A 10-Point Plan to Boost Self-build

A 10-point Plan to Boost Self-build may 2013

introduction

A 10-point Plan to Boost Self-build

This document sets out measures to deliver growth in the UK housebuilding sector by creating a more accommodating environment for minor housing development schemes of between one and 30 units. Minor development schemes are primarily those delivered by small regional developers, selfbuilders, Housing Associations and the burgeoning custom build sector.

On the day prior to the 2013 National Homebuilding & Renovating Show at the NEC, Birmingham, we gathered 14 key self-build leaders as part of a Self-Build Industry Round Table Meeting, and asked them to share what they saw as the main issues holding their industry back. We asked planners, finance providers, package suppliers, custom builders, and providers of building materials (some, but not all of whom, were members of the National Self Build Association, NaSBA) for their ideas and to aid us in coming up with some bold ideas to help shape our self-building future.

Delegate List: Ray Boulger, Head of Mortgage Strategy John Charcol Raymond Connor, MD BuildStore Financial Services Tim Crump, MD Oakwrights Ken Dijksman, Ken Dijksman Planning Consultants Peter Harris, MD Centaur Special Interest Media James Herriot, MD Callerton Kitchens and RK-Tec Michael Holmes, Editor-in-Chief Homebuilding & Renovating Simon Middleton, MD Self-Build Zone Steve Midgley, MD Fairgrove Homes Nick Noble, MD Centaur Consumer Exhibitions Jason Orme, Editor Homebuilding & Renovating John Sawyer, Head of Custom Build Enabling Igloo Regeneration Adrian Spawforth, MD Spawforth Associates Ted Stevens, Chairman NaSBA Mark Stevenson, MD Kingspan Potton Sally Tagg, MD Foxley Tagg Planning Consultants Adrian Troop, MD Nu-Heat Gus Zogolovitch, MD Solid Space

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A 10-point Plan to Boost Self-build

background

The small-scale organic growth of settlements by modest and dispersed incremental additions over time has been going on for centuries. It created the villages and towns we all love. This natural evolutionary process ground to a halt when the last Labour Government introduced the principle of not building on greenfield sites unless such sites are specifically identified and allocated in a five-year development plan.

One consequence of this action has been to gradually starve self-builders, smaller developers and now custom build developers of building land and this is considered to be a significant factor in the historically low level of new housebuilding. We have been appalled but not surprised to discover that over 90% of all new homes built in the UK are on larger sites of 31 units or more which in our view is clear evidence of the failure of current policies to assist environmentally benign and socially/ economically beneficial small scale residential proposals.

It is proposed that ‘switching the tap back on’ to create a flow of smaller development sites would see the self-build sector and small builder/developer sector return to their former levels of activity and beyond, providing a sustainable and politically acceptable way to deliver more new homes, creating new jobs and prosperity.

• The number of self-build completions has fallen by 40% since the peak of the market in 2006-07, from over 18,000 per year to 11,000 in 2012. (Source HMRC) • There were fewer than 15,000 applications across the UK for single new dwellings in 2012 — the majority of them were proposed on infill sites and were replacement dwellings.

• Only 142,000 new homes were completed in total in the UK in 2012 (including private sector, local authority, housing associations and self-build) — a fall of 30% from an average of over 200,000 during the peak years.

• The number of small builders constructing 30 or less units a year has declined by 55% between 1991 to 2011. (Figures from National House Building Council) • The number of housing starts made by small builders constructing 1 to 30 units (including approximately 30% of self-build homes) has fallen from 24% of all new homes, to just 10%.

• Over 90% of all new homes built in the UK are on larger sites of 31 units or more.

• Research undertaken by Ipsos MORI in January 2013 on behalf of NaSBA (National Self Build Association) suggests that the demand for bespoke housing (self-build and custom build homes) is significantly greater than the number of units completed.

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A 10-point Plan to Boost Self-build • The Ipsos MORI survey found that approximately six million Britons would like to build their own home and over one million would like to do so in the next 12 months. At current levels of construction, fewer than one in a hundred are likely to succeed.

