Report

Housing Delivery Test 2020 Result

22.1.21 2 MINUTE READ

The Housing Delivery Test (HDT) results for 2020 have now been published by the Ministry of Housing, Communities and Local Government (MHCLG). Suzi Green gives her commentary on the results and what this means for development opportunities in our region.

What is the Housing Delivery Test?

The HDT is an annual measurement of housing delivery in each local planning authority (LPA) area and was introduced to encourage LPAs to enable the delivery of more housing. Whilst authorities have long been incentivised to plan for housing land supply, there has historically been less incentive to ensure enough houses get built. Considerations such as the deliverability of planning permissions, the number of conditions and the lead in times for proposals have not been at the forefront of decision makers minds when issuing decisions.

The HDT engages the presumption in favour of sustainable development where insufficient homes have been built over the previous three-year period, irrespective of whether an LPA has a five-year land supply.

The following sanctions currently apply:

From 2020 onwards, if delivery fall below 75% of the required amount set out in the five-year housing land supply target over the previous three years, the presumption in favour of sustainable development set out under paragraph 11 footnote 7 of the National Planning Policy Framework (NPPF) will apply. In 2019, this figure was 45%.
Where delivery falls below 85% of the required amount, a 20% buffer is added to the housing target of that LPA.
If an LPA falls below 95% in its delivery rates, the authority must publish an action plan in order to justify how it will increase their delivery rate over the coming years.

These sanctions will apply until the next set of HDT results are published.

What do the 2020 HDT results mean?

On 19 January 2021, the new HDT results were published, three months later than originally anticipated.

The key headlines

The presumption in favour of sustainable development has been triggered in 55 LPA areas;
A further 19 LPAs will automatically have a 20% buffer applied to their housing target;
33 LPAs will be required to prepare an action plan;
217 LPAs face no action at all.

The results for Bidwells’ core operational areas are shown spatially below.

It must first be remarked that the Government pressed ahead with publishing the HDT results for 2020 and decided not to amend the qualification for different sanctions following the disruption of the Covid-19 pandemic on the housing industry. However, MHCLG did tweak the methodology slightly with the period for measuring homes required in 2019/20 reduced by one month to reflect the temporary disruption of the first lockdown.

Some of the noticeable changes in the HDT results for 2020 come as no surprise to the team at Bidwells following our predictions last year.

The number of LPAs for which the presumption has been triggered has seen a dramatic increase since 2019, from eight to 55 LPAs.

Whilst there are some exceptions i.e. Great Yarmouth, Kingston on Thames, Islington, Newham etc., the outlook for those authorities already flagged as requiring improvement in some form in 2019 has either remained the same or worsened in 2020.

It would be impossible to ignore the role of the Green Belt and how this has affected the HDT results. Perhaps more striking this year than those previous, is the correlation between those authorities which have failed the HDT and those which are Green Belt authorities. These are LPAs i.e. St Albans, Three Rivers, Welwyn Hatfield, etc) which typically have poor land supply positions already and are essentially protected from the presumption in favour of sustainable development under paragraph 11 footnote 6 of the NPPF (as a developer is required to demonstrate ‘Very Special Circumstances’ to justify the removal of land from the Green Belt which is an uncommon occurrence).

Therefore, the HDT has no teeth in these Green Belt authorities, which can rely on the protection of national planning policy to consistently under-deliver and allow their housing supply to dwindle. The HDT is a mechanism designed to make it easier for planning permission to be achieved in LPAs whose housing delivery is poor is fundamentally undermined in Green Belt LPAs.

There are areas in which the HDT does have an impact and these are often those LPAs which already have significant (often unattainable) housing requirements and their own constraints e.g. built up urban areas. There continues to be significant pressure on London authorities to achieve the required delivery rates. London Boroughs including: Barking and Dagenham, Bexley, Camden, Westminster, Enfield, Kensington and Chelsea, Redbridge, Southwark and Tower Hamlets, have seen a reduction in their delivery since 2019 and now either require a 20% buffer or the presumption is triggered.

In a press release published on 19 January 2021, MHCLG took the stance that some of the blame for under-delivery should be placed on a failure of a number of LPAs to adopt an up-to-date Local Plan. Housing Minister Christopher Pincher has emphasised the importance of preparing up to date Local Plans and the delivery of new homes as a key way for the UK economy to rebound as a result of Covid-19.

It is critical work should continue to advance Local Plans through to adoption by the end of 2023 to help ensure that the economy can rebound strongly from the COVID-19 pandemic.

Conclusion

The HDT results have once again been received with interest from planners and developers and unlock a number of opportunities for growth in LPA areas across Bidwells’ core patch, particularly in London where delivery remains under significant pressure.

The protection of Green Belt land and a close correlation with current patterns of five-year housing land supply, mean that a number of areas which failed the HDT in 2020 will remain unaffected by the sanctions that are to be imposed. Without significant national policy change and up to date plans being produced in these LPA areas, the root cause of poor delivery will not be addressed.