Category: CIL

The Proposed London Housing Emergency Measures Package Is Underwhelming

That is the message I have been receiving in many discussions with developers and advisors since consultation started on MHCLG’s Proposed London Emergency Housing Package and The Mayor of London’s draft Support for Housebuilding London Plan Guidance, both documents published on 27 November 2025 for consultation until 22 January 2026.

I’m picking up that the conclusion is reluctant. Clearly, it is helpful that the drought of new housing activity in London has been recognised. Clearly, it is appreciated that MHCLG and the London Mayor have worked hard at a co-ordinated package as between them which moves significantly, and no doubt with much internal organisational pain, from the previous policy position in terms of affordable housing expectations, in terms of the usual approach to CIL and in terms of some aspects of housing standards. There is also a dilemma on the part of the industry: this is an emergency; measures are needed now; if this set of proposals has to be ditched and replaced with a more effective package, we are just losing more time, unless the industry can point with some unanimity towards practical, easily implemented, improvements to what is on offer.

But the reality is that the current package (1) will not be enough and (2) is too caveated and conditional to provide the crucial reassurance that is needed to those who hold the strings in terms of funding or financing. From what I hear I’m not at all sure that the Mayor’s new time-limited route is even likely to be used, as opposed to continued reliance on viability testing.

Following the initial joint announcement on 23 October 2025 I wrote a blog post on 1 November 2025 setting out 4 Key Asks For The London Housebuilding Support Package Consultation. None were taken on board in the consultation drafts. Let’s hope that there still is time before the package is finalised.

To follow the structure of my previous post:

Should there be more focus on stalled sites that already have planning permission?

Of course!

Why ignore the lowest hanging fruit? The opportunity has now passed for primary legislation to reintroduce section 106BA (which could have been a late bolt-on to the Planning and Infrastructure Bill). But why not by ministerial direction reduce the minimum period of five years for the purpose of being able to make applications under section 106A, which are capable of appeal, to say two years – and introduce guidance as to MHCLG’s interpretation of “useful purpose” (of course the courts’ legal interpretation ultimately will be what counts but guidance will still be useful!)?  And in any event introduce firm guidance to local planning authorities that they should approach requests for deeds of variation on viability grounds positively where the case has been made (and set out in the guidance what will be sufficient to make that case)?

Is late stage (as opposed to early stage) review necessary in relation to the proposed “time-limited planning route”?

No!

The uncertainties caused to funders by the mere existence of any review mechanism the application of which is outside their control has a deadening effect on developers’ ability to fund schemes, utterly disproportionate to the likelihood that any review mechanism will ever deliver any material amount of additional affordable housing, schemes are so underwater. And unnecessary uncertainty has been created because the time-limited route envisages a different set of mechanisms to those which currently exist.

The simple change would be for the Mayor’s LPG to specify that for a time-limited period the fast-track thresholds will be reduced from 35% and 50% to 20% and 35% with the structure remaining exactly the same as to when review mechanisms will be required and how they will operate. A bucketload of uncertainty would be immediately removed.

Are there unnecessary difficulties with introducing a viability test into the proposed CIL relief?

Yes!

In fact, this whole new intended structure for 50 to 80% relief from borough CIL is going to be disproportionately complex given that it will rarely make the difference between a project going ahead or not (and with the prospect of later clawback, funders will always assume the worst in any event so it just won’t help bring them over the line). What I’m being told is that where CIL is a killer is on cash flow. On viability – the overall go/stop on development – it is of only marginal influence.

If there is going to be any tweaking of the Regulations:

  • Why not allow for payment at a later stage (you recall that when the infrastructure levy was touted by the previous government as  replacement for CIL it was to be payable at upon completion of the development so would there be such a problem with it being paid, say, on occupation)? Boroughs don’t spend the monies upon receipt – timing isn’t critical to them! And Mayoral CIL is simply paying down long-term debt in relation to Crossrail.
  • Require all boroughs to switch on the potential for exceptional circumstances relief and see what can be done to simplify the process.

Ahead of any Regulations, just lean on the boroughs to switch on exceptional circumstances relief (if they refuse that is a warning sign in itself) and introduce advice as to the evidence that should normally be sufficient. Even that would help.

And incidentally this would actually also would help SMEs, currently shut out of the relief proposed in the consultation document by a combination of the £500,000 liability threshold and the proposed £25,000 application fee. And while we’re at it, extend this beyond residential C3 development.

Are the proposed additional powers to be given to the Mayor enough?

Probably, but…

It really would be useful if the Mayor could call in schemes of 50 units or more even before the borough is minded to refuse them, as long as the statutory determination period has passed – thereby reflecting the current arrangements in the Mayor of London Order 2008 for schemes of 150 units or more.

Final thoughts

Of course the proposed additional grant funding for affordable housing is welcome. But inevitably it isn’t enough.

Surely, we all agree that the thrust of all these measures is not good to the extent that, consistent with the operation of the existing system, it assumes that affordable housing, including social housing (for which there is such a desperate need in the capital) is what has to give in order to enable development to proceed. How can we move to a system where the delivery of social housing is not reliant on, effectively, an affordable housing tax imposed on residential development, given that the current model is not working?

To end on a positive note, I was really cheered to hear about Homes For People We Need campaign and to read their report Making Social Rent Homes Viable. Whilst it identifies that £18.83 billion is required to develop 90,000 social rent homes per year, there is a strong investment case for substantial government subsidy, given that temporary accommodation costs of £2.8 billion annually could in theory service index-linked bonds worth circa £160 billion. “In theory an investment by HM Treasury to build c.130,000 Social Rent homes for those families currently in temporary accommodation, assuming £209,000 subsidy per home and thus a total subsidy of £27.2bn, could reduce the current bill for Temporary Accommodation to zero”.

There are a number of strategic recommendations and suggested policy reforms in the report:

“• Social Housing Tax Credits represent a promising approach, enabling private capital deployment now in exchange for future tax relief.

• Section 106 Agreements should fix affordable housing values at the planning stage to improve market efficiency.

• Right to Buy should be further reformed to preserve the affordable housing stock.

• ‘Flex Rent’ approaches linking rents to household income should be considered to optimise revenue generation whilst maintaining affordability.

• The Housing Association sector desperately needs recapitalisation in addition to the recent 10-year rent settlement.”

Santa hat-tip to Thursday’s Planning After Dark Podcast episode Santa Hats, Social Rent and Squeaky Leather Trousers for the chat with Grainger’s Michael Keaveney which introduced me to this.

In summary I hope that what is arrived at is fast, simple, measures to help meet the current housing and affordable housing emergency. But then I hope that there is a proper longer-term solution along the lines promoted by this report to help meet the underlying and remaining (national not just London) housing and affordable housing crisis. The current section 106 model is not working!

Simon Ricketts, 13 December 2025

Personal views, et cetera

4 Key Asks For The London Housebuilding Support Package Consultation

Most chats this week have been about the 23 October 2025 homes for London policy note.

tl;dr summary: positive direction but concerns about potential complexities, uncertainties and as to whether it will all be in place speedily enough.

We’re all now waiting for the consultation to start “over six weeks from November” (fair play, at least no “by the end of Autumn” fudge).

There are plenty of detailed issues arising, and differing interests will want to re-prioritise the measures in different ways, but I thought I would set out four key asks that I have, which in my view should be specifically addressed in the consultation documents:

  1. Should there be more focus on stalled sites that already have planning permission?

This is the lowest hanging fruit. And yet all we have (in paragraphs 33 and 34) is a reference to the potential for renegotiating previously agreed arrangements by way of deed of variation and discouragement as to the use of section 73.

This isn’t enough. I set out the current procedural constraints in my 18 October 2025 blog post London Stalling.

Procedurally, bar reintroducing section 106BA or, for a temporary period, amending section 106A to reduce the 5 years’ requirement, at the very least we need:

  • Specific encouragement for local planning authorities to accept developers’ requests to engage with the process of varying existing agreements where specific criteria (consistent with the direction of the policy note) are met, linked to some sort of oversight, monitoring and/or route for complaint where authorities refuse to engage (given that unless your section 106 agreement is at least five years’ old, or unless this is in the context of a section 73 application (of which more in a moment) there is no right of appeal on the part of the developer)
  • Not the current suggestion that the section 73 process “should no longer be used as an alternative means of reconsidering fundamental questions of scheme viability or planning obligations” but rather a proper recognition of the real challenge of keeping planning permissions, and associated planning obligations packages, up to date as against changing circumstances and the important role that section 73 plays in this. Attempts to make currently unviable schemes viable invariably involve an intertwined mix of scheme changes and changes to planning obligations. Section 73B, introduced by the Levelling-up and Regeneration Act 2023, is less useful as only the implications of the proposed changes are to be taken into account rather than considering the amended proposal holistically against the current development plan and other material considerations. This all needs to be connected up with the continuing problem that Hillside creates for amendments to projects (I was pleased to see Baroness Taylor confirm this week, on behalf of the government, in response to Lord Banner’s tabled amendment to the Planning and Infrastructure Bill, that the government will “explore with the sector” a “statutory role for drop-in permissions to deal with change to large-scale developments”. This is so important!).
  1. Is late stage (as opposed to early stage) review necessary in relation to the proposed “time-limited planning route”?

In basic summary, this route is where a residential scheme can commit to at least 20% affordable housing with a 60/40 social rent/intermediate tenure split with planning permission issued by the end of March 2028. If the first floor of the scheme has not been built by 31 March 2030 (in the case of larger phased schemes, in the case of any phase where the first floor of buildings providing at least 200 dwellings has not been built by that date), “a late review will be undertaken once 75 per cent of homes within the scheme or the final phase are occupied to determine whether a higher contribution for affordable housing can be made”.

