Let’s explore what the Housing Delivery Test (HDT) actually does, discuss what it means for investors and developers, and explain how Nimbus can help you satisfy HDT requirements.
How does the housing delivery test work?
The Housing Delivery Test is an annual measurement of housing delivery in relevant plan-making authorities.
The Housing Delivery Test works by comparing the net homes delivered over the past three years to the homes required over the same period, with penalties for councils delivering less than 95% of their requirement.
The Government’s target remains ambitious, aiming to build 300,000 homes per year by the mid-2020s, as reaffirmed in recent policy statements. To enable this, an HDT report is released annually, detailing councils that have failed to meet their target. The latest report, published on 14th February 2023, highlights that 55 councils failed to meet their housing delivery targets. As a result, these councils face planning restrictions designed to encourage improved performance.
What are the penalties?
The Housing Delivery Test engages the presumption in favour of sustainable development where insufficient homes have been built over the previous three-year period. It means that the presumption can be triggered even where there is more than a five-year housing land supply. This classifies the local plan as outdated, leaving the local authority more vulnerable to housing development.
If insufficient homes have been built, the following rules apply:
- Less than 45% of the target: The presumption in favour of sustainable development applies.
- Less than 85% of the target: A 20% buffer is added to the five-year land supply target, increasing the housing requirement.
- Less than 95% of the target: Councils must publish an action plan outlining how they will increase housing delivery.
Recent developments
The 2023 report also emphasised the introduction of measures to tackle persistent underperformance, including additional monitoring and intervention by central government. Councils failing to meet delivery targets are now required to take further steps to streamline planning processes and identify viable development sites.
The good news for investors and developers
The HDT creates opportunities for developers and investors in areas where councils have not met their housing delivery targets. Councils unable to meet these targets may no longer insist on implementing additional planning restrictions specific to that area. Instead, the National Planning Policy Framework (NPPF) takes precedence, offering greater clarity and reducing potential barriers for development.
Moreover, developers can leverage the presumption in favour of sustainable development, making it easier to secure approval for housing projects that align with national policies.
How can Nimbus help you seize property opportunities?
If you’re interested in exploring the latest Housing Delivery Test report, it is available on the UK government website, alongside guidance documents and technical notes.
At Nimbus, we understand that time is money for investors and developers. That’s why we’ve created an HDT overlay in our property data software.
Our HDT overlay uses a colour-coded map to display each council’s performance against housing delivery targets. It highlights areas that have not met their targets, enabling you to quickly identify viable sites and focus your efforts where development opportunities are more accessible.
Nimbus provides property data solutions for both commercial and residential clients. To see how our tools can help you seize opportunities, streamline site selection, and connect with property owners, book a demo today.
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