Angus Council Housing Need & Demand Assessment Steering Group Meeting 15 th December 2009

1. Angus Council Housing Need & Demand Assessment Steering Group Meeting 15th December 2009

2. Aims of Session • To review outcomes of secondary analysis (Core Outputs 1-4) • To validate the baseline HNADA calculation for affordable housing • Consider evidence from CHR • Review calculation outcomes for each HMA • To outline methodology for assessing the requirement for market housing • To present the outcomes of the HNADA market housing model

3. Secondary Analysis: Core Outputs 1-4

4. HNADA Core Outputs • HNADA credible if “analysis delivers core outputs” • Core outputs provide: • Housing market intelligence • Estimated ranges of need or housing requirements • Housing market analysis outputs • Evidence to interpret system operation • Informs intervention planning • Range focus: as housing markets are dynamic, definitive measures of need cannot be attained

5. HNADA Core Outputs Housing Market Intelligence (Demographic & Economic Context) Estimates of current dwellings Analysis of housing market trends Range: Housing Requirement/Need Total future households Specific housing requirements Current households in need Future affordable housing requirement Future market housing requirement Future requirement for either market or affordable housing

6. Demographic Context • Marginal population growth (1.8%) since 2001 • Marginal growth in number of households (5%) • projected 7% increase over 10 years to 53,950 • single parents and single person households expected to increase by 16% (3,440) and 18% (20,170) • Substantial growth in older households by 2019 • 75+ expected to increase by 30% (to 13,297) • 65+ to increase from 20% (21,977) to 25% (28,199) of population • Shift in balance of care/housing options for older people • Need for family housing decreasing by 19% • 9,180 households falling to 7,410 • Impact on future dwelling profile required? • Requirements from single parent/person households

7. Economic Context • Economic Performance since 2000 • Economic growth at national and global levels • Like Scotland, Angus has enjoyed high levels of output and employment • Employment Rate in Angus: 2008/09 • Higher employment rate (84.3%) than Scotland (79.6%) • Higher self-employment (10.5%) than Scotland (7.6%) or UK (9.1%) • Unemployment rate • Increased by 0.3% to 4.4% (April 08-March 09) • October 2009: 3.1% of population in receipt of JSA • Income and Earnings • Angus average gross weekly pay = £470.80 • Scotland average gross weekly pay = £461.80

8. Economic Context • Employment Structure in Angus • Labour market highly dependent on skilled trade occupants (14.6%); Scotland (11.6%); UK (10.7%) • Under represented in managerial and professionally qualified occupations

9. Estimate of Current Dwellings • 53,713 residential dwellings (July ‘09) • 71% private ownership,20% social housing, 9% private rented sector • 72% of private dwellings fail SHQS • 57% of private owners own outright • 2,751 vacant properties (5% stock) • 84% empty homes; 16% 2nd homes • Shift in Dwelling Profile since 2001 • 14% increase in dwellings • 9% decrease in Private Rented Sector? (4,902 – 4,451?) • Social housing decrease: from 25% (11,552) of dwellings in 2001 to 20% (10,866) in 2009 • Private sector increase from 75% (35,393) to 80% (42,848)

10. Housing Market Trends 2003-08 • Access to finance/low cost of borrowing • Fuelled mobility in market • 20% growth in market turnover between 2003 and 2007 • 5.4% sales turnover in 2007 (2,330) • High levels of inward migration • Only 65% of sales to Angus residents between 2005-2007 • Purchasers from Dundee have a major influence on HMAs • Fuelled house price inflation (2003/07) • Increase in weighted average house prices = 84% • Housing affordability issues evident • 52% can’t afford LQ, 72% can’t afford WA • In 2009 housing market is constrained • 2008: Volume of sales fell by 30%

11. Aberdeen City: 114% Aberdeenshire: 123%Dundee City: 90% Fife: 71%Perth & Kinross: 69% Median House Price Inflation Angus: 84% increase Housing Market Trends 2003-08 2008 Angus inflation = 3%

