Our housing figures and how they are calculated
We explain how house building figures and housing needs in Sussex are calculated
As part of our campaign on housing levels in Sussex, we are producing a series of explainers to help readers understand more about the planning system and its effect on our county.
Here, we focus on housing targets and explain how they are calculated. We also explore the tests the government sets councils to ensure building continues at the required pace and the penalties faced if they fail.
Our campaign calls for councils to have greater powers to determine their own housing needs, free from the influence of centralised calculations.
What is housing need and how is it calculated?
The government gives all local authorities a figure, known as ‘housing need’, which is its calculation of how many homes are needed. This does not take into account any local issues, such as a lack of available land.
This figure is calculated using a formula known as the Standard Method.
Centre for Cities defines this as a ‘formula which divides up the national target for each place based upon predictions of local household growth and affordability’.
“Less affordable cities are given slightly higher supply targets in recognition of their higher need,” it adds.
In Sussex, the gap between house prices and earnings is high, meaning it faces a greater pressure to build more homes.
According to the Office for National Statistics, the ratio of gross annual house prices to annual earnings in Sussex in 2020 ranged from 8.16 (Crawley) to 14.09 (Chichester) with an average of 11.09. The average for England was 7.84.
Do councils have to provide their housing need in full?
Although it is not technically mandatory to meet the housing need in full, it can prove very difficult for councils to argue otherwise.
National guidelines state there may be ‘exceptional circumstances’ which mean councils can provide a different figure.
Lack of space due to land in the national park or Areas of Outstanding Natural Beauty are the sort of constraints which might be taken into account – but councils will have to have ‘robust evidence’ to prove they cannot meet their housing need, guidance warns.
What is a housing requirement and how does it differ to housing need?
Calculating how much land is available for housing is a key consideration when councils produce their local plans.
The figure a council finally arrives at and has approved – be it lower, on target or above target – becomes its ‘housing requirement’.
The task of delivering on that requirement then becomes the next challenge.
What happens if a council fails to deliver its housing target?
In most cases, responsibility for actually building new homes falls on developers, rather than local authorities.
But currently, the system penalises the councils if housebuilding does not keep up with the required pace.
If this happens, there is something called a ‘presumption in favour of sustainable development’.
This effectively makes it easier for developers to gain planning permission, even for housing in more contentious locations.
This is also known as the ‘tilted balance’.
The Housing Delivery Test
The Housing Delivery Test compares the number
of homes built in a council’s area against its housing requirement over a threeyear period. It is published annually. The figure used depends on the status of a council’s local plan. If a plan is out of date, the housing need figure will be used. The figure can change each year, based on the circumstances at the time. If less than 95 per cent of the requirement has been built, councils must publish an action plan to set out how it will boost housebuilding.
In the worst-case scenario, where less than 75 per cent has been acheived, the ‘presumption in favour of sustainable development’ comes into play. In Sussex, Adur, Worthing, Arun, Eastbourne and Hastings fell below the 75 per cent mark in the latest test.
The five-year housing land supply
As well as being tested on the number of homes built, councils must also identify enough land for new housing to be located on.
The government explains: “A five-year land supply is a supply of specific deliverable sites sufficient to provide five years’ worth of housing (and appropriate buffer) against a housing requirement set out in adopted strategic policies, or against a local housing need figure.”
Again, the status of a local plan depends on the figure used to calculate how much housing is needed per year.
What are the housing targets for Sussex?
As explained, housing needs can vary in comparison with a council’s housing requirement. Sussex councils are also at different stages with their local plans.
To further complicate the picture, new data is due to be released on Wednesday (March 23) which will affect councils’ housing needs under the Standard Method.
This was the picture before any new data emerged:
Arun district – Arun adopted its local plan in 2018 with a housing requirement of 1,000 homes per year. Under the Standard Method, its housing need is 1,304. Arun District Council paused a review of its local plan in October last year as a result of uncertainty at a national level over planning policy changes.
Chichester district – Chichester adopted its local plan in 2015 with a housing requirement of 435 homes per year. Its housing need under the Standard Method is 638 homes per year. Chichester District Council is in the process of reviewing its local plan but conceded in September last year that it would be ‘unlikely to meet the full housing targets set by the government due to a lack of external funding for infrastructure improvements’.
South Downs National Park The National Park explained it did not have housing targets, it has ‘housing provisions’. These set out a total of 4,750 homes over 19 years (20142033). This equates to 250 homes a year covering the entire 1,627km2 national park area (covering parts of Hampshire, West Sussex and East Sussex). A total of 1,828 dwellings have been completed from 2014/15 to 2020/21.