- Is a Permission a Permission or is it a Requirement?
Associate Solicitor Victoria Charlesson, in our Planning & Environmental team, discusses how the government can incentivise those with the benefit of planning permission to build out those permissions.
We have previously published a blog in respect of landbanking and Sir Oliver Letwin’s review. We now take a look at one of the ways in which the Government could try to encourage build out of planning permissions and close the gap between those homes granted permission and houses dwellings actually built.
Figures released by Savills at the end of 2017 showed that “prime arable” land was on average valued at circa £9,000.00 per acre, compare this with an average value of circa £6m per hectare for residential land (Valuation Office Agency 2015). You can see why investment into agricultural land with the view of selling it on with planning permission is rather appealing. Note however that this figure includes London land values and ignores possible Section 106 obligations such as affordable housing provision which would reduce the development value.
How then can the government incentivise those with the benefit of planning permission to build out those permissions?
There is no condition placed in planning permissions requiring that development is to be completed within a specified period. The Planning Practice Guidance specifically provides that such conditions would not meet the test of necessity and would be difficult to enforce due to external factors which influence development (contractor availability etc).
Notwithstanding this Central Bedfordshire Council has previously required developers to enter into a Section 106 obligation requiring them to identify how many dwellings could be built within five years of planning permission being granted and then committing to that build out rate. A similar approach was agreed between a developer and the local authority at a site under appeal in Milton Keynes. However, this appeal has since been called in by the Secretary of State. It is unclear whether such approach has increased build out of planning permissions, or if such obligations have indeed been complied with.
Issues with this approach include enforceability. If the developer does not meet the target of houses being built what action can the local authority take to ensure compliance? Perhaps it is this type of situation whereby a local authority may decide to serve a completion notice on the developer. Such notices are not regularly used by local authorities and they do not require completion of the development. However, they do threaten to withdraw planning permission to the extent that it has not been implemented. The threat of potentially losing the benefit of planning permission for the dwellings not yet implemented may well be enough for the developer to at least build out those that were agreed to in the Section 106 obligation and therefore increase some build out of dwellings.
Local authorities should however be careful in considering when to serve such notices and try to ensure that completion notices are not served where a developer has technical reasons for not completing a development such as lack of availability of resources rather than simply monetary reasons to increase profit on dwellings built by keeping demand high but supply low.
Interestingly a recently closed consultation on changes to the National Planning Policy Framework (NPPF) the revised document proposed a new paragraph 78 which would require local planning authorities to:
- Consider imposing a condition requiring commencement of development within a shorter timescale than usually provided (e.g. within 2 years rather than 3) provided such a condition would not threaten the development’s viability/deliverability. Therefore, the local authority should consider the developer’s position in being able to implement the permission and bring forward the development prior to imposing such a condition. One would assume that where onerous planning conditions are attached a local authority would not also impose such a condition.
- Consider why (if appropriate) an earlier grant of planning permission for major development for that same site was not commenced within the conditioned period. We would assume that part of this consideration would include looking to see whether underlying land issues (e.g. contamination) affected the viability of the scheme or whether economic factors played a role etc. In how much depth a local authority is required to go and what action it should subsequently take remains to be seen.
The consultation ran until 10 May 2018.
Alternatively, the local authority may wish to consider their compulsory purchase powers. We will look at this option in another blog shortly.
For more information, please contact a member of our Planning and Environmental Law team.
This blog article was produced with support from Kayleigh Chapman.
This article is intended for the use of clients and other interested parties. The information contained in it is believed to be correct at the date of publication, but it is necessarily of a brief and general nature and should not be relied upon as a substitute for specific professional advice.