Presentation of Draft Findings 13 th July 2015 glhearn.com - - PowerPoint PPT Presentation

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Presentation of Draft Findings

13th July 2015

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Introduction

• Paul McColgan

‒ Planning Associate Director

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Structure

• Context and Purpose
• Methodology
• HMA review
• Housing Need
• Housing Mix
• Needs for Specific Groups
• Questions

Context and Purpose

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NPPF View

• National Planning Policy Framework

‒ Meeting in full the objectively-assessed need for market and affordable housing in the housing market area where this would be consistent with achieving sustainable development ‒ Meeting need and demand for homes - being more responsive to “market signals” ‒ Housing remains a strategic issue – requiring local authorities to work together to plan to meet housing needs, and align with economic strategies

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Planning for Housing

• Councils working collaboratively to identify and then meet “full objectively

assessed need for market and affordable housing in their housing market area”

• Establishing housing need through the Strategic Housing Market

Assessment ‒ How many homes? ‒ What mix of homes? ‒ Needs of different groups within the population

• “Policy-off” assessment of objectively assessed need

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Planning Practice Guidance

• Government finalised Guidance on Assessment of Housing and Economic

Development Needs in March 2014

• Indicates that starting point for assessing need is latest official Government

household projections (now 2012-based) ‒ Sensitivity analysis where appropriate.

• Overlaying other factors:

‒ Market signals - improve housing affordability ‒ Affordable housing needs ‒ Employment trends/ distribution …. do these suggest a need to increase housing supply in some areas?

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Key Elements of SHMA

• Objective Assessment of Housing Need (OAN)
• Need for Different Types of Homes
• Need of Specific Groups within Population

***It is not the housing target***

SHMA Approach

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Overview of Approach

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Methodology

Trend-based Population & Household Projections Testing Migration Trends Testing Household Formation Rates Market Signals Evidence Affordable Housing Needs Analysis Case for Adjustments to Improve Affordability Economic Growth Prospects Alternative Migration Scenarios Objectively Assessed Housing Need (OAN) Aligning Housing & Economic Strategy Land Supply, Constraints, Sustainability Appraisal Unmet Needs from Other Areas Housing Target in Plan SHMA Process

Housing Market Geographies

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Housing Market Areas

“A housing market area is a geographical area defined by household demand and preferences for housing, reflecting the key functional linkages between places where people live and work. It might be the case that housing market areas overlap. The extent of the housing market areas identified will vary, and many will in practice cut across various local planning authority administrative boundaries.”

• Planning Practice Guidance

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Defining Housing Market Areas

• Planning Practice Guidance identifies three sources:

‒ House prices and rates of change in prices ‒ Household migration and search patterns ‒ Contextual data such as travel to work

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Practical Issues

“One problem with drawing boundaries is that if each local planning authority were to draw its own boundaries, there would be almost as many HMAs as local authorities. This is because the largest migration flows in and out of any individual authority are usually those linking it with immediately adjacent authorities. But each of these adjacent authorities will probably find that their largest migration flows link them to their immediate neighbours, and the chain continues. Thus if each local authority works independently to define an optimal HMA, each authority may draw a different map, centred on its own area.” PAS Technical Advice Note: June 2014

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Existing National Research

CURDS 2010

• Strategic (Framework)

Housing Market Areas ‒ Based on 77.5% commuting self- containment

• Local Housing Market Areas

‒ Embedded within these ‒ Based on 50% migration self-containment

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Recognising London’s Influence

Commuting to Inner London

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Recognising London’s Influence

House Prices

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A Practical Way Forward

• Recognising influence of London

‒ Out migration from London ‒ Duty to Cooperate

• SHMA Studies which interrogate dynamics in local markets
• Inter-connectedness / overlapping market areas

