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COVID Impact on Planning and the Property Market

June 18, 2020

Since the UK Government announced that the UK had to enter into ‘lockdown’ on 23 March there has been a dramatic impact on the planning process and the property market. This Blog sets out the independent views in relation to the impact of COVID and also outlines a number of new measures that are being introduced through the planning system to help the economy.

At KEW Planning, we have found that all projects relating to hotels and restaurants have been placed ‘ON HOLD’ indefinitely. These sectors have been very badly hit and are unlikely to recover for some considerable time post lockdown.

We will see a marked transition in various sectors in the property market. Food retailers are outperforming any other sector, along with distribution warehouses with people having to convert to online shopping. There are likely to be a number of hotel properties coming forward for purchase and the planning system needs to be able to facilitate the conversion of these into alternative uses, to ensure these are not turned into dead spaces.

The office market is likely to see the biggest change in trend, showing that we do not need as much space to work with flexible working arrangements. However, it has also highlighted how important social interaction is for mental health and well-being. There will be a need to refurbish offices to meet social distancing requirements and provide social spaces for meetings and areas for colleagues to interact sensibly.

COVID and Planning

The Coronavirus 2020 received Royal Ascent on 25 March and this set out a number of measures to allow meetings to be conducted virtually, particularly relevant for planning committees. Westminster was one of the first to hold one on 14 April.

The Chief Planner Steve Quartermaine wrote on 30 March to all LPAs in his final letter in the post, to request that planning authorities implement new measures to deal with the COVID-19 situation.

It wasn’t until 22 April that Welsh Government’s Julie James issued a written statement on the ability for Local Authorities in Wales to hold virtual meetings and that the erection of site notices (required for planning applications) was deemed ‘essential’.

Although Welsh Government issued these Regulations, every authority has taken a different approach to how the planning department chose to operate. For example, Cardiff made the decision to not accept ANY planning applications at all during April and introduced a phased approach in the second week of May, allowing discharge of conditions and reserved matters applications to be validated.

Key requests included expansion of Permitted Development rights, enabling more shops and pubs to deliver and provide takeaways as well as a mandate for 'virtual' planning committees.

It is difficult with support staff working from home but this has resulted in delays for the majority of planning applications.

In addition, Major applications in Wales were unable to commence the Pre-Application Consultation (PAC) process due to the draft hard copy requirement to be displayed in a public place for the public to view. Only on 19 May were amendments issued and these are onerous on the applicant. These were deliberately vague and unhelpful with costly implications and time delays. Any applicant that had started the PAC process before lockdown, had to start the process over again. Welsh Government has not considered the vast costs that are associated with the process in the first instance, and are now introducing an onerous requirement to provide a hard copy for any one that requests it. There has clearly been no engagement with developers regarding these new temporary regulations which are in place until 18 September 2020!

What would be radical and show real leadership and consideration for businesses, trying to continue in the fast approaching recession, would have been to temporarily remove the requirement to have to undertake PAC.

Data shows that planning applications of all types fell on average by 3.5 per cent in March and 18.5 per cent in April in England and Wales. This is one of the key findings in the Planning Portal’s first Planning Market Insight Report.

The Planning Portal said the restrictions placed on personal movement and businesses to stem the spread of coronavirus have had a “significant impact” on the planning and construction industries.

The insight report comes as the construction industry goes back on site following a message broadcast on television on Sunday 10 May by Prime Minister Boris Johnson, and measures announced by housing secretary Robert Jenrick regarding flexible working hours and staggered travel.

Other key findings in the Planning Insight report include:

  • Applications have fallen most in the worst affected Covid-19 regions – London and the South East, and the North West.
  • Outline planning applications, which are less detailed versions of large planning applications submitted at an early stage to understand whether the principle of development is acceptable to local authorities, declined by 9 per cent in March and 10 per cent in April. Planning Portal said these applications “held up well”, which is a positive indicator for longer-term development.
  • Applications related to advertising have been hardest hit, with a 60 per cent decline.
  • Applications related to telecoms infrastructure are up, demonstrating the continuing investment in 5G networks in particular.

How might the planning system manage a return to productivity?

Planning Authorities need to be more flexible when determining applications. The cost of the process is so high and even on schemes that don’t appear contentious, there are always difficulties to navigate, with objections from consultees at times, which make the process very lengthy when conditions are available to satisfactorily deal with many issues.

Planning Officers need to show courage and remember that they have the ultimate decision and when all factors are considered that on balance some of these other constraints are not as significant as they can be made to be.

If the Government want to see a return to productivity and construction, planning authorities need to be more pragmatic and facilitate with approving applications.

We have seen many obstacles in general in the approach to development in Wales. The private sector, in particular, feels that Welsh Government have imposed measures like PAC; removal of 5 year housing land supply as a material consideration and SuDS which act as significant barriers to the delivery of development both in terms of cost, delay and many difficulties in securing planning permission. These days it is not easy at all.

