Proposed reforms to the National Planning Policy Framework

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NHC Senior Policy Advisor Karen Brown outlines what the key proposals in the revised planning framework mean for the housing sector. The NHC’s Patrick Murray attended a roundtable with Housing Minister Matthew Pennycook to feedback members views. Read the briefing here.

Proposed reforms to the National Planning Policy Framework

The NHC was invited to discuss the government’s consultation on reforms to the National Planning Policy Framework (NPPF) with Housing Minister Matthew Pennycook.

NHC Executive Director, Patrick Murray, attended and shared the views of our members on what the changes to planning policies will mean for the North’s housing sector. He also had the opportunity to share our recent research on the opportunities to unlock brownfield land for homes in the North, if the adequate funding is provided.

The discussion was positive, and it was clear to see the ambition in both government and the housing sector to use planning reform alongside much-needed investment to deliver more social housing.

 

In the briefing below NHC Senior Policy Advisor Karen Brown outlines what the key proposals in the revised NPPF mean for members. 

The new Labour Government published a draft of the revised NPPF. The Secretary of State Angela Rayner addressed Parliament to outline the reasons why change is necessary. Key amongst these is the need to increase the supply of new homes to meet the Government’s 1.5m homes target (the equivalent of 300,000 homes per year).

Key points in the NPPF proposals:

  1. Reversal of NPPF changes made in 2023, including:
  • Making the standard method for assessing housing needs mandatory for all local authorities
  • Removing the ‘urban uplift’
  • Strengthening the ‘duty to cooperate’ and cross-boundary strategic planning
  • Restoring the five-year housing land supply requirement and the 5% buffer for housing delivery in local plans
  • Removing the requirement that a minimum of 25% of affordable housing units should be First Homes
  • Replacing ‘beauty’ standards with ‘well-designed development’
  1. Setting out expectations for Local Plans by every local authority
  1. Defining ‘grey belt’ land with ‘golden rules’ such as a 50% requirement for affordable homes. Expectations for brownfield planning approvals will be strengthened.

 

Housing targets

A core change in the draft NPPF includes a new Standard Methodology for calculating Local Housing Need (LHN). Underpinned by the Government’s ambition to deliver 1.5 million homes over the Parliament, this results in an increased target of 370,000 homes per annum across England – up from 300,000 under the current method.

Instead of household projections, the new method uses a stock increase approach – a baseline set at a percentage of existing housing stock levels, driving a level of delivery proportionate to the existing size of areas. The revised method has as its starting point a multiplier of 0.8% of existing housing stock each year, plus a revised affordability adjustment of 0.6% (previously 0.25%). LPAs can still propose a lower figure due to local constraints and conditions e.g. major flood problems.

The proposed revised method for the Northern regions is:

  Current Method Proposed Method Average Annual Net Additions (2020/21-2022/23)
North East 6,123 12,202 8,466
Yorkshire & Humber 18,699 27,433 17,602
North West 21,497 37,817 27,742
England 305,223 371,541 228,871

 

The proposals remove the previous 40% cap on any uplift above the previously adopted local plan housing figure as well as removing the 35% uplift that applied to the 20 largest cities.

Affordable Housing and tenure mix

For affordable housing the requirement will be widened for planning policies to specify the type of affordable housing required, including the minimum proportion of Social Rent homes required. On sites in the Green Belt, for major developments, there is a proposed target of 50% affordable housing with an appropriate proportion being Social Rent, subject to viability.

The proposals remove the requirement that a minimum of 25% of affordable housing units secured through developer contributions should be First Homes.

Land Use and Green Belt

The proposed NPPF attaches great importance to Green Belts.

The consultation seeks to identify a new classification of ‘grey belt’ land within the Green Belt, to be used in the planning system through both plan and decision-making to meet development needs. There are proposed ‘golden rules’ for development on land released in Green Belt – 50% affordable, with appropriate proportion being social rent, but this would be subject a viability test using a new Green Belt benchmark land value. Proposals for compulsory purchase for housing are also outlined.

