Housing need: what can we learn from the new CLG proposals?
Last Thursday the Government published for consultation its proposed new method for assessing housing needs. This is important and long-awaited news. Everyone knows that the current method is hopeless – complicated, confused, ambiguous, the main reason why plan-making takes forever and costs the earth. But to come up with something better has proved hard. We have been waiting since February for the standardised, simplified method promised in the housing White Paper.
In terms of method, the new proposals are a vast improvement – straightforward, clear and logical, swapping the tortured jargon of the PPG for intelligent human language. Which is not to say they are perfect. There are technical issues yet to be resolved, such as errors in the official demographic projections, which produce some large distortions (far too many homes for Tendring and far too few for Cambridge, for example). If the CLG is serious about listening, the consultation should fix this and similar problems.
In terms of results, two points stand out. Firstly, the Government has come clean about the total housing number it is looking for: roughly 266,000 net new dwelling per annum across England over the next 20 years. This is an ambitious total, about 20% above the official household projections, which carry forward historical long-term trends. No one knows if the market, plus affordable housing providers, will actually deliver these numbers. But it must be a good thing to try.
The second point about the new numbers relates to geography. Much to its credit, as well as the new method CLG has published the actual numbers it produces for each local authority. As shown in the map below, compared to the latest existing assessments the uplift is overwhelmingly concentrated in the rich greater South East. The most dramatic increases are in London. For the North and other peripheries, numbers generally go down. All this results from the affordability (‘market signals’) adjustment that is part of the new method, and produces high need in areas where houses are expensive in relation to earnings.
This widening North-South divide may be a true reflection of the demand for housing – including job-led demand, because high house prices and good job opportunities generally go together. Whether it is an environmentally sustainable or socially equitable future for England, is a different matter. To shift it would need bold spatial strategy, to redistribute the new numbers through larger-than-local planning and targeted public investment. Part of the strategy must be to deal with London – whether by rethinking the Green Belt, long-distance exports beyond the South East or (more likely) both. The new consultation proposals do not touch this agenda.
For planning authorities and housebuilders / developers, the implications of the proposals are stark. The time has come to stop arguing about numbers and look hard for more development sites. The challenge is to identify opportunities that are both deliverable and sustainable – faster and on a much larger scale than before. As professional advisers, this will be our focus in coming months and years.