Housing supply in London reached a low of 17,850 new homes in 2010/11 against the current minimum target of 32,000 per annum.

Although the draft amendments to the London Plan increase the target to 42,000 per annum, this still leaves a shortfall of at least 7,000 homes per annum against the new London SHMA assessment of need for 49,000 homes a year.

The difference between house prices in London and the South East is higher than it has ever been, and we expect this to translate into increased demand in the Home Counties over the next five years.

This case study looks at the LPAs with the strongest migration links to London: the places likely to feel the greatest effect of people moving out of London in search of housing.

The colours on Map 2.1 indicate the difference between locally planned housing targets in each LPA, and predicted need, and the map shows clearly that there is currently little prospect of the shortfall in London being compensated for by surrounding authorities.

Market signals

The Planning Practice Guidance (PPG) requires that housing need assessments pay regard to market signals. In the South East, in which most of the local authorities in Map 2.1 are located, and where demand is higher, Holmans’ projections indicate a higher need for housing, equivalent to expanding housing stock at a rate of 1.1% per annum.

In most of these LPA areas, market signals indicate high levels of demand relative to both the South East and national averages, indicating that need in these areas is higher. However, most of the LPAs have set themselves housing targets below the average required.

Authorities within the more affordable, lower demand areas to the east of London (Thurrock, Dartford, Gravesham) are amongst the few planning to deliver relatively high numbers of houses, in excess of 1.04% of stock. Conversely, in Surrey, Berkshire and Buckinghamshire, where there is higher demand, housing targets are below this rate.

We conclude from this analysis that there is a need for application of a broad ‘duty to co-operate’ across a sub-regional area in the South East, comprising London and its adjoining authorities, and also those locations with a close connection to the London Housing Market Area within roughly an hour’s commuting time of the capital. It is within this sub-region that there maybe a particular role for New Towns to contribute towards meeting some of the unmet need.

Yorkshire’s Golden Triangle

Moving away from our current study area, to Yorkshire’s Golden Triangle – this high value property market, which lies between Leeds, Harrogate and York, suffers from high demand and low supply. The area’s popularity with commuters, coupled with the Green Belt and other constraints on development, has resulted in affordability pressures.

The Leeds 2012 Strategic Housing Market Assessment reported that within this area the average annual wage is £34,959 compared to an average house price of £274,477, an affordability ratio of 1:8.

To address this issue, there is an emerging requirement of approximately 150,000 new homes within the Golden Triangle over the next 18-20 years. Most LPAs within the triangle have sought to retain the previous RSS targets, with the exception of Selby, which has sought a lower figure.

The key cities in the region, Leeds and York, are planning to meet the growing demand for homes. Savills analysis shows that planned levels of development in Leeds and York exceed the Holmans’ average, although in both cases, Green Belt reviews are proving necessary.

New towns

Prospects for new settlements

London’s population is growing fast and is set to rise to over nine million by 2021 according to current projections. It is becoming increasingly clear that we cannot accommodate the needs of this expanding population within the boundaries of the capital’s 33 boroughs.

This growth will put pressure on housing in the surrounding Home Counties and we need to plan larger scale developments to meet this demand.

A recent report by the TCPA calls for the creation of comprehensively planned, larger scale developments and the modernisation of current legislation to facilitate the delivery of New Towns.

The NPPF allows for larger scale development such as new settlements, including ‘Garden Cities’, as a means of addressing housing needs. The 2014 Budget indicated the publication by Easter of a Garden Cities Prospectus to encourage locally-led new settlements. Savills is aware of a number of emerging new settlement proposals in the south, for example at Wisley and Dunsfold Airfields in Surrey, Mayfields in West Sussex, and Ebbsfleet in Kent. All are currently being promoted by landowners.

Savills considers that New Towns are not a panacea for the housing shortage, but can be an additional source of new housing that complements existing sources.

Genuine new places

New Towns require a long term commitment by Government and other agencies to ensure their success. Only over longer timescales (25-30 years) can the investment in infrastructure and place-making be recovered from land sales as development takes place. In the past, this level of commitment has been underpinned by the creation of New Town Corporations, vested with the necessary Planning and CPO powers.

In order to be successful, New Towns should be located in areas where high demand for housing coincides with high levels of economic activity capable of generating adequate local employment. Also there needs to be an existing capacity in local infrastructure or Government commitment to the delivery of new infrastructure capacity.

It is only by creating genuine new places which combine new jobs with quality of life, good design and good transport choices, that we can hope for public support. The Chancellor of the Exchequer’s recent announcement of a new ‘garden city’ with an initial 15,000 homes at Ebbsfleet in Kent will give a boost to this long-standing major housing development, and meet some of the need for housing in London and the South East; however, it is little more than a drop in the ocean.

Taken from
Planning: Countdown to the election