At the end of 2006 a number of important policy and consultation documents in relation to housing provision were published. Given the fanfare that accompanied publication of the Barker Review of Land Use Planning, with its recommendations for creating a more efficient and effective planning system, there has been limited reaction to the government’s new Planning Policy Statement 3 (PPS3) on housing, issued on 29 November 2006. In early December the government also published a new Code for Sustainable Homes as well as two consultation papers. The first consultation paper was entitled ‘Building a Greener Future: Towards Zero-Carbon Development’. The second was consultation for a new planning policy statement on planning and climate change. The consultation periods end on 8 March 2007.

All of these documents contain important changes that will affect the delivery of housing through the planning and building regulation system in the future.

PPS3 on housing

The government’s objective for housing is to ensure everyone has the opportunity of living in a decent home, which they can afford, in a community where they want to live. The problem from the government’s viewpoint is essentially an economic one of inadequate system responsiveness: not enough housing is being provided fast enough or at a low enough price to meet existing need, nor is the system able to change sufficiently quickly to meet shifts in patterns of housing need.

One answer to this problem would be wholesale deregulation in order to let Adam Smith’s ‘invisible hand’ of the market take over. However, even the most fervent free-marketeer would be reluctant to pursue a system that did not have the accepted need for controls to ensure the conservation of the environment and public amenity.

The Barker Review contains some recommendations that would improve system responsiveness and therefore assist the delivery of sufficient housing. At this stage they are merely recommendations and we wait to see how the government will put these recommendations into policy and law. The new PPS3 in itself, however, will provide a more focused policy context to assist the government in the achievement of its housing goals.

The primary means by which the government proposes to achieve its goals, as set out in PPS3, is to increase substantially the availability of housing sites by a more detailed appraisal of local housing needs and demands, and more aggressive allocation of sites to meet that need and demand.

PPS3 represents a clear change from previous planning policy in that it recognises market economics, and that planning can be used as a tool to make housing affordable to a greater number of people. The government is seeking a step change in housing delivery through a more responsive approach to land supply at a local level.

PPS3 replaces PPG3 on housing, although PPS3 states that LPAs are not required to have regard to PPS3 as a material consideration when determining planning applications until 1 April 2007. This is presumably due to the need for further supporting guidance to be published (see below).

Market responsiveness

PPS3 provides that regional planning bodies and LPAs should take into account market information when developing planning policies. Regional Spatial Strategies and Local Development Documents (LDDs) should be informed by an evidence base of housing need (households unable to access suitable housing without financial assistance) and demand (households willing and able to buy). This will be achieved through Strategic Housing Market Assessments (SHMAs). Strategic Housing Land Availability Assessments (SHLAAs) will establish land availability. Further guidance on these assessments is awaited.

This approach will be adopted across sub-regional housing market areas. Again, an advice note is awaited on identifying sub-regional housing market areas. Encouragingly, PPS3 recognises that in establishing the SHMAs and SLAAs LPAs should collaborate closely with the house-building sector. LDDs should be informed by the SHMAs so that the LDDs set out the proportion of households that require market or affordable housing and the likely profile of household types, eg families with children, single persons, or couples. This breakdown of household types in policy terms is a new approach. Developers will be required to bring forward proposals that reflect housing demand and the profile of households requiring housing.

Regional Spatial Strategies (RSSs) should provide for housing provision that will enable LPAs to plan for housing over a period of at least 15 years. LDDs should set policies for delivering housing, including identifying broad locations and specific sites, to enable continuous delivery of housing for at least 15 years from the date of adoption taking into account the level of housing provision set out in the RSSs. The LDDs, based on information in the SHLAAs, will need to identify deliverable sites for the first five years. To be deliverable, sites should be:

• available;

• suitable for sustainable communities; and

• achievable in that there is a reasonable prospect that the housing will be delivered on that site within five years.

In addition, a further supply of specific developable sites for years six to ten and, where possible, for years 11 to 15 should be set out. Allowances for windfall (non-allocated sites) should not be included in the first ten years of land supply unless LPAs can provide evidence of genuine local circumstances that prevent specific sites being allocated. In such circumstances a windfall allowance can be included in light of the SHLAA, historic windfall delivery rates and anticipated future trends. A reduction in provision for windfall sites within the 15 year supply will impact on the ability of landowners and developers to take advantage of unplanned sites becoming available, and will strengthen the need for long-term forward planning.

The key to PPS3 is that, once identified, the supply of land is to be managed by LPAs to ensure a continuous five-year supply of deliverable sites. This will be achieved by pursuing a policy of monitoring the supply of deliverable sites on an annual basis using the annual monitoring report. Allocated sites will be drawn upon, as necessary, to update the five-year supply. Genuine management will be required so that if housing delivery is not being met in accordance with the targets then more housing land will need to be brought forward by updating the quantity and mix of land within the five-year supply of deliverable sites. Of particular interest is the recognition that where market conditions have changed it may also be necessary to reassess need and demand. This appears to be a recognition that if there is a danger of the market overheating, the LPA, by its monitoring and managing, should bring forward sites earlier than might have been the case under the 15-year delivery plan.

Mix of housing

The government appears to be concerned about the mix of housing that is currently being built. PPS3 seeks to achieve a good mix of housing, reflecting the accommodation requirements of specific groups, in particular families and older people. Interestingly, there is an express recognition that where family housing is proposed it will be important to ensure the needs of children are taken into account, for example private gardens and play areas.

Affordable housing

PPS3 is to be read in conjunction with the Affordable Housing Policy Statement issued on the same day. This is guidance and not adopted policy. PPS3’s definition of affordable housing makes it clear that ‘low-cost market’ housing will not be considered as ‘affordable’ under PPS3.

LDDs are to set separate targets for social rented and intermediate affordable housing, as well as specifying the size and type of affordable housing that is likely to be needed in particular locations. This will derive from the SHMA.

The national indicative minimum site threshold of 15 dwellings before affordable housing is required is set out, although LPAs can set lower minimum thresholds where viable.

Brownfield land and densities

The new National Brownfield Strategy, including a consultation, was published on the same day as PPS3. It is aimed at helping local councils bring forward more brownfield land for development.

PPS3 retains the national annual target of 60% of new housing to be provided on previously developed land. LDDs should include local previously developed land targets but they may contain a range of densities across a plan area rather than one fixed density.

Conclusions

PPS3 must be seen in the context of the ongoing review of the planning system. It will be the cornerstone of the government’s desire to have a step change increase in housing delivery. This increase, however, is not to be at the total expense of the environment. PPS3 itself seeks a more managed release of land for housing. In allocating sites for housing, the proposed new PPS on climate change will seek to limit the environmental impacts as far as possible. The actual design of individual houses will be controlled by the Code for Sustainable Homes and in time a more restrictive building regulation regime, to achieve one of the government’s environmental goals of zero-carbon homes.