The basics #16 - why *4 year* housing land supply doesn’t mean what you may think

Time to silence the critics. The doubters. The haters. No. Never let it be said that this is a blog which fears arcane geekery. We don’t fear it, we embrace it.

It’s called planoraks, for heaven’s sake. That has to mean something. And according to the OED, it means:

Socially inept? Check.

Studious? Check.

Obsessive? Double-check.

Unfashionable and largely solitary interests? I mean. Does that even require an answer.

So if you’re sitting comfortably, studiously and just a little obsessively, come join me for a 3 minute primer on the Government’s new “4 year housing land supply” policy and why the policy does not mean what you may have assumed.

Ready? Set? Off we go…

We’re almost 20 years into the requirement for planning authorities to show a minimum deliverable supply of 5 years’ worth of housing (hats off to PPS3). Falling below that 5 year supply can trigger our much-discussed tilted balance - more on which here and here and here and here.

The latest NPPF - which I summarised here (albeit it’s already been edited once since my breathless summary) - gave the requirement for 5 year housing land supply a number of knocks. One of the more head-scratchy new policies is at paragraph 226:

“From the date of publication of this revision of the Framework, for decision-making purposes only, certain local planning authorities will only be required to identify and update annually a supply of specific deliverable sites sufficient to provide a minimum of four years’ worth of housing (with a buffer, if applicable, as set out in paragraph 77) against the housing requirement set out in adopted strategic policies, or against local housing need where the strategic policies are more than five years old, instead of a minimum of five years as set out in paragraph 77 of this Framework. This policy applies to those authorities which have an emerging local plan that has either been submitted for examination or has reached Regulation 18 or Regulation 19 (Town and Country Planning (Local Planning) (England) Regulations 2012) stage, including both a policies map and proposed allocations towards meeting housing need. This provision does not apply to authorities who are not required to demonstrate a housing land supply, as set out in paragraph 76. These arrangements will apply for a period of two years from the publication date of this revision of the Framework.”

What sits behind this idea? Well, the Government’s explanation was that:

“The government proposed introducing a transitional arrangement for emerging plans to only be required to demonstrate a 4-year rolling land supply where work is needed to revise plans. About half of respondents supported the proposal, considering it as a reasonable measure to allow authorities to amend emerging plans in light of policy changes. Some respondents felt that this would help incentivise and speed up plan production and adoption. 

The government notes some opposition to this proposal, with concerns raised about the complexity this would introduce to the plan-making system and the potential impact on housing supply. There was also some disagreement about which plans this measure should apply to, and some confusion about plans which would be eligible.

The government has carefully considered the range of responses and has decided to proceed with the proposal to reflect the support shown in the consultation responses.”

How many authorities are we talking about?

Of the 330 or so planning authorities in England, at the mo around 120 cannot demonstrate a 5 year supply of housing land. Buuuut, of that sub-5 year cohort, around 40 - so 1 in 3 - can demonstrate at least 4 years of deliverable sites measured against the normal 5 year target.

The Government’s idea seems to be - offer a 4 year target rather than a 5 year target as an inducement for those authorities to at least consult on development plans. There are problems with the theory. The incentive is simply to e.g. produce a Regulation 18 consultation. It does nothing to incentivise plan-making, i.e. adopting anything.

But here’s the bigger problem - the policy isn’t really an incentive at all. It does not do what the Department implies. That is because, in a nutshell: its drafting does not require authorities to demonstrate 4 years of housing against their 5 year target. It does something different. And different in an important way. It requires authorities to demonstrate 4 years worth of deliverable housing sites against a 4 year target.

So what, right? Why does that matter? How obsessive and solitary are we going to get here?

Well, give me 2 more minutes to explain why it may end up mattering. Just 2.

And to understand it better, take a trip with me down that glorious A303 past Stonehenge to the West Country. All the way to Devon. We’re off to wonderful Exeter. Home of a glorious medieval cathedral. The Exeter Chiefs (rugby, if you’re wondering). The Met Office. And, most importantly, birthplace of none other than Coldplay’s Chris Martin.

But not home, a little sadly, of an up to date Local Plan:

• Exeter’s current core strategy was adopted back in February 2012 - before the first NPPF. So. Pretty old.

• Which means that under the pre-December 2023 NPPF, Exeter was required to demonstrate a minimum of 5 years’ supply of deliverable housing sites measured against its standard local housing need requirement figure. Was it achieving that task? No. On its own account. Taking Exeter’s own numbers at face value, its most recent count resulted in a 4.3 year housing land supply measured against its minimum 5 year requirement. A more recent appeal decision put the number at between 4-4.1 years. Must try harder.

