Recently proposed changes to Planning Policy could create exciting development opportunities for landowners with land adjacent to existing settlements.
Central planning policy is contained within the National Planning Policy Framework (NPPF), which was originally published in 2012.
An ever-changing social and economic landscape, combined with the 2017 Budget and several Government Consultations and White Papers, have resulted in the need for a review of the NPPF.
From March to May 2018, the Government consulted on a revised Draft NPPF. One key proposal, contained with Paragraph 72, is the introduction of Entry Level Exception Sites.
What are Entry Level Exception Sites?
Entry Level Exception Sites, as per the revised Draft NPPF, are proposed to be:
- Suitable for first-time buyers (or those looking to rent their first home) and comprise a high proportion of entry-level, discounted homes
- Outside but adjacent to existing settlements, and proportionate in size to them
- On land which is not already allocated for housing
Importantly, Entry Level Exception Sites are not reliant on a shortfall being demonstrated in a Local Authority’s five-year housing supply. Instead, they are focussed around a lack of housing suitable for first-time buyers or renters in the area, which is an issue that is particularly acute in rural locations.
Entry Level Exception Sites vs. Rural Exception Sites
Within current policy, there is provision for Rural Exception Sites, designed to provide affordable housing in rural areas. However, the key issue with Rural Exception Sites is that there is a policy requirement for developments to comprise 100% affordable housing (although Local Authorities can allow small numbers of market homes, at their discretion). Because of the cost and value of affordable housing, in most cases, development is financially unviable and is reliant on charitable landowners, who are content to serve a public good and develop their land for little more than bare agricultural values. As a result of this, uptake by landowners has been limited.
Entry Level Exception Sites are proposed to be an expansion of the existing Rural Exception Sites Policy, rather than to replace them.
Although some clarification is required regarding what constitutes a ‘high proportion’ of entry-level discounted homes, it is anticipated that allowing some market housing on such sites will make developments more financially viable and therefore increase uptake from landowners.
In addition, there are likely to be issues regarding other definitions, for example, what constitutes a home suitable for a first-time buyer, or renter, and what constitutes proportionate development. It is anticipated that Local Authorities and Land Owners and Developers will have widely varying views.
How can landowners benefit?
Entry Level Exception Sites have the potential to create exciting opportunities for landowners to obtain planning permission for housing on unallocated land, in edge-of-settlement locations where there is an identified lack of entry-level housing.
The opportunity, and profitability, is expected to be greater in areas where there already exists a policy requirement for a high percentage of affordable housing within new developments (whether allocated or not), and profitability is anticipated to be far greater than where sites are promoted as Rural Exception Sites.
There may be greater opportunity for income generation through the development and management of a scheme ‘in-house’, without the involvement of a housing association for the affordable or entry-level elements. This could involve management of the property, lettings and tenants.
Entry Level Exception Sites could represent a viable alternate use for holdings on the edge of existing settlements; specifically, land that is unallocated where there is a need for entry-level housing. Although clarification is required, and it is likely that the policy will evolve over time, it is anticipated that development will be more profitable than through the current Rural Exception Sites.
Bidwells awaits the publication of the new NPPF, expected in the next few weeks and will review the document for further information on this matter
For more information regarding Entry Level Exception Sites, Rural Exception Sites or other rural land matters, please do not hesitate to get in touch.