The Planning System and the Impact of Potential Delays on a Project
The planning system is the framework that allows landowners and developers to legally get permission to enhance the use of their land and add value to it. Whilst a piece of land may, in principle, be appropriate to build a block of apartments upon, or several houses, without the correct planning permission in place, it would not be possible to develop this.
Planning is the part of the development timeline in which developers and their architects alike can get particularly creative and design incredible buildings and spaces that can form the fabric of a local area for many years to come. A previously derelict building/plot of land can be dreamt into a vibrant new space for the local community and residents, and planning permission is the approval required by the local planning authority that allows for these ideas to come to fruition through future development. Without the need for planning permission, we could easily find ourselves in areas that are overdeveloped and are poorly thought out spaces that could negatively impact a local area, and the residents/workers who reside within it.
The English Planning System
Planning applications and subsequent permissions are reviewed and granted by local planning authorities in which the development is located. However, in a bid to consolidate and simplify planning policy across England, the government announced in December 2010 that a National Planning Policy Framework (NPPF) was to be created and applied across the country. The first NPPF was published in March 2012, and his further been amended and updated in July 2018 and May 2019. The NPPF sets out the governments national planning policy and guidelines for local planning authorities to adhere to and control development within its area by adopting local policies. The NPPF policies include topics that incorporate economic, environmental, and social plans to address areas like sustainable developments, delivery of total housing supply and making effective use of land.
Beyond the NPPF, each local planning authority across England is required to create a Local Plan to be approved by the Secretary of State to ensure it aligns with the NPPF. The Local Plan must include local core policies, site allocations across the area, and a proposals map. The Local Plan is used for local planning authorities to mastermind how land is to be used across its area, and what should be built, and when. It is around this that developers can understand the nuances of the area in which they are working in, and where the opportunities lie for them to move forward to developing the correct type of product that adheres to the local planning authorities development vision. Typically, the Local Plan sets out policies for a 10 to 20 year period.
On the back of this, it is when a developer could look to use the guidance set out by both the NPPF and the Local Plan to put together an appropriate planning application to the local planning authority for consideration.
Different Types of Development Planning Permissions
Typically there are several different types of planning applications for development that can be submitted, these include prior approval, outline planning, or full planning.
There are certain types of developments that are granted planning permission through the adherence of national legislation, and therefore negates the need to submit a planning application. This is known as permitted development. To be eligible for permitted development rights, it has to be previously outlined as a permitted change in the General Permitted Development Order (GPDO), and adhere to limitations and conditions associated with this. One of the most popular examples of this is General Permitted Development Order Class O, which outlines the change of use of B1(a) offices to C3 dwellinghouses.
Another type of planning is outline planning permission. This type of planning seeks to establish whether the scale and nature of a proposed development is acceptable to the local planning authority, instead of a developer putting forward a fully detailed proposal. Once outline planning has been approved by a local planning authority, a developer would then be required to put forward a reserves matter application in order to be granted permission by the local planning authority to obtain approval for the finer details of the development prior to the commencement of construction works.
The most popular development planning application type is a full planning application. This is a step further than the outline planning application, and provides a detailed application for the development. This can include everything ranging from proposed floorplans, elevations and CGIs of the proposed development to supporting documents such as highways and transport statements, acoustic reports, and many more. The required documentation and supporting documents to achieve consent for a full planning application can be considered on a site by site basis and will often be determined by the local planning officer working in liaison with the developers planning consultant.
If you were to ask a planning consultant, the top two questions they get asked by upcoming developers in an initial brief would be “how many units can I get on it”, and “how long will it take”. Whilst the first question can be somewhat established by considering the size of the land, the scope of buildings nearby, and how the proposed sits in relation to the Local Plan and NPPF, the second question can often be slightly trickier to answer.
First of all, it’s worth noting that prior approval applications have a statutory period of 56 days to respond to from the day the application is received and validated by the local planning authority. If a determination isn’t given after this time, the application is automatically given approval. This is one of the reasons that GPDO Class O - office to residential conversions - have been so popular with developers since it was adopted.
Outside of this, the timelines around full applications are somewhat more clouded and there is no definitive timescale in which you will receive a response from the local planning authority. Whilst they will provide some rough guidance on timescales they will aim to respond by, it is common knowledge that these time periods are often missed and run over, sometimes by quite a long time. Generally speaking, local planning authorities may give a target timeline of 10-12 weeks for major developments, but this could vary for each authority. Following this, it is worth noting that if planning applications are rejected by the local planning authority, a developer could look to appeal this decision, and often getting a date to have the appeal ruled upon can take the application timeline to in excess of a year from the date it was first submitted. For significantly larger developments, the planning process can take several years.
