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Posted by on Dec 14, 2015 in Others | 0 comments

Planning for Housing in the West of England – The Scale of the Challenge

Planning for Housing in the West of England – The Scale of the Challenge


Prepared at the request of BUSINESS WEST


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Glen Bramley
Professor of Urban Studies, Heriot-Watt University, Edinburgh EH14 4AS


Executive Summary

In this paper we address the housing challenges facing the West of England. This is a timely subject. Not only are housing pressures rising steeply in Bristol, Bath and their surrounding authorities, but the West of England is also in the process of planning for its housing growth needs for the next twenty years. The choices that the West of England makes now will have very large future implications for the region, its businesses and its people.

This report stresses that greater Bristol has high economic growth potential – with some of the highest employment growth projections of any city in England. Many other cities would love to be so favourably placed for growth.

But this economic potential will only be delivered if the West of England is able to plan and deliver the housing that is a critical prerequisite to supporting this growth. Housing is vital for many social and demographic reasons, but is also critical for economic performance.

If the West of England fails to plan with enough ambition, then there will be adverse consequences – with more housing affordability problems, greater housing need pressures and longer commuting journeys. This carries with it the significant risk that economic growth will be choked off – employers will experience labour recruitment and retention problems, with particular difficulty attracting skilled applicants. The more highly skilled workers that will be needed for the West of England’s growth ambitions are likely to aspire to home ownership and a good quality living environment and the West of England will find it increasing hard to provide this to them. Potential investors may also regard the West of England less favourably than competing areas better able to accommodate an expanding workforce.

In this paper we compare Bristol and the West of England with other similar ‘competitor cities’, including the larger Northern cities, ‘growth cities’ with similar economic potential and performance such as Reading, Greater Cambridge and Greater Oxford and also other southern housing market areas which can be seen as competing economically with the West of England.

We find that although its economic growth position is strong, in many respects Bristol and Bath face bigger housing challenges than its competitors. The general planning policy stance in Bristol is moderately negative, but strikingly negative in Bath. Bristol and Bath both face large green belts, which many of our competitors do not. Bristol and Bath are also planning for relatively fewer homes than many other of its competitor cities. Many of the larger Northern cities have both lower housing costs and higher political ambitions for delivery.

How the West of England addresses its housing challenge is thus part of the broader devolution and cities challenge underway in the UK.

A central part of this paper also tests what the implications for the West of England will before its current housing ambitions. We have analysed the likely consequences for the West of England if it delivers the level of housing that it is currently planning. This analysis is based on the use of a nationally respected economic model that sets out to test the impacts of planned housing delivery across a range of important demographic, housing market and economic factors. We both analyse the consequences of delivering the current plans (for 85,000 homes in the greater Bristol area), but also look at the impact of lower and higher levels of housing delivery ambition.

The main conclusions are:

  • The West of England needs to increase its housing plan targets and housing delivery significantly to achieve reasonable outcomes across most of the important demographic, housing market and economic criteria
  • The current DCLG household projection for the West of England appears to be in striking distance but this projection itself is suspect, on the grounds of building in significant suppression of household formation in the last decade or so.
  • It is very likely that historical housing under delivery has been forcing young people to postpone forming their own new households, and the current West of England plans will mean this continues.
  • Current plans mean that working population growth will not keep pace with likely job growth, with probable important and negative labour market implications.
  • Although rental affordability in the West of England will remain generally better than for England as a whole, our projections show that rental affordability in the West of England deteriorates significantly over the next twenty years.
  • Home-ownership affordability will continue to deteriorate in the West of England under currently planned numbers. The level of deterioration is less under high supply scenarios.
  • Backlog housing need is likely to increase, but to contain this and get annual net need in line with affordable supply would require quite large increases in social housing as well as general housing supply
  • International migration assumptions have significant effects but present a mixed picture, with higher inflows facilitating economic growth at a cost in terms of affordability and housing needs
  • Higher economic growth without matching housing supply growth makes no improvement in affordability and creates a worsened jobs-workforce gap

Home-ownership affordability is a particular issue for the West of England. For example, the lower quartile house price-to-earnings ratio was 7.33 in Wider Bristol and 9.03 in Wider Bath in 2011. Our model forecasts that only 28% of under-40 households would have enough income to buy, on average over the plan period, 5.5% points worse than England, and this will deteriorate by 7.6% points over the period 2007-2036. Although rental affordability is better, this will also deteriorate quite a lot.

The prospects for home-ownership among younger households have fallen dramatically, from 70% in 2001 to 47% in 2011, and are forecast to fall further to 35% in 2031 for wider Bristol, with even lower figures for Bath. Even among 40-59 year olds home-ownership will fall to 57% by 2041, compared with 87% in 2001. These prospects are likely to damage economic growth potential, since higher skilled people are likely to aspire to home-ownership.

Our paper also raises some significant doubts about the method by which the West of England has calculated its future housing needs (through its ‘Strategic Housing Market Assessment’). We address this issue in more detail in a separate paper.

As well as looking at the issue of how many homes the West of England need to build, the paper also looks at the challenges associated with delivering these homes. This issue is of particular relevance given the ongoing discussions about devolving power, including over housing delivery, to the West of England authorities.

The paper finds that delivering the level of affordable housing that the West of England both requires and aspires to build will be a significant challenge. Under the current national government policy framework it is very unlikely that the West of England can deliver its ambitions, unless it both raises the level of total planned market housing and agrees to strong new methods of making sure housing delivery produces a significant component of affordable housing.

The paper also outlines some of the challenges for delivering the level of market housing that the West of England needs. Learning from current thinking and practice, the paper suggests that the West of England not only needs to consider giving more housing permissions, but must also look to establish new delivery vehicles to complement existing market delivery. This means an ambitious new way of planning and delivering housing growth, but also the leadership necessary to persuade central government to give the West of England the power and resources it will need to achieve this aim.


  1. Introduction


This note has been prepared at the request of Business West, building on a presentation made at a round table meeting with the West of England local authorities on 30 January 2015. It forms the basis for a separate critical assessment of the Strategic Housing Market Assessment (SHMA) published in November 2015. The focus of this note is on the planning challenges facing the West of England sub-region in relation to housing supply and affordability, the ways this may impact on the economic progress and competitiveness of the WoE sub-region, and on issues of housing delivery in the current and prospective planning environment. The context for the original version of this note was consideration being given to greater devolution of financial and other powers to city regions, and how the WoE might respond to these opportunities. The context for this revised note of course includes the outcome and aftermath of the 2015 General Election, with a Conservative Government implementing a set of policies and budgets which are partially new and partially confirming previous directions.

This note draws on several related strands of research work that I have been directly engaged in, as well as some material from other published sources, particularly the Centre for Cities. It makes particular use of a sub-regional housing market model (SRHMM) which I have developed since 2010, in work on several projects, originally for the former National Housing and Planning Advice Unit (NHPAU), then in a project for Gloucestershire County and Districts, a similar model developed for Housing New Zealand (HNZ), and more recently in work for the Joseph Rowntree Foundation (JRF) concerned with policy modelling examining ways to reduce poverty in the UK. Accounts of the background to this model are in Andrew et al (2010), Bramley (2011), Bramley & Watkins (2015) and of its geographical basis in Jones et al (2010). It also draws on work looking at planning for new housing across England, which has contributed to the Lyons Inquiry on housing supply and the Highbury Group on Housing Delivery (Bramley & Watkins 2014a & b), including work looking at public attitudes to new housing development (Bramley, Matthews & Hastings 2014) and an assessment of the New Homes Bonus. Finally, I have incorporated material from a recent study (undertaken for DCLG as part of the IMD2015 update exercise) to develop consistent measures of affordability at local and small areas level across England. There are a number of published (peer reviewed) academic articles which refer to parts of this work as well as several conference presentations which are referenced at the end of this paper.

The paper starts by discussing the policy and housing market context, with particular reference to policy aspirations and current planning mechanisms governing housing supply (Section.2). It then presents a picture of the current potential for housing supply across England, chiefly through the medium of maps showing different aspects of this potential and key constraints at local authority level (s.3).

It then considers where the Greater Bristol (WoE) ‘city region’ sits within this broader picture, and compares/contrasts it with a number of areas which might be considered as a ‘peer group’ of potential growth areas. This also entails discussion of the appropriate sub-regional basis for housing market analysis and policy coordination in the WoE case (s.4).

