Comment

More carrot, less stick - The NPPF changes to the requirement to demonstrate a five-year housing land supply

The Government’s changes to the requirement to demonstrate a sufficient five-year housing land supply in the National Planning Policy Framework (NPPF) are having immediate consequences.

In short, the new NPPF now means that those authorities with an up-to-date plan will no longer be required to demonstrate a five-year housing land supply^[1], and those that have published a Regulation 18 or Regulation 19 Local Plan will now only be required to demonstrate a four-year housing land supply. The need to include a 5% buffer to support choice and competition in the market has also been removed.

Immediate implications and impacts

As a result, planning strategies are being reviewed, potential applications are being stalled, appeals are being reconsidered and the approach to decision taking in many appeals has shifted. We are also aware of a number of instances where applications that have received resolutions to grant planning permission are now being recalled to committee.

To add a further layer of uncertainty, the actual meaning of some changes to the NPPF is unclear, with considerable debate amongst eminent barristers^[2] on what the wording of the NPPF actually means, which perhaps contrasts with what the Government actually meant it to mean. 

Regardless, what is immediately clear is that the changes to the requirement to demonstrate a five-year housing land supply (or four years in some case) are going to result in far fewer homes being delivered, certainly in the short-term and potentially going forward.

There are now examples of many authorities where the requirement to demonstrate a five-year housing land supply has been removed, or the requirement has eased^[3]. In many cases, these are authorities that accept that they are unable to demonstrate a sufficient five-year housing land supply, and so clearly need more homes to come forward (and where, without them, there is the potential for significant adverse social consequences). 

It now more difficult to argue that planning permission should be granted in those areas (as a result of the tilted balance under the presumption in favour of sustainable development at NPPF paragraph 11 no longer being engaged). The level of housing delivery in those particular authorities will only reduce in my view (with a potential exasperation of existing shortfalls), at least in the short-term. Yet many of those authorities will remain protected for many years to come and there will be little incentive to address acknowledged shortfalls. 

The Housing Delivery Test may provide some consequences, but that is only a short-term look across the last three years, can ignore trends of longer-term under-provision and it simply doesn’t have the same teeth as the requirement to demonstrate a five-year housing land supply. 

Future of housing: prospects and challenges

These examples do not sit comfortably against the Government claims that the changes to the NPPF will ultimately lead to the delivery of more homes. Yes, there is now some incentive for councils to progress forward with local plans, looking to obtain some greater protection in respect of its five-year supply. But even those local plans are now able to move forward proposing numbers that are potentially much lower than the Government’s standard method requirement, and moving away from any potential for Green Belt review and release. 

There is also ambiguity in respect of the Government’s expectations for what should be included within emerging local plans in order to benefit from the protection of four-year supply. For example, what is meant by housing allocations towards meeting housing need - could that mean a small handful of draft allocations that meet some of the need, but not anywhere near meeting full needs. And what is meant by a policies map identifying those allocations?

These are matters (including the issue of what a four-year supply actually means) that are going to be debated in appeals and, ultimately, we suspect in the courts. This may be negated through additional guidance provided through updated planning practice guidance, but that guidance needs to be clear and prompt. 

Many have accused the requirement to demonstrate a five-year supply as a blunt tool, however, in our experience, it has been an effective tool to deliver homes that are so desperately required in many parts of the country with substantial components of many councils’ current supplies made up from sites that have been allowed appeal. 

Where would those councils be in respect of the housing land supplies if those appeals had not come forward, and those homes were not now going to be delivered – it is clear that the Government would be even further behind on its aspiration to deliver 300,000 homes per annum, with even greater consequences on affordability and impacts on the most vulnerable. 

Whilst not a popular tool, the requirement to demonstrate a five-year supply and the resultant triggering of the tilted balance has certainly been effective in delivering more homes where they have been required. Furthermore, those permissions have also been granted because those sites have been found to be suitable and sustainable for the delivery of homes.

Summary

Ultimately, whilst the NPPF changes will please many authorities and  communities who wish to resist developments for new homes, it clearly runs counter to the Government’s retained commitment in the NPPF to significantly boost the delivery of homes and its commitment to deliver 300,000 homes per annum. 

Regardless of the changes to the NPPF, an authorities’ delivery performance to date and its housing supply should remain important material considerations. But what level of consideration (and weight in the planning balance) local planning authorities and inspectors give to such issues is still to be seen. If we are to truly deliver the homes that we need, these matters must still be given careful consideration and afforded appropriate weight and importance in any decision-making. 

Nevertheless, we can only see the changes to the NPPF leading to substantially reduced delivery in the coming years, unless such changes are reviewed and amended, potentially by a subsequent Government.

For further expert advice on the recent NPPF changes, or to discuss housing and planning requirements, please reach out to Jeff Richards.

22 January 2024

[1] However, footnote 79 does set out transitional arrangements, meaning that for applications made before the date of publication of this version of the Framework, a five-year supply would still need to be demonstrated.  
[2] With much debate on whether the requirement for a four-year supply means a four-year supply across a five year supply period, or four years across a four-year period – including Zack Simons - Planoraks and Chris Young KC on LinkedIn 
[3] Despite the debate on the meaning of a four-year supply, it was clearly the Government’s intention to make it easier for authorities to demonstrate a four-year supply against paragraph 226.