Introduction
It is something of an irony that at the time the Scottish housing market is facing its most significant downturn for possibly 30 years, the Scottish Government has issued up to date guidance (a revised version of SPP3) on the identification of housing land and the delivery of homes through the planning system. While there have been (and there are still) issues with the system, the immediate problems are rather more fundamental – a lack of funds and a lack of buyers.
Revised SPP3
SPP3, which came out at the end of July 2008, is a finalised version of a document which went through a lengthy gestation period and was subject to consultation with many interested parties. This is to be applauded. Unfortunately, as it has only recently been issued, the document is likely to be of limited, immediate relevance to the current housing market and the issues which the Scottish Government, developers and indeed local authorities have to address.
Paragraph 4 makes reference to "pressure" in the housing system. The pressure it is referring to however, has been evident over the last 5 years, namely house price inflation and an insufficient supply. The document notes (paragraph 6) that "the relationship between supply and affordability is complex". The market now, however, is different. The issues are not simply affordability but buildability. Will house builders continue to build? Is there anyone out there who can buy (not simply because houses are not affordable, but also because they do not have access to funding to commit to a purchase)?
In many ways the current difficulties facing the house building industry in Scotland are beyond the control of the UK Government which means by definition they must be beyond the control of the Scottish Government.
Looking at the document itself, SPP3 continues many themes that were seen in the predecessor document and in its general approach it is very similar to the previous version. It stresses the importance of house building and the need for a proper, planned approach to house building. It picks up on the Government's theme, first annunciated in the consultation document last year entitled "Firm Foundations", to increase the number of completions per year in Scotland from 25,000 to 35,000 – an aspiration that seems almost impossible to fulfil at the present time. It identifies a need for quality developments – a theme which has been at the forefront of thinking for the last 4 or 5 years.
However this document goes further than its predecessor. The objectives set out in paragraph 16 have clear origins in the previous version of the document. In a number of instances it is more prescriptive, particularly in relation to the mechanism local authorities should adopt to keep the housing market in general under review. It has detailed guidance on the audit process, albeit ultimately accepting that the audit is a matter for the planning authority. Possibly more significantly, it seeks to try and plan for housing on a more positive proactive, rather than reactive basis. One of the key objectives is "allocation of a generous supply of land to meet identified housing requirements across all tenures, including affordable housing and related policy objectives" (emphasis added). The use of the word "generous" is a significant change in thinking. As noted above, the theme of generosity is one which may be out of step with reality although it will hopefully become of increasing relevance as the present difficulties recede.
Furthermore, the document looks for real flexibility with the ability to bring forward additional housing land quickly and efficiently – again possibly a pious need in the current market but beneficial in the longer term. In terms of allocations the document seeks to take a longer term view and encourage mechanisms to identify housing land for the longer term with the ability to bring that forward quickly, if necessary, having regard to market practice and issues such as completions.
Possibly 18 months ago house builders would have welcomed this thinking and hopefully in 18 months or 2 years from now they may do so again. At the present time, given market conditions and anticipation that no matter how bad they are, they are likely to get worse, this guidance seems slightly out of touch with reality.
Apart from quality, other themes are picked up from previous policy documents including sustainability.
One concept which is given greater emphasis, is the proposal that sites might be allocated for specific market sectors. The topic of affordable housing is picked up in SPP3 largely building upon the drafting in PAN74 which came out 2 or 3 years ago. To that extent there is nothing new in the need to build affordable housing. What is given greater emphasis is the ability to allocate specifically for affordable housing to allow the development of affordable housing to take place.
The document also touches upon the issue of planning gain but simply indicates that a review is ongoing. No further clarification is given in relation to the outcome of that review process. In England, it appears that the community infrastructure levy will proceed in the short term. Detailed guidance is now available. In Scotland, we await with interest to see how the Government decides to tackle that issue. One thing which is certain is that the need to address infrastructure issues has not reduced in any way whatsoever.
Conclusion
Market conditions make the immediate relevance of the revised SPP3 document somewhat limited. Hopefully these conditions will not prevail in the longer term. Certainly when the market revives there will be opportunities for house builders and if planning authorities adopt the thinking set out in SPP3 then there should be far greater flexibility for developers to meet market needs – which, despite the current crisis, will not have gone away.
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