Set up to fail: why housing targets based on flawed ...

Set up to fail:
why housing targets based
on flawed numbers threaten
our countryside

Introduction

We know we need to build more homes.
However, current Government policy puts setting
ambitious housing targets above providing the
right housing and making better places.

This new research shows that But CPRE’s new research, summarised
those targets are often arbitrary here, found that in effect the guidance
and inflated. What is worse is asks local authorities to base their
that local authorities are then plans on aspiration rather than need.
held responsible for meeting these The result is that targets are based on
targets despite, for the most part, not made-up numbers that the construction
building homes themselves. When the industry has neither the will nor the
targets are missed, the end result can capacity to meet. The situation is then
often be a loosening of local planning made worse because if housebuilding
control which leads to precious falls below these five-year targets, the
countryside being unnecessarily lost local plan that contains these targets –
to development while brownfield land and protection for land not classed as
is left untouched. suitable for housing – no longer applies.

At the heart of these issues is the The result is that local authorities are
requirement for local authorities to being compelled by national policy to
identify the need for housing and then release more land for development in a
meet that need in full. The National bid to meet the targets. Developers are
Planning Policy Framework (NPPF) then able to pick the most profitable
sets out how to determine ‘objectively sites, usually greenfield ones. However,
assessed housing need’. Online they do not necessarily have the
Government guidance in the National motivation or capacity to build faster.
Planning Practice Guidance (NPPG) Building rates stay low; housing targets
provides a recommended approach to are missed; countryside is needlessly
deciding ‘objectively assessed need’ lost: the worst of all worlds.
through a Strategic Housing Market
Assessment (SHMA).

How councils arrive at housing targets

SHMA

Constraints ‘Objectively assessed need’ Land supply

Housing target in local plan

The research findings

CPRE commissioned housing consultants to undertake
an independent review of the methodologies used to
determine ‘objectively assessed need’ for housing.
The main findings of the report are:

● The lack of clarity in the Government ● The guidance states that SHMAs should need in general, and affordable housing
guidance means there is no clear be based on fact and assumes that need in particular. The current ‘predict
approach to calculating ‘objectively their outputs are unaffected by policy and provide’ approach does not take
assessed need’. This has resulted in decisions, aspirations and availability account of housing needs derived
the local plan process being delayed of finance. However, this cannot be from meaningful sub-areas and local
while large sums of money are spent true because past trends that the assessments such as parish surveys
on debating housing numbers at the assessments reflect – including historic and neighbourhood plans.
examination of draft local plans. under supply of housing – were ● SHMAs tend to finalise their figures
themselves influenced by previous without proper consideration of
● Government guidance expects SHMAs policies. Assessments of future the influence of surrounding areas.
to take account of projected job growth economic and employment trends When consideration is given, vital
and to adjust for this accordingly. are also inevitably influenced by context is lost when final decisions
However, projections incorporate current policy. on housing targets are made on
aspirations for growth, as well as past individual districts taken out of the
levels of economic activity, and ● The policy and guidance disadvantage wider geographical context.
therefore raise the question of just rural areas by indicating that ● The main focus of SHMAs is usually
how ‘objective’ the assessment is. local authorities should not take on need/demand factors, and
account of constraints such as land assessment of the future need for
● Councils are required to show how their availability, viability, infrastructure or housing does not take account of
local plan will meet the ‘objectively environmental impacts. This means such supply-side factors as:
assessed need’ from the SHMA in full, that a separate assessment of housing – physical or policy constraints;
unless other policies mean this is not land availability (called a Strategic – the availability of land
possible. Constraints such as Green Housing Land Availability Assessment
Belt should be taken into account, as or SHLAA) has to take place at a later for development;
should opportunities, but government stage, adding avoidable time and cost – the viability of residential
guidance does not give appropriate to the local plan process.
clarity on how constraints are to be development;
balanced with meeting housing need. ● Rural areas have suffered most from – environmental and social
Constraints are rarely reflected in the the abandonment of survey-based
housing targets of new local plans. approaches to determining housing sustainability; or
– the views of local communities.
● Given the above, the housing figures
in local plans are often unrealistic,
and unachievable by the current
housebuilding industry.

