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Amalgamation of units still at risk

As we have noted previously, the Town and Country Planning Act 1990 (“TCPA”) is clear that the conversion of a single unit into several units requires planning permission. Although the legislation is silent on amalgamation, it may too be a material change of use requiring planning permission (see our 13 May 2014 blog).

In the recent Cheyne Gardens appeal an Inspector dismissed an appeal against Royal Borough of Kensington and Chelsea (“RBKC”)’s decision not to grant a certificate of lawfulness for works to amalgamate two flats into a single dwelling. Planning permission had been refused and the applicant argued that a Certificate should be granted on the grounds that there was no material change of use requiring planning permission.  The analysis centred on two questions:

1          Is the change of use ‘development’?  ap

The appellant argued that the proposals should not be treated as development on the basis of Section 55(2)(f) TCPA and Article 3(1) of The Town and Country Planning (Use Classes) Order 1987. Both provide that where a building is used for a purpose of any class specified in the schedule to that Order, the use of that building for any other purpose within the same class shall not be taken to involve development of land. In Richmond upon Thames v SSETR & Richmond upon Thames Churches Housing Trust [2000] this was confirmed as engaged where the combined units were already in a single occupation.

The Inspector refused to apply Section 55(2)(f) and Article 3(1) on the basis that the two flats in this case were in use as two separate dwellinghouses, each occupied by a single household or person. The revised position would be one unit occupied by a single household or person.  Whilst the new arrangement, by virtue of the amalgamation, would be used for one of the uses within Class C3, it would not be the self-same building in the before and after scenarios.  The amalgamation was therefore development capable of amounting to a material change of use.

2          Is the change of use material in planning terms?

Richmond established that the extent to which a particular use fulfils a legitimate or recognised planning purpose (in terms of a purpose relating to the character of the land) is relevant in deciding whether a change from that use is a material change of use.   In particular, the loss of a particular type of residential accommodation where that loss was resisted by specific policies.

RBKC put forward evidence that de-conversions and amalgamations were anticipated to result in the loss of 400 homes over a five year period. Set against that, London Plan Policy 3.3 imposes a minimum 10 year housing building target of 7,330 dwellings for RBKC, with an annual monitoring target of 733 homes.  The Inspector considered that the loss of one unit should be considered against the annual target.  Despite accepting that this would be an “almost infinitesimal change” (and the loss of the single unit was under the 5 unit threshold set in the RBKC policy) he nonetheless decided that it would “as a matter of fact and degree have a significant impact in planning terms” concluding that circumstances had “changed significantly” since the adoption of that policy.

So what?

The focus of recent amalgamation appeals has been on the materiality of the change, rather than the question of whether there has been a change of use. The decision reflects the approach applied by the High Court in June, quashing CLEUD and Section 78 appeals on the basis that the Inspector should have taken account of generalised housing need arguments despite the lack of a specific policy threshold.

Although there is real scope to achieve permission on the basis that the loss of supply is clearly de minimis, the Cheyne Gardens decision confirms that decision makers will continue to treat general housing supply policies as a basis for regarding small amalgamations as material even though more specific policies on such changes do not necessarily warrant it.  The difficulties of doing so in the absence of such policies are illustrated by the 77 Drayton Gardens decision, in which the Inspector refused to grant a CLEUD (on the basis that a material change had occurred by virtue of amalgamation of two units, treating the existence of restrictive policies as weighing on the ‘threshold’ question of whether a change of use had occurred). He nonetheless quashed the related enforcement notice and granted permission on the basis that evidence of housing need (including for larger units) and actual supply outweighed the conflict with the development plan.

Neighbourhood Plans Fudge

The Government’s solution to the so-far intractable problem of Neighbourhood Plans that do not meet housing needs is here in the form of a Written Ministerial Statement (WMS) calling time on the  relative certainty provided by the NPPF and firing the starting gun for changes to the NPPF due with the issue of the Housing White Paper early in 2017.  Most Neighbourhood Plans (NPs) will be going nowhere sensible, even more emphatically than ever.

Nothing comes of nothing

The Courts have confirmed that the Examination tests for a Neighbourhood Plan are a cake walk that does not require any sensible relationship with strategic goals of meeting Objectively Assessed Needs. NPs can be passed fit for service at Examination simply having “regard to” national policies where it is “in general conformity with the strategic policies” that may date back to the 1990s and have little or no relationship to the ongoing mess of housing delivery.

Equally, the ability to put NPs in place without any up to date strategic policies – and the endless snakes and ladders of the Local Plan process – creates a challenge for those promoting NPs as a positive framework for local growth.  Adopted NPs may provide a warm glow that immediately fades as an absent overarching housing land supply weighs in under paragraph 49 of the NPPF.

The Government’s response to date has been wholly political.  In some cases NPs have been effectively ignored; in others the out of date NP policies have been given determinative weight, refusing permission for 100 homes at Yapton in an area of housing need with 3 years’ HLS on the basis that out of date NP policies should be given “significant weight”.

