In this week's blog, we return to a previous piece on the now highly contentious topic of "Levelling Up & Regeneration Bill: Planning and Local control in England" and explore what was divulged by the Rt Hon Michael Gove MP in his letter to all MPs dated 5th December. This three-and-a-half-page document assures the house that a new National Policy Framework is in the works and should arrive ahead of Santa.
There are elements to the plans that are promising, and there are elements that, on initial reading, seem contradictory and concerning. Still, ultimately all of these policies will affect the development finance industry in the coming months, and remaining politically neutral as always, we will explore them below.
The broader essence of the statement is that all powers will be devolved to local authorities in decision-making, stating that the planning inspectorate will "no longer override sensible local decision-making." The idea is that local communities will have a more significant say, and in a housing crisis, the sentence "local planning authorities will be able to plan for fewer houses" does jump off the page. However, some solid arguments exist; the Greenbelt is referenced, for instance.
The Greenbelt currently occupies around 12.6% of the UK or 1.63M hectares, and it's always a hot topic, as nobody on either side of the debate wishes to be an advocate for the debasement of the countryside; William Blake didn't write a poem about England's green and pleasant micro apartments, certain things are sacrilege, and we are all in alignment with that sentiment.
One issue in the statement that may present a concern for our industry is the deliberate levels of subjectivity around decisions; one point is that planning decisions will revert to a system where one of the targets is for buildings to be in the same character as the existing area, the word 'beautiful' has even been used. Historically, a previous strategy of the governments has been regeneration zones, and urban renewal has long been a factor in our towns and cities, going back to the 1990s, and to drop some Shakespeare in as well, "Beauty is bought by judgement of the eye". Old buildings much loved are renewed to make way for modern facilities specific to the tastes of the modern era; it's not possible to make scale decisions in that way, based on individual preferences.
The second issue most prevalent in our industry is an element in the statement that attempts to put some of the blame at the door of the property developers. In the alternative lending sector, you are often called in to provide a solutions-based package, freeing up cash flow or restructuring facilities where delays have caused a critical issue. That process will be made considerably more difficult if there is a new clock running down quickly on the planning, which could create a situation where schemes have planning removed in their early stages. These measures, on the surface, are preventative measures against land banking & operators taking on projects outside their abilities. Still, those policies have an inherent danger: you could make life harder for smaller developers rather than supporting those businesses.
To finish on a positive note and to provide some balance, there was a reference to Brownfield development, specifically our friends and partners at Homes England, who will be spending millions on acquiring urban sites desperately needing renewal. This will have little vocal opposition as it's a good idea; it's one of the many reasons that devolving more power to regional mayoral offices works so well, and it will provide much-needed homes in the inner city.
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