Eight calls for urgent planning reform to help accelerate the delivery of new housing

Following a round table discussion with private developers, planning consultants, and valuation and legal experts in the real estate sector, we have published a manifesto putting forward eight urgent calls for reform to help get SME developers building.

The task at hand

Private developers deliver 60% of new housing stock in the UK but are required to navigate a web of inefficiencies and bureaucratic hurdles to get projects off the ground. The system is stacked against them, with a one-size-fits-all approach to regulation escalating costs and rendering a number of smaller schemes unfeasible.

The Government will not be able to deliver its target of building 1.5 million new homes in the next five years without viable solutions to address the lack of uniformity in decision-making between local authorities. Immediate action is needed to foster consistency, collaboration and provide developers with certainty.

Whilst the Government has laid down ambitious targets for the delivery of new housing, there is a lack of focus on the real issues being faced on the ground. The following points capture the most pressing challenges that are preventing private developers from building new homes.

Cost of delays. Interest rates on bridging loans now stand between 10-15%. At the current rate, a year’s planning delay on a £10m site could cost developers over £1m in interest.

A broken system. There is an absence of consistent leadership, accountability and commerciality in planning departments. Diminishing incentives to work in the public sector has led to an experience gap and to overworked staff. This has given rise to uncertain planning conditions and a lack of proactive engagement with the developers on the housing needs of the local area. 

Politicisation of planning. Planning has become politicised and polarised, with a number of sitting councillors elected on anti-development tickets. The default position from some local authorities on new housing projects is now ‘no’.

The webs of bureaucracy. Extensive bureaucracy within the planning system creates onerous, lengthy and overcomplicated applications and appeal processes. The same planning mechanisms are often applied to both small and large residential schemes, with the blanket application of Section 106 agreements making a number of smaller sites unviable.

A lack of transparency. There is a significant disparity in how local councils handle development processes, coupled with a lack of transparency on planning rejections and how Community Infrastructure Levy (CIL) payments are spent. Applications are often rejected without engagement with developers, leaving little room to address concerns promptly. There is also a lack of clarity on how CIL payments are spent on local infrastructure, undermining support from the community.

Calls for reform

The following solutions were outlined as practical, frontline solutions that could accelerate the delivery of new housing by unburdening private developers and lowering the risk of planning refusal.

By instilling greater leadership, consistency and transparency throughout our planning system we have the potential to accelerate the delivery of new housing and unlock the market for private developers. 

1.   A cultural shift. We need to see a proactive, pro-investment and pro-development stance from local authorities. Taking the politics out of planning departments is a crucial first step, and introducing a National Scheme of Delegation in decision-making could help fast-track applications where there are no technical reasons not to approve it.

2.   Hitting the brief. Planning departments should develop a brief on what the local area needs. Developers can then deploy planning consultants and present a case to local authorities to ensure their plans align with local demand for housing.

3.   Approval incentives. To combat default opposition to new developments within planning departments, we need to see individual planning officers given development targets to incentivise commerciality and accountability, cascading from senior management down to junior planning officers.

4.   Transparency in CIL payments. Developers contribute significant funds towards CIL payments, yet rarely see clear evidence on how these funds are utilised. Local authorities need to be transparent and pinpoint where the money has been spent.

5.   The promotion of CIL schemes. In addition to greater transparency, there should be efforts to promote local CIL-funded projects. This would help repair the relationship between developers and local communities, whilst demonstrating the infrastructure contributions private developers make.

6.   Tackling viability and streamlining cost burdens. Small schemes should not be subject to absolute Section 106 payments. They are used as a terms and conditions mechanism to delay projects and drive-up costs. We propose the reintroduction of Section 106BA in order to bring forward stalled housing sites, alongside the reintroduction of the ‘Free-Go’ for re-submitted applications to incentive SME’s in bringing forward more applications.

7.   Community engagement. To challenge anti-development and NIMBY rhetoric, developers and local authorities should consult the community by presenting various potential development approaches. This would empower local communities with choice, whilst ensuring developments proceed. 

8.   Designated intermediaries. Pro-investment intermediaries should be established within local authorities to engage developers, drive investment and help get projects off the ground.

Chris Gardner, CEO, Atelier, commented:

“The one stakeholder group that is completely unrepresented in every planning application and approval process is the would-be homeowner. The current system neglects the hopeful homeowners across our country.

“Taking a step back, we need to see a transformation in the leadership and culture of the system so that we are once again encouraging development. Planning officers need to know that they are supported when they make unpopular decisions. If you’re going to build 1.5 million houses you need to be bold, and the Government needs to be driving that from the top.”