This briefing paper considers how affordable housing is defined in England and looks at key trends in the affordability of different tenure types. It examines the supply of affordable housing and the role of Housing Benefit in enabling households to access and retain affordable housing.
Documents to download
Planning for the Future: planning policy changes in England in 2020 and future reforms (1 MB, PDF)
There have already been several waves of planning policy change (including on change of use and permitted development rights (PDRs)) during the Covid-19 pandemic, with more to come.
For some time, the Government has been signalling its intention to make radical changes to the planning system in England. The Covid-19 pandemic brought about some immediate changes to certain aspects of planning policy – such as enabling pubs to offer hot food takeaway services – while other, substantial changes to the planning system, aimed (the Government says) at creating a new system suitable for the 21st century, are the subject of consultation through the white paper Planning for the Future. The Government also intends to make some changes to the current planning system and has launched a concurrent consultation about that.
Consultations launched in August 2020
Planning for the Future white paper
This briefing seeks to highlight key points within Planning for the Future – those which are perhaps most likely to be of interest to Members and those which have attracted most comment. Readers should refer to the white paper for the detail of the Government’s proposals.
In his speech on the economy on 30 June 2020, the Prime Minister, Boris Johnson, argued that “newt-counting delays” slowed down house building. He said that, in the recovery from the Covid-19 pandemic, we would “build better and build greener but we will also build faster”.
A planning White Paper had been expected for some time; the long-awaited Planning for the Future white paper was launched on 6 August 2020, with an accompanying press release. The press release sets out in the Government’s words what the changes will mean:
- Local communities will be consulted from the very beginning of the planning process. By harnessing the latest technology through online maps and data, the whole system will be made more accessible
- Valued green spaces will be protected for future generations by allowing for more building on brownfield land and all new streets to be tree lined
- Much-needed homes will be built quicker by ensuring local housing plans are developed and agreed in 30 months – down from the current 7 years
- Every area to have a local plan in place – currently only 50% of local areas has a plan to build more homes
- The planning process to be overhauled and replaced with a clearer, rules based system. Currently around a third of planning cases that go to appeal are overturned at appeal
- A new simpler national levy to replace the current system of developer contributions which often causes delay
- The creation of a fast-track system for beautiful buildings and establishing local design guidance for developers to build and preserve beautiful communities
- All new homes to be ‘zero carbon ready’, with no new homes delivered under the new system needed to be retrofitted as we achieve our commitment to net zero carbon emissions by 2050
The consultation on Planning for the Future’s proposed changes opened on 6 August 2020 and closed on 29 October 2020.
Section 5 of the March 2020 Commons Library debate pack on housing and planning in England discusses the history and background to this white paper.
Launching the white paper, the Housing Secretary, Robert Jenrick, set out how the reforms would simplify the system, while giving more emphasis to quality, design and the environment, and would support recovery from the pandemic.
Reactions to Planning for the Future’s proposals
The proposed reforms have, though, received a mixed response and have attracted some controversy.
Some have welcomed the proposed changes. In the press release accompanying the white paper, the CEO of Gleeson Homes, James Thomson, offered strong support for the proposals and particularly the commitment to build 300,000 new homes a year. In the same press release, the chief UK policy director of the Confederation of British Industry, Matthew Fell, was quoted as saying that the proposed reforms would allow housebuilders to get to work and good quality homes could help meet climate targets. The Chief Executive of Network Homes, Helen Evans, welcomed the proposals which would (she said) help increase the delivery of affordable homes.
There has, though, been some fierce criticism. In an open letter issued shortly after the Prime Minister’s build, build, build speech, the chief executive of the Royal Town Planning Institute (RTPI), Victoria Hills, voiced concern about the approach that the white paper was expected to take and the “planner bashing rhetoric” and argued that sweeping away the planning system was not the right response. The President of the Royal Institute of British Architects, Alan Jones, agreed that the planning system needed to be reformed but branded the white paper’s proposals as “shameful”.
The Campaign to Protect Rural England voiced concerns about how community involvement would work within a zoning system and “missed chances” around carbon-neutral, affordable housing. The housing charity, Shelter, expressed concern at the reforms’ potential impact on social housing. The Mayor of London, Sadiq Khan, argued that the changes would be a “disaster for London” and a “nakedly ideological assault on local democracy”. In a preliminary response to the white paper, the Local Government Association said it was vital that new homes should be delivered through a locally-led planning system and communities should retain the right to shape the areas in which they live.
