Opinion: We need a planning system that recognises the need for alternative uses

Self storage, vets and dentists are among many niche services supporting our neighbourhoods but such alternative forms of development are seldom addressed specifically by planning policy.

The recent consultation on the draft National Planning Policy Framework (NPPF) has now closed, where – amongst other headlines – 300 more local authority planners are promised and higher housing delivery targets than ever before. The new government is certainly pro-development and seems to be saying all the right things to encourage a property industry frustrated by a lack of planning reforms and development delays.
However, much is still focused on housing the nation, with less emphasis – it could be argued – being placed on the need for other ‘alternative’ types of development. It’s worth noting that the draft NPPF does address other development, albeit without detail on how need is to be evidenced and proper classification of what these alternatives really are.

And yet there is huge appetite by investors, developers and operators for non-traditional types of property as we found in our recent An alternatives view report. In this first thought leadership piece of its kind, we looked at the performance, outlook, challenges and opportunities of 17 niche assets from automotive and roadside to vets and dentists, the ‘living’ sector to education and sport, infrastructure and food retail. We found that most of the alternative sectors performed strongly when compared to other real estate assets over the last 12 months, but that growth was being held back by constricted pipelines for development, due – in part – to the current parameters of planning policy/regulation and a lack of understanding and classification within the planning process.

Many planning policies have in the past been put together with housing at the forefront, which is understandable and supported. However, it must be recognised that there are many niche types of property that simply don’t have enough focus in the planning system. The government thankfully now actively encourages land uses like data centres as critical infrastructure. However, there needs to be clarity as to where such critical assets should be accommodated, especially as they are often located in places where they are potentially in competition with other land uses for which there is also a growing need, not least logistics or open storage. Like housing, all of these uses are essential to support the UK’s future growth prospects. In fact, having these employment uses alongside housing are critical to the success of the housing itself.

Scope for clarification

The Use Classes Order has been overhauled significantly a few years ago, with the introduction of Class E, but the B8 use class – which, in practice, covers a range of different types of use – was untouched, and there can still be disagreement between authorities as to whether, for example, a data centre is a B8 use or not. We would like to see consideration given to clarifying this part of the Use Classes Order, coupled with further review of the permitted development regime to provide more transparency and certainty to developers.

At a more local level, with the government traditionally homing in on residential development, we often find that local authorities are continually less targeted in bringing forward non-residential site allocations, let alone those for more alternative forms of development. After all, housing (including affordable housing) can only be delivered successfully at scale as part of a comprehensive package delivering long-term viable communities, and that requires a range of types of development and an appropriate mix of supporting land uses. The government needs to be clear that when making local plans, local authorities must consider the needs for all land uses – directly and indirectly critical to housing-led strategies – and provide a consistent national policy framework to enable this to happen.

Further along the planning system, research shows that even with housing-led development like purpose built student accommodation (PBSA), build to rent (BTR), later living and co-living – what the industry calls the alternatives of the residential living sector – there is often a limited understanding of their purposes and operation at the local authority level. This can make getting planning permission harder and more protracted than should be the case. With a laser focus on affordable forms of housing first and foremost (which is, of course, what the nation needs), there is a risk of making the delivery of all types of living environments (including affordable housing) more difficult to realise.

And that’s without addressing the wider commercial and other forms of economic output which, whilst being attractive to investors, can also be pivotal in supporting new and existing communities but, in planning terms, are not consistently or appropriately recognised or encouraged. For example, whilst existing uses that are deemed to be useful to the community are usually protected by planning policy, there is little positive policy support for health and education uses, and any policies that there are, are usually general in nature and caveated by development management considerations which would apply in any event.

Beyond this, for many forms of infrastructure there is little, if any, acknowledgement of the role they play – data centres, petrol stations (or the electric vehicle (EV) charging hubs that are increasingly replacing them), car dealerships or similar. Self-storage is also hardly ever specifically addressed by planning policy directly: usually only through more generic employment policies which offer no positive support to the essential role that they play in supporting small businesses and encouraging city centre living. Yet, investment is required in all of these areas to support fit-for-purpose quality services, and the planning system should be playing a key role in encouraging this.
Rather, we often find alternative sector development up against a planning system which, in large part, does not readily look to positively accommodate them (except by default). We need a planning system that recognises the need for these types of properties, with their niche challenges and opportunities – that starts with developing a better understanding of these uses.

Our asks

Delivering housing that is affordable (in the broadest terms) and in the right places is obviously critical, but the planning system also needs to adapt to encourage and deliver the full range of the nation’s development needs. In this context, we are calling on the government to:

• Review the use classes system to clarify land uses such as data centres, student accommodation and retirement property, with further consideration being given to how the permitted development regime could add more flexibility and certainty to developers
• Extend the policy focus beyond just housing to more comprehensive planning to meet other needs – currently often neglected, but essential to supporting housing success and economic growth – through site allocations, not least for uses such as data centres and open storage
• Ensuring that the development management process is as positive and predictable as possible, both through the formulation of more positively worded policies encouraging the right uses in the right locations, but also through a pragmatic and more commercial approach once a planning application is submitted.

At this key point in planning reform we are keen to work with developers to start the conversation so that non-traditional new niche sectors get the attention they deserve going forwards, not in place of affordable housing (or housing more widely), but to support the balanced delivery of communities that foster economic growth as well as providing homes for people, all delivered sustainably.

Pubished in PlacemakingResource on 29th November 2024