With pre-budget expectations indicating a strong focus on housing, the delivery of the Budget by Philip Hammond, the second of his Chancellorship, did not fail to disappoint, with a raft of housing and planning relating announcements being made.

The Government stated it is determined to fix the broken housing market and restore the dream of home ownership to a new generation. Its plans to achieve this are multi-pronged, proposing a number of reforms to seek to ensure there is more land for housing and other measures to support the private sector and local authorities to deliver more homes. There are also initiatives to help those currently shut out of the housing market.

The Budget announced a package of new policies which aim to raise housing supply by the end of this Parliament to its highest level since 1970, to reach 300,000 new homes per year through:

• Making available £15.3 billion of new financial support for housing over the next five years, bringing total support for housing to at least £44bn over this period; and
   
• Introducing planning reforms that will ensure more land is available for housing.

The key headlines are set out below, with many initiatives and measures subject to further Government consultation and review.

Planning for More Homes

The Budget builds on the reforms proposed in the Housing White Paper and confirms the Government’s commitment to maintain the existing protections for the Green Belt. Key initiatives include:

• Deallocating sites from plans – The Government will consult on strengthening policy to be clear that allocated land should be taken out of a plan if there is no prospect of a planning application being made;
   
• Intervention where there is a failure to progress Local Plans – The Government will shortly activate powers that will enable it to direct local planning authorities to produce joint statutory plans and undertake an assessment of where they should be used;
   
• First-time buyer led developments – The Government will consult on a new policy whereby local authorities will be expected to permit development on unallocated land on the condition that a high proportion of the homes are offered for discounted sale for first-time buyers, or for affordable rent. This will exclude land in the Green Belt; and
   
• Increasing housing density in urban areas – To ensure brownfield and urban land is used as efficiently as possible, the Government will consult on introducing a range of measures.

Ensuring that planning permissions are built out faster

The Government will consult on:

• Strengthening the Housing Delivery Test so that, from 2020, the presumption in favour of sustainable development would apply for Districts where delivery falls below 75% of the local housing requirement;
   
• Expecting local authorities to bring forward 20% of their housing supply as small sites increasing competition in the house building market; and
   
• Speeding up the development process by removing exemptions from the deemed discharge rules.

The Government will set up a review panel, chaired by Sir Oliver Letwin to review build out with the intention of explaining the significant gap between housing completions and the amount of land allocated or consented, and make recommendations for closing it. The review will provide an interim report in time for the Spring Statement 2018 and a full report in advance of Budget 2018.

The Government will also develop a Central Register of Residential Planning Permissions to improve information on where permissions are held and to monitor build out rates.

Developer Contributions

The Government promised in the Housing White Paper to respond to the CIL Review. Consequently, DCLG will launch a consultation with detailed proposals on the following measures:

• Removing restriction of Section 106 pooling;
• Speeding up the process of setting and revising CIL;
• Allowing authorities to set rates which better reflect the uplift in land values between proposed and existing uses;
• Changing indexation of CIL rates to house price inflation rather than build costs; and
• Giving Combined Authorities and planning joint committees with statutory plan-making functions the option to levy a Strategic Infrastructure Tariff (SIF).

Housing Investment

The Government will strengthen the ability of the Homes and Communities Agency (to be renamed Homes England) to use investment and planning powers to intervene more actively in the land market.  Initiatives include:

• £1.1bn for a new Land Assembly Fund to support the development of strategic sites;
• Five new Garden Towns;
• Increasing the Housing Infrastructure Fund by a further £2.7bn, taking the total investment to £5bn;
• Strategic planning in the South East Cambridge-Milton Keynes-Oxford corridor;
• A further £630 million to accelerate the building of homes on small, stalled sites by funding on-site infrastructure and remediation;
• A further £1.5bn for the Home Building Fund, providing loans specifically targeted at supporting SMEs;
• £8bn worth of new housing guarantees to support housebuilding;
• A further £2bn of funding for affordable housing, including the funding of social rented homes. This takes the total budget for the Affordable Homes Programme from £7.1bn to £9.1bn to 2020 – 21. It is expected this will provide at least 25,000 new affordable homes;
• Lift in Housing Revenue Account borrowing caps for Councils in areas of high affordability pressure, so they can build more Council homes;
• Estate regeneration - £400 million of loan funding for estate regeneration to transform run-down neighbourhoods and provide new homes in high-demand areas; and
• Construction skills – providing £34 million to scale up training models.

Homeownership

Initiatives to help those shut out of the housing market include:

• Stamp duty land tax – The Government will permanently raise the price at which a property becomes liable for SDLT to £300,000 for first-time buyers to help young people buy their first home;
• Help to Buy Equity Loan – a further £10bn for the scheme;
• Empty Homes Premium – local authorities will be able to increase the council tax premium from 50% to 100%; and
• Right to Buy Pilot - £200 million large-scale regional pilot of the Right to Buy for housing association tenants in the Midlands.

CONCLUSION

The Chancellor has delivered a Budget that is heavily focussed on improving housing delivery, to what would be its highest level since 1970, at 300,000 new homes per year.

The areas which have the greatest potential to change the planning system include policies to deallocate sites from local plans, increasing housing density in urban areas and intervention where there is a failure to progress Local Plans. In addition, the government has confirmed its commitment to maintain the existing protections for the Green Belt.

It is not clear how these policy changes will be implemented, however, it is likely the policies will be consulted on as part of a proposed new National Planning Policy Framework next year.

There is significant potential for wide-ranging implications, not least in relation to the Greater Manchester Spatial Framework, with the second draft due for release in June 2018.

Look out for further, more detailed analysis on the implications via our forthcoming KnowHOWs.