Boom, bust and a building moratorium
To understand why custom and self build housing is now such a familiar topic in Westminster, one must trace its origins right back to the end of the Brown government and the start of the coalition regime. As most housing articles will lay bare, decades of under supply has led to national affordability levels which, in some locations, are now off any recognisable scale. This was true in 2008 and, immediately after the crash, the nation’s reliance on market delivered new housing was painfully put in the spotlight when housing starts practically came to a standstill.
Localism, as one of the conservative flagship policies was introduced to tackle this head-on through the decentralisation of power and the ability for communities to deliver change in their own boroughs. Although it has surely taken longer than any politician would have dared to suggest, some very important and significant changes were introduced which have paved the way for our exciting and forthcoming Right to Build era.
First came the November 2011 Localism Act which introduced two significant changes to planning process through the introduction of a Neighbourhood Development Order (NDO) and the Community Right to Build. Both of these put decision making for development (and in this context new housing) right in the heart of the community whereby, with a positive compliant referendum, development could be allocated to sit alongside the Local Plan. This was subsequently refined and crystallised in the Neighbourhood Planning (General) Regulations 2012 by statutory Instrument.
Second came the November2011 Housing Strategy for England paper entitled ‘Laying the Foundations’ which, amongst many other initiatives, asked Councils to measure local demand for self and custom build and to think of ways of delivering solutions. Specifically it encouraged the introduction of larger scale dedicated custom build projects as well as paving the way for some limited funding to enable exemplar projects and stimulate best practice.
Third was the introduction of the National Planning Policy Framework (NPPF) in March 2012. This introduced the requirement for every Local Authority to produce a SHMA (Strategic Housing Market Assessment) and a SHLAA (Strategic Housing Land Availability Assessment) to inform their Local Plan development. Crucially, this was to include provision for those people ‘wishing to build their own houses’.
Right to Build vanguards
During the next two years the Government continued to support custom build through making a pipeline of land available from the HCA (Homes and Communities Agency) and with the launch of several repayment loan funds for custom build projects. These initially had some partial success but the mechanics for loan eligibility and compliance was complex and the pipeline of sites not entirely suitable. However, by the March budget of 2014, with improved but still inadequate new housing starts (all typologies), the Government introduced its intention to consult on the Right to Build later that year. This would be to help shape legislation for obligating Local Authorities to support custom build as laid out in the NPPF and other earlier pledges.
In the summer of 2014 Local Authorities were invited to submit proposals for becoming a Vanguard council which, with some direct funding, would undertake to refine their various custom build initiatives. This would be to foster best practice ideas, share information and learning and to test through physical experience how the Right to Build legislation should best be shaped.
11 Councils were selected to share in the funding of £550,000. Their intended projects were quite different and the funds allocated in very different sums; based upon information taken directly from the Government’s press release dated 30th September 2014, the division was as follows:
- £100,000 Teignbridge District Council has adopted a 5% policy for self/custom build with all qualifying planning consents (over a minimum size).
- £100,000 Sheffield City Council plan to deliver 800 self/custom build plots and to specifically encourage group activities.
- £ 90,000 Cherwell District Council has the most ambitious plans for up to 2,000 self/custom build plots with over half based on one large former MOD site specifically acquired for self/custom build procurement.
- £ 50,000 South Cambridgeshire District Council is planning to bring forward 100 plots for self/custom build.
- £ 46,000 Pendle Borough Council are specifically looking to see how this could assist with affordable home delivery linked to self/custom build.
- £ 28,000 Exmoor & Dartmoor National Park Authorities are keen to explore ‘local demand from long standing residents who work and live in their national parks’. These two councils were cited by Brandon Lewis MP, Housing Minister, in Westminster as one of the most rewarding vanguard applications given the sensitivities of their location.
- £ 25,000 South Norfolk District Council will be working with a housing association on combined procurement for self/custom build.
- £ 15,000 Oldham Metropolitan Borough Council will be recycling brownfield council owned land for custom/self build.
