In his final report on build out rates, Sir Oliver Letwin has concluded that the ”fundamental drivers” of England’s slow building rate is the industry’s homogeneity of housing being built.
Following on from the recommendations set out in his interim report, Sir Oliver concluded that developers delivering a more diverse array of housing type and tenure would lead to a “substantially accelerated” rate of delivery.
Sir Oliver also recommended that it would not be sensible to attempt to force developers to reduce their house prices.
The government-commissioned review found that giving local authorities greater control over developments in their area, through one of either two special purpose vehicles, would help to boost housebuilding. These vehicles, termed a “Local Development Company” (LDC) or a “Local Authority Master Planner” (LAMP), would help the authority design a bespoke master plan and design code for each site.
Sir Oliver recommended that local authorities should be able to bid for a “small amount of seed funding to enable it to hire dedicated and qualified staff” for the newly created LDC or LAMP, before noting that Homes England is “establishing a new team” that could provide advice in this area.
He also suggested the government should establish a National Expert Committee to “advise local authorities on the interpretation of diversity requirements for large sites and to arbitrate where the diversity requirements cause an appeal as a result of disagreement between the local authority and the developer”.
On large housing sites, Sir Letwin recommended introducing new powers for local authorities to compulsorily purchase land “at prices which reflect the value of those sites once they have planning permission” in order to designate housing zones which can be developed “only as single large sites”.
This designation, he said, would ensure that landowners “cannot reduce the planning applications for such sites” to below 1,500 units, ensuring that they have to “comply with the diversity requirements in the new planning rules” for large sites.
The MP for West Dorset said he felt that local authorities “should be empowered to specify… strong master-planning requirements” for these newly created zones, including for a “strict design code” and “full and specific infrastructure requirements”.
This designation would therefore mean that the land value of these large sites would not be raised far above that if the site had “subsequently obtained outline permission under our current rules”.
To help “cap residual land values” for these large sites, Sir Oliver then recommended the housing and communities secretary insist on high levels of diversity, which should keep the ultimate land value of the site at “around ten times their existing use value”.
This ultimate uplift in the land value of the large site could also then be used to “contribute towards the cost of infrastructure… and affordable housing”, Sir Letwin said.
To deliver these changes, Sir Oliver recommends the government adopt a “new set of planning rules” specifically for large sites, which can be delivered through primary and secondary legislation, as well as an annex to the National Planning Policy Framework.
The government announced in the Treasury’s red book that a full response to the review will be delivered in February 2019.
John Acres, president of the Royal Town Planning Institute, said Sir Oliver’s recommendations “signal a much overdue strengthening of public sector planning”, adding that he welcomed giving enhanced powers to local authorities to help “achieve proactive development”.
“The concept of a National Expert Committee is a novel and potentially useful one, and we welcome Sir Oliver’s suggestion that at least one of its members should be a chartered town planner. The expected role of the committee in pre-application is vital to avoid holding up planning appeals.”