How many new homes should a site deliver?

by Ed Dade

Posted on Jan. 23, 2019

The number of homes allocated by Local and Neighbourhood Plans on individual development sites can be an emotive issue for local people, particularly where a development proposal differs from what the plan says.


At the plan-making stage, it can be quite tricky to estimate the number of homes a site can accommodate (the site's capacity). In addition to dwellings, a development proposal may include any number of other features which reduce the area of land available for development, such as public open space; Sustainable Drainage Systems (SuDs); landscaping and planting; infrastructure, such as roads and utilities; and other land uses, such as employment, retail, etc. In addition, a site may be constrained by physical features such as topography, watercourses, infrastructure, habitats and geology.

The design and layout of a scheme will influence the number of homes the site can accommodate. Proposals for high-density flats and apartments will clearly deliver more homes than proposals for low density detached dwellings (on the same size site).

Often, the precise number of dwellings a site can accommodate is not figured out until the planning application stage. The applicant will submit plans and designs as part of the planning application, which may change following negotiations with the local authority.

Housing figures in Local and Neighbourhood Plans

When allocating sites in either Local Plans or Neighbourhood Plans, there are no hard and fast rules for how a site's capacity should be estimated or described. When writing a plan it wouldn't usually be practical to carry out a detailed master-planning exercise of the site, therefore the site's capacity must be estimated in some way.  Different plans deal with this issue in different ways:

  • Maximum limit: Some plans will set a precise upper limit on the number of homes a site can accommodate. In such cases, this may be expressed as a 'maximum' limit. Usually, this is applied where there is some evidence that exceeding the threshold will result in harm.
  • Range of values: Some plans may apply an upper and lower limit, with the assumption that the actual number of dwellings permitted on the site will be somewhere between the two values. This helps to show that the exact site capacity is not known at the time of writing the plan, but implies that the minimum and maximum values are appropriate, or that development outside the range will be unacceptable. It also raises issues around how the total number of dwellings the plan will deliver should be calculated.
  • Indicative or estimated site capacity: Some plans simply make an estimate of the site capacity, usually, using a formula or set of assumptions about the proportion of the site available for development and the likely density of new development. This is usually accompanied by some sort of caveat explaining that the indicative figure is just a 'guide' and may in practice be exceeded/not met. The benefit of this approach is that it is simple - there is just one number to deal with. However, this can imply that the indicative number is the 'correct' one. When an application is submitted, the number of proposed dwellings may be markedly different from the 'indicative' figure (for reasons discussed at the top of this page). In some cases applicants have faced an uphill battle in demonstrating the scheme is appropriate, where local people and decision-makers may have a bias toward the indicative figure - in other words, sometimes people 'latch on' to the indicative figure, and are shocked when the actual development proposals is for a markedly higher or lower number of dwellings.
  • No site capacity figure at all: Some plans may opt to not include an estimate of site capacity. Instead, they may simply describe the site and provide a measurement of the site area. This raises the issue that it is not clear to applicants and the wider community about how many homes the site is likely to deliver. It can also make it tricky to work out how many dwellings the plan will deliver in total.

When allocating sites in a Neighbourhood Plan, in most cases the 'indicative site capacity' approach will likely be the preferred approach. In most cases, there simply won't be sufficient evidence to set firm limits on the amount of development a site can accommodate.

Review of appeal decision: Dunholme, Lincolnshire

A recent appeal decision illustrates how an 'indicative' or approximate site capacity figure works in practice. There are likely to be countless other planning decisions which discuss the issue, but I picked this one because a) the decision was issued very recently, and b) the site is allocated in a Neighbourhood Plan.

Development proposal

The development proposal, for 64 dwellings with roads, garages and residential parking including community parking and public open spaces at land at Honeyholes Lane, Dunholme, Lincolnshire, was initially refused by West Lindsey District Council (WLDC), but following an appeal was granted full planning permission by a Planning Inspector.

Appeal decision

The site is allocated in the Dunholme Neighbourhood Plan (DNP) for "approximately 49 dwellings". The Central Lincolnshire Plan (CLLP), which was adopted after the Dunholme Neighbourhood Plan was made, also allocates the site for 49 dwellings, but notes that this figure is "indicative".

At the time at which these plans were made / adopted, the site already had outline planning permission for 49 dwellings, which likely explains how the indicative figure had been chosen.

In his decision, the Planning Inspector noted that neither the CLLP nor the DNP place a ceiling on the amount of development which can be delivered on the site. The proposed increase of 15 dwellings, from 49 to 64 dwellings, represents a 31% increase, which the Planning Inspector considered to be a "not insignificant increase".

The increase in proposed number of dwellings was clearly a contentious issue. WLDC claims it had initially justified the approval of the previous scheme (for 49 dwellings) due to its "low density nature being appropriate to an edge of settlement site that marked the transition from open countryside to built-up area". However, the Planning Inspector observed the local character and landscape surrounding the site and concluded:

I am not persuaded that the proposal for 64 dwellings would be harmful in the context of the detail of the proposal or the nature of the site’s surroundings

The test for determining whether 64 dwellings is appropriate is not, to what extent the indicative housing figure differs from the indicative site capacity figurebut instead is what harm will result from the development.

How to deal with site capacity and density in your Neighbourhood Plan

As highlighted by the Dunholme appeal case, indicative site capacity figures are fairly arbitrary. The precise number of dwellings which is 'right' for a site will be determined through the planning application process.

Your Neighbourhood Plan should generally avoid setting maximum site site capacity, unless you have compelling evidence that this number must not be exceeded. One example could be where the local highways authority has specified that a road junction has limited capacity, thereby placing a limit on development (unless a technical solution to the problem can be found).

Higher density development does have its advantages. It uses land more efficiently, and can enable more people to live closer to service and facilities, in other words, it is more sustainable. The NPPF (para. 122) requires planning policies and decisions to support proposals which make efficient use of land.

However, in some locations it may be more appropriate to provide lower density forms of development. For example, to reflect the character of surrounding development or, in an edge of settlement location, to create a transition from the built area to the countryside.

Rather than becoming too fixated on the amount of development a site should accommodate, instead focus on what that development should be like, and think about the ways you can influence the style of development through your policies.

You could undertake an assessment of the landscape and character of your area. You don't need to cover the entire Neighbourhood Area, but could simply focus on those areas which are most sensitive, for example, the 'edges' of the settlement where it joins the open countryside, or parts of the built area which have a distinct architectural style. This doesn't need to simply be the 'historic' areas (such as within a Conservation Area) - modern development has 'character' too.

This week the Environment Agency, Forestry Commission, Historic England and Natural England has published, via Locality, a guide on how to consider the environment in Neighbourhood Plans, titled Neighbourhood Planning for the Environment. The guide covers a broad range of themes and helpfully identifies where you can find existing evidence on environmental issues and provides guidance on assessing environmental issues - including carrying out your own assessments of the natural and built environment within your Neighbourhood Area.

Once you have gathered evidence, you can use this to inform your policies. A set of well-written, criteria-based policies, based on robust evidence, can ensure that the design and form of development responds sensitively to the local environment. This approach will likely ensure that new development is appropriate for its location, irrespective of the number of new homes it delivers. As always, refer to the Locality guide, Writing Planning Policies.


'Indicative' or estimated housing figures for development sites, as set out in Local Plans and Neighbourhood Plans are often of limited importance when determining planning applications. Where the local environment or landscape is particularly sensitive, use well-written, evidence-based policies to ensure new development complements the area. 

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