Housing and Planning Act 2016

Policy background

Home ownership

4. In England most of the available data shows that the aspiration to buy and own a home remains strong for the majority of households. Over half (57%) of private renters and around a quarter (24%) of social renters in the UK think they will eventually buy their own home. This desire to achieve home ownership is also reflected in the latest British Social Attitudes survey which reported that 86% of people aspire to own their own home (https://www.gov.uk/government/statistics/english-housing-survey-2014-to-2015-headline-report).
5. Around two thirds of social renters (68%) and three fifths (60%) of private renters stated, as their main or only reason for why they don’t expect to buy their own home in the UK, that they would be unable to afford it.
6. Of the estimated 22.5 million households in England in 2014-15, 14.3 million or 64% were owner occupiers. The proportion of all households in owner occupation increased steadily from the 1980s to 2003 when it reached a peak of 71%. A period of gradual decline in owner occupation followed but this seems to have abated with no change in owner occupation rates between 2013-14 and 2014-15. (https://www.gov.uk/government/statistics/english-housing-survey-2014-to-2015-headline-report).
7. Although now abated, the long-term downward trend in owner occupation has disproportionately affected younger households. Of those households that do own their home 75% are over the age of 45 and nearly half (46%) of households in the 25-34 age group live in the private rented sector (only 21% were renting privately in 2003-04). Over the last twenty years, the proportion of under 40 year olds who own their home has fallen by over a third from 61% to 38% (https://www.gov.uk/government/statistics/english-housing-survey-2014-to-2015-headline-report) and, in 2014, the Office for National Statistics (ONS) reported that 3.3 million people between the ages of 20 and 34 were still living with their parents (accounting for 26% of the age group).
8. The number of first-time buyers since the financial crash of 2007-08, as measured by the number of mortgages issued to first-time buyers, has fallen significantly. Throughout the 1980s and 1990s the number of mortgages to this group averaged over 400,000 per year (https://www.cml.org.uk/news/723/) but between 2008 and 2014 the average annual number of loans has been fewer than 300,000.
9. In its manifesto the Government committed to "build more homes that people can afford, including 200,000 starter homes exclusively for first-time buyers under 40". The Act requires local planning authorities to actively promote the development of starter homes for first-time buyers between the ages of 23 and 40. Starter homes will be sold at a minimum 20% below the market price to provide the opportunity for more young, first-time buyers to get onto the housing ladder.
10. The Government also announced its intention to extend the Right to Buy to the tenants of housing associations in its manifesto. Working with the National Housing Federation, the Government has secured an agreement with housing associations to give their tenants the opportunity to buy their home with an equivalent discount to the Right to Buy.
11. Homes sold to tenants under this agreement will be replaced on a one-for-one basis nationally using the proceeds from the sale of the property. This seeks to support an increase to the overall supply of new housing.
12. The Government will compensate the housing association for the discount offered to the tenant, and housing associations will retain the sales receipt to enable them to reinvest in the delivery of new homes.

Housing supply and the speed of delivery

13. Following the financial crisis, housebuilding in England fell to its lowest point in the post-war era. Since 2010-11, where completions totalled 108,000, the number of new homes built in England has been on the rise, reaching 124,000 completions in the financial year 2014-15 (https://www.gov.uk/government/collections/house-building-statistics). But this number is far short of the number estimated that is required to keep up with the existing demand, with the figure in some cases ranging from 200,000 to 300,000 per year.
14. This Act puts in place various tools for housebuilders and decision-makers in local authorities to support and promote an increase in housing supply and at a quicker pace. It also puts forward a number of reforms that are aimed at streamlining the planning system to help speed up the delivery of housing.

