Hart District Council Regulation 18 Local Plan Consultation Representations on behalf of Berkeley Strategic
Berkeley Strategic Land Limited 9 June 2017
© 2017 Nathaniel Lichfield & Partners Ltd, trading as Lichfields. All Rights Reserved. Registered in England, no. 2778116. 14 Regent’s Wharf, All Saints Street, London N1 9RL Formatted for double sided printing. Plans based upon Ordnance Survey mapping with the permission of Her Majesty’s Stationery Office. © Crown Copyright reserved. Licence number AL50684A OurRef 13984433v3
Hart District Council Regulation 18 Local Plan Consultation : Representations on behalf of Berkeley Strategic
Executive Summary
These Representations have been prepared on behalf of Berkeley Strategic Land Ltd in respect of the Hart District Council’s Regulation 18 Local Plan Consultation. Berkeley is promoting land for development at Netherhouse Copse (“Grove Farm”). For a Local Plan to be found sound it must adhere to the requirements of paragraph 182 of the NPPF. However, it is considered that there are a number of issues with both the draft Local Plan and the supporting technical studies which would result in the plan being found unsound. 1 The SHMA has under-estimated the objective assessment of housing need (OAHN) of Hart District and the wider HMA by not correctly applying changing migration patterns between London and the South East, not making adjustments for market signals which could reasonably be expected to improve affordability and not satisfactorily addressing affordable housing needs. The OAHN has been calculated to actually be 607dpa. 2 The Sustainability Appraisal concluded that the preferred option put forward in the Council’s emerging Local Plan is not sufficiently justified over and above others. 3 Policy SS1: Spatial Strategy: Scale and Distribution of Growth has not been positively prepared, nor is it effective as it does not meet the OAHN of the District as required by paragraph 47 of the NPPF. An increase in the emerging housing requirement should be made from 10,185 from 2011 to 2032 to 11,713 and Grove Farm should be allocated. 4 Policy SC2: Murrell Green there is significant doubt over the prospect of this development delivering 1,800 dwellings within the plan period and it is considered that realistically only a total of c.1,100 dwellings could be delivered in the plan period. 5 Policy SC3: Land at Cross Farm and Policy SC4: Sun Park both have fundamental questions as to whether they are viable because both applications have come forward with no affordable housing provision. 6 Policy MG6: Gaps between Settlements is not justified, effective and is also inflexible. The gaps have been identified with regard to an emerging housing requirement figure which does not accord with OAHN and the policy is not effective because allocations fall within the local gaps. It is not flexible as it has proved itself to be a tension in the ability of the District to meet housing needs.
The allocation of Grove Farm would have substantial benefits for the District and would also help to correct some of the issues identified with the emerging Local Plan. In particular, its allocation would: 1 Deliver a further 423 homes into the trajectory towards meeting the District’s true OAHN, addressing the deficiencies of Policy SS1. 2 Introduce a significant portion of additional supply into the trajectory which adds greater flexibility to adapt to rapid change, particularly if any other sites are slower to deliver or do not come forward at all. 3 Provide more than the required amount of SANG. Policy NE1: Thames Basin Heaths Special Protection Area is clear that mitigation measures will be required for all net new dwellings and must be delivered prior to occupation and in perpetuity. This means that the overprovision of SANG at Grove Farm is a substantial benefit because it can also help mitigate the impact on the SPA of other housing schemes which cannot themselves provide SANG. 4 Ensure the delivery of the education land for secondary school expansion at Calthorpe Park School. Policy I9 Safeguarded land for Education safeguards 1.45 ha of land within the Grove Farm site for the future expansion of Calthorpe Park School.
Hart District Council Regulation 18 Local Plan Consultation : Representations on behalf of Berkeley Strategic
Contents
1.0 Introduction 1
2.0 Objectively Assessed Housing Needs 2 The Councils Evidence 2 Lichfields OAHN Calculation 2 Unmet Housing Needs 3 Current Local Plan Status 3 Meeting Housing Needs across the HMA 5
3.0 Sustainability Appraisal 6
4.0 Housing Supply 11 Hart District Local Plan: Strategy and Sites 11 The Local Plan Trajectory 11 Summary 19
5.0 Other Policies 20 Policy MG6: Gaps between Settlements 20 Policy I9: Safeguarded land for Education 21
6.0 The benefits of allocating Grove Farm 22 Benefits 22 Sustainability 23 Summary 23
7.0 Conclusions 24 Technical Studies 24 Local Plan Polices 25 Grove Farm Allocation 26
Hart District Council Regulation 18 Local Plan Consultation : Representations on behalf of Berkeley Strategic
1.0 Introduction
1.1 These representations have been prepared on behalf of Berkeley Strategic Land Ltd (“Berkeley”) in respect of the Hart District Council’s (“Hart” “the Council”) Regulation 18 Local Plan Consultation (“the Local Plan” “the emerging Plan”). Berkeley is promoting land for development at Netherhouse Copse (also known as Grove Farm), and a planning application for a residential-led development of that site is currently the subject of an appeal under s.78 of the Town and Country Planning Act 1990. The Council has elected not to select Berkeley’s site at Netherhouse Copse for an allocation in its emerging Plan. Having considered the Plan and its current evidence base, Berkeley considers this decision has not been justified, is not consistent with national policy, and would not be effective. Overall, the Plan in its current form, if progressed to submission with the current strategy, would not be sound.
1.2 This report covers the substantive issues associated with Berkeley’s objections to the emerging Local Plan, focusing on the issues of Objectively Assessed Housing Need (OAHN), unmet housing need within the HMA, the housing land supply trajectory, provision of SANG, local gap and education policies and the Sustainability Appraisal.
1.3 This report is set out under the following headings;
Section 2 Objectively Assessed Housing Need primarily reviews the Council’s SHMA. The section is informed by a technical note appended to these representations which reviews the OAHN concluded upon in the SHMA in the context of the necessary requirements of the NPPF, PPG and relevant High Court judgments and provides more robust OAHN evidence for Hart District. The section goes on to establish the impact that this OAHN calculation would have on the unmet housing needs of the Housing Market Area (HMA);
Section 3 Sustainability Appraisal reviews the robustness of the Sustainability Appraisal (SA) (April 2017) in its conclusion on the chosen geographical housing delivery method in Hart District;
Section 4 Housing Supply provides some contextual analysis on site lead-in times and build-out rates before reviewing the realism of the Councils housing trajectory based on current evidence and reviewing the Councils stated five year housing land supply position (5YHLS). It also considers the implications of the need for sites to deliver SANG;
Section 5 Other Polices reviews the local gap and education policies in the emerging Local Plan as they relate to the Grove Farm scheme;
Section 6 Grove Farm deals with both the benefits and sustainability credentials of the Grove Farm scheme; and
Section 7 Conclusions explains the shortcomings of a number of technical studies and policies in the emerging Local Plan and sets out how the allocation of Grove Farm could address a number of problems with the emerging Local Plan.
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2.0 Objectively Assessed Housing Needs
2.1 Policy SS1: Spatial Strategy: Scale and Distribution of Growth makes provision for the delivery of at least 10,185 new homes (net) over the Plan period 2011-2032 at an annual average rate of 485 dwellings per year. The Council has adopted a higher housing requirement (485 dpa) than the OAHN concluded upon in the Hart, Rushmoor and Surrey Heath Strategic Housing Market Assessment (SHMA) (382 dpa) to address a greater proportion of affordable housing needs. We consider the SHMA is inadequate in its assessment of OAN, and that the emerging housing requirement figure is not sufficient to meet the housing needs of Hart District. We present our alternative view on the OAHN for Hart is set out below. The Councils Evidence
2.2 Appended to this representation is a technical note which sets out our criticisms of both the SHMA calculations and the Council’s housing requirement figure, and includes our own calculation of OAHN which corrects our points of critique. In summary our critique identifies the following errors in the SHMA’s assessment of OAN: 1 The SHMA has under-estimated the demographic-led needs in the Housing Market Area (HMA) by failing to consider the impact of London. The London SHMA (2013) assumes changing migration patterns between London and the South East and these will increase population and household growth in the HMA which has migration relationships with London; 2 The SHMA has not made adjustments for market signals which reflect the requirements of the PPG, namely to make an adjustment which could reasonably be expected to improve affordability; 3 The SHMA has not satisfactorily addressed affordable housing needs. In Hart alone, the Council itself proposes what it considers a ‘policy-on’ increase its figure above the SHMA’s OAN for the District. This adjustment is one that should have been made within the SHMA as part of the step to address affordable needs in line with the PPG as well as High Court judgments Satnam and Kings Lynn. This failure is replicated across the two other local authority areas; and 4 The Council has not provided evidence through the Affordable Housing Needs Background Paper as to why a further modest uplift over 485dpa, to go towards meeting full affordable housing needs could not be accommodated. Lichfields OAHN Calculation
2.3 Analysis in the Appendix 1 technical note demonstrates that delivery in excess of 485 dpa is entirely reasonable and could be expected to occur. This is in line with the King’s Lynn High Court judgment and the requirements of the PPG which requires scenarios for the supply of housing to be those that can be reasonably expected to occur.
2.4 Lichfields analysis focuses on market signals, particularly making an adjustment which can be reasonably expected to improve affordability. Lichfields analysis based on OBR/University of Reading1 shows that at the current OAHN, affordability in Hart (and across the HMA) would deteriorate significantly, from an already poor position. Within the District, a minimum of 607 dpa would be needed from 2014-36 to maintain the current affordability ratio to 2022. It
1 An approach we adopted at the Mid Sussex Local Plan Examination and which was accepted by the Inspector.
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represents a level which could be reasonably expected to occur in the context of past build rates in the District and benchmarks of growth rates elsewhere in the region.
2.5 Policy SS1 sets its housing requirement over the plan period 2011 to 2032. However, as our OAHN calculation is based in part on the worsening affordability in the District between 2011 and 2014, it would not be appropriate to backdate it. As such to conclude upon a comparable figure for Policy SS1, completions in Hart from 2011 to 2014 have been taken into account. Incorporating these means that housing need in Hart over the period 2011 to 2032 amounts to 11,713, some 1,528 units more than is currently being planned for.
Table 2.1 Lichfields housing need calculation 2011 to 2032 in Hart
Completions 2011/12 326 Completions 2012/13 197 Completions 2013/14 264 607 over 18 year period 2014-2032 10,926 Total 11,713
Source: Lichfields analysis Unmet Housing Needs
2.6 The NPPF (paragraph 47) requires OAHN to be met across the HMA, as far as is consistent with the policies set out in the Framework. On this basis if a local authority is constrained insofar as meeting OAHN, then their share of the HMA’s OAHN would need to be met within the other authorities of the HMA (subject again only to the constraints within the NPPF). In essence the rest of the HMA would have to take on these unmet housing needs to ensure the OAN of the HMA as a whole is met.
2.7 The SHMA currently concludes an OAHN for the HMA of 1,200 dpa. Delivery of up to 1,737 dpa would be needed in the HMA just to stabilise affordability at the current level to 2022, illustrating the scale of under-estimation of full OAHN in the SHMA. In this context, we should look at the housing provision being planned for in each of the three authorities of Hart, Rushmoor and Surrey Heath to understand if there are any unmet housing needs arising which the remainder of the HMA will have to absorb, taking into account the conclusions of these representations on the true scale of OAHN in the HMA. Current Local Plan Status
Hart District Council
2.8 This document forms a response to Hart District Council’s Local Plan Regulation 18 Consultation, for the new Local Plan for the period 2011-2032. Its most recent Local Development Scheme (effective from 6th April 2017) anticipates that the Local Plan will be adopted in summer 2018.
2.9 Currently the Council is basing its housing supply in its emerging Local Plan on a requirement figure of 382dpa and an uplift to assist in meeting a need for affordable homes, which results in a final figure of 485dpa. The emerging Local Plan sets out a housing supply that exactly meets its housing need for the Plan period.
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Rushmoor Borough Council
2.10 Rushmoor Borough Council adopted its Core Strategy in October 2011, for the period 2006 to 2027. The Core Strategy sets out a requirement for 6,200 new dwellings between 2006 and 2026, of which 4,500 will be at the Aldershot Urban Extension. This equates to a figure of 310dpa. However the Council now uses the SHMA figure identified through the assessment of the HMA of Hart, Rushmoor and Surrey Heath to identify its housing requirement. The Council is also now working on a new Local Plan, with the draft submission consultation due to take place after the General Election on 8th June 2017, and the current intention to adopt the Local Plan in summer 2018.
2.11 The agenda of the Cabinet meeting of the 4th April 2017 states that (paragraph 3.5):
“The update to the Strategic Housing and Employment Land Availability Assessment (SHELAA) has determined that there is adequate capacity to accommodate Rushmoor’s share of the HMA’s objectively assessed housing need, with a small surplus of around 850 units over the Plan period. This is sufficient to allow some flexibility should some sites for any reason not be delivered as anticipated. However, given the tight urban nature of Rushmoor, and the fact that much of the land outside the settlement boundary is subject to nature conservation designations or is in military ownership, there is no opportunity to increase housing delivery beyond this level to assist the HMA partners with meeting any unmet need. Work is underway to secure a Memorandum of Understanding between the three authorities reflecting this position on meeting housing need.”
2.12 Rushmoor has identified a requirement of 7,850 dwellings over its emerging Local Plan period of 2014-2032, based on the SHMA (2016) requirement of 436dpa. Within the draft submission document it also identifies land for 8,737 dwellings, a significant increase on the 2015 SHLAA. However, it is of note that Rushmoor has historically not been able to meet its share of OAHN, previously claiming in its Preferred Approach that it may have a shortfall of 1,600 dwellings to be met elsewhere in the HMA. It should also be noted that in the last two monitoring years there has been a shortfall in housing completions with just 282 dwellings being completed in 2015/16 and 212 being completed in the previous year. In other words, if past performance is any guide, there is little reason to be confident that Rushmoor will be able to meet its OAHN (even it remained at the low level estimated in the SHMA).
Surrey Heath Borough Council
2.13 Surrey Heath Borough Council adopted its Core Strategy in February 2012, for the period 2011- 2028. However, it has also begun the initial stages of producing a new Local Plan that will provide an updated spatial strategy for the Borough through the beginning the Call for Sites process.
2.14 Surrey Heath has been using a requirement of 382dpa OAHN as indicated in the SHMA (2016), however the Council recognises that at present it is not meeting its housing needs, with a five year housing land supply of 4.54 years for 2017-2022. On the requirement side the Council has identified that once a 5% buffer and backlog is accounted for, 489 dwellings will be required for each year of the five year period or 2,445 dwellings over five years. Meanwhile, on the supply side there is land for 2,220 dwellings over this period, which is a shortfall of 225 dwellings.
