A standard methodology for housing need
The household projections published by the ONS in September 2018 created a bit of a quandary for policymakers particularly for Local Plan preparation as projected household rates were significantly reduced across the whole of England where previous MHCLG 2014 projections showed that there was a significant housing need.
Recent research from Savills for Cambridge showed internal migration was slumping for example.
The NPPF which was revised in July 2018 allowed for a transition for Local Plans up to the end of January to be based on the 2012 NPPF household methodology.
Now that the transition period has ended, Local Plans are to be based on the standard methodology.
The standard methodology is based on household projections with market signals for affordability and vacancy with a 40% uplift cap.
The most recent projections to establish household need are the 2016 projections which are based on the period of household growth between 2001 and 2011. During this period, household formation was suppressed by external factors and the 2016 projections going forward bake this suppression in.
The government aims to support the delivery of 300,000 new homes per year by mid-2020s. The difficulty is that the 2016 projections weren’t supporting the government aim of creating 1 million homes by the mid-2020s. So much so that a technical consultation was published in October specifying that. For the short-term, to specify that the 2014-based data will provide the demographic baseline for assessment of local housing need.
The NPPF and NPPG were updated on the 20th Feb 2019 to specifically state that an assessment of household need starts by setting the baseline using national household growth projections (2014-based household projections in England, table 406 unitary authorities and districts in England). This clarification must be welcomed by policymakers to set a clear direction.
Housing Delivery Test
As part of the overall plan to boost the supply of housing, Government introduced a housing delivery test in the July 2018 version of the NPPF. The HDT results were published on the 20th Feb 2019.
HDT is a calculation expressed as a percentage, of
(i) net homes delivered in a specified 3 year period (“the numerator”), as against
(ii) the number of homes required in that period (“the denominator”).
• The numerator is not just “net homes delivered”
• Student adjustment –“net increase in bedrooms in student communal accommodation in local authority” divided by the average number of students in a student only households in England”
A 20% buffer will be applied if…
• From November 2018 – if delivery falls below 25% of housing required over the previous three years;
• From November 2019 – if delivery is below 45% of housing required over the previous three years
• From November 2020- if delivery is below 75% of housing required over the previous three years
The Housing Delivery Test will apply from the day following the publication of the Housing Delivery Test and there are 21 authorities that are required to prepare an action plan.
• Bromsgrove
• Derbyshire Dales
• Huntingdonshire
• King’s Lynn and West Norfolk
• Milton Keynes
• Peterborough
• Rotherham
• Stroud
• Tamworth
• Torbay
• Welwyn Hatfield
• Babergh
• Arun
• Worthing
• Slough
• Bexley
• Enfield
• Sevenoaks
• Tunbridge Wells
• Braintree
• Thurrock
On the 8th February 2019 Amyas Morse, the head of the NAO said…
“For many years, the supply of new homes has failed to meet demand. From the flawed method for assessing the number of homes required, to the failure to ensure developers contribute fairly for infrastructure, it is clear the planning system is not working well. The government needs to take this much more seriously and ensure its new planning policies bring about the change that is needed.”
Will there be opportunities for further development in these struggling boroughs? We will wait and see.
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