Has Localism Failed? Osborne Gets Tough on Local Planning Authorities

By: Lucent Group   02/22/2016
Keywords: Land Management, House Rentals, House Rental

The post-election proposals from the Conservative Government seem to buck the trend of the 2011 Localism Act. Local councils need to move faster.

David Cameron announced in September 2015 that planning permission would be streamlined with preapprovals for selling off publicly owned lands to housing developers. While a marked departure from standard planning processes, it should come as little surprise to those in the business of housebuilding. It appears the Conservative government is losing its patience with local councils.

“Is it not time to cut out the middleman?,” Cameron asked in a keynote speech covered by InsideHousing.co.uk “Should government not just contract out development on this land and get building on it straight away?”

This is just one sign among many that central Government is growing impatient with local planning authorities (LPAs) and their respective councils over a collective failure to provide for sufficient house building. The country has a critical shortage of homes, building under 140,000 residential units (flats, terraced, detached, etc.) per year when something closer to 250,000 homes each year for the next decade are needed to bring supply into balance with demand.

Investors engaged with property fund managers know the challenges of getting use permission. In their quest to turn unused land into housing, the LPAs have to be assured the new development will not place undue burden on the existing community infrastructure, or that the developers will provide necessary funding (through Section 106 payments or Community Investment Levies) to cover that concern.

Local councils have been asked under the requirements of the National Planning Policy Framework to produce five-year plans, projecting where and how new homes can and should be built in their communities. About half have complied as of mid-2015. The remainder, in addition to being out of compliance, then are subject to the interests of developers with no sense of a master strategy.

Cameron’s Chancellor, George Osborne, has proposed from London several additional changes to the planning system that further undermines the idea of localism. Chief among them is how the Government should intervene to draft local plans when the local authorities fail to do so themselves. Other changes include:

• Penalties to local authorities who make 50 per cent or fewer planning decisions on time.

• No planning approval necessary within a new “zonal” system that applies to suitable (residential-worthy) brownfield sites. Additionally, mayors of London and Manchester are granted stronger compulsory purchase powers to bring forward more brownfield land for development.

• Major infrastructure projects that include elements of housing will be fast-tracked through the Nationally Significant Infrastructure regime (not required to go through full democratic consultation).

• Residential property owners in London are allowed to add up to two storeys to their structures to accommodate additional homes (one restriction is that the addition not be taller than an adjoining neighbour).

This should provide encouragement to private financiers engaged in alternative investments. The lure of the high demand for housing is increasingly attractive as an investment, however some who are new to real property find the planning approval process to be off-putting. With streamlined systems in place and becoming less bureaucratic, such worries are diminished.

Investing in housing or other forms of real estate, land, property - and market-traded equities relating to these - comes with nuance and complexity. Individuals are advised to discuss it with an independent financial advisor.

Keywords: House Rental, House Rentals, Land Investment, Land Management, Property Rental, Real Estate Rental

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