customandselfbuildtoolkit.org.ukhttp://customandselfbuildtoolkit.org.uk/briefing-notes/how-the-planning-system-can-generate-more-opportunities/

How the planning system can generate more opportunities

KEY LEARNING POINTS

The way councils plan for new development and how they administer the planning system at a local level can have a significantimpact on the number of privately built homes. Local Plans are a key instrument in this process. Key points to note are: -

Local Plans need to meet their full, objectively assessed needs for market and affordable housing and are central tobring more land forward. Housing mix is a key consideration and it should take account of demand for people who wantto build their own homes

Local Plans risk being found unsound if they don’t provide enough evidence that they have taken the demand for privatehomebuilding into consideration. Demand Registers and Strategic Housing Land Availability Assessments are central tothis process

Government has set out a range of relevant policies which help to identify opportunities to support private homebuildingprojects locally

The Government’s Right to Build consultation included a series of proposals for how councils might meet the demand onlocal Registers. These proposals and the Self-build and Custom Housebuilding Act 2015 should be considered whencouncils prepare their Local Plans, and when they decide planning application

Land can be secured in a number of ways, including through housing allocations, buying and selling land, and viaaffordable housing policies

There are broadly seven different approaches that councils are currently taking, and some have identified significantdevelopment opportunities through their Local Plans

It is important to consider how demand is linked to land supply and what the role of an ‘allocation scheme’ may be in thisprocess

INTRODUCTION

Access to suitable land in the right locations, and the challenges associated with the planning process are the two biggesthurdles for private homebuilders. Local Plans are the keystone of the planning system and are central to helping unlock moreland for this form of housing. Although some councils are taking significant steps to facilitate more private homebuilding throughtheir Local Plans and other planning initiatives, others have so far taken little to no action. Many remain unclear about how toproactively facilitate opportunities through their Plans, and others are unsure about what might work best in their localcircumstances.

POLICY CONTEXT

The NPPF

All local planning authorities in England are required to prepare a Local Plan which sets planning policies for their area againstwhich all planning applications are determined. Local Plans need to meet their full, objectively assessed needs for market andaffordable housing. To inform the preparation of these the National Planning Policy Framework (NPPF) asks councils toundertake a Strategic Housing Market Assessment (SHMA) to assess their future housing requirements. This assessmentshould include requirements for “people wishing to build their own homes” (Para 159).

About

This is one of more than 20 Briefing Notes that explain resourcing, planning, land, finance, demand, marketing, consumersupport and various technical issues. To see the full range of guidance click here.

Definitions

For the purposes of this Toolkit we have made the following definitions:

‘self and custom built homes’ as properties commissioned by people from a builder, contractor or package company(this is known as ‘custom build’ housing). When people physically build themselves, sometimes with help from sub-contractors, this is known as ‘self build’ housing. We call all these people ‘private homebuilders’.

‘serviced building plots’ are shovel-ready parcels of land with planning permission, laid out and ready for constructionwith access and utilities/services provided to the plot boundary. Some private homebuilders just purchase a plot; othersopt for a ‘shell’ home (that they then finish off), or they select from an extensive menu of options offered bydevelopers/builders.

‘group projects’ mean homes built by private homebuilders who work as a collective.

NOTE

This Briefing Note will be revised when the Regulations to support the commencement of the Self-build and CustomHousebuilding Act 2015 and the Government’s Right to Build policy are finalised.

The NPPF refers to the requirements of ‘people wishing to build their own homes’ (Para 159)

Having assessed these requirements, the Framework asks councils to prepare a Strategic Housing Land AvailabilityAssessment (SHLAA) to establish realistic assumptions about the availability, suitability and likely economic viability of land tomeet their full identied housing requirements over the Plan period (usually about 15 years).

As part of this, councils are asked to plan for a mix of housing to deliver a wide choice of high quality homes, widenopportunities for home ownership and create sustainable, inclusive and mixed communities. This should take account ofcurrent and future demographic and market trends and the needs of different groups in the community, including“people wishing to build their own homes” (Para 50).

