Transcript Powerpoint Presentation

Lancaster City Council
Independent Housing
Requirements Study
Interim Findings
Presented by Antony Pollard
Director, Economic Planning
Turley Associates
18 July 2013
Purpose of our presentation today
This study will help provide evidence of how many dwellings the Council
needs to allocate in its Local Plan for development in the next 15 years
• Presentation outlining the scope of works, programme and interim
findings of an independent housing requirements study
•
Obtaining your views and understanding of:
– The proposed methodology / approach
– Drivers of the housing market across Lancaster
•
Reflecting on your insights / experience from other areas
Scope of Works
Progression of a new Local Plan requires an NPPF compliant
evidence base
• Complement existing evidence base
– 2011 David Couttie Associates Housing Needs Survey
– Recognise not an NPPF compliant assessment of full needs
• Consider in detail the objectively assessed need for housing over the
plan period:
– Interpretation of ONS demographic projections
– Recognition of the need to align policies around economic growth,
regeneration and housing need
•
Assemble housing market evidence within a single document
“To boost significantly the supply of housing,
local planning authorities should:
- use their evidence base to ensure that their
Local Plan meets the full, objectively assessed
needs for market and affordable housing in the
housing market area, as far as is consistent
with the policies set out in this Framework,
including identifying key sites which are critical
to the delivery of the housing strategy over the
plan period”
NPPF, Paragraph 47
“Each local planning authority should ensure that
the Local Plan is based on adequate, up-to-date
and relevant evidence about the economic,
social and environmental characteristics and
prospects of the area. Local planning authorities
should ensure that their assessment of and
strategies for housing, employment and other
uses are integrated, and that they take full
account of relevant market and economic
signals.”
NPPF, Paragraph 158
“Local planning authorities should have a clear
understanding of housing needs in their area. They should:
- prepare a Strategic Housing Market Assessment
(SHMA) to assess their full housing needs, working with
neighbouring authorities where housing market areas
cross administrative boundaries. The SHMA should
identify the scale and mix of housing and the range of
tenures that the local population is likely to need over the
plan period which:
- meets household and population projections, taking
account of migration and demographic change;
- addresses the need for all types of housing…
- caters for housing demand and the scale of
housing supply necessary to meet this demand”
NPPF, Paragraph 159
Research Challenges
Range of factors pose a challenge for the research process
• Complexity of the housing market
– Multiple influences / drivers
– Planning for the long-term: Using historical drivers to inform future
projections
• Absence of clear methodological guidance
– Interpretation of the NPPF
– Anticipated update to the SHMA Guidance following the Taylor Review
• Range of valid assumptions
– Baseline / policy-led
•
Range of perspectives / viewpoints
“ The aim is to establish this requirement through a
comprehensive understanding of what is required to
address demographic change. In doing so you also
need to understand the implications of achievable
economic potential in the area and how your
population will change over time. It is important that
an appropriate methodology which considers all the
relevant information is undertaken at the right stage.
This will ensure that policy issues are not included in
the setting of the requirement. Supply, or a criteria
based approach, must also not be confused with the
requirement.”
