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Planning Policy Wales – A Missed Opportunity?
Article originally featured in Western Mail. 
The Government’s updated planning policy aims to ensure Wales will grow in a sustainable way but Gareth Williams, of planning consultancy Lichfields, says it amounts to a ‘significant lost opportunity’.
The Welsh economy faces many challenges over the coming years and like our English neighbours one of the most pressing is housing.
Just over 6,500 dwellings were completed in 2017/18, against estimates of need of between 9,000 and 12,000.  And this is way below the average completions of 14,000 a year in the 1970s.
Lesley Griffiths, Cabinet Secretary for Energy, Planning and Rural Affairs, last week unveiled the new Planning Policy Wales (PPW10), saying it will help ensure that Welsh planning decisions will ‘improve the lives of both our current and future generations’ and ‘build a better environment to accommodate current and future needs’.
Here at Lichfields we strongly support its place-making ambitions, but further analysis of the 168-page document leaves us with reservations as to how these developments can be achieved.
Much of the document is focused on setting the vision for the types of places that the Welsh Government wants to see in Wales, rather than providing detailed guidance for the implementation of this vision.
It is evident that PPW10 continues to be lacking in detail regarding the practical tools and policy mechanisms that are required to assist the delivery of new developments. Whilst some of this is delegated to the TANs and new LDP Manual the key messages should in our view be set out in PPW10.
In particular, it fails to provide sufficient guidance on policy interventions that can be applied should either the development plans or allocated sites in adopted plans fail to come forward.
Take housing for example; Over recent years, a major problem in Wales has been the fact that many allocated housing sites have not been delivered.
The Welsh Government has upped the specification requirements for Welsh housing, meaning houses now cost more to build, but generally sell for less than they would in England.
There are large parts of Wales where housing sites aren’t viable and we have to ask ourselves, how do we make them more viable?
Given the long term imbalance between the need for and delivery of housing in Wales, the fact that PPW10 places an emphasis on boosting deliverability is most welcome, and there is a sense in this new document that we are heading in the right direction by ensuring we have the right sites allocated in plans.
But there is still concerns amongst the housebuilding community that they will continue to face similar barriers to the ones they have faced over the last 15 years if development plans don’t come forward quickly enough.
Land is the raw material that underpins housebuilding, but the existing planning system has not been delivering the land that is needed - this is the main concern of the housebuilding industry.
The Welsh Government has put its eggs into the plan-making basket, it believes the way it will achieve its housebuilding ambitions is through allocations in adopted development plans. Whilst this is right in theory in reality plan-making has in the past not delivered so there needs to be a Plan B to ensure a continuous supply of land for housing.
For a housebuilder in England there is greater opportunity to force the issue at appeal. This includes a presumption in favour of sustainable development where local authorities either haven’t delivered sufficient homes in accordance with their local plan (Housing Delivery Test) or don’t have an adequate housing land supply looking forward (5 Year Land Supply).
Whilst PPW10 retains the need for a 5 Year Land Supply there is no Housing Delivery Test and the sanctions for noncompliance are much weaker. The situation was exacerbated earlier this year when Welsh Government suspended one of the few policy levers the housebuilding community had in TAN1.
TAN1 stated that ‘considerable weight’ should be given to the need to increase housing supply, when dealing with housing applications where a five-year supply cannot be demonstrated.
But the Welsh Government has suspended the ‘considerable weight’ obligation significantly reducing the potential delivery of windfall sites which in recent years have provided almost one third of new homes in Wales.
House building employs 13,000 people in Wales which is more than both the aerospace and automotive industries, respectively.
This on-going policy weakness in respect of ensuring continuity in housing land supply means many areas of Wales are being disadvantaged both socially and economically, and the suspension of the recent caveat on housing supply threaten future development and jobs.
The fact that PPW10 does not go far enough to overcome these shortcomings appears to be a significant lost opportunity for the country.



What new household projections tell us about future housing need
New data released from the 2016-based household projections by the Office for National Statistics (ONS) show that the number of people living on their own in England is projected to increase by more than 25% over the next 25 years.
Clearly, household projections do not equate with demand or need for housing directly (see Lichfields blog on household projections methodology). Instead, they “show how many additional households would form if the population of England keeps growing as it did between 2011 and 2016 and keeps forming households as it did between 2001 and 2011.”[1]
Household projections are though an integral part of how we plan for housing - setting the baseline scenario for population growth, the Standard Method, and the Housing Delivery Test (albeit that the Government has proposed temporarily continuing with 2014-based household projections for planning purposes over the next two years).
The new projections show that, there will be a significant increase in the number of one-person households by 2041, driven almost entirely by growth in one-person households over the age of 65. Due in large part to people living longer, one-person households in this age group will grow by 51% by 2041, accounting for 91% of the overall growth in the total number of one-person households.
However, growth in older households is not evenly-spread across the country; as Figure 1 shows, growth is mostly concentrated in the South of England and the Midlands, as well as in London, while in the North and South West there seems to be less variation. Still, more than half of English local authorities are projected to see the number of people aged 65 and over who are living alone increase by more than 50% by 2041.

Figure 1: Growth in in number of one-person households aged 65+ (2018-2041)

It is also interesting to consider changes in the number of younger households, specifically aged 25-34, particularly as these households are the focus of Government policies and programmes aimed at increasing homeownership (see our blog on entry-level exceptions for example).
Across England, there will be just 1.7% growth in households in this age group over the period to 2041, and less than 1% growth in the number of single person households of the same age. Notably, both groups have projected declines of close to 10% by the year 2032; this reflects the demographic shifts of a smaller age-cohort coming through, with numbers roughly returning to their present levels by 2041. What is not accounted for in these statistics are the 1.8% of concealed households (e.g. adult children living at home) and sharing households identified in the 2011 Census.[2]
Figure 2 below shows the geography of the projected change in one-person households aged 25-35, and reflects a very different spatial pattern compared to Figure 1 above. Overall, just 45 local authorities will see an increase in one-person households over the period to 2041.

Figure 2: Change in in number of one-person households aged 25-34 (2018-2041)

The balance of different types of households projected also has implications for the mix of homes that will be needed, particularly at the local level.  The most significant increase (+139%) of any household type relates to those households made up of people over 90 who are living alone. This could suggest a challenge in terms of the current housing stock, and might also represent an opportunity for specialist housing developments for the elderly. However demand for this type of housing will also reflect factors other than the demography of the population, namely people’s willingness and ability to move in their old age.
The total number of households with children is projected to increase by only a small amount (1.9%) between 2018 and 2041. In simple terms, this suggests that the need for large sized housing may fall. However, multiple interrelated factors will also affect demand for larger housing. For example, the uneven geographical distribution of larger housing stock; so called ‘under occupancy’ meaning that one-person households might not live in one-bedroom homes as people may want spare rooms, and also, overcrowding within the existing stock.
Actual housing need and demand are subject to many different factors, not least changes in migration and birth rates, which can be linked to broader changes in government policy. Furthermore, housing demand is heavily influenced by the economic outlook. Nevertheless, it is important to consider the extent to which the housing market can and should adjust in terms of type and mix (and not just overall quantum) to accommodate the significant increases in older households, and the relative limited change among other age groups and household types.

For more information on Lichfields’ latest research on housing need, including entry level homes, contact Bethan Haynes or Matthew Spry.



[1]Household projections for England – household type projections: 2016-based

[2]What does the 2011 Census tell us about concealed families living in multi-family households in England and Wales?