On 24 July 2018 the government published the long-awaited revised National Planning Policy Framework (the 'revised NPPF'). It replaces the 2012 version and is already a material consideration for the determination of planning applications.
The delivery of housing remains a focus for government and the chapter dealing with housing has been bumped up the order in the revised NPPF. Central to the government's policy aim of boosting significantly the supply of housing is the new standardised method of assessing housing need and the introduction of the housing delivery test.
Assessing Housing Need
Under the old NPPF, in preparing their local plans (which set out the strategic spatial planning policies, including housing numbers, over the next 15-20 years) local planning authorities were required to objectively assess their full housing need. Whilst there was Planning Practice Guidance and a technical note to assist local planning authorities, there was no one set way of calculating the number of houses required. Developers would often say the numbers were too low, whilst elected members and communities would say that the numbers are too high. This would inevitably lead to delay and cost.
Through the revised NPPF, the government has introduced a standard method. It essentially involves three steps. Step 1 is to take the household projections over a ten year period to work out the projected growth in households. Step 2 requires an adjustment for affordability. So in areas where there is the greatest disparity between average house prices and average wages, there is an upwards adjustment for the number of houses required. Step 3 involves the imposition of a cap on numbers which can be up to 40% of the increase and is determined by how old the local planning authority's strategic policies on housing are.
It is important to note that local authorities may depart from the standard method provided that there are 'exceptional circumstances' that can justify an alternative approach which also reflects current and future demographic trends and market signals. There are no examples of what can constitute exceptional circumstances, and this is likely to be an area rife for litigation.
Many local planning authorities, particularly in the south and south-east of England, will see a considerable increase in the number of houses required under the new standard method, whereas a number of local planning authorities in the north of England will see a reduction.
The projected number of houses in England, calculated under the standard method, is estimated to be 265,000 dwellings per year. This is less than the government's target of 300,000 dwellings per year by the mid-2020s. The cap has the effect of artificially supressing the objectively assessed housing need but is seen as a way of making the increase in housing provision more politically acceptable to elected members and their communities.
The Office for National Statistics will be publishing its population projection figures in September and it is anticipated that they will have lower forecasts than previously expected. The government is expected to make amendments to the standard method to try to ensure that the number of houses delivered each year hits the 300,000 mark.
Housing Delivery Test
In a move away from the process of getting planning permissions to focussing on outcomes, the government has introduced the housing delivery test into national policy.
The calculation is simply the number of houses delivered in an area over the past three years divided by the target number of houses over that same period, expressed as a percentage.
The main implication for not meeting that delivery target is similar to when a local planning authority cannot demonstrate a deliverable five year supply of housing land. Where delivery is 'substantially below' specified percentages at different points in time then the presumption in favour of sustainable development bites (often referred to as the tilted balance) and planning permission should be granted unless the presence of protected areas or assets of particular importance provides a clear reason for refusing the development proposed or any adverse impacts of granting permission would significantly and demonstrably outweigh the benefits, when assessed against the policies in the revised NPPF taken as a whole.
For the purposes of determining whether the presumption kicks-in, 'substantially below' is defined as being:
- Less than 25% of housing required in November 2018;
- Less than 45% of housing required in November 2019; and
- Less than 75% of housing required in November 2020.
The impact is not likely to have much practical effect until 2020.
A significant consequence for local planning authorities and their communities is that where the housing delivery test is not met, sites which are not allocated in the local plan (or neighbourhood plan) may become vulnerable to speculative applications for sites which are less favourable to local planning authorities and their communities. These applications will be assessed against the titled balance with a presumption in favour of granting permission.
Another consequence of the housing delivery test is that where local authority is under 75% of delivery, it is required to prepare an action plan to address the causes of under delivery and identify actions to be taken to address those causes.
There are many other housing related policies in the revised NPPF which are designed to significantly boost the supply of housing. The standard method and the housing delivery test are perhaps the most headline grabbing, but only time will tell if these policies delivery the number of houses that the government has targeted.