Briefing: How changes to the five-year land supply rules will affect authorities

Key changes to the NPPF will reset the rules governing the five-year land supply test, say Felicity Tozer and Jon Gateley.

Development: changes to five year land supply rule
Development: changes to five year land supply rule

Q Why is having a five-year housing land supply important?

A Mechanisms around housing supply are some of the most important tools at the government’s disposal as it pursues its aim of "fixing the broken housing market". They rest on a simple idea: identify a suitable annual target for each area, and incentivise or penalise performance on delivery. With direct ramifications for plan-making, applications and appeals, a local authority’s five-year land supply thus has more significance than any other single metric; the failure to demonstrate it renders policies out of date.

Q What changes to the five-year land supply does the revised National Planning Policy Framework (NPPF) introduce?

A The process of calculating a five-year housing land supply remains essentially the same following the revised NPPF and updated Planning Practice Guidance (PPG), although there are some changes. Firstly, LPAs are able to confirm, and fix for one year, the five-year supply through annual position statements (APSs). Secondly, where policies in an adopted plan are more than five years old, the housing requirement for the five-year supply is now the local housing need (LHN) (as calculated via the government’s standard methodology). Thirdly, the need for a council to provide a ‘buffer’ of additional housing land supply is no longer triggered by a subjective judgement that it has been guilty of ‘persistent under-delivery’, but is to be set according to performance against the NPPF/PPG by the housing delivery test (HDT) and any APS. Fourthly, any shortfall in housing delivery to date in the local period remains to be addressed in the next five years. Fifthly, there is now a definition of ‘deliverable’, which sites must meet to be included within the supply.

Q What are the implications of the revised definition of ‘deliverable’?

A The revised definition of ‘deliverable’ goes significantly further than the previous version. Sites with outline permission, or which are allocated in plans/registers, qualify only where there is "clear evidence" of completions being likely within the five-year period. This places the onus on the LPA to demonstrate deliverability, as opposed to the 2012 NPPF burden of proof that was prevailing on applicants and appellants. With many LPAs relying on outline permissions and allocations for a tranche of their supply, this change is likely to create a new battleground at applications and appeals. An early example, in Suffolk (DCS number: 200-007-929), where around 40 per cent of the LPA’s supply comprised outline permissions, resulted in the inspector noting that the LPA’s evidence for the inclusion of these sites fell "substantially short" of what was required.

Q The LPA’s strategic housing policies are more than five years old. Can I rely on the LHN requirement?

A The drop in projected households from the 2014-based household projections to the 2016-based projections has been well-publicised, as has the impact this will have on the ability of the planning system to meet the government’s target of 300,000 dwellings per annum. The government has stated that it will address this matter with an amended standard method, due by the end of this year or early next year. So LPAs and applicants and appellants will have to rely on the LHN as based on the 2016 household projections for now, but that should be viewed as a temporary situation with the figures likely to change again. For all five-year housing land supply calculations, the publication of the HDT results (due November 2018) will determine the extent of the buffer in housing provision to be applied.

Q What should you do if you are seeking to defend/challenge a five-year housing land supply?

A A first step is to confirm the current housing requirement, and also consider how circumstances might change in the near future; especially with a significant number of strategic housing policies in plans approaching the five-year anniversary of their adoption. A second step is to then review the supply with regard to the new definition of ‘deliverable’, as this is likely to have a significant impact in some places. Clear and convincing evidence will be critical in this regard.

Felicity Tozer is associate and Jon Gateley is associate director at consultancy Savills 

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