Five Year supply calculations

Planning Advisory Service (PAS)

Open group | Started - July 2012 | Last activity - This week

Ian McDonald, modified 7 Years ago.

Five Year supply calculations

Enthusiast Posts: 70 Join Date: 15/05/12 Recent Posts

How do you calculate the number of years supply as part of your five year land supply?

Do you:

(a) divide the housing supply for 5 year period by the number of annual requirement (housing requirement for 5 year period divided by 5 years); or

(b) divide the housing supply for 5 year period by the number of annual requirement including the 5% or 20% buffer (housing requirement for 5 year period plus the 5% or 20% divided by 5 years)?

There is no national guidance online to help us.

Thanks.

Andrew Chalmers, modified 7 Years ago.

RE: Five Year supply calculations

Advocate Posts: 169 Join Date: 20/10/11 Recent Posts

Ian there has been considerable discussion on 5 year supply on this site over the years but fundamentally the lack of guidance from government has wasted thousands of hours and expense trying to sort out something DCLG shoudl have done upfront. There have been rumours of more guidance over the years but has anything useful emerged...

But surely the answer to your question is the latter (b). Without confusing things further as many mix up requirement and supply, you are demonstrating you have a land supply big enough to meet requirements. In addition this land supply also to have a buffer of 5 or 20%.

So we would effectively divide the 5 year land supply by the residual requirement (with backlog) with 5 or 20% on top of this. Then we convert this % to years.

So at its most simple 5 year supply / ((original plan requirement x 5 plus residual) * 5 or 20%)

There may well be some debate whether the 5 or 20% should be applied to requirement plus backlog. PAS and I agree on this, although others don't, but that is how we do it.

Hope this assists.

Ian McDonald, modified 7 Years ago.

RE: Five Year supply calculations

Enthusiast Posts: 70 Join Date: 15/05/12 Recent Posts

Thanks for your reply Andrew.

What should the number of years supply target be? Is it 5 years supply or 5.25 years supply for 5% buffer (and 6 years supply for 20% buffer)?

If 5.25 years supply is used as the target then the calculations doesnt add up when using (b). Lets say the 5 year target plus shortfall is 7,500 homes. Apply the 5% buffer on top which is 7,875 homes (which means annual requirement of 1,575 homes). The housing supply for 5 year is 7,900 homes. Note the housing supply exceeds the 5 year target plus 5%. This means 5.02 years supply against the target of 5.25. Or is the target always 5 years no matter which buffer used? If using (a), the years supply is 5.27.

Hopefully you can see my confusions in all this.

Andrew Chalmers, modified 7 Years ago.

RE: Five Year supply calculations

Advocate Posts: 169 Join Date: 20/10/11 Recent Posts

Ian hopefully Adam's diagram clarifies the answer?

And looking again at your subsequent posting - you are still aiming for the 5 year target (but with the 5 or 20% built into the equation). So try not to confuse things further by talking of 5.25 or 6 year supplies. It is against 5 year you need to measure so yes the target is 5 years.

So you are correct with your 5.02 year supply.

Your plan (B) which results in 5.27 makes no allowance at all for the 5 or 20 % - and while we would all love this to be the case don't!

Of course the 5% or 20% buffers are not there to actually be built but to ensure there is a sufficient pool of deliverable land to ensure your plan provision is met, but that probably confuses things all the more.

Ian McDonald, modified 7 Years ago.

RE: Five Year supply calculations

Enthusiast Posts: 70 Join Date: 15/05/12 Recent Posts

Thank you Adam and Andrew for your replies - they were very helpful.

Ian

Former Member, modified 7 Years ago.

RE: Five Year supply calculations

Thanks Andrew,

Yes we do agree! :-) So do Inspectors (now, it wasn't always the case). Ian, I don't know if you've seen our FAQ page on 5YLS. It's a little old now but the answers aren't outdated.

http://www.pas.gov.uk/web/pas1/local-planning/-/journal_content/56/332612/7363780/ARTICLE

We also produced this slide as part of our event series on OAN and 5YLS:

I'm repeating what Andrew has said I appreciate, but hopefully you'll find the diagram helpful.

Adam