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Budget 2017: Housing in focus, but green belt questions remain, says expert

It is difficult to see how the UK government will meet its house building targets without releasing some lower quality land from the green belt, a housing law expert has warned.22 Nov 2017

The government is targeting the construction of around 300,000 new homes each year by the mid-2020s. However, housing law expert Iain Gilbey of Pinsent Masons, the law firm behind Out-Law.com, said that it was "unlikely" that the government would be able to "continue to avoid addressing the green belt 'elephant'" if it was to reach these numbers.

"Building on brownfield and unconstrained greenfield sites alone is not enough and although easing the current restrictions is politically difficult for a minority government, carefully regulated and planned release of well-located and lower quality green belt land must be considered as inevitable if the housing market in economically strong areas is to be 'fixed'," he said.

The government has allocated an additional £15.3 billion to support house building over the next five years as part of a plan to tackle the UK housing shortage based on "money, planning reform and intervention". The new funding includes £1.1bn for the government to buy land to build more homes at strategic sites and £2.7bn for the Housing Infrastructure Fund, and takes total government support for house building to at least £44bn by 2020.

Changes to planning laws will be made to encourage "high quality, high density" house building in city centres and around transport hubs, while "continuing the strong protection of our green belt", the chancellor said in his speech. This could include introducing minimum densities for housing developments in these areas, along with policy changes to support the conversion of empty space above high street shops and retail and employment land into housing, according to the Budget document. The government also intends to introduce a new permitted development right which would allow commercial buildings to be demolished and replaced with housing.

The Budget document confirms the government's intention to intervene where local planning authorities (LPAs) do not have an up-to-date local plan in place. The government will shortly activate new powers enabling it to direct LPAs to produce joint statutory plans, and to undertake an assessment of where they should be used, following last week's announcement that it had written to 15 LPAs beginning the formal process of considering intervention.

The government will also consult on strengthening the housing delivery test, which is used to establish whether LPAs are planning for and delivering enough new homes and potentially trigger policy responses from the government. It intends to increase the threshold at which the presumption in favour of development will apply at 75% of housing delivery by 2020; to introduce an expectation that LPAs deliver 20% of their housing supply as small sites; and to speed up the development process by removing the exemptions from the 'deemed discharge' rules.

The government was due to announce plans for the reform of developer contributions and the community infrastructure levy (CIL) as part of the Budget. Instead, it will publish a further consultation on "detailed proposals" for reform, based around removing unnecessary complexities and allowing LPAs to respond more quickly to changes in the market. These will allow areas to implement a CIL more quickly, to set rates which better reflect the uplift in land values between a proposed and existing use, and to introduce different rates for different changes in land use.

The consultation will also set out plans to allow combined authorities and certain planning committees to levy additional strategic infrastructure tariffs (SITs), in the same way that the London Mayoral CIL is being used to provide funding for Crossrail. The government intends to consult on whether SITs should be made available for local infrastructure, as well as strategic projects.

The government has committed to 100,000 new homes in Oxfordshire by 2031, as an early response to recommendations made by the National Infrastructure Commission (NIC) last week. Up to one million new homes, along with supporting road and rail infrastructure, are planned for the Cambridge-Milton Keynes-Oxford corridor by 2050, in line with the NIC's recommendations. The government will also take forward plans to use public-private New Town Development Corporations to deliver five new 'garden towns' in England, in areas where demand is greatest.

New powers to "facilitate the delivery of sufficient new homes where they are most needed" will be granted to the Homes and Communities Agency (HCA), including compulsory powers. The HCA will be rebranded as 'Homes England' to reflect this shift.

The government has also announced that it will abolish stamp duty on new home purchases up to £300,000 in value by first time buyers, with immediate effect. The relief will also be available on the first £300,000 of the purchase price of properties up to £500,000 by first-time buyers. This will take around 80% of first-time property purchases out of stamp duty altogether, while cutting stamp duty for 95% of first-time buyers, the government said.

The chancellor also announced an urgent review of the "gap" between planning permissions granted and new homes built, which will deliver an interim report in time for the Spring Statement next year. The government will "intervene … using direct intervention compulsory purchase powers as necessary" should the review find that there were "commercial, rather than technical, reasons" why house building was not taking place where planning permission had been granted, the chancellor said in his speech.