New Government planning policy does not go far enough

The Government's loosening of planning restrictions should be welcomed. But more change is needed to reform our archaic system of land ownership.

To build or not to build: a question the Government has stamped its view all over within the latest set of planning reforms. The cornerstone of the guidelines will be a ‘presumption in favour of sustainable development’.

The rules have been revised after last year’s initial draft provoked widespread opposition from conservation and environmental groups. The guidelines have now been amended to ease fears that encouraging widespread building would lead to a loss of countryside.

So what are the new plans trying to achieve?

Presumption in favour

The aim of the new planning reforms sits firmly within the Government’s charted route back to economic growth. Put simply: a shifting of the balance firmly in favour of building and development should, in theory, spur on the construction of homes, reinvigorating the housing sector and dealing with the chronic lack of homes, while also creating jobs and boosting the economy.

This is being done through one key theme - a presumption in favour of sustainable development. However the definition of sustainable development has opened up something of a battle ground between conservation groups and the Government.

Green field

Environmental campaigners are concerned that loosening planning guidelines will give developers free rein to build across the rural areas. For years, planning guidelines in Britain have restricted the growth of our towns and cities and kept the countryside largely unspoilt. Green groups are worried that the planning review will change this.

Their concerns stem from the fact that rural land is cheaper than urban land. This allows developers to turn a larger profit by building on it. This may be great for economic growth and jobs, but it’s not so good for the environment.

For the conservationists, the Government’s initial guidelines did not include enough protection for rural areas. The view was that growth and development trumped everything.

The revised rules include a recognition of the “intrinsic character and beauty of the countryside” with specific protection for green belts. The framework encouraged the development of land with “lesser environmental value”, most predominantly by “reusing land that has been previously developed".

Essentially, the Government wants developers to shun the easy, cheap option of green-grabbing cheap rural land and reinvigorate tired urban land instead.

But there's a problem.

Land values

Brownfield land - the unused sites sitting within urban areas – is more expensive to develop than rural land. This prompts two questions. Firstly, can developers afford to build on relatively expensive land in the current climate? And secondly, will they want to develop land on which they cannot easily turn a profit?

For housing, it all comes back to demand. The Government is easing planning guidelines to tackle the chronic shortage of homes that is – so logic says – pushing up house prices. But this is only part of the problem.

Follow the solution through. New homes are built, prices come down, first-time buyers snap them up with assistance from the Government FirstBuy scheme, and we all applaud the coalition for curing our housing disease. Except these changes are not a cure.

Here are two more likely sequences of events.

Firstly, developers do not build on brownfield sites because there is no demand for new build homes. Why? Well, partly because they are usually hideously overpriced and a trap for negative equity, but the stagnant mortgage sector and lack of capital among first-time buyers for a deposit doesn’t help either.

Or secondly, developers do build, but prices don’t come down – because the companies need to turn a profit and the brownfield land is overvalued in the first place. First-time buyers snap up these homes and then watch in horror as a chunk of their property’s value falls off as soon as they put their key in the lock for the first time.

Land charlatans

Figures from the Department for Communities and Local Government show that around 77% of planning applications were accepted between April and September 2011. Does this really suggest a draconian planning framework always geared to undermine the developer? No.

A more definite solution is needed to tackle the issue that lies at the heart of the reticence of developers to build on brownfield sites, and the concern of conservationists over green-grabber builders. Land values.

Land is hideously overvalued in Britain because of the myth that there is none of it. Like most myths, this one is cultivated by those whose interest it serves.

Look to rural areas: vast plots of land are smoothly passed down from generation to generation, kept firmly within close-knit agricultural dynasties. Do the authorities care? No, they’re far too busy tweaking a new planning report.

Land ownership rules in the UK – along with property and land taxation – are archaic. If these foundation issues are not tackled, no planning framework – even one as sensible as the Government’s latest effort – will ever stand tall.

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