Planning reform is welcome but inadequate to the scale of our housing and economic crises

September 07, 2012 5:32 PM

The Government’s announcement that planning restrictions may be relaxed on single story extensions and that developers will be able to apply for subsidised housing requirements to be removed if they can prove that they make a development unviable is good news. Subsidised housing rules, cruelly named “affordable housing”, do little more than redistribute a reduced quantity of housing, making it even more unaffordable for everyone else. Planning restrictions similarly mean people have to waste time and money grovelling for permission to expand their homes while some are simply put off the whole process and just don’t bother. That makes housing less affordable.

But while the move to double the length of extensions allowed under permitted development rights is welcome, this reprieve is only proposed to last three years. And it isn’t enough, anyway. The shocking lack of affordable, decent housing in Britain isn’t primarily due to a lack of single story extensions and conservatories. It’s fundamentally because government is blocking developers from building the floor space we need. The biggest restrictions involve planners stopping buildings from being as tall and bulky as they would otherwise be, stopping commercial buildings from being converted into residential use and stopping people from developing on greenfield sites.

Although most of us spend the majority of our time in urban and suburban areas, Britain is not nearly as developed as many imagine. Just 10.6 per cent of land in England is “developed”, which includes public parks, private gardens, allotments and golf courses as well as concrete and buildings. Building a million new homes on greenfield sites with an equivalent increase in other development including commercial buildings and parks would increase that figure to 10.9 per cent. To put that into context, around 30,000 homes are currently built per quarter. But a huge increase in the number of homes could be achieved even keeping restrictions on greenfield sites if rules in cities were relaxed.

Government and council planning policy are full of terms such as preserving the ‘rhythm’ of ‘streetscapes’ which has in most areas effectively frozen building heights and bulk to the prevailing local norms. In stark contrast to the lively variety of building heights prevalent in Georgian, Victorian and pre-war England, new development today is almost always constrained to a standard size. Home-owners simply aren’t allowed to build a three or four story building if the rest of the street has only two story houses lining it. This planning concept is designed to protect neighbours from loss of sunlight from building shadows, over-looking and an institutional aesthetic preference for uniformity. But the downside is the housing crisis, exacerbated house price booms, increased homeless and cramped, small, over-priced “rabbit hutch” homes.

Planning restrictions, however, are only part of the story. Excessive building regulations which demand expensive materials favoured by environmental activists pile further costs onto developers, making fewer projects viable leading to fewer homes being built with the inevitable consequence of even higher prices. And on top of all that, the Government hits developers and homeowners with heavy taxes for the privilege of actually doing the one thing that does anything to help solve the housing crisis: building houses.

As well as homeowners having to pay Council Tax to fund local services when they occupy a new home, ultimately they are also lumbered with all the costs piled onto developers when it’s built. As well as Corporation Tax on any profits left over, developers pay:

  • Community Infrastructure Levy, which is set by councils and is as high as £575 per square metre in Wandsworth in south west London, or £43,700 for an average sized house of 76 square metres

  • “Section 106” payments, as a condition of planning permission

  • Stamp duty when it’s sold

  • Income Tax and National Insurance for their construction and other staff

  • All the other taxes like Fuel Duty, Business Rates, Landfill Tax, environmental levies and Insurance Premium Tax


With such a heavy burden of taxes and regulations, it’s no wonder we have a housing crisis and a construction industry in a parlous state. The recent announcement of a tweak to planning rules is a step in the right direction but it isn’t nearly enough. If the Prime Minister really wants to get Britain building, he shouldn’t be wasting taxpayers’ money giving dodgy guarantees for mortgages and subsidies for “key workers”. He should permanently tear up much more of the planning system and slash taxes, instead.The Government’s announcement that planning restrictions may be relaxed on single story extensions and that developers will be able to apply for subsidised housing requirements to be removed if they can prove that they make a development unviable is good news. Subsidised housing rules, cruelly named “affordable housing”, do little more than redistribute a reduced quantity of housing, making it even more unaffordable for everyone else. Planning restrictions similarly mean people have to waste time and money grovelling for permission to expand their homes while some are simply put off the whole process and just don’t bother. That makes housing less affordable.

But while the move to double the length of extensions allowed under permitted development rights is welcome, this reprieve is only proposed to last three years. And it isn’t enough, anyway. The shocking lack of affordable, decent housing in Britain isn’t primarily due to a lack of single story extensions and conservatories. It’s fundamentally because government is blocking developers from building the floor space we need. The biggest restrictions involve planners stopping buildings from being as tall and bulky as they would otherwise be, stopping commercial buildings from being converted into residential use and stopping people from developing on greenfield sites.

Although most of us spend the majority of our time in urban and suburban areas, Britain is not nearly as developed as many imagine. Just 10.6 per cent of land in England is “developed”, which includes public parks, private gardens, allotments and golf courses as well as concrete and buildings. Building a million new homes on greenfield sites with an equivalent increase in other development including commercial buildings and parks would increase that figure to 10.9 per cent. To put that into context, around 30,000 homes are currently built per quarter. But a huge increase in the number of homes could be achieved even keeping restrictions on greenfield sites if rules in cities were relaxed.

Government and council planning policy are full of terms such as preserving the ‘rhythm’ of ‘streetscapes’ which has in most areas effectively frozen building heights and bulk to the prevailing local norms. In stark contrast to the lively variety of building heights prevalent in Georgian, Victorian and pre-war England, new development today is almost always constrained to a standard size. Home-owners simply aren’t allowed to build a three or four story building if the rest of the street has only two story houses lining it. This planning concept is designed to protect neighbours from loss of sunlight from building shadows, over-looking and an institutional aesthetic preference for uniformity. But the downside is the housing crisis, exacerbated house price booms, increased homeless and cramped, small, over-priced “rabbit hutch” homes.

Planning restrictions, however, are only part of the story. Excessive building regulations which demand expensive materials favoured by environmental activists pile further costs onto developers, making fewer projects viable leading to fewer homes being built with the inevitable consequence of even higher prices. And on top of all that, the Government hits developers and homeowners with heavy taxes for the privilege of actually doing the one thing that does anything to help solve the housing crisis: building houses.

As well as homeowners having to pay Council Tax to fund local services when they occupy a new home, ultimately they are also lumbered with all the costs piled onto developers when it’s built. As well as Corporation Tax on any profits left over, developers pay:

  • Community Infrastructure Levy, which is set by councils and is as high as £575 per square metre in Wandsworth in south west London, or £43,700 for an average sized house of 76 square metres

  • “Section 106” payments, as a condition of planning permission

  • Stamp duty when it’s sold

  • Income Tax and National Insurance for their construction and other staff

  • All the other taxes like Fuel Duty, Business Rates, Landfill Tax, environmental levies and Insurance Premium Tax


With such a heavy burden of taxes and regulations, it’s no wonder we have a housing crisis and a construction industry in a parlous state. The recent announcement of a tweak to planning rules is a step in the right direction but it isn’t nearly enough. If the Prime Minister really wants to get Britain building, he shouldn’t be wasting taxpayers’ money giving dodgy guarantees for mortgages and subsidies for “key workers”. He should permanently tear up much more of the planning system and slash taxes, instead.

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