Planning reforms welcome but disappointing for BTR sector

While there is much to be welcomed, there are significant areas that require clarification and debate. Will the white paper lead to a step-change via the prime minister’s rallying cry of “build, build, build” while “cutting red tape but not standards” as hailed by the secretary of state Robert Jenrick, and ultimately lead to the creation of more beautiful buildings and exceptional places for all?

Given the loud pre-publication announcements about the white paper based on a radical revolution, much was expected. Helpfully, the document emphasises the crucial role the planning system can have on people’s lives, the economy, the environment, combating climate change and promoting design excellence which is refreshing and welcomed. Planning is hugely important to the build-to-rent (BTR) sector as we continue to secure more and more development opportunities and look to deliver these quickly through the planning system as part of creating exceptional places to live and work. 

The planning system has been lambasted – unfairly on many occasions – over recent decades as it sought to address a growing number of complex and interwoven development, environmental and social issues that were placed on its shoulders. The white paper provides an exciting opportunity to rethink, streamline and refine this system.  

Whether this is a radical revolution is up for debate as many familiar elements remain, such as local plans, applications, appeals and neighbourhood plans. However, it is clear that the government and the planning taskforce have challenged us with the proposed introduction of a myriad of important changes that will have a clear impact on the acquisition, planning, funding and delivery of new BTR schemes in England. 

In the foreword to the white paper, the prime minister highlights the need for people to be able to move to where “talents can be matched with opportunity”. In essence, this creates flexibility within the residential market for people to move seamlessly as new opportunities arise without compromising the quality of their lifestyle or the accommodation within which they live. This quality and flexibility is at the heart of the BTR movement and as such, it is hugely disappointing that the potential of the BTR sector is not specifically acknowledged – indeed not even mentioned – within the white paper.  

There appears to be a continuing preponderance on owning assets while the BTR sector is moving forward at pace delivering exceptional quality and flexibility in placemaking, mixed-use intergenerational accommodation and amenity-rich inclusive communities. Crucially, the BTR sector can play a vital role in helping to reach the 300,000-home annual target. The government should explicitly acknowledge this role given the fundamentals of the BTR rent business model and, crucially, our long-term stewardship and quality management of new homes and places. 

The proposals within the white paper come thick and fast. It will be fascinating to see how many of these survive through technical and political scrutiny, which will take place over the coming months. There is also a significant amount of additional information to be provided, including the publication of a local planning authority “comprehensive resource and skills strategy” alongside reference to the government investing in modernising the planning system via its next Spending Review. These are crucial elements if the reforms are to gain traction and become workable. The ability to work constructively with planning officers who have the time and energy to engage on the preparation of substantial regeneration projects is absolutely key to whether the planning reforms will be a success or not. 

The funding of the planning system also needs a carefully crafted strategy and the planning reforms reference the potential use of the new consolidated Infrastructure Levy to pay for core planning services. This includes the revamped local plan process, which will undoubtedly require substantial additional resource from all parties. The payment of substantial planning application fees, plus planning performance agreement contributions, often results in sums payable to the local authority in excess of £150,000. The ringfencing of these monies to pay for the planning system has not found its way into the white paper, which is a missed opportunity. 

The white paper cross-references a significant number of documents and initiatives that will become available over the coming months and which directly affect the proposed reforms. These include the National Model Design Code; the revised Manual for Streets; the Future Homes Standard; form-based development types; revisions to the National Planning Policy Framework; the potential for a new design expert body to be created; a new local authority performance framework; and clarity around how the new sustainable development test will operate. It is clear that there is a substantial amount of additional information to be published before the planning reforms can be fully assessed.  

The white paper also states that the Planning Inspectorate and statutory consultees should become more self-financing through new charging mechanisms. It is crucial that a co-ordinated approach (not a piecemeal free-for-all) is adopted to ensure that the already-expensive costs of pursuing planning proposals are not further inflated. Interestingly, the white paper uses some unfamiliar planning language such as “gentle densities” and “gentle intensification”, plus advocating that all new streets are tree-lined. The definition of “gentle” will be an interesting discussion, as will the practicalities of negotiating the positioning of tree-pits with utility providers and local authority highway officers. 

