Housing Delivery Test 2022: What the data reveals

As 2023 ends, a ponderous UK Government finally publishes the long-awaited Housing Delivery Test 2022 - showing the state of housing delivery over the past 3 financial years. Here’s our take on the data.

December 22, 2023

20 December 2023 was a big day for the planning sector. The highlights included the release of a new National Planning Policy Framework and the Government's response to the planning reform consultation. These developments are important, but today, we're focusing specifically on the newest Housing Delivery Test Results 2022 (yep, 2022 - even though it's the end of 2023!).

Let's break down what this means and why it matters.

Before we get into the juicy stuff, here’s a quick FAQ for all things HDT.

What is the Housing Delivery Test?

The Housing Delivery Test is our yearly reality check on housing. It compares the actual homes built with the target numbers over the past three years, using data from both national records and local planners. It's a straightforward way to see if we're hitting the mark or falling short in housing delivery.

How is the Housing Delivery Test calculated?

So how do we know if a local authority has passed the test or not? Every year, they all have to publish data about how many of their target number of houses they have built, and the Housing Delivery Test results are then calculated at the end of the three-year cycle.

The formula for that looks something like this:

Housing Delivery Test (%) = Total net homes delivered over 3 year period divided by Total number of homes required over 3 year period

The outcomes of the test dictate the next steps and potential repercussions for housing delivery performance. While there are no prizes for hitting the mark, missing it can lead to consequences.

Scoring 95% of your housing target is seen as a pass, which doesn't result in any action. So, let's focus on what happens when they don't meet the mark.

What is an action plan?

If a local authority only manages to build 85-94% of its target then it must produce a Housing Delivery Test action plan detailing how it is going to improve its performance in line with national planning guidance.

What is the 20% land buffer?

If a local authority only manages to build 75-84% of its target things get a little more serious. A local authority must set aside a ‘buffer’ - an extra 20% of land for potential development, over and above what they've already earmarked in their five-year plan.

What is ‘presumption in favour of sustainable development’?

The major consequence kicks in when a local authority delivers 74% or less of its housing target: they are then subject to the presumption in favour of sustainable development. This means that as well as the 20% land buffer, planning permission in these zones is generally granted unless the site is protected (e.g. Greenbelt or AONB) or the negative effects outweigh the benefits. This also influences land promotion and increases the chance for more speculative planning applications in these areas.

How does the HDT help developers?

You're likely seeing the potential already, but let's delve a bit deeper. The Housing Delivery Test highlights where local authorities are falling short, indicating where there's a dire need for more housing.

When scouting for development sites, you're not just looking at feasibility; you're considering the local housing market, the track record of planning applications, and existing development rights. While areas meeting their targets are still worth considering, those that have had to add a 20% land buffer or are under the NPPF’s presumption in favour of sustainable development are particularly intriguing.

In buffer zones, there's more development potential than initially planned, offering extra opportunities. However, the presumption areas should be at the top of your searches. Despite potential restrictions, the likelihood of planning permission being granted is much higher, presenting a valuable scenario for developers.

Which councils performed worst?

Unsurprising there is very little change in the top 20 worst-performing areas from the last HDT in 2021. New entries to the list include Rother, Farnham and Redbridge. And while they might look like promising opportunities at first glance, it's important to investigate why they're still behind on targets a year later. Often, these areas are held back by Greenbelt and other planning restrictions, making any building efforts there quite challenging.

20 worst performing councils in the HDT 2022

  1. Epping Forest - 30% a deficit of 1713 homes
  2. Southend-on-Sea - 31% a deficit of 2100 homes
  3. Epsom and Ewell - 32% a deficit of 1019 homes 
  4. Eastbourne - 32% a deficit of 1197 homes
  5. Hastings - 32% a deficit of 782 homes
  6. Worthing - 33% a deficit of 1516 homes
  7. Portsmouth - 38%  a deficit of 1380 homes
  8. Tandridge - 38% a deficit of 1036 homes
  9. Bromsgrove - 41% a deficit of 833 homes
  10. Rother - 41% a deficit of 932 homes
  11. Fareham - 42% a deficit of 786 homes
  12. Basildon - 46% a deficit of 1431 homes
  13. Thurrock - 46% a deficit of 1599 homes
  14. Three Rivers - 46% a deficit of 878 homes
  15. Bury - 46% a deficit of 823 homes
  16. Sandwell - 47% a deficit of 2026 homes
  17. Calderdale - 49% a deficit of 1047 homes
  18. Redbridge - 50% a deficit of 1461 homes
  19. Castle Point - 50% a deficit of 461 homes
Housing Delivery Test layer on Searchland

How to find new areas of opportunity?