More specifically, the research found
several problems i) identifying need,
demand and aspiration for growth
through SHMAs; ii) meeting genuine
need through local plans.

i) Identifying need, demand and
aspiration for growth through SHMAs:
● Guidance lacks a robust methodology:

it represents a list of ingredients with
no recipe.
● Terminology is confusing. For example,
‘need’ and ‘demand’ are confused to
the extent that they are often treated
as synonymous, which they are not.

Set up to fail: why housing targets based on flawed numbers threaten our countryside 1

● The implications of the growing number Requirements Study and an update to
of older people who want to downsize that study in the five years between
to smaller accommodation but are not 2008 and 2013.
able to, are not taken into account. ● It is clear that local authorities are
The effect of this is to inflate the need effectively being required to plan for
to build additional family housing, – and are held to account against –
often in rural areas and at a wastefully aspirational demand, rather than
low density, to maintain the existing actual need.
balance of supply. The specific needs ● Creating higher than necessary
of other demographics, such as younger housing targets leads to identifying
people who may wish to rent small additional sites that result in additional
flats, are also not adequately considered. housing on inappropriate sites in
the countryside.
ii) Meeting genuine need through ● It is not clear what ‘need’ means
local plans: in rural areas and how it can be
● The local plan process takes a long properly assessed.

time, particularly once it reaches The upshot of all of the above is
submission stage. Modifications to that current processes mean the
meet housing targets are often the Government, through its planning
key area of debate. The length of time inspectors, is in practice simply taking
taken increases the likelihood of a top-down approach to impose and
needing to consider new demographic enforce housing targets, despite the
evidence and policy guidance, which stated intentions of ministers for a
in turn can generate further delay. more localist system in this regard.1
Ribble Valley is a case in point,
undertaking two SHMAs, one Housing

1 HM Government (2011) Laying the Foundations: A Housing Strategy for England Ribble valley flood plain

The cause of low house building rates

There is a general consensus that Housing statistics in England Housing approvals
current housebuilding rates are below 250,000 Housing starts
what is required. It is frequently argued 200,000 Housing completions
that the main constraint is the planning 150,000
process and that the amount of land 100,000 of communities. It is not in their
that is released for development 50,000 interest to increase the number of
in local plans is inadequate. It is houses on the market or to directly
assumed that housebuilders would be 0 meet local need because this would
able to build more if there were less undermine their business model.
regulation and more land to choose The house building sector has come
from. However, several factors – such as to be dominated by a small number
lack of construction skills and supplies of large businesses. The strategies of
and a reluctance to change business these firms are focused around
model – means that this assumption continuing profitability rather than
is deeply flawed. building housing to meet the demands
2007
The percentage of planning 2008
permissions being granted by local 2009
authorities has remained steady and is 2010
currently at around 88%. The graph 2011
demonstrates that it was the number of 2012
planning applications being submitted 2013
that slowed construction rather than 2014
overly restrictive planning departments. 2015

2 Set up to fail: why housing targets based on flawed numbers threaten our countryside

The consequences

Although the assessments of housing ‘need’ that result from
this process are clearly inaccurate, inflated and unreliable,
national policy says that these figures are only a starting
point in coming up with a final housing requirement.