The NPPF also sets out a number of other policies which should be taken into account when councils prepare their Local Plansso they can create opportunities for promoting private homebuilding. These include the need to: -

Take a positive approach to sustainable new development in rural areas by supporting the sustainable growth andexpansion of all types of business and enterprise, both through conversion of existing buildings and well-designed new buildings. (Para 28)

Identify and bring back into residential use empty housing and buildings and normally approve planningapplications for change to residential use and any associated development from commercial buildings, where there is anidentied need for additional housing. (Para 51)

Recognise that the supply of new homes can sometimes be best achieved through planning for larger scaledevelopment, such as new settlements or extensions to existing villages and towns that follow the principles ofGarden Cities. (Para 52)

In rural areas, be responsive to local circumstances and plan housing development to reect local needs, particularly foraffordable housing, including where appropriate through rural exception sites. Some market housing which wouldfacilitate the provision of signicant additional affordable housing to meet local needs is recognised as being acceptablein such locations. (Para 54)

Recognise that isolated homes in the countryside are permissible where there are special circumstances, such aswhere the development would re-use redundant or disused buildings and lead to an enhancement of the immediatesetting. (Para 55)

Starter Homes

The Government’s expectation about the role Local Plans can play in addressing the needs of private homebuilders is alsohighlighted in the letter from the Minister for Housing and Planning to all English local authorities on 5 March 2015. This made itclear that Plans risk being found unsound if they fail to provide sufficient evidence to demonstrate that they have taken thedemand for private homebuilding into consideration.

The new Self-build and Custom Housebuilding Act 2015, the proposals in the Government’s Right to Build: Supporting Customand Self Build (DCLG, October 2014) and the new draft legislation in the Housing and Planning Bill build on this.

The Government’s new Starter Homes planning policy (announced 2 March 2015) provides further opportunities for privatehomebuilding. The policy allows some market housing to be developed on exception sites, and, in principle it can be applied toprivate homebuilding projects, provided they meet the starter homes policy tests, namely: -

The site must be an exception site on commercial and industrial land that is either under used or unviable in its current orformer use, and which has not currently been identified for housing

Homes need to offered for sale at a minimum of 20 per cent below open market price (this does not rule out plots for salewith customised build contracts)

Homes need to be well-designed and of a high quality, contributing to the creation of sustainable places where peoplewant to live, work and put down roots to become part of the local community

Homes need to be restricted to first time buyers under 40 (this does not rule first time private home builders who have notpreviously bought a home)Homes should not be resold or let at their open market value for five years

Further advice on different approaches to releasing land is set out in our Briefing Note on Different ways to bring forwardland.

The Right to Build

The Government’s consultation on the Right to Build: Supporting Custom and Self Build proposes to introduce a new statutoryrequirement for all councils to establish and maintain a Register and to then bring forward suitably permissioned serviced landto meet the demand on their Register, where it is reasonable to do so. This new requirement will form part of the planningsystem and will, when implemented, significantly strengthen the Government’s policy and guidance.

The consultation made it clear that the broad framework for introducing Registers will be provided via the new Self-Build andCustom Housebuilding Act 2015. The Government has also introduced new draft legislation in the Housing and Planning Billwhich places a duty on councils to ensure that there are sufficient serviced permissioned plots to meet the demand establishedthough a local Register on an on-going basis. The Bill also asks councils to keep a register of available land in their area.

A summary of how the Government proposes the Right to Build to operate is set out in our Briefing Note on Registers andassessing demand.

The consultation on the Right to Build sets out broad proposals for how councils might meet the demand in their local Registers.The key elements are: -

Taking account of the Right within the existing planning framework – land allocated for private homebuilding shouldform an integral part of a council’s five year housing land supply, with councils identifying relevant sites and planningpolicies depending on the scale of the demand

Providing certainty, reducing cost and speeding up development – where land is released, councils should ensurethat plots have outline planning permission, with access and layout forming part of the permission. The land should beserviced – so it should have water, waste water and electricity and/or gas provided to each plot. If any land remediation isrequired this should also be undertaken. Design Codes and Local Development Orders can be used to avoid the need forreserved matters applications on each plot

