HNDA refresh and tool

HNDA Stocktake In autumn 2010, the Scottish Government met with them to discuss their experiences and identify issues for review. This stock take built on evidence collected as HNDAs were drafted.

Results of the Stock-take The HNDA review made a number of recommendations over areas that should be examined: 1.Handling High/Low HNDA Results 2.Aligning: HNDA/Main Issues Reports/Local Housing Strategies/Local Development Plans 3.Define ‘Generous’ Land Supply 4.Housing Market Partnership Advice 5.Reduce Cost & Complexity

HNDA Refresh Housing Market Partnership advice and reducing cost and complexity are being taken forward through a refresh of the HNDA guidance. This will be undertaken with the following in mind: – no changes to principles and purpose, more about clarification – clarify links to other policy areas/documents and timescales – CHMA has investigated the possibility of producing an HNDA tool that could be distributed nationally but used locally to reduce the cost and complexity of HNDA production.

CHMA development of HNDA tool Result was desire to refresh and simplify guidance and explore possibility of producing HNDA tool. Make it simpler, cheaper and more transparent to produce HNDA analysis Model to not be compulsory but viewed as a tool to save time and money Important to see in context of whole HNDA process

Basic principles Not a National model but a tool to perform local analysis Optional – if not liked then don’t use Model inputs can be overridden e.g. backlog need Assumptions can be changed – This will be possible in “real-time” – groups can sit and discuss assumptions and see impact immediately Key is that if model is used, choices must be considered and justified to receive “Robust and credible” status

HNDA Tool Schematic Newly arising households Existing Households Needing new supply Basic Affordability Calculation Households who could afford mortgage repayments Households who can’t afford mortgage repayments Buyers Renters Social Rent PRS Below Market Rent

Stage 1: Choose NRS Household projection scenario. Can be adjusted if required. Stage 2: Add existing need figure which should represent required new dwellings. Can use in-built estimates or use own. Stage 3: Choose income data and scenarios over future growth and distribution. Stage 4: Choose house price scenario, percentile of house price distribution and income ratio (Affordability assumption). CALCULATION 1: Tool uses price and income distribution data to calculate the proportion (and hence numbers) of new households (annually) who could afford to buy based solely on relationship between projected house prices and projected income Stage 5: Chose proportion who could who buy, rental price growth assumption and upper and lower intermediate rent affordability limits CALCULATION 3 (END) –Renters split between market rent, intermediate rent and social rent based on comparison of income against rental price CALCULATION 2: Potential buyers split between those who buy and those who don’t (who rent).

Sub-Areas Top-Level Sub Areas (May be cross LA boundary but need to be built on datazones) Sum of Sub-Areas Sum of Sub-Areas constrained to top-level