With outline planning permission now taking around 12 months, the number of housing developments by small and medium-sized (SME) house builders is dropping at an alarming rate…
SME House Builders
A study that shows the waiting time for outline planning permission has almost quadrupled in the past 30 years, also reveals that small to medium-sized (SME) house builders are being hit by an increase in costs.
The research was commissioned by the Land, Planning and Development Federation (LPDF) and United Trust Bank, to explore the impact of changes to the planning system since the 1990s on small and medium-sized (SME) housebuilders.
Impact on Small House Builders
The research showed that while it took an average of 14 weeks to gain outline planning permission back in the 90s, it now takes a whole year – with a further wait of six to eight months to secure full planning permission.
The effect on SME housebuilders is clear – while they delivered 39% of new homes in 1988, that figure had dropped considerably to just 10% in 2020.
And when it comes to the costs involved in gathering the information needed to submit outline permission, that has shot up from £28,000 to a whopping £125,000. Planning fees have also rocketed by an astounding 72%, with more increases on the way.
Lichfields, which carried out the study, says that the amount of evidence needed from SME builders by local planning authorities – which can include 30 separate assessments and more than 100 pages of guidance notes – is having a “a material effect” on the ability of SMEs to bid on and complete development sites.
While the government plans to increase the number of homes built each year, Local Plans are allocating fewer small and medium sized sites for development. This leads SMEs to target more risky sites outside of site allocations – which would benefit from the endorsement of an early stage outline planning permission.
The study calls for planning authorities to require simpler and less detailed evidence at the initial outline permission stage in an effort to cut costs and make it easier for SME developers to apply. It also suggests that more land that is suitable for SME development should be identified by local authorities and in the Local Plans. Indeed, this is something Apex Planning Consultants routinely argues for from local planning authorities. It is acknowledged that strategic sites will deliver new schools, GP surgeries and leisure opportunities, however they are to meet the demands of that development, and the development as a whole can take decades to be completed.
Small and medium sized sites can be delivered quickly helping to meet the demand for housing, provide varied house types that add visual interest to an area, and still result in financial contributions towards the enhancement of local facilities. The fact the National Planning Policy Framework (paragraph 69) says very much the same thing shows the importance of small and medium sized sites, and the need to be more pragmatic about what is needed to determine planning applications so as to remove significant barriers to their development.
Local Planning Authority
Researchers say that the extended planning process and increase in the amount of evidence requested has been caused by a rise in case law and precedents, along with legal challenges and appeals. It means that local planning authorities are now asking for more evidence at the start of the process, in order to avoid legal challenges further along the line.
It also suggests that funding cuts have led to a lack of specialists, as well as higher staff turnover, which is also affecting the planning process. It suggests that ringfencing planning fees could encourage planning authorities to have a pro-development mindset. This is of course something planning agents and developers have long advocated, because it makes sense that any increase in planning application fees should go towards improving the planning service offered by local planning authorities only, not hived off to bolster other services.
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