Cornwall Monitoring Report
Cornwall 5 Year Housing Land Supply Statement
September2016
Table of ContentsPage
1:Introduction1
2:Establishing the Five Year Requirement2
3:Calculating the Supply9
4: Conclusion23
Appendix 1: Local Plan Expert Group Report Appendix 13 (March 2016)
Appendix 2: Cornwall Housing Trajectory 31st March 2016.
Appendix 3: Cornwall Housing Trajectory Lead in Times and Delivery Rates Methodology.
2016Housing Land Supply
1Introduction
1.1This report establishes the position as at 1st April 2016in relation to whether or not there is a five year supply of land for housing in Cornwall. The supply has been assessed against the emerging Cornwall Local Plan housing requirement which is based upon the Council’s latest assessment of its full objectively assessed housing needthat has taken into account comments made by the Local Plan Inspector in his preliminary findings.
1.2Cornwall Council asked the Planning Advisory Service (PAS) to undertake a peer review of its approach to assessing supply in its 2015 Housing Land Supply Report and thereport was amended to take into account some of the issues raised. This year’s report continues with the same approach with some changes to take account of the latest thinking.
2Establishing the Five year Requirement
2.1The Cornwall Local Plan was submitted to the Secretary of State on 6th February 2015 and the first Public Hearing Sessions ran between 18th and 22nd May 2015
2.2The Local Plan target before the Inspector at Examination at this time was 47500 homes at a proposed annual rate of 2,375 per year. The Local Plan Inspector issued his preliminary findings following the hearings in May 2015. He asked the Council to make a number of changes to the assumptions around migration and headship rates, upon which the demographic projections were based which, in his words, will result in a small increase in the demographic starting point shown in the SHMNA (45,900). He also stated that the Council should consider whether or not there was a need for any further uplift to enable the provision of further affordable housing. He did not consider there was a need for any uplift to respond to market signals and recommended that the Council should apply a 7% uplift to respond to the impact of second homes.
2.3 The Local Plan Examination was suspended whilst the further work requested by the Inspector was undertaken and consulted upon. In light of the Inspector’s preliminary findings Cornwall Council undertook further work to identify a full objectively assessed housing need (FOAN). Using the latest DCLG household projections as a starting point an assessment was made as to whether an uplift was required to take account of market signals, the impact of second/holiday homes and the effect of economic growth. A further assessment was then undertaken to establish the need for an uplift to take into account any shortfall in affordable housing. The conclusion of this work was that there was a need for 52,500 homes over the period 2010 to 2030. The detailed assessment of the FOAN has been published on the council’s website.
2.4 The proposed increase in the Local Plan Housing requirement to 52,500 was consulted upon along with other proposed changes between January and March 2016 and the examination resumed between 16th and 24th May 2016. The overall housing requirement of 52,500 was tested and examined at the Local Plan examination. Following the latest hearings a schedule was produced by the Council of proposed changes which the Inspector requested were consulted upon. Responses to the consultation were only sought on those changes which had not already been subject to consultation and arose during the latest stage of the examination. The overall housing figure was not included within the new changes upon which views were sought. The consultation was undertaken between 1st July and 12th August 2016. The Local Plan Inspector has now issued his final report and this was published on the 26th September 2016. His report concludes that the local Plan Housing requirement should be 52,500.
2.5The Council’s position is that the figure of 52,500 can therefore now be given considerable weight as the Local Plan is now at an advanced stage and will be adopted should the Council accept the Inspector’s recommendations.
Completions and the Historic Record of Delivery
2.6There were 2,536 completions during the year 2015/16. Since the start of the plan period there have been 13,991 completions at an average of 2,332 per year. This represents an under provision of 1,759 homes when compared to the proposed Local Plan housing requirement of 2,625per year or 15,750 over 6 years. This shortfall should be made up within the following 5 years as advocated by Planning Practice Guidance and the Local Plan. It is therefore added to the five year requirement. Table 1 below sets out the annual completions achieved since the beginning of the plan period (2010). This table also shows how the stock of planning consents either not started or under construction that are available for development has increased significantly from 12,943 in 2010 to 21,752 in 2016.