12. Estimate of Future Households • Over Next 10 Years… • 7% increase in number of households, 364 households per annum • Projected increase in households aged 65+ • Decrease in households aged 16–24 (-2%) • Increase in households aged 25-29 (27%) • Increase in typical first time buyer group • Current market restrictions likely to impact most heavily on FTB’s given level of deposit required and restricted lending multiples relative to income • May influence demand expressed for social or private rented housing options

13. Groups with Specific Requirements • 18% increase in older people (55+) by 2019 (28,590) • 50% increase in households aged 85+ • 36% of older people have disability or LLTI (14,812) • 1% have mental health problems • 10% frail due to old age • 10% have a long term illness • 12% have mobility/physical disabilities

14. Groups with Specific Requirements • 20% households have LLTI/disability • 6,113 of overall households have household member with a physical disability • 4,867 have a limiting long term illness • Subjective requirement for special forms of housing expressed by 2,493 households • Recent increases in migrant workers (855% 2002-08) has fuelled housing need • Impact of economic recession?

15. Need for Special Forms of Housing • HNADA survey “Do you or anyone in your households have an unmet need for special forms of housing” • 5% of respondents said they did have a an unmet need = 2,493 households • Of the 2,493 households: • 25% were single people (615) • 26% were couples (639) • 17% were 3+ adult households (430) • 27% were households with children (680) • 5% were single parents (130)

16. Need for Special Forms of Housing Of the 2,493 households: • 50% require ground floor accommodation • 32% require specialist care housing • 3% require wheelchair accommodation • 6% require sheltered accommodation • 8% require other special forms of housing

17. Need for Special Forms of Housing • Of the 50% who require ground floor accommodation • 46% were aged between 45-59 • 31% were aged 60+ • 17% were aged 30-44 • Of the 32% who require specialist care housing • 41% are aged between 30-44 • 35% are aged between 45-59 • 17% are aged 60+ • Of the 6% who require sheltered accommodation • 75% are aged 75+ • 25% are aged between 65-74 • Of the 3% who require wheelchair accommodation • 57% are aged between 45 and 49 • 43% are aged 75+

18. Need for Special Forms of Housing • Of the 50% who require ground floor accommodation • 44% own their property outright • 24% have a loan or mortgage • 21% rent from a housing association • Of the 32% who require specialist care housing • 48% have a loan or mortgage • 26% own their property outright • 15% are living in social housing • Of the 6% who require sheltered accommodation • 50% rent from Angus Council • 31% own their property outright • 19% are in other forms of accommodation • Of the 3% who require wheelchair accommodation • 58% have a loan or mortgage • 42% rent from Angus Council

19. Baseline Housing Need Calculation for Affordable Housing

20. Current Need X (a quota) Newly Arising Need Plus Minus Supply of Affordable Housing Equals Affordable Housing Need Calculation Net Shortfall/ Surplus

21. Affordable Housing Need Calculation • Current Need: Unsuitable Housing • Homeless or with insecure tenure: 175 • Concealed Households: 219 • Overcrowding: 779 • Special Needs: 3,194 • Poor Condition: 428 • Harassment: 127 • Current Need = 4,922

22. Affordable Housing Need Calculation • Total Current Need – Eliminate: • ‘In situ solutions’: • Provision of aids/adaptations/support = 680 • Net ‘Special Need’ figure = 2,514 • Net ‘Current Need’ figure = 4,242 • Then eliminate • % can meet need in private housing market • 52% households can meet market entry price • Net Current Need = 2,206

23. Affordable Housing Need Calculation • Newly Arising Need • New household formation: 840 • Eliminate new formers who can afford to meet market entry level prices = 269 (32%) • Existing households falling into need: 724 • Change in household circumstances including annual flow of homeless households • Newly Arising Estimate = 1,295

24. Affordable Housing Need Calculation • Affordable Housing Supply • Affordable housing relets: 1,075 • Committed new affordable supply: 50 • Turnover net of units taken out of management: 0 demolitions • Annual Supply Estimate = 1,125

25. Affordable Housing Need Calculation • Interim Calculation Estimate • Current need = 4,922 • Net current need = 2,206 • Net annual current need = 221 (10 years) • Annual newly arising need = 1,295 • Annual total need = 1,516 • Annual affordable supply = 1,125 • Estimated shortfall = -391 • 10 year Est. shortfall = -3,910

