East Midlands Councils

Housing Market Assessment :the next generation

25th April 2013 –Melton Mowbray Baptist Church

Bob LineB.Line Housing Information

Leicester

www.blinehousing.info

Housing Market Assessmentsthe next generation

• what do they need to cover

• key outputs

• what are the controversial aspects at present

• what methodologies should they use

• what is current guidance, will it change, how

?

SHMAs should develop, enable or provide (2007 guidance)

• long-term strategic views of housing need and demand to inform spatial strategies

• local authorities to think spatially about the nature and influence of the housing markets in their local area;

• robust evidence to inform policies aimed at providing the right mix of housing across the whole housing market – both market and affordable

• evidence to inform policies about the level of affordable housing required, including the need for different sizes of affordable housing

• support authorities to develop a strategic approach to housing through consideration of housing need and demand in all housing sectors – assessment of the key drivers and relationships within the housing market;

• draw together the bulk of the evidence required for local authorities to appraise strategic housing options

• ensure the most appropriate and cost-effective use of public funds.

Which means ?

Gather extensive data and evidence, handle and interpret it to :-

• Understand local housing market systems – including spatially

• Derive some key ‘magic numbers’ - Additional housing required – housing targets- Type and size mix - Tenure mix- Affordable Housing required

- but magic numbers are a myth

Additional housing required – housing targetscontroversial

• Based on Household Projections,

• .. household projections are produced by applying projected household representative rates to the population projections published by the Office for

National Statistics.• CLG projections , or Popgroup, Cambridge

Econometrics, Edge Analytics, etc

• Typically additional housing required is equated to crude increase in number of households, + some ‘slack’ .

CLG projections – free and ‘official’

detailed data for modelling and analytical purposes

https://www.gov.uk/government/statistical-data-sets/detailed-data-for-modelling-and-analytical-purposes

Latest set 2011-2021 - ONS  interim (population) projections are not in the usual schedule of releases but have been produced to meet specific user requirements for an updated set of projections which incorporate data from the 2011 Census but are only required to 2021

..\..\CIH\Planning for Housing group\CLG household projections 2013\East_Midlands_unrounded.xls

Examples- totals

How to convert household projections to housing requirements

Demographic demand and housing need

•how do new additions to stock address demographic demand

and/or need

not a simple process, planning doesn’t engage with it enough

•most newly emerged household unlikely to be able to access

new properties – ‘filtering down’ required

•how much, and how fast, does filtering down work

Deriving type and size mix from household projections

Unpicking, and interpreting the household projections

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Detailed unrounded x tabs 2011

Detailed unrounded x tabs 2021

Link it, Simplify it , Graph it

Chart 21: Comparison of broad household types and ages: 1991, 2008 & 2033

0

2000

4000

6000

8000

10000

12000

14000

15-2

4

25-3

4

35-4

4

45-5

4

55-6

4

65-7

4

75-8

4

85+

1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033 . 1991 2008 2033

Source: DCLG Households2

Num

ber o

f hou

seho

lds

Other

Al l Fami l ies

Couples

Singles

Rushcliffe – from www.howmanyhomes.org

Lifestages and housing careers

Doesn’t always apply, may be differences and variations along the way – but broadly generally applies

Housing mix estimates

You can estimate the mix required if you assume:•Households require the dwelling type appropriate to them in size & type ( affording it is another issue )• They are keener to ‘upsize’ when they need to than ‘downsize’ when they could• you can estimate the extent to which larger homes are released for growing households ( largely families with children) by downsizers ( largely empty nesters)•If they are not released more family units are needed to offset this•You can vary ‘downsizing’ and other factors with evidence based judgments

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Examples of housing mix estimates

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Adjusted for ‘aspiration’

Result is for all households, so compare to all stock

Housing Need - for ( PPS3) Affordable Housing

Basic Components of Need• Need from emerging households unable to

afford to buy or rent PRS without HB +• Backlog need from existing households in

unsatisfactory, insecure, unsafe or unaffordable housing / years policy period +

• Need arising from existing households falling into need - total

• less supply of affordable housing – new & relets, low cost sales

..\..\HSN, HSA\HSNversions\Example_Bramleybased_LA_needs_model2010.xls

Affordability v affordable housing

PPS revisions 2011-02-23

The terms ‘affordability’ and ‘affordable housing’ have different meanings. ‘Affordability’ is a measure of whether housing may be afforded by certain groups of households.

‘Affordable housing’ refers to particular products outside the main housing market.

Creates a ‘dumbbell’ marketHigher value , higher cost market housing – flats, larger detached => oversupply

Subsidised social rented

Insufficient middle range family housing to help create balanced provision

Spatial understanding – sub areas

Get the geography right to make it all clearer

• Administrative boundaries: housing submarkets do not respect administrativeboundaries, yet it is at this level that much data is collected and analysis undertaken. We need to separate the two.

• Spatial scale: sub-markets can exist at any scale

• Methods: there has been no agreed way to identify or describe sub-markets.

“Sub-markets potentially provide us with the organising principle we seek ” Pryce G, 2007

Housing submarkets

Need by submarket

Developers business model

• purchase an option on land; obtain planning permission;

• may trade land with planning permission• borrow money to acquire the site and build a first

amount of homes; • sell completed units in a phased way to pay back

the loan; • complete the remainder of the planned units during

which time profits can be taken; • move on to another site and repeat the overall

process

Developer behaviour – gaming the planning system ?

• Push for release of more land, through higher numbers, based on crude total demographic change

• Cherry pick it, land trade , appeal on plum sites with 5 (6) year land supply trump card.

• Squeeze down or delay AH and middle range market housing

• push more towards Affordable Rent to get higher price for AH

• build large expensive Executive Homes• drip feed completed units onto the market so as

to maintain local price levels • Will not, - cannot - , deliver volumes required to improve

supply:demand balance ?

Future GuidanceTaylor Report - Review of Government Planning Practice Guidance• Updating the Strategic Housing Market Assessment (SHMA) and

Strategic Housing Land Availability Assessment (SHLAA) guidance, to underpin the delivery of the National Planning Policy Framework in plan making and ensure it is used effectively.

CLG say• we will be reviewing the SHMA guidance, the timetable has not yet

been confirmed, but it will form part of the review of all planning related guidance.  …. The outcome will be an appropriate and easy to use set of guidance, focussing on issues that require national expression, to support implementation of the Framework. ' focussing on issues that require national expression' means focusing on issues that need  some form of articulation/guidance at a national level rather than be left to local interpretations which can provide an inconsistent approach

It will not always be the case that the guidance should come from Government – in some cases professional bodies may be the most appropriate bodies to publish guidance. The Government has been clear that until such time as the guidance review is complete, the existing guidance where relevant can still be used.

Updating SHMAs ?

• Census data now available

• Guidance could take ages

• Many Core Strategies getting stuck and knocked back at EiPs

• Start planning now ?