Review of the current planning system
Also on 6 August 2020, the Government launched a consultation on changes to the current planning system. The consultation closed on 1 October 2020.
The August 2020 newsletter from the chief planner at the Ministry of Housing, Communities and Local Government (MHCLG) summarises the proposed changes, which cover four main areas of policy:
Delivering First Homes: planning issues: First Homes are one form of affordable housing. Under Delivering a sufficient supply of homes, the National Planning Policy Framework (NPPF) sets out how LPAs should assess the size, type and tenure of housing needed, including affordable housing, and says that major development (defined as ten or more houses) should normally (but with certain exceptions) provide at least 10% of the homes for affordable home ownership.
Here, the consultation document sets out proposals for setting developer contributions for First Homes. The consultation document suggests that planning applications should seek to capture the same amount of value as would be captured under the LPA’s existing published affordable housing policy within its Local Plan. A quarter of affordable housing on site should be First Homes and the consultation document offers two options for the remaining three quarters.
Threshold for developer contributions: As the Commons Library briefing Planning Obligations (Section 106 Agreements) explains in more detail, planning obligations – sometimes known as section 106 agreements or “affordable housing levies”- are legally enforceable obligations entered into under section 106 of the Town and Country Planning Act 1990 (as amended) to mitigate the impacts of a development proposal. The obligations may be provided by the developers “in kind” – by the developer building or providing directly the matters necessary to fulfil the obligation, for example by building a number of affordable homes for an area – or in the form of financial payments. (In some cases, it can be a combination of both). The Planning Practice Guidance (PPG) on planning obligations states that contributions should be sought from only for major developments, which for residential development means 10 or more homes or a site with an area of 0.5 hectares or more.
Under the heading of supporting small and medium-sized developers, the consultation document remarks that small and medium sized (SME) building businesses build the majority of smaller sites, which tend to build out more quickly. It proposes to go beyond the current power to defer Community Infrastructure Levy payments and extend the support given to SMEs in economic recovery by raising to 40 or 50 homes the threshold at which developer contributions would be sought, for a time-limited period which would end “as the economy recovers from the impact of Covid-19”. The consultation document acknowledges that there will be a “trade-off between introducing measures to increase the number of developable small sites and the importance of securing section 106 planning obligations to deliver affordable housing including First Homes”. The Government also proposes to scale up the site size threshold at the same proportion as the increase in the number of homes threshold.
Permission in principle: One of the key planning changes from the Housing and Planning Act 2016 was a new system of allowing the Secretary of State to grant planning “permission in principle”. Planning “permission in principle” is therefore a relatively new process which grants planning permission for housing-led development. It separates the decision about the principle of whether housing development should be approved from a later technical details consent process. The in-principle matters relate to the location, use, and amount of development on a site. It is expected that everything else will be reserved for the technical details consent stage. Planning permission in principle would then have to be combined with a new “technical details consent” granted by the local authority before development could go ahead. The PPG on permission in principle identifies the types of development to which LPAs cannot grant permission in principle; major development is outside the scope of permission in principle, unless the site is entered in Part 2 of a brownfield land register.
The consultation document seeks views on extending permission in principle to cover major development. The Government argues here that this change too would benefit SMEs. The existing restrictions in the Permission in Principle Regulations relating to environmental impact assessments and habitats requirements would not change.
Standard method for calculating housing need: The consultation proposed to amend the standard method, which must be used unless “exceptional circumstances” justify another approach. As the debate pack published in March 2020 for a Westminster Hall debate on the Greater Manchester Spatial Framework and the Green Belt mentions, Robert Jenrick had promised a review, to encourage more building in urban areas and on brownfield sites. In that Westminster Hall debate, the housing minister, Christopher Pincher, confirmed that the formula would be reviewed.
Before the consultation, the standard method comprised three steps (setting the baseline, affordability adjustment and capping the level of increase). The consultation document set out proposals to amend it, to include as a new element a percentage of housing stock levels and an affordability adjustment. Another change was to be the removal of the cap on the level of increase, which (the consultation paper said) “artificially suppresses” identified housing need. The consultation document set out the detail of the two, amended steps – step 1 was setting the baseline and step 2 was adjusting for market signals – and provided the results of the new standard method, which was a national housing need of 337,000 on the basis of currently available data.
