64.Since 2013, successive Governments have argued that permitted development rights “make a significant contribution towards housing delivery”. This has generally been the principal policy objective of all the residential PDRs, including the new class MA right. The Government says that in the five years to March 2020 change-of-use PDRs created 72,687 new homes. It also argues they make the best use of existing buildings and reduce the need to build on greenfield sites.
65.The evidence mostly agreed that residential PDRs had increased housing supply. According to Policy Exchange, PDR “has created tens of thousands of new homes, especially in areas like London where the UK’s housing shortage is most acute.” London YIMBY and PricedOut said it was “an important way for developers to contribute to meeting the unmet need for homes” and that it had made a “substantial” contribution to housing supply. The CLA told us that in rural areas “the impact of PDR on the…quantity of new housing” had been “hugely beneficial” and that the class Q right, permitting change of use from agricultural to residential, alone had created 2,316 new homes. Less enthusiastically, Clifford, Ferm, Livingstone and Canelas said there had been “some increase in housing delivery”, the BPF that it had made a “modest contribution”. It was also recognised that, whatever the contribution, the new use class MA right would increase the number of premises available for conversion and probably, therefore, the amount of housing delivered through that route.
66.The question of permitted development’s past contribution to housing supply is complicated by the possibility that some of the new housing would have been built anyway. Reading Council told us that since 2013 some 1,040 new homes had been delivered in Reading through PDR. It said this might seem like “a major contribution “ but insisted it was “not necessarily as straightforward as that”. Since residential conversions “had been taking place in Reading for many years” prior to 2013, it thought some of the PDR conversions might have happened anyway and that developers might have opted for “easy wins” under permitted development. In the ten years before 2013, on average 665 new dwellings were delivered each year, whereas between 2013 and 2020, on average 656 new dwellings were delivered each year. It said that, whilst “this latter figure may have been lower without PDR, it is not possible to know this for certain, and it does therefore cast some doubt as to whether PDR has actually boosted overall housing supply, in Reading at least.”
67.Shelter agreed it was “difficult to accurately establish” how much additional housing PDR supplied and said it was “implausible” to claim that none of the additional housing would have been delivered without PDR. Michael Fearn, a planning consultant, described as “a myth” the Government’s claim that PDR was a major source of housing. Ian Fletcher from the BPF told us that PDR accelerated some housing but that much of it would get built anyway with full planning permission and that whether it made “a great deal of difference in the long run” was “more open to question”.
68.In oral evidence, the Minister described the 72,000 houses delivered through PDR in the five years to March 2020 as “significant additionality” and pointed out that it equated to “between 12% and 14%” of the half a million homes built overall during the same period. Simon Gallagher, explaining that in 2016-17 some 10% of all new housing was delivered through PDR, called it a “material contribution”. The Minister did not answer the question about whether PDRs had diverted resources away from other housing development.
69.The poor quality of some housing produced under permitted development is one of the longest-standing complaints about the post-2013 changes. In response to these legitimate criticisms, the Government commissioned academics from the Bartlett School of Planning, University College London, to undertake an independent review. Their report, published in 2020, concluded that housing built under permitted development tended to be of worse quality than that built with full planning permission. In particular, it found that PDR housing was more likely to not meet space and light standards, to have less private outdoor amenity space and to be located in commercial areas. In many other areas, however, including access to transport, services and green space, it found little difference overall. Much of the evidence to our inquiry referenced the report’s findings. In addition, we heard concerns about the mix of dwelling type and tendency of PDR housing to be used as temporary accommodation for homeless and vulnerable families and individuals.
70.The quality of housing was among the most cited criticisms of the entire permitted development regime. Clifford, Ferm, Livingstone and Canelas described the “extremely poor quality” of the housing as “a national scandal”. The LGA told us that, according to a survey it conducted in 2018, 92% of councils were moderately or very concerned about the quality and design of PDR housing and 89% were moderately or very concerned about the appropriateness of its location. It also highlighted the impact of poor-quality housing on mental wellbeing and its consequent role in exacerbating health inequalities. Shelter told us about the “devastating impact on the wellbeing and health of families” living in substandard accommodation. The Mayor of London said permitted development had “demonstrated a clear inability to deliver high-quality well-designed homes”.
