Our broken planning system is to blame for new housing targets being missed

Guest writer Mark Booth, Co-Founder of Hayfield, commentary piece in React News, 17th May 2024.

Planning "reforms" are being used as an excuse to refuse applications.

Credit to Savills for its recent research highlighting that England is on course to deliver just half of the annual official target for new homes.

This will not surprise anyone in the industry, but I appreciate the uncomfortable position such headlines will put the government in.

It would be churlish not to acknowledge, as Savills does, the impact of mortgage availability and build cost inflation on new development.

Even within our corner of the market, which is at the higher end of properties and is well insulated from wider turbulence, the chain-based nature of housing transactions means the struggles at one end affect the other.

Fortunately, market conditions are improving now that rates are stabilising, and inflation has eased. Since January we have noticed enough of a marked uptick in enquiries, show home visits and sales to suggest that we are now at the start of a new cycle.

But the real barrier to development, which in my eyes has been the biggest drag on new starts and completions, is our broken and paralysed planning system.

What local elections tell us

The local elections were a repudiation of many things about the current administration, but surely the lack of much-needed new housing development is one of them? Voters in many leafy – and once-safe leafy Tory – councils plumped for the unashamedly pro-development Labour party vote.

Our hope is that in the run-up to the election both major parties take planning reform seriously, with the Conservatives seeing that trying to play to a nimby audience is not a vote-winning strategy.

This is not to say that the Tories have not acknowledged that a problem exists with our planning system. But the current government’s reforms so far have been weak at best – think of the £5m from the autumn statement to support over-stretched planning teams – and counterproductive at worst.

Take its National Planning Policy Framework (NPPF) reforms from December. Rather than cajoling recalcitrant councils into getting new schemes off the ground, it has been used as a reason to refuse applications.

Our sister business, Living Space, which is a social housing developer, was on the receiving end of this in Wiltshire.

The NPPF reforms removed a “presumption in favour” of sustainable development requirement for councils which cannot prove a five-year supply of deliverable housing land but can show a degree of draft local plan progression. Such councils, like Wiltshire, instead now need only prove a four-year housing land supply.

This saw our application refused even though it had been recommended for approval by Wiltshire’s officers and members just a month before the reforms, on the basis that it delivered substantial benefits as a 100% affordable housing development.

The Planning Inspectorate has described the county’s needs for affordable housing as “acute” – there are 4,500 local households with an unmet affordable housing need – and so we intend to appeal the decision in the hope that this will be balanced against the limited harms of granting planning permissions, despite the lack of a presumption in favour.

Fundamental flaws

There are three fundamental flaws with the NPPF reform. First, it creates a policy vacuum that allows councils to under-deliver housing in the short term, without securing long-term delivery.

Second, it introduces measures that enable them to plan for less homes than their calculated housing need and the benchmark for delivery is also being weakened.

Third, it introduces a further unnecessary layer of complexity into an already overcomplicated planning system, which is yet another barrier to SMEs due to heightened risk and cost.

Unless a council is determinatively pro-growth – and alas, few are – then the new NPPF introduces a greater number of measures for local authorities to be able to resist new housing development even when there is a clearly identifiable need.

Further examples of the system’s in-built bias against our national goals abound. We have had applications for new housing with solar PV knocked back on grounds of aesthetics, despite the obvious benefits of not just tackling the climate emergency but providing affordable energy.

You may recall the outsized emphasis Michael Gove has placed on the aesthetic quality of new housing. Predictably, such a subjective directive is being interpreted by councils as yet another lever to pull when looking for reasons to block new schemes.

Even in the most benign market conditions and a growing economy, running the gauntlet of planning slows new housing development down to a crawl.

Fix it, and we might stand a fighting chance of building the homes the country so desperately needs.