Since Theresa May announced that there would be a general election on 8th June, there have been concerns within the property development industry that it could impact the speed at which projects are approved.
Rico Wojtulewicz, policy adviser for the House Builders Association, has warned that any delays to the planning system in the run-up to the general election could be costly for builders and developers.
“We expect the planning system to continue creaking, with [the] politicisation of planning decisions remaining at unhealthily high levels.
“SMEs take due diligence very seriously because the planning systems [remain] extremely risky.
“Any delays can increase projects costs, delay starts, stretch budgets and, in the worst cases, send SMEs out of business.”
What areas of the country could be impacted?
Development Finance Today got in touch with a sample of major local authorities across the UK to find out what impact the snap election could have on planning decisions during the run-up.
Manchester City Council, Glasgow City Council and the City of London Corporation all said the general election was unlikely to have any impact on planning decisions in these areas and that usual processes would continue.
Birmingham City Council said there would be no change to its business due to its planning committee being “quasi-judicial”, so things such as the pre-election period do not have a direct impact as they would do on other council business.
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“The only visible change will be that the planning committee scheduled for June 8 (general election day – when councillors will be out campaigning) will be slipped a week to June 15, and the normal fortnightly meetings will resume the following week on June 22,” a spokesperson for Birmingham City Council told Development Finance Today.
There will be no changes to Birmingham City Council's planning business
“This will not affect our attempts to keep decisions within the statutory timeframes.”
Meanwhile, Bristol City Council added: “Development management (decisions on planning applications) is a regulatory function carried out by the Development Control Committees or by officers using delegated powers.
“Decisions are made on the basis of the council’s adopted planning policies and the membership of the committees is based on the results of the 2016 local elections.
“As a result, planning decisions should not be affected by the forthcoming general election.”
What impact could potential delays have on developers and housebuilders securing funding?
As Rico warned, planning delays can have major effects on property professionals.
“It is unlikely a development lender will commit to a development facility until full planning is in place,” said Michael Dean, principal at Avamore Capital.
“Uncertainties such as CIL [Community Infrastructure Levy] and s106 can have a material bearing on the development budget and a development’s viability.
“Any delays to planning will inevitably cause delays to development facilities and the time at which developers can put ‘spades in the ground’.”
Ashley Ilsen, head of lending at Regentsmead, felt the upcoming election could cause a temporary slowdown in house sales, which could impact the short-term lending sector.
“While the outcome may appear obvious, this will temporarily increase uncertainty in the market, which isn’t a good thing.
“The sector is likely to be hoping that the election result will create stability in the long run, particularly in regards to our Brexit negotiations.
“It’s fair to say that this period of uncertainty that we are operating in will be heightening in the foreseeable future.
Could there be changes after the election?
Steve Larkin, director of development finance at LendInvest, felt the result of the election would have the biggest impact on the current planning system.
“If the current government wins a greater majority, it may encourage them to go further with reforms and bring forward more public land for development and provision more development on green belt land.
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“However, if they lose or sustain significant losses, it could put the planning reforms that are currently underway at risk by delaying them or halting them altogether.”
However, Michael felt that as a Conservative government was likely to remain in power after 8th June, he expected that there would be limited change to the system.
“Regardless of what is said in any party’s manifesto, the housing white paper was a good indicator of what we can expect, ie very little tangible progress.
“In the short term, planning decisions are much more sensitive to local government elections, which take place [today, 4th May] and do not affect all local authorities.
“Any uncertainties around planning decisions caused at local government level will be resolved in the next few weeks.”