2020 – The year the housing was hit by a maverick algorithm

2020 – The year the housing was hit by a maverick algorithm

Alongside Planning for the Future White Paper (see previous article), ministers published without fanfare a second consultation on changes to the planning system. Council housing targets will be set centrally using a crude formula that distributes responsibility for the government’s ambition for 300,000 new homes a year round the country. But the formula will allocate more housing to higher priced areas such as the south and east, while reducing ambitions for the Northern Powerhouse. A ‘short-term’ waiver of S106 requirements for most small sites could cut affordable housing delivery by up to 20%. A quarter of affordable housing delivered will be for sale at a 25% discount at the expense of social and affordable rented homes.

Conservative MPs in the shires are already getting nervous about the government’s plans for centrally imposed housing targets. Housing will be distributed using to a new standard methodology, the principles of which were first outlined by Lichfields and Savills in May. The new method assumes that larger settlements can absorb more housing. The least affordable areas will get higher building targets. There will be a priority for brownfield use and a discount for councils with large areas of protected land. Except ministers haven’t a clue about how to implement that discount. They are asking councils for ideas.

Savills has produced an authoritative analysis of how the new targets will pan out without the discount. Individual council targets will add up to 337,000 homes a year across England. That’s 25% above current local plan targets and well above the 178,800 new homes built in 2019.

The annual requirement for Greater London under the standard method will rise from 56,000 to 94,000 homes year – significantly more than the annual average of 36,000 homes over the last three  years. Is that sort of uplift even feasible? Sussex is already struggling with housing pressure, especially around Horsham and Brighton and Hove, but could see a 33% increase in targets. Bath and North East Somerset could get a near doubling of its standard method requirement from 648 to 1,216 new homes a year.

Many towns and cities in the Northern Powerhouse, including Bradford, Leeds and Sheffield would both see falls in their targets. The message from the government is clear, where housing is expensive build more. Where is cheaper build less. The consultation doesn’t explain how this allocation of targets contributes to the government’s already struggling levelling up agenda.

The proposed new standard method is also causing concern among Conservative MPs who fear that imposition of more housing on their leafy shires will lead to the loss of green fields on their doorsteps, votes at the ballot box and potentially their seats.

Not a single house was built under the government’s now scrapped Starter Homes initiative. The latest scheme is First Homes, which must be sold at 30% under market value. Ministers are proposing that 25% of all new affordable housing are First Homes and that other tenures, including affordable rent and social rent are reduced accordingly.

Fewer affordable homes will be built if the government’s proposals go through. Currently developments of more than 10 homes must provide for affordable housing. Ministers want to raise that threshold to 40 or 50 homes, reducing the level of affordable housing built by 10 to 20 per cent.  

Ministers also want to combine S106 and community infrastructure levy contributions into a single Infrastructure Levy. In principle, that’s a good thing and Robert Jenrick is insisting it will lead to more affordable housing (£). However, ministers propose giving councils wide discretion on how the Infrastructure Levy will be spent, including possibly diverting it subsidise services and reduce council tax.

There is always scope for adjustments to housing policy. But the new standard method the government is now consulting on can only be described as maverick.

The consultation on Planning for the Future runs until and the consultation on Changes to the current planning system until 1 October 2020.

A article on the implications of the government’s proposals for the planning system was published yesterday.

This article was first published on Lib Dem Voice.

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