In reality, erratic ‘need’ figures are not should take into account the different According to Government data,
being balanced with sensible planning roles and character of different areas, 242,000 houses were given planning
for infrastructure, consideration of and recognise the intrinsic character and permission in the year up to June 2015.
environmental constraints, and realistic beauty of the countryside – to ensure Housing starts and completions, however,
assessments of what housebuilders will that development is suitable for the local show no sign of coming close to matching
be able to deliver. context.”2 The statistics, however, clearly this number. In fact, quarterly statistics
show this is not happening: just seven on how many new homes have started
CPRE has analysed the 54 local of the 54 plans (13%) contain housing construction shows that building rates
plans adopted in the past two years targets that are in part determined by have been static since the beginning of
that have included a new housing target. environmental factors. 2014 (around 136,000 per year) whilst the
This research shows that the average latter data shows completions are currently
housing requirement of the plans is If we scale these figures up to a national at 131,000. So more and more planning
30% above the Government’s household level we find that local authorities are permissions are being granted on
projections and 50% above the average planning for the equivalent of 270,000 greenfield sites, but housebuilding rates
build rate (taken over the past 15 years). houses a year for the next 15 years. remain the same. The housebuilders
Realistically, this is a figure that is beyond simply build houses as they always
The research also shows that the reach of the current housebuilding have but with increased housing
environmental constraints are not being sector, given that it only managed to targets3 now have more sites to choose
taken into account when determining build 177,000 homes during the economic from in the countryside, where profits
housing targets – even though ministers boom of 2007. The figure is even higher are larger, leaving brownfield sites that
insist they should be. In a letter this year than the 250,000 homes a year that the could provide 1m homes standing idle.4
Minister of State for Housing and Planning Government have said is their target.
Brandon Lewis said: “plans and decisions

How often environmental Average completions and targets
constraints affect housing targets of local authorities in study

7% 800
6% 700
600
87% 500
400
Met OAN in full 300
Within a few percent 200
of meeting full OAN 100
Constraints meant
OAN could not be met 0
within the district
Future housing target
Future household growth
Housing completions
222222222222222000000000000000000000000101111823451607214390///////////////222222222222222000000000000000000000001110111271365412098345

2 https://www.gov.uk/government/publications/letter-to-the-chief-executive-of-the-planning-inspectorate
3 CPRE (2015) Getting Houses Built: How to Accelerate the Delivery of New Housing
4 CPRE (2014) From wasted space to living spaces

Set up to fail: why housing targets based on flawed numbers threaten our countryside 3

Case studies

Barnsley Metropolitan Council

Barnsley Metropolitan Council, which a large number of houses are being
contains a large rural area, published a planned, the vast majority of these
SHMA in 2014 to help in the production would be unaffordable to those on
of its new local plan. low incomes.

The SHMA recommends a housing Despite the area being heavily
figure of 1,110 dwellings per year which, constrained the emerging local plan is
based on past trends in delivery (760 per attempting to meet the high housing
year), would require a 44% uplift in build targets by releasing several Green Belt
rates. CPRE South Yorkshire’s analysis of sites for development.
the report also found that although

Oxfordshire

The Oxfordshire SHMA, published in double any previous rate, which is
March 2014, suggests the need for an unlikely to be achieved. The housing
extra 100,000 houses in the county by targets in the SHMA are having a direct
2031. This is the equivalent of two new effect on the countryside, for example
cities the size of Oxford in just 17 years. the draft Vale of White Horse District
local plan proposes 1,400 houses in the
This could lead to roughly 200,000 North Wessex Downs AONB and 1,500
more people – a 30% increase in the houses across four sites in the Green
population, and much higher than the Belt, contrary to NPPF policy.
10% anticipated UK population growth
for the same period. The SHMA figures
would mean building at virtually

North Somerset Council

Communities and Local Government figures set out in a housing assessment.
Secretary of State Greg Clark recently Development potential in North
approved a planning inspector’s Somerset is highly constrained by
recommendation to increase housing Green Belt, Areas of Outstanding
targets for North Somerset Council. Natural Beauty and areas at high risk
of flooding.
The council has been waiting for their
local plan to be approved for three and This means that the council cannot
a half years. The plan was given the show that enough houses are likely
go-ahead by a planning inspector in to get built over the next five years to
2012 but the housing target was meet the higher figure. If this situation
subsequently successfully challenged remains unchanged, it will trigger
in the courts. a national policy which voids the
local plan and allows developers to
Since that time the council has done pounce on greenfield sites that are
more work on their housing target not currently allocated for housing.
and arrived at a figure of 17,000, but a It would also likely lead to the loss of
planning inspector said that this should Green Belt land in the district.
be raised to at least 21,000 to meet

4 Set up to fail: why housing targets based on flawed numbers threaten our countryside

CPRE’s recommendations

Terminology and guidance in the NPPG needs to be reviewed,
clarified and expanded to allow for more responsive
assessments, specifically:

● Planning guidance in the NPPG on SHMAs ● Guidance is required on how housing needs of
must provide a clear distinction between ‘need’ rural areas can be included into assessments:
and ‘demand’ and give primacy to meeting by using local housing needs surveys,
genuine housing need. for example.

