How many homes? The new Standard Method

How many homes? The new Standard Method

A higher standard

The introduction of a standard method in 2018 intended to shift time, resources and debate at examination away from the ‘numbers’ question and towards the ‘how’ and ‘where’ of building new homes. But, simple as it was, the method was not without its’ criticisms and almost as soon as the method was implemented, it was announced that it would be changing.

The Government’s new method, announced in the document on Changes to the Current System, incorporates stock into the baseline (as well as household projections) to help achieve a ‘fair share’ approach; this helps boost numbers in areas with low projections. It also puts a greater emphasis on the uplift for affordability and removes the cap which exists under the current approach, stating it is ‘not compatible’ with the aim of boosting housing supply quickly. These changes mean a new national total of 337,000 homes a year – far higher than the 270,000 under the current approach but no doubt intended to help plans ‘stretch’ for the 300,000 homes a year ambition, in light of some areas not being able to deliver.

The Government has confirmed it drew inspiration from ideas tabled by Lichfields (a summary of these appears in our blog which is referenced in the Government's paper) but it is a distinct approach that blends aspects together. 

 

Starting to level up?

These changes look set to be more compatible with the objective of ‘levelling up’ the midlands and north. While the current method meant that many of these regions would plan for fewer homes than they have delivered in recent years, the new method brings the number closer to (but not yet at) recent delivery in the north, and significantly above recent delivery in the midlands (see Figure 1). It also creates higher numbers across the south compared with the current method, but this will always be the case for a method with such a significant emphasis on affordability.

However, the new method still continues to concentrate growth in London. Its figure of 93,532 looks unrealistic, given long term delivery rates in the capital of 30-40,000 per annum. Without a duty to cooperate, the excess need (50-60,000 homes) will fall between the cracks, meaning 300,000 may still be beyond reach.

 
Figure 1: Current local plan requirements, recent housing delivery, current standard method and new standard method by region. Source: Lichfields analysis based on MHCLG/ONS
 
 

More importantly,  the Government’s White Paper proposes to replace the Standard Method for Local Housing Need with a nationally-set method for setting local housing requirements in effect distributing 300,000 homes per annum across local authorities, taking into account constraints and other factors. So, whilst the current proposals will be of significant importance for emerging local plans coming forward over the next 2-3 years – and in five year land supply matters over that time horizon – they may ultimately have a short shelf-life. 

Lichfields has crunched the numbers for individual local authorities, grouped by sub-regions. Please click on the links below to find your area, and compare how the new proposed method compares to current local plans, recent housing delivery, and the current method. For information on how we have calculated the figures, please click here.

 

 
       

 Regions  

 
 
     
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
   
     
 

Birmingham and Coventry

  

 

Bristol, Gloucestershire, Wiltshire and Somerset

 
  
 

Cheshire, Greater Manchester and Merseyside

 
  
 

Cornwall, Devon and Dorset

  
 
 

Cumbria and Lancashire

 
  
 
 

East Anglia - Central and North

 
  
 
 

Hampshire

 
  
*Surrey Heath has been included as part of Hampshire rather than Surrey as the Council identifies itself as being in a Housing Market Area with Rushmoor and Hart (both in Hampshire).
 
 

Hertfordshire and Essex

 
  

*Surrey Heath has been included as part of Hampshire rather than Surrey as the Council identifies itself as being in a Housing Market Area with Rushmoor and Hart (both in Hampshire).

 
 

Kent

 
  
 
 

Leicestershire and Northamptonshire

 
  
 
 

Lincolnshire and Peterborough

 
  
 
 

London

 
  
 

Nottinghamshire and Derbyshire

 
  
 
 

North East

 
  
  
 

Surrey

 

*Surrey Heath has been included as part of Hampshire rather than Surrey as the Council identifies itself as being in a Housing Market Area with Rushmoor and Hart (both in Hampshire).

 
 

Sussex

 
  
 
 

Thames Valley

 
  
 
 

West Midlands (outside Birmingham and Coventry)

 
  
 
 

Yorkshire and The Humber

 
  
 
  

Calculations based on the proposed standard method consultation guidance paragraphs 23 to 39. Step 1 - Baseline figure is whichever is higher of 0.5% of stock (based on MHCLG Live Table 125, unrounded, for 2019, see para 26/footnote 11 of the guidance) or the latest household projections (2018-based, as per ONS Live Table 406 with the current year [2020] being used as the starting point and over a 10 year period [2020 to 2030] as per paras 23 and 27). Step 2 – Affordability uplift is based on formula in para 30 of the guidance, using ratio for the most recent year for which data is available (2019, as per para 29) and change over the last 10 years of published data (2009 to 2019, para 29). No cap is applied, in line with para 39 of the guidance.

Disclaimer: This publication has been written in general terms and cannot be relied on to cover specific situations. We recommend that you obtain professional advice before acting or refraining from acting on any of the contents of this publication. Lichfields accepts no duty of care or liability for any loss occasioned to any person acting or refraining from acting as a result of any material in this publication. Lichfields is the trading name of Nathaniel Lichfield & Partners Limited. Registered in England, no.2778116