“Big news for landlords and builders,” brokers react to Chancellor’s planning reforms

As part of the Autumn Statement, Chancellor Jeremy Hunt announced planning reforms aimed at expediting the process and relaxing rules around transforming houses into two-bed flats.

Hunt said: “From next year, working with the Communities Secretary, I will reform the system to allow local authorities to recover the full costs of major business planning applications, in return for being required to meet guaranteed faster timelines.

“If they fail, fees will be refunded automatically, with the application being processed free of charge. A prompt service or your money back, just as would be the case in the private sector. 

“Conservatives are the builders, with more homes being completed in 2021/22 than any single year of the last Labour Government.

“Today, we take further decisions to unlock the building of more homes. We’ll invest £110m over this year and next to deliver high quality nutrient mitigation schemes, unlcokcing 40,000 homes, and we’ll invest £32m to bust the planning backlog and develop fantastic new housing quarters in Cambridge, London and Leeds, which will lead to many thousands of additional dwellings.

“We’ll allocate £450m to the Local Authority Housing Fund, to deliver 2,400 new homes, and consult on a new permitted development right [PDR] to deliver any house to be converted into two flats, provided the exterior remains unaffected.”

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In light of this significant measure, brokers and property experts have been sharing their reactions with Newspage:

Ranald Mitchell, director at Charwin Private Clients:

“This is big news for landlords and builders of all sizes, who will now be able to convert existing houses into two separate flats under permitted development.

“This will allow for a more profitable utilisation of space and create the additional supply the market needs.

“A faster, more robust planning system will also benefit housebuilders with full refunds for failed applications. As far as planning goes, this appears to be a good plan.

“Of course, whether it will be implemented successfully is another thing altogether.”

Stephen Perkins, managing director at Yellow Brick Mortgages:

“Transforming houses into two separate flats might help the Government achieve some paper targets on the number of homes generated, but will likely just see four cars parked on the road outside every house.

“The guarantee of a planning decision within a deadline or your fees refunded sounds like a good soundbite but there is no plan on how to achieve the timelines with the massive backlogs already in place.

“This will just mean all of them don’t meet the deadlines and reduces Local Authority income with no benefit to the planning or building processes.”

Stacey Rohwer, head of investment at IP Global:

“Urgent action was needed around planning and this Autumn Statement was unequivocally a step in the right direction.

“This financial safety net, coupled with the promise of more predictable timelines and reduced bureaucracy, will encourage development projects, foster positive relationships with Local Authorities and may contribute to increased housing supply.”

Kundan Bhaduri, property developer and portfolio landlord at The Kushman Group:

“The planning reforms announced today are an absolutely outstanding decision and incentivise small businesses and landlords to develop and convert more dwellings to meet the requirements of 21st Century housing needs.

“On the other hand, the Shadow Chancellor Rachel Reeves seems more interested in abolishing the non-domiciled status and charging VAT on private school fees.

“Surely many will see her as Labour’s Nadine Dorries, the culture warrior of the left? Does Labour have nothing else to offer?”

Alastair Hoyne, chief executive officer at Finanze:

“Being able to covert suitable properties will be good news for investors. It may contribute to the availability of much-needed housing although it will be a small drop in the ocean in comparison to the national requirements.

“An overhaul of planning is definitely long overdue.

“Delays and unnecessary bureaucracy are stifling growth and costing millions in abortive applications at a time when that money is best invested in providing homes.”

Gary Bush, financial adviser at MortgageShop.com:

“The planning tweaks will help those managing properties have additional irons in their fire, as long as any conversions follow the UK’s Building Regulations.”

Justin Moy, managing director at EHF Mortgages:

“Any initiative to improve the stock of property available for purchase has to be good news, if it can be implemented without tonnes of bureaucracy and years of delays.

“Splitting properties into two separate flats has been popular with developers for many years, so to crystallise this as a way forward is an interesting move.

“Relaxing planning rules and the extension of permitted rights sounds like a place we have been before. It’s now time to deliver and deliver quickly.”

Charles Breen, founder and director at Montgomery Financial:

“This is all just for show. By the time any real and substantive changes would be implemented, this administration will be long gone.

“If they really wanted to make groundbreaking reforms to planning then it needs to be criteria-based like the majority of other countries.

“As long as a development meets the planning criteria, it will be approved unlike the current system where any NIMBY can decline an application and clog up the entire process.

“Removing that road block alone would be a truly radical reform, not guaranteeing some application fee refunds.”

Joe Garner, founder and managing director at Joe Garner Consulting:

“This is a positive step forward, as a house split creates two dwellings out of one in the quickest possible timeframe, which will stimulate the grass roots of the construction industry whilst also helping to alleviate the acute financial pressure felt by Local Authorities that are legally obliged to house the homeless but cannot afford to do so.

“The next step is to allow the split of one house into two flats by permitted development with the caveat that a minimum energy improvement of two grades must be achieved whilst doing so.”

Michelle Lawson, director at Lawson Financial:

“If this is the best they can come up with in a housing crisis God help us all. They had an opportunity to make a real difference and not just a token gesture. Another missed opportunity.”