2.15 Most recently Surrey Heath recorded delivering just 305 net additional dwellings for the monitoring year 2015/16 and 187 for 2014/15, suggesting an increase in the shortfall of housing supply.
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Meeting Housing Needs across the HMA
2.16 As mentioned above, Hart’s proposed Plan has provided enough housing to meet its requirement figure exactly, but this gives little flexibility if all the elements of supply do not come forward.
2.17 In its most recent monitoring report (2015/16) Hart District Council has set out all Duty to Co- operate activity in which it was involved over that monitoring year, including for housing requirements and supply. It was identified in this that Rushmoor previously claimed to have a shortfall of supply for 1,600 dwellings against its requirement (although since then this is purportedly resolved) while Surrey Heath maintains that it will be unlikely to be able to meet its OAHN due to environmental constraints and are under no obligation to review its Green Belt.
2.18 It is clear (even if one accepted all the underlying assumptions in the current evidence) that Surrey Heath may require assistance from the other authorities in the HMA in order to meet its housing requirement if it cannot find enough sites in its Call for Sites process. Both Hart and Rushmoor (which has consistently believed it cannot meet its need, and has very low rates of development) may therefore need to find additional sites in its authority areas to meet these needs. There is no evidence this issue has been properly considered.
2.19 Furthermore, this is the position based on the OAHN figures from the Wessex Economics SHMA, which our analysis shows is deficient in a number of areas. Our OAHN calculations show that delivery of up to 1,737 dpa would be needed in the HMA just to stabilise affordability at the current level to 2022, a significant 537dpa increase on the concluded OAHN of the SHMA. This increase in housing needs across he HMA will place significant pressure on Rushmoor, who are only just meeting their own needs and Surrey Heath who cannot meet the SHMA’s concluded OAHN as it is. As such it is clear that Hart will be facing significant unmet housing needs pressure from its neighbouring HMA authorities.
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3.0 Sustainability Appraisal
3.1 The Council has concluded in the Sustainability Appraisal of the Hart Local Plan: Strategy and Sites (April 2017) (“the SA”) that Option 2 (delivery of small sites and Murrell Green) is the preferred approach as assessed in the SA.
3.2 The purpose of this section of the report is to unpack how this conclusion has been reached and consider whether this conclusion represents a justified and evidenced housing development choice for Hart District. Defining reasonable alternatives
3.3 The PPG (ID11-018) requires that different realistic and deliverable options for policies within the plan are tested, with the PPG setting out “They must be sufficiently distinct to highlight the different sustainability implications of each so that meaningful comparisons can be made.” The SA is required to set out why those reasonable alternatives were chosen. In terms of housing policies for a plan this means testing: 1 Reasonable alternatives on the quantum of development (i.e. the housing requirement); and, 2 Reasonable alternatives on the distribution of development (i.e. the spatial strategy and combination of site allocations to be made).
3.4 In Hart, the SA only tests the proposed housing requirement figure of 485 dpa. It does not rule out lower growth (para 6.2.6) or higher growth relating to potential unmet needs (para 6.2.7) but goes on to set out (box 6.3) that any higher or lower growth options are considered ‘unreasonable spatial strategy options’. This is on the basis that: 1 Any option involving providing for a level of growth below the OAHN figure (which the SA states as 382dpa) would be contrary to the NPPF in the context that the SA work has “concluded that in strategic terms, no overriding constraints have been identified that would prevent the Council from meeting OAHN”; 2 Any option delivering significantly below the housing requirement would be inconsistent with the positive approach in Hart’s housing policies of delivering more affordable housing; 3 Any option involving high growth through delivery of two or more urban extensions as these were less ‘popular’ in previous public consultations; and 4 Any option involving very high growth through delivering both new settlement options, due to potential issues with deliverability.
3.5 Firstly, it is considered that, as set out above in Section 2.0 of this report, the SA misdirects itself in respect of what figure should be cited as the objectively assessed housing need (OAHN). Whilst the SA refers to OAHN as that in the SHMA (382dpa) and the housing requirement as being a “policy-on” housing target figure (485 dpa), in definitional terms and as clarified in the high courts, the higher affordable housing needs derived figure should be the one described as the OAHN, with the lower figure (derived without reference to affordable housing need) not being consistent with the requirements of the framework nor the PPG. This is established by our analysis in Section 2.0 of this report. The implication for the SA is that this would confirm a lower figure than 485dpa is unreasonable, but also impacts upon how the SA has assessed deliverability and flexibility with the starting assumption that 485 dpa housing target figure does “build in some flexibility” above OAHN (para 6.2.8) is actually incorrect.
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3.6 Secondly, the housing requirement reasonable alternatives appear to have been constrained by the results of earlier public consultation (i.e. not looking at higher growth delivering 2+ urban extensions) rather than due to any measure of what may be a sound and reasonable planning outcome. The artificial narrowing of reasonable alternatives by reference to ‘popularity’ could simply reach a position whereby the most sustainable option is rejected as unreasonable because of a level of apparent public objection. In the event that the OAN and/or housing requirement increases in the future, it may be necessary for Hart to deliver ‘higher growth’ and a combination of urban extensions may be the most sustainable means of doing that, irrespective of popularity. Such options remain reasonable to test, and the SA should do so. To have not done so is clearly unsound.
3.7 The options that the SA does arrive at are set out in SA Table 6.3. The six different options for delivering “in the region of the housing target” (para 6.5.2) comprise different combinations of potential sites (i.e. different spatial strategies), including combinations of two new settlement options, three larger urban extension options and an option comprising a range of ‘small site’ urban extensions. Those ‘small sites’ appear to have been chosen from a wider pool of potentially suitable sites as identified in the SHLAA, but without the SA explaining why and/or whether individually those sites could contribute sustainably to housing growth as part of other options. Overarching approach
3.8 The overall approach of the SA has been to assess six alternative distributions of housing development (‘options’) against a framework of 11 sustainability topics. The assessment is done on a relative basis ranking the six options in terms of performance, also highlighting where an option will include likely ‘significant effects’ either positive or negative. The relative approach to ranking performance means that the SA arrives at no assessment or conclusion on the overall performance/sustainability of each option (as confirmed in the Non-Technical Summary – page 8). This is in conflict with the PPG (ID11-018) requirement for the SA to:
“…outline the reasons the alternatives were selected, the reasons the rejected options were not taken forward and the reasons for selecting the preferred approach in light of the alternatives. It should provide conclusions on the overall sustainability of the different alternatives, including those selected as the preferred approach in the Local Plan.” (Our emphasis)
3.9 This relative ranking approach also makes it difficult to distil the scale of difference between the alternatives as scored within the findings (i.e. whether the difference between the option ranked first and the option ranked second is very small or very large) and, therefore, the degree of weighting placed on a ranking in the assessment and/or the degree of weighting placed on different topics.
3.10 By way of example, below illustrates how the preferred option (Option 2) performs worse than Option 3 (Grove Farm and Murrell Green) on an average ranking across all 11 topics (assuming all topics are equally weighted). Option 2 also scores similarly to Option 5, even if a greater weighting is given to the topics in which ‘significant effects’ could arise.
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Table 3.1 Average rankings of alternatives appraisal findings
Categorisation and rank Option 1 Option 2 Small sites Option 4 Small sites Option 3 Option 5 Grove Farm Owens Option 6 M’ Green Grove Farm Pale Lane Owens Farm Winchfield (Preferre M’ Green M’ Green Farm M’ Green d Option) Topic Pale Lane Average rank of 3.7 2.1 1.7 2.1 2.1 2.4 all 11 topics Average rank of three 5.3 2.3 2.7 2.7 2.3 4.0 ‘significant effect’ topics
Source: SA of Hart Local Plan: Strategy and Sites
3.11 Whilst the conclusion of the SA on reasonable alternatives is that differentiating between Options 2 to 6 is “difficult” and that “there’s no single stand out option” the assessment clearly appears to rank Option 3, on an overarching basis across all topics, as relatively better performing - albeit Option 2 and Option 5 could similarly be said to rank well. The SA’s approach fails to provide conclusions on overall sustainability with the assessment that is undertaken suggesting on an overall basis a different conclusion on the most sustainable option might be reached from that in the SA. Appraising the alternatives
3.12 The appraisal of the reasonable alternatives is substantively contained within Appendix 3 of the SA. It utilises the above overarching approach of relatively ranking each option against each topic. However, this is not performed in any codified or scored way, but appears to be formed simply from a subjective, and in some cases relatively arbitrary, review of the potential impacts. In a number of areas, the logic behind the SA’s subjective ranking appears to be unclear at best and faulty at worst. In particular, we have focussed on the assessment undertaken in respect of Berkeley’s site at Grove Farm which is included within Options 1 and 3, with Option 3 (Grove Farm and Murrell Green) ranking relatively better.
Deficiencies in the Grove Farm assessment
Biodiversity and provision of SANG
3.13 On the biodiversity topic, the SA ranks Option 3 as second best behind Option 4, essentially ranking Owens Farm as better than Grove Farm (the only difference being those sites between the two). It is not made explicit why, but it is noted that for Owens Farm, the assessment acknowledges that, despite being beyond the 5km zone of influence, it has potential to need deliver or contribute to SANG, but that potential exists to provide ‘strategic SANG’; being SANG with spare capacity. On a similar basis, the Grove Farm proposals, whilst being within the SANG 5km zone, includes delivery of SANG through the extension to Edenbrook Country Park. The SA acknowledges this, but does not acknowledge that that mitigation would also provide excess SANG capacity with wider benefits. This is a material error that would be evident from the SANG proposed in the current application for Grove Farm.
3.14 In addition, the SA acknowledges that provision of smaller sites (as in the preferred option) would not “(in the most part) deliver SANG)” and ranks those options lower accordingly, which given biodiversity is a topic with potential significant effects should have some significant
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bearing on the overall assessment of the preferred option. However, the Council in its response to the SA and its text on the choice of preferred option (para 8.2) simply downplays this assessment of Option 2 stating it is “confident that sufficient SANG can be provided” without providing any further evidence for this.
Housing delivery
3.15 On the topic of housing, Option 3 is ranked as performing marginally worse than Options 2, 4 and 5. The rationale behind this is that the total housing delivery of 10,134 dwellings under this SA constructed option would not deliver the housing requirement of 10,185 dwellings. Despite the SA constructing all reasonable alternatives to broadly deliver the housing target, it then scores options down if they do not. No apparent consideration is given to the potential to augment any scenario with further suitable small site in order to achieve the balance the SA appears to target in terms of: 1 Delivering a sufficient quantity of housing over the plan period; 2 Delivering it in a trajectory that is robust and can help maintain a 5YHLS; and 3 Delivering it in a spatial pattern that can help meet local housing needs.
3.16 In this respect the SA presents a false choice for Grove Farm, which could simply be made to be on a par in ranking terms by an option that also includes a small number of suitable small sites alongside the Grove Farm site within an overall strategy. In terms of delivery, the SA concludes that a package of smaller sites is supported as they are likely to be inherently ‘deliverable’ albeit the SA does not acknowledge the fact that often smaller sites face larger constraints on viability and delivering affordable housing.
Transport impacts and accessibility
3.17 On the topic of traffic, the Grove Farm site is described as being “somewhat distant from the strategic road network, and there could well be rat-running in the westward direction, through Dogmersfield, potentially leading to congestion at junctions.” Detailed transport modelling work has been undertaken as part of the application for the Grove Farm site and this is before the LPA. This evidence does not indicate that the above concerns around rat-running and congestion are in anyway founded. This is therefore an error in the SA.
3.18 It appears that the above unfounded conclusion is the substantive reason for the ranking then made that places Option 2 above Option 3. The summary states “On balance, Option 2 is judged to perform best as it would not involve a strategic urban extension at Grove Farm… which [is] associated with notable issues”; the only such ‘notable issue’ identified being the one set out above. Conversely, Option 2, with its reliance on many small sites, some in locations less suitable to promoting active or sustainable modes of transport compared to Grove Farm on the edge of Fleet, would suggest the rankings should be reversed. Reasons for selecting preferred approach
3.19 As set out previously, the SA sets out an overall set of rankings for the six options across the 11 topics also providing a summary and conclusions. The SA itself does not, however, make a conclusion on the overall ranking, the overall sustainability or the ‘best’ option, simply concluding that Option 1 performs least well, but the remaining five alternatives are more difficult to differentiate.
3.20 The Council, within the SA, set out its preferred option as Option 2, but fundamentally appears to downplay the potential significant impacts upon biodiversity of the option and also the role it
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would have in supporting growth at the existing larger communities in the District. The reasons do not appear to be substantively rooted in the assessment made in the SA. Conclusion on SA
3.21 The Hart Local Plan has already selected a preferred option and, therefore, there needs to be sufficient justification as to why that option has been chosen over and above others. At its simplest level the purpose of the SA is therefore to appraise and demonstrate why ‘this site’ is preferred over ‘that site’. The PPG sets out in respect of the clarity and level of detail required of the SA that (ID11-009):
“The sustainability appraisal should only focus on what is needed to assess the likely significant effects of the Local Plan. It should focus on the environmental, economic and social impacts that are likely to be significant. It does not need to be done in any more detail, or using more resources, than is considered to be appropriate for the content and level of detail in the Local Plan.”
3.22 However the SA does not allow a conclusion on the likely significant effects of choosing ‘this site’ over ‘that site’ because: 1 The reasonable alternatives adopted already pre-determine collections of sites and locations and then rigidly adhere to them. There is no assessment of whether hybrid options or augmenting strategic sites with individual small sites could achieve better and more sustainable outcomes (as highlighted by the ranking on Option 3 for housing delivery, because the pre-set scale of the reasonable alternative, did not quite meet the housing requirement it is meant to); 2 The overarching approach is to relatively rank options, and not to provide an overall conclusion or scoring on sustainability. There is no clarity on how factors and topics should be weighted and what is important to the overall strategy; nor as to the scale of significant positive or negative effects. This is contrary to PPG ID11-018 which sets out “The sustainability appraisal should predict and evaluate the effects of the preferred approach and reasonable alternatives and should clearly identify the significant positive and negative effects of each alternative”. As this is not provided no such conclusion on overall sustainability can sensibly be drawn; and 3 The SA, while flagging many of the significant effects and issues, does not provide sufficient detail to distil across the basket of 11 indicators, which sites are the most appropriate strategy, whilst the Council’s conclusion contained as the section of the SA on establishing the ‘preferred option’ is similarly agnostic as to the significance of effects and does not evidence how mitigation (for example strategic SANG – which the Council’s sum response on mitigation is that it is “confident sufficient SANG can be provided”) actually affects, on balance, the risks of significant effects.
