The boundaries of materiality

In November 2019, the Supreme Court gave judgment in R (on the application of Wright) v Resilient Energy Severndale Ltd [2019], a case concerning a decision to grant planning permission for an onshore community wind turbine. The development proposals included a commitment to make annual donations to a community fund, to be spent on unspecified ‘community benefits’. The development proposals included a commitment to make annual donations to a community fund, to be spent on unspecified ‘community benefits’.

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This article was first published in Property Law Journal (February 2020) and is also available at www.lawjournals.co.uk.

Short-term lets (not?)

Since our 2018 blog on short-term lets, the Scottish Government has published its report Research into the impact of short-term lets on communities across Scotland (the Report) and section 17 of the new Planning (Scotland) Act 2019 (the Act) will equip local authorities with the power to introduce Short-Term Let Control Areas where they decide that this is in the interests of local communities.  The aim is for the regulations to be in place by spring 2021.  

The Act does not expressly define what a short-term let is but private residential tenancies under section 1 of the Private Housing (Tenancies) (Scotland) Act 2016 and tenancies of a dwellinghouse (or part of it) where all or part of the dwellinghouse is the only or principal home of the landlord or occupier are held not to constitute short-term lets. 

The Report indicated that although there were just under 32,000 active Airbnb listing in Scotland as of May 2019 (a three-fold increase since 2016), approximately half of these listings were in either the City of Edinburgh (CEC) (31%) or Highland Council (19) areas. 

Control areas will be optional.  This will not be a blanket approach across the country.  Instead, certain hotspot areas, such as Edinburgh and Skye (Highland Council), can designate all or part of their areas as control areas. Planning permission will always be required where a property is to be used for a short-term let within a control area.

The current situation is that where it can be shown that there has been a material change of use from a residential property to short-term let accommodation, planning permission is required.  This is on a case-by-case basis and assessed on (i) the character of the new use and the wider area; (ii) the size of the property; (iii) the pattern of activity associated with the use, including the number of occupants, the period of use, issues of noise, disturbance and parking demand; and (iv) the nature and character of any services provided. 

A recent (successful) appeal against the refusal of a certificate of lawful use application by CEC can illustrate the approaches.  The application was submitted on the basis that the existing use for short term residential letting, ongoing since around May 2019, was not a material change of use and consequently did not require planning permission.  The property in question was a two bedroom flat on the ground and basement floors of a four storey tenement building.  The property had its own private access, no services were provided to the occupants and there was a mix of uses within the vicinity of the property including a kebab shop, hairdresser and a financial services business.   Based on the above criteria, the Scottish Government Reporter concluded that the existing use was in keeping with the nature and size of the property and that there was no significant disturbance or impact from the use therefore a certificate should be granted. 

If, going forward however, the property fell in a control area, planning permission would automatically be required.  Same property.  Different result.  At least there would be certainty in knowing that planning permission would be required for properties falling within control areas. 

Local authorities already have the tools to combat short-term lets.  If CEC were to designate only the city centre ward (2,710 active Airbnb listings per the Report, more than the whole of Glasgow) as a control area, other wards within its jurisdiction that are not designated as control areas would still require to be dealt with on a case-by-case assessment.  When considering council resources alongside this approach, an authority may be unable to fight this battle on two fronts.  Managing the influx of a massive number of planning applications could prove catastrophic to planning departments while still having to deal with cases outwith control areas on an individual basis.  This may encourage planning authorities to designate all of their area as a control area or from a budgetary/resource perspective, not to implement a control area at all. 

Following the introduction of control areas, on 8 January 2020 the Scottish Government announced further powers for local authorities to regulate short-term lets by introducing a licensing scheme under the Civic Government (Scotland) Act 1982 also in force from spring 2021.    It will become a criminal offence to operate a property as a short-term let without a licence.  The scheme will include a new mandatory safety requirement and provide councils with the discretion to apply further conditions to address the concerns of local residents.  A new licensing scheme will present similar issues to the new planning controls – namely that of a lack of council resources. 

In addition to the above schemes, there is a commitment from Scottish Ministers to consider the taxation of short-term lets to compliment the Transient Visitor Levy Bill to be introduced later this Parliament. 

