Planning to solve the housing crisis

Planning to solve the housing crisis
 
London under pressure

12 June 2017, by Savills Research

Allocating need based on market strength has significant implications for London and its commuter belt

 

London’s assessed housing need could double to more than 100,000 per year under a new system for working out housing requirements. Supply at this level is required to improve affordability. More emphasis on ‘homes in the right places’, a key plank from the Housing White Paper, could mean big increases in housing requirements in London and its commuter belt, well above existing targets and levels of delivery in many locations.

A new approach

The Housing White Paper promises a new standardised approach to calculating housing need. It must add up to a high-enough figure to meet existing need, make up the backlog, and make a meaningful improvement to affordability. This should be at least 300,000 homes per year, in line with a growing academic and expert consensus. The White Paper suggests a more modest 225,000–275,000, but this only covers population growth and it will have no impact on housing affordability.

We await the promised consultation on the new method with great interest. In the meantime, we have proposed a simple approach that applies an increase to each district’s projected household growth based on local housing affordability (see the table below). The uplifts were chosen so that the national figure adds up to 300,000 homes per year.

Local planning authorities should propose higher numbers than those derived from this approach where they are needed to support ambitious economic growth plans.

FIGURE 5

Assessing housing targets – Our simple approach to calculating housing need applies an increase to each district’s projected household growth based on local housing affordability

 
Figure 5

Source: Savills Research, DCLG, VOA and Land Registry

The waiting game

Our results (see the map below) show that the largest potential impacts from our approach are concentrated in and around London. The darker shaded districts could see the largest housing need increases, with those in blue being of more immediate interest as they don’t have an up-to-date adopted plan.

The yellow areas have adopted plans but the introduction of statutory five-year reviews means that, over time, the standardised approach will increase need in these locations too, offering longer-term opportunities to bring forward more land.

FIGURE 6

Annual housing need increase – The darker shaded districts could see the largest housing need increases, with those in blue not having an up-to-date adopted plan

 
Figure 6

Source: Savills Research, DCLG, VOA and Land Registry

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