On 5 March 2018, the Government began a consultation on the highly anticipated revisions to the National Planning Policy Framework.
Amongst the most significant proposals for reform is the proposed introduction of a "standard method" for calculating local housing need and a "Housing Delivery Test", which will affect both the way in which local plans are prepared and the manner in which planning applications are determined.
The requirement on local authorities to adopt the Standard Method is set out in paragraph 61 of the draft NPPF. This requires strategic plans to be based upon a local housing need assessment, conducted using the standard method "unless there are exceptional circumstances that justify an alternative approach which also reflects current and future demographic trends and market signals."
The method itself will be set out in the online national planning guidance. This will also be put out to consultation, but (at the time of writing) has not yet been published. However, it is anticipated that it will align closely with the proposals set out in the Governments previous consultation paper, planning for the right homes in the right places published in September 2017.
In that publication, a three step approach to calculating need was proposed:
- Step 1 is to establish a baseline from the Office for National Statistics projections for numbers of households in each local authority area;
- Step 2 is to adjust that figure to take account of market signals by reference to median affordability ratios (comparing median house prices to median earnings) published by the Office for National Statistics;
- Step 3 is to impose a cap on the level of any increase, which would be either: 40% above the annual requirement figure in the current local plan (if it is less than 5 years old); or 40% above the projected household growth figure based on the Office for National Statistics household projections.
A table published alongside the September 2017 consultation paper indicated that the adoption of the Standard Method would have a potentially significant impact (both positive and negative) on the calculation of housing need across the country.
Under the revised NPPF (paragraph 74), local authorities will be required to identify and update annually a supply of specific deliverable sites sufficient to provide a minimum of five years' worth of housing against their housing requirement (plus a buffer), or against their local housing need where the strategic plan is more than five years old.
In addition, a new Housing Delivery Test is introduced to measure each local authority's performance in delivering new houses. The Test would result in a figure expressed as a percentage of the total net homes delivered against the total number of homes required over the previous three years. If the Housing Delivery Test shows that there has been significant under delivery of housing over the previous three years (in this context meaning less than 85%), the local authority must include a 20% buffer in its supply of specific deliverable sites in order to achieve the required five years supply.
In an area in which the local authority cannot demonstrate a five-year supply of deliverable housing sites or where the Housing Delivery Test indicates that delivery of housing has been substantially below (that is, below 75%) the housing requirement over the previous three years, paragraph 75 and paragraph 11d of the draft NPPF dictate that the presumption in favour of sustainable development will apply to any application for housing development. This means that planning permission should be granted unless:
- The application of policies in the NPPF that protect areas or assets of particular importance provides a clear reason for refusing the development proposed; or
- Any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in the NPPF taken as a whole.
An exception to this will apply in any area which is covered by a Neighbourhood Plan which is less than 2 years old. In those areas, paragraph 14 of the draft NPPF dictates that "the adverse impact of allowing development that conflicts with [the Neighbourhood Plan] is likely to significantly and demonstrably outweigh the benefits where:
- paragraph 75 of the NPPF applies; and
- The local planning authority has at least a three year supply of deliverable housing sites (against its five year housing supply requirement), and its housing delivery was at least 45% of that required over the previous three years.
The consultation on the draft NPPF began on 5 March 2018 and will close at 23.45 on Thursday 10 May 2018.