What the new NPPF means for the living sector

If density is to be achieved by reducing green space at ground level, then that is a shame, even if that green space is replaced elsewhere in the building. Density also amplifies wear and tear, complicates waste logistics and intensifies the demand for resident services.

If the government’s push for “urban and suburban densification” results in squeezed floorplates and value-engineered communal spaces just to hit a rules-based metric, we risk creating assets that leak Net Operating Income (NOI).

In operational real estate, a building that is cheap to build but expensive to run is a distressed asset in waiting. As we move toward this rules-based system, investors must ensure that operational modelling informs the planning application, not the other way around.

A viability exit route

Perhaps the most significant shift for those with stalled capital is the admission that the economic landscape, defined by high interest rates and construction costs, has rendered many existing consents unviable.

The government’s explicit encouragement for local authorities to be “pragmatic” about renegotiating Section 106 obligations is a vital intervention. For institutional forward-funders stuck with uncontracted Section 106 units or viability gaps, this offers a tangible exit route. The consultation confirms that modifying planning obligations may now be necessary to boost delivery.

Furthermore, the implementation of Section 73B adds a layer of agility we have sorely missed. This allows us to pivot asset strategies, such as unit mix or amenity allocation, in response to real-time market data without restarting the entire planning clock.

Standardisation needs an operator’s eye

The launch of ‘pattern books’ for standardised house designs is another risk. While the promise of accelerating delivery through modern methods of construction and AI is strong, standardisation cannot come at the cost of functionality. Any reputable BTR operator will be only too willing to share why build-to-sell homes, whether apartments or houses, mostly need redesigning to extract the best NOI and therefore to justify the best yield.

Ringley’s data across £12bn of assets shows that so-called “minor” design flaws like poorly located risers, inaccessible facade systems or inadequate parcel storage cost millions over an asset’s lifecycle. If the government wants to use pattern books to speed up the system, these books must be written by operators, not just architects.

We need standardised designs that are operationally ready: pre-optimised for tech integration, maintenance access and resident flow.

The race to the bottom?

The draft framework also notes a desire to “limit duplication” of standards, restricting local authorities from imposing technical requirements already included in the Building Regulations. The government wants to avoid not just duplication but also the gold-plating that frustrates national developers.

However, in the living sector, “standard” is rarely enough. Institutional assets require higher specifications for acoustic performance, connectivity and sustainability to attract and retain savvy, chic, well-travelled millennials and Gen Zs who value low bills and hassle-free living to support a flexible, experience-led lifestyle.

If the new NPPF effectively caps quality standards to speed up approval, investors must discipline themselves to build above the code. The planning system may no longer force you to build a premium product, but the market certainly will.

The reality check

The reforms outlined in the draft NPPF are designed to override conflicting policies and break the inertia of the planning system. This is welcome. But as we enter this new era of a broader presumption in favour of development, the responsibility shifts from the planner to the investor – and this can only be a good thing.

For new entrants to the living sector, particularly those divesting from commercial to residential, one needs to choose an advisor with real operational expertise, one that can extrapolate both design and build decisions to NOI, given every £50,000 of NOI saved is £1m gross asset value added.

The government is removing the barriers to entry. It is now up to us to ensure that what we build is not just legally compliant, but operationally robust.

We must not let the rush for consent obscure the reality of the long-term hold. The NPPF can mandate the quantity of homes, but only intelligent asset management can guarantee their quality.

Mary-Anne Bowring, co-founder and group managing director, The Ringley Group