The proposals re-introduce the requirement for all Local Planning Authorities to undertake a Green Belt Review as part of their Local Plan preparation where housing need cannot otherwise be met.

The proposals establish a sequential test – brownfield sites should be prioritised, and to support release in the right places, first consideration will be given to PDL within in the Green Belt, before moving on to other grey belt sites, and finally to higher performing Green Belt sites where these can be made sustainable.

Government defines grey belt land as, ‘land in the green belt comprising of previously developed land and any other parcels and/or areas of green belt land that make a limited contribution to the five green belt purposes, excluding areas or assets of particular importance.’

The proposals seek to broaden the existing definition of brownfield land, with a strengthened expectation that applications on brownfield land will be approved, with the consultation stating, ‘the default answer to brownfield development should be yes.’

Local Plans

The new NPPF aims for universal plan coverage “as quickly as possible” and “within this Parliament.”

The publication date of the new NPPF (publication date + one month) will trigger the application of new figures, depending upon the stage of a Local Plan adoption – so the new figures will likely be enforced by the end of the year.

There are obligations on plan making authorities to collaborate. The plan making authority is obligated to cooperate and make sure that their plan policies are consistent with those of other bodies, promoting a more strategic approach to planning. The initiating plan making authority will assume responsibility for making an informed decision based on cross-boundary matters.

Fees and cost recovery

The consultation document recognises that local planning authorities will need to be appropriately resourced.

A chapter of the consultation proposes new fee structures for planning services and also options for localisation of planning fees which would require primary legislation to establish.

Next steps

Whilst the Secretary of State was keen to emphasise the need to avoid too much reform there is more to come. Notably the measures in the Planning & Infrastructure Bill, consultation on National Development Management Policies, Right to Buy consultation and the first round of New Towns designations. A long-term housing strategy will be published alongside the Spending Review.

Alongside the NPPF consultation, the Lords Built Environment Select Committee is carrying out an inquiry into the Grey Belt as proposed in the NPPF consultation. This short inquiry will seek to gain a better understanding of what Grey Belt land is, how it can contribute to housing targets and what sustainable Grey Belt development looks like.  The inquiry is open for submissions from anyone with answers to the questions in the call for evidence. Evidence can be submitted until Monday 14 October 2024.

The NHC has responded to the NPPF consultation.  The published response can be found here.

Autumn Budget 2024 Representation

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The Northern Housing Consortium submitted its representation to HM Treasury in the run up to the new government’s first Autumn Budget, set to take place on 30th October.

Our representation focused on how the new government can support the North’s housing sector to deliver on the government’s ambitions. This includes building 1.5 million new homes in this parliament, delivering the Warm Homes Plan and improving housing quality in both the social and private rental sectors, by giving providers long-term funding certainty to plan investment.

The most important thing that we need to see from government, however, is an immediate two-year extension to the current Homes England Affordable Homes Programme (AHP). Our members, especially small and medium members who access Homes England grant through the Continuous Market Engagement (CME) mechanism, report that they can no longer access grant to develop new homes, as the current programme is now essentially out of funds. If providers cannot access grant funding, which their development programmes rely on, they will not be able to bring forward schemes, even if they have been identified and are ready to progress. This cannot wait until a new AHP commences in 2026 as schemes are at risk of falling through between then and now. Without an extension to the current programme, it is likely that affordable housing starts will fall in the near future, taking years to subsequently recover. This will make it much harder for the government to achieve its target of building 1.5 million new homes over the next 5 years.

The major policy asks to support the housing sector in the North are:

