New delivery test and standard method boost housing land supply positions, consultancy finds

The impact of the new housing delivery test combined with the new standard method of assessing housing need is likely to boost many councils' land supply positions, particularly outside London, new research shows.

Ben Frodsham, associate director at Indigo Planning, at the Planning for Housing conference
Ben Frodsham, associate director at Indigo Planning, at the Planning for Housing conference

Consultancy Indigo Planning has produced a study that the firm highlighted at the Planning for Housing conference in London this morning.

The research examines the likely impact of the delivery test and the standard method on authorities' ability to comply with their duty to provide a five year housing land supply, plus any necessary buffer. Both the delivery test and the standard method were introduced in July's revised National Planning Policy Framework (NPPF), 

The delivery test measures net new homes delivered by a council over a three-year period compared to its local housing requirement, with penalties for authorities that fail to deliver enough new homes.

Under the test, if the council delivers less than 85 per cent of its requirement, authorities are required to add a 20 per cent buffer to their land supply. 

Both the 2012 and 2018 frameworks require all authorities to apply a five per cent buffer to their housing land supply figures.

Under the 2012 NPPF, if there was a "record of persistent under-delivery" this buffer was increased to 20 per cent.

However, under the 2018 framework, the 20 per cent buffer is instead required if the council delivers less than 85 per cent of its requirement as formally measured by the delivery test. 

Indigo found that the introduction of the delivery test will actually improve housing land supply positions for many authorities, that might have been expected to have to provide a 20 per cent buffer under the 2012 NPPF but will only be required to provide a five per cent buffer under the new framework.

Ben Frodsham, associate director, said that the firm had based councils' previous buffer levels on their most recent five-year housing land supply statement. Their land supply calculations were then reassessed by Indigo to factor in the provisions of the standard method and the delivery test.

He said: "What the housing delivery test does is it makes it crystal clear. Across the country, there are many authorities that now go from a 20 per cent to a five per cent buffer. 

"That's important because it means the five-year requirement actually significantly reduces, because you are applying 15 per cent less buffer in many cases, which has a profound impact on the assessment at the end."

Nonetheless, the consultancy has concluded that, in London, with its much higher housing requirements under the new London Plan and the standard method, many authorities' land supply positions will become worse, even when delivery test-prompted buffer changes are factored in. But Indigo found that the opposite was true outside the capital. 

Frodsham pointed out that the new standard method figures in the Midlands and the north of England often produced lower numbers than the housing targets in emerging local plans, which will mean an increased housing land supply in places where the plan is out of date. 

He said: "What was supposed to boost housing delivery seems to have strengthened the current supply positions across the country."

Frodsham said the firm would update its figures when the first delivery test results are announced next month and the standard method calculation is revised by the government, which it says it intends to do before Christmas. 

Speaking at the same session, Simon Neate, chairman of Indigo Planning, said the delivery test's transitional thresholds were "too low to be effective".

The test, which comes into force next month, applies the presumption in favour of sustainable development initially to local authorities delivering below 25 per cent of their housing requirement. This threshold is raised to 45 per cent in November 2019 and 75 per cent from November 2020 onwards.

According to Indigo's calculations, no authorities would be caught by the lowest 25 per cent threshold, which would see the presumption in favour of sustainable development applied, and only three per cent would be under 45 per cent,

"The planning system is being let off," said Neate, adding that "more radical action" was needed by the government to achieve its objective of delivering 300,000 homes by 2050.

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