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Pioneer responds to NPPF Consultation

Category: News 17 October 2011

In a letter submitted to CLG on the 17th of October 2011, David Parker, Managing Director of Pioneer, set out comments in response to the NPPF consultation, as follows:-  

"Dear Mr Scott, 

National Planning Policy Framework – Consultation Response 

The following provide a response to the consultation draft National Planning Policy Framework (“NPPF”) document published in July 2011.   

The views expressed represent the response of Pioneer Property Services Ltd: we are a housing and development consultancy specialising in housing market analysis, scheme specific research and advice, negotiations in respect of market and Affordable Housing provision, and the development of new, investment grade, private rented housing.   

1. General Comments 

Pioneer would like to express firm support for the NPPF, and welcomes the overarching objectives of the document, which Pioneer considers to represent a positive step towards enabling a more streamlined, accessible and effective planning system.   

On a more detailed level, Pioneer has some, hopefully, constructive feedback in response to specific wording, or areas where it is felt additional clarification would be beneficial.  These comments are set out in the following paragraphs.  

2. Delivering Sustainable Development 

Paragraph 10: 

The NPPF offers only a broad description of “sustainable development” and includes as a second bullet point ‘planning for people (a social role)’.  The overarching aims within this bullet point are all to be welcomed, but further clarification would be helpful in terms of what is actually meant by ‘strong, vibrant and healthy communities’.  

There is a danger that this will (as has happened in various Planning Inquiries) be interpreted to mean that in all instances an element of affordable housing must be included on all residential developments if they are to be deemed ‘sustainable’ irrespective of genuine viability issues.  This stalls developments that would require a return of the market conditions experienced pre-2008 to be viable and consequently acts to retard economic growth. Thus the current position is somewhat circular in that it will be difficult to secure such growth without implementable consents and it fails to recognise that there is no position less ‘sustainable’ than building nothing.  

We recommend that clarification could be provided as a footnote, or within the Glossary as follows: 

Sustainable Development: is defined at paragraph 10 of this document.   Where, as a result of site specific constraints, it is demonstrated not to be practicable or viable to include a proportion of affordable housing upon a residential development, this should not be assumed to render the development unsustainable, or unable to contribute to the creation of sustainable communities.” 

The wording of the second bullet point should be amended to read: 

“…to meet the need requirements of present and future generations;…”. 

This prevents confusion arising in relation to the distinction that should be made between affordable housing ‘need’ and market housing ‘demand’.  This confused terminology occurs throughout the draft NPPF document and should be amended throughout to refer to either housing requirements (i.e. housing overall), housing need (i.e. affordable housing) or housing demand (i.e. market housing).  

Overall clarification of this issue could be provided by including a definition of housing demand and housing need within the Glossary as follows: 

Housing Demand: the quantity of market housing which households are willing and able to buy or rent.” 

Housing Need: the quantity of affordable housing required for eligible households whose needs are not met by the market.”  

3. Plan-making 

Local Plans, Paragraph 26 

Reference is made to local authorities being able to seek to obtain a ‘certificate of conformity with the Framework’.  Unfortunately, this certificate is not defined within the Glossary, and the process by which a local authority may obtain one, and what the impact will be where such a certificate is obtained is not explained.   It would be inappropriate for such a certificate to be issued in respect of existing plans developed prior to the publication of the NPPF (which differs substantially to the existing planning system) and which by definition cannot, therefore, be in conformity with it.   

In particular we are very concerned that local planning authorities should not be able to seek such certificates without the ability for representations to be submitted and the relevant matters subsequently examined in an open, robust and independent fashion. 

Ensuring Viability and Deliverability, paragraph 39 

Pioneer welcomes the emphasis given to significantly increasing the supply of housing.   However, if the NPPF is to be instrumental in ensuring local planning authority expectations are realistic we suggest the drafting in paragraph 39 should delete confusing references to ‘normal costs’ as many local planning authorities are interpreting this to mean viability testing of their proposed Policies should ignore current economic circumstances.      

This is a significant concern. Viability is central to many planning negotiations and, despite numerous Inquiries involving such issues, there has been little convergence of views.  Furthermore, whilst RICS published for consultation the draft “Financial Viability in Planning” document in July 2011 it doesn’t provide a pragmatic methodology as it refers to PPS3 throughout and fails to reflect the enhanced emphasis on achieving economic growth which is central to the emerging NPPF.   

Therefore, the NPPF must unequivocally set out the direction of travel if it is to truly enable a shift away from the current system.  NPPF wording should state clearly how viability is to be tested, and should: 

  • reflect the market reality that residential consents confer a premium value on land and that landowners should benefit from the majority of this uplift (for a supply of deliverable sites to be maintained this should represent the baseline position in viability appraisals) 

  • require that viability is assessed using current (rather than ‘normal’) costs and values - presently this is only referred to within a footnote at page 30. 

  • firmly place the responsibility for maintaining a viable supply of housing land upon the local planning authority and, 

  • firmly deter the destructive belief that, regardless of market circumstances, land values should be reduced to the point where all planning obligations can be supported. 

Amendments should consequently be made to paragraph 39 to incorporate the above points. 

Ensuring Viability and Deliverability, paragraph 42 

Paragraph 42 should include a requirement for evidence to be subject to public consultation in line with the NPPF emphasis upon wider public involvement.  

4. Planning for People 

Housing - Significantly increasing the supply of housing - Paragraph 109 

The first bullet point refers to the use of an ‘evidence base’ but, to align with paragraph 28 of the NPPF, it should be clarified that this includes an SHMA either within the paragraph itself or as a definition within the glossary. 

In relation to the second bullet point and the associated footnoted text please see comments at section 3 above. 