71.In their evidence to our inquiry, Clifford, Ferm, Livingstone and Canelas, the authors of the 2020 report, as well as the 2018 RICS report on the same subject, summarised their findings on space and natural light. In 2018, they found just 30% of PDR units would have met the nationally described space standards, compared with 94% of planning permission units, and in 2020 they found just 22% would have met the same standards, compared with 73% of planning permission units. They also found that PDR units were usually well below those standards (sometimes 15 or 16 sq m), whereas planning permission units, where they were below the standard, were often only just below. On provision of natural light, in 2020 they found that 72% of PDR units had only single-aspect windows, compared with 29.5% of those created through planning permission, and that some appeared to have no windows at all. They also found that, owing to the nature of the conversions, many units had strangely shaped internal layouts with “very little natural light penetration to the main habitable area”. In response to the 2020 report, the Government included the provision of “adequate natural light in all habitable rooms” in the list of prior approval for the class MA right and amended the 2015 Order to require that all homes built under permitted development meet nationally described space standards.
72.The evidence generally welcomed the new space and light standards, although Clifford, Ferm, Livingstone and Canelas criticised the light standard for not mandating windows. As worded, the requirement can be met through the provision of skylights or lightwells. Whilst this may ensure adequate natural light, they said not having a window “through which one can look out” was “damaging for mental health” and had “potential ventilation issues”. Under the “adequate natural light” condition, councils could deny approval for units without windows, but they would not be required to. Mark Worringham also told us that one of Reading Council’s neighbouring authorities had concerns about the lack of windows and “potential modern slavery implications”.
73.In their 2018 RICS report, Clifford, Ferm, Livingstone and Canelas said they found just 14% of the PDR units benefitted from access to private or communal amenity space, such as a roof terrace, garden area or balcony. In 2020, they found that just 3.5% of the PDR units benefitted from access to private amenity space, compared with 23% of the planning permission units. The lack of outdoor amenity space was repeatedly raised as a concern in the evidence. Rachel Blake from the LGA said thought should be given to “the families who will be moving into these spaces and the impact on those families of not having play space or open space, which you would have to consider if you were to go through a full planning application process.” Mark Worringham from Reading Council said that, whilst natural light and space had been addressed, outdoor amenity space remained a concern.
74.The ability of PDR housing to be located in inappropriate locations, such as industrial parks, was another source of particular concern. According to Clifford, Ferm, Livingstone and Canelas, PDR conversions are eight times more likely than residential developments built with full planning permission to be located in primarily commercial areas, such as business parks, and primarily industrial areas. Crawley Borough Council had “strong concerns” about “the quality of homes provided and in turn the quality of life for occupiers given the location of many PDR schemes in industrial locations”. It said these areas were “simply not appropriate locations for residential use” as they were subject, day and night, “to business noise, fumes, vibrations, and vehicular movements, including from heavy goods vehicles which can create significant safety risks for pedestrians”. As the council explained, however, “unless there is a specific business noise issue” the inappropriateness of such areas cannot be used as a reason for refusing an application for prior approval. It concluded: “These locations generally have no facilities for residents, and are often at considerable distance, severed by major roads, from supporting community facilities, shops etc., and some have only limited public transport connectivity.”
75.We also heard that permitted development did not produce the right mix of housing. In particular, it tends to result in more one-bedroom and studio flats and not enough family units. In their 2020 report, Clifford, Ferm, Livingstone and Canelas found that 69% of PDR units were one-bedroom or studio flats, compared with 44% of planning permission units. We heard how this oversupply of smaller homes could lead to overcrowding and poor health outcomes. London First criticised the original 2013 right for not requiring a unit mix, which resulted in developments that sought “to maximise the number of small units rather than address local housing need for large and family-sized accommodation”. Rachel Blake from the LGA said that increasing housing delivery through PDR, “without the ability to pursue a tenure mix with a larger number of homes for families”, raised equalities issues. Reading Council told us that 83% of new dwellings in Reading delivered through permitted development had been one-bedroom or studio flats and that this did not match the council’s identified housing need. The Mayor of London said permitted development could not “deliver the tenure and size of homes required to meet Londoners’ needs”.
