The long-awaited draft text of the revised National Planning Policy Framework (“the NPPF”) was published for consultation by the Government on 5 March along with a number of supporting documents. On 9 March 2018 the Government also published draft revisions to National Planning Practice Guidance. This represents the largest overhaul of national planning policy since the introduction of the current NPPF in 2012. The consultation is due to close on the 10 May 2018, with the current intention to publish a final version before the summer.

With housing being high on the Government’s political agenda, the draft new NPPF seeks to build on the original NPPF published in 2012, whilst also incorporating changes to planning policy implemented through Written Ministerial Statements, proposals from previous consultations (including the Housing White Paper), case law and the Budget 2017.

Whilst there are numerous changes from the 2012 version, the majority are not earth-shattering. The new structure with 17 topic-based chapters (in an attempt to avoid repetition and duplication) is largely what the industry was expecting. The key changes we highlight relate to:

  • Paragraph 11 and the tilted balance (the new paragraph 14)
  • Housing Delivery Test
  • Viability
  • Affordable Housing
  • A brief overview of the ‘best of the rest’

Paragraph 11 and the tilted balance

The “golden thread” of the 2012 NPPF, and the subject of considerable commentary throughout the last 6 years, the presumption in favour of sustainable development remains at the forefront of the Framework (although reference to the golden thread has been removed). Paragraph 11 (paragraph 14 as it was) has been re-ordered and helpfully better reflects the decision-taking process.

All those familiar with the existing NPPF will recognise the wording of Paragraph 11 d) i. It provides an exception to the straightforward application of the tilted balance where specific policies in the NPPF that protect areas or assets of particular importance provide a clear reason for refusing the development. The new footnote 7 to paragraph 11 d) i (previously footnote 9 to paragraph 14) is now expressed to contain an exhaustive list of such restrictive policies. This should now preclude the argument that has been run by local planning authorities on appeal over the past 12 months that other policies (such as the current paragraph 109 relating to valued landscapes) should be considered as a specifically restrictive policy. The new Footnote 7 also makes clear that this paragraph 11 a) does not refer to development plan policies.

The guidance note published alongside the draft new NPPF correctly states that:

“this does not preclude other policies being used to limit development where the presumption applies, if the adverse impacts of granting permission would significantly and demonstrably outweigh the benefits”.

Developers will need to remain wary of the application of such policies in the context of the tilted balance.

Paragraph 75 of the draft new NPPF provides greater clarity on when the tilted balance will be engaged for housing applications (i.e. where there is no five year housing land supply (with appropriate buffer) or where the Housing Delivery Test (discussed below) indicates that the delivery of housing has been below 75% of a local planning authority’s requirement over the previous three years. Save for the reference to the Housing Delivery Test the wording of this new paragraph 75 follows the approach of the Supreme Court in Secretary of State for Communities and Local Government v Hopkins Homes Ltd [2017] UKSC 37.

Frankly, save for the helpful amendment to footnote 7 to paragraph 11 d) i there are no significant changes to the application of the tilted balance. In particular, developers and promoters will be pleased to see the retention of the potential alternative route to the tilted balance where there is a five year housing land supply but where policies which are most important for determining the application are out-of-date pursuant to the current paragraph 215 (paragraph 208 in the draft new NPPF).

Housing Delivery Test

The Housing Delivery Test, or HDT, is simply:

HDT (%) = Total net homes delivered over three year period / Total number of homes required over the three year period

“Net homes” includes student and other communal accommodation.

A proposed new paragraph 75, invokes paragraph 11 d) (the tilted balance) if a five year supply of deliverable sites cannot be demonstrated (with the appropriate buffer) or where the HDT is substantially (less than 75%) below the housing requirement over the previous three years. This demonstrates the Government’s new focus on delivery and places some responsibility on local planning authorities to play a role in addressing the national housing crisis.

It is expected that the application of the HDT will be the subject of significant scrutiny once it comes into force. In particular, the potential new route to the tilted balance where a local planning authority’s HDT percentage is significantly below their housing requirement is certain to be explored by landowners, developers and promoters in areas where delivery rates are poor.

Viability

Building on the “Planning for homes in the right places consultation”, viability assessments should not be necessary at the decision making stage and should primarily be made at the plan making stage. Consequently, where proposed developments accord with the relevant policies in an up-to-date development plan, there should be no requirement for a viability assessment to accompany the planning application (draft new paragraph 58).

A separate document containing draft Planning Policy Guidance for Viability has also been made available by the Government alongside the draft new NPPF which provides further guidance on the Government’s intended approach to viability, including the proposed standardised inputs and calculation of land values.

