Housing in the South East - South East Regional Committee Contents

2  How many houses are needed in the South East?

4.  The setting of average annual targets for future house building has been a contentious issue in successive regional plans for the South East Region. These targets were debated at length at the Public Examination of the most recent South East Plan,[5] arriving at an 'agreed' target of 32,700 net additional dwelling per annum between 2006 and 2026. Since these debates took place alternative and higher estimates of housing need have emerged in advice from both the National Housing and Planning Advice Unit (NHPAU) and in Department of Communities and Local Government (DCLG) publications. Some local authorities and environmental bodies, on the other hand, have suggested that planned rates of house building might be already be set too high in view of environmental constraints in the region.

Future house building rates

5.  NHPAU, told us that the number of households in the South East was expected to grow a quarter as fast again in the next 25 years as it grew in the last 25 years, due to a range of factors such as people living longer and more people living alone or in smaller households, higher birth rates and continued net in-migration. Its advice states that regional plans for the South East should consider a range of between 38,000 and 53,800 new dwellings a year on average between 2008 and 2031—a total of between 874,000 and 1.24 million additional homes.[6] The lower figure of the range is the number of dwellings that would be needed to accommodate the projected increase in households—DCLG projections indicated that the number of households in the South East Region would increase by some 28% between 2006 and 2031, at an annual rate of change of 39,000.[7] The higher rate, it suggests, would be needed in order to tackle the problem of unmet need, second homes and vacancies in new supply and to stabilise affordability at no worse than levels experienced in 2007.[8]

6.  By contrast the South East Plan, published in May 2009, proposes a building rate of 32,700 net additional dwelling per annum between 2006 and 2026—a total of 654,000 over the twenty year period. That is, however, some 3,800 dwellings per annum higher than the house building rate proposed in the draft plan put forward by the South East England Regional Assembly. The official figure of 32,700 is the annual house building rate that local authorities in the region are currently working towards in preparing Local Development Frameworks—the figure is disaggregated into targets for individual sub-regions and local authorities in the region.

7.  The Home Builders Federation told us in its evidence that it supported higher rates of house building than provided for in the South East Plan stating that "the figure in the South East Plan should be higher than that finally decided upon by the Secretary of State in order to ensure that it properly reflects the demographic need of the region as set out by the Government's own National Housing and Planning Advisory Unit (NHPAU)".[9]

8.  SEEPB and The Campaign to Protect Rural England (CPRE) both indicated to us that targets for housing target numbers as currently used were not always the most appropriate way of providing for future housing need. In its evidence SEEPB pointed out that:

Local Authority experience suggests that centrally driven targets for housing numbers will ultimately become an end in itself. They are not the most appropriate way of ensuring that the right house is provided in the right location … [and] any review of the housing numbers set out in the South East Plan must be done through its work on the regional strategy.[10]

9.  CPRE suggests that "housing demand in the South East is almost limitless and any attempt to satisfy demand could mean unacceptable damage to the environment and countryside".[11] It told us that housing targets in spatial strategies should be replaced by a range of possible figures which should be tested locally as well as at the regional scale.

10.  Evidence from local authorities revealed some widely different attitudes to housing numbers. Oxford City Council, in its evidence, supports an annual target of 39,000, higher than the South East Plan target. Hampshire County Council however says that although it was currently exceeding the South East Plan delivery targets it could not be assumed that it was capable of accepting more housing on an indefinite basis.

11.  The NHPAU has asked for an objective debate about the number of houses to be built in the region. It argued that there was a need to have an informed, objective debate, underpinned by evidence about the number of homes that needed to be planned for. The choice in the region was not between increasing housing supply or continuing at current build levels: "the real choice is whether we plan for the houses needed, so that people are decently housed, or we plan for the social and economic consequences of persistent and increasingly severe undersupply".[12]

12.  SEEPB told us that the NHPAU targets would be one of many considerations to take into account in reviewing the South East Plan. However, they argued that other factors across the region also need to be taken into account: "not least the capacity of the infrastructure to accommodate growth and the capacity of the industry to deliver a certain level of housing."There were also "overriding factors" associated with the implications for the quality of the environment and the landscape such as the issues of flood risk and flood defence, "given that a significant part of our region consists of areas of coastal development."[13]

Recent rates of house building

13.  Data on house building rates are published quarterly by DCLG, and statistics on completions are also compiled by SEEPB from local authority monitoring reports. A recently published DCLG report shows house building reaching a peak at about 32,000 per annum in 2007-08 with rates before and after somewhat less than the South East Plan target figure of 32,700.[14]

Figure 1: House completions 1997/98 to 2007/08

Source: DCLG, House Building, September Quarter 2009: England.

