The Government published proposed reforms to the National Planning Policy Framework (NPPF) on 30 July 2024 and is seeking public input on these changes until 11:45pm on 24 September 2024. The proposal seeks to undo a number of changes made to the NPPF in December 2023 to streamline the planning process and push through an ambitious plan to get Britain building. 

This insight focuses on the proposed new standard method of assessing housing need.

What is the current standard method for assessing housing need?

The current standard method identifies the minimum number of homes that a local planning authority (LPA) should plan for in its area. This is calculated by using data produced by the Office for National Statistics to identify a baseline of housing projections which is then adjusted to account for affordability. In certain areas there can be caps or urban uplifts applied to achieve a total number of homes required. When each LPA numbers are combined the total achieves the required 300,000 homes nationally. However, this method is no longer deemed fit for purpose and the Government want to provide a more robust approach.

What is the proposed standard method for assessing housing need?

The proposed method will use a baseline set at a percentage of 0.8% of existing housing stock levels in each LPA area instead of housing projections. The % is based on the fact housing stock has grown nationally by 0.89% per year over the last 10 years.

The proposed method will still factor in affordability (using workplace-based median house price to median earnings ratio), but instead there will be a focus on areas which are facing greater affordability pressures. In practice the baseline stock figure would be adjusted upwards in areas where house prices are more than four times higher than earnings. In addition affordability will be assessed against an average over the three most recent years for which data is available, rather than the most recent data point.

There will no longer be any caps or urban uplifts applied for certain areas, this will ensure homes are provided in a wide range of important towns and cities across the country and not just the top 20 with the largest population.

What if an LPA cannot meet its housing need in line with the new standard method?

Although LPAs will be expected to make every effort to allocate land in line with their housing need, there may be valid reasons to justify a lower housing requirement, for instance due to local constraints on land and delivery, such as flood risk. However, this will need to be evidenced through consultation and examination, and any LPA that cannot meet their needs will have to demonstrate how they have worked with other nearby authorities to share that unmet need.

What does this mean for the future of housing delivery?

At its core the new standard method aims to:

• support the Government’s ambition to deliver 1.5 million new homes over the next five years
• provide more stable and predictable housing numbers
• distribute homes across the country where they are most needed
• be straightforward to understand and apply.

The Government considers that these changes will drive growth across the country and not just pockets of towns and cities, with a particular focus on setting a realistic target for the delivery of homes in London.

In summary

The proposed standard method seeks to support the Governments ambitious target to deliver 1.5m homes over the next five years. The proposed method will provide a more robust baseline of applying a % against existing housing stock levels rather than housing projections. The affordability element will still apply albeit with a focus on areas which are facing greater affordability pressures.

Capsticks’ view and how we can help

We encourage you to make any desired responses on the proposed reforms to the NPPF before the consultation closes at 11:45pm on 24 September 2024. Guidance on how to make comments can be found through this link here and enquiries about the consultation contact can be made to the following contact: [email protected]

Our specialist local government advice is cost-effective and strategic, complemented by practical knowledge of your daily challenges. We are experts on all aspects of compliance with these new legal requirements and can advise on the broader changing landscape of the planning law.

If you have any queries around what is discussed in this article, and the impact on your organisation, please speak to Suzanne Smith to find out more about how Capsticks can help