We are continuing to see a diversification in the housing market as developers are looking at different ways to meet the pressing need for more housing, and institutions are gaining interest in the ‘accommodation’ asset classes. Retirement and care homes are an important part of this dynamic.
This week, the government published a new chapter in the national Planning Practice Guidance (“PPG”) to guide Councils in preparing planning policies on housing for older and disabled people.
The PPG quite rightly sets out that the need to provide housing for older people is critical. People are living longer and the proportion of older people is increasing. By mid-2041 the number of people aged over 85 is predicted to double to 3.2 million.
There is an ever increasing need to provide more high-quality accommodation in the senior living sector. Such provision will enable older people to make positive proactive choices earlier in life, rather than being forced to be reactive to their changing circumstances. It frees up much needed housing for the younger generations and ultimately saves the government money in respect of future health and social costs.
The inclusion of planning guidance in this sector is a step in the right direction, however the guidance does not go far enough.
The PPG leaves it to the local authority to consider into which use class a particular development may fall. It states that “when determining whether a development for specialist housing for older people falls within C2 (Residential Institutions) or C3 (Dwellinghouse) of the Use Classes Order, consideration could, for example, be given to the level of care and scale of communal facilities provided”. Interestingly there is no reference to sui generis.
Use class matters because there could be costly implications for developers in the form of affordable housing and CIL. Going forward the use class is key in determining whether planning permission is required for a change of use, or whether reliance can be made on permitted development rights. Therefore, the use class determines the flexibility that exists for a property and, therefore, whether a suitable exit strategy exists, which is often important for funders and other intuitions.
The PPG states that plans should set out the contributions expected from developers, which should include setting out the levels and types of affordable housing provision required. However, no further guidance regarding the question of affordable housing is given.
It is up to applicants to demonstrate whether circumstances justify the need for a viability assessment at application stage.
The PPG states that plans need to provide for specialist housing for older people where a need exists. It sets out that it is up to the plan-making body to decide whether to allocate sites for specialist housing for older people. Allocating sites can provide greater certainty for developers and encourage the provision of sites in suitable locations. Leaving this to the local planning authorities’ discretion means we will continue to see an inconsistent landscape.
Overall, an opportunity has been missed to assist developers with the often-contentious and legally complex question of what use class various forms of senior living accommodation falls within. Whilst this is perhaps more a product of the out of date use classes system, and due to the limitations of guidance, some local authorities will continue not to put the senior living sector at the forefront of plan making.
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