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Housing Delivery Test: The Picture in the North West

Housing Delivery Test: The Picture in the North West

Colin Robinson & Frances Lennon 14 May 2019
In February, the Ministry of Housing, Communities and Local Government [MHCLG] published the results of the new Housing Delivery Test [HDT] for each local authority in England.  The new test marks a clear shift in the Government’s thinking regarding delivery and providing a straightforward and reasonably transparent approach to determining whether Councils are hitting their targets.  Crucially, it also has real ‘teeth’, with the HDT effectively changing the route to the presumption in favour of sustainable development, triggering paragraph 11 of the Framework. Whilst many of us are familiar with the previous approach which looked at the 5-year housing land supply, the HDT now requires us to see how successfully Councils have been at delivering their housing requirements over the past 3 years, with a series of graded ‘penalties’ depending on the extent of the shortfall, with a 3-year transition period (see Figure 1 below).  Whilst the objectives and methodology of the HDT are now well known, it is helpful to consider the implications of these results and to assess how the situation might change as the thresholds for the various sanctions increase, firstly in November 2019 and again in November 2020. The picture in 2019 What does this mean in reality? Looking nationally, applying the results of the HDT from February 2019 (delayed from November 2018) shows that: 7% of all councils will be required to produce an action plan; 27% of councils will need to apply a 20% buffer to their housing land supply; 66% of councils will be required to take no action at all; and, crucially, no councils will immediately be subject to the presumption in favour of sustainable development. As shown in Figure 2, looking more specifically in the N0rth West region: 26 councils will not be required to take any action at all; and, 13 councils will need to apply a 20% buffer to their housing land supply and prepare an action plan. The results therefore indicate that the North West region is generally performing well when compared to the national results, highlighting a relatively higher level of housing delivery over the past 3 years (at least when compared with Local Plan housing targets / household projections). The picture in 2020 If we make certain assumptions regarding housing delivery continuing along a similar trajectory over the next 2 years and trend forward the housing need calculations, we can start to provide an indication of which authorities may be vulnerable to failing the test once the threshold is revised to 75% in November 2020.  Our work suggests that in 18 months’ time, around a third of all English councils could face the presumption in favour unless delivery rates begin to increase. As shown in Figure 3, our analysis suggests that within the North West region: 27 councils may be required to take no action at all; 2 councils may be required to produce an action plan; 3 councils may need to apply a 20% buffer to their housing land supply; and, 7 councils could be subject to the presumption in favour for sustainable development (Bolton, Bury, Oldham, Rossendale, Stockport, Trafford, and Warrington). It is clear from analysis that the Greater Manchester authorities are particularly struggling, with 6 out of 10 authorities requiring some form of intervention and 5 subject to the most severe level of HDT penalty.  This is likely to place increasing pressure for the GMSF to be adopted as soon as possible and to start bringing forward more housing sites earlier in the plan period.  Elsewhere, there are potential HDT-compliance issues in Wirral and Sefton on Merseyside, and parts of East Lancashire.  Otherwise, the situation is largely positive for the rest of Lancashire, Cumbria, and Cheshire.  This could of course change significantly if housing delivery falls, or conversely if higher housing targets or future household projections results in less attainable housing requirements. Going forward: The influence of the standard methodology In February 2019, the standard methodology for assessing Local Housing Need [LHN] was introduced. The simplified methodology is based solely on the 2014 household projections, with most Local Authorities having a percentage uplift to address (un)affordability. A number of regions, especially Greater London and the South East, have faced an increase in housing requirement as a consequence.  For the purposes of assessing performance against the HDT, an increase in the future requirement means that it is not just the increasingly severe threshold for the application of sanctions that will cause authorities to fall into the presumption in favour of sustainable development categories. Whilst in the North West the standard methodology has reduced the LHN for many authorities, there still remains uncertainty regarding future projections and therefore the future approach. Questions surrounding the full impact of future housing requirements therefore remain. Results reveal that 680,000 homes were built over the last three years; that’s an average of c.227,000 per year. There is clearly a long way to go in order to reach the Government’s aim of 300,000 homes in order to address the housing crisis. This highlights the key weakness of the HDT: it is only effective if housing targets are ‘right’ in the first place. Although we cannot know how many houses will be delivered in the future and can therefore only estimate future performance against the HDT, this analysis is nevertheless instructive in highlighting those authorities where a significant increase in net completions is likely to be necessary going forwards if the most severe sanctions are to be avoided. Furthermore, the fact that the HDT brings more certainty in relation to the application of a 20% buffer is also likely to have an impact on the other route to the “tilted balance”, which relates to five-year housing land supply. In the context of the tougher approach to deliverability within the National Planning Policy Framework [Framework], this will require more sites to be identified for future development in a number of authorities. For more information on the approach to the assessment of five-year housing land supply set out in the Framework, take a look at our Insight Focus. In conclusion, the HDT is a key monitoring tool based on previous housing delivery performance. However, the numbers produced are likely to change as the Test will reflect future fluctuations in the data and housing figures, and it will be difficult to precisely estimate housing requirements many years into the future. These estimates show that continuing to monitor changes to housing figures is essential to ensure future housing projections are sufficient and can be met. To find out more about the HDT and LHN please follow the link below to our Insight focus.