Table 1: Completions 2010-2016
Year / Completions / Number of Homes with Planning Permission1st April 2010 – Start of the Plan period / 12943
2010/11 / 2060 / 13518
2011/12 / 2375 / 15097
2012/13 / 2278 / 15520
2013/14 / 2040 / 18978
2014/15 / 2702 / 20380
2015/16 / 2536 / 21752
2.7The analysis of building rates in last year’s 5 year supply statement (December 2015) over the 15 years since 2001 provided a robust justification that there had not been a persistent record of under delivery over the housing market cycle as advocated by the Planning Practice Guidance.
2.8The analysis was made in relation to performance against the cumulative build rates on the basis of suggestions following a review of the Council’s approach to assessing its five year supply by the Planning Advisory Service. This approach was also supported on the basis that to analyse delivery on a year by year basis against the annual average would be unrealistic as this does not take into account that housing will inevitably be delivered in cycles sometimes exceeding and other times not delivering the average provision. The key being the delivery of the development plan target over the longer term. Such an approach was supported in the Sketchley House, Secretary of State decision paras 11.11-11.13. (APP/K2420/A/13/2208318).
2.9Since the publication of the December 2015 5 Year Supply Statement, the Local Plans Expert Group has published its report to the Communities Secretary and to the Minister of Housing and Planning on Local Plans for consultation (March 2016). Appendix 13 of this report (see Appendix 1) sets out its suggested approach to housing supply and at paragraph 4 suggests that persistent under delivery should be assessed over the longer period of no less than 10 years and that under delivery in two thirds of the monitoring years when assessed against the relevant housing requirement in place at the time for that period (likely to be the relevant adopted development plan, including a Structure plan where relevant) would be considered as persistent under delivery. The Expert Group also refers to the High Court decision in Cotswold District Council Vs SoSCLG (27 November 2013) to support its view.
2.10In light of this Table 2 below sets out delivery since 2001 as compared to the plan requirement in place at the time. This consists of the 1997 Structure Plan with a requirement for 2,275 homes per year between 1991 and 2011 then the last Structure Plan adopted in 2004 with a requirement of 1,970 homes per year between 2001 and 2016 up to 2010 and then the emerging Local Plan provision between 2010 and 2016. Against these requirements it is clear that the plan requirement has not been met in just 6 of the last 15 years or 40%. The under delivery of 40%is much lower than the two thirds or 65% suggested by the Local Plans Expert Group as representing a persistent record of under delivery. Even if the last 10 years were considered to be a full economic cycle then the adopted plan requirement has been exceeded in half of these years which again is less than that advocated by the Local Plans Expert Group as representing a persistent record of under delivery.
Table 2: Housing delivery compared to the annual average development plan requirement
Year / Actual Completions / Cornwall Structure Plan 2007 (2275pa) / Cornwall Structure Plan (1970pa) / Local Plan Requirement (2625pa) / Surplus (+) or Shortfall (-)2001/2 / 2485 / 2275 / +
2002/3 / 2639 / 2275 / +
2003/4 / 2183 / 2275 / -
2004/5 / 2495 / 1970 / +
2005/6 / 2084 / 1970 / +
2006/7 / 2612 / 1970 / +
2007/8 / 3179 / 1970 / +
2008/9 / 2877 / 1970 / +
2009/10 / 2473 / 1970 / +
2010/11 / 2060 / 2625 / -
2011/12 / 2375 / 2625 / -
2012/13 / 2278 / 2625 / -
2013/14 / 2040 / 2625 / -
2014/15 / 2702 / 2625 / +
2015/16 / 2536 / 2625 / -
The following table shows delivery against the cumulative totals of the adopted development plans in place at the time.
