Understanding the Five-Year Housing Land Supply and Housing Delivery Tests: What They Mean for Local Authorities
The UK's housing crisis has placed local authorities under pressure to meet growing housing demand. Two critical tools in addressing this are the Five-Year Housing Land Supply (5YHLS) and the Housing Delivery Test (HDT). These mechanisms guide how local authorities manage housing development and respond to shortfalls. Understanding these tools and their implications is essential for anyone involved in housing development.
The Five-Year Housing Land Supply (5YHLS)
The 5YHLS ensures that local authorities allocate sufficient land for housing over a rolling five-year period. This supply must not only include land but also demonstrate that it is "deliverable"—meaning homes can be built and occupied within that timeframe.
Key factors in the 5YHLS include:
Local housing needs: Reflecting local demographics, economic factors, and government targets.
Land availability: Identifying enough land in the local plan that can be developed within five years.
Past performance: If housing delivery falls below 85%, a 20% buffer must be added to the land supply to ensure a more robust stock. Authorities delivering consistently add a 5% buffer.
Failure to demonstrate a robust 5YHLS means authorities risk losing control over planning decisions, making it easier for developers to get approval for projects outside local plans.
The Housing Delivery Test (HDT)
The HDT measures how well local authorities meet their housing delivery targets over a three-year period. It compares the number of homes delivered against the number required, expressed as a percentage. Depending on the authority's performance, the consequences vary:
Below 95%: The authority must create an action plan to boost housing delivery.
Below 85%: The authority must identify an additional 20% land supply to accommodate growth.
Below 75%: A presumption in favour of sustainable development applies, which means planning applications are more likely to be approved, even if they do not align with local policies. This reduces the local authority's control over developments.
The presumption favours developments that meet sustainability criteria but doesn’t guarantee approval. Instead, it shifts decision-making power away from local authorities when they fail to meet housing goals.
Why the 5YHLS Matters
The five-year supply is crucial because it ensures that land is available for housing development, responding to both local need and deliverability. For authorities, failing to maintain this supply can result in:
Loss of planning control: Developers can submit speculative applications more likely to be approved, even if they conflict with the local plan.
Presumption in favour of development: This shifts decision-making power, risking overdevelopment and pressure on local infrastructure.
Implications for Local Authorities
Local authorities must balance planning for housing growth while managing local priorities. To avoid penalties, they must:
Plan proactively: Ensure local plans include enough land and work with developers to bring forward deliverable sites.
Monitor regularly: Regularly review housing delivery to stay on track.
Engage with communities: Involve local residents to balance growth with community needs.
Opportunities for Landowners and Developers
For landowners, this could be an opportune moment to explore its development potential. With local authorities under pressure to approve more planning applications, your land may be more valuable than ever. We can help you navigate the planning process and assess the prospects for developing your land.
If you’re looking to acquire land, the current planning environment could present unique opportunities. With a greater likelihood of planning approvals, particularly in areas where local authorities are failing their targets, now may be the perfect time to expand your portfolio. Our team at Virginland is here to discuss your land acquisition requirements and help you identify the most promising opportunities.
Get in Touch with Virginland
Whether you're a landowner or developer, Virginland is here to help you navigate the changing planning landscape and make the most of new opportunities. Reach out to explore how we can assist with land development and acquisition.