Housing Need                          

Made Simple…

...or at least that is what the Government would like us to believe with the publication of their revised methodology for calculating the full objectively assessed needs (FOAN) as part of a document published by DCLG today entitled ‘Planning for the right homes in the right places’. So what does it mean?

In the interim, not a lot. This is a consultation document only, and one that might receive a record number of responses from irate local planning authorities, housebuilders, consultants and academics. The Government would like this to be in force in April 2018, when the Government intends to publish a revised version of the NPPF, but has accepted that local plans that are submitted before the 31 March and those that have been adopted in the last five years will be exempt. We can therefore expect a flurry of plan making in some parts of the country over the next few months.

All other LPAs will need to follow three simple steps:

1. Set the baseline using the latest ONS household projections.
2. Uplift for housing affordability (buying, not renting) using affordability ratios.
3. If the resulting figure is 40% more than the number currently being used, cap it at 40%.

Government does suggest that there might be compelling reasons to deviate from this methodology, although it does not give any examples. This is much the same as the current methodology and one of the biggest causes in slowing down plan making.

So, who are the LPAs likely to have their housing numbers hiked to the 40% cap?

  • Most of London, although Croydon does buck the trend, with special congratulations going to Greenwich where steps one and two would otherwise suggest an increase of almost 850%.
  • Outside of London, it is mainly the eastern home counties, particularly those in Hertfordshire, that are most affected. Aylesbury Vale, Central Bedfordshire and Luton are also notable. The only LPA outside of the south to be affected appears to be Chorley in Lancashire.

At the other end of the spectrum there are several LPAs that see their numbers cut, particularly:

  • Major university towns and cities including Cambridge, Oxford, Newcastle, Manchester, Southampton and Bath.
  • The Midlands ‘Engine of Growth’, particularly large LPAs such as Birmingham and Shropshire.

The phenomenal variation in accuracy of the new method relative to the old should highlight the one fundamental flaw. Calculating housing need really isn’t that simple.

There is a desperate need to revise the current methodology to make it simple but this proposal goes too far such that it is no longer an objective assessment. It fails to recognise that each housing market area is unique and there might be perfectly valid reasons to depart from a standard methodology, such as the presence of a university which can misleadingly supress demographic projections and household forecasts. It also fails to grapple the relationship between housing and economic growth, which is fundamental if a local plan is to be found sound; simply avoiding it is not the answer.

Elsewhere in the consultation document, the Government proposes to formalise the Duty to Cooperate process through the use of ‘Statements of Common Ground’. In theory this seems to be a good idea. However, the Government is also proposing that the tests of soundness are amended to ensure that local plans are prepared on the basis of these statements. Since these statements will ultimately focus on the distribution of development, there will be some concern that they will effectively circumvent much of the democratic process that is inherent in the evolution of a local plan. Furthermore, questions will need to be asked as to how compatible these statements are with the Strategic Environmental Assessment regime.

Finally, there are proposals to improve the assessment of viability of local plans with greater explanation of what infrastructure is required to facilitate development and how this will be funded. There are various other elements to the consultation in terms of determining housing mix, the distribution of housing need to Neighbourhood Plan areas and the setting of planning fees. However, these are seeking views rather than setting out proposals.

The DCLG consultation documents can be found here. Bidwells will be making representations in due course. Please do get in contact if you wish to discuss the implications for your project.

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