identifying the sub-regional housing markets of the...

East Midlands Regional Assembly East Midlands Regional Housing Board

Identifying the Sub-Regional Housing Markets of the East Midlands

www.dtzpiedaconsulting.co.uk

DTZ Pieda Consulting Greyfriars Gate 5 Greyfriars Rd Reading RG1 1NU

Identifying the Sub-Regional Housing Markets of the East Midlands

A Final Report

by

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Ref: 04054719 12 April, 2005

CONTENTS Page

EXECUTIVE SUMMARY ................................................................................................................i

1 INTRODUCTION ...........................................................................................................1

2 BACKGROUND ON SUB-REGIONAL HOUSING MARKETS .................................3

3 HOUSING MARKETS IN THE EAST MIDLANDS.....................................................13

4 ROLLING OUT THE HMA PROCESS IN THE EAST MIDLANDS ..........................25

5 RECOMMENDATIONS TO THE EAST MIDLANDS REGIONAL HOUSING BOARD AND THE EAST MIDLANDS REGIONAL ASSEMBLY.............................41

ANNEXES

Annex A Mapping of Key Datasets

Annex B Initial Hypothesis Paper and Map

Annex C Write Up of Sub-Regional Presentations/Consultations

Annex D DTZ Approach to the Delineation of Housing Markets in the East Midlands

Annex E HMA Conceptual Framework

Executive Summary

In October 2004 DTZ Pieda Consulting were commissioned by the East Midlands Regional Assembly and East Midlands Regional Housing Board to map the pattern of sub-regional housing markets across the East Midlands. The core objectives of the assignment were:

• To identify the boundaries of sub-regional housing markets in the East Midlands region and;

• To recommend which local authorities need to work together in the future to undertake Housing Market Assessments within the sub-regional context.

Typically one would expect a sub-regional housing market to comprise an area in which the majority (70%) of all household moves are contained, One would also expect a close relationship between the boundaries of sub-regional housing markets and sub-regional labour markets – generally referred to as Travel to Work Areas (TTWAs). Using extensive data analysis and stakeholder consultation the study has identified 8 sub-regional housing markets within the East Midlands that are, for all practical purposes, wholly contained within the East Midlands, and 2 housing markets where the core of housing market lies outside the region, but covers a significant area within the region.

In summary the benefits of preparing HMAs can be seen to fall into four categories.

• Sub-Regional Planning

• Promotion of Best Practice and Joint Working

• Resource Allocation

• Housing Needs In general the benefits will be maximised where both regional and local partners work together effectively. The focus and emphasis of an HMA may differ, however, depending on whether the HMA is being led by a regional body or local partnership. The study finds that the five regions which surround the East Midlands exert a considerable influence on the spatial pattern of the region’s housing markets. The functional labour markets (which act as close approximations for sub-regional housing markets) of Peterborough, Greater Manchester, Sheffield, Rotherham and Grimsby extend into the East Midlands. This highlights the need for effective cross-regional working and co-operation to tackle housing market issues and imbalances. The HMA Guidance indicates that HMAs should, where they are to be conducted, be undertaken for identifiable sub-regional housing markets. However in defining the areas for which HMAs should be undertaken it can make sense to undertake an HMA for more than one housing market, or to undertake more than one HMA within what is identified as a single sub-regional housing market. In the great majority of cases we recommend that the focus of an HMA is on a single identified sub-regional market. However, DTZ recommend that: • A single HMA be undertaken for the Central Lincolnshire and Coastal Lincolnshire

sub-regions.

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• The Nottingham housing market be divided between its identified urban core and peripheral area.

• An HMA is undertaken for that part of the Northern (Sheffield/Rotherham) housing market that falls within the East Midlands.

• It makes good sense for an HMA to be undertaken for the whole of the Peterborough sub-region, and there is little merit in undertaking an HMA solely for that part of the Peterborough housing market in the East Midlands.

DTZ recommend that the primary purposes of HMAs in the East Midlands will be to contribute to the process of sub-regional planning and encouraging joint working on housing and planning issues at the sub-regional level. A number of sub-regional partnerships and joint working arrangements currently exist in the East Midlands which aim to tackle housing issues on a pan-district basis. DTZ would encourage existing housing partnerships to continue in their ongoing arrangements and joint-working structures, but suggest that the particular housing market areas that cover these partnerships should inform this work. Partnerships will need to have regard to their particular housing market boundaries, but this does not mean that a partnership has to immediately change its composition to conform with the boundaries of a particular housing market area. The report identifies the different sub-regional housing markets in the East Midlands. We recommend that the EMHB and Regional Assembly endorse these findings and start to reflect this analysis in the Regional Housing Strategy. The Regional Assembly should consider how the structure of sub-regional housing markets should inform the Regional Spatial Strategy. DTZ recommend that the EMHB promote the completion of HMAs for each sub-regional housing market in the region, over a period of the next 3 years. If DTZ’s recommendations are endorsed this would imply undertaking 9 HMAs in the East Midlands plus participation of East Midlands authorities in a Peterborough sub-regional HMA. This would imply aiming to complete around 3 HMAs each year. DTZ recommend that the EMHB and Regional Assembly maintain oversight of the HMA process throughout the region and is an active partner in all HMAs. This implies helping to develop the brief for HMAs (which is required whether or not external contractors are to be used or not) and participating in steering arrangements for studies. The conduct of HMAs must however ensure the full engagement of partners from within the sub-region to ensure that the findings are translated into local housing strategies and opportunities for joint working. There must be scope therefore for the brief for HMAs to reflect the particular issues and priorities of the sub-regional partners. There is a requirement to make clear to local authorities and existing sub-regional partnerships the budgetary and resource allocation implications of rolling out the HMA process. DTZ recommend that HMAs be jointly funded by EMHB and the sub-regional partners. DTZ recommend that the preparation of HMAs should be seen as a joint responsibility of the EMHB, RPB and sub-regional partnerships. Thus the EMHB should work with sub-regional partnerships to develop the brief for HMAs; where appropriate to appoint external

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consultants; and participate fully on steering groups. This partnership should be reflected in funding arrangements with costs of preparing HMAs shared between the EMHB, RPB and sub-regional partnerships in equal measure. DTZ suggest that the EMHB should match the funding put up by sub-regional partnerships.