• There are many reasons why so many people fail to fulfil their ambition to build an individual home, but shortage of building plots is identified as the major reason by NaSBA and a number of independent reports.

The 10 proposals on the following pages, developed following the Self-build Industry Round Table Meeting held in March 2013, set out how the planning system could be reformed to ensure the supply of land for self-build and custom build developers is turned back on. The proposals should not require primary legislation, but seek to build on the National Planning Policy Framework (NPPF), and add further clarification and guidance on how it should be interpreted and implemented by local authorities. There is also scope to implement some of the changes by reviewing the outdated-but-not-revoked ‘Planning System: General Principles’.

CoNCLUSION Promoting small-scale residential development sites of up to 30 new homes could deliver a substantial additional number of high-quality, highly energy-efficient individual new homes by stimulating activity in the self-build, custom build and small builder sectors. This new housebuilding activity would be funded in the main by private capital, with limited environmental harm, and with positive benefits for smaller communities in terms of affordable housing, and the sustainability of local shops, schools and facilities. It could also bring with it inherent economic benefits for the construction sector and wider UK economy, creating new jobs and prosperity.

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A 10-point Plan to Boost Self-build

proposals

1. Allow Sites for 1-30 Units to Be Classed as Minor Development For the purposes of plan and local decision making, the definition of ‘major development’ is currently 10 or more dwellings. This is considered to be too low. Increasing the definition of ‘major development’ to applications for over 30 new homes would simplify and speed up the decisionmaking process and allow many more smaller unallocated sites to come forward for development.

2. Local Authorities Should be Encouraged to Allow Small-Scale Greenfield Windfall Sites Given the complexities of producing a five-year Local Plan, smaller sites including those for single dwellings are ignored as individuals don’t have the means to influence the Local Plan, and councillors do not see such sites as being able to significantly help meet housing supply requirements. Greenfield ‘windfall’ sites were traditionally part of the planning process and a viable way for individuals to build new homes outside of the strict confines of the local development or settlement boundary. This allowed for proportionate growth of settlements. Unfortunately they were eradicated by the last Labour Government under PPG3 which meant that all new development had to take place either within the settlement boundary or on brownfield sites.

We propose that all new minor development proposals (i.e. those under 30 units) should be capable of coming forward as unallocated ‘windfalls’ regardless of the status of the site (subject to necessary exclusions for green belt, National Parks, AONB, etc).

Local communities will be able to set parameters and criteria (usually within the Local Plan) against which to judge individual proposals. If the ability to influence this is framed within future Strategic Housing Market Assessment (SHMA) and Strategic Housing Land Availability Assessment (SHLAA) guidance, we would be delighted to contribute our thoughts.

3. Extend the ‘Help to Buy’ Scheme to Include ‘Help to Build’ Government should extend the ‘Help to Buy’ loan scheme, starting in January 2014, to include selfbuild and custom build projects. Providing those who want to build their own home a loan of up to 20% of the land cost and subsequent build costs, secured against the land value, would extend the option to self-build to many more people, encouraging more homes to be built. Lenders currently require a significant deposit on a land purchase, creating cashflow problems during the build stage for many, especially as lenders’ surveyors are currently very conservative in the valuation of construction projects during the build phase.

A similar scheme for custom build, offering a loan of up to 20% of the end value of a custom build home, would provide a significant boost for this nascent sector. Importantly, it could also bring the big five housebuilders into the custom build market, introducing them to a new and different customer who is not currently in the market for their new homes. This would allow the major housebuilders to bring new parts of large strategic land sites on stream sooner and faster.

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proposals (cont.)

A 10-point Plan to Boost Self-build

4. Remove Affordable Housing Contributions/Section 106 Agreements and Community Infrastructure Levy On Minor Development Schemes The number of proposed dwellings that trigger a percentage requirement of affordable houses should be increased significantly: schemes of up to 30 dwellings in villages and 50 dwellings in towns should be capable of being built without providing affordable housing. This measure alone could improve the viability of many sites and stimulate a significant number of new residential proposals.

