Setting a standardised methodology to calculate needs and clear targets for plan-making
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Standardised methodology… clear housing targets… it all sounds rather familiar? The Taskforce recommended that a methodology be devised that is applicable for all the various forms of older persons housing, which is simple, universally recognised, transparent and available for LPAs to use.  

NPPF Paragraph 63 has represented a positive step in that regard, meaning the days of amalgamating older persons housing into a single ‘black hole’ of Use Class C2 development (the effect of which subsequently dilutes the level of actual needs across this spectrum) are no more.

Arguably the biggest obstacle in planning which creates the greatest level of uncertainty for investment decisions within the sector, is the lack of a consistent methodology and the use of prevalence rates (6*) for establishing needs (i.e. retirement, sheltered housing, extra care, care homes). Too often the only option available to applicants is to back their own evidence and factor in the high risk of an appeal strategy from the outset.

While most LPAs support an ‘ageing in place’ strategy and policy of housing adaptation (which all have their place as not all older residents will want or need to move from their existing homes), this can often miss the fact that prevalence rates used in housing need methodologies already assume that the vast majority (90%+) of residents aged 65+ years will remain in-situ within their own homes.

A standardised methodology for the sector would provide definitive clarity for all parties through plan-making and decision-taking processes. For you eagle-eyed readers out there, you will already be aware that buried in Part 15LB of the Levelling Up and Regeneration Act 2023, is a legal obligation for the Secretary of State to:

‘issue guidance for local planning authorities on how their local plan and any supplementary plans (taken as a whole) should address housing needs that result from old age or disability’.

The hope in the industry is that this additional guidance could materialise in the form of a standardised methodology, utilising consistent prevalence rates and demographic data to establish mandatory housing targets for LPAs.

The Older Persons Housing Taskforce report and Government’s recent form on imposing mandatory housing targets will certainly embolden those in the sector. Inevitably, it raises a number of questions about how such an approach could align with the Government’s revised Standard Methodology for housing more generally:

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• How would a methodology that will likely utilise demographic data (i.e. population aged 65+ years) align with a revised Standard Method adopting a housing stock-based approach?

• Will this deliver proportionate outcomes for authority areas (as a totality of the local housing need and affordable housing requirements)?

• How will a methodology ensure that all needs of the market are being met (affordable, mid, premium) are being met?

Despite being a critical part to encouraging the concept for downsizing, the latter point is often overlooked by planning authorities. In a country where attitudes towards this lifestyle change pales in comparison to other countries such as America, Australia and New Zealand (7*), it is imperative that a methodology can secure greater choice in quality and housing offer in the right locations.

 

The risk is a disproportionate weighting to certain ends of the market which is to the detriment of many residents who would otherwise be open to the idea, subsequently locking many households in accommodation that is no longer fit-for-purpose. The day-to-day challenges this brings in terms of physical and mental health outcomes, loneliness and general wellbeing is applicable to everyone, regardless of their socio-economic status.

 

With speculation that the next iteration of NPPF may include qualitative housing targets as part of the five-year housing land supply test, particularly around affordable housing, there would be a clear synergy to also include older persons housing (and its subsequent sub-categories) within such a policy approach.

 

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Requiring LPAs to allocate sufficient land to meet housing targets

 

Inspectors at appeal (8*) have consistently accepted arguments that C2 developments (particularly integrated retirement communities) are pushed to ‘marginal’ sites, most likely in the Green Belt. This is due to an inability for developers/ operators to commercially compete with mainstream housebuilders. Similarly, there are several LPAs who have been found wanting due to a ‘distinct lack of robust planning policies’ to support older persons housing (contrary to the new requirement of NPPF Paragraph 63), with Inspectors citing a lack of defined housing targets and site allocations permitting C2 uses to promote delivery on the ground.