3.23 Ultimately, we consider that the SA does not adequately demonstrate that Option 2 is the most appropriate strategy, when considered against the reasonable alternatives, as required by paragraph 182 of the Framework.
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4.0 Housing Supply
4.1 This section assesses the housing supply element of the draft Hart Local Plan: Strategy and Sites 2011-2032. This involves looking at the Council’s assumed housing trajectory over the Plan period and from what elements of supply they expect houses to be delivered from (i.e. strategic allocations, smaller allocated sites, windfall sites etc.). There are four major strategic sites included in the draft Local Plan under Policies SC1-SC4. A review of the strategic sites in terms of their individual lead-in and delivery rates that could be achieved from both the Council’s and Lichfields’ perspectives is provided. Hart District Local Plan: Strategy and Sites The Local Plan Trajectory
4.2 The Council has set out its projected housing trajectory, starting with past completion in 2011/12 and then setting out for each year of the emerging Local Plan a housing completions trajectory including outstanding permissions, windfalls and Local Plan allocations (Figure 4.1). Significantly, this indicates a housing shortfall from 2022/23, meaning that the Plan will fail to maintain a rolling five year housing land supply over the whole Plan period. Grove Farm can help plug this shortfall.
Figure 4.1 Hart Local Plan Housing Trajectory
Source: Draft Hart Local Plan Strategy and Sites 2011-2032 Regulation 18 Consultation (April 2017)
4.3 The above indicates that the Council expects to exceed its stated objectively assessed housing need (OAHN) of 382dpa for most years of the Plan period (with the exception of 2024/25 and 2031/32) and exceed its stated annual requirement of 485dpa for 8 of the 15 remaining Plan years.
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4.4 The Council also expects to achieve approximately 850 dwelling completions in the year 2020/21, and for three consecutive years achieve housing completions over 700 between 2019/20 and 2021/22. This compares with 700 dwellings completed in 2015/16 a culmination of a high delivery of 230 dwellings on Queen Elizabeth Barracks site alongside contributions from completions on a wide range of other sites, coming forward all at the same time, illustrating how such a varied pool of sites delivering at the same time can help to boost completion rates.
1. Flexibility
4.5 The stated housing requirement over the Plan period equates to 10,185 which includes an OAHN of 382dpa and an uplift to assist in meeting a need for affordable homes2. The Council has accounted for a total supply of 4,881 new dwellings in the Plan period, after taking into account the 5,304 dwelling completions that happened between 1st April 2011 and 31st January 2017 (Table 4.1).
Table 4.1 Housing Supply of Hart District 2011-2032
Element of Supply Number of Dwellings Completions (1st April 2011-31st January 2017) 2,160 Homes with Planning Permission (1st April 2011-31st January 2017) 3,144 Previously Developed Land 210 Strategic Sites (Policy MG3 and Policies SC1-SC4) 3,720 Extensions to smaller settlements (Policy SC5) 611 Rural Exception Sites 50 Windfall Allowance 290 Total 10,185
Source: Draft Hart Local Plan Strategy and Sites 2011-2032 Regulation 18 Consultation (April 2017)
4.6 The Council has therefore set its supply to be exactly equal to its requirement. However, this is predicated on the wholly unrealistic assumption that all of these aspects will definitely come forward within the period 2011-2032; for example, that not even a proportion of sites with planning permission yet to be implemented will lapse or that any of the components might not materialise in the timescales of the plan. There is also no evidence as to why housing supply cannot be increased to provide further flexibility. Therefore it can be considered that the Plan does not have sufficient flexibility to adapt to rapid change, as is required under paragraph 14 of the National Planning Policy Framework (NPPF) where it is stated:
‘Local Plans should meet objectively assessed needs, with sufficient flexibility to adapt to rapid change, unless:
Any adverse impacts of doing so would significantly and demonstrably outweigh the benefits, when assessed against the policies in this Framework taken as a whole; or
Specific policies in this Framework indicate development should be restricted.’2. Five Year Housing Land Supply 2016 to 2021
4.7 Lichfields’ initial review of HDC’s stated supply position from the Hart Five Year Housing Land Supply (at 1st April 2016) (2nd August 2016) has identified the below sites which we consider should be omitted or that their total supply in the next five years is reduced.
2 We identify in Section 3.0 of these representations why this approach is flawed.
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Large Site Planning Permissions Land at Watery Lane
4.8 This site has the benefit of outline planning permission for 300 dwellings. A discharge of condition application was registered on 12 August 2016 but remains undetermined and only covers a small number of conditions on heritage/archaeology (out of several). A Reserved Matters application was also registered in February 2017 for all 300 dwellings, submitted by the housebuilder Martin Grant Homes. It is therefore assumed that the site is likely to be delivered by a single housebuilder and using an average delivery of c.50 units per annum, this scheme would take circa 3.5 years to deliver the Council’s assumed 180 units within the five year period, by 2021. This would require first completions on site by October 2017 which allows only 5 months for approval of reserved matters, discharge of all pre-commencement conditions, and opening up works. It is considered this is overly optimistic, and it will likely take a year minimum from reserve matters approval to first delivery (as is typical for a scheme of this size). Based on this we consider only c.140 dwellings will be delivered in the five year period, compared with the Council’s assumed 180 units, reducing supply by 40 units.
Small Site Planning Permissions Land at Kingfisher Dry Cleaners and Hook Barbers
4.9 On this site, planning permission was extended until 18th October 2016 under application ref. 13/01562/EXT but appears to have since lapsed without having been implemented (with no evidence of requisite conditions being discharged and no development activity apparent from the site). We consider the 5 dwellings from this scheme should be excluded.
Deliverable Sites North East Hook
4.10 This site has outline planning permission for 550 units which were granted on 21 November 2016. The supporting Environmental Statement assumed a five year construction programme (2015 - 2020), equating to 110 dwellings per annum. Two separate pre-application enquiries have been made in relation to future Reserved Matters applications for 250 and 300 homes respectively (pursued by two separate developers). Following this, a reserve matters application for the phase of 300 dwellings was registered in May 2017. No planning conditions appear to have been discharged as yet. If the scheme is to deliver the Council’s assumed 348 units at 110 units per annum, the first home would need to be delivered at February 2018. This allows 10 months only for approval of reserved matters across both phases/parcels, discharge of all pre- commencement conditions and opening up works. It is considered this is overly optimistic and that it will likely take a year minimum from reserve matters approval to first delivery on each parcel (as is typical for a scheme of this size), which would likely mean delivery of first homes late in 2018. Based on this we consider only c.265 dwellings will be delivered in the five year period, compared with the Council’s assumed 348 units, reducing supply by 83 units. Even then, this may be optimistic if a reserve matters application on the 250 unit parcel is not forthcoming relatively soon.
3. Strategic Housing Delivery
4.11 In total the four proposed allocated sites from the emerging Local Plan below (Policies SC1-SC4) are expected to deliver 3,720 dwellings over the Local Plan period. Sun Park is the first site expected to deliver completions, in 2020/21, with Hartland Park to follow in 2021/22. Murrell Green and land at Cross Farm are both expected to start delivering dwellings in 2023/24.
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Lead-in Times and Delivery Rates for New Settlements
4.12 Lichfields has researched the lead-in times and delivery rates of large strategic sites in its Insight piece, ‘Start to Finish: How Quickly do Large-Scale Housing Sites Deliver?’3 which was published in November 2016. Findings and case studies are used below to assess how quickly sites allocated in the draft Hart Local Plan can be delivered.
4.13 In terms of lead-in times, the research shows that the average time for sites of 1,500-1,999 dwellings and over 2,000 dwellings to gain planning approval and deliver the first homes on site is about 5.3 years and 6.1 years. The research also shows that without a live planning application, large sites are unlikely to contribute to five year housing land supply. The lead-in time for larger sites can be sped up through plan-making, development briefs and/or master planning as well as through fast-tracking a first phase alongside an application for the wider site.
4.14 It is important to consider new settlements delivery rates separately from other sites (including those of a similar scale but which are urban extensions). This is because the development of a new settlement not only requires new infrastructure and community facilities to be built, but it also requires the creation of a new market to buy the houses in an area which is not contiguous with any established or known major settlements. The time taken to first houses being completed on the site could also therefore be extended compared to other sites as the developer will have to provide key infrastructure before building homes.
4.15 Some examples of new settlements and their delivery rates include Cambourne in South Cambridgeshire, which at 4,343 dwelling is similar in scale to the anticipated eventual size of Murrell Green. Its highest delivery rate was 620 dwellings in year five, with an average delivery rate of 239dpa over the 16 year build period within which 3,819 homes have been built. Ebbsfleet in Gravesham/Dartford is another example of a new settlement for 15,000 homes, which has to-date delivered 398 dwellings over five years- equating to a delivery rate of 80dpa. Finally, Wixams in Bedford is a new settlement development for 4,500 homes. To date, 827 dwellings have been built over a 7 year period, or 118dpa.
4.16 Dickens Heath in Solihull is another new settlement for 1,672 homes which has delivered at a rate of 121dpa over the 14 year build period. Great Denham in Bedford is a new settlement for 1,450 homes, which over a 12 year period has built out 835 dwellings, or about 70dpa. Finally Red Lodge in Forest Heath is a new settlement for 1,667 homes, which has built 1,192 dwellings over an 11 year period or 108dpa. These three sites are comparable to the scale of development proposed at Murrell Green over the Plan period.
4.17 Over the construction period of all of the above examples, a high number of houses were delivered in the initial years; however this was followed by a considerably reduced delivery rate for a number of years. The case studies here also have had peaks and troughs in their delivery rates over their whole construction period, as such a steady increase in delivery and/or with the same number of houses being delivered over a number of years is not necessarily an accurate representation of new settlement delivery rates. This can be largely attributed to the initial site preparation, particularly infrastructure delivery, which would have allowed a high number of houses to come forward in initial stages.
4.18 Cases of higher delivery can also be related to there being a higher number of outlets (i.e. housebuilders) delivering on the site and also where affordable housing is also being delivered (effectively creating another sales outlet). This is because they are selling different products and
3 Start to Finish: How Quickly do Large-Scale Housing Sites Deliver? November 2016 http://lichfields.uk/media/1728/start-to- finish.pdf
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therefore can deliver more houses without saturating the market. Government financing of infrastructure has also been proven to improve delivery rates whereby there has been a reduced delay between the phases of a development. Slower rates of delivery over the construction period can be attributed to allowing for market absorption and if key infrastructure needs to be funded and/or delivered before more houses on a site can be delivered (as is often included within the conditions of a planning permission).
Policy SC2 Murrell Green – 1,800 homes
4.19 This proposed allocation is located to the east of Hook and is a greenfield site for a new settlement including 1,800 dwellings, a primary and secondary school, employment land, a local centre and green spaces. The site consists of a number of land parcels that were identified in the SHLAA (2016) and being promoted by the ‘Winchfield Consortium’ (see Figure 4.2). The Council had been previously considering and assessing a new settlement around Winchfield station which was being promoted by Barratt, albeit recently in the process this has switched to the preferred site for such a development being Murrell Green. This means there has been a limited amount of technical work and assessment done to date in support of the site, which is further reflected in the Council’s report to Cabinet of 9 February 2017 which indicates that a separate DPD may be needed to bring forward the site so as not to delay the Plan process (i.e. allowing the Council to address the detail of delivery at a later date). The key constraints of the site are ecological (the Thames Basin Heath SPA) and transport.
4.20 Under Policy SC2, the Council set out that delivery will be phased from 2023/24 onwards. The Winchfield Consortium set out a phasing approach4 for the eventual delivery of 4,883 units over three phases, with the belief that 1,800-2,400 of these dwellings can be delivered in the Plan period. This includes a first phase of 1,110 dwellings, primary and secondary school, village centre and employment land as well as a second phase of 2,652 dwellings and a third phase of 1,101 dwellings.
4.21 In respect of the possible lead-in times of Murrell Green, it appears that there is some degree of disparate ownership across the site and wider land promoted. It is understood there are at least 9 land owners across the area identified by the Local Plan and whilst there is a loose ‘consortium’ of sorts, this is not borne out by a formal collaboration agreement. When comparing Figure 4.2 to Figure 4.3, there is also some disparity in where development will take place between the Council and the current land promoters whereby although there is some crossover of the Winchfield Consortium land and the Council’s schematic framework, there is not an exact fit – some land also appears to be unregistered. This suggests that either negotiations may have to be entered into with other landowners to develop the land set out by the Council (or via CPO routes) or that the promoters are looking to develop a different part of land. This could involve different housing delivery rates from what the Council has set out, but will also inevitably require complex legal agreements and equalisation agreements to be addressed before delivery. The separate DPD that will need to be produced, presumably before any planning application can come forward and will require additional time to be built into the delivery programme. By way of example as a comparator the ‘Fareham Local Plan Part 3: the Welborne Plan DPD’5 took almost four years following adoption of Fareham’s Core Strategy in 2009 to put in place for that new settlement scheme; as at 2017, some eight years following its allocation, the Welborne site is still to deliver any new homes.
4 Winchfield Concept Document, available at: http://wehearthart.co.uk/wp-content/uploads/2015/12/Winchfield-Concept- Document-FINAL_SPREADS_150223.pdf 5 http://www.fareham.gov.uk/planning/localplan.aspx
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4.22 The Winchfield Concept Document also sets out that the land is being promoted on behalf of the landowners; therefore it seems likely that further time will be needed before the first houses can be delivered to find developer(s) to build them out. Finally, as a new settlement located on a rural greenfield site remote from any existing major settlement, various pieces of infrastructure such as transport networks and utilities will need to be installed before the first homes can be delivered whilst the absence of major social infrastructure in early phases is a further factor that can slow the rate of development.
Figure 4.2 Land promotion sites included in the Winchfield Consortium Concept document
Source: Winchfield Consortium
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Figure 4.3 Schematic Development Framework for Murrell Green
Source: Draft Hart Local Plan 2011-2032 Regulation 18 Consultation
4.23 Applying the average lead-in times for sites over 2,000 dwellings would mean that in order to deliver the first homes on site in 2023/24 (as the Council set out under Policy SC2), a planning application would have to be submitted at the absolute latest in early 2018 (and likely pre-dating any separate DPD for the site). This would also require the application to run smoothly through the process and any serious constraints to the site being resolved early on.