Sticking Plaster Applied

laiThe WMS states that

relevant policies for the supply of housing in a neighbourhood plan … should not be deemed to be ‘out-of-date’ [under NPPF49] where […]”:

  • the WMS or the NP are less than 2 years old
  • the NP “allocates sites for housing”
  • the LPA “can demonstrate a three-year supply of deliverable housing sites”.

Cue some authorities currently bobbing around on the Local Plan process to ditch infrastructure planning, batten down the hatches with a 3 year supply and encourage NPs through the process.  Cue some NP that allocate a couple of single unit sites being treated as up to date even if there remains a housing shortfall in the neighbourhood.

A far better solution would simply be to require the NP examination regime to grapple with the unconstrained Objectively Assessed Needs for their area and plan to meet an equitable slice of them until the Local Plan comes along. NP authors are, after all, engaging in devolved governance.  With that great power comes great responsibility.

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Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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Autumn Statement: mood music?

In the absence of the Housing White Paper, the industry is still left needing to mind the gap.  We have simplified budgets – abolishing the Autumn Statement – but no hint of simplified planning for growth.

The overall commitment to housing is welcome mood music, but the lack of detail on powers and fiscal incentives to support locally-led Garden Towns to deliver at the scale needed leaves a hole.  Expanding grant funding for affordable tenures is great news but at £25,000 per unit is not going to be life changing.

hamThe £2.3bn Housing Infrastructure Fund could be a game changer if it is used to reward areas for proactively planning for growth. Making an up to date housing land supply a condition for at least some of the funding would dangle the right carrot for authorities that currently only have the stick. The lack of fiscal measures for new settlements – incentivising forward funding of major infrastructure that can unlock delivery at real scale – is disappointing though.

Affordable Housing is heading towards life support – delivery in 2015-16 was 52% lower than last year.  The announcement in the Autumn Statement of a funding injection to deliver 40,000 affordable homes is welcome. It is a clear recognition that addressing the housing shortage is not simply about building more homes.  Yes, we need more but they must meet a variety of needs. There are further signals of a softening of the Government’s stance on Starter Homes – tenure flexibility replacing David Cameron’s commitment to a single tenure.

Without the Housing White Paper, there is also still a wait to see how the NPPF is going to be reshaped and in particular how housing land supply and Local Plan duties will be re-set following expert advice on accelerating delivery. If the Community Infrastructure Levy is to be replaced by a simplified flat national charge, the effect on infrastructure funding and the transitional arrangements need to be understood now, so that schemes in the pipeline do not get put into suspended animation.

The statement gives some clues about the Government’s direction of travel but, funding commitments aside, offers little substance.  We still await the detail in the Housing White Paper which we are told will be published “soon”.  Reasons for the delay are unclear. Have responses to leaks on more radical measures, such as penalising developers for slow delivery, prompted a re-think?

Planning TV – Spotlight on Environmental Impact Assessment

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Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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In this episode of Planning TV, Lucy Wood, Environmental Planning Director at Barton Willmore joins Roy Pinnock, Dentons, to discuss forthcoming changes to the Environmental Impact Assessment Regulations.

Short term rentals – a potential planning issue?

The recent decision in Iveta Nemcova v Fairflied Rents Limited [2016] UKUT 303 underlined the importance of reviewing lease terms (in particular, the user covenant) prior to letting residential property on a short term basis, as set out in our alert.  It therefore seems timely to reflect upon the potential planning issues raised by short term rentals, particularly given the rising popularity of websites such as Airbnb and onefinestay.

airWhat’s the use?

From a planning perspective, permanent use of residential property for temporary sleeping accommodation constitutes a material change of use for which planning permission is required.

Short-term lettings in Greater London are also subject to a further planning restriction in the form of Section 25 Greater London Council (General Powers) Act 1973. This makes the use of residential premises as temporary sleeping accommodation for less than 90 consecutive nights a material change of use requiring planning permission.  The purpose behind the provision is to protect London’s permanent housing supply.

The Government introduced an exception to this restriction in the Deregulation Act 2015.  As a result, short term lettings in the capital are no longer deemed a material change of use if:

  1. the cumulative number of nights use as temporary accommodation does not exceed 90 nights in any one go (or any calendar year); and
  2. the person providing the accommodation is liable to pay council tax.

Such use may, nonetheless, be classed as a material change of use under Building Regulations. Consequently, upgrade works may still be required to comply with relevant standards.

The new rules also grant the Secretary of State power to create further exceptions by way of regulations, albeit subject to approval by both Houses of Parliament.

Motivating factors

The Government’s rationale for relaxing the rules was set out in ‘Promoting the sharing economy in London – Policy on short-term use of residential property in London’, which came out of a wider review of property conditions in the private rented sector.  In short, the changes were intended to give Londoners the opportunity to earn extra income renting out their property and expand the pool of competitively priced accommodation in the capital, while removing uncertainty caused by inconsistent enforcement of section 25 across London Boroughs.

Safeguards

The new 90 day cap was imposed to prevent permanent temporary sleeping accommodation use. As a further safeguard, local authorities can direct that the new rules do not apply to: (i) a particular residential premise (for example, where there has already been enforcement action against a statutory nuisance); or (ii) a particular area.  However, local authorities can only use this power with the consent of the Secretary of State where it is “necessary to protect the amenity of the locality”.  Time will tell whether these safeguards prove to be effective.