Why the late stage review mechanism in these circumstances, rather than the early stage review that is currently the case with fast track schemes that don’t achieve substantial implantation by the specified deadline under London Plan policy H5? Late stage reviews unnecessarily spook funders and lenders, leaving the eventual outcome too late in the process – and also having the public policy disbenefit of being too late to allow for any further affordable housing, that can be unlocked via the review, to be accommodated within the scheme. There is also inconsistency with paragraph 30 which suggests another approach for multi-phase schemes: “For multi-phase schemes, a review of the scheme will apply prior to the start of each phase for which the milestone in paragraph 27 has not been reached, to determine whether additional affordable housing can be provided in subsequent phases.”

Isn’t it better to keep things simple and follow, where possible, the existing mechanisms within policy H5, just with the thresholds temporarily reduced?

  1. Are there unnecessary difficulties with introducing a viability test into the proposed CIL relief?

Permissions which are secured via the new time-limited planning route that commence after the relief is in place and but before December 2028 will qualify for at least 50% relief from borough CIL (NB is this 50% after reliefs and exemptions have been applied and what will be the calibration to work out the higher level of relief where the scheme is delivering more than 20% affordable housing?), but the relief would be “contingent upon meeting proportionate qualifying criteria to ensure relief is targeted at schemes which would otherwise remain stalled or fail to come forwards, with a lower relief applicable where the full available amount is shown not to be warranted.” This sounds complicated. With this hurdle in place, not only would the developer not know whether they will qualify for the relief until planning permission is granted and they receive their liability notice, but it means that the purported advantage with the time-limited planning route of not having to undertake viability assessment is illusory, because the work will be needed in any event to secure the CIL relief – and the requirement will surely be very hard to turn into workable legislative drafting – we know how difficult exceptional circumstances relief is to secure due to the various criteria and requirements built into that particular mechanism.

  1. Are the proposed additional powers to be given to the Mayor enough?

Boroughs would be required to “refer planning schemes of 50 units or more where the borough is minded to refuse the application – this would be a more streamlined process operating alongside the existing referral threshold of 150 units which applies regardless of a borough’s intended decision, and would ensure that the Mayor was able to review whether the right decision had been reached in the context of the housing crisis.”

But there may well be cases where schemes are being held up at borough level, either pre-resolution or post resolution whilst for instance the section 106 agreement is being negotiated, and where securing planning permission by the end of March 2028 will be critical under this package of measures. Here, speedy intervention, or threatened intervention, by the Mayor could really help. So, for this time limited period at least, why not allow the Mayor to intervene at any time after the end of the statutory determination period in relation to any scheme comprising at least 50 dwellings? Otherwise, that absolute cut of the end of March 2028 for grant of planning permission will need to some flex built in to allow for the possibility of appeal etc.

I’ll confine myself to those four although I have others, and I know that you do too…

NB none of this is to be churlish as to the scale of the task that MHCLG and the GLA have before them. It is of course by no means easy to get this package right and to avoid unintended consequences.

Simon Ricketts, 1 November 2025

Personal views, et cetera

Commons Select Committee: Land Value Capture

Today’s Commons Housing Communities and Local Government Committee’s report Delivering 1.5 million new homes: Land Value Capture (28 October 2025) contains recommendations which are more wide-ranging than the report’s title would suggest: some practical and, one would hope, uncontroversial; others touching on some raw political nerves at MHCLG no doubt.

Starting with the latter, do turn to the “epilogue” which comments directly on what were at that stage just media reports as to the “package of support for housebuilding in the capital” announcement which the government and the Mayor of London issued on 23 October 2025. The Committee expresses itself to be “seriously concerned by media reports that London’s affordable housing target could be cut” and “the Secretary of State may be considering suspending local authorities’ powers to charge the Community Infrastructure Levy to address concerns about development viability. None of the evidence to our inquiry—including from representatives of developers—advocated abolishing CIL entirely as a means of addressing viability concerns. On the contrary, we heard that the Government should reform CIL to extend its coverage where it is viable.”

“The Ministry must continue its work with the Greater London Authority to deliver an acceleration package, so that London boroughs are delivering housing in line with their local housing need targets. In response to this Report, the Ministry must provide its assessment of how changes to London’s affordable housing target may deliver more affordable housing units, by increasing the number of new homes built overall. Any reduction to London’s affordable housing target must be accompanied by a clawback mechanism to ensure developers return a portion of their profits to the local authority, ringfenced for affordable housing delivery, if a development surpasses an agreed benchmark profit. If London’s affordable housing target is reduced and the number of affordable housing units delivered declines, the Ministry and the Greater London Authority must commit to reinstating the 35% target.”

Perhaps this epilogue is slightly premature, given the actual announcement proved only to be a prologue to a consultation process that will run “from November” (late November is my guess). Perhaps the Committee should hear further evidence on that back of the consultation material to be published – it is slightly odd to be responding just to a newspaper report, particularly given that the actual announcement has been made.

But that epilogue does point to the fundamental policy tension in the current economic environment: what matters most – affordable housing delivery by percentage, or by absolute numbers? See for instance its recommendation that the government’s “forthcoming reforms to its guidance on viability assessments must ensure developers reliably deliver on their agreed affordable housing commitments, with viability assessments only used to alter these commitments retrospectively in the most exceptional circumstances. To support this, we recommend that all local authorities in England must be encouraged to set a minimum percentage target for affordable housing in their local plan [NB what don’t?], with a ‘fast-track’ route planning route for developments which meet this local target.”

“Too often, site-specific viability assessments are used by developers to negotiate down affordable housing requirements in circumstances where this is completely unjustifiable. Affordable housing contributions are frequently the first provision to be cut following a viability assessment, even where a developer may be making other significant contributions through Section 106 agreements and CIL. In areas with high land values, viability assessments should only be used in this way in very exceptional circumstances. Currently, not all local authorities have their affordable housing requirements clearly set out in local policy. Greater clarity from local authorities would provide developers with the right incentives to avoid lengthy viability negotiations, and ensure more applications are meeting local affordable housing requirements from the outset.

As part of its ongoing review of the viability planning practice guidance, the Government must consider how different types of developer contribution could be re-negotiated following a viability assessment, to protect affordable housing contributions. The Government must also update national policy to encourage all local authorities to set a minimum percentage target for affordable housing in their Local Plan for all major developments that include housing. This figure should be based on a local need assessment for affordable housing in each local authority, with particular regard for the local need for Social Rent homes. Local authorities should be encouraged to offer a ‘fast-track route’ for developments which meet the local affordable housing target, by making those developments exempt from detailed viability assessments and re-assessments later in the development process. This would encourage developments with a high percentage of affordable housing and speed up the delivery of housing of all tenures.

The Government must continue to develop its proposal to publish indicative benchmark land values to inform viability assessments on Green Belt land across England. The Government must publish different benchmark land values for each region of England, to reflect variation in land values. The Government must also ensure that the viability planning practice guidance contains clear advice on the “local material considerations” that would warrant local adjustments. The Government should continually review the effectiveness of the policy and consider how it may be extended to development on land that is not in the Green Belt.”

On land value capture itself:

“There is scope to reform the current system of developer contributions in England to capture a greater proportion of land value uplifts from development to deliver affordable housing and public infrastructure. There is a compelling case for such reforms—especially in the context of a deepening housing crisis and with public finances currently under strain. However, a radical departure from the Section 106/Community Infrastructure Levy (CIL) regime, which currently constitute the existing mechanisms of land value capture in England, would risk a detrimental impact on the supply of land in the short-term. We recognise that this would be disruptive to the Government’s housebuilding agenda.

Reforms to land value capture should be iterative, starting with improvements to existing mechanisms. Therefore, the Government must immediately pursue the reforms to Section 106 and CIL outlined in the chapters below. These reforms must optimise the system’s capacity to capture land value uplifts and deliver infrastructure and affordable housing—particularly homes for Social Rent—in line with the Government’s wider policy ambitions. The Government must also trial additional mechanisms of land value capture in areas where there are significant uplifts in land value which current mechanisms may not capture effectively. Specifically, the New Towns programme discussed in Chapter 5 presents a vital opportunity to test new ways of financing infrastructure delivery on large developments and learn lessons for future reforms.

Any reforms to land value capture should also be considerate of the wider tax system, to balance public needs and equitable charges on development. To support this work, the Government should publish updated land value estimates, which were last published in August 2020. If the Government does not intend to do so, it must explain why it no longer publishes this data.”

In essence, the Committee sees any radical change as likely to be disruptive to the government’s current agenda. Instead, it is recommending a number of changes which in my view are “no brainers”, for instance better resources for local planning authorities and looking to simplify the approach to section 106 agreements and to CIL:

Reforms to section 106 agreements

“There is a strong case for the introduction of template clauses for aspects of Section 106 agreements across England, as was recommended by the National Audit Office and others. Templates would allow local authorities to focus negotiations on site-specific factors rather than legal wordings. Template clauses would also allow for greater standardisation and clarity of requirements across all local authorities, and in turn reduce the workload of local authorities and Small and Medium-sized Enterprise developers.

As part of the site thresholds consultation that will take place later this year, the Ministry must seek views on how standardised Section 106 templates could most effectively streamline the negotiation process across sites of all sizes. Based on the consultation responses, the Ministry must work with the Planning Advisory Service to develop a suite of Section 106 template clauses and publish these within six months of the consultation closing. Alongside their publication, the Ministry must also update its guidance to local authorities on Planning Obligations to encourage local authorities to adopt these template clauses.”

I covered the same ground in my 14 June 2025 blog post Why Does Negotiating Section 106 Agreements Have To Be Such A Drag? Not only that, but my firm has also been working on an actual template draft for small and medium sized schemes and a specific set of proposals for ironing out the pinch points that currently exist at every step of the sway from arriving at heads of terms through to agreement completion. This was there to be grasped – it is a national embarrassment. We held a workshop on 30 September 2025, attended by a selection of thirty or so lawyers and planners from the public and private sectors, developers and representatives of industry bodies with MHCLG present in an observer capacity. If you weren’t invited I apologise but we were limited by the size of our meeting room! The draft output from the workshop will be released next month. If there is an organisation out there which is willing to make a larger space available in late November for a launch event please let me know.

