2021 Housing Delivery Data – The Heatmap

17th January 2022

The Government has released the housing delivery data for last year.

Let’s take a look:

 

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COVID – the elephant in the room

2020 wasn’t a normal year. When the first lockdown hit in March 2020, many construction projects were paused, having a knock-on effect on housebuilding.

The Housing Delivery Test runs from 1st April 2020 to 31st March 2021, so this data release overlaps most of the lockdowns (unlike last year’s which covered just a fortnight).

In short, COVID impacts this data. 

Because of this, the Government reduced the “homes required” for 2019-20 by a month, and for 2020-21 by four months. 

This means that the targets for homes required by Local Authorities were lower than last year’s – something to note when comparing numbers.

 

The state of housebuilding in 2021

Overall the picture for new houses has improved.

In 2021, English local authorities were asked to deliver 153,000 new homes (lower targets than last year because of COVID), and they delivered 221,000 homes – 144% of target. 

This was better than last year’s performance of 121% of target.

But this is still 78,500 homes short of the much-discussed target of 300,000 new homes a year, where they only hit 74% of target. Last year, the shortfall was smaller at 49,000 homes, or 84% of target.

However, considering the bar was lowered by four months of new homes this year, this actually suggests an improved performance.

But, there’s still some work to do.

 

Key insights

  • 1) We’ve got more housing. But is it enough?

Each local authority has a unique housing target, based on household projections and housing need. 

On average in 2021, authorities were overperforming at 154% of their individual targets – rising from 137% in 2020, 117% in 2019, and 112% in 2018. 

Clearly performance is improving. 

But, three out of ten authorities were under 95% of their target – a drop from last year’s one-third, but still a significant number.

Why is this the case?

Could overperforming authorities be less strict with their planning rules? Do they have low requirements? Or is housing demand low there, and thus less profitable? 

Are underperforming authorities a case of stretched planning departments? Strict planning rules? Infrastructure challenges?

This data, and the housing crisis in general, raises more questions than answers. But such questions could prove profitable to the savvy developer.

 

  • 2) Are those houses in the right areas?

England might be building more houses but, from the heatmap, it’s clear that new housing is still falling short in the areas where people want to live the most (and where prices are highest). 

Since 2018, Kent and the London commuter belt have become increasingly red on the heatmap (but some local authorities have shifted to green in 2021). For instance, authorities such as Gravesham, Medway, and Sevenoaks are falling well short of their housing targets.

 

Yet regionally, the North is still continuing to overdeliver – with Burnley, Copeland, and Redcar and Cleveland, all above 400% of their targets, and rising from previous years.

 

  • 3) Local authorities and where they stand

From the table (you can click on the headers in the table to sort by) we can see that the ten authorities most overdelivering on their targets are:

  • Oxford
  • Richmondshire
  • Copeland
  • Tamworth
  • Redcar and Cleveland
  • Burnley
  • Knowsley
  • Crawley
  • Preston
  • Darlington

And we can see that the ten authorities falling furthest short of their targets are:

  • Southend-on-Sea

  • Eastbourne

  • Epping Forest

  • Epsom and Ewell

  • Worthing

  • Tandridge

  • Basildon

  • Hastings

  • Kensington and Chelsea

  • Bromsgrove

So, with a few exceptions, the North/South divide remains pretty strong.

  • 4) The consequences are harsher for those LAs not hitting their targets

In 2019 a new consequence was introduced to the Housing Delivery Test – “presumption in favour of sustainable development”. The cutoff for this consequence was raised in 2020, and has shifted the landscape in planning applications. 

Of the 320 local authorities in this data, 227 (71%) have met their targets and will face no consequence, up from the 67% last year. 

But according to paragraph 215 of the National Policy Planning Framework (NPPF), authorities face the following consequences if they aren’t building enough housing:

 

If they are under 95% of their target – 

Authorities have to come up with an action plan detailing why they're under-delivering, explore ways to reduce the risk of further under-delivery, and also set out measures on how they'll improve delivery.

This applies to 23 authorities (7%) – down from 33 (10%) last year.

 

If they are under 85% of their target –

Authorities have to produce an action plan and provide a 20% buffer to the five-year land supply they’ve allocated towards housing. 

This applies to 19 authorities (6%) – unchanged from last year.

 

If they are under 75% of their target –

Authorities have to provide an action plan, provide the buffer, and then the “application of the presumption in favour of sustainable development” will apply. 

This affects 51 authorities (16%) – a drop from the 55 authorities (17%) last year.

2019 to 2020 saw a big jump in this number, as the cutoff for this consequence rose from 45% of target to the current level of 75%.

When the Housing Delivery Test first came into effect, it was unknown territory for what it meant for developers. But in its fourth year, we’re seeing more clarity on what it could mean. 

For instance, near the start of 2021, a redevelopment providing 103 homes in Redbridge was given the green light, despite receiving 144 objections to the plans. Why? Because Redbridge is now subject to the “presumption in favour of sustainable development” as outlined in the planner's recommendations.

 

We still need new housing

This is the fourth year the Housing Delivery Test has been running, and overall the country is getting better at delivering houses. Despite that, three out of ten authorities are not hitting their targets, and many of these are in the South East. 

2020-21 only saw 74% of the much publicly discussed 300,000 new homes a year goal being delivered. While COVID played into this, if we were to use the Housing Delivery Test’s grading scheme, England would face a “presumption” consequence as a whole. 

“Presumption in favour of sustainable development” applies to 51 authorities, often in areas where there is a desperate need for new houses, with prices reflecting this. There might be opportunities in this for fast-moving developers.

Looking to plug the housing shortfall? We can help.

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More sites (and better sites) means that those developers can deliver more of those houses that the country desperately needs.

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David is LandTech’s resident Data Journalist. He has a degree in Physics, but he went all in on the spreadsheets after giving up on his dream to be an astronaut. He once made £150 from an initial investment of £20 selling… apples.