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 Results2. Aligning: HNDA/Main Issues Reports/Local Housing

Strategies/Local Development Plans3. Define ‘Generous’ Land Supply4. Housing Market Partnership Advice5. 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 SchematicNewly arising households

Existing HouseholdsNeeding 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-AreasTop-Level

Sub Areas (May be cross LA boundary but need to be built on datazones)

Sum of Sub-AreasSum of Sub-Areas constrained

to top-level