4.24 Murrell Green would have to average a delivery rate of 200dpa from 2023/24 to the end of the Plan period in order to deliver the full 1,800 dwellings allocated in the emerging Local Plan. Using the case studies for larger new settlements set out above, although Cambourne has achieved an average delivery rate in excess of 200dpa, the other two examples have been much lower (118dpa and 80dpa) suggesting huge variation in sites of this size and therefore that a number of individual factors can impact on the delivery rates of a larger new settlement. For Murrell Green, the delivery rate could be affected by the infrastructure required to bring each phase of the development forward, how many housebuilders are on-site and what quantum of affordable housing is also being provided. If considering Murrell Green against just the 1,800 dwellings allocated in the Plan period, smaller sites of a similar scale indicate a delivery rate between 80dpa and 120dpa, further indicating that the full 1,800 dwellings will not be delivered in the Plan period.
4.25 It should be taken into account that the developer(s) of the site will likely be looking at the long- term vision of the site and therefore it may be built at a reduced rate to allow for market absorption of the houses being built. Furthermore, considering the first phase is for just 1,100 dwellings, it is possible that there may be delay between phases due to the planning application process and the final 700 dwellings required in the Plan period are delayed. It should also be noted that although it is unclear how many developers could be involved in the site there would need to be at least four to sustain 200dpa delivery rates.
4.26 Overall, there is significant doubt over the prospect of this development delivering 1,800 dwellings within the plan period and particularly whether a start on-site could be achieved by 2023/24 given the need to adopt the Local Plan, bring forward and adopt a separate and subsequent DPD for the site, submit and determine applications and then open-up a site of significant scale. Assuming delivery begins at the earliest by 2026/27 and delivery rate of
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120dpa rising to 200dpa is achieved over the remaining six years of the plan, then it likely that Murrell Green’s contribution to the plan trajectory will only total c.1,100 dwellings in the plan period, 700 less than the Council trajectory assumes.
Policy SC3 Land at Cross Farm – 100 homes for the elderly and 64-bed care home
4.27 This site is located adjoining to the south of Crookham Village and is allocated for a 64-bed care home and 100 homes for the elderly. It is considered that these 100 homes are Use Class C3 as they would count as ‘mainstream’ housing, while other development on-site would be for residents requiring higher levels of care in specially adapted accommodation and therefore is Use Class C2 and not included in the housing supply.
4.28 Under Policy SC3, the Council set the site out for development from 2023/24 onwards. An outline application for the site was validated by the Council on 6th January 2017 (App. No. 16/03400/OUT) which proposes the delivery of a 160 unit Care Village, a 64-bed care home and central facilities building. Policy SC3 also requires 40% of the homes for the elderly to be affordable, however the application sets out that all 160 dwellings will be market housing. There is no information as to why no affordable provision is included in the application. This means that this allocation will not be meeting the needs of the local population or complying with the emerging policies of the Local Plan.
Policy SC4 Sun Park – 320 homes
4.29 This site adjoins Farnborough to the north-west and was previously in use as an office development; however it has remained vacant since 2011. The site is allocated for 320 dwellings being phased from 2020/21 onwards.
4.30 A planning application was validated on 1st April 2017 for a full planning application for 323 dwellings on the site (App. No. 17/00771/FUL). Controversially it is proposed that all housing on site will be market housing, despite the draft allocation including a 40% affordable housing requirement. This position has been made using paragraph 20 of the NPPG, in regards to the Vacant Buildings Credit. This is a mechanism whereby the existing floorspace of a vacant building should be credited against the floorspace of the new development. In the case of Sun Park, the developer believes that if they replaced the current buildings with residential dwellings that total the same amount (or less) of floorspace, the Vacant Buildings Credit would mean they would not have to supply affordable housing. Although the underlying reasons for using Vacant Buildings Credit to not provide affordable housing at Sun Park are unclear, there are outstanding objections against the application relating to this and as such this may prolong the time it takes for houses to be delivered on the site as these issues are resolved. Lichfields’ research shows that sites of 100-499 dwellings take an average of four years to complete the planning process and deliver the first houses on site and as such first houses being delivered in 2020/21 looks increasingly unlikely.
4. Other Land Allocations for New Homes
4.31 Table 4.2 below sets out the sites included in the draft Local Plan under Policy SC5; however considering the size of the allocations at this stage it is not considered proportionate to assess their deliverability in the Plan period.
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Table 4.2 Housing Land Allocations in Policy SC5
Site No. of dwellings Hook Neighbourhood Plan Allocations 66 Cemex A, Eversley 105 Cemex B, Eversley 19 Land between Eversley Road and Firgrove Road, Yateley 88 Odiham Neighbourhood Plan Allocations 119 Plough Meadow, South Warnborough 18 Granary Court, South Warnborough 16 Granary Field, Long Sutton 10 Crondall Neighbourhood Plan Allocations 66 Land south of Riseley, Riseley 83 TOTAL 611
Source: Draft Hart Local Plan Strategy and Sites 2011-2032 Summary
4.32 Having assessed the strategic sites above, it appears likely that not all the houses in this part of the housing supply will come forward. More specifically, the development of a new settlement of 1,800 homes in the plan period at Murrell Green is optimistic. There are also concerns over the ownership of the land, the number of developers involved and how the current phasing plans will affect the number of homes being delivered. Evidence on lead-in times suggest Murrell Green will take longer than the Council anticipate to deliver its first homes, while delivery rates vary hugely for new settlements of this scale and are regarded to need at least four housebuilders in order to have an average output of 200dpa. It is considered c.1,100 dwellings could be delivered from Murrell Green in the plan period, causing a shortfall of 700 dwellings in the Council’s trajectory, which already has no flexibility in terms of ensuring sufficient supply to meet the proposed target. The overall shortfall is therefore likely to be even greater if appropriate headroom is applied to the trajectory.
4.33 Both land at Cross Farm and Sun Park have planning application submitted; however, they have also both put forward schemes with 0% affordable housing and as such are not compliant with the emerging policy. Not only could this prolong the lead-in time to the first homes being delivered, it also suggests lower delivery rates. Combined these factors could result in at least a proportion of the homes allocated at these sites to be delivered outside the Plan period.
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5.0 Other Policies
5.1 We have identified some further policies to which Berkeley objects. Policy MG6: Gaps between Settlements
5.2 This policy establishes gaps between settlements which should not be developed. The policy states that development of these gaps will only be supported where: a “it would not diminish the physical and/or visual separation of settlements; and b it would not compromise the integrity of the Gap either individually or cumulatively with other existing or proposed development.”
5.3 The proposed locations of the local gaps are identified on Figure 5 in The Spatial Strategy of the emerging Local Plan document. Grove Farm falls within the identified Fleet/Church Crookham to Crookham Village gap, the extent of which has not changed from that in Policy CON21 of the saved Local Plan polices.
Figure 5.1 The emerging Spatial Strategy for Hart
Source: Figure 5 The Spatial Strategy Draft Hart Local Plan Strategy and Sites 2011 - 2032
5.4 We do not consider that this policy is logical or meets the tests of the NPPF for a number of reasons.
5.5 Firstly, the gaps have been identified with regard to an emerging housing requirement figure which does not accord with paragraph 47 of the NPPF in meeting OAHN for market and affordable housing, i.e. development in these gaps is assumed to not be required to meet the housing requirement. However, as set out in the preceding chapters, the OAHN for Hart is actually substantially in excess of the emerging housing requirement and the housing trajectory
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will not deliver sufficient homes to even meet the emerging requirement, let alone OAHN. As such a gap policy which restricts any development in these gaps when housing needs are not being planned for is unjustified.
5.6 The NPPF (paragraph 182) requires Local Plans to be effective. However, it is clear that local gap polices in Hart have not historically been effective, and there is no reason to consider this one would prove to be. The emerging allocation for Cross Farm falls within the local gap between Fleet/Church Crookham to Crookham Village identified in Saved Policy CON21 (it is not clear from Figure 5 of the emerging Local Plan if the proposed gap has been amended to omit the Cross Farm development). However, the Council has allocated sites within these previously designated local gaps to meet housing needs. A further housing allocation on the western edge of Yateley is also clearly coming forward in a local gap designated under Policy CON21. It is clear that the local gap policies have not been an effective means of restricting development.
5.7 Equally, the local gap policy is not flexible. Paragraph 14 of the NPPF requires Local Plans to contain policies that are flexible enough to respond to rapid change. The local gap policy has proved itself to be inflexible in this regard as it causes a tension with the ability of the District to meet housing needs. The Moulsham Lane scheme was allowed on appeal in a strategic gap.
5.8 Finally, the indicative Fleet/Church Crookham to Crookham Village gap appears unnecessarily large. The gap between the west of Fleet and the northern most extent of Crookham Village falls very low in the identified local gap area and it is not clear why a gap continues so significantly further north of this point.
5.9 This policy is not effective or flexible. But more fundamentally, it is not justified to include a restrictive development policy when the emerging plan is not meeting its OAHN. Policy I9: Safeguarded land for Education
5.10 This policy safeguards 1.45 hectares of land adjacent to Calthorpe Park School, Fleet for educational use. This parcel of land falls within the Grove Farm development site and the delivery of this scheme could bring this land forward to allow the school to expand to meet any needs arising from the Hartland Park development and other development that will occur within the greater Fleet secondary school catchment. It is clear that the expansion of this school is integral to the wider development of Hart. Indeed, the Planning Committee report for the Grove Farm application apportioned great weight to this aspect of the scheme:
“The development also has a significant potential benefit to a possible Calthorpe Park School expansion because it unlocks land that could allow the school to expand to meet any needs arising from the Hartland Park development and other development that will inevitably occur within the greater Fleet secondary school catchment. This should be given great weight.”
5.11 Although we do not object to the substance of this policy, without the delivery of the Grove Farm scheme this land will not be gifted for expansion of the school.
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6.0 The benefits of allocating Grove Farm
6.1 A substantial number of benefits would ensue from the allocation and delivery of the Grove Farm scheme, some of which have already been set out in earlier sections of these representations. We set out below a summary of the development proposal along with its associated benefits to the District and the site’s sustainability credentials. Benefits
6.2 The scheme has a number of significant benefits which weigh heavily in the schemes favour:
Economic
A total capital investment of around £85 million, representing a large injection of private sector funding into the local economy;
Supporting 166 temporary construction jobs per year on average during a six year build or 99 FTE construction jobs;
An annual spend of over £11.6 million per annum from all 423 households proposed to local businesses and services, supporting an additional 120 jobs supported at local shops and services;
A financial contribution towards schools capacity in the local area and 1.54ha of land for a potential Calthorpe School expansion; and
New Homes Bonus payments of £.2.97 million over the four year period, £740,000 per annum in Council Tax payments and first occupation expenditure of approximately £2.33 million.
Social
Delivery of up to 423 dwellings, including 169 (40%) affordable housing. The delivery of a policy compliant quantum of affordable housing should be given great weight because the Council has not come close to meeting 40% affordable housing delivery in its annual completions;
The proposals will ensure the amenity of the area will be improved by the provision of extensive areas of new publicly accessible open space. This will include: a The provision of land for the delivery of a new community building within the site; b SANG as an extension to Edenbrook Country Park that will include surplus SANG for further development of c.150 dwellings; c Protection of gap to south of site between the proposed development and Crookham village; d Provision of land for expansion of Calthorpe Park School; e On site Public open space/children’s play facilities; f Parks, gardens and amenity greenspaces; and g Improvements to the local footway and cycle network and preservation of existing public rights of way.
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Environmental
The creation of a Site of Alternative Natural Greenspace (SANG) of approximately 11.12 ha; this is an overprovision of the SANG needed for this scheme;
Drainage and landscape works;
Retention of trees and hedgerows as far as possible;
Enhanced buffer planting along the southern site boundary; and
A 15m buffer to the Ancient Woodland on the southern boundary of the site. Sustainability
6.3 In addition to the substantial number of benefits arising from the scheme, the Grove Farm proposal also represents a sustainable form of development – and is suitable, available and achievable. The site is in close proximity to Fleet town centre, schools and a leisure centre. This has already been agreed by the Council who stated the following in the Planning Committee report for this application:
“The proposals can therefore be considered sustainable development, for which the NPPF presumes in favour. Taken as a whole, this is a material consideration such that determination of this application should be made other than in accordance with the Local Plan.” Summary
6.4 The Grove Farm development is a sustainable housing development which provides substantial benefits to the District. The following, final, section of these Representations sets out how allocation of this site would assist in ensuring Hart produces a sound Local Plan.
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7.0 Conclusions
7.1 For a Local Plan to be found sound it must adhere to the requirements of paragraph 182 of the NPPF, namely that it is:
Positively prepared – the plan should be prepared based on a strategy which seeks to meet objectively assessed development and infrastructure requirements, including unmet requirements from neighbouring authorities where it is reasonable to do so and consistent with achieving sustainable development;
Justified – the plan should be the most appropriate strategy, when considered against the reasonable alternatives, based on proportionate evidence;
Effective – the plan should be deliverable over its period and based on effective joint working on cross-boundary strategic priorities; and
Consistent with national policy – the plan should enable the delivery of sustainable development in accordance with the policies in the Framework.
7.2 We consider that a number of the emerging Local Plan policies do not accord with the above four points and would result in the plan being found unsound. Technical Studies
SHMA
7.3 The SHMA has under-estimated the OAHN of Hart District and thaw wider HMA by not correctly applying changing migration patterns between London and the South East, not making adjustments for market signals which could reasonably be expected to improve affordability and not satisfactorily addressed affordable housing needs. Lichfields has produced its own assessment of OAHN at Appendix 1 which shows that OAHN in Hart is significantly higher than evidenced in the SHMA, at 607dpa.
Sustainability Appraisal
7.4 The preferred option put forward in the Councils emerging Local Plan needs to be sufficiently justified over and above others. At its simplest level it is the purpose of the SA to appraise these options.
7.5 However, the SA does not allow a conclusion on the likely significant effects to be reached. The reasonable alternatives adopted already pre-determine collections of sites and locations and then rigidly adhere to them. The overarching approach is to relatively rank options, and not to provide an overall conclusion or scoring on sustainability. There is no clarity on how factors and topics should be weighted and what is important to the overall strategy; nor as to the scale of significant positive or negative effects. This is contrary to PPG which sets out the SA should predict and evaluate the effects of the preferred approach and reasonable alternatives and should clearly identify the significant positive and negative effects of each alternative.
