Ensuring delivery on developments that have planning permission

KEY LEARNING POINTS

  • Planning conditions and obligations are key tools to help ensure a custom and self build housing development is implemented
  • Most councils currently take a light touch approach to secure delivery on larger sites, and impose few restrictions on applicants
  • There are a range of approaches available to secure delivery of custom and self build housing on consented sites - these depend on whether a council is selling its own land, whether the proposal is on private land and whether there is an adopted Community Infrastructure Levy in place
  • Councils should be transparent about the types of planning conditions and obligations they intend to impose on applicants

INTRODUCTION

There are many ways councils can manage the implementation of private homebuilding projects and discourage the ‘gaming’ of planning permissions to build speculative homes for sale.

EXISTING PRACTICE

Most local authorities have, to date, taken a light touch approach to ensuring that sites with planning permission for custom and self build housing are implemented. In many cases councils don’t define custom and self build housing in their decision notices. This is almost always the case for planning permissions for single homes, unless the council has some form of exception site policy. For an example of this, see our detailed case study on Shropshire Council’s ‘Build Your Own Affordable Home’ programme.

For multi-unit sites involving serviced building plots and custom build developments, existing practice has been for councils to impose simple planning conditions to secure delivery, sometimes in conjunction with Section 106 planning obligations.

For outline or ‘hybrid’ permissions, planning conditions typically focus on the submission of further details in the form of reserved matters approvals (relating to appearance, landscaping, layout and scale of new homes) before allowing any development to start on site. Such permissions also typically specify when further details should be submitted and require construction work to begin within specified periods (typically two years). The requirement to submit a Design Code is also common.

For full planning permissions, councils typically impose conditions that ask for details of external materials of homes/garages, landscaping and means of enclosure/boundary treatments to be submitted for approval. Councils also often require details to be submitted that show the proposed ground/finished floor levels, the parking arrangements for each plot, limits to hours of construction and a Construction Traffic Management Plan

About

This is one of many Briefing Notes that explain resourcing, planning, land, finance, demand, marketing, consumer support and various technical issues. To see the full range of guidance click here.

Definitions

For the purposes of this Toolkit made the following definitions-

NOTE

This Briefing Note will be revised when the Regulations to support the commencement of the Self-build and Custom Housebuilding Act 2015 and the Government’s Right to Build policy are finalised.

Purbeck District Council provides clear guidance on the Section 106 agreements it imposes to ensure self build homes that are built on exception sites remain affordable in perpetuity

The use of Section 106 planning obligations has to date been less common. Where obligations to secure the delivery of custom and self build homes are used they often include the need for plots to be marketed for this type of housing for a specified period of time before they can be built out for open market housing. They may also limit the sale of more than two housing plots to an individual family member.

Where obligations are used then the meaning of custom and self build is typically specified. A common (albeit incomplete) definition used to date appears to be “a house or group of houses that is commissioned by an individual or group of individuals from a builder, contractor or package company and is built by an individual either by themselves or with the assistance of an appropriate tradesperson”. For a more complete definition, see our Introduction to the private homebuilding sector briefing note.

Despite these practices most councils have, to date, not been transparent about the type of conditions or obligations that will be imposed on applicants. This is clearly unhelpful to applicants and risks protracting negotiations on planning applications.

Some pioneering local authorities are being more transparent. These include:

Teignbridge District Council - it has set out its approach in a Supplementary Planning Document. This identifies its local plan policy, which asks for at least 5 per cent of housing plots on sites of more than 20 homes to be made available to people who want to build their own homes. The policy makes clear that the council will impose planning conditions that require these developments to be completed within three years of someone purchasing a plot. Where plots have been made available and marketed appropriately for at least 12 months and have not sold, the plot(s) can either remain on the open market for use as a custom build, or be offered to the council or a housing association before being built out by the developer. 

The guidance sets out a series of definitions and standard clauses that will be imposed on applicants through planning obligations, including: -

  • Providing a minimum of 5 per cent of the total number of dwellings as serviced custom build plots
  • Specifying each plot that is to be phased as a custom build plot
  • Reserved matters planning applications for plots to be made by the householder intending to occupy a custom build home
  • Sites to be appropriately marketed for custom build housing, with the amount of open market housing proposed to be developed on the site limited until this has been done.

