Oblix Capital welcomes robust Policy Exchange challenge to the planning system

By Bridging Loan Directory 24th February 2020

Specialist real estate lender Oblix Capital has welcomed the report recently issued Policy Exchange, the UK’s leading thinktank, which calls for fundamental changes to the planning system if the UK is to have any chance of meeting its house building targets in the future.

The 77-page report concludes that although the system has been tinkered with over the past few decades, the fundamental principles have remained unchanged for over 70 years and are no longer fit for purpose.

The key findings within the paper are that:

Land use is rationed depending on what planners think is ‘needed’, and supply is therefore limited to their aspirations rather than reality
Excessive planning restrictions have caused a redistribution of wealth and income from renters to homeowners
The planning system is disproportionately influenced by the ‘noisy minority’
The complexity and risk of the planning system has diminished the country’s base of small and medium-sized developers
Planners are tasked with achieving too many policy objectives
The complexity and discretionary nature of the planning system means that decisions are regularly challenged in the courts, which increases costs, risk and delays when navigating the planning process

The authors urge the Government to be bold and ambitious in establishing a new system that can meet the challenges the country now faces, including:

Introduce a binary zonal land use planning system. Land should be zoned either as development land, or non-development land. Development land would have a presumption in favour of new development, whereas non-development land would be restricted to minor development, which would only be possible in more restricted circumstances.
End detailed land use allocations. The planning system should not try to systematically control what specific activity can take place on individual land plots based on fallacious projections of housing and commercial ‘need’. The supply of new homes, offices and other types of land use should no longer be capped by local planning authorities in local plans or by site allocations.
Redefine what a local plan should be. As well as ending systematic land use control of individual plots, the Government should radically reform the structure and objectives of local plans. delivering 10,000 homes a year when fully operational. In 2016, Legal & General announced plans for a £55m factory in Leeds Modular unit builders TopHat secured £75m in backing from Goldman Sachs in April 2019.

Richard Payne, pictured, Director of Development at specialist real estate lender Oblix Capital said:

“We welcome this robust challenge to the planning system – the current regime suppresses supply, drives up costs and needs fundamental reform if the UK is to have any chance of building the volume of quality housing stock that is required. There are several bold recommendations within the report, and we look forward with interest to see whether the Government will accept the need for a root-and-branch review of the planning regime.”

Oblix Capital’s full assessment can be found on their website here, and the Policy Exchange report can be accessed here.