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Legal landscape: Are we building too many houses?

Do the latest national household growth projections mean we're in danger of building too many homes, not too few? Fergus Charlton weighs up the possiblities

Comments in the press about outdated population projection figures being used to assess housing need have suggested that, rather than building the homes that we need, we will be building ‘ghost’ homes that will never be occupied. Is that the reality? Will green belt, as those reports assert, be eaten up by vacant homes?

How is housing requirement assessed?

The National Planning Policy Framework (NPPF) provides that each planning authority should have strategic delivery policies informed by their local housing need assessment which itself follows the standard method. Councils can depart from the standard method if exceptional circumstances justify an alternative approach, but which must still reflect current and future demographic trends and market signals.

What is the standard method?

Details of the standard method used to assess standard housing need is set out in planning guidance. When it is used, it identifies a minimum annual housing figure. The first step is to set the baseline using the national household growth projections. The household projections are trend-based and indicate the number of additional households that would arise over 10 years if recent demographic trends continue. The projections are produced by the Office for National Statistics (ONS). 

The baseline figure is then adjusted to take account of affordability.

It is these baseline project figures that have been under attack. They are based on household projections for 2014, rather than drawing on more recent figures.

Why are 2014 figures used?

In October 2018, the government issued a technical consultation on updates to national planning policy and guidance. One of the issues in respect of which views were sought related to the standard method of assessing local housing need.

Although the consultation acknowledged that latest figures from the ONS show a reduction in the projected rate of household formation compared with previous projections, the government has decided not to lower its aspirations for the delivery of new homes. The government highlighted that population changes are only one aspect of the driver for housing supply. Other factors include rising incomes and changing social preferences, coupled with the need to address worsening affordability through tackling the undersupply of housing.

The government's response to the consultation, issued in February 2019, confirmed that the 2014-based projections should continue to be used to provide the demographic baseline for the standard method.  
Whilst this is the starting point for local authorities, they may decide that exceptional circumstances justify the use of an alternative method. If they do, they will need to identify these reasons. The government's consultation response confirmed that local authorities will not be able to use the 2014-based household projections as a reason to justify lowering their housing need.

In its response to the consultation, the government confirmed that, over the next 18 months, it will review the formula and the way in which it is set using ONS data. The intention is to establish an approach that balances the need for clarity, simplicity and transparency for local communities with the government's aspirations for the housing market.

Are inflated figures leading to a reduction in the Green Belt?

Green belts are given significant protection in the NPPF. Changes to green belt boundaries can only be justified in exceptional circumstances, which have to be established through strategic policies. Before concluding that exceptional circumstances exist it is necessary to confidently show that all other reasonable options for meeting that housing need have been examined, including use of brownfield sites.

So, although the government has committed to build more houses, it has made it clear that this is not to be at the expense of the green belt. Rather, the key message is to build "the right houses in the right places."

The suggestion that green belt is being used to provide housing fails to take account of the safeguards in place to ensure that inappropriate development does not take place. Local planning authorities are obliged to view the construction of most new buildings in the green belt as inappropriate. There are limited exceptions to this for housing, such as infilling of villages, and where there is an identified local community need for affordable housing.

Neither developing in, nor reducing the extent of, the green belt is an easy task; both are subject to intense scrutiny before they can proceed. In the face of such constraints it is somewhat ludicrous to assert that Councils are releasing green belt land for houses that are not needed, and all the more so to assert that where green belt has been released the house builders would construct homes without confidently knowing they will go on to be sold and occupied.

Fergus Charlton is legal director and planning specialist at UK law firm TLT

Image: Shutterstock



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