Gov’t sets out details of planning and BTL changes
The government will seek to tighten the planning performance regime, reduce housebuilding regulation and restrict tax relief for landlords.
In the 88-page Fixing the Foundations: Creating a More Prosperous Nation – in which the government sets out its plans to increase productivity – several changes to the planning process are outlined.
These included putting local authorities that make 50 per cent or fewer of planning decisions on time “at risk of denigration”, and legislating to grant automatic planning permission in principle on brownfield sites registered as suitable for housing.
According to the government, 58 per cent of major planning applications were dealt with on time in 2012/2013, compared to 77 per cent in 2014/2015.
The government has also pledged to get 200,000 starter homes built by 2020, at a 20 per cent discount for young first-time buyers.
Measures to reduce housebuilding regulation include not proceeding with the zero carbon allowable solutions carbon offsetting scheme and introducing a dispute resolution mechanism for section 106 agreements.
The relief on finance costs landlords of residential property can get will be limited to the basic rate of tax, with the restriction phased in over four years from April 2017.
Jeremy Castle, director in the London Planning team at Deloitte, said: “The planning announcement is a bold move towards addressing the slowdown in UK housebuilding.
“Further down the line, it will be a challenge to write a robust piece of legislation that grants automatic permissions for brownfield development.”
However, Evan Owen, Gwynedd-based adviser advocate and former chairman of the IFA Defence Union, criticised the 20 per cent discount on starter homes for young first-time buyers, saying: “Wages never keep up with house prices so the discount becomes meaningless over time – a waste of effort and money.”
Jonathan Adams, director of London-based property consultants Napier Watt, praised plans to build on brownfield sites but warned housebuilders against developing flats that would not appeal to UK buyers.
| Key points – Other government proposals for the housing market |
| Legislate to allow major infrastructure projects with an element of housing through the nationally significant infrastructure regime |
| Legislate to extend the planning performance regime to minor applications |
| Require local authorities to plan proactively for the delivery of starter homes |
Adviser view
Simon Morris, a property and investment specialist for London-based Hennessy Jones, said: “Will the capping of tax breaks or the restriction of tax deductions increase maintenance costs and buy-to-let mortgage fees? If so, landlords need to re-calculate risk versus return, to determine whether they can generate a healthy return on their investment.”