Offering plots – people on a local Register should be offered suitable plots for sale at the local market value. Councilswill be given flexibility about how they do this but some principles were: -

people should be given at least three opportunities to purchase a plot

plots should as far as possible reflect a private homebuilder’s preferences for location and costs

plots should be independently valued to ensure they are sold at market value

plots should be offered at a fixed price

“land allocation schemes” would not be prescribed

Approaches to securing land – these could include councils: -

setting out allocations in Local Plans where specific sites are identified for development for private homebuilding

giving developers the option to make section 106 planning contributions to provide land, as an alternative toproviding cash payments

buying or selling land

Areas of constrained land supply – councils could work together to provide land

Potential for affordable housing – enable people who are eligible for affordable housing to work with a local housingassociation to build their own homes. This could involve councils allocating specific sites in their Local Plans with arequirement that a proportion of the development is delivered as affordable housing and then working with a housingassociation to bring forward suitable opportunities.

The Self-Build and Custom Housebuilding Act 2015

When this Act commences (likely to be in early 2016) it will place a duty on all local authorities in England to keep a Registerand to have regard to this when carrying out their planning; housing; public land disposal; and, regeneration functions. Thismeans the Act is a material planning consideration when councils prepare their Local Plans and determine planningapplications. The Government is currently preparing legislation to bring into force the provisions of the Act. More detail on thescope of the Act is set out in our Briefing Note on Registers and assessing demand .

Top Tip

Use the Local Plan

The Local Plan is a key instrument to enable more land to come forward for private homebuilding projects, and privatehomebuilding should form part of a council’s five year housing supply

RELATING DEMAND TO SUPPLY AND STRATEGIC HOUSING LAND AVAILABILITYASSESSMENTS (SHLAAS)

The SHLAA is an important evidence base to underpin the preparation of local planning policies. Its purpose is to identify afuture supply of housing land that is suitable, available and achievable during the Local Plan period. An assessment shouldidentify sites and broad locations for development; assess their development potential and suitability; and, the likelihood ofdevelopment coming forward (ie. their availability and achievability).

Once councils have profiled the type of demand that exists based on their Register they can then use the SHLAA and its regularupdates to secure a pipeline of sites to meet this demand over the Local Plan period. For guidance on the use of Registers, seeour Briefing Note on Registers and assessing demand .

Although the SHLAA needs to follow the standard methodology set out in the Government’s Planning Practice Guidance thefollowing pointers should assist councils to take account of the demand for private homebuilding: -

Consider the full range of options for where sites may come from – key sources are allocations which can includeprovision for private homebuilders, securing provision when considering windfall sites, buying or selling of land (see boxbelow for breakdown of types of sites and their potential suitability)

Consider site suitability carefully – when assessing a range of different sites, consider how the site could provide forthe profiled demand (mix) established through the Register. Smaller infill opportunities and sites of between 5-20 homesare likely to be particularly suitable. Larger housing sites of several hundred or more homes will present opportunities forthe inclusion of plots and development as part of market housing and could be suited solely for private homebuilderswhere there is strong demand and clear developer interest. Larger sites will also be particularly suitable for custom builddevelopments

Consider a specific ‘call for sites’ to enable private homebuilding projects, and consider establishing a registerof land – this will create developer and landowner interest, enable sites to be more carefully matched to demand and willsieve out development opportunities to link buyers with landowners. Councils should take a partnership approach and beproactive by engaging with NaCSBA and custom build developers, the local community and interest groups to identifyopportunities

Custom build developers can help identify opportunities and reduce the need to resource in-house skills. Simpleinvitations to submit suggested sites to the council without discussing opportunities with landowners and interestedparties should be avoided

Look at opportunities on the edge of settlements – many settlements will present opportunities for small scalehousing on their edges without impacting on the countryside. Farms, previously developed land and infill sites will be keycandidates. Exception sites also offer private homebuilding opportunities. For example they can directly provideaffordable building plots or self finish ‘shell homes’ or, as part of a larger scheme, they can help to cross-subsidiseaffordable housing

Consider the scope for proactive area-wide allocations where development is encouraged, and identify ‘broadlocations’ – area-wide allocations such as housing zones which are supported by proactive policies (possibly with LocalDevelopment Orders or Design Codes) can help encourage single plot development and small infill opportunities, andcan match the demand identified on a local Register without needing to identify very small sites. Such allocations can beincluded in a five year supply if there is sufficient evidence that sites are deliverable. National policy enables broadlocations to be identified to meet demand in later years if there is a reasonable prospect of sites within such locationsbeing viably developed. Broad locations and area-wide allocations can include areas within settlements if they aresupported by explicit policies to encourage housing, such as, for example infilling; particularly if this is promoted by alocal land register (see below). Such approaches can help avert reliance on windfall sites

