Housing and Planning Bill

Written evidence submitted by London First (HPB 14)

House of Commons Public Bill Committee: Housing and Planning Bill

Summary

1. London First is a business membership organisation with the mission to make London the best city in the world in which to do business. Our members mirror London’s economy: including property, transport, finance, professional services, creative industries, hospitality, retail and education.

2. To keep pace with population growth, London needs 50,000 new homes a year; currently only half this number is being built. We therefore welcome measures which will increase the supply of new homes but believe that more thought needs to be given about how some aspects of this Bill will work in London.

3. The main issues that we would like to highlight are:

· The Government should devolve the implementation of the starter homes initiative in London to the Mayor.

· A high percentage of London councils’ housing stock is high value. If this value is to be released to fund the right to buy, the money raised in London should stay in London to help build the new homes that the city needs.

· The Bill devolves more strategic planning powers to the Mayor, which we support as a useful package to get more homes built in London.

· The Bill should introduce a new power to require all public agencies in London to proactively cooperate with the work of the London Land Commission to enable it to work more effectively and quickly to deliver more land for housing development.

Starter homes (Part 1, Chapter 1, clauses 1-7)

4. The Bill already provides for a higher price cap for starter homes in London and clause 4 planning permission: provision of starter homes – 4 (5) and 4 (6) – states that regulations may confer discretions on planning authorities and different provision for different areas. In this context, the Government should devolve the implementation of the starter homes initiative in London to the Mayor. This would be in keeping with the fact that much housing and planning policy in London is already devolved to the Mayor of London, with this having been reinforced by the Localism Act 2011.

5. Devolving the implementation of starter homes policy to the Mayor would also allow for London’s unique planning arrangements – The Mayor’s London Plan sitting above a borough’s local plan – to ensure a smoother transition to this policy. A one size fits all approach to implementation is likely to fail due to high house prices in London and the different approaches taken to housing policy across the 32 boroughs and the City. The Mayor and the boroughs are best placed to determine the mix and proportion of all tenures (including Starter Homes) to be provided on development sites. This is particularly important to the delivery of London’s Opportunity and Intensification Areas as these areas have particularly sensitive financial viability due to the need to provide extensive strategic, local and on-site social and physical infrastructure.

6. Furthermore, a blanket imposition of the starter homes requirement on all types of housing development would have a negative impact on the likelihood of some of that development coming forward. For example, housing built specifically for long-term rent (build to rent) or purpose built student accommodation should have a reduced requirement or exemption from providing starter homes due to the different viability model of this type of development. This would be in line with the Government’s existing guidance on such development in relation to the application of affordable housing and other planning obligations.

7. The build to rent market in London has the potential to increase the supply of new homes as well as accelerate the delivery of large developments that are traditionally built out in phases. This type of development is supported by institutional investors such as pension funds that want to invest for the long-term and accrue steady returns through the rental income generated. Managing all of the homes built in a development is central to this strategy and any blanket requirement to deliver houses for market sale will both reduce the viability of the development in the first instance and significantly reduce, if not completely nullify, the appetite of institutional investors to support build to rent development in the first place.

Implementing the right to buy on a voluntary basis (Part 4, Chapter 1, clauses 56-61) and vacant high value local authority housing (Part 4, Chapter 2, clauses 62-72)

8. Whether in the Bill or elsewhere, further detail about the implementation of this policy is required. Central London local authorities and London in general contains a significant amount of high value local authority housing stock. If this value is to be released to fund the right to buy, the money raised in London should stay in the capital to help build the new homes that the city needs.

9. There will need to be greater clarity about the processes to replace both the homes that are sold under the right to buy and the high value local authority housing. And further thought should also be given to how the sale of high value local authority housing will interact with the ability of local authorities to undertake estate regeneration schemes. Done well, such development can provide greater economic opportunities for local residents as well as delivering more new homes. However, estate regeneration is complex process and the Bill could create more homeowners in estates who will potentially have to be compensated and create uncertainty over the construction of new council houses in estates as they might fall into the high value category and eventually be sold off.

Planning in Greater London (Part 6, clause 101)

10. This clause continues the process of devolving planning powers to the Mayor. Greater control will be given to the Mayor over direction powers on wharfs and sightlines and the Mayor’s ‘call in’ power will be extended. Taken together, this is a useful package to enhance the Mayor’s strategic powers which will help get more homes built in London.

Planning Permission in Principle (Part 6, clause 102-103)

11. We welcome the establishment of a ‘permission in principle’ for brownfield sites (through a ‘brownfield register’, local and neighbourhood plans) as we hope that it will provide greater certainty and improve the speed of the planning process. A ‘technical details consent’ will be required before development can commence - the details of this process will be set out in secondary legislation. However, this must be light touch in order to ensure genuinely speedy decisions are delivered. There may also be a role for the Mayor in assisting boroughs in maintaining their brownfield registers building on the Mayor’s existing role in leading the work of the London Land Commission (discussed below).

The London Land Commission (LLC)

12. The LLC was established by the Government and the Mayor of London to identify brownfield land for development in public ownership and to help co-ordinate and accelerate the pace of land release for housing in London. The Bill does not contain any provisions relating to the Commission but offers an excellent opportunity to reinforce the important work that the Commission is doing. The Bill should introduce a new power to require all public agencies in London to proactively cooperate with the Commission’s work. This will enable the Commission to work more effectively and quickly to deliver more land for housing development.

November 2015

Prepared 10th November 2015