In the ten weeks since the Labour Party won the snap General Election, Deputy Prime Minister Angela Rayner MP and her junior ministers have wasted no time in starting to “Get Britain Building Again”. The Housing Minister, Matthew Pennycook MP, wrote to the BMF about proposals to mandate housing targets and reform planning permission in England. In this article, Brett Amphlett (BMF Policy Manager) describes the main points of announcements by Mr Pennycook and his Secretary of State.

HOUSING TARGETS
The Housing Secretary, Angela Rayner MP, announced that all local authorities in England will be given mandatory housing targets to force the pace of delivery towards 1½ million more homes. These new targets will mean councils must boost new house-building in those districts most in need – and help more local people buy their own home.

The Deputy Prime Minister has written to all council leaders and their chief executives to explain that the existing standard method will be revised – thereby raising the overall total target from around 300,000 to approx. 370,000 a year. Ms Rayner reminded them that there is “not just a professional responsibility, but a moral obligation to see more homes built”, and that she will not hesitate to use her powers of intervention if necessary.

The Ministry of Housing, Communities & Local Government (MHCLG) released a table showing how many more homes each authority should build using this new standard calculation. You can find it here: https://www.gov.uk/government/consultations/proposed-reforms-to-the-national-planning-policy-framework-and-other-changes-to-the-planning-system.

In some districts, this will result in significant increases in the number of new homes required. For North-West England, the target rose from 21,500 to just under 38,000 homes. In Eastern England, the target increased from 35,000 to nearly 45,000.

These announcements have provoked a predictable backlash from disgruntled residents and local protestors in Southern England who fear their town or village will be forced to take many more new homes under these mandatory targets. Inevitably, “The Daily Mail” published a 3-page pull-out-and-keep-guide on how to be a NIMBY in its 17 July edition.

PLANNING PERMISSION
The MHCLG has begun a consultation on reforming the National Planning Policy Framework (NPPF). Ministers seek views on a series of proposals regarding (among others) higher planning fees, criteria to intervene in local plans, and Nationally Significant Infrastructure Projects.

Specific changes the ministers want to make immediately after this consultation include:
making the standard method for assessing housing needs mandatory – with a new way for local councils to calculate the housing needs within their authority to ensure the local plan is sufficiently ambitious & robust;
broadening the existing definition of brownfield land;
identifying ‘grey belt’ land within the Green Belt – i.e. previously-developed land of little or no ecological value;
improving the presumption in favour of sustainable development;
ensuring that councils can prioritise the types of affordable homes needed within their authority.

We are collaborating with other industry partners (notably those on the CLC Housing Work Group) to understand what the proposals mean – and the implications for the customers of merchants. The 84-page consultation is here and it closes in September: https://www.gov.uk/government/consultations/proposed-reforms-to-the-national-planning-policy-framework-and-other-changes-to-the-planning-system.

In August, we conducted a short online survey that pulled out those topics of most relevance to you. For the 10 selected questions, we provided you with options to agree or disagree with the proposals to help us assemble views and shape the BMF response. Thank you to those of you who contributed.

DISCUSSION
Regional Imbalance
If you study the MHCLG table, you will notice many of the new homes will not be built in (for example) Birmingham, Coventry or London, where house prices continue to rise, but in already-affordable areas in northern counties. London’s target has been downgraded by 20,000, Coventry’s has been halved and Birmingham’s cut by over 2,000 homes. Yet London and the South East is where homes are the most desperately needed. Why is this? The answer lies in the formula used to create the targets. Instead of looking at the number of households, the formula will now use a measurement of housing stock.

It is desirable for any government to encourage housebuilding across the country to tackle regional imbalances. The new rules will push up targets in the South East (outside of London) where homes are very much needed. But it makes little sense to have a formula that (by and large) prioritises housing in districts where demand for new homes is comparatively low. This cannot be right and we question the logic behind this.

London
The Deputy Prime decided to cut the annual target for the number of homes to be built by London’s Labour Mayor. This was widely seen to be a ‘political’ decision given that Mr. Khan is struggling to hit his current target.

In the draft NPPF, Ms. Rayner changed the method for calculating housing need – meaning London must plan to build 81,000 homes per year – instead of the previous target of 99,000. It was the only reduction for any region in England. London built 37,000 new homes per year on average between 2020 and 2023, against Sadiq Khan’s own annual target of 52,000. Hitting 81,000 a year equates to the biggest increase of any region. Ms. Rayner admitted it was a “huge ask” but said she had faith in Khan’s ability to meet it.

Some local targets will almost certainly be undeliverable. Because of Rayner’s new method of increasing targets in areas where homes are least affordable, the Royal Borough of Kensington & Chelsea will see its target more than triple from 1,381 homes to 4,271. This is 15 times more new homes than the 267 that the RBKC currently builds each year.

Hope Value
There are fears that landowners who are holding Green Belt land that had no development value before the changes come into force will attempt to cash in. To avoid this, ministers are putting forward changes to compulsory purchase & compensation rules. The aim is to “remove inflated values of land based on the prospect of planning permission” to ensure schemes that are in the public interest can proceed. This is what property professionals call the “hope value”. A farmer can sell agricultural land for (say) £20-25,000 a hectare if used for crops – but with planning permission, that land can be worth £££ millions, depending on location and suitability.

Under proposed rules (which are being consulted on) landowners could be forced to sell at a prescribed price that the MHCLG reckons will provide “fair but not excessive return” for the landowner, as well as “maximising community benefits”.

New Settlements
Sir Michael Lyons and Dame Kate Barker have been appointed by Angela Rayner MP to lead the Government’s New Towns Taskforce. A New Towns Code will dictate the criteria that developers must meet. This includes 40% affordable housing – including “genuinely affordable” social rented homes – with the necessary infrastructure and public services.

Lyons and Barker will work with metro-mayors and local authority leaders to advise ministers on “the right places for new towns, listening to those who know their areas best”. Within the next 12 months, this Taskforce will recommend locations for these new settlements. They may comprise at least 10,000 homes, although the MHCLG expects some of them to be larger than that.

CONCLUSION
The magnitude of the Labour Party’s election win brings with it a determined political push to get on with building more new homes. Some of their proposals require new laws to be passed – others (as above) have to be formally consulted upon – and will therefore take some months to finalise and introduce.

Recently-elected first-time Labour MPs face a tricky dilemma: (a) loyally support their Party leadership or (b) take up cudgels on behalf of their constituents who will doubtless start organising petitions to resist housing projects they do not like. There are difficult days ahead as ministers want to complete this consultation and take policy decisions before Christmas 2024. Watch this space.