Intelligence: 21 February 2019New PPG clarifies methodology for assessing housing need

On 19 February 2019, the Ministry of Housing, Communities and Local Government (MHCLG) published the long-awaited outcome of the ‘Technical consultation on updates to national planning policy and guidance’ which ran between 26 October and 07 December 2018.  The proposals put forward by Government in the consultation have been taken forward and incorporated within an updated version of the Planning Practice Guidance (PPG) on ‘Housing and economic needs assessment’ (HENA) published on 20 February 2019.

Any Local Plans submitted to the Planning Inspectorate for examination either on or after the 24 January 2019 will be examined in accordance with the 2018 National Planning Policy Framework (NPPF) which requires authorities to assess local housing need following the standard method. 

The PPG HENA details the standard method for assessing housing need and now clarifies that the 2014-based household projections should be used to set the ‘baseline’ (Step 1) for the standard method calculation.  Figure 1 summarises the standard method calculation as it currently stands.

The decision by Government to use the 2014-based household projections rather than the more recent 2016-based household projections is welcomed because the 2014-based household projections take the standard method assessment of need closer to the Government’s aspiration for 300,000 homes per annum nationally by the mid-2020s.

Barton Willmore calculate that the standard method underpinned by the 2014-based household projections would generate a national need for c.266,000 homes per annum (capped), whereas underpinned by the 2016-based household projections national need would have only amounted to c.212,000 homes per annum (capped).  Our interactive map allows users to see the resulting level of housing need based on the standard method as at February 2019.

A short-term fix

However, reverting to the 2014-based household projections is only a temporary fix for the short-term.  The Government has committed to review the standard method over the next 18 months with a view to “establish a new approach that balances the need for clarity, simplicity and transparency for local communities with the Government’s aspirations for the housing market.”

The standard method as it stands currently therefore won’t be around for long!

A longer-term solution

In considering a new approach, we urge the Government to address actual housing need rather than focusing on establishing minimum need (as is the case with the standard method).  The Government has acknowledged actual housing need to be 300,000 homes a year nationally – coincidentally equivalent to the uncapped standard method assessment of need underpinned by the 2014-based household projections.

The PPG HENA is clear that the standard method provides a minimum annual local housing need figure and that an authorities Plan will be considered sound if it plans to meet housing need according to the standard method.  However, what is the incentive for authorities to plan for more housing? There is concern that if authorities are not ambitious, the Government’s growth strategies may be jeopardised.

Similarly, whilst the PPG HENA states that if an authority uses an alternative approach which results in a lower housing need figure than identified using the standard method, the approach will be tested thoroughly at examination.  Is the sting of the stick sharp enough? Welcomed though, is the PPG HENA’s clarification that any method reliant on the 2016-based household projections will not be considered sound.

Fundamentally, the objective is to enable the delivery of 300,000 homes per annum and the NPPF 2018 will need to be changed to address actual (full) need, necessitating revisions to paragraph 60, and the present emphasis on local plans meeting minimum need.  This would undoubtedly make the process more complicated, but they may be unavoidable, if we are serious about solving the housing crisis.

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NPPF, Planning Practice Guidance, Housing Need, Household projections, Standard Method