Housing - Significantly increasing the supply of housing - Paragraph 110 

This paragraph repeats the advice of paragraph 109 that Plans should address the assessed development requirements (paragraph 109 refers to the use of evidence to ensure the ‘full’ housing requirements are met), but then softens the wording thus enabling local authorities to disregard the assessed housing requirements where the ‘adverse impact’ of addressing these would ‘significantly and demonstrably outweigh the benefits’.  It should be explicitly stated in the NPPF that it is most unlikely any ‘adverse impact’ could outweigh the negative economic impact of failing to provide an areas full housing requirement and such ‘adverse’ aspects would therefore need to be robustly and comprehensively demonstrated by the local planning authority. 

The methodologies applied in some SHMA and housing needs studies serve to artificially inflate levels of affordable housing need even beyond the entire amount of new housing assessed to be necessary by regional guidance and we strongly suggest that, in tandem to the re-drafting of the NPPF, the SHMA Practice Guidance of 2007 should be updated to reflect that many households are willing/able to spend more than 25% of their income on their housing costs (particularly when interest rates are historically low). Furthermore, generating a statistical need for an additional dwelling simply because a household in the private rented sector is in receipt of Local Housing Allowance serves only to exaggerate the number of new homes that need to be developed – particularly when this convoluted logic is not similarly applied to households in social housing who rely upon Housing Benefit. 

The approach in paragraph 109 will strongly encourage local planning authorities to ensure that their housing requirements evidence is objective, and accurately reflects the overall level of additional housing required.  The circumstances under which local planning authorities are able to robustly demonstrate that there are adverse impacts of such gravity that the full housing requirement need not be met will surely be extremely limited, and as such should be clearly defined within NPPF. This will help to ensure that local planning authorities only refer to statistically robust housing requirement assessments within their evidence base and encourage them to review existing assessments with methodological issues.

 Housing - Deliver a Wide Choice of Quality Homes – paragraph 111

Paragraph 111 would benefit from clarification.  It is assumed that the initial bullet point is strategic in nature and relates to housing provision overall.  As such the word ‘needs’ should be substituted with ‘requirements’.

The second bullet point is problematic; it could be construed to empower local planning authorities to prescribe not only affordable housing mix, but also market housing mix (at specific locations).  This is a significant deviation from the position in PPS3 that developers and housebuilders are best placed to determine what will represent an appropriate market housing mix, as their primary motivation is to provide market housing that reflects the demand for such housing. 

In that regard it is notable that the over supply of flats reported in recent times is suggested in “The Implications of Housing Type/Size Mix and Density for the Affordability and Viability of New Housing Supply” (NHPAU February 2010, page 12) to be directly linked to the previous Government’s policy emphasis upon delivering higher density developments and using previously developed land.  This demonstrates the dangers of seeking to control market housing mix through policy, rather than in response to market demand.   The wording should be amended as follows:

“identify the size, type, tenure and range of affordable housing that is needed required and the likely profile of household types requiring market housing in particular locations, reflecting local market housing demand; and affordable housing need and…”

Affordable housing mix should reflect the objectively assessed ‘need’ as opposed to demand – this prevents the inefficient use of scarce subsidy and assists with preventing an increase in under occupation in the affordable sector, in accordance with proposals within the Welfare Reform Bill in respect of the distribution of Housing Benefit.

Sustainable Communities – paragraphs 124 / 125

The NPPF sets out that the built environment should facilitate social interaction and inclusive communities.  The concerns raised at section 2 of this letter apply equally to the paragraph 124 and 125 wording.   The wording seems to suggest that socially inclusive communities can be achieved through a variety of planning solutions, not limited to (or suggested to require) the distribution of specific housing tenures within a residential site. However, this needs to be clarified to avoid confusion in line with the comments at section 2 of this letter.

Green Belt – paragraph 145

This contains a double negative and should be amended as follows:

“Certain other forms of development are also not inappropriate in Green Belt…”

5. Glossary

Affordable Housing, page 53

The affordable housing definition retains ‘Social Rent’ as an affordable housing tenure.  This is unnecessary given that the tenure is no longer financially supported within the HCA Affordable Housing Framework (i.e. it is not being promoted as the tenure of choice) and the NPPF ‘Affordable Rent’ tenure definition enables the flexibility to provide dwellings with rents of up to 80% - hence it does not restrict a rent being charged that equates to a ‘target rent’ where this is justified.  

Whilst there will remain an element of existing tenants who will have the right to be re-housed where they need to move under social rented tenancies, as the majority of social housing stock comprises of social rented housing these needs should be capable of being met within the turnover of existing stock. 

All new tenants not requiring an intermediate affordable housing option can be housed within Affordable Rent dwellings and there will therefore be a pressing need for additional affordable housing stock to be provided on this basis.

If the Social Rent definition is to be retained, the second sentence should be amended to read as follows:

“It may also be owned and/or managed by other persons…”

In addition the definition of ‘intermediate housing’ should include, to accord with current definitions, the following wording after the last sentence:

“The definition does not exclude homes provided by private sector bodies.”

General Comment

See also feedback at section 2 of this letter in respect of housing demand and housing need.

In conclusion we regard the proposed NPPF to be a positive change which must be made if the planning system is to foster economic growth and engender a sustained recovery in the housing industry.  However, we are firmly of the opinion that to ensure it achieves these laudable aims you should give further consideration to the definitions of: “viability”, “deliverability”, “sustainable”, “mitigation”, “acceptable in planning terms” and revise in tandem the Practice Guidance on the preparation of SHMA.

 

Yours sincerely,

   

David Parker MSc BA(Hons) DMS FCIH

Managing Director

T: 0844 9798001

M: 07788 140240

E: dparker@pioneerps.co.uk

 

 



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