- £ 10,200 Shropshire Council already has a published policy for ‘affordable self build’. They plan to work with both Social landlords and neighbouring Stoke Council to foster self/custom build opportunities.
- £ 5,000 West Lindsey District Council intends to make self/custom build plots available on brownfield public sector land.
- £unknown Stoke-on-Trent Council has piloted one small custom build site with serviced plots, and is trialling several other small developments. They plan to bring forward up to 72 hectares of land for local self/custom build purposes.
In addition to their specific pledged initiatives listed above, all were to actively promote their custom build registers in order to gauge demand.
Right to Build consultation
The Right to Build consultation, like any other policy consultation exercise from a sitting Government, sets out the context of the subject and lists its proposals for consideration with a raft of questions which need to be answered. The Government launched their consultation on the 23rd October 2014 with a planned closure date of the 18th December 2014. In essence this consultation was proposing that the Bill would:
- Oblige Local Authorities to promote and keep a register of all those people who wished to build, or have built, a home for their own occupation on an individual serviced plot of land.
- Oblige Local Authorities to take note of this demand and to create solutions within their Local Plan policies for the delivery of satisfactory solutions through the provision of appropriate land.
- That there would be a certain qualifying timetable during which this land must be procured.
- That there would be certain qualifying requirements for individuals to be eligible to register their requirements; e.g. a satisfactory connection with the geographical area, a restriction to one register only, satisfactory financial means, and so on.
Based upon the consultation response, Government would then shape the content of their proposed Right to Build legislation. In very general terms there has been broad acceptance and support for their proposals with some flexibility suggested in terms of the eligibility test for initial consumer registration. Whilst this should be based on a family or work connection, there were ranging views as to whether this should also have a minimum qualifying time. Local Authorities were understandably worried about land procurement and whether or not they would have adequate skills and resource to deliver. The full transcription is in the public domain and available from the DCLG website.
Self Build & Custom Housebuilding Act 2015
Meanwhile Richard Bacon, MP, Chair of the House of Common All Party Committee for self and custom build, had also tabled his own Private Members Bill, The self-Build and Custom Housebuilding Bill 2014 in the Summer/Autumn of 2014. With full Government support, this was to strategically run alongside the wider Right to Build consultation (described above) with the very real possibility that, given its brevity, it would manage to slip through parliament largely unopposed.
This is exactly what happened and in March 2015 the Bill received Royal Assent and became the Self Build and Housebuilding Act 2015. Its significance to the custom/self build sector is enormous as it is the first piece of primary legislation which legally obligates all Local authorities to hold and maintain a register of those people who wish to build, or have built, their own home; and, crucially, in doing so to have ’due regard’ to that demand in terms of their procurement policies. In reality , however, without a legal obligation to procure land as a solution it is unlikely to achieve much.
Housing and Planning Bill 2015
Hence, the second part of the proposed Right to Build legislation, omitted from the new Act (described above) and based upon the consultation responses (also described above), and with the early results from the 11 vanguards, is now buried in the new Housing and Planning Bill 2015.
This Bill covers a whole range of issues which includes the Government’s much publicised Starter Homes initiative, The Right to Build (part 2), new proposals for rogue landlords, fair rents, planning reforms right through to compulsory purchase. It was introduced in the House of Commons in October 2015 and so far has had two readings (debates) and is now under committee scrutiny.
If it remains unopposed then it will effectively amend the aforementioned Self Build and Custom Housebuilding Act 2015 so that it includes the part 2 obligation for Local authorities to meet demand on their registers with an adequate number of serviced d plots.
However, the exact minutiae of how the Local Authorities must proceed and how consumers can become eligible for registration will require new regulations which will need to be delivered by secondary legislation as a subsequent set of regulations under a Statutory Instrument.
Because the Housing and Planning Bill has been introduced into the Commons, it must now work its way through their committee and report stages before coming back to the house for its third reading (debate). There is no indicative timetable for this but at the moment the committee stage is underway whereby the bill is being examined on a line by line basis.