DTZ recommend that the EMHB encourages local authorities to work together in commissioning new Local Housing Assessments once the LHA guidance is available, and ensure that newly commissioned studies will permit analysis for sub-regional housing markets. New LHAs should yield information on the scope for intermediate housing products. All survey data should be geo-coded. The EMHB should also take an active role in promoting quality and consistency across the region in the conduct of LHAs. There is much to be gained in increasing standardisation of core questions, survey methods and the format of analysis in allowing comparison between local authority areas and sub-regions. The revised guidance on LHAs that ODPM is due to issue early in 2005 will assist the EMHB in this role. DTZ recommend that the authorities in each of the sub-regional housing markets should come together to agree upon a timetable and process by which they will take forward the completion of an HMA for their area within the next 3 years. Key issues to be addressed are the composition of the HMA partnership and the timeframe in which the sub-region wishes to undertake and HMA. Some local authorities might potentially need to be involved in more than one HMA because they are on the edge of a number of sub-regional housing markets. We recommend that these authorities participate in one HMA, but that part of the brief for that HMA is to examine the overlap with adjacent housing markets and the implication of this for strategy in the overlap areas. This report provides guidance on the process of developing the brief for an HMA. This is a key part of securing a worthwhile outcome from the HMA process and should not be rushed. More detailed information on the HMA process itself is contained in the HMA Manual.

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Identifying the Housing Markets of the East Midlands

February 2005

1 INTRODUCTION

1.01 DTZ Pieda Consulting was commissioned by the East Midlands Regional Assembly and East Midlands Regional Housing Board in October 2004 to map the pattern of sub-regional housing markets across the East Midlands. The analysis will inform the development of the Regional Spatial Strategy and the Regional Housing Strategy. It is also anticipated that the analysis will help to guide the future allocation of housing resources.

1.02 The specific objectives of this study were:

• To develop a method for identifying sub-regional housing markets in the East Midlands.

• To identify the boundaries of sub-regional housing markets in the region and the degree to which they overlap.

• To recommend which local authorities and other organisations need to work together to undertake detailed Housing Market Assessments within the sub-regional context.

1.03 Ultimately, the intention of this study is to inform the Regional Housing Board and local authorities throughout the region of the way in which housing markets operate and their spatial extent. The study has also been designed to provide every local authority in the region (at district/unitary authority level) with a spatial definition of the housing market or markets that are associated with its administrative area.

1.04 In order to understand the pattern and spatial extent of the sub-regions in the East Midlands DTZ have:

• Completed extensive analysis of key data in order to identify the number and extent of sub-regional housing markets in the East Midlands. The key data analysed related to household movements; travel to work patterns; and employment concentrations.

• Consulted widely with local stakeholders and sub-regional partnerships to explore

their views on the extent of sub-regional housing markets and to draw upon local knowledge. Reactions were sought to an initial map developed as a hypothesis. A copy of this initial map and consultation questions is presented in Annex B.

• Brought to bear our own expertise to advise on how best to enhance the

understanding of housing market dynamics within the region. We have drawn on the expertise developed in mapping housing markets in the South East and South West regions; and from preparing the Housing Market Assessment Guidance Manual.

• A flow chart of the different stages of the DTZ approach is presented in Annex D

1.05 Part of the brief for this study has been to advise the Regional Assembly and the Housing

Board on appropriate groupings of local authorities to be responsible for undertaking Housing Market Assessments or collaborative Local Housing Assessments. In making our recommendations we have clearly drawn upon the analysis of the pattern of housing markets. But we have also taken into consideration the existence of established sub-regional groupings and local authorities partnerships in the East Midlands.

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1.06 DTZ would like to acknowledge the valuable contributions that have been made throughout the preparation of this project by the study’s Steering Group. This comprised Stewart Bembridge (GOEM), Mary Beasley (EMRA), Margaret Leopold (EMDA), Cathy Jones (EMRA), Matthew Berry (Northamptonshire County Council), David Cressey (East Lindsey District Council) and Charles Amies (Housing Corporation).

1.07 The findings of the study are set out as follows:

• We begin in Section 2 by examining the background to sub-regional housing markets, going back to basics and answering questions such as what do we mean by a sub-regional housing market? Why is it important to think about housing markets at a sub-regional level? And what is the purpose and value of undertaking an Housing Market Assessment (HMA)?

• In Section 3 we present the findings of our analysis of the number and spatial extent

of sub-regional housing markets in the East Midlands, highlighting overlaps and factors such as the influence of markets in the five regions which border the East Midlands. The detailed statistical analysis of how we arrived at these conclusions is contained in Appendix A.

• Section 4 provides information on how HMAs should be conducted, who should take

responsibility for their implementation and explores the relationship between HMAs and Housing Needs Studies (HNS) and the emerging guidance on Local Housing Assessments, to be published by ODPM early in 2005.

• Section 5 sets out DTZ’s recommendations to the Regional Housing Board and

Regional Assembly on sub-regional groupings and priorities.

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2 BACKGROUND ON SUB-REGIONAL HOUSING MARKETS

2.01 Over recent years there has been an increasing emphasis from central government on the requirement to think sub-regionally about the operation of housing markets and, by implication, on the need for greater partnership working between local authorities to tackle housing market imbalances. The publication and the recommendations of the Barker Review of Housing Supply in early 2004 have further added to this focus.

2.02 It is implicit in the brief for this study that the Regional Housing Board, Regional Planning Body and partners need a better understanding of the way in which sub-regional housing markets operate. The future development of the Regional Spatial Strategy will also increasingly seek to focus upon sub-regional housing considerations. Yet it is not made explicit why such an understanding of sub-regional housing markets is important. Nor is it necessarily clear to all partners what the Housing Board, and the organisations that make up the Housing Board, will do differently as a consequence of having a better understanding of the dynamics of sub-regional housing markets. It is important to clarify these issues:

2.03 This section therefore discusses:

• What do we mean by a sub-regional housing market? • Why is an understanding of housing market dynamics at the sub-regional level

important? • What, then, is the value of undertaking sub-regional Housing Market Assessments

(HMAs) or Local Housing Assessments?

What do we mean by a Sub-Regional Housing Market?

2.04 It is important to ensure that there is a common understanding of what is meant by the term ‘the housing market’. Once this is understood it is possible to explain what is meant by the sub-regional component of the phrase ‘sub-regional housing market’.

2.05 In economic terminology a market is where buyers and sellers come together to exchange goods or services at an agreed price. The price mechanism is the means by which demand and supply are brought into balance. Excess demand will result in prices being bid up. Excess supply will mean that prices fall until buyers are found for the surplus goods or services.

2.06 The housing market is a particularly complex market for a variety of reasons:

• First, housing is a high value commodity. Purchases by individuals are typically financed over a long period of time. The decision to purchase is therefore of great importance to individuals and subject to the influence of the cost of capital – interest rates.

• Second, housing is both a consumer good and an investment good. A consumer good is one that people buy to derive immediate benefits from – a pleasant place to live, a roof over their head. An investment good is bought to provide a financial return.

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• Third, because housing is built to last, at any point in time only a fraction of the total stock of housing is ‘on the market’ – that is, available for sale. Typically in any year around 10% of the stock of housing may change hands, and new supply (newly built homes) comprise only 10% of total sales in any year (that is 1% of the total stock).

