The standard method for local housing need explained

The standard method for local housing need now starts from the existing housing stock rather than from household projections. The baseline is 0.8 per cent of an area's existing dwelling stock, taken from the government's published dwelling stock estimates by local authority district, and that baseline is then adjusted upwards where local housing is unaffordable relative to local earnings. The result is a minimum annual figure for plan making. It is not a target, not a ceiling, and not a figure any individual application has to deliver.

What the method calculates, and what it does not

Local housing need is the starting point for how many homes a local plan should provide for. The Framework describes it as a minimum, and the plan making process then tests whether that number can be accommodated, whether neighbouring authorities need to take some of it, and what the plan's housing requirement will be.

Four things the figure is not.

It is not an assessment of the mix of homes needed. Tenure, size and type come from a separate needs assessment, and the affordable element comes from the affordable housing need evidence rather than from this calculation.

It is not a cap. An authority may plan for more, and in some cases is expected to.

It is not a decision making tool in itself. At application stage the figure matters because it feeds the five year housing land supply calculation where the plan is out of date, and because a shortfall against it is a material consideration. It does not operate as a direct test of a particular scheme.

And it is not stable. The inputs are refreshed on an annual cycle, so the figure for an authority changes without any policy decision being taken.

The baseline and where the stock figure comes from

The baseline is 0.8 per cent of the existing dwelling stock in the authority's area, using the most recent published dwelling stock estimate for that district.

Two consequences follow from a stock based baseline, and both are politically awkward.

Large authorities with large existing stocks get large baselines, regardless of whether their population is growing. Small rural districts with small stocks get small baselines, even where there is acute local pressure on affordability.

And growth is self reinforcing in reverse. An authority that has built little has a smaller stock and therefore a smaller baseline next year, which rewards under delivery in a way the previous projection based approach did not.

The stock estimates are normally published in the spring, and the resulting baseline then holds until the next release. Check which dataset vintage any figure in front of you is based on, because a housing requirement quoted in a document eighteen months old may be built on superseded inputs.

The affordability adjustment

The baseline is adjusted using the median workplace based housing affordability ratio published by the Office for National Statistics, which is the ratio of median house prices to median gross annual workplace based earnings.

The adjustment uses a five year average of that ratio. Where the five year average is 5 or below there is no uplift and the baseline stands. Above 5, the adjustment factor is calculated as the amount by which the ratio exceeds 5, divided by 5, multiplied by 0.95, and then added to 1. That factor is applied to the baseline.

Workplace based rather than residence based is the detail that catches people. In commuter districts, residents earn more than the jobs located in the district pay, so the workplace based ratio produces a larger uplift than a residence based measure would. Authorities argue about this at examination and the method does not accommodate the argument.

The affordability ratios are refreshed on their own annual cycle, separately from the stock estimates, so a figure can move twice in a year for reasons unconnected with each other.

What the December 2024 changes removed

The method that preceded the current one used household projections as its baseline, applied a different affordability formula, capped increases above the adopted plan figure or the projections, and added a 35 per cent uplift for the 20 largest urban areas.

The caps and the urban uplift have gone. The practical effect is that the figure is now harder to suppress and harder to concentrate. Authorities that relied on a cap to hold their requirement down no longer can, and the cities that carried the urban uplift saw their figures change, in some cases downwards.

For a developer promoting land, the useful consequence is that the arithmetic is now short enough to check in an afternoon. You can calculate an authority's figure yourself from two published datasets, and where an authority's evidence base states a different number, you can ask why.

Departing from the method

The Framework allows an alternative approach in exceptional circumstances, where the authority can justify it with evidence. In practice the bar is high and examiners have been unsympathetic to authorities arguing for a lower figure on local constraint grounds.

What constraints do affect is whether the plan can meet the need, not what the need is. An authority surrounded by Green Belt, National Landscape or flood risk still calculates its need by the standard method, then explains in the plan why the requirement is lower and what it has done to address the shortfall through the duty to cooperate and any strategic arrangements.

That distinction is the one to hold onto in representations. An objection that the authority has used the wrong need figure is a soundness point. An objection that the authority has unjustifiably reduced its requirement below need is a different and usually stronger soundness point.

The relationship with the plan's housing requirement

The need figure feeds the plan's housing requirement, and the requirement is the number the plan commits to. They are frequently not the same.

Where the requirement is lower than need, the plan has to justify the gap. Where it is higher, which happens where an authority takes unmet need from a neighbour or plans for economic growth, the higher figure becomes the one against which five year supply and the Housing Delivery Test are measured.

For decision taking, the figure used in a five year supply calculation is the plan's requirement where the plan is recent enough, and local housing need where it is not. The rules on which applies, and the transitional arrangements around newly adopted and emerging plans, have moved with the reform programme, and our note on plan-making reform and what happens to emerging plans sets out the transitional questions.

Where the figure gets contested

Five arguments recur at examination and at appeal.

1. Which vintage of stock estimate and affordability ratio applies, where the plan has been in preparation across more than one annual cycle.
2. Whether the authority has used the workplace based ratio correctly, including the five year averaging.
3. Whether unmet need from a neighbouring authority should be added, and how much.
4. Whether the plan's requirement is justified in departing from the need figure.
5. Whether the supply used to measure against the requirement consists of sites that are deliverable in fact.

Of those, the fifth is where most appeals are actually decided. The need calculation is arithmetic, and arithmetic can be agreed. Deliverability is a judgement about named sites, and it is where the evidence does the work.

Using the figure in representations

Lead with the number and its source, then the consequence. A Planning Statement that states the authority's current need figure, the plan requirement, the published supply position and the shortfall in a short table at the front is read. One that works through the methodology for four pages before reaching a conclusion is skimmed.

Then tie the figure to your scheme. The number of homes, the delivery timescale and the affordable contribution are the benefits that the shortfall gives weight to, and an Affordable Housing Statement that sets out tenure, numbers and the delivery mechanism turns an assertion into something an officer can rely on.

As at October 2026 the method described above is the published one, with the stock estimates refreshed in the spring and the affordability ratios on a separate annual cycle. Verify both inputs against the current government publications before you rely on any figure, and follow reform announcements through a source that dates its entries, such as PlanScope's planning law updates timeline, checked against the original publication.

If you are promoting a site and want to see which supporting documents it is likely to need, enter the postcode on PlanScope and work through the constraints first.

This is general guidance, not legal advice, so 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.