16 Sep 2020

How do the Government’s planning reforms meet the changing needs of society?

William Scoular & Erin Clarke

Investec’s Structured Property Finance team

At the beginning of August, Boris Johnson unveiled what he described as “once in a generation” planning reforms. Designed to simplify and accelerate the planning process, the reforms will restrict the power of local councils to oppose new developments, thus fast-tracking building projects which fall into the categories of either ‘growth’ or ‘renewal.’

The Government has described the reforms as seeking a “significantly simpler, faster and more predictable system,” with housing secretary Robert Jenrick calling the changes “radical and necessary.”

 

However, ambition notwithstanding, the reforms have not drawn a unanimously warm welcome from the industry. Organisations such as RIBA have cautioned that the changes will do little to guarantee the delivery of affordable, sustainable homes, warning that “there’s every chance they could also lead to the creation of the next generation of slum housing.”

 

While these reforms are not a direct result of the pandemic - the UK Government has long been signalling its plans to make changes to the planning system - they nonetheless come at a time when the pandemic is forcing a mass reckoning with our relationship to bricks and mortar.

 

Lockdown saw people required to spend more time at home than perhaps ever before, calling into sharp focus the ability of our homes to adapt to meet our changing needs - not least for those living in poor-quality housing without access to green outdoor space.

 

How, then, will the pandemic continue to drive changes in what we look for from a home? And will the Government’s proposed reforms set out to evolve the planning system to meet these needs?

Erin Clarke Investec’s Structured Property Finance team
Erin Clarke, Investec’s Structured Property Finance team

The planning reforms have the potential to facilitate this shift, driving much-needed economic growth in areas outside of city centres. It’s worth highlighting, though, that housing is just one piece of the puzzle. To offer the level of impetus needed to truly revive the suburbs and rural areas, it is essential that we also have the level of infrastructure in place to support this growth.

The rural renaissance

Since the early stages of the pandemic, property experts have indicated a possible surge in home buyers seeking rural homes. Recent data backs this up: Rightmove reported that the UK housing market saw £37bn worth of property sales in July, with “unseasonal” highs for new-seller asking prices in regions including Devon and Cornwall.

 

This, of course, is somewhat unsurprising. Despite growing calls from the Government for businesses to begin ushering their staff back to the office, more and more businesses are allowing their employees to work flexibly for the foreseeable future, and in doing so gifting them the freedom to live wherever they like. Notably, this is not just the preserve of tech companies such as Twitter and Facebook – other, more ‘traditional’ businesses are making the move too, with investment manager Schroders recently announcing that it has permanently embraced flexible working across its business.

 

Coupled with a shifting of social values which has seen many of us craving deeper connection with nature - and therefore better access to green spaces - many buyers are taking advantage of becoming untethered from their city jobs and choosing to move further afield.

 

This shift is one of the many trends being accelerated by Covid-19 which futurologists have been pointing towards for some time.

 

Earlier this year Investec partnered with global futures foresight consultancy, The Future Laboratory, to understand the key macro trends that will define the decade ahead. The forming of new regional ‘hotspots’ was one of the trends to emerge from our report, with businesses and individuals expected to migrate away from city centres to form clusters in more “diverse and dynamic locations.”

 

Erin Clarke of Investec’s Structure Property Finance team, comments: “The planning reforms have the potential to facilitate this shift, driving much-needed economic growth in areas outside of city centres. It’s worth highlighting, though, that housing is just one piece of the puzzle. To offer the level of impetus needed to truly revive the suburbs and rural areas, it is essential that we also have the level of infrastructure in place to support this growth. This encompasses things like transport links but also, crucially, digital connectivity: it is very well offering people the opportunity to do their jobs from their homes in the countryside, but without a fast and robust broadband connection, such promises may not be lived up to.”

Sustainability matters

The planning overhaul also features a strong focus on sustainable design and development with, for instance, the commitment that all new streets be tree-lined, and that Local Plans be assessed against a “statutory sustainable development test,” along with ambitious targets for improving the energy efficiency standards for buildings.

 

In theory, this meets the requirements of the many for whom sustainable living - and tackling the climate crisis more widely - has become a priority. In our report, The Future Laboratory’s findings identify sustainability, responsibility and regeneration as a fundamental purchase consideration by 2030, describing a society in which “there will no longer be ‘unconscious consumers.’” This concerns every sector, and every choice consumers make - from where we source groceries and clothing, right through to the much bigger decisions pertaining to where we and how we live.

 

However, some members of the industry have warned that the proposed reforms will not go far enough to prioritise sustainable building; RIBA argues that the commitment to make all new homes carbon neutral by 2050 “needs to be brought forward radically.”

The future of commercial property

Finally, it’s worth taking a moment to consider the proposed changes from a commercial property standpoint.

Erin adds: “For businesses and entrepreneurs who want to extend or build new premises, the proposals will aim to significantly speed up the process of doing so.”

As such, the FSB has said the plan is “hugely welcome.” The hope, for groups such as the FSB and its thousands of members, is that deregulating the process will enable small businesses to extend or build new premises far more quickly, as well as delivering a financial boom to the small business construction sector.

 

This is an opportunity to allow businesses to evolve post-pandemic, particularly in regional areas where small businesses often need access to land in order to take advantage of local opportunities for economic growth. Done right, the new system must also be able to support the areas of the economy hit hardest by the pandemic. Will the reforms allow the UK’s town centres and high streets to truly bounce back, for example?

What happens next?

Currently, the reforms are in consultation stage, with the consultation due to close at the end of October.

 

While it remains to be seen what the response to the consultation will reveal, there is no question that the plans will be a topic of hot debate over the coming months.

 

In the meantime, the pandemic will continue to drive enormous shifts in the way we live, and what that means for our country’s buildings. The role of the new planning system, if it is to be future-proofed for decades to come, must be to acknowledge these changes, and meet them head-on.