7Planning and supply of homes for older people
112.We discussed the demand for and shortage of specialist homes in paragraphs 85 to 86. When we asked why developers of specialist housing were not delivering more homes in response to demand, Paul Teverson of McCarthy and Stone said “there is absolutely a market failure [ … ] it can only be the planning system that is the cause of that”.279 We consider the impact of national and local planning policy on the delivery of housing for older people in this chapter.
National planning policy
113.The National Planning Policy Framework (NPPF) and associated guidance asks local planning authorities to plan housing based on current and future demographic trends. The then DCLG said:
Paragraphs 47 and 50 of the NPPF is explicit that local planning authorities should plan for a mix of housing based on current and future demographic and market trends. In doing so they should address the needs for all types of housing and the specific needs of different groups in the community, including older people.
Paragraph 159 of the Framework provides more detail of the evidence that local planning authorities should produce as they prepare their Local Plan. It makes it clear that local planning authorities should prepare a Strategic Housing Market Assessment to assess their full housing needs [ … ] This should take account of migration and demographic change and address the need for all types of housing, including the needs of different groups in the community such as older people [ … ].280
While the Home Builders Federation said that the NPPF set a “pro-active” and “positive” approach on the need for local authorities to plan for housing for older people,281 many more thought that it failed to do this. Barton Willmore LLP said that it needed to be “clearer in the provision and support for housing specifically for older people”,282 Tetlow King said it lacked “detail, clarity and emphasis”,283 and the Chartered Institute for Housing said it placed “limited requirements on authorities”.284
114.The commitment by the Government in the Housing White Paper to strengthen national planning policy to require local authorities to have “clear policies for addressing the housing requirements of groups with particular needs, such as older and disabled people”285 was therefore welcomed, as was the forthcoming guidance for local authorities under the Neighbourhood Planning Act 2017 on addressing housing needs that result from old age or disability.286 The then Housing Minister, Alok Sharma, told us that the draft of the revised NPPF will be published in early 2018 and the guidance is expected to be published at the same time.287 We have subsequently been told by the Permanent Secretary of the MHCLG that publication will be just before Easter.288 We believe that national planning policy should give greater encouragement to the development of housing for older people and ensuring sites are available for a wider range of developers. We recommend that, in the impending review, the NPPF should be amended to emphasise the key importance of the provision of housing for older people in both local authority plan making and decision taking.
Local planning policy
Assessing housing need and land
115.Housing and Care 21 were critical of the way local authorities assessed need through their Strategic Housing Market Assessments, saying they were:
Not consistent in their treatment of housing demand overall. There are a limited number of datasets which can be used to assess demand, but these vary in their estimate and there is no overall guidance as to which dataset may be the most accurate or robust. As well as a lack of a uniform approach, many assessments simply do not consider older people’s housing as a separate element, so it gets overlooked.289
We also heard that they were “sporadic and inconsistent”290 and some did not adequately consider older people’s housing—they “ignore it completely or solely assess the need for rented or affordable options”.291
116.We were, however, referred to examples of good practice, such as by Birmingham City Council and by Worcestershire County Council292 and, during our visit, we were briefed on the robust approach taken by Central Bedfordshire Council to assessing need. They commissioned 600 short and 80 in depth independent surveys of a representative sample of older residents across all housing and tenure types. As a result, they have estimated a need for 3650 specialist dwellings and 5400 mainstream houses. The Home Builders Federation recommended that local planning authorities should assess the percentage of housing for older people needed “across all the relevant classifications [ … ] then broken down [ … ] according to an analysis of the local market and demographic context”.293 The Department has since consulted on a new standard method for calculating local authorities’ housing need, the response to which is currently awaited.294 We recommend that the new standard approach to assessing housing need explicitly addresses the complex and differing housing needs of older people.