This is complemented by a consideration of economic growth potential, including a discussion of how this may be affected by housing supply and costs. The empirical aspect of this draws both on my own modelling and on the work of the Centre for Cities (s.5).

The next section (s.6) looks more closely at the prospects of the WoE sub-region in terms of a range of criteria of adequacy, or relevant outcomes, focussing on key indicators highlighted by the National Planning Practice Guidance (NPPG 2014). This entails looking at forward forecasts using the SRHMM and considering the impact of variant scenarios. This touches on several weaknesses of the SHMA, including its lack of any attempt at forecasting future market conditions.

Household projections continue to play a significant role in planning practice guidance for assessing the need and demand for new housing. This is problematic in a number of areas, including the West of England, because of the way these projections have been revised downwards based on recent data, which are unduly influenced by the effects of recession and past underprovision (s.7).

Analysis linking the national-local picture of housing potential and constraints focuses some attention on the issue of Green Belt and the case for significant revisions to permit large scale urban extensions in growth areas such as the WoE (s.8).

In the last section (s.9) some observations are offered on ways of actually delivering enhanced housing output, drawing on the proposals from various sources, as well as on lessons from areas which have demonstrated more positive approaches to planning for growth. These ideas are motivated by a key finding from the modelling work, concerning the relationship between planning numbers and actual housebuilding rates. There are also issues here about the consistency of affordable housing needs with the overall planning scenario and considerable doubts about deliverability of affordable housing, given policy and financial parameters now in place for social and affordable housing.


  1. Policy and Market Context


In the approach to the 2015 General Election, housing came up the agenda as a significant issue and, although it may not have been decisive in the final outcome, the governing and other parties felt obliged to put forward additional policy commitments in this area. Ipsos-MORI report public concern about housing issues being at their highest level for 41 years, particularly for younger people and in London and the south (Inside Housing, 02 November 2015).

Although during the 2000s there was a growing concern at national government level and in academia that England had a serious housing supply problem, well summarised in the Barker (2004) review, this view was perhaps not universally shared in public attitudes and in local government planning circles. Since then, we have had a financial crisis, a prolonged and serious economic recession, a collapse in housebuilding numbers, and perhaps a growth in public concern about housing. Entering home-ownership remains unaffordable and unattainable for many younger households, with younger adults spending longer living with parents or sharing, and many more people housed for longer in the expanding private rented sector. House prices are rising again, especially in London but now spreading to the wider south of England. The particular problems of mortgage availability associated with the banking crisis have eventually been overcome, partly thanks to government measures such as ‘Funding for Lending’ and the ‘Help to Buy’ schemes, so one can argue that the demand side of the market has returned towards a more normal situation. However, the level of new housing output has recovered only slowly and numbers remain far below those achieved in the mid-2000s, and further still below levels argued by independent experts to be necessary to meet the requirements of a strongly growing population (boosted by continuing high levels of net immigration into England). Serious questions are therefore being raised about the adequacy of the housing supply system, and whether more radical measures are needed (Lyons 2014; Highbury Group 2015; Bramley 2015 [Built Environment]).

Meanwhile, the planning system, which had been subject to significant reform in the 2000s, was more radically changed after the 2010 change of government by the move to ‘Localism’, the abolition of regional planning machinery and housing targets, somewhat greater use of financial incentives, and a new National Planning Framework and Practice Guidance. While the NPF, particularly its ‘presumption in favour of sustainable development’, and financial incentives including the New Homes Bonus (NHB) and Community Infrastructure Levy (CIL), might be expected to encourage and facilitate greater housing supply, it has to be said that the move to localism was a very strong force in the opposing direction.

As I have shown in analyses of public attitudes to new housing (Bramley, Matthews & Hastings 2014), there has been a predominantly negative balance of opinion against new housing in most of the country, particularly in those areas of southern England where (as I show below) the greatest potential demand is concentrated. This evidence predicted patterns of reductions in planned housing targets (particularly downwards in the south) which were initially clearly born out by actual changes in planned numbers, as documented by Tetlow King (2012) in their surveys of Local Plans for the National Housing Federation and others. There are some signs that attitudes may be softening somewhat, from more recent survey evidence, but it is not clear from the hard data available that this is yet leading to any radical change overall.

The situation is complicated by the government’s fiscal policies and by some of its responses to the housing supply problem. The austerity strategy has led to large cuts in the grants available for affordable and social housing, and the mechanism of allocating these pays less attention to need than to the financial ability and willingness of housing providers to bid for the limited grants available. Further, the government has responded to the recession-induced problems in delivering major housing sites by weakening the policy framework for delivering affordable housing through s.106 planning agreements. This is in my view a short-sighted reaction, which threatens to weaken this mechanism as the market revives and when the need for it is even greater. Furthermore, many local authorities would have been more willing to support housing development if they could ensure that a significant proportion of it was affordable and accessible to local households in need (reflecting public attitudes as evidenced above).

There is growing awareness and acceptance of the reality that housing markets, like labour markets, are based around functional economic sub-regions, as reflected in the current interest in city-regions. The current localist planning regime does not fit well with this, but there are at least a couple of concessions to this perspective in the requirement to assess housing need and demand on a ‘housing market area’ (HMA) basis and in the ‘Duty to Cooperate’. It is unclear how effective the latter is in overcoming the tensions between cities, concerned with promoting growth and meeting housing needs, and surrounding authorities which may be more concerned with protecting existing residents’ amenity values. In other words, the Duty to Cooperate may be on a collision course with ‘The Right to Grow’.

The outcome of the 2015 election implies a consolidation of existing policy settings, on the whole, with less likelihood of the implementation of many of the recommendations of the Lyons review or the Highbury Group. However, we can still imagine scenarios entailing at least the selective devolution of powers to city regions, with agendas strongly driven by economic growth and competitiveness, and an expectation that such growth strategies would be backed by adequate plans for housing provision.

In terms of policy changes and developments affecting housing, there are a number which call into question the future size, location, character and financial viability of the social rented housing sector. These include the proposed extension of Right to Buy to Housing Association tenants, the requirement to sell vacant council housing in high value areas, the negative rent guidelines set for the next five years, the lowering of the ‘benefit cap’, and further moves towards changing tenancy terms. The introduction and extension of the ‘Starter Homes’ initiative also suggests significant changes to the ability of the S106 mechanism to deliver a broader mix of rental based affordable housing options. Despite its growing size and importance, there are few specific measures (in England, unlike Scotland) towards greater regulation of the private rented sector, although tax relief on BTL mortgages has been limited to the standard rate.

On the planning side, there is some continuity from the package of policies in place, including the combination of Localism, incentives and the NPF, particularly given the SoS at DCLG is the minister previously associated with Localism. However, additional measures have been included in the Treasury-led ‘Productivity Plan’ (Fixing the Foundations: Creating a more prosperous nation Cm 9098), where Chapter 9 announces a raft of measures to promote housing supply. This includes a reserve power for DCLG to intervene to write Local Plans where LA’s have failed to progress them (so reintroducing ‘top-down targets’), streamlined zoning-style presumption to allow build on registered brownfield land, use of national infrastructure powers for housing, encouragement of high density transit-oriented development, and ‘strengthening guidance’ on the Duty to Cooperate. Particularly significant for areas like the WoE is the general policy stance on Green Belt, which may be characterised as strongly set in favour of maintenance of existing Green Belts, further reinforcing the bias towards high density brownfield development. Interestingly, consideration is being given to enhanced CPO powers, and devolved city region mayors (as in Manchester) may get these powers along with powers to set up development corporations. This paper also confirms the shift in emphasis away from social rented provision towards low cost home ownership.


  1. Housing Supply Potential across England


As a contribution to the Lyons review, and as an input to other research, I compiled an analysis of housing potential across England at local authority level, using reasonably current data (typically for the period 2010-13). Housing potential was conceived as being determined by five main dimensions or domains, as follows:

  • Capacity, in terms of land available, constraints on land, and its characteristics and suitability
  • Demand, in terms of the underlying drivers of demography and employment and market outcomes in terms of prices, rents, and affordability
  • Planning Stance, namely the previous local predisposition to support or resist housing development, based on objective indicators of land available, planning decisions, etc. as shown from past data to predict the supply of new planning permissions
  • Current Performance in terms of recent record of consents, completions and NHB receipts
  • Local Sentiment, based on proxy predictions calibrated against British Social Attitudes Survey evidence from 2010

Each of these domains (apart from the last) was constructed as an index from a varying number of individual component indicators, each transformed into a standardized ‘z-score’ to allow for different units of measurement. The resulting indices were expressed in units ranging roughly from -100 to +100. The easiest way to appreciate the resulting picture is to map them.