(Local Government Association / Planning Advisory Service, July 2013,
‘Ten key principles for owning your housing number – finding your
objectively assessed needs’)
Our Approach
Our Methodology – Objectively Assessed Needs
Our Methodology – Objectively Assessed Needs
Our methodology – Other elements of the SHMA
Aligning and drawing together evidence to present a coherent
SHMA
•
–
–
–
–
Updating of affordable housing need indicators:
Market climate
Affordability ratios
New household formation rates
Role of the private rented sector
• Understand implications for level of need for affordable housing
identified in the DCA study
•
–
–
–
Specific housing needs:
Older person growth under population projections
Projected growth in different household types
Signposting to results of the needs survey and other research outputs
Understanding the
drivers of the
housing market
Spatial connections / Market Geographies
Absence of RSS re-emphasises importance of understanding
market geographies
•
Wealth of historic analysis / policy development
• Key considerations:
– Travel to work connections
– Migration flows
• Important to evidence duty-to-cooperate considerations
– On-going policy discussions
National research on defining subregional housing markets
NHPAU / DCLG Research project in 2010
• Recommended two tier approach:
– ‘Strategic’ market area
– ‘Local’ housing market areas
• Lancaster identified as an independent strategic
market area
• Lower tier includes a split based on two main
towns – Lancaster & Morecambe
– Incorporates all wards in the district
– Lancaster includes 1 ward in Wyre and 4 wards
in Craven
• Alternative ‘single-tier’ definition presented
which groups ‘local authorities’ – Lancaster forms
its own market area
Local
Market
Areas
Strategic
Market
Area
Commuting Dynamics
Relationship between home and work represents important linkage
• Census 2001 data showed high level of containment:
– Commuting ratio of 1.06 (marginal exporter of labour)
– 82% of people who lived in Lancaster worked in the authority
• ONS published Annual Population Survey for 2010 and 2011 confirms
high self-containment
• Largest outward commuting flow to South Lakeland (2 – 4% of
resident workers)
• Largest inflows from Blackpool, Fylde, Wyre and South Lakeland
• Small in commuting from range of other areas including Craven and
Preston
UK migration flows – Spatial dynamics
Gross Flows – Average 2001 - 2011
Top Ten Inflows into Lancaster
South Lakeland
Wyre
Preston
Bradford
Manchester
Blackpool
Leeds
Bolton
Wigan
Craven
Top Ten Outflows from Lancaster
average
2001/022010/11
547
267
212
171
169
153
149
139
130
124
South Lakeland
Wyre
Manchester
Preston
Leeds
Blackpool
Bradford
Bolton
Craven
Barrow-in-Furness
average
2001/022010/11
445
290
236
213
186
153
144
106
101
100
UK migration flows – Spatial dynamics
Net Flows – Average 2001 - 2011
Top Ten inflows
Top Ten outflows
Average Net Migration
Burnley
21
Manchester
Craven
23
Leeds
23
Wyre
Bury
25
Sheffield
-19
Oldham
26
Westminster
-18
Bradford
27
Newcastle upon Tyne
-18
Rochdale
27
Wandsworth
-17
Blackburn with…
-67
-37
-23
Wigan
33
Tower Hamlets
-14
Bolton
33
Oxford
-14
York
-13
South Lakeland
102
0
•
Average Net Migration
50
100
150
Average Net Migration 2001/02 - 2010/11
-80
-60
-40
-20
0
Average Net Migration 2001/02 - 2010/11
Housing Need Survey revealed reasons given by those moving into the
authority (including international migration):
– To be near a relative / Better quality area / Better quality housing / closer
easier to commute / Able to afford local housing / New job
• For those moving out family reasons and employment / access to work
most strongly cited reasons
UK migration flows – Age of migrants
Strong inflow of ‘student’ population but marked loss of ‘graduates’
Age-group net flows
1500
1000
500
0
-500
-1000
-1500
75+
70-74
65-69
60-64
55-59
50-54
45-49
40-44
35-39
30-34
25-29
20-24
15-19
10-14
5-9
-2000
0-4
Net Migration Av 2001/02-2010/11
2000
Demographic Trends
Lancaster has seen moderate growth in
population and households
• ONS Census built mid year population estimates
show:
– Increase in population of 3,800 people between
2001 and 2011
• Latest 2012 estimate shows a population of
almost 140,000
Total Population Change 2001 - 2012
141000
140000
139000
138000
137000
136000
135000
134000
• The 2011 Census revealed that there were 57,822
households in Lancaster
– Increase of almost 2,000 from 2001
– Lower than previous ONS estimate
133000
132000
131000
130000
• 2013 Council tax shows 61,954 dwellings
– 2,657 of these classified as empty homes (4.3%)
– Approximately 59,300 occupied dwellings
A changing age profile
Population change includes significant
shift in age profile
• Notable increase in
population aged 15 –
25
• Further ‘hollowing
out’ of population
aged 30 – 40
• General ageing of
the population in line
with England and
Wales average
A Changing Population – Components of
Change
Understanding the balance between births and deaths (natural
change) and migration
Components of Population Change Lancaster 2001 - 2012
2
Population (000s)
1.5
1
0.5
Net Migration and
other changes
0
Natural Change
-0.5
-1
Economic Context
Demand for housing and the economy interlinked
•
National agenda to stimulate economic recovery:
– 2013 Comprehensive Spending Review (June)
» “recovery from such a deep recession can never be straightforward, Britain
is moving out of intensive care - and from rescue to recovery”
– ‘The Plan for Growth’ (March 2011)
» concern “low levels of housing completions and limits on land supply also
create barriers to mobility and high costs of entry for firms coming to the
country”
– ‘Laying the Foundations: A Housing Strategy for England’ (November
2011)
» Housing to play an important role in supporting rather than constraining
economic recovery
Lancaster’s Economy
Impact of the recession not as significant as suggested 12 months ago.