These new government measures are an attempt to balance the interests of local communities with the interests of visitors.   There are no overnight solutions for these issues.  Uncertainty remains for the foreseeable future for short-term lets in Scotland. 

Section 73 Changes – Don’t Let the Gremlins In

The Court of Appeal’s decision in Finney v Welsh Ministers in late 2019 – that Section 73 permissions cannot alter the description of development – should not have come as a shock.  We noted in the original Lambeth appeal case that S73 should be approached as doing what it says in the 1990 Act – authorising development other than in accordance with conditions imposed on the original grant of permission.

Unusual Restraint

In Finney, the developer had applied for (and obtained) permission for “…two wind turbines, with a tip height of up to 100m“. It appealed against the later refusal of permission under S73 for amendments to conditions to extend the tip height to 125m.  The Inspector considered the merits of the increased height and decided to grant permission, deleting reference to the height in the description of development while doing so (to avoid the fundamental inconsistency between it and the revised conditions that would otherwise result).   The Court of Appeal confirmed that the there is no power to do this (and rejected an earlier High Court decision to the contrary).

None of this should make much difference in practice, because the judgment is simply applying a literal interpretation of the words of Section 73.  

Gremlins

Gremlins creep in because of the way that planning applications are handled.  This is avoidable but sometimes appears to be irresistible. 

Building heights, use classes, floorspace figures and unit numbers rarely need to be included in the ‘operative’ description of development.  They can be controlled by condition. Where Section 73 is later used to amend these parameters, a planning judgement is then needed.  In some cases, this may require more information on impacts (including, where EIA is applicable, additional environmental information). 

There is a tendency to add in all sorts of unnecessary detail when applications are submitted, however.  In Finney, the applicant did this to itself.  Elsewhere, LPAs will clutter the description of development on receipt and refuse to budge until it has been piled high with detail (much of which ironically then fails to make it into conditions). 

There is an open question about whether authorities have the jurisdiction to do this (or whether they simply have to determine the application as submitted, subject to whatever conditions they see fit).  It is moot, because no applicant wants to get off on the wrong foot and so changes are conceded which create inflexibilities.  These can then hamstring the ability to make mundane changes later on. 

Taking away solutions?

Section 96A of the 1990 Act is a useful tool, if used properly.  Unlike the S73 power, S96A is not limited to changes to conditions.  The power simply allows changes to the decision notice (including conditions), as long as they are “not material“.

Descriptions of development can therefore legitimately be decluttered, where changes are – cumulatively – non-material in planning terms.  This is undoubtedly a low threshold, but one which will nonetheless not be breached in many cases.  For example, deleting a use class or unit numbers from a description of development where use and unit numbers are already controlled by condition.  Section 96A was after all introduced in an economic downturn in order to avoid unnecessary fresh planning applications. Although there is no right of appeal against S96A refusal, it provides a sensible basis for changes that – by definition – are trivial.

Post-Finney, doubt is being raised about the use of S96A in this way.  Given that the Court of Appeal recently confirmed in the Fulford case that S96A may be used to make non-material changes to reserved matters approvals, concerns about non-material changes to the planning permission itself (whether the description of development, the conditions or the informatives) need to be put in perspective. 

The real issue for S96A, which is not legal, is whether:

  • as a matter of planning judgement there are land use planning effects that make the change material; and
  • there is an adequate information base to make that assessment.

If this begins to become a blocker to sensible changes to schemes to get them off the ground, Government should issue guidance confirming this position to avoid decelerating planning at a time when it is trying to speed it up.

(How) Can Planning Speed Up Delivery? (part 2)

Part 1 of this blog considered the expectations and challenges around build out and some of the reforms proposed to address it. This part considers the implications of slow build out for local authorities and what they, and the planning system more broadly, can do to speed up delivery.

Accountability for delivery

Local authorities are at the sharp end of the slow build out problem. They have limited control over development once development is fully permitted but are increasingly going to be become accountable under the NPPF for delivery against their local housing requirements.  

