Housing and Planning Bill

Written evidence submitted by Durham County Council (HPB 137)

Scope of response:

1 The attached report sets out issues for consideration, as part of the consultation on the Housing and Planning Bill; and has been prepared in consultation with Registered Providers operating within County Durham.

Context to the County Durham Housing Market:

· County Durham is located in the north-east of England and is home to over 513,000 people.

· There are over 236,000 dwellings in County Durham.

· Of these, 20% is social housing, 66% owner-occupied, and 13% privately rented (2011 census).

· Housing in County Durham is associated with relatively low price levels compared to national averages.

· Median house prices across County Durham have increased from £45,450 in 2000 to £100,000 in 2012. However, there is considerable variation in house prices within County Durham.

· Higher priced areas include Durham City, Chester-le-Street and rural areas.

· Lower priced areas include Easington/ Peterlee (in the east of the County and Stanley in the north).

Part 1:

Chapter 1: Starter Homes

2 The Bill makes provision for to deliver upon the Government’s stated intentions towards delivering 200,000 starter homes by 2020 as set out most recently in the Comprehensive Spending Review 2015. The Bill defines, Starter Homes as a new dwelling, available only to first time buyers under the age of 40, to be sold at a discount of at least 20% of the market value and to be less than a price cap of £250,000.

3 Clause 3 of the Bill notes that Local Planning authorities have a commitment to promote starter homes through Local Plans, whilst Clause 4 seeks to make provision for starter homes to become a feature of future housing developments by ensuring that a ‘planning authority may only grant planning permission for a residential development of a specified description if the starter homes requirement is met’.

4 The Bill notes that further regulations may set out the likely requirement for future provision of starter homes as part of a planning application. It is welcome that the regulations may confer discretions to a local authority to set out these requirements. This is considered important within the context of the North East Housing market, which is associated with land values and house prices lower than the national average, where it may not be viable to deliver starter homes on all sites in all locations. Such a policy requirement may have the unintended consequence of making private sector housing unviable and thereby reducing overall housing delivery.

5 Whilst the Council is supportive of measures to increase home ownership there is concern that starter homes should not be at the expense of the delivery of affordable homes. Given the relatively lower viability of housing development in County Durham, a national requirement to deliver a proportion of starter homes may reduce the opportunities to deliver affordable homes. Should regulations impose a minimum requirement for starter homes, for instance 10%, this may mean that there will be no potential for the delivery of affordable housing. In some parts of County Durham, owing to viability constraints, affordable housing requirements as part of new development are as low as 10%. A national requirement of 10% starter homes through regulation would mean that there would be no potential to deliver any other types of affordable homes through section 106 agreements in these areas of County Durham. These are often the areas that would benefit from a varied mix of affordable housing types.

6 Affordable housing makes a valuable contribution to the County Durham housing market. The Council through its Strategic Housing Market Assessment (SHMA) [1] has identified a net shortfall of affordable housing in County Durham. This assessment of affordable housing need, considers groups in housing need that may be excluded from those eligible for a starter home as set out in the Bill. For instance, those over 40 years old and those who are not first time buyers. The SHMA notes that a significant proportion of affordable housing need is made up by those in the over 60 age group. 29% of the local authority’s current housing register are aged 65 years old or more and 5% of all lettings via the register in 2014-15 were to applicants in the same age group. Starter homes would not meet the housing needs of these groups.

7 It is noted that there does not appear to be a mechanism to impose an income restriction on first time buyers. The Bill does not give guidance on how starter homes will be rationed by need or the Register to be kept by the private Home Builders Federation. On this basis, it is possible that starter homes could be bought by those least in need rather than most in need. Furthermore, the intention that starter homes can be resold or let an open market value five years after the initial sale means that they will not meet needs ‘in perpetuity’ and there will be no recycling of funding in relation to starter homes to meet future needs.

8 In relation to infrastructure provision to support development, the starter home exemption from Community Infrastructure levy, will potentially reduce the funding for infrastructure to support development needs.

9 There is concern that enacting statute to shift the emphasis from affordable rent to the support of home ownership will reduce the scope for local authorities to make decisions on tenure, in line with local circumstances. Durham County Council has a strong understanding of its resident’s tenure preferences in line with existing stock as developed through its evidence base, including the SHMA.

10 One Registered Provider working within County Durham has commented, "The Bill definitely needs to give Local Authorities discretion to objectively assess need and demand in their area i.e. they should be free to specify the numbers and percentages of affordable rent and shared ownership homes on a site. It is important that local authorities remain able to pro-actively and flexibly plan to meet objectively assessed housing need in their area, as required by the NPPF."

11 Finally, starter homes are aimed at younger first time buyers. County Durham is experiencing an ageing population and around 90% of household growth in County Durham to 2030 will be in households aged over 65. The Council’s evidence base has shown that virtually all new private housing currently being built is aimed at families. The majority of housing being delivered for the older age group is affordable housing to rent. This emphasises the importance of ensuring that starter homes do not replace traditional affordable housing products. Indeed, to supplement starter homes a case can be made for ‘finisher homes’. Providing housing products aimed at meeting the needs of older people can enable older owner occupiers to move which, in turn, would free up family homes on to the market.

