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THE ESSENTIAL GUIDE: What is a five year housing land supply and why is it so important?

Planning applications for residential development are often justified by saying that the council doesn’t have a “five year supply of housing land.” But what does that mean exactly? And why is it so critical? This post explains.

Planning for enough new homes

It is widely accepted that we are in the midst of a housing crisis. One of the ways the government is attempting to tackle this is by getting more new homes built.

In 2012, the government issued a new set of national planning policies called the National Planning Policy Framework. One of the objectives of those policies was to “significantly boost the supply of new homes.”

In part, that is to be achieved by making councils establish what the need for new homes in their borough actually is. Once that housing need is established, councils must put a plan in place to deliver it. A council can only plan to build fewer homes than they need if they have a really robust justification – like they won’t physically fit.

Identifying enough suitable sites

Setting a suitable target for the number of new homes to be built is only part of the picture. For homes to be built, they must be granted planning permission too.

That is where many councils have been falling short. For a variety of reasons, the number of planning permissions being granted was often less than the number of homes that needed to be built.

Sometimes that was because a council had a very old local plan. Those older plans often only intended to deliver new homes up to a date that had already passed. That meant that almost all the sites identified for new homes were already developed.

In other cases, local plans were more recent but came into force just before the housing market crashed in 2008. The housing market is very different now than it was before that crash. For example, in many places house prices still haven’t recovered. It is also harder to get a buy-to-let mortgage which has caused the market for flats outside city centres to shrink. That means that some sites which councils expected would be suitable for housing development are no longer commercially viable.

As local plans cover a 10 to 15 year period, it is not unusual for circumstances to change like this. That is why councils are required to monitor their plans and produce new ones, or update the old one, if conditions change significantly. That process can take a long time though – in some cases five years or more.

In lots of places, therefore, the supply of new homes was extremely low while councils worked their way through the local plan process.

Councils must keep delivering

The government took the view that that wasn’t acceptable. When people need new homes now, it seems unreasonable to make them wait for a new plan to come into effect if there are sites that are suitable for development immediately.

To try to make sure councils keep delivering new homes, national policy now requires councils to have enough sites ready for development to meet their housing need for the next five years. That is what is meant be a five year housing land supply.

If a council has an up-to-date local plan, that usually isn’t a problem. That plan should identify enough sites for housing development to meet housing need. Where a plan has expired though, or contains policies that are no longer working, the picture becomes more complicated. What if enough new homes aren’t being delivered, but the council’s local plan won’t allow any more to come forward?

Where the housing supply is too low, national policy takes over

To address that, national policy says that when a council doesn’t have a five year supply of housing land all of its policies for delivering housing are out-of-date. Instead of planning applications being decided based on what local policies say, national policies will instead take precedence. In essence, that means that if a site can be considered sustainable development then planning permission should be granted.

The consequence of not having a five year housing land supply is therefore that councils start to lose control over where new homes are built. If a developer submits an application to build homes on a site that is in a sustainable location, councils often have to approve that application even if it isn’t a site they would have chosen. This can be difficult for councils to accept, so those applications are often decided at appeal.

What does this mean for you?

This means that, in some locations, it may be possible to secure planning permission for new homes on sites where it has not been possible in the past, or where there is no support from the council.

The Strategic Land Group is a specialist land promoter and deals with situations just like this across the country. We work with land owners to deliver planning permission on their sites at our cost and risk. Our return is a share of the value of the site once it is sold, which means if we don’t succeed, it doesn’t cost you a penny.

If you own a site that you think might be suited to this approach, please get in touch today for a confidential, no obligation assessment of the chances of securing planning consent on your site.

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