26. Calculation for Affordable Housing: CHR Validation

27. Calculating the Requirement for Market Housing

28. Current Need for Market Housing Market Housing Requirement Methodology Total Need & Demand for Market Housing Newly Arising Need for Market Housing Affordability Analysis Annual Internal Demand Match Need & Demand to Supply Market Entry Level Upper End of Market Mid-Market Properties Annual Inward Migration Market Entry Level Upper End of Market Mid-Market Properties Market Supply

29. Calculation Inputs • Current Need: Market Housing • North HMA: 56% CAN afford = 729 • South HMA: 39% CAN afford = 490 • East HMA: 52% CAN afford = 417 • West HMA: 47% CAN afford = 415 • Angus Gross Current Need = 2,051 • Angus Annual Current Need = 205

30. Calculation Inputs • Newly Forming Households • North HMA: 49% CAN afford = 40 • South HMA: 38% CAN afford = 100 • East HMA: 33% CAN afford = 66 • West HMA: 42% CAN afford = 124 • Angus Annual Need = 330

31. Calculation Inputs • Annual Demand Assumptions • Total Demand ‘Very Likely to move’ in next year = 1.85% • North HMA = 240 • South HMA = 250 • East HMA = 266 • West HMA = 238 • Angus ‘Like to Move’ = 994

32. Calculation Inputs • Demand: In Migration (2007) • North HMA = 279 • South HMA = 289 • East HMA = 190 • West HMA = 227 • Angus In Migration = 985

33. Calculation Inputs Total Annual Need & Demand Yr 1 205 per annum Current Need for Market Housing = Newly Arising Need for Market Housing 330 per annum = 994 per annum Annual Internal Demand = 985 per annum Annual Inward Migration (2008 Sales) = Total Annual Demand = 2,514

34. Calculation Inputs Total Annual Need & Demand Yr 1 205 per annum Current Need for Market Housing = Newly Arising Need for Market Housing 330 per annum = 1,418 per annum Aspirational Demand = 985 per annum Annual Inward Migration (2008 Sales) = Total Annual Demand = 2,938

35. Calculation Inputs • Total Need & Demand • Split into quartiles based on affordability assessment • 3.5 X’s income lending multiple

36. Calculation Inputs Market Housing Supply (2007) • Sales Volume 2007 = 2,350 • Modelling Assumption : • Sales in Year 1 – 3 reduced by 30% • Volume of sales incrementally increase from Yr 4 to year 10 by approx. 6% per annum

37. Market Housing Requirement Yr 1 • Quartile 1: Shortfall • North HMA: -136 • South HMA: -180 • East HMA: -129 • West HMA: -163 • Angus shortfall = -609

38. Market Housing Requirement Quartile 1: Year 1,5,10

39. Market Housing Requirement Yr 1 • Quartile 2: Shortfall/Surplus • North HMA: -124 • South HMA: -100 • East HMA: -96 • West HMA: -129 • Angus shortfall = -450

40. Market Housing Requirement Quartile 2: Year 1,5,10

41. Market Housing Requirement Yr 1 • Quartile 3+: Shortfall/Surplus • North HMA: 113 • South HMA: -82 • East HMA: 54 • West HMA: 34 • Angus surplus = +119

42. Market Housing Requirement Quartile 3-4: Year 1,5,10 Surplus

43. Market Housing Requirement • Clear Shortfalls in Housing Q1&2 • Relates to properties below £130,000 • Total Shortfall Year 1: 609 • Shortfall over 10 Years: 2,568

44. Market Housing Requirement • Surpluses in Housing Q3&4 • Relates to properties above £130,000 • Total Surplus Year 1: 119 • Surplus in East, North & West HMA’s: 201 • Shortfalls in South HMA: 82 • Cumulative Surplus (10 Years): 695 • Total Shortfalls (All Quartiles) • Year 1 = -939 • Year 5 = -745 • Year 10 = -146

45. Market Housing Requirement • Cumulative Shortfall of Market Housing: 6,400 • New Build Delivery Assumption: 2,640 (2007: 290 sales per annum) • Housing Land Requirement circa 9,000?