Housebuilding: 'yet another flawed algorithm'

By Kathy O'Leary | 30 August 2020

After the recent exam grades fiasco brought their use into sharp focus, we have been turning our attention to the latest algorithm to land on our desktops.

The Government’s ‘housebuilding algorithm’, the proposed new national standard methodology for setting local housing requirements, is causing consternation in suburban and shire districts up and down the country. The Government is currently consulting on it as part of its package of proposed planning reforms.

The algorithm places greater emphasis on affordability, adding an adjustment to reflect how this has changed over the last 10 years on top of the adjustment for current median workplace-based affordability ratios.

In addition, the Government is proposing to scrap the cap, which limits each council’s housing requirement to no more than 40% higher than any figure adopted in the last five years.

The impact will be to concentrate new housing in those hotspots where issues of affordability are most pressing, with the biggest increases in housing targets in London boroughs. Between them, they will be expected to deliver an unrealistic 93,000 new homes a year.

Analysis shows that outside London, new housing will be concentrated in the suburban and shire districts in the South, rather than in more sustainable town and city centres. Many of the areas with the greatest falls in housing targets will be cities and metropolitan areas in the North and the Midlands.

My own highly desirable and predominantly rural district in the attractive Cotswolds, where affluent ‘blow-ins’ inflate house prices, is one of the 141 estimated to see a more than 25% change in its housing target – a 72% increase in the adopted local plan annual target to 786 new homes per year – well above recent delivery rates.

Our ability to deliver more much-needed affordable housing will be impacted by the Government’s plans to raise the threshold to help small and medium-sized builders recover from the economic impact of COVID-19 and we can’t build council housing fast enough to keep up with the Right to Buy.

The potential disparity in new housing allocations highlights real concern about the negative effects of yet another flawed algorithm.

Kathy O’Leary is chief executive of Stroud DC

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