With the holiday season having drawn to a close, the housing industry is clearly destined for a busy autumn. Government consultations and announcements on PGS and PPS3 will most likely dominate the agenda in the final quarter. As you know, we have clearly communicated our views to Government and Opposition, including the new ministerial line-up in the DCLG.
POLITICAL CONTACTS
HBF met Ruth Kelly, the new Secretary of State for Communities and Local Government, on 11 July. This was a useful first meeting at which we covered our views and policy work on the proposed Planning-gain Supplement, PPS3 and affordable housing policy, as well as pressing our concerns about the Thames Basin Heaths SPA problem and the need for proper assessment of the market impact of HIPs.
On 17 August we were invited to attend the Conservative Party’s seminar on assisting first-time buyers. Chaired by Michael Gove and addressed by David Cameron, they both accepted the need to build more homes. David Cameron called for a “planning revolution”, including more local incentives and community involvement to help deliver an increase in supply, and emphasised enabling people to meet aspirations for home ownership. Given the “back garden” campaign, it was encouraging to see our wider messages getting through.
HBF INITIATIVES
DCLG Housing Supply Review Group
This senior Group has taken over the study of 20 southern local planning authorities (LPAs) from the Prime Minister’s Delivery Unit. Yvette Cooper will hold two workshops for representatives from these LPAs, homebuilders and other key stakeholders on 18 and 26 October. Removal of barriers to housing delivery and examples of innovative working or good practice is the objective. HBF has been assisting DCLG in identifying homebuilders operating in these areas.
We are also undertaking a major new data collection exercise in response to discussions at the Review Group. We have issued a Planning Timeline pro forma to all members of the Major Home Builders and Metropole Groups. Evidence will be presented to the DCLG in October about time taken to grant planning permission at various stages in the planning process for DCLG policy to address. HBF hopes the Timeline will become an ongoing survey, generating regular performance statistics.
Planning-gain Supplement (PGS)
Press reports that PGS had been dropped were strongly rejected by the Government in private and public. A further consultation will be published with the Pre-Budget Report in November/December. HBF’s working group (chaired by Roger Lewis) is considering a workable solution, on the assumption the Treasury will introduce some form of levy. We are discussing valuation and Red Book guidance with the RICS.
HBF is organizing a meeting with Treasury, Revenue and Customs, Valuation Office and DCLG officials to discuss the Working Group’s preliminary ideas and try to clarify Treasury thinking. The findings of a PGS study by Knight Frank, jointly sponsored by the HBF, RICS, BPF and CBI will be launched on 19 September. A number of HBF members have supplied case studies for the research.
Affordable housing
Paul Pedley is chairing the expert Affordable Housing Policy Group (AHPG) set up at the request of the HBF Board. Four meetings are planned for September-November, leading to a report in November. It will put the issue in its wider policy context and seek a policy solution which meets both Government and industry objectives.
S106 agreements
A Sheffield University S106 study for the DCLG concluding that only 40% of residential planning permissions over ten units had S106 agreements in 2003/4 has been quoted by Ministers justifying calls for increased planning obligations contributions, particularly affordable housing. HBF has raised major concerns about the research with the Sheffield academics and DCLG officials which have been accepted. In response to a call for member evidence, 14 companies, accounting for approximately 50,000 annual completions, reported an average 74% of planning permissions in 2005 had a S106 agreement. With one relatively small exception, company shares ranged from around 50% to 100%. We will continue to press these points and our evidence with Government.
INDUSTRY ISSUES
Home Information Packs (HIPs)
The dropping of mandatory Home Condition Reports in July has strengthened HBF’s case for a proper market assessment of HIPs, as communicated to Ruth Kelly. The situation is now somewhat confused, with the Association of Home Information Pack Providers (AHIPP) rolling out regional packs in November, followed by as yet unspecified Government trials. We will continue to call for a practical approach recognising market impact issues.
Thames Basin Heaths SPA
Our attention is increasingly focusing on the evidence base for English Nature’s proposed delivery plan and its assessment as part of the Examination in Public of the draft South East England Regional Spatial Strategy starting this autumn. The presentation of our own commissioned research on the impact of development and means of mitigating this where necessary will be a key part of this process. Seven days will be given to the technical assessment of the evidence base relating to the SPA as part of the EIP.
Customer satisfaction (Barker Recommendation 32)
We are considering extending the Survey beyond the current 22 participants. To date, 57 companies have confirmed their support for HBF’s voluntary Customer Service Code of Conduct.
HBF has resumed work on core model contract terms after the OFT declined to agree to our alternative suggestion, a Statement of Principles. We will be meeting the OFT in October to discuss progress with Recommendation 32.
House building record
There were just under 192,000 housing completions in Great Britain in 2005, according to latest provisional DCLG estimates, 2% higher than in 2004 and the highest annual total since 1990.