• Fourth, the housing market is highly regulated. The location and volume of new development is controlled through the town planning system. Minimum quality standards are set for new building and existing housing.

• Finally, because shelter is a basic human requirement, considerable resources are provided to ensure that those who cannot afford market housing are adequately housed either through direct provision of housing (council or housing association homes) or subsidy (Housing Benefit).

2.07 The final dimension that distinguishes the housing market from many product markets is

that it has a strong spatial dimension. Location matters. Thus, while it is possible to talk of a national housing market and regional housing markets, in practice most buyers seek to move within the same sub-region because they wish to continue to live in that general area because of their sense of belonging, their family or broader social relationships, their jobs or access to particular services – most notably particular schools.

2.08 Typically one expects a sub-regional housing market to comprise an area in which some 70% of all household moves are contained, excluding long distance moves which are associated with a major lifestyle change – for example a change in the place of work, retirement to a different part of the country, or a decision to share accommodation with a partner who is located in a different part of the country. This sub-regional market is likely to cover an area that falls at least partly in the administrative area of a number of local authorities.

2.09 There are a number of other ways to think about the likely extent of sub-regional housing markets. The area of the sub-regional housing market area will map onto the area of search considered by the majority of households – not ignoring the fact that many people will confine their search to a much more localised area, or have limited choice to move further a field. However the fact that certain socio-economic groups may have more limited choices is a characteristic of the housing market, not something that determines the boundaries of the sub-regional housing market.

2.10 One would also expect a close relationship between the boundaries of sub-regional housing markets and sub-regional labour markets – generally referred to as Travel to Work Areas (TTWA). TTWAs delineate the areas within which at least 70% of the workforce in employment live and work. Across the East Midlands around 65% of all households contain people who are in work, and unless these people are taking up a job in another location outside an acceptable journey time, they are likely to look for somewhere to live within the same travel to work area if they move home.

2.11 Below the sub-regional level there are local housing markets. For example smaller towns have their own housing market characteristics, as will particular parts of larger towns and cities. Such areas can achieve a high level of self containment – because many household moves are of relatively short distance. Rural areas also have their own market characteristics though many rural areas are functionally part of sub-regional housing markets based on large centres of employment – cities or towns.

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Why is an understanding of housing market dynamics at the sub-regional level important?

2.12 In brief, understanding how housing markets operate is essential to the development of housing and planning strategy. In particular housing and planning strategy needs to recognise a number of features of the way that housing markets operate:

• First, the operation of different housing markets (the owner occupied market, the private rented market and the social housing sector) is intimately related to the dynamism, or lack of it, of local economies. It is also influenced by available transport infrastructure. Long distance migration can have an important influence on housing markets, and is the outcome of a complex mix of factors. Anticipating change – which is fundamental to good strategic planning – depends on understanding the key drivers of change, so that the effect of different interventions can be reliably foreseen.

• Second, sub-regional housing markets will display different characteristics. This is

the natural outworking of different historic inheritances in terms of the stock of housing, the characteristics of the local population, the economic structure of the sub-region, its natural endowment, strategic accessibility and its appeal to in-migrants, etc. Different sub-regions will therefore have different problems and opportunities. Strategy needs to reflect these differences – and these differences should inform resource allocation decisions.

• Third, housing markets do not respect administrative boundaries. Sub-regional

housing markets can be expected to cross administrative boundaries. So, by implication, the development of strategy for any sub-region will imply a need for joint working between housing and planning authorities. Joint working is required to deliver an effective strategic response, but it can also bring benefits in terms of sharing of good practice, and hence increasing effectiveness and cost efficiency.

2.13 It also important for all those responsible for housing and planning strategy to understand

the inter-relationship between the demand and supply of ‘market’ housing – housing bought or rented at prevailing open market prices or rents – and sub-market housing. There are a number of ways in which what happens in the owner occupied sector, which is the dominant tenure in sub-regional housing markets in the East Midlands, has an impact on the private rented sector and the social rented sector. It is important in developing strategy that these inter-tenure relationships are thoroughly understood.

Responsibilities for Housing Provision 2.14 Under Public Service Agreement (PSA) 5 ODPM is required to achieve a better balance

between housing availability and demand for (affordable) housing in all English regions while protecting valuable countryside around our towns, cities and in the greenbelt, and the sustainability of existing towns and cities. The latest comprehensive spending review adds emphasis to PSA5 on affordability. Specific measures to deliver PSA5 are set out in Service Delivery Agreements and the ODPM is developing a method for measuring affordability that will lead in time to the definition of regional affordability targets.

2.15 The Barker Review concluded that the operation of the housing market is of considerable importance to efficient operation of the national economy, and macro-economic management of the economy. Barker concluded that the current shortfall in housing provision is having major economic consequences. The Barker Review also concluded

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that the current method for assessing housing need is not adequate. The Government is currently consulting on merging regional housing and planning boards following the Barker Review, with the view for a revised structure to be in place by August 2005.

2.16 Responsibility for housing and planning strategy exists at two levels within Regions, and as a consequence both need an appreciation of the characteristics and drivers of sub-regional housing markets.

• At the regional level, Regional Housing Boards are responsible for developing the Regional Housing Strategy. A key emphasis in Regional Housing Strategies is to promote the development of sustainable communities in line with the government’s Policy Statement ‘Sustainable Communities – Building for the Future’. Regional Assemblies are responsible for developing the new Regional Spatial Strategies that will in time replace Regional Planning Guidance.

• At the local level, Unitary and District Authorities are responsible for preparing

Local Housing Strategies for their own administrative area. These strategies are intended to address housing issues across all tenures. County Councils have hitherto been responsible for preparation of Structure Plans, Unitary Authorities for Unitary Development Plans and Districts for Local Plans. Under the new arrangements introduced by the Planning Act Unitary and District authorities will prepare Local Development Frameworks.

What is the purpose and value of undertaking sub-regional Housing Market Assessments?

2.17 Considerable resources will be required if Housing Market Assessments are to be undertaken for each of the sub-regional housing markets in the East Midlands. What then are the potential benefits of preparing and conducting HMAs? The Housing Market Assessment Manual sets out in broad terms the benefits of undertaking an HMA.

2.18 In summary the benefits of preparing HMAs can be seen to fall into four categories.

• Sub-Regional Planning • Promotion of Best Practice and Joint Working • Resource Allocation • Housing Needs

2.19 These benefits can be secured by both regional partners and through local partners working together. The purpose and emphasis of an HMA may differ however depending on whether the HMA is being led by a regional body or a local partnership. We bring out this difference in emphasis between ‘top down’ and ‘bottom up’ HMAs in our comments below (see in particular paras 4.23 to 4.25).