7.6 Ultimately, the SA does not adequately demonstrate that Option 2 is the most appropriate strategy, when considered against the reasonable alternatives. Therefore polices informed by the SA are not based on a sound, policy complaint evidence base. ]
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Local Plan Polices
Policy SS1: Spatial Strategy: Scale and Distribution of Growth
7.7 This policy sets the housing requirement for the District between 2011 and 2032. However, this policy has not been positively prepared and nor is it effective as it does not meet the OAHN of the District as required by paragraph 47 of the NPPF.
7.8 An increase in the emerging housing requirement should be made from 10,185 from 2011 to 2032 to 11,713, some 1,528 units more than is currently being planned for. Grove Farm should then be allocated to meet this additional housing requirement.
Policy SC2 Murrell Green
7.9 There is significant doubt over the prospect of this development delivering 1,800 dwellings within the plan period and particularly whether a start on-site could be achieved by 2023/24 given the need to adopt the Local Plan, bring forward and adopt a separate and subsequent DPD for the site, submit and determine applications and then open-up a site of significant scale.
7.10 We consider that realistically only a total of c.1,100 dwellings in the plan period, 700 less than the Council trajectory assumes, can realistically be delivered.
7.11 Further housing allocations are needed to bolster the housing supply position of the trajectory and to ensure it can respond to rapid change as per paragraph 14 of the NPPF. Overall the housing allocations policies are not currently effective in this regard.
Policy SC3 Land at Cross Farm and Policy SC4 Sun Park
7.12 There is a fundamental question as to whether these policies are viable because both applications have come forward with no affordable housing provision. Until such a time as this issue is resolved it is unclear whether the schemes will deliver at the pace and times envisaged.
7.13 As per Policy SC2 above, the housing allocation policies are not flexible enough to deal with rapid change as required by paragraph 14 of the Framework.
Policy MG6: Gaps between Settlements
7.14 This policy is not justified, effective and is also inflexible. The policy is not justified because the gaps have been identified with regard to an emerging housing requirement figure which does not accord with paragraph 47 of the NPPF in meeting OAHN for market and affordable housing.
7.15 The policy is not effective because the emerging allocation for Cross Farm falls within the local gap between Fleet/Church Crookham to Crookham Village and another allocation falls within the Eversley to Yateley local gap. Equally, the local gap policy is not flexible enough to accommodate needs not anticipated in the plan as it has proved itself to be a tension with the ability of the District to meet housing needs, with schemes being allowed on appeal in designated gaps.
7.16 Finally, the indicative Fleet/Church Crookham to Crookham Village gap appears unnecessarily large and covers an area of land which is significantly larger than required to retain a gap between Crookham Village and Fleet.
7.17 We consider that the Fleet/Church Crookham to Crookham Village gap should be reduced to include just the land between Crookham Village and Netherhouse Copse.
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Policy I9: Safeguarded land for Education
7.18 Although we do not object to the substance of this policy, without the delivery of the Grove Farm scheme this land will not be gifted for expansion of the school. Grove Farm Allocation
7.19 The allocation of Grove Farm would have substantial benefits for the District and would also help to correct some of the issues we have identified with the emerging Local Plan. In particular, its allocation would: 1 put a further 423 homes into the trajectory towards meeting the Districts OAHN of 607 dpa 2014 to 2032, addressing the deficiencies of Policy SS1 which does not currently meet OAHN. 2 Introduce a significant portion of additional supply into the trajectory which adds greater flexibility to adapt rapid change, particularly if any other sites are slower to deliver or do not come forward at all. The scheme has been submitted as a planning application and there is no technical objection as to why it cannot be delivered. The scheme also has the ability to start to deliver within the next five years to bolster the five year housing land supply position. 3 Provide more than the required amount of SANG. Policy NE1: Thames Basin Heaths Special Protection Area is clear that mitigation measures will be required for all net new dwellings and must be delivered prior to occupation and in perpetuity. This means that the overprovision of SANG at Grove Farm is a substantial benefit because it can also help mitigate the impact on the SPA of other housing schemes which cannot themselves provide SANG, this in turn helps bolster the Councils trajectory by ensuring small windfall sites can be delivered in accordance with Policy NE1. 4 Ensure the delivery of the education land for secondary school expansion at Calthorpe Park School which is needed to meet future needs arising from the greater Fleet secondary school catchment area including Hartland Park. This was attributed significant weight by the Council in the Planning Committee report for the Grove Farm application.
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Appendix 1: OAHN Technical Note
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Review of Objectively Assessed Housing Need - Hart, Rushmoor and Surrey Heath
Our ref 12487/MS/BHy Date June 2017
Introduction 1.1 This note has been prepared by Lichfields on behalf of Berkeley Strategic Land Limited (“Berkeley”) in the context of Berkeley’s interests at Land north of Netherhouse Copse, Fleet. It reviews the current objectively assessment of housing need (“OAHN”) set out in the Hart, Rushmoor and Surrey Heath Strategic Housing Market Assessment 2014-36.
1.2 Lichfields considers there are a number of flaws with the approach adopted in the SHMA for the three authorities in the Housing Market Area (“HMA”). The remainder of this section considers the policy context for looking at OAN – in terms of the NPPF and PPG – and then reviews the SHMA itself. Whilst the focus is on Hart, given the issue of unmet needs, issues associated with Surrey Heath and Rushmoor are also considered.
2.0 Policy Context
National Planning Policy Framework 2.1 The National Planning Policy Framework (NPPF) outlines that Local Planning Authorities (LPAs) should positively seek opportunities to meet the development needs of their area (paragraph 14) and that in order to ‘boost significantly’ the supply of housing that they should: “use their evidence base to ensure that their Local Plan meets the full objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this framework…” (Paragraph 47). 2.2 The NPPF outlines the evidence required to objectively define housing needs within an area, setting out that Local Planning Authorities should (paragraph 159); “Prepare a Strategic Housing Market Assessment to assess their full housing needs…identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which;
Meets household and population projections, taking account of migration and demographic change;
Addresses the needs for all types of housing, including affordable housing…; and
Caters for the housing demand and the scale of housing supply necessary to meet this demand.”
2.3 Furthermore, the core planning principles set out in the NPPF indicate that a planned level of housing to meet objectively assessed housing needs (OAHN) must respond positively to wider opportunities for growth and should take account of market signals, including housing affordability (paragraph 17).
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Planning Practice Guidance 2.4 The Planning Practice Guidance (PPG) contains a section providing guidance on housing and economic development needs assessments. The PPG indicates that there is no one methodological approach or use of a particular dataset(s) that will provide a definitive assessment of development need (paragraph 005), but goes on to outline an overarching methodology for preparing need assessments in a transparent manner. The PPG identifies that an objective assessment of need should fulfil the following criteria:
Be proportionate and not consider purely hypothetical scenarios, only future scenarios that could reasonably be expected to occur (paragraph 003);
Be based on facts and unbiased evidence. Constraints should not be applied to the overall assessment of need (paragraph 004);
Utilise household projections published by the Department for Communities and Local Government as the starting point estimate of overall housing need (paragraph 015);
Consider sensitivity testing, specific to local circumstances, based on alternative assumptions in relation to the underlying demographic projections and household formation rates (paragraph 017); and
Take account of employment trends (paragraph 018), appropriate market signals including market indicators of the balance between the demand for and supply of dwellings (paragraph 019) and affordable housing needs (paragraph 029).
Hart, Rushmoor and Surrey Heath SHMA (November 2016)
Summary 2.5 The Hart, Rushmoor and Surrey Heath SHMA (November 2016) (“the SHMA”) concludes on OAHN for Hart of 382 dpa 2-14-36, and for the HMA 1,200 dpa, as shown in Table 1. This is based on the range of needs shown by the jobs-led scenario which shows growth of 1,200 jpa across the HMA, and a need for between 1,195 and 1,254 dpa.
Table 1 Concluded OAHN in the SHMA (dpa 2014-36)
Uplift to starting Uplift to starting Employment-led point for Starting Point point for Market Full OAHN needs (1,200 jpa) affordable Signals housing Hart 254 +15% (292) ~ 382 Rushmoor 280 +15% (322) 1,195-1,254 ~ 436 Surrey Heath 251 +15% (289) ~ 382 HMA 785 +15% (903) 1,195-1,254 +79 (864) 1,200
Source: Hart, Rushmoor and Surrey Heath SHMA
3.0 Demographic-led Needs 3.1 The SHMA uses the 2012-based SNPP, and states that it has updated this to take into account the 2013/14 Mid-Year estimates. This gives a starting point figure of 785 dwellings per annum for the Housing Market Area (HMA) over the period 2014-2036.
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3.2 The SHMA omits any analysis of the impact of additional in-migration from London which would support an upward adjustment to the official projections. This is considered in more detail below.
London 3.3 The London SHMA (2013) which underpins the Further Alterations to the London Plan (FALP) is based on the assumption that there will be less in-migration to London and more out- migration from London, as a result of improvements in the economy outside of London following the recession and the subsequent changes to migration this will lead to. The figures adopted by the Greater London Authority (GLA), which in turn underpin the adopted Further Alterations to the London Plan (FALP) assume that outflows from London will increase by 5% and inflows will decrease by 2%, and these assumptions have been ‘signed off’ by the FALP Inspector, hence accepting this will be the case. Indeed recent migration figures show net migration from London to the wider South East increasing in recent years, supporting the SHMA’s assumptions. 3.4 This will have an impact on authorities across the South East (and arguably further afield), given that housing needs will therefore manifest themselves in those areas (and not in London). Where areas fails to provide sufficient housing, there is likely to be an increase in unmet need as housing needs ‘fall through the gaps’ between local authorities. Such an adjustment represents a ‘specific local circumstance’ highlighted in the PPG which needs to be accounted for when considering the demographic-led needs. 3.5 The 2012-based SNPP (which forms the basis of the SHMA) draws upon internal migration trends observed between 2007/08 and 2011/12, i.e. during/immediately post-recession. Therefore it would be reasonable to apply the GLA’s projected change to migration patterns to the flows projected for local authorities in the 2012-based SNPP. This approach would ensure that migration in the HMA reflected the assumptions in the SHMA. 3.6 Looking at migration in recent years, just over 10% of in-migration to Hart and Rushmoor has been from London, and this is slightly higher (at 14%) for Surrey Heath. Around 8-10% of all out-migration from the HMA is to London. Therefore the impact of the GLA’s assumptions will clearly need to be taken into account within this area, as less migration to London and more migration from London will lead to increased population growth and housing need in the HMA. The failure of the SHMA to address this is a significant omission.
4.0 Market Signals 4.1 The PPG sets out a clear two-stepped process to addressing market signals within the calculation of OAN: 1 Firstly, to determine whether a market signals uplift is necessary. This is set out in PPG ID2a-019 within the first sub-paragraph as follows: “Appropriate comparisons of indicators should be made… A worsening trend in any of these indicators will require upward adjustment to planned housing numbers compared to ones based solely on household projections.” 2 Secondly, when a market signals uplift is required, to identify at what scale this should be set, with guidance advising that it should be set at a level that could be expected to improve affordability. This is set out in PPG ID2a-019 within the second and third sub-paragraphs as follows:
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“In areas where an upward adjustment is required, plan makers should set this adjustment at a level that is reasonable… they should increase planned supply by an amount that, on reasonable assumptions and consistent with principles of sustainable development, could be expected to improve affordability, and monitor the response of the market over the plan period.” 4.2 In respect of the evidence underpinning the Hart local plan, the first step is not in dispute. The SHMA assesses the market signals and concludes that “this is a housing market under pressure” (para 9.46), noting that “prices have risen faster in the HRSH HMA than across the South East as a whole. In addition, affordability has been getting worse since 2009, which is not the case for England as a whole” (para 9.46). It is the second step that is in dispute, and whether the SHMAs response to this can be viewed to be one that “on reasonable assumptions… could be expected to improve affordability”.
4.3 The SHMA applies a 15% uplift to the starting point, to give 903 dpa for the HMA. The SHMA notes the LPEG recommendations but instead bases its market signals analysis on how household formation rates could change (based on a partial return to the 2008-based rates). It concludes that a 7-14% headship rate adjustment would be appropriate, concluding on a figure of 15%. It is however noted that the SHMA’s concluded OAHN is in excess of this and is based on a jobs-led scenario.
The principle of market signals uplift to improve affordability 4.4 The purpose of a market signals uplift is to ensure the Government’s housing aims (as expressed in the NPPF) are met and to ensure this is reflected in assessments of need by making “upward adjustment to planned housing numbers compared to ones based solely on household projections” (PPG ID2a-020) where market signals indicate such an adjustment is necessary. The principle of providing ‘more’ than ‘unvarnished’ household projections in England has long been established through successive assessments of the country’s problems with lack of housing supply. Numerous reports1 demonstrate, over a sustained period, a consensus over the need to increase supply above household projections to deliver improvements in housing affordability. This has continued to underpin successive Governments’ approach to assessing housing need, including within the PPG and more recently as recognised within the Housing White Paper.
4.5 Under the current planning system, achieving a national outcome for housing supply is the product of implementing a large number of individual local plans. As such it is fundamentally necessary to link any local strategies to the overarching national principles which are driving Government policy (i.e. ‘think global, act local’). Each area will have its role to play in contributing towards the Government’s aims; some more than others, based on their circumstances. 4.6 It is acknowledged that housing supply is but one factor influencing the affordability of housing (availability of credit and household incomes being two other key influencers), but the role of the planning system in increasing supply to achieve this is clearly an important lever available to government, and one that it seeks to apply through PPG-compliant assessments of OAN.
1 For example see the Barker Review of Housing Supply (http://news.bbc.co.uk/nol/shared/bsp/hi/pdfs/17_03_04_barker_review.pdf), National Housing & Planning Advice Unit (NHPAU) work entitled ‘Developing a target range for the supply of new homes across England’ http://webarchive.nationalarchives.gov.uk/20120919132719/http://www.communities.gov.uk/documents/housing/pdf/523984.pdf , Bramley and Watkins 'Housebuilding, demographic change and affordability as outcomes of local planning decisions; exploring interactions using a sub-regional model of housing markets in England' (2 October 2014) Bramley & Watkins, Heriott Watt University (Published in Progress in Planning 2015) - https://pureapps2.hw.ac.uk/portal/en/publications/housebuilding-demographic-change-and-affordability-as-outcomes-of-local-planning-decisions(23dfd394-4dc7- 406d-ad05-3ee18fdd8497).html , and House of Lords Select Committee on Economic Affairs published their report ‘Building More Homes’ 1st Report of Session 2016–17 (15 July 2016) House of Lords Select Committee on Economic Affairs (HL Paper 20) - http://www.publications.parliament.uk/pa/ld201617/ldselect/ldeconaf/20/20.pdf
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4.7 Whilst the above places the market signals uplift within the national context, how this overarching principle, is applied to local evidence in Hart and the HMA is considered below.
