Among the slew of planning changes announced by the new government this summer, the changes to the Standard Method for calculating Housing Need (the ‘Standard Method’) were perhaps the most significant.
Although these changes - technical by their nature - may not grab the headlines like a commission into New Towns; or the introduction of a new ‘Grey Belt’ definition that may see houses delivered within our seemingly sacred Green Belts; the changes to the Standard Method change not only show how many houses need to be delivered, but also where they are required.
The current ‘Standard Method’ is currently used in the plan making process as the starting point for calculating housing need - Local Planning Authorities (LPAs) can then justify reductions from this starting point based on environmental and policy constraints (i.e. Green Belt) that may affect their area.
The current Standard Method is based on 2014 household projections, to which the average growth rate over 10 years is applied, followed by an uplift based on affordability ratios. This figure is then capped, if necessary, before a further 35% uplift is applied to the top 20 urban areas.
This is how we have arrived at the direction that we need to deliver 300,000 houses each year.
With the proposed new Standard Method, new housing is required to be delivered proportionate to existing housing stock. It’s based on a requirement to deliver 0.8% of the existing housing stock annually. An uplift is then applied based on local affordability ratios to require more housing to be delivered where housing is least affordable.
The new Standard Method will see a total housing requirement of over 370,000 houses a year.
Why is the Housing Target important?
An area’s housing target is the benchmark by which its housing delivery is measured. The Housing Delivery Test is an annually-released dataset that judges each LPA’s housing delivery, averaged over three years, against their housing need.
If they are under 95% of their target, LPAs have to come up with an action plan detailing why they're under-delivering, explore ways to reduce the risk of further under-delivery, and also set out measures on how they'll improve delivery.
If they are under 85% of their target, LPAs have to produce an action plan and provide a 20% buffer to the five-year land supply they’ve allocated towards housing.
If they are under 75% of their target LPAs have to provide an action plan, provide the buffer, and then the “presumption in favour of sustainable development” will apply.
Increasing the housing targets for LPAs, and making them mandatory, will mean that in the future more LPAs are likely to fall under the presumption of sustainable development.
The impact
Looking just at housing targets and delivery averaged over the last three years, this map shows how LPAs have been delivering compared to their target. Positive numbers indicate a surplus, while negative numbers indicate a deficit.
Please note that this analysis does not show that the ‘presumption in favour’ definitely applies. Based on the Sunak Government’s changes to the NPPF in December 2023 this is currently a much more complex equation.
When looking at the same delivery numbers (i.e. over the last three years) when compared to the proposed new mandatory housing target numbers, you can see below how this picture changes.
As you can see, the weight of housing delivery requirements has shifted where development is required and pushed many more LPAs into a position where they would be at risk of falling under the ‘presumption’.
This is significant on its own, but even more so when you combine this change with the other changes that have been introduced; notably the changes to the NPPF in paragraph 152 (b), which state that development should not be regarded as inappropriate in the Green Belt in certain circumstances, this effectively switches off a Green Belt designation from the list of ‘footnote 7’ constraints that would prevent a site from falling under the presumption in favour of sustainable development.
More research in this area will follow. Watch this space.
In the meantime, if you want to see how likely it is that the presumption may apply to areas that are not constrained by ‘footnote 7’ constraints (i.e. SSSI, AONB, Scheduled Monuments, Flooding etc.) in any LPA under the 2023 NPPF, you can do that in LandInsight. Book a demo below to speak to one of our experts to learn how.