Chapter 2: Self build and custom housebuilding

12 The Bill amends and supplements the duties placed on local authorities under the Self‐build and Custom Housebuilding Act 2015, which introduced new duties on local authorities to keep, and have regard to, registers of people seeking land for self‐build and custom housebuilding.   The Bill defines self-build and custom housebuilding as housing built by individuals or associations of individuals

13 Under a Duty to Grant Planning permission, the Bill requires local authorities to grant sufficient suitable development permissions on serviced plots of land to meet the demand for self‐build and custom housebuilding in their area as evidenced by their housing register. Further regulations may make different provision for different authorities or different proportions of demand or exemptions and must specify the time for compliance with the Duty

14 The Council welcomes the encouragement of self-build /custom build. It is recognised that to date, most self-build is carried out by older people using equity from their homes and building for their retirement, in this context opportunities for self-build would increase the housing choices for older people. However, in line with the National Planning Policy Framework and Planning Practice Guidance, Durham County Council have undertaken a SHMA to understand local demand for all types of housing. On this basis, the legislative requirement is considered to be unnecessary.

Part 2:

Chapter 1 & 2: Rogue Landlords and Letting Agents in England – Banning Orders

Chapter 3: Database of Rogue Landlords and Letting Agents

Chapter 4: Rent Repayment Orders

15 All issues and changes described in these sections are welcomed by Durham County Council. The proposed changes will strengthen the regulation in the private sector.

Part 3:

Recovering Abandoned Premises in England

16 All issues and changes described in these sections are welcomed by Durham County Council.

Part 4: Social Housing in England

Chapter 1: Implementing the Right to Buy on a Voluntary Basis

17 Durham County Council welcome that the Bill will implement Right to Buy on a voluntary basis, and will not be a legislative obligation. This will allow housing associations to maintain a good degree of control over their stock. Housing associations in County Durham are happy they will be able to use any sales and discount compensation from government to build new homes, as they see fit in the respective areas.

Chapter 2: Vacant High Value Local Authority Housing

18 Clauses 62 to 72 of the Bill outline the Government’s commitment to require local authorities manage their housing assets in a more effective way. This includes payment top the Secretary of State based on the value of vacant (high value) assets, including where stock transfer from a local authority has taken place. The National Housing Federation state that, "There is a legal presumption against retrospectivity… and it will only apply to stock transfers following the Bill’s enactment". Therefore, Durham County Council would not be affected by this section of the Bill, as they transferred the last of their social housing stock in May 2015.

Chapter 4: High Income Social Tenants: Mandatory Rent

19 In 2014-15, just less than 1% of all applications to the local authority’s housing register, Durham Key Options, came from households with an income of £30,000 or more. In this regard, Durham County Council does not believe this section of the Bill will have a significant effect. It is also welcomed that the Bill will set out the level of the rent and the meaning of high income. This will enable the authority and its housing partners to maintain consistency in its policy and processes.

20 It is noted that the Bill may require housing associations to charge market rent to applicants that do not provide proof of income- if this is implemented, further guidance would be helpful from Government on how this can be requested and obtained, including how information will be shared with the HMRC. Durham County Council is keen that this implementation does not act as a barrier to work for unemployed applicants and further promotion of incentives to work may be useful.

Part 5: Housing, Estate Agents and Rent charges: Other Changes

21 All issues and changes described in these sections are welcomed by Durham County Council.

Part 6:

Local Planning

22 The Bill makes provision for the Government to intervene if Councils fail to have an adopted plan in place by 2017 as an extension of the Secretary of State's intervention power in the local plan making process.  

23 Durham County Council welcome the Government’s continued commitment to the plan led process. Following the resolution to the legal process associated with the County Durham Plan, the Council is aiming to prepare an amended and refreshed version of the Plan to submit for Examination.

24 One Registered Provider from County Durham has commented, "It is not clear how the Secretary of State's ‘interference’ in local authority planning will be resourced and how effective their directions to local authorities will be, in speeding up the process of getting more planning permissions for housing issued and more housing delivered."

Permission in Principle and local registers of land

25 The Bill will enable local planning authorities or neighbourhood groups to grant planning permission in principle for housing sites at the point when a site is allocated in an adopted local or neighbourhood plan document or a local brownfield register. 

26 Through the Bill, the Government seeks to establish brownfield land registers and for land and for planning permission to be granted automatically through a development order.  The Bill makes provision for the Secretary of State is granted powers to determine what land should be included in such registers and also which sites should receive such permissions.

27 Housing partners in County Durham welcome the introduction of the power to grant permission in principle for development. It has the potential to increase planning certainty and speed up planning decisions. Registered Providers believe that permission should be broadly comparable with outline permission.

28 Durham County Council consider that it is positive that the Bill notes that there is "some discretion on the part of the local planning authority to exclude land from the register." This will ensure that local circumstances are considered.

29 The Council has had success with regeneration activities and bringing brownfield land back into use. However, the brownfield sites that remain are the most challenging in terms of viability. In the County Durham housing market context, it is considered that there is limited opportunity to significantly boost the supply of housing through the use of brownfield sites alone.

December 2015

[1] County Durham Strategic Housing Market Assessment 2013 Update.

Prepared 14th December 2015