Update – December 2016

Developers invited to take action

St. Albans has been advised that it has not fulfilled its duty to cooperate. David Hogger, the Planning Inspector reviewing the Strategic Local Plan (SLP), wrote to the council giving it two options: to receive a report from the inspector recommending non-adoption; or to withdraw the plan from examination.

An obviously unimpressed Cllr Julian Daly, leader of the district council, said: “This has already been a long and difficult process. He told the Herts Advertiser he was not sure what course of action the council would take in response to the inspector’s recommendations. The Planning Policy Committee scheduled for December 6 was cancelled and the next will be on January 9.

Cllr Daly added that one option for developers involved in the consultation might be to consider taking legal action over the inspector’s conclusions, as their proposed schemes would now face delays as a result. He said: “They could call for a judicial review – it’s a possibility.”

The Inspector said in his letter that “the evidence does not enable me to conclude that prior to the submission of the SLP, St Albans Council gave satisfactory consideration to identifying, addressing and seeking co-operation with regard to strategic cross-boundary matters and priorities”.

He went on to say that a “small number” of councils nearby considered that the duty had been met by St Albans Council, but added: “There is no opportunity for a council to be selective over which of its ‘neighbours’ it cooperates with.”

Hogger concluded by saying that, as the plan “has not been based on effective joint working on strategic matters and priorities”, and because “there is insufficient evidence to demonstrate that the SLP has been positively prepared”, there is the “significant risk” that the plan could be found to be not sound.

This view by the Inspector may well have an impact upon other local planning authorities around the country. Whereas many have been pushing ahead with local plans under the assumption that there is a “duty to cooperate but not to agree”, this decision at St. Albans suggests that the Inspectorate wants to see a good deal more: not just a box-ticking exercise. It appears there needs to be a degree of collaboration, or at least a desire to engage, discuss each other’s needs, and come to some compromise.

Barwell changes rules on Neighbourhood Planning

Earlier this month, Gavin Barwell, Planning Minister, announced a change to planning policy whereby a Neighbourhood Plan can be used to stop development in certain circumstances. In a written statement, he explained that currently, if a council does not have a five-year land supply, an application should only be rejected if the negatives of a development significantly outweigh the positives which means that any local plan or neighbourhood plan can be overruled and development would have to be consented.

The new rules, which come into immediate effect, will mean that if the neighbourhood plan is less than two years old, has allocated sites for housing and the council has demonstrated it has a three-year supply of sites for housing, it will not be deemed to be out-of-date, thus allowing speculative development to be successfully halted in its tracks within the neighbourhood plan area. This additional power will certainly be an added incentive for the creation of plans, and to review them regularly. See the Inside Housing article here.

Cambridge & Peterborough Mayor to have planning powers

In late November, Cambridge County Council finally signed-off the devolution deal with the Government. It will create the first non-metropolitan devolution area in England, combining authorities in Cambridgeshire and Peterborough under a new elected mayor.

The new mayor will acquire planning powers in relation to future local plans as well as ability to create supplementary planning documents. The devolution plan document states that the elected mayor would have powers to create “a non-statutory spatial framework, which will act as the framework for planning across the combined authority area, and for the future development of local plans”. The mayor would also have powers to create supplementary planning documents and create “mayoral development corporations or similar rural vehicles, with planning and land assembly powers, which will support delivery of strategic sites in the combined authority area”.

Could this be the return of regional planning? It certainly looks like it, although many would agree that such a role has been missing for some time, especially with larger strategic sites and infrastructure considerations. It will also assist with cross-border ‘duty to cooperate’ which seems to be failing in some parts of the country. See the Public Sector Executive article here.

Mayoral elections are expected to take place in May 2017.

Super prime rental market takes off

Knight Frank has reported that increases in Stamp Duty have led to leap in the super prime rental (above £15k per month) market across the Home Counties. In its winter update, it reported that the number of properties available for rent has increased by 56 per cent so far in 2016 compared to last year, with the number of viewings more than doubling year-on-year. Tenancies agreed in 2016 are comfortably higher than the past two years.

Jemma Scott, partner Home Counties lettings, explains: “When you consider that the stamp duty on the purchase of a £10 million property in the Home Counties is £1.1 million, rising to £1.4 million if it is a second home or additional residence, that’s equivalent to more than three years rent.”

Much of this growth is from overseas with international tenants accounting for 81 per cent of all Super Prime deals across the Home Counties (although it should be noted this is a small subtotal of the market as a whole) since 2014. Of these, US renters have been the most active nationality over that time, accounting for 36 per cent of all super prime tenancies agreed, followed by tenants from the UK. Education is a key driver in the Home Counties, with a strong correlation between the market and proximity to international schools. Read the full Knight Frank Winter newsletter here.

According to Savills, the same effect is also being seen in London. The changes in taxation coupled with Brexit mean buyers are being cautious about committing, preferring instead to rent in the short to medium term. This has been preceded by a flurry of sales activity following the recent fall in Sterling with foreign buyers snapping up some bargains in the capital. Savills predicts quite a flat sales market in London while Brexit negotiations proceed, with a continuing buoyant rental market. Savills’ market reports here.

