The recently elected Labour government has unveiled a draft rewrite of the National Planning Policy Framework (NPPF) for consultation. This document introduces significant changes aimed at streamlining housing needs assessments, promoting sustainable development, and supporting economic growth.
The consultation is open until 24 September 2024. Overall, there has never been a better time to explore the planning potential of land. Here, PWA Planning’s Matthew Wyatt, provides an in-depth analysis of the key elements developers need to know.
Local housing needs
Mandatory standard method: A significant shift in the new NPPF is making the government’s standard method for assessing local housing needs mandatory. Previously an advisory starting point, this method now requires LPAs to use it without exceptions.
The draft eliminates the ‘exceptional circumstances’ clause that allowed councils to argue for alternative methods. By standardising this approach, the government aims to eliminate debates over the correct number of homes to plan for, thereby accelerating the planning process.
LPAs must plan for the resulting housing need figure and can only propose lower figures if they can demonstrate “hard constraints” such as existing National Parks, protected habitats, and flood risk areas. In such an event, the LPA must provide thorough evidence and justification during local plan consultations and examinations that they have explored all possible options for optimising housing density, collaborating with neighbouring authorities, and reviewing green belt boundaries.
Clearer directive: The draft NPPF changes the directive for housing needs from meeting “as much of an area’s identified housing need as possible” to meeting the area’s identified housing need outright. This simplification aims to reduce ambiguity and enforce more definitive planning obligations.
Revised standard method: The standard method for calculating housing needs will transition to a two-step approach. First, a baseline is set by calculating the existing housing stock, replacing the less stable household projections.
The method proposes using 0.8% of existing housing stock as the baseline, reflecting average national housing growth. Second, an affordability multiplier is added, which will be more significant than before. This change aims to ensure more predictable and stable planning figures.
Affordability adjustments: The affordability adjustment will now have a greater impact, with areas where house prices are over four times higher than earnings seeing a higher multiplier. The new adjustment uses an average affordability ratio over the past three years, providing stability and smoothing out volatility.
The consultation also explores integrating rental affordability into the model, potentially broadening the scope of affordability considerations.
Under the proposed changes, London’s housing need figures are expected to decrease, while targets in other regions, particularly in the North of England, will rise. The consultation documents include detailed spreadsheets showing these regional adjustments.
Five-year housing land supply
Policy reversal: The draft proposes reversing recent changes that allowed showing a four-year housing supply instead of five in certain cases. It reinstates the requirement for a five-year supply with an added five percent buffer to ensure market choice and competition. This aims to maintain a robust supply pipeline and prevent housing shortages.
The draft also proposes removing references to accounting for past oversupply against future needs, emphasising the need for ongoing robust housing delivery.
Clarified presumption in favour of sustainable development: The draft clarifies which policies are most important for assessing housing schemes, emphasising land supply, location, design, and affordable homes. This aims to prevent the presumption in favour of sustainable development from being used to promote low-quality or unsustainable projects.
If the NPPF is published in its current form, it is inevitable that more authorities will find themselves without a five-year housing land supply, resulting in planning applications being determined based on the presumption in favour of sustainable development.
Emerging local plans will need to identify and allocate more sites to meet housing needs. However, in her Written Ministerial Statement on July 30, 2024, Angela Rayner stated, “But we cannot wait for all release to come through plan making,” indicating that there will be increased emphasis on LPAs supporting development that meets immediate needs in the short term.
The green belt
Green belt review: Local planning authorities (LPAs) must review green belt boundaries when unable to meet housing or commercial needs without such revisions. The draft introduces ‘grey belt’ land, defined as previously developed land within the green belt that contributes minimally to green belt purposes. This reclassification aims to facilitate sustainable development while preserving vital green spaces.
Sequential test for green belt releases: A new sequential test prioritises previously developed land within the green belt for development before considering other grey belt sites and higher-performing green belt sites. This structured approach ensures that development is sustainable and minimises adverse impacts on green belt functions.
Development on grey belt land: Major development on grey belt land will be considered appropriate if it meets specific ‘golden rules’, including a high percentage of affordable housing, necessary infrastructure improvements, and enhanced access to green spaces. Land deemed ‘grey belt’ will not strongly fulfil any green belt purpose and will feature characteristics like substantial built development or being fully enclosed by built form.
Housing supply benefits to trump green belt harm: The consultation document proposes that if a local planning authority (LPA) cannot demonstrate a five-year housing land supply or if their delivery is less than 75% according to the Housing Delivery Test, development on the green belt will be considered appropriate under certain conditions.
This includes situations where there is unmet commercial or other needs. However, this is contingent upon the development occurring on sustainable ‘grey belt’ land. Additionally, such developments must adhere to specific ‘golden rules’ for major projects and ensure they do not fundamentally undermine the green belt’s function across the entire planning area.
