With Scotland and the rest of the UK continually missing housebuilding targets, Fraser Mitchell, Partner in our Property and Infrastructure team, asks: what are the roadblocks to building?
Figures from Homes for Scotland indicate that there is currently a shortage of almost 100,000 homes in Scotland. According to their most recent figures, 25,000 new homes are needed each year to keep pace with need and demand – and that figure was last met in 2007. Let those figures sink in. That could mean 100,000 families priced out of the housing market because demand is outstripping supply or 100,000 older couples unable to downsize (and free up larger family homes) because smaller, more suitable, homes are not available. Of greatest concern is that it could mean 100,000 families living in sub-standard housing, the impacts of which are among the practical consequences of failing to deliver the number of homes to meet the real need and demand.
The question then arises: if this scale of shortage exists, why don't we, as a nation, just build more houses? Building new homes requires a number of elements to be in place – there must be willing developers, access to development funding, a skilled workforce, a demonstrable need and demand for new homes, and land that can be made available for those homes to be built upon. Scotland has an abundant supply of all five of these. A further key issue is that development requires planning permission, and the planning system is a public regulatory system. It is the local planning authority (the Council or national park authority) or the Scottish Ministers who are responsible for granting the authorisations needed to develop land. That system has a statutory framework – put in place by Parliament - and a policy basis. In essence, the statutory framework sets out the procedural rules for preparing development plans and submitting and determining planning applications, and planning policy guides how planning decisions should be taken.
When it comes to dealing with formal development proposals, the statutory framework is broadly similar across the UK. Planning applications should be determined in accordance with the relevant development plan unless material considerations indicate otherwise. What is material and what weight should be attached to it in the decision-making process is a matter of planning judgement for the planning authority. In Scotland, the development plan has recently changed with the adoption of National Planning Framework 4 (NPF4). This is a new national policy which includes in its foreword an express statement from the Planning Minister that its purpose is to deliver more quality homes in Scotland. To achieve this, it contains a series of policies which are designed to guide the allocation of land for housing development. It also sets a minimum all-tenure housing land requirement (MATHLR) for each local authority area in Scotland. Given its recent adoption, it is too early to judge its impact on the delivery of new homes. However, there are two aspects of the policy which raise questions in the housing sector.
The first is around flexibility. The previous national policy favoured development that contributed to sustainable development, corresponding with the Scottish Government's recognition that we are experiencing a climate and nature crisis. The previous national policy also allowed new housing sites to come forward where there was an existing shortage of allocated land to meet the housing land requirement (known as the "tilted balance"). These policies have both been superseded under NPF4 as part of a new approach to have an entirely plan-led system. This approach is a noble aspiration for planning purists, but it may raise some concerns. The planning system has been plan-led since its inception, and its focus on that has sharpened over the years. Despite this, since the last round of planning reform in 2006, Scotland has fallen further behind in the delivery of new homes. Had it not been for the previous national policy position, which enabled additional sites to come forward where allocated sites failed to deliver new homes, the housing position in Scotland would be worse still. And to emphasise that point, Homes for Scotland is clear that we are in the midst of a housing crisis. That there is a shortage of new homes is beyond doubt.
Second, the MATHLR numbers contained in NPF4 are, in general, a reduction on previous figures. However, these figures represent a baseline in terms of the number of houses that should be brought forward over a 10-year period. The expectation is that these numbers will increase when local authorities produce their local development plans. These local development plans will go through a "gate-check" process as part of their formal examination, and it is likely at that stage that further evidence will be presented to establish the requirement for new homes within each local authority area. This is where barriers to development will either be knocked down or fortified. If the planning system is to be truly plan-led, then LDPs should be ambitious and include a generous supply of housing land. To achieve this, an accurate picture of housing need and demand must be presented. There is an opportunity here for Councils and developers to work together to present comprehensive evidence, based on empirical data, that reveals the true level of need and demand within a local authority area.
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