Sub-Regional Planning

2.20 The Regional Housing Board and local authorities have a responsibility to deliver ‘Balanced Housing Markets’. The Comprehensive Performance Assessment also places emphasis on the need for Local Authorities to achieve balanced housing markets and to set housing strategy within its sub-regional context. To do this it is imperative to understand the overall balance between demand for and supply of housing at the sub-regional level, and the implication this has for affordability. In high demand areas where there is perceived to be an imbalance, there is a requirement for intervention, either to increase

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supply or, rather less likely to be feasible, to curb demand. The Barker Review has in particular highlighted the requirement for an increase in supply if long run average real house price increases are to be moderated. In low demand areas, the options are to stimulate demand or reduce supply.

2.21 Issues regarding increasing the supply of market or affordable housing inevitably raises issues in terms of sub-regional strategic planning. So do issues of demolition or market restructuring. In high demand areas key issues are how much new housing is required and where is it to be located? In answering such questions it is critical to understand the relationship between economic development and housing demand. Equally it is critical to understand the spatial pattern of demand for labour and housing that results from travel to work patterns. Travel to work patterns are dependent, in part, on the capacity of existing transport infrastructure.

2.22 These issues will be picked up in the Regional Spatial Strategy, which will need to link back into the Regional Economic Strategy, the Regional Housing Strategy and the Regional Transport Strategy. All of these strategies, DTZ would suggest, need a sub-regional dimension. There is a great variety in the dynamics of the sub-regions of the East Midlands, and this will imply that different interventions are appropriate. This becomes even greater when the basic framework of homes, jobs and transport are overlaid by consideration of environmental issues, and the requirement to build sustainable communities.

2.23 Housing Market Assessments can be used as a key tool to inform the Regional Spatial Planning process at the sub-regional level. It can provide baseline data on the housing market; identify the key demographic and economic drivers; and provide a basis for thinking about future requirements, primarily in terms of housing; though it should highlight the implications of different economic, transport and social futures for housing provision. The HMA process can help local authorities and their partners to understand the effect of planning decisions on housing markets. Put more generally it is a key tool for aligning future policy to ensure the policy objective of balanced housing markets is achieved.

2.24 The value of HMAs in the sub-regional planning process can be realised whether the process is led by a sub-regional partnership of local players, or initiated and led by a regional body, probably with local participation.

Promotion of Best Practice and Joint Working

2.25 There is growing recognition amongst local authorities of the need for joint working on housing issues precisely because housing markets cross administrative boundaries. HMAs can be used as a tool to promote a shared understanding of a sub-regional housing market by a number of authorities. This in turn can potentially provide the basis for closer alignment of both housing and planning policies and lead into joint working.

2.26 There are a number of potential benefits to be realised by joint working:

• At the most basic level, joint working can help the process of sharing information and best practice. Authorities learn from each other, but still have separate decision making processes.

• Local partners may also band together around issues of common concern to make representations to decision makers and those who control resources – the benefit of strength in numbers and speaking with one voice.

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• Authorities may also seek to deliberately align their policies on particular topics. This may be to strengthen their negotiating positions, or with the aim of stimulating investment by making decision making processes more transparent. In some areas for example authorities are looking at the scope to adopt similar Section 106 agreements.

• Local partners may decide to work together to secure economies of scale in terms of either procurement or administration. At present the most evident forms of collaboration are housing partnership arrangements between particular groups of local authorities and housing associations.

• At the highest level of joint working, authorities may decide to pool resources into some form of jointly controlled organisation to achieve certain objectives. In other parts of the country this has often taken the form of joint development vehicles.

2.27 The preparation of Housing Market Assessments can contribute to the development of joint

working at all these levels.

• HMAs can provide the basis for a common understanding of housing and planning issues between adjacent authorities.

• HMAs can provide a common basis for making representations to regional or national government for changes in policy or for resources.

• HMAs can, if so directed, identify where there would be benefits in developing common policies and joint working of various different forms.

Informing Resource Allocation Decisions

2.28 It has also been suggested that Housing Market Assessments could be used to build up the evidence base for resource allocation decisions. It is clear that in general HMAs help decision makers to understand the differences between different sub-regions, and the key issues in those regions. Informed decision making is clearly better than decision making made in the dark.

2.29 However there have been some suggestions that HMAs might in some way be used as a key source of information to allow resource allocation to be made on the basis of statistical analysis, using information from HMAs or at least using information from HMAs to supplement currently available statistics available for each authority in England. DTZ very much doubt this is realistic.

2.30 The main reasons for rejecting the notion that HMAs could be used in this way is that, if data is to be used as the primary means to allocate significant resources – a formulaic process of resource allocation – then robust data has to be produced for all areas on an entirely consistent basis and should be updated at regular intervals. This could be achieved through the HMA process, but it would require centralised prescription of the data to be collected, the format for its analysis, and it would have to be updated regularly, probably annually.

2.31 In essence the HMA would be a requirement on local authorities for a new statistical return. This is not the purpose for which HMAs were devised. HMAs were conceived as a flexible tool that regional and local partners could use to help inform strategic decision making. It would undermine the use of HMAs to inform sub-regional strategic planning and promoting best practice and joint working. Local authorities would see little benefit

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from preparing an HMA and might well look to the regional bodies that wanted such information to fund the HMA process.

2.32 In the current climate there also seems little need for a tool to allow the formulaic allocation of resources. Regional Housing Boards are already required, in drawing up their recommendations for Funding Settlements in 2004/05 and 2005/06, to allocate a formula-based minimum share of resources to each authority. ODPM is currently consulting on future mechanisms of resource allocation to regions and within regions.

Housing Needs

2.33 The HMA process can help facilitate the shift for local authorities from acting principally as landlords meeting local housing need, to becoming strategic enablers responsive to demand for the whole community. Undertaking an HMA therefore acts as the sub-regional context for a wide range of documents, including Housing Needs Assessments and Neighbourhood Renewal Assessments.

2.34 The OPDM are currently preparing revised guidance that integrates the existing HMA Guidance Manual and the Local Housing Needs Assessment (HNA) Guidance. The Guidance will set out how to undertake Local Housing Assessments (LHAs). The LHA Guidance shares much of the HMA framework in terms of the strategic approach taken, the stakeholders involved in the process, the data collected and analysis taken, and the spatial remit to be covered.

2.35 The new framework should therefore help to guide the allocation of resources to address housing needs and inform key housing needs decisions, such as the appropriate mix of affordable housing – that is the balance between provision of social rented homes, compared to various forms of low cost home ownership, key worker housing or even private rented accommodation. The relationship between the Housing Needs Assessment (HNA) and the Housing Market Assessment (HMA) is explored in more detail in Section 4.

How does this study integrate with the overall HMA framework?

