The review of house building on large sites, carried out by the former minister Oliver Letwin, has recommended tougher requirements for developers to build a wider variety of home in terms of size, design and price.
In his review Letwin pointed out that it can take 15 years to complete building on some of the largest sites and a fear of ‘flooding’ the market with identical properties has been a large cause for delays in planning, building and completion.
It also calls for the Government to adopt a new set of planning rules specifically designed to apply to all sites with 1,500 homes or above in areas of high housing demand, making a mixture of housing types mandatory, including affordable homes for both sale and rent.
Letwin calls for the establishment a National Expert Committee to advise local authorities on the interpretation of diversity requirements for large sites and to arbitrate where the diversity requirements cause an appeal as a result of disagreement between the local authority and the developer.
To give the greatest possible chance that the new planning rules for large sites will have an effect in the near term, he recommended that the Government should provide incentives to diversify existing sites of over 1,500 units in areas of high housing demand, by making any future Government funding for house builders or potential purchasers on such sites conditional upon the builder accepting a Section 106 agreement which conforms with the new planning policy for such sites.
He also wants the Government to consider allocating a small amount of funding to a large sites viability fund to prevent any interruption of development on existing large sites that could otherwise become non-viable for the existing builder as a result of accepting the new diversity provisions.
The report also sets out how there should be a new power for local planning authorities in places with high housing demand to designate particular areas within their local plans as land which can be developed only as single large sites, and to create master plans and design codes for these sites which will ensure both a high degree of diversity and good design to promote rapid market absorption and rapid build out rates.
Letwin also recommend that local authorities should be given clear statutory powers to purchase the land designated for such large sites compulsorily at prices which reflect the value of those sites once they have planning permission and a master plan that reflect the new diversity requirements.
To Help, he suggested that local authorities could use a Local Development Company (LDC) to carry out this development role by establishing a master plan and design code for the site, and then bringing in private capital through a non-recourse special purpose vehicle to pay for the land and to invest in the infrastructure, before ‘parcelling up’ the site and selling individual parcels to particular types of builders/providers offering housing of different types and different tenures.
Or they could establish a Local Authority Master Planner (LAMP) to develop a master plan and full design code for the site, and then enable a privately financed Infrastructure Development Company (IDC) to purchase the land from the local authority, develop the infrastructure of the site, and promote the same variety of housing as in the LDC model.
‘I found that the main reason developers are slow to complete building on large sites is that there is only a limited demand each year for the highly uniform properties they are building on those sites,’ said Letwin.
‘My final report sets out some policy levers that the Government can use to increase the variety of homes on sites, so they can be built out more quickly,’ he added.
Secretary of State for Housing, James Brokenshire, said that the recommendations will be considered in terms of the next steps needed to meet the current target of building 300,000 new homes a year. ‘It is clear action is needed so developers work with us as partners,’ he added.
However, Nick Taylor, head of planning at Carter Jonas, pointed out that there are many reasons why planning permissions are not implemented quickly. ‘It is not clear why variety in tenure and housing type would increase build out rates, especially as both are often set by the local planning authority,’ he said.