‒ Influences from adjoining areas near boundaries

• ‘Best fit’ to local authority boundaries

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Migration

• Key migration flows are principally with

adjoining authorities (per 1,000 population) ‒ Between Hounslow – Ealing / Richmond (8.5, 6.6) ‒ Between Spelthorne and Runnymede (5.6) ‒ Elmbridge and Kingston (5.5) ‒ Woking and Guildford (5.0) ‒ Runnymede and Woking (5.0) ‒ Spelthorne and Hounslow (4.4) ‒ Woking and Surrey Heath (3.9)

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Net Migration Patterns

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Where Residents Work

Workplace of Runnymede & Spelthorne Residents

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Where Workers Live

Homes of those working in Runnymede & Spelthorne

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Conclusions

• Strong level of commuting and migration

links across authorities in NE and W Surrey

• Movement out from (and commuting

back in to) London

• Five clusters of links emerge looking

across Surrey and to surrounding areas

• Interplays both within and across areas

(including with London) – porous boundaries

• We have examined housing

need for Spelthorne and Runnymede

Rushmoor Surrey Heath Hart Spelthorne Runnymede Epsom & E Mole Valley Reigate & B Tandridge Kingston and Elmbridge London Woking Guildford Waverley

Considering Demographic Housing Need

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Projections – Key Issues

• Starting from the latest national projections

‒ 2012 Household Projections ‒ 2012 Sub-National Population Projections

• Sensitivity Analysis

‒ Migration ‒ Household Formation Rates

• Overlaying Economic Forecasts
• Separating supply issues from assessment of need
• Supply shortfalls as a duty to cooperate issue
• Recognising labour market extending across London into Home Counties

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Demographic Projections

• “Projections do not predict the future – they roll forward what’s

happened in the past”

• Figures are particularly sensitive to:

‒ Migration ‒ Household formation rates

• Impacts of international migration and the recession on

household formation

• Starting point should be latest official population and household

projections

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Demographic Projections

• ONS 2012-Based Sub-National

Population Projections

• CLG 2012-based Household

Projections

• Updated for Mid-Year Estimates in 2013
• Prepared in May prior to 2014 MYE

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ONS 2012-Based Population Projections - Spelthorne

• ONS 2012-based projections in line with shorter term trends and above

longer term trends

85,000 90,000 95,000 100,000 105,000 110,000 115,000 120,000 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

Population

Trend (2001-13) Trend (2008-13) 2012-based Linear (Trend (2001-13)) Linear (Trend (2008-13))

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ONS 2012-Based Population Projections - Runnymede

• ONS 2012-based projections sat below short term trends post 2025 and

above longer term trends

70,000 75,000 80,000 85,000 90,000 95,000 100,000 105,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 Population Trend (2001-13) Trend (2008-13) 2012-based Linear (Trend (2001-13)) Linear (Trend (2008-13))

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Sensitivity Analysis

• 2012-based SNPP reasonable demographic projection when taking account of

past trends in population growth

• However, we have undertaken sensitivity analysis to look at longer term

migration rates and Un-attributable Population Change

• Notably high UPC in Runnymede
• Longer term migration rates result in an overall need which is around 40

dwellings per annum less than official projections

• However this increases housing need in Runnymede (+120) and reduces it

in Spelthorne (-150)

• Adjusting for UPC result in an overall need which is around 240 dwellings per

annum official projections

• This increases housing need in Runnymede (-275) and increases it in

Spelthorne (+40)

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Sensitivity Analysis

150,000 160,000 170,000 180,000 190,000 200,000 210,000 220,000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

Population

Trend (2001-13) Trend (2008-13) 2012-based 12_year migration UPC adjustment Linear (Trend (2001-13)) Linear (Trend (2008-13))

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Sensitivity Analysis

We do not however consider these to be appropriate alternatives:

• We require strong justification to move away from SNPP i.e. If the SNPP

moves away from both short and long term trends.