So will it boost the building sector? 

A fundamental element of the planning reforms is to “build, build, build” via a more certain and streamlined local plan process. Prior to the publication of the white paper, much was made of a radical move towards “zoning” and the reforms include a three-tier system focused on Growth, Renewal and Protected. Whether this is radically different from the current approach to allocating land can be debated, but one radically different element is the proposal within Growth areas to automatically grant outline planning permission for substantial development on allocated sites on the date the local plan is adopted.  

The definition of “substantial development” has not been defined but the suggestion is that this will be set nationally. The allocation (or zoning) of substantial development sites through the local plan process will include thresholds on height, scale and density. Once an automatic outline permission has been granted, the White Paper makes clear that subsequent detailed matters should be dealt with by officers via delegated powers, so there is no further member or local community involvement. 

This draws out a series of questions including how we – as developers, landowners and operators – optimise and safeguard the development potential of an area or site via the local plan process. How is the local planning authority going to resource this process, which could result in a (presumably) large number of outline planning permissions all being granted on the same day?  

In addition, a fundamental element of the white paper is local engagement. Local political parties, communities and individuals will need to become more organised at the local plan stage, as this may be their only opportunity to have their voices heard. 

Based on the information currently available within the white paper, it is hard to see how the local plan process will become streamlined and more efficient given the amount of detail and debate that will be required to either optimise the regeneration of a “substantial development” site or mount a comprehensive opposition. The white paper also encourages design codes and guides to be twin-tracked at the same time as preparing the local plan, adding further workstreams to an already crowded dance floor. The white paper targets the completion of the revamped local plans by the end of this Parliament (spring 2024), which will require a huge step-change and major funding commitments to come forward very quickly. Nevertheless, if the government is serious about the planning reforms, this is what will be required. 

The use of technology within the planning system is welcomed and is long overdue. However, professional judgement via the planning balance will continue to be hugely important. Planning decisions cannot be left to an algorithm or a tick-box spreadsheet approach. This is a further reason why comprehensive resourcing and investment into the planning system is crucial in order to deliver beautiful buildings and exceptional places. 

Finally, the consolidated Infrastructure Levy, which is intended to replace the Community Infrastructure Levy and Section 106 Agreements, has the potential to create much sensitive debate and discussion. It is important to recognise that the Section 106 Agreement mechanism is there to mitigate the impact of development and often contains a raft of obligations and controls that are not monetary. It is difficult at this stage to see how Section 106 Agreements can be phased out altogether without being replaced by a form of local agreement even when the Infrastructure Levy is introduced. It is also difficult to see how the Infrastructure Levy rate (or rates) set nationally could realistically account for all the many sites across the country, each with their own special characteristics and personalities. There surely must be a fear that high-value areas will receive more levy monies than low-value areas. A discussion on the workability of a national Infrastructure Levy is undoubtedly going to meander along over the coming months, although the ability to leverage infrastructure levy monies to provide affordable housing is a welcome proposal and again is long overdue. 

A missed opportunity

The start of the planning reform journey has been fascinating and there appears to be a genuine commitment from the government to initiate change. Encouragingly, the white paper has generated significant debate via a clear recognition that the planning system and the people that work within the system have a crucial role to play in creating exceptional places to live and work.  

The vast majority of the white paper is focused on the challenge of delivering new, quality homes. In this context, the government has regrettably missed a tremendous opportunity to recognise the extraordinary potential of the BTR sector. At Moda Living, we are determined to approach the reforms with an open mind and continue to press the government to enthusiastically accept that the BTR sector is an excellent model that creates beautiful buildings and exceptional places for all while enabling people to move seamlessly so that, as the prime minister says, their talents can be matched with opportunity.

James R Blakey is planning director at Moda Living