U.K.'s Plan to Abandon Homebuilding Targets Is Unlawful, High Court Rules

By: Tim Barwell
Published date: 10 November 2010
Source: www.bloomberg.com

The U.K. government’s elimination of regional homebuilding targets in an attempt to bring planning decisions to the local level was unlawful, according to a ruling from the High Court in London.

A judge today accepted closely held developer CALA Homes (South) Ltd.’s argument that Communities Secretary Eric Pickles acted prematurely in revoking the rules, according to a copy of the judgement.

The regional targets, which were set under the previous Labour administration, were scrapped by the Conservative-led coalition government weeks after it took power in May. The lack of a transitional policy left a “massive hole” in the planning process and created “considerable confusion among everyone involved in the delivery of housing,” the Home Builders Federation, the industry’s main lobby group, said in a statement after the ruling.

"Those housing proposals will now need to be revisited prior to the passage of any primary legislation," Macfarlanes LLP, CALA's lawyers, said in a statement. "It is important that the house building and construction industry -- which has a major role to play in delivering the economy from recession -- does not suffer as a result of the Secretary of State’s actions."

The case was part of a judicial review, which traditionally forces government agencies to review their decisions.

Communities and Local Government Minister Bob Neill said the judgement “changes very little,” and that the government plans to introduce the Localism Bill to Parliament later this month.

'Top-Down Targets'

"Top-down targets don’t build homes,” Neill said in a statement. “They’ve led to the lowest peacetime housebuilding rates since 1924."

The industry constructed about 118,000 homes in England last year, down from 175,000 in 2007, according to the government.

"The new government has said upfront it wants to build more houses, which is a good thing," David Ritchie, chief executive officer of Bovis Homes Group Plc, said in an interview on Nov. 8. "Their first step was negative though. They removed the core housing planning policy without replacing it, which has created a hiatus in homebuilding."