finance

UK planning reforms must not overlook building more affordable housing


The writer is chief executive of the UK charity Centrepoint, which works with homeless young people

The UK government’s proposed planning reforms are long overdue, and at first glance they appear quite radical. Moving to a traffic-light system of zone planning represents a significant rethink, aimed at removing barriers to developments like those sometimes put up by local planning authorities under pressure from residents. What is not yet clear is how these reforms will change the course of the housing crisis. Deregulation must not come at the expense of affordability.

The government seems to be putting real faith in the market to deliver the 300,000 new homes a year it is aiming for. But this approach is unlikely to increase the supply of affordable and social housing stock significantly. This will be the case even if, as is expected, the reforms include the replacement of Section 106 of the Town and Country Planning Act 1990 and the community infrastructure levy, charges applied to new developments that create funds for affordable housing.

Section 106 and the CIL are important, but insufficient. Too often negotiations on what developers pay is arduous and the settlement too small to have much impact. So it is time to try something new, but it must be an upgrade.

So far, there is little cause for excitement. Noises from inside government suggest that to give smaller businesses incentives to build, developments of up to 50 units will be exempt from the new infrastructure levy. Increasing the exemption threshold from 10 currently to 50 risks tempting some developers to scale down middle-sized schemes to avoid the levy. Also, worryingly, under the new First Homes scheme funds from Section 106 will be ringfenced for delivering properties for purchase at a discounted rate, which potentially reduces available funding for new affordable rented homes.

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The government should use the moment to make certain important changes. The current threshold for what qualifies as affordable housing — which the government uses when marking developers against affordable housing targets — is too high.

“Affordable rent” is set at up to 80 per cent of prevailing market rents but in London and other expensive places, that is really not affordable. At Centrepoint, we find many young people making their way out of homelessness are way off being able to afford rents at the properties that have supposedly been built for people like them.

Rent must be related to local incomes. That is why we launched Centrepoint’s Independent Living Programme for young people at risk of homelessness. This scheme uses cost-efficient modular construction methods and caps rent at a third of tenants’ salaries.

We also need more flexibility in the planning system. Under current regulations, new properties must be 37 square metres or more. This footprint ensures a good size home for a family, but such units are too big and too expensive for many single young people.

Careful legislation can help. With lower space standards where appropriate, tenants would not be forced into sharing with strangers, often a real deterrent. In the London Borough of Southwark, we have secured planning permission for 21 square metre homes, despite the lengthy and complex process for developments that deviate from national space regulations.

On modular designs, others should follow our lead. Advances in this technology opens up a range of options for undeveloped land. Things have moved on from the “prefabs” of the 1950s and 60s, many of which were infamous for their poor quality. Now is the time to offer greater incentives for more efficient use of brownfield and “meanwhile” sites for temporary homes.

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Planning reform that leaves the task of increasing supply mostly to the market will struggle to deliver genuinely affordable and social housing. If this is to be truly radical legislation, we need wide-ranging upgrades to existing controls that provide incentives for innovation and the building of good quality, lower-cost homes that young people can afford.



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