Housing and Planning Bill

Written evidence submitted by British Property Federation (HPB 25)

Introduction

1. We welcome the pro growth ambition behind the Housing and Planning Bill and are supportive of some of the initiatives proposed to bring greater freedom to the planning system, and to encourage local authorities to plan sensibly (and with some sense of urgency) for their area.

Key concerns

· The Build to Rent sector is one of the fastest growing in the UK, bringing investment and additional housing all over the country. However, the requirement for these sites to include Starter Homes will kill off this new sector. We will be seeking an exemption from the requirement.

· Local plans are the cornerstone of our planning system. In order not to overburden already stretched local authorities, and to ensure effective delivery, it is imperative that plans are slimmed down and focused on the needs of communities.

· Permission in principle is to be welcomed, however, in order to create great places and ensure a balanced local economy, developments including mixed use, employment land, retail, leisure, and industrial and distribution space must be included.

Starter Homes (clauses 1-7)

2. The introduction of Starter Homes is welcome, and we are supportive of the intention to create more housing for young people.

Build to Rent

3. It is crucial, however, that the Government does not overlook other forms of tenure in its desire to create new homes for owner-occupation, and that it recognises the additional homes that can be delivered by the Build to Rent sector.

4. Build to Rent homes are designed and built specifically for renting offering longer tenancies, other flexibilities (to personalise the home for example), good onsite amenities, and good transport links for easy commuting.

5. As long-term investors, Build to Rent providers' only interest is in creating ‘places’ that thrive. Their investments will gain or lose value depending on their wider environment. They therefore have a huge motivation to ensure that not only their developments work well, but also the neighbourhood and services that surround them. They have no motivation or incentive to leave homes empty. The quicker they are let the quicker their pensioners and other investors derive their income.

6. We are concerned that a requirement to deliver Starter Homes as part of large schemes could damage investment into this sector, as fragmented sites are much less appealing to investors. We will be seeking an exemption for the Build to Rent sector from the requirement to include Starter Homes onsite.

Infrastructure provision

7. The Starter Homes proposals include the removal of the Community Infrastructure Levy and S106 for these units. Other sites in the surrounding area may however, as a consequence of this exemption, find themselves under additional pressure to ‘cope’ with a resulting shortfall in places and facilities in schools - and a lack of other amenities - that would have otherwise been funded by developers, alongside the provision of new homes. This guidance could therefore have a negative effect on the viability for other schemes.

8. Consideration should be given to the location of new Starter Homes, and to ensure that there is adequate infrastructure provision. An oversaturation of a site with one sort of housing will create added risk for the developer and a potentially unattractive location for purchasers. In order to create attractive, balanced communities, it is crucial that a proportionate view is taken, and that additional infrastructure can be provided where necessary.

Valuation

9. We are concerned that there are likely challenges around the valuation of Starter Homes at 80% of market price. In order to satisfy the lender community, we urge Government to work closely with the Royal Institute of Chartered Surveyors to ensure that these complex valuation issues arising are drawn up sensibly.

10. Lenders, borrowers and developers will have to be satisfied that valuations are fair and consistent, especially in relation to comparable properties. It may be difficult to assess "open market value" for homes if there are insufficient comparables for these starter homes.

Housing information (clause 87)

11. We broadly support the provisions in part 2 of the Bill to crack down on bad landlords. We are also supportive of the general principle in clause 87, which seeks to allow local authorities access to tenancy deposit information for the purposes of their enforcement work. We think the provisions in the Bill are a missed opportunity, however, to also allow access to such information for the purpose of communicating with landlords their duties and obligations. Most landlords that are protecting deposits will be seeking to do the right thing and a better policy would allow such information to be used for educating as well as enforcement.

Local plans (clauses 96-100)

12. We whole-heartedly support the proposals to ensure local authorities have local plans in place by 2017, as we believe that they are fundamental to growth, both through new housing and job creation. Ensuring that all local authorities have plans in place will undoubtedly have a positive effect on investment.

13. It is absolutely critical that hand in hand with this requirement comes a clear change in approach to local plans to make them slimmer, more targeted and more effective. This is particularly important now, given how many local authorities are under enormous pressure financially and strapped for time and resources.

Automatic planning permission in principle on brownfield sites (clauses 102-103)

14. We welcome the proposals for automatic planning permission in principle to be granted, thereby simplifying the planning process. At the moment, it is proposed that permission in principle is only available for residential development. Whilst this is a good start, there should be recognition that homes are not enough by themselves; we must develop office, leisure, retail, and industrial and distribution space as well, in order to create cohesive communities.

15. Thriving communities need a mix of amenities to be a success. In order to create places where people want to live, there need to be places for people, to work, shop, and enjoy themselves, and planning policy must reflect that accordingly.

We would be pleased to amplify or discuss any of the above points.

Prepared 10th November 2015