refuse planning permission other than in limited circumstances where both:
‘a) the development proposed is so substantial, or its cumulative effect would be so significant, that to grant permission would undermine the plan-making process by predetermining decisions about the scale, location or phasing of new development that are central to an emerging plan; and
b) the emerging plan is at an advanced stage but is not yet formally part of the development plan for the area.’
Further clarity is also provided with potentially significant implications, under certain circumstances, for substantial, non-Development Plan compliant schemes. Paragraph 50 confirms that prematurity will ‘seldom be justified’ as a reason for refusal where a draft plan has yet to be submitted or where a neighbourhood plan has not yet reached the end of the local planning authority publicity period.
In respect of viability considerations, the Framework has some significant implications. It presents a new starting point for LPA’s when considering development viability, in that schemes should be assumed capable of meeting up to date policy requirements for contributions. The onus is with the applicant to demonstrate if viability issues exist. LPA’s are directed to attribute weight to viability assessments in their role as decision taker having regard to any change in circumstances including whether the plan and its viability evidence are up to date. Further to the emerging trend for increased transparency, the Framework confirms that all viability assessments should be made publicly available. Planning Practice Guidance has also been substantially updated with regards to undertaking viability assessments and should be the starting point for establishing the methodology required.
Delivering a sufficient supply of homes
This section represents the crux of the Government’s housing market reform programme, its intention to build more homes more quickly and sets out a number of notable shifts in policy. The most significant include:
- In establishing housing need, the number of new homes must now include (but not limited to), affordable housing, older persons, students, people who rent their homes and self/custom build;
- Affordable housing should not be sought on schemes of less than 10 dwellings (other than in designated rural areas where the threshold may be 5 units or lower);
- Major housing schemes (10+ houses) should incorporate at least 10% of units for affordable home ownership;
- LPA’s will need to identify land to accommodate at least 10% of need on sites smaller than 1 hectare (this compares to the proposed 20% figure in the draft);
- Decision making should give ‘great weight’ to windfall housing sites within existing settlements; and
- ‘Entry-level exception sites’ for first time buyers/renters should be supported. These should be sites which are not already allocated for housing, adjacent to existing settlements and proportionate in size to them.
With regard to housing delivery, the obligation to maintain a 5 year deliverable housing land supply remains, based on the housing requirement or against housing need where the strategic policies are more than 5 years old.
As for demonstrating a 5 year supply, LPAs will be able to evidence this either through a recently adopted plan or in an annual position statement which must have been produced through engagement with developers, followed by consideration of the Secretary of State. It must also incorporate the recommendations of the Secretary of State where there is any disagreement on specific sites. In the interests of maintaining delivery, where housing delivery falls below 95% over a previous 3 year period, the LPA will be required to prepare an action plan to rectify this.
Of potentially real significance to the house building industry is the inclusion of new policy content on the time limits for planning permission. The Framework now says that to assist with implementation, consideration should be given to reducing the standard time limit for commencement (currently 3 years) ‘… where this would expedite the development without threatening its deliverability or viability.’ It is also significant that the changes will expressly permit the LPA to undertake an assessment, for major housing schemes, as to why any earlier grant of permission for a similar development did not start.
The definition of affordable housing has been revised and this will no doubt have significant implications in the sector. The changes confirm that ‘social rent’ and ‘affordable rent’ products now fall within the scope of what is referred to as ‘affordable housing for rent’. The Framework now also refers to ‘other affordable routes to home ownership’ which means other low cost home ownership products which are available at a price equivalent to at least 20% below local market value. Annex 2 now defines affordable housing as:
‘Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers); and which complies with one or more of the following definitions…’
It goes on to define these as affordable housing for rent, starter homes, discounted market sales housing and ‘other affordable routes to home ownership.’
Making Effective Use of Land
There is a firm commitment by the Government to ramp up development density. It re-emphasises that ‘substantial weight’ should be given to the use of suitable brownfield land within settlements for ‘homes and other identified needs.’ It also confirms that planning policies and decisions should:
- Promote and support the development of underutilised land and buildings (especially to meet housing needs where land supply is constrained); and
- Support opportunities to use the airspace above existing residential and commercial premises for new homes.
The document is clear that planning policies and decisions need to reflect changes in the demand for land. LPA’s will need to undertake regular reviews of both allocated land and availability. Where allocated sites have remained dormant and the LPA considers there to be no reasonable prospect of an application coming forward, they should either reallocate the site for a more deliverable use or potentially deallocate a site if undeveloped. As this process will need to form part of plan review, in the immediate term, applications for alternative uses should be supported where this would contribute to meeting an unmet need.
