Comment
Planning for the right homes in the right places?
Standard Method 2: Implications for the South East
The Government’s publication last week of the much anticipated Standard Method for calculating Local Housing Need (LHN), the new “SM2”, will likely see some Local Planning Authorities (LPAs) across the South East region breathe a sigh of relief. Political opposition to the proposed revisions to the existing standard method (“SM1”), which would have seen a substantial increase in LHN figures for most South East LPAs, has contributed to the Government abandoning a number of its objectives in delivering an improved method. The existing method that has been in place since 2018 has in essence been tweaked, rather than overhauled. It also continues to be based on the now outdated 2014 household projections.
This tweak introduces a new “cities and urban centres uplift”, which elevates the outcome of the method by 35% in all London boroughs, and 19 other cities and towns. It is only these areas that see an immediate change in the outcome of the existing method, although all authorities will shortly see modest changes in their figures when the calculation is necessarily rebased to 2021 in the New Year. This new approach will in effect require London to deliver a third of England’s overall annual housing requirement.
In the South East, outside of London, as a result of the new targeted uplift, only Brighton & Hove, Reading and Southampton will see any significant increase in their LHN, over that calculated using SM1.
The challenge of planning for sufficient housing across the South East, in particular to address issues of affordability in the region, have not gone away and indeed in many cases have continued to worsen in the context of changing demand pressures resulting from the events of 2020. The decision to focus additional need on only a limited number of LPAs will not provide the immediate supply response required to meaningfully address this challenge. This is despite there being a much broader range of larger settlements that are capable of accommodating significant scale growth.
The substantial uplift in London’s LHN under SM2 will be almost impossible to deliver given the substantial step change it represents. London’s LHN is now more than double the number of houses that were actually delivered in the capital during 2019/20 but the new London Plan will not address this until its next review in five years’ time. London’s LHN uplift, in isolation from the wider South East, also fails to consider the wider role the region has always played in meeting London’s housing needs. With both the Government and London Mayor Sadiq Khan continuing to commit to the protection of the Metropolitan Green Belt, there must be even further pressure on adjoining South East LPAs to accommodate London’s unmet needs. However, with the much maligned Duty to Co-operate potentially on its way out [1], and with numerous authorities in the South East failing this legal test, will there even be a mechanism to achieve this?
Interestingly, the three LPAs in the South East that will actually see a significant increase in their LHN are not under Conservative control. Instead they are either controlled by Labour (Reading and Southampton) or the Green Party (Brighton & Hove). However, all face significant constraints in terms of their geography and tightly drawn administrative boundaries where available sites for family homes are limited. The question therefore is whether sufficient land can come forward to address these significantly higher LHN figures, providing the identified needs for market and affordable housing, or whether assistance will be called upon from adjoining authorities.
In light of the somewhat underwhelming changes to calculating LHN, as brought about by the new SM2, it seems reasonable to assume there will also be changes to the more radical reforms outlined in the Planning for the Future White Paper. Nevertheless, it must be hoped that future planning reforms will in some way deliver a more strategic approach to meeting housing and infrastructure needs in the south east. Otherwise, the housing ambitions of this Government may never be fully addressed.
To discuss the implications of SM2 in the South East please contact James Cording or Ryan Johnson.
We have once again collaborated with the Land Promoters and Developers Federation (LPDF) to summarise the minimum housing need implied by the new standard method for each local authority, recognising that the indicative figures published by Government will change in the New Year. For further context, this document also allows comparison with past delivery, existing housing requirements and the outcomes of the draft SM2.
22 December 2020
[1] Proposal 3 of the Planning for the Future White Paper August 2020, MHCLG, p.30