Planning Reform Fears; Shake-Up in Appeals System 'Will Push House Prices Up'

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Byline: IAN SMITH

HOUSE builders are facing a [pounds sterling]120million-a-year increase in planning costs under proposals to be unveiled by the Scottish Executive.

Construction firms claim the changes will result in the supply of new homes being dramatically slashed and in an increase in property prices.

Communities Minister Margaret Curran will publish the Executive's proposals on reforming Scotland's planning laws this week.

Included will be the so- called 'third-party right of appeal'.

At present, only parties directly affected by a particular development have the right to appeal. Under the new plan, anyone would have the right to object - such as environmental groups campaigning against developments on greenfield sites.

Building organisations last night warned the proposals would tie up the planning system in red tape and cause massive delays to developments, forcing already-rocketing house prices to rise even faster.

Homes for Scotland - an umbrella group whose members build 80 per cent of properties north of the Border - estimated the plans would generate an extra 800 objections a year, each of which would cost at least [pounds sterling]150,000 in legal bills.

They would also delay projects by up to two years, increasing the average planning process for a housing development to four years.

Homes for Scotland also claimed it would reduce the number of properties being built each year by 10,000, at a time when Scotland is building at least 5,500 fewer homes than are needed to meet demand.

It is estimated that 50 per cent of all new building projects would be hit by appeals, thereby affecting [pounds sterling]1.7billion of housing investment.

The group believes the planning changes will make many small-scale developments unviable.

Mrs Curran will announce a consultation on planning reforms on Thursday and will face a furious campaign from the Scottish business community to withdraw the third-party right of appeal proposal.

Third-party right of appeal has already been ruled out in England and Wales because of the damaging effect it would have on housing development.

But Enterprise Minister Jim Wallace has indicated to business leaders that he favours extending the right of appeal.

The changes would also have enormous consequences for local council planning departments, burdening them with a massive extra workload and stretching already tight budgets.

Gerry More, a senior executive of Cala Homes - a prominent member of Homes for Scotland - said: 'It is going to increase costs, increase uncertainty and increase delays on a system already hugely overloaded with pressure and bureaucracy. …