Brian Berry of the Federation of Master Builders (FMB) explores the advantages of the new ‘Permission in Principle’ route to planning permission.
You may not yet be aware, but since June 2018 a new route to planning permission – ‘Permission in Principle’ – has been available for housing developments of fewer than 10 units. Permission in Principle (PiP) is designed to separate the consideration of the ‘principle of development’ (i.e. ‘is this site suitable for new housing?’) from decisions around the technical detail of the development (i.e. ‘are the specific details of a proposed development suitable for this site and in accordance with local policies?’).
As such, this is a two stage process to full planning permission. A PiP application consists of a two-page form containing basic information about the site, a plan which identifies the site in question, and a fee. The statutory time limit for PiP applications to be determined is five weeks. The grant of PiP will last for three years, during which time a developer will need to apply for a ‘Technical Details Consent’ (TDC) to convert this into a full planning permission. The focus of PiP is strictly limited to location, land use and amount of development. All other matters are dealt with at the TDC stage.
PiP is a tool which has been designed to fulfil a number of different purposes. It is also available to be applied to any site on the Brownfield Register to encourage the development of those sites identified as suitable for housing. The Housing and Planning Act 2016 also allows for PiPs to be automatically placed on all sites allocated within local and neighbourhood plans, but this is yet to come into effect and appears to have been shelved for the time being. However, we believe that for many housebuilders and developers, it is the new application route for smaller sites which might prove to be one of the most beneficial changes to the planning system in recent years. The aim of this new route is to reduce the upfront costs and hassle involved in getting an ‘in principle’ decision, thereby reducing some of the risks involved in planning and allowing greater investment in the technical details process, once the principle has been established.
We know that one of the greatest obstacles facing many housebuilders is the probative risk involved in bringing forward planning applications, and that risk and cost are often hugely disproportionate on the smallest sites. Outline planning permission was originally meant to provide a means of managing these risks, but over time even obtaining an outline permission has come to involve the submission of large amounts of information and detailed pre-application discussions, creating significant upfront cost in return for an uncertain outcome.
Many smaller housebuilders are unable to spread these risks over a numbers of sites and different applications. SME housebuilders are likely to be financing applications through their own funds or private loans and so the risk of investing in a planning application and not receiving permission can be quite prohibitive. PiP is intended to address precisely these risks and is designed to be closer to an old-fashioned ‘redline’-type application.
This new development has followed directly from the call by the Federation of Master Builders (FMB) for a return to the principles of the redline application for outline permission. Indeed discussions over what has become PiP started as far back as 2015, after the Government signalled its willingness to look at a ‘redline-type’ application. The FMB and others in the industry were involved in early stage discussions as to how this could work. What we have now differs somewhat from the idea originally discussed, a result of having been adapted to fit a number of other purposes, including the Brownfield Register. However, it still largely accords with the key principle of reducing risk for smaller scale developers.
There is even hope that over time, if PiP is shown to provide enough certainty, then lenders may be willing to lend on the basis of PiP, allowing the applicant to invest in the more costly Technical Details stage.
Local authorities, not unexpectedly, have not been universally positive about the new application route, which is one reason why you might not yet have heard of it. In addition, there are bound to be some teething problems and its success will always be dependent to some extent on its being implemented roughly as intended. We will monitor this closely. However, we still believe that this new permission in principle route, as set out, will prove to be significant advantage to the industry going forward.