Given the lack of change among the worst performers, a fresh angle might be more fruitful. This year, 52 local authorities are experiencing new Housing Delivery Test outcomes - either receiving an outcome for the first time or seeing a change from last year. 

Remember, areas shifted to a presumption in favour of sustainable development could provide an easier path to planning approval. So, keep a close eye on these 18 local authorities:

18 councils that moved to 'presumption in favour of sustainable development' in the HDT 2022

  1. Redbridge - 50%, a deficit of 1461 homes
  2. Lewisham - 51%, a deficit of 2111 homes
  3. Bromley - 52%, a deficit of 794 homes
  4. Torbay - 55%, a deficit of 610 homes
  5. Stevenage - 57% a deficit of 419 homes
  6. Uttlesford - 58%, a deficit of 796 homes
  7. Kingston upon Thames - 60% (presumption), a deficit of 971 homes
  8. Gosport - 65% (presumption), a deficit of 217 homes
  9. Trafford - 65%, a deficit of 1234 homes
  10. Southwark - 66%, a deficit of 2085 homes
  11. Kirklees - 37%, a deficit of 1406 homes
  12. Erewash - 69%, a deficit of 310 homes
  13. Camden - 69%, a deficit of 910 homes
  14. Hertsmere - 69%, a deficit of 572 homes
  15. Merton - 71%, a deficit of 588 homes
  16. Thanet - 71%, a deficit of 607 homes
  17. Adur - 72%, a deficit of 130 homes
  18. Greenwich - 74%, a deficit of 1907 homes
Housing Delivery Test - Showing Greenbelt in Redbridge

Moreover, 16 local authorities received an outcome for the first time. These areas, previously untouched by planning repercussions, present opportunities for developers looking to explore somewhere new.

16 councils that received an outcome for the first time in the HDT 2022

  1. Redbridge - 50% (presumption), a deficit of 1461 homes
  2. Uttlesford - 58% (presumption), a deficit of 796 homes
  3. Gosport - 65% (presumption), a deficit of 217 homes
  4. Southampton - 75% (buffer), a deficit of 610 homes
  5. Leicester -77% (buffer), a deficit of 985 homes
  6. Hackney - 77% (buffer), a deficit of 783 homes
  7. North Warwickshire - 80% (buffer), a deficit of 135 homes
  8. North Tyneside - 81% (buffer), a deficit of 380 homes
  9. Newham - 84% (buffer), a deficit of 1169 homes
  10. Dartford - 85% (action plan), a deficit of 302 homes
  11. Ealing - 86% (action plan), a deficit of 747 homes
  12. Runnymede - 87% (action plan), a deficit of 174 homes
  13. King's Lynn and West Norfolk - 90% (action plan), a deficit of 142 homes
  14. Richmond upon Thames - 91 % (action plan), a deficit of 71 homes
  15. New Forest - 92% (action plan), a deficit of 65 homes
  16. Dudley - 93% (action plan), a deficit of 114 homes

Last we checked in 2021, the focus of these planning outcomes felt squarely on London and the surrounding areas. However, the latest data from 2022 indicates that housing delivery issues are spreading beyond the South East, affecting the Midlands and the North, areas typically less affected by Greenbelt constraints.

It's becoming clear that developers should consider looking beyond the traditional North/South divide and explore new areas. With the entire UK seeing population growth, and the North East experiencing the highest percentage increase at about 1.3% in mid-2022, development opportunities are emerging across the country. This shift underscores the importance of adapting strategies and exploring untapped markets to address the widespread need for housing.

Searchland’s powerful tools, including our Housing Test Delivery layer (which grants you access to all of this data instantly) can help you find those opportunities quickly and efficiently, taking out much of the hassle that comes with locating properties for development. Contact us today to find out how we can save you time and effort.

July 9, 2024

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