By Beth Watts, BSc (Hons) AssocRTPI, Planner

On 14 September 2017 the Department for Communities and Local Government published a consultation on the new methodology for objectively assessing housing need. This consultation, which has since been re-affirmed by the recent Budget, shows the Governments continued commitment to housing, and improving the shortage of housing across the country.

The Consultation follows on from the housing White Paper in February of this year, and sets out the intention to provide a new standardised methodology to ensure that the right homes are planned in the right places as well as providing a better link to neighbourhood planning.

Currently the National Planning Policy Framework and Practice Guidance requires all local authorities to produce a Strategic Housing Market Assessment (SHMA), to assess their housing needs. Although this requirement is set out in policy, there is currently no definitive guidance setting out the way in which a SHMA should be prepared.

The findings of the housing White Paper set out that because local authorities can create their own methodology for calculating their objectively assessed housing need, they can circumnavigate difficult decisions.

The current consultation seeks to propose a straightforward and transparent methodology to formulate the objectively assessed housing need and therefore the SHMA, which has the potential to increase or decrease the housing need in a local authority area.

The methodology proposed by the consultation links the baseline (annual average household growth over a ten year period) with an uplift depending on market signals. The market signals are based around the workplace-based median house price to median earnings ratio, to quantify both house price and an areas average earnings. This ratio is then considered in terms of it’s increase, with a 1% increase in the ratio above 4.0 meaning that the household projection should be increased by 0.25%.

This level of increase is capped and directly related to the status of the authorities local plan; with adoption in the last five years ensuring that the housing need figure is capped at 40% above the annual requirement figure in the local plan and where adoption is more than five years ago the housing need figure is capped at 40% above whichever is the higher of the household projection or annual housing requirement in the local plan.

In real terms this means that the local authorities of Bromley, Canterbury, Dartford, Dover, Gravesham, Horsham, Maidstone, Medway, Rother, Sevenoaks, Tonbridge and Malling as well as Tunbridge Wells, will all see an increase in their housing needs figures.

Bloomfields will be monitoring the outcome of this consultation closely in order to provide appropriate advice to their clients to ensure that the future development potential can be maximised.