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The Housing and Planning Bill – housing heaven or headache? Self-build and custom housebuilding

Out-Law Analysis | 29 Oct 2015 | 3:49 pm | 4 min. read

FOCUS: The Housing and Planning Bill released last week has started its passage through parliament. 

The Bill lays out the framework through which the government hopes to deliver new homes under a faster and more streamlined process. As with many new pieces of legislation, however, it will be the detailed draft regulations and guidance still to be issued that will provide a clearer picture of how this will impact on the delivery of homes and how the various initiatives will operate together.

However, there are practical implications that can be considered now. In the third in a series of articles that focus on issues related to the delivery of housing via the planning system, we look at the provisions on self-build and custom housebuilding and summarise some other aspects of the Bill.

Self-build and custom housebuilding

The Bill's provisions support existing legislation on self-build and custom housebuilding by requiring local planning authorities (LPAs) to ensure sufficient serviced permissioned plots are available to meet demand in their area, as identified by the register of persons requiring self-build plots.

The main proposal under the Bill on this issue is that LPAs will be under a legal duty to grant sufficient 'suitable development permissions' to meet the demand for self-build/custom build in their areas.

The Bill clarifies that 'development permission' will include planning permission or planning permission in principle (PiP) and will be "suitable" where it authorises development that could include self-build and custom housebuilding on those plots. It is therefore envisaged that self-build and custom build plots could be made available as part of a wider housing development scheme alongside other housing types.

The Bill inserts a legal definition of 'self-build and custom housebuilding'. It does not separate the concepts to distinguish between 'self-build' and 'custom build'. It defines these terms collective as meaning a "building or completion by individuals, association of individuals or persons working with or for individuals or associations of individuals, of houses to be occupied as homes by those individuals". 

"Home" is defined as that individual's sole or main residence. The Bill goes on to clarify that the definition "does not include the building of a house on a plot acquired from a person who builds the house wholly or mainly to plans or specifications decided or offered by that person" – i.e. regular commercial housing developers.

There may, however, be some scope for some housebuilders to offer custom-housebuilding plots where more than 50% of the plans, i.e. 'mainly', are left to individual formulation or formulation by a third party, including potentially a third party developer. The implementing regulations will require review as to how they deal with potential collaborative arrangements between separate developers, with one providing the plot and the other providing plans and construction input to the customer.

Clearly the legislation and related regulations intend to tightly control who can provide this type of housing. Developers and LPAs may decide to work alongside individuals or associations of individuals to provide the land for self-build as part of a wider housing scheme. No mention is made as to whether section 106 contributions or a Community Infrastructure Levy (CIL) would be associated with self-build plots.

Summary of other areas covered by the Bill - neighbourhood planning

The new Bill aims to simplify and speed up the neighbourhood planning process to support communities that seek to meet local housing and other development needs through neighbourhood planning.

Neighbourhood plans are taking on average two years to complete which creates further uncertainty for developers and LPA's in their decision making. To reduce the time involved, the Bill will introduce powers to allow automatic decisions on the designation of whole parish areas, rather than only part of the area applied for being designated, subject to certain criteria being satisfied. Further, the secretary of state (SoS) will have the ability to introduce time periods within which the LPA must make key decisions and also to prescribe time limits for LPA's to decide whether to hold a referendum on the plan.

A further power will be given to the SoS to intervene, at the request of the parish council or neighbourhood forum, in a LPA's decision whether to hold a referendum on a neighbourhood development order or plan proposal.

Finally, a new provision will require a LPA, at the request of a neighbourhood forum, to notify the forum of planning applications in the neighbourhood area for which the forum is designated. This right is already afforded to parish councils.

These changes illustrate that it is perceived that LPAs are not always helping neighbourhood plans progress as fast as the Government would like and give the SoS wide powers to intervene.

Of course, some draft neighbourhood plans are not fit for purpose, including where they are not in general conformity with emerging or existing local plans, and these changes will do little to help such plans. It will also be interesting to see how the SoS will resource direct input into neighbourhood plans – where are all the staff at the Department for Communities and Local Government (DCLG)  to help? It is a little ironic that greater centralist Government department intervention rights are perceived as potentially required to implement the localism agenda.

Local planning

The Bill gives new powers for the SoS to intervene in local plan making to ensure local plans are effectively delivered by LPAs.

A number of new powers will be introduced in relation to local development schemes/development plan documents including a new section enabling the SoS to intervene in the development plan process by directing a LPA to prepare or revise a document, to submit that document to examination, to publish the recommendations and to consider whether to adopt the document.

This has been widely trailed and is a useful power where LPAs have consistently failed to prepare an adequate plan quickly.

Planning powers of the Mayor of London - devolving further powers to the Mayor

The Bill will devolve further planning powers to the Mayor of London, in line with the government's devolution commitments.

The list of planning applications which the Mayor can 'call-in' will now be able to be prescribed by the SoS by reference to the Mayor's London Plan and the Mayor will be able to direct a London borough to consult with him before granting planning permission for those prescribed developments.

The Mayor will also have planning powers over wharves and sightlines devolved to him and secondary legislation to give effect to this will be made in due course.

This has also been widely trailed and is likely to be a useful power for areas of London, for example Opportunity Areas, where such call-ins may become more common as a result of the link to the London Plan.

Richard Ford and Kate Brock are housing and planning law experts at Pinsent Masons, the law firm behind Out-Law.com

For further information, please contact:

London: Richard FordIain GilbeyNicholle KingsleyMarcus BateRichard GriffithsRobbie Owen

Birmingham: Rebecca Warren

Leeds: Jonathan Riley

Manchester: Mike Pocock