In the second of our blog posts on some key developments in planning law in 2022, we look at some new proposals set out in a Consultation published in December 2022 on how to stop landbanking. These come on top of some new provisions known as the “use it or lose it” clauses in the Levelling-up and Regeneration Bill which is slated to become law in spring of this year.
The process of landbanking, whereby landowners obtain planning permission (thereby securing an enhanced value for their landholdings) but fail to implement (or at least substantially complete) a permission, has long been identified as a problem, particularly in the residential sector. The problem is now acute with the lack of suitable and affordable housing availability.
So, in an attempt to clean up the practice, the UK Government has introduced “use it or lose it” clauses in the Levelling-Up and Regulation Bill. Under these provisions, developers would be required to serve a commencement notice on the local authority before development commences. This requires the developer to set out the expected start date and the delivery trajectory of the scheme. It should be noted that this requirement could apply not only to residential schemes but to other large mixed-use schemes. This has yet to be decided.
New Clause 100 of the Bill provides a power for local authorities to serve completion notices in respect of unfinished developments where they are of the opinion that the development will not be completed within a reasonable time, specifying that the planning permission of any uncompleted parts of the development will cease unless it is completed within the period specified in the notice.
The period specified for completion must not be less than 12 months after the notice has been served.
Under the existing law, a completion notice can only be served once it has been confirmed by the Secretary of State; for this reason (and others), they are rarely used.
Added to these provisions is the latest consultation on the National Planning Policy Framework (NPPF) and related issues, published in December 2022; a number of further supplementary proposals have been added. The NPPF has to be taken into account by local authorities in their development plans and also in considering planning applications. First, there is to be “naming and shaming” of developers that fail to deliver developments on large sites.
Secondly, the proposed delivery timescales are to become a material consideration in the context of planning applications for residential development. This will presumably require the submission of potentially commercially sensitive back up evidence and (critically) may lead local authorities to require enforceable delivery commitments through s106 planning agreements.
In addition, there is also a rather vague but ominous reference in the Consultation to the possibility of “financial penalties” against developers who build “too slowly”. This is to be the subject of a further consultation in 2023.
Watch this space!
See our other blog posts in this series:
Our top 6 Planning Law takeaways in 2022 – Part 1: The problem of overlapping planning permissions
Our top 6 Planning Law takeaways in 2022 – Part 3: What to do when the planners delay
Our top 6 Planning Law takeaways in 2022 – Part 4: What happens if the local authority gets its CIL paperwork wrong?
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For any other legal questions related to UK real estate, please get in touch with your usual Mayer Brown contact or one of the blog editors.