Don’t rely on windfall sites to meet demand for private homebuilding in the five year housing supply – up to nowprivate homebuilding projects have typically come forward as windfall sites. Councils can therefore make an allowancefor them in their five year housing land supply (for example some local authorities have taken a proxy from single homescompleted, informed by knowledge about how many may be privately built), provided they have compelling evidence thatthey will continue to provide a reliable source of supply. However councils need to be aware that the private homebuildingmarket is changing in response to Government policy, and demand is growing, so relying on past trends where one-offhomes may have been constructed on infill plots or as a replacement of existing housing is unlikely to be a defensibleapproach. Many projects on infill plots are also not private homebuilder-led but spec-built market housing by smallbuilders

Use the Register to inform annual updates of the five year supply of specific deliverable sites – the Register is apowerful tool which provides up to date information of what types of development are in demand, where and when. Thiswill help inform the location and type of sites that are needed

Types of sites that are particularly suitable for private homebuilding

The following table is based on the list in the National Planning Policy Framework’s Planning Practice Guidance:

Top Tip

Use the SHLAA

Use the Strategic Housing Land Availability Assessment and its regular updates to secure a pipeline of sites and identifybroad locations to meet established demand over the Local Plan period

Top Tip

Consider a ‘Call for Sites’

Consider a specific ‘call for sites’ for land for private homebuilding projects and whether area-wide policies or allocationsmay be suitable for your area

Top Tip

Don’t rely on windfall sites

Don’t rely on windfall sites to meet demand in the five year housing supply

Can land be allocated for private homebuilding projects?

Some councils have asked if land can be allocated for private homebuilding in a development plan, particularly where the localauthority is not the landowner. This is because some councils consider that the way a home is procured (ie. custom or selfbuild) is not relevant to the “character of the use of the land” and thus cannot be taken into account by the planning system.

We are clear that land can be allocated for private homebuilding provided there is clear evidence of demand and it can beshown the site is deliverable. This is because national policy specifically asks councils to plan for the needs of people who wantto build their own home and this policy is a significant material consideration which councils can, and should, take into account.The role of allocated sites is also flagged in the Government’s consultation on the Right to Build: Supporting Custom and SelfBuild, the new Housing and Planning Bill and the Self-build and Custom Housebuilding Act 2015 which will place a duty oncouncils to have regard to local Registers when carrying out their planning and other functions.

LOCAL LAND REGISTERS

Councils may want to consider how they can be more transparent about available land and stimulate the local land market. Oneway to do this is by establishing an informal local register of known sites which are deliverable, available and capable of beingdeveloped to support private homebuilding projects. Registers could simply be lists of sites which have been submitted througha ‘call for sites’, or following a more thorough assessment by the council. Local authorities should, however, make it clear thatsites listed on a register like this will still require planning permission in the normal way. Local registers of land may also soonbecome a formal requirement, as set out in the new Housing and Planning Bill introduced by the Government.

A good example of a local land register like this has been piloted by Dartmoor National Park Authority. This is in recognition ofthe limited public land availability and responds to the inevitable constraints upon land within a National Park. Land owners cansubmit land using an application form which is sent to and then assessed by the authority against the policies in the Local Plan.Suitable land that has strong potential to come forward for private homebuilding can then be matched with people on theRegister. The approach complements the authority’s SHLAA and has identified a number of potential housing sites fordevelopment. It has also served as a useful filter for inappropriate sites in the National Park context.

Area-wide council registers of developable building land are widely used in Germany. Although they are non-statutory they arefacilitated through the Federal Building Code which enables councils to record and publicise potential land which could be

developed. The objectives of these registers is to give the council, developers, landowners and local communities an up to dateand transparent overview of available building land in their area. Registers are made available on council websites andpublicised in the local media. Updates are then produced regularly. Most Registers contain GIS maps of land which, in thecouncil’s opinion is vacant, underused and has development potential. Councils make it clear that the register is an informationsource with no legal status, and that land included on it has no planning status. Landowners and developers are encouraged toenter into pre-application discussions with the council at the earliest opportunity. Landowners can also apply to the council inwriting to remove land which has been identified.

