LGA: The North may get fewer homes under new housing formula

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Proposed changes to housing numbers requirements may see fewer homes delivered in the North of England, contrary to the government’s ‘levelling up’ agenda, the Local Government Association (LGA) has warned.

The warning by the LGA, which represents councils in England and Wales, comes as the government announced plans to revise its algorithm which sets how many new homes should be built in local areas.

The plans form part of the government’s proposed sweeping reforms to the planning system which it says will help it hit its target for 300,000 new homes a year across England.

Analysis by the LGA shows that Northern regions will see lower growth rates under the new formula, while the Midlands and the South will see the highest increase in new homes growth.

The new methodology will also have a disproportionate impact on rural areas, as some of England’s most rural places will be required to increase their number of new homes by 59%, compared to a 20% increase in urban areas.

Cllr David Renard, the LGA’s housing spokesperson, said: “Councils have raised concerns over the government’s new housing numbers and it is positive that ministers have indicated that they are willing to listen and work with local government to get this right.

“Under these plans, some parts of the country will have to ramp up housebuilding with existing targets doubled. Others, mainly cities in the North, will be told they need to build less, which risks reducing the number of homes they had earmarked for development and bulldozing their current house-building plans. This seriously jeopardises any ambition to level-up the country.”

According to the LGA’s analysis, London will be expected to see a 161% increase in new homes built under the new targets, while 57% and 39% increases will be expected in the South West and the South East respectively.

This compares poorly to housing in the North of England, as proposed targets will be 28% lower in the North East, 8% lower in the North West, and 6% lower in Yorkshire and the Humber.

Newcastle stands to be the Northern city hit hardest by the new targets, as it can expect to see a 66% decrease in new homes built compared to recent years. Liverpool, Sheffield, and Leeds would see 59%, 20% and 14% drops.

The analysis will worry councils, who have stressed the need for a locally-led planning system amidst the government’s proposed planning reforms.

The LGA has also called on the government to use its upcoming Spending Review to allow councils to retain 100% of Right to Buy receipts and set local discounts so they can invest in new and existing housing stock.

Cllr Renard added: “Algorithms and formulas can never be a substitute for local knowledge and decision-making by councils and communities who know their areas best. When decisions about housing need and developments are made locally, wider issues can be considered, such as ensuring they come with necessary infrastructure and affordable homes.

“If we are to truly fix our chronic housing shortage, the Spending Review needs to ensure councils have the tools, powers and flexibilities to plan for and deliver the quality homes and places our communities need.”

A spokesperson for the Ministry of Housing, Communities and Local Government (MHCLG) dismissed the LGA’s analysis, saying that its fears about the new formula are ‘unfounded’.

“The current formula for local housing need is inconsistent with our aim to deliver 300,000 homes by the mid-2020s,” the spokesperson said. “We are consulting on each element of the indicative formula and will reflect on the feedback we receive so that we can build the houses that are needed for the next generation.

“As under the current system, local housing need will only be the starting point in the process of planning for new homes and councils will still need to consider local circumstances to decide how many homes can be delivered in their areas.”

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