Lichfields forecasts a perfect storm for West Midlands housing planning

Thousands of much needed homes for the West Midlands are being lost and delayed due to late plan-making, according to a new report from planning and development consultancy Lichfields.

The ‘Perfect Storm’ Insight report considers what impacts the pace of change in the planning system has had on plan-making in the West Midlands, highlighting the impact on the future delivery of homes across one of the biggest and most important urban areas in the country.

Lifting the lid on the current situation, the report identifies a ‘perfect storm’ created by fundamental economic challenges and a plan-led system, which has been tampered with too much in the last three years and that now urgently needs certainty.

The report finds that while some local planning authorities have met their needs, at least seven LPAs are identified as likely to fail to meet their housing needs in the five-year period 2020-2025. This reflects around 16,500 homes being lost over the same period and equates to the under-delivery of new homes for over 40,000 people in the West Midlands region alone.

Lichfields says the impact of all the ‘lost’ housing delivery in the region is having a severe economic impact; they have calculated that in excess of £2.5bn capital investment has been lost over the 2020 to 2025 period, with 7,600 direct FTE and more than 8,000 indirect FTE jobs also lost annually on top of losses of £1.4bn GVA (gross value added) per annum.

It also found that some 55,000 houses on draft-allocated housing land, and 730 ha of draft-allocated employment land, are being held up from delivery across the region as a result of delayed Local Plans, with the impact of this being that the delivery of homes for over 130,000 people and as high as 85,000 jobs have been delayed by years.

(pictured) Myles Wild-Smith, associate director at Lichfields’ Birmingham office and co-author of the report, believes these figures make for stark reading and highlight the pressing need for much greater stability and confidence in the planning-making process.

“Our study into the West Midlands housing sector offers a clear insight into the current market situation and state of plan-making,” he said. “The region is one of the most dynamic, best performing parts of the country with strong economic growth. It’s also an attractive place to live and work but it’s evident it’s also failing to realise its full potential, hampered by a sluggish approach to plan-making and consequently housing and employment land delivery.

“It’s clear LPAs want certainty in the plan-making system, with many LPAs officially or unofficially delaying their Local Plan Reviews as a result of anticipated changes to national planning policy. In failing to properly plan through a plan-led system, the housing and employment sectors in certain areas are being detrimentally affected despite the high demand for quality housing and employment land in places where people want to live, build communities and work.”

The report highlights missed opportunities for the West Midlands to deliver homes and jobs for local people in the face of delayed plan-making. Had more up-to-date plans been in place, it remains questionable whether the wider impact on housing delivery would have been so acute, added Myles Wild-Smith, given there would have been a greater supply to begin with, and the impact of delays or reduced delivery would have been less pronounced.

The report echoes the critical need for certainty within the planning-making process, to enable LPAs to feel confident in investing significant time and resources in preparing local plans.

“Certainty comes from investing in a planning system that grapples with long term growth, generating prosperity and meeting local housing and employment needs through a plan-led system,” Alex Davies, who co-authored the report, believes. “Until we have calmer seas, the plan-making world will continue to be choppy – and the West Midlands will be unable to reach its full economic and development potential. Indeed, for a region that prides itself on economic achievement and growth aspirations, a suite of up-to-date plans is now paramount.”

The ‘Perfect Storm’ Insight report is based on analysis of 18 LPAs across the West Midlands who are, or at least should be, preparing plans. It found that only six draft plans were sufficiently advanced to contain draft housing and employment land allocations which are now delayed by at least two years and at least seven LPAs are identified as likely to fail to meet their housing needs in the five-year period 2020-2025. The report is available at https://lichfields.uk/content/insights/a-perfect-storm