The draft new paragraph 58 also sets out that where a viability assessment is required, this should reflect national planning guidance and should be made “publicly available”. The draft Planning Policy Guidance for Viability sets out that viability assessments will only not be made publicly available in exceptional circumstances and any redactions need to be to the satisfaction of the decision maker.

This guidance also refers to the use of an executive summary using a template (which is currently under development) to ensure the process is accountable. This executive summary should refer back to the viability assessment that informed the plan and to summarise the changes since then.

The draft Planning Policy Guidance for Viability also highlights the role that viability review mechanisms in section 106 agreements may “help to provide more certainty through economic cycles”. The wording of this section of guidance indicates that such mechanisms should cater for both downward and upward reviews which is to be welcomed. In light of the new focus on viability, at one level it seems likely that review mechanisms will be sought more frequently by local planning authorities. It would appear that the focus on viability mechanisms in the 106 is at odds with the Government’s proposals to avoid the need for site specific viability appraisals to be submitted with an application. However, it remains to be seen whether, once sites are allocated in development plans after the new NPPF is in place, whether local planning authorities will countenance further viability reviews and review mechanisms.

Practically, the increased focus on viability will require developers and landowners to examine this in more detail at an early stage and this will inevitability influence the way deals are struck to promote or purchase land given the potential inability to argue viability pursuant to individual applications.

Affordable Housing

A further key change is a revised definition of Affordable Housing set out at Annex 2 of the draft new NPPF. This definition now includes starter homes, affordable housing for rent, discounted market sales housing and a wide “other affordable routes to home ownership” category, which includes shared ownership, relevant equity loans, other low cost homes for sale and rent to buy.

Inevitably this change in definition is going to lead some developers to seek to renegotiate their existing section 106 agreements where such a change would generate additional value and/or better suit the demands of the area in question. As we approach the publication of the new NPPF developers should also look to include flexibility in the definitions of affordable housing in their section 106 agreements.

Despite this change potentially opening up new affordable housing products there is no mention to date in the Government’s consultation documents of revising Use Class C3 which defines dwellinghouses. In light of the increased types of accommodation being developed – including purpose built student accommodation, communal living projects and build to rent – a revision to the Use Classes Order is much needed to help local planning authorities better define what developments should include affordable housing provision.

The Best of the Rest

Other key points of note include:

  • paragraph 14 (read with paragraph 212) provides clarity on the treatment of neighbourhood plans in the context of the tilted balance in light of the written ministerial statement on neighbourhood planning. In particular, this sets out that:

- where a neighbourhood plan has been passed at referendum (within two years or less before the date the decision is made or more than two years before the decision if this is taken before 11 December 2018);

- the neighbourhood plan contains policies and allocations to meet its identified housing requirement;

- the tilted balance is engaged pursuant to the new Paragraph 75; and

- the local planning authority has at least a three year supply of deliverable housing sites (against its five-year requirement) and its housing delivery was at least of 45% of that required (assessed against the HDT from November 2018 onwards) over the previous three years;

then the adverse impact of allowing development that conflicts with the neighbourhood plan is likely to significantly and demonstrably outweigh the benefits under paragraph 11;

  • further emphasis on the plan led system – with plans setting out contributions expected in association with particular sites and types of development (paragraph 34);
  • as many commentators have highlighted, paragraph 36 of the draft new NPPF changes the requirement for local planning authorities to prepare a plan for the “most appropriate strategy” to an obligation to prepare “an appropriate strategy”. In our view this reinforces the difficulty in arguing that an emerging development plan document is unsound;
  • provision for affordable housing should not be sought for developments that are not on “major sites” (which is unhelpfully not defined), other than in designated rural areas (where policies may set out a lower threshold of 5 units or fewer). To support the re-use of brownfield land, where vacant buildings are being reused or redeveloped, any affordable housing contribution due should be reduced by a proportionate amount (paragraph 64);
  • paragraph 69 looks to ensure that at least 20% of the sites identified for housing in local plans are of half a hectare or less although the consultation invites comments on whether this is an appropriate figure;
  • proposed policy to allow the development of exception sites to provide entry-level housing for first time buyers (paragraph 72);
  • local planning authorities should consider imposing planning conditions providing that development must begin within a timescale shorter than the relevant default period where this would expedite the development, without threatening its deliverability or viability (paragraph 78);
  • paragraph 87 revises the sequential test for proposals for main town centre uses to include sites which are expected to become available within a reasonable period;
  • there are also tweaks to the Green Belt provisions in paragraphs 132 to 146 including setting out a role for neighbourhood plans and the exceptions to the general presumption that new buildings are inappropriate development;
  • paragraph 209 will be of particular relevance to local planning authorities progressing their local plans now as it confirms that the policies in the 2012 NPPF will continue to apply to the examination of those plans where they are submitted on or before six months after the date of the publication of the new NPPF.