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10 MAY 2018

High Court reviews application of planning policy on housing and viability

Those involved with planning applications as decision makers or applicants will be aware of how central development viability appraisals have become in determining planning and affordable housing obligations.

Government has signalled its intention to reduce delays associated with negotiating planning obligations so the views expressed by Judge Holgate in his recent high court decision are highly relevant given the stage we are at in the government’s review of national planning policy.

This was a judicial review decision handed down by the High Court last week, Parkhurst Road Ltd v Secretary of State for Housing, Communities and Local Government and London Borough of Islington. The case concerned an Inspector’s decision to dismiss an appeal principally on the lack of affordable housing provision not being the maximum reasonable.

The judge asserted the importance of the use of comparable valuation evidence, properly adjusted to reflect planning policy, in deciding planning obligations. However, he would like to see additional guidance being produced by RICS possibly in conjunction with MHCLG and the RTPI on the application of policy so as to eliminate protracted disputes and achieve more efficient decision making. RICS welcomes the judge’s suggestion some of which is already being undertaken.

The judge went beyond deciding on the merits of the judicial review application in a complex case. Of significant wider relevance is his Postscript (paragraphs 142 to 147) addressing the application of current planning policy in a market economy. The judge quotes extensively from the RICS GN ‘Financial Viability in Planning’ which he said should command respect in the planning process as setting out accepted good practice, unless there is a sound reason to the contrary.

The judge identifies the tensions between the market and planning policy and the realism needed when these matters are taken into account in the decisionmaking process. This includes overcoming the uncertainty associated with undertaking a viability assessment; and the identification and application of comparable evidence.

Viability guidance

RICS regularly revises its guidance in response to changes in various market conditions. Prior to this judgement, RICS had already been reviewing our viability guidance in response to feedback from the sector. We are now awaiting the outcome of the governments review of the NPPF/PPG, particularly in relation to expected policy changes relating to viability assessments, before completing our full review.

In the meantime, we will be issuing clarification on the requirements for reporting and procedures in providing development viability appraisals through a standalone document containing mandatory requirements.

This will address such matters as statements of objectivity, impartiality and reasonableness; lack of conflicts of interest and transparency of information. All reports provided will be required to include non-technical summaries to facilitate understanding by non-specialists.