The Government’s proposed Standard Method for assessing housing need in local authorities across England is predominantly informed by household projections produced by the Office for National Statistics (ONS), with a further uplift to address affordability pressures.
Today (20 September 2018) the ONS published the 2016-based household projections. This latest release projects growth of 1,650,500 households (7.1%) in England over the next 10-years (2018-2028) which is significantly lower in comparison to the growth projected by the previous 2014-based series over the same period (2.2 million, +9.2%). The lower projection of household growth is largely driven by the underlying ONS 2016-based Sub National Population Projections (SNPP) which projected lower population growth than the previous 2014-based SNPP.
Lower projected household growth is a pattern seen across all regions as demonstrated in Table 1. The most notable difference is within London, where the 2016-based household projections project 39% fewer households than the previous series.
Table 1: Change in projected 10-year household growth
So what effect will these new household projections have on the Standard Method?
We estimate that housing need across England assessed using the Standard Method sums to 212,000 homes per annum, following the release of the 2016-based household projections. This is substantially lower than the 266,000 homes per annum identified by the Government’s initial Standard Method assessment published back in September 2017.
Table 2 illustrates that the 2016-based household projections result in a lower assessment of Standard Method housing need across all regions.
Table 2: Comparison of housing need according to the Government’s initial September 2017 assessment and the updated assessment in light of the 2016-based household projections
National housing need of 212,000 per annum as indicated by the latest Standard Method assessment falls significantly short of the Government’s desire to build 300,000 new homes per year by the mid-2020s. This begs the question, how can the delivery of 300,000 homes a year be hard wired into plan making?
The revised NPPF tells us that the Standard Method determines the minimum housing needed and the accompanying PPG explains that the ‘government is committed to ensuring that more homes are built and are supportive of ambitious authorities who want to plan for growth’. It goes on to set out the circumstances where housing need may exceed the minimum need expressed by the Standard Method.
The language used treats Standard Method need much like the NPPF2012 guidance treated the household projections, describing it as the ‘starting point in determining the number of homes needed in an area. It does not attempt to predict the impact of future government polices … there will be circumstances where actual need may be higher… ‘.
The language has changed (‘actual’ need replaces ‘full’ need) but the meaning is broadly the same. Uplifts for above trend planned growth may be considered ‘where growth strategies are in place’ or ‘funding is in place to promote and facilitate growth (e.g. Housing Deals)’ for example.
The uplift from Standard Method minimum need to actual need may help bridge the gap to 300,000 homes, but there is no indication that it will be incumbent on local planning authorities to plan beyond minimum need. Indeed, a requirement to increase the standard method seems unlikely, when the ‘positively prepared’ test of soundness is evidently satisfied by recourse to Standard Method minimum need, whatever the local circumstances might be.
Government has said that it will keep the Standard Method under review and made a specific commitment to review it following publication of the 2016-based household projections, should these give rise to results that are inconsistent with a national aim to build more homes.
Vague though the ‘build more homes’ benchmark is, if it is a reference to 300,000 homes a year and the Standard Method is regarded as the key means to achieve it, then the Standard Method will need to be altered, substantially so. We await comment and reaction from MHCLG, but for now, if local authorities move towards setting housing targets based on the Standard Method assessment of housing need, the target of 300,000 homes a year will not be achieved.
Use our interactive map to compare the initial standard method based housing need figures for each local authority published by Government last year, with those which result from the application of the latest 2016-based household projections.
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