CPRE calls on local authorities to reject SHMA


22nd May 2014

CPRE Oxfordshire has called on local District Councils to reject new housing figures after a report reveals they are over 2.5 times the Government’s own projections.   

The recent Oxfordshire Strategic Housing Market Assessment (SHMA) suggested that the county needed 100,000 more houses within just 17 years, around double previous estimates and the equivalent of a 40% growth in every settlement.

CPRE was so concerned by the SHMA that it commissioned a report into the figures from Alan Wenban-Smith M.A. MRTPI MSC (an independent consultant in urban and regional policy who has led regional and metropolitan planning for the West Midlands local authorities, was a special advisor to the Commons Select Committee Inquiry into SE Growth Areas and is a former visiting professor of planning at both Newcastle upon Tyne and Birmingham City universities, as well as being a member of the RTPI’s Policy Committee.)

His report – published today – makes astonishing reading. 

Helen Marshall, Director of CPRE Oxfordshire, said:

“The Oxfordshire SHMA is so overstated, and so fatally flawed, both in its interpretation of evidence and lack of adherence to government planning guidance policy, as to be unfit for purpose.

In the light of the report’s findings, CPRE is calling on all Local Authorities to reject the SHMA and not to use it as a basis for any future planning decisions.”

In his report, Alan Wenban-Smith says that the SHMA, instead of making some minor ‘adjustment’ to the government’s household projections for the county, is ‘effectively a wholesale replacement’. He says the methodology used in the SHMA to determine future housing figures is ‘subject to serious criticism’. ‘In my opinion’ he says ‘the adjustments are not compliant with NPPF policy, which requires such adjustments to be ‘reasonable’.’

Wenban-Smith concludes that if the housing projections for Oxfordshire were rolled out across the country, the level of housing completions would be “completely outside the range of post WW2 experience.  This casts considerable doubts on the reliability of the economic modelling and/or the relationship between the model and projected household formation.”

Helen Marshall concluded:

“We hope that this report persuades local policy-makers not to accept the SHMA and to think again about how they determine the appropriate number of homes needed for Oxfordshire going forward.”

Report’s Conclusions in brief

1.            The present SHMA is not in accordance with current planning policy, which allows “adjustment of the Government’s published household projections, while the SHMA proposes a wholesale replacement” (2.7). The SHMA figures are in fact more than 2.5 TIMES the official projections.

2.            The SHMA replaces the direct national statistics for migration in and out of Oxford City over the last 10 years with a local estimate cobbled together from total population and births/deaths.  This is projected forward another 20 years and mostly assigned to extra international migration into the County.  Any estimate centred on net migration gains will be volatile because of the large population movements in and out of Oxford, and so unreliable.  This “tweak” adds a hypothetical 13,000 houses (2.12).

3.            The authors of the SHMA have “adjusted” the projected average household size for Oxfordshire (2.52 in 2011) from the DCLG trend (a decline to 2.47 persons per household by 2031), to a revised (pre-credit crunch) trend figure of 2.41. This alone adds 7,600 houses to the “forecast” (2.18).

4.            The SHMA adds the “deficiency in housing delivery” for the period 2006-2011 to the forecast total of housing need, effectively assuming that future growth (‘business as usual’) will wipe out all the effects of the global economic crisis. This adds a further 3,500 houses (2.19).

5.            The SHMA draws on plans drawn up by the (unelected) Local Economic Partnership which forecasts 85,000 new jobs in Oxfordshire over the period, and a consequent need for a further 24,000 new houses. But on examination the committed growth scenario is essentially a catalogue of development proposals. It confuses economic development with property development, by assuming that jobs will be created as a direct result of new development, but taking no account of the dynamic processes of job losses and gains that go on in the much larger existing stock of firms and premises.  For example it assumes that new shops increase trade and jobs rather than simply moving them around.  What is more it brushes aside know future job losses – the departure of JET from Culham (2.29).

6.            However the authors of the SHMA actually understate the percentage of affordable housing which would be necessary if their overall numbers were remotely correct, ignoring standard practise on the relation of average household income to affordable housing need (2.31). Affordable housing is  of course a burden on developers, and G.L. Hearn, (the SHMA’s authors) who are (according to their webpage) one of the UK’s leading independent property consultancies providing trusted commercial property advice to the public sector, developers, investors and occupiers could be concerned at the impact of large affordable housing obligations on developers including their clients.

7.            The SHMA proposes another 15,000 houses as the means of getting more ‘affordable housing’ as by-product, through Planning Obligations.  However it is neither valid (nor feasible) to attempt to build additional houses over and above demographic or economic needs already set at the extremes of probability, simply to secure provision of affordable housing.  If such additional housing could be sold, it would be because it was meeting such needs itself. 

8.            The SHMA does suggest that house building on the scale it proposes would decrease house prices, and thus assist affordability and increase sales in another way. However, the 2004 Barker Report estimated that even a 50% increase in building would price only 5000 additional households (nationally!) into the market after ten years” (3.8). What is more  Figure 7 of the consultant’s report shows that even if outputs more than double recent levels were achieved, housing would still become less affordable not more.

9.            This is partly because house prices are set not by new build but by the sale of existing properties (known as ‘churn’) and because much of the land market takes the form of option agreements between landowners and builders and incorporates a house price expectation (3.21).

10.          For all these reasons the SHMA is likely to be grossly overstated, by a multiple of over 2. Allocations of housing land made in response to it will have the effect of giving builders carte blanche in their choice of which sites to develop to meet actual levels of demand (3.30).

11.          Builders will choose to develop only the easiest and most profitable sites. Green field sites are easier to develop and therefore preferred by builders, so a large increase in provision inevitably means changing the successful brownfield first policy to “Greenfield First” (3.31a last sentence). This is not only environmentally harmful but flies in the face of sustainability.

Further information

Unsound & Unsustainable: Why the SHMA will increase greenfield use but not meet housing needs – A critique of GL Hearn’s April 2014 Oxfordshire Strategic Housing Market Assessment (SHMA)            Urban & Regional Policy, May 2014  

The full report and the Executive Summary of the report are available below.