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Planning for an ageing population: is co-housing the solution?
It is no secret that the UK’s population is ageing. Between 2016 and 2030, the population of over 60s in the UK is estimated to rise from 15 million to 20 million, and currently (for the first time ever), there are more people aged 65+ than there are children aged 15 or under[1]. Older population growth leads to household growth, and inevitably the housing needs of the UK will change alongside this shifting demographic. Lichfields’ Insight Focus explores this issue within the context of South West England. So, what is the planning system doing to address the changing demographic? I first turn to England’s ‘planning bible’, the National Planning Policy Framework (2019), which amongst other things aims to significantly boost the supply of homes. Within this context it requires the size, type and tenure of housing needed for specific groups in the community to be assessed and reflected in planning policies, including housing for older people (para. 61). While there is clear policy support for certain types of housing, such as Starter Homes and Build to Rent, there is no specific policy support or Government initiative to promote the delivery of housing for older people. The undersupply of adequate retirement housing has all too often been overlooked at national planning level. In London, the London Plan (2016) has adopted ‘Lifetime Homes’ as a requirement in new housing developments. Although this is a positive step towards creating inclusive and adaptable homes, it mainly focuses on physical accessibility of older people, and doesn’t address the need to provide accommodation with an element of care to support those with physical or mental needs, often affecting the older population. The draft London Plan, which is currently undergoing Examination in Public, has a specific policy relating to specialist older persons housing. Draft Policy H15 requires Boroughs to ‘work positively and collaboratively with providers’ to identify sites appropriate for such homes. The draft policy is a step in the right direction and in response to local need sets targets for the number of specialist accommodation units to be delivered annually in each London borough (until 2029). Draft London Plan Policy H15 should help to ensure that a quantum of housing for older people is delivered across all London Boroughs. However, we are aware that providers of housing for older people struggle to compete with more standard housing providers when acquiring sites, which makes delivery of housing for older people more difficult. There are several potential planning mechanisms that could assist delivery for this housing type, such as introducing policies that explicitly support provision of specialist accommodation in boroughs where there is an identified unmet need. Planning conditions attached to permissions can also secure occupancy for older people in perpetuity. There is increasing interest in senior co-housing schemes to help address the needs of our ageing population which is considered below. Co-housing: a potential solution to a growing problem Co-housing schemes are usually arranged as a cluster of private homes around a shared communal space (including a ‘common house’, guest room for visitors, garden(s) and laundry rooms), which is designed and managed by its residents. Community groups comprising retirees only are creating their own senior co-housing schemes which aim to encourage independent living with shared facilities while helping to reduce loneliness. Other pull factors include the sociable nature (limiting isolation), increased security (with more ‘eyes on the street’), and the sense of community it creates. Furthermore, senior co-housing developments enable older people to downsize, thus freeing up larger family homes. Co-housing is an established concept in Scandinavia and the Netherlands, while the UK plays catch up. There are currently over 60 groups in the UK in the process of developing their own co-housing projects, and the Government is making £163m available across England for such projects (up to 2021), through the Community Housing Fund. Sadiq Khan also launched the Homes for Londoners Community Housing Hub in 2017 to support community groups (not specifically for older co-housing communities) and individuals wanting to build their own homes by offering advice - including how to access funding and unlock land, and providing technical support for projects. Below is an exemplary senior co-housing scheme in Barnet, London: New Ground, Barnet -  Older Women’s Co-housing  (OWCH): This senior development comprising 25 homes was built in 2016 for a group of women over 50. Eight are let for social rent through the housing association Housing for Women; the others are leaseholds. OWCH faced local opposition, but eventually managed to obtain planning permission in early 2013 with help from the Director of Adult Social Care who agreed that senior co-housing communities can reduce pressure on health and social care services. Sourced imagery: OWCH It is not fair to suggest that there is only one housing solution for such a diverse demographic group, but senior co-housing schemes could be a positive option for older people to live independently, while also having a community close-by. Increasing the number of these communities can reduce pressures on health and care services, and allow older people to be independent within a close network that helps in reducing loneliness and isolation. It is of course important to note that senior co-housing communities would only be appropriate for older people without specialist mental and physical health care needs. Additionally, community-led housing projects such as senior co-housing schemes come with a lengthy process of finding an appropriate site, securing funding, and successfully negotiating with a registered provider/developer partner. For OWCH, the whole process took around 16 years! To assist the delivery of senior co-housing schemes, local authorities could remove some of the planning barriers by offering free pre-application advice or implementing a nil CIL rate for such schemes. Local authorities could also impose planning conditions to ensure these developments can only be occupied by older people in the long term. Furthermore, planning authorities should ensure community-led development policies are included in their Local Plans, and produce SPDs on community-led housing to set a clear approach for delivery. They could also allocate Council-owned sites for such developments or obtain outline planning permission for senior co-housing development to speed up the process for co-housing groups. The bottom line is that more attractive options need to be available for retirees (particularly the ‘young-old’ generation) to enable them to take a leap from their family homes and start afresh. This would free up larger homes for other people that need them. With the post-war baby-boomers reaching retirement age, built environment professionals must seek ways to provide high quality housing for them…and pronto!   [1] UK Census 2011, ONS

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