Custom build reflection & projection 2020/21
Mario Wolf MRTPI, Custom Build Homes’ Director of Planning and Strategic Engagement highlights 2020 custom build milestones and what the sector has in store for 2021.
2020: A year in custom build housing
2020 will live in our memories in infamy for years to come! We remain in the depths of an unprecedented pandemic which has put our lives on hold for the foreseeable future until our national vaccination programme begins to have its effect. Despite all the negatives that happened in 2020, the housing sector has shown resilience during the economic downturn. Other sectors have, and are continuing to be, ravaged by national and regional lockdowns and stay-at-home policies
Imposed by the Government, but the housing market has remained active. Construction activity returned strongly after the first lockdown in Spring, with UK house prices hitting an all-time high of £250,000 in November with an average increase of 7.6% over the year to November 2020, according to the ONS, buoyed by the temporary stamp duty suspension on property sales in July and record low mortgage rates.
We have also seen these positive market signals reflected in our client engagement with more sites being identified for housing as landowners look for new opportunities to maximise value. We have also increasing consumer demand for self- build and custom housebuilding, reflected in statutory Right to Build Registers held by English councils and our Group’s demand register which has over 100,000 people looking for plots.
Drivers for moving home
At Custom Build Homes we are very clear that the pandemic has and will continue to change the property market, with homeowners wanting more from their properties. Home buyers now want more flexible indoor space and rooms for privacy, home offices, bigger gardens with space for pets, family- friendly local areas and more. Many are therefore attracted to what customisable homes have to offer. Not only for homes on individual building plots but also on larger housing sites.
Another driver has been and continues to be, the positive support which our sector is receiving on the public policy front from the Governments in England and Scotland.
Shaping policy
At Custom Build Homes we are working closely with our sector trade body (the National Custom and Self Build Association), the Government sponsored Right to Build Task Force and through our links to Government to shape the policy landscape for the benefit of the wider market.
August
In August, the Government published its White Paper on Planning for the Future which set out a fundamental reform package for the planning system in England. It received over forty thousand responses, including ours. We continue to engage with the Government to help shape these reforms from our sector perspective and remain in no doubt, when implemented, it will generate significantly more new opportunities for custom and self- build housing across England.
October
In October, the Housing and Communities Secretary wrote to all local authorities in England to remind them of their duties under the Self-build and Custom Housebuilding Act 2015 and launched a review of the legislation. The underlying aim of the review is to tighten the law and stamp out gaming by councils, to ensure they provide enough land and take proper consideration of custom and self-build housing when making local planning decisions.
We know from our own experience and those of our clients that many councils fail to grasp the implications of the legislation and seek to game the system by introducing barriers for people to register. Consequently, what we see is a suppressed version of the demand in these areas!
He also announced that the now outdated Planning Practice Guidance to support his national planning policy framework would be revised by the end of the year. Regrettably this has not yet happened despite the urgent need for policy clarification in several areas.
November
In November, the Chancellor announced in his Spending Review that as part of £2.2bn of new loan finance being provided to support house builders the Government will be introducing a new Help to Build scheme for custom and self-builders, and will provide more funding for SME housebuilders and Modern Methods of Construction. He also announced that Government would provide £100m of funding tosupport,amongstotherthings, the release of public sector land including for serviced plots for self and custom builders
December
In December, Homes England, the Government’s housing delivery agency announced it was simplifying how it engages with developers and housebuilders to bring its land to market. A new Dynamic Purchasing System (DPS) – to be introduced in Jul 2021, will replace the closed shop of what has been the Delivery Partner Panel (DPP3). Our engagement with Homes England has given us confidence that custom build
housing enablers and developers will have a key role to play in the DPS, to partner with developers and housebuilders to bring larger sites forward.
We also saw several planning appeals coming through which have established a number of principles for planning decisions involving custom and self-build housing.
These include;
- the need for councils, as the incumbent of the duty, to evidence they have met demand; that a shortfall of supply in previous years weighs heavily in favour of a scheme; that it is insufficient to rely on CIL exemptions to demonstrate supply;
- that custom and self-build is an important material consideration whose social and economic benefits should attract substantial weight in a decision;
- and, that the policy presumption in favour of a project can be triggered where plans are out of date and can’t demonstrate supply.
