We are exploring across three articles some of the key implications of the proposed reforms for those involved in the commercial, residential and infrastructure sectors. You can access the first (on commercial development) here. In this, our second article, we explore the meaty area of housing and housing delivery.

Planning to build the homes this country needs

Our chronic housing shortage often dominates the headlines, and was certainly a major issue for all of the political parties in the run-up to the recent election. So it is no surprise that many of the proposed changes are cited as seeking to support the government’s ambitious manifesto commitment to see 1.5 million new homes delivered in the next 5 years. Key proposed changes include:

• Reinstating mandatory housing targets and revising the ‘standard method’ for assessing local housing need, with the intention to “drive growth in every corner of the country”;

• Supporting development through a combination of broadening the definition of brownfield land, requiring local authorities to review green belt boundaries where necessary to meet unmet housing need, and introducing ‘grey belt’ land to enable appropriate development for housing within the green belt; and

• Amendments to support and encourage the delivery of affordable homes.

New standard method, new order on housing need

As promised, the government proposes reversing a number of the NPPF changes made in December 2023. Key amongst those, is the reinstatement of mandatory housing targets. But the government’s proposals have gone further by:

• Removing the existing avenue whereby local authorities could avoid the use of the ‘standard method’ for assessing housing need in lieu of alternative approaches by claiming ‘exceptional circumstances’, which has to date been largely used to justify lower overall housing targets. This change is intended to “stop debates about the right number of homes to plan for and support authorities to get on with plan making”.

• Revising the ‘standard method’ for assessing housing need (currently based on housing projections subject to affordability adjustments and site-specific urban uplifts) to a 2-step process. Step 1 establishes a baseline of existing housing stock and then applies a 0.8% increase as the starting point in each authority.  Step 2 provides for a revised affordability adjustment taking the overall target upward where house prices are more than four times higher than earnings. Importantly, both the urban uplift and the specific cap are to be dropped. 

Authorities would still be able to justify lower requirements based on local land constraints (such as National Parks, protected habitats and flood risk areas), but importantly they must demonstrate that they have taken all possible steps, including optimising density, cross border sharing (i.e. with neighbouring authorities), and green belt review, before lower housing requirements would be considered.

A spreadsheet setting out the different outcomes between the old and new standard method shows an overall increase in targets of 30%, but the distribution of this increase varies considerably, with significant rises in parts of the north-west, south-east and south-west, but then a reduction in the target for Greater London.  A number of Conservative-led councils in the south-east have already raised objections citing a likely ‘furious’ backlash from their local communities who would be expected to take the strain due to London being unable to meet its housing need. 

The proposed changes should expand opportunities for landowners to identify housing allocation sites in a wider range of areas across England. This would increase scope for securing consent for development, but these may not always garner local support. 

Identifying the land to meet the need

Not all authorities will be able to identify sufficient available and immediately suitable undeveloped land to support the revised housing targets. As already discussed in our first article (in the context of commercial development), brownfield land will remain the preferred option. Indeed, development on brownfield sites located within existing settlements for homes (and other identified commercial uses) should be treated as ‘acceptable in principle’ by decision-makers.

However, where such sites remain insufficient for housing (or commercial) development, authorities will be required to review the potential for the release of green belt land to meet local housing need in full. Avoidance of such review will require clear evidence that such alterations would fundamentally undermine the function of the green belt across the entire local plan area. 

The review hierarchy requires consideration for previously developed land in sustainable locations first, next comes ‘grey belt’ land, and then finally considering other sustainable green belt land.  As noted in our first article, the proposed definition of grey belt land points to previously developed land, and other land making a limited contribution to 5 established green belt purposes (set out in para 141 of the redline NPPF).  But the concept of grey belt land is not just important as part of any green belt review. The changes also propose that development on unreleased grey belt would not be regarded as inappropriate development, thereby avoiding the need to meet the very special circumstances tests. Such development will need to be shown not to undermine the function of the green belt (again taken as a whole), and that the authority is unable to meet its 5-year housing land supply. Proposals must also meet the new ‘golden rules’ which require the provision of: at least 50% affordable housing, relevant infrastructure improvements, and new or improved accessible green space close to the new homes.

In those parts of the country with existing housing land shortfalls, these changes open up opportunities for grey belt development well before any green belt reviews are undertaken (or land either allocated or released). With that said, we can expect there to be considerable debate over the extent to which the land can be considered truly ‘grey’.

Affordability through flexibility

With bold claims that this government will deliver “the biggest increase in social and affordable housebuilding in a generation”, the consultation seeks feedback on a number of proposed changes associated with affordable housing. These include removing the current requirement for  a minimum 10% of homes on major sites being for affordable home ownership, as well as the 25% requirement of affordable housing being for ‘First Homes’. Authorities will be expected to consider and identify the right mix and tenure of housing, but with express reference to social rent homes, and have regard for a new policy to be added to the NPPF that promotes the benefits of mixed tenure sites to create diverse communities.

We expect one change that will solicit little push back is the government’s intention not to introduce the proposed Infrastructure Levy, but rather rely on improvements to current section 106 and CIL arrangements.

What else?

To add to the mountain of planning reform paperwork, the government also announced its policy on New Towns, which are to contain a minimum of 10,000 new homes on both greenfield land (but separated from nearby settlements), and through urban extensions. This is to be supported by a newly formed New Town Taskforce which is required to deliver its shortlist of sites within the next 12 months.

What's next?

Responses to the consultation need to be submitted by 24 September. While we expect considerable response and comment on the extensive changes relating to housing supply and delivery, the government has said it wants to publish the revised NPPF before the end of this year. Time will tell if they can meet their own ambitious timeline.

Look out for our third and final article on the proposed reforms which will focus on energy and infrastructure. As always, if you have any questions on the above, or anything else included in the consultation, please do get in touch with your usual Hogan Lovells planning contact.