 

Ensuring that a range of sites are allocated in local plans, is fundamental to scaling up delivery. This includes town centre locations, greenfield sites and green belt sites to enable a range of scale, typologies and tenure options for senior citizens. This approach has been strongly advocated for by the Taskforce who add that where an LPA are unable to allocate sufficient land to meet the needs of their ageing population, then local plans should also include an exceptions policy.

 

An exceptions policy would certainly provide greater flexibility for new site opportunities through the decision-taking process, particularly where there is a proven housing need which isn’t being met. Recent changes to NPPF Paragraph 146 and the justification for exceptional circumstances to amend Green Belt boundaries where an authority is unable to meet an identified housing need any other way, has similarly provided new opportunities for those promoting sites for C2 uses through local plans. Substantiating an argument over a lack of land to sufficiently allocate for C2 uses will become increasingly difficult.

 

In a new NPPF 2024 World, we can anticipate feverish competition between sites coming forward, with LPAs (and politicians) eager to demonstrate how they have secured maximum planning and public benefits. The role of specialist C2 housing will therefore become even more important in providing a key point of differentiation for landowners and developers alike which can only be to the benefit of the sector.

 

 

Looking to the Year Ahead

 

The recommendations of the Older Persons Housing Taskforce have been strongly endorsed by the industry and go the heart of the fundamental reform that is required to the planning system.

 

The revisions to the Standard Methodology and NPPF in 2024 will present opportunities for those in the sector with many authorities suddenly finding themselves without a demonstrable five-year housing land supply. However, this won’t resolve the commercial reality and competition for sites with traditional housebuilders.

 

Grey Belt policy and the introduction of clear guidance for decision-making within PPG, has already contributed to an uptick in planning permissions being granted for housing on Green Belt sites that otherwise would have been refused. However, the application of the Golden Rules, under Paragraph 155, will continue to present challenges for operators in the C2 sector who already challenging enough to deliver affordable housing on a policy compliant basis let alone potentially up to 50% provision. This is particularly acute for C2 developments such as IRCs where the models require a significant frontloading of costs to amenity provision.

 

It's no surprise to see that an appeal (Ref: APP/P0240/W/24/3347529) proposing an integrated retirement community and care home facility, which would have delivered 165 new homes in an area of an identified need, was dismissed due to a lack of affordable housing and meeting the Golden Rules. Despite satisfying the Grey Belt definition, the appeal scheme only made provision on a 30% policy compliant basis. Many in the sector will continue to be faced with no other option but the unpalatable risk of continuing to run viability cases.

 

Likewise, the Golden Rules raises the important question of how they are applied to specialist older persons housing and precisely which form of qualifying development are liable to affordable housing requirements. See the recent appeal decision at Beaconsfield (9*) where the affordable housing provision in that case equated to only 15%, which was found to be a ‘reasonable approach’ in the absence of a clear policy requirement for any provision from C2 development. It was subsequently found that the Golden Rules and 15 percentage point uplift had been satisfied, and planning permission was granted – a positive and much needed outcome in an authority area with a 0.58-year supply of housing land. However, it’s one example of a decision that could have been very different if there was a more robust affordable housing policy in place.

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It is no surprise that both cases related to sites within the Green Belt, exemplifying the challenge of competitiveness for sites, the commercial realities for developer/operators and the importance of rolling out the Taskforce’s recommendations.

 

With strong sentiment in the sector suggesting a dramatic rise in planning applications is on the way, and undoubtedly greater competitiveness to secure site allocations through the plan-making process, it is a great opportunity for the sector to capitalise.

 

With further planning reform coming in the year ahead and National Development Management Policies on the way, now is the time for the recommendations of the Older Persons Housing Taskforce to be enshrined within NPPF and PPG, to finally establish the robust policy framework that is required to address this ‘critical’ issue.

 

We will be continuing to monitor progress on the Taskforce’s recommendations with close interest and update you accordingly. To talk this through further or if you have any queries relating to specific site enquiries, please get in touch with Elliott and the team who are actively advising across a number of schemes in the retirement and care sectors.