Table 3 Housing delivery compared to the cumulative development plan requirement
Year / Annual Completions / Cumulative Completions / 1997 Cornwall Structure Plan (2275pa) / 2004 Cornwall Structure Plan (1970 pa) / Emerging Local Plan Requirement (2625pa) / Surplus (+) or Shortfall (-)2001/2 / 2485 / 2485 / 2275 / 210
2002/3 / 2639 / 5124 / 4550 / 574
2003/4 / 2183 / 7307 / 6825 / 482
2004/5 / 2495 / 9802 / 8795 / 1007
2005/6 / 2084 / 11886 / 10765 / 1121
2006/7 / 2612 / 14498 / 12735 / 1763
2007/8 / 3179 / 17677 / 14705 / 2972
2008/9 / 2877 / 20554 / 16675 / 3879
2009/10 / 2473 / 23027 / 18645 / 4382
2010/11 / 2060 / 25087 / 21270 / 3817
2011/12 / 2375 / 27462 / 23895 / 3567
2012/13 / 2278 / 29740 / 26520 / 3220
2013/14 / 2040 / 31780 / 29145 / 2635
2014/15 / 2702 / 34482 / 31770 / 2712
2015/16 / 2536 / 37018 / 34395 / 2623
2.11Using this approach the Council is of the view that both in terms of the cumulative housing provision and an assessment of performance against the annual average that there has not been a record of under delivery and that therefore in accordance with the NPPF a 5% buffer should be applied to the five year requirement. The imposition of a 20% buffer is not a penalty for under delivery but a mechanism for triggering the requirement to bring forward an additional supply of housing. It is therefore worthy of note that in the first 6 years of the plan period Cornwall has increased its available supply through sites with planning permission from about 13,000 to almost 22,000 homes. (See Table 1 above). This means that the Council has already increased its supply yet building rates have not followed suit despite this increase. This is an issue recognised nationally and the government are looking at ways to incentivise the building industry to deliver.
2.12 It must be recognised, however, that, in the last 6 years (the first six years of the plan period) completions have averaged just under 2,332 per year which is below the 2,625 per year proposed in the emerging Local Plan. However, completions have exceeded the average interim requirementin the year before last and are only slightly below the required rate in the last year. This would suggesta return to pre-recession levels of housing growth. This perhaps lends support to the view that looking at the economic cycle as a whole, including the pre-recession peak, the 2010-13 trough and the recent return to growth there has not been a persistent record of under delivery. The recent rate of completions must also be taken within the context of the recentrecession with the associated fall in building rates and the fact that the housing requirement is seeking a step change in housing supply as required by the NPPF.
Table 3: Cornwall Housing Completions 2000 - 20152000/1 / 2001/2 / 2002/3 / 2003/4 / 2004/5 / 2005/6 / 2006/7 / 2007/8
Cornwall Total / 2193 / 2485 / 2639 / 2183 / 2495 / 2084 / 2612 / 3179
2008/9 / 2009/10 / 2010-11 / 2011-12 / 2012-13 / 2013-14 / 2014-15 / 2015/16
2877 / 2473 / 2060 / 2375 / 2278 / 2040 / 2702 / 2536
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2.13Table 4, below provides a summary of the five year housing requirement with both a 5% and 20% buffer. For the reasons stated above, a 5% buffer is considered appropriate when assessing the adequacy of supply resulting in a five year requirement against a 52,500 target of 14767
Table 4: 5 Year Housing RequirementPlan Requirement / 52,500 (2,625 pa)
Five Year requirement (2,625 x 5) / 13,125
Plus shortfallof 1759(15,750 – 13,991)* / 14884
Five year requirement plus 5% buffer / 15,628
Five year requirement plus 20% buffer / 17,861
Five Year requirement / 15,628
* The shortfall is the difference between the minimum expected completions since the beginning of the plan period less actual completions. Any shortfall is added to the five year requirement on the basis that it should be made up within 5 years rather than the remainder of the plan period. The buffer (5% and 20%) is then applied to this revised requirement.
3Calculating the Supply
3.1To be considered as contributing to the 5 year supply a site must be deliverable and meet the tests of Paragraph 47 and footnote 11 of the NPPF.
3.2Planning Practice Guidance states that sites with planning permission and local plan allocations can be considered deliverable. It also says that where there are no constraints other sites without planning permission or that are not local plan allocations may be considered as deliverable. In all cases robust evidence must be produced to demonstrate deliverablity. There are currently no adopted local plan allocations, however a number are being progressed through the Site Allocations element of the Local Plan.
3.3The following outlines the methodology for demonstrating the deliverability of firstly sites with planning permission and then other sites that are considered wholly or in part deliverable within the next 5 years.A spreadsheet showing details of the expected delivery from all sources of supply is included at Appendix 2.
Planning Permissions
3.4As at 1st April 2016 there was planning permission for 21,752homes.As shown in Table 1 above and Table 6 below, this supply has increased once again from last year and is a significant increase in the available supply when compared to the start of the plan period.
3.5For the purposes of assessing deliverability, sites with permission have been broken down into sites below 10 units (small sites) and larger sites of 10 units or more.
Small sites 1-9 units.
