Announcements of measures to support the economy following Covid-19 are coming thick and fast from the Government at the moment. One recent announcement, made by Prime Minister Boris Johnson last week, announced reforms to the planning system. In this post we will look at what these proposals could mean for the housing market.
The Government claims that the planning reforms recently announced by Boris Johnson are the most radical reforms to planning permission in England since the Second World War. The aim is to both support the construction industry and increase the supply of homes. This will be made possible by extending permitted development rights and allowing builders and developers to redevelop buildings into new homes without the need to obtain planning permission in certain circumstances.
The proposals make several key changes to the rules on planning permission:
* More commercial buildings will be able to be converted into residential property without planning permission. (This is an extension of a permitted development right allowing offices to be converted into residential property which has been in place for several years.)
* Redundant commercial and residential buildings will be able to be demolished without planning permission if they are to be replaced with homes.
* There will be changes to what are known as the use classes. It will be possible to change the use of a building from one use to another use without planning permission in a wider range of circumstances than is possible now.
So, for example, a shop will be able to be used as a café or an office without planning permission – which isn’t normally possible at the moment. The proposals say that some uses, such as a pub or village shop, will be protected though.
* There will be what is called a fast track system to make it easier to build new residential space on top of existing buildings. This will have to follow a consultation process rather than requiring planning permission. These types of development are often known as airspace developments.
The Government announcement says that more details of the proposals will be published this month and that it aims to make changes to the law as soon as this September. The measures could form part of a much wider overhaul of planning law in England, which has been under consideration for some time, but which has been delayed.
So let’s look at what these changes might mean in practice, and at what they might mean for the housing market overall.
* It will be much easier and cheaper for developers to convert commercial buildings into residential property.
Obtaining planning permission can be a long, complex and expensive process for several reasons: The planning process in many areas is overburdened with applications. Some councils are anti-development. Objections from residents’ and action groups can halt new developments. Planning application appeals can be expensive and lengthy.
Schemes that would not otherwise have gone ahead will potentially now be able to be developed. That could help could help property sector companies and jobs in construction too.
* It should increase the supply of new homes to buy, to rent and to invest in across many areas. Developers will probably be attracted to use the new concessions in places where demand is highest and supply is short.
* There could be an impact on prices and rents. For example, if the supply of property increases within an area prices and rents could be pushed down.
* It could help revitalise town centres and other places that have been, or will be, affected by an economic downturn. For example, empty and unsightly commercial properties could be revamped for new uses or to create attractive new residential areas.
* It could lead to unregulated, perhaps undesirable development and conflicts of use in some cases. For example, more residential buildings could be developed in commercial or industrial areas.
* The measures won’t necessarily provide more housing of the types and in the locations where it is most needed however. Developers are likely to be attracted to use the new concessions in places where it is most financially attractive, not necessarily the places where affordable housing is most needed.
* Local communities and local authorities will lose a degree of control over development in their local area.
* It could lead to a drop in housing standards in some cases. The Building Regulations will continue to apply even where planning permission is not required. However, it has been possible to convert some office buildings into residential property for several years now and the standards of these have not always been very good.
There is even a risk that these concessions could be exploited by some less scrupulous developers who see it as an opportunity to provide home buyers, investors and tenants with sub standard property.
In general, anything which increases supply and choice in the housing market ought to be seen as a positive for buyers, tenants and property investors alike. It needs to borne in mind, however, that these proposals have drawbacks as well as advantages. It will be interesting to see more specific details when they are published. And it won’t become clear as to exactly how they might affect the housing market until developers start to come forward with new schemes.