The government and the law
Where it all started
In all of this, we refer to “self-build”. The law however, refers also to “custom-build”. That means the law covers every occasion when an individual or group of people buy a plot of land to build their own home, either with their own hands, or by instructing a third party contractor - or any arrangement in-between.
Whether you are a self-builder or a land owner, you might be interested in this background. We will take you through the history of self-build over the last few years. We find it very exciting. The subject is not so much complicated, as vast.
You do not need to know all of this, we've simply summarised it for you, to give you an idea of the background behind what we do. By reading it, you will have a better understanding of how it is that qualifications in law are really more valuable in the planning arena than those in other disciplines.
Self-build first came to prominence through mention in Paragraphs 50 and 159 of the National Planning Policy Framework (March 2012) and related planning practice guidance. That was followed by a Ministerial statement by Brandon Lewis on 1 December 2014 at the House of Commons. That statement is at Small-scale developers
The basic law on self-build is contained in the Self-Build and Custom Housebuilding Act 2015 (“SB Act”). That act was concerned largely with placing a duty on all local planning authorities (“LPAs”) in England to keep a register of individuals and community groups who have expressed an interest in acquiring land. From then on, an LPA must:
- provide a register of people interested in self-build;
- promote the register;
- make available sufficient plots with planning permission to meet local demand.
- have regard to the demand on their local register when exercising their planning and other relevant functions;
Failure to do this may lead to local plans being “found unsound”, as highlighted in the letter from the Minister for Housing and Planning to all English Local Authorities on 5 March 2015.
If a local plan is found unsound by the inspectors, the door is open for anyone to apply for planning permission anywhere in the Borough or District with a greatly increased chance of success - at appeal if not at first instance.
Further encouragement for the vanguard LPAs
In 2014, the Minister designated eleven local planning authorities (“LPAs”) to be in the vanguard of self-build in England. The initial request for applicant LPAs sets out very clearly the government’s enthusiasm and expectation of the LPAs selected. See Right to Build vanguard councils chosen (this is a pdf which will download auto, if you allow it) , where you will read:
“Housing Minister Brandon Lewis has announced the 11 areas that will receive a share of £550,000 to pioneer the Right to Build scheme.
“We’re determined to help anyone who aspires to own their own home – whether that’s buying on the open market through schemes like our Help to Buy, or to build. That’s why from today, 11 areas across the country will be the first to offer a new Right to Build,” says Brandon Lewis.
The chosen vanguard councils will establish and maintain a register of people that are interested in constructing their own home through custom or self building. They will also be responsible for identifying sites that are appropriate for these small developments.”
The LPAs subsequently accepted onto the programme are:
- South Cambridgeshire (£50,000) to bring forward at least 100 plots of land for custom builders with sales from January 2015
- Shropshire (£10,200) to bring forward 6 ha of land for self builders in association with Stoke Council and local social landlords
- Oldham (£15,000) to bring forward formerly-developed council-owned land for sale in autumn 2014
- West Lindsey (£5,000) to make self build plots available on previously-developed public sector land
- Exmoor and Dartmoor National Park Authorities (£28,000) to explore how local self-builders can be helped while protecting important countryside
- Pendle (£46,000) to deliver self-build plots and exploring how to deliver further affordable homes
- Sheffield (£100,000) to deliver over 800 self build sites and support groups planning their own custom builds
- South Norfolk (£25,000) to work with Saffron Housing Association to deliver 40-60 custom build plots
- Stoke-on-Trent to bring forward 72 ha of land for local self builders in the area
We have not investigated progress by all of these. But we do know that South Cambridgeshire now (Jan 2017) have a self-build “department” supported by senior people in the planning team, together looking to find a very large number of self-build plots.
The Housing and Planning Act 2016 (“H&P Act”)
The next major change was made by the H&P Act. It inserted into the SB Act, new text as follows:
"2A Duty to grant planning permission etc
(2) An authority to which this section applies must give suitable development permission in respect of enough serviced plots of land to meet the demand for self-build and custom housebuilding in the authority's area arising in each base period.
(3) Regulations must specify the time allowed for compliance with the duty under subsection (2) in relation to any base period.
(4) The first base period, in relation to an authority, is the period-
(a) beginning with the day on which the register under section 1 kept by the authority is established, and
(b) ending with the day before the day on which section 10 of the Housing and Planning Act 2016 comes into force.
Each subsequent base period is the period of 12 months beginning immediately after the end of the previous base period.
