Research article

All bark, no bite? Implementing the Housing Delivery Test

Housing delivery test

Tougher sanctions will force local authorities to meet government targets. But there are loopholes


A significant new addition to planning policy in the draft NPPF is the Housing Delivery Test. For the first time, it requires local authorities not only to look forward at their housing land supply, but also to look back over what their policies have delivered.

We project that by 2019, 21 local authorities will be at risk of the heaviest sanctions unless they significantly improve the rate of delivery, or adopt new plans that have targets below current estimates of need. But the Test is likely to have a limited impact in its first year.

Housing Delivery Test

FIGURE 6 | Housing Delivery Test | More rigorous sanctions in 2019 will hit local authorities in the event of undersupply
Source: Savills Research using MHCLG data

2018: clearing the first hurdle

We expect that no local authority will deliver less than 25% of its housebuilding target in the three years to March 2018 (results will be known in November 2018*). This means they will avoid the strictest sanction – for the presumption in favour of sustainable development to apply to all proposals. The area most at risk is London, which contains half of the 12 local authorities delivering only 25% to 40% of their housing need.

There are limited sanctions for lesser failures. We predict that 119 local authorities will deliver less than 85% of their targets and be required to add a 20% buffer to their land supply. However, this sanction already applies to 46 of them under the current system due to past undersupply, so will only affect 73 local authorities.

A further 24 local authorities will face the lightest level of sanction, which is to produce an action plan to combat under-delivery. This leaves 183 local authorities (just over half) on track to pass the Test.

2019: falling at the second?

Serious sanctions are more likely in year two of the Test, which sees the threshold for presumption in favour of sustainable development rise from 25% to 45%. There is also the introduction of the new standard methodology to calculate housing need.

We estimate that 21 local authorities are at risk of falling below the 45% mark at this stage. These areas would need to deliver an additional 6,500 homes in total in 2018/19 compared with current levels, to reach the 45% threshold. This is equivalent to more than 300 extra homes per district.

Alternatively, for the 12 of those 21 local authorities without up-to-date or advanced draft local plans, it may be possible to adopt housing targets below the expected housing need and reduce the delivery required to hit 45%.

In this alternative scenario, the unmet need must be fully accounted for through cooperating with neighbours to redirect the requirement.

Projected delivery pass rates for 2019

FIGURE 7 | Projected delivery pass rates for 2019 | We predict only eight of 33 London authorities will meet targets
Source: Savills Research using MHCLG data

Rush to adopt

In September 2017, the Government launched a standard method for calculating local authorities’ housing need. One of the outcomes from the application of the standard methodology was some significant increases in housing targets. The introduction of the standard methodology is already having an impact on plan making with some local authorities seeking to quickly submit or adopt their plans before the changes in methodology comes into effect.

Central Bedfordshire and West of England (Bristol, Bath, North Somerset and South Gloucestershire) have openly stated that the potential need to increase housing targets is a motivating factor in their aim to swiftly adopt proposed plans.

On the other hand, Solihull Council has slowed down its plan-making process. Having agreed to take unmet need from Birmingham, that number may fall under the standard methodology.

*2018 results are based on modelling net additional dwellings data using the more timely Energy Performance Certificates for new homes