Increasing optimism from Experian forecasts around scale of recovery
Contrasting Experian Quarterly Forecasts - Workforce Jobs
64,000
62,000
Apr-12
Jul-12
58,000
Oct-12
Jan-13
May-13
56,000
54,000
52,000
1997
1998
1999
2000
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
Workforce Jobs
60,000
Economic Futures
Latest Experian forecasts predicts job
growth of just over 4,000 jobs between
2011 and 2031
This does not take account of planned
investment / policy aspirations
•
Heysham Link Road
• Supporting Nuclear and Renewables
Investment
– Heysham 3: 4,000 – 6,000 additional
construction jobs / 400+ permanent jobs
– Biomass / Grid investment
•
Regeneration of Morecambe
Market factors
Market operation manifested in a range of indicators. Important
implication for historic change and future trends
•
A changing housing stock
•
Market transactions and values
•
Vacancy
The provision of new housing
Net completions have reduced substantially over recent years
Impact on population and household formation over this period
Net Completions 2001 - 2013
600
500
400
300
200
100
0
2001/02
2002/03
2003/04
2004/05
2005/06
2006/07
2007/08
2008/09
2009/10
2010/11
2011/12
2012/13
A changing stock profile
Growth in all property types
Greatest proportionate increase in flatted properties
Numbers
Household Spaces
Proportion
2001
2011
Change
2001
2011
Detached
10,603
11,067
464
18.0%
18.2%
Semi-detached
22,198
22,678
480
37.7%
37.2%
Terraced
15,815
16,128
313
26.9%
26.5%
Flat, Maisonette or Apartment
9,811
10,544
733
16.7%
17.3%
430
525
95
0.7%
0.9%
Other
A changing tenure profile
Fall in those owning with a mortgage
Rise in Private renting
Numbers
Tenure (Households)
Proportion
2001
2011
Change
2001
2011
Owned Outright
19,352
20,890
1,538
34.7%
36.1%
Owned with a Mortgage
21,138
19,109
-2,029
37.9%
33.0%
314
367
53
0.6%
0.6%
Social Rented
5,675
5,762
87
10.2%
10.0%
Private Rented (including living rent
free)
9,360
11,694
2,334
16.8%
20.2%
Shared Ownership
Reduced market activity
Significant reduction in levels of transactions – in line with national
picture
Indexed levels of transactions
1.80
1.60
1.40
Index (1996 = 1)
1.20
1.00
Lancaster
Lancashire
0.80
England
0.60
0.40
0.20
0.00
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
House price changes
Delayed period of strong growth 2003 – 2007
Stagnation 2007 - 2011
Indexed Median House Price Change
3.50
3.00
Index (1996 = 1)
2.50
2.00
Lancaster
Lancashire
1.50
England
1.00
0.50
0.00
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Modelling future
population and
household growth
An appropriate range of scenarios
Scenarios selected to create an appropriate evidence based range
•
Demographic projections:
– Re-based 2010 Sub National Population Projection
» 2011 Census age / sex profile
» Application of last official ONS migration projections – average of
approximately 800 in-migrants per annum (international migration)
–
»
»
»
»
Migration-led
Projects forward based on corrected (reduced) migration estimates
Migration levels almost balanced.
