Peer-to-peer property lending platforms have called for radical planning reform for housebuilding after the topic was left out of the Queen’s Speech.
Stuart Law, chief executive of Assetz Capital, said that the planning system acts as a barrier to development, especially for small- and medium-sized enterprise (SME) housebuilders who struggle with the cost and time needed to successfully navigate the process.
The Queen’s Speech mentions a planning bill and said some proposals for aspects of planning reform were published in the government’s Levelling Up white paper in February, but did not say what the next steps were.
Law said that he was disappointed a key approach was not mentioned in the speech and said urgent radical planning reform is needed given huge demand for new build homes and rising costs.
Assetz has found that increasing demand for new build homes has led to a 14 per cent difference in price growth for new and older homes in the fourth quarter last year.
“The lack of a clear and comprehensive approach to planning reform was a notable omission from today’s Queen’s Speech,” Law said.
“Given the huge deficit between supply and our national housing need, I had hoped planning reform would feature more prominently in the legislative agenda going forward.”
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Lee Birkett, chief executive of JustUs, agreed that urgent planning reform is required.
“At the moment the planning system is broken, it’s done by local councils with their own interests at heart and it needs complete reform from a national basis,” he said.
“It should be removed from councils and there should be a clear set of rules and guidelines and if a proposal meets the criteria it’s passed. At the moment it’s more opinions of people.”
February’s Levelling Up white paper said the government aims to transform the planning system in the UK by spreading opportunity across all parts of the country.
The paper said the government is developing models for a new infrastructure levy and will provide further support for re-using brownfield land for development.
It also said councils and communities will create new local design codes to shape streets as residents wish and widen the accessibility of neighbourhood planning.
Law said he wants to see more details because so far it does not look like reforms are going to be nearly radical enough.
“While it is vital that new developments are sensitive to, and enhance, local communities, local design codes will also add yet another hurdle for housebuilders to jump, adding to construction costs that are already sky high because of inflation, the energy crisis, and long-term impacts of Brexit and Covid19,” he said.
“We will of course need to see exactly what future legislation looks like. But from what we have heard today, it doesn’t look like reforms are going to be nearly radical enough, or being progressed with enough urgency, to help tackle the major challenges housebuilders face, or deliver significant numbers of new homes to meet demand and moderate price growth.”