The effect a delayed planning application can have on the lifecycle of a project can be significant if not taken into consideration early. Assume a developer has acquired a parcel of land with the intention of getting planning approved within 12 months, and construction to be completed within 18 months thereafter. If the land has been purchased with the use of expensive development finance, and high interest rates on the borrowed money, planning delays could have serious impacts on the long-term cash flow of the project. Even if the developer doesn’t have debt on the site, and has used cash funds to purchase the land, the IRR (Internal Rate of Return) on the cash injection into the project can be quickly eroded - this could be a particular problem if the cash has come from an investor who was promised a 24-30 month return on their money. The opportunity cost involved with tying up these funds in delayed planning applications could be significant if it leads to missing out on other opportunities.
Despite it all seeming like delays are pinned on the local authorities lack of quick response, or the frustrating idea that they have rejected an application that you believe has enough merit to be overturned at appeal, there are several practices that developers can adopt to ensure they have the best possible chance of lowering the likelihood of planning delays.
One of the most obvious ways to ensure you minimise any potential delays is to make sure you have submitted the paperwork correctly. Whilst it may sound menial, the application form covers all types of developments, so it is important you are aware of exactly what you are applying for, and this is filled in correctly. Planning departments at councils are overstretched and under budgeted, small issues such as admin mistakes can easily get overlooked in the planners workload, and cause issues further down the line which require the application to be resubmitted and cause a delay.
Another best practice to give yourself the best chance of minimising any planning delays is to ensure you have the right people working with you and on your project. Often this could mean picking specialist individuals for your particular project to form your planning team. Your planning team would consist of the developer as the lead/project manager, a planning consultant to produce a planning statement and advise on the overall scheme, an architect to create the designs, and also there may be several other consultants such as highways/acoustic/S106 to provide statements and reports to support the application. It’s important to ensure that members of your team are appropriate to the particular project you are working on. If moving into a new area, working alongside a planning consultant who can add value beyond just understanding the NPPF and reading the local plan, such as experience and relationships with local planners can be of paramount importance. Similarly, you may have worked with incredible planners in the past who may be well versed in designing beautiful detached homes, however if your current scheme is an apartment building on a constricted site that would require clever design to overcome outlook issues, it is important you engage early on with an architect who has a proven record in understanding this and being able to overcome it early on in the process, rather than when planning officers flag an issue and require changes and resubmissions later down the line. The more experience and specialised your team can be on the type of project you are delivering and well versed with the local planning authority you are liaising with, the better the chance of foreseeing any potential issues that can lead to negative feedback from local planners and cause delays in achieving a successful application.
Having a strong team should directly impact choosing the correct planning strategy. Often the planning system needs to be approached tactfully and strategically to achieve the desired result in the quickest timespan. Whilst it may seem like the quickest way to achieve a planning permission would be to put forward a single application as soon as possible, it is often the case that multiple applications, and even going through pre-application advice processes can help to gain the maximum value out of a scheme. A pre-application advice is a process in which you put forward your plans to the local planning authority, and rather than them viewing this as a full and final application to determine whether or not to grant permission, the developer is requesting their comments and opinions to better understand which elements of the application they may like and dislike when moving forward to the full application. Whilst this may add extra steps to the overall process and bear associated costs involved with putting a pre-application together, gaining the local planning authorities views and incorporating them into your full application can be an extremely helpful way to ensure you have the best possible of achieving a positive outcome, rather than having to go through an appeal process, which can cause significant delays to the timeline of a project.
A strong team who understand the nuances of your project and the area you are working in can help to advise on the best possible planning strategy to de-risk the chances of negative responses, and in turn obtain a successful permission in the shortest possible timeframe.
The planning process is a bit of a maze to navigate, and the complexities involved is directly correlated to the value that can be unlocked in land. Whilst it can be argued that the planning system is broken and it is overly complicated to understand what can and cannot be achieved, it is navigating these factors that will differentiate between an average developer, and a great one who can look at a site and understand the ways in which they can make a deal stack up and work by utilising the intricacies of planning system in their favour.
About the Author
Nikhil Patel is the Managing Director of Flamingo Investment Group.
Flamingo Investment Group is a boutique real estate group, specialising in residential property developments in and around London and the United Kingdom.