Supreme Court rules on importance of ability to demonstrate a five-year housing supply

Last Wednesday, the Supreme Court handed down a judgment that will have profound implications for the development of green-belt land.

At the heart of the case, which involved two separate but related planning appeals, was paragraph 49 of the National Planning Policy Framework (NPPF), which states: “Relevant policies for the supply of housing should not be considered up to date if the local planning authority cannot demonstrate a five-year supply of deliverable housing sites.”

In essence, the court was asked to make a judgment on how the paragraph should be interpreted and how, therefore, it should be applied in conjunction with the “presumption in favour of sustainable development” unless “any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this framework taken as a whole” contained in paragraph 14 of the NPPF.

Here, Property Week summarises the judgment and asks key planning experts to comment on its implications.

In the first application considered by the court, Richborough Estates was seeking planning permission for 146 homes on a 16-acre site in Cheshire East. The site is in an area near Crewe designated as ‘green gap’, which the council wants to upgrade to green belt. The application was refused, allowed at appeal to the Planning Inspectorate and then challenged in the High Court by the council.

The second application followed a different timeline, but ultimately concerned the same issue - the interpretation of paragraph 49. In that case, Hopkins Homes was seeking planning permission for 26 houses on land in Yoxford, Suffolk, which lies within parkland outside the settlement boundary. Its appeal against Suffolk Coastal District Council was upheld before being challenged in the High Court.

‘Tilted balance’

Both decisions then went to the Court of Appeal and came before the Supreme Court in February. The result of last week’s judgment is that Richborough’s permission has been reinstated and the appeal decision to allow development in Yoxford has been sent back to the Planning Inspectorate.

The judgment states that the main purpose of paragraph 49 of the NPPF is to trigger the so-called “tilted balance” clause in paragraph 14: “In that context, the words ‘policies for the supply of housing’ indicate the category of policies with which we are concerned: the word ‘for’ simply indicates the purpose of the policies in question. There is no justification for substituting the word ‘affecting’, which has a different emphasis.”

In short, the judgment confirms that the narrow view of paragraph 14 seen in previous judgments, the “presumption in favour of sustainable development”, can be overridden if it would cause harm when read in conjunction with the rest of the NPPF, or where “specific” policies apply. The judgment makes clear that those specific policies include development plan policies and therefore green-belt policies.

So the absence of a local plan or a five-year housing land supply does not mean that development on green belt is a shoo-in: the weight to be given to green-belt policy remains unless an applicant can demonstrate that “very special circumstances” exist to justify it being overridden.

Reaction

Trevor Ivory, UK planning head at DLA Piper, who led the team acting for Hopkins Homes

The judgment renders paragraph 49 irrelevant. As from today, the critical question is whether a planning authority can demonstrate a five-year land supply. If not, the second limb of paragraph 14 is triggered and the decision-maker will need to have regard to the extent to which particular policies of the development plan are the reason for the underperformance when deciding what weight to give to those policies in the application of the tilted balance - regardless of whether they are housing supply policies.

This judgment puts a lot of power in the hands of the decision-maker, who will have a wide discretion on questions such as whether a policy is part of the cause of an underdelivery of housing. Even if the decision-maker concludes that a policy is part of the problem, they will still also have a wide discretion as to the weight to attach to the issue.

Planning by appeal therefore looks set to continue, with developers unhappy about local planning authority refusals looking for a very different weighting from the secretary of state and his planning inspectors.

Martha Grekos, partner and head of planning, Howard Kennedy

The Supreme Court decision takes us, quite rightly, back to the basics of sensibly having to balance the issues and allowing the need to secure an adequate supply of housing land to be taken into account in determining the weight to be applied to a policy, even if the policy is not specifically caught under paragraph 49 of the NPPF.

If there is a failure to provide for a five-year housing supply, it does not matter whether the failure is because of the inadequacies of the policies specifically concerned with housing provision or because of the overly restrictive nature of other non-housing policies. The shortfall is enough to trigger the tilted balance under paragraph 14 of the NPPF.

This decision is therefore to be welcomed as it forces all of us to be less legalistic about the application of policies, whether national or local, to development proposals. In other words, there is no need to have a technical examination on whether policies are regarded as ‘relevant policies’. We simply need to weigh up the consequences of a housing deficit against policies that are restricting that housing supply.

Yes, this does mean that the decision-maker has a wide discretion to attach weight to such an issue and some may argue that developers that are unhappy with a local authority’s decision may look to appeal to obtain a different weighting, but surely the positive side of this is that the ruling is likely to lead to more permission being granted where councils cannot demonstrate a five-year land supply for housing. Time will tell.

Justin Cove, associate director, Nexus Planning

This ruling represents a significant shift for decision-makers to contend with in the future. While significant weight is already applied to protecting the green belt where there is an absence of a five-year housing land supply, we are now likely to see greater weight applied to other ‘restrictive’ policies.

This is likely to result in a rise in the number of appeals being lodged that involve applications outside the defined urban area. At the local authority level, where a wider interpretation of paragraph 49 has generally been relied upon, this will probably cause more applications to be refused than otherwise might have been.

Given the subjectivity involved in this highly sensitive decision-making process, we can expect to witness a varied range of appeal decisions over the coming months and years as decision-makers tackle each particular circumstance.

Katherine Evans, head of planning, TLT

This long-awaited Supreme Court ruling is highly significant: it is the first of its kind since the introduction of the NPPF in 2012.

Through unanimously dismissing both councils’ appeals, the Supreme Court has given the planning industry a clear message, although as always the devil is in the detail. Decision-makers now understand where their role in the process lies.

Helpfully, the court clarified that the NPPF does not displace the primacy of the statutory development plan in respect of non-housing policies when considering planning applications. Given the myriad political issues surrounding housing policy, however, it remains to be seen how this is applied in future applications.

The judgment will also be of particular importance to green-belt and other environmental policies, as the court ruled that up-to-date policies should still be applied through paragraph 14, even where authorities fail to demonstrate a five-year land supply and fall foul of paragraph 49.

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