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Wilson Wraight Planning – Autumn Update

While the debate about the forthcoming Planning Bill rumbles on, a number of potentially radical alterations to the planning system have been introduced. Among these are the merging of many traditional town centre use classes into the single use class E, and the expansion of permitted development to cover conversions from class E to residential, upwards extensions and demolitions to create new housing.


The government’s policy allowing homes to be built on sites not allocated in a local plan under its new First Homes initiative, is arguably another radical alteration. Detailed in a written ministerial statement and explained further in planning practice guidance and the government’s response to its First Homes consultation, the policy has potentially significant repercussions.


First Homes are new build properties to be sold at a discount of at least 30 per cent to first-time buyers, the majority of which the government expects to be delivered via the planning obligations that developers undertake to mitigate the impacts of their schemes. The policy was brought into force at the end of June as a replacement to the previous ‘entry-level’ exception sites policy and offers a route to permission where sites have failed to gain support in the local plan. Unlike the entry-level exception sites policy, there is no upper limit to their size, and First Homes schemes can even include some market housing to assist viability.


According to housing minister Christopher Pincher’s May 24 2021 written ministerial statement, the First Homes exception site policy is designed to “maximise the number of First Homes made available to those keen to get on the housing ladder”, allowing a route to approval for unallocated sites. It replaces the previous policy intended to allow exception sites for discounted market housing for first-time buyers or renters, known as the ‘entry-level’ exception site policy. However, it does not replace the policy allowing for rural exception sites, which provide affordable rented housing in rural areas for people with local connections.


This policy could represent a significant opportunity, and unsurprisingly, a number of land promoters and developers have registered interest in the scheme, while some planning authorities and countryside campaigners have expressed concern it could result in unsustainable large developments.


However, many traditional housebuilders are likely to be put off by the fact the vast majority of homes on First Homes exception sites would have to be sold at a not insignificant discount.


Unfortunately, the main obstacle to the policy’s success is currently national policy as the exception sites element of it was directly contradicted in the July update to the National Planning Policy Framework (NPPF) even though it was published after the First Homes policy. This contained no reference to First Homes, instead referring not only to the previous “entry-level” exception sites policy that the First Homes policy is supposed to replace, but also omitting reference to the development size limits being abolished.


Further amendments to the NPPF are intended to resolve this contradiction in due course, but for the moment it remains unclear what an inspector would make of an appeal based on the ministerial statement.


A further stumbling block is the current lack of local policies to make clear how First Homes will be implemented by individual planning authorities. This is important, because the national First Homes policy gives councils significant leeway, allowing them (given appropriate evidence) to set larger minimum discounts than 30 per cent, introduce additional local eligibility criteria, control the amount of market housing permitted on such sites, and set rules on the size of exception site that is considered ‘proportionate’. These are all crucial points for potential applicants to understand when deciding whether to proceed with applications or whether to take land under Option on the basis of a viable strategy to progress such a scheme. At the moment you would have to work in a policy vacuum which is undesirable for landowners and promoters due to the inability to quantify risk.


As a consequence of this uncertainty, it is unlikely that there will be significant interest from mainstream developers at present, although this may be a more attractive proposition for affordable housing providers who are likely to encounter less competition in the marketplace for suitable sites.


For further information on this and to discuss any related planning matters please contact our Head of Planning Dan Hewett