Housebuilders welcome Yvette Cooper’s plan to overhaul of PPG3 and force councils to release land for housing

The government has indicated that it intends to shake up the planning system to tackle the problem of rising house prices and hit its targets for the construction of 1.1 million homes in the South-east.

The government is hoping to use PPG3, the planning document that determines councils’ planning policy, as a way of making the system more responsive to market signals.

Yvette Cooper, the planning minister, used the annual convention of the Royal Town Planning Institute last Thursday to outline her approach. She said she agreed with the analysis of economist Kate Barker that planners often failed to respond to housing demand.

She said: “The planning system is not taking account sufficiently of the signals in the market – whether it be in low demand areas or high demand areas – when deciding how much housing [is] needed, with damaging consequences for the local economy.”

Cooper added that the government would consult on “possible changes to planning policy” to address this before parliament broke up for the summer recess on 21 July.

It is understood that these proposals will be included in an updated version of PPG3, which will advise local authorities to earmark enough land to ensure a plentiful supply of cheap housing.

It is also understood that affordability targets will be set at local, regional and national levels based on the ratio between the earnings of those on the lowest incomes and the price of the cheapest housing.

These targets will not apply to national parks and areas of outstanding natural beauty.

The planning system is not taking account of the signals in the market

Yvette Cooper

Cooper’s comments delighted housebuilders, who are still reeling from the announcement last October that local authorities may be given responsibility for deciding the mix of open market housing.

This decision was subsequently reversed, but the fact that the ODPM has yet to publish its intentions over PPG3 had unnerved many developers.

One said: “It is fan-bloody-tastic! It paints local authorities into a difficult corner as they need to respond to demand signals but to do this they need to release land.

“I would be very surprised if some of the South-east Tory-run councils were up for doing this.”

It is believed that one of the reasons for the delay in carrying out the consultation exercise over how the government will deliver its “step change” in housing supply is to ensure that all departments sign up for the proposals.

The Treasury is so concerned about housing supply that it is planning to publish a paper that will explain the importance officials place on “finally getting the system right”.

The paper is not expected to contain any fresh policy statements but is likely to be an updated version of a housing paper originally intended for publication last year.

Interested parties: Who wants what from PPG3

Government

Housing and planning minister Yvette Cooper is determined to push through the higher annual building rates required to deliver the extra 1.1 million homes in the South-east by 2016. Expect her to push through changes to release more public land, as called for by economist Kate Barker, and for section 106 agreements to be slimmed down to cover affordable housing once Barker’s “planning gain supplement” is introduced.

Housebuilders

They recognise the government has to tread a fine line between getting homes built and local democracy. However, they are aware they are the only people who can actually build homes. The Home Builders Federation is adamant that the government has to be flexible about what constitutes a “sustainable community” and not adopt a rigid approach that predetermines the mix of properties and land uses in new developments.

Planners

The main thing they want is an updated set of guidelines they can follow. They have also been stung by Cooper’s criticism. Kelvin MacDonald, director of policy and practice at the Royal Town Planning Institute, said he disagreed that market signals should result in more land being released for housebuilding. He said such an approach was not democratic and that the market was affected by more than land supply.