In the Queen’s Speech this week the Government announced its intention to legislate to reform the planning system in the next session of parliament. Here we will look at what could happen and what it could mean for the housing market.

Planning reform was not an entirely new announcement. Reforms have been under consideration for some time and were initially planned to be brought before parliament in 2020.

So what might planning reform involve?

The new reforms suggest a very fundamental change to the planning system. The biggest change, potentially, since the current system was introduced following WWII.

Under the current planning system, builders and developers have to work up plans to build, for example, new housing. They then have to submit a planning application to the local planning authority. The plans are checked to see how they comply with local planning policy, put out for public comment, and perhaps discussed with planning officers and revised before they are recommended either for approval or refusal. They may also be discussed by a planning committee made up of local councillors before a decision is made.

While this system has many merits many people will agree that it can be cumbersome and time consuming. Speeding up the system so that more houses can be built more quickly is one of the Government’s reasons for trying to reform it.

It’s proposed that the new system, however, will be based around a zoning system. This could be similar to the system that is used in some other countries, such as the USA.

Under the reforms, local councils will have to designate the locality either as areas for ‘Growth’ or to be ‘Protected’. A further category of ‘Renewal’ areas has also been proposed previously.

It seems likely that this zoning will work alongside a kind of permitted development system. As long as builders and developers wanting to build in a Growth zone abide by a local planning code they will be able to go ahead and build without needing to formally apply for planning permission.

What will this mean for the housing market?

In theory it should be quicker and easier to build new houses. So the supply of new houses should increase. This, in fact, is one of the main reasons the Government has given for making the reforms. That could be good news for those wanting to buy a house, as well as for builders and developers of course.

There could be some problems with the new system, however.

A key point is that areas of the country will need to be zoned for planning purposes. This is likely to be complicated and could take time. The current system for creating local plans is far from simple. It takes local authorities almost three years on average to introduce a new local plan.

The present system calls for local authorities and developers to work together to ensure that new housing goes where it is needed and wanted, and is of the right type. While the current system isn’t always as effective as it could be the reforms won’t make the situation any better. Developers will be able to build what and where they like in Growth areas to a great degree.

It’s likely there will be no opportunity for interested parties to comment and object to individual proposed developments. This seems at odds with the established system of local democracy, and that the idea that new development should complement the local area.

That could result in more problems in the housing market not fewer. There could end up being too much of the wrong housing in some areas and vice versa. While there seems no commercial reason why developers would want to build homes that aren’t needed in an area they could do, whether by design or accident. There might not be so much emphasis on providing the homes that are needed. It’s unclear how a new system for providing affordable housing would actually work.

It could mean that some types of property in some areas will still be in very short supply, and prices and rents there will keep rising or even soar. While in other they will stabilise, or even be hit. It could make the UK property market even more imbalanced – and very difficult to judge.

Planning reform – other points to consider

There is a housing shortage in many parts of the UK because there is a shortage of suitable land to build on. Delays in building new homes are not just due to the current planning process, but other factors such as the time needed to source land, land banking, the time needed to design a development, construction skills shortages and the time needed to physically build it out. Planning reform won’t do anything to address those issues.

Lastly it’s important to remember that the proposals for planning reform are still proposals. The exact details have yet to become clear. They are controversial and could change before they are introduced, if indeed they are. It’s also likely to be some time before any changes come into effect.

However, it’s important to bear in mind that the latest planning proposals hold potential to change the planning system fundamentally and have a major impact on the UK housing market in future.


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