Suggestions such as temporarily not having to undertake PAC during this pandemic while the economy recovers would be very useful. In addition, we would strongly urge Welsh Government to review the threshold for the requirement to undertake PAC as either 10 new residential units or 1,000sqm of new floorspace as these are very low.

On the 14 May 2020, there was a Minister announcement which stated:

We understand the pressure that authorities are under, and the importance of practical measures which can ease the impact as well as support the wider efforts to keep the country running. It is important to keep the planning system moving as much as we can, so that it is able to play its full part in the economic recovery to come, at both national and local levels.”

Alongside measures for construction and housebuilding, also published, the UK Government wants site visits and the use of digital technology and virtual meetings to become the norm in planning casework.

The proposed changes for the Planning System

Community Infrastructure Levy (CIL):

The ministry intends to introduce amendments to the Community Infrastructure Levy Regulations 2010 to help small and medium-sized developers. Charging authorities will be able to defer payments, temporarily disapply late payment interest and to provide a discretion to return interest already charged where they consider it appropriate to do so. This measure can be applied to developers with an annual turnover of less than £45 million. It will be removed when the economic situation has recovered.

Determination timescales

The Ministry of Housing and Communities for Local Government (MHCLG) explains that determination timescales for planning applications will not be changed, although it acknowledges that not all timescales will be met.

Developers are encouraged to agree extensions of time where necessary but retaining the timescales means that appeals can be submitted to the Secretary of State on the grounds of non-determination.

Publicity and consultation for planning applications

On Thursday 14 May, temporary regulations to supplement the existing statutory publicity arrangements for planning applications, listed building consent applications and environmental statements for EIA development were introduced.

MHCLG has said this will mean that local planning authorities will have the flexibility to take other “reasonable” steps to publicise applications, if the specific requirements for site notices, neighbour notifications or newspaper publicity cannot be discharged. Steps can include social media and other electronic communications, but they must be proportionate to the size of the development.

Virtual planning committees

The Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020, which came into force on 2 April, allow English local authorities to hold public meetings virtually,byphoneorvideolink,duringthepandemic. TheHealthProtection (Coronavirus Restrictions) (Wales) Regulations 2020 Regulations came into force in Wales on 29 April.

Local planning authorities are encouraged to take advantage of the powers rather than deferring committee dates. There are “Urgency powers” that give senior officers delegated authority to make decisions which should be considered.

Local plans

The announcement sets out that Local Plans should still be progressing through the system, as they will support the economic recovery from the pandemic and to meet the 2023 deadline, by which time all local authorities should have a plan in place.

The challenges most local authorities may face are recognised and ways to address this include temporarily relaxing requirements on community engagement and the need for physical documents, to engaging with the Planning Inspectorate on the use of virtual hearings and written submissions.

Planning Practice Guidance (PPG) on plan-making has been updated to explain how local authorities can review and update their Statements of Community Involvement and should be read in parallel with existing guidance on plan-making, including paragraphs

34, 35 and 71. If there is any conflict, this guidance supersedes current plan-making guidance until further notice.

Validation of applications

Many local authorities are already receiving planning applications online but the government says it is important that arrangements are in place to ensure that paper applications can still be validated.

Priority should continue to be given to the validation of any urgent Covid-19-related applications for planning permission and associated consents, including hazardous substance consents.

New time-limited permitted development rights

This right came into effect on 9 April and will end on 31 December this year. The right allows “local authorities and health service bodies to carry out development, both works and change of use, of facilities required in undertaking their roles to respond to the spread of coronavirus, without a requirement to submit a planning application”.

Planning Inspectorate

Digital events

Work to hold digital events – by telephone or videoconferencing – was initially meant to be implemented later this year, but work on this has been brought forward as a result of the coronavirus, particularly for cases where:

  • the inspector may need to ask questions or hear cross-examination for complex issues;
  • there is a high level of public interest and a public event needs to be held; and
  • where the legislation governing particular casework requires such an event to be held in given circumstances (e.g. national infrastructure and local plan examinations). The first virtual Hearing is being held shortly and it is hoped that this process continues to allow decisions to be reached. What have we learned from the outbreak? The pandemic has shown that when needed, the UK Government can act fast to deal with emergency situations and all the devolved Administrations must follow suit! It also has clearly demonstrated to those companies not keen on working from home, that in many circumstances they can. This reduces the need to travel significantly and reduces the Country’s carbon footprint. We have also learnt just how important social interaction with other people is for mental health. The office will therefore always be a key requirement, to act as a hub and meeting place, as well as work.

The importance of technology and good digital tech makes all the difference. Internet speed, quality of equipment and video conferencing programmes like Teams and Zoom must be high quality.

We’ve also learnt that the NHS has been massively underfunded and resourced. Huge investment and revitalisation will be required. Healthcare as a sector will be king as the pandemic has really highlighted.

Planning Authorities and professionals have the ability to adapt and facilitate to aid the recovery. Time to bring these measures outlined in this Blog into place now.

18 June 2020

Kathryn Williams

MRTPI Managing Director

KEW Planning