Regulations will prioritise those with 'local connection' on custom-build register, says expert

Regulations that make changes to the 2015 Self-Build and Custom Housebuilding Act (2015 Act) have now been published, and come into force on 31 October. They give effect to provisions in the 2016 Housing and Planning Act (2016 Act), which introduced a new duty for local planning authorities (LPA) to grant permission for enough serviced plots to meet the demand for self-building and custom building in their area.

The 2015 Act introduced a new set of duties for local planning authorities. They must now keep and publicise a register of individuals and associations that are "seeking to acquire serviced plots of land", and "have regard" to that register when carrying out their functions. Housing and regeneration expert Clare Mirfin of Pinsent Masons, the law firm behind Out-Law.com, said that the changes would effectively enable local authorities to develop a two-part register.

"The 'local eligibility' test is set at the discretion of the local authority and affords the opportunity for local authorities to base the test on two criteria: those who have local connections, and those who can demonstrate they have sufficient resources to purchase the land for their own self-build and custom housebuilding," she said.

"I see this as significant because it affords the local authority substantial control over who is able to make it onto the first part of the register; and confines the LPA's duty to provide enough development permissions, as that duty will from 31 October only apply to Part 1 of the register. Further, there is no right of appeal if the LPA decides someone does not meet the local criteria, although there is a duty on the LPA to give reasons where it determines an applicant is not eligible for entry onto Part 1," she said.

"While the requirement to provide 'shovel ready' plots will improve the speed with which self-building can commence, the additional burden of meeting the local eligibility test and watering down of the local authority's duty to provide sufficient plots does not appear, on the face of it, to be a move likely to encourage the government's stated aim of doubling the rate of self-building by 2020," she said.

The government would also have to make a consequential change to the National Planning Practice Guidance (NPPG) to reflect the fact that local authorities would be permitted to set criteria for entry onto the self-build register from 31 October, Mirfin said. Local authorities are currently prevented from adopting additional eligibility criteria under the NPPG.

The terms self-build and custom house building are used interchangeably to refer to the building or commissioning by individuals or associations of their own custom-built homes. The government is committed to doubling the number of self-build and custom housebuilding projects in England by 2020, in response to strong evidence of demand.

An explanatory note published by the government alongside the new regulations explained that there was "strong support" among respondents to a recent consultation for giving LPAs the right to apply a local connection test. The regulations have been drafted in such a way as to allow local authorities to incorporate the applicant's local connection into "the calculation of priority", rather than using it as a straightforward eligibility test, according to the note.

"It should be noted that the ability for LPAs to set such tests is discretionary, and I do query how the tests would work in practice - in particular where some individuals may struggle to meet the part of the test that requires them to show that they have sufficient resources to purchase the land given that we do not yet know for certain the availability of mortgage funding for such projects," said housing and planning law expert Lucy Close of Pinsent Masons.

According to Close, one of the most interesting parts of the regulations is the ability they give LPAs to apply to the secretary of state for an exemption from their duty to provide sufficient serviced plots to meet demand where their housing land supply is constrained.

"The explanatory notes issued with the regulations raises some issues for LPAs, which means that it does not provide a carte blanche to avoid needing to deal with custom build," she said. "For example, the exemption is not automatic and the secretary of state will consider a range of factors when making his decision as to whether to allow the exemption."

"Even if the exemption is granted, LPAs will still need to have regard to those on the register when carrying out their planning functions. All of this indicates that the best default approach for LPAs to take is that they do still need to assume that they will need to meet their duty to provide enough permissions to meet need in their areas," she said.