Localism Bill

The Government's long awaited Localism Bill has finally been delivered to Parliament today, 13th December 2010.

As we expected our predictions proved sound regarding the decentralisation of powers to local people who will now decide on new build in their communities. We are already hearing from landowners and local councils who are welcoming the opportunity to breathe new life into towns and villages.

As you are aware in the lead up to the Localism Bill it was initially suggested that before house building can commence around 90% of the local community must agree.

When we last spoke we predicted this to drop to 75% community agreement. What we did not envisage was a further dramatic drop to only 50% agreement as revealed today in Parliament.

This is exceptional news and will speed up the whole process of getting homes built in the short term. As you know the south east has been earmarked as a priority area.

The bill is expected to put planning powers in the hands of local communities, through neighbourhood plans, and building incentives such as the New Homes Bonus, which will see the government match council tax on new homes for the first six years.

Furthermore almost £1 billion of Government funding has been set aside so that councils who build more homes start benefiting immediately from extra cash, a major incentive to development.

We believe that closely following Parliamentary procedures on a daily basis gives us a valuable insight into making considered decisions for future land investments.

We have given a bullet point description of the broad remit of the Localism Bill and of course will keep you updated on further legislation that affects our investments.

What the bill will do:

-Return decision-making powers on housing and planning to local councils and
communities
- Give residents the power to instigate local referendums on any local issue and the power to veto excessive council tax increases
- Grant greater financial autonomy to local government and community groups
- Abolish Regional Spatial Strategies
- Give communities the right to bid to take over local state-run services
- Require public bodies to publish online the job titles of every member of staff and the salaries and expenses of senior officials
- Create Local Enterprise Partnerships (to replace Regional Development Agencies)
- Review the Housing Revenue Account

Stewart Baseley, executive chairman of the Home Builders Federation, said: 'The Localism Bill proposals provide a real chance for people to develop their communities for the better and house builders will work with them to build the homes communities and families want.'

Kate Henderson, chief executive of the Town and Country Planning Association, called it 'the most far-reaching proposals to change the planning system since the 1947 Planning Act'.

This legislation has brought forward the timescale for everybody who benefits from housebuilding via incentives to housebuilders and local authorities to build more homes and enhance the communities who rely on key workers and local services.

We welcome today's positive news and look forward to providing you with information on any further implementation of legislation.

Editorial Comment - Towersland Planning Team

‘Macro-economic stability’ is the new phrase used by developers, town planners and anybody involved with the Governments new initiatives on new sustainable communities. This type of phrase generally sends the right-minded among us to sleep fairly quickly, but if we just look at what it really means to investors we discover something which could be rather interesting.

It covers every area of new developments including transport issues, the environment, supply services, hospitals and schools. The Government has set in stone a number of planning acts that will remove some of the restraints that prevent house builders from increasing the stock and thus enable the creation of new sustainable communities (see latest newspaper reports). What this means is, together with developers, they need land, and as the old maxim goes, they’re not making any more of it.

Where are they going to put the promised three million homes over the next ten years? See below for extracts from the South East Plan.

At Towersland we use the same procedures as local planners and developers to source the very best land that ticks all the boxes for new sustainable communities.

Simply put, we have the land and the developers want it.

A legitimate question is -Will local services and resources cover these new developments?’

The answer is clear.

The government have said that in a move to help the construction industry and to revive the market the treasury is ready to go into partnership with private companies to ensure that developments proceed. In some cases the Government will offer to complete the local roads and other infrastructure that a private company would normally be required to do as part of building a development.

If they don’t, the Local Authorities and the South East England Regional Assembly (SEERA) will address these issues. They will ask developers for a ‘contribution’ known as Section 106 Agreement. These contributions pay for new schools, bypasses, reservoirs and anything that will enhance the life of existing residents and new comers.

The recent cash injection by the Government to kick start the house building industry has gained cross party agreement. This agreement is of significant news to investors who suspect a change in Government at the next election.
The reality is that both sides of the house have done the maths and realise that boosting the house building market and building affordable homes for key workers will have a massively beneficial knock on effect on the whole national economy.

Of course not every body believes new sustainable communities are a good thing. In the planning industry people who object to new local housing are called ‘eco-toffs’ Planners realise that this type of person will hide behind green issues when, in fact they are being self protectionist. They will buy houses in certain areas and price out local people who couldn’t possibly afford the inflated prices that weekenders are prepared to pay. Affordable housing provides homes for key workers who utilise the local butcher, baker, post offices and schools which are the real heart of these communities. It could be regarded as cynical self interest about their property values if a community of affordable homes were built nearby!

Parliament, SEERA, local planners and the developers are in the odd position of having the moral high ground. They are the ones promoting the fact that everyone has a right to a decent home. They want local residents and key workers to have a choice about the homes they live in and want to create greener sustainable communities, which will make a significant contribution to the quality of life and the prosperity of the southeast.