Map 1 shows the pattern in terms of housebuilding capacity. The underlying components include the proportion of ‘green’ land, sparsity of population, land area, ‘unconstrained’ land (not Green Belt, AONB, National Park or Built Up Area), density and vacant urban land. It can be seen from this map that capacity is greater in more rural areas, with an especially positive picture across Eastern England and also in parts of what may be termed the ‘far west’. Very low capacity is shown around London and the inner Home Counties, and some other metropolitan areas, but rising towards the edge of the ‘Greater South East’. It is noteworthy that the WoE authorities are in the second lowest capacity band (light blue).

 Map 1


Map 2 shows the pattern in terms of potential demand. Underlying indicators include actual and potential household growth, house prices, affordability, earnings, income, concealed households, job growth, employment rates and (negative effects from) unemployment, IMD poverty, vacancies and distance from London. The picture here is quite different, with the highest demand concentrated in London and the Home Counties, spreading out to most of the Greater South East and into adjacent parts of the nearer South West and South Midlands. On these indicators, most of the WoE and surrounding authorities are in the second highest category, although Bristol itself is in a more middling position.


Map 2


Map 3 shows the planning stances of these local authorities in the later 2000s, based on underlying indicators of outstanding planning permissions, social housing completions, land available, five-year supply ratio, the approval rate of planning applications, with negative effects from small sites and recent changes in targets. The pattern here is more complex, with a scatter of darker green localities with more positive stances including some in London, quite a number in the East of England, the South Midlands and in the rural West and North. Some established growth areas (Cambridge, Ashford) are included in this group. WoE authorities were mainly in the two lowest groups (with more negative stances), but again with Bristol in a middling position.


Map 3


Map 4 shows the current output index, based on recent flow of permissions, private and social completions and NHB receipts. This may be seen as an amalgamation of capacity and demand – higher values are in those areas of the south, particularly the outer fringes of the Greater South East, some established growth areas again, and some London boroughs. WoE authorities were in the middling or moderately low group.


Map 4


Map 5 shows a combination of all of these, labelled ‘overall potential’. This may be taken as an indication of how housing growth might look if we ‘carry on as we are’. There are a number of clusters of higher growth potential, including parts of London, the Oxford and Cambridge sub-regions, central East Anglia, a South-East Midlands corridor, Ashford-mid Kent, Hampshire, Gloucestershire, and Cornwall. It is notable that the WoE is not among these, with the relevant authorities in either the middling or lower bands.


Map 5



  1. The Bristol/WoE City Region


In this section I look at the Wider Bristol (WoE) city region and compare it with a range of comparator city regions, using a selection of the specific or composite indicators used within the previous mapping exercise. Instead of local authority districts the spatial framework is Housing Market Areas (HMAs), utilising the 102 HMAs which form the basis of the SRHMM. These are constructed from combinations of whole LAs (pre-2009 set). So ‘Greater Bristol’ is Bristol City + North Somerset + South Gloucestershire. ‘Greater Bath’ is BANES + Mendip + (former) West Wilts. The comparisons are shown in Table 1 below.

The first set of comparators are areas in the Greater South East seen as having high growth potential given their location and economic structure. London itself is shown next – bearing in mind that the London ‘HMA’ goes beyond the GLA boundary to include adjacent areas in the ‘outer metropolitan area’ in Surrey, Herts, etc. The next set of comparators are medium sized cities in the South of England which might also be seen as competitors for the WoE. The final set are four city regions in the north and midlands which are vying for city-region status and powers.

The first set of indicators depict the recent planning policy setting for housing (the plan target), the current performance in terms of new planning permissions, and the previous planning policy stance, the first two expressed as annual percentage growth rates in housing stock and the stance expressed as an index centred on 0 and ranging in these cases from -81 to +51. The plan targets for Bristol (and Bath) are rather below average and below the values for most of the comparators, although in some cases they are similar. The actual supply of permissions in 2012-13 is slightly above average in Bristol, but still below levels in some of the comparators. Some areas show lower numbers, perhaps because of the overhang of the recession (e.g. Manchester, Leeds). The general planning policy stance in Bristol is moderately negative, but strikingly negative in Bath. Most of the comparators have a more positive stance than Bristol, although Gtr Cambridge, Exeter and Peterborough are similar.

The next three indicators help to explain some of the differences in planning stance and targets. The first shows the percentage of land area which is not obviously constrained by built up area, Green Belt, AONB or National Park. Greater Bristol has a relatively low score on this at 17%, although Reading is similar and the largest cities (Gtr Manchester, Leeds and London) have less. Many of the other southern smaller city regions have much higher scores on unconstrained land, giving them a competitive advantage in facilitating growth. The next indicator, percentage of Green Belt land, helps to explain some of the variations here – similar quite high shares in three of the high growth comparators (but not Oxford) and in the major cities (London, Manchester, Leeds). But the smaller southern cities are much less affected by Green Belt. The third indicator is different in character, but helps to explain planning policy stances – this measures the sentiment towards housing development using a predictive function for the majority in favour of development (based on BSAS 2010). Bristol and Bath have quite negative scores (majorities against development), although they share this feature with Milton Keynes-Luton-Watford, Greater Reading, (Outer) London, and Southampton. Some of the smaller cities are closer to a balanced position, whilst Leicester seems quite positive.

The next two indicators are derived from the official household growth projections, first those based on 2008 data and secondly the new 2012-based projections published recently (we omit the interim 2011-based projections). Household projections have exerted a strong influence on planning for housing and continue to do so, reinforced by current Planning Practice Guidance. These display a possibly puzzling deviation between the values produced in different years, using different base data. I discuss in a separate note the problems and limitations associated with an over-reliance upon household projections. Nonetheless, it is noteworthy from the table that whereas in the 2008-based set Greater Bristol had a relatively high growth rate (1.49% pa), the highest of any HMA shown in this table, by the time of the current 2012-based projections this has come down rather dramatically to 0.92% pa, only just above the national average. In general, and as we would expect, most of the comparator city regions also had above average projected growth in the 2008-based series, exceptions being Greater Exeter and Peterborough. In 2012, there has been a general downward shift in the projections nationally, and this is reflected to some degree in quite a lot of the comparators, although not in Milton Keynes-Luton-Watford, Greater Cambridge, London, Exeter and Peterborough. As I explain in the later discussion, I believe the volatility in these projections is unhelpful for planning and misleading in certain cases, including notably that of Greater Bristol.

The last two indicators relate to demand and need for additional housing. The house price to earnings indicator is a widely-used summary indicator of affordability problems. (It is a bit simplistic, as it does not take account of household composition and incomes, nor of problems associated with credit rationing at this time). Its highest value is of course in London, and it tends to take lower values in northern cities. While Bath is notably high, Bristol is around the average level (in 2011). It is similar to three of the high growth city regions but lower than Greater Reading and most of the smaller southern city regions. However, the ‘lower quartile’ house price earnings ratios, which are commonly used in SHMAs and for comparisons, are higher than this, 7.33 for Greater Bristol (which is above the national figure) and 9.02 for Greater Bath. The high values for these ratios show just how unattainable home-ownership is going to be for households with just one earner (or one full and one part time) and without particular access to capital from family sources.

The final indicator is the composite demand index featured in Map 2. This shows Bristol in the positive range but less high than London, Reading, Milton Keynes-Luton-Watford, Southampton and Swindon. However, the northern and midland cities score much lower on composite demand, which indicates that they may find it more difficult to achieve their higher housing growth aspirations.

Table 1

Table 1


  1. Economic Growth Potential


In this section I want to argue that Greater Bristol (WoE) has relatively high economic growth potential. This matters for housing planning because one of the important criteria for judging how adequate levels of planned housing numbers are is whether they enable the labour force to keep pace with potential employment growth. If they fail to do so, then there are potentially adverse consequences for housing – more affordability problems and housing need pressures – and also for quality of life and sustainability – more longer commuting journeys. But there is also a significant risk that economic growth may itself be choked off – employers may experience labour recruitment or retention problems, particularly more difficulty attracting skilled applicants, while potential investors may regard this area less favourably than competing areas which appear better able to accommodate an expanding workforce. More highly skilled workers are likely to aspire to home ownership and a good quality living environment. In this context, it is significant that Bristol has worse than average home-ownership affordability and this is expected to remain worse into the future in the baseline and alternative forecasts, as discussed further below.