According to the last Housing Delivery Test (HDT) results, 33% of LPAs have become subject to at least one of the NPPF ‘penalties’ arising from under-delivery. 19 further local authorities are likely to face another 20% buffer to their 5-year housing land supply in 2020 (Planning Magazine). If local authorities lack enough ‘deliverable’ sites to make up that level of supply, the ’tilted balance’ may kick in. Those authorities then, in theory, become more vulnerable to planning by appeal.  

So what can LPAs do?  

LPA tools

  • Restrict: Authorities can, in principle, impose conditions setting a timeframe for implementation that is shorter than the default statutory 3 years. Where an LPA considers that an implemented development is unlikely to be completed within a “reasonable period”, it can serve a ‘completion notice’ (s.94(2), TCPA 1990). This does not require completion; it is a notice that the permission will (subject to Secretary of State sign-off) expire. At the end of the period specified, the permission becomes invalid and the development can no longer proceed.

These are negative tools, however. They are more likely to frustrate development than encourage it. It is not surprising that they are seldom used.

  • Contract: Local authorities are likely to consider using contractual mechanisms. These would include an agreed trajectory for build out, including deadlines by which certain build out ‘milestones’ must be completed – e.g. numbers of storeys or residential units, a development phase.  Absolute delivery commitments may generate legal interest in whether they are enforceable or, more fundamentally, necessary (see Wavendon Properties, for example). Where agreed milestones are not achieved by the relevant deadlines, there could be:
  • changes to housing types and tenures – e.g. increased proportion of rented housing or affordable housing, a shift in the affordable tenure split towards social rent, etc.;
  • acceleration of triggers for the delivery of infrastructure items (schools, libraries, etc.);
  • a viability review;
  • theoretically, an option for the Council to acquire the land becoming exercisable.

The effectiveness and desirability of these mechanisms depend on factors such as the extent of any contractual get-outs for the developer, provisions for control over the quality of the development and monitoring, and the LPA’s monitoring capacity.

  • Deliver: More ambitiously, local authorities can themselves engage in delivery, either individually or with private sector partners, through ‘local housing companies’. Indeed the use of these vehicles has increased significantly in recent years.
  • Supply: politicians can chose to allocate more land than necessary to meet the NPPF’s minimum requirement for a 5YHLS + 5%, to better compensate for consent lapses, which local plan housing trajectories sometimes underestimate. Flipped the other way around, less exuberant delivery trajectories can be used (which more closely reflect the build out patterns covered in Part 1 of this blog) – more deliverable sites would need to be identified to compensate for the more realistic approach. 

Positive thinking

There is no single solution for speeding up delivery, and mere tinkering with the current system will not do. More work is needed to understand whether positive incentives can be devised to specifically target the rateof delivery, rather than delivery per se

In any event, any package of measures should include Government incentives that reward authorities, and perhaps investors, for planning for growth and delivering it in a timely manner. Putting in place a more meaningful alternative to the New Homes Bonus would be a start in creating incentives to facilitate speedy delivery once outline permissions have been granted without the burden on further planning regulation.

In the meantime, the tools identified above are likely to come more to the fore in debates about delivery.

(How) Can Planning Speed Up Delivery? (part 1)

Between 2011/12 and 2017/18, on average, 258,192 homes were consented each year but only 153,560 homes were completed each year.  This gap is a challenge given high housing demand and the slow ratchet of the Housing Delivery Test.

The issue has focused attention on the build out rate: how quickly new dwellings are completed once they are fully consented. The search for solutions to ‘slow’ build out has focused on the planning system (which restricts and permits development, but does not demand its completion). So what can the planning system do to increase the build out rate?

This blog is in two parts. Part 1 looks at the reasons for build out and some of the measures proposed to address it. Part 2 considers the implications of ‘slow’ build out for local authorities and the planning tools available to them to encourage faster build out.

Build out rate – market forces

On the face of it, large-scale housing development is an obvious way to deliver more homes quickly, especially given NPPF support and government funding for urban extensions / new settlements. However, the Letwin Review found that very large sites in high-demand areas are likely to complete only a small proportion of their units each year.

Lichfields’ research (first reported in 2016 and updated in 2018) found that sites of all sizes experience the same constraints. Sites of 500-999 units struggle to complete more than 100 homes a year. Although sites of 2000+ units can see higher build-out rates – i.e. over 300 completions a year – those higher rates tend to be short-lived within the overall build out period. 

