© pxl.store / Adobe Stock
Following on from the Housing Secretary’s new housing and development proposals, announced on Tuesday, we have compiled the UK Construction Industry’s response. This article may be updated as more responses come in.
RTPI
RTPI voices concerns over housing and development proposals announced by Housing Secretary
The Royal Town Planning Institute (RTPI) has raised concerns over the recent housing and development proposals announced by the Housing Secretary.
The institute has expressed reservations about the proposed updated planning rules for brownfield sites and the changes to Permitted Development Rights (PDR).
Responding to the announcements, Chief Executive of the RTPI Victoria Hills said, “While we have always welcomed the emphasis of development on brownfield, the minor adjustments to England’s planning system made today will not support the system at large to tackle the challenge of increasing housing supply. We need a long-term solution, including resourcing.”
In response to changes to Permitted Development Rights:
“Permitted Development Rights have had mixed results so far. As highlighted in RTPI’s written evidence submitted to the Parliament, many homes created through these routes are of poor quality and have little access to essential amenities like schools, GPs, and playgrounds. This issue is not limited to office blocks, as some of the worst living environments created this way have been on industrial sites.”
In response to changes to developments on brownfield sites:
“In our response to the NPPF consultation last year, we made the case for statistically calculated, evidence-based assessments for new housing numbers. We will provide a more comprehensive consideration of this point in our consultation response.
“Moving forward, any plans to build on brownfield sites will require a consideration of job opportunities and the proximity of essential amenities, including access to sustainable transport. As our Location of Development research shows, planning oversight is essential, even if this includes rejecting unsuitable developments.”
The RTPI will begin scrutinising the details of these proposals before issuing a full response.
NFB
Government seeks to shift new homes from greenbelt to brownfield
The Government consultation ‘Strengthening planning policy for brownfield development’ seen to implement a ‘presumption in favour of brownfield’ to ensure more brownfield land is used for housing, rather than expanding onto the greenbelt or outside of communities.
Richard Beresford, chief executive of the National Federation of Builders (NFB), said:
“There isn’t enough brownfield land to get close to solving the housing crisis and whilst this policy is welcomed as a concept, if it exists to avoid the political backlash from building on the greenbelt, we should expect the housing crisis to endure.”
The consultation seeks to:
- Implement brownfield presumptions through the penalty policies in the housing delivery test.
- Ensure cities and urban areas take the majority housing supply uplifts.
- Place increased accountability on the London Mayor for under-delivery.
- Give greater weight to brownfield land in local planning policy.
Rico Wojtulewicz, Head of Policy, and Market Insight, said:
“Brownfield is land allocated for non-residential development, if you get rid of it for housing, where do you put the extra GP surgeries, jobs, shops, services etc.to support even higher local populations? Well, you either build them on the greenbelt, outside of communities or not at all.
If the Government wants to make ‘brownfield first’ a decent solution, it needs to demolish sites and rebuild them more densely, eg:10+ storeys. This will mean developments can provide housing and non-housing needs. If it does not do this, we still will not build enough houses, as there is not enough brownfield as it is, and ‘brownfield first’ will produce worse places to live.”
FMB
Development plans must look beyond big cities, says FMB
The Housing Secretary’s proposals to reform planning rules to increase building on brownfield land, and to place further requirements on local councils who are failing to build enough new homes, are positive steps – but they must look beyond just cities to solve the housing crisis, says the Federation of Master Builders (FMB).
Brian Berry, Chief Executive of the Federation of Master Builders commented; “House building rates have fallen flat, and urgent action will be necessary in order to deliver the volume of homes that Britain needs. I welcome the Government’s proposals to make it easier for permission to be granted for building on brownfield sites, and the planned requirements for local councils to be less bureaucratic in preventing house building. But we must take these ambitions beyond the big cities.”
Berry Continued; “Small house builders must be at the heart of these plans, not just major developers. Brownfield sites are the mainstay sites of small builders, helping to rejuvenate run-down sites back into high quality housing. But we must also look beyond big cities and at the type of homes being delivered. There is a lack of affordable housing in the countryside, where small house builders once thrived. There are a wealth of brownfield sites outside of our major cities, but they are often overlooked in local plans, this must be addressed”.
Nacropolis Group
Ravi Pankhania, Founder and Managing Director of Nacropolis Group comments: “The Government’s plan announced today to boost brownfield homebuilding in England is a good start in addressing the demand for more housing. Through a comprehensive review of land, areas can be identified that could be repurposed for thoughtful development while ensuring the preservation of essential ecological functions. For example, a sizeable amount of the greenbelt is actually brownfield land with little to no environmental value.
Developing these areas together with promoting building more densely in urban areas, Britain’s pressing need for more homes can begin to be properly addressed. This involves encouraging the construction of taller buildings, promoting mixed-use zoning to reduce urban sprawl, and revitalising underutilised urban spaces. By focusing on infill development and redevelopment projects, cities can make more efficient use of existing infrastructure and amenities while preserving green spaces outside urban boundaries.
Such a holistic approach that balances the need for development with environmental conservation and community well-being is essential in addressing the challenges of urbanisation and land use in England.”
