What does the Housing Delivery Test mean? And whatever happened to Housing Market Areas?

Has anyone wondered what the new Housing Delivery Test would mean in practical terms?

And has anyone spotted that the draft revised National Planning Policy Framework (NPPF) doesn’t mention Housing Market Areas?

The old NPPF, if we can call it that already, required local planning authorities “to use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area.”

The new draft says “strategic plans should, as a minimum, provide for objectively assessed needs for housing and other development, as well as any needs that cannot be met within neighbouring areas.” The implication being that there will be a single housing requirement for each local authority area. This coincides with the way that the standardised approach to determining housing need was proposed in September 2017.

In many areas, the housing market area (HMA) does not coincide with the local authority boundary. Take Wiltshire and Swindon for example.

Wiltshire is a single unitary authority. Its adopted Core Strategy sets a housing requirement across the authority of 42,000 dwellings between 2006 and 2026. But, because the authority area is so large, it is split into three HMAs: East Wiltshire, with a requirement of 5,940 dwellings; North & West Wiltshire, with a requirement of 24,740 dwellings; and East Wiltshire, with a requirement of 10,420 dwellings. To avoid you needing to search for the calculator, these are 297; 1,237 and 521 dwellings per year respectively. The remaining 900 dwellings relate to West of Swindon, and meet Swindon’s needs rather than Wiltshire’s.

Swindon Borough is currently its own HMA. Its Local Plan requires the delivery of 22,000 dwellings between 2011 and 2026, at a rate of 1,150 dwellings per year up to 2016, and 1,625 per year after that.

Appeal Inspectors have recently concluded that Swindon’s supply is less than 3 years, South Wiltshire HMA’s supply is a little below 5 years, the North and West Wiltshire HMA’s supply is slightly above 5 years, and East Wiltshire HMA’s supply is well above 5 years. On that basis, the tilted balance in the current paragraph 14 is triggered in Swindon, sometimes in South Wiltshire, rarely in North and West Wiltshire and never in East Wiltshire, generalising somewhat!

Swindon and Wiltshire Councils are working together to produce a joint spatial framework into which their next local plans (covering the 2016 to 2036 period) will fit.

They have released a joint Strategic Housing Market Area Assessment which defines four housing market areas, relating to Swindon, Chippenham, Salisbury and Trowbridge. The identified housing need in each is, respectively: 29,000; 22,250; 8,250 and 13,500 in total, or 1,450; 1,113; 413 and 675 dwellings per year.

This means that the two current local plans combined require the delivery of 3,725 per year between 2016 and 2026, and the emerging joint work proposes 3,650 dwellings per year between 2016 and 2036.

One of the repercussions of the joint strategy is that some of Swindon’s housing need could be met in Wiltshire. This would clearly help bearing in mind Swindon’s poor housing delivery rate in recent years.

Now let’s look at the standardised housing need numbers released in September 2017.

If the methodology was unchanged from the draft, Wiltshire would be required to provide 2,227 dwellings per year, and Swindon 1,021 dwellings per year. This totals 3,248 dwellings per year; substantially below both the Councils’ current target and their future targets based on their own independent evidence.

The new NPPF proposes that the tilted balance in the new paragraph 11 will apply if either the LPA cannot demonstrate a five year housing land supply or where delivery over the past three years was below 75% of the requirement.

The new NPPF then explains that a five year supply can be demonstrated where it has been produced through engagement with developers and considered by the Secretary of State, I assume via an appeal. It seems unlikely that Swindon would pass this test; Wiltshire might if it was assessed authority wide.

The draft Housing Delivery Test methodology set out in the Housing White Paper proposed to use ONS housing delivery data to determine housing delivery in the past three years. In the most recent three years for which data is currently available (2014-15 to 2016-17), Wiltshire has delivered an annual average of 2,253 dwellings; Swindon has delivered 569 dwellings annually, on average.

On the basis of the standardised housing need methodology, this means Wiltshire met 101% of its target; Swindon 56%. Swindon would therefore not meet the Housing Delivery Test target of 75% and paragraph 11 would be triggered on this basis, as well as on the basis of 5 year supply.

However, the NPPF proposes “implementation” to transition the Housing Delivery Test in gradually. This sets the target for November 2018 at 25% and for November 2019 at 45%. Swindon would pass this test.

So we have a situation where Swindon has a housing delivery problem now. In order to fix it, it is working with Wiltshire to define the overall housing need for the two authorities, and to define housing market areas in which to meet that need. Wiltshire will probably take some of Swindon’s housing in order to help meet the overall need.

The regime now proposed in the new NPPF means that, while the tilted balance will probably be triggered in Swindon because of its low five year supply, it may well meet the Housing Delivery Test, during the implementation period at least.

On the same basis, the tilted balance is unlikely to be triggered across the whole of Wiltshire, even in the South Wiltshire HMA.

The new NPPF requires future plans to be based on the standard housing need methodology “unless there are exceptional circumstances that justify an alternative approach which also reflects current and future demographic trends and market signals.” These exceptional circumstances appear to exist in Wiltshire and Swindon, and probably elsewhere too.