New planning framework provides stronger platform for development and growth

Real Estate:UK (RE:UK), the organisation that represents the £950bn commercial property sector, has welcomed the new National Planning Policy Framework (NPPF) as a broadly supportive step towards a clearer, more delivery-focused planning system.

The final framework reflects a number of priorities raised by the organisation during consultation, making important changes as well as providing clarity in a number of areas. Inevitably, there are also a number of areas where further progress is needed. Real Estate:UK will continue to engage constructively with Government to ensure the priorities of its members are heard.  

Danny Pinder, Director of Policy, Real Estate:UK, said: “The new NPPF is a welcome and constructive step towards a planning system that supports development, investment and economic growth. We are particularly pleased that the Government has listened to concerns about proposed changes to viability and retained the flexibility necessary to accommodate large scale, complex and uncertain multi-year developments.

“The clearer framework for strategic sites, changes to Spatial Development Strategy timeframes, stronger recognition of employment and logistics uses, and more nuanced approach to housing tenure and density will all help create the conditions to deliver homes, workplaces and infrastructure together.

“At the same time, there are areas where the changes fall short and we will be continuing conversations with Government. Equally, and with Autumn Budget nearing, the Government mustn’t lose sight of the fact that planning reform alone will not fix viability challenges facing the sector. To unlock delivery, the Government must take serious stock of the accumulation of tax and regulatory changes crippling delivery, and take meaningful steps to address these pressures and support delivery at the Autumn Budget.”

Local Plan Making

While we supported the principle of reducing scheme-specific viability assessments where these were not necessary, we urged the government to avoid seeking spurious accuracy on elements of a development not known up front when evaluating viability and developer contributions at plan-making stage, arguing that viability circumstances can change.

We are pleased that the government has reflected these concerns in its final framework, explicitly recognising that sufficient flexibility is needed at application stage and that site-specific viability assessments may still be justified in specific circumstances outlined in the policy document. This should help councils set ambitious but realistic policies, while allowing developments to respond to changing costs, infrastructure needs and market conditions.

Strategic Planning

The new definition of a strategic site - with around 1,500 homes as a guide - gives much-needed clarity for large, long-term developments.

The framework also finds a better balance between agreeing the main requirements at the outset and allowing masterplans, housing tenures and later phases to change as a scheme is built out. Clearer links between long-term spatial strategies and Local Plans should give investors and infrastructure providers more confidence.

Spatial Development Strategies

Real Estate:UK particularly welcomes the strengthened approach to Spatial Development Strategies (SDS) which reflects a number of its longstanding priorities. The extension of the SDS planning horizon to 25 years provides greater long-term certainty for planning, infrastructure delivery and investment, as does the move to a reduced frequency of reviews where there are no material changes to a site, rather than mandated 5-yearly reproduction.

While further detail will be required to resolve outstanding questions around the distribution of housing and employment land and the treatment of Local Plans that conflict with newly adopted SDS, the NPPF provides clarity on the distinctions and responsibility between SDS and Local Plans that will be helpful to many in the sector. 

Delivering more homes

We support the intensification on brownfield sites around stations, where there is a major opportunity for Build to Rent in particular to deliver high-quality homes at density and at scale, throughout the market cycle.

Removing the proposed fixed 150-home threshold for mixed-tenure requirements is a welcome acknowledgment that tenure mixes must be appropriate, deliverable and based on local needs and market conditions. However, we note the removal of Build-to-Rent (BTR) as an explicit requirement in any mixed tenure policy and would urge the government to recognise the essential role that the BTR sector can play in meeting the government’s target of 1.5 million new homes.

We would have liked to see the Government go further by requiring housing needs assessments to consider various tenures explicitly, ensuring that identified housing need reflects the range of tenures required within communities. While it is positive that affordable housing is recognised within housing need, assessments should also capture the need for different forms of rented housing, including Build to Rent and other intermediate and market rental tenures such as student accommodation and senior living, to provide a more complete picture of local housing requirements.

While the NPPF’s reduction in national density requirements from 40/50 to 35/45 dwellings per hectare in well-connected locations provides greater flexibility for bringing forward large-scale schemes, we remain concerned that nationally prescribed density requirements may prove overly rigid. Density should be determined with regard to local market conditions, the character of the area, infrastructure capacity and the viability of different development types, particularly in lower-value markets where higher-density development may not be commercially deliverable.

Real Estate:UK understands the Government’s concerns around ensuring that affordable housing contributions translate into affordable homes on the ground. However, we are disappointed with the decision to move away from providing greater flexibility for medium-sized developments through allowing payments in lieu of on-site affordable housing delivery. This decision overlooks the practical challenges of securing Registered Provider ownership and management of small clusters of affordable homes, particularly in rural areas where schemes may not provide the economies of scale needed for efficient delivery. Greater flexibility could help overcome these barriers and ensure that affordable housing contributions translate into delivery more effectively.

Supporting high streets

We are supportive of the retention of the sequential test to protect local high streets and we welcome the removal of wording that could have forced developers to split a retail proposal across several sites simply to meet the town-centre sequential test. Greater flexibility on parking standards for large retail and similar regeneration schemes should also make it easier to invest in high streets and town centres.

At the same time, the new 12-month protection for pubs against a change of use though well-intentioned, fails to address the main reason many pubs close: unsustainable operating costs. Preventing a new use from coming forward could leave empty pubs unused for longer, increasing the risk that they fall into disrepair and blight the high streets the policy is meant to protect.

Employment uses and supporting supply chains

The new framework gives greater recognition to the need to plan for employment and logistics space alongside housing and other development, including by allowing SDS to address employment, economic growth and infrastructure. This is essential to support modern supply chains, including last-mile deliveries, and to ensure that new and growing communities have the infrastructure and services they need.

The requirement for employment-land decisions to reflect current market signals and the changing needs of different sectors is also positive, recognising that assessments should not rely solely on historic take-up figures, which can fail to capture changes in supply chains and may be distorted by the long-term undersupply of space in key markets.

However, there remains more to do to ensure employment land is given sufficient strategic weight alongside housing and to provide greater clarity on how employment need should be assessed.

Additionally, while the framework’s new logistics provisions are a welcome step, further clarity is needed on the definition of freight and logistics and on how location and transport policies should support strategically important transport hubs, including those located further away from urban settlements. We hope that further clarity on both these points will be addressed in the forthcoming guidance on practical implementation.

Sustainability

We are disappointed that the Government will not proceed with plans to limit local energy-efficiency standards, and continue to believe that greater consistency between local standards would reduce delays and costs and make the planning process simpler.

However, we welcome the stronger emphasis on tackling climate change as a central part of plan-making, alongside measures that encourage a more proactive approach to both mitigation and adaptation. In light of recent events, we wholeheartedly support the inclusion of wildfire risk in national planning policy.