Policy conflicts?

The reforms are consistent with the Government’s broader objectives of relaxing planning laws and reducing the burden of unnecessary change of use applications. However, they would appear to be at odds with the Government’s drive to increase the supply of homes.  It is therefore doubtful that the Secretary of State will make further exceptions to section 25 in the near future.

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Permission in Principle – a mild salve for an acute housing shortage

So-called planning red tape has frequently been the scapegoat for the housing crisis. The planning system has also frequently been changed and tweaked with the aim of addressing the crisis.

principle_stamp_logo_cleanrtwertNow the Housing and Planning Act 2016 has introduced, through amendments to the Town and Country Planning Act 1990, permission in principle (PiP). Much of the detail will follow through Regulations.  The consultation earlier this year gives us an indication of what might be included.

What is Permission in Principle?

PiP establishes that a particular scale of housing-led development on a defined site is acceptable.  The aim is for a PiP to minimise the upfront and at-risk work of applicants.   This may be the case where the planning authority or neighbourhood forum is proactive, resourced and pro-development.

PiP can be (1) designated by the planning authority or neighbourhood forum or (2) granted in response to an application.  Designation is made through a “qualifying document”: a register (see below); development plan document; or neighbourhood plan.  A developer can make an application in respect of a site which, if granted, will have almost the same result.  In both cases PiP must be followed by technical details consent before any development can take place.

Designated PiPs will lapse after 5 years and granted PiPs after 3 years (although in both cases the planning authority can set an alternative period). Presumably the rationale for the difference is that (brave) authorities and forums may designate large sites whereas it is currently envisaged (see Consultation document) that a PiP may only be granted for a maximum of 10 homes.

If a planning authority refuses an application for PiP the applicant can lodge an appeal. This should give potential developers of small, contentious sites a quicker route to an inevitable appeal.

Brownfield Register

The 2016 Act introduces the “Register of Land” concept which authorities can be required to compile through Regulations. Known as the brownfield register, as the objective is to identify previously developed land, it is one method through which a PiP may be designated (the aim is to assist achieving the Government aim of 90% of brownfield land having consent for housing by 2020).

The Government has provided guidance for the 73 authorities participating in a brownfield register pilot scheme. Authorities should draw on up to date evidence, such as their Strategic Housing Land Availability Assessment evidence, in identifying sites.  They should then assess suitability for housing by considering availability, capacity and capability.  Sites which meet the criteria should then be compiled into the register (with those which were rejected noted) and published.

Having reviewed a sample of the completed pilot registers, the majority of identified sites already have planning permission. An indicator that other factors are preventing delivery? And that PiPs designated through the register are unlikely to make any significant contribution to housing delivery?

How much detail is required?

The Government’s initial thoughts are that only “in principle matters” be required as part of a PiP: a red line location plan, proposed uses (which must be “housing-led”), and the minimum and maximum quantum of residential development.

As yet, contrary to requirements for outline applications, points of access need not be identified. This is likely to change as robust assessment of a proposal is difficult without such information.  More detail may also be required for EIA development.  In making an EIA development designation,  the authority or forum should be able to make efficient use of information gathered as part of the Strategic Environmental Assessment and run elements of the assessments concurrently.  We may also see more streamlined assessments which properly assess likely significant effects but omit the many other effects often covered.

At the technical details consent stage, full details must be provided (currently to be for the whole PiP development). The planning authority must determine those details in accordance with the PiP, unless it has effectively expired or there has been a material change in circumstance since the PiP came into force.

Why PiP will not facilitate extensive housing delivery

Consistent with determining any other planning application, the planning authority must have regard to the development plan and any other material considerations in exercising either of their powers to create a PiP (see Housing and Planning Act 2016, provisions to introduce TCPA, sn.59(A)(11)).  Whilst this must be right in a plan-led system, and progressive planning authorities may make a designation against the backdrop of an emerging local plan, it leaves developers with the same difficulties they currently experience with outdated policy and an unwilling authority.

Unless thinking changes as a result of consultation, applications will only be allowed for a maximum of 10 homes. If the PiP route genuinely offers a more expedient route than preparing an outline application, limiting applications to 10 homes is a real missed opportunity.  We will not see developers making bold PiP applications for hundreds of homes on unallocated sites based on substantive material considerations.

Government currently considers that technical details consent should come forward for the entire PiP area at once, a disadvantage compared to the operation of a large outline permission.  It is unclear why this measure, which could certainly delay delivery, has been included.  Perhaps the secondary legislation will more sensibly allow for phasing.

At this stage it is unclear whether PiP will achieve the aim of greater certainty and speed in the planning process and whether it offers anything more appealing than allocations, outline planning applications and local development orders.

Planning TV – Spotlight on landbanking

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Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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Planning TV – Spotlight on Placemaking

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Dentons Planning TV is a new and innovative platform for engaging in and reacting to the latest developments in the dynamic world of planning. Its mission statement is simple: to provoke debate and facilitate engagement at all levels in the planning process.

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