Section 106 dispute resolution scheme

This may be why I write blog posts…. The Committee picked up on a reference I made in the blog post mentioned above to section 158 of the Housing and Planning Act 2016 which has never been switched on, allowing for a dispute resolution procedure to be able to be invoked where necessary during the course of negotiations.

“Local planning authorities across England have expressed concern that protracted Section 106 negotiations are causing delays to housing delivery. Drawn out negotiations do not benefit public outcomes and cause undue delays to development, which may impede the Government’s housebuilding ambitions. Whilst we recognise the Minister for Housing and Planning’s concerns that introducing a dispute resolution scheme may add complexity to the system, we believe the potential benefits to affordable housing delivery and unlocking stalled development outweigh this risk.

The Government should introduce a statutory Section 106 dispute resolution scheme, under the provisions of the Housing and Planning Act 2016. If the Government does not intend to pursue this, it should set out a detailed explanation as to why the Ministry has chosen not to implement the provision legislated for by Parliament in the 2016 Act. This should include setting out any specific technical or legal barriers to implementation which the Ministry has identified.”

Community Infrastructure Levy

Again, nothing earth-shattering. Rather, calls for more transparency as to which authorities are charging CIL and at what rates; widening opportunities for authorities to pool receipts (and recognising the opportunity that the reintroduction of strategic planning will bring) and greater focus on infrastructure funding statements.

On new towns:

The Committee calls on the government to set out where the funding is to come from (“The Government’s New Towns programme is likely to require billions of pounds of public and private investment over several decades, including millions from HM Treasury to establish development corporations during this Parliament”); greater use should be enabled of tax increment funding to fund infrastructure in cities and new towns. Specifically on the role that land value capture might play:

“There is significant potential to use land value capture as part of funding the proposed New Towns, especially on green field sites. However, we are concerned that the Government has announced substantial detail of the 12 potential sites without a planning policy to protect land value, contrary to the recommendation of the New Towns Taskforce. It appears that the Government has not yet established any delivery body to purchase land or enter agreements with landowners, which risks allowing developers considerable time to acquire sites for speculative development and immediately push up land values. The Taskforce said that, in the worst-case scenario, this could “jeopardise New Town plans”.

The Government must immediately conduct an analysis of Existing Use Values (EUV) on each of the 12 sites to maximise the capture of future land value uplifts, and develop plans for using appropriate mechanisms for land value capture on each site. This must include the option of development corporations using Compulsory Purchase Orders to assemble land where ownership is fragmented or negotiations stall. The Government must ensure arrangements for the purchase of land on New Towns sites are in place before it announces its final decision on locations by spring 2026.”

“The Ministry is right to prioritise New Towns which have the greatest potential to boost housing supply in the short-term, but its plan to “get spades in the ground on at least three new towns in this Parliament” does not match the scale of the Government’s housebuilding ambition. The New Towns programme can and must make a contribution towards increasing housing supply during this Parliament.

The Government must immediately clarify how housing delivery in New Towns will interact with local authority housing need targets. In its final response in spring 2026, the Government must include a roadmap for the New Towns programme, to show when each development corporation will be established, when development will commence on each site, and the estimated development timeline for each New Town.”

So will the government meet its 1.5m homes target?

“The housing sector is eagerly awaiting the Government’s Long-Term Housing Strategy, which it first announced in July 2024. Originally, this was to be published alongside the Spending Review in spring 2025. The continuing lack of a cohesive plan to deliver 1.5 million new homes has left the sector in the dark. We are also deeply disappointed that the Government has been unwilling to engage with us on the development of the Strategy, or provide any updates on its delayed publication, other than to tell us that it will be published “later this year”.”

“The Government can only begin to make significant progress towards its 1.5 million target once the sum of local housing need targets in Local Plans add up to that figure. Whilst the Government’s reforms to the National Planning Policy Framework seek to plan for approximately 370,000 new homes per year, local authorities will take several years to transition to this national annual target, as the currently Local Plans take seven years to produce and adopt on average. The Government has stated its ambition to introduce a 30-month plan-making timeline, but the relevant provisions in the Levelling-up and Regeneration Act 2023 to speed up plan-making have still not been implemented.

The Government must immediately bring forward its Long-Term Housing Strategy without further delay. It must set out an ambitious, comprehensive, and achievable set of policies that will deliver 1.5 million new homes by July 2029. The Strategy must prioritise implementing reforms to the plan-making system to move towards a 30-month timeline. The Strategy document must include an annex to provide the Ministry’s assessment of how many net additional dwellings each policy change will contribute towards annual housing supply, adding up to 1.5 million new homes over the five-year Parliament. If the Ministry is unable to supply this, the Government must make an oral statement to the House to confirm how many new homes it will deliver by the end this Parliament.”

There we have it. If nothing else, that will all spur us on with the work on the template section 106 agreements work and, related to that, I’m very keen to discuss how section 158 of the Housing and Planning Act 2016 might provide an effective, light touch, procedure.

Simon Ricketts, 28 October 2025

Personal views, et cetera

London Stalling

This one is about the current position with London (non) development and some thoughts about what procedural steps may be open to you if you are a London (non) developer with a planning permission for a scheme that is no longer viable to build out.

On 14 October 2025, Molior published figures for Q3 2025 construction starts and sales in relation to schemes in London with 25+ homes for private sale or rent. Apologies for the extensive quoting but their summary is clearer than anything I can write:

“Between 2015 and 2020, there were 60-65,000 homes for private sale or rent under construction in London at any given time.

Today, that number has fallen to 40,000 … and 5,300 of those are halted part-built.

With a surge of completions expected in 2026, Molior forecasts that just 15-20,000 new homes will be actively under construction on 1st January 2027.”

“London had just 5,933 new home sales in Q1-Q3 2025.

Sales rates are weak across all local markets and at every price point.

At prices up to £600 psf – the level at which most London owner-occupiers can buy – sales to individuals are virtually non-existent.”

“Build-to-rent completions are about to plunge.

Interest rates rose during 2022, then the Liz Truss budget pushed them higher.

This stopped new money from funding London multifamily development.

Completions are set to disappear after 2027 because construction starts fell in 2023 / 2024.”

“There were 3,248 private starts in Q1-Q3 2025.

London is now on track for fewer than 5,000 private construction starts in 2025.”

“Starts have been falling for a decade because sales rates and profitability have been falling for a decade.

Building Safety Regulator delays have made things worse in 2025.”

“Development is unviable across half of London.

Development costs are high, so it is unviable to build profitably in half of London – areas under £650 psf.

This is even if the land is provided free and there are no planning obligations like CIL and affordable housing.”

“London has 281,000 unbuilt permissions.

These numbers are private + affordable C3 permissions.

The numbers include outline consents, detailed consents and unbuilt phases of schemes partly under way.

Also included are projects successful at committee but still waiting S106 sign-off.”

Set all that alongside the homelessness and rough sleeping crises in London. The BBC reported yesterday that more than 132,000 households were living in temporary accommodation on 30 June 2025, up 7.6% from the same time last year. Aside from the human cost, this is of course at a huge financial cost for London boroughs: £740m ‘black hole’: London’s temporary accommodation crisis draining local resources (London Councils, 13 October 2025). And at the sharpest end: Number of people “living on the streets” of London increases by 26% (Crisis, 31 July 2025).

Whilst I try not to wear out my two typing-fingers commenting on press speculation about forthcoming announcements, I think we can assume that the government and the Mayor of London will soon be announcing various measures to try to turn this around or at least provide some sort of jump-start (note to government press team, I suggest that we are in “jump-start” rather than “turbo-charge” territory). See for example the Guardian’s 17 October 2025 piece London developers to be allowed to reduce percentage of affordable homes.

The spectre in the press pieces of some temporary reduction in developers’ threshold for qualifying for the Mayor’s fast-track (i.e. basically avoiding the need for formal viability appraisal and a late stage viability review mechanism if they can commit to a level of affordable housing which is usually 35%, with a policy-compliant split of affordable housing tenure types within that – see policy H5 of the London Plan for more detail) down to perhaps 20% is being seen by some as amounting to an actual reduction in the amount of affordable (and particularly socially rented) housing that will be developed.  But this analysis is unfortunately wrong: very few schemes are currently proceeding with 35% or more affordable housing.  Viability appraisals either agreed or accepted after scrutiny on appeal (this is not developers cooking the books) are already coming out at way less than 20%, let alone 35% (which is why simply reducing the threshold alone wouldn’t be enough). See for instance the inspector’s decision in relation to the Stag Brewery appeal (summarised in my 4 May 2025 blog post (7.5% affordable housing) and the 29 May 2025 decision letter in relation to a proposed tower block in Cuba Street (16.6% affordable housing). Nor is this a purely London phenomenon, if you recall last month’s Brighton Gasworks decision (summarised in my 27 September 2025 blog post) (zero affordable housing).

20%, plus the other measures being whispered about such as increasing subsidies for socially rented housing and/or allowing councils not to charge CIL, may tip the balance so as to turn some non-developers back into being developers again and thereby deliver more affordable housing (including socially rented housing) in absolute numbers (which is what counts after all) than is currently the case.

But what about the many schemes consented on the basis of 35% or more, that simply aren’t proceeding, at least beyond basic operations to keep the permission alive (see my 7 September 2025 blog post The Stressful & Sadly Often Necessary Task Of Keeping Planning Permissions Alive)?

If we look to amend existing, unviable, section 106 agreements, no longer do we have the benefit of section 106BA, a provision introduced in April 2013 via the Growth and Infrastructure Act 2013, to allow developers to apply to modify or discharge affordable housing obligations in Section 106 agreements where those obligations made a development economically unviable, and then repealed three years later in April 2016. That provision unlocked various stalled permissions at the time. Is it too late, or too unpalatable, for an amendment to the Planning and Infrastructure Bill simply to reintroduce it?