117.The NPPF asks local authorities to assess the quantity and suitability of land potentially available for housing development (a Strategic Housing Land Availability Assessment). Many developers said their policy was to use brownfield land because it was “in well-connected urban areas” where their customers prefer to live295 and close to existing homes.296 As discussed earlier, living in well-located housing close to local services and amenities makes an important contribution to older people’s health and wellbeing. The Chartered Institute for Housing said that the Government should encourage local authorities to identify suitable sites, particularly “small infill or brownfield sites well located within existing settlements and well connected to transport and with local facilities”.297
Local Plans
118.We heard that Local Plans and local planning policies often failed to plan for older people’s housing298 and we recall Habinteg’s evidence that many councils were also not planning for accessible housing.299 We asked Paul Teverson whether this was McCarthy and Stone’s experience. He said:
On the question of whether local councils plan for this form of housing, the answer is largely no, which is a real shame. There are three reports we always refer to, one by the HCA in 2014, which found that just 14% of local councils were planning for retirement housing across all sectors. There was also a Barton Willmore study in 2015 that said only 20% of councils were doing it, and an Irwin Mitchell study that said only 10%, so we think the figure is somewhere between 10% and 20%.300
119.However, we also heard examples of some Local Plans requiring 10% of all new housing to be built specifically for older people301 and that several authorities in the North West were “requiring all new developments over 15 units in to include 20% of the stock for older people”.302 Graham King, Head of Integrated Commissioning at Sunderland City Council, explained why his council had been particularly successful at increasing housing for older people:
There is definitely a brand: Sunderland is open for business [ … ] We make reference to specialist housing for all vulnerable people—not just older persons—in our Local Plan. Our housing strategy has a chapter dedicated to specialist housing for vulnerable people and older people, and we have regular engagement with developers bringing forward land sites and so on. Sunderland is quite unique in that regard.303
Similarly, Central Bedfordshire has published information about its housing for older people strategy, area demographics and market opportunities in an ‘investment prospectus’ for developers.304
120.Michael Voges of ARCO said that some local authorities were more receptive to developers of affordable extra care housing than private housing (we discussed the particular shortage of privately developed specialist homes at paragraph 86). Mr Voges attributed this in part to the fact that affordable extra care housing was “replacing care home obligations for their local social services departments, and getting people out of larger mainstream homes”.305 In contrast, they saw private housing as potentially bringing older people to their area. Paul Teverson of McCarthy and Stone said:
There is a misconception [ … ] that we are dragging in older people from other boroughs who are going to clog up your social care system and your GP practices. In reality, our average mover is coming from four miles away, so they are living within the district. Even if they were not, it is still their prerogative to move.306
In fact, as discussed in paragraphs 87 to 91, specialist housing has well-evidenced health and wellbeing benefits and can lead to reduced health and social care costs. Some local authorities, like Sunderland City Council and Central Bedfordshire Council, have joined up their planning, housing and health and social care teams so they are therefore able to assess the health and social care benefits of having appropriate accommodation for older people.307 However, we heard that this kind of joint working was rare.308
121.We asked the then Housing Minister, Alok Sharma, how the Neighbourhood Planning Act 2017 guidance would encourage local authorities to develop housing for older people. He suggested it would be “very specific in terms of their plans, in terms of location but also in terms of quantum”.309
122.We believe that older people should be able to choose from a wide choice of housing which can accommodate their needs and preferences. This will include, across the social and private sectors, smaller, or better designed, general needs housing, accessible housing, specialist housing, including retirement homes and extra care housing, and cohousing. To enable them to make this choice, and move to a home which better suits their needs, the guidance required under the Neighbourhood Planning Act 2017 should recommend that:
- Local authorities produce and publish a strategy explaining how they intend to meet the housing needs of older people in their area, including the scale and mix of housing and the tenures needed, and setting out the evidence relating to current housing need.
- Local Plans should, based on an assessment of local need, identify a target proportion of new housing to be developed for older people and identify suitable well-connected sites, close to local amenities. They should identify a range of different types of housing, including accessible homes, extra care housing and smaller mainstream homes to be built. The number of homes developed against this target should be published each year.
- There should be greater collaboration within local authorities between planning, social care, health and housing teams, particularly on the production of Local Plans. Local authority planning, health and social care teams should work together to assess the savings to health and social care budgets which may arise from additional specialist housing in their area and consider this in the context of negotiations over planning charges.
- Local authorities should be more receptive to private developers who wish to build housing for older people in their area, and appreciate the potential health and wellbeing benefits leading to reduced need to health and social care services to be gained.
