London

The Mayor of London has published his draft London Plan, which is open for consultation until 2 March 2018. In a briefing on the plan last Friday, Deputy Mayor for Planning Regeneration and Skills, Jules Pipe said that the plan already carries “material weight”. From our discussions with GLA officers, it seems that the GLA will be using it in planning decisions from now on.

Below, we have picked our top ten themes.

  1. Good growth
  2. Opportunity areas
  3. Housing supply
  4. Affordable housing – the threshold approach
  5. Build to Rent (BTR)
  6. Industrial land and affordable workspace
  7. Culture and creative industries
  8. Strengthening the GreenBelt
  9. Transport
  10. Student accommodation and shared living

Good growth
Having adopted the concept of ‘Good Growth’ in “A City for All Londoners”, the draft plan sets out a clear statement of the Mayor’s intent to see more high density mixed use places. The draft plan introduces a new concept of “making the best use of land”, which has been described by officers as an overarching objective that feeds many of the of policy areas. This holistic approach is a variation to previous requirements to “maximise” or “optimise” the use of land, and is likely to cause plenty of debate about what constitutes the best use of land.

In seeking to deliver ‘Good Growth’, the plan adopts a design-led approach to the policies that will determine the scale, density and form of development. While the pro-growth theme runs through the policies, they contain many detailed considerations that also need to be taken into account. For example, there is a four page policy on tall buildings, compared to a single page in the previous plan. While the plan aims to be focused on delivery, it introduces a number of new tests to address before development can proceed.

Opportunity areas
The Mayor continues to emphasise the importance of Opportunity Areas (OAs) in meeting London’s growth needs. These areas will see the most significant change within London. The emphasis of Policy SD1 is to provide support and leadership for the implementation of frameworks for accommodating growth and delivering adequate infrastructure. The policy requires that Boroughs should clearly set out how they will encourage and deliver the growth potential of OAs; create employment opportunities and housing choice; and recognise that larger areas can define their own character and density.

Opportunity Areas have been clustered into growth corridors to show spatial development patterns across London, covered by a series of new key diagrams. New OAs are identified within areas that are planned for major transport infrastructure, such as the Bakerloo Line Extension, Crossrail 2 and HS2. The plan recognises the role of infrastructure projects as major catalysts for growth. Many OAs overlap with Strategic Areas for Regeneration (areas in greatest socio-economic need), which have the potential to promote inclusive growth to tackle social inequality and increase opportunities for Londoners.

Housing supply
Housing supply targets have increased significantly for outer London Boroughs, which are being pushed to provide additional higher density developments. A small sites policy encourages infill development within the curtilages of a house and redevelopment of underutilised smaller sites.

Policy H1 “Increasing housing supply” emphasises housing delivery on brownfield sites and encourages Boroughs to create brownfield registers and use permission in principle. It states that development should be optimised in areas with or planned PTAL rating 3-6, or located within 800m or a tube, train or railway stations or the town centre boundary, with a particular emphasis on development being high density near future transport infrastructure. The policy further encourages redevelopment of low density sites such as leisure centres and retail centres to retain the uses at lower levels and provide residential units above.

The new specific small sites Policy H2 focuses on sites which could provide up to 25 residential units. It also encourages Boroughs to identify these sites on their brownfield registers and grant permission in principle. The policy introduces on presumption in favour for development on small sites, through residential conversions; residential extensions, demolition and redevelopment of existing buildings; and infill development within the curtilage of a house.

Affordable housing – the threshold approach
As anticipated Policy H6 of the draft plan largely mirrors the guidance relating to the “threshold approach” set out in the Affordable Housing and Viability SPG; an approach which has been used as policy by the Mayor in the determination of a number of significant applications in the last six months.

Policy H6 confirms that developments providing 35% affordable housing can benefit from the Fast Track route in the SPG. For development on public sector land and strategic industrial locations, applicants must provide 50% of affordable housing to qualify for the Fast Track route. The supporting text states that this requirement reflects the difference in value between industrial and residential development. It seeks to provide further protection of industrial land and maximise the delivery of affordable housing where industrial land is released for residential use.

