Planning law update – June 2021

Our planning experts are on hand to discuss in further detail what effects they could have for you and your organisation.

First Homes mandatory after 28 December 2021 and New Model for Shared Ownership

Following public consultations in February and August 2020, on 24 May the Government published a written ministerial statement outlining the introduction of First Homes, a new tenure of affordable housing to provide homes for first time buyers at a discount of a minimum of 30%.  This was accompanied by new Planning Practice Guidance on First Homes.

We will consider the new scheme and what it means for developers in more detail in our next  Planning Law Update, but for now, there are two key dates to be aware of:

• 28 June 2021: This is the date that the changes to planning policy relating to First Homes will come into force, meaning that minimum of 25% of all affordable units secured by developer contributions should be First Homes. This should be taken into account in local plans and neighbourhood plans from this date (subject to transitional arrangements for local/neighbourhood plans at examination and publication stage).
• 28 December 2021: From this date, any full or outline planning permissions determined must comply with the First Homes policy requirements (with exceptions for where there has been significant pre-application engagement (for which the relevant date is 28 March 2022) and where the local/neighbourhood plans are made under the transitional arrangements).

Importantly, the new First Homes requirements will also apply to applications to amend or vary a planning permission under S73 TCPA 1990 where the variation or amendment in question relates to the quantity or tenure of affordable housing.

The Government also confirmed that the new model for shared ownership consulted on late last year (including lowering the minimum share purchase to 10% and allowing staircasing in 1% increments) will also come into effect from 28 June 2021.

Media reports Ministers are considering levy on developers for unbuilt homes

Amid concerns about land-banking by developers, and estimates that 1.1 million homes granted permission over the past decade remain unbuilt, Government Ministers are reportedly privately considering the introduction of a new ‘use it or lose it’ tax on permitted but unbuilt homes.

There doesn’t appear to have yet been any official statement on the proposals, but the Times reports one suggestion that developers would pay full council tax on all properties on a development from one to two years after securing planning permission, regardless of whether the homes have been built.

The Local Government Association has called for such a tax to be included in the upcoming Planning Bill, radically suggesting that Councils should be permitted to charge developers full council tax on every unbuilt development from expiry of the original planning permission, and additionally that it should be easier for Council’s to use compulsory purchase powers to acquire ‘stalled’ housing sites or sites where development is not meeting contractually agreed timescales.

It remains to be seen whether this reported ‘private consideration’ will lead to any formal proposals, but neither the Queen’s speech (see below) nor the accompanying Briefing notes made any mention of these radical suggestions.

Planning Bill introduced in Queen’s Speech 

As anticipated, the Queen’s Speech on 11 May announced the introduction of a Planning Bill, to “modernise the planning system, so that more homes can be built”.

The proposed modernisation of the planning system was first set out in the Planning for the Future white paper in August 2020, and the briefing notes accompanying the speech (available here) provide little in the way of further detail in respect of the proposals.

However, the briefing notes do confirm that reform of environmental impact assessment processes will be within the new Planning Bill, despite Environment Minister George Eustace previously announcing that the issue would be subject to a further consultation.

The Speech doesn’t offer any timescales as to when a draft Bill will be published, but commentators have suggested this is likely to be no earlier than Autumn 2021.

Pilot testing of the National Model Design Code

The Government announced on 21 May that the new National Model Design Code (“NMDC”), intended to ensure that “areas are beautiful, well-designed and locally-led”, is to be tested by 14 councils across England, including Newcastle City Council, as part of a six month pilot scheme. Once finalised, the NMDC will form part of the Government’s planning practice guidance and should be read as part of the National Design Guide.

The Councils will each receive £50,000 to produce a local design code in line with the NMDC, and is intended to test the application of the NMDC across different types of development, location and regions.  More information about the pilot can be found here.

Court finds that S106 Agreement does not have to bind all material interests in an application site

In R (McLaren) v Woking Borough Council [2021] EWHC 698, the High Court held that Woking Borough Council had not made an error in granting planning permission for a development where only part of the application site was bound by a S106 Agreement.

In this case, a landowner sought judicial review of the Council’s decision to grant planning permission to New Central Developments Limited (“NCDL”) for 46 flats and car parking, despite the fact that only NCDL had entered into a 106 Agreement which bound only their freehold interest, roughly half of the application site, with the other half belonging to the claimant.

Among other grounds, the claimant argued that the s106 Agreement was legally deficient in that it did not bind the site, and contended that there had been no explanation as to how or why the Council had reasoned the exclusion of the claimant’s land from the Agreement.

The Judge found that the Agreement complied with the requirements of s106 of the TCPA 1990, stating that he could not see any legal requirement for a S106 Agreement to bind all material interests in the planning application site, and that on the facts of this case, it was not a pre-condition of the Council Planning Committee’s decision for the claimant to be a party to the Agreement.  The Agreement bound a sufficient part of the site to preclude development unless the obligations in the agreement were met.

If you have any questions on the issues covered in this update and how they will affect you, please do not hesitate get in touch.