How do we define an improvement in affordability? 4.8 The PPG states that the ratio between lower quartile house prices and the lower quartile income or earnings can be used to measure affordability and this is the metric around which we have focused our analysis in this paper. Although the PPG (ID: 2a-020) sets out that plan maker should “increase planned supply by an amount that… could be expected to improve affordability”, the reference case for that improvement is not stated. The PPG (ID2a-003) requires that the assessment of need “should be proportionate and does not require local councils to consider purely hypothetical future scenarios, only future scenarios that could be reasonably expected to occur.” In this regard, any improvement to affordability should be one that is reasonably expected to occur. 4.9 Measuring improvements in affordability should make reference not only to current levels of affordability but also to any forecast change in affordability were housing supply to progress at a level consistent with official projections. This must be set in the context that the lower quartile affordability ratio in Hart was 13.5 in 2016, a significant increase on recent years (see most recent data released March 2017 in Appendix 1). 4.10 The Office for Budget Responsibility (OBR) produces forecasts of both house prices and wages and analysis on the inter-relationship between the two factors. We present analysis later in this note (and at Appendix 2) which applies these assumptions to Hart; this forecasts that if housing supply were delivered at the current OAHN, of 382 dpa, affordability would deteriorate to 14.5 in the shorter term (to 2022 – the horizon of OBR’s forecast) and to 17.3 by the end of the plan period.
4.11 On this basis, we consider that any increase in planned supply (as required by the PPG) should as a minimum be such as to stabilise, and preferably improve the current affordability ratio in Hart (13.5). Even stabilising the affordability ratio at the current level would represent a better outcome than the reference case of continued worsening affordability in the District. This is a goal that was recognised by the NHPAU in its work and by the House of Lords Select Committee on Economic Affairs2.
An evidence based market signals uplift for Hart and the HMA 4.12 There are numerous methodological approaches that can be adopted in seeking to quantify an appropriate market signals uplift for Hart based on local evidence of affordability and market signals in the District and the HMA. The PPG does not set out a single definitive approach. Indeed, it suggests (ID: 2a-020) that the approach is one where – having established that an uplift is required: 1 The adjustment should be one that is reasonable; 2 The scale of adjustment should be related to the relative scale of affordability constraints and other indicators of high demand. The greater the improvement in affordability needed, the larger should be the additional supply response; 3 Plan makers should not attempt to estimate the precise impact of an increase in housing supply;
2 ‘Building more homes’ 1st Report of Session 2016–17 (15 July 2016) House of Lords Select Committee on Economic Affairs (HL Paper 20) - http://www.publications.parliament.uk/pa/ld201617/ldselect/ldeconaf/20/20.pdf
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4 They should increase planned supply by an amount that, on reasonable assumptions and consistent with principles of sustainable development, could be expected to improve affordability; 5 They should then monitor the response of the market over the plan period. 4.13 It is clear that we need to look at the circumstances of Hart in identifying an appropriate scale of uplift, given the greater problems of affordability in that district (compared to the national average). We have therefore looked at a range of alternative approaches at the local level, and then draw these together to arrive at a conclusion as to the appropriate uplift.
1. OBR house price forecast and University of Reading model 4.14 The Office for Budget Responsibility (OBR) produced Working paper No.6 Forecasting house prices in July 20143. The report identifies the following with regards to future earnings growth and house price growth (the components of an affordability ratio) in paragraph 3.12: “Using some long-run assumptions for real income growth (2.2 per cent a year, including growth in the number of households of 1 per cent a year) and housing supply (keeping pace with the number of households), and assuming the housing discount rate and wage share variable are stationary, the model predicts around 3.3 per cent real house price growth a year in steady state. In addition, assuming consumer price inflation in line with the Bank of England’s 2 per cent target implies 5.3 per cent a year nominal house price growth in steady state.” 4.15 The University of Reading's affordability model, as set out previously, found a high price elasticity (-2.0) in relation to increases in stock at regional level in England, implying in effect that for every 1% increase in supply, relative prices would be expected to fall by 2%.
4.16 There has been some degree of change since 2014 in OBR’s forecasts of income growth and house price growth, however the difference between forecast rate of house price and wage growth remain the same as in OBR’s original analysis. Therefore, we have updated the model to account for the OBR’s March 2017 economic outlook which would indicate average house price growth of 4.8% per annum and peak annual wage growth of 3.7% over the period to 2022 (the horizon of OBR’s economic outlook, but applied as a long run assumption).
4.17 Based on the analysis contained in the above reports, affordability calculations can be undertaken to estimate what impact 856 dpa (the SHMA’s concluded OAHN) would have on the affordability ratio and what level of delivery would be necessary to sustain the affordability ratio at current (2016) levels. Such modelling by Lichfields for the HMA shows that at the current OAHN, affordability would worsen significantly across all parts of the HMA by the end of the plan period, worsening to 17.3 in Hart, 11.7 in Rushmoor and 15.8 in Surrey Heath. 4.18 To maintain affordability across the HMA at each Districts’ current level to 2022 (the horizon of OBR’s forecast), there would be a need for 607 dpa in Hart, 585 dpa in Rushmoor and 545 dpa in Surrey Heath, as shown in Table 2.
3 ‘Working paper No.6: Forecasting house prices’ (July 2014) Office for Budgetary Responsibility, Toby Auterson - http://budgetresponsibility.org.uk/docs/dlm_uploads/WP06-final-v2.pdf
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Table 2 Affordability outcomes - OBR March 2017 Assumptions
Dwellings per annum (2014-36) Current (2016) Current OAHN Affordability in 2036 needed to maintain current District Affordability Ratio (2014-36) under current OAHN affordability ratio… …to 2022 …to 2036 Hart 13.5 382 17.5 607 675 Rushmoor 9.5 436 11.5 585 667 Surrey Heath 12.6 382 15.8 545 591
Source: Lichfields based on DCLG/OBR 2014/University of Reading
4.19 Figure 1 shows historic change in work-place based affordability in Hart, which has been steadily rising since 1997 (save a small dip in 2008). From 1997 to the late 2000s, Hart broadly followed trends in affordability seen at the national level, where the affordability ratio increase from 3.6 in 1997 to around 7.0 in the 2000s.
4.20 However, Hart has seen a particularly sharp increase in the affordability ratio in recent years. As at 2016, entry level house prices amount to 13.5 time local earnings; almost double the current national average (of 7.2). Figure 1 also shows future changes in affordability based on the current OAHN of 382 dpa (under which affordability would worsen to 17.5 by 2036), 607 dpa (required to keep affordability constant to 2022) and 675 dpa required to keep affordability constant to 2036). However, clearly maintain the affordability ratio at its current level still places Hart well above the national average, which has been relatively stable at around 7 since the mid-2000s. For the District to begin to see any improvement in affordability in the short term, provision above 607 dpa would be required and hence it should be viewed as a minimum.
Figure 1 Affordability Outcomes for Hart
20.0 SHMA Period
18.0 382 dpa
16.0 607 dpa
14.0 workplacebased
- 675 dpa 12.0
10.0
8.0
6.0
4.0
LowerQuartile Affordability Ratio 2.0
0.0 19971999200120032005200720092011201320152017201920212023202520272029203120332035
Historic Current OAHN Maintain Affordability to 2022 Maintain Affordability to 2036 SHMA Period England
Source: Lichfields based on DCLG/OBR March 2017/University of Reading
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4.21 Even then, it should be noted the above modelling assumes a price elasticity of -2.0 which could be seen as cautious. Recent research by Regeneris4 indicates that at a Local Authority level a price elasticity of -1.0 is more appropriate (1% increase in supply brings about 1% fall in price) and better reflects factors at the local authority level (paras 4.19-4.22). However, this would involve taking a different view to the OBR position.
2. Hart weighted apportionment of national needs 4.22 Hart is relatively worse in respect of affordability than the national equivalent, with a lower quartile affordability ratio of 13.2 compared with 7.16 nationally, as shown in Figure 2. All other things being equal, to improve affordability across the Country, Hart, and its housing market area peers, would need to make a proportionately greater uplift than those where affordability issues are less acute. If we accept the national position set out above - that the minimum national level of delivery required is c.250,000 dpa (e.g. as in the July 2016 House of Lords Select Committee report – see paragraph 81) - then this would imply a 35,000 dwelling uplift above the 2012-based and 2014-based household projections (both at c.215k dpa). We can then consider how this required uplift should be shared between 320+ Local Planning Authorities across the country in order to seek to hold the affordability ratio (at least at a national level) constant. In doing so, we broadly adopt a localised version of the approach adopted by the NHPAU.
Figure 2 Distribution of LQ Affordability Ratios 2016
34 32 30 28 26 24 22 20 18 16 Hart 13.5 14 Surrey Heath 12.6 12
10 Rushmoor 9.5 LowerQuartile2016 Ratio Affordability 8 England, 7.0 6 4 2 0 Districts (excl. Isle of Scilly) and England
Source: ONS
4.23 We have modelled a scenario in which district with an affordability ratio above the national ratio makes a market signals uplift in proportion to its difference with the national figure – this would
4 Why supply matters: the elasticity of house prices at a local level (January 2016) Regeneris Consulting - https://drive.google.com/file/d/0B3JZDh2pal1PaVJncno2dU92Tk0/view
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see Hart address 0.75% of the overall 35,000 dwelling uplift, equating to 262 dpa and a 103% uplift on the starting point; 4.24 Table 3 shows the outcomes for the HMA overall. This would suggest an uplift of 587 dpa to give a total figure of 1,372 dpa across the HMA.
Table 3 Outcome of national apportionment across HMA
Starting Point Uplift Total Hart 254 262 516 Rushmoor 280 99 379 Surrey Heath 251 226 477 HMA 785 587 1,372
Source: Lichfields Analysis/SHMA
3. Benchmarking stock increases 4.25 Hart has historically delivered very modest growth in its stock of homes in comparison to other authorities in the South and East of England. It is notable that there are few authorities which are less affordable than Hart but have delivered more housing. Hart, with completions at around 0.92% of stock annually over the period 2001-2016, is in the middle of the range. 4.26 As illustrated in Figure 3, areas including, Milton Keynes, Swindon, Colchester and Dartford have all delivered new housing at a rate of up to 1.5% of stock per annum (and in some cases, more if looking at the period pre-recession), and see generally lower affordability ratios. On a comparative basis, this analysis demonstrates that, all else being equal, a greater growth rate in housing stock could help to moderate affordability pressures (albeit clearly it is not the only factor).
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Figure 3 Dwelling Stock Increases by Affordability in LPAs in South West, South East and East of England
Source: Dwelling Stock Increases from CLG Live Table 125, LQ Affordability Ratio from ONS Affordability Ratio series
4.27 If Hart were to increase rates of delivery to 1.2%-1.4% of stock per annum, as seen in numerous locations elsewhere, this would be equivalent to a delivery rate of 521-620dpa (against a 2016 dwelling stock of 38,426 as per CLG Live Table 125). This could be seen to be a level of stock increase which could reasonably be expected to moderate increases in affordability to levels seen in those more affordable comparator locations where housing stock has been growing at such a rate.
Bringing the market signals evidence together 4.28 The requirement in the PPG is to uplift housing needs for market signals on a basis which could reasonably be expected to improve affordability. The OBR-based affordability modelling, which is agnostic of any underlying projections of household growth, i.e. simply illustrating the relationship between stock increases and price change, illustrates that the SHMA’s current OAHN would result in a significant deterioration in the affordability ratio by 2036. Against this reference case, we consider that at the very least, the Council should be seeking to stabilise affordability at its current level, albeit in recent years this has worsened significantly hence this should be considered an absolute minimum.
4.29 An OAHN of 607 dpa (annual average over the period 2014-36) would be needed to maintain the current (2016) affordability ratio to 2022. Given 2022 is the horizon of OBR’s forecast, and the PPG requires plan-makers to “increase planned supply by an amount that, on reasonable assumptions … could be expected to improve affordability, and monitor the response of the market over the plan period” we consider that 607 dpa represents a reasonable minimum for the OAHN for housing in Hart, and the impact of this monitored in the short-medium term.
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This approach to market signals was endorsed by the Mid Sussex Local Plan Inspector Jonathan Bore in his letter to Mid Sussex District Council on the 20th February 2017. 4.30 To determine whether this scale of growth could ‘reasonably be expected to occur’, it can be benchmarked against stock growth. At a national level, growth of 250,000-300,000 homes each year would represent a 1.0-1.3% increase on the existing stock, and it would be reasonable to assume that the rate of growth across England will vary, with some areas delivering slower growth and some delivering higher growth. As shown above, some areas across the East/South East have achieved growth rates of around 1.3% or more in the last 15 years, although this has been as high as 1.5% in some years. For Hart, a level of 607 dpa (required to maintain current affordability to 2022) would represent growth of c.1.3% growth in the stock per annum (and is lower than the most recent year’s completion), hence could reasonably be expected to occur. We consider this OAHN in the context of past delivery trends later in Section 3.0.
4.31 It is also evident that the SHMA’s current OAHN (of 382 dpa) would lead to a significant deterioration in affordability in Hart, which is already almost twice as worse than the national average. This pattern is the same across the HMA. This does not fulfil the PPG requirement for plan-makers to make an adjustment which could ‘reasonably be expected to improve affordability’, given Lichfields’ analysis illustrating that at least 607 dpa would be need to stabilise affordability to 2022 and that this level of delivery could reasonably be expected to occur.
5.0 Employment-led Needs 5.1 We note the SHMA’s approach to defining employment led needs is what shapes the conclusions on OAHN for Hart. Unfortunately, the underlying assumptions behind the modelling of these job-based scenarios is not transparently explained and Lichfields has been unable to discern the approach adopted, notably in terms of which specific figures have been adopted, for example, in terms of job growth levels for each area, and what economic activity rates are used. As identified at the beginning of the section, an enquiry was made of Wessex Economics – the SHMA’s authors – on 13th March 2017, but we were advised that the Councils instructed them not to answer our queries. This is most unfortunate; in the absence of any clarification, we have to assume the SHMA’s analysis in this regard is not justified.