Figures 1-2 presents projections of employment growth (workplace jobs plus self-employment) from1997 to 2041 (with actual data up to 2011). These projections are embodied in the current version of the SRHMM (v17a) baseline forecast. The projections are not particularly sophisticated, being based on extrapolations of (a) real GVA and (b) GVA per worker. In both cases, the forward projection takes a weighted combination of the previous trend for the HMA area and an assumed national trend, with weights of 0.35 local and 0.65 national in case (a) and 0.50/0.50 in case (b) (i.e. allowing quite a lot of ‘regression towards the mean’).

Figure 1: Employment Growth Projections for selected city-regions – applying common growth assumption to all areas

Final Bramley_BRIEFING_PAPER_WoE2_2Dec-page-010000

The Greater Bristol projection is shown in red, with London in solid black, and other comparator areas (selected from the same set included in Table 1) in differing colours and line styles. The most striking finding from this analysis is that, taking a longer term perspective, Bristol has one of the highest growth trajectories of key city-regions in England. In Figure 1, which adopts a conservative, neutral set of assumptions to all areas, Bristol is second highest at 39% job growth between 1997-2041, second only to Greater Cambridge (53%), just ahead of Leeds (38%), and further ahead than Greater Manchester (26%) and Greater Reading (22%) or indeed London* (16%) (*HMA definition, wider than GLA).


Figure 2: Employment Growth Projections for selected city-regions – adopting ‘medium high’ growth assumption for Greater Bristol

Final Bramley_BRIEFING_PAPER_WoE2_2Dec-page-018000

Source: Sub Regional Housing Market Model, baseline projection, v.17a Note: For all areas except WoE this uses baseline economic growth assumption (GVA +2.0% pa); for WoE this assumes 2.3% growth, giving job growth in line with the ‘medium-high’ scenario discussed in SHMA as preferred option.

Figure 2 shows a more likely scenario for Bristol, based on the discussion of local employment prospects and forecasts in the SHMA, which suggests that the ‘medium high’ growth scenario was the most likely. This further confirms the finding that Bristol has one of the highest growth trajectories of key city-regions in England. By 2041 there would be 52% more jobs in Greater Bristol than in 1997. Only one city region clearly exceeds this, Greater Cambridge at 53%. All the other comparator areas have lower growth trajectories, including Leeds (38%), Manchester (26%), Reading (22%) and London (16%).

There may have been a view in some planning circles that Bristol’s employment growth has faltered and cannot be expected to recover fully to earlier levels. I think that this is a misreading of the evidence. It is true that Bristol was leading the pack in the early 2000s and then faltered somewhat before dipping sharply in the recession. But similar faltering and recessionary falls were experienced in nearly all of the comparator areas. In other words, these pessimistic planners are too influenced by the exceptional experience of the recession – even emerging from the recession in 2015, Bristol was second in this league table and 20% above its 1997 base level. Planning should take a longer term perspective, and in that context Bristol can expect significant employment growth.

This view is very much reinforced if we then turn to the very useful material on aspects of economic competitiveness of cities produced by the Centre for Cities. These are more specific indicators which highlight where cities sit in the rankings in terms of more specific factors which may be strongly indicative of potentially strong future economic performance.


  • Bristol is in the top group for – business start-ups – patents granted – knowledge-intensive -business services – higher qualified workforce – SME density & employment gain
  • Bristol is in a relatively high group for – GVA per worker – employment rate – ratio private: public sector employment – ave weekly earnings – earnings growth

I would argue from this recent, more specific evidence that the admittedly relatively simple ‘extrapolative’ employment projection offered above is not a ‘flash in the pan’ but a realistic scenario for the West of England. Many other cities would love to be so favourably placed for growth.


  1. Housing Outcomes and Adequacy


6.1 Performance Criteria


In this section I turn the spotlight directly onto the planned level of housing provision for the WoE and ask the key questions which the revised National Planning Practice Guidance advises should be asked when interrogating core strategies for housing. Is the current planned level of provision adequate in relation to key measures of demand and need? Using a reasonable forecasting framework, is the shortfall in key outcomes likely to be overcome or to persist or even worsen? And, in the latter instance, how much additional housing provision would be required to give a reasonable assurance that outcomes would reach more acceptable levels, against obvious benchmarks?

Table 2 below presents a summary of key performance outcomes. The 2014 Practice Guidance identifies a range of indicators, particularly

  • Plan target or actual or forecast numbers vs household projections
  • Employment growth vs workforce
  • Market signals – prices, rents, affordability – comparisons with national benchmark, and whether improving/worsening over time
  • Housing needs – overcrowding, concealed households, homelessness

The Guidance says that these tests should be applied at HMA level, which is what we do here. The ‘numbers’ presented are for the planning period of 20 years (2016-36), and are based upon the SRHMM model forecasts. We set a baseline scenario: (‘Base 2’), in which we take the final SHMA new housing target after adjustments (85,000 over 20 years) and assume the WoE and adjacent areas have slightly higher economic growth (+2.3% vs 2.00%), consistent with the ‘medium-high’ job growth favoured in the SHMA. The remaining scenarios explore the effects of WoE authorities (and their immediate neighbours) increasing plan provision for housing by varying amounts, increasing the share of social rented housing within new provision, as well as the effects of other contextual scenarios, particularly lower or higher international in-migration to Britain, and higher economic growth at national level.


6.2 Performance in Baseline Scenario

The first group of criteria relate to household growth projections. The planned housing provision target following the SHMA is 85,000 (4250 per year) and this is slightly above the current (2012-based) household projections (77,834). So we can say that the WoE now succeeds on this first interpretation of this criterion – hence the green shading. We actually forecast that completions would be somewhat lower than this in our baseline forecast, at 74,188, so on that interpretation of this criterion the WoE would be a marginal fail (yellow shading). Our model forecasts a likely outturn of household growth in the baseline of 80,750, which is marginally above the current official projection figure.

It is also important to point out that the current official household projections are very much lower than the previous 2008-based projections for Bristol, which lends a degree of doubt to this comparison, and raises the suspicion (discussed in a separate note) that the reduction in the projection may reflect recent supply constraints and their effects in suppressing household formation and migration below their earlier trend levels. There is therefore some ambiguity about how far one can say that these plans are adequate on this criterion. The figures in Table 2 suggest they are marginally adequate in one sense but marginally inadequate in another. However, my predominant conclusion would be that they are inadequate, because I seriously question the reliability of the official 2012-based projection for wider Bristol.


The second criterion is based on the comparison of forecast job growth and working age population numbers. Although population growth for the WoE is forecast to be quite high, at 179,264, of which nearly half (48%) is accounted for by net in-migration, the growth in working population is a lot less at 63,238, and this figure is significantly below forecast job growth (83,217) in the baseline. So again we can say that the WoE fails this test. This finding is of course particularly important in suggesting that current housing plans do not provide sufficient support to the level of economic growth which is generally agreed to be likely.

There is an additional twist to this argument, lurking within the migration figures. The net in-migration figure is more than accounted for by net international in-migration. The net migration for UK residents is actually a large negative at -11,000 in the baseline While a good many of these may be retired, many will be of working age. It is very questionable whether the system is working well, and providing support to economic growth, with this level of net loss of indigenous population. For this reason we have highlighted this figure (in the row labelled ‘excl inter’) and shaded high values negative values (over -10,000) in pink.

The third set of criteria relate to affordability, with key outcomes based on market signals and forecasts. For private rented housing, affordability will be better than the English average benchmark by 4.8% points on average in the baseline. This is the other criterion on which the WoE succeeds in the baseline. But there will be a significant worsening of rental affordability over the plan period, however, compared with 2007, of the order of 16% points, which makes a clear fail. These results are based on a new, re-estimated set of models for private renting.

The situation is generally worse for home-ownership affordability. On average only 28% of younger households will be able to buy on the basis of income, compared with c.57% able to afford renting. This will be on average 5.8% points worse than the national average rate, and will deteriorate by 7.6% from the baseline year of 2007 to 2036 So there are two very clear fails on this important criterion. Not only is the aim of enabling more people to enter owner occupation a major target for all parties, but it is also very important from the viewpoint of supporting the competitive position of the city region in terms of its ability to attract and retain skilled people.

