Yesterday afternoon [13 March 2018], Sir Oliver Letwin provided an interim update on his review of housing buildout in a letter sent to the Chancellor and Secretary of State prepared to inform the Spring Statement.
It is only a preliminary update - Sir Oliver’s team is still working on its analysis of ‘the problem’ and a report of his findings is due to be published in June for comment by ‘interested parties and experts’. Recommendations for change will be formulated from the Summer onwards, based on this analysis and engagement. A Final Report will be published in time for the Autumn Budget.
Yesterday’s update acknowledges the key difference between the grant of an outline planning permission and an implementable consent, but it is frustratingly silent on the impact of delays between each point on housing delivery. It appears unlikely that that this aspect of the process or the reasons behind it will form a significant part of the review. Instead, Sir Oliver seems intent on focusing on delays during the ‘build out’ stage, once an implementable consent has been obtained.
Sir Oliver’s letter highlights issues caused by the availability of capital, labour and materials (amongst others) affecting the build out stage, but suggests that his research so far highlights the key issue as what he terms the ‘absorption rate’ – defined as the rate newly constructed housing can be sold into the local market without materially disturbing the market price. He appears likely to focus the remainder of his review on the potential impacts of encouraging greater competition amongst housebuilders on large sites, requiring a greater range of products and tenures (including market rent) on large sites and less reliance on large sites in the planning process generally. This ties in with some of the content of the draft National Planning Policy Framework published last week, including its proposed requirement for at least 20% of sites identified in Local Plans to be of less than half a hectare.
Sir Oliver Letwin’s terms of reference require him “to explain the significant gap between housing completions and the amount of land allocated or permissioned in areas of high housing demand, and make recommendations for closing it”. There is a danger that he will not fulfil his brief by failing to review the parts of the process prior to the grant of implementable planning permissions. The time taken to obtain approval for matters of detail and discharge all pre-commencement conditions once outline permissions have been granted is a significant factor hidden behind some of the headline grabbing statistics on the gaps between permissions granted and homes delivered across the country. Under resourcing of local planning authorities does not assist this part of the process. Whilst there is no doubt also room for improvement during the build-out stage, there must be a concern that the focus of Sir Oliver’s review is politically motivated.
We would urge all those charged with the delivery of housing to engage in this review where possible to ensure that its analysis and recommendations properly address the issues.