Changes in taxation and Brexit will undoubtedly affect prime sales in London and the Home Counties. With uncertainty about the future and higher taxation on sales, many high net worth individuals will understandably be reluctant to commit, preferring instead to rent properties. This will probably lead to much of the over-supply of prime property in London reverting to rental for the time being, which may lead to a slow down in development in this sector during 2017.

Cambridge again

Following the highly successful and well-attended Built Environment networking event at the Cambridge University Centre in November, Estates Gazette ran its Cambridge Question Time event the same week. Over 300 property professionals attended to hear a panel, comprising Richard Janes, head of development at Savills; Mark Reeve, chairman of the Greater Cambridge Greater Peterborough Enterprise Partnership; Emily Orton, co-founder of Darktrace; Derek Carr, partner at PEM, William Jewson, development director at Howard Group; and The Rt Hon Lord Lansley, chair of the Cambridgeshire Development Forum, discuss a wide range of topics. Cambridge law firm Mills & Reeve summarised the debate on its Property Matters blog:

1. Brexit is an opportunity for Cambridge to promote its global brand. Whilst difficult currently to determine how (and how much) Cambridge will be affected by Brexit, there was consensus amongst the panel that free movement of people was key to the continuing success of the city. Cambridge relies on attracting the best world talent and needs to continue to do so to maintain its place on the world stage. There was little concern amongst the panellists that Cambridge would continue to thrive – it is a dynamic city, good at finding solutions to issues that challenge it.
2. In two audience polls, 52% thought Brexit would not be bad for brand Cambridge, although 33% thought limitations on free movement would severely damage the city’s reputation as an international centre for research (with the majority 43% thinking it was too early to judge).
3. The perennial problem of Cambridge’s transport infrastructure needs a bold, innovative and long-term solution. Should we be looking to smart technologies e.g. driverless cars and buses to streamline city traffic? (see here for more information)  Essentially, it needs to be more expensive to drive into Cambridge than use alternative transport. Currently, transport considerations are a priority for city employers, which  impact on their decisions of where to take space.
4. Devolution will benefit Cambridge and the surrounding area if the mayor is given sufficient powers and funding to be able to set a strategy and see it through to delivery. Too many innovative strategies have failed in the past due to lack of delivery. The suggestion that the mayor should be taken out of politics, that another layer of local government is not required, broadly met with audience approval, with 78% agreeing that the mayor should be an outsider with no bias towards any particular authority.
5. Housing in Cambridge is unaffordable, particularly for first time buyers. Increased supply is fundamental and it was noted that, proportionate to its size, Cambridge built more houses than anywhere else in the UK last year. Unaffordable housing causes problems for employers looking to attract new employees, who may be faced with long commutes to work. Proposed solutions included: building on green belt areas (whilst maintaining green corridors); building higher density in the city centre; widening the focus away from the city centre to the surrounding areas e.g. Alconbury, Northstowe – recognise that Cambridge is a medieval city and not everyone needs to be in the centre and improving the transport infrastructure to link surrounding towns, as well as encouraging people out of cars. The City Deal will look to address the issue and there is a need to leverage public sector money with private sector to maximise investment in the city.
6. Cambridge needs to offer more shared working spaces, which are particularly popular with start-ups and SMEs. The city needs to build on the success of developments, such as the Cambridge Conservation Initiative in the University’s David Attenborough Building, to offer more space where businesses can come together to collaborate and innovate.

Cambridge’s global brand is solid and will continue to be so, despite Brexit. Demand for space in Cambridge, particularly from science and technology companies, remains strong. However, housing and transport infrastructure questions urgently need to be addressed, as they directly influence business decisions on where to locate. With the right powers, funding and personality, will a mayor be able to deliver the required solution?

Council tax rises

Earlier this month, Local Government Chronicle published information from its ‘Council tax tracker’, which monitors what councils are proposing in terms of changes in council tax for the next financial year. The LGC Council Tax Tracker for 2016-17 showed that of 215 proposals found, 189 councils planned an increase council tax while only one council cut its bill.

Of the 24 top-tier authorities, 22 are planning to raise council tax by the maximum amount of 3.99% without triggering a referendum. Of the remaining two, Cornwall Council and Newcastle City Council, increases of 3.97% and 3.95% are planned respectively.

In terms of the new social care precept (increase from 2% to 3% next financial year), 136 councils are eligible for this of which 128 councils are planning to make use of it.

Could this be a small step along the devolution path to local tax-raising powers to meet local needs? It may be, although much of the media has focused on the postcode lottery effects of the blanket policy. It is true that authorities in poorer areas will not be able to raise as much money as those in  more affluent areas whereas the cost of social is care is the same and the need most probably greater.

Fracking challenge fails

A High Court challenge to a fracking consent in North Yorkshire has failed.  In dismissing the application for judicial review, Mrs Justice Lang ruled that the terms and conditions afforded ‘a considerable degree of protection to residents’ and the council’s decision was lawful. North Yorkshire County Council granted permission in May for Third Energy to start operations.

This decision was condemned by local campaigners including CPRE which part-funded the legal challenge. Friends of Ryedale Gas Exploration told BBC Radio York that they are pleased that fracking can now go ahead at the site at Kirby Misperton, which is near Pickering. Click here to see BBC News article.