It is universally accepted that housing delivery in England needs to increase, and every iteration of the NPPF, since its first publication in 2012, has referred to the government’s objective of significantly boosting the supply of homes. The latest edition, which was published on 19 December 2023, is no exception. And as we approach 2024, a year that could quite reasonably be viewed as falling in the “mid-2020s” – the point by which the Government’s target of delivering 300,ooo new homes per year was meant to have been achieved – this ambition seems all the more relevant.
The reality is that we are still very far from meeting the target of 300,000 new homes per year. Compared to the number of net additional homes delivered in 2022/23, an increase of almost 28% is required at a time when delivery is going in the wrong direction, having fallen by 5% since 2018-19.
The Statement made by the Secretary of State on 19 December was clear that “our reforms will also strengthen our ability to meet our target of 300,000 additional homes a year”. To what extent with the new NPPF ensure that this is the case? In this blog, which forms part of a series looking at various elements of the new Framework, I consider the approach that local planning authorities are required to adopt in respect of the identification of housing requirements in strategic policies.
A promising start
Things start well enough. Paragraph 11 continues to set out the presumption in favour of sustainable development and refers to the expectation that plans should “meet the development needs of their area” and “as a minimum provide for the objectively assessed needs for housing and other uses”. The retention of the presumption provides an important context to the new NPPF and any amendments (particularly in relation to paragraphs 60 and 61) should be viewed in the light of this.
However, things then seem to be watered down slightly in paragraph 60 which refers to the “overall aim” being to “meet as much of an area’s identified housing need as possible.” This implies that the housing needs might not be met in full and points to a contradiction which could result in confusion as local plans are prepared and examined.
Back to the positives, paragraph 61 still requires local planning authorities to apply the standard methodology for the assessment of local housing need “to determine the minimum number of homes needed”. Use of the word “minimum” is important and is picked up again in paragraph 67 which states that “strategic policy-making authorities should establish a housing requirement figure for their whole area … [which] may be higher than the identified housing need.”
Alarm bells and a warning for local authorities
So far, so good, and no change from before. Since its introduction, local authorities have been at liberty to deviate upwards from the standard methodology figure but could not use an alternative approach unless exceptional circumstances applied.
The alarm bells start to ring, however, when we read the words (also in paragraph 61) “the outcome of the standard methodology is an advisory starting-point for establishing a housing requirement for an area”. On first (and second) reading, this could very well be taken to suggest that a local authority might be able to take the standard methodology as a starting-point but then deviate (upwards or downwards) in order to arrive at its preferred housing requirement figure.
But that does not seem to be what was intended. The government’s response to the national planning policy consultation, which was also published on 19 December, contains the following statements:
“The government is clear that the standard method should still be used to inform the process of planning for new homes. Policy continues to expect local housing need to be determined using the standard method, unless there are exceptional circumstances which justify an alternative approach.”
“We are now confirming that long standing position in the language of the Framework.”
The Secretary of State made a similar point in his speech, stating that:
“Local authorities must provide rigorous evidence justifying their departure from assessed housing need, they must do everything to identify other land suitable for development, and while the Planning Inspectorate will respect well-made cases, it will not accept under-shooting that is not firmly rooted in environmental or other safeguards. This is about sensitive adjustment in meeting targets, not their abandonment.”
The implication is therefore that a local authority may only plan for fewer homes than anticipated by the standard methodology if it can demonstrate exceptional circumstances. It simply cannot treat housing need like an unwanted Christmas present and pretend that it does not exist. The exceptional circumstances – which cannot be that the Council deems the standard methodology figure to be too high – will need to be explained and tested at examination. Local authorities should take this expectation very seriously and the government must ensure that this “clarification of language” is not used as a mechanism to provide for fewer homes than an area needs. Quite simply, failure to justify a downward deviation should result in a local plan being found unsound.
Dealing with urban areas
The uplift to the standard methodology for the 20 largest urban areas has been retained in the new NPPF. Although the previous version of the NPPF was not explicit about how the 35% standard method uplift should be dealt with, the PPG stated that:
"This increase in the number of homes to be delivered in urban areas is expected to be met by the cities and urban centres themselves, rather than the surrounding areas, unless it would conflict with national policy and legal obligations."
Many urban areas would have struggled to meet these needs in full, but we might have previously expected authorities to explore the possibility of meeting its unmet need in adjacent areas through the duty to co-operate. The new NPPF takes this a step further (or backwards) and confirms that cities and urban areas should only seek to meet these needs outside their areas if voluntary arrangements exist.
Our analysis suggests that the urban areas (excluding London) are collectively delivering around 27,000 homes a year; already below the 33,000 per year needed under the standard methodology before the urban areas uplift is applied. Even if they could increase their output in line with the standard methodology before the uplift, assuming no voluntary arrangements come forward this represents a shortfall of 11,000 homes per year against the standard methodology figure with the urban uplift. This shortfall is likely to fall between the gaps between local authorities. In London, the 35% uplift that could go unaccounted for amounts to 22,000 homes per year, and London already delivers far below its need. As a minimum, this represents around 33,000 homes a year going unmet – over 10% of the national total.
Good enough?
If the phrase “advisory starting point” is not all that it seems, does that mean that the new NPPF will do enough to boost housing supply to the magic 300,000 figure?
Probably not. The standard methodology adds up to a total of 294,500dpa – i.e. a shade under the target figure, even if it was met in full. And there are two fundamental changes that will make meeting that figure in full even more difficult:
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The fact that there is now “no requirement for Green Belt boundaries to be reviewed or changed when plans are being reviewed or updated” (paragraph 145). In very many authorities across the Country, the appropriate release of Green Belt land has historically been essential to meeting the identified housing need. Removal of the requirement to undertake a review (or release of Green Belt land) means that a large number of authorities will find it even more difficult – or even impossible – to meet their local housing need. The standard methodology identifies a need for over 46,000 homes each year in authorities that have more than 50% of their land area designated as Green Belt. Clearly, some of that need will come forward but it is unlikely that it will be met in full in these areas.
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The abolition of the Duty to Cooperate (repealed as part of the Levelling Up and Regeneration Act) means that local authorities that are unable to meet their housing need in full are not required to relocate the unmet need into adjoining authorities. Nationally, the standard methodology identifies that more than 149,000 homes are required each year in authorities that comprise of more than 50% urban area, and even more is in authorities that are heavily constrained by Green Belt and other policy designations. Again, some of that requirement will come forward, but this further underlines the potential for unmet need. The NPPF does refer (in paragraphs 62 and 67) to “voluntary cross border redistribution agreements” and “provision for neighbouring areas” but the extent to which this will make up any shortfall remains to be seen. The simple truth is that a large proportion of unmet housing need is likely to fall through the cracks. As set out above, just failing to provide for the 35% urban centres uplift would equate to 10% of the national need going unmet.
Move forward with caution
Whilst the new NPPF is intended to provide a clarification in terms of how the standard methodology is used by policy makers, it is essential that this message is heard – and taken seriously – by those that are preparing local plans. Anything less than exceptional circumstances for a reduction in the requirement should be rejected. But as we approach the mid-2020s, the simple reality is that it is unlikely that the new NPPF will strengthen the ability to meet the 300,000 target. In fact, it will probably weaken given the clear expectation that need in urban areas need only be met by surrounding areas if “voluntary” arrangements exist. And it is those that are most in need of housing that will suffer.
Lichfields will undertake more analysis on the revised NPPF in the coming weeks.
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