New tools for housebuilders and decision-makers

15. The Government made a commitment to get planning permission in place on 90% of brownfield land suitable for housing by 2020. The Act supports the development of brownfield land by requiring local authorities to prepare, maintain and publish local registers of specified land.
16. The Act enables permission in principle to be granted for housing-led development on sites chosen and allocated by local authorities, parish councils and neighbourhood forums in development plan documents, neighbourhood plans and their brownfield register. It allows development on suitable sites to proceed quicker by agreeing in principle matters upfront.
17. In line with the Government's commitment to devolution, this Act enables the Secretary of State to devolve further planning powers to the Mayor of London and at the request of local authorities to make alterations to the planning system to speed up local delivery.
18. The Government has an ambition to double the number of custom-built and self-built homes by 2020. In March 2015 Parliament passed the Self-build and Custom Housebuilding Act 2015.  The Act, which came into force on 1st April 2016, requires local planning authorities to compile a register of persons seeking to acquire land to build or commission their own home and to have regard to that register when carrying out their planning, housing, land disposal and regeneration functions.  The Housing and Planning Act 2016 requires local planning authorities to ensure that there are sufficient serviced permissioned plots consistent with the local demand on their custom build registers.  This is intended to make it much easier for people to find land to build or commission their own home, diversifying housing supply and revitalising smaller builders who have not experienced the same level of recovery as the large housebuilders since the financial crisis.
19. Since 2012, developers putting forward applications for major development have been able to submit these applications to the Planning Inspectorate for decision should the local planning authority fail to make decisions on time. This has seen the number of major applications decided on time increase to 81% in October to December 2015, compared with 57% in July to September 2012, when the designation approach was first introduced. This Act will extend the cases where planning authorities may be designated for poor performance to include applications for non-major developments. Once designated applicants  for  non-major development will, unless regulations provide otherwise, have the option to submit their application to the Planning Inspectorate. This will take place where the local planning authority has a track record of very poor performance in the speed or quality of its decision-making.
20. This Act will also take forward the Government's commitment to require local authorities to manage their housing assets more efficiently. Local authorities will be required to make a payment to the Secretary of State based on the value of their vacant higher value housing. These payments would be used to help support people into home ownership, including funding discounts for housing association tenants' Right to Buy. The value of this housing will also be used to fund the building of new homes to meet housing need.
21. The Act introduces a common process for establishing both Urban and New Town Development Corporations and Areas.  They will be established, following statutory consultation, through the affirmative (though expressly de-hybridised) resolution procedure in both Houses of Parliament. The process for establishing Urban Development Corporations and Areas and New Town Development Areas previously differed. The reforms aim to speed up the process and to remove any duplication of work undertaken as part of local plan preparations, whilst allowing for proper Parliamentary scrutiny.

Streamlining the planning system

22. Effective regeneration of areas, which could comprise considerable amounts of new housing, often requires the compulsory purchase of land or property. This Act streamlines the process, seeks to make powers of entry for survey in connection with a proposal to acquire land fairer and more consistent, clarifies the remedies available to the Courts where a compulsory purchase order is successfully challenged, improves how compensation is paid, and harmonises procedures for settling disputes about material detriment.
23. The Secretary of State previously could not grant approval for housing as part of an application for a nationally significant infrastructure project, submitted under the Planning Act 2008. This meant either temporary accommodation for workers had to be demolished once construction was completed, or a separate planning application had to be made. This Act changes the approval system to allow developers to include an element of housing as part of their application for consent for an infrastructure project deemed of national significance.
24. On average, the neighbourhood planning process takes two years to complete. This Act seeks to reduce the length of the process. It introduces powers for the Secretary of State to prescribe circumstances in which a local planning authority must designate the whole of a neighbourhood area applied for, and to prescribe dates by which local planning authorities must make key decisions. It also allows the Secretary of State to intervene on the decision to send a plan to referendum in limited circumstances. The Act also enables neighbourhood forums to require a local planning authority to notify them of planning applications in their area, with the intention of enabling them to participate more effectively in local planning.
25. This Act widens the range of matters which a development order may allow local authorities to consider in a prior approval for building operations, beyond approval of matters related to the siting and design of buildings where permission is granted under permitted development rights for the erection, extension, or alteration of any buildings. Any permitted development rights to allow for building operations would be expected to reduce planning application costs.
26. Planning obligations can help mitigate the impact of development to make it acceptable in planning terms. The negotiation of such obligations can become protracted. The Act provides for the Secretary of State to appoint a person to help resolve outstanding issues about planning obligations, and requires that person to produce a report to set timeframes setting out steps taken to resolve those issues and, where issues have not been resolved, recommendations. This is intended to help speed up the negotiation of such obligations. This Act also allows the Secretary of State, through regulations, to place restrictions or conditions on the enforceability of obligations relating to affordable housing.
27. Implementing alternative delivery models, such as outsourcing and shared services, are common for some local authority services but less so for planning services. Choice for the user also has an important part to play in the provision of effective public services. The Act allows for the introduction of pilot schemes to test the benefits of introducing competition in the processing (but not determination) of applications for planning permission.