A good example is the Building Land Register (‘Baulandkataster’) set up by Bad Kissingen County Council in Germany Thecouncil uses the register to incentivise infill and regeneration opportunities in towns and villages; to promote more effectivemarketing of land; and to help it respond to developers who submit proposals to develop green field sites and council-led landreleases. More information on Bad Kissingen’s approach is set out in our Briefing Note on Different ways to bring forwardland.

DIFFERENT LOCAL AUTHORITY APPROACHES IN ENGLAND

Our analysis of all local councils in England found that, as of June 2015, more than 130 local planning authorities (39 per cent)were taking action to help boost the opportunities available for people who want to build their own homes.

Councils in the North East were the most proactive, followed by those in the South West and West Midlands. The least activeregion was London, where about one in five have taken action to date.

The approaches councils are taking varies widely. Some have policies asking for a mix of homes on sites, and they promoteprivate homebuilding as part of their affordable housing initiatives. Others require building plots to be provided on larger housingsites. Some support collective group projects and have given commitments to work with industry and local communities toidentify suitable opportunities. A few are also looking to provide finance support.

Seven different approaches can currently be identified: -

Policies promoting housing mix - a popular approach to date has been to encourage or, in some cases, require privatehomebuilding alongside other market housing on windfall sites and allocations. The proportion is typically assessed on acase by case basis and takes into account the level of local demand

Land allocations, disposals and acquisitions - a growing number of councils are identifying suitable sites or locationswhere private homebuilding is specifically encouraged, promoted or required. In some cases land is made available bydisposing of public land or by buying land

Action through Housing Strategy - some Councils set out their general approach to supporting private homebuildingthrough their Housing Strategies. This then informs planning and development policies, and the council’s engagementwith industry enablers and communities on projects or initiatives

Promotion as part of affordable housing - a growing number of councils are bringing forward private homebuildingopportunities through their affordable housing policies and, in some cases, they facilitate development through exceptionsites

Specific support for projects - some councils identify specific projects that they support. A good example is Bristol CityCouncil, which has set up its own Community Land Trust See Case Study Bristol CLT

Percentage policy asking for private homebuilding plots to be provided on larger housing sites (typically 5-10%on sites of more than 20 homes) - a growing number of councils are introducing policies that ask for a proportion ofallocated or windfall sites over a certain size to make provision for private homebuilding. The most common approach isto require developers to provide serviced building plots, with a Design Code. This simplifies the planning process forindividuals and reduces the need for the council to determine a large number of planning applications

Financial help (mortgages/development finance) - a small number of councils are helping people get access tomortgage finance or are offering mortgages. An example is Capita Asset Services’ Custom and Self Build FinanceScheme supported by Lloyds Banking Group

Seven different approaches can currently be identified among English councils

More information about which councils are following particular approaches is contained in a database of all English localplanning authorities prepared by NaCSBA. This is available by emailing info@nacsba.org.uk.

The areas shaded in green identify those local planning authorities that were taking action in June 2015

It should be noted that several councils are using a combination of approaches, and some have identified quite significantopportunities (see box below). These include the re-use of former public sector land, proposals to include private homebuildingopportunities as part of future urban and village extensions, and introducing new planning policies that encourage affordableself and custom build homes in rural areas.

Examples of larger development opportunities identified by councils

The following examples were identified during a survey by NaCSBA in June 2015:

Opportunities identified at Beacon Park, Gorleston in Great Yarmouth

Pros and Cons

Some pros and cons of the different approaches are set out in the table below and selected council examples are listed in ourBriefing Note on Different ways to bring forward land. Further detail on approaches to delivering affordable housing and theuse of rural exception sites is set out in our Briefing Note on Design Codes and Plot Passports.

Top Tip

Identify land

Identify all potential sources for land and explore different policy approaches to bring this forward

Top Tip

Look Around

Look at what other councils have done to date and consider what works for you in your local circumstances - there is noone size fits all approach

LOCAL ALLOCATION SCHEMES

The ‘first in line’ approach is favoured in the Netherlands

Having identified the types of sites that can be brought forward to meet any established demand, councils will want to considerhow these sites could be linked to the Register.