Once the commons has approved the Bill in the third reading it will be sent to the Lords who the repeat the process; they will have their first reading (an introduction), then their second reading (a debate) and then their committee and report stages before a thirds reading. If at that stage the Bill remains without proposed alteration then it could proceed to Royal Assent. However, if proposed changes have been suggested then there will be a pin-pong process for the Bill to pass between the two chambers until consensus has been reached.
So, the timetable cannot be pre-determined but we should now reasonably expect part 2 of the Right to Build to be enacted later this year followed by its one set of detailed regulations. Watch this space!
Summary timetable of key Government policy & intervention for custom build support and the forthcoming Right to Build.
- November 2011 – Royal Assent for the Localism Bill including new NDO’s and the Community Right to Build (CRtB).
- November 2011 – Publication of the Government’s housing strategy for England paper ‘Laying the Foundations’ introducing the notion of custom build demand assessment
- March 2012 – Introduction of the new National Planning Policy Framework (NPPF) with reference to custom build assessment in Local Authority SHMA & SHLAA evidence.
- April 2012 – The Neighbourhood Planning (general) Regulations SI 637 (2012) crystallising the mechanics for NDO’s and CRtB
- July 2012 – launch of the Custom Build Homes Development loan fund. £30m allocated to help stimulate possible exemplar projects to get started. Closed in March 2015 as planned.
- March 2013 – Policy Exchange think tank publishes paper entitled ‘A Right to Build’ Local homes for local people, authored by Alex Morton, Head of housing, planning and urban policy, Policy Exchange.
- Throughout (various) 2013 – The HCA (Homes and Communities Agency) make certain strategic sites available for custom build development.
- March 2014 – In his spring budget the chancellor confirmed that the Government would consult on the Right to Build later in the year.
- June 2014 – exemption secured from CIL (Community Infrastructure Levy) for qualifying self build homes. CIL was introduced under the planning Act 2008 and a subsequent SI in 2010.
- June 2014 – £150m serviced plot loan repayment fund – launched by the Government to help provide easier capital for service plot delivery – euphemistically known as ‘shovel ready plots’.
- Summer 2014 – Local Authorities invited to submit proposals for becoming a Vanguard Council as part of test for how the Right to Build might operate.
- Summer/Autumn 2014 – Richard Bacon MP launches his Private Members Bill, ‘Self-Build & Custom Housebuilding Bill) on its journey through Westminster.
- September 2014 – 11 successful Vanguard Local Authorities announced to share in £550,000 of Government funding to help develop their custom build models.
- October 2014 – Right to Build Consultation commences for a 8 week period. The consultation closes on 18th December 2014
- March 2015 – The Government’s response to the Right to Build consultation is published
- March 2015 – Brandon Lewis MP, Housing Minister, writes to all Local Authorities summarising the Government’s support for custom build to become a mainstream housing solution and their forthcoming obligations under the Right to Build.
- March 2015 – Richard Bacon’s Bill receives Royal Assent and becomes the Self-Build and Custom Housebuilding Act 2015, which enacts the first element of the Right to Build.
- May 2015 – following the Conservative Party election to government The Queen’s Speech is delivered on the 27th May and includes details of the new Housing and Planning Bill.
- October 2015 – The housing and Planning Bill is introduced to the House of Commons on the 13th October 2015. In December 2015 it had successfully passed through its first two readings and had reached the committee stage in the Commons.
- December 2015 – new research from NaCSBA is formally launched at No.10 Downing Street by Brandon Lewis MP, Housing Minister, with a tool kit for Local Authorities on European wide custom build delivery models.
This article was commissioned by Buildstore Ltd and written by Tim Doherty. Tim is the Director and Principal Surveyor of Dobanti Chartered Surveyors, a building surveyors based in Tunbridge Wells, Kent. Get in touch for more information about Dobanti’s property and building services, or read more online now. Further articles and blog posts can be found here.