Housing

Housing—overview

National Planning Policy Framework

The National Planning Policy Framework (NPPF) sets out the government’s national policy in England. First adopted in 2012, it has been replaced several times since with revised versions, most recently in December 2024. The NPPF recognises that to significantly boost the supply of homes, it is important that a sufficient amount and variety of land can come forward where it is needed, that the needs of groups with specific housing requirements are addressed and that land with permission is developed without unnecessary delay. The overall aim should be to meet as much of an area’s identified housing need as possible, including with an appropriate mix of housing types for the local community.

References:

National Planning Policy Framework (NPPF), chapter 5

The NPPF states that to determine the minimum number of homes needed, strategic policies should be informed by a local housing need assessment, conducted using the standard method in Planning Practice Guidance (PPG). In addition to the local housing need figure, any needs that cannot be met within neighbouring areas should also be taken into account in establishing the amount of housing to be planned for.

References:

NPPF, para 62 

The size, type and tenure of housing needed for different groups in the community should be assessed and reflected in planning policies.

References:

NPPF, para 63 

Local planning authorities (LPAs) should set policies for meeting affordable housing demand on site, unless off-site provision or a financial contribution in lieu can be robustly justified (eg to improve or make more effective use of the existing housing stock); and the agreed approach contributes to the objective of creating mixed and balanced communities. See Practice Notes: The National Planning Policy Framework, Affordable Housing, Affordable housing grant funding and Objectively assessed need and housing land supply in the NPPF.

References:

NPPF, para 64 

Small and medium-sized sites

The NPPF recognises the ‘important’ contribution which small and medium-sized sites make to meeting the housing requirement of an area. It therefore requires LPAs to identify, through the development plan and brownfield registers, land to accommodate at least 10% of their housing requirement on sites no larger than one hectare; unless it can be shown, through the preparation of relevant plan policies, that there are strong reasons why this 10% target cannot be achieved. They should also use tools such as area-wide design assessments and local development orders to help bring small and medium-sized sites forward, and work with developers to encourage the sub-division of large sites where this could help to speed up the delivery of homes.

References:

NPPF, para 73 

Bringing land back into use

The NPPF advises planning policies and decisions to promote and support the development of under-utilised land and buildings, especially if this would help to meet identified needs for housing where land supply is constrained and available sites could be used more effectively (for example converting space above shops, and building on or above service yards, car parks, lock-ups and railway infrastructure). As part of this approach, plans and decisions should support efforts to identify and bring back into residential use empty homes and other buildings, supported by the use of compulsory purchase powers where appropriate.

References:

NPPF, para 125 

Homes England

Homes England (HE) is the national housing and regeneration delivery agency in England. Before January 2018, HE was known as the Homes and Communities Agency (HCA), whose investment functions were re-branded as HE, while its functions of regulating social housing were re-branded as the Regulator of Social Housing (the new name for the Regulation Committee of the HCA). See Practice Note: Affordable Housing.

Planning applications

LPAs must determine planning applications in accordance with the development plan, unless material considerations indicate otherwise. The NPPF is a material consideration. Note that, in England, from a date to be appointed, LPAs must determine planning applications in accordance with the development plan and national development management policies, unless material considerations strongly indicate otherwise. See Practice Note: Determining planning applications—material considerations.

References:

Town and Country Planning Act 1990, s 70(2)

Planning and Compulsory Purchase Act 2004, s 38(6)

Housing applications should be considered in the context of the presumption in favour of sustainable development. For decision-making, the presumption directs LPAs to approve development proposals that accord with an up-to-date development plan without delay. Where there are no relevant development plan policies, or the policies which are most important for determining the application are out of date, the presumption requires permission to be granted unless: the application of specific policies, set out in the NPPF which protect areas or assets of particular importance, provides a strong reason for refusing the proposed development, or adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in the NPPF as a whole. See Practice Note: Presumption in favour of sustainable development.

References:

NPPF, para 11 

Housing applications will also take financial viability considerations into account. Although the government has scaled back the use of site-specific viability assessments, viability remains pivotal to the delivery of sustainable housing development. Viability in planning requires one to balance the commercial reality of incentivising landowners and developers to release land and develop it, while, wherever possible, complying with local planning policy to deliver planning mitigation and additional community benefits to the area. The NPPF seeks to front-load viability considerations, stating that where up-to-date policies have set out the contributions expected from development, planning applications that comply with them should be assumed to be viable, and that it is then up to applicants to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. Where a viability assessment is provided, the NPPF requires that the approach in the PPG is followed—see Practice Note: Viability in planning decision-taking—comprehensive guidance.

References:

NPPF, para 59 

Section 106 agreements

One of the primary uses of section 106 planning obligations is to secure the provision of affordable housing. This remains the case even though planning obligations under section 106 of the Town and Country Planning Act 1990 are supplemented by the Community Infrastructure Levy (CIL) which aims to support broader infrastructure. See Practice Note: The statutory test for section 106 agreements and interaction with Community Infrastructure Levy (CIL) and The Community Infrastructure Levy—overview.

References:

TCPA 1990, s 106

LPA’s considerations

Most LPAs have a policy that residential developments over a certain size must incorporate a certain percentage of affordable housing. To secure delivery of affordable housing, an LPA may specify that no open market dwellings on the development can be occupied until the affordable housing land has been transferred to a registered social provider or until the affordable housing dwellings have been constructed. If this is the case, this is usually documented and secured by way of a section 106 agreement.

Developer’s considerations

Developers usually seek as much flexibility as possible and want to be able to sell a reasonable amount of open market dwellings before being obliged to deliver affordable housing or transfer the land.

Developers also seek to avoid making a loss and to limit costs by:

•        negotiating their own price with the registered social provider rather than the LPA, and

•        negotiating a cascade arrangement in the section 106 agreement. The developer must offer to sell the affordable housing land to a succession of registered social providers who have a fixed period to accept. If none of them accept the dwellings can be sold on the open market

First Homes

First Homes were announced in a Ministerial Affordable Housing Update Statement  and introduced by national planning policy and the PPG  with effect from 28 June 2021.

First Homes are a specific kind of discounted market sale housing.

First Homes were the previous government’s preferred discounted market tenure and under that regime were required to account for at least 25% of all affordable housing units delivered by developers through planning obligations. The version of the NPPF introduced by the Labour government in December 2024 disapplied the requirement to deliver a minimum of 25% of affordable housing as First Homes. Delivery of First Homes can, however, continue where LPAs judge that they meet local need.

References:

PPG on First Homes 

See Practice Note: Affordable housing—First Homes.

Self-build and custom housebuilding

Self-build and custom housebuilding (SCH) is an important element of the government’s planning strategy for housing. The purpose of the Self-build and Custom Housebuilding Act 2015 is to allow individuals wishing to build their own home to register their interest in acquiring land with the relevant authority, who is obliged to:

•        keep and maintain an SCH register

•        have regard to the demand for SCH as evidenced by the registers when exercising certain functions including those relating to planning and housing

See Practice Note: Self-build and custom housebuilding.

Further reading

For further reading surrounding housing generally, see Practice Notes:

•        Vacant building credit

•        Build to Rent schemes—key features

•        Housing—Optional Technical Standards