Community Voice on Planning FAQ's

SHMAs, Housing need and 5 year housing supply.

This is an acronym which stands for Strategic Housing Market Assessment.

According to the Government “They should provide a fit for purpose basis upon which to develop planning and housing policies by considering the characteristics of the housing market, how key factors work together and the probable scale of change in future housing need and demand”

In other words the planning department in a local authority will attempt to analyse the current situation and predict what type of housing needs are likely to be in the future. For example by looking at demographics they may determine that they need more dwellings for single people and older people.

Answer: Each planning authority has to produce an Objectively Assessed Housing Need or OAN. The planning advisory service defines this as:

‘The housing that households are willing and able to buy or rent, either from their own resources or with assistance from the State’.

How this is done unfortunately varies. It will use the Office of National Statistics information and figures from the census and other documents like the Strategic Economic Plan for the Area to come up with its answer. The answer is contained in the Strategic Housing Market Assessment (SHMA). One of the problems nationally is that there is no “right” and fixed way for them to do this and it has been a bone of contention around the country that often housing need is over-calculated.

Strategic Housing Market Assessments (SHMAs) are calculations of local housing need. They are based on the following:

  1. Estimates of current dwellings in terms of size, type, condition, tenure
  2. Analysis of past and current housing market trends, including balance between supply and demand in different housing sectors and price/affordability.
  3. Estimate of total future number of households, (taking into account local population growth patterns, employment projections and migration in and out of the area)
  4. Estimate of future households requiring market housing
  5. Estimate of current number of households in housing need
  6. Estimate of future households that will require affordable housing
  7. Estimate of the size of affordable housing required
  8. Estimate of household groups who have particular housing requirements e.g. families, older people, key workers, black and minority ethnic groups, disabled people, young people, etc.
  9. Estimates of household numbers (4, 5 and 6) may be expressed as a number or a range.

The process should:

  1. Ensure that identifying housing market area(s) is consistent with other approaches to identifying housing market areas in surrounding areas
  2. Involve key stakeholders, including house builders and land owners
  3. Contain a full technical explanation of the methods employed, with any limitations noted
  4. Ensure that assumptions, judgements and findings are fully justified and presented in an open and transparent manner
  5. Explain how the assessment findings have been monitored and updated (where appropriate) since it was originally undertaken.
  6. Take account of the availability of land as identified in the Strategic Housing Land Availability Assessment (SHLAA).

Such forecasts are, however, essentially speculative, driven by a presumption in favour of development.

Each local planning authority is supposed to identify “Objectively Assessed Need” for housing called the OAN (see above). It then has to calculate its 5 year housing supply figures. This is the number of houses that it is considered necessary to build over a five year period in a particular geographical area to satisfy the demand for homes.

The National Planning Policy Framework (NPPF) (see–2) makes the requirement for a five-year land supply (i.e. a supply of deliverable sites sufficient for five years’ worth of a Local Authority’s housing requirements) one of the major factors in deciding planning applications and this is the case even where there are Local Plans in place as it is dependent on constantly changing factors like past build-out rates. (It is also open to a variety of interpretations as appeal decisions show.)

The supply should be based on the local SHMA (Strategic Housing Market Assessment) of housing needs and on land availability and viability, and take into account restrictions like Green Belts.

The whole subject is a minefield for communities and Local Authorities alike. The following link offers more detailed explanation:

Not always. Any past undersupply should be dealt with within the first five years of a Local Plan period. Also Local Authorities must review the supply annually in the light of build-out rates and past undersupply. The Framework also requires councils to have in place an additional housing land supply buffer. Paragraph 73 NPPF.

Local Plans are required to be aspirational, but deliverable. Paragraph 31 of the NPPF requires that the preparation and review of all plans and policies are based on adequate, proportionate up-to-date and relevant evidence. A key evidence source for housing supply for the council is provided by past Annual Monitoring Reports (AMRs) which record housing completions, predicted future completions and the current 5 year housing supply situation.