Private enterprise completed 169,000 dwellings, 88% of the total, a 1% rise on 2004, and the highest since 1989.
Total housing starts (GB) fell very slightly to 212,500 in 2005, including just under 191,000 private enterprise starts (90% of the total).
In England, there were 159,436 completions, of which 141,718 (89%) were private enterprise. The Government’s target is for at least 200,000 completions per year in England by 2016, a level exceeded only once (203,000 in 1988) in the last 25 years.
Planning performance record
DCLG quarterly statistics showed a record 64% of ‘major’ (10+ units) residential planning decisions were made within 13 weeks in the first quarter of 2006, up from a low of 34% in 2001 Q3 (The proportion was last at a similar level in 1993 when it reached 63%). However a record 35% of applications were refused, against a low point of 13% in 1998 Q1.
PLANNING
Development Plans
We believe it is significant that the first two core strategy (CS) documents at inquiry under the new planning system have been rejected as unsound. The Lichfield CS did not make realistic provision for a 10 year supply of housing land and had major deficiencies in its evidence base. Stafford Borough Council’s strategy had a lack of local distinctiveness and no housing trajectory or clear policy to address current over provision of housing supply.
These decisions are a clear message from DCLG that “business as usual” will not be appropriate under the new system. It also sends a message to other stakeholders (including HBF and home builders) that their involvement with the process will come under scrutiny.
Under previous development plan processes the private sector made general objections to deposited plans and debated alternatives at the public inquiry. The new system requires interested parties to be involved throughout the policy making process. Promotion of alternative sites and/or strategies must be done at the options stage of plan preparation not after deposit. There are, however, no formal procedures for such involvement.
The new development plan system is thus, clearly challenging for both the public and private sectors. HBF will be able to coordinate and facilitate members’ involvement in emerging documents and options. However, the system requires the involvement of the actual practitioners who will implement the plan proposals if it is to be true “involvement”.
We cannot continue to blame LPAs for poor planning if, as an industry, we do not respond to the new agenda in a constructive manner.
DCLG consultations
As ever, the summer is also a time for issuing DCLG consultation papers.
While the final version of PPS3 is not expected until October or November, it is the subject of much reflection and discussion behind the scenes. Size, type, affordability and density issues are known to be causing most concern at DCLG. Given the Governmental commitment to higher targets and rates of delivery, a new approach to land release seems inevitable.
On planning applications, DCLG is consulting on whether local authorities might be given the power to publish their own requirements for information provided with planning applications. HBF has great concern over this proposal, particularly considering applications would be invalid without these requirements. Current requirements are short and consistent across England and Wales (including the recently added design and access statements), with additional information only being requested following validation. LPAs may be tempted to add burdensome requirements with no chance of appeal. The consultation ends on 30th September.
On Planning Delivery Grant replacement, the idea of money for Local Authorities meeting housing targets proposed by this consultation paper is ostensibly attractive, but the are also obvious problems. Market fluctuations and the different development rates of large and small sites mean that targets are unlikely to be met exactly every year (possibly countered through the suggestion that monitoring would be against a rolling 3 year average). However, our greatest fear is that LPAs would impose completion requirements on developers in order to meet their housing delivery grant targets. Consultation ends on 17 October.
HBF will be responding to all consultation documents from DCLG through the National Planning Committee.
TECHNICAL AFFAIRS
Regulation issues
The picture in this area is mixed. We still have little further detail about the Government’s thinking on the Code for Sustainable Homes. DCLG have, however, indicated they would announce proposals on new water efficiency regulations in the parliamentary recess, with four months being allocated for responses. And in response to our letter about the slow rate of progress on improving the waste management licensing system, DCLG have said they still hope to issue a consultation later in the summer.
We are also writing to DCLG communicating the results of our questionnaire on utilities provision, particularly expressing concern about time taken for provision. Some parts of the country are experiencing huge delays, and this problem must be addressed.
Regulations - the way forward
It is important in this context that we continue to be proactive.
We have held a second meeting of the group we set up with NHBC, LABC, CPA and RD Ltd to consider proposals HBF could put forward to improve building regulations to which representatives of DCLG were invited. This meeting agreed that the bodies would each consider a particular part of the issue to enable thinking to make progress. HBF is assessing the feasibility of setting targets for different Parts of the current Building Regulations. We have already held a meeting with member companies to look at this.
I have also been invited to accompany Housing and Planning Minister Yvette Cooper on a fact-finding trip to Holland and Denmark to look at approaches to sustainable residential development there. Being with the Minister whilst viewing these developments will provide a useful opportunity to emphasise the necessity of grounding housing and planning policy objectives in this field in the reality of construction and market practicalities.
Stewart Baseley
Executive Chairman