Housing management

28. This Act seeks to improve the housing system and the way it is managed. The Act puts in place measures to ensure that social homes support those most in need. Protections for private tenants are introduced so that they know that rogue landlords will be tackled and forced to improve or leave the sector, stopping them profiting from dangerous or badly managed properties. The Act allows protections for landlord and tenant money held by property agents to be introduced and a power to require private sector landlords to meet new electrical safety standards. Local authorities will be equipped with greater tools to know and meet the housing need in their area.
29. Social housing is let at low rents on a secure basis to those in housing need. However, there are approximately 300,000 social rented tenants (across the local authority and housing association sectors) with household taxable incomes over £30,000 per annum, including around 50,000 with taxable incomes in excess of £50,000 per year. The Act links more closely social housing rents to the income of social tenants.
30. Since 2012, local authorities have been able to grant flexible tenancies but they are not taking advantage of this flexibility.  Instead, the majority of council tenancies continue to be granted on a ‘lifetime’ basis meaning that tenants have the right to live in their social home for the rest of their life (provided they keep to the conditions of their tenancy), regardless of how the household’s circumstances change in the future. Under this Act local authorities can generally only grant new social tenancies of between 2 and 10 years, but up to 19 years where the tenant has children and must carry out a review of the household’s circumstances at the end of the fixed term. Further, family members who succeed to a lifetime tenancy may only be granted a 5 year tenancy.
31. There are a small number of rogue or criminal landlords who knowingly rent out unsafe or substandard accommodation. The Act introduces a number of measures to give local authorities tools to ban rogue landlords or property agents, preventing them from exploiting more tenants.
32. Local authorities have a duty to review housing conditions so they can take action to improve them. However, they frequently have a limited picture of the size and scale of the private rented sector in their area. Through this Act the Government allows them access to data relating to nearly 3 million tenancy deposits.
33. This Act reduces the regulatory controls for private registered providers of social housing to increase the freedoms of registered providers to manage their housing stock while maintaining protections for tenants and the viability of the sector. The Act also introduces a Special Administration Regime for private registered providers of social housing that are at risk of entering insolvency proceedings.

Land management

34. Government has committed to release public land with capacity for at least 160,000 homes and raise at least £5 billion from land and property disposals over this Parliament. Government is demonstrating its commitment to engaging with local authorities by introducing a new duty to engage.
35. To incentivise public authorities to release surplus land in a timely manner, this Act introduces a new duty to report on surplus land. This is a transparency measure, ensuring that when bodies retain surplus land for a specified period that they publish details, including their reasons for retaining that land.
36. The Act builds on existing powers contained in the Local Government, Planning and Land Act 1980 for the Secretary of State to direct a body to dispose of land under certain circumstances. The Act makes provision for this power to be exercised under a broader set of circumstances.
37. The Climate Change Act 2008 requires the Minister for Cabinet Office to publish an annual report on the efficiency and sustainability of the central civil estate. The Act applies similar requirements in respect of local government buildings and military estate buildings. Such reports will set out the progress made by the reporting body on reducing the size of its estate, and its performance on sustainability of its buildings.