Build to Rent
Build to Rent (BTR) is recognised with its own Policy H13. The draft plan takes a positive approach to the sector to enable it to better contribute to the acceleration of delivery of new homes in London. This will be subject to meeting some strict rental criteria such as covenanting to 15 years as BTR, being at least 50 units and controls over rent level security. The affordable housing offer in this emerging sector can be solely Discounted Market Rent with a preference for London Living Rent Level. Affordable BTR units still need to be secured in perpetuity.

For BTR schemes to follow the Fast Track Route set out in the Affordable Housing and Viability SPG, schemes must deliver at least 35% affordable housing, of which at least 30% should be at the London Living Rent level, with the remainder being at a range of discounts below market rent to be agreed with Boroughs and/or the Mayor as appropriate. This approach will be reviewed in 2021 in an updated SPG.

Industrial land and affordable workspace
The draft plan provides a greater level of protection for Strategic Industrial Locations (SIL) and Locally Significant Industrial Locations (LSIL) with Policy E4 seeking no net loss of industrial capacity across London. Policy E7, however, embraces the intensification and co-location of industrial land which could result in some SIL/LSIL land being lost to residential or other uses, but the amount of industrial floorspace must be retained through the more intensive use of sites, e.g. multi-storey warehouses.

The plan provides policy support for the provision and protection of affordable workspace and low cost business places. Policy E2 states that low cost business space will be supported in order to meet the needs of small and medium sized business, while larger office developments (providing above 2,500 square metres of B1 floorspace) should consider the “scope” to provide a proportion of flexible workspace.

Policy E3 relates to affordable workplace and states that in “defined circumstances, planning obligations may be used to secure affordable workspace at rents held below the market rate for specific social, cultural or economic development purposes”. Additionally the policy states that in mixed use schemes affordable workplaces should be operational before any residential elements are occupied.

Both Policies E2 and E3 have been designed to support the economic growth of small to medium enterprises and of sectors such as the creative industries. The policies, however, will raise concerns for some developers in terms of the impact on viability and on scheme design, if on-site provision is required.

Culture and creative industries
The Mayor maintains his strong and vocal support for cultural and creative industries (Policy HC5), in recognition that they contribute 11.1 per cent to London’s total GVA.

Of particular note is the encouragement for Boroughs to identify Creative Enterprise Zones (CEZs) in areas that have emerging or existing clusters of creative industries. This can also be in areas of identified demand and more deprived areas where there is evidence that the designation of a CEZ will enhance the local economy and provide facilities and workspace for the creative industries. CEZs will be expected to deliver attractive, affordable and flexible space for these industries and encourage the temporary use of vacant buildings and sites. This is a stamp of approval for industries which can be disrupted by high rents, particularly start-ups and SMEs.

Strengthening the Green Belt
Significant commentary in the run up to the publication of the draft plan suggested the Mayor would be seeking to strengthen Green Belt policy. However, it was difficult to see how the Mayor would do this in the context of national guidance. Indeed Policy 7.16 of the adopted London Plan mirrors the Government’s approach in the NPPF.

Policy G2 of the draft plan continues to strongly support the protection of London’s Green Belt. Unlike the current plan and NPPF, there is no reference to allowing development in “very special circumstances”. The second part of the policy supports extension of the Green Belt, but seeks to prevent “de-designation” of Green Belt land. It will be important to consider whether the draft policy would put more pressure on transport infrastructure, would increase commuting distances and would require those authorities outside London to increasingly support the capital’s housing needs.

Transport
Car-free development should be provided in the most accessible (or planned to be) locations (Central Activities Zone, Inner London Opportunity Areas, Metropolitan and Major Town Centres, all areas of PTAL 5 – 6, Inner London PTAL 4). Developments elsewhere should be designed to provide the minimum necessary parking. The maximum residential parking standards (Table 10.3) have been simplified resulting in almost a halving of car parking provision. This reduction may help developers negotiate with Boroughs where higher parking provision is sought, but could exacerbate concerns of local residents where demand for on-street parking is already high.

