The standard method is a government-set formula used to estimate how many new homes a local authority needs to plan for each year.
It was introduced to provide consistency and transparency in how housing need is calculated across England, and is the default approach unless a council can justify using an alternative (e.g. through an up-to-date Local Plan that’s been examined and accepted).
⚙️ How does it work?
The standard method is a two-step calculation based on:
- Household growth projections
– These are official statistics (from ONS) that estimate how many new households are expected to form in each area over time. - Affordability adjustment
– This increases the housing need figure in areas where house prices are high compared to incomes (i.e. less affordable areas must plan for more housing).
– The formula uses the median house price-to-earnings ratio to adjust the total.
📌 For example: If a council area has a high affordability ratio — say, homes cost 12 times the average income — the housing need figure will be increased significantly to reflect that more homes are needed to address the imbalance.
🧮 Formula (simplified):
Minimum Annual Housing Need = ➡️ Baseline household growth + ➡️ Uplift based on local affordability
🛑 Can a council use a different method?
Only in specific cases — such as during a Local Plan review that’s:
- Fully updated and subject to public consultation and examination
- Using locally-specific evidence (e.g. infrastructure capacity, environmental constraints)
- Approved by a Planning Inspector
But in the absence of a recent, examined Local Plan, the standard method applies automatically — and forms the basis of the 5-Year Housing Land Supply test.