• Which means that, in a pre-December 2023 NPPF world, the most important policies for determining e.g. planning applications for housing would be deemed out of date under §11 of the NPPF, and the so-called “tilted balance” risked becoming engaged (see the links above for more information about how that works).

• But hang about. Hasn’t Gove come to the rescue here? Because from 23 October 2023 to 15 January 2024 Exeter has been consulting on a new local plan: here. It’s a “Regulation 18 consultation”. It includes “both a policies map and proposed allocations towards meeting housing need”. Which means that we tick the boxes at §226 of the new NPPF - set out above.

• Which means that [drumroll…] Exeter now “will only be required to identify and update annually a supply of specific deliverable sites sufficient to provide a minimum of four years’ worth of housing (with a buffer, if applicable, as set out in paragraph 77) against [its] housing requirement”.

Happy days for Exeter-ians everywhere, right? Chris Martin will be thrilled. Because, as we’ve seen, let’s assume they’re at 4.1 as the Inspector said last summer. 4.1 is (juuuust) higher than 4. So that’s the end of that right? No tilted balance. Right?

Wrong.

And here is why:

The planning Inspector’s 4 - 4.1 year figure was measured against a target not of 4 years of housing requirement, but of 5.

So it doesn’t give us an answer to what Exeter’s housing supply for the purposes of §226 in the new NPPF. Because that policy does not require supply to be measured against a target of 5 years worth of housing requirement. It requires supply to be measured against a target of 4 years worth of housing requirement. The new policy’s language is very different to e.g. §14 of the September 2023 NPPF which dealt with Neighbourhood Plans leading to the tilted balance resisting development in circumstances where, among other things, “the local planning authority has at least a three year supply of deliverable housing sites (against its five year housing supply requirement…”.

§226 does not require supply to be measured against a 5 year requirement like the old §14 did. §226 does something very different. It replicates the language of what is now §77 NPPF which sets out the general 5 year housing land supply requirement. But it swaps the 5 for a 4.

Simple, right? 4 years of housing supply. Measured against 4 years of requirement.

So what? What could this mean in dear old Exeter? Coldplay fans everywhere want to know. Here comes, as the shampoo ads used to say, the science bit. Again taking Exeter’s supply figures broadly at face value…

• Its total housing requirement for the next 5 years is 3,371 homes. But that included a 5% buffer which, under the December 2023 NPPF, we don’t have anymore. Without the buffer the total requirement for the next 4 years is 2,568 homes.

• The supply across each of those years - so the Council told us - looks like this:

• 2,914 homes in total, so they claimed, across overall the 5 year period. 324 of those are projected in year 5 of the period.

• But that isn’t the end of the story. Because we know that the Council accepted a couple of months after this table was published that it was too optimistic. The 4-4.1 year supply it accepted on appeal means a supply not of 2,914 homes, but instead of around 2,700 homes.

• We don’t know - because the Council doesn’t appear to have said yet - how that reduction plays out year by year. But let’s assume that the homes already removed by the Inspector during the appeal included 1/2 of the 324 slated to appear year 5. To derive a 4 year housing land supply, we’d also need to remove all the other “year 5” homes - so we have another 160 or so to knock off.

• Which would takes us to a total deliverable supply over 4 years of around 2,700 - around 160 = around 2540 homes.

• 2,540 homes of supply measured against a 4 year target of 2,568 homes would take us to… a 3.9 year supply out of 4. Fiendishly close, you may think. But no cigar.

• If those numbers were close to being right, it’d mean that the most important policies in the development plan would remain out of date in Exeter, and the “tilted balance” would capable of being triggered for those reasons.

Now, that’s (obviously) a non-scientific example. Based on no evidence, a fair wodge of assumptions, and a liberal sprinkling of guesswork. In Exeter. Only one authority. And a lovely authority it is too.

But, of course, there are scores of comparable examples all across Blighty. Places where a 4+ year supply measured against a 5 year requirement target will not translate into a 4+ year supply measured against a 4 year target. Ironically, these will include cases where authorities will be able to demonstrate a 5+ year housing land supply, but (e.g. in places where a larger proportion of their projected supply is pushed into year 5), will not be able to demonstrate a 4+ year housing land supply. Which would have the consequence of incentivising some authorities not to consult on their local plans. Ho hum. Oh the fun and games we have to come this year working all of this out.

In the meantime, wrap up warm for those site visits, #planoraks. It’s getting fresh out there. And stay well. I hope you’re all enjoying your shiny new NPPFs. And, whatever else you do, even if the haters call it obsessive, zip up those anoraks with pride, and try your level best to #keeponplanning.