Lower levels of net international migration
Net internal out-migration still assumed
– Natural Change
» No migration assumption (illustrative only)
An appropriate range of scenarios
Assessing the impact of the economy
•
Employment-led projections
– Experian
» Aligns population through a varying of migration to match forecast job
growth of just over 4,000 jobs
» Requires average in-migration of working age persons of
approximately 800 per annum
» Assumes continuation of 2001 evidenced commuting ratio but
improvement to unemployment / economic activity rates
– Experian – balanced commuting
» Models assumption that every new job is taken by a resident in
Lancaster
» Effectively slightly reduces commuting rate
Range of Population Projections
Important differentiation between employment-led and recent trendbased migration-led projections
Projected Population Change 2011 - 2031 - Various Scenarios
160,000
155,000
SNPP-2010
145,000
Migration-led
Natural Change
140,000
Employment-led (Experian)
Employment-led Balanced Commuting
135,000
130,000
2031
2030
2029
2028
2027
2026
2025
2024
2023
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
125,000
2011
Persons
150,000
Translating population into households
Population converted into households through the application of
headship rates by age and sex
•
Currently two sets of ONS produced headship rates:
– 2008 Sub National Household Projections (2010)
» Project rapid fall in household sizes driven by single / couple
households
» Reflective of positive market context at the time
– Interim 2011 Sub National Household Projections (2013)
» Moderate falling household size
» Project forward impact of market slow-down
» Increased numbers of multi-adult households, lower rate of single
person / couple households
2008 Headship Rate derived Household /
Dwelling Projections
Conversion to dwellings assumes a 2.5% empty property
assumption (turnover)
Households
Scenario (2008 rescaled headship
rates)
Per Annum
Per Annum
Dwelling
Total
average Requirement
Change
household
(2.5%
2011 - 2031 growth
vacancy)
2011
2031
SNPP-2010
57,356
70,026
12,669
633
649
Migration-led
57,837
62,708
4,871
244
250
Natural Change
57,837
65,472
7,635
382
391
Employment-led (Experian)
57,837
69,655
11,818
591
606
Employment-led Balanced
Commuting
57,837
69,484
11,647
582
597
2011 Headship Rate derived Household /
Dwelling Projections
Variant headship rates projected forward over 20 years reduce
resultant household growth
Households
Scenario (2011 SNHP Trend
based headship rates)
Per Annum
Per Annum Dwelling
Total
average Requirement
Change household
(2.5%
2011 - 2031 growth
vacancy)
2011
2031
SNPP-2010
57,254
68,369
11,114
556
570
Migration-led
57,832
61,383
3,551
178
182
Natural Change
57,832
64,368
6,536
327
335
Employment-led (Experian)
57,832
67,880
10,048
502
515
Employment-led Balanced
Commuting
57,832
67,720
9,888
494
507
Understanding the Labour-force Implications
All the projections include a breakdown by the age and sex of the
population – enables size of labour-force to be assessed
Labourforce
Scenario
Total Change Per Annum
2011 - 2031
average
2011
2031
SNPP-2010
69,577
74,704
5,127
256
Migration-led
68,268
63,202
-5,066
-253
Natural Change
68,268
64,707
-3,561
-178
Employment-led (Experian)
68,268
72,831
4,563
228
Employment-led Balanced
Commuting
68,268
72,589
4,321
216
Evaluating the Scenarios
Important to assess the merits of the scenarios in wider policy
terms and also with regards their alignment with the NPPF
• Sustainable balance between economic ambitions and housing provision
represents an important consideration:
– Two of the demographic scenarios (migration-led and natural change) would
result in a reduced labour-force
– In-migration of new working age households and the retention of those currently
moving out of the area required to ensure balance achieved
• ‘Boosting the supply’:
– All scenarios represent uplift based on last five years completions
– Migration-led scenario would not represent an uplift against 10 year average
– Considering impact on addressing affordable housing need
Considering the need
for affordable
housing
Housing need survey – Headline Findings
DCLG Needs Assessment identified a net annual need for
