Why a new approach to planning is needed

Planning reform is called forPlanning reform is called for
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Planning reform is needed for all forms of development says Savills director Rob Moore

In my opinion: Rob Moore, Associate director planning at Savills www.savills.co.uk

The planning system and intertwined housing crisis finds itself in a strange place right now. Both are facing many pressures, not least of which is dealing with the immediacy of the Covid-19 pandemic.

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The new government promised a new dawn but the Planning White Paper release was set for spring, which means we may now already be a number months, if not more, behind schedule.

The Budget and subsequent announcements from the Secretary of State for Housing, Communities and Local Government, Robert Jenrick, were clear in reasserting 300,000 new homes need to be built per annum. Their answer to delivering this where all others have failed is to “level up” brownfield land. This makes perfect sense to any pure spatial planner. Often these sites are in the most sustainable locations and they enable opportunities for regeneration and investment in the social capital,which is so desperately needed.

A brownfield first policy is nothing new. It’s been the policy since the days of New Labour and yet there are still no groundbreaking improvements towards meeting the housing crisis. As a general rule, this is because unlocking the brownfield puzzle is one of complex viability – principally in terms of the relationship between Gross Development Value (is it in the right area?),

Existing Use Value (it needs to be worth the landowner’s energy) and build costs. That’s without mentioning the existing leaseholders and heightened costs that come with building in urban areas. At the end of this equation is affordable housing which is almost inevitably squeezed.

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The point being that investing in brownfield alone to deliver the numbers required will be expensive. Expensive at a time when there are other urgent priorities already putting pressure on the Chancellor’s commitments.

Some of the measures we are aware of show how exposed this policy is. For example, the £400m funding pot to work with mayors and leaders in opening up stalled brownfield sites. Even in keeping the funding at this level, the £400m could soon be swallowed up by a few dozen projects.

Another measure – using the airspace above stations for high rise – is a good idea but the cost of groundworks and foundations for high-rise buildings above stations would need to be matched by high capital values for the area, high enough to overcome challenging cashflows. This makes the policy completely ineffective for more marginal locations.

We are also aware of the potential increase in Permitted Development Rights on vacant sites and extensions. Class O (office to residential) has had a measured impact on many city centres.

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What is interesting is that the government’s approach involves either spending or relying on the markets to deliver on brownfield, without major policy intervention.

Measures which would actually contribute to improve the viability of schemes, including lowering build costs through VAT breaks on certain types of construction were rumoured, but didn’t materialise.

I believe there is a wealth of measures which the Government could have explored, creating the right conditions for modular developers, SME developers, volume builders, community and self-builders alike. All while working on green belt, greenfield and in garden villages, alongside brownfield land to make the scale of gains required.