Published on 14 July 2023, the report on proposed national planning policy reforms also agrees with Propertymark’s concerns that the plans left too much room for local authorities to undercut their housing targets and gave little reassurance that the right number of new homes across all tenures will be delivered.
Availability and affordability due to supply issues
Propertymark is pleased to see the committee acknowledge that the affordability crisis in the PRS is a direct result of the failure of successive governments to build enough homes. We are also largely concerned with the historic and ongoing housing supply issues that England has struggled with for decades. In 2020, it was estimated that over 1.6 million households needed social housing and we have seen demand for rental properties continue to rise with a 57% increase in demand since 2018.
We have often stated that undersupply is and continues to be one of the key underlying issues facing the sector today. The UK Government must stick to its commitment to address the undersupply of housing.
The historic levels of undersupply of homes, exacerbated by empty homes and unused brownfield land, all contribute to people having less choice in where they want to live. While there are several other factors impacting the number of homes that are built every year, we want to see reforms to the planning system that increase the supply of homes across all tenures.
In a speech on 24 July 2023, Secretary of State for Levelling Up, Housing and Communities, Michael Gove MP, tacitly acknowledged the issues and announced plans to target homebuilding in cities, promoting urban regeneration. Ambitious plans for Cambridge, plus inner-city London and central Leeds, have been clearly set out as well as landmark investments in Greater Manchester and the West Midlands.
Upskill and fund local authorities
58% of all councils, and 83% of county councils, who responded to a Local Government Association survey in May 2022 reported difficulties in recruiting planning officers. A shocking 74% of planners working for local authorities said they felt overstretched.
Local authorities are tasked with implementing the majority of the Government’s planning reforms, so the level of under-resourcing is of significant concern. The evidence gathered by the report shows a clear need for more resources and specialist skills for local planning authorities to be effective.
It will reassure many to hear Gove’s announcement of a new £42 million Planning Skills Delivery Fund designed to plug skills gaps and clear bottlenecks in the planning system, as well as the intention to increase planning fees for developers, further boosting resources for planning departments.
For local authorities to meet their housing need, Propertymark called for assessments of short-term lets in tourism hotspots, analysis of the percentage of homes that are affordable in comparison to the average income of a given region to ensure that sufficient properties are available for homeowners and additional funding to boost homes in some parts of England to ensure the UK Government meets their levelling up agenda.
1 million homes waiting to be built
The Department’s statistics show that the UK Government is currently falling short of delivering its target of 300,000 new homes per year by the mid-2020s.
In 2021/2022, the annual housing supply in England amounted to 232,820 net additional dwellings. Recent statistics from the Department show the number of new homes granted planning permission in England declined to 269,000 homes in the year to March 2023—down 11% on the year to March 2022.
In 2021, analysis by the Local Government Association found that 2,782,300 homes had been granted planning permission by councils since 2010/11 but over the same period only 1,627,730 had been built, meaning 1.1 million homes with planning permission had not been built.
Local plans should remain mandatory
Currently, local authorities must demonstrate a five-year housing land supply and are expected to meet local housing targets. The UK Government is proposing to remove the requirement for local authorities with an up-to-date local plan to continually demonstrate a five-year housing land supply, and to make local housing targets advisory.
The committee stated that it is difficult to see how the UK Government will achieve its 300,000 net national housing targets by the mid-2020s if local targets are only advisory. The UK Government has not provided sufficient evidence to demonstrate how the policy of removing mandatory local housing targets will directly lead to more housebuilding.
Propertymark strongly supports retaining the requirement for five-year supply plans and mandatory targets.
Reforms would further reduce planning permission
The number of units granted planning permission has fallen since 2019 and the evidence points to the reforms pushing this number still lower.
The committee highlights research into the impact of the proposed changes to the National Planning Policy Framework which concludes they are likely to reduce the number of houses built by 77,000 per year – largely because obligations to plan and deliver new homes are diluted or removed and there is increased resistance to the building at densities significantly out of character with the existing area.
The Green Belt must not block housing targets
The Green Belt does not have to be altered in most circumstances, but local authorities should continue to review Green Belt boundaries as part of their planning process. Propertymark stated that clear guidance must be issued detailing instances it should be altered, in particular when it is the only way to meet housing targets.
