Log in | Register

Government revises calculation for housing need

Words: Laura Edgar
Statistics / iStock-520660497

Housing secretary Robert Jenrick has announced that the proposed housing formula for England has been updated to focus on urban areas as the government seeks to ‘level-up’ the country and deliver 300,000 homes a year by the mid-2020s.

The move comes after Conservative MPs, including former Prime Minister Theresa May, criticised the housing formula set out as part of the planning white paper, Planning for the Future.

Published in August, the government’s proposed alteration to the standard method for calculating housing need – introduced in 2019 – suggested that the baseline figure used in the calculation of the number of homes required in an area should become an either/or; either 0.5 per cent of existing stock or the figure produced by the 2014 household projections data that is currently used.

This, the consultation paper argued, would overcome “artificially low projections in some places, where overcrowding and concealed households suppress the numbers”.

MPs, particularly in the South East, were concerned their area would be “concreted over”.

Responding to the consultation on the proposed algorithm in October, the RTPI said it "simply does not make sense" and would cause more problems than it solves.

For the institute, the new formula would result in unprecedented high housing targets in the south of England, which would be undeliverable by some local authorities due to lack of available land. It would also do little towards the prime minister’s ‘levelling up’ agenda and could actually exacerbate current imbalances in housing requirement in the north of England. The RTPI’s concerns remain (see comment from head of policy Richard Blyth below).

According to countryside charity CPRE, it would have “allow[ed] developers to build hundreds of thousands of poorly located new homes in the countryside threatening locally valued green space”. It also “completely undermines” government ambitions for urban regeneration.

The government said an updated method will instead be introduced in order to help councils to enable the delivery of 300,000 homes a year by the mid-2020s. It seeks to prioritise brownfield sites and urban areas.

Cities will be “encouraged” to plan for more family homes and to make the most of vacant buildings and underused land, so green spaces are protected.

The government hopes their plans see more homes be built in England’s 20 largest cities and urban centres, as it looks to chart a path of recovery from the Covid-19 pandemic, support jobs in the construction sector and revitalise highstreets with the footfall of new residents.

Also plans include revising the ‘80/20 rule’, which guides how much funding is available to local areas to help build homes. The government said this “will establish a new principle to ensure funding is not just concentrated in London and the South East”.

Jenrick said: “This government wants to build more homes as a matter of social justice, for intergenerational fairness and to create jobs for working people. We are reforming our planning system to ensure it is simpler and more certain without compromising standards of design, quality and environmental protection.

“The Covid-19 pandemic has accelerated and magnified patterns that already existed, creating a generational opportunity for the repurposing of offices and retail as housing and for urban renewal. We want this to be an opportunity for a new trajectory for our major cities – one which helps to forge a new country beyond Covid - which is more beautiful, healthier, more prosperous, more neighbourly and where more people have the security and dignity of a home of their own.”

Jenrick added that a Urban Centre Recovery Task Force has been set up. It will advise on the development and regeneration of town and city centres. Peter Freeman, who was behind the redevelopment of King’s Cross and is the new chair of Homes England will sit on the task force.

Today (16 December), the government made a series of other housing-related announcements.

  • £67 million in funding for the West Midlands and Greater Manchester mayoral combined authorities to aid them in delivering new homes on brownfield land, as well as confirming an additional £100 million of funding for brownfield development.
  • In January the government plans to launch a new £100 million Brownfield Land Release fund to support brownfield development, estates regeneration, development on public sector land and self and custom-build serviced plots in coming forward. This will be open to councils across England, but not ones from those mayoral combined authority areas that recently benefited from the £400 million brownfield fund. A significant portion of this will go towards supporting self and custom-builders.
  • The government will work with the Greater London Authority (GLA) to agree a strengthened role in London for Homes England so they can work more closely with the GLA, boroughs and development corporations to help deliver sites in London and the preparation of bids for the new National Homebuilding Fund.


The RTPI's head of policy Richard Blyth welcomed the update to the formula but said the institute’s concerns remain.