The actual and baseline forecast rates of home-ownership by broad age are shown in Figure 1. There has been a striking fall in ownership among under-40s, across the country, which has been somewhat more pronounced in the WoE. Going forward, this decline tends to level off by 2031, with some rise back to 2011 levels by 2041. WoE is forecast to fall further, to a position considerably below England in the period from the 2020s onwards.

Figure 1: Home-ownership rates by age, Greater Bristol, Greater Bath and England, 2001-2041 (actual to 2011, baseline scenario from 2021)

Final Bramley_BRIEFING_PAPER_WoE2_2Dec-page-022

This decline will work its way through to the 40-60 and 60+ groups in the later period, with ownership rates in Greater Bristol significantly below England.

The corollary of this is the growing phenomenon of ‘Generation Rent’. In our baseline forecast (Base 2), the private rented sector in England rises from 10.1% of all households in 2011 and 18.1% in 2011 to 24% in 2041. In the WoE the rise is from 20.3% in 2011 to 32.3% in 2041. In 2041 only 53.5% of households in the WoE will be owner occupiers, compared with 60.3% in England in that year, and 64.9% in the WoE in 2011 (itself well down from the mid-70s in the early 2000s).

The fourth set of criteria relate to housing needs. Two indicators are presented here. The first looks at the change in forecast level of backlog needs. This appears to show a significant increase over the plan period, of around 6,200, so this is another case where there appears to be a substantial measure of deterioration. The second indicator compares an estimate of annual net need for affordable housing (newly arising ‘unaffordable’ plus a quota of the backlog) minus the forecast supply of affordable lettings (new and relet), in an early-middle year of the plan period (2021). This shows a significant shortfall of 900, which is again a ‘fail’. This shortfall is rather more than half of the SHMA figure for the annual need for additional affordable housing (1453). So the overall picture on need is negative.

The overall assessment in our baseline scenario is predominantly negative. The WoE fails on most of the criteria, with only two clear successes (provision vs household projection, and relative rental affordability) and some ambiguity around the household growth issue). The failure is particularly serious in terms of home-ownership affordability and this reinforces concern about the failure in terms of workforce numbers relative to prospective job growth.

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6.3 Alternative Supply Scenarios

Further columns to the right in Table 2 look at performance under a number of alternative scenarios, where we vary either or both of the planned provision levels and the economic and demographic assumptions.

The first of these alternatives (column A) looks at the impact of raising supply to a ‘moderate’ degree, with a 22% increase in plan targets to 104,040 in the WoE, with similar increases in adjacent HMAs. This level of target is of interest because it exceeds the former (pre-2010) Regional Spatial Strategy figure. Forecast output rises, but only by 6,600, compared with the 19,000 increase in plan target – an illustration of the ‘pushing string’ or ‘implementation gap’ problem which characterises the system as represented by our model. Decisions on the rate and phasing of new build remain with developers, not the planning authorities. Household growth would rise by a smaller amount, to 83,675, which again exceeds the DCLG projection. Thus, the WoE could then claim to be clearly meeting that criterion of adequacy, indicated by the green shading. Total population would rise by 2,000 relative to the baseline, due to slightly higher net in-migration, but working population would rise by only 450, still well short of the level of job growth in this scenario. Rental affordability would now be marginally higher and would deteriorate by marginally less. Home-ownership affordability improves by about 1.2% and 2.9% points on each indicator but would continue to be worse than the national level and would still deteriorate by 4.7% points. The second need figure would actually worsen slightly, while the backlog would increase slightly less.

The next scenario (B) cranks up supply to a ‘fairly high’ level, 44.5% above the baseline, with a planning target of 123,045. However, again the actual supply response would be a lot less than this, about 13,400 extra vs 37,930 extra planned numbers. Household growth would rise to 87,450, about 6,700 above the baseline and now well above the projection. The growth in working age population would still fall well short of the job growth (by 18,230). Rental affordability would be 6.1% points better than the national level on average, with a 13.7% point deterioration over the period, still quite small changes from the baseline. Home-ownership affordability would remain worse than the national level by 3.4% on average but the deterioration over the plan period would be contained to only 2.4% points. The first need indicator would be only marginally better than in the baseline, whilst the second would be marginally worse. Overall, one can say this scenario offers only marginal improvements over the baseline; with 4 greens, 1 yellow and 6 pinks, compared with 2/2/7.

The next scenario (C ) cranks supply up further again, to a ‘Very High’ level, which is how we would characterise a 67% increase, with an overall target of 142,400, an increase of 57,300. Completions and household growth would now significantly exceed the projection. This scenario more or less eliminates the issue of net out-migration of indigenous population, but working population still falls short of job growth by 16,550. The most significant achievement is to bring home ownership affordability down to only 2.3% points worse than England, while seeing only a 0.9% deterioration over the 2007 base year. However, the need figures are not much impacted still, and remain quite adverse. The overall traffic light score is 5 greens, 1 yellow and 5 pinks.

The next scenario considered (D) takes the ‘fairly high’ regional supply scenario (124,750) but combines it with a significantly higher level of social rented housing provision as well, roughly doubling this. This turns out to be the most favourable option in terms of outcome criteria. New build and household growth would both be around 103,000, well above the official projection level. This illustrates the reality, discussed further in the subsequent section, that if you build more housing then household growth will be higher. Indigenous migration is now positive. However, there is still a 16,000 shortfall between working population and job growth. Rental affordability is still 11.5% worse at the end of the period but on average it is 6.4% above England. Home-ownership affordability is within striking distance of the England average (-2.6%), while showing a 3.2% point improvement over the whole period. Backlog need change falls to only 2,046, while the shortfall of affordable supply vs net annual need is almost eliminated. This is broadly consistent with the SHMA affordable need figure, in the sense that roughly doubling social supply would close the gap. The overall score is 6 green, 2 yellow and 3 pink. It is worth noting that results from this scenario reflect a feature of the model, that increased social supply has a positive effect on private output as well (based on the econometric model for private completions).


6.4 Contextual demographic and economic scenarios


The next two scenarios look at the impact of different assumptions about international migration, an issue that is significant in its effects on housing and labour markets and is also politically contentious. Our baseline central assumption is that international migration continues to run at an average net inflow of 160,000 pa. for England. This figure (which is similar to ONS central assumptions) is at the lower end of numbers experienced over the last 12 years (Bramley 2015), implying that either England becomes less attractive to migrants or the Government succeeds in its policy aspiration to reduce numbers to a somewhat greater extent than it did in the last Parliament. We test quite large differences, of plus or minus 100,000 around this base. We also incorporate a linked assumption that differences in international migration would be associated with some degree of variation in economic growth. This is set at about half of the proportional effect on the workforce of these numbers, equating to about +/-0.15% on GVA growth.

The low migration scenario € has a mixture of effects, some adverse and some positive, but does not fundamentally change the position in terms of traffic lights. Household growth would be about 6,700 lower, and hence slightly lower than the projection, as we would expect. Although indigenous out-migration is largely eliminated, there is a larger shortfall of workforce growth vs job growth, totalling 31,000. Rental affordability is somewhat improved, and home-ownership also, especially over the longer term (-2.2% vs -7.6% deterioration). The need backlog change falls to under 1000 and the net annual need shortfall falls to about 280.

High international migration (F) increases household growth to 85,750. The indigenous out-migration level increases to 23,700, but the gap between workforce and job growth is much reduced, to about 10,300. Affordability worsens by about 0.4-0.5% points on average, or 1-3% at the end of the period. Backlog need rises to 10,900 and the annual need shortfall increases to 1,040. This scenario scores only 3 green and 1 yellow, with 7 pinks. Without increased supply, this scenario buys higher growth at the expense of worse affordability and greater need.

The penultimate scenario considered is one of higher economic growth (+0.3% additional GVA growth) nationally and locally, without any increase in supply. The shortfall of workforce vs job growth rises to 40,000. Affordability is virtually unchanged, with higher incomes offset by higher rents and prices. Backlog need is reduced somewhat but the annual need shortfall is little changed. Score: 3 green, 1 yellow, 7 red. The implication is that higher growth should be matched by higher supply.


6.5 The Supply-Affordability Relationship


This model (SRHMM) is designed to explore in particular the relationship between housing supply and affordability in the housing market, at the most appropriate spatial scale, namely the sub-regional housing market area. Affordability is key, both in its own right and because of its knock-on impacts on housing need, household formation, tenure development and other factors. The model uses empirically-based, well-researched relationships between these key variables over time and space to constitute the key components of the model. Whether or not the baseline forecast represents the future as it actually turns out is less critical than that it should present a reasonable picture of the likely future, given a set of assumptions about future exogenous conditions. Most importantly, the model provides a sound basis for answering ‘what if?’ questions about what the effects would be of djfferences in key assumptions or inputs. In the context of planning, the key question is – what difference would it make to affordability if planned housing supply were higher or lower by a given amount?

