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Lewes District update

Tuesday, 28 November 2017 10:34

The Lewes Groups is concerned about one abuse already being operated in the house building business, and a second being lined up for the future through the Right Homes in the Right Places proposals recently consulted on.

The first scam is unintentionally permitted by the current version of the National Planning Policy Framework, which allows a developer to return to a planning authority after the conditions of a planning permission have been agreed, and reduce the community benefit aspects included in the permission, on "viability" grounds. This was originally intended to make it viable to develop less-profitable brownfield sites, which is sensible. It is being mis-used, indeed exploited.

The abuse is now routine, with several examples in Lewes District. This is the main reason that although national house building seems at last on the up, delivery of affordable housing has fallen. An example of how it works. A Ringmer landowner obtained PP for a site for 18 market and 12 affordable houses on a greenfield site through the Ringmer NP. She then discovered that the sewerage connection was going to be much more expensive than she expected, so sold the site to a "house builder" at a price that reflected this. The same day the buyer sold the site on to a planning consultancy at a 50% profit. The new buyers are relying on being able to jettison the affordable housing element and otherwise "improve" the PP by using the viability argument, which they are allowed to base on the price they have actually over-paid.

Note that the landowner has already made a profit from land value uplift and the first intermediary has also profited from a smart deal. The second intermediary is looking to do the same by improving the PP before selling the site on again. Will the new buyer be an actual housebuilder or yet another developer, looking for an even more profitable outcome? We have examples of such chains five developers long, and THIS is what is presented to ministers as "Delays in the planning system" and why PP have gone up fast, but actual house building has been much more sluggish.

It isn't just small developers do this. A major Ringmer strategic site in the Local Plan gained Planning Permission (PP) by a strategic land company, whose business model is to get greenfield PP, extract the development gain, and then auction the site to a house builder. In this case the highest bidder was a company called Bovis Homes. The winner in such an auction inevitably over-pays for the existing PP. In this case, Bovis cannot make a profit with a reasonable scheme given the price they have paid. Result: development stalled. Bovis's solution? Cut the sizes of the agreed affordables, and change the market element to reduce the number of small houses the village needs, replacing them by crammed-in executive homes that are not at all what is needed.

The solution? Ministers need to support a brave planning inspector who in June ruled that a developer was not allowed to over-pay for a site (in London) and then cut the affordables to endure that they nevertheless were able to make a 20% profit. There is a simple way to do this - insist that viability arguments can only be made at the original PP stage. At present a strategic land company will promise the earth at the PP stage and rely on someone else being able to set aside the promises made later.

The new scam being set up is the proposal that if in future Planning Authorities do not deliver their target number of houses, then they will be required to increase their target by 20%. IF this is agreed, and it must not be, all it will do is yet further divert actual Housebuilding from the stalled brownfield sites you see all around Newhaven and other towns to greenfield sites in the Low Weald villages.

At the first level this just isn't fair. The planning authorities' job is to provide enough suitable sites, and the NPPF says they should prioritise brownfield. Any authority that has allocated sites to meet its Local Plan target has done its job and should not be penalised. Local authorities don't build houses: that is the house building industry's job, and it is that industry that isn't delivering. As the House of Lords and Civitas reports emphasise, it is not in that industry's interest, or within their capacity, to deliver affordable housing, and that is the problem that needs a solution. It also isn't in their interests to build so many houses that the price falls.

The proposal to but the blame on the planning authorities comes from self-interested lobbying from the strategic land companies. if adopted it will do nothing to increase house building: it will just enable the strategic land industry to make more money from greenfield PP, where they can capture the land value uplift that comes from PP.

John Kay
Lewes District Branch, CPRE Sussex

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