Affordable housing thresholds are currently used to resist housing development, particularly in rural areas. In other districts, Section 106 Agreements (s106) extracting planning gain are imposed as a Planning Condition even on approvals for single dwellings. Payments equivalent to 30% of the development cost can often be levied as a commuted Affordable Housing Contribution. Planning obligations may also be conditioned requiring an Infrastructure Contribution (except where Community Infrastructure Levy (CIL) has been introduced). Consequently many such schemes, including single dwelling sites, become unviable and either do not come forward, are not progressed, or development quality is compromised.

We welcome the Department for Communities and Local Government’s current proposals to allow an exemption for self-builders from Community Infrastructure Levy. CIL threatens to have a catastrophic effect upon small-scale developments where the impact upon local infrastructure is actually not significant. In relation to self-build schemes where site availability is low, redevelopment schemes that have an existing site value, and in cases where the developer’s margins are not high, CIL is disproportionate and will simply prevent schemes leaving the drawing board.

The industry should further educate self-builders about the impacts of planning obligations and that they remain a negotiable part of the planning process.

5. Allow Only Sites with Planning Permission to be Counted as ‘Deliverable’ Within the Five-Year Supply Requirement Development sites should only be considered ‘deliverable’ in Local Plan terms if they actually have an extant planning permission. If the ‘five-year supply of deliverable sites’ only refers to sites with planning permission, local authorities would have to encourage more sites to be brought forward, and there would be a genuine and highly beneficial increase in planning applications and planning permissions leading to delivery of building land, and subsequently more houses.

Paragraph 47 footnote 11 of the NPPF defines ‘deliverable’ as: “Available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years and in particular that development of the site is viable.” It makes no reference to sites having planning permission and we propose that this forms the basis of the definition of ‘deliverable’ as the grant of planning permission, in our experience, is the most important factor in increasing the probability that new houses will be built.

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proposals (cont.)

A 10-point Plan to Boost Self-build

6. Ensure Neighbourhood Plans Cannot Be Taken Into Account Prematurely We welcome the introduction of Neighbourhood Plans and the opportunity for local communities to shape the future of their environment. However, whilst Neighbourhood Plans are being drawn up they should not be used as a reason to refuse development on the basis of prematurity. There is a risk that Neighbourhood Plans are being commenced solely in order to resist development. Local authorities are already opposing development on the basis that it will ‘prejudice the Neighbourhood Plan’. We propose that prematurity to Neighbourhood and Local Plans should not be considered grounds for refusal.

7. Reduce the Cost of Putting Forward Planning Applications for Minor Development Proposals We regret the decline in outline planning applications which were previously used by self-builders as a cost-effective way of assessing the viability of a site. Only the information necessary to make a determination about the principle and deliverability of a proposed development scheme should be required as part of this application. Local authorities need to be clearer about distinguishing between determinate issues, which will influence whether or not a development should go ahead, and secondary issues, which will affect how it goes ahead. In recent years the cost of producing the information required for an application to be registered has soared, by including Flood Risk Assessments, Tree Reports, Biodiversity Surveys and Reports, Archaeological Reports, Utilities Reports, Landscape and Visual Impact Assessments, Design and Access Statements, Code for Sustainable Homes Assessments and more. The cost can be £10,000s for a scheme that may never progress and this is a barrier to bringing forward smaller sites.

The accepted proposals as part of the Government’s response within the Streamlining Information Required for Planning Applications – to require local planning authorities to review their Local Information lists every two years – do not go far enough in our opinion in ensuring the burden on self-builders will be reduced. We propose that for minor planning applications all secondary issues become reserved matters. This should not be left to local authorities to determine as they will usually want the maximum level of information at the application stage. These proposals will encourage the re-use of outline applications and therefore make it easier and cheaper for explorative applications to come forward.

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proposals (cont.)

