Standard method for assessment of housing need

Indication is that the standard method for assessment of housing need, or a standard method for calculating local housing need was introduced via a government white paper entitled Fixing our broken housing market, published in February 2017, followed in March by a consultation.

The standard method for assessment of housing needs was last updated in 2019 (although in 2024 the standard was part of a now closed consultation on changes to the NPPF launched by the Labour government; see below)

The current standard method for assessment of housing needs (as of 2019) is used to calculate a minimum annual local housing need figure and is carried out wth the following steps:

Step 1 - Setting the baseline. This is done using the 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 (this should be 10 consecutive years, with the current year being used as the starting point from which to calculate growth over that period). Note that the figures displayed are rounded and individual cells need to be viewed in order to see the full number.

Step 2 - An adjustment to take account of affordability. The average annual projected household growth figure (calculated in step 1) is then adjusted based on the affordability of the area. This is done using the most recent median workplace-based affordability ratios, published by the Office for National Statistics at a local authority level. For each 1% the ratio is above 4, the average household growth baseline should be increased by a quarter of a percent. An authority with a ratio of 8 will have a 25% increase on its annual average household growth baseline. No adjustment is applied where the ratio is 4 or below. The precise adjustment formula is as follows and used only where an adjustment is required:

Step 3 - Capping the level of any increase. A cap is applied which limits the increases an individual local authority can face and depends on the current status of relevant strategic policies for housing. Where policies were adopted within the or reviewed by the authority and no updating was required, in last 5 years (when making the calculation), the local housing need figure is capped at 40% above the average annual housing requirement figure set out in the existing policies.

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).

For areas covered by spatial development strategies, the relevant strategic policies are those contained within the spatial development strategy. Where a requirement figure for an authority in a spatial development strategy differs from that in a local plan, the figure in the spatial development strategy should be used as long as the spatial development strategy is no older than 5 years.

Where the relevant strategic policies within a spatial development strategy are over 5 years old, the relevant strategic policies at individual local authority level set out in the authority’s local plan can be used in calculating the cap (if these policies are adopted after the relevant spatial development strategy, and the policies set out in the local plan are less than five years old, or older and has been found not to require updating as part of a plan review). If the relevant strategic housing requirement policies in the local authority’s local plan are over 5 years old, then 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 most recent number taken from the spatial development strategy

Step 4 - The method as it currently stands also includes a Step 4 which is referred to as Urban uplift, which was introduced by the Conservative government under Boris Johnson and requires a 35% uplift for those urban local authorities in the top 20 cities and urban centres list. Its application depends on whether the local authority contains the largest proportion of population for one of the 20 cities or urban centres in England within the list.

The labour government review of the NPPF in 2024 proposed removing the urban uplift step. Stating 'Paragraph 130 was added to explain that local character can be taken into account when local planning authorities consider their ability to meet their housing needs. The policy sets out that significant uplifts in density may be inappropriate if this would result in development wholly out of character with the existing area. Local planning authorities are required to use authority-wide design codes to evidence the impact on character. Proposal to delete as local planning authorities should identify opportunities for maximising the efficient use of land, especially in areas well served by transport and other infrastructure.'

It has been generally accepted that he National Planning Policy Framework expects strategic policy-making authorities to follow the standard method in this guidance for assessing local housing need. It uses a formula to identify the minimum number of homes expected to be planned for, in a way which addresses projected household growth and historic under-supply. This formula, the standard method identifies a minimum annual housing need figure. It does not produce a housing requirement figure.

Under the Labour government a new standard method for assessment of housing needs has been proposed as being mandatory, with a local authority plan for the resulting figure; lower figures are accepted only with demonstration of hard constraints and all other options exhausted. To support an ambitious government commitment of 1.5 million new homes in this Parliament.

For further historical information see Housing and economic needs assessment and more recently Research Briefing: Calculating housing need in the planning system (England). Published Tuesday, 12 March, 2024.

For further information regarding the Standard method see Gov.UK Guidance "Housing and economic needs assessment -Guides councils in how to assess their housing needs."

[edit] Related articles on Designing Buildings

• Affordable housing.
• Densification.
• Diversity and the housing crisis.
• Empty dwelling management orders.
• Empty housing in London - documentary.
• Gentrification.
• Home ownership.
• Housing and Planning Act 2016.
• Housing guarantees.
• Housing shortage.
• Housing tenure.
• Housing white paper 2017.
• Local housing need.
• Local plan.
• Localism Act.
• National Planning Framework.
• National planning policy framework NPPF.
• National Planning Practice Guidance.
• Neighbourhood development order.
• Neighbourhood planning.
• Outline planning permission.
• Planning legislation.
• Planning permission.
• Planning policy replaced by the NPPF.
• Private rented sector PRS.
• Social housing.
• Strategic Housing Land Availability Assessment.