14.  Evidence from the SEEPB and the Government Office for the South East (GOSE), based on local authority monitoring reports, pointed to higher rates of house building in the pre-recession period—34,560 in 2006-07 and 35,400 in 2007-08. In oral evidence, Mr Laxton, Head of Service for Housing and Planning, GOSE, explained that the monitoring report figures were higher because they are compiled differently and include conversions and changes of use.[15] There is agreement amongst those giving evidence that housing starts have fallen significantly in recent years, by as much as a half of those achieved during peak years.[16] This will result in many fewer houses being completed in coming years than are needed in the region. SEEPB in its oral evidence told us that:

The evidence available for starts on site shows that we are running about 50% down on what we were two or three years ago. In the last quarter, of autumn 2009, about 5,180 homes started on site; that is roughly 50% down on two years before that. We've seen that pattern consistently now for two, two and a half years. Taking that through to completion, one would expect to see a drop-off in housing completion figures for this current financial year and the next.[17]

Unintended consequences

15.  SEEPB warned of unintended consequences in pursuing targets set out in the South East Plan. It argued that to maintain momentum with delivery, local authorities could be forced to accept sub-optimal schemes in terms of location or quality because they were the ones that were financially viable.

In the current circumstances there is an increased risk that the desire to maintain housing outputs at all costs might over ride broader policy objectives. Whilst the importance of maintaining output is acknowledged there is a need to avoid creating a supply of permissions that is ultimately inconsistent with the agreed policy framework.[18]

16.  Some organisations giving evidence to us questioned whether centrally imposed targets represented the best way forward to plan for future housing development. It was suggested that the focus should be shifted to building the right kind of houses rather than focusing on the numbers built, with particular concerns evident about affordable housing and family-sized homes. We also heard persuasive arguments that the amount of house building planned for should take more account of local circumstances and environmental limits in both rural and urban areas. Despite such arguments, we concluded that it was difficult to see how the supply of housing could be adequately planned and monitored without some benchmark against which progress could be measured. We recommend that annual targets be retained as a key performance target, since they provide a useful benchmark, provided that they are reviewed on a regular basis and recognised as averages that will not necessarily be met every year. In disaggregating the regional target to local authority areas varying local circumstances must necessarily be taken into account, but some regional oversight is necessary still to ensure that local areas address such variability in consistent ways. We acknowledge that opportunities for future house building should continue to be limited in the more environmentally sensitive parts of the region and in coastal areas and that more work be put into identifying these areas at a regional level.

17.  Long-term average targets for house building are clearly going to be subject to review as new data become available. Current projections of population growth and household formation suggest that the target building rate in the South East Plan of 32,700 houses per annum will be insufficient to satisfy the region's need for houses. SEEPB acknowledges that recent projections by NHPAU will be a factor that is taken into account in reviewing the plan. We recommend that SEEPB and GOSE take full account of the higher house building targets suggested by the NHPAU projections as a matter of urgency and be prepared to revise their target upwards.

5   Government Office for the South East, The South East Plan: Regional Spatial Strategy for the South East of England, London, The Stationery Office, May 2009 Back

6   NHPAU, More homes for more people: advice to Ministers on housing levels to be considered in regional plans, July 2009. Available from: http://www.communities.gov.uk/ Back

7   Department for Communities and Local Government, Household Projections to 2031: England. London, 2009 Back

8   Ev 75 Back

9   Ev 75 Back

10   Ev 108 Back

11   Ev 51 Back

12   Ev 75 Back

13   Q 73 [Mr Tugwell] Back

14   Department for Communities and Local Government, House Building, September Quarter 2009 England Back

15   Q 91 [Mr Laxton] Back

16   Housingstartsisthenumberofdwellingswhereconstructionhasstarted.Housingcompletionsisthefigurewhentheyarefinished. Back

17   Q 69 [Mr Tugwell] Back

18   Ev 108 Back

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