“Positively Tigger-like” – The Spring Statement
The Chancellor of the Exchequer delivered an ebullient first Spring Statement this afternoon. At one point he referred to being “positively Tigger-like” in an attempt to silence nay-sayers on the opposite side of the house.
As promised, this was very much an update as to the health of the UK’s economy and an opportunity to warm up for the “single fiscal event” that will be the Autumn Statement. There would be no surprises or new funding announcements today.
At a headline level the outlook for growth remains positive with the Office of Budget Responsibility uprating its’ GDP forecasts for the current year and confirming that it anticipates 500,000 more people to be in employment by 2022. Inflation is forecast to fall and wages rise faster than price growth.
So far, so good but what about the implications for planning and development?
For the property sector there was a conspicuous absence of reference to planning reform, despite the Government currently consulting on major changes to the NPPF and the PPG which are ostensibly designed to speed up the pace of delivery.
For more on planning reform see our series of NPPF comments.
In lieu of Sir Oliver Letwin MP’s much anticipated “Independent Review of Build Out” rates the Chancellor referred to a letter updating on progress.
The letter is available to review here.
Letwin confirmed that his review has to date focused exclusively on major house-builders and large sites. It is encouraging that he acknowledges the distinct stages of building including a regulatory stage (securing all the necessary approvals) and the build out stage (once a house builder has an implementable consent).
Gathering evidence from a range of witnesses, the Review has identified a list of limitations on build out rates including labour supply and skills, materials availability and provision of local transport infrastructure among other factors. However it is clear that Letwin is not persuaded that these factors are the “primary determinants” of the speed at which sites are built out. He is clearly more concerned with the “absorption rate” - referring to the rate at which homes can be sold into a local market without creating turbulence in pricing.
Letwin’s letter gives a tantalising taster of what his full review might explore including:
- Potential for absorption and build out rates to be enhanced if large sites were packaged in different ways (e.g. a range of house builders offering markedly different products, tenures or price points).
- Potential for absorption and build out rates to be enhanced if there were less reliance on large sites and a greater choice of sites.
- The implications of changing the absorption rate on the current business model of major house builders.
The interim results of the Independent Review are promised in June and Letwin has signalled that his team will also be looking in to the effects of faster build out rates on house builder 'land banks'.
The Review clearly has the potential to influence Government thinking and policy and Turley will continue to monitor progress of the review and make representations.
For a discussion on how Turley can represent your interests please contact your local office.