76.We also heard from several groups and individuals concerned about the class L right, which permits changes of use from C3 (dwellinghouses) to C4 (small houses in multiple occupation) and vice versa. A small HMO is defined as a shared house occupied by between three and six unrelated people. According to the National HMO Lobby, HMOs tend to congregate in particular areas, especially places with high student populations, and can result in “imbalanced and unsustainable communities”. Highfield Residents Association said HMOs had the “capacity to significantly change and unbalance the character of settled residential areas”. As a result, both argued that the class L right should be amended to cover only conversions from C4 to C3. The Moseley Society and Moseley Regeneration Group pointed out that the new class MA right will mean that any use class E premises could ultimately be converted to an HMO.
77.Some of the evidence expressed particular concern about vulnerable and homeless families and individuals ending up in poor-quality homes converted under PDRs. The RTPI said there had been “a tendency for the very worst conversions, such as Terminus House in Harlow, to end up being occupied by large families in difficult circumstances.” Shelter also highlighted the case of Terminus House. John Bibby, Policy Manager at Shelter, listed several other buildings being used as temporary accommodation. The London School of Economics said the fact that “many PDR properties end up as temporary accommodation” reflected “their relatively low standards”. The LGA said: “Substandard and poorer quality homes developed through PDR are more likely to be used to house vulnerable people such as those in temporary accommodation.”
78.Whatever its actual contribution, most of the evidence argued that, given the concerns about quality, PDR was an inappropriate means of trying to boost housing delivering. East Riding of Yorkshire Council said its “long term success is questioned when the overall quality is low and the locality impractical”. John Bibby said Shelter was “completely against the idea” of ever using permitted development to deliver new homes. Mark Worringham from Reading Council said any development that results in new dwellings should be covered by a full planning application. Likewise, the DCN told us that “full planning permission should be required if we are to achieve quality, long-lasting, sustainable, and healthy communities”. South East Strategic Leaders said PDR was “not a solution to the housing crisis”.
79.A minority of those who submitted evidence disagreed and argued that the housing shortage was so acute that anything that delivered more homes should be welcomed, even if this meant accepting homes of a lower quality. London YIMBY and PricedOut suggested that some of those complaining about substandard homes might be crying “crocodile tears” and simply did not want “people on low incomes living near them”. John Myers, representing the YIMBY Alliance and PricedOut, whilst admitting that the number of new homes was “not enormous”, pointed out that every “small office…converted into a home” was “a home somebody can live in” and that we “should not completely neglect the homes being created”. The Adam Smith Institute said MHCLG was right “to allow the rapid repurposing of commercial real estate into residential” and thought there was “scope to go further”. Policy Exchange suggested that people should be allowed to live in small flats if that was the best option available to them and that the “fundamental solution” was “expanding the supply of good homes, so that small and dark flats are no longer anyone’s best option”. That said, it did accept that in the meantime it “may well be appropriate” to apply minimum standards.
80.When compared to the overall number of new homes being delivered, it appears that permitted development rights have made a contribution to the supply of new homes, although the precise number is difficult to calculate given the likelihood that some of these homes would have been built anyway. It also seems likely that the new class MA right will increase its contribution further. Given the acute housing shortage in this country, we welcome this additional housing, but we have serious concerns that some of these homes are of poor quality and that some of the people living in them do not have the option of living elsewhere. All new homes delivered through PDR must be truly fit for purpose and suitably located. A flat on an industrial estate is totally unsuitable for young children.
