A Plan for York

‘York exiles the poor’ was the heading for the first evidence I tried to submit to the public inquiry for the 2018 York Local Plan Inquiry. Now there is an opportunity to submit an updated version because the local plan process is being re-run under a renewed York Council – now with a Labour majority.

Ignoring the housing affordability ratio

The housing affordability ratio measures the relationship between house prices and earnings, calculated by dividing median house prices by median gross annual earnings. A higher ratio shows lower affordability (e.g., 8x income), while a lower ratio indicates higher affordability.

During the 1970s, average house prices in the UK were around 2.6 times income, in the 2020s they increased to 8 times income. The cost of a home in York vastly outpaces local earnings, making it very difficult for first-time buyers – unless they inherit.

A parallel measure maintained by the UK Office of National Statistics compares the cheapest houses with incomes of people with lower incomes. For them, In the 1970s York, a lower-priced home might cost about 3 to 4 years the earnings of low income families. For this group, in the 2020s, a lower-priced home costs around 8 to 11 years of earnings. Home ownership now is only for those on higher incomes – or have other forms of wealth like inheritance.

From 2018 the UK National Planning Policy Framework (NPPF) requires that when the local affordability ratio is more than 5, a council must plan for extra homes when assessing housing need. The 2025 York Local Plan avoided this requirement because it used the 2012 version of the NPPF. There is now a 2024 version – and soon a 2026 version, which the current council will use for the new local plan.

In 2017, York’s Local Plan Working Group rejected a recommendation to apply a further 10% in housing numbers as a market signals uplift that was recommended by consultants, G L Hearn. However, Councillor Merrett Dave Merrett spoke on social and overall housing provision and transport implications. He felt the overall housing numbers should be increased, to ensure sufficient affordable housing was available.

The 2024 NPPF has a formula for how many new homes a council should aim at. The formula first asks councils to build extra homes equal to an 0.8% of existing homes each year. In York that will be 654 new homes per year. The formula asks councils in areas of high house prices to build even more the target multiplied by an ‘adjustment factor’. This factor uses the five year average affordability ratio in this formula:

Adjustment Factor = ((five year average affordability ratio-5)/5)×0.95 + 1

The five-year average (2020–2024) housing affordability ratio for York is 8.5. So the adjustment factor becomes 1.665, so instead of 654 new homes the new NPPF will be asking for 1138 new homes each year in York.

The NPPF now rejects the 822 new houses per year in the 2025 York Local Plan. However, a new figure of 1138 homes per year is unlikely to be enough to bring affordability ratios down to the levels of the 1970s.

Planning gain

My first submission to the 2018 Local Plan Inquiry argued that planning permission creates very large “planning gain” from converting cheap agricultural land into much more valuable building land. Planning gain is largely captured by landowners rather than the public. I noted that limiting housing supply makes homes less affordable, especially for younger and less affluent residents, while benefiting land owners and homeowners. (In 2018, I estimated planning gain from the proposed local plan to be £2.55 billion, or around £30,000 per household in York.)

I argued that the plan enabled carbon-intensive lifestyles and did not adequately account for embodied carbon in construction. I also argued that the proposed green belt acted as a “lock” that freezes in an unfair and unsustainable pattern of development.

This particular local plan would have deepened inequality, raised housing costs, and worsened environmental outcomes. The evidence I submitted can be seen on one of my websites as York exiles the poor.

Government policy has now moved in my direction.