ASK Partners
As Michael Gove looks to relax property planning laws, focus shouldn’t just be on new builds. By Daniel Austin, CEO and co-founder at ASK Partners
The UK has a widely reported and growing housing shortfall as a result of under building since the 1950s. A broken planning system and local objections have been blamed and aside from the human cost, this has become a major economic problem. It is very hard to increase growth without being able to provide homes, and the associated infrastructure, for workers in high growth sectors such as life sciences, pharma and tech. We have recently seen a number of planning decisions referred to the Secretary of State which can delay the delivery of schemes by years and create such uncertainty that developers are reluctant to take the risk. With an election on the immediate horizon both political parties are making promises to fix the planning system, but with political agendas becoming ever more populist, the question is whether either party can come up with plans that will genuinely accelerate growth without losing them votes; which is the exact reason why central and local government should not be involved in the planning process at all as they cannot be impartial in controversial decisions which have a major impact on their electorate.
An often overlooked and relatively new aspect of the potential for housebuilding growth in the UK is adaptive reuse. This process, which involves repurposing existing structures for new functions has become a popular development strategy since the Covid pandemic, with developers actively seeking out those assets which will benefit from being re-positioned to take advantage of the shift in occupier demand, such as office to residential conversions. These projects are easier to obtain financing for as loans can be secured against a fixed asset rather than a piece of land. Construction risks are reduced and critically in an inflationary environment, costs are also lower. It is also a more sustainable approach, emitting less carbon than demolition or ground up development. Crucially, it can skirt planning hurdles altogether. In some cases, conversions can be carried out under permitted development rules. One such example is an office building in Solihull which was converted into 181 apartments under permitted development and with minimal changes to the core structure of the main buildings. The project was completed on time and on budget given the lower construction risks.
Permitted development projects are not always possible but where full planning permission is required, conversions of existing buildings are far less likely to receive local objections. Locals tend to be in favour of breathing new life into unattractive disused buildings and boarded up shops to bring back a vibrancy to the local area and economy. An example in this case is the Z Hotels group, which has acquired a number of central London sites for conversion into its now well-known compact luxury hotels. ASK recently financed the acquisition of a vacant office block in Leicester Square which the group now has planning to convert into a further hotel in its portfolio.
Furthermore, research carried out by the homeless charity, Crisis, found that there are currently 250,000 homes sitting empty and in disrepair in the UK. Not repurposing them is clearly a missed opportunity to provide genuinely affordable housing for those in need and proof that it’s not all about new builds; it just requires a change of mindset. The repurposing approach also unlocks development opportunities for small and medium sized (SME) developers.
As a specialist real estate debt provider, these are the kind of creative property developers we want to support and who can contribute to creating a resilient, sustainable, and vibrant real estate sector that aligns with the diverse needs of communities and the ever-evolving landscape of the UK. As such, we offer bespoke lending solutions, in many cases at the pre-planning stage, based on our flexible underwriting process which enables us to evaluate projects factoring in location, underlying land value and potential. So, whilst the planning system remains a huge hurdle in the UK, there are huge numbers of existing buildings ripe for refurbishment and conversion which just require creative strategies that align with the changing demand for the built environment to help them become the much-needed homes we require, and in a less controversial and more sustainable way.
Cornerstone Tax
David Hannah, Group Chairman of Cornerstone Tax, whilst welcoming the government’s shift in priorities, urges the Levelling Up Department to pursue more than ‘piecemeal tinkering’
Tuesday saw the Levelling Up Secretary Michael Gove outline a host of new policies intended to boost the UK’s struggling housing supply amidst political pressure ahead of the upcoming General Election. The package of measures aims to shake-up the current process for planning permission, making it easier for developers to build on derelict – brownfield – sites across England’s 20 biggest towns and cities. Ministers are currently hoping that the new policies will lead to an extra 11,500 homes being built in London alone, with nationwide estimates yet to be shared. According to David Hannah, Group Chairman of Cornerstone Tax, the UK’s leading property tax advisory, welcomes the government’s shift in priorities, but argues that the proposed package is “too little too late”.
The government’s proposed “brownfield-first approach” will prioritise new developments on sites such as old car parks and former industrial estates, with the announcement aiming to “turbocharge” planning in towns and cities that fail to hit 95% of their housebuilding targets. Despite this, experts from across both property and construction sectors have criticised the new rules as inadequate, failing to make up for previous policies that have caused significant damage to construction volumes, such as Rishi Sunak’s decision to scrap compulsory housebuilding targets in late 2022.
According to David Hannah, the move amounts to “piecemeal tinkering” from a government that’s continuously neglected to resolve the fundamental challenges of the UK’s housing market. The abolition of housing targets and the Sunak’s concession on his pledge to build 300,000 new homes by the mid-2020s proves that the Conservatives are struggling to decide where their priorities lie. Hannah asserts that the government should focus on reforming the private rental sector, resolving the obstacles that prevent new landlords from entering the market and continue to contribute to the current affordability crisis across the UK’s cities.
David Hannah, Group Chairman of Cornerstone Tax, comments:
“Tuesday’s announcement from the Levelling Up Department amounts to desperate political tinkering from a government that’s long-neglected the ongoing housing crisis.
Gove must prioritise whether “houses” or “homes” are more important to the voting public, the current crisis in the rental sector continues to put many would-be buyers off of making that first big purchase – this can be demonstrated across the country, where an increasing number of landlords have left the market in response to the rising costs associated with their property.
This crisis could be eased by removing the second home surcharge from bona fide private rental sector investors giving them a reduction in their acquisition costs and also reinstating full relief for mortgage interest payments in common with other businesses that have to borrow money to provide their services.
This double measure would have both reduced the costs of purchase, whilst allowing landlords to freeze, or even potentially cut, rents which have had to have both these penal measures “costed in” over the last few years. It would also stimulate purchases in the market at a time when owner occupiers are unable to purchase because of affordability issues.”