3.6Previous work across Cornwall based on sites granted permission in 2005 established that 82% of such sites were developed within 5 years, This resulted in an 18% discount rate for non-delivery within 5 years being applied to current permissions. This was based upon information from four of the six former districts on permissions granted in one year that were developed within 5 years.
3.7As we are now 6 years into the plan period it is possible to use more robust data to check whether this is still the case. As at April 2010 there was planning permission for 4,649 homes on small sites. In fact 4,232 homes were built on small sites in the following five years (table 5 below), which is equivalent to 90% of all commitments and represents 846 per year. This shows that the 18% discount for small sites was overly cautious and that one of 10% is more appropriate. This can be continually monitored and amended each year if trends change. As at 1st April 2016 there was planning permission for 4,465homes on sites below 10 units. A 10% discount for non-delivery within 5 years has been applied to these permissions to give an estimated yield from this source of 4,018dwellings over 5 years (Table 6 below).
Table 5: Completions on small sites (1-9) during plan period
2010/11 / 2011/12 / 2012/13 / 2013/14 / 2014/15 / 2015/16 / Total748 / 924 / 875 / 859 / 826 / 995 / 5227
Large Sites 10 or more units
3.8Previous housing land assessments included information obtained from developers to establish when they expected sites to commence development and at what annual rate they expected to deliver them. Where developers were not able to be contacted then informed views of officers were sought. Due to the considerable number of sites in Cornwall and the fact that the number of sites is increasing, this approach delayed the publication of the annual housing land supply statement. In addition,it has been suggested at planning appeals that the views of developers may be overly optimistic in many cases. As a result Cornwall Council have undertaken some analysis of average lead in times (from when planning permission is granted to when the first dwelling is completed) and average delivery times based on an analysis of sites granted permission on or after April 2010 together with those sites that were under construction in 2010. The detailed methodology is included in Appendix 3. The results show that for sites of 10 – 50 dwellings the average lead in time from permission being granted to delivery of the first dwelling is 2.5 years and the average delivery rate from then on is 39 dwellings per year. For sites of between 50 and 99 dwellings the lead in time is 2 years and average delivery is 30 dwellings per year. For larger sites of 100 or more dwellings, the average lead in time is 1.5 years with 35 dwellings completed per year thereafter. The survey was based upon activity during a period of recession and build rates in particular are likely to be on the conservative side. This will be continually reviewed and the assumptions revised as appropriate.
3.9The sample of sites only analysed sites with full planning permission. Additional work was therefore undertaken to establish the average time between the granting of outline permission and the approval of reserved matters. This showed that the average time between granting anoutline permission and the approval of reserved matters ranges from 20 months for sites 10-49; 21 months for 50-99; and 24 months for 100+. These additional lead in times have been added to the lead in times for full permissions to give the following lead in time from outline permission to completion of 4.2 years for sites of 10-49; 3.75 years for sites 50-99 and 3.5 years for sites of 100 or more.
3.10This approach does result in some sites appearing to show unrealistic rates of delivery in the detailed housing trajectory. It is important to note however that these are average rates and so therefore some sites will show overly optimistic delivery whilst others will show an overly pessimistic delivery. The application of an average rate also appears to show overall very high expected completions in the first couple of years with building rates falling as the five year period progresses. The trajectories are however not an attempt to predict future annual build rates but rather to assess the availability of sites that could deliver homes over the next five years. It is far better therefore when viewing the trajectories to look at the overall expected delivery over the full five year period.
3.11The use of average rates mean that it would not be appropriate to adjust either the lead in time or delivery rates for individual sites to reflect individual circumstances because just as there will be circumstances where sites for whatever reason are delayed and delivering fewer dwellings than expected there will equally be others that deliver sooner and above average rates. Thereforeshould attempts be made to challenge the delivery on some individual sites as being overly optimistic then this would produce an unbalanced view of delivery on a county wide basis as it would have to be countered by adjusting sites that under estimate delivery and lead in times. Notwithstanding this, further work has been undertaken in assessing expected delivery of the largest sites and identifying specific sites where development may have stalled. This has resulted in further adjustments by reducing the yield on some sites from that indicated by average rates and excluding some sites from the five year supply all together. Also for some of the largest sites over 300, delivery rates have been increased where it is expected that more than one developer is likely to be operating from the site at the same time. The sample for the calculation of the average rates did not include any sites over 300 units and therefore it is unaffected by this change.