Some developers will argue that the figures used to calculate the OAN are out of date and that the 5 year land supply should be higher. The Planning Advisory Service suggests that the evidence required is primarily through the Strategic Housing Land Availability Assessment (SHLAA) taking account of deliverability, viability and constraints including:

  1. What sites are deliverable – suitable, available now, achievable and viable?
  2. What level of development has previously been achieved and what is the market capacity within the area;
  3. What are the views of developers, i.e. rates per site (or per sales outlet where the site is large and contains different areas to be build out);
  4. What infrastructure is required and how will this be funded;
  5. What viability constraints exist; and
  6. What environmental designations exist?

Affordable Housing.

Defined in the NPPF as “Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers); and which complies with one or more of the following”

 Summarised below and available in Annex 2 Glossary of the NPPF:


  1. Affordable housing for rent at least 20% below local market rents
  2. Starter homes: as specified in sections 2 and 3 of the Housing and Planning Act 2016
  3. Discounted market sales housing that is sold at a discount of at least 20% below local market value.
  4. Other affordable routes to home ownership including shared ownership, relevant equity loans, other low cost homes for sale (at a price equivalent to at least 20% below local market value) and rent to buy.

Local Plans

This is a plan that sets out how a planning authority will manage development across the area over a 20 year period. It will include where development will be allowed and objectives for how land can be used e.g. for housing or businesses. It will include details of sites that have been allocated and policies which will guide the scale, location and type of development. It will also include open spaces and specific sites that theoretically will be protected.

The National Planning Policy Framework (NPPF) requires that local planning authorities identify the Objectively Assessed Need (OAN) for housing in their areas, and that Local Plans translate those needs into land provision targets.

The OAN is usually based on a Strategic Market Assessment or SHMA.

The policies produced in a Neighbourhood Plan (see–2) cannot block development that is already part of the Local Plan. What they can do is shape where that development will go and what it will look like.


A Local Plan produced after a Neighbourhood Plan is “made” can override policies in a Neighbourhood plan (NP). An NP must address the development and the use of land. This is because if successful at examination and referendum the NP will become part of the statutory development plan (Local Plan) once it has been “made” (brought into legal force) by the planning authority.

Planning Appeals

Only the applicant can appeal against a refusal and the appeal is made to the Secretary of State. Before making an appeal the applicant should consider re-engaging with the Local Authority to see if any changes are likely to make the application more acceptable, in which case the applicant submits a new proposal.

Objectors have no right of appeal in planning law and can challenge in the courts in a process known as Judicial Review, only on evidence that the planning decision was not made following the proper procedures. Legal challenges cannot take into account whether the decision was right or not in planning terms, only whether regulations and conventions about making decisions were properly followed.

Anyone may attend but you must register to speak.


The NPPF states that “achieving sustainable development means that the planning system has 3 overarching objectives, which are interdependent and need to be pursued in mutual supportive ways… “

  • An economic objective
  • A social objective
  • An environmental objective.

The NPPF also says that “these objectives should be delivered through the preparation and implementation of plans and the application of the policies in this Framework”…

It also states that at the heart of the Framework is a presumption in favour of sustainable development.

Miscellaneous FAQs

You could try applying for a reduction in your Council Tax Band from the Valuation Office Agency on grounds of loss of amenities or fall in the value of your property.

Information on flood issues relating to planning can be found on the UK Environmental Law Association (UKELA) website at The NPPF sets tests to protect people and property from flooding. If these are not met new development should not be allowed. A Strategic Flood Risk Assessment should be undertaken and form part of a Local Plan. In areas at risk or for sites of one hectare or more, developers must undertake a site-specific flood risk assessment to accompany a planning application. Where development needs to be in a flood-risk location, measures such as installing drainage systems should be carried out.

Local Enterprise Partnerships (LEPs): There are 38 Local Enterprise Partnerships across England. They are business led partnerships between local authorities and local private sector businesses.  They play a central role in determining local economic priorities and undertaking activities to drive economic growth and job creation, improve infrastructure and raise workforce skills within the local area.  LEP boards are led by a business Chair and board members are local leaders of industry (including SMEs), educational institutions and the public sector (see

In practice, all too often powerful LEPs formed by developers and local business interests set up as joint bodies with councils and may override the concerns and involvement of local communities and undermine the protection of green spaces.