affordable housing of 551 dwellings per annum (2011)
• This represented an increase in affordable need from 417 as
calculated through the 2008 assessment
• Calculation includes the addressing of a large backlog of current need
over five years
– Backlog of 2,127 or 425 per year
• Newly arising annual need was 556 households a year
– 47% of new households identified as unable to afford market housing
– Current annual supply of 430 lettings per year doesn’t meet this newly
arising need adding annually to the backlog
» 126 households per year estimated as in need and not met through
the annual supply
Affordability Ratios
Ratios remain relatively comparable, albeit slightly lower, between 2010 and
2012
Evidence that affordability remains an issue in Lancaster
Ratio of Lower Quartile Earnings to Lower Quartile House Prices
8.00
7.00
6.00
Ratio
5.00
Lancaster
4.00
Lancashire
England
3.00
2.00
1.00
0.00
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011R 2012P
Changing levels of household formation
Demographic modelling includes estimates of gross household
formation levels
• Natural Change scenario used
– Does not take account of migration trends
– Locally derived need
•
Constrained to younger household groupings
• Suggests gross household formation rate of approximately 1,500 per
annum (2011 SNHP rates)
•
Would result in a higher level of overall need for affordable housing
•
Check against provision of affordable stock – lettings
•
Private rented sector role in addressing need
Emerging
Conclusions
Summary of findings to date
Post recession slow down in the local economy / housing market
Forecasts / projections show importance of aligning economy and
housing to change trends going forward
• Authority of Lancaster represents a relatively self-contained (albeit locally
varied) housing market
• Historically migration trends have shown inflow of students but out-flow of
graduates / younger households
•
Impact on ageing population profile if trends sustained
•
Recent completion levels notably below planning targets / demand
•
Stock profile reflects national changes to private rented sector / growth in flats
• Transactions data shows stagnation of price and significant reduction in level of
activity
Summary of findings to date
Post recession slow down in the local economy / housing market
Forecasts / projections show importance of aligning economy and
housing to change trends going forward
• Availability of employment opportunities important driver. Latest
forecasts paint an increasingly positive picture
• Wider economic ambitions if realised would generate a further step
change with impacts on infrastructure investment (including housing)
• Projections show objectively assessed need of between 510 – 610 to
match baseline economic forecast
• Evidence highlights sustained need for affordable housing
– Low market activity / completions potentially compounding issue
Workshop
Discussion
Discussion Prompts
Presentation has highlighted a number of points for debate /
discussion
• How does the modelling of objectively assessed needs align with other
examples?
• What factors will influence population change and in particular future
migration levels?
– Market position?
– Economic investment?
– Supply driven?
• Who are we planning to accommodate?
– Incoming households
– Local need – retention of graduates
• What are the factors influencing the rate of household formation and how
might these change?
Next Steps
Concluding the Research
Number of steps required to finalise research
•
Reflection on feedback from today
•
Refinement of modelling outputs
•
Report drafting and client group review
•
Publication of the final report
“ Corroboration, consistency and integration
will ensure a joined up strategy and be more
likely to deliver a good and sound plan. For
example consideration of the long term
demographic and economic led projections
may reveal that they are producing a similar
level of housing requirement. If this will ensure
you meet your objective of achieving x jobs
over the plan period as well as addressing the
high level of affordable need that exists, then
there is a consistent set of evidence which
integrates your strategy together and can be
justified” (LGA / PAS, July 2013)