August
In August, the Government published its White Paper on Planning for the Future which set out a fundamental reform package for the planning system in England. It received over forty thousand responses, including ours. We continue to engage with the Government to help shape these reforms from our sector perspective and remain in no doubt, when implemented, it will generate significantly more new opportunities for custom and self- build housing across England.
October
In October, the Housing and Communities Secretary wrote to all local authorities in England to remind them of their duties under the Self-build and Custom Housebuilding Act 2015 and launched a review of the legislation. The underlying aim of the review is to tighten the law and stamp out gaming by councils, to ensure they provide enough land and take proper consideration of custom and self-build housing when making local planning decisions.
We know from our own experience and those of our clients that many councils fail to grasp the implications of the legislation and seek to game the system by introducing barriers for people to register. Consequently, what we see is a suppressed version of the demand in these areas!
He also announced that the now outdated Planning Practice Guidance to support his national planning policy framework would be revised by the end of the year. Regrettably this has not yet happened despite the urgent need for policy clarification in several areas.
November
In November, the Chancellor announced in his Spending Review that as part of £2.2bn of new loan finance being provided to support house builders the Government will be introducing a new Help to Build scheme for custom and self-builders, and will provide more funding for SME housebuilders and Modern Methods of Construction. He also announced that Government would provide £100m of funding tosupport,amongstotherthings, the release of public sector land including for serviced plots for self and custom builders
December
In December, Homes England, the Government’s housing delivery agency announced it was simplifying how it engages with developers and housebuilders to bring its land to market. A new Dynamic Purchasing System (DPS) – to be introduced in Jul 2021, will replace the closed shop of what has been the Delivery Partner Panel (DPP3). Our engagement with Homes England has given us confidence that custom build
housing enablers and developers will have a key role to play in the DPS, to partner with developers and housebuilders to bring larger sites forward.
We also saw several planning appeals coming through which have established a number of principles for planning decisions involving custom and self-build housing.
These include;
- the need for councils, as the incumbent of the duty, to evidence they have met demand; that a shortfall of supply in previous years weighs heavily in favour of a scheme; that it is insufficient to rely on CIL exemptions to demonstrate supply;
- that custom and self-build is an important material consideration whose social and economic benefits should attract substantial weight in a decision;
- and, that the policy presumption in favour of a project can be triggered where plans are out of date and can’t demonstrate supply.
Inspectors are also testing whether a scheme will be built out for custom and self-build and looking to planning agreements to achieve this. Critically statutory registers have also been held to underestimate demand and that our Group’s demand data provides an important secondary data to consider.
Our Podcast with Christopher Young QC and Andy Moger MRTPI from Tetlow King Planning unpacked some of these issues with great insight. Watch it now >
In Scotland too we saw the publication of the Revised Scottish Planning Policy in December which includes positive planning policies supporting the provision of plots for self-build through local development plans.
The outlook for 2021 looks increasingly positive
So, as we move into 2021, where is the custom build sector heading and what can we expect on the policy front?
Although some analysts predict a slowing of the housing market as result of the pandemic, the extent of this will no doubt be affected by the Chancellor’s Budget in March and his decision on whether to lift the stamp duty relief or extend it further.
At Custom Build Homes we are optimistic that we will be seeing more custom and self-build projects coming forward. We know from our data that local plans are increasingly identifying new allocations for custom and self-build housing on small and large sites, as well as many of the new garden settlements planned. Landowners will increasingly look to custom build as a valuable housing model, to help win consents in the face of the
public policy reforms and strong consumer demand.
Spring
In the Spring we can expect a game changing mortgage support product in the form of an equity loan being introduced by the Government for formal launch in the Autumn. If designed right, it will boost consumer demand further and build market confidence. We can also expect the launch of a Brownfield Fund to incentivis
councils to bring sites forward for custom build homes on public land.
Autumn
In the Autumn we can expect a wide ranging new Planning Bill to set the framework for the planning reforms. A downside of this is likely to be that local plan production will slow further as councils decide to wait for the implementation of the reforms. This will however create opportunities for new projects
where councils have out of date plans and under perform on housing supply.
We can also expect more work to be done to build our industry capacity to take up the opportunities which are being created. An agenda we are closely engaging with.
Enabling developments
At Custom Build Homes we enable our clients to benefit from our unrivalled knowledge of planning practice for self- and custom housebuilding in the UK.
If you have land or want to bring a custom build housing scheme forward, please contact us at [email protected] as we may be able to support you.
