This information should not be relied upon as legal or professional advice. Read the disclaimer.
Access to social housing
In England, most local authorities include residency requirements in their housing allocation schemes. This means people applying for council or housing association homes must usually have lived in the area for a set period of time. Exceptions apply in certain cases. There’s Government guidance on Providing social housing for local people.
Scottish local authorities can take account of local connection in their allocation schemes, see Social housing allocations in Scotland: practice guide (section 7.1).
The Welsh Allocation of accommodation and homelessness: guidance for local authorities provides for local connection policies and local letting policies which might address:
- Dealing sensitively with lettings in rural areas to sustain communities by giving priority to those with a local connection to the local area.
- Sustaining Welsh-speaking communities by giving priority to those in housing need with a local connection to the area (section 3.69).
The Housing Selection Scheme in Northern Ireland doesn’t refer to local connection.
Limiting access to new-build private housing through planning measures
Planning is a devolved matter. The joint briefing Comparison of the planning systems in the four UK countries: 2016 update outlines how planning legislation and policy operate in England, Wales, Scotland and Northern Ireland.
Some local planning authorities (LPAs) require either a local connection test or a principal residence test to be met for new housing. There are examples (particularly in National Park Authority areas) of local connection/principal residence policies being contained in Local Plans, Neighbourhood Plans and supplementary planning documents.
Both Local and Neighbourhood Plans are formal “development plan documents.” Planning law requires applications for planning permission to be determined in line with the development plan, unless material considerations indicate otherwise.
There are two mechanisms for implementing such policies: planning conditions and planning obligations. The ability to use them depends on local circumstances and whether there’s robust evidence to support their use.
LPAs can impose planning conditions on planning permission granted for new housing developments. These conditions must meet tests in the National Planning Policy Framework (NPPF, para 56) specifying they’re: necessary, relevant to planning and to the development to be permitted, enforceable, precise and reasonable in all other respects.
Planning obligations (section 106 agreements)
Planning obligations, sometimes known as section 106 agreements, are legally enforceable obligations made under s106 of the Town and Country Planning Act 1990 (as amended). They’re made between a developer and the LPA. The Commons Library briefing on planning obligations (CBP-07200) provides more information.
They must meet three legal tests contained in part 11 of the Community Infrastructure Levy Regulations 2010. A planning obligation must be:
- necessary to make the development acceptable in planning terms;
- directly related to the development; and
- fairly and reasonably related in scale and kind to the development.
When used to impose a “local connection test” on new developments, it means the housing can only be bought by people who fulfil the test.
A section 106 agreement runs with the title of a property and is legally enforceable in the courts. Some examples include:
In Scotland, planning obligations are normally secured under section 75 of the Town and Country Planning (Scotland) Act 1997 (known as “section 75 agreements”, discussed in the joint briefing).
Scotland’s chief planner wrote to planning authorities in November 2011 to clarify the Scottish Government’s views on the use of conditions or planning obligations to restrict the occupancy of new rural housing, pointing out that occupancy restrictions had caused a number of issues, such as difficulty in getting a mortgage. The advice now forms part of Planning Circular 3/2012: Planning Obligations and Good Neighbour Agreements. The circular observes “restrictions on use … should generally be avoided” and “where the authority is satisfied that an adequate case has been made, it should not be necessary to use a planning obligation as a formal mechanism to restrict occupancy or use”. Planning conditions are therefore the preferred option, where an occupancy restriction is considered necessary and appropriate.
A written statement on Second homes in Wales (January 2021) set out the 2016-2021 Government’s policies on second homes. It mentioned research commissioned on Second homes: Developing new policies in Wales (2021) which discusses (amongst other things) local market housing policies in Anglesey and Gwynedd.
Planning Policy Wales says planning authorities must develop policies to meet their areas’ challenges and particular circumstances; these might include occupancy restrictions where there’s “clear and robust evidence” for them, for example in terms of land supply, environmental or social impacts (para 4.2.9).
Technical Advice Note 2 on planning and affordable housing also discusses occupancy restrictions. It suggests “Local planning authorities should not normally impose additional occupancy controls where a registered social landlord is to be responsible for the management of the affordable housing” (para 12.2). And “Where occupancy criteria are included as part of conditions or planning obligations, a ‘cascade’ mechanism should be included to ensure occupants will always be found for affordable housing when such housing is vacated” (para 12.7).
A consultation on Planning legislation and policy for second homes and short-term holiday lets ran between November 2021 and February 2022 which invited views on:
- Amending the Use Class Order to create new use classes for primary homes, secondary homes and short term holiday lets.
- Allowing permitted changes between these new use classes (which the local planning authority could make an Article 4 Direction to disapply).
- Amending Planning Policy Wales to provide, where relevant, the prevalence of second homes (and short-term holiday lets) must be taken into account when considering the housing requirements and policy approaches in Local Development Plans.
The Strategic Planning Policy Statement says local development plans should “zone land or include policy, as appropriate, to reflect the local need resulting from the demand for second homes” (p74).
First Homes (England)
The Government is implementing a new First Homes scheme to help first-time buyers in England onto the property ladder by offering new-build homes at a discount of at least 30% off the market price. Local authorities will be able to prioritise these homes for local residents and key workers by using section 106 agreements.
The Commons Library casework page on First Homes for first-time buyers (England) provides more information.
Pre-existing private housing
If occupation of these dwellings is not subject to a planning condition or section 106 agreement requiring occupation by households with a local connection, or where a principal residence test applies, local authorities have no powers to restrict sales or occupation to local people.
Measures have been introduced to mitigate second home ownership, such as enabling authorities to charge the full rate of council tax (and an additional council tax premium of up to 100% on second homes in Wales) and higher rates of Stamp Duty Land Tax.
Second homes in Northern Ireland are charged the same level of domestic rates as sole or main residences.
Commons Library debate pack, Second homes and holiday-lets in rural communities (CDP-2022-0001) 4 January 2022