Viability
123.Developers of specialist housing providing evidence strongly emphasised the different development economics they faced in comparison to developers of general needs housing.310 The Home Builders Federation said developers “struggle to compete” because their overall “gross development value” is higher. They identified the following characteristics of specialist housing as significant in this:
- Less saleable space as a result of communal areas;
- Larger gross internal area, as a result of communal areas, attracting higher Community Infrastructure Levy (CIL) and section 106 charges;
- Higher density, which attracts higher CIL and section 106 charges;
- Lack of pre-sales (the communal areas must be complete and operating before anyone moves in);
- Little or no phasing;
- A cost to the developer when units remain unsold as they must maintain all services; and
- Higher build costs.311
124.We also heard that the price of brownfield land, which developers prefer for the reasons considered above, can be driven up through competition with commercial developers.312 We received most evidence about the impact of CIL, payable on development which create net additional floor space, where the gross internal area of new build exceeds 100 square metres. Although developers may also pay contributions under section 106 agreements towards infrastructure and affordable housing. Paul Teverson of McCarthy and Stone explained that CIL was particularly onerous for developers of specialist housing:
CIL is a flat-rate square metre tax, which means that we would pay that tax on all of our shared areas where we provide restaurants, homeowners’ lounges and our slightly larger corridors to meet wheelchair accessibility standards.313
He went on to say that the current system of planning charges were “purely designed around working with mainstream housing”.314 Claudia Wood of Demos said that economic modelling that she had undertaken for a forthcoming piece of research had shown that the planning charges on specialist housing “make a lot of developments completely unviable”.315 She continued: “the developers we spoke to all said that, of 30 or 40 sites they looked at, they could maybe find one that they could build on to make the numbers work”. While we heard it was possible for developers to negotiate, this added costs and led to delays.316 Recognising that they “absolutely save money in the longer term”,317 Graham King of Sunderland City Council said that his council had taken a different approach to developer contributions on extra care schemes built on their land. He said:
We do take 106, but we have also had some models for our care schemes where we have looked at a best value principle. We have actually put in the value of the land on some schemes, because we have been able to prove longitudinally over 10 to 15 years that the savings on the adult social care and health budget have been much grander than the potential value of the land.318
McCarthy and Stone called for a “social care credit” to be applied on planning charges accruing to specialist housing developments.319
125.We also heard that the “inconsistent and cumbersome” application of the C2 and C3 planning classifications to extra care housing was problematic for developers.320 Some local authorities apply the C2 classification, applied to residential care homes and nursing homes, to extra care housing which reduces planning charges. Others classify this type of housing as C3, along with mainstream housing, which means full charges apply. Audley Retirement argued that extra care housing should fall within the C2 class:
Extra care is set up to fulfil many of the functions that care homes can provide in terms of care delivery as and when the resident requires it, monitored by an onsite care team and there is access to communal facilities. There are controls over who can occupy them by age and a need for care that do not exist on C3 standard dwellings.321
Extra care housing developers had a range of suggestions for countering this issue: an “extension and additional clarity” on C2 so that it captures extra care housing;322 the creation of a sub-section of C2 which attracts lower planning charges;323 and the creation of a “dedicated use class” for extra care housing which would enable planning contributions to be streamlined.324
126.When we asked about this, the then Housing Minister, Alok Sharma, told us that the guidance will look at the “precise terminology that is used to describe the different types of older people’s housing”.325 We believe that the level of planning contributions on specialist housing, which are increased as a result of the non-saleable communal areas which are a feature of this type of housing, is impeding the delivery of homes. We recommend either the creation of a sub-category of the C2 planning classification (which currently applies to residential care and nursing homes) for specialist housing, which would reduce the contributions required from developers, or the creation of a new use class for specialist housing which would have the same effect.
279 Q94
285 MHCLG, Fixing our broken housing market, February 2017
286 Chartered Institute for Housing [HOP 087], Barton Willmore LLP [HOP 064] The Neighbourhood Planning Act has placed a duty on the Secretary of State to issue guidance on addressing housing needs that result from old age or disability (not yet published).
287 Q236
288 Communities and Local Government Committee, Oral evidence: DCLG Annual Report and Accounts 2016–17, 15 January 2018, Q13
294 DCLG, Planning for the right homes in the right places, 14 September 2017
298 See, for example, British Property Federation [HOP 062], ARCO [HOP 060], Barton Willmore LLP [HOP 064]
300 Q91
303 Q93
304 Central Bedfordshire Council, Meeting the Accommodation Needs of Older People in Central Bedfordshire: Investment Prospectus 2016–2020, July 2016
305 Q91
306 Q91. See also Dr Brian Beach at Q17
308 Q93
309 Q272
310 Audley Retirement [HOP 018], Churchill Retirement Living [HOP 025], Anchor [HOP 042], McCarthy and Stone [HOP 059], Home Builders Federation [HOP 058]
313 Q97
314 Q97
315 Q25
317 Q112
318 Q109
325 Q272
8 February 2018