Shropshire Council - to ensure a consistent and manageable approach to its exception sites policy it has published an information pack which sets out a series of standard planning conditions it will impose. These include restrictions on the initial size of the property (normally no more than 100 sq. m) and removal of permitted development rights so that express permission has to be sought for any future extensions or conversions. Applicants for full planning permission also need to be made by the prospective occupier of the home. For an example of this, see our detailed case study on Shropshire Council’s ‘Build Your Own Affordable Home’ programme.

Cornwall’s ‘bitesize guide’ clearly sets out the planning conditions that will be imposed on applicants seeking permission for an affordable self build project
 

ALTERNATIVE APPROACHES

It will always be for councils to decide how they wish to secure the delivery of private homebuilding projects that have planning permission.

Local authorities that are concerned about the scope for developer ‘gaming’ on larger sites may want to consider if the approaches below provide further protection.

Council owned land or plot sales

Where councils are disposing of their own land they can exercise strict controls over who the land is sold to, and control its build out.

For example if they are selling a site to a developer they can require the land to be used for custom and self build housing through covenants and sale agreements. Early legal advice on the best way of achieving this is recommended.

Where councils service their own sites and sell plots they have the option to limit sales to private individuals (instead of builders), and they can restrict plot sales to one plot per customer. This can also prevent bulk purchases by developers who may wish to build speculative homes for sale.

Local authorities can also impose strict build out requirements. For example, a council could build in an ability to claw back a plot (with penalties and administrative costs) if the home has not been constructed within a specified period (typically two years from receiving full planning permission). Owner occupation time limit clauses can also be imposed. This practice is often used by private landowners and is widely employed abroad.

Securing delivery through planning permissions on non-council owned land

Where councils are not in a position to dispose of land or plots for custom and self build development then delivery can be secured in two ways.

Councils without an adopted Community Infrastructure Levy could: -

  • Require development to be phased to enable commencement of infrastructure works before plots are developed. This disincentivises a site to be built out for market housing
  • Impose restrictions through a suitable planning condition or obligation requiring:
    • Build out of plots within a specified time period from approval of full planning permission (for example two years), taking account of any agreed development phases for larger projects
    • Plots to be initially offered to people on the council’s demand Register for a specified period (for example six months)
    • Ask for plots to be actively marketed as custom and self build for a specified period (eg. 12 months) at a price the council considers realistic and achievable - this may specify the need to use at least three marketing sources (for example a national property portal such as Rightmove or Zoopla, at least two land or estate agents, and one other source - such as, for example, a custom build enabler)
    • Where it can be demonstrated there are no buyers, plots to be offered to a local housing association or the council (with a requirement for a limited written offer period, such as 21 days)
    • Only allow plots to be built for market housing if all of the above are unsuccessful

Where a council has imposed a requirement for plots to be marketed it may also wish to consider whether this should be further enforced to discourage developer gaming. One way this could be done is by restricting occupation of a proportion of market homes on the site (for example 50 per cent) until plots have been appropriately marketed for immediate purchase. Such an approach would however depend upon the size of the site and complexity of the infrastructure and any specific site circumstances.

Councils with an adopted Community Infrastructure Levy could apply the above restrictions and also look to impose pre-commencement conditions. For example, asking for a signed Community Infrastructure Levy ‘Form 4: Transfer of Liability’ (and possibly a Demand Notice) for each plot that is to be custom build.

Other restrictions that councils could impose include: -

  • Where plots are built as affordable housing or starter homes, imposing standard clauses to secure this form of housing into the future (for example restrict resale in perpetuity etc.)
  • Asking plot purchasers to submit a self-certification form to the council that accompanies a reserved matters application (where required). This could look to confirm that the development has been commissioned from a developer and is not an off-plan purchase
 

Further Reading

The following Case Studies offer useful insight into the issues discussed in this Briefing Note:

CREDITS

The NaCSBA Research & Development Programme is funded by the Nationwide Foundation and aims to promote the self-build and custom build sector as an affordable route into housing for a greater number of people in the UK.

For further information, please visit:

www.nacsba.org.uk or www.selfbuildportal.org.uk