A boost for housebuilders in London?

The Government and Mayor of London have announced measures to support housebuilding in the Capital.

These measures are subject to live consultation starting in November and running for six weeks.  We anticipate them being in place by the end of the year.

The proposed measures centre on:

• CIL Relief to reduce Borough CIL contributions by 50% (note does not include Mayoral CIL) – time limited to schemes commencing by 31 December 2028.  To qualify, schemes will need to achieve 20% affordable, 60% of which must be Social Rent.  Build to Rent is also eligible but Green Belt schemes or any Student Accommodation and Co-Living schemes cannot benefit from the CIL relief.
• Amending London Design Guidance to encourage higher density developments.
• A new 20% Affordable Housing route without requiring Financial Viability Assessments (FVA) – time limited to schemes achieving planning permission by 31 March 2028 and an achieving a fixed delivery milestone by end March 2030 beyond which deadline a gain-share review mechanism will be applied.  Notably public sector, industrial and utilities land will be subject to a 35% route (currently 50%), and Student Accommodation and Co-Living will not be eligible for the 20% route.
• A new City Hall Developer Investment Fund to help fund of £322m as grant investment.
• Additional powers to the Mayor to take control of 50+ home planning determinations from Local Planning Authorities AND new call-in powers relating to development proposed in London’s Green Belt or Metropolitan Open Land.

More detail on the above is set out in the Government announcement see: https://www.gov.uk/government/news/new-measures-announced-to-ramp-up-housebuilding-in-london

Planning Insight sees the key opportunities for landowners and developers as being:

• Enhanced viability for both stalled (i.e. consented) and new residential applications benefiting from a new 20% affordable threshold and 50% Borough CIL relief.
• Opportunities to progress co-location industrial and residential developments at 35% affordable instead of 50%.
• A reduced requirement for affordable housing on public sector and utilities land – down from 50% to 35%.
• Potential to reduce or remove expensive basements from consented and proposed schemes via the removal of onerous cycle storage requirements.
• Improved residential configurations and additional homes within schemes resulting from relaxations on dual aspect and units per core design restrictions.
• Option for the Mayor/GLA to take control of Applications for 50+ homes where the Local Planning Authority is opposed to the proposals.
• Similar to the above, the Mayor would be able to call in and determine proposals for development in the Green Belt or on Metropolitan Open Land.

Clearly this will help new or emerging planning proposals which can incorporate these approaches from the outset but there is also opportunity to amend consented ‘stalled’ schemes.

Will this be successful?

The design revisions are sensible steps to help deliver more homes where remaining design policies should still ensure a high quality in residential accommodation.

Smart planning strategies will be necessary to unlock both new schemes and to amend consented or emerging schemes wishing to take advantage of the proposed provisions and to avoid pitfalls.

Student and Co-Living operators will be disappointed they have been excluded from CIL and Affordable revisions but the housebuilders have been struggling to compete on land / development values with these models which has clearly influence Government thinking.

Many are arguing that the 20% affordable level is still unviable for residential developments in London but the Mayor and Labour Government were never likely to step back further from key manifesto pledges to deliver more affordable housing.   This sets a bar from which less viable schemes can still seek to negotiate affordable provision via FVA.

We do wonder whether the GLA Planning Team has the resource capacity to deal with a significant influx of referral schemes.

It is also likely that many consultation responses will focus on the short qualifying timeframe to securing planning under these new regulations and we would hope the Mayor and Government will reflect on the timescales.

Could the Government be doing more? 

More is coming via the Planning and Infrastructure Bill later this year and NPPF revisions and secondary legislation is mooted which will further seek to speed up and derisk the planning process.

We would like to see some of more deregulation for SME developers and on sites of less than 10 units and up to 50 units.  In particular, S106 delays and expensive requirements including BNG are preventing these schemes from progressing to Planning far less starting on site.

Do get in touch if you would like to discuss the above considerations and your project requirements with Planning Insight.   Our Team has excellent experience in progressing new applications but also in the niggly amendments and project variations which will be required to unlock stalled schemes utilising the proposed new measures.