The proposed change to the standard method – and in particular the increase in identified housing need it would create for some local planning authorities (LPAs) – attracted a great deal of controversy.
A short overview of the housing need calculation, and analysis of local authority data from the planning consultancy Lichfields, is available in the Commons Library insight Housing: How is need assessed?
The Commons Library debate pack on planning reform and house-building targets (prepared for the Backbench Business Committee debate on 8 October 2020 on planning reform and house building targets in relation to the White Paper, introduced by Bob Seely MP) provides background information and extensive press and comment.
Government announcement on 16 December 2020: standard method for calculating housing need
The Government has not yet published its response to other aspects of the review of the current planning system, but on 16 December 2020 published its response on local housing need, alongside a written ministerial statement.
The Government response said that it had heard concerns (including in Parliament) that the distribution of need was not right and that it wanted towns and cities to emerge from the Covid-19 pandemic renewed and strengthened (especially as the pandemic has changed the way people live, work and travel). The Government therefore confirmed that it would not be proceeding with the changes set out in the consultation.
The Government has instead amended the current standard method by adding a 35 per cent uplift to the post-cap number which it generates for Greater London and the local authorities containing the largest proportion of the other 19 most populated cities and urban centres in England (based on the Office for National Statistics list of major towns and cities). These are: London, Birmingham, Liverpool, Bristol, Manchester, Sheffield, Leeds, Leicester, Coventry, Bradford, Nottingham, Kingston upon Hull, Newcastle upon Tyne, Stoke-on-Trent, Southampton, Plymouth, Derby, Reading, Wolverhampton, and Brighton and Hove.
The PPG on housing and economic needs assessment was updated on 16 December 2020 and now includes the uplift as step 4 of the assessment of housing need. The Government has published figures for indicative local housing need, using the updated methodology.
The Government announcement on 16 December 2020 attracted much comment, just as the proposed changes had in their earlier stages.
The Royal Town Planning Institute welcomed the announcement, while expressing concern that a target-based approach to housing was too narrow and wider priorities such as health, infrastructure, net zero carbon goals and the environment should not be side-lined.
The Local Government Association and others also expressed concerns about whether (for example) the new approach might make it harder to achieve the Government’s target of 300,000 new homes a year or to level up economic activity across disadvantaged areas. Similarly, the leader of Islington council in London was quoted as arguing that the target would be unachievable because of land constraints and the revised method would reinforce so-called Nimbyism. Planning magazine quoted the chairman of the Land Promoters and Developers Federation as arguing that the Government had “taken a highly regressive lurch backwards”.
The planning consultants Lichfields published their own analysis of the announcement and what it might mean for housing delivery. They too argued that the updated standard method alone was unlikely to lead to the delivery of 300,000 homes a year by the mid-2020s.
Changes already made
The Government has recently made various changes to planning rules, some of them in response to the Covid-19 pandemic. Others – such as those relating to upward extensions – enact changes that the Government has long advocated.
Some of these changes relate to permitted development rights (PDRs), under which development may take place under a general permission granted by Parliament without requiring an application to the LPA for planning permission. Other changes – introduced through the Town and Country Planning (Use Classes) (Amendment) (England) Regulations 2020 – create new some use classes and abolish some old ones. The Explanatory Memorandum to these Regulations says that transitional provisions (retaining the effect of the PDRs based on use classes in place before these Regulations came into force) will apply until 31 July 2021, when new, revised PDRs for change of use will be introduced. The Commons Library briefings Permitted development rights and Planning: change of use offer detailed analysis of PDRs and change of use (although they were last updated in April 2020 and so do not capture all the most recent developments).
Other changes were introduced through the Business and Planning Act 2020, which received Royal Assent on 22 July 2020. The Act’s planning provisions are all now in force.
The Commons Library briefing on the Bill outlines the changes, which cover:
- a fast track process for varying planning conditions relating to working hours on construction sites
- time limits for development (extending the dates on which planning permission, outline planning permission and listed building consents might otherwise expire)
- planning proceedings (giving the Planning Inspectorate more flexibility in deciding whether certain local planning appeals should be heard by way of written representations, a hearing or a local inquiry) and
- arrangements for the electronic inspection of the Mayor of London’s spatial development strategy.