• SNPP are broadly in line with short term trends
• If there had been a shift, the older data is less reliable
• UPC reflects error in older data more than more recent trends
• ONS amended methodology post 2006
• Latest available data suggests that migration rated could be even higher
• 2012 - 2013: SNPP – 559 MYE – 1006 net in migration
• 2013 – 2014: SNPP – 685 MYE – 814 net in migration
• GLA expect increasing out migration from London
• Longer term trends reflect pre EU expansion

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Demographic “Starting-Point”

• Rebased to 2013 MYE
• Includes provision of vacant and second homes (4.9% Run - 3.6% Sp)
• Most recent official population and household result in higher percentage

growth than Surrey, South East and England

• Include some degree of suppression in 25-34 year age group
• This however does not take into account economic need, affordable

housing need nor market signals

Runnymede Spelthorne Study-area Households 2013 33,566 40,325 73,891 Households 2033 41,848 50,187 92,035 Change in households 8,282 9,862 18,144 Per annum 414 493 907 Dwellings (per annum) 434 511 945

Considering Affordable Housing Need

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Affordable Housing Needs Model

Future Housing Need

Estimate of Newly-Forming Households in Need & Existing Households falling into Need over plan period

Affordable Housing Supply

Estimate of Supply of Affordable Housing from Relets of Existing Properties over plan period

Affordable Housing Supply

Supply of Affordable Housing from Vacant Stock & Development Pipeline

Current Housing Need (Gross)

Current Households in Housing Need based on Census and other modelled data

Total Net Current Need Net Housing Need Arising Total Net Current Need

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Affordable Housing Need: 2013-33

Area Current need Newly forming households Existing households falling into need Total Need Supply Net Need Runnymede 27 393 100 521 150 371 Spelthorne 37 486 127 650 209 441 Study-area 64 879 227 1,171 359 813

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Implications of Affordable Housing Need

• Net affordable housing need of 813 dwellings per annum

‒ 86% of demographic need ‒ Could decrease with different affordability assumptions applied ‒ But also includes households already in accommodation (just not a home suitable for their particular needs)

• However, some of this need can be met through Local Housing Allowance

and the Private Rental Sector as it currently does – over 2,700 LHA/HB claimants currently in the PRS with 359 new claimants per annum

• Therefore some justification to consider an additional uplift on the basis of

affordable housing need ‒ This is examined alongside market signals

Housing Market Signals

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Market Signals

• Tell us about supply-demand

balance – but also relative attractiveness of places to live

• Importance of considering

what these say about balance

• ver period both before and

since the recession – and impacts on trends in household formation

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House Prices (2014)

• Some differences within the HMA

‒ Median Values are above regional medians in both Boroughs ‒ Mean Values in Spelthorne are considerably lower than Runnymede and below regional values

Median All

Runnymede £258,726 Spelthorne £247,000 HMA £250,000 South East £245,000

Mean All

Runnymede £369,156 Spelthorne £285,790 HMA £325,388 South East £309,634

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House Price Trends (1997 – 2007)

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House Price Trends (2008 – 2013)

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Lower Quartile Price-Income Ratios

• Affordability decreased significantly since 1997
• Prices challenge standard borrowing ratios (x9)

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Completions

• Growth has been largely above target pre recession and below it post

recession

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Changes in Tenure Profile 2001-11

• Significant Growth in Private Rented Sector and decline in owning with a

mortgage in line with national trends

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Overcrowding

• Growth in over crowding between 2001 and 2011 moderate above wider

comparators

Overcrowding 2001 2011 % Change Runnymede 1,918 2,710 41% Spelthorne 2,493 3,553 43% Surrey 23,620 30,783 30% South East 195,392 265,974 36% England 1,457,512 1,928,596 32%

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HMOs

• Growth in Housing in Multiple Occupation/Shared Household spaces

between 2001 and 2011 in line with county trend but below regional and national figures ‒ Significantly higher in Spelthorne than Runnymede

HMO 2001 2011 % Change Runnymede 1337 1426 7% Spelthorne 1527 1850 21% Surrey 16,281 18,573 14% South East 120,055 150,647 25% England 749,666 995,677 33%

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Key Housing Market Signals

• There have been notable changes to the housing market in Runnymede

and Spelthorne over recent years, including: ‒ Deterioration in housing affordability over 2001-11 decade ‒ Shift towards Private Rental Sector ‒ Increasing HMO and Over-crowded households

• Combined with the credit crunch these issues are likely to have constrained

household formation

• Market signals indicate that household formation rates have been

constrained and that an upwards adjustment is required to reflect this.