It is useful to draw out and summarise at this point what the model is saying about this particular ‘sensitivity test’, in the case of the WoE (a not untypical city-region in the south of England). We showed in Table 2 , comparing scenario A (moderately higher supply) with the baseline, that an increase in planned supply (‘provision’) of 18,929 (22.2%) led to a change in ‘affordability’ (percent of under-40 households able to afford to buy) from 28.0% to 29.3%, that is a change of 1.3% points or a proportional change of 4.6%. The sensitivity of two economic variables such as these is best summarized using the ‘elasticity’, that is the ratio of the two proportional changes. In this case the elasticity is 4.6/22.2=0.207. This could be described as a relatively low elasticity or sensitivity.

Similar elasticities can be calculated for the other supply scenarios (B, C and D) relative to the baseline – they lie in the range 0.203 to 0.387. The higher figure is for the (now rather unlikely) scenario (D) of doubling social housing supply as well (0.387).

It should be noted that these elasticities are consistent with those obtained using the DCLG=Reading ‘Affordability Model’ developed by Meen (2011) and colleagues, with comparable regional simulations giving values of between 0.06 and 0.21 (see Bramley 2013, Table 2).

Taking a round figure of 0.2 from the range of typical figures for general increases in market supply, we can say as a general rule of thumb that, if you need to achieve say a 10% improvement in affordability, you would need an increase in planned supply of 10/0.2=50%. That is somewhere around what was described as ‘fairly high’ in the above analysis. This is the ‘order of magnitude’ key figure to carry forward into the discussion in the separate paper commenting on the SHMA of ‘Responding to Market Signals’.


6.6 Conclusions from Model Scenarios

The model permits us to test any number of additional scenarios, but those selected and reported here are perhaps sufficient to give a general picture of the possibilities. The main conclusions are

  • The WoE needs to increase plan targets and housing delivery significantly to achieve reasonable outcomes across most of the criteria
  • The current DCLG household projection appears to be in striking distance, but as discussed below this projection itself is suspect, on the grounds of building in significant suppression of household formation in the last decade or so.
  • Seeing working population growth in line with likely job growth will be a very hard nut to crack
  • Rental affordability is generally better than for England as a whole, but it deteriorates quite a lot over time; home-ownership affordability is generally adverse in the WoE under most scenarios, but the gap is closed under high supply scenarios
  • Backlog need is likely to increase, but to contain this and get annual net need in line with affordable supply would require quite large increases in social as well as general supply
  • International migration assumptions have significant effects but present a mixed picture, with higher inflows facilitating economic growth at a cost in terms of affordability and housing needs
  • Higher economic growth without matching supply enhancement makes no improvement in affordability and a worsened jobs-workforce gap
  • The trade-off between supply increases and affordability improvements is roughly 5:1 in proportional terms


  1. Household Growth Projections


We discussed above whether the West of England’s planned housing numbers were adequate when measured against future household growth projections (section 6.2). It is my view that the reduction in the household projection numbers for the WoE between the 2008-based and 2012-based figures, which amounts to a 40% or 56,000 reduction over 20 years, is anomalous and problematic, casting doubt on the value of household projections for housing planning.

In publications going back to Bramley & Watkins (1995) I have drawn attention to the potential ‘circularity’ involved in using household projections as the sole basis for planning.

Circularity arises when (a) household projections are used as the basis for planning numbers, while (b) actual housebuilding (which is governed by planning numbers) affects the amount of migration to and household formation within an area, and thereby affects observed household growth and the recent trends in those factors, which are then used as a basis for the household projections. 28

In a recent paper given at the British Society for Population Studies conference in 2014, I made the following comment after reviewing some possible reasons why planners and demographers were reluctant to consider economic influences on household numbers.

“Against these must be set an awareness of the problems which can result from approaches to household forecasting and planning which ignore key economic effects. One example is the problem of ‘circularity’ (Bramley & Watkins 1995), or the self-fulfilling prophecy, which may lead to a cycle of underprovision in some regions. Another example is the situation whereby projections get out of phase with cycles, because of the convention of using the latest (but significantly lagged) data, ending up changing in the wrong direction relative to what is actually going on in the market. There is a significant illustration of this danger in the Interim 2012-based household projections for England, which are heavily affected by the effects of the Great Recession of the period 2008-12. Any set of projections or forecasts which imply persistent discrepancies of households vs dwellings need to be questioned, for reasons set out later*. Belief in the ‘fact’ that a projection says that there will be a certain rate of household growth, regardless of what happens to supply, prices, incomes or employment, betrays a lack of realism about adjustment mechanisms in the market. “ * this is a reference to the definitional identity relationship between households and dwellings, allowing for vacancies, second homes and sharing. (Bramley & Watkins 2014c).

The 2012-based household projections imply a growth rate of 4038 extra households per year; as noted this was a 40% reduction on the 2008-based projections figure of 6840 per year. However, the actual growth in households achieved by the WoE between the 2001 and 2012 censuses was only 3242. The main cause of that lower growth was probably the fact that the net additions to housing stock only amounted to 3046 pa over the decade. While the recession clearly reduced supply after 2008, even in the better years (2005-07) completions only totalled 2529 pa. This lower level of supply can reasonably be expected to have impacted on population growth (through net migration) and on household formation, during the decade.

Using a combination of actual data and model estimates, it would appear that net migration to the WoE was indeed much lower (at 4759 persons pa) in that decade than in our forward forecast. Furthermore, that positive net migration was more than wholly accounted for by international migration. In other words, Greater Bristol was in a net negative position on domestic migration; it was losing more UK resident population than it was gaining, in spite of being an economically dynamic and attractive city region in the south of England! This would seem to be strong circumstantial evidence that housing was being underprovided in the sub-region, especially when taken in conjunction with the worsening housing affordability – real house prices rose by 4.6% p.a. in Greater Bristol over the decade 2001-11, a higher figure than all of the high growth comparators examined in Table 1 and markedly above the England average of 2.9%.

Further indirect corroboration is found when we look at household formation, using household ‘headship’ rates (the percentage of people in a particular age group who head, or represent, a separate household). 29

The following Figure 2 looks at the proportion of 20-29 year olds who head (or ‘represent’) separate households for a number of years over the period 1992-2013 in selected regions, including the South West, based on the Labour Force Survey. Two key features stand out from this. Firstly, southern regions including the South West have seen a generally downward trend in young adult headship, whereas the trend in the North East and East Midlands (the least pressured housing market regions in England) has been close to static. Secondly, the decline in the South West started later than in London and the South East, and was not quite as great in 2013 (although it was in 2008).

Final Bramley_BRIEFING_PAPER_WoE2_2Dec-page-029

Source: adapted from author’s analysis for 2015 Homelessness Monitor.

The 2012-based household projections include a table showing the proportion of the increase in households accounted for by population change, household formation or the interaction of the two. For the three WoE authorities, the proportion accounted for by population is 99% (Bristol) and 96-97% (N Soms & S Gloucs). In other words, household formation as a process is stalled – people’s chances of forming a new household are not improving, and this is now factored into the projections as a ‘permanent’ feature.

However, it is arguable, from a longer term perspective, and having regard to a wider literature on household formation (Bramley et al 1997, Bramley & Watkins 2014c), that

1 There was a curious upward blip between 2008 and 2010, in all areas, but levels have declined steeply again since then, particularly in the southern areas. It is not quite clear why the blip happened, but I would suggest that this is associated with the sharp growth in private rented lettings associated with buy-to-let (plus owners unable to sell in the market downturn) at this time. A consequence of the blip is that the 2011 Census tends to paint a more optimistic/static picture of recent trends in headship, comparing with 2001, than one gets from seeing this fuller picture of trends over time.

there are longer term social changes in society which are likely to lead to further separate household formation, particularly among younger adults, given economic and housing market conditions that permit people to realise their preferences. There is certainly strong evidence that the recent downturns were very much a reaction to cyclical economic and market conditions. There is obviously room for debate around some aspects of these trends, however, it is straining credibility to argue that there will be no net household formation in the future.