Furthermore, the Framework requires LPA’s to adopt a positive approach to applications for alternative uses of land on previously developed sites not allocated for a specific purpose. Particular support should be given to use retail and employment land for homes in areas of high demand, provided this would not undermine key economic sectors, sites or the vitality and viability of town centres.
Minimum density standards for housing have been absent from national guidance for many years, however changes to the Framework will now equip plans to introduce these where justified. This is particularly where there is an existing or anticipated shortage of housing land where ‘… it is especially important that planning policies and decisions avoid homes being built at low densities.’ In these particular circumstances:
- Local plans will be expected to contain policies for optimal land use to meet as much of the identified need for housing as possible. Policies should include minimum density standards for city and town centres and other locations well served by public transport;
- Minimum density standards should also be considered for other parts of the plan area; and
- LPA’s should refuse applications which they consider fail to make efficient use of land.
Achieving well-designed places
Of note is that the Framework no longer advises that design policies should avoid unnecessary prescription or detail. It now confirms that plans or supplementary planning documents should use visual tools such as design guides and that the level of detail and prescription should be tailored to local circumstances. There is also more recognition for consultation with the document confirming that ‘Applications that can demonstrate early, proactive and effective engagement with the community should be looked on more favourably than those that cannot.’
A further new intervention which will be of interest is set out at paragraph 103. It states that LPA’s should seek to ensure the quality of approved development is not materially diminished between permission and completion. This policy addition will now give LPA’s a greater ability to resist the downgrading of schemes through changes to the approved materials for example, which are usually sought through the Non Material Amendment process.
The Framework has been published largely as a replication of the version consulted on earlier in the year and hence its content will not be a revelation to many. Changes between the consultation draft and the final version are limited. The context to the updated Framework, as has been repeatedly cited by Government, is to address the severe issues of housing undersupply and affordability prevalent across the country. It is of no surprise therefore that the most substantial policy changes relate to the delivery of housing and the more effective use of land.
The new policy requirements will necessitate a shift in approach by both the development industry and Local Authorities alike. Developers will now need to contend with the fact that viability reports will be made publically available (as a minimum in a summary format with key figures) whilst the pressure may well and truly be on to kick start delivery on sites where pared back time limits are imposed by way of planning condition.
There will be some relief for developers that the Government has decided not to mandate the use of review mechanisms (such as clawback) in capturing value increases from large or multi phased developments. However it is evident that increasing pressure will be applied to maximise development densities, especially in city and town centres. The Framework makes allowance for LPA’s to look at introducing such standards elsewhere in their areas; demand higher densities where there is a housing shortage and ultimately to refuse applications where they believe schemes are not appropriately efficient. This is balanced, to some extent, by the now ‘great weight’ to be applied to windfall development opportunities, within the urban area.
LPA’s will be equally affected by the changes. The ability to identify a minimum 10% stock of brownfield housing sites may well prove a challenge in some areas. In addition to maintaining a deliverable 5 year housing land supply, the Housing Delivery Test imposes a major incentive to process housing applications as swiftly as possible and work with developers to speed up implementation and delivery. Of interest for the future is reference in the Government’s consultation response which recognises, in the context of the Delivery Test, LPA’s desire to have increased powers to drive housing build out. The Government has stated that it will consider this further following the outcome of the Letwin Review.
The Framework has undoubtedly boosted the affordable housing sector through the broadening of the traditional definition to now formally include affordable rent and discounted open market housing. There is specific recognition of the need for entry level exception sites (for first time buyers) which should be in addition to the normal supply, which will most likely be in greenfield, edge of settlement locations. Affordable housing on brownfield sites within the Green Belt is also now explicitly acknowledged as being acceptable, in a further change to policy. It will be of interest to see whether these measures will truly boost affordable provision and get to the root of the chronic undersupply problem.
Notwithstanding the clear policy drive to deliver more housing, the Government is intent that this should not be at the expense of Neighbourhood Plans. That said, where there is acute housing need and the appropriate conditions apply, the Framework indicates that the mere presence of a Neighbourhood Plan need not indicate that new housing schemes would be unacceptable. Indeed, the requirement for housing figures to be identified for Neighbourhood Areas (in Local Plans) could potentially streamline the relationship between Local Plans and Neighbourhood Plans.
What can be concluded from the new Framework is that whilst the changes may not be revolutionary, the pressure to deliver more homes more quickly has certainly been ratcheted up by Government with real implications for underperformance. There are a number of areas where Government has promised further guidance, and which will be subject to further briefing updates in due course.