A Labour Government appears pencilled in for July.
For those sites where planning is a foregone conclusion now, we recommend pushing on to get planning now to avoid any potentially harmful changes that may come through the system in the next few months.
There will be other more marginal sites like ‘greybelt’, where we expect positive changes within 100 days of the new Government. In these cases, it will be best to wait.
But what do we know about how a Labour Government with a significant majority might impact the planning world, and more specifically affordable housing and viability?
What's been said?
Rachel Reeves the shadow chancellor has confirmed that a review of the NPPF would be undertaken within the first 100 days of a Labour administration.
There has been discussion of the government sitting through July in order to get various consultations rolling, with the aim of October-December for implementing changes swiftly, calling in a number of applications of significance and making written ministerial statement directions to push particular points home to local authorities as material considerations. There is also a strong underlying hint that existing legislation with unimplemented aspects (such as the Levelling Up Bill) will be utilised to quickly make changes (such as implementing National Development Management Policies) for ‘quick wins’ that do not require new primary legislation:
Labour Manifesto Highlights
Some of the key pledges made:
- Immediate update to the NPPF.
- Restore housing targets.
- Fast tracking urban brownfield sites.
- 'Greybelt' release - poor quality brownfield green belt sites.
- But - caveated by 'Golden Rules' (see below).
- Fund more planning officers.
- 'the biggest increase in social and affordable housebuilding in a generation'.
- Strengthen planning obligations.
- Solutions to Nutrient Neutrality.
- Reform compulsory purchase so 'landowners are awarded fair compensation rather than inflated prices based on the prospect of planning permission'.
- Build new towns.
- Take action to force LPAs to adopt local plans.
- Strengthen the presumption in favour of sustainable development.
- More strategic planning.
What does this mean for planning?
Politics aside, many industry commentators have greeted these statements with approval, although some caution.
New NPPF
The proposed immediate update to the NPPF will be an easy first step to show active progress.
Limited consultation requirements and no legislation, potentially supported by various written ministerial statements, would set a direction of travel and provide some additional certainty – although these are only material considerations in the planning balance and will require stronger enforcement to ensure councils take full heed.
We expect to see housing targets re-established and perhaps strengthened, and a direct of travel for affordable housing delivery and viability. Traditionally we might expect Labour to push back on viability as a concept – however given the current pro-business approach it may be we will in fact get more detailed direction on how and when viability should be considered.
Given the above, we may also see progress towards enshrining the NPPF as the ‘National Development Management Policies’ allowed for in the Levelling Up Act but not yet implemented. This would be a ‘quick win’ as suggested in reporting, requiring no new primary legislation but having an immediate impact on certainty and effecting significant reform of the current local plan system with minimal legislative time required.
Expected first update by Q3-Q4 2024, with possibly a more substantial update in Q2 2025.
More Intervention
There has been much comment suggesting a more strategic approach to planning at the regional level, which will be welcomed by many in light of the current discordant approach and lack of joined up thinking particularly on key infrastructure projects.
However, what has been less trialled is the apparent willingness to intervene in more large proposals at the Secretary of State level. Comments made by the Shadow Chancellor and Labour leader Keir Starmer are strongly suggestive that they will take a more interventionist approach to ‘calling in’ more applications – taking decision making out of local hands and determining these schemes more centrally. With a pro-development approach this could be a powerful tool against local NIMBY opposition, particularly when considered in light of the Labour approach to green belt development.
Rent Control
One point Keir Starmer briefly raised in the Question Time Election Leader’s Special on 20 June 2024 hinted at the potential for rent controls which have previously been advocated for by London Mayor Sadiq Khan “ ‘the landlord just does a bidding war … who will pay more … we have to end that … we can pass legislation to say you can’t do it because it is driving rents through the roof’.
www.youtube.com/watch?v=MjXbBvvq2lc
While he later glossed over this, perhaps uncomfortable with having mentioned it in the first place, this brief exchange is suggestive that Labour may feel positioned to intervene in rental markets. This would have significant impacts on values across the board, which in turn would have an impact on viability.
Funding Public Planning
Additional funding for officers is welcomed by everyone in the industry given the long delays and poor quality of communication broadly being experienced due to funding constraints at local authorities.
However, planners don’t appear from nowhere. They take time to be trained and in the meantime competition with the private sector is at an all-time high driving up salary bands for fully qualified Chartered Town Planners. Recent commentary has also suggested that the number of new planning officers suggested will barely dent the current need in the system, and that this will need to be an ongoing commitment also supported by quality requirements – i.e. not diluting the reported numbers with unqualified support staff for example.
Expected impact: late 2025 earliest.
Greybelt and Greenbelt
The much trialled Greybelt idea is a positive step away from England’s ideological roadblock and sends a strong anti-NIMBY signal.
‘Greybelt’ broadly refers to poor quality land within the green belt which is not effectively ‘green’. It may include brownfield sites but may simply be disused wasteland or contaminated land.
As with all brownfield sites, there may be considerable abnormals such as demolition, contamination, and service challenges which impact on viability. This clashes with some of Labour’s ‘golden rules’ for greybelt release, including:
Brownfield first,
Greybelt second,
50% affordable housing,
Building of associated public services and infrastructure,
Improving green spaces.
A similar existing policy approach is taken to open countryside with rural exception sites. We advise on a number of these schemes per year, and where considerable affordable housing is delivered these schemes can be challenging to deliver.
Robust viability assessment is required to demonstrate to local authorities the ‘maximum viable’ onsite affordable housing delivery, and value engineering is often required to ensure schemes are viable and deliverable.
We would expect a similar approach to be taken with greybelt sites. Grey belt will likely be introduced as a new definition as part of any NPPF update c.Q4 2024.
And what about viability and affordable housing?
More broadly, the ambition appears to be higher affordable housing delivery and stronger planning obligations.
The most pragmatic approach is likely to be speeding up implementation of the previous administration’s Infrastructure Levy which has languished since the Levelling Up & Regeneration Act was passed. A very slow ‘test and learn’ approach was previously suggested in response to widespread criticism of whether the proposals would work and the viability challenges associated with an overly simplistic approach.
However, the legislative groundwork is prepared already, so we might expect Labour to adapt and develop this to achieve a quicker result and implement via regulations to show immediate progress – although of course the knock on effects of rushing this may have adverse impacts.
The most likely approach would appear to be setting a ‘minimum’ required delivery similar to the NPPF’s approach, and then allowing local areas to set maximums – this would show immediate progress without potentially requiring significant upfront viability testing.
The Infrastructure Levy will be non-negotiable, but likely requires considerable consultation and testing to deliver effectively (a la CIL) so we wouldn’t expect substantial progress until at least Q3 2025. This will likely give a window of opportunity for reviewing planning obligations and viability over the next 12 months.
Land Value
Manifesto commitments regarding compulsory purchase land value and greybelt development land conversely may impact the value of certain sites for viability purposes.
Overall
Given the likelihood of a Labour government with a significant majority, we may expect significant moves towards ‘quick win’ planning reform in the first few months, with a longer-term trajectory towards a higher burden of costs on development sites offset by additional certainty and more opportunity in the system.
For many, the changes in the system will have significant impact on costs and values.
A viability assessment is a flexible toolkit which will help you make the most of all the changes above.
Please get in touch today to find out how we can help.
