LPAs Running Behind in Plans, But Approvals Are Up

Two years into the streamlined NPPF, more development proposals are winning planning appeals. It means more homes for Britain, but not everyone is happy.

Two years into the new rules for development in the UK – as defined in the National Planning Policy Framework, or NPPF – it appears that more residential developments are being approved by local planning authorities (LPAs). Relative to the housing shortage crisis this is welcome news.

But why exactly are more plans being approved? PlanningResource.co.uk, the independent information hub for planning professionals, reported in 2013 and 2014 that too few local planning authorities are compliant with the NPPF. This then has the effect of allowing proposals by developers (very often real asset fund managers) to win appeals after initial rejection. Said the publication: “The framework opens up new opportunities for appeal against LPA decisions. If an application is turned down because of conflict with the local plan, there now may be an opportunity for the applicant to argue that the plan has not been brought into line with the NPPF, and hence is “out-of-date”, and the presumption in favour of sustainable development should apply.”

PlanningResource.co.uk further describes the NPPF as a “game changer,” providing an advantage to developers who previously would not attempt an appeal. If the local authorities have a weak plan at all, rulings more often than before go to the homebuilders.

This is much more than a niche matter. The Planning Inspectorate (PINS, in the Department for Communities and Local Government) provided data in early 2014 that shows how only 49 of 336 local planning authorities (14.6 per cent) have plans in place deemed sound upon examination; the total number of planning authorities with plans of any sort is just over half (56.8 per cent) of local authorities. The reason for such failures may be due to staffing cuts in planning policy teams, according to Alister Scott, professor of environmental and spatial planning at Birmingham City University.

Is this a problem? Does the housing crisis not call for a streamlined process? The Director-General of the National Trust, Dame Helen Ghosh, says that pressure from the Government is forcing councils to approve too many plans too quickly. In her words, “I think events proved that you just need to take longer to do these things properly to get the land use right and genuinely to engage local communities.” Former Planning Minister Nick Boles tends to differ, reports The Telegraph. He counters that councils have been asked for a decade to “shape where developments should or should not go.”

The National Trust says their research finds that half of all councils with greenbelt land allocate some of it for development. Whether or not that is what the local citizenry wants is left to question. But the Centre for Housing and Planning Research at Cambridge University offers its own observations and advice based on multiple studies that might serve as a guide to local planning authorities:

• The NPPF has been well received by large house builders. They say that alteration to the policy is inadvisable; rather, LPAs need to focus on smart practice of the policy.

• Effective planning means adopting an effective five-year housing supply plan. Without it, the councils will more likely lose on appeal (as evidence shows often happens).

• Planning is effective once development is acknowledged as essential. When chief executives, planning officers and elected members become pro-development, a positive, get-it-done programme results.

In other words, planning works – if and when done in advance, and when the powers that be are in alignment with the national push to build more homes.

What is clear is that homebuilders, developers and their investors have a lot to be optimistic about. With more planning changes likely to be approved (or approved on appeal), this is a time to build. Surely, the opportunity can drive considerable asset growth for those participants? But with more than a million homes needed in the UK to meet a young, growing population, it serves the needs of the country as well.

Investors need to choose their investments in housing wisely. Whether it is to buy individuals homes for rental, or to invest through land fund managers, the investment should be reviewed by an independent financial advisor. The IFA can determine if it meets the risk profile of a wealth portfolio.

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