“Despite this update, there are fundamental flaws with relying on a spreadsheet to decide housing numbers – what we really need is a proper democratic national debate about the roles of different parts of the country in housing policy.

“The formula may have been tweaked but it is still a formula which focuses single-mindedly on achieving the government’s gross national housing target of 300,000. Government decisions on matters such as infrastructure will inevitably influence housing delivery in different places and it is impossible to see how any formula could take this into account.”

Melanie Leech, chief executive at British Property Federation (BPF), also welcomed the focus on new housing delivery in urban areas and making the best use of brownfield land.

“Build to rent – new, high-quality, professionally managed homes for renters – works particularly well as an urban, brownfield product. It has seen strong growth across the regions in recent years – with 26,500 new build-to-rent homes currently completed and 68,500 under construction and in planning in cities such as Leeds, Sheffield, Birmingham, Leicester and Manchester.

“It is hugely positive that the government will revise the 80/20 rule – any housebuilding should have access to government support to ensure that wherever you live, you get the essential infrastructure that supports housing growth.

“The challenge, however, is that housebuilding alone will not ‘level up’ the North. The government is still missing a piece to the jigsaw – the delivery of new homes must go hand in hand with new employment opportunities and new investment into our town and city centres. This will require working alongside the commercial real estate sector, to facilitate its investment into new, modern retail and leisure environments, logistics space, community facilities and services, and healthcare. This will no doubt be a priority for the Urban Centre Recovery Task Force and we look forward to working with Peter Freeman, the chair of Homes England, to take this forward.”

Crispin Truman, chief executive of countryside charity CPRE, is pleased the government “is listening and willing to revise their damaging proposals”.

“Building more affordable homes on previously developed land in more sustainable locations is something we‘ve been calling for and is a win-win scenario for people and nature. But the problems with these planning proposals run much deeper than the housing algorithm, which are in need of a complete reboot, not just an update. Today’s announcement could be the start of a much-needed debate about how to ensure the right development in the right place across the whole country.” 

The charity urged ministers to go further. “Our analysis has found over one million homes could be built on brownfield or recycled land, many of which already have planning permission. Alongside redistribution of housing schemes like the New Homes Bonus, these changes could be a real stepping stone to levelling up the country and providing the affordable homes communities are crying out for.

“The key test for these changes to the housing algorithm will be whether they help give local councils the ability to plan the quality, affordable homes we need, while preventing unnecessary loss of countryside and green spaces. It’s time for ministers to go further and make sure we breathe new life into our towns and cities, whilst building more affordable homes and responding to the climate emergency. Only with a locally-led planning system that encourages input from local communities will this be achievable.”

Brian Berry, chief executive at the Federation of Master Builders (FMB), said: “Facilitating a more diverse housing market is key to fixing the housing crisis. Our high streets have suffered through the pandemic, but converting vacant buildings or underused commercial spaces into homes is an important way of breathing new life into our town centres. The FMB has long advocated for local authorities to facilitate and coordinate the conversion of empty spaces above shops into flats by quality builders. This should form part of the new proposals.

“Building on brownfield land helps protect green spaces while unlocking the new homes that we desperately need. Small to medium-sized house builders (SMEs) train 71 per cent of apprentices and build high quality homes, so making the funding accessible to them is crucial to building back better. The government will not be able to meet its target of building 300,000 new homes a year without reversing the decline in SME house builders, and bringing forward a more diverse housing market.”

Peter Hogg, London city executive at Arcadis, commented: “Arcadis was concerned about the housing allocation algorithm from the outset, so we are pleased to see that the government is withdrawing the idea. What replaces it will need to be more considered and will need to allocate housing numbers in a way that promotes the creation of vibrant, sustainable places and successful communities. We hope that the government will take the opportunity to really focus their planning reforms on placemaking, rather than housebuilding – with the focus on communities, economies and enabling infrastructure that good placemaking entails.

“This will require the government to work with regional and local authorities as well as communities to understand where houses are needed to unlock good local growth, rather than make arbitrary allocations.”

Image credit | iStock