Standard method: calculating local housing need

The standard method is a formula in national planning guidance that produces one number for each local planning authority: the minimum annual local housing need for its area. It is a starting point for plan-making, it is not a target, and it is not the same thing as the housing requirement in an adopted local plan. Confusing those three is the most common error in objections, in committee reports and occasionally in appeal statements.

For a planning consultant the practical questions are narrower. Which version of the method applies to this authority today, what figure does it produce, how does that figure relate to the requirement being used to measure supply, and what follows if supply falls short. Everything else is commentary.

What the method produces

The output is a minimum annual figure for local housing need, expressed as dwellings per year. It is calculated from published national datasets applied to a fixed formula, so two competent people running it for the same authority on the same day should reach the same answer.

That mechanical quality is deliberate. Before the standard method existed, every local plan examination involved a contest between demographic consultants over projection assumptions, and examinations ran for years. The method trades accuracy at the margins for a number that can be produced quickly and checked by anyone.

It applies to an authority area as a whole. It does not distribute need to settlements, it does not say what tenure mix is needed, and it does not tell you how many affordable homes are required. Those come from the authority's own evidence base, and the affordable element feeds into what a scheme has to show in an Affordable Housing Statement.

The baseline and the affordability adjustment

The method has two parts: a baseline, and an adjustment for affordability.

The baseline was originally derived from household projections, using a ten-year average of projected household growth. The December 2024 revision replaced that with a baseline expressed as a percentage of the existing dwelling stock in each area, which removed the dependence on projections that many authorities argued were out of date. Take the current percentage from the Planning Practice Guidance rather than from a summary, because it has been changed once and may change again.

The adjustment uses the median workplace-based house price to earnings ratio published by the Office for National Statistics. Where housing is less affordable, the baseline is adjusted upwards, and the strength of that uplift was increased at the same revision. The logic is contested by authorities in expensive areas, since building more homes in a district does not obviously move a ratio driven by regional markets, but the formula applies regardless of whether you find the reasoning persuasive.

Two features of the older method were removed in December 2024: the cap that limited how far need could exceed the existing plan requirement, and the 35 per cent uplift applied to the largest urban authorities. Both still appear in older appeal decisions and older committee reports, so check the date of anything you are relying on.

Need is not the requirement

This distinction does most of the work in practice.

Local housing need is the formula output. The housing requirement is the figure in the adopted local plan, arrived at through plan-making under section 38 of the Planning and Compulsory Purchase Act 2004 and tested at examination. They can differ for several legitimate reasons.

An authority with substantial Green Belt, National Landscape or habitats constraints may adopt a requirement below its calculated need, having shown at examination that the need cannot be met in full and that it has explored the options. That does not make the need figure disappear. It reappears whenever the plan becomes out of date.

Where an alternative approach is argued

Guidance allows an authority to use an alternative approach to calculating need, but sets a high bar: circumstances that are out of the ordinary, justified by strong evidence about demographics specific to the area.

In practice, successful arguments have tended to involve local demographic anomalies, such as a large institutional population distorting household formation, rather than general dissatisfaction with the formula. Arguments that the formula produces too many homes for a rural district rarely succeed on their own, and inspectors have said so at examination.

The reverse argument is also available. An authority can plan for more than its calculated need, and several have, where they are accommodating growth deals, unmet need from a neighbour under the duty to cooperate, or an economic strategy that implies more workers.

The effect on five year housing land supply

Where the strategic policies of the development plan are current, supply is measured against the requirement in the plan. Where they are not, supply is measured against local housing need calculated by the standard method, with the appropriate buffer applied.

This is why the method matters to applicants rather than only to plan-makers. In an authority with an ageing plan, the standard method figure becomes the denominator in the supply calculation, and a rise in the figure can move an authority from a demonstrable supply to a shortfall without anything changing on the ground.

A shortfall engages the presumption in favour of sustainable development, under which permission should be granted unless the adverse effects would clearly outweigh the benefits when assessed against the Framework as a whole, subject to the policies that disapply it. The National Planning Policy Framework was re-issued on 17 August 2026 with policy-coded chapters in place of paragraph numbers, so cite the relevant code from the current edition rather than an old paragraph number, and verify it on gov.uk.

Which version applies, and when

Revisions to the method take effect through changes to the guidance, usually alongside transitional arrangements for plans already at an advanced stage. Those arrangements are where the disputes happen: whether a plan submitted before a cut-off date proceeds on the old figure, and what happens if it is withdrawn and resubmitted.

Check three dates before you rely on a figure: the date of the guidance you used, the date of the underlying affordability data, and the date the authority's plan was adopted. Keeping an eye on reform announcements helps, and the planning law updates timeline is a reasonable place to follow them, though the underlying guidance on gov.uk remains the authority.

Using the figure in an application

State the calculation, show the inputs, and give the date. A Planning Statement that asserts a shortfall without setting out the arithmetic invites the officer to substitute the council's own figure without comment.

Then be precise about what the figure does for you. A shortfall is not a permission. It changes the balance applied to the decision, and the weight given to the shortfall depends on its scale and on the reasons for it. Inspectors distinguish between a supply of 4.8 years and a supply of 2.1 years, and so should your submission.

One honest caveat: the number moves. Affordability data is republished annually, stock figures update, and the formula itself has been revised. A calculation done nine months ago is not evidence today, and reusing it is the kind of thing an officer notices. The same discipline applies to any derived figure in a submission, including the floorspace-to-jobs conversions described in employment density.

This is general guidance, not legal advice. Check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.