(5) In this section "development permission" means planning permission or permission in principle (within the meaning of the 1990 Act).
(6) For the purposes of this section-
(a) the demand for self-build and custom housebuilding arising in an authority's area in a base period is the demand as evidenced by the number of entries added during that period to the register under section 1 kept by the authority;
Furthermore, S2A (6) (c) states:
“development permission is "suitable" if it is permission in respect of development that could include self-build and custom housebuilding.”
We can summarise that as: an LPA must maintain and publicise a register of people interested in self-build and also provide enough plots for the number on the register in every year. No carry-forward permitted.
So there is an unequivocal legal requirement for plots to be found. Of course, if it happens that an LPA does not have anyone on their register (no-one has found the web page?) or very few people (the LPA has not publicised it), then there is no consequent obligation to provide plots.
The position is improved slightly by the last two lines above, which I think have been inserted to prevent an LPA from claiming that they have no suitable land.
The Self-build and Custom Housebuilding Regulations 2016 (“the 2016 Regs”)
The 2016 Regs have swept away some of the earlier provisions and provided more thorough coverage of elements relating to registers and qualifications. Among other points, an LPA may now provide eligibility conditions which favour local people.
However, in this article, I am not concerned with qualifications relating to the register because they do not affect private plots sold without reference to the register.
Most importantly, the Regulations make clear, for the first time, that the intention of the SB and CH Act was not simply to expect an LPA to produce self-build plots from their conjuror’s hat, but to rely on private provision, as for other housing provision. This is clear from the note to the 2016 Rgs, which states:
“The Self-build and Custom Housebuilding Act 2015 (c 17) ("the Act") requires relevant authorities to keep a register of individuals and associations of individuals who are seeking to acquire serviced plots of land in the authority's area and, unless exempt, to grant sufficient development permissions to meet the demand for self-build and custom housebuilding.”
Financial contributions and infrastructure costs
Qualification of plot
Only qualifying plots satisfy the definition of “serviced plot of land” and consequently enable the self-builder to take advantage of the exemptions and concessions. That term is now defined in the Housing and Planning Act 2016, as:
“a plot of land that-
(a) has access to a public highway and has connections for electricity, water and waste water, or
(b) can be provided with those things in specified circumstances or within a specified period;"
(c) at the end of that section (the existing text of which becomes subsection (1)) insert-
"(2) Regulations may amend the definition of "serviced plot of land" by adding further services to those mentioned in paragraph (a)."
A useful point to note here is that a plot does not have to be fully serviced at any relevant time. It is enough that it "can be provided with those things in specified circumstances.” I take it that ownership and provision by a third party developer-enabler is a circumstance which may be specified.
This is not specifically about self-build, but it is most important in the context of small sites.
On 1 December 2014, Housing Minister Brandon Lewis made a written ministerial statement at the House of Commons, as follows:
“Due to the disproportionate burden of developer contributions on small-scale developers, for sites of 10-units or less, and which have a maximum combined gross floor space of 1,000 square metres, affordable housing and tariff style contributions should not be sought.”
This policy is most relevant to contributions to affordable or social housing rather than infrastructure. However, after lengthy court proceedings, it is now established national planning policy that qualifying schemes will not incur the charges mentioned.
The application of this to self-build remains uncertain for this reason. A self-build plot is unquestionably exempt from any requirement to contribute to social housing. Almost all LPAs have made it exempt for many years. An issue here is that a social housing contribution may be imposed in a S106 agreement as part of a grant of outline permission - that is, before an LPA can be certain that the site will ultimately be developed for self-build and not for some other type of ownership.
The second problem is that there is no guarantee that a self-build scheme of ten units will produce a built area of less than 10,000 sm. Indeed, that outcome would be most unlikely.
The third problem is that the written ministerial statement is persuasive but not law. That leaves a discretion to an LPA to find reasons why a site is exceptional in some way. I will now explain the position of self-build in relation to community infrastructure levy before I return to discussion of a S106 agreement.
Community Infrastructure Levy
The law relating to self-build and CIL is clear. Self build is exempt from CIL. See Planning Practice Guidance: Paragraph 135 > Reference ID: 25-135-20140612
“How does the self build exemption work (for a whole new home)?
The Government is keen to support and encourage individuals and communities who want to build their own homes, and is taking proactive steps to stimulate the growth of the self build market. One measure to help self builders has been to grant them an exemption from the Community Infrastructure Levy.
