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Housing and planning shake up

September 11, 2012

The government is unveiling measures to relax planning rules to boost the economy. Here’s what we know so far:

What’s happening?

The government has announced a relaxation of planning rules for the construction industry and owners of homes and businesses in England. This includes removing some requirements to build social housing as part of a development, an extension of a scheme to help first-time buyers and new government guarantees for major infrastructure projects. They also want the rules on extending homes and business premises to be relaxed for a temporary period.

Why is this being proposed?

Ministers argue that the changes will boost the economy by helping the construction sector and first-time buyers, amongst others. They say they are “slashing unnecessary red tape across the planning system”. The prime minister has conceded that “some of the proposals are controversial”.

What are the major changes?

On affordable homes: The existing requirement on developers to provide a proportion of affordable homes in any development will be relaxed. Developers who successfully argue that a council’s affordable housing requirements make a project “commercially unviable” will see the requirements removed.

On the rented sector: The government will invest in housing sites to create 5,000 homes for rent at market rates. This follows recommendations in a report by Sir Adrian Montague on the large-scale development of homes for private rent.

Businesses and commercial premises: More applications to build commercial and housing developments will be fast-tracked, with developers allowed to bypass local councils if town hall planning departments are believed to be performing poorly. Businesses will be able to expand by 100 square metres and industrial units by 200 square metres. Shops and offices will also be able to grow to the edges of their premises.

Extensions/lofts on private homes: Ministers are to consult on plans to let people build larger loft conversions and extensions on houses without needing to get permission from local planning officers in non protected (ie conservation) areas. It would double the permitted length of extensions to 8m for detached homes and 6m for others, although it would retain the rule that extensions should not take up more than half the garden.

What do supporters of the changes say?

The National Housing Federation, which represents housing associations, has described the package as “a major step forward” which has “the potential to transform the housing market”. The federation believes that the planning changes will lead to more affordable homes being built. Deputy Prime Minister Nick Clegg has said that government investment in affordable housing would more than compensate for the removal of requirements on developers.

What do critics say?

The Local Government Association denies that the planning system is preventing house building. It says there is a backlog of 400,000 new homes which have planning permission but have yet to be built. Labour says that finance is still needed to build homes even when planning permission is granted. Shadow Treasury minister Rachel Reeves also described the removal of requirements on social housing as “desperately disappointing”.

Are these changes permanent?

No. They will be for a fixed time period, although it has yet to be announced what the time frame is for all the measures. Ministers say they will shortly begin a consultation on relaxing the rules on extensions for homes and businesses for a three year period.

Will new legislation be required?

For most of these measures, no. But the Infrastructure (Financial Assistance) Bill will enable the government to provide loan guarantees for £40bn of infrastructure projects and £10bn of new homes, which should enable developers to access capital more cheaply. Ministers also plan legislation to allow applications for planning permission to be decided by the Planning Inspectorate rather than local authorities in some cases.

How much will it cost?

As well as the infrastructure guarantee, the Treasury will provide new capital funding of £300m for affordable homes and to bring empty homes back into use. £200m will be invested in housing sites for rented homes. £280m will be put into extending the FirstBuy scheme which helps first-time buyers, with a matching contribution from house builders.

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