New developments need to boost ‘affordable home ownership’

Prime Minister Theresa May pictured last month. Today she delivered a speech on changes to national planning policy
Prime Minister Theresa May pictured last month. Today she delivered a speech on changes to national planning policy

Housing for families on waiting lists could be sacrificed in new developments in favour of making home ownership more affordable as part of Government planning reforms.

The draft revised National Planning Policy Framework (NPPF), which was first published in March 2012, aims to boost supply in England from the current 217,000 homes last year to 300,000 per annum by the mid-2020s.

While the NPPF was hailed as simplifying previously cumbersome planning guidance, critics have described it as a ‘developers’ charter’ which skewed the system in favour of housebuilders and failed to tackle land banking.

Prime Minister Theresa May said the root cause of the national housing crisis was a failure over decades to build enough of the right homes in the right places.

She described how higher house prices have also led to higher rents, so prospective first-time buyers are less able to save for a deposit.

The Government has launched a consultation on the proposed changes to the planning system today (Monday February 5).

Mrs May said: “This Government is rewriting the rules on planning. With the major overhaul being published today, we’re giving councils and developers the backing they need to get more homes built more quickly.

“More homes at prices that are affordable for first-time buyers. More homes for the NHS staff, teachers, firefighters and other key workers on whom all communities depend. More homes for rent on family-friendly, three-year tenancies.

“We’re streamlining the planning process, so that much-needed homes aren’t held up by endless appeals and bureaucracy.”

Currently councils have a set target for affordable housing on major developments, usually between 30 and 40 per cent.

This is made up of affordable rented homes, which are allocated to families on the housing register, and shared ownership units, where prospective buyers cannot afford a mortgage on 100 per cent of a home.

However revisions to the NPPF state that where major housing development is proposed at least ten per cent of the homes should be available for ‘affordable home ownership’ as part of the overall affordable housing contribution from the site.

The widened definition of affordable housing includes starter homes, discount market sales housing and ‘other affordable routes to home ownership’.

On the one hand Mrs May said they would make sure councils ‘do all they can to find sites, grant planning permission and build homes’.

This would include a nationwide standard to calculate how many homes are required in each area.

Meanwhile the Prime Minister also described how the gap between permissions granted and homes built is ‘still too large’ with developers needing to ‘step up and do their bit’.

She said the current housing market where lower supply equals higher prices ‘does not encourage them to build the homes we need’.

Councils may be allowed to take a developer’s build-out rate into account before deciding whether or not to grant planning permission.

Mrs May said: “I want to see planning permissions going to people who are actually going to build houses, not just sit on land and watch its value rise.”

Other proposed changes include encouraging greater housing densities on brownfield land, increased protection for ancient woodland and a more transparent planning process.

Mr Javid said: “An entire generation is being locked out of a broken housing market as prices and rents race ahead of supply. Reforming the planning system is the crucial next step to building the homes the country needs.

“This government is determined to fix the broken housing market and restore the dream of home ownership for a new generation. There is no silver bullet to this problem but we’re re-writing the rules on planning so we can take action on all fronts.”

But John Healey, Labour’s Shadow Housing Secretary, said: “This year-old policy shows again that ministers have no proper plan to fix the housing crisis.

“Eight years of failure on housing is the fault of Whitehall, not town halls.

“Since 2010, home-ownership has fallen to a 30-year low, rough sleeping has more than doubled and the number of new homes being built still hasn’t recovered to pre-recession levels.”

Meanwhile Lord Porter, chairman of the Local Government Association, said: “The truth is that councils are currently approving nine in ten planning applications, which shows that the planning system is working well and is not a barrier to building.”

He added: “It is completely wrong, therefore, to suggest the country’s failure to build the housing it desperately needs is down to councils. The threat of stripping councils of their rights to decide where homes are built is unhelpful and misguided.”

He described how the private sector ‘will never build enough of the homes the country needs on its own’ and called on the Government to allow councils the freedom to borrow and invest to ‘spark a renaissance in housebuilding by local government’.

This comes as the Campaign to Protect Rural England (CPRE) has highlighted how the Government’s planning policy is allowing developers in Sussex to rely on viability assessments to reduce their contributions towards affordable housing.

Roger Smith, from CPRE’s Sussex branch, “The government’s policies prioritise developers’ profits when there is a desperate need for new homes for low income families.”

Meanwhile Kia Trainor, a director at CPRE Sussex, described how viability decisions needed to be scrutinised by the public.

She explained: “More and more councils like Brighton and Hove are making a commitment to open book assessments and greater transparency.

“We also want national policy to be stronger in relation to developer accountability when community housing needs are not being met.”

The consultation runs until May 10.

To view and comment on revisions to the NPPF click here.