2.36 The primary objective of this study is to address steps 1 and 2 in the HMA process, on a consistent basis, for the entire East Midlands region. Each of the 10 steps of the overall HMA process is presented in Figure 2.1 below.

2.37 An overview of the HMA process and its link to Housing Need is presented in the conceptual framework illustrated in Figure 2.2 below.

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Figure 2.1: The 10 Step Process of the HMA

Source: ODPM/DTZ Pieda Consulting

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Figure 2.2: A Conceptual Framework for the HMA Process and the Operation of Housing Markets

Socio-Economic Trends - Economic

Development

- Increased Mobility

- Improved Transport Infrastructure

- Social Aspirations

- Demographic growth

- Inheritance and Investment

Net-Migration of Economically Active

Socio-Economic Trends - Dissolution of

Existing Households-Social Factors

- Increased Mobility

- Social Aspirations

- Income and Wealth

- Affordability and Availability of Housing

Net Additions to Stock through conversion and change of use.

Net-Migration of Retired

Net Change in Second Homes

Net Household Formation within

Area

Stock of Exiting Housing

(Vacancies & Relets)

LA Sector

HA Sector

Private Rented Sector

Owner Occupied Sector

New Development

Dwellings created by conversion or change from non residential

use less dwelling loss to non

residential use

Land Use Planning

System.

Government Housing Policy

Funding: - Private - Housing Corporation - ODPM

Availability of Land for Housing

(Greenfield and Brownfield)

Conversion of existing dwellings to multiple dwellings less amalgamations

Demolition and Clearance

HOUSING NEED People unable to buy or rent in the Open Market

Involuntary Out-migration

Concealed Households

Demand for

Housing

Supply of

Housing

Market Demand

Prices and

Rents

A CONCEPTUAL FRAMEWORK OF THE OPERATION OF HOUSING MARKETS

East Midlands Housing Markets Study

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3 HOUSING MARKETS IN THE EAST MIDLANDS

3.01 The analysis undertaken by DTZ, combined with the feedback gained through the consultations, indicates that the East Midlands can be divided into a total of 8 sub-regional housing markets that are, for all practical purposes, wholly contained within the region and 2 housing markets where the core of the housing markets lies outside the East Midlands, but covers a significant area within the region. The underlying statistical analysis that has informed the identification of these housing markets is set out in Annex A. It is recommended, therefore, that this section of the report should be read in conjunction with the mapping analysis presented in Annex A.

THE SUB-REGIONAL HOUSING MARKETS IN OUTLINE

3.02 A brief description of the sub-regional housing markets is given below. This draws upon the mapping and analysis of key datasets presented in Annex A and insights gained through the consultations process.

Northampton

3.03 The Northampton sub-regional housing market encompasses much of western Northamptonshire, as reflected in the significant household and travel to work movements taking place between Daventry, South Northamptonshire and Northampton districts. The dominance of Northampton as a centre of employment is reflected in its travel to work area, which extends across much of Daventry and South Northamptonshire districts.

3.04 Eastwards connectivity with Corby and Kettering, however, is markedly weaker, with little significant evidence of household movements between Corby and Kettering and the districts of the Northampton sub-region, measured either in terms of total households or percentage of all households.

3.05 Wellingborough marks the key point of overlap between the Northampton and Corby-Kettering sub-region. The district demonstrates connectivity with both Northampton and East Northamptonshire in relation to household migration and travel to work movements, as well as a clear relationship northwards with Kettering. Wellingborough also has its own distinct travel to work area, which spans across the district boundary into East Northamptonshire.

3.06 Plans for an Urban Development Corporation (UDC) to oversee new growth in west Northamptonshire have now received Parliamentary approval. The objective of the UDC is to support the regeneration of the area within its boundary and its activities will seek to deliver sustainable communities. The core area of the UDC is situated in Northampton, Daventry and Towcester. This boundary therefore means that the UDC will operate in the areas of Northampton, South Northamptonshire and Daventry- the three districts which comprise the Northampton sub-region.

3.07 The travel to work and household migration patterns indicate that Coventry and Rugby exert relatively little influence on the Northampton sub-regional housing market. However, strong commuting flows into Milton Keynes from Northampton and South Northants generate an overlap with the Milton Keynes sub-region to the south.

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Corby- Kettering and Wellingborough

3.08 The second sub-regional housing market located within the county boundary of Northamptonshire extends to cover much of Corby, Kettering, Wellingborough and East Northamptonshire. Kettering and Corby demonstrate a high degree of integration in terms of household migration and travel to work. The distinct Kettering and Corby travel to work area (TTWA), which spreads eastwards into East Northamptonshire, again highlights the strong relationship between the two districts. A proportionately large household flow (residential movements expressed as a % of resident population in the district of origin) is apparent from Corby into Kettering, as are strong travel to work movements from Kettering into Corby.

3.09 The fact that the Kettering and Corby TTWA extends eastwards into East Northamptonshire but remains within the Kettering district boundary to the west signals the divide with the Northampton sub-region. To the south and east, the sub-region extends across much of Wellingborough and East Northamptonshire districts as a result of proportionately large household flows between these two districts and Kettering and Corby. The relationship between Kettering and Wellingborough is likely to be augmented by the path of the Midland Mainline, which runs through both districts, and the access this offers residents to the London labour market.

3.10 The high levels of household migration movements and overall connectivity between East Northamptonshire and Wellingborough further intensify the level of self-containment within the sub-region.

3.11 Corby, Kettering, Wellingborough and East Northamptonshire are also currently in the process of jointly preparing a local development framework and joint development ‘delivery vehicle.’ These are being established to pull together resources and proposals for major development across this 4-council area. Additionally, key policies are being aligned with Corby-Kettering-Wellingborough and East Northamptonshire-Rushden since all belong to the North Northamptonshire MKSM Growth Area.

Nottingham and Derby

3.12 The integrated and overlapping housing markets of Nottingham and Derby are reflected in the strong clusters of travel to work and household migration movements centred upon these principal urban areas.

3.13 The close proximity of these two regional centres of employment, the high capacity transport infrastructure that links them, and the effect of the M1 allowing equal access from north and south to both centres, are key factors contributing to the complexity of household movements and travel to work patterns.

3.14 However, when the more minor movements taking place between the districts surrounding Nottingham and Derby are stripped out, to leave only core household and travel to work movements, a clearer sub-regional picture emerges.

Nottingham

3.15 Within the circumference of the Nottingham housing market emerges a well-defined core and peripheral sub-regional area. The dominant clusters of household movements and travel to work between Nottingham, Broxtowe, Gedling, Rushcliffe and Erewash mark the spatial extent of the urban core of the housing market. However, there is also a demonstrable peripheral area of relatively small but inter-linked household and travel to

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work movements, which take place between Newark and Sherwood, Mansfield and Ashfield districts and which link orbitally with the urban nucleus of Nottingham.

