Introduction

Simon ColesDirector – Planning & Environment

South West Business Breakfast

Unlocking Housing Development

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The 2018 Budget

NPPF Update – What will it deliver?

Robin UptonDirector – Planning

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March 2012 July 2018

NPPF Update

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Main Changes and Implications – 2018 NPPF

• Which NPPF applies• Plan Making - strategic policies versus non-strategic policies• Tilted Balance• Housing delivery test• Making effective use of land• Affordable housing• Viability (Nigel Jones)• Heritage• Interpretation wobbles

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The Tilted Balance – Presumption in Favour

• New paragraph 11 (previously para 14)

• Plans and decisions should apply a presumption in favour of sustainable development.

• For decision-taking this means: c) approving development proposals that accord with an up-to-date development

plan without delay; or d) where there are no relevant development plan policies, or the policies which

are most important for determining the application are out-of-date, granting permission unless: i. the application of policies in this Framework that protect areas or assets of particular

importance provides a clear reason for refusing the development proposed; or,ii. any adverse impacts of doing so would significantly and demonstrably outweigh the benefits,

when assessed against the policies in this Framework taken as a whole.

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Footnote 7

This includes, for applications involving the provision of housing, situations where the local planning authority cannot demonstrate a five year supply of deliverable housing sites (with the appropriate buffer, as set out in paragraph 73); or where the Housing Delivery Test indicates that the delivery of housing was substantially below (less than 75% of) the housing requirement over the previous three years. Transitional arrangements for the Housing Delivery Test are set out in Annex 1.

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Housing Delivery Test Measurement Rule Book

• Delivery – Local Authority monitoring (adjustments) • Requirement:

o For Housing requirements less than five years old, (e.g. Teignbridge) the lower of either;

A) the latest adopted housing requirement, orB) the minimum annual local housing need figure (standardised OAN)

o For Housing requirements older than five years, (e.g. TDBC) the minimum annual local housing need figure applied.

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/728523/HDT_Measurement_Rule_Book.pdf

Total net homes delivered over three year periodHousing Delivery Test (% ) = x 100

Total number of homes required over three year period

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Map of LPAs with a housing requirement younger/older then 5 years

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Housing Delivery Test – Transitional Arrangement

• The Housing Delivery Test will apply from the day following the publication of the Housing Delivery Test results in November 2018. For the purpose of footnote 7 in this Framework, delivery of housing which was substantially below the housing requirement means where the Housing Delivery Test results published in: a) November 2018 indicate that delivery was below 25% of housing required

over the previous three years; b) November 2019 indicate that delivery was below 45% of housing required

over the previous three years; c) November 2020 and in subsequent years indicate that delivery was

below 75% of housing required over the previous three years.

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Neighbourhood Plans

• Paragraph 14 – The effect of a Neighbourhood Development Plan

• Neighbourhood Plan policies outweigh the tilted balance if all of the following applies: a) The neighbourhood plan is less than two years old;b) The neighbourhood plan contains policies and

allocations to meet its identified housing requirement; c) The local planning authority has at least a three year

supply of deliverable housing sites against its five year housing supply requirement + buffer; and,

d) The local planning authority’s housing delivery was at least 45% of that required over the previous three years.

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Tilted Balance Conclusions

• Paragraph 11 – significant and demonstrable harm test applies;• Where Local Plans and policies are out of date;• Where a local planning authority cannot demonstrate a five year supply of

deliverable housing sites;• Where the Housing Delivery Test applies.

• Paragraph 14 – Neighbourhood Plans• Transition softening.

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Making Effective Use of Land

• PPS3 2012 NPPF 2018 NPPF.• Para. 117 – Promotes an effective use

of land for homes and other uses.• Para. 123 – Where there is a shortfall

in housing land… seek a significant uplift in the average density of residential development within these areas.

• Para. 68 – Local Plan requirement for 10% of housing requirement on sites no larger than one hectare (reduced from 20% on half hectares sites in draft).

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Affordable Housing

• Social rent deleted from draft version.• New tenures:

⎼ Affordable housing for rent;⎼ Starter homes;⎼ Discounted market sales housing;⎼ Other affordable routes to home ownership.

• Para. 63 – only affordable housing for ‘major development’ defined as schemes of 10 or more or 0.5 hectares (no longer 1,000sqm, dropped by one unit) or 5 in designated rural areas.

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Heritage

• Para. 193. When considering the impact of a proposed development on the significance of a designated heritage asset, great weight should be given to the asset’s conservation (and the more important the asset, the greater the weight should be). This is irrespective of whether any potential harm amounts to substantial harm, total loss or less than substantial harm to its significance.