The exemption will apply to anybody who is building their own home or has commissioned a home from a contractor, house builder or sub-contractor. Individuals claiming the exemption must own the property and occupy it as their principal residence for a minimum of three years after the work is completed.”
That means no obligations for contributions to social housing, the wider transport infrastructure, the local primary school, the foul sewer, or other distant endeavours.
You might think this could be applied simply to proposals in an LPA whose local plan has not yet been approved by the Minister and who therefore cannot yet charge CIL. There is a legal problem. CIL takes effect and becomes chargeable only in relation to specified development and only when detailed planning permission has been granted for that development. The reason is clear - the correct charge cannot be calculated until everyone knows what will be built.
That does not apply to a contribution imposed under a S106 agreement as a condition of granting outline permission. So we have the ridiculous situation where a CIL-compliant authority is bound by law to exempt self-build, but a recalcitrant LPA still dealing through a S106 agreement may ignore the written ministerial statement and declare that any proposal for self build for more than a single plot is subject to a contribution for 40% social housing or a financial contribution in lieu.
The solution of course is very simple. The LPA does not ask for a social housing contribution at the stage of outline consent. If, horror of horrors, the land owner or developer then applied for detailed consent, it would still be open to the LPA to seek a contribution at that time.
If an LPA appeared to be failing in its legal obligation to provide sufficient plots, and ignoring the intention of the Government to enable self-build, an appeal would succeed. The LPA would then also pay the appellant’s costs. See also below: “More New Law”.
Section 106 obligations
A Section 106 agreement is used to enforce planning obligations. The Guide states:
Paragraph: 001 Reference ID: 23b-001-20161116
When can planning obligations be sought by the local planning authority?
Planning obligations assist in mitigating the impact of unacceptable development to make it acceptable in planning terms. Planning obligations may only constitute a reason for granting planning permission if they meet the tests that they are necessary to make the development acceptable in planning terms, directly related to the development, and fairly and reasonably related in scale and kind. These tests are set out as statutory tests in the Community Infrastructure Levy Regulations 2010 and as policy tests in the National Planning Policy Framework.
Revision date: 16 11 2016"
Here, the Minister has attempted to differentiate between obligations which relate directly to a site and obligations which are effectively contributions to general infrastructure provision. However, what is clear is that if an LPA wishes to use a S106 agreement to enforce payments, then the subject matter must relate to obligations not covered by CIL but which relate clearly to the effect of the proposed scheme.
More new law
At the time of writing, the Neighbourhood Planning Bill is about to receive the Royal Assent. Section 12 of the Act, titled “Restrictions on power to impose planning conditions” gives the Minister very wide powers to control the use of planning conditions by LPAs. It effectively gives the teeth of the Law to the guidance I have quoted above. I have no doubt that the Minister will immediately identify LPAs whose use of planning conditions he believes is excessive and will reduce specific powers of those specific authorities. Even if that does not happen fast, the fact that it is law will compel an inspector on appeal to make her own decision as to the reasonableness of a condition.
This does not sound very much. But have a look at the documents we have produced for an application in Longstanton.This site was exceptional in the requirement, but nonetheless I am sure you will agree that it is impressively demanding. It was also extremely expensive. We were also asked for a contamination report and a full traffic assessment. We negotiated a sensibly reduced traffic assessment and have refused to offer a contamination report on a paddock which the Councils own records show to have been used as the orchard of a local manor house and then as grazing land.
We shall now be better able to argue against a requirement for reports like these because an inspector at appeal is now more likely to agree that they fail the test of reasonableness.
Volume builders cannot help
To provide self-build plots as the Housing Minister requires, every local planning authority must depend on small schemes. That is because volume house-builders cannot easily help. They make their profit from two sources: obtaining planning consent on land; and constructing houses for sale. The writer has been a director of a substantial house-builder and is well aware:
- of the pressure to produce an ever-increasing profit;
- of the cost of obtaining planning permission;
- that large sites produce a higher proportionate profit than small sites;
- that self-build simply abandons the potential profit from constructing houses.
In summary, it is not profitable to sell individual plots when there is a good profit to be realised by constructing a house. That is what they do.
A further effect of those pressures, is that volume builders do not have the time or resources to consider the small sites where new houses would be most acceptable to existing residents. They seek sites where permission can be obtained with least cost and with standardised procedures. That leaves only small sites for self-build.
Despite that, we do see opportunities to work with volume builders in dealing with a proportion of a large site. This may assist our big partner to obtain permission for the development they seek.
If you have land and think we may be able to help, contact us now.