Planning backlash calls time on ‘grotesque’ PDR micro-homes

“These are not ‘beautiful homes’ in the words of another government-commissioned report. These are the slums of now, the slums of the future.” Shadow housing minister Mike Amesbury’s attack on permitted development last week was not enough to convince ministers to reject housing secretary Robert Jenrick’s legislation to expand controversial PDR. But it did achieve one big win – a ban on micro-homes developed under the legislation. “It was a seismic acknowledgement of one of the most grotesque failed housing and planning policies this nation has ever seen and its replacement, with a slow and growing backlash, will put standards at the heart of the new system,” says Hugh Ellis, head of policy at the Town and Country Planning Association. The micro-home ban means all new homes delivered through PDR must meet national space standards, with a minimum size of 37 sq m for a one-bedroom flat. This compares to homes of less than 10 sq m under the old regime. The TCPA has long campaigned against PDR, instead calling for “healthy homes” with space, but also light, safety and access to infrastructure. “Rather than thinking about a building and a place simply as a commodity to be built at the lowest possible standard which is lawful, we now want to see all of the regulatory systems promoting places that enhance people’s health and wellbeing,” says Ellis. “The private sector is going to have to up its game.” Shrinking market “If you’ve invested in new housing units that have come through the PDR route at the bottom end of the market, they are very likely to be worthless very quickly, I would suspect,” adds Ellis. He points out the often-underestimated high costs of refurbishment and the shrinking demands for “shoe-box” housing. The market had already started to move away from micro-flats, led by cautious lenders following a surge of unsuccessful developments with high-profile casualties. “The world is now a different place. We definitely won’t be doing micro-homes for sale going forward,” says Josh Garside, managing director of Apt Living. The developer started out with PD schemes, notably its 292-flat Gunnersbury Park development in west London, where a quarter of the homes are less than 37 sq m and the smallest is 33 sq m. Its next scheme, in Sutton, south London, will contain standard-sized homes via the planning process. “The whole perception and negative connotation of the small unit PD schemes has now increased to such a level that people are tarring PD schemes as a whole with the same brush” says Garside. He says the homes are un-mortgageable and that most lenders will not provide development loans for PD schemes with smaller homes. Regulating rentals But there remains a market for these homes. Those old PD homes with low cap values per sq ft may still be attractive to cash investors eyeing the rental market. “On an investment basis, when interest rates are like they are, the yield that you can get on one of these studios, compared to the other viable alternatives, looks attractive,” says Garside. Ian Fletcher, head of policy at the British Property Federation, points out that the smallest stock often ends up housing the most vulnerable. “Unfortunately, there may still be a market for some of that really small stock that is mainly rental. As we’ve seen, some of the smallest units have ended up in temporary accommodation,” he says. “Putting those vulnerable people into those sorts of situations is something that should not be allowed to happen.” The BPF has been calling for greater quality control for the past 18 months and would like better consultation with the industry. “It shouldn’t be a Wild West situation, where it isn’t regulated at all,” adds Fletcher. “What we are trying to take out here is the very low end of the market and I don’t think we are in any way seeking to ensure that developers won’t still be able to deliver an affordable product.” He rejects the idea that the ban will lead to more expensive housing. “That [argument] illustrates everything that is wrong with our economic model of housing delivery. It essentially says that I cannot afford to give you a home that is decent. 37 sq m for a one-bedroom flat is not a generous amount of space,” adds the TCPA’s Ellis. “You don’t build a car with one wheel or no safety belts. It is a bit cheaper, but it’s not a good idea.” To send feedback, e-mail emma.rosser@egi.co.uk or tweet @EmmaARosser or @estatesgazette