6.0 Affordable Housing Need 6.1 A major flaw of the SHMA is how it goes about addressing affordable housing needs in the overall level of OAHN. In simple terms, the Council’s decision to make what it believes is a ‘policy-on’ increase to its housing requirement to 485 dpa to deliver more affordable housing should have been a step the SHMA took in arriving at the full OAHN. It is not a ‘policy-on’ step to address these affordable needs, and the SHMA is flawed in this respect.
How many homes need to be delivered to meet affordable housing needs?
6.2 We set out below the total quantum of housing that would need to be delivered to meet affordable housing needs in full (at 40% of housing delivery as set out in saved Policy ALTGEN13). The annual affordable housing needs figures are sourced from the SHMA (2016) and Lichfields has not sought to scrutinise these figures.
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Table 4 Total Housing Delivery Needed in Hart to meet 40% Affordable Housing Delivery
Total per annum Source (SHMA 2016) Total homes needed at 40% AH delivery Those who can’t rent or buy 126 Figure 10.3 315 Those who can’t buy but can rent 179 Figure 10.17 448 Those who can’t buy (both) 305 ~ 762
Source: Lichfields analysis
6.3 On the basis of the above analysis, to meet the needs of those households who cannot afford to rent, a total housing delivery of 315 dwellings per annum would be required in Hart. This increases to 762 homes per annum if the needs of all those households who could not afford to buy is delivered at 40% of housing completions. 6.4 Firstly, although it is sometimes only the affordable housing needs of those who cannot afford to buy or rent that is considered, Lichfields considers there is good case to include those who cannot afford to buy a home in this calculation, which is why the NPPF specifically includes affordable home ownership (‘intermediate’) as a tenure of affordable housing in its definition of affordable housing at Annex 2. In the calculation of the housing requirement uplift in the emerging Local Plan (Table 1), the Council agrees with this approach and proposes an uplift to deliver an additional 562 subsidised rental homes (i.e. for those who can’t afford to rent) and 303 homes for shared ownership/Starter Homes (i.e. for those who can’t afford to buy). How this impacts the overall housing requirement in the emerging Local Plan is set out below:
Table 5 Emerging Housing Requirement in HDC
Dwellings Hart stated OAN 2011-2032 8,022 (382 per annum) Flexibility to meet more affordable housing needs a) Subsidised Rental Homes 562 b) Starter Homes/ Shared Ownership 303 c) Market Housing 1,298 Total 2,163 Total Housing Requirement 2011-2032 10,185 (485 per annum)
Source: HDC Draft Local Plan: Strategy and Sites 2011-2032 Table 1
6.5 As such, because the Council has calculated its housing requirement on the basis of helping to meet the affordable housing needs of those who cannot afford to buy – increasing its housing figure to 485 dpa – this step is clearly a scenario that could be reasonably expected to occur and should have been addressed as part of the calculation of the OAHN in line with para 21 of the PPG (ID:2a-029)
6.6 Moreover, although the Council is proposing at emerging policy SC8: Affordable Housing to maintain the currently adopted 40% threshold for total affordable housing delivery as a proportion of total housing delivery, there is clear evidence that HDC has not been getting close to 40% affordable housing completions annually, with an average more akin to 25% as set out below.
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Table 2.3 Past Affordable Housing Delivery in Hart
Net affordable Total housing Affordable Housing % housing completions completions 2006/07 87 396 22% 2007/08 17 229 7% 2008/09 0 52 0% 2009/10 0 -17 0% 2010/11 31 70 44% 2011/12 208 326 64% 2012/13 22 197 11% 2013/14 46 264 17% 2014/15 70 338 21% 2015/16 155 705 22% Percentage affordable housing delivery since adoption of the Hart 25% Local Plan (including policy ALTGEN13 IN June 2006) Percentage affordable housing delivery in most recent five year 27% period (2011/12 to 2015/16)
Source: Various HDC AMRs (2015/2016, December 2012, December 2011, December 2010, December 2008, December 2005) and Lichfields analysis
6.7 Berkeley considers that it is not reasonable to assess the amount of housing needed to deliver total affordable housing need against 40% because this has not been achieved historically and is therefore unrealistic. If the longer term average of 25% affordable housing delivery were applied to the total affordable housing need figures, the total amount of housing that would need to be delivered to meet affordable housing need in Hart increases significantly, as set out below.
Table 2.4 Total Housing Delivery Needed in Hart to meet 25% Affordable Housing Delivery
Total per Source (SHMA Total homes needed at 40% annum 2016) AH delivery Those who can’t rent or buy 126 Figure 10.3 504 Those who can’t buy (but can rent) 179 Figure 10.17 716 Those who can’t buy (Both) 305 ~ 1,220
Source: Lichfields analysis
How many homes can Hart deliver to address affordable housing needs? 6.8 As is established by the Courts in Kings Lynn, it is not necessary for HDC to meet its affordable housing needs in full if this would clearly be unrealistic (in PPG terms, not a scenario that could be reasonably expected to occur). However, the OAN calculation set out in the SHMA (2016) does not go far enough in assessing how Hart could address its affordable housing needs. The SHMA only makes an uplift for affordable housing needs which is equivalent to the number of concealed households in the District.
6.9 The concluded OAN for HDC from the SHMA is 382 dwellings per annum, but as shown above, this does not meet all the affordable housing needs of the District. If it could be demonstrated that the District could not do anymore to meet more affordable housing needs, this could satisfy the Kings Lynn judgment’s finding which requires affordable housing needs to be addressed, but not necessarily met in full. However, this argument is not supported because HDC clearly can deliver more than the SHMA’s concluded OAN because it has chosen to do so itself in the
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emerging housing requirement in the Local Plan, which it has set at 485 dwellings per annum, 103 dwellings per annum higher than the SHMA OAN figure of 382. 6.10 We therefore consider that the Council and SHMA has incorrectly adopted an OAN figure that does not ‘address’ the affordable housing needs; this should in fact have been undertaken as part of the OAN calculation, rather than as an additional element of uplift to the housing requirement. This is explored in more detail below in response to the affordable housing background paper. Even if one accepted all the Council’s assumptions – and those in the SHMA – this means the OAN figure, therefore increases from 382 to 485. Increases would be needed across the other two local authority areas within the HMA too to address this deficiency.
Affordable Housing Background Paper 6.11 The Affordable Housing Background Paper (March 2017) (“the background paper”) is prepared on behalf of the Council to examine the extent to which the shortfall in meeting affordable housing needs should be addressed in the plan and to make recommendations as to delivering more affordable housing. This is in the context that the SHMA identifies a net need for 306 affordable homes per annum in Hart over the plan period, and that the proposed OAN figure of 382 dpa if adopted as a housing requirement would inevitably lead to significant shortfalls in affordable housing provision.
Affordable housing need as a constituent part of OAN 6.12 At the outset, the SHMA and the Affordable Housing Background Paper both fundamentally misdirect themselves as to the proper approach to affordable housing needs and how it influences and interacts with the conclusion on objectively assessed need (OAN). Both refer to affordable housing needs, and the potential need to uplift the housing figure to address affordable housing needs, as being part of the housing requirement step of the process, often referred to as a “policy-on” consideration, and outside of the OAN process. This is most starkly set out in paragraphs 2.5-2.7 of the background paper which references the SHMA, the SHMAs Appendix I as well as the Planning Advisory Service technical guidance on OAN. However, each of these misapplies principles firmly established in the NPPF, PPG and the courts – that affordable housing needs are, and should be, a constituent part of the arrived at OAN. 6.13 Paragraph 47 of the NPPF sets out “To boost significantly the supply of housing, local planning authorities should use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area” (our emphasis) whilst it further goes on at paragraph 159 to direct local planning authorities to “prepare a Strategic Housing Market Assessment to assess their full housing needs… identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which… addresses the need for all types of housing, including affordable housing”. The PPG sets out the required approach in assessing the need for affordable housing at ID2a-022 to ID2a-029, including that “affordable housing need should then be considered in the context of its likely delivery as a proportion of mixed market and affordable housing developments, given the probable percentage of affordable housing to be delivered by market housing led developments.“
6.14 The high court in ‘Satnam Millennium Limited and Warrington Borough Council [2015] EWHC 370’ (referred to as “Satnam”) highlighted the importance of considering affordable housing needs in concluding on full objectively assessed needs. The judgment found that the adopted OAN figure within Warrington’s Local Plan was not in compliance with policy in
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respect of affordable housing because (as set out in paragraph 43 of the judgment) the assessed need for affordable housing need was never expressed or included as part of OAN. The decision found that the “proper exercise” had not been undertaken, namely: “(a) having identified the OAN for affordable housing, that should then be considered in the context of its likely delivery as a proportion of mixed market/affordable housing development; an increase in the total housing figures included in the local plan should be considered where it could help deliver the required number of affordable homes; (b) the Local Plan should then meet the OAN for affordable housing, subject only to the constraints referred to in NPPF, paragraphs 14 and 47.” 6.15 Whilst the second limb in the above has subsequently been clarified, this judgment does establish the untouched principle that full OAN has to include an assessment of full affordable housing needs. 6.16 Subsequent to this ‘Kings Lynn and West Norfolk Borough Council v (i) Secretary of State for Communities and Local Government and (ii) Elm Park Holdings [2015] EWHC 1958’ (referred to as “Kings Lynn”) establishes how full affordable housing needs should be addressed as part of a full OAN calculation. The judgment identifies that it is the function of a SHMA to address the needs for all types of housing including affordable, but not necessarily to meet these needs in full. The justification of this statement is set out below in paragraphs 35 to 36 of the judgment.
“At the second stage described by the second sub-bullet point in paragraph 159, the needs for types and tenures of housing should be addressed. That includes the assessment of the need for affordable housing as well as different forms of housing required to meet the needs of all parts of the community. Again, the PPG provides guidance as to how this stage of the assessment should be conducted, including in some detail how the gross unmet need for affordable housing should be calculated. The Framework makes clear these needs should be addressed in determining the FOAN, but neither the Framework nor the PPG suggest that they have to be met in full when determining that FOAN. This is no doubt because in practice very often the calculation of unmet affordable housing need will produce a figure which the planning authority has little or no prospect of delivering in practice. That is because the vast majority of delivery will occur as a proportion of open-market schemes and is therefore dependent for its delivery upon market housing being developed. It is no doubt for this reason that the PPG observes at paragraph ID 2a-208-20140306 as follows: i "The total affordable housing need should then be considered in the context of its likely delivery as a proportion of mixed market and affordable housing developments, given the probable percentage of affordable housing to be delivered by market housing led developments. An increase in total housing figures included in the local plan should be considered where it could help deliver the required number of affordable homes." … This consideration of an increase to help deliver the required number of affordable homes, rather than an instruction that the requirement be met in total, is consistent with the policy in paragraph 159 of the Framework requiring that the SHMA "addresses" these needs in determining the FOAN. They should have an important influence increasing the derived FOAN since they are significant factors in providing for housing needs within an area.” (Our emphasis)
6.17 The judgment is clear that the correct method for considering the amount of housing required to meet full affordable housing needs is to consider the quantum of market housing needed to deliver full affordable housing needs (at a given percentage). However, as the judgment sets out,
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this can lead to a full OAN figure which is so large that a LPA would have “little or no prospect of delivering (it) in practice”. Therefore, it is clear from this judgment that although it may not be reasonable and therefore should not be expected that the OAN will include meeting affordable housing needs in full, an uplift or similar consideration of how affordable needs can be ‘addressed’ is necessary as part of the full OAN calculation – they should have an important influence increasing the derived OAN. This reflects para 159 of the NPPF and is reiterated in the high court and court of appeal judgments in ‘Oadby and Wigston v Bloor Homes’.
6.18 Whilst the SHMA (Appendix I) acknowledges these judgments, it (and the background paper subsequently) fundamentally misapplies them in suggesting on the basis of them that addressing affordable housing needs only form part of the “policy-on” housing requirement. The Kings Lynn judgment could not be clearer that those affordable housing needs should have “an important influence increasing the derived FOAN since they are significant factors in providing for housing needs within an area.” Similarly, the background paper’s reference to the PAS guidance is unhelpful as it a) has no official bearing on weight as guidance; b) pre-dates a number of the above judgments; and more fundamentally c) acknowledges in the PAS guidance itself that the authors position “may be contradicted by a High Court judgment… which seems to imply the calculated affordable need is a constituent part of the OAN.” 6.19 Therefore, the question which the background paper should be seeking to answer is: what scale of uplift to the objectively assessed need is reasonable to ensure that affordable housing needs are properly addressed.
Scenarios tested 6.20 Lichfields agree with para 5.58 that PRS is not appropriate as a principle mechanism for meeting affordable housing need. In terms of quantum, only appears to test 485dpa or 750dpa (meeting full affordable housing needs) as uplifts to 382dpa – nothing in between despite; 1 Scenarios in excess of 485, such as 500, 515, 550 or 600dpa would similarly boost affordable housing supply, reducing the level of unmet affordable housing need; 2 Hart has previously consistently achieved completions in excess of 500dpa (averaged 515dpa over 5 year period 2002/03 to 2006/07) and therefore such scenarios could be reasonably expected to occur (Appendix H Table 1 of the paper); 3 Over a three year period, average annual levels of delivery of 579 dpa have been achieved (between 2003/04 and 2005/06); and 4 Lichfields own market signals analysis shows that 607 dpa would represent growth of 1.3% dwelling stock per annum which is reasonable in the context of the level of delivery required at the national level, and levels which have been achieved in other areas across the South East.
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6.21 The background paper appears to conclude that 750 is unreasonable (para 5.28), but only limited rationale is given for why 485dpa would therefore be a cap on a scenario, beyond simply saying the impacts of 750dpa on surrounding authorities would be significant. Notwithstanding, it is not consistent with guidance to assume that any uplift would contribute towards meeting needs elsewhere, or would harm/undermine their ability to meet their own needs (as concluded in 5.23) – that appears to assume that relatively large increases in the Hart area would lead to some kind of market failure (in one of the most buoyant housing markets in the country) – given the NPPF does seek to significantly boost supply. 6.22 Following the requirements set out in the King’s Lynn judgment, the OAN should be uplifted to address affordable housing need until such a point as there is little prospect of delivery in practice. Given that a three year average of 579 dpa has been delivered in practice before, a level of 607 dpa would be a realistic growth rate of 1.3%, and the overarching need to significantly boost the supply of housing, there is no reason not to adopt a figure of 607 dpa which would help boost the delivery of housing overall, and make a significant contribution to meeting affordable housing needs.