3.16 The connectivity between all of the districts in the sub-region is further heightened by the absence of any notable household or travel to work relationships with other adjacent districts, with a clear self-contained household migration pattern evident to the north east and north of Nottingham and stretching southwards into Rushcliffe.

3.17 Erewash marks the western extent of the Nottingham market and the point of overlap with the Derby sub-region. Erewash’s travel to work area and travel to work patterns, which reveal a greater dependency on Nottingham for employment opportunities compared with Derby, suggest a comparatively high degree of integration with the Nottingham sub-region. It is also subject to considerable levels of inward household migration from eastern districts within the Nottingham sub-region such as Broxtowe.

Derby

3.18 The Derby sub-regional housing market stretches from South Derbyshire to Amber Valley, overlapping with the Nottingham sub-region across Erewash. It extends across the regional boundary into East Staffordshire due to the sizeable household migration movements evident between South Derbyshire and East Staffordshire. The town of Burton on Trent abuts the South Derbyshire boundary on both its eastern and northern edge.

3.19 Travel to work patterns display a similar configuration, with heavy commuting flows from Amber Valley and South Derbyshire into Derby City, and between East Staffordshire and South Derbyshire. Travel to work patterns also reveal a relationship between South Derbyshire and North West Leicester, leading to the demarcation of the southern overlap with the Leicester sub-region.

3.20 The Derby travel to work area extends into the southern fringes of Derbyshire Dales district, the centre of Amber Valley and much of South Derbyshire. However, areas to the south of Derby, such as Swadlincote, face restricted infrastructure access to the City and demonstrate greater connectivity with the Burton on Trent labour market. The Derby sub-regional housing market therefore crosses the regional boundary and into East Staffordshire.

Leicester

3.21 The Leicester housing market exhibits a well defined sub-region and high degree of self containment, with a heavy concentration of household and travel to work movements evident between Hinckley and Bosworth, Blaby, Harborough, Charnwood, Oadby and Leicester City. Travel to work patterns reveal the strong reliance upon the Leicester labour market from the districts surrounding the City and the relative absence of large scale commuting movements into alternative centres of employment such as Coventry.

3.22 To the north, the sub-region overlaps with the Nottingham sub-region at the point of Loughborough. However, the larger number of household movements between Charnwood and Leicester suggests the Leicester housing market to be a more dominant influence over Charnwood than Nottingham. This conclusion is further reinforced by the fact that there are more travel to work movements southwards from Charnwood into Leicester than northwards to Nottingham.

3.23 The relationship between Leicester and Coventry is weak in terms of the numbers of people moving home expressed as a % of resident population of the area of origin. But

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there is a clear cross regional connectivity between Hinckley and Bosworth and Nuneaton and Bedworth. Accordingly, the Leicester sub-region overlaps into this area on its western fringe.

3.24 Melton District displays the highest degree of individual self-containment of all the districts within the study area, as reflected in its highly restricted household movement and cross-district travel to work patterns. Melton’s high degree of self-containment is further reflected in the spatial extent of its travel to work area, which is almost exclusively contained within its district boundaries. Nevertheless, travel to work patterns do reveal commuting flows, albeit limited, from Melton into Leicester. Therefore while acknowledging the presence of a fairly self contained housing market in Melton District, the district relates best to the Leicester sub-region.

Central Lincolnshire

3.25 Lincoln’s position as a freestanding city in the north eastern area of the region and a major centre of employment generates a well defined sub-regional housing market centred upon Lincoln City. Considerable levels of household and travel to work movement between Lincoln and its southerly and northerly hinterland define the sub-region’s spatial extent, which covers the greater part of West Lindsey and North Kesteven and extends into North Lincolnshire, East Lindsey and the eastern margins of Newark and Sherwood.

3.26 The Lincoln sub-region demonstrates a greater eastern than western spatial extent due to the lack of centres of employment to the east and the stronger travel to work flows from areas of East Lindsey into Lincoln which this engenders. By contrast, Newark and Sherwood to the west demonstrates a greater workplace connectivity with Nottingham, although this may change with the growth of commuter traffic between Newark and Lincoln as a result of the improvements to the A46 Newark/A1 to Lincoln road. Newark therefore represents the point of overlap between the Nottingham and Lincoln sub-region.

3.27 To the north west the sub-region stretches into the south eastern corner of Bassetlaw, with the geographical barrier of the River Trent defining the end of its spatial extent. This barrier also manifests itself in the travel to work patterns, which show an absence of movement between Lincoln and West Lindsey with Bassetlaw.

3.28 To the south west, the sub-region extends into the northern fringes of South Kesteven due to the reasonably high level of travel to work and household migration evident between North Kesteven and South Kesteven. However, the spatial extent of the sub-region does not stretch as far as Grantham due to the markedly stronger degree of connectivity of South Kesteven with Peterborough.

Coastal Lincolnshire

3.29 The housing market areas associated with the coastal strip of the East Midlands exhibit a polycentric structure. That is, with no major centres of employment, the area comprises an amalgam of local markets, all of which are subject to significant influences of in-migration and second home purchases, but which are not particularly integrated with one another.

3.30 The area is rural in character with a settlement pattern based upon villages and small market towns. Consequently, a series of localised housing markets, sharing similar characteristics but with little inter-migration are apparent, based around coastal nuclei such as Skegness, Mablethorpe, Grimsby and Boston.

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3.31 This configuration is particularly evident in the travel to work areas associated with this coastal vicinity. Within East Lindsey, for example, there are five separate travel to work areas (Grimsby, Louth, Horncastle, Skegness and Mablethorpe and Boston), three of which (Skegness and Mablethorpe, Louth and Horncastle) are entirely contained within the district’s boundaries.

3.32 To the south, the sub-region encompasses Boston due to the high levels of household migration occurring between East Lindsey and Boston. To the north, the sub-region overlaps with the Grimsby sub-regional housing market, again due to the significant number of household migration movements taking place between Grimsby and East Lindsey.

Northern (Sheffield and Rotherham)

3.33 Districts in the northern fringe of the region such as North East Derbyshire, Chesterfield, Bolsover and, to a lesser extent, Bassetlaw, exhibit a high degree of connectivity with the Sheffield and Rotherham housing market. Due to their location and the pattern of road and rail connections a large proportion of the residents of these districts work in Sheffield and Rotherham, as reflected in the pattern of travel to work movements.

3.34 These districts also experience commonality in the issues faced in their respective housing markets. Areas of low housing demand, pockets of economic deprivation and the legacy of the downturn in the coal mining industries are key housing related problems experienced in these areas.