• Guidance suggests that this should be ‘reasonable’ but does not quantify

how it should be made

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Demographic Projections – Conclusions (cont.)

• Our approach to an upwards adjustment is informed by demographics

‒ Key impact of improving affordability (in terms of overall housing need) would be to support increased household formation amongst younger

• households. This would also result in higher affordable housing provision
• We have therefore run a sensitivity analysis which considers and seeks to

quantify the implication of returning the household formation rates of the 25- 34 age group back to 2001 levels by 2033

0.3 0.35 0.4 0.45 0.5

Runnymede

CLG 2012-based CLG 2011-based CLG 2008-based 0.3 0.35 0.4 0.45 0.5 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033

Spelthorne

CLG 2012-based CLG 2011-based CLG 2008-based

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Demographic Projections – Conclusions (cont.)

Runnymede Spelthorne HMA Households 2013 33,566 40,325 73,891 Households 2033 42,321 50,801 93,122 Change in households 8,755 10,475 19,231 Households Per annum 438 524 962 Dwellings From SNPP model 434 511 945 Potential uplift 25 32 57 Revised Dwellings (per annum) 459 543 1,002 % uplift 6% 6% 6%

Considering the Needs of the Economy

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Calculating Local Economic Growth

• Our calculations are informed by the Summer 2013 Experian Forecasts

which also inform the LEP Strategic Economic Plan projected to 2033

• Expected growth of around 30,000 jobs in HMA from 2013-33
• We have also taken into account:
• Commuting patterns;
• Double – jobbing;
• Economic Activity

– Including Changes to the Pensionable age

• Current Age structure

Runnymede Spelthorne Jobs (2013) 66,118 41,298 Jobs (2033) 81,166 56,334 Change (2013-33) 15,048 15,036 % change from 2013 22.8% 36.4%

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Implications of Meeting Local Economic Growth

• Linking this to a 2012-based headship rate results in a need for 1,250

dwellings per annum.

• These however does not take into account:

‒ Local employment land capacity issues ‒ Potential growth of in-commuting to London linked to the City’s ambitious job growth ‒ Impact of third runway decision at Heathrow

• Also deviate from past trends, particularly in Spelthorne where jobs declined

between 2001 – 2011

• Economic projections to be tested further

Housing Need PA 2011-31 Runnymede Spelthorne HMA

Per Annum Change in Resident Workforce

544 813 1,357

Annual Housing Need

525 725 1,250

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Bringing the Evidence Together

• 2012 based household projections (i.e. the latest official projections at

time of drafting SHMA) suggest a growth of 945 dwellings per annum ‒ These reflect reasonable migration assumptions ‒ Some suppression in household formation rates of key 25-34 year age groups

• Upward adjustment required to improve affordability (57 dwellings per

annum) suggests a need for 1002 dwellings per annum ‒ Returns formation rate in key 25-34 year age groups to 2001 levels

• Potential need for further uplift to reflect economic need of up to 1,250

dwellings per annum ‒ However there are questions relating to reliability of forecasts and how they can be delivered

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Bringing the Evidence Together

• Overall need for housing of up to 1,250 homes per annum

‒ Runnymede – 459 – 525 per annum; ‒ Spelthorne - 543 – 725 per annum.