7.0 OAN Summary 7.1 The SHMA has under-estimated the demographic-led needs in the HMA by failing to consider the impact of London. The London SHMA (2013) assumes changing migration patterns between London and the South East following the recession; trends which are being realised. These will increase population and household growth in the HMA which has migration relationships with London; however these have not been taken into account in the SHMA.
7.2 The SHMA has not made adjustments for market signals which reflect the requirements of the PPG, namely to make an adjustment which could reasonably be expected to improve
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affordability. Our analysis based on OBR/University of Reading shows that at the current OAHN, affordability in Hart (and across the HMA) would deteriorate significantly, from an already poor position. Within the District, a minimum of 607 dpa would be needed on average over the plan period 2014-36 to maintain the current affordability ratio to 2022, and the impact of this uplift could be monitored over the plan period in line with the PPG. It also represents a level which would be expected to occur in the context of past build rates in the District and benchmarks of growth rates elsewhere in the region. Up to 1,737 dpa would be needed in the HMA just to stabilise affordability at the current level to 2022, illustrating the scale of under- estimation of full OAHN in the SHMA. 7.3 The SHMA has not satisfactorily addressed affordable housing needs. In Hart alone, the Council itself proposes what it considers a ‘policy-on’ increase its figure above the SHMA’s OAN for the District. This adjustment is one that should have been made within the SHMA as part of the step to address affordable needs in line with the PPG. This failure is replicated across the two other local authority areas. 7.4 Even then, the Council has not, through the Affordable Housing Needs Background Paper, provided evidence as to why a further modest uplift over 485dpa, to go towards meeting full affordable housing needs. Lichfields analysis has demonstrated that delivery well in excess of this is entirely reasonable and could be expected to occur. This would also be in line with King’s Lynn and the PPG around scenarios which are reasonable.
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Appendix 1: Affordability Data for Hart, Rushmoor and Surrey Heath
Figure 4 LQ Affordability Ratio - 1997-2016
16.0
14.0 workplace
- 12.0
10.0
8.0 based 6.0
4.0
2.0 LowerQuartile Affordability Ratio 0.0
Hart Rushmoor Surrey Heath England
Source: ONS Affordability Data
Table 6 LQ Affordability Ratio 1997-2006
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Hart 5.20 6.12 6.81 6.29 6.89 7.29 8.55 8.52 10.29 9.90 Rushmoor 3.99 4.12 4.60 5.12 5.26 5.88 6.10 6.01 7.39 7.18 Surrey Heath 5.04 5.93 6.26 7.32 7.18 7.60 8.77 8.46 8.66 9.91 England 3.57 3.57 3.77 3.85 4.08 4.51 5.21 6.27 6.82 7.17
Source: ONS Affordability Data
Table 7 LQ Affordability Ratio 2007-2016
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Hart 11.17 11.63 9.39 9.86 10.25 9.64 10.99 11.30 12.13 13.52 Rushmoor 7.52 7.19 6.21 6.72 7.01 6.88 6.79 7.60 8.38 9.50 Surrey Heath 10.48 10.42 8.48 10.58 10.23 10.26 10.18 9.57 11.12 12.63 England 7.21 6.91 6.48 6.86 6.72 6.58 6.57 6.91 7.11 7.16
Source: ONS Affordability Data
Pg 19/23 Lichfields.uk 14114588v1
Appendix 2: OBR Modelling Outputs
Pg 20/23 Lichfields.uk 14114588v1
17.5
16.7
2036
0.38%
1.00%
45,787
46,887
-0.19%
£44,666
£780,625
£745,776
17.2
16.5
2035
0.37%
1.00%
45,419
46,423
-0.18%
£43,073
£742,185
£711,618
Completions2014-16
17.0
16.3
2034
0.35%
1.00%
45,051
45,963
-0.18%
£41,536
£705,727
£679,025
16.8
16.2
2033
0.34%
1.00%
44,683
45,508
-0.17%
£40,054
£671,145
£647,925
16.5
16.0
2032
0.33%
1.00%
44,315
45,058
-0.16%
£38,625
£638,341
£618,249
16.3
15.8
2031
0.31%
1.00%
43,947
44,611
-0.16%
£37,247
£607,221
£589,932
16.1
15.7
2030
0.30%
1.00%
43,579
44,170
-0.15%
£35,918
£577,696
£562,912
15.9
15.5
2029
0.28%
1.00%
43,211
43,732
-0.14%
£34,636
£549,681
£537,130
15.7
15.3
2028
0.27%
1.00%
42,843
43,299
-0.13%
£33,400
£523,098
£512,529
15.5
15.2
2027
0.25%
1.00%
42,475
42,871
-0.13%
£32,209
£497,871
£489,054
15.3
15.0
2026
0.24%
1.00%
42,107
42,446
-0.12%
£31,059
£473,929
£466,655
15.1
14.9
2025
0.22%
1.00%
41,738
42,026
-0.11%
£29,951
£451,205
£445,281
14.9
14.7
2024
0.20%
1.00%
41,370
41,610
-0.10%
£28,883
£429,634
£424,887
14.7
14.6
2023
0.19%
1.00%
41,002
41,198
-0.09%
£27,852
£409,157
£405,426
14.5
14.4
2022
0.17%
1.00%
40,634
40,790
-0.09%
£26,858
£389,716
£386,857
14.3
14.3
2021
0.16%
1.00%
40,266
40,386
-0.08%
£25,900
£371,257
£369,138
382
14.2
14.1
2020
0.14%
1.00%
39,898
39,986
-0.07%
£24,976
£353,730
£352,231
14.0
14.0
2019
0.12%
1.00%
39,530
39,590
-0.06%
£24,085
£337,085
£336,099
2014-36 average 2014-36
13.8
13.8
2018
0.10%
1.00%
39,162
39,198
-0.05%
£23,225
£321,277
£320,705
13.7
13.7
2017
0.08%
1.00%
38,794
38,810
-0.04%
£22,397
£306,262
£306,016
1
Hart
1.048
1.037
368
13.5
13.5
2016
38,426
38,426
£21,598
£292,000
£292,000
New Ratio New
House Prices (accounting inflation, for Rate of increase and rate of rate and increase of Rate for inflation, (accounting Prices House
Price Change Price
Supply Change above underlying assumptions underlying above Change Supply
No Houses No
Assuming increase in number of homes (p.a.) homes of number in increase Assuming
Number of houses (assuming 1% p.a. increase) p.a. 1% (assuming houses of Number
Lower Quartile Earnings (implied from house prices/affordability ratio) prices/affordability (impliedhouse from Earnings Quartile Lower
Lower Quartile Affordability Ratio (Source: ONS) (Source: Ratio Affordability Quartile Lower
Lower Quartile House Prices (Source: ONS) (Source: Prices House Quartile Lower
Housing Price Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Price Housing
Earnings Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Earnings
Inflation (1.00 ifnone) (1.00 Inflation Local Authority Local Affordability based on OBR March 2017/University of Reading - Current SHMA OAHN
Pg 21/23 Lichfields.uk 14114588v1
14.3
16.7
2036
0.23%
1.00%
50,726
46,887
-0.45%
£44,666
£640,204
£745,776
14.2
16.5
2035
0.24%
1.00%
50,111
46,423
-0.49%
£43,073
£613,543
£711,618
14.2
16.3
2034
0.26%
1.00%
49,496
45,963
-0.52%
£41,536
£588,164
£679,025
14.1
16.2
2033
0.27%
1.00%
48,881
45,508
-0.55%
£40,054
£564,004
£647,925
14.0
16.0
2032
0.29%
1.00%
48,266
45,058
-0.58%
£38,625
£541,002
£618,249
13.9
15.8
2031
0.31%
1.00%
47,651
44,611
-0.62%
£37,247
£519,103
£589,932
13.9
15.7
2030
0.32%
1.00%
47,036
44,170
-0.65%
£35,918
£498,251
£562,912
13.8
15.5
2029
0.34%
1.00%
46,421
43,732
-0.69%
£34,636
£478,396
£537,130
13.8
15.3
2028
0.36%
1.00%
45,806
43,299
-0.72%
£33,400
£459,489
£512,529
13.7
15.2
2027
0.38%
1.00%
45,191
42,871
-0.76%
£32,209
£441,484
£489,054
13.7
15.0
2026
0.40%
1.00%
44,576
42,446
-0.80%
£31,059
£424,338
£466,655
13.6
14.9
2025
0.42%
1.00%
43,961
42,026
-0.84%
£29,951
£408,009
£445,281
13.6
14.7
2024
0.44%
1.00%
43,346
41,610
-0.88%
£28,883
£392,459
£424,887
13.6
14.6
2023
0.46%
1.00%
42,731
41,198
-0.92%
£27,852
£377,649
£405,426
13.5
14.4
2022
0.48%
1.00%
42,116
40,790
-0.96%
£26,858
£363,545
£386,857
13.5
14.3
2021
0.50%
1.00%
41,501
40,386
-1.01%
£25,900
£350,114
£369,138
607
13.5
14.1
2020
0.53%
1.00%
40,886
39,986
-1.05%
£24,976
£337,324
£352,231
13.5
14.0
2019
0.55%
1.00%
40,271
39,590
-1.10%
£24,085
£325,145
£336,099
2014-36 average 2014-36
13.5
13.8
2018
0.58%
1.00%
39,656
39,198
-1.15%
£23,225
£313,549
£320,705
13.5
13.7
2017
0.60%
1.00%
39,041
38,810
-1.20%
£22,397
£302,509
£306,016
615
13.5
13.5
2016
38,426
38,426
£21,598
£292,000
£292,000
705
705
12.1
2015
37,721
37,721
£22,671
£275,000
1
Hart
1.048
1.037
338
338
11.3
2014
37,383
37,383
£21,681
£245,000
New Ratio New
House Prices (accounting inflation, for Rate of increase and rate of rate and increase of Rate for inflation, (accounting Prices House
Price Change Price
Supply Change above underlying assumptions underlying above Change Supply
No Houses No
Assuming increase in number of homes (p.a.) homes of number in increase Assuming
Completions (year beginning) (year Completions
Number of houses (assuming 1% p.a. increase) p.a. 1% (assuming houses of Number
Lower Quartile Earnings (implied from house prices/affordability ratio) prices/affordability (impliedhouse from Earnings Quartile Lower
Lower Quartile Affordability Ratio (Source: ONS) (Source: Ratio Affordability Quartile Lower
Lower Quartile House Prices (Source: ONS) (Source: Prices House Quartile Lower
Housing Price Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Price Housing
Earnings Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Earnings
Inflation (1.00 ifnone) (1.00 Inflation Local Authority Local Affordability based on OBR March 2017/University of Reading - Housing required to keep affordability constant
Pg 22/23 Lichfields.uk 14114588v1
13.5
16.7
2036
0.34%
1.00%
52,226
46,887
-0.68%
£44,666
£604,744
£745,776
13.5
16.5
2035
0.36%
1.00%
51,536
46,423
-0.71%
£43,073
£580,802
£711,618
13.4
16.3
2034
0.38%
1.00%
50,846
45,963
-0.75%
£41,536
£558,002
£679,025
13.4
16.2
2033
0.39%
1.00%
50,156
45,508
-0.79%
£40,054
£536,290
£647,925
13.3
16.0
2032
0.41%
1.00%
49,466
45,058
-0.83%
£38,625
£515,613
£618,249
13.3
15.8
2031
0.43%
1.00%
48,776
44,611
-0.87%
£37,247
£495,921
£589,932
13.3
15.7
2030
0.46%
1.00%
48,086
44,170
-0.91%
£35,918
£477,168
£562,912
13.3
15.5
2029
0.48%
1.00%
47,396
43,732
-0.95%
£34,636
£459,308
£537,130
13.2
15.3
2028
0.50%
1.00%
46,706
43,299
-1.00%
£33,400
£442,300
£512,529
13.2
15.2
2027
0.52%
1.00%
46,016
42,871
-1.04%
£32,209
£426,104
£489,054
13.2
15.0
2026
0.55%
1.00%
45,326
42,446
-1.09%
£31,059
£410,681
£466,655
13.2
14.9
2025
0.57%
1.00%
44,636
42,026
-1.14%
£29,951
£395,996
£445,281
13.2
14.7
2024
0.60%
1.00%
43,946
41,610
-1.19%
£28,883
£382,015
£424,887
13.2
14.6
2023
0.62%
1.00%
43,256
41,198
-1.24%
£27,852
£368,706
£405,426
13.3
14.4
2022
0.65%
1.00%
42,566
40,790
-1.30%
£26,858
£356,038
£386,857
13.3
14.3
2021
0.68%
1.00%
41,876
40,386
-1.35%
£25,900
£343,983
£369,138
675
13.3
14.1
2020
0.70%
1.00%
41,186
39,986
-1.41%
£24,976
£332,514
£352,231
13.4
14.0
2019
0.73%
1.00%
40,496
39,590
-1.47%
£24,085
£321,604
£336,099
2014-36 average 2014-36
13.4
13.8
2018
0.76%
1.00%
39,806
39,198
-1.53%
£23,225
£311,230
£320,705
13.5
13.7
2017
0.80%
1.00%
39,116
38,810
-1.59%
£22,397
£301,369
£306,016
690
13.5
13.5
2016
38,426
38,426
£21,598
£292,000
£292,000
705
705
12.1
2015
37,721
37,721
£22,671
£275,000
1
Hart
1.048
1.037
338
338
11.3
2014
37,383
37,383
£21,681
£245,000
New Ratio New
House Prices (accounting inflation, for Rate of increase and rate of rate and increase of Rate for inflation, (accounting Prices House
Price Change Price
Supply Change above underlying assumptions underlying above Change Supply
No Houses No
Assuming increase in number of homes (p.a.) homes of number in increase Assuming
Completions (year beginning) (year Completions
Number of houses (assuming 1% p.a. increase) p.a. 1% (assuming houses of Number
Lower Quartile Earnings (implied from house prices/affordability ratio) prices/affordability (impliedhouse from Earnings Quartile Lower
Lower Quartile Affordability Ratio (Source: ONS) (Source: Ratio Affordability Quartile Lower
Lower Quartile House Prices (Source: ONS) (Source: Prices House Quartile Lower
Housing Price Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Price Housing
Earnings Rate of increase (proportional) (Source: OBR) (Source: (proportional) increase of Rate Earnings
Inflation (1.00 ifnone) (1.00 Inflation Local Authority Local Affordability based on OBR March 2017/University of Reading - Housing required to keep affordability constant
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