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SearchLand’s Summary of 2021 Housing Delivery Test Results

The Housing Delivery Test results for the last 3 years are in - see who needs an action plan, has to buffer, or is subject to Presumption and the best areas for developers.

Published on
January 20, 2022

What is the Housing Delivery Test? 

As you’re probably aware, the UK faces a housing shortage. The government’s plan to address this is to build 300,000 new homes every year across the country and, to help achieve this, they introduced the Housing Delivery Test in 2018.

What the Housing Delivery Test does is to calculate what the net number of homes added in an area (usually divided up by local authority) is and compares it against the total number required. If you’re thinking that this may show areas of opportunity for developers, then you would be right.

Interestingly, the number of homes delivered counts student accommodation and non-student accommodation separately; just as something to bear in mind.

This cycle goes in three-year periods, which is why, having been introduced in 2018, the 2021 data are so important!

The graphic below shows the results. The best areas for developers to focus on are where the results are below 75%.


https://app.flourish.studio/visualisation/8476026/

We should note that the figures for Bournemouth, Christchurch and Poole, are published at their previous, separate boundaries, as are the figures for North, East, and West Dorset, hence why these do not appear in the graphic above.

West Dorset is at 114% with 2009 required and 2293 delivered.

Christchurch and East Dorset were measured together and had a result of 94% (action plan) with 1815 homes required and 1698 delivered.

Poole achieved 78% (buffer) with 1833 required and 1432 delivered.

Bournemouth achieved 67% (Presumption) with 3714 required and 2480 delivered.

North Dorset achieved 69% (Presumption) 750 required and 520 delivered.

How does the Housing Delivery Test work?

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:

Credit: Housing Delivery Test measurement rule book

The results determine what happens next and what the consequences of the housing delivery test can be, and, although there are no rewards for meeting targets, there are certainly punishments.

Meeting 95% of your target is considered a pass and whilst it probably comes with a sense of relief for those in positions of responsibility, it doesn’t result in any changes, so we’ll swiftly move on to the negative grades.

 

Action plan – 85-94%

The equivalent of grade A, (95% would certainly be an A*), 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.

 

20% land buffer – 75-84%

The next level down requires a local authority to set aside a “buffer” of an additional 20% of land that could be developed. This 20% has to be on top of any land that it had previously identified as suitable for its five-year development plan.

 

Presumption in Favour of Sustainable Development – 74% and below

It feels like when we’re growing up that we’re often told not to presume anything, but it seems the government can presume when necessary. The Presumption in Favour of Sustainable Development, sometimes also known as the “tilted balance”, is a condition in the National Planning Policy Framework (NPPF) that means pretty much any planning application should be granted.

Of course, there remain some exceptions to this, usually areas that would remain restricted anyway, such as the Green Belt, areas of outstanding natural beauty, or where the negatives “would demonstrably outweigh the benefits”, are off limits.

One curious element of the Housing Delivery Test is that there are some areas that require a great deal more houses than they have, and yet they truly struggle to provide them and are trapped in a bizarre catch-22.

According to Lichfields, half of the local authorities that would be subject to Presumption in Favour of Sustainable Development would actually be unable to permit all the extra developments that it is designed to prompt. Instead, and this is the reason why they are subject to it in the first place, they are constrained by Green Belts and other restrictions, so any attempt to develop in them would be extremely difficult.

 

“I’m a developer, how does all this help me?”

 

We hear you! We also suspect that you probably see the potential here already, but we’ll go into it a bit further, nevertheless. What the Housing Delivery Test does is show areas of need, where local authorities are failing to meet their targets and where more homes are desperately required.

As you are searching for locations to acquire and develop – and did we mention that SearchLand’s tools make this process quicker and easier than ever before? – then you will likely be considering not only where it is physically possible, but also what the local housing market is like and the success of other planning applications in the area. Or prior approvals under permitted development rights .

Areas that have met their Housing Delivery Test targets may well still be viable locations, but we want to focus on those areas that have either had to introduce a 20% land buffer or are subject to the NPPF’s Presumption in Favour of Sustainable Development.

The land buffer areas will have, as you might imagine, more land available for development than they had otherwise planned, generating more opportunities for you.

But the Presumption areas are the most valuable to look at. They may not open up more land, and there are likely to still be restrictions in places, but you are suddenly looking at an environment where your application is almost guaranteed to be granted. Wouldn’t that be nice?

 

Councils to look at

Here’s our list of the 20 local authorities with the worst 2021 Housing Delivery Test results:

1. Southend-on-Sea – 31%, deficit of 2094 homes

2. Eastbourne – 32%, deficit of 1192 homes

3. Epping Forest – 35%, deficit of 1589 homes

4. Epsom and Ewell – 35%, deficit of 971 homes

5. Worthing – 35%, deficit of 1484 homes

6. Tandridge – 38%, deficit of 1038 homes

7. Basildon – 41%, deficit of 1600 homes

8. Hastings – 42%, deficit of 528 homes

9. Kensington and Chelsea – 43%, deficit of 1083 homes

10. Bromsgrove – 44%, deficit of 789 homes

11. Havering – 46%, deficit of 1728 homes

12. Three Rivers – 46%, deficit of 865 homes

13. Watford – 48%, deficit of 1068 homes

14. Castle Point – 49%, deficit of 461 homes

15. North Hertfordshire – 49%, deficit of 1289 homes

16. Thurrock – 49%, deficit of 1542 homes

17. Bury – 52%, deficit of 739 homes

18. Sandwell – 52%, deficit of 1820 homes

19. Portsmouth – 54%, deficit of 1023 homes

20. Calderdale – 55%, deficit of 945 homes

Whilst these are the 20 worst results, there are actually 49 local authorities that are subject to Presumption, whilst Bournemouth and North Dorset (both recently reorganised Local Planning Authorities) are also subject to Presumption.

As you can see, the vast majority of these are either in Greater London, on the South Coast, or within commuting distance of the capital. Whilst the Housing Delivery Test has been criticised for not addressing the needs of housing in the north of England and favouring the southeast instead, this demand for accommodation is in line with what we would expect.

In the wake of COVID (sorry to mention it), record numbers of people have moved out of London, with 49,470 first-time buyers and home movers leaving the capital in 2021. In Tandridge, which met only 38% of its target, 67% of buyers in the first half of 2021 were from London. Those moving out tended not to go too far from the capital, with the majority moving to within 32 miles.

With that in mind and the fact that this trend may well continue, the distribution of regions where more homes are need and that are subject to Presumption should be encouraging for developers as a sign of great opportunity in the southeast of the country.

SearchLand’s powerful tools 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.



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