Comment

Housing delivery: Has the horse already bolted?

In the context of wider concerns with the standard methodology for calculating housing need and the implications of the forthcoming latest household projections, we remain unconvinced that the revised NPPF does enough to facilitate the step change in housing delivery required to achieve Government targets.

Following the publication of the draft revised National Planning Policy Framework (NPPF) in March 2018, we commented that the document had not gone far enough with its proposed mechanisms to boost housing delivery; commenting that (amongst other thing), the bar on the Housing Delivery Test had been set too low.

The final revised NPPF (July 2018) retains the same approach to the draft version, with no substantive changes to the paragraphs, policies and mechanisms which seek to maintain supply and the delivery of housing. The revised NPPF was also disappointingly published without large swathes of the accompanying revised national Planning Practice Guidance (PPG), including on the correct method for the calculation of housing land supply and production of annual position statements, which leads to uncertainty about the correct interpretation of some provisions of the Framework.

Demonstrating deliverability

As previously, the revised NPPF requires LPAs to identify a supply of deliverable sites to meet identified requirements over a five year period. The revised document does, however, introduce an altered definition of ‘deliverable’ which puts further onus on the Local Planning Authority (LPA) to provide ‘clear evidence’ that housing will be completed within five years on sites that do not benefit from detailed planning permission (including allocated sites, sites with outline permission or those that benefit from permission in principle or are identified on a brownfield register). This definition should provide welcome clarity for decision makers, superseding previous definitions of deliverability and conflicting interpretations from the courts such as the recent St Modwen judgment [2017].

This change has the potential to have an immediate impact on LPAs, requiring them to demonstrate that sites within their claimed supply are capable of meeting the enhanced definition of ‘deliverable’, and collate the ‘clear evidence’ required to justify this position. This will be particularly important in areas where the LPA’s claimed supply is marginal and likely to be tested in the short-term, either through Section 78 appeal or Local Plan examination.

Conversely, the revised NPPF is also likely to result in a requirement for developers, land promoters and house builders to demonstrate that proposed developments are ‘deliverable’ where they are promoting sites through the Local Plan or for development management purposes. Whilst the PPG is yet to be updated to provide further guidance on when sites should be considered ‘deliverable’, at this stage, it is suggested that prospective developers/promoters give consideration to:

• Agreeing to a condition requiring development to commence within a shorter timeframe than the standard period
• Submitting a detailed build programme for the site, to include realistic timescales for securing detailed planning permission (including Reserved Matters approval, if needed), discharging conditions, mobilising contractors, site preparation/remediation works and provision of any infrastructure required prior to the construction of dwellings
• For sites being promoted by a house builder/developer, providing a local delivery record to demonstrate that the site is within the control of a house builder/developer who has a strong record of delivering housing in the local area
• For sites being promoted by a strategic land promoter, providing evidence to demonstrate how the site will be marketed to house builder/developers, and allowing realistic timescales for this process within a build programme. This could also include an indication of initial interest from prospective house builders/developers.   

Ignoring longer-term failure/surplus

The revised NPPF seeks to overcome the ambiguity of defining ‘persistent under delivery’ within the original NPPF by clarifying that a 20% buffer should be applied where there has been significant under delivery of housing over the previous three years [paragraph 73(c)].

Whilst this clarity is likely to reduce the extent of legal scrutiny of this element of the NPPF, the definition of a three year period may well raise unintended consequences for the Government. For example, in areas where housing delivery has consistently fallen short of adopted requirements over the early period of a Local Plan, but delivery has started to increase in more recent years, any longer-term failure to deliver sufficient housing in the area could be ignored, failing to boost housing supply in the local area. Conversely, an LPA could be unfairly punished if a longer-term surplus has accrued but delivery rates have fallen more recently.

What about the Letwin Review?

Having commissioned an independent review into build-out rates of large sites in areas of high housing need, it seems somewhat remiss to publish the final revised NPPF before the review has been able to report its findings. Whilst the interim analysis published in June indicated a number of reasons why build out rates may not be as high as anticipated, the final recommendations and ‘policy levers’ which may help to increase build-out rates are not due to be published until the Autumn Budget in November.

The Government may be missing a trick by finalising the revised NPPF before the recommendations of the Letwin Review have been published. Should Sir Oliver draw conclusions on policy changes required to increase build-out rates, it would now be impossible for these to be incorporated into national policy in the short term. Perhaps the Government is expecting to include any additional amendments within the revised PPG on housing land supply? Such an option is likely to increase the extent of changes within supporting guidance, rather than within the NPPF itself.   

Changes of note in the revised NPPF include paragraph 68 where the contribution from small sites towards overall needs has reduced from at least 20%, to at least 10%. The Government’s rationale for this change appears to be in response to many LPAs expressing a view that the percentage requirement of 20% of sites was too high and inflexible to use in practice. For some authorities, we agree that the previous higher percentage requirement may have been difficult to deliver but this blanket amendment may prove to be premature in advance of the publication of the final Letwin Review which are likely to point towards evidence that a more diverse range of sites (including more small sites) is required to best deliver and maintain housing supply.

Similarly, paragraph 72 states “the supply of large numbers of new homes can often be best achieved through planning for larger scale development, such as new settlements or significant extensions” but seeks to ensure that LPAs apply realistic assumptions for when such sites will deliver new homes given the lead in times for large scale sites. 

This inclusion is necessary in our view as, in our experience, LPAs will often advance unrealistic assessments for when housing will be first delivered on such sites and how many homes they will then deliver each year. This can lead to unrealistic Local Plan housing trajectories and an artificial inflation of supply in both the short term (five year supply) and across the Local Plan period as a whole. At Local Plan examinations, we would expect there to be greater scrutiny on the assumptions being made for the contribution of large site delivery. Again, we would expect the Letwin Review to reach conclusions on the contribution that such large scale sites can contribution to housing delivery and the often significant lead in times for such sites to come forward.

The NPPF horse has already bolted, before recommendations from the Letwin Review can be considered and embedded in the Government’s main planning policy document, leaving the stable door wide open.  

For further information on housing delivery, and to find out how Turley can help you, please contact Anna Relph, Jonathan Dodd or Jeff Richards.   

8 August 2018