The Government recently released a new Planning White Paper – Planning for the Future which has sparked debate across the country about the role of democracy in the decision making process and the way that we plan for development in our local environment. It also released a consultation which closed last week on Proposed changes to the current Planning System

Following consultation with our members, the Rural Services Network has submitted a response to the consultation has it has serious concerns and is fundamentally opposed to two of the proposals included within the consultation. 

You can read our full response here, and we set out below our main concerns.

1. Affordable Housing Thresholds

The proposal to raise the threshold that triggers affordable housing contributions from 10 to 40 or 50 dwellings for a limited time period will drastically reduce the supply of rural affordable homes. This is because in many rural communities, residential developments tend to be smaller than 10 dwellings. Many rural communities, therefore, will see no affordable homes being provided at all. 

The consultation document proposes an exemption to this rule in designated rural areas based on the S157 1985 Housing Act definition. However, this measure will be largely ineffective because it will not apply to 70% of smaller rural communities. 

Despite good intentions, these changes will not, in practice, help SME builders in rural areas. Indeed, they are likely to be detrimental to the interests of such firms.  The threshold policies in Local Plans are based on evidence of local housing need, have been viability tested, scrutinised at Examination and found to be sound.

Raising the threshold as proposed would mean that these needs would no longer be met, particularly in villages and rural towns where site opportunities are more limited

 2. First Homes Exception Sites

The proposed ‘First Homes Exception Sites’ will seriously damage the supply of Rural Exception Sites in non-designated areas and, with it, the ability to meet a broad range of housing needs.

Landowners will choose to sell their land for First Homes Exception Sites which, because they will provide predominantly affordable housing for sale, are likely to command a higher land value than Rural Exception Sites. They will also cause confusion and destroy the emphasis on community engagement and support. Gone will be the opportunity provided by Rural Exception Sites to provide a mix of affordable homes tailored to the specific needs of the community, often including discounted market sale in perpetuity.

A recent high- level analysis for ACRE that compares site values between First Homes Exception Sites and Rural Exception Sites across a sample of low, medium and high value markets shows that in all cases a First Homes Exception Site developed for 100% First Homes at the minimum discount offers a higher land value than rural exception sites.

In high value areas this is a positive residual value and landowners are likely therefore to sell for First Home Exception sites.

In low value and medium areas both forms of exception site result in a negative residual value. To plug the viability gap market housing can be included on both forms of site. However, unlike rural exception sites the land value of First Homes Sites is not pegged. In consequence the land value is likely to rise and landowners will choose to sell as a First Homes Exception Site. In such instances the level of market housing on a First Homes Exception Site could be at a level that none of the dwellings are in the form of rented housing, which is the primary need in rural areas, even in low value areas such as some coastal and remote areas where wages are low and there are high levels of second and holiday homes.

This risk is recognised in the proposal by not applying First Homes Exception sites in designated rural areas. However, again the chosen definition to define these areas means 70% of small rural communities will be excluded. This definition needs to be altered.

The RSN has proposed some amendments to these proposed policies:

1. Replace the definition of designated rural areas from those areas listed under S157 regulations to all parishes with a population of 3,000 or fewer. This would provide a definition that is transparent and readily understandable, easy to evidence and update, efficient and simple to apply, whilst providing consistent coverage across rural England.
2. Adopt the wording in the NPPG1 that was introduced in July 2019 that allows local planning authorities to set their own thresholds for affordable housing in their designated rural communities but, as above, not just those with S157 designation.

It is critical that rural communities are allowed to thrive and that the many key workers who have been so important during the covid-19 pandemic and beyond, are able to afford to live in the communities they serve. These revisions will be fundamental in helping to achieve that end.