Policy Response:

Planning for the right homes in the right places

Policy Response - Proposed standard approach to housing need is a step in the right direction but doesn’t go far enough
Planning for the right homes in the right places

23 October 2017, by Savills Research

Proposed standard approach to housing need is a step in the right direction but doesn’t go far enough

The government’s long-awaited consultation on calculating housing need proposes a very straightforward method with the intention of removing some of the complexity and debate that surrounds the issue.

Consequently the chance for Local Planning Authorities and their consultants to ‘fudge’ their numbers and ‘dodge difficult decisions’ (Sajid Javid’s phrases) should be much limited.

Equally, the lengthy delays caused by complex forecasts and the debate around them particularly at the examination stage of the Local Plan making process will be reduced. Many unanswered questions on the implementation of the new method however remain.

 


The real impact of the new method will not therefore be known until the revised NPPF is published and we see how the new figures translate into actual Local Plan housing requirements

 

Key Findings


  • The proposed method would increase housing need at a national level, but not to a high enough level to really make an impact on worsening affordability pressures.
    • What’s more, the uplifts are distributed too evenly across the country and are not focused on the most unaffordable areas.

 

  • Despite the consultation using the phrase “the right homes in the right places”, there is no mechanism to correct for very low household projections in areas that are very unaffordable and have past records of low delivery, e.g. Oxford, Chiltern, Hart.
    • This is further exacerbated by the 40% cap on uplifts. Concerns regarding deliverability have no place in a need calculation – this is an issue for the Local Plan process.
    • Our solution is to convert the need figure under the proposed standard calculation to a growth in stock metric, and to increase this where it falls below a further affordability-based level. This will reduce anomalies resulting from low household projections and remove the feedback loop where low levels of past housing delivery feed into low housing targets.
    • Housing need arising from very strong employment growth forecasts (or specific ambitious growth plans) is explicitly dealt with under the current system, but this would become a ‘policy on’ option for the Local Plan under the proposals. New targets would only have to exceed the standard need to be deemed sound at examination, not necessarily meeting the full employment-driven housing need where this has been assessed separately.

 

  • Duty to Cooperate must be strengthened or the increased need will not translate into increased targets. Whilst the introduction of a Statement of Common Ground may improve some matters by flagging potential problems earlier, the biggest (and largely unaddressed) cross-boundary issue is dealing with London’s unmet needs, and the consultation provides no clear mechanism for this.

 

  • Transitional measures will limit the immediate impact to authorities in the middle stages of Local Plan production (Reg 18 or 19 stages), with some of the most unaffordable locations at this stage set for big increases, averaging 36% across 7 LPAs. They will either have to rush to submit a plan based on their existing OAN or find more housing land to meet the increased need.
    • For those at earlier stages of the plan process the most pressing issue will be five year land supply. For the 21 most unaffordable LPAs without up to date plans in place their housing requirement for land supply purposes would more than double, on average.
 
 

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Key contacts

Nick Gregori

Nick Gregori

Associate Director
Residential Research

Head Office London

+44 (0) 20 7409 5907

 

Jonathan Dixon

Jonathan Dixon

Associate Director
Planning

Cambridge

+44 (0) 1223 347 069