Letwin Review: Independent Review of Build-Out

The final part of Oliver Letwin's independent review into build-out rates in the UK was released alongside the Autumn Budget late last month. Letwin's Review sought to explain the significant gap between housing completions and the amount of land allocated or permissioned in areas of high housing demand, and make recommendations for closing it.

Letwin's Review concluded that one of the principal reasons for slow build-out rates is the homogeneity of the types and tenures of homes being built on 'large sites', and the associated limits on the rate at which the market can absorb these new homes. Letwin comments: "If either the major house builders themselves, or others, were to offer much more housing of varying types, designs and tenures including a high proportion of affordable housing, and if more distinctive settings, landscapes and streetscapes were provided on the large sites, and if the resulting variety matched appropriately differing desires and financial capacities of the people wanting to live in each particular area of high housing demand, then the overall absorption rates - and hence the overall build-out rates - could be substantially accelerated." 

Letwin's recommendations have therefore focused on ways to diversify the type and tenure of houses on offer - specifically on sites which will deliver more than 1,500 new homes ('largest sites'). He proposes a new set of planning rules which are specific to large sites, which would require these to provide a greater diversity of homes which are able to address the various categories of demand within the local housing market. He suggests that the new rules should be supported by a new National Expert Committee, which would advise local authorities on the interpretation of diversity requirements, and would also arbitrate where the diversity requirements cause an appeal as a result of disagreement between the LPA and the developer.

To avoid any lengthy delays with his proposals being adopted, Letwin concludes that developers should be offered incentives to incorporate such diversity requirements into their schemes, with a proposal that any future government funding for house builders of large sites is conditional upon the builder accepting a section 106 agreement which conforms to the new measures. A small amount of funding to a 'large sites viability fund' should also be established, to prevent any interruption of development on existing large sites that could otherwise become unviable as a result of the new provisions.

Although there is undoubtedly some merit to Letwin's conclusions, it is perhaps overly simplistic to attribute slow build-out rates to a single overriding issue. There are numerous impediments and cause for delay in the development process - not least through the negotiation of section 106 agreements and the discharge of pre-commencement conditions. So whilst Letwin's proposals may have the potential to impact positively on build-out rates once planning has been obtained, it's possible that the addition of another set of planning rules will simply exacerbate delays in the planning process itself, by placing yet another hoop for developers to jump through.

The Letwin Review was a common theme that emerged from Ashfords' recent South West Property Debate - read the full article here. One of the event speakers, Paul Britton, Senior Development Manager at Homes England, favoured the Custom Build Housing Model gathering greater momentum in the UK - custom build currently only equates to 16% of the UK's housing stock vs. over 50% in most other countries. Furthermore, the Graven Hill development in Bicester was referenced as a key example of custom build operating at its best; with affordable and accessible housing, build to rent and private sale homes all co-habiting and benefitting from shared infrastructure and landscaping.

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