The impact of shifting housing targets on planning and development in London

London’s housing need is vast, and while both the latest NPPF and the London Plan acknowledge this in their targets, they still fall short of what many in the industry believe is necessary. Furthermore, the capital must play a leading role if the country is to meet its overall housing targets.  

As previous years’ figures demonstrate, targets alone do not guarantee delivery. London’s chronic undersupply of new homes has persisted through multiple administrations, despite varying approaches to targets.  

The barriers are numerous and include land availability (large sites tend to be on green belt land, while brownfield sites come with heightened physical and viability challenges), the social and practical issues associated with the need to meet density requirements (with the latter exacerbated by the requirements of the Building Safety Act) and of course affordability and funding. 

“There needs to be better communication and transparency on both sides between the local authorities and developers when it comes to planning viability and negotiating Section 106 agreements”

The need for affordable housing is particularly acute – as is recognised in the increased levels of social housing for rent put in place since the general election – and yet registered providers lack the substantial public funding to enable them to deliver, not least because money has been directed to improving existing stocks, and so there has recently been a reluctance to take on new units. Government grants have failed to keep pace with rising costs, leaving many schemes stalled. Furthermore, spiralling construction and finance costs contribute to delays and uncertainty. 

Across London, numerous housing schemes are stalled. The reasons include developers struggling with viability due to increased costs, associated in part with strengthened planning policy and building regulation requirements. There needs to be better communication and transparency on both sides between local authorities and developers when it comes to planning viability and negotiating Section 106 agreements. Additionally, local authorities lack the resources to actively bring forward development on public sector land.  

A co-ordinated approach is needed to unlock these sites. This must include financial incentives and subsidies, specifically grant funding for affordable housing, and greater flexibility in viability assessments could help make schemes stack up. 

The Planning and Infrastructure Bill, which will legislate for compulsory purchase to be used for “effective land assembly”, could accelerate delivery, but the compulsory purchase process is not a quick and easy one.  

The bill, together with the English Devolution and Community Empowerment Bill, has provided some much-needed clarity on strategic planning, recognising that the government cannot meet housing need without planning for growth beyond a local scale. While the introduction of new spatial development strategies will benefit some cities, regional strategic planning has existed in London since 1999, with the first statutory plan published in February 2004. This has undoubtedly helped unlock some sites that have been determined centrally by the mayor, but equally there are additional layers of scrutiny which can also cause delays in delivery of large scale planning permissions.  

“As the bill progresses through parliament, legislators must bear in mind that housing targets have no function unless the underlying issues are addressed”

As with many of the initiatives in this bill, timing may be an issue: the bill must progress through both Houses of Parliament and has inevitably attracted some opposition.

Additionally, how will a changed approach to strategic planning be implemented alongside emerging plans for devolution? There are many moving parts to the reforms package and the government will need to ensure that measures are compatible and will deliver the planned levels of growth. 

As the bill progresses through parliament, legislators must bear in mind that housing targets have no function unless the underlying issues are addressed. The housing crisis will not be solved by putting a different figure into an Excel spreadsheet, but must focus on a changed approach to delivery: one which encourages higher-density, well-designed development in the right locations (but with the necessary flexibility), implements green belt and grey belt policies to allow sustainable development where appropriate, provides investment in both housing and infrastructure and follows through on the plans to accelerate planning decisions. 

The reality is that lofty targets help to move the agenda in the right direction, but the constant question of how to deliver on them is the real issue. While the Planning and Infrastructure Bill offers some potential solutions, success will depend on effective implementation. If London is to meet its housing needs, a more ambitious and pragmatic approach is required – one that moves beyond targets to real action on the ground. 

Alister Henderson, partner, Carter Jonas