Cycle parking provision is commensurate with the adopted London Plan, but Central and Inner London Boroughs, plus Richmond, Merton, Kingston, Hounslow and Barking and Dagenham have higher minimum cycle parking standards – doubled for short-stay Class A uses and long-stay office uses. The Mayor will also support other boroughs adopting these higher standards, for example including the Mini-Hollands (the programme to support Boroughs in creating a network of cycle routes), Liveable Neighbourhoods or Opportunity Areas. While a focus on cycle parking should be supported, the impact which a doubling of the standards could have on cycle stands in the public realm will need to be carefully considered in the design of developments and place making.

Student accommodation and shared living
The adopted London Plan states that student housing “will normally be subject to the requirements of affordable housing policy” (paragraph 3.53C). In comparison, the draft plan Policy 17 “Purpose Built Student Accommodation” (PBSA) has a more onerous requirement requiring “at least 35% of the accommodation is secured as affordable student accommodation”. If less than 35% is provided, the scheme must follow the Viability Tested Route and submit viability evidence to justify the reduction.

A new requirement by the draft plan is that PBSA must be operated directly by a higher education institution or a developer must have an undertaking for a specified higher education institution. This will be maintained by a nominations agreement through a condition or legal agreement. This is likely to have significant implications for private student housing providers whose current business model may not be linked directly to higher education institutions. PBSA providers are at risk of falling between two stools if they do not meet the criteria of draft Policy H17, or if they are required to comply with draft Policy H18 as shared living.    

Draft Policy H18 “Large-Scale Purpose-Built Shared Living” refers to Sui Generis developments which contain more than 50 units and with tenancies for a minimum of less than 3 months. The policy lists numerous criteria which must all be met including the requirement that the proposals must meet an identified need. 

Deloitte Real Estate is advising landowners, developers, occupiers, institutions and infrastructure providers across London. Our planning experts would be happy to discuss the implications of the draft plan for you and assist with the preparation of representations. 

Mark-underwood

Mark Underwood - Head of Planning, Deloitte Real Estate

Mark is a Partner and has worked at Deloitte since 1997. He began his career at Deloitte in the firm’s London Office and moved to work from Manchester in 2000.He spent 2007/08 heading up and establishing the Deloitte Leeds Planning team and returned to London in June 2008. He now works in Deloitte’s London Office within the Planning and Development group. He has broad experience in the working of the planning system, including the submission of planning applications, expert witness advice in connection with planning and related inquiries and planning advice of a general nature. Mark is also accredited by the Institute of Environmental Management & Assessment. 

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Jeremy Castle - Director, Deloitte Real Estate

Jeremy joined Deloitte Real Estate’s Central London Planning team in 2012. He leads a wide range of projects including Here East, Fulham Gasworks and the planning review of transport-related property portfolios. His varied career has included working for three major property companies leading the planning strategies for  projects in Central London and the rest of the UK,  including the redevelopment of Battersea Power Station.  The first 10 years of his career was spent as a planning  consultant. 

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Caroline-mcdade

Caroline McDade - Director, Deloitte Real Estate

Caroline McDade is a Director in the London Planning Team. She joined Drivers Jonas as a graduate in August 1998. As a Director, she leads on a wide range of planning work, in particular on large scale residential, retail and infrastructure schemes. She advises clients with large schemes on development management matters, the effects of planning policy and environmental impact assessment. She leads S.106 negotiations on viability and the management of large multi-disciplinary project teams. 

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Adam-donovan

Adam Donovan - Director, Deloitte Real Estate

Adam is a Director in Deloitte Real Estate in the Planning and Development Practice. He has worked on major planning instructions throughout the UK acting on behalf of both public and private sector clients, including developers, retailers and landowners. Adam has particular knowledge of Central London planning issues and has worked for a wide range of clients on all aspects of planning advice including planning application, strategies and listed building consents. 

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