The recent official household projections raise more questions than they answer and serve to undermine confidence in the general approach. They are likely to underestimate future potential household growth significantly for the WoE sub-region, because they are over-influenced by shorter term cyclical market factors in the immediately preceding period. I outline this argument in more detail in my separate paper.


  1. Green Belt


We have shown (Table 1 above) that Green Belt is quite an important constraint on housing supply in the WoE, as it is in some other major conurbations, notably London and Birmingham-West Midlands, and in some other ‘high growth’ city-regions like Reading and Cambridge. Others have argued that there is a serious need to review and redesign Green Belt for the 21st Century if adequate housing supply is to be delivered to support economic and population growth in a sustainable way. For example the Lyons (2014) Review (p.21) made a critical assessment, in the context of a discussion of ‘Allowing towns and cities to grow’, drawing on other work including that of the Centre for Cities. Bristol was explicitly singled out in this context, alongside Cambridge, Oxford and York. Kate Baker has argued for a review of Green Belt, both in her original (2004) review of housing supply and in subsequent contributions, pointing out (as have others) that the actual proportion of

England’s land area which is ‘built up’ is less than 10%, whereas most members of the public appear to believe that it is a majority.

The undoubted political popularity of defending the ‘Green Belt’ probably stems from a serious misconception about (a) the existing extent of ‘urban sprawl’, and (b) the actual purpose and character of Green Belt. The planning profession through RTPI (2002) have themselves argued for reform, as we did in our review of Green Belt policy in Scotland in 2004 (Bramley et al 2004, Prior & Raemaekers 2007). Whether in the short or medium term, some aspects of Green Belt policy and practice in the WoE, as in some other areas of England, would merit revisiting.

The proponents of reform are not arguing for complete scrapping of strategic growth controls or growth-shaping devices, which is what Green Belts are; neither are we arguing for a developers’ free-for-all. We are saying that there should be a realistic assessment of longer-term land requirements to support the sustainable growth of cities and towns, including housing and ancillary service and amenity requirements, and a strategic assessment of the best (most sustainable) urban form options to meet those requirements. Very often this will take the form of urban extensions, or linked nodes or corridors of development aligned to main transport infrastructure (public transport nodes are emphasized in the latest ‘Productivity Plan’ from H M Treasury). This is likely to be more compatible with a ‘Green Belt’ set of growth shaping controls which takes the form of wedges more than the traditional ‘polo mint’ type of Green Belt as imposed in the 1950s.

We also argue that the redesignation of land in these reconstituted 21st Century Green Belts (or Wedges) should be based upon their intrinsic landscape qualities, ecological diversity and value for recreation. Landscape which is of comparable quality to that in AONBs and National Parks should clearly not be given over for development.

In using the SRHMM to assess the impacts on affordability outcomes of different levels and locations of additions to planning targets for housing supply, it became apparent that there are limits to what can be achieved without some reconsideration of the Green Belt (Bramley & Watkins 2014b). It was found that this was particularly the case for London and the

Green Belt areas which dominate in the immediately adjacent ‘outer metropolitan area’.

Broadly speaking, the current post-election policy settings for planning seem to encourage even more higher density development on brownfield land (a market that was clearly glutted in the late 2000s), but less emphasis on new settlements and urban extensions. My own view, based on extensive evidence on how different types of housing neighbourhood function and people’s own satisfaction and quality of life (Bramley & Power 2009, Bramley et al 2009), is that this trend will not meet the aspirations of many, particularly younger families, and will not create happier, sustainable communities. In my previous study for the WoE SHMA of 2008, I showed how there was also an imbalance of housing supply and type between the urban and rural/village/small town parts of the region, with too much small high density flatted accommodation in the city and virtually none in the rural areas, and that this did not fully correspond with need and demand. This current policy emphasis seems likely to exacerbate these imbalances.


  1. Delivering New Housing


  • Takeup of planned provision – ‘pushing string’


Having a set of planning targets which are appropriate in scale, type/tenure and location is a first step, a necessary condition for meeting the challenge of housing in the West of England. However, it will not be sufficient without additional follow-through and implementation measures. Material presented earlier in this note provides evidence for the implementation weakness in contemporary UK planning for housing, a weakness which is fairly general and not specific to the WoE. Our modelling has consistently shown a shortfall between additions to planning ‘numbers’, or indeed actual planning consents, and additions to actual new build completions achieved. The results in Table 2 imply that in most cases the ratio of extra new build completions to extra planning target/permissions is between 0.35 and 0.45. So you need to ‘plan’ two and a half times more extra housing than the amount you actually want to achieve. And having done that, you will only get an affordability impact of a fraction of that, a few percentage points improvement after quite a long time.

Why is there this implementation weakness, or delivery failure, in relation to housing? In the recent period of recession one could blame weak demand, lack of credit and lack of viability. However, this is a longer term problem which has been quite apparent for many years (e.g. Bramley 1993 identified it). Many building projects suffer slippage, for technical reasons or because of changes in the client’s requirements. This may also be a factor, but typical private housing developments are speculative developer-led schemes, not contracts for a large client.

There is a widespread view that the established British approach to housebuilding, practised by the large housebuilding developers, does not deliver an adequate volume or responsiveness of supply. Housebuilders allegedly play the planning system to get allocations and permissions for their optioned sites, then control the rate of output to suit their corporate strategies and to ensure that they don’t run out of land, while exploiting any local monopoly which the generally tight planning framework reinforces. However, these strategies represent rational behaviour in the face of the incentives and constraints around them, including monitoring by city analysts and prudence in the face of the classic risk facing any speculative housebuilder – that the demand for their product may evaporate in the two or more years it takes them to bring it to market. The industry has also become more concentrated, with less scope for competition from small and medium sized builders.

The contemporary planning system acts mainly as a negative regulatory control. It can stop or delay development, but it cannot make it happen. Fundamentally, the phasing (timing) of output is controlled by the landowner/developer, not the planning authority. This is reinforced by the fact that many landowners take a long view of development potential and are rarely under pressure to bring their sites to the market and see them built, particularly given a general expectation of even higher land values in the future. This situation makes any attempt to increase supply a bit like pushing string.

Key evidence for this problem is found in the econometric models underpinning the SRHMM, which I have developed over the years, some with Chris Leishman, to predict rates of private housing output at local or sub-regional level. These models always show that there is a sort of implementation gap at the margin between the numbers of plots allocated or permissioned and the number of units actually built. You need to put a lot more land into the system than the number of extra units you get out in completions, as illustrated above. A further problem then arises when you are trying to create a large-scale increase in supply, which is that the number of sites released and the area covered expands excessively, leading to an incoherent pattern of development and inefficiency in the provision of infrastructure.


  • Proactive or ‘Positive’ Planning


I think that the solution to this entails developing the capacity for a more positive and proactive approach to land development in key growth areas. One traditional and successful model was the new town development corporation; another was the proactive local authority in town expansion areas like Swindon. In today’s conditions, these mechanisms could be revived in some cases (e.g. Thames Gateway) but in other cases I believe a model involving joint ventures between local authorities, landowners and financing bodies may be most appropriate. Another possible model may be Community Land Trusts. The local authorities and participating landowners would pool their land resources and work to a supply target. They would deliver land by auctioning sites with a planning brief to housebuilders who actually wanted to build housing, and the terms of the land sale would entail phasing requirements – build so many units to a size mix and planning brief in each year starting next year – and the land would be sold under building licenses with the freehold conveyed directly to the occupiers, rather than given away to the developers. This would overcome the implementation gap, guarantee increased supply, and increase product competition.

It would help the financial feasibility of mechanisms of this kind if the basis for compensation of landowners, when sites were acquired by the development agency, were to be changed from full market value (including prospective development or hope value) to existing use value plus a fixed addition for disruption. The landowner could be given an equity stake in the finally achieved value when the development is completed, after meeting the full costs of required infrastructure and community facilities, including an appropriate share of affordable housing. The final profit could be shared with the stakeholders in the development agency (including the local authority), but would not be paid out in advance.

There was significant support for these approaches in both the Lyons (2014) Housing Review and in the detailed proposals from the Highbury Group (2015) on Housing Delivery. The recommendations of the Highbury Group overlap considerably, but differ in emphasis in certain respects: more reliance on Local Authorities as the main agency in delivery and caution about setting up a lot of new structures. Given the outcome of the Election, only some of these ideas remain in play in the short term, but the mention of CPO powers and DCs for City-Region mayors in the ‘Productivity Plan’ is notable.