MHCLG has published planning guidance to accompany the Business and Planning Act 2020, covering construction working hours, extension of certain planning permissions, making current spatial development strategies available digitally and pavement licences.
The Town and Country Planning (Spatial Development Strategy) (Coronavirus) (Amendment) Regulations 2020 were laid on 21 July and came into force on 12 August 2020. They make amendments to the Town and Country (London Spatial Development Strategy) Regulations 2000 and the Combined Authorities (Spatial Development Strategy) Regulations 2018 relating to how documents are made available for inspection between 12 August 2020 and 31 December 2020.
The UK Government has published a compendium of guidance to local government on coronavirus, including on planning and building safety. The July 2020 update from the chief planner at the Ministry of Housing, Communities and Local Government (MHCLG) outlines the recent changes. Property consultants Lichfields have also published an overview of the recent changes, with links to articles offering further commentary.
Other planning policy changes ahead
A new approach to Environmental Impact Assessments in planning?
In response to a PQ in July 2020, Christopher Pincher said that the Government wanted to see “better planning for nature”.
Also in July 2020, in a speech on environmental recovery, the Environment Secretary, George Eustice, announced a consultation on changing the approach to environmental assessment and mitigation within the planning system, to (he said) “front-load ecological considerations in the planning development process” and “protect more of what is precious”.
Media coverage of the speech suggested that some wildlife groups were offering a cautious welcome:
- But green groups are concerned the reforms could lead to weaker protections for rare habitats and species. Many are mistrustful of ministers’ intentions, following a speech by the Prime Minister earlier this month in which he appeared to blame slow housebuilding rates in England on environmental protections for rare newts.
- Dr Jeremy Biggs, co-founder and director of the Freshwater Habitats Trust, told i: “If the agenda is less box ticking and better science-based conservation action, then that is welcome. But if we hastily ditch protection of threatened species and habitats in the name of planning reform, that will make it difficult to stop the decline of nature, never mind reversing it.”
December 2020 consultation on permitted development rights
The Government launched the consultation on revised PDRs on 3 December 2020. The consultation closes on 28 January 2021.
Main points of the consultation include:
- A new PDR to allow change of use from the new use class E (commercial, business and service) to C3 residential.
- An amended PDR for the extension of schools, colleagues, universities and hospitals, to support the faster delivery of schools and hospitals and other public infrastructure improvements.
- A similar right for prisons and defence sites, which would allow prisons (but not other residential facilities such as immigration removal centres) to expand their facilities.
- Faster decisions on applications for planning permission: for relevant planning applications, the statutory period for determination would be reduced from 13 weeks (or 16 weeks in the case of development requiring an Environmental Impact Assessment) to 10 weeks.
- Existing PDRs will be consolidated and simplified.
As with other proposed planning reforms and the existing PDR for office to residential change of use, these proposals – and especially those relating to change of use from Class E commercial, business and service to residential – have attracted some criticism. In the Local Government Chronicle, the head of planning and practice at the RTPI and the chief executive of the Town and Country Planning Association were quoted as arguing that the changes relating to change of use from Class E to residential could create “a lot of dead frontage” and that expanded PDRs were “not the way” to create necessary housing.
Other briefings on various matters to do with planning are available on the topic page for housing and planning.
Sections 1.5 and 2.1 of this briefing and parts of the summary, dealing with housing requirement and the standard method, and section 6 (formerly section 1.15) on further reading were updated on 8 October 2020.
Sections 1.5, 2.1 and 6 were updated again on 11 December 2020, when new section 2.5 on implementation and new section 4.2 on the December 2020 consultation on permitted development rights were added and section 1.14 on transition to the new system, section 3.2 on temporary use of land and relevant parts of the summary were also updated.
Section 2.1 was updated again on 12 January 2021.
Other parts remain (except for some minor amendments) as first published on 20 August 2020.
Documents to download
Planning for the Future: planning policy changes in England in 2020 and future reforms (1 MB, PDF)
This briefing looks at the background to the UK Government's freeports policy, including the 2021 Budget's announcement of freeport locations.
The Environment Bill 2019-21 has completed it Committee Stage and had day one (of two) of its Report Stage in the House of Commons. This paper is a summary of what happened in the Committee and day one of Report Stage and how the Bill has changed. It considers key Government and Opposition amendments. It is prepared in advance of the Bill's next stages expected in the next Parliamentary session.