Instead, the main routes are:

  • If the section 106 planning obligation is at least five years’ old, a formal application to the local planning authority can be made under section 106 A of the Town and Country Planning Act 1990 on the basis that the relevant obligation, unless modified, “no longer serves a useful purpose”.  The test is expressed very generally which is unhelpful but the case would be that if the obligation is causing development, otherwise beneficial, not to proceed, it cannot be serving a “useful purpose”. There is the right of appeal to the Planning Inspectorate.
  • Seeking variation of section 106 planning obligations in the slip-stream of an application made under section 73 of the Town and Country Planning Act 1990 (an application, of course, for planning permission for the development of land without complying with conditions subject to which a previous planning permission was granted – and which is to be assessed against the current development plan and other material considerations). This was the route taken in the Cuba Street appeal I mentioned above. Full planning permission had been granted in December 2022. A section 73 application was made to amend the approved floor plans set out in the schedule referenced in condition 2 of that permission, to “provide an increase in the residential units from 421 to 434, and a reduction in the affordable housing (AH) provision from 100 (71/29 affordable rented to intermediate split as a ratio) to 58 (66/44 affordable rented to intermediate split as a ratio). In percentage terms the change in AH would be from 30.15 % to 16.6%. A consequence of these changes would be amendments to conditions 24 and 29, with respect to wheelchair accessible homes and cycle storage, given that they relate to the quantum of development subject to the original permission.”
  • Negotiating a deed of variation to the section 106 planning obligation, outside these formal procedures, without any recourse to appeal if the authority is resistant.
  • A fresh application for planning permission – utterly the nuclear option in times of cost, time and risk.

If there is indeed some form of announcement from MHCLG and the Mayor of London, I will be interested to see:

  • What is said about existing stalled permissions and any advice that is to be given to boroughs as to the approach they should take when approached by way of any of these procedural routes.
  • More generally, how will any announced (presumably temporary) relaxations with regard to the London Plan policy H5 threshold approach  or any other policy requirements sit as regards section 38 (6) of the Planning and Compulsory Purchase Act 2004 (“If regard is to be had to the development plan for the purpose of any determination to be made under the planning Acts the determination must be made in accordance with the plan unless material considerations indicate otherwise”)? Where there’s a will there’s a way but this is all another reminder, as if we needed it, that the process for reviewing and updating the London is so slow as not to be fit for purpose.

Oh and we still await MHCLG’s updated planning practice guidance on viability.

“London calling, at the top of the dial.

And after all this, won’t you give me a smile?”

Simon Ricketts, 18 October 2025

Personal views, et cetera

The Stressful & Sadly Often Necessary Task Of Keeping Planning Permissions Alive

At a time when political focus is on the actual delivery of development projects, sadly much of our time as planning lawyers is still spent on keeping planning permissions alive ready for some future time when the particular project may be viable or otherwise able to proceed.

Planning permissions take an age to secure. My 14 June 2025 blog post Why Does Negotiating Section 106 Agreements Have To Be Such A Drag? referred to the May 2025 Lichfields research work How long is a piece of string? which found that the average determination period for outline planning applications for ten or more dwellings in 2024 was 783 days (up from 284 days in 2014).

So, maybe two or three years after scheme design freeze, the developer achieves its planning permission. By which time the market and/or technical requirements may have changed. If a full planning permission it may well have the default implementation deadline of three years, failing which it will lapse. If an outline planning permission it may well have the default reserved matters submission deadline of three years and a default implementation deadline of the later of five years from grant and two years from the last reserved matters approval to be secured.

The Planning and Compulsory Purchase Act 2004 tightened the screw on developers in two ways:  first by removing the ability to use section 73 applications to extend the deadline for implementation and the submission of reserved matters applications (subject to temporary extensions first allowed for in the wake of the financial crisis and secondly in the light of the Covid pandemic) and secondly by reducing the default implementation deadline to three years from five.

I would argue that those measures have not served to increase or speed up the delivery of development, nor has it cleared the system of planning permissions which are no longer ever likely to be built out. All it has done is increase the extent to which developers, when they are not ready to proceed with development, are driven to carry out a limited implementation strategy simply to keep the planning permission alive.

After all, relatively minor works pursuant to the planning permission may serve to keep it alive;  a list of “material operations” is included in section 56 of the Town and Country Planning Act 1990:

“(a) any work of construction in the course of the erection of a building;

(aa) any work of demolition of a building;

(b) the digging of a trench which is to contain the foundations, or part of the foundations, of a building;

(c) the laying of any underground main or pipe to the foundations, or part of the foundations, of a building or to any such trench as is mentioned in paragraph (b);

(d)  any operation in the course of laying out or constructing a road or part of a road;

(e)  any change in the use of any land which constitutes material development.”

However, care is needed, because the works carried out must not be in breach of any pre-commencement conditions on the planning permission (unless particular exceptions apply that have been established by case law). Often therefore, prior to works being carried out, it will be necessary to discharge various conditions or to vary them so as to allow for the implementation works to be carried out pre-discharge.

The Building Safety Act has given rise to an additional complexity in the case of “higher-risk buildings”, namely (in basic summary) buildings that are to contain at least two residential dwellings and which are either at least 18 metres in height or at least seven storeys. Under regulation 3 of the Building (Higher-Risk Buildings Procedures) (England) Regulations 2023, works can’t start to construction until building control approval has been secured, meaning that what may have been a straight-forward implementation strategy – perhaps digging a trench for part of the foundations of the building – may need to be ruled out given the current delays in the Building Safety Act gateway checks processes. (What is and isn’t determined to be a start to construction is left a little hazy, given that HSE guidance states that “carrying out of site set up, demolition of previous buildings, stripping out works or the excavation of trial holes or installation of test piles would not be considered as starting work“).

Thought will also need to be given to whether the implementation works trigger any onerous section 106 agreement obligations, bearing in mind that the agreement is likely to have excluded certain types of preliminary works from the definition of “commencement of development” in the agreement.

If the scheme is in an area where a CIL charging schedule is in effect, thought will also need to be given to the extent to which a community infrastructure levy payment is triggered and for how much: is this a phased permission where CIL for the relevant phase will be triggered, or will these limited works trigger payment of CIL for the entire development?

Lastly, how to have a document trail that can be relied upon in the future to demonstrate that the planning permission has been kept alive? There are well-trodden strategies for securing a certificate of lawfulness under section 191 or 192 of the 1990 Act (the two processes entail different strategies, with different risks and indeed even sometimes very different application fees).

Does it all have to be quite like this? What public policy purpose is served? I was interested recently to learn that in Northern Ireland, for instance, the position is different:

First, rather than the long list of material operations within section 56 of the 1990 Act, section 63 (2) of the Planning Act (Northern Ireland) 2011: “development shall be taken to be begun on the earliest date on which any of the following operations comprised in the development begins to be carried out—

  1. where the development consists of or includes the erection of a building, any work of construction in the course of the erection of the building;
  1. where the development consists of or includes alterations to a building, any work involved in the alterations;
  1. where the development consists of or includes a change of use of any building or other land, that change of use;
  1. where the development consists of or includes mining operations, any of those operations.”

Decisions of the Planning Appeals Commission in Northern Ireland have determined that for instance the laying out of an access or the digging of a trench is not sufficient to meet this test.

Secondly, there is a specific procedure in Northern Ireland for renewing planning permissions: Regulation 3 of the Planning (General Development Procedure) Order (Northern Ireland) 2015 , with Department for Infrastructure advice as follows:

“As a general rule, such applications should be considered and refused only where: (a) there has been some material change in planning circumstances since the original permission was granted (e.g. a change in some relevant planning policy for the area, or in relevant highway considerations, or the publication of new planning policy guidance, material to the renewal application); (b) continued failure to begin the development will contribute unacceptably to uncertainty about the future pattern of development in the area; or (c) the application is premature because the permission still has a reasonable time to run. This is not an exhaustive list and each application must be considered on a case by case basis.”

Is this a better approach? What do we think?

Simon Ricketts, 7 September 2025

Personal views, et cetera

A Bluffer’s Guide To The English Devolution And Community Empowerment Bill

This weekend you will be worried that someone in the pub is going to say “hey, you’re a planner! … what’s the difference between a mayoral strategic authority, non-mayoral foundation strategic authority and single local authority foundation strategic authority; and between a CCA and a CA; and between the community right to bid and the community right to buy?”

You definitely need to be prepared and, rather than staying at home instead, there are probably three main options:

  1. You could read the 338 page Bill that was introduced into the House of Commons on 10 July 2025, perhaps alongside the 156 pages of explanatory notes and 237 pages of impact assessment.
  1. You could channel your inner Angela Rayner, by way of MHCLG’s 10 July 2025 press release or, for a deeper dive, a guidance document published by MHCLG, which serves to put the proposals within the Bill within a wider reform context.
  1. You could (and have indeed already started to) read this bluffer’s guide (this bluffer being me).

Confession: I have only scrolled through the material once so far just identifying what seemed to be most immediately relevant. There will be much that I have missed.

Much of the Bill serves to give effect to proposals within the English Devolution White Paper (16 December 2024) which I commented on from a planning perspective in my 18 January 2025 blog post Viva La Devolution although there is much more besides.

Anyway, here is some stuff that may be useful:

The Bill is really about four main things (quoting from MHCLG’s guidance document):

  • “Devolution: describing devolution structures, outlining and expanding powers for Mayors and authorities through the new Devolution Framework and explaining routes to devolution for places that don’t have it.”
  • Local government: ensuring the process for local government reorganisation supports the ambition in the White Paper, outlining changes to local authority governance, reforming accountability and introducing effective neighbourhood governance structures to amplify local voices.
  • Communities: giving more power to local communities to purchase assets of community value and …”
  • (the guidance document includes this under the “communities” heading but it is of wider relevance than that) abolishing upwards only rent review provisions in commercial leases.

