HBF Planning Conference

Reaping the rewards of Housing Market

Assessments

Yolande BarnesDirector, Savills Research

14 September 2006

• some background on demand and supply

• are HMAs good news or (yet) another excuse for consultants to make money?

• what should an HMA include?

outline

some background on demand and supply

UK build rates are the lowest in Western Europe …

Source: RICS, Savills Research

0

2

4

6

8

10

12

14

16No. of dwellings built per1,000 inhabitants

… and don’t always hit planned targets

Source:Savills, regional planning documents & DCLG

Annual Targets

800 to 5,000600 to 800400 to 600200 to 400

0 to 200

Annual Completions vs Targets

500 to 3,000200 to 50050 to 200

-50 to 50-200 to -50-500 to -200

market pricing shows quality disparity

Source: Land Registry/Savills Research

-£30,000

-£20,000

-£10,000

£0

£10,000

£20,000

£30,000

£40,000

£50,000

Detached Semi Terrace

1995 2000 2005

we just ain’t building them any more …

… or creating the new “ubertowns”

Source: Savills Research

when competing for scarce space …

… the size of your club matters

(although we think we’re more sophisticated now)

demand and supply interact

Source: HM Land Registry, CACI

0

20,000

40,000

60,000

80,000

100,000

120,000

0 50,000 100,000 150,000 200,000 250,000

Top of house price band

Num

ber o

f pro

perti

es/ h

ouse

hold

s

0

10,000

20,000

30,000

40,000

50,000

60,000

Hou

seho

ld In

com

e (£

)

Stock Potential demand constrained by affordability Household income

a good HMA will add value

market expertise is needed at an early stage

Source: Savills Research

Ownership of strategic schemes/sites

8%

24%

68%

Housebuilders

Commercial & mixed developers

Nothing to do with property

the market for some schemes may be wider than you thought …

Source: Savills using Census 2001

City of EdinburghCity of EdinburghCity of EdinburghCity of EdinburghCity of EdinburghCity of EdinburghCity of EdinburghCity of EdinburghCity of Edinburgh

FifeFifeFifeFifeFifeFifeFifeFifeFife

West LothianWest LothianWest LothianWest LothianWest LothianWest LothianWest LothianWest LothianWest Lothian

MidlothianMidlothianMidlothianMidlothianMidlothianMidlothianMidlothianMidlothianMidlothian

East LothianEast LothianEast LothianEast LothianEast LothianEast LothianEast LothianEast LothianEast Lothian

All FTE Working in EdinburghAs % of All Resident FTE

0.9 to 10.8 to 0.90.5 to 0.80.3 to 0.50 to 0.3

… some developments will create their own market …

… competition from other new stock will have an impact …

Source: Savills Research

S. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - WestS. Riverside - West

WestWestWestWestWestWestWestWestWest

South - West CentralSouth - West CentralSouth - West CentralSouth - West CentralSouth - West CentralSouth - West CentralSouth - West CentralSouth - West CentralSouth - West Central

West CentralWest CentralWest CentralWest CentralWest CentralWest CentralWest CentralWest CentralWest CentralCentralCentralCentralCentralCentralCentralCentralCentralCentral

City and MidtownCity and MidtownCity and MidtownCity and MidtownCity and MidtownCity and MidtownCity and MidtownCity and MidtownCity and Midtown

DocklandsDocklandsDocklandsDocklandsDocklandsDocklandsDocklandsDocklandsDocklands

NorthNorthNorthNorthNorthNorthNorthNorthNorth

South CentralSouth CentralSouth CentralSouth CentralSouth CentralSouth CentralSouth CentralSouth CentralSouth Central

EasternEasternEasternEasternEasternEasternEasternEasternEastern

% of future supply

25%

5%

changing demographics will affect demand and demand will change market demographics …

Source: ONS

0

200

400

600

800

1,000

2004 2024

000s

0-15 16-29 30-49 50-64 65-74 75+

… HMAs can inform the development mix to exploit market niches and fulfil latent demand

Source: Savills

  Size range (sq.ft.) Units %

1 bed flats 400 550 540 17%

2 bed flats 650 800 610 19%

Larger flats/ smaller houses 800 1100 300 10%

Smaller houses 800 1100 680 22%

Larger houses 1100 1550 1,010 32%

Total     3,140 100%

optimising development through understanding the market provides an edge

Source: Savills

100.0

120.0

140.0

160.0

180.0

200.0

220.0

240.0

Current 1st 5 yrs 2nd 5 yrs 3rd 5yrs

period mid-point

Inde

x

RPI Regional HPI Achieved pricing

so what should an HMA include?

• social housing

• need

• excludes two-thirds of occupiers

it is not anold-fashioned housingassessment

1. Supply• current• future

2. Demand• current• future

it goes beyondstandard developmentfeasibility studies

1. inclusive• all occupiers

2. dynamic• over space• over time• between occupier

groups

3. interactive• critical mass• development impact• phasing impact• existing and created

demand

housing marketassessments need to be: