Skip to content

When property development and the environment collide

By Ritchie Clapson CEng MIStructE, co-founder of propertyCEO

Excess nutrients in our waterways cause algae to bloom, suffocating other pondlife and disturbing the natural balance of water-based things. It is indisputably a bad thing. The government estimates that less than 1% comes from new housebuilding, with a far larger proportion coming from agricultural farmland. The matter is also not helped by our water companies’ inadequate wastewater treatment facilities that fail to prevent a significant proportion of these nutrients from reaching our waterways. Ironically, new housebuilding connects to these underperforming water treatment systems, whereas agricultural farmland does not. Yet it has been housebuilding rather than agriculture or the water companies that has been taking the fall.

Here’s how it came about

Natural England (an executive non-departmental public body, sponsored by the Department for Environment, Food & Rural Affairs) wanted to ensure that new housing schemes did not add to the nutrient problem. They identified 74 local authorities who had vulnerable land, environmentally speaking, and required that any new development must not add to the nutrient problem. But here’s the rub: new houses can’t help but have some local impact on nutrient levels, even though the people who will live there are already generating sewage, etc., wherever they currently live.

So, it made it impossible for developers to prove that their new homes weren’t adding to the nutrient problem locally. Consequently, if the local authorities decided to grant planning permission, it would expose them to legal action by Natural England, who could (quite rightly) argue that nutrient levels would increase. This ended predictably with an impasse and placed the affected local authorities in a position where they couldn’t grant any planning permission for new homes without being legally exposed. So, they refused to grant permission for any new homes, and the residential property development industry in 74 council areas up and down the country went into stasis.

Why is this a problem?

The main challenge is that we have a national housing crisis. Too few new homes are being built yearly, and the issue is worsening. The government reckons we need to build around 300,000 new homes annually, which, to put it into context, is just over the number of homes already in Oxfordshire. Unfortunately, we’re falling way short, and having 74 local authorities unable to build new homes isn’t helping. What has exacerbated the problem is that it has been left to fester. We’re now at a point where around 100,000 new homes are stuck in the planning system due to this nutrient neutrality deadlock.

Recently, Levelling Up Secretary Michael Gove stated that he planned to tackle the nutrient issue head-on by relaxing the development constraints and offsetting the impact through direct investment in improving water treatment in affected areas. In addition, new homes in those areas would be subject to a levy that will be put towards the cost of having the water companies place much-needed investment into their treatment infrastructure and processes to clean up their act. This prompted a backlash from environmental groups, who saw it as a capitulation. We should have clean waterways, but we do need new homes.

In the end, the government’s attempt to amend the Levelling-up and Regeneration Bill was voted down in the House of Lords: the vote was 203 peers against the amendment and 156 for. Disappointing news for those in favour of Gove’s plan.

Another route to provide new homes

A less well-reported development has seen the government take further action, which should be very welcome in greener quarters. According to the countryside charity CPRE, there are currently 1.2m new homes that could be built on unwanted brownfield sites. These sites are redundant commercial, light industrial, and retail premises that are no longer needed. No matter where you live in the country, you will doubtless be aware of dozens of these buildings yourself. Whether it’s disused factories or empty shops on the high street, there are hundreds of thousands of these buildings up and down the country. And the government is all too aware of it.

In 2020, they radically overhauled the permitted development rights (PDRs) that apply to commercial buildings, and today, a huge number of these sites can be converted into residential use without the need for full planning permission. And they have recently done so again, further extending the scope and removing some of the constraints so that it’s easier, than ever before, to convert these buildings. For obvious reasons, this is excellent news for people looking to try their hand at property development: changing an existing building without the need for planning permission is relatively low-risk in development terms, and with so many buildings to aim at, there’s now a considerable number of people looking to develop their first project in their spare time.

So, small-scale property developers are justifiably made up, and it’s good news for all with concerns about the environment.

Good news all round

Conversion of commercial buildings means we are effectively recycling property. After all, why do we need to build on our precious greenbelt when we can build 1.2 million new homes using buildings we already have? They already exist, are in the right place, and are connected to our utility infrastructure, such as water, waste, and power. They don’t require new roads to be built, and no one needs to dig holes in the ground. And because these buildings had previous inhabitants, the net impact from a nutrient perspective is negligible. Better still, from a government perspective, no one usually objects.

Try to change the planning system, and backbenchers nationwide will start worrying about a NIMBY backlash. Because the sad truth of the matter is that everyone wants the housing crisis solved, but they don’t want any new houses built anywhere near them. This is a challenge for any government, present or future. Converting existing buildings is just about the only palatable housebuilding strategy from a political perspective.