Housebuilding algorithm could deprive the North of new homes

An updated algorithm designed by government to set how many new homes need to be built in local areas will lead to London and the south seeing a housing boom while swathes of the north will see fewer homes built, councils have warned.

Under proposed changes to the housing numbers requirements, the government will revise the current method for setting targets for councils on the number of homes to be built in their local areas.

The Local Government Association, which represents councils in England and Wales, said the new formula has introduced a stark variation in where new homes are required to be built without regard to the wider levelling-up agenda.

Analysis of the new government formula shows that, compared to the current formula, the highest percentage increase in new homes growth will be expected in the Midlands and the South, with lower growth rates in northern regions.

The new methodology will also disproportionately impact on rural rather than urban areas. Some of the most rural places in England will see a requirement for a 59 per cent increase in homes compared with those required to be built under the current algorithm, compared to a 20 per cent increase in major urban areas.

The analysis also shows that, compared with the number of homes built in recent years:

Under the new national targets, London will be expected to see a 161 per cent increase in housing. A 57% increase in new homes will be expected in the south east and 39 per cent in the south west.

For example, Brighton and Hove will be expected to deliver a 287% increase in housing, Dover will have to increase new homes by 294% and Tunbridge Wells will have to increase by 184%.

In comparison, proposed housing targets for the north east are 28% lower than existing delivery, 8% lower in the north west and 6% lower in Yorkshire and Humberside.

Northern cities stand to see significantly fewer homes built with the new requirement seeing a 66% decrease on those built in recent years in Newcastle, 59% in Liverpool, 20% in Sheffield and 16% in Leeds.

Councils argue that a locally-led planning system needs to be able to ensure developments are of a high standard, are built in the right places, include affordable homes and are supported by infrastructure that provides enough schools, promotes greener and more active travel, and tackles climate change.

To ensure people have the right access to a mix of housing, the LGA is also calling on the government to use the forthcoming Spending Review to allow councils to retain 100% of Right to Buy receipts and be given the flexibility to set discounts locally in order to invest in new and existing stock.

Cllr David Renard, LGA 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. Building new good quality and affordable housing is vital to regenerating our towns and cities, improving our health and wellbeing, creating jobs and enabling local economies to thrive and bounce back following the coronavirus pandemic.

“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.”