Devolution

Devolution deals have to date been arrived at in ad hoc fashion. The Bill allows the government to roll out a standardised devolution framework. I summarised the different types of strategic authority in my January 2025 blog post, but MHCLH have now published this series of five “Devolution Framework Explainers” , on:

  • Established mayoral strategic authorities
  • Mayoral strategic authorities
  • Non-mayoral foundation strategic authorities
  • Single local authority foundation strategic authorities

In relation to roads, strategic authorities will be required to set up and coordinate a “key route network”, comprising the most important roads in their area, in respect of which they will have various powers of direction and the power to set traffic reduction targets – and will have the role of licensing bike and e-bike hire schemes.

In relation to planning, they will have equivalent powers to those of the London Mayor; in addition to SAs’ duty to prepare a spatial development strategy, the mayors of combined authorities and combined county authorities will have the power to direct refusal of planning applications of potential strategic importance (Regulations will need to set out what the thresholds will be) or to call them in for their own determination.  They will be able to prepare mayoral development orders, establish mayoral development corporations and, if there is an adopted SDS, levy Mayoral CIL. Mayoral SAs will also need to prepare a local growth plan.

Mayors will be able to appoint and renumerate “Commissioners” to lead on particular statutory “areas of competence”.

Mayors will be elected via the supplementary vote system, rather than “first past the post” (as was the system prior to May 2024). They will be able to be the police and crime commissioner for their SA area. They will not be able to moonlight as a member of Parliament.

What is all this likely to mean for particular areas? I’m glad you asked me that! MHCLG has also now published a series of 16 “Area Factsheets”, providing “information on areas benefitting from English devolution, including electoral terms, route to established status, police and fire functions, distinctive governance arrangements and local government reorganisation”, for:

  • Cambridgeshire and Peterborough
  • Devon and Torbay
  • East Midlands
  • Greater Lincolnshire
  • Greater London Authority
  • Greater Manchester
  • Hull and East Yorkshire
  • Lancashire
  • Liverpool City Region
  • North East
  • South Yorkshire
  • Tees Valley
  • West Midlands
  • West of England
  • West Yorkshire
  • York and North Yorkshire

Local government

This includes the power for the Secretary of State to direct two-tier councils to submit proposals as to how to become a single unitary tier and in some cases to direct particular unitaries to submit a proposal to merge with each other. The cabinet system will be compulsory for local authorities and there will be no new local authority mayors.

“The Bill will empower communities to have a voice in local decision by introducing a requirement on all local authorities in England to establish effective neighbourhood governance. The requirement for local authorities to have effective neighbourhood governance will empower ward councillors to take a greater leadership role in driving forward the priorities of their communities. This will help to move decision-making closer to residents, so decisions are made by people who understand local needs. Additionally, developing neighbourhood-based approaches will provide opportunities to organise public services to meet local needs better.” (from the explanatory notes, paragraph 98).

Assets of community value

The Localism Act 2011 introduced the “community right to bid” by way of the ”assets of community value” process (for a couple of examples of litigation in relation to assets of community value, see my 14 July 2018 blog post, 2 ACV Disputes). In that blog post I summarised the rather toothless nature of the current system as follows:

“The listing of land or buildings as an asset of community value has legal consequences but ones that will seldom be determinative as to an owner’s longterm plans. Whilst disposal of a freehold or long leasehold interest can’t take place without community groups being given an opportunity to bid, there is no obligation to accept any community bid that is made. The listing can be material in relation to the determination of an application for planning permission, but the weight to be attached to the ACV listing is a matter for the decision maker.”

The Bill proposes the strengthening of the system in several ways (again quoting from MHCLG’s guidance document):

  • “The community group and asset owner will either negotiate a price for the asset, or an independent valuer will set a price based on the market value. Under Community Right to Buy, the moratorium on the sale of the asset will be extended to 12 months, giving community groups more time to raise funding to meet the agreed purchase price. Asset owners will be able to ask the local authority to check that community groups are making sufficient progress on the sale 6 months into the moratorium.

The definition of an ACV will also be expanded to help protect a wider range of assets, including those that support the economy of a community and those that were historically of importance to the community. Community groups will be able to appeal the local authority’s decision on whether an asset is of community value and local authorities will be supported to deliver the powers with new guidance.”

(This will raise significant concerns with land owners I feel sure).

  • Although sports grounds can already fall within the ACV definition the Bill will introduce “a new type of ACV – the Sporting Asset of Community Value (SACV) and automatically designate all eligible sports grounds as such. As with the standard ACV regime, communities will have the first right of refusal when a ground is put up for sale. SACV status will also provide enhanced protections for sports grounds. For example, unlike the standard 5-year renewal period under the ACV system, sports grounds designated as SACV will retain this status indefinitely. Other facilities – such as car parks – that the ground depends on to function effectively – will also be eligible for SACV listing, preventing the ground from being undermined by the intentional removal of its supporting assets.”

Abolishing upwards only rent review provisions in commercial leases

This landlord and tenant law provision, well away from my wheelhouse, is a strange outlier within the Bill.  As per the MHCLG guidance:

“The Bill will ban UORR clauses in new commercial leases in England and Wales. Commercial leases include sectors such as high street businesses, offices and manufacturing. Some very limited areas such as agricultural leases will be exempt. The ban will also apply to renewal leases where the tenant has security of tenure under Part II the Landlord and Tenant Act 1954. The ban aims to make commercial leasing fairer for tenants, ensure high street rents are set more efficiently, and stimulate economic growth.

Following the ban, if a UORR clause is in a new or renewal commercial lease, the requirement for rent not to decrease will be unenforceable; the new rent will be determined by whatever methodology is specified in the lease, for example in line with changes to the retail price index. The new rent may be higher, lower or the same as the previous rent.”

Enjoy your drink. Enough of all these acronyms, it’s an IPA for me please, thank you.

Simon Ricketts, 11 July 2025

Personal views, et cetera

IL Defined

Except that you can’t really define the Infrastructure Levy yet. This blog post summarises what we know so far and asks some open questions.

Town Legal’s summary of the Bill and related announcements contains this section on the Infrastructure Levy, for which thanks go to Clare Fielding:

“8. Part 4 – Infrastructure Levy

8.1 Part 4 of the Bill introduces a charge to be known as the “Infrastructure Levy” in England. In addition the Secretary of State is given the power to designate the HCA a charging authority for the purposes of the Infrastructure Levy.

8.2 The Community Infrastructure Levy (CIL) is abolished in England, other than Mayoral CIL which continues to exist in Greater London.

8.3 CIL continues to apply in Wales.

8.4 Schedule 11 of the Bill inserts new sections 204A to section 204Z1 into the Planning Act 2008 (“PA 2008”) giving the Secretary of State the power to make regulations (IL regulations) providing for the imposition in England of the Infrastructure levy. The regulation-making power creates the framework for an IL regime that looks is strikingly similar to CIL in some respects, but with some significant differences. Key features:

(a) Like CIL, LPA to be IL charging authority and IL regulations can so designate other councils and bodies as well;

(b) Like CIL, a person will be able to assume IL liability before development commences, and becomes liable when development commences;

(c) Like CIL, the IL regulations must make provision for liability when no-one has assumed liability;

(d) Like CIL, the IL regulations may make provision about matters such as partial liability, apportionment of liability, transfer of liability and exceptions from and reductions in liability;

(e) Like CIL, IL to be calculated when development “first permits development”, and IL becomes due on commencement [but Regulations may provide for it to be paid on account or in instalments];

(f) Like CIL, “development” is a defined term and IL regulations must define planning permission, define the time at which the planning permission is regarded as first permitting development;

(g) Like CIL, IR regulations must make a charitable exemption where the building is wholly or mainly used for charitable purposes, and may provide for charitable exemption in other circumstances;

(h) A charging authority must issue a charging schedule and in setting rates must have regard to the level of affordable housing funding from developers over a given period, the economic viability of development, the potential economic effects of including land value increase of certain matters, the amount of IL received from developments over a given period and the charging authority’s infrastructure delivery strategy;

(i) Unlike CIL, the IL regulations may allow for a much wider variety of approaches to rate-setting: differential rates for different uses or zones areas; nil or reduced rates; rates calculated not just by floorspace but by numbers of units, buildings, or by allocation of space within units or buildings, or in any other way;

(j) Unlike CIL, IL is to be charged as a proportion of property value (this has not yet been fully fleshed out);

(k) Like CIL, charging schedules must be subject to public examination procedures;

(l) IL to be applied in the same way as CIL, to fund the provision (etc) of infrastructure to support the development of the charging authority’s area. “Infrastructure” includes affordable housing (as the PA 2008 did before that reference was removed by the CIL Regulations), and the regulation-making power still includes power to amend the definition of infrastructure for IL purposes;

(m) Unlike CIL, there is an interesting “relationship with other powers” paragraph (para 204Z1), under which the IL regulations may include provision about how the following powers are to be used or are not to be used:

(i) Part 11 of the PA 2008 on CIL;

(ii) section 70 TCPA 1990 (planning permission);

(iii) section 106 TCPA 1990 (planning obligations); and

(iv) section 278 Highways Act 1980 (execution of works).

8.5 The Policy Paper explains further that it is the Government’s intention indeed to reduce the scale of s106 planning obligations so that s106 agreements will be used:

(1) on the largest sites in place of IL (provided that the value of the infrastructure being provided in that way is not less than that which would be achieved under IL); and

(2) on other sites where “narrowly focused” s106s will be used to provide onsite infrastructure.

8.6 The Policy paper also makes reference to removing the role of negotiations in delivering affordable housing, suggesting that the Government’s intention is that AH will be delivered through the IL.”

