Sharma defends standardised methodology focus on affordability

Housing and planning minister Alok Sharma has defended the proposed standardised housing need methodology's focus on increasing housing delivery in the least affordable areas, arguing against a claim that the method would simply increase pressure on already 'maxed-out' areas in the South.

Housing and planning minister Alok Sharma
Housing and planning minister Alok Sharma

The new methodology, published for consultation in September, would use household growth projections as the baseline for local housing need, before adding a multiplier for less affordable areas (defined as those in which house prices are more than four times average earnings).

The methodology would boost housing requirements in the South and East, while depressing housing need figures in the North and Midlands.

Following the publication of the consultation, housebuilders and landowners claimed the move "flies in the face" of the wider Northern Powerhouse initiative.

In a session of the communities and local government select committee today on housing need and the National Planning Policy Framework, Labour MP Helen Hayes took up this argument, claiming that the proposed methodology would widen the North-South divide.

"Part of the problem we have around affordability is about the lack of economic opportunity across large parts of the country that drives people to come to large conurbations to seek employment, and if the only approach that the government takes to affordability is to build more and more homes in those densely populated areas, without addressing the issue of the lack of economic opportunity which is driving that inward migration, then I think that’s a problem," she said.

Hayes said the proposed methodology "simply increases the pressure on areas that are very possibly maxed-out on their ability to deliver".

The MP also said that there was a disconnect between the possible outcome of the new methodology in seeing less homes built in the North and the professed aims of its Industrial Strategy.

But Sharma played down the concerns, saying that it was right for the strategy to place an emphasis on increasing affordability in the least affordable parts of the country.

"What this formula is doing is addressing housing needs and affordability right now rather than what might be the case five or ten years down the road", he said.

The minister also argued that the industrial strategy would not "overnight produce a seachange" for the economy of the North.

Simon Gallagher, director of planning at the Department for Communities and Local Government said that the proposed methodology would take into account economic growth in the North.

He said: "As economic growth in the North advances in line with our industrial strategy then the numbers will adjust accordingly. What we didn’t want to do was go ahead of the market and risk disturbing local market conditions".

Sharma stressed that areas in the North could be "more ambitious" with their housing plans if they wanted to.

"Clearly, if based on economic growth and jobs growth forecasts, local areas want to be a lot more ambitious, we very much welcome that and clearly if they believe that if the homes that they want to build can be sold ... then that’s a very good thing", he said.

The minister said that this is "not some top down figure that is being handed to a local area, it is merely a starting point for a discussion on how many homes an area can take".

Elsewhere at the session, committee chairman Clive Betts asked the minister is there were plans to tie the Community Infrastructure Levy (CIL) "back into viability".

Sharma answered "yes" and said that this month’s Budget would include "further announcements on CIL".

The minister also provided an update on the timetable for the publication of the revised National Planning Policy Framework (NPPF).

He said that this would be published for consultation early in 2018, with the final document published in the spring. Pushed to provide a more accurate timescale, Gallagher said that the final publication would most likely be in the "April/May window".

Sharma added that a raft of other publications would also be published alongside the draft revised NPPF.

He said: "One of the other issues is around the deliverability test, so I think that what you will see is when we publish the draft revised NPPF, there will be a range of other publications - responses to consultations etc - that will be published so that they can be looked at as effectively one body of information that hopefully will show some joined-up thinking in this area."

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