What does the revised NPPF mean for housebuilding in the UK?

Following the publication of the government’s revised NPPF, the new planning rule book, we speak with Constanze Bell, leading planning Barrister at Kings Chambers about the implications of the updated policy for housebuilders and developers.

Constanze Bell, Barrister, Kings Chambers

The revised National Planning Policy Framework (NPPF) was published on 24 July 2018, with James Brokenshire MP’s Written Ministerial Statement[1] pronouncing it “will transform the planning system”. The Government lauded the new NPPF as part of a wider process of reform.

The Secretary of State’s WMS continued: “Since we published our Housing White Paper last year, we have been making significant progress in fixing the broken housing market, reforming our planning system and increasing housing supply to start to improve affordability, as well as taking steps to ensure that communities have the safe and high-quality homes they need to thrive. Since 2010 we have delivered over a million new homes, and in 2016/17 we saw 217,350 new homes delivered – the highest number in all but one of the last 30 years.”

The Government has confirmed a commitment to ensuring 300,000 homes are built per year by the mid-2020s.

The Standardised Methodology

The new standardised methodology to assess housing needs is one of the most dramatic changes in the revised NPPF. It applies unless exceptional circumstances justify an alternative approach. However, the effects will not be felt for some time. The previous NPPF applies for the purpose of examining plans submitted for examination on or before 24 January 2019.

It has been widely noted that for many Local Planning Authorities the use of the standard methodology often results in a lower housing need figure. Perhaps unsurprisingly therefore, the new standardised methodology is subject to change. When household projections are released in September 2018, the Government may adjust the method to ensure that outputs are consistent with the policy objective of building more homes[2]. The specific details of any change will be the subject of further consultation[3].

Housing Delivery Test

The new Housing Delivery Test is designed to impose sanctions on Local Planning Authorities which fail to meet the local plan specified housing targets. The Housing Delivery Test will apply from the day following the publication of the Housing Delivery Test results in November 2018.

Viability Assessments

Viability assessments are now to take place at the plan-making stage. Planning applications which comply with up to date policies “should be assumed to be viable” (paragraph 57).

The burden is on applicants to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage which will be a departure from the norm. The decision maker will decide about the weight to be given to the viability assessment, having regard to “all the circumstances in the case” (paragraph 57, revised NPPF).

Green Belt Policy

Green Belt policies have not changed significantly in the revised NPPF. Paragraph 136 requires exceptional circumstances to amend Green Belt boundaries. An obvious (and radical) way to promote housing development would have been to reform Green Belt policy to make it easier to release Green belt for housing. Unsurprisingly, this has not been pursued.

The Presumption in Favour of Sustainable Development

The redrafted presumption in favour of sustainable development, now found at paragraph 14, is widely perceived to be an example of improved drafting. Where there is a shortfall, policies “most important for determining the application” are deemed out of date unless one of two exceptions apply. Which policies are “most important” for determining an application and the application of the two exceptions will be matters of planning judgment. Chapter two “Achieving Sustainable Development” makes clear that the question of whether a proposal constitutes sustainable development is to be dealt with by reference to relevant local plan and NPPF policies[4]. There is to be no “freewheeling exercise of discretion” to determine whether a proposal constitutes sustainable development[5].

Neighbourhood Planning

Neighbourhood plans become increasingly important under the revised NPPF because the effects of a shortfall can be reduced where a neighbourhood plan contains policies and allocations to meet its identified requirement. The local planning authority has at least three years supply of housing sites and the local authority can meet specified housing delivery thresholds.

The Revised NPPF: a transformation for housing delivery in the planning system?

Overall, the revised NPPF is hardly a transformation of the planning system. There are certainly some welcome improvements in drafting such as the amended presumption in favour of sustainable development, and some important revisions and amendments. The most significant revisions such as the Housing Delivery Test and standard methodology, will concern Local Planning Authorities more than developers.

The tension between the Government’s commitment to boosting housing delivery and the pressure to adopt local plans is captured in the new standard methodology. On the one hand the new methodology may well speed-up local plan preparation, but on the other it frequently generates a lower housing requirement figure. We await further revisions to the methodology.

The recognition afforded to neighbourhood plans in the new NPPF will be well received by local action groups.

At first glance the new emphasis on viability assessments occurring at the application stage only when justified by “particular circumstances” might sound like bad news for developers, but it is likely to be limited in impact. Viability arguments will still be run at the application stage; they will simply be reframed to refer to “particular circumstances”.

Government policy is, of course, only one small part of housing delivery. The House of Lords Science and Technology Committee report “Off-site manufacture for construction: Building for change” (published 19 July 2018)[6] states that the construction sector as it currently operates cannot meet the UK’s need for housing and may struggle to meet the need for infrastructure. If that is the case, then no quantity of carrots and sticks, however framed by policy, can compel the necessary delivery.

References:

[1] Housing Policy Update: Written Statement- HCWS818

[2] See the Government response to the draft revised NPPF consultation, at p. 27.

[3] See the Government response to the draft revised NPPF consultation, at p. 27.

[4] See, paragraph 9 NPPF: these objectives should be delivered through the preparation and implementation of plans and the application of the policies in this Framework; they are not criteria against which every decision can or should be judged. The objectives (economic, social and environmental) are found at paragraph 8 NPPF.

[5]For context see discussion in Cheshire East Borough Council v Secretary of State for Communities and Local Government [2016] EWHC 571 (Admin), [2016] PTSR 1052

[6] The House of Lords Science and Technology Committee, Off-site manufacture for construction: Building for change, 19 July 2018