Why? For Letwin, it was too much of the same. The market can only absorb so many of a limited range of products (i.e. 1- and 2-bed private sale flats) within a given period, unless prices come down.  

It is important to stand back when looking at the raw statistics and think about when the clock really starts to run for ‘consented’ schemes.  Achieving post-consent approval of details (including reserved matters) can take significant time, which means the gap is not necessarily what it seems nor simply a function of supply-demand economics.

Reform?

Several players have proposed reforms:

  • Tenure diversity: Letwin recommended introducing new planning rules for large sites, requiring more diversity of home types and tenures in line with demand.  These changes would include new legislation requiring ‘housing diversification’ to be a reserved matter in all outline planning permissions for large sites in high demand areas and a prod for authorities to “insist on levels of diversity that will tend to cap residual land values for these large sites at around ten times their existing use value”.

The Government’s response was lukewarm: supporting the principle of funding increased housing diversification through reductions in residual land values but moving on to the process elements of Accelerated Planning.  

  • Letwin also suggested that improved coordination between utilities, highways authorities and other agencies could help bring forward the start of build out. This is an area where real delays to build out occur and where Government should assist, including through the Infrastructure and Projects Authority.
  • The British Property Federation has launched its own Accelerated Planning Manifesto focussing on how plan-making and development management can drive delivery. Noting the “contradiction” between deep cuts to the English planning system while increasing housing targets by 50%, the first proposal is for Government to “invest heavily in local authority planning departments to address … funding cuts combined with more investment from the private sector.”
    The Queen’s Speech on 19 December indicated that the forthcoming planning White Paper (to be published soon) will contain measures to help with local authority resourcing. We will otherwise have to wait for the publication of the White Paper to see what appetite the new Government has for the above proposals.
  • A further change would be to recognise the limits of process engineering and regulatory interventions on supply economics and simply allocate more land. The current ‘Do Minimum Plus 20%’ approach would seem to create too small a pool of land.

General Election 2019: Vote Planning

The 2019 General Election is taking place against a backdrop of real controversy about the nature and the role of Government. The fault lines in the main parties’ Manifestos on Planning show some interesting shared ground and stark fault lines. Examples of common themes across the three leading parties include a 300,000 homes a year housebuilding target, a push for building green, and a scepticism of foreign homebuyers. All three parties propose reforms with implications for the Private Rented Sector and Build to Rent development. Only Labour proposes clear value capture measures designed to assemble land more cheaply.

Here is our summary of the main parties’ manifesto commitments in planning:

With thanks to Kendal Youngblood for preparing this blog.

Where next for stewardship?

The delivery of new homes has for some time now been a key priority for the current government, previous governments and inevitably will remain so for future governments. With the scale of housing needed to begin to make a dent in the housing shortage, comes also the need to provide infrastructure, new public realm, community and recreational facilities and green space. While the focus is on identifying strategic sites to help deliver the housing needed, greater consideration must be given to the legacy arrangements required to ensure that once residents are living in the delivered houses, they are embedded within a community which offers the recreational facilities and greenspace to sustain and enrich what is simply ‘living’. Stewardship is key to that enrichment and should be addressed early in the development management process. Creating communities requires more than just bricks and mortar.

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This article was first published in Property Law Journal (November 2019) and is also available at www.lawjournals.co.uk

Private keep out!

The ‘right to roam’ has a storied history. The first parliamentary bill was introduced in 1884, then re-introduced in successive years to 1914; this culminated in the mass trespass action and imprisonment of six activists on Kinder Scout in the Peak District in 1932 to draw attention to the lack of public access across the countryside. 

Fast forward to 2000 and the Countryside and Rights of Way Act 2000 (CROWA 2000) finally granted the public a ‘right to roam’ over certain designated open country land and coastal margins.  CROWA was two faced.  While it secured a right to roam, under Part II, some historic footpaths and bridleways are now threatened with extinction.  Those rights of way that came into existence before 1949 but have not been recorded on any definitive map and statement by 1 January 2026, may be extinguished if section 56 is brought into force.

