6 Sep 2012

Planning rules could be relaxed to unlock growth

Extensions to houses and business properties will be made easier as part of a package of government measures to help kick start the economy.

David Cameron and Nick Clegg will announce that for a limited time property owners will be able to build much bigger extensions without planning permission than at present.

The coalition wants to make it easier for tens of thousands of families and companies to expand their properties, giving a much-needed boost to the construction industry.

Under the measures, another 16,500 first-time buyers are also to receive help getting on the housing ladder under an extension of the FirstBuy scheme to be announced by the prime minister and deputy prime minister.

Would-be homeowners without a deposit are given an equity loan of up to 20 per cent of the purchase price under the scheme.

Mr Cameron will said: “We’re determined to cut through the bureaucracy that holds us back. That starts with getting the planners off our backs.

“Getting behind the businesses that have the ambition to expand. And meeting the aspirations of families that want to buy or improve a home.”


The new permitted development rights will make it easier to install conservatories and loft extensions without going through weeks of planning bureaucracy and form-filling.

Full planning permission – required for extensions of more than a few metres from the rear wall of any home – will only now be needed for those beyond six or eight metres, depending on whether it is terraced or detached.

But John Hitchcox, chairman of global property firm Yoo, has described the plans as “laughable” and a waste of time.

“If more people extend their homes, they’ll be less demand for new ones – further hitting the ailing construction sector which forms such a key part of our economy.

“Rather than waste time on schemes that will help only a tiny number of people, they should revise stamp duty to get transactions moving properly. The burden of stamp duty makes it impossible for many young buyers already hit hard by cuts to tax credits and pensions.”

Businesses will also be able to expand shops by 100 square metres and industrial units by 200 square metres. Shops and offices will be allowed to develop up to the boundary of the premises.

Affordable homes

Mr Clegg defended plans under the package to relax the requirement on developers to provide a proportion of affordable homes in any development.

But Mr Clegg insisted that the change would be more than compensated for by extra government investment to support the building of more affordable homes.

Treasury funding of £300 million has been found to help provide up to 15,000 such properties and bring 5,000 empty homes back into use, Downing Street said.

And new legislation will provide government guarantees of up to £40bn of major infrastructure projects and up to £10bn of new homes, including a move to guarantee the debt of housing associations and private sector developers.

Mr Clegg said of the change in social housing restrictions: “Instead of having developers sitting for five years on useless land where nothing has happened, no young people are being employed on construction sites, no affordable homes are being built, no new houses are being built for first-time buyers, we are saying ‘let’s undo that knot at an earlier stage’.

“Our calculations are that there are some sites where they will be able to proceed without building affordable homes. That is why we are putting up £300m to more than make up for any loss.

“The net effect of all of these proposals, let me be very clear, is more, not less, affordable homes.”

Shadow chief secretary to the Treasury Rachel Reeves said: “The government are kidding themselves if they think these announcements are up to the scale of the challenge.

“If ministers really want to help homeowners and small firms, why don’t they listen to our idea to cut VAT to 5 per cent on home improvements, repairs and maintenance?

“And why do they refuse to repeat the bank bonus tax to fund the building of 25,000 affordable homes and 100,000 jobs for young people?”