100 200 300 400 500 600 700 800 Runnymede Spelthorne Annual Housing Need (units) Supporting Economic Growth Improving Affordability Demographic Baseline

Housing Mix

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Housing Mix

• Implications of changing

demographics

• Welfare and benefit reforms drive

more close relationship between household and home size in affordable sector

• Taking account of balance within

current housing mix

Housing Mix

Current Imbalances Transport / Regeneration Age Structure Demographic Trends Welfare & Benefit Reforms Economic Growth

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Mix of Market Housing

• Focus of demand towards 2 & 3 bed properties
• Implications of growing older population – supporting downsizing

Size 2013 2033 Additional households 2013-2033 % of additional households 1 bedroom 6,123 7,110 987 8.4% 2 bedrooms 17,175 20,769 3,594 30.5% 3 bedrooms 26,298 31,364 5,066 42.9% 4+ bedrooms 14,145 16,292 2,147 18.2% Total 63,741 75,535 11,794 100.0%

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Mix of Affordable Homes

• Analysis takes account of benefit reforms, turnover/ management issues

and long-term demographic trends

• Focus on providing balanced profile of affordable homes
• Need for more smaller 1 and 2 bedroom properties

Size 2013 2033 Additional households 2013-2033 % of additional households 1 bedroom 3,760 6,489 2,730 43.0% 2 bedrooms 2,795 4,511 1,716 27.0% 3 bedrooms 3,165 4,843 1,678 26.4% 4+ bedrooms 430 658 228 3.6% Total 10,150 16,501 6,351 100.0%

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Mix of Market Homes – Tenure

• Mix identified should inform district wide policies on mix as well as site

allocations and affordable housing negotiations

1-bed 2-bed 3-bed 4+ bed Market 5% 30% 45% 20% Affordable 35-40% 25-30% 25-30% 5-10% All dwellings 15% 30% 40% 15%

Need for Specific Groups

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Needs of a Growing Older Population

• Supporting people to stay in their homes – adaptions to properties,

floating support

• Providing choice and opportunities for downsizing

Age group Runnymede Spelthorne HMA Under 55 11.2% 8.9% 10.0% 55-64 29.1% 27.6% 28.3% 65-74 38.6% 40.5% 39.6% 75-84 41.4% 38.2% 39.6% 85+ 116.7% 114.4% 115.4% Total 19.9% 18.4% 19.1% Total 55+ 42.6% 41.5% 42.0%

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Needs of a Growing Older Population

• Projected growth of 77% in people with dementia and 64% of those

with mobility problems

• Projected need for 93 units of specialist housing per annum (sheltered

and extra care) – the majority in the market sector. This is within the housing need.

• Additional need for 12 C2 (residential care) bedspaces per annum –

this is in addition to the housing need

Type of illness/disability

2013 2033 Change % increase Dementia

2,329 4,113 1,783 76.6%

Mobility problems

5,968 9,790 3,823 64.1%

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Specialist Housing Needs

• The following have been reviewed in the main document

‒ BME Households

• Provide advice and ensure PRS quality is suitable

‒ Families

• Lone parent particularly disadvantaged
• Projections suggest a 15% increase in the number of Children

‒ Young People

• Important due to economic potential they bring
• High levels of unemployment and reliance on PRS
• Monitor HMOs
• Decreasing number of students living off campus

‒ Custom Self Build

• Around 450 people have registered interest across HMA

Questions

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Emailed Questions

• To what extent does the SHMA recognise added pressure from London?

‒ Our approach is trend based and assumes what happens in the past will continue

• To what extent does the SHMA recognise benefit cuts will increase out

migration from London? ‒ No evidence to suggest benefits cuts in the past have impacted local

• demand. Possible that the new cuts will increase out migration from

London but it is not possible for us to accurately quantify that impact.

• What are the consequences of London Boroughs placing homeless

households in the Local PRS? ‒ Not possible for us to speculate how this will change but if it happened in the past it will be included in past trends.

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Emailed Questions

• Will the changes to planning legislation announced in the budget

increase the supply of homes and what consequences will have on employment on this area? ‒ The SHMA is focussed on demand, it does not review supply side issues. This was also prepared prior to the budget announcements

• What allowance has been made for the probable expansion of

Heathrow? ‒ None, any impact of Heathrow expansion will be in the distant future if this happens at all

Moving Forwards

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Programme

• Two week period for feedback
• Final Report

‒ Early August

• Employment projections to be updated later this year

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Feeding Back

• Paul McColgan

‒ Paul.McColgan@GLHearn.com ‒ 0207 851 3748

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