As set out in the policy paper, when providing for the detailed regime by way of Regulations, the Government will:

• Introduce a new ‘right to require’ to remove the role of negotiation in determining levels of onsite affordable housing. This rebalances the inequality between developers and local authorities by allowing local authorities to determine the portion of the levy they receive in-kind as onsite affordable homes.

• Consider how the Levy should be applied to registered provider-led schemes.

• Require developers to deliver infrastructure integral to the operation and physical design of a site – such as an internal play area or flood risk mitigation. Planning conditions and narrowly targeted section 106 agreements will be used to make sure this type of infrastructure is delivered.

• Detail the retained role for section 106 agreements to support delivery of the largest sites. In these instances, infrastructure will be able to be provided in-kind and negotiated, but with the guarantee that the value of what is agreed will be no less than will be paid through the Levy.

• Retain the neighbourhood share and administrative portion as currently occurs under the Community Infrastructure Levy.

• Introduce the Levy through a ‘test and learn’ approach. This means it will be rolled out nationally over several years, allowing for careful monitoring and evaluation, in order to design the most effective system possible.

By way of IL the Government is attempting to extend the Community Infrastructure Levy, massively, in three directions:

(a) to make local planning authorities responsible for the delivery of affordable housing, using funds raised by the levy – meaning that the monies raised from development will be at many multiples of current CIL rates.

(b) to charge the levy on the basis of gross development value rather than floorspace.

(c) to make introduction of the levy compulsory.

I have now read the relevant parts of the Bill (sections 113 to 115 and Schedule 11), explanatory notes and policy paper many times and I must confess that there is much that I still don’t understand or which is still a blur pending further detailed work.

This is how the levy was sold to us in the Planning For The Future White Paper (August 2020):

“The process for negotiating developer contributions to affordable housing and infrastructure is complex, protracted and unclear: as a result, the outcomes can be uncertain, which further diminishes trust in the system and reduces the ability of local planning authorities to plan for and deliver necessary infrastructure.”

“Securing necessary infrastructure and affordable housing alongside new development is central to our vision for the planning system. We want to bring forward reforms to make sure that developer contributions are:

• responsive to local needs, to ensure a fairer contribution from developers for local communities so that the right infrastructure and affordable housing is delivered;

• transparent, so it is clear to existing and new residents what new infrastructure will accompany development;

• consistent and simplified, to remove unnecessary delay and support competition in the housebuilding industry;

• buoyant, so that when prices go up the benefits are shared fairly between developers and the local community, and when prices go down there is no need to re-negotiate agreements.” (paragraph 4.5)

Now that we see what is emerging, I do not believe that anyone is suggesting that IL will be simpler than CIL. Undeniably it will be more complex (and indeed in London we will need to grapple both with CIL and IL – the work is doubled).

But I am concerned that it will be less predictable as well. Why does predictability matter? The main inflexion points in a typical development are as follows:

1. the contract to acquire the property, pricing-in likely development costs, including CIL/IL

2. scheme formulation so as to arrive at a proposed quantum and mix of development which is likely to be financially viable whilst working within likely planning constraints

3. negotiation of section 106 agreement and conditions such that permission can be issued

4. securing development funding and potential pre-lets and land parcel sales

5. letting the construction contract

6. sale of completed development, whether individual plot/flat sales or investment disposal.

If a reliable estimate of IL liability is not available for stages 1 to 3 and a concluded figure, which can relied upon as a final outcome, is not available for stages 4 to 6, development becomes much more difficult. How do you price, allocate risk and enable each party to the development to decide whether they are prepared to press the button?

The current proposals seem very blurred so far as to how and when gross development value, and therefore the amount of IL payable having regard to any relevant local thresholds, will be determined.

In terms of “how”, will it be for each developer to submit its valuer’s estimate of GDV for the completed development (or relevant completed phase), presumably prior to commencement of development? Or will there be some independent assessment? Or will there be any standardised values (for instance for development below a defined scale or value)? It is difficult enough with CIL where the moving parts are floorspace levels for each use plus the application of reliefs and exemptions. To these moving parts will now be added the inherent subjectivity that comes with valuation (accentuated where you have a type of development without readily available comparables, or subject to unusual restrictions or constraints?) and then the application of so far undefined thresholds – building costs for the area have been mentioned, but what about, for instance, existing pre-development land values (and will these be sufficiently site-specific)? The number at stake will also be much larger than is currently the case with CIL. Each process is going to be strongly argued over as the outcome will directly impact the financial bottom line of the developer and, ultimately, project viability.

In terms of “when”, will we be able to go “nap” on a figure at commencement of development or is the figure to be revisited on development completion or sale? Will any procedures for review or appeal carry on after development has commenced or will commencement of development be the cut-off?

If the authority subsequently requires affordable housing to be provided in the scheme by way of the “right to require”, how does this get taken into account in the calculation of GDV?

At what stage will a developer have certainty that a scheme is regarded as sufficiently large or strategic for IL not to apply? Can he opt in or out? Will there be local thresholds (which would inevitably influence scheme size, depending whether IL was regarded as a more or less advantageous mechanism than simply relying on section 106)?

It seems that “in kind” section 106 or other types of agreements will be required but the actual quantum of IL attributable to the development will not be known for certain at the stage the section 106 agreement is completed.

Will an authority’s targeted quantum of affordable housing, both borough/district wide and for particular areas or sites, be set out in its local plan, or infrastructure delivery statement? And will developers in future be bringing forward development proposals without reference to any anticipated affordable housing element? The local messaging is going to be complicated.

How rigorously will IL charging schedules be examined? The underlying valuation work and the thresholds to be applied will be critical.

How can we make sure that IL proceeds are used in the right way and that more affordable housing is indeed delivered, as well as the infrastructure needed to enable particular development proposals to come forward without delay?

Will the system be robust and workable in appeal situations where the developer and authority may not necessarily see eye to eye?

It is going to be fascinating to work through these sorts of issues as the proposals take shape. At this stage, what protections do we want to see in the Bill itself to safeguard against the detailed regime subsequently not living up to the Government’s promises? The Government’s commitment to a “test and learn” approach to the introduction of IL is welcome but of course risks adding to complexity by creating a patchwork of different processes dependent on geography and/or when schemes come forward – and accepts that there are inevitably going to be mistakes and unanticipated outcomes along the way.

I wasn’t particularly planning to run a clubhouse session this Tuesday but if anyone would like to join a discussion on these sorts of issues, let’s re-think that. Let me know!

Finally, another plug for the Town Legal/Landmark Chambers webinar at 5 pm on Monday 6 June back on the theme of housing: “Will the Bill deliver more or less housing? Yes or no?” Simon Gallagher (Department of Levelling Up, Housing and Communities) will join Zack Simons (Landmark Chambers), Kathryn Ventham (Barton Willmore now Stantec) and myself in a session chaired by Town Legal’s Meeta Kaur. Join us here.

Simon Ricketts, 28 May 2022

Personal views, et cetera

Details from image by Megan Bucknall courtesy of Unsplash

Stonewater – Paper – Scissors

We all had a good, evidence-based, moan about CIL on clubhouse last week.

Stonewater (2) Limited v Wealden District Council (Thornton J, 15 October 2021) is of course only the latest example of the complexities and uncertainties that arise – in particular on the question of application of reliefs and exemptions (the importance and number of which has been driven by the fact that CIL liability is in most cases so significant) but also on the question of how to mesh the operation of the CIL regime with the operation of the planning system without jamming the whole thing up.

There are plenty of good summaries and critiques of the judgment by now (for instance this Town Library summary by my colleague Safiyah Islam, or this 18 October 2021 blog post by Nicola Gooch, CIL, S.106 Agreements & Affordable Housing Relief: What happens when the housing crisis hits political reality).

This is my take:

Land with planning permission for 169 houses was acquired by Stonewater, a registered provider of affordable housing. The section 106 agreement provided for 59 dwellings within the development to be affordable housing, with a specified tenure mix. The number of affordable housing units was to “comprise 35% of the Dwellings within the Phase (which shall be rounded up to the nearest whole unit”.

Stonewater’s model was more enlightened than that of the developer which had secured the permission. Stonewater “regularly acquires sites which are subject to a section 106 agreement which secure a low or policy compliant level (35%) of affordable housing, with a view to increasing affordable housing delivery to 100%. The Court was told that this is not unusual, and the Claimant is not alone in doing so. Grants from Homes England are based on the principle that registered social housing providers provide additional affordable housing over and above the levels secured in planning obligations.”

Relief from CIL is available for affordable housing via social housing relief. There are criteria set out in regulation 49 of the CIL Regulations which do not include any requirement that the affordable housing is secured by way of section 106 agreement or condition. After all, if there is a clawback period of seven years within which CIL has to be paid with interest if the occupation no longer meets the criteria for relief.

Unsurprisingly, Stonewater sought social housing relief for the whole development, given that it proposed to deliver it all as affordable housing meeting the criteria in regulation 49. The council refused relief on the basis that a varied section 106 agreement would first be required, committing in the agreement for all the dwellings to be delivered as affordable housing. The council later additionally argued that the existing section 106 agreement was to be interpreted as rendering it unlawful for more than 35% of the dwellings to be delivered as affordable housing.

It might be asked why Stonewater didn’t simply enter into the section 106 agreement required – but of course that would have been likely to destroy its entitlement to Homes England funding given that on the face of it there would then be no additionality, and why should it enter into a further agreement if that was not required by the Regulations? Stonewater challenged the council’s decision by way of judicial review. The first issue melted away once the Secretary of State was joined as an interested party and the council conceded that a section 106 agreement obligation that a dwelling be delivered as affordable housing is not a prerequisite to a claim for social housing relief (although it can be useful evidence that the dwellings will be used in a way that meets the criteria for relief) – as did any notion that the relief is discretionary on the part of the authority rather than mandatory. So the only question was whether delivery of more than 35% of the homes would be in breach of the section 106 agreement.