Reviewing these proposals against my earlier observations, I would say that the key issues for the WoE are


  1. Acknowledging that this is a strategic housing growth area which needs to have the tools to deliver ambitious plans
  2. Negotiating joint core strategy for housing including revised housing numbers, strategic allocations and sectors for development
  3. Establishing a suitable delivery vehicle, perhaps a joint local authority-led development company, possibly with participation from other key major landowners
  4. Develop an action programme linking the phasing of key sites with the provision of key infrastructure (building on SHLAA)
  5. Review expected contributions via CIL, S.106, and other mechanisms, and set out protocols for expectations of landowners and developers bringing forward major sites
  6. Monitor progress of key sites against the action programme with a view to potentially triggering interventions /acquisitions where appropriate


  • Delivering affordable housing


Problems with delivering new affordable housing (whether social rent or intermediate, for sale or rent) are far from new – they have characterised the situation facing local authorities in their housing strategies for most of my career, particularly since the cuts which commenced in 1976 which ended large scale council housebuilding. The models which have gradually evolved in England have relied largely upon housing associations as developers, utilising a lot of private finance as well as recycled internal surpluses to supplement increasingly low rates and amounts of government grant, together with the use of free/discounted former public land (where still available) and increasingly Section106 planning agreements, based on local policy targets which themselves relate back to the needs assessed in SHMAs.

This system has delivered moderate numbers, which grew in the late 2000s under the previous government, partly through counter-cyclical measures reacting to the early stages of the financial crisis, and then more recently through the current government ‘stretching’ grant more thinly under the Affordable Rent scheme. In Greater Bristol net additions to affordable housing have run at between 500 and 1000 per year recently, of which 75% on average have been social rented housing (including Affordable Rent in the last couple of years). However, the trend has been declining from a 2008 peak of 1,360 to only 570 in 2013.

In our baseline modelling we effectively assume a gradual increase from 500 now to about 790 in 2041. The SHMA has little specific to say about the immediate prospects for delivery of affordable housing, although it mentions the Affordable Rent scheme commitments which equate to 176 units per year up to 2018.

The WoE faces a situation where the need for new affordable housing, looking forward over the plan period, is estimated at 1,455 dwellings per year. A higher figure of 2,562 dwellings per year is derived from estimates of the impact of reduced levels of Welfare Benefit / Housing Allowance support for low income tenants in the private rented sector – however, this figure is not referred to in the main summary document. I have not attempted to unpick or critique the former figure, as it is based on many input data sources and assumptions. There was a similarly relatively large figure which emerged from the previous SHMA which I was associated with.

The obvious and most salient point, strategically, is that this level of affordable housing lacks credibility as something which can be delivered in the actual policy and market situation which now prevails. Firstly, it is two-and-a-half times higher than current actual delivery in the WoE, and higher than delivery in any recent year on record. Secondly, the government’s current headline programme (Affordable Rent) is offering to deliver only 12% of this total over the coming 3 years. Thirdly, the Government is signalling that it is looking to switch support from social rent to low cost home ownership, which alongside other signals suggests that the already meagre subsidy budget will be further cut. Fourthly, several post-election and post-budget policy changes affecting housing associations, particularly the unexpected reduction in target rents, will reduce association surpluses and reduce their capacity to develop new social or affordable housing. Fifthly, although extensions and revivals of the Right to Buy have promised mechanisms to achieve replacement, it is far from clear that these mechanisms are robust and delivering.

Further to these points, we have to consider the cumulative effect of changes in the Section 106 mechanism which have resulted from a series of policy announcements over the last several years, made in response to the perceived crisis of housing undersupply and the low level of activity in the housebuilding industry until recently, and doubtless encouraged by lobbying from that quarter. Viability assessments have become important and have been used to get AH requirement watered down or removed in many instances, partly because of the ability of applicants to put forward viability assumptions which slant the picture in their favour. Certain classes of site have been removed from s.106 including small sites and some urban brownfield sites. There is also an inevitable trade-off between getting more affordable housing and getting infrastructure paid for through CIL. Perhaps the most damaging move has been the Prime Minister’s recent announcement that local authorities will no longer be able to insist on a particular proportion of social rented housing within the mix, and that ‘Starter Homes’ will be an acceptable way of fulfilling planning obligations for affordable housing.

Given the somewhat watered-down nature of s.106 and the range of sites which will likely evade its reach, and the effects of viability considerations in particular, one has to view with scepticism a needs based target which implies a general ‘quota’ of 34% affordable housing.

In the current climate, the WoE may be doing well to get much more than half of that. This is particularly reinforced by the scarcity of public subsidy which can be clearly anticipated.

Bristol has in the past tried to follow an approach where normal s.106 sites did not collect subsidy and had to break even on cross-subsidy. I would commend this approach, particularly in circumstances where there is not going to be much if any subsidy. But the corollary of this is that the s.106 quotas will have to be lower, and include a high share of LCHO, to pass the viability test.

Adopting a more positive approach to the total housing numbers enables a more virtuous circle to work with respect to affordable housing. A larger total target will lead to more housing supply and improved affordability and need outcomes. But it will also, crucially, open up more sites on which s.106 contributions can be obtained. In this way more of the gap in terms of need can be bridged.

Since out of necessity more of the affordable housing will be LCHO, this will also make a significant contribution to bridging the affordability (including the deposit) gap for potential homebuyers, which we have indicated as a significant issue for the WoE. However, care is needed in establishing exactly what type of provision counts as affordable. 20% discounts on developers’ new build products, as in the current ‘starter homes’ scheme, may not be more affordable than what is available in the second-hand market.


  1. Key Conclusions


The geographical analysis of current potential for housing growth (s.2) is rather surprising in not showing the WoE as being in the higher housing growth potential category. This reflects relatively restrictive planning stances and constrained land supply, including the effect of Green Belt.

Comparison with a peer group of comparable city regions confirms this picture (s.3), and draws attention to the particularly anomalous position with household projections, where the WoE has seen an exceptional reduction between 2008-based and 2012-based numbers. Other indicators show the WoE as facing relatively high demand.

Evidence is presented that the employment growth potential of the WoE is relatively high, among the highest of the comparable set of city-regions (s.4).

Analysis of forecast outcomes using the SRHMM shows clearly that the WoE needs to increase plan targets and housing delivery significantly to achieve reasonable outcomes across most of the criteria identified in NPPG (s.6.2-6.3). The trade-off between supply increases and affordability improvements is roughly 5:1 in proportional terms (6.4). This has implications for how planned numbers should be adjusted in relation to ‘market signals’.

It will be difficult for the WoE to see working population growing in line with likely job growth (s.6.3-s.6.4).

Rental affordability is generally better than for England as a whole, but it deteriorates quite a lot over time; home-ownership affordability is generally adverse in the WoE under most scenarios, but the gap is closed under high supply scenarios (s.6.2-s.6.4).

Backlog need is likely to increase, but to contain this and get annual net need in line with affordable supply would require quite large increases in social as well as general supply (s.6.3-6.4).

International migration assumptions have significant effects but present a mixed picture, with higher inflows facilitating economic growth at a cost in terms of affordability and housing needs (s.6.4).

Higher economic growth without matching supply enhancement makes no improvement in affordability and a worsened jobs-workforce gap (s.6.4).

The recent official household projections raise more questions than they answer and serve to undermine confidence in the general approach. They are likely to underestimate future potential household growth significantly for the WoE sub-region, because they are over-influenced by shorter term cyclical market factors in the immediately preceding period (s.7).

Whether in the short or medium term, some aspects of Green Belt policy and practice in the WoE, as in some other areas of England, would merit revisiting (s.8). This conclusion reflects the modelling work on how supply influences outcomes (s.6), evidence on the significance of Green Belt in the WoE case (s.2-s.3), professional views on the contemporary role of Green Belts, and wider evidence on desirable future urban form from a social sustainability perspective (s.8).

Delivering adequate supply is hampered by the character of the housebuilding industry, as is evidenced by our modelling, and this argues for use of more proactive development vehicles in growth areas like the WoE (s.9.1-9.2).

The level of affordable housing provision proposed in the SHMA, while justified in needs terms, lacks credibility as something which can be delivered in the actual policy and market situation which now prevails (s.9.3). Realistic affordable housing quotas in plans and s.106 agreements are likely to be lower, which means the only route to delivering this level of affordable housing will be through increasing the total housing numbers substantially.




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