Oliver Letwin conducted a review of the build out rate of fully permitted homes on the largest sites in areas of high demand. He concluded that the homogeneity of types of tenure of homes led to slow build out rates.
The report recommended new planning rules for sites over 1500 units in areas of high demand requiring a diversity of offerings with a Natural Expert Committee to arbitrate as to the interpretation of these requirements. The proposal is that there will be a statutory requirement that “housing diversification” will be a reserved matter on such sites. Applicants would be required to provide a “diversification strategy” and diversification would be required in each phase.
It is proposed that Government funding for house builders and purchases will be dependent on accepting a s106 which complies with those requirements.
This chimes with other changes (in the NPPF 2018) which indicate a desire by the government to see planning policy on contributions and s106 obligations used as tools to drive development which is in the public benefit. This may be by governing tenure, providing infrastructure or controlling residual land values.
Sir Oliver Letwin also recommended giving powers to local planning authorities in places with high housing demand to designate areas to be developed as a large coordinated site with master plans and design codes and to use CPO to compulsorily acquire the land at prices which reflect the diversity offered. The aim is to ensure that development value is capped at around 10 times existing use value.
The proposal has elements of the land value auction model referred to in the House of Commons Committee report on land value capture issued September 2018, because it proposes public acquisition of the land and then parcelling it up for sale for development with different types and tenure.
It is proposed that, if adopted, these rules wold be effective for sites given permission on or after the start of 2021.
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