The Right Homes In The Right Places, But What Is The Impact On The Economy

Sector: Residential

Group News

The recent Government consultation paper, which seeks to deliver 266,000 homes per annum nationally, includes a standard methodology that applies uplifts based, generally, on providing more homes in the least affordable locations relative to local wages.

To show the potential impact in Gross Value Added (GVA) growth capita terms, Pegasus Economics has mapped the change in gross value added (GVA – a proxy for economic output) when comparing existing Local Plan figures to those identified by the standard methodology.The standard methodology leads to higher housing requirements (and thus higher household populations) over the ten years to 2026. Unsurprisingly, total GVA also increases in the south and decreases in many parts of the north when compared to existing Local Plan dwelling requirements. This could present a challenge for the northern authorities in delivering the Northern Powerhouse and Midlands Engine initiatives, as it is suggesting lower economic growth in these locations by 2026.

As set out in Pegasus Group’s representations to the Government, it is appropriate that further sensitivity testing takes place at the local level to determine if the level of housing identified by the standard methodology is sufficient to meet both economic and social needs. It is considered that there is scope to do so, particularly given the national dwelling requirement most recently referred to is 300,000 per annum.

It is anticipated that the Government will introduce a Standard Methodology as part of a revised National Planning Policy Framework in Spring of 2018.

This article has been provided by Executive Director, Chris May, and Associates, Richard Cook, Neil Tiley & Hanna Staton.

For further information about Pegasus Group and its services please contact us.

Right Places Map

Change in GVA By 2026 – Local Plan Dwelling Requirements Vs Standard Methodology