81.As already recommended, the Government should pause any further extensions of permitted development, including the new class MA right, which is due to take effect on 1 August, and conduct a review of all PDRs for change of use to residential. As part of this review, it should consider how to extend prior approval without also adding to the burden on local authorities. In particular, we recommend that local authorities be able to prevent the siting of homes in inappropriate locations, such as business and industrial parks. Among other amendments to prior approval, the Government should consider the following:
82.It has long been an accepted part of the planning system that the impact of large-scale development on local communities needs to be mitigated through the provision of additional infrastructure and affordable housing. As Policy Exchange explained, “inflows of people to a locality can lead to a strain on local services”, as it “takes time for local services to expand in response”. Sudden increases in population can place a particular burden on the NHS and schools. For this reason, LPAs can secure contributions from developers to mitigate the impact of development through Section 106 agreements and the Community Infrastructure Levy (CIL). Section 106 agreements, otherwise known as developer contributions, are agreed between LPAs and developers before planning permission is granted and can be used to require developers to provide or pay for a certain number of affordable homes or infrastructure. CIL is a fixed charge levied on the floorspace of new development and secures infrastructure that addresses the cumulative impact of development in an area. It is not mandatory for LPAs and levy rates are discretionary and established by assessments of infrastructure need and viability.
83.In practice, permitted development is usually exempt from all developer contributions and CIL. As Clifford, Ferm, Livingstone and Canelas told us, it is “generally accepted” that Section 106 agreements “cannot be negotiated” for permitted development, although they noted a few exceptions to this rule in London. In principle, permitted development is liable for CIL, but if no additional floorspace is created and the developer can prove the building was at least partially occupied in six months of the previous three years, they are exempt. In effect, this means that almost all permitted development schemes avoid paying CIL.
84.The effective exclusion of permitted development from developer contributions was repeatedly cited as among the most serious defects of the permitted development regime. Clifford, Ferm, Livingstone and Canelas said PDR had “introduced large numbers of new residents to areas, putting strain on social infrastructure”, sometimes in “areas of towns that did not previously have high resident populations” and which lacked green and outdoor play space. In a 2018 study, they calculated the cost of proper provision for areas affected by PDR could be £27.5 million in five case study local authorities. Reading Council said it had “potentially missed out on £2.17 million towards education and open space infrastructure”. Brighton and Hove City Council pointed out that the new class MA right would “likely result in significant additional infrastructure requirements” and so exacerbate the problem unless made liable for developer contributions. On the other hand, Mark Tufnell, Deputy President of the CLA, called the loss of developer contributions “a price worth paying”.
85.The loss of affordable housing was a source of particular concern. The LGA estimated that 16,200 affordable homes could have been lost in the last five years as a result of the exemption. Mark Worringham from Reading Council said the loss of affordable housing was “one of Reading’s biggest concerns with permitted development”. He said the majority of new housing in Reading needed to be affordable if it was to satisfy its assessed need but that permitted development was “taking a big chunk out of play”. Reading had estimated it could have secured up to 600 affordable homes since the office-to-residential right was introduced, which would have met 18 months of affordable housing need. It had also lost £3.6 million in financial contributions that could have been put towards council housing. James Wickham from the London Property Alliance said it was “a concern” that housing built under PDR had not in the past contributed to affordable housing. John Bibby from Shelter said:
Fundamentally, the most serious shortage of housing that we have in the country is the shortage of social rented homes, to which permitted development is not contributing anything, and it is in fact taking away affordable housing contributions. We do not see this as being something that is contributing in a meaningful way to the delivery of the right kind of new homes.
86.In its report, Building more social housing, our predecessor Committee said it remained “concerned about the lack of affordable housing obligations” and that without reforms “it is likely the planned expansion” of permitted development “will further reduce the delivery of social housing through the planning system.”
87.The recent White Paper, Planning for the future, proposes a new consolidated Infrastructure Levy that would replace both CIL and planning obligations and which could be extended to capture “some permitted development rights including office to residential conversions and new demolition and rebuild permitted development rights.”
