Letwin Review recommends new planning rules for housing variety

This week the Independent Review of Build Out: Final Report by Sir Oliver Letwin MP was published. In the draft analysis published in June, Letwin had focused on the issue of the build out rate of fully permitted new homes on the largest sites in areas of high housing demand. He concluded the similarity of the types and tenures of the homes on offer on these sites, and the limits on the rate at which the market will absorb such products are the fundamental reasons for the slow rate of build out.

In the final report Letwin presents recommendations about ways in which the Government could increase the variety and differentiation of what is offered on these large sites, raise the proportion of affordable housing, and raise the rate of build out.

Letwin concludes that the Government should:

• adopt a new set of planning rules specifically designed to apply to all future large sites (initially those over 1,500 units) in areas of high housing demand, requiring those developing such sites to provide a diversity of offerings, in line with diversification principles in a new planning policy document;
• establish a National Expert Committee to advice local authorities on the interpretation of diversity requirements for large sites, and to arbitrate where the diversity requirements cause an appeal as a result of disagreement between the local authority and the developer.

The Review suggests to give the greatest possible chance that new planning rules for large sites will have an effect in the near-term, the Government should:

• provide incentives to diversify existing sites of over 1,500 units in areas of high housing demand, by making any future Government funding for house builders or potential purchasers on such sites conditional upon the builder accepting a Section 106 agreement which conforms with new planning policy for such sites;
• consider allocating a small amount of funding to a large sites viability fund, to prevent any interruption of developing on existing large sites that could otherwise become non-viable, for the existing builder as a result of accepting the new diversity provisions.

The Review suggests to give the greatest possible chance of significant change in the build out rates and quality of large scale development in the longer term, the Government should:

• introduce a power for local planning authorities in places with high housing demand to designate particular areas within their local plans as land which can be developed only as single large sites, and to create master plans and design codes for these sites which will ensure both a high degree of diversity and good design to promote rapid market absorption and rapid build out rates;
• give local authorities clear statutory powers to purchase the land designate for such large sites compulsorily at prices which reflect the value of those sites once they have planning permission and a master plan that reflect the new diversity requirements;
• give local authorities clear statutory powers to control the development of such designated larges sites, through either a Local Development Company or a Local Authority Master Planner who would develop a master plan and design code before the land is sold to privately financed Infrastructure Development Company.

The Royal Town Planning Institute (RTPI) welcomed the report, saying it signalled "a much overdue strengthening of public sector planning" but the recommendations should be extended "across a much wider section of the housing market". John Acres, RTPI president commented "the recommendations he is making today reflect a full grasp of the fact that untramelled market forces alone have not been delivering enough homes and will not deliver what the people need".

The RTPI had been closely involved in many stages of the review, stating that it echoes their key concern that "the delivery role of the public sector has been limited in recent years to responding to private sector proposals. The reviews recommendations to change this by giving enhanced powers for local authorities to achieve proactive development is very welcome".

Chancellor Phillip Hammond responded to the review in the Budget, stating that the report confirmed that housebuilders were not engaged in speculative landbanking, and that the Government would respond to his proposals in the new year. 

For more on this subject, see:

• Independent Review of Built Out Final Report.