  1. A two-year extension to the existing Affordable Homes Programme to keep housing providers developing the homes we need, ahead of announcing a new post-2026 programme that can support regeneration and has the flexibility to work with Mayoral Combined Authorities to deliver on local priorities.
  1. A new ten-year rent settlement of CPI +1% for social landlords so they can effectively plan their investments in new and existing homes.
  1. A long-term funding commitment for the decarbonisation of the North’s social housing stock of £500 million a year between 2025 and 2030, with a commitment to increase funding to minimum of £1 billion per year from 2030-2035. This would cut carbon emissions, tackle fuel poverty and support the creation of up to 77,000 new good green jobs in the North.
  1. A ten-year, £4.2 billion, programme of devolved brownfield funding to unlock the delivery of 320,000 new homes by remediating all identified brownfield land in the North of England. This needs to be based on a more comprehensive assessment of total project benefits in line with updated value-for-money methodology.
  1. The government to consult on both funding and regulation, including a new Decent Homes Standard for both rental sectors, to tackle the challenges with the existing housing stock and the need to regenerate communities across the North. This will also need to include increased capacity funding for local authorities to effectively enforce any regulatory requirements in the private rental sector.
  1. Permanently linking Local Housing Allowance rates to the 30th percentile of local market rents to ensure private rental sector affordability and prevent future rises in homelessness

 

Tracy Harrison, Northern Housing Consortium Chief Executive, said:

“Our budget representation has focused on how the Government can target investment to enable our members to make a real difference to communities across the North. They’re  ready and waiting to support the Government to deliver new homes,  warmer homes and to regenerate communities.

“However, to deliver this change members need funding certainty. A priority is an immediate two-year extension to the existing Affordable Housing Programme. Our members, particularly smaller and medium sized providers developing through Continuous Market Engagement, report that they can no longer access grant to build new affordable homes despite having schemes that are ready to start development, stalling the delivery of much-needed homes. This must be followed by a longer-term Affordable Homes programme which will be a key part of fulfilling the government’s ambition to build £1.5 million homes over the next parliament.

Other measures which will provide members with certainty to develop and invest in homes include a ten-year rent settlement at CPI + 1% and a £4.2 billion ten year brownfield remediation fund. Investing in decarbonising the North’s homes will pay dividends – £500m investment per year over the next five years and 1 billion for the following five years would cut fuel poverty and carbon emissions and help to create 77,000 good green jobs in the North.

“The government should also provide much-needed security to those in the private rented sector on low incomes and permanently link local housing allowance to the 30th percentile of local market rents to prevent future rises in homelessness. The private rented sector has also been consistently shown to offer the lowest quality homes – it is vital that the government takes forward proposals to apply the new Decent Homes Standard to both the social and private rented sector, following effective consultation with the sector. They must also consult on funding and regulation to so we can work together to tackle the challenges with existing homes and the need to regenerate communities in the North.

“We must also recognise there isn’t ‘a one size fit’s all’ solution. If we want funding to address local issues there needs to be devolution where local leaders, including Mayoral Combined Authorities, are given the flexibility to use their funding where it’s going to bring the most benefit – for example, ensuring all areas can benefit from brownfield funding investment, not just those with high land values. We are pleased that the Labour Party was supportive of devolution in their manifesto and our members are already working to make their ambitions a reality.”

The full representation is available here.

Net Zero research launch at Labour Party Conference

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During this year’s Labour Party Conference in Liverpool, we are holding an event on decarbonising the North’s homes, which includes the launch of new Net Zero research from the NHC.

The event is called ‘MEETING THE NET ZERO CHALLENGE: How the new Labour Government can help accelerate green home upgrades in the North’ and will take place on Tuesday 24 September 7.15pm to 8.30pm.

Attendees will hear from those involved in the research and experts in the field about how the North’s social housing sector can support the Government to cut emissions, unlock jobs, and create the homes of the future.

We carried out this new research with housing providers, local government, combined authorities, and contractors, to identify how increasing the energy performance of social housing could be used to accelerate the transition to more energy efficient homes.

The North’s 7 million homes are contributing to climate change – with a quarter of the North’s total emissions coming from its homes. Upgrading the North’s existing homes is vital to meet the country’s net zero targets and unlock a new generation of green jobs. There is now a real opportunity to work with the social housing sector in the North to pump-prime the market for domestic retrofit – boosting supply chains, innovation, and creating around 77,000 green jobs in the North.

Join us as we discuss priorities for the new Labour government and how the social housing sector, local government and elected mayors can kickstart the wider decarbonisation of our nation’s homes.

If you would like to attend, please contact josef.bews@northern-consortium.org.uk