Budget 2022: Chancellor Kwarteng's Growth Plan

Chancellor Kwasi Kwarteng’s 'mini-budget' Growth Plan 2022 has now been published in further detail on the gov.uk website here.

With regards to specifically to planning, property and viability, there are several pertinent extracts, although caveated that the detail will come from the Department for Levelling Up, Housing and Communities ‘shortly’.

 

Investment Zones

These include a streamlined planning permission process, and liberalisation of planning rules, in the proposed ‘Investment Zones’ –presumably renamed so as not to be confused with previously championed Local Enterprise Zones (LEPs).

 

'The Department for Levelling Up, Housing and Communities will shortly set out more detail on the planning offer. This will include detail on the level of deregulation and the streamlined mechanism for securing planning permission.'

 

Agreed areas for these ‘investment zones’ are unconfirmed at this time, although the document notes ‘early discussions’ with mayoral combined authorities and ‘upper tier’ local authorities (38). These are outlined at Appendix A, including:

 

1. Blackpool Council 2. Bedford Borough Council 3. Central Bedfordshire Council 4. Cheshire West and Chester Council 5. Cornwall Council 6. Cumbria County Council 7. Derbyshire County Council 8. Dorset Council 9. East Riding of Yorkshire Council 10. Essex County Council 11. Greater London Authority 12. Gloucestershire County Council 13. Greater Manchester Combined Authority 14. Hull City Council 15. Kent County Council 16. Lancashire County Council 17. Leicestershire County Council 18. Liverpool City Region 19. North East Lincolnshire Council 20. North Lincolnshire Council 21. Norfolk County Council 22. North of Tyne Combined Authority 23. North Yorkshire County Council 24. Nottinghamshire County Council 25. Plymouth City Council 26. Somerset County Council 27. Southampton City Council 28. Southend-on-Sea City Council 29. Staffordshire County Council 30. Stoke-on-Trent City Council 31. Suffolk County Council 32. Sunderland City Council 33. South Yorkshire Combined Authority 34. Tees Valley Combined Authority 35. Warwickshire County Council 36. West of England Combined Authority 37. West Midlands Combined Authority 38. West Yorkshire Combined Authority

These will apparently be more targeted than local authority wide zones, and apply to specific locations such as city centres, industrial areas, or business districts.

From an investment perspective there is therefore likely to be increased interest in these areas up until any announced confirmation given the hefty tax and investment incentives proposed. See the full Growth Plan for details.

It will also be interesting to see how this regime will sit alongside the Town & Country Planning Act and development plans, in particular how development proposals within investment zones are treated for the purposes of CIL, affordable housing and the currently proposed Infrastructure Levy.

 

However, the proposed zones are likely to be highly contentious given their deregulatory nature, which is likely to remove community influence on the planning process entirely. We would expect to see the eventual outcomes watered down as per their historical antecedents.

 

Planning reform

As with the last prime minister’s agenda, a further planningreform bill is mooted:

 

'3.31 To make buying a home a reality, the government must accelerate housing delivery. Planning permission was granted for more than310,000 homes last year, up 10% on the year before, but further reform is needed. Later this autumn, the government will set out its vision to unlock homeownership for a new generation by building more homes in the places people want to live and work and by getting our housing market moving. This will boost growth across the UK helping more people afford to live near good jobs. The government’s full proposal will be set out in due course.'

 

While we will have to await the full proposals, and these are highly likely to receive the same opposition as the previous administration's planning reform plans from Conservative backbenchers, this is further detailed in relation to infrastructure delivery particularly:

 

'Planning reform to accelerate infrastructure delivery –The Growth Plan announces new legislation (the Planning and Infrastructure Bill) to accelerate priority major infrastructure projects across England, by:minimising the burden of environmental assessments; making consultation requirements more proportionate; reforming habitats and species regulation; and increasing flexibility to make changes to a Development Consent Order once it has been submitted. It also announces sector-specific changes to accelerate infrastructure delivery, including: bringing onshore wind planning policy inline with other infrastructure to allow it to be deployed more easily inEngland; reforms to accelerate road delivery through more streamlined consent processes; and giving telecoms operators easier access to telegraph poles on private land. These reforms will mean that energy infrastructure, including renewables, gets built more quickly. The government will work with the devolved administrations in relation to devolved planning responsibilities.'

 

We will have to await the detail of these broad statements, but it will be interesting to see how the path of the current Levelling Up andRegeneration Bill is effected (if at all), and how the new proposals may differ from those in the junked Planning for the Future white paper.

 

A note on SDLT

Stamp duty is also in line with further reforms:

 

'4.24 Stamp Duty Land Tax – The government is reducing the tax burden on people buying a home. From 23 September 2022, the government will increase the threshold above which Stamp Duty Land Tax (SDLT) must be paid on the purchase of residential properties in England and Northern Ireland from£125,000 to £250,000. The government will also increase the relief that first-time buyers can receive. From 23 September 2022, the threshold at which first time buyers begin to pay residential SDLT will increase from £300,000 to £425,000, and the maximum value of a property on which first-time buyers relief can be claimed will also increase, from £500,000 to £625,000.'

 

And full relief on SDLT for investment in land and buildings for new residential development in the proposed investment zones, and  land and buildings bought for use or development of commercial property:

 

'Stamp Duty Land Tax – a full SDLT relief for land and buildings bought for use or development for commercial purposes, and for purchases of land or buildings for new residential development.'

While this will have a minimal impact on viability assessment, on larger sites there will be some variation.

One final point

One further interesting point noted was the reference to greater flexibility in investment of proceeds of public land sales for departments:

 

'3.32 The government will promote the disposal of surplus public sector land by allowing departments greater flexibility to reinvest the proceeds of land sales over multiple years. This will encourage the sale of more public land for housing and allow departments and the NHS to reinvest in public services. Devolved administrations have bespoke flexibilities to move funding between financial years and the government will discuss the implications of this change with them in due course.'

 

This is of interest from a viability perspective as it chimes with wider comments regarding the proposed Infrastructure Levy which suggest proceeds would be allowed to be invested in a wider array of areas, not just for community infrastructure and affordable housing. This will reinforce concerns that the funds actually available for the main issues covered by the current CIL and S106 regime will in fact reduce under the newly proposed system, and it will become far more complex and less transparent as well.

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