My Lords, I thank the noble Lords who have participated in the debate on this important amendment. I thank in particular my noble friend Lord True, who has been very committed to this issue. He has been a tireless advocate of change in relation to permitted development rights for office to residential and has been extremely generous with his time, both with me and with officials, particularly in sharing with us his experience in Richmond. There is no clearer indication of his commitment to his borough than that he is here this evening prior to going to the meeting on the all-important budget.
I also thank the noble Lord, Lord Tope, for giving his perspective from Sutton. I appreciate that this is largely a London issue. I do not know whether it is a particular issue in the borough of the noble Lord, Lord Kennedy, but it seems to be more focused on London than elsewhere—perhaps for understandable reasons.
Before turning to the detail of the amendment and what I am proposing, I will say a few words about why the Government see permitted development rights that support the delivery of new housing as an important tool in helping to address the current housing challenges the country faces. That is true of the Government, it is true of the department and it is true of the Minister, my honourable friend Gavin Barwell, although he does not believe that it comes without the need to act in particular instances. I do not think he sees this is as a totally monochrome issue.
The Prime Minister has made clear that the chronic shortfall in delivery of new homes is one of the greatest barriers to progress in Britain today, which I am sure we would all agree about as a basic principle. As we have said as a Government many times over the last few weeks, the housing market in England is not working. Noble Lords have identified that issue, too, and therefore we have announced through the White Paper a series of measures to help the country to plan for, and build, the homes it so desperately needs. This includes plans to diversify the market by bringing in smaller and medium-sized builders, encourage innovation through modern methods of construction and attract investors to develop new homes for rent as well as for sale.
At the heart of the housing White Paper is a clear expectation that every part of the country should have in place an up-to-date local plan that starts from an honest assessment of the need for new homes in the area. The White Paper also proposes to introduce a new housing delivery test, which will hold local authorities to account for delivery of sufficient homes in their areas to meet local need. While I recognise the concerns that noble Lords have highlighted today, it is clear that permitted development rights in generality for the change of use to residential are delivering new homes. In the year to March 2016, over 13,800 additional new homes across England were delivered under these rights, providing young people and families with a chance of a much-needed new home. Over 12,800 of these homes came from the change of use from offices to residential. Such statistics cannot be lightly ignored. These rights play an important role in the planning system, making effective use of existing buildings as part of our broader brownfield strategy, avoiding the need to build on greenfield land, for example.
However, I recognise that while the national picture is positive in terms of how these permitted development rights contribute to housing delivery, in some places—we have heard specifically about two today—there have been concerns about the local impact. My noble friend Lord True and the noble Lord, Lord Tope, in particular have spoken eloquently about this and the experience of the rights in their areas.
Again, at the national level, the picture is positive. The British Council for Offices reports that the market is responding, particularly in regard to prime office space. In addition, it is also providing cheaper and smaller office space, including through hub, incubator and serviced office models. In addition, Jones Lang LaSalle reports that in the year to December 2016, overall UK office rents fell by 1.3%. However, the Government accept that this is not the picture everywhere, and I assure noble Lords that we are sympathetic to their concerns about the impact of the right in certain areas. Where there are local issues, it is already open to the local planning authorities, as has been said, to bring forward an Article 4 direction to protect the amenity or well-being of the area. We know that local planning authorities are already doing so, with 33 directions having been made to restrict office to residential permitted development rights in specific areas, including in the London boroughs of Richmond and Sutton, as, in all fairness, we have heard. Although rarely used, the Secretary of State retains powers to intervene in directions, for example to modify a direction where it is too widely applied.
Having listened carefully to the concerns of my noble friend Lord True, and the noble Lord, Lord Tope, and to the points made briefly by the noble Lord, Lord Kennedy, during this and previous debates, I am interested in the approach suggested in this amendment that areas that are delivering the homes that their communities need should have greater flexibility to remove permitted development rights. Building on the existing Article 4 process, I am keen to work with my noble friend Lord True and the noble Lord, Lord Tope, to explore an approach that would provide more certainty that where an Article 4 direction removing the permitted development right for the change of use from office to residential is necessary to protect amenity and well-being, the Secretary of State will not intervene where an area is meeting its housing need, tied to housing targets. As now, a direction will still need to be supported by robust evidence of the impact on amenity and well-being, including from the loss of office space. In particular, I am interested in exploring how we can build on the proposals in our recent housing White Paper for a new housing delivery test. I am keen to discuss this proposition further with my noble friend Lord True and the noble Lord, Lord Tope, and to return to this matter at Third Reading. This approach would reflect the intent of my noble friend’s amendment in that it provides local flexibility for those areas that are meeting their housing requirements to have greater say over where the right would apply, as long as they can demonstrate that removal of the right is necessary, without adding new procedures or complexity to the statute.
I have also heard concerns raised, and discussed them with my noble friend Lord True, about the importance of ensuring that local authorities are adequately resourced to consider planning applications in areas where an Article 4 direction is in place. If noble Lords agree, I would like to return once again to this matter at Third Reading. In the light of assurances on those two important issues, which I know have been raised by noble Lords, I ask my noble friend Lord True and the noble Lord, Lord Tope, not to press this amendment to a vote at this stage.