3.35 The spatial extent of the Sheffield housing market extends around and marginally into the Peak Park on the western side of Sheffield. However, the data indicates that the influence of Sheffield on the Peak Park is relatively minor, particularly in comparison to the much more extensive influence on this area of Greater Manchester.

High Peak - Derbyshire Dales

3.36 The High Peak - Derbyshire Dales sub-region covers the southern and central High Peak areas and the greater part of Derbyshire Dales. The western extent of the sub-region includes the north westerly corner of Staffordshire Moorlands District due to residents in this area accessing services within Derbyshire Dales as opposed to those in Stoke on Trent.

3.37 Travel to work patterns reveal the considerable influence of Greater Manchester on High Peak with heavy commuting flows apparent from High Peak district into Stockport, Tameside and Manchester. This pattern underlies the Greater Manchester sub-region’s eastern boundary, which stretches from Glossop down to Buxton. By contrast, travel to work movements from the High Peak and Derbyshire Dales into Sheffield and Rotherham are negligible. As a result, the Sheffield and Rotherham market extends only marginally into the Peak District embracing the settlements on the eastern fringe of the Pennines.

3.38 The level of connectivity between High Peak and Derbyshire Dales districts is low, in terms of household and travel to work movements. Nevertheless, both areas are affected by similar influences on their housing markets, such as high levels of second and holiday home ownership and long-distance in-migration from high income groups, causing rising prices within the area. The area also has a unified planning authority – the Peak District National Park- which has helped to develop a close working relationship between the High Peak and Derbyshire Dales districts.

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3.39 The High Peak - Derbyshire Dales housing market extends southwards into the area around Ashbourne, where it overlaps with the north west fringe of the Derby housing market. Ashbourne is perceived to be on the cusp of both part of the High Peak - Derbyshire Dales housing market and the Derby housing market.

Peterborough/Welland.

3.40 The Peterborough/Welland housing market encompasses South Holland, the greater part of South Kesteven, Rutland and overlaps with the eastern boundary of Melton district and the southern boundary of Boston district.

3.41 The relative absence of major towns and employment centres between Lincoln and Peterborough means that districts in the south eastern corner of the region are heavily dependent upon the Peterborough employment market. This manifests itself in the large travel to work movements evident between South Kesteven, South Holland and Peterborough. These movements highlight an important economic relationship and help define the Peterborough sub-regional housing market.

3.42 Peterborough’s relationship with South Kesteven, South Holland and Rutland is made explicit in the recently completed study by the East of England Development Agency. The study concludes that Peterborough is located at the centre of a sub-region that extends into the six neighbouring local authorities of Huntingdonshire, Fenland, South Holland, South Kesteven, East Northamptonshire and Rutland.

3.43 The identified sub-region encompasses the towns of Oundle, Stamford, Bourne, Spalding, Holbeach, Wisbech, March, Ramsey and Whittlesey. The relationship between these districts is underpinned by Peterborough’s high-quality accessibility from north-south road (A1) and rail routes (ECML), although road connections into the rural Fens and Northamptonshire are considered poor.

3.44 There is a high degree of connectivity between Rutland and South Kesteven reflected in a proportionately large flow (people moving expressed as a % of resident population in the district of origin) of people moving between the two districts. However, the data suggests a weak relationship between Rutland and Peterborough. Overall, Rutland shows a high degree of self-containment and is divided by the path of the A1. The area of Rutland to the east of the A1 divide is viewed as particularly closely aligned with South Kesteven.

3.45 Consequently, while Rutland forms part of the Peterborough sub-region, it does so as a result of its high degree of connectivity with South Kesteven (which is highly integrated with Peterborough) and not through a direct relationship with Peterborough itself. As with Melton district, therefore, whilst acknowledging the presence of a fairly self contained housing market in Rutland the district relates best to the Peterborough sub-region.

3.46 Within the Peterborough/Welland market an additional sub-division can be observed between a southern area that is heavily influenced by Peterborough and the effect of long distance commuting into London; and a northern area that is more self contained with Grantham as its focal point.

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Figure 3.1: Study Area Map of Districts

Key District Key District 1 BEDFORD 42 RUSHCLIFFE 2 AYLESBURY VALE 43 CHERW ELL 3 FENLAND 44 OXFORD 4 HUNTINGDONSHIRE 45 EAST STAFFORDSHIRE 5 MACCLESFIELD 46 LICHFIELD 6 AMBER VALLEY 47 STAFFORDSHIRE MOORLANDS 7 BOLSOVER 48 TAMW ORTH 8 CHESTERFIELD 49 NORTH W ARW ICKSHIRE 9 DERBYSHIRE DALES 50 NUNEATO N AND BEDW ORTH

10 EREW ASH 51 RUGBY 11 HIGH PEAK 52 STRATFORD-ON-AVON 12 NORTH EAST DERBYSHIRE 53 W ARW ICK 13 SOUTH DERBYSHIRE 54 MANCHESTER 14 BLABY 55 OLDHAM 15 CHARNW OOD 56 STOCKPO RT 16 HARBOROUGH 57 TAMESIDE 17 HINCKLEY AND BOSW ORTH 58 BARNSLEY 18 MELTON 59 DONCASTER 19 NORTH W EST LEICESTERSHIRE 60 ROTHERHAM 20 OADBY AND W IGSTON 61 SHEFFIELD 21 BOSTON 62 BIRMINGHAM 22 EAST LINDSEY 63 COVENTRY 23 LINCOLN 64 SOLIHULL 24 NORTH KESTEVEN 65 KIRKLEES 25 SOUTH HOLLAND 66 KINGSTON UPON HULL CITY 26 SOUTH KESTEVEN 67 NORTH LINCOLNSHIRE 27 W EST LINDSEY 68 DERBY 28 KING 'S LYNN AND W EST NORFOLK 69 LEICESTER 29 CORBY 70 RUTLAND 30 DAVENTRY 71 NOTTINGHAM 31 EAST NORTHAMPTONSHIRE 72 PETERBOROUG H 32 KETTERING 73 MILTON KEYNES 33 NORTHAMPTON 74 NORTH EAST LINCOLNSHIRE 34 SOUTH NORTHAMPTONSHIRE 75 BOLTON 35 W ELLINGBO ROUGH 76 BURY 36 ASHFIELD 77 ROCHDALE 37 BASSETLAW 78 SALFORD 38 BROXTOW E 79 TRAFFORD 39 GEDLING 80 MID BEDFORDSHIRE 40 MANSFIELD 81 SOUTH BEDFORDSHIRE 41 NEW ARK AND SHERW OOD 82 LUTON

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Figure 3.2: The Proposed East Midlands Sub-Regional Housing Markets

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Figure 3.3: Proposed Sub-Regional Housing Market with Shaded Overlaps

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The Influence of Surrounding Regions

3.47 The five regions which surround the East Midlands exert a considerable influence on the spatial pattern of the region’s housing markets. This influence is particularly apparent when one analyses the major concentrations of employment within the study area. Figure 3.4 presents those districts within the study area that contain more than 60,000 employees working within them.

