• Issue 47

  • May 2019

The Source

Doubt cast on council’s housing need and housing land supply positions following new affordability data

Earlier this month, the Office for National Statistics (ONS) published annual figures on affordability which showed the cost of homes relative to incomes and England and Wales flatlined last year.

At a local authority level, the numbers form part of the basis of the government’s standard method for assessing housing need, meaning any changes feed through to local housing requirements and five-year housing land supply calculations. This is due to the affordability adjustment applied under the standard method.

The majority of English authorities (58%) saw affordability worsen. The practical impact of any changes on planning authorities is limited by the fact any uplift is capped 40% above the local plan housing requirement in a bid to dampen down local changes in affordability; this means three quarters of authorities will see the calculation of housing need change by no more than 2% either way. As well as this, any housing need calculation is protected for two years in the plan-making process from the point of submission to an examiner.

Despite this, the change will have undoubtable consequences for some authorities in terms of both plan-making and housing land supply positions. The slightest change to figures can quite easily tip those authorities with a finely balanced housing land supply over the threshold.

For authorities without an up to date plan this is particularly the case as the standard method is used to determine the five-year housing land supply figure making them vulnerable at appeal. At appeal, there are no circumstances to departure from the standard method.

Nicky Linihan, housing delivery specialist at the Planning Officers Society, said any change that negatively affects housing land supply positions could leave authorities having to look at new sites and consequently review sustainability appraisals, habitats assessments and transport modelling causing great uncertainty.

Nick Harding, head of planning at Fenland Council, which saw the biggest uplift in affordability levels, said the authority has been “lucky”, as the increased annual housing need requirement happened to match the 650-home figure contained in its existing plan. However, the constant changes have left authorities feeling they are “not necessarily in charge of our own destiny”, he added.

Richard Crawley, programme manager at the Local Government Association’s Planning Advisory Service comments: “The lesson here is let’s not live life on the edge. Don’t relax with a 5.1-year land supply. Let’s get it up to six or seven or eight years.”

However, for critics of the standard method, this new data, and the upheaval created, just highlight the flaws in the model. Jonathan Lee, managing director at consultants ORS, said: “We feel that the standard method is still producing results that aren’t robust at a local level” and Cristina Howick, planning director at consultants PBA, said the latest figures are a reminder that if house prices fall, then, under the standard method, the national requirement for new homes will fall too, potentially undermining the government’s 300,000 new homes per annum target.