What major planning policy changes have there been recently that have impacted Prime Central London residential development?
This year has seen two major planning policy changes impacting prime Central London residential development; the new London Plan and the adoption of Westminster City Council’s (WCC) new City Plan. The latter is a shift in several key areas of planning policy and the first comprehensive update to WCC’s planning policies since the previous UDP in 2007.
The major impact is a greater resistance to the creation of large residential units in policy terms. WCC’s plan also now protects office to hotel or residential conversion in the Central Activities Zone (CAZ), a reaction to concerns over the loss of office stock. The policy position around affordable housing delivery has also been strengthened such that off-site delivery or payment in lieu will only be accepted in exceptional circumstances.
Royal Borough of Kensington (RBKC) is currently consulting on issues and options ahead of developing a new local plan. Many of the same issues are being debated as part of that emerging planning process with RBKC exploring options to restrict unit size, prevent amalgamations and maximise affordable housing.
It is important to understand the drivers influencing these policies. In part, it’s economics; there is a finite stock of land and authorities are under huge pressure to deliver additional homes for families, therefore needing to make the most efficient use of land. Politically, in the post-Covid world, there is also a desire to ensure a levelling up across socio-economic demographics.
What is on the horizon for the next 5 years and how do you see your clients responding and adapting to these?
Whilst previous drafts of the new and emerging policy had concern regarding potential restrictions on height, WCC’s adopted version takes a more pragmatic approach. There now appears to be recognition that the principle of roof extensions is generally acceptable, except where there are adverse heritage impacts. This is positive in that the creation of larger dwellings may be achieved by building upwards on existing residential stock.
Sustainability has made its way to the top of the agenda for politicians and policy makers, in particular embodied energy and re-use over demolition. WCC’s new plan - and a new Environmental SPD expected to be adopted before Christmas - is more forward-thinking in terms of carbon reduction, energy efficiency and retrofitting. This aligns with the new London Plan and, together, provide greater clarity on change acceptable in historic buildings.
This presents opportunity. Often it is prime residential development that enables historic and listed buildings to be brought back into sustainable and viable use and Local Authorities recognise the heritage benefits in permitting larger units within this stock, providing exceptions against a normal resistance to large units.
We are also seeing a blurring of the traditional lines between work and home and a greater emphasis on providing space to work in residential accommodation. Consideration to how these spaces are incorporated, for example their capacity and specification, will be needed.
Are Local Authorities delivering in their commitment to utilise affordable housing payments and CIL?
Affordable housing policy has become more stringent which is no surprise given the scale of the housing need in the Capital and this reflects the London Plan and Sadiq Khan’s position. The target requirement of 35% provision is also now coupled with an even greater weight placed on achieving on-site provision. Moving forwards, off-site and payment in lieu solutions will likely only be acceptable in exceptional circumstances and as a last resort.
Given the land prices in RBKC and Westminster, a £5m contribution towards affordable housing would have little impact and significantly less delivery on the ground than in other parts of London. Prime residential can help contribute to the delivery of affordable homes which should be supported however a balance will need to be struck to ensure that the quantum involved is not too great as to prevent development occurring, particularly given the significant rise in construction costs.
So far very little of those contributions have been spent on delivery of affordable house which is largely a product of Local Authorities needing land rather than money to deliver. WCC does now have an ambitious programme of affordable housing construction at its Ebury Estate and Church Street developments, to which its affordable housing fund is committed, with outline planning permission for the Ebury Estate recently granted. WCC has spent, or committed, approximately half of the £107m of CIL raised since 2016 when it was first charged.
Will the post Covid world of more flexible working and online retail force Local Authorities to be more flexible in their approach to change of use?
This will certainly be the case at Government level. We have already seen this emerge in terms of Permitted Development Rights and the introduction of Class E, both of which are designed to support the high street and let demand drive development. However, Local Authorities will need to follow this through and be more flexible in helping to bring buildings back into viable use.
Positively, new and emerging planning policy supports the diversifications of town centres and high streets. Generally permitting, for the first time, the loss of retail space to other uses that serve visiting members of the public is acceptable. However, this is not the case at ground floor level in the International Centres of Regent Street, Oxford Street, Bond Street and Knightsbridge.
How are Local Authorities planning to deal with the backlog of applications and increase demand caused by the pandemic?
The current backlog in applications that we are witnessing is a direct result of the chronic shortage of resources in the planning departments at Local Authorities. This is one of the biggest challenges that the development industry - both residential and commercial - is facing and the only way this can be dealt with is through Government intervention.
Are we likely to see air quality and hygiene standards becoming part of planning requirements, in the same way the environmental agenda has over the past decade?
Government intervention in respect of environmental standards is part of the much wider global climate challenge and drive towards net zero. The Covid-19 pandemic has certainly brought air quality and hygiene standards into much sharper focus, but these are more likely to demand driven.
In the commercial sphere there has been a huge shift to clean and green buildings with fierce competition, and higher rents, for those that demonstrate environmental credentials and accreditations, as well as cleanliness and wellness. As individuals become more conscious of the environment and health and well-being in their own homes, it is likely their demands and expectations will drive the change in this market as well.
Graham is a Chartered Town Planner and a Partner in Gerald Eve’s Planning & Development Team with extensive experience across residential and commercial development. In the residential sector he has advised on numerous prime and super-prime residences and Large Country Estates, obtaining planning permission and listed building consent for the regeneration and restoration of a range of listed buildings and supporting infrastructure.