Housing Need Evidence

December 2014 – Strategic Housing Market Assessments – Ministerial letter from Brandon Lewis – See the correspondence at Gov.uk
The letter states that the government has set out in the NPPG that a Strategic Housing Market Assessment is just the first stage in developing a Local Plan and councils can take account of constraints which indicate that development should be restricted. The extent of constraints will be justified on a case by case basis for each Local Plan, depending on particular local circumstances, within a housing market area.

One source of evidence is the website: http://www.howmanyhomes.org/ This website has been set up by a group of professional bodies, trade associations and charities with an interest in planning for housing. The Group came together in 2011 in response to a call from practitioners for practical support in assessing how many homes were needed in their areas in the context of the new housing and planning landscape.

Latest News:
An examining planning inspector has recommended a number of modifications to Lichfield District Council’s draft local plan (LDLP) in order to make it capable of adoption. The modifications include an increase in the minimum housing provision during the plan period and a commitment to an early review or partial review of the LDLP in the event that further housing provision is required to meet the needs of neighbouring Birmingham or Tamworth. January 2015.

An independent planning inspector has found the draft Uttlesford local plan (ULP) unsound, after concluding that the stated housing need and the consideration of options for a new settlement in the district were not compliant with government guidance. December 2014

Inspector backs London Plan changes, but remains “unconvinced” housing targets can be met within GLA boundaries. He recommended that draft further alterations to the Greater London Authority’s (GLA’s) strategic development plan for Greater London be adopted, despite expressing concerns that the strategy “will not deliver sufficient homes to meet objectively assessed need” in the capital. December 2014

An inspector has recommended that the examination of a Leicestershire council’s key core strategy planning blueprint is suspended for nine months so that the authority can provide more up to date housing need evidence. April 2014
Inspector Kevin Ward said that he considered that the local authority’s core strategy “is not based upon an up to date and robust assessment of the housing needs of the housing market area”.
“As it stands, the core strategy has not been positively prepared, it is not justified or effective and it is not consistent with national policy in respect of overall housing provision. It is therefore not sound,” the inspector’s letter said.

An inspector has warned a Devon council that its key development plan is not sound and described its lack of an up-to-date housing need study as ‘a serious failing‘.(7 April)
Inspector Anthony Thickett has written to East Devon District Council to say that he does “not consider that the local plan is sound nor at this stage can it be made so by main modification” and has recommended it carry out extra work to address his concerns.

Thickett attacked the plan’s 15,000 home target as not justified by “up to date and appropriate evidence”, highlighting the lack of a recent strategic housing market assessment (SHMA) to back up the housing figures.

Fifteen English local authorities have withdrawn draft local plans in the past two years.

Council planners working on core strategies and local plans have had a tough time of it. Many have stumbled trying to hit the moving target created by new policies in the National Planning Policy Framework (NPPF), the subsequent revocation of Regional Spatial Strategies and the updated census figures in 2011.

Since the NPPF came into effect in March 2012, 15 local authorities have withdrawn their core strategies or local plans (see panel). The process of drawing up a new plan is long, with many having to start from scratch on the evidence underpinning the plan.

No council that has withdrawn its core strategy has yet completed the process of submitting a new plan, but all are working on the issues raised by inspectors. Issues around housing are the most common reason for inspectors’ warnings that plans could be found unsound and subsequent recommendations to withdraw plans.


What is Housing Need and why is it so difficult?

According to the National Policy Planing Guidance, household projections published by the Department for Communities and Local Government should provide the starting point estimate of overall housing need. These may require adjustment to reflect factors affecting local demography and household formation rates which are not captured in past trends.

Plan makers may consider sensitivity testing, specific to their local circumstances, based on alternative assumptions in relation to the underlying demographic projections and household formation rates. Issues will vary but might include:

  • migration levels that may be affected by changes in employment growth or a one off event such as a large employer moving in or out of an area or a large housing development such as an urban extension in the last five years
  • demographic structure that may be affected by local circumstances or policies eg expansion in education or facilities for older people

Plan makers should make an assessment of the likely change in job numbers based on past trends and/or economic forecasts as appropriate and also having regard to the growth of the working age population in the housing market area. Any cross-boundary migration assumptions, particularly where one area decides to assume a lower internal migration figure than the housing market area figures suggest, will need to be agreed with the other relevant local planning authority under the duty to cooperate. Failure to do so will mean that there would be an increase in unmet housing need.

The housing need number suggested by household projections (the starting point) should be adjusted to reflect appropriate market signals, as well as other market indicators of the balance between the demand for and supply of dwellings.  Prices or rents rising faster than the national/local average may well indicate particular market undersupply relative to demand.

Once an overall housing figure has been identified, plan makers will need to break this down by tenure, household type (singles, couples and families) and household size. Plan makers should therefore examine current and future trends of:

  • the proportion of the population of different age profile;
  • the types of household (eg singles, couples, families by age group, numbers of children and dependents);
  • the current housing stock size of dwellings (eg one, two+ bedrooms);
  • the tenure composition of housing.

Plan makers should set out clear conclusions and any assumptions made in reaching these conclusions on the levels of quantitative and qualitative predicted need. This will be an important input into assessing the suitability of sites and the Local Plan preparation process more generally.

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