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Consultation Launched Regarding the Calculation of Housing Need

The Government has launched its long-awaited consultation on a proposed standardised methodology for the calculation of housing need across England; responses are invited until 9 November 2017.

Presently, disagreements as to the most appropriate methodology for defining housing need have increased the timescale and costs of many applications, appeals and Local Plan Examinations. The adoption of a single methodology is proposed as a means of addressing this situation.

The proposed methodology seeks to utilise household growth projections, provided by the Office for National Statistics, to set a consistent baseline. Thereafter, plan-makers are required to use the workplace-based median house price-to-median earnings ratio from the most recent data available, to factor affordability into the housing need calculation process. Applying this approach would see a significant increase in the potential housing need in some parts of England, said the Government, so the final proposed stage caps the level of any increase according to the current status of the local plans:

  • For authorities with a Local Plan adopted in the last five years, a cap of 40 per cent above the annual requirement set in the local plan is proposed.
  • For authorities that don’t have an up-to-date local plan, the cap is 40 per cent above whichever is higher of the projected household growth for their area over the plan period or the annual housing requirement in their local plan.
In some areas, particularly in the South of England, the proposed methodology sees significant increases in the number of houses proposed to be built annually. Via the proposed methodology, the London Borough of Greenwich, for example, would see its annual housing target rise from 350 to 3,317 units. The above being said, despite the consultation being proposed as part of the Government’s measures to address the housing delivery crisis, a number of areas see substantial decreases in proposed housing delivery. Oxford, regularly cited as one of the least affordable places to live in the country, sees its housing need figure slashed by more than half. Birmingham, a key regional city and regeneration focus with a very recently adopted Local Plan, sees its annual housing figure reduced by 870 homes per annum, compared to its most recent housing needs assessment. Barrow Borough Council are told, via the consultation, that its housing need figure should be zero.

The consultation document is at pains to note that ambitious Councils can plan for higher growth, but one must question what incentive do they have to plan for more? Considering that the Government has retained its commitment to protecting the Green Belt, options to increase housing delivery in many locations will remain difficult, especially with the influence of local politics and neighbourhood planning across the Country.

For all of the population projections in the world, and their subsequent fiscal manipulation, the following points remain hugely pertinent when considering housing delivery:

  • 'Five year land supply’ is not and never was intended as a means of resisting or restricting housing delivery. Instead, it sets the onus on Councils to identify and deliver a minimum number of houses, not a ceiling figure as it is so often construed. Whilst setting a ‘need’ figure is crucial to supply analysis, it is perhaps more important that Officers and Members understand that ticking the box of delivering a minimal housing requirement target does not mean that further housing could and should not be delivered beyond this point;
  • The NPPF enshrines a presumption in favour of sustainable development. It does not contain a caveat that this ‘golden thread’ of national planning policy should be ignored where minimal housing targets are met or exceeded. If a site is sustainable and logical, it should remain so regardless of the localised housing land supply position. This position is frequently overlooked and is a direct inhibitor to housing being delivered in suitable locations; and
  • The Government still seems at a loss as to how best to stimulate house building. One must ask how this centralised push to set housing targets sits alongside the thrust for greater localism and neighbourhood planning? The planning system remains a key barrier to the delivery of much needed housing and further attention must, we feel, be directed towards getting the system to function more effectively, inclusive of Councils having sufficient resources and high quality Planning Officers to appropriately prepare Local Plans and assess planning applications or their respective merits.

We would be delighted to advise you further regarding how this current consultation might impact on any schemes or sites you might be considering, and to assist you in making representations. We look forward to answering any queries you might have in due course.

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