Aside from considerations about local connection (see our Briefing Note on Local Connection Issues) and in the absence ofmore specific Government guidance and further legislation under the new Right to Build, we have identified the followingpointers: -

Decide what approach the council wants to take to match demand with supply, and whether an allocationspolicy will be useful – the new Act will require councils to have a regard to their Register when exercising their functionsbut it does not formally require them to prepare and adopt a local allocation scheme that sets out how they will makeopportunities available to those on their Register. Councils may however still want to consider if an allocations policywould help it to manage local expectations and implement their Local Plan

Allocation scheme publicity – ensure that any scheme is published on the council’s website and that all privatehomebuilders on the local Register are aware of it. This will help with enquiries and manage expectations

Approaches to allocation – consider a range of approaches to allocating land to people on the Register and decidewhether one or more will work in your circumstances: -

First come first served or Open schemes - This simple approach works best in high demand areas where multipleor large sites come forward and where high numbers of plots are offered to everyone on the Register as theybecome available. This approach reduces complexity, does not require significant resources and is used widely inthe Netherlands (see our Briefing Note on The sales management process). The downside with this approach isthat it favours people who have the time available to queue

Pooling or ‘banding’ schemes - This approach divides people on the Register into defined bands or poolsdepending on their indicated preferences. Although it can be more resource intensive to administer, it enablesdemand to be matched more effectively. For example, if ten people have registered to find land to build smalldetached homes on modestly sized plots in a specific part of a borough, they could be notified when larger siteswith matching plots receive planning permission. They can then contact the developer to buy a plot on a ‘firstcome first served’ basis for a limited period of time before the land is marketed more widely. This could be securedby the council when giving planning permission

One to one matching scheme - Where the number of people on the Register is small and the number of plotscoming forward is limited, plots could be offered on a ‘first registered first served’ basis or targeted to matchspecific plot requirements. This approach is more appropriate to affordable housing and smaller council ownedsites where it may be better to link plots closely to local connection and housing waiting list criteria. It is commonin Germany where councils dispose of building plots based on registration lists, typically using a points system.This is more resource intensive than open or banding schemes, but has the benefit of targeting those who havebeen waiting longest or have the greatest need

Other approaches - These include, for example, a lottery, auctions or sealed bids. However, they are notrecommended as they are likely to be more resource intensive and complex to operate. They can also discouragepeople from registering in the first place and undermine the value of the Register as the key indicator of demand

Administering allocations – A scheme could be administrated in-house or outsourced to a contractor or othernominated organisation(see the box below)

International Experience

We have identified a range of examples from overseas which could be adapted for use here. See our Briefing Note on Differentways to bring forward land.

Top Tip

Simple allocations

Decide on whether to adopt an allocation scheme to match demand to supply and chose a simple approach, such as firstcome first served

ADVICE ON ALLOCATIONS SCHEMES

Councils may wish to consider the following pointers when setting up an allocation scheme: -

Applications should be administered online via email (unless an applicant has requested to receive correspondence bypost)

Applicants should also be able to make enquiries by telephone, and should provide a telephone number so a council can,if required, contact them quickly

Periodic reviews of the scheme are recommended to ensure it operates effectively and efficiently and that applicantdetails remain up to date. This could be done by asking applicants to reconfirm whether they wish to stay on the Registerannually and being given 28 days to confirm this. If they don't respond they would be deleted from the Register

Sites/plots should be advertised on the allocation scheme web page (see box below for example). This could be acondition of a planning permission and contain the name and contact details of the developer/landowner, the type ofdevelopment, land prices and who would be eligible to apply to buy land. Applicants on the Register can then expresstheir interest and the council could apply its allocation scheme

Alternatively councils may want to simply notify those that are eligible when a site receives planning permission and/or ask thedeveloper to do so without Council involvement. This could be secured by the council when giving planning permission.

CREDITS

The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-buildand custom build sector as an affordable route into housing for a greater number of people in the UK.

For further information, please visit:

www.nacsba.org.uk or www.selfbuildportal.org.uk