The judge saw the 35% requirement as fixed, not a minimum:

“In my assessment, the language of the document points to an interpretation that the agreement controls the amount of affordable housing that can come forward, by fixing a specific requirement of 59 dwellings or 35% affordable housing. Paragraph 2(iii) of Schedule 1 says that precisely 35% of the units in any phase must be affordable. Accordingly, if the development proceeds in multiple phases, there must be 35% in each phase and thus, inevitably, as a matter of maths, 35% in aggregate. This specific requirement permeates the definitions, which draw a clear distinction between the ‘Affordable Housing Units’ which are “the 59 Dwellings … which shall be for use as affordable housing” and ‘the Private Dwelling Units’ which means everything other than the 59 Dwellings. Paragraph 3 of Schedule 1 provides the mechanism whereby the Council can exercise control in all cases (not just multiple phases) over the provision of affordable housing. The, broadly defined, Affordable Housing Scheme must be submitted for approval and development may not commence until the Council has approved it.

Accordingly, a scheme which provides less, or more units, of affordable housing would not comply with the section 106 requirement to provide 59 units and hence would be contrary to its terms and to that extent unlawful, albeit the Council would have a discretion to vary the Section 106 agreement or enter into a new agreement.”

I must say I find this a strained interpretation. As the claimant pointed out, there would be no reason in policy to restrict the amount of affordable housing in the scheme – why should the developer not be free to dispose of any of the dwellings at less than market value? Indeed, although not I think mentioned in the judgment, how would such a restriction meet the test in regulation 122? Would an authority really succeed in arguing that a developer was in breach of its section 106 agreement if it disposed of market units at less than market value? Of course not.

The judge asserted that “whilst affordable housing is generally desirable in policy terms, it does not follow that more affordable housing is always desirable without limit. There may be proper planning reasons to prefer a mixed scheme. For example, in this case, the Court’s attention was drawn to extracts from the Planning Officer’s report which suggest the expected CIL receipts from a scheme with 35% affordable housing were relevant to the decision making. The highways authority had expressed concern about the potentially severe impact from the development on the local highway network and considered mitigation was required. It was common ground that the necessary mitigation was to be funded by the CIL receipts from the development. However, it is neither necessary nor appropriate for this court to evaluate any preference for a mixed scheme on the facts of this case. It is sufficient to say that it is in accord with the statutory planning context, and / or “common sense”, to have a section 106 agreement which retains control over the provision of affordable housing. This does not defeat the achievement of more affordable housing since the Council, in the exercise of its planning judgment, may vary the Section 106 to permit this, if persuaded of its desirability.” However, how does this sit with the council’s position that it would grant the relief simply if Stonewater entered into a section 106 agreement varying the previous arrangements and requiring all the dwellings to be affordable?

Surely, instead, this was an overly prescriptive reading of the Regulations on the part of the authority and a strained interpretation of the section 106 agreement on the part of the judge? It is truly depressing to think about how long commencement of development is held up on schemes until disputes such as this are resolved – and how so much money has been wasted on all sides.

Simon Ricketts, 13 November 2021

Personal views et cetera

This week’s Planning Law Unplanned delicacies on clubhouse, at 6pm on Tuesday 16 November, will be Sage and Tulip. We’ll be hearing from Kate Olley, who appeared for Mr Sage in the recent High Court case on the important and topical question as to when planning permission is needed to run a business from home, and we’ll be discussing the Secretary of State’s refusal of planning permission for the Tulip in the City of London. Aside from Kate, our guests include arch-planorak, barrister Zack Simons. Thoughts on the decisions? Then join us, to listen or participate. Link to app here.

Courtesy wikipedia

CIL: There Is No Equity About A Tax

“…in a taxing Act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.”

This passage comes from a 1921 case, Cape Brandy Syndicate v IRC, and was quoted this week by Thornton J in the latest case about a self-builder who had unwittingly lost any right to an exemption from the community infrastructure levy: Gardiner v Hertsmere Borough Council (Thornton J, 6 July 2021). (For a previous unfortunate tale see my 19 January 2019 blog post CIL The Merciless).

The purpose of this post is simply to point out again as to how important, but difficult, it is to arrive at an accurate interpretation of the Community Infrastructure Levy Regulations.

This latest case raised “a point of principle as to whether the self-build exemption provided for in Regulation 54A of the Community Infrastructure Regulations (2010/948) (the CIL Regulations) applies to the grant of planning permission, pursuant to S73A TCPA, for development already carried out.”

Query why there is a self-build exemption in the first place for such large self-build schemes as those which end up in these sorts of disputes, but on a wider basis the case is certainly a warning of the CIL consequences of carrying out development in breach of planning control…

“The Claimant is a self- builder who obtained planning permission for partial demolition of, and extension to, his existing chalet bungalow at 59 Aldenham Avenue, Radlett, Hertfordshire, WD7 8JA (“the Site”). CIL was not payable as the Defendant exempts residential extensions from the levy. The Defendant’s planning officers visited the site during the course of the demolition work and considered that the works undertaken had gone beyond the works authorised by the planning permission. They were of the view that the development was unauthorised. In response the Claimant submitted a new planning application to regularise the demolition works undertaken and to permit the subsequent rebuild now required (as opposed to the former extension) of the house. Planning permission was subsequently granted, part-retrospectively, pursuant to s.73A TCPA for the demolition and the erection of a new detached 6-bed dwelling.

The Defendant [Hertsmere Borough Council] is the charging and collecting authority for CIL in the area of Radlett, Hertfordshire. The Interested Party [the Secretary of State] was joined by order of Mr Justice Holgate and directed to produce written submissions to assist the Court as the claim raises issues of interpretation of the CIL Regulations which may have wider implications.”

The case was despatched by Thornton J in short order:

“It is […] apparent, when the ‘strict criteria’ in Regulation 54B(2) are tested against the grant of planning permission, pursuant to Section 73A TCPA, for development already carried out, that they bar the availability of the exemption for such permission.

Firstly; the claim for an exemption must be made by a person who “intends to build, or commission the building of, a new dwelling” (Reg 54B(2)(a)). The references to ‘intends’ and ‘commission’ are forward looking. They are not consistent with an application by a person who has already built or begun to build a dwelling.

Secondly; the claim must be made by someone who has assumed liability to pay CIL in respect of the new dwelling’ (Regulation 54B(2)(a)(ii)). The assumption of liability is a prerequisite to obtaining the exemption. Yet this is not possible for retrospective planning permission granted under Section 73A TCPA, by virtue of Regulation 7(5) and 31 CIL Regulations. Regulation 31 governs the assumption of liability. It refers to “a person who wishes to assume liability in respect of a chargeable development”. The precise use of the words “a chargeable development” make clear that a chargeable development must exist in order for a person to assume liability to pay CIL in respect of it. In other words liability cannot be assumed under Regulation 31, in respect of a chargeable development, until such time as the chargeable development exists. This is necessarily after planning permission has been granted, by virtue of Regulation 9(1). Liability cannot be assumed for something that does not exist and may never exist (if planning permission is not granted).”

“The Claimant’s wife pointed out in correspondence that “our record of engagement with the Council clearly reflects our respect for the [planning] process and that we are exactly the type of residents to whom the CIL exemption is supposed to be available”. In response, the Defendant acknowledged that “the circumstances of this case that caused the CIL liability to be triggered may seem unfair”.

To which Thornton J’s response was the passage at the beginning of this post.

Thornton J handed down judgment in another CIL case at the end of May, London Borough of Lambeth v Secretary of State (Thornton J, 28 May 2021), with another tough outcome for the party liable to pay CIL.

The Lambeth case considered whether a surcharge for late payment of the levy is dependent on the service by a collecting authority of a liability and/or a demand notice and whether, where a revised liability and/or demand notice is issued or served, previously incurred late payment surcharges cease to be payable? In essence, if you were liable to pay CIL but failed to pay it & then only subsequently does the charging authority issue its liability or demand notice, is it fair that the authority can still levy a surcharge for non-payment?

“The Claimant [the London Borough of Lambeth] contends that liability for a late payment surcharge is:
a. not contingent on the service of a Liability or Demand Notice; and
b. the issue/service of a revised Liability and/or Demand Notice does not have the effect of extinguishing liability for a late payment surcharge which has already been incurred.

The Defendant [the Secretary of State] accepts that the Claimant’s interpretation of the CIL Regulations is correct and concedes the claim.

The Interested Party [Thornton Park (London) Limited] continues to contest the claim. The Interested Party’s case before the Inspector and this Court is that the effect of Regulation 65(9) is that the issue of a revised Demand Notice means that any previously served Demand Notices cease to have effect so a surcharge for late payment can only be imposed 30 days after service of the revised notice, as per Regulation 85(1).

“The essential factual background is as follows: the Claimant granted planning permission for development, for which the Interested Party assumed responsibility for payment of CIL and in respect of which the Claimant duly served a Liability Notice. On 23 November 2018, the Claimant served a Demand Notice stating the amount payable by the Interested Party to be £5,549,963.41 and that the amount was payable in two instalments: on 25 January 2019 and 24 July 2019. Those instalments were not paid. On 18 September 2019, the Claimant granted the Interested Party’s application for a non-material amendment to the planning permission resulting in a change of the chargeable amount. Revised Liability and Demand Notices were served to reflect the changes. On 15 October 2019, the Claimant issued a revised demand notice to include late payment surcharges. The Claimant issued a further revised Liability Notice on 27 November 2019 followed by a revised Demand Notice (including late payment surcharge [of £465,617.67]) on 10 December 2019, to account for further changes to the development and thus to the chargeable amount. In response the Interested Party appealed [successfully] against the payment of the surcharge on the basis that the breach which lead to the imposition of the surcharge had not occurred.”

The council challenged the inspector’s decision. Thornton J concluded that the inspector had “erred in finding that the Claimant had no lawful authority to impose a late payment surcharge with respect to unpaid CIL. Liability for a late payment surcharge is not contingent on the service of a Liability or Demand Notice. The issue/service of a revised Liability and/or Demand Notice does not have the effect of extinguishing liability for a late payment surcharge which has already been incurred.”