A 10-point Plan to Boost Self-build

8. Ensure the Target-Driven Culture Does Not Lead to Unnecessary Refusals We propose that local authorities (LA) are given guidance that should be made crystal clear that housing targets (however they are derived) are minimums not maximums and that prematurity simply cannot be used as a reason for refusing planning consent for sustainable new residential schemes. We have met many a self-builder whose viable scheme has been rejected simply because the LA say they have already hit their target for new dwellings and are therefore no longer considering any applications for new dwellings. The upper limit is being used to discourage applications for new homes. Making it clear there is no upper limit will prevent this.

9. Ensure Determination Targets Do Not Lead to Refusals The current target-driven scheme of placing a performance time limit on the determination of planning applications is resulting in unnecessary refusals, delays to schemes that are withdrawn and resubmitted, and additional cost. We propose that, subject to agreement from the applicant, all minor development proposals (sites for 1-30 units) are given the option of being exempted from the eight-week time limit and therefore from National Performance Indicators.

Currently, many schemes are recommended for refusal due to a lack of time, often without just cause. Allowing an extension of the determination period with written consent from the applicant and removing such instances from the National Performance Indicator would prevent this problem very simply. Many such delays in determination are the result of local authority (LA) requests for further detailed reports and surveys to support the application — many of which could be dealt with equally effectively as a planning condition.

10. Provide Further Guidance Notes on Interpretation of the National Planning Policy Framework in relation to Sustainability and Rural Exception Sites Paragraph 55 of the National Planning Policy Framework (NPPF) allows special circumstances for the provision of isolated new homes in the countryside — one of which is that the design should be of ‘exceptional quality or innovative nature’. We propose a formal definition within a guidance note to local authorities (LAs) to clarify this issue because evidence suggests that the interpretation of it is hugely variable from LA to LA and even from appeal inspector to appeal inspector.

The current interpretation (particularly the translation of the term ‘innovative’ as ‘ingenious’ in some appeal judgements) seems to be solely used to allow ‘eco mansions’ to be built. We feel that smaller-scale, lower-budget homes are being discouraged because of the high cost of promoting such a development scheme. We therefore propose the following definition:

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proposals (cont.)

A 10-point Plan to Boost Self-build

“High-quality architecture as judged by local authority Design Review Panels” This is democratic, locally accountable and means that new houses in the countryside can be built by people without needing the funds to access the very expensive design and (invariably appeal-orientated) planning process.

The NPPF also establishes a presumption in favour of sustainable development. This is strongly encouraging, but many local authorities are, in practice, treating this as a one dimensional issue and concentrating almost exclusively upon the transport/accessibility parts of ‘sustainability’ when determining planning proposals (e.g. assessing how close the proposed new dwelling is to the existing settlement, local amenities, public transport etc.). The NPPF requires a more holistic consideration of the social, economic and environmental benefits of what is being proposed.

Assessed in these terms many self-build schemes are highly sustainable, even if relatively remote from town centres or schools. The reality of car bourn travel cannot be ignored or used to prevent desirable small scale developments of family houses in villages and on the periphery of towns.

Protection of designated areas would remain in place to protect the most important parts of the countryside from unsuitable development.

In addition to our view, a well-established and industry-recognised definition of ‘sustainable’ home already exists within the Code for Sustainable Homes (which requires homes to be sustainable in much broader terms than just energy efficiency). The current situation allows for local authorities to require new homes to meet the Code for Sustainable Homes definition of sustainability as a planning condition, but also rejects the same proposal for a Code Level 6 home on the basis that it is not sustainable according to the NPPF. This is contradictory. We therefore propose that the sustainability of the build quality and construction of many self build homes be given significant weight. Protection of designated areas would remain in place to protect the most important parts of the countryside from unsuitable development.

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A 10-point Plan to Boost Self-build

the industry

The self-build and custom build industry has a major role to play in educating the broader public about the benefits and issues faced by individuals building their own home. The key issue is not that lack of interest in the idea exists (some six million people according to a recent Ipsos MORI poll) but that the industry and authorities have failed to remove the hurdles that stop 99 out of every 100 achieving their dream.

Current industry initiatives include National Self Build Week; the industry-funded Self Build Portal and a series of campaigning and educational articles in the key self-build magazines, for instance on the impact of the Community Infrastructure Levy.

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