● The NPPG should be amended to include ● There is a need to develop methodologies
the following definition of housing need: capable of generating demographic and
‘The number of households who lack their own housing projections at parish level as a
housing or live in unsuitable housing and who counterbalance to ‘top down’ assessment.
cannot afford to meet their housing needs in
the market.’ 5 ● It is also essential to define and distinguish
between different types of housing
● Surveys of local communities’ housing needs in requirements: affordable, specialised and
specific areas, for example rural areas, should local housing need; and housing demand,
have a place in the SHMA process. Guidance is consumer preferences and aspirations.
required concerning how these might be
developed and applied. ● SHMAs should be required to explicitly consider
the implications of their ‘objectively assessed
need’ recommendations for rural areas.

Local plans should be allowed to weigh up all evidence for housing
need, demand and constraints on an equal basis and come to a
housing target which is flexible and subject to regular review:

● The NPPF should be amended (para 14, 47 and genuinely needed. They may plan for more
159) to say that when local authorities are to meet demand or aspiration if they wish,
determining their local plan housing target, but it must be made clear that this is a choice.
in the context of need and demand, they must ● There is a need to link SHMAs with SHLAAs in
take account of opportunities and constraints, order to ensure that environmental and policy
as well as a realistic assessment of how many constraints are properly taken into account
homes the housebuilding sector will be able when housing requirements are set in local
to deliver. plans. It would help to speed up the local plan
process to combine both assessments or run
● Local authorities should only be required them concurrently.
to plan for the number of homes that are

It’s clear from CPRE’s work and this new research on ‘objectively
assessed need’ that there is range of problems caused by flawed
guidance and ungrounded assumption over the cause of our poor
housebuilding performance.

Unless local authorities use their evidence to protect the
countryside in their areas and use existing planning guidance
to explain why high housing targets are not sustainable we are
likely to see ever greater loss of our precious countryside.

5 This definition was used in Strategic Housing Market Assessments: Practice Guidance Version 2 (DCLG, 2007)

1 2

Unrealistic Councils are
housing targets forced to allocate

are set large amounts
of land to meet
8
targets
And round we
go again...

7 Set up to fail: 3

Developers why housing targets Developers
again target the based on made-up cherry-pick the most
most profitable numbers threaten
profitable sites –
sites our countryside usually greenfield,

ignoring
brownfield

6 5 4

Councils are Housing targets Building rates
forced to allocate are inevitably are kept slow by
developers to keep
even more missed
land prices high

CPRE fights for a better future for Our objectives Our values
England’s unique, essential and We campaign for a sustainable future ● We believe that a beautiful, tranquil,
precious countryside. From giving for the English countryside, a vital
parish councils expert advice on but undervalued environmental, diverse and productive countryside is
planning issues to influencing national economic and social asset to the nation. fundamental to people’s quality of life,
and European policies, we work to We highlight threats and promote wherever they live
protect and enhance the countryside. positive solutions. Our in-depth research ● We believe the countryside should be
supports active campaigning, and we valued for its own sake
seek to influence public opinion and ● We believe the planning system should
decision-makers at every level. protect and enhance the countryside in
the public interest

This report has been informed by independent research undertaken by
Housing Vision and Tibbalds entitled Smarter SHMAs: a review of Objectively
Assessed Need in England which can be accessed at: www.cpre.org.uk

Campaign to Protect Rural England Print: www.parklanepress.co.uk www.cpre.org.uk
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registered in England, number 4302973
November 2015