How might the new five-year land supply calculation work?


How might the new five-year land supply calculation work?

By Joanna Lee, Associate

It is clear that five-year land supply is still a vital part of the planning process and is likely to remain so for the foreseeable future. As Daniel Wheelwright explains, it is likely that authorities will struggle to demonstrate a five-year land supply because authorities who deliver less than 85% of their annual target will have to include an extra 20% buffer in their five-year land supply calculations. In addition, where authorities achieve only very low delivery, subject to increasing thresholds from 2018-2020, there will be an automatic presumption in favour of sustainable development.

In parallel with the emphasis on delivery, through the introduction of the delivery test and sanctions, the Government is keen to create more certainty about whether an adequate land supply exists. The White Paper proposes to amend the National Planning Policy Framework to give local authorities the opportunity to have their housing land supply agreed on an annual basis and fixed for a one-year period.  

There are benefits to both authorities and developers in agreeing the five-year land supply including providing more certainty to all parties and reducing the considerable cost and time of arguing the merits and details of the calculation at appeals.

It is currently envisaged that if authorities wish to agree their land supply they will be required to:

  • Prepare a draft housing land supply statement in line with guidance on how the calculation should be made, working with developers and other interested parties
  • Consult on the draft statement
  • Submit the statement to the Planning Inspectorate

The proposals appear to be based on the Welsh approach which has been in place since 2015 and requires authorities to prepare a Joint Housing Land Availability Study each year to ensure sufficient land is available for a five year supply of land for housing. Technical Advice Note 1 provides guidance on the preparation of the studies, the method of calculation and the conditions sites much satisfy to be included. It seeks the use of statements of common ground as the mechanism through which areas of agreement or disagreement are identified and has to accord with a strict annual timetable to enable the process to be complete with 5 months. It is understood that where this approach is being used it appears to be largely effective, subject to details of how sites are to be included as deliverable.

The current proposal simplifies the Local Plans Expert Group (LPEG) recommendations and takes forward the more generally accepted proposal for a standard approach to the five-year supply calculation, with some of the more controversial proposals. In particular, clarity on the starting point for the calculation in terms of the requirement is very welcome and will benefit all parties as this takes up a considerable amount of time at appeals. Not surprisingly, the White Paper is short on specifics and the devil is likely to be in the detail of the precise aspects of the calculation in terms of the components of supply, lapse rates, lead in times and build rates, windfalls, definitions of deliverability and whether specific uses such as C2 or student flats should be excluded from the calculation.

The Government is currently consulting on whether authorities who seek to go down this route and have their housing land supply agreed should maintain a 10% buffer. The logic for this is not explained and it is notable that this 10% buffer was not within the LPEG recommendations. How this requirement will be reconciled with the delivery test requirement for a 20% buffer will be interesting. Presumably this would not be a cumulative requirement resulting in those authorities that want to embrace the route for more certainty getting penalised with an even greater buffer! It is more likely that a 10% requirement would be used unless the delivery test indicates the need for a 20% buffer.

The current consultation also seeks views on whether the Inspectorate should examine the authority’s assessment and if so the extent to which this should include not only the approach but also the supply figure itself. Given that many of the arguments at appeal are related to the delivery of sites, as well as the method used in the calculation, it would seem essential that any examination properly takes account of site specific issues and differences put forward by objectors.

Developers, housing providers and landowners will all need to be properly involved in the process of setting the five-year housing land supply if authorities choose to take up the opportunity presented and get their housing land supply figures agreed. As a Practice we believe it is important to influence the process and respond to the consultation by 2 May 2017, to ensure that all of the right elements are included in any standard calculation and guidance.