As stated by Thornton J in Gardiner, and stated in similar terms in Lambeth:

“The Community Infrastructure Levy is akin to a tax. The proper interpretation of tax legislation requires a close analysis of what, on a purposive construction, the statute actually requires”.

Forget about trying to what work out what might have been equitable. Just read the Regs.

Cheerful point for the future: CIL’s mooted replacement, the Infrastructure Levy, will also be “akin to a tax” and of course will contain a whole new set of trip hazards and uncertainties. Given that there can be little room for flexibility, or consideration of what may be an equitable outcome, at the point of liability, the legislation itself inevitably ends up having to allow, as best it can, for all permutations of situation and that’s where the complexity comes (and grows with every amendment).

Simon Ricketts, 10 July 2021

Personal views, et cetera

Two events coming up this week:

Our clubhouse Planning Law, Unplanned session at 6 pm on Tuesday 13 July, is entitled “JR = VAR? Reviewing judicial review & human rights protections”. What are the Government’s proposals for judicial review & human rights reform and what are the potential practical implications for the planning system in particular? The discussion will be led by Charlie Banner QC (Keating Chambers), Celina Colquhoun (39 Essex Chambers and former member of the Faulks review) and Joshua Rozenberg (honorary QC, leading legal commentator & author of “Enemies of the people: How Judges Shape Society”).

Please feel free to join us, whether to take part in the discussion or just to listen. Invitation to app & event here.

A joint Town Legal and 39 Essex Chambers webinar is also taking place, at 5 pm on Thursday 15 July: Judicial Review & The Planning System in 2021: Practical tips, current trends, what’s round the corner?

Please free to register here.

Trent Won, Cil Nil

The community infrastructure levy system, in its application to lay individuals in particular, is monstrous, absurdly over-engineered, often badly administered and unfairly opaque.

Could anyone disagree after reading Lang J’s judgment handed down yesterday in R (Trent) v Hertsmere Borough Council (16 April 2021)? (Or for another example see my 19 January 2019 blog post CIL The Merciless).

Solicitor Alison Trent brought proceedings for judicial review, as a litigant in person, in order to quash a totally unjustified demand notice for £16,389.75 that she received on 21 April 2020 in relation to the construction of a dwelling in Radlett.

Her success represents a loud wake-up call for CIL collecting authorities.

Planning permission was issued on 10 February 2017 for demolition of a house and the construction of a replacement three bedroom dwelling.

Even with a project as simple as this, there is a complicated sequence of notices:

⁃ Under regulation 65(1) of the CIL Regulations 2010 “the collecting authority must issue a liability notice as soon as practicable after the day on which a planning permission first permits development”.

⁃ The person assuming liability for CIL then has to serve an assumption of liability notice and, if appropriate as here, a self build exemption claim form.

⁃ A commencement notice must then be served on the authority before development commences.

When something goes wrong in that sequence, matters invariably get messy.

Here:

⁃ There was no evidence that the necessary liability notice had been sent out in 2017 although a draft was on the council’s computer system.

⁃ Ms Trent had unwittingly jumped the gun by purporting to submit a self build exemption form ahead of planning permission being issued and had failed to submit an assumption of liability notice, both mistakes apparently at least partly due to misleading advice she had received from the authority.

⁃ The development took place and, when the authority realised, it issued a liability notice, demand notice and imposed surcharges for failing to submit an assumption of liability notice (surcharge of £50) and failure to submit a commencement notice to the Council (surcharge of £2,500).

Ms Trent had successfully appealed to the Planning Inspectorate against the imposition of the surcharges. The inspector found that (1) the council had failed to issue a liability notice and therefore she had never been in a position to serve an assumption of liability notice – the 2017 notice had never been served and the 2019 notice was not served “as soon as practicable” after planning permission had been issued – and that (2) the deemed commencement date on the demand notice was incorrect. She had also argued that the notices did not meet procedural formalities but the inspector did not need to consider that issue.

Unbelievably, the authority then issued a replacement demand notice, on 21 April 2020, relying on the 2019 liability notice which the inspector had considered not to be valid!

Ms Trent challenged the issue of that demand notice by way of judicial review, arguing as follows:

“In the light of the Inspector’s findings, and the Council’s material misunderstandings or errors of fact and/or errors of law and/or procedure, the Council’s decision to issue the 2020 demand notice, on the basis that the 2019 liability notice was valid, was manifestly improper and/or irrational and/or unfair and unreasonable.

…the Council’s decision to issue the 2020 demand notice, and to maintain its registration on the Land Charges Register for the Property in respect of the alleged CIL liability, was a breach of the Council’s duty under section 6 of the Human Rights Act 1998 in that it acted in a manner which was incompatible with her Convention rights under Article 1 of Protocol 1 to the European Convention on Human Rights (“ECHR”).”

The judge found as follows (extracts from judgment):

“In my judgment, the Defendant was required to issue and serve statutory notices which complied with the requirements in the CIL Regulations, and to do so in the prescribed sequence. In consequence, the Claimant was not under an obligation to pay the CIL, as required by the 2020 demand notice, unless and until the Defendant had issued and served a valid liability notice, in accordance with regulation 65 of the CIL Regulations.”

“Planning permission was granted on 10 February 2017. So the 2019 liability notice was issued 2 years and 6 months (less 5 days) after the grant of planning permission. I agree with the Inspector that such a long period of time cannot reasonably be described as “as soon as practicable” and this amounted to a breach of the requirement in regulation 65(1). The breach was not waived by the Claimant.

Regulation 65(1) imposes a mandatory requirement without any provision for extensions of time. Time starts to run from the date on which a planning permission first permits development. The phrase “as soon as practicable” gives an authority some flexibility, for example, if the recipients are not readily identifiable or their address known, or if there is an administrative backlog. But in the light of the statutory scheme and its purpose, the expectation must be that any delay would be measured in weeks or months, not years. I consider that the absence of any provision for extensions of time was deliberate, to ensure that authorities comply with the duty in a timely way.”

“In my judgment, it is of fundamental importance to the operation of the statutory scheme that the liability notice is issued and served soon after the grant of planning permission because of the key information it contains about the recipient’s liability to CIL, and the next steps which follow under the scheme. It is not the practice of this Council to provide this information in any other form or at any other time, and I assume that the same applies in other authorities.

I consider that the failure to issue and serve a valid liability notice on the Claimant within the prescribed time period was prejudicial. If the Claimant had received a timely liability notice, in February 2017, it would have alerted her to” the need to apply for exemptions.

“In my judgment, as the liability notice is a formal legal document, which imposes a tax liability on the recipient, and places a land charge on the owner’s property, it is of fundamental importance that the recipient is correctly identified by their name. In this case, the liability notice should have been addressed and issued to “Alison Trent”. She should have been identified as the owner of the relevant land. Instead, the Defendant addressed and issued the liability notice to “C/O Alison Trent & Co”. “Alison Trent & Co.” is the Claimant’s business. It has no legal or beneficial interest in No. 40 and does not fall within any of the categories of recipients. I consider that the only plausible explanation for this error was incompetence on the part of the Defendant. As the liability notice was not addressed and issued to the correct person, it is invalid.

The regulations do not contain any provisions to save a non-compliant notice. The Claimant pointed out that this is in contrast to other regulatory schemes such as enfranchisement notices under section 13 of the Leasehold Reform, Housing and Urban Development Act 1993 which may be saved by paragraph 15(1) of Schedule 3.

As a general rule, failure to effect valid service of a liability notice would invalidate a notice. However, in this case, the notice was successfully served on the Claimant, care of the London business address, which was the second of the two addressees she provided on the Land Register. Therefore, despite the failure to serve the Claimant at No. 38 or No. 40, which was in breach of the requirements of the CIL Regulations, I do not consider the failure is of sufficient significance to invalidate the notice.”

Whilst the inspector could not formally quash the 2019 liability notice, “I would expect a responsible authority to have regard to the Inspector’s findings when deciding upon its next steps.”

“The Claimant’s ground of challenge under Article 1 of Protocol 1 to the ECHR turned on the lawfulness of the 2019 liability notice, and the consequent 2020 demand notice, requiring her to pay the CIL as assessed. As I have found that the notices were not valid, it follows that there would be a breach of A1P1 if the Claimant was required to pay the CIL.”

“In conclusion, the Claimant’s claim for judicial review is allowed. The liability notice issued by the Council on 5 August 2019, and the demand notice issued by the Council on 21 April 2020, are invalid for the reasons set out in this judgment, and are to be quashed.”

So there we have it.

Woe betide any collecting authority that delays unreasonably in serving a liability notice (common in my experience) or addresses it incorrectly. The judgment would imply that the authority may lose the right to serve a liability notice at all (and thereby not be entitled to levy any CIL in relation to the development) if it delays unreasonably in serving a liability notice (in this case there was a delay of two and a half years, but in circumstances where the authority’s records had probably, although wrongly, shown that one had already been served). That had not previously been my understanding and it would be extremely risky for a developer to embark on construction in reliance on that approach, rather than (as is often currently the case) chasing down the late notice so that it can go on the merry-go-round of assumption of liability, securing exemptions and serving the commencement notice. But I can foresee arguments being raised in some situations.

And woe betide this Government if its proposed Infrastructure Levy is as unnecessarily complicated as CIL. First, why do we have a self build exemption in the first place? Secondly, given that we do, it should be obvious from the planning application that the development proposed is likely to qualify. Why the need for any forms at all? Under a properly constructed system, there would be no need for these reeling spools of, of, yes, of red tape – there I’ve said it.

Simon Ricketts, 17 April 2021

Personal views, et cetera

PS This week’s clubhouse Planning Law Unplanned session will be a careers special. 6pm, 20 April. As always, message me for more information.