88.Much of the evidence, whilst supporting the principle of including permitted development within the new Infrastructure Levy, was concerned about the timing of its introduction. John Bibby from Shelter feared it looked like “jam tomorrow” while the Government continued “to extend permitted development rights today”. He said no one knew when it would be introduced, what it would look like and how many new affordable homes it would deliver. Dr Clifford from the Bartlett School of Planning said it was “welcome” and would go “some way to addressing the problem” but had concerns about the rate it would be charged at and “how many more permitted development conversions to residential we might see before we actually have that implemented.” Sarah Bevan from London First welcomed the idea of the levy but called it “the least developed part of…what was quite a sketchy White Paper” and feared it might be “watered down”. Like Dr Clifford, she worried that “in the meantime, we are missing out on so many potential affordable homes” and “developer contributions to physical and social infrastructure”. Clifford, Ferm, Livingstone and Canelas said the Government should amend regulations “urgently” to require planning contributions for all PDR conversions, instead of waiting for the new Infrastructure Levy to be implemented.
89.The Minister told us the Department had no plans to introduce the Infrastructure Levy before the Planning Bill and that, as part of the consultation, it was “looking to see whether PDR development could be part of the Infrastructure Levy”. He said the Department was “still working through the proposals…to make sure they work” but that he was “very keen” to make sure they delivered “at least as much affordable property, as well as infrastructure, as the present system”. When asked if changes would be made as part of the upcoming planning reforms, he said we would “not have to wait long” to hear the proposals.
90.Housing delivered under permitted development can have as great an impact on local infrastructure and the delivery of services as housing built through the full planning process. It should therefore contribute to the cost of offsetting its negative impact. The loss of affordable housing is a particularly unfortunate consequence of its effective exemption from Section 106 agreements and the Community Infrastructure Levy. We welcome the idea of the proposed new Infrastructure Levy covering permitted development, but we are concerned about the lack of detail and of a clear timetable for its introduction.
91.Whatever the Government’s long-term plans for permitted development and the Infrastructure Levy, we recommend it legislate as soon as possible to ensure that permitted development contributes towards the cost of providing the infrastructure and affordable housing needed to offset any negative impact on the local community.
168 , para 7.6
169 MHCLG, , para 10
170 Policy Exchange ()
171 London YIMBY, PricedOut ()
172 CLA ()
173 Clifford, Ferm, Livingstone and Canelas (); British Property Federation ()
174 NALC ()
175 Clifford, Ferm, Livingstone and Canelas (); [Rachel Blake, Mark Worringham]
176 Reading Borough Council ()
177 Shelter ()
178 Mr Michael Fearn (Consultant at MFS Professional Limited) ()
180 [Christopher Pincher, Simon Gallagher]
182 Town and Country Planning Association, , (November 2018); Royal Institution of Chartered Surveyors, , (May 2018)
183 MHCLG, , (July 2020); the academics who wrote the report also submitted evidence to the inquiry, and one of them, Dr Ben Clifford, gave oral evidence
184 Town and Country Planning Association (); [Rachel Blake]; London Councils (); Clifford, Ferm, Livingstone and Canelas (); District Councils’ Network (); Shelter (); Association of Town and City Management (); Levitt Bernstein (); Reading Borough Council (); Local Government Association (); Land Promoters and Developers Federation (); Tonbridge & Malling Borough Council (); Crawley Borough Council ()
185 Clifford, Ferm, Livingstone and Canelas ()
186 London Councils ()