Overall, PWA anticipates a significant increase in building on the Green Belt, especially in areas where growth has historically been limited due to extensive Green Belt designations. LPAs will no longer be able to use the Green Belt as an excuse for not planning to meet their housing needs. The heightened expectations for affordable housing allow the Government to justify the trade-off, arguing that developers will bear the cost to offset the environmental impact associated with the loss of openness.
For LPAs that have historically been very protective of the Green Belt, disputes are expected over whether certain land should be classified as ‘grey belt,’ a subjective determination requiring planning judgment. However, the proposed changes in the consultation open many opportunities for sites that previously seemed unlikely to secure planning permission.
Local character and design coding
The draft emphasises higher density in urban areas, replacing district-wide design coding with localised codes, masterplans, and guides for areas of significant change and potential. This shift aims to better accommodate urban growth and regeneration efforts.
Positive approach to brownfield development: The draft strengthens the presumption in favour of brownfield development, stating that such proposals should be regarded as acceptable in principle. This encourages efficient land use and reduces pressure on greenfield sites.
Strategic planning
Enhanced cross-boundary cooperation: New mechanisms for strategic planning emphasise cross-boundary cooperation to address housing needs and infrastructure delivery. The government aims for universal strategic planning within five years, covering functional economic areas to ensure coherent and sustainable growth.
Strategic planning expectations: LPAs and county councils must ensure plan policies align with those of other relevant bodies and infrastructure providers unless justified otherwise. This includes consistent planning for major infrastructure and accommodating unmet development needs from neighbouring areas.
Affordable housing
Focus on social rent: The draft sets a clear expectation that housing needs assessments consider social rent requirements explicitly. LPAs are expected to outline their expectations for social rent delivery within broader affordable housing policies.
Removal of fixed affordable housing percentages: The requirement for at least 10% of homes on major sites to be affordable home ownership and the 25% First Homes requirement are proposed to be removed. Instead, the draft encourages mixed-tenure developments to create diverse communities and support timely build-out rates.
Supporting economic growth
Councils are directed to identify sites suitable for modern commercial uses, including laboratories, gigafactories, and data centres. This supports the needs of a modern economy and encourages the growth of high-tech industries.
Further support is given for the expansion or modernisation of other industries of local, regional or national importance to support economic growth and resilience. Clearly, more weight should be given to the benefits of delivering economic growth via development proposals.
Renewable energy projects
Following the immediate removal of the controversial restrictions on onshore wind turbines by the Chancellor, the consultation focuses closely on the need to help support energy security and positive effects on climate change and the transition to net zero.
The intended changes could have a marked influence on decision making and the weight that LPAs should place on impacts against the positive contributions renewable schemes achieve. Significant weight is to be given to those schemes which contribute to the net zero target, irrespective of the scale of the proposal. The acknowledgment that a series of small schemes can add up to a big positive impact is emphasised.
At the grid scale, the proposal to increase the energy generating capacity threshold which triggers the NSIP regime is intended to allow more local decisions for energy schemes. The previous thresholds have not kept pace with improvements in technology, meaning that schemes are being artificially reduced to beat the threshold and avoid the costs of NSIP. Increasing the threshold means that larger schemes can be progressed through the Town and Country Planning Act approach.
The outlook for developers of renewable energy proposals of all types and scale, including small and medium scale private solutions, appears positive.
New plan-making system transition: Transitional arrangements aim to maintain the progress of plans at advanced stages, with specific deadlines and support for authorities needing to revise their plans.
The government plans to implement the new plan-making system by summer or autumn 2025, with all plans required to be submitted for examination under the existing system by December 2026. This will be subject to further secondary legislation, which we’ll be keeping an eye on.
Embracing the new framework
This comprehensive revision of the NPPF marks a significant shift in planning policy, aiming to streamline processes, support sustainable growth, and address housing needs more effectively. PWA will be submitting representations to the consultation, and we invite you to share any matters you believe need to be addressed.
It’s clear that with these changes, we are entering a period where the benefits of development are recognised more positively than they have been for at least the last decade. Ensuring planning consents are granted is a key pillar of the government’s strategy to boost the economy and raise taxes to fund public services.
As always, it’s hard to predict how long these windows of opportunity will remain open. If you are a landowner, or know someone who is, and have been refused permission in the past or have considered land as a potential site for housing, employment, commercial, or energy development, now is the time to act. We strongly encourage you to get in touch with us.
We can provide an assessment of the merits of promoting your site and develop a strategy for securing planning permission. If you require more information, please get in touch with our team on 01772 369 669.
