Changes proposed to the planning system will reduce the number of homes Birmingham is required to deliver. Instead, housing delivery will have to rise in surrounding districts such as Coventry, Dudley, and Solihull. Land availability is already limited across these areas. Residential developers will have to compete with employment land uses, particularly logistics, to secure sites.

Other planning changes may help. Combining retail and office uses into the new 'E' class will give landlords the freedom to provide truly mixed-use spaces. In doing so, they can help bring vitality back into local town centres and provide the services and resident demand needed to support housebuilding across the wider West Midlands combined authority.

The West Midlands combined authority (WMCA) comprises Birmingham, Coventry, Dudley, Sandwell, Solihull, Walsall and Wolverhampton local authority districts.

Need outstrips supply

The WMCA is not delivering enough homes to meet need. Not only will the overall shortfall increase under the changes proposed in the 2020 Planning White Paper, but the shortfall will also become more concentrated in specific areas.

The current method for calculating housing need, Standard Method 1, shows the WMCA requires 9,862 homes per year. By contrast, the combined authority has delivered an average of 7,800 homes over the last three years, 21% below need. The new standard method for calculating housing need would require 10,431 homes per year in the WMCA, which would push the shortfall up to 25%.

Standard Method Two (SM2) also changes where the new homes are needed. Fewer homes are needed within Birmingham itself and more are needed in surrounding local authorities. Need is 15% lower in Birmingham under SM2 but jumps up 55% in Coventry, 38% in Dudley and 25% in Solihull. In Coventry, housing delivery would have to more than double from the three-year average to meet need. Coventry, Birmingham, and Solihull have all had to embrace Green Belt release in their plans to meet their need for housing and employment land already; these changes could require them to release more.

Competing demands on land

Land in districts such as Coventry is already in high demand. Well served by major motorways, including the M5 and M6, these areas are well-suited for distribution centres.

In some locations, net serviced land values for logistics are comparable to, or may even exceed, those for residential. Combined with the potentially preferable net developable area and shorter development timeline, this can present scenarios where development for logistics generates a greater and more timely return to landowners. This will make it even more challenging to find the appropriate balance between housing need and long-term employment growth.

Of course, not all sites work for logistics. But there are other competing land uses: demand for land for offices and other employment uses also puts pressure on the land available for housing, which is already laced with other constraints. Around two thirds of Solihull is classed as Green Belt, for example.

Ultimately, we need to consider how different uses will interact on a site right from the start at the planning stage. Considering how uses can collaborate will put less pressure on land supply while creating more effective places. The most successful residential communities incorporate non-residential uses such as schools, healthcare facilities, retail and leisure (see our report Delivering New Homes Resiliently). To help deal with the pressures from these competing uses we need to see planners and developers apply a holistic approach when allocating or building out sites, rather than dealing with different uses in isolation.

Creating a holistic planning system

One impact Covid-19 has had is to make us more selective about where we spend our working days. The sudden shift to homeworking has been challenging for some, but liberating for others. As the pandemic continues, so too will the need for many of us to work from home.

This doesn’t mean the day of the office is over. Just because workers no longer need to go to ‘The Office’ doesn’t mean they won’t want to work from ‘An Office’. The pandemic has given us the chance to reimagine what work could look like and where it could be located. The office of tomorrow will need to demonstrate flexibility. It will need to support employees’ health and wellbeing while promoting social interaction and the exchange of ideas. Fundamentally, these spaces will need to be comfortable and easily accessible. Local town centres could hold the key to providing these healthy, flexible, convenient workplaces, particularly for residents of the new homes delivered in these more suburban local authorities.”

With the new planning use class 'E' and local housing delivery to support footfall, town centres and high streets have the opportunity to adapt and diversify their offering. This can assist with helping the UK economy bounce back by helping to invigorate smaller towns and to create new, local businesses by encouraging multiple uses within a town centre. There will still be occupier demand for city-centre offices where occupiers can host meetings and events, but for day-to-day work that doesn’t require physically travelling to HQ, flexible workspaces in local centres offer employees an attractive alternative to hunching over their kitchen table.

Flexible office spaces can help reinvigorate the high street by occupying vacant retail space. Some retailers have already embraced this approach: Staples launched its ‘Workbar’ space in 2016, providing high-speed Wi-Fi, free parking and meeting rooms. WeWork more recently trialled a new concept in New York that offers a mix of flexible office space, retail and leisure. Made by We, an on-demand workspace, event space, shop and café is a concept which could help failing town centres in the UK. Closer to home, Bruntwood is building communities with new 'pop-up' retail to offset their co-working offering.

What’s the Costa your workplace?

As well as creating spaces where local people can come to work, creating flexible workspaces in local centres will boost footfall and help support shops and amenities in the surrounding area. This could significantly help re-invigorate town centres. The British Coffee Association estimates around one in five people visit a coffee shop in the UK on a daily basis, with cafés often a magnet for self-employed workers. Co-working cafés could also be the ideal launch pad for start-ups.

Local pubs, many of which sit completely empty during working hours, could also offer a lifeline to the high street by helping workers find quick, convenient and cost-effective short-term desk space. Young’s chain of pubs have already started this trend with their Work from Pub (WFP) packages for freelancers and home-workers. Running throughout the week, each participating pub is fully equipped with free Wi-Fi, charging points, quiet spaces and, crucially, unlimited tea and coffee. Never before has the pub been so productive.

The way we work is changing. People are increasingly looking for engaging workspaces in a stimulating environment close to home, so it’s important to provide a high street which promotes both wellbeing and a sense of community. Work now has the ability to become even more local.

For more information, please contact Savills Birmingham or arrange a market appraisal with one of our local experts.

View all of our latest Birmingham Cross Sector research here.