Testing times for housing: will the new Housing Delivery Test make a difference?
Increasing the supply of housing has been a stated aim of every government of recent times. When David Cameron was Prime Minister he set out an ambition to build a million homes by 2020. Theresa May’s stated target is to deliver 300,000 homes a year in this Parliament. There has been some divergence in policy between the two Conservative Prime Ministers – a shift away from a home-owning democracy and promoting Help-to-Buy towards a renewed focus on increasing the provision of affordability and a tougher position on the Buy-to-Let market. But the key theme is much the same – to build more homes.
Mrs May claims that housing delivery is a personal priority but her 300,000 homes a year target is a big challenge. In 2016/17, 148,000 new homes were completed, less than half of the current target. But there is space for the government to be ambitious: the number of homes started in 2016/17 was the highest recorded since 2008/9. The Prime Minister will be hoping to address the imbalance between planning permissions granted and completions – and to ensure that councils are delivering on their objectively-assessed housing requirements. It is in this context that the government have introduced a new Housing Delivery Test, contained within the revised National Policy Planning Framework.
The Housing Delivery Test is designed to ensure that councils are delivering the new homes needed. It will be updated every November, and it will measure an authority’s home delivery record against its local housing requirement over the previous three years. The NPPF states that if less than 95 per cent of the housing requirement has been delivered over the three-year period, the authority should prepare and publish an action plan to assess the causes of under-delivery. Where less than 85 per cent of the requirement has been delivered, it says, a 20 per cent buffer for under-delivery of housing would be triggered. The idea is to place greater responsibility on local authorities for ensuring that the planning permissions they have granted are taken forward and homes are built.
Supporters of the initiative say it is a welcome incentive for local authorities to work with developers and speed up implementation and delivery. Critics have argued that it wrongly penalises councils and puts pressure on local authority planning teams.
It remains to be seen whether the new Housing Delivery Test will be able to make a significant contribution towards Mrs May’s 300,000 new homes a year ambition. The bad news for the government is that it will have to tackle the housing crisis at the same time as navigating Brexit, and against the backdrop of a fragile the economy and sluggish wage growth: economic uncertainty rarely makes for a booming construction industry.