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How will the housing numbers change?

This blog has strongly opposed building 4,500 houses in the Loddon Valley countryside area around Hall Farm, and has suggested an alternative site at Ashridge Manor. The southern parishes in Wokingham Borough have taken the overwhelming bulk of housing development, with quite inadequate infrastructure so far in place. We in SOLVE feel that it is time for other areas to share the burden.

But behind the arguments over particular development sites, there is a bigger issue: how much extra housing is the borough actually going to need in future, and how is that figure arrived at? The current position is that it's not the local council that decides the local ‘housing need’ figure, it's the Westminster government. It has a Standard Method for working that out, which we’ll come on to. The Wokingham Borough target housing figure touted by the last Conservative council was reportedly 768 dwellings per year, presumably the output of the government’s calculation method.

The government has been consulting on changes to the planning policy framework, apparently with the idea that Westminster’s targets shouldn’t be automatically imposed on local authorities without negotiation. In the absence of any official announcement yet, it's hard to tell what is actually going to happen.

However, there is one change that may well be implemented. It's a recommendation by the Local Government Association for planning policy to use household growth projections based on 2018 population data. Up to now, the government has used 2014-based figures to work out housing targets, but the LGA regards these as out-of-date and unsatisfactory. Numerous councils and planning publications have said that the 2014-based household growth estimates were turning out to be too high, and the ONS 2018-based projections have brought them down considerably. Household growth across England for the following ten years was forecast in 2014 to be 2.3 million, but in 2018 it was revised downwards to 1.6 million. If the government switches to 2018-based figures, can we expect Wokingham Borough’s housing target to be lower?

To tackle this question, we have to look into the ‘Standard Method’ the government uses to tell us how many houses we’re supposed to need. That means taking on board some statistics. I personally don't go much above the level of basic numeracy, so I have to rely on the official figures made available online by the Office for National Statistics (ONS). If you can tolerate a discussion involving a fair amount of their official numbers, I hope you'll find this blog piece worthwhile. However, if number-crunching just turns you off, that’s fine, see you next time.

How the government determines 'housing need': the 2014-based process

The government’s National Planning Policy Framework imposes on local authorities the following Standard Method for calculating their ‘housing need’ figure:-

‘Step 1: Set the baseline using national household growth projections (2014-based household projections in England, table 406 unitary authorities and districts in England) for the area of the local authority. Using these projections, calculate the projected average annual household growth over a 10 year period.’

‘[Step 2] Then adjust the average annual projected household growth figure (as calculated in step 1) based on the affordability of the area. The most recent median workplace-based affordability ratios, published by the Office for National Statistics at a local authority level, should be used.’

The latest (2022) ‘median workplace-based affordability ratio’ for Wokingham Borough is 12.77. Making the required calculation, this means the ONS’s forecast number of households must be multiplied by 1.548. On the current 2014-based estimates, the forecast number of households in the Borough given for 2024 is 70,000. The forecast figure for 2034 is 75,000, an increase of 5,000 households. Multiplying by 1.548, we get 7,740 as the government’s ‘housing need’ figure, as projected from next year.

We’re not quite there yet. The Standard Method imposes a cap on that figure. In the case of Wokingham, where the local plan in force is more than 5 years old, the cap works like this:

‘[Step 3] Where the relevant strategic policies for housing were adopted more than 5 years ago (at the point of making the calculation), the local housing need figure is capped at 40% above whichever is the higher of:

a. the projected household growth for the area over the 10 year period identified in step 1; or

b. the average annual housing requirement figure set out in the most recently adopted strategic policies (if a figure exists).’

Following alternative ‘a’, projected household growth on the 2014-based figures is 5,000, as we just saw. Multiplying that by 1.4 gives 7,000 dwellings. As for the ‘b’ alternative, Wokingham’s 2010 Strategic Plan doesn’t mention an annual housing requirement in the text. However, it does include (p. 93) a graph with a line for an ‘annualised housing requirement’. The scale used in the graph is not very precise, but the line appears to lie somewhere under 700. That means the borough’s housing need for the coming 10-year period should be capped using alternative ‘a’. In other words, it’s 7,000 dwellings, i.e. 700 a year.

'Housing need' using the 2018-based process

So what’s our position if the 2018-based growth projection is used instead?

The ONS 2018-based projection forecasts 5,649 more households in Wokingham between 2024 and 2034. Multiplying that figure by 1.548 (Step 2), the borough’s ‘housing need’ figure over the next 10 years is 8,745 dwellings. We apply the cap in Step 3 (1.4 times the projected household growth), and follow alternative ‘a’ as before. Then we get 7,909 dwellings, or 791 per year. That compares with 700 dwellings we obtained using the 2014-based projection, and 768 that the Council reportedly claimed was its Standard Method-produced figure (I have not been able to find the rationale for that precise number).

Therefore, by recommending the 2018 base projection be used, the Local Government Association is wishing more housing on us. Not specifically or deliberately, of course, but that appears to be the outcome of what it wants.

That leaves the question of why the 2018-based projection puts up our housing target figure, when the national housing growth figure is coming down. The answer is no doubt due to our area being perceived as more desirable to live in than other parts of the country. In other words, the ONS expects us to go on being targeted by in-migration. And the government will want more houses to be built for the incomers.

It looks as if we in Wokingham Borough should be managing our expectations down, as regards government changes to housing policy.

Pat Phillipps

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