Planning - positive or negative?

Planning can sometimes seem to be a subjective topic, but changes to your local environment could positively or negatively impact your quality of life and value of your property.

The planning system in this country is in a constant state of flux and the current government introduced the Localism Act in November 2011 with the aim of devolving more decision making powers from Central Government back into the hands of individuals, communities and councils.  The Act covers a wide range of issues, but has had the effect of introducing a number of new concepts and procedures into the planning system which prospective purchasers and developers of land need to be aware of.  Equally, lenders and financial institutions will want to see a good and marketable title to property in case they need to enforce their security.  Where there is any planning risk and potential liabilities, the current market conditions mean that lenders tend towards cautiousness. 

Simultaneously there are regional issues in some parts of the country relating to energy and infrastructure.  For example, the proposed High Speed 2 (HS2) rail project would travel through the countryside affecting a number of properties and raising queries about compulsory purchase and potential impacts on value.  Similarly, there have been contentious renewable energy projects, such as solar farms, wind turbines and the possibility of “fracking” development which all prove controversial to local communities. 

Every transaction is different and the requirement of purchasers and their solicitors will also vary according to the circumstances and local planning policies.  The Government has used these initiatives to streamline planning policy in an attempt to stimulate growth.  There have also been changes to legislation, not only via the Localism Act but also the Growth and Infrastructure Act 2013 and various changes to regulations to allow more flexibility within the planning system.  For example, developers can now seek the re-negotiation or discharge of affordable housing planning obligations in Section 106 Agreements in order to make development viable.  Under the previous legislation, five years needed to pass before a formal request to vary planning obligations could be made.

There are also regulations which affect permitted development rights which now circumvent the need to seek specific planning consent for certain changes, although sometimes the fine print will still need to be scrutinised to examine effects on issues including highways, flooding and contaminated land. 

The keystone of the Government’s current planning policy guidance is the National Planning Policy Framework (NPPF) which was published in March 2012 and supplemented recently by an online resource known as the Planning Practice Guidance (PPG). 

The law and guidance is now underwritten by an “inherent presumption in favour of sustainable development” but taken together all of the above changes mean that there may be radical differences to communities brought about by the planning system which can impact on residents very swiftly, affecting quality of life and the value of property.  It is therefore imperative to make the appropriate searches to understand the impact of planning applications on a local area, in conjunction with the local planning policies and the changes to national law and guidance. Taking one specific example, the number of new homes that have been granted planning permission increased by 25% in England in the 12 months following the publication of the NPPF.

Potential purchasers therefore need to consider not only what development has been granted approval, but what applications may also be pending and the prospect of future development as allocated in local planning policy documents. Many local plans are still in the draft stage and the Government has been clear that the NPPF and the presumption in favour of sustainable development takes precedence until councils have finalised these plans. 

Making clients aware of local planning activity must be a fundamental and essential part of every due diligence process, whether this is conducted on behalf of a potential developer, prospective purchaser or a lending institution.  The subtleties of the planning system are such that, notwithstanding the fact that there is an increasing amount of information available freely on the internet and online, expert knowledge is needed to assess and to identify the relevant issues.  Local information about amenities and demographic trends may also be essential to ensure that property purchasers are buying in full knowledge of the property, likely development in the area and any existing planning constraints.

Although the above is intended as an overview of the issues which surround the planning system in this country it is clear that specific and detailed advice may be required where there is any doubt about the issues which may arise or the means of identifying potential issues.  

Author: David Brammer, Partner and Head of Planning at SGH Martineau LLP