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Banking

UK planning reform bill promises big change

Big changes are coming to the UK real estate market as the government seeks to pass the planning reform bill which is aimed, in part, at streamlining and improving the planning process. If passed, the bill will introduce a single consents regime for big infrastructure projects, create an independent infrastructure planning commission and institute further initiatives to improve the town and country planning system. Now in its first reading in the House of Commons, the proposed legislation could bring the most significant changes to planning in the UK since the end of the Second World War.

"It’s happening now because pressure on Britain to compete and put infrastructure in place more swiftly is being felt," says Howard Bassford, partner at DLA Piper in London. "Anecdotally, businesses complain about the amount of time it takes to deal with things, which is perceived as weakening our competitive advantage."

For example, if investors were seeking to invest in a nuclear power plant, at present that investment might go to an energy project where it is perceived the project would progress more quickly than in the UK. Locations such as India or China where there might be a need for more nuclear plants than in the UK, as well as an opportunity for quicker returns because that kind of infrastructure can be built more swiftly in those countries, are luring investors away from the UK.

Another big proposal is a community infrastructure levy that replaces the government’s proposals for a planning gain supplement. The idea is that when developments produce a need for new public infrastructure such as schools, roads, public transport or a hospital, for example, those infrastructure needs would be funded by the community infrastructure levy.

"We don’t have the full picture [on the community infrastructure levy] yet because the government will deal with the details through regulations," says Bassford. "However, this bill suggests that the community infrastructure levy will be set at a more local level than planning gain supplement and will also be collected and spent by a relevant charging authority at a local level."

This element of the bill could mean that the UK’s already high land and property prices could rise further. Developers of residential properties, for example, could pass on the cost of the community infrastructure levy to the end consumer, the homebuyer.

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