• Para. 196. Where a development proposal will lead to less than substantial harm to the significance of a designated heritage asset, this harm should be weighed against the public benefits of the proposal including, where appropriate, securing its optimum viable use.

“How many conservation officers

does it take to change a lightbulb?” “What do you mean change?”

(Kevin McCloud)

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Interpretation Wobbles

• The missing ‘in’.• Regarding impacts upon AONB’s, National Parks and the

Broads.• Old NPPF para. 116 states, “Planning permission should

be refused for major developments in these designated areas except in exceptional circumstances…”

• New 2018 NPPF para. 172 states, “The scale and extent of development within these designated areas should be limited. Planning permission should be refused for major development other than in exceptional circumstances…”

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Conclusions – 2018 NPPF

• Will it deliver 300,000 homes per year?• 217,000 new homes were built in 2016-17.• Some minor improvements to delivery.• Planning permission takes too long.• Market forces likely to be key.

DEVELOPMENT LAND VIABILITY AND THE NEW VIABILITY NPPG

Nigel L. Jones BSc FRICS ACIArbChesters Commercial

01935 415454

Member of RICS Working Group

Member of RICS Presidents panel of Arbitrators & Independent Experts specialising in Development Land

Author of the “Shinfield” approach to viability

Experience

First Principles of Viability

Viability is subjective – not objective

Must ensure competitive returns to a developer and landowner

Potential for compulsory acquisition of development land as proposed by IPPR Commission on Economic Justice (August 2018)

Failed similar policy in Community Land Act in 1970s

Current Statutory Position

NPPF published July 2018

Viability to be dealt with at plan making stage

Paragraphs 34/41/42

Specific comment paragraph 57

“Elephant is still in the room!”

How do you assess Benchmark Land Value to test viability?

NPPG July 2018

How should land value be defined for the purpose of viability assessment?To define land value for any viability assessment, a benchmark land value should be established on the basis of the existing use value (EUV) of the land, plus a premium for the land owner. The premium for the landowner should reflect the minimum return at which is considered a reasonable landowner would be willing to sell their land. The premium should provide a reasonable incentive, in comparison with other options available, for the landowner to sell land for development while allowing a sufficient contribution to comply with policy requirements. This approach is often called ‘existing use value plus’ (EUV+).

How should the premium to the landowner be defined for viability assessment?The premium (or the ‘plus’ in EUV+) is the second component of benchmark land value. It is the amount above existing use value (EUV) that goes to the landowner. The premium should provide a reasonable incentive for a land owner to bring forward land for development while allowing a sufficient contribution to comply with policy requirements.

How do you assess developers return?15% to 20% of GDV MAY be appropriate.

Still here because………..NPPG statesPlan makers should establish a reasonable premium to the landowner for the purpose of assessing the viability of their plan. This will be an iterative process informed by cross sector collaboration. For any viability assessment data sources to inform the establishment of the landowner premium should include market evidence and can include benchmark land values from other viability assessments.

Financial Viability in Planning

Site value definition‘site value should equate to the market value subject to the following assumption: that the value has regard to development plan policies and all other material planning considerations and disregards that which is contrary to the development plan.’

inconsistently applied, but what is agreed is as follows: ‘The residual land value (ignoring any planning obligations and assuming planning permission is in place) and current use value represent parameters within which to assess the level of any planning obligations.’

Why Does Market Evidence Not Work

Sale of comparable sites include obligations & abnormal costs

Need to strip them out to form headline values

Having done this – then what?

Why Does Market Evidence Not Work

More objective test is needed

Parameters of value – EUV & no obligations value

Share of the uplift is needed

It is a tax but why not?

Why Does Market Evidence Not Work

Return to the “Shinfield” approach

Consistent with NPPG i.e. EUV

= premium

Difference is that premium

is objective

The Future is...

“It might be thought that an opportune moment has arrived for the RICS to consider revisiting the 2012 Guidance Note, perhaps in conjunction with MHCLG and the RTPI, in order to address any misunderstandings about market valuation

concepts and techniques, the “circularity” issue and any other problems encountered in practice over the last 6 years, so as to help avoid protracted

disputes of the kind we have seen in the present case and achieve more efficient decision-making. The High Court is not the appropriate forum for resolving

issues of the kind which the Inspectors dealing with the Parkhurst Road site had to consider. It is very much to be hoped that the court is not asked in future to

look at detailed valuation material as happened in these proceedings.”

Thank you - Any questions?

South West Business BreakfastUnlocking Housing Development