The housing white paper: a safe port in a political storm

9 May 17

Housing policy is currently more settled than in any other briefs although councils face some key constraints.

Current politics is frenetic. Alongside ongoing Brexit negotiations, we have a snap general election, which has dissolved parliament, halted legislative procedure and created a hiatus for the country.

However, some sectors feel this uncertainty more than others and the charted course for housing appears relatively calm.

Across the political spectrum, there is recognition that the country desperately needs more homes. While there are differences in priority and focus, it appears that all groups are happy to put housing supply front and centre of domestic plans.

Much of the policy stability for housing comes from the housing white paper, published in February.

To its credit, it takes a holistic and pragmatic approach with a focus on the fundamentals to boost supply.

One of the important components of the white paper is its emphasis on the plan-led system as the key mechanism to plan for and deliver the homes that we need.

The white paper is clear: it wants to ensure local councils have up-to-date  local plans and to ensure its housing targets are in adopted policy.

In a plan-led system, the local plan is the first step to planning homes and yet 61% of local planning authorities outside of London still do not have an up-to-date (post-NPPF) local plan.

And for those that do, it is not plain sailing – for many local plans ‘signed off’ by an inspector, they have to increase their housing targets to progress.

Crucially, plan making is lacking in the key areas of high demand surrounding Manchester, Birmingham and London where difficult choices about the green belt appear to be slowing progress.

Standardising the way we calculate ‘housing requirements’  – as termed in the white paper – will help, but the issue of cross-boundary working to deal with unmet need remains the challenge.

The white paper recognises that housing targets and planning permissions are only two pieces of the puzzle; the rate at which sites are built out is equally as important.

Despite some of the land-banking rhetoric in the lead up to its publication, the white paper’s focus was much more targeted on proportionate measures to ensure local councils have better information on the speed of site build-out with which to assemble their housing land supply trajectories, cognisant that a more punitive regime on developers might simply deter them from bringing forward planning applications.

Smaller sites can be planned quicker but they tend to build fewer homes each year, while larger sites are the opposite; and stronger market areas have higher delivery rates due to higher absorption rates.

An important proposal in the white paper is the housing delivery test, which introduces incentives for local authorities to maintain a supply of new housing.

As currently envisaged, the test compares recent net additional dwellings to the housing need in the area and, where thresholds of delivery are not met, forms of intervention are triggered to assist local areas to boost supply. Preliminary analysis of this test shows that 68% of councils would need to provide either an action plan (12%) – stating how they will meet targets – or require an additional 20% land buffer (56%) added to their five-year land supply in 2017.

Highlighting how interrelated the issues of housing delivery and green belt are, 76% of councils that are constrained by green belt would require either an action plan (11%) or an additional 20% land supply buffer (65%) in 2017.

A key constraint for councils will obviously be budgets. Between 2009-10 and 2015-16, local government planning department budgets have fallen by more than 50% in real terms.

While the white paper sets out a plan for increasing planning fees, the impact of this revenue remains to be seen.

With increasing housing demand and planning responsibilities funded by a smaller budget, councils may need to adopt new models of service delivery – perhaps following the example of Barking and Dagenham’s Be First company – and by taking a more proactive role in development – via land assembly, leveraging public assets and building homes directly.

Unusually, given the plethora of housing initiatives over the last three years, policy in this sector looks more settled than many other national briefs. There are many detailed issues that need greater clarity, and some tough decisions to be made at a local and national level, but with strong commitment all round, stability can be maintained.

  • Joe Sarling
    Joe Sarling

    Associate director and research lead at the planning and economics consultancy Lichfields. He has worked at the National Housing Federation, Shelter and Royal Town Planning Institute.

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