The definitive map and statement is a record of public rights of way held by every local authority (including county councils and London borough councils) in England and Wales.  Many of these unrecorded historical paths are still in use, and an application can be made for a modification to a definitive map on the basis of 20 years’ use under section 53 of the Wildlife and Countryside Act 1981.

According to a Freedom of Information request by the Ramblers, there are over 4,000 outstanding applications to record historic rights of way on definitive maps, and DEFRA has estimated that 20,000 applications may be made before the proposed cut-off date of 2026.

There is currently little guidance on when/if section 56 of CROWA 2000 will be brought into force, and the longer it is delayed the likelihood increases that the 2026 cut-off date may be extended. The sensitivity of the issue was highlighted in a recent debate in the House of Lords regarding a potential five year extension to 2031.

Users of historic rights of way established before 1949 will have to collect sufficient evidence that supports an application for a presumed dedication of a public right of way based on 20 years’ use before 1949. This can be difficult given the intervening period, but manorial records, inclosure awards and maps, tithe and award maps, OS maps and Council records can assist.

For landowners to resist such an application, they will have to demonstrate that prior to 1949 the current or previous landowner did not intend to dedicate the route as a public right of way by:

  1. stopping people using the route, either by turning people away or by putting obstacles in their way;
  2. restricting use of the highway to a particular section of the public;
  3. lacking capacity to dedicate the land.

There is a prescribed procedure for making an application for a modification to a definitive map and for objections to be made. Whether one agrees with the potential cut-off date will depend on their particular views as landowner or right of way user.  However, if public rights of way were established before 1949 and are important to local people, there is potentially a limited opportunity to formalise that right of way and help to keep definitive maps up to date for the benefit of all.

The cost of justice: certainty?

Are the Courts starting to be more generous to Councils when they make mistakes when granting planning permission?

The Court of Appeal confirmed the judgment of a lower court centred around an error by Wirral Borough Council. Wirral Borough Council mistakenly granted planning permission to Thornton Hall for three marquees within the Thornton Manor estate without any planning conditions. This Council had intended to issue the permission temporarily for a period of 5 years. This was apparent in the committee report and the section 106 agreement, which included a draft decision notice. The appellant waited 5 years and informed the Council that the marquees still stood.   

Exceptionally, the initial judgment granted a 5 year extension of time for the judicial review. The permission was quashed, with Thornton Hall’s knowledge of the error being cited as important. While the facts are extremely specific, it does open up the scope for judicial review way past the usual 6 week period. The decision prioritises proper planning outcomes over the need for a clear and certain planning record.

The Supreme Court supported Lambeth Borough Council on a similar case earlier in the month. The site involved a Homebase store originally granted permission in 1975. A section 73 application to vary an extant permission to sell a wider range of goods was granted to the site in 2010. The new consent explicitly stated that this was limited to ‘non-food goods’.  A further section 73 permission was granted in 2014, and did not include the ‘non-food goods’ condition. The landlord applied for a certificate of lawful use and argued that there were no restrictions on what could be sold. On appeal the inspector agreed and a certificate of lawful use was issued.

The Secretary of State was ruled to have acted correctly by the High Court and Court of Appeal. The Supreme Court overruled this judgment. It found that the conditions of the 2010 section 73 permission continued to have effect, so far as they were consistent with the 2014 permission.

This adds an element of uncertainty into the interpretation of the planning history of a site. It means applicants will have to pay close attention to previous section 73 permission(s) and their conditions and work out whether earlier restrictive conditions should be considered to be “rolled forward”.  That is a rather subjective approach.

In both cases the outcome was understandable.  Why should the public at large suffer, and the owner gain, from Council mistakes? On the other hand the decisions make it more difficult to be clear about what uses are lawful.  Justice comes at the cost of certainty and simplicity.

With thanks to George Fennell who assisted in preparing this blog post.

Appropriate assessment of habitat sites

As the courts continue to grapple with the issue of ‘appropriate assessment’ under the Habitats Regulations, we examine why this area has attracted so much attention and contemplates what lies ahead.

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This article was first published in Property Law Journal (September 2019) and is also available at www.lawjournals.co.uk