187 Local Government Association (); the point about mental wellbeing was made by others, including District Councils’ Network (); Hertfordshire Infrastructure & Planning Partnership (); Clifford, Ferm, Livingstone and Canelas ()
188 Shelter ()
189 Mayor of London ()
190 MHCLG, , (July 2020); RICS, , (May 2018)
191 Clifford, Ferm, Livingstone and Canelas ()
193 Clifford, Ferm, Livingstone and Canelas (); [Clifford]
195 Clifford, Ferm, Livingstone and Canelas ()
196 Clifford, Ferm, Livingstone and Canelas (); Reading Borough Council (); Local Government Association (); District Councils’ Network (); The London Borough of Hillingdon (); London Councils (); East Riding of Yorkshire Council ()
199 London Councils (); Reading Borough Council (); Shelter (); [Ian Fletcher]; Tonbridge & Malling Borough Council (); British Property Federation (); Local Government Association (); Royal Town Planning Institute (); London Borough of Bromley (); South East Strategic Leaders (SESL) (); [Mark Worringham]; Crawley Borough Council ()
200 Clifford, Ferm, Livingstone and Canelas ()
201 Crawley Borough Council ()
202 London First (); Reading Borough Council (); Local Government Association (); [Rachel Blake]; Clifford, Ferm, Livingstone and Canelas (); Mayor of London ()
203 Clifford, Ferm, Livingstone and Canelas ()
204 Clifford, Ferm, Livingstone and Canelas (); District Councils’ Network (); London Councils (); Shelter ()
205 London First ()
207 Reading Borough Council ()
208 Mayor of London ()
209 National HMO Lobby (); Highfield Residents Association (); Heathdene Area Residents Group (); Nottingham Action Group on HMOs (); The Moseley Society, Moseley Regeneration Group (); Mr Colin Quinney (); Mrs Elizabeth Gates ();
210 National HMO Lobby (); Highfield Residents Association ()
211 The Moseley Society, Moseley Regeneration Group ()
212 District Councils’ Network (); Shelter (); Royal Town Planning Institute (); LSE London, London School of Economics (); Local Government Association ()
213 Royal Town Planning Institute ()
214 Shelter ()
216 LSE London, London School of Economics ()
217 Local Government Association ()
218 Town and Country Planning Association (); London Councils (); East Riding of Yorkshire Council (); [Mark Worringham, John Bibby]; District Councils’ Network (); Local Government Association (); South East Strategic Leaders (SESL) (); Mayor of London ()
219 East Riding of Yorkshire Council ()
222 District Councils’ Network ()
223 South East Strategic Leaders (SESL) ()
224 London YIMBY, PricedOut ()
226 Adam Smith Institute ()
227 Policy Exchange ()
228 Policy Exchange (); London Councils (); Local Government Association (); Heathdene Area Residents Group (); Crook, Goodstadt, Whitehead; Henneberry, Gallent, Morphet, Carmona, Wong, Tait and Parker ();
229 Most Section 106 agreements are for affordable housing. In 2018, MHCLG published a survey of LPAs on the number of planning obligations agreed or delivered in the 2016-17. It found that developers’ agreed contributions for affordable housing totalled an estimated £4 billion in 2016-17, which represented 80% of the value of all Section 106 agreements. See: MHCLG,
230 MHCLG, , (16 November 2020)
231 Clifford, Ferm, Livingstone and Canelas ()
232 Clifford, Ferm, Livingstone and Canelas ()
233 [Mark Worringham]; [James Wickham, Ian Fletcher]; Dolphin Living (); District Councils’ Network (); Reading Borough Council (); Local Government Association (); Mayor of London (); Clifford, Ferm, Livingstone and Canelas (); London Councils (); East Riding of Yorkshire Council (); Brighton & Hove City Council (); London First (); Tunbridge Wells Borough Council (); Policy Exchange (); London YIMBY, PricedOut (); South East Strategic Leaders (SESL) ()
234 Clifford, Ferm, Livingstone and Canelas ()
235 Reading Borough Council ()
236 Brighton & Hove City Council ()
238 [Rachel Blake]; [James Wickham]; Dolphin Living (); District Councils’ Network (); London Councils (); Reading Borough Council (); Local Government Association (); Shelter ()
239 [Rachel Blake]; Local Government Association ()
243 Housing, Communities and Local Government Committee, Third Report of the Session 2019-21, , HC173, para, 103
244 , p. 64
248 Clifford, Ferm, Livingstone and Canelas ()