In October, a consultation released alongside the Planning White Paper, discussing changes to the current planning system, closed.
Included in the changes, was a proposal to amend the way in which housing need would be calculated for each local authority.
Part of Boris Johnson’s ‘Build, Build, Build’ campaign announced in June, the aim of changing the method for calculating housing need is to encourage more house building in urban areas and on brownfield sites, particularly in the South East.
However, the proposed change to the standard method of calculating housing need has attracted a great deal of controversy, not least because it will result in a significant increase housing delivery for some local planning authorities (LPAs), in some cases by a staggering 91%.
What will change?
The standard method of calculating housing need currently involves an affordability adjustment with a 40% cap the level of increase.
The cap on the level of increase, which according to the consultation paper “artificially suppresses” identified housing need, will also be removed.
The amended formula will comprise of step 1 – setting the baseline, and step 2 – adjusting for market signals.
It is estimated that, based on the new formula, there will be a national housing need of 337,000, increased from 270,000 under the current methodology.
Which areas will experience the biggest increases?
Looking specifically at the Solent region, here are some of the councils which will experience some of the biggest increases in housing need.
Havant, Test Valley, Winchester and East Hampshire Councils will all see a significant rise, meanwhile Fareham, Portsmouth and Southampton will have a lower need under the new housing need formula.
Many of these areas will need to facilitate much more development than their LPAs were planning for.
How will this impact councils and developers?
Councils already in the latter stages of developing their Local Plans will be able to continue with their plans based on their current housing numbers.
However, if the proposed changes suggested by the white paper are adopted, councils with existing Local Plans over five years old will be forced to plan for the full revised requirement of housing in the short term until they have a new Local Plan.
For other areas already struggling to meet housing numbers, this will pose a significant challenge and is likely to result in councils considering more housing development sites in order to increase supply throughout the plan period.
Meanwhile for those councils not quite so advanced in development of their Local Plans, the changes will leave them with no other option but to stall progress whilst they get to grips with how to deliver on the new housing need for their areas.
What will this mean for development?
Many councils and developers could find themselves considering more development sites than ever before with councils needing to consider additional sites that they may have previously discounted.
They may need to accelerate delivery of development land which was previously considered a long term prospect, such as urban extensions into greenfield land, to satisfy increased housing targets.
Developers may also be able to bring forward sites which they had previously discounted in order to increase supply against the revised targets and deliver more housing, more quickly.
Meanwhile, there could be scope for sites that have already been promoted for development to increase their housing density.
Additional housing tenures could also be considered (for example Build To Rent, retirement living, affordable housing and co-living) to improve housing delivery in these areas by delivering multiple development streams simultaneously.
To understand the potential impact on housing targets within an area and how this affects five-year housing land supply in the short term, contact our planning and development team for more information.
Now is the time for developers to review their pipeline of development land and consider targeting additional sites for housing delivery to exploit increased housing targets. Our expert team of planning and development advisers is well placed to provide insight on the deliverability of your scheme in light of the latest planning changes.
To speak to a member of our team, don’t hesitate to get in touch.