Figure 3.4: Study Area Employment Concentrations Greater than 60,000 Employees

3.48 Throughout the East Midlands there are only 4 districts (Derby, Nottingham, Leicester and Northampton) that have more than 60,000 employees located within them. There is therefore a significant ‘pull’ exerted on the East Midlands from the employment centres positioned in the fringes of adjacent regions. The most notable areas of influence are:

• Peterborough, which exerts a strong influence on the districts in the south east corner of the East Midlands, including South Holland, South Kesteven and East Northamptonshire.

• Greater Manchester which has a significant influence on the High Peak and, to a lesser extent, Derbyshire Dales districts.

• Sheffield and Rotherham which exert an influence over North East Derbyshire, Chesterfield, Bolsover and Bassetlaw districts.

• Grimsby which has an influence on part of East Lindsey district.

3.49 The functional labour markets (which act as close approximations for sub-regional housing markets) of Peterborough, Greater Manchester, Sheffield, Rotherham and Grimsby extend into the East Midlands. This highlights the need for effective cross-regional working and

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co-operation to tackle housing market issues and imbalances. These cross regional linkages are, however, being increasingly recognised in emerging research and strategy development.

3.50 For example, the recent Peterborough sub-regional report, commissioned by the East of England Regional Assembly, concludes that Peterborough deserves special consideration in future development proposals because it is central to a sub-region that spans the boundaries of the East of England and East Midlands regions. Further analysis about the practical implications that such cross regional issues have on the undertaking of HMAs in the East Midlands is explored in more detail in Section 4.

3.51 Other substantial concentrations of employment in adjacent regions, notably Birmingham Coventry, and Stoke on Trent might be thought to exert an influence on the East Midlands. The data analysis suggests that this is not so, in large measure because the influence of these centres is countered by that of Derby, Nottingham, Leicester and Northampton.

Inter-Regional Migration

3.52 Inter-regional migration also has a significant impact on housing markets in the East Midlands region. The region experiences significant levels of net in-migration from the East of England, the South East and London and, to a lesser extent, Yorkshire and the Humber (see Figure 3.5). Population movements between the East and West Midlands are broadly in balance, while there is net out migration, albeit on a modest scale, from the East Midlands to all other regions.

3.53 In overall terms the largest number of in-migrants to the region come from the South East, East of England and London, followed by Yorkshire and the Humber and the West Midlands. Those from London, the South East and East of England may have a particular impact on affordability. They are quite likely to have higher levels of housing equity, and if they continue to work in those regions, to enjoy higher incomes than those working in the region. They may be able to outbid local residents in the East Midlands.

Figure 3.5: Regional Migration Movements Into and Out of the East Midlands (Year Ending September 2003)

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3.54 Such displacement effects are particularly likely to occur in areas which are attractive to in-migrants who continue to work in London or the South East. These may be locations with good road connections or rail services to London and the South East. In such locations in-migrants may bid up house prices and displace local purchasers to lower cost locations in the same housing market that are not so accessible to London and the South East.

3.55 A similar effect is likely to take place in desirable rural areas. In such areas people moving into the area from outside the region, to retire, or following a decision to ‘down-shift’ may often be able to outbid local residents. There are also pressures from those buying second homes. Locations such as the Peak District National Park, rural Lincolnshire and the coastal areas of East Lindsey, Boston and South Holland may be particularly susceptible to these influences.

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4 ROLLING OUT THE HMA PROCESS IN THE EAST MIDLANDS

4.01 Section 3 described the structure of sub-regional housing markets in the East Midlands. In this section, we turn to questions concerning the conduct of HMAs, in particular:

• What areas should be covered by HMAs – and should HMAs be undertaken for every

sub-regional housing market?

• Who should take the lead on preparation of HMAs – regional organisations or sub-regional partnerships?

• How should one frame the terms of reference for an HMA to maximise the benefits of the study?

• How important is consistency of approach between HMAs and how can this be achieved?

• What should be the relationship between HMAs and Housing Needs Assessments? 4.02 The discussion in this Section supplements the detailed guidance contained in the HMA

Manual published by ODPM (and prepared by DTZ) on how to prepare an HMA.1 The Guidance remains valid for the conduct of HMAs in the East Midlands, though new guidance bringing together existing guidance on the conduct of HMAs and updating guidance on Housing Needs Assessments is in preparation and scheduled for publication in early 2005.

What areas should be covered by HMAs?

4.03 The HMA Guidance indicates that HMAs should, where they are to be conducted, be undertaken for identifiable sub-regional housing markets. However in defining the areas for which HMAs should be undertaken a number of factors need to be taken into account. These are set out in the Box below. In view of these considerations it can make sense to undertake an HMA for more than one housing market, or to undertake more than one HMA within what is identified as a single sub-regional housing market.

Factors to Consider in Defining Areas HMA Areas

• In general an HMA should be undertaken for a defined sub-regional housing market. But on occasions there may be grounds for undertaking a single HMA for more than one housing market or for sub-dividing a housing market and undertaking more than one HMA in that housing market area.

• In some areas there are significant overlaps between housing markets. Where such overlaps exist it may well make sense to look at two areas at the same time, because there is a relatively large area which is subject to the influence of two markets. It helps to explain this concept if the reader thinks of a Venn diagram comprising two circles which have a significant area of overlap.

• In other areas there are a large number of local authorities contained within one identified housing market area. The benefits of collectively undertaking an HMA can be offset if the size or number of housing markets examined as part of an HMA is so large that the area has little coherence or the number of local authorities is so large that management of the process becomes very difficult.

1 http://www.odpm.gov.uk/stellent/groups/odpm_communities/documents/downloadable/odpm_comm_027115.pdf

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• There are also added difficulties where partnerships that would logically be responsible for HMAs involve authorities in different regions.

• For practical reasons it is desirable, if it can be sensibly avoided, for authorities not to be involved in two or more HMAs. In some cases undertaking an HMA for two adjacent housing market areas can prevent these problems.

• There are unquestionable economies of scale in carrying out HMAs, so that it will be more cost effective to undertake a combined HMA for two small market areas adjacent to one another, than to separately undertake two HMAs. This is so even if the brief makes it plain that the analysis should ensure that the different characteristics of the two markets need to be brought out.

• One of the reasons for undertaking HMAs is to encourage joint working and sharing of best practice between authorities. The benefits of shared learning and the potential for joint working are lost if only one or two authorities undertake an HMA, even if the boundaries of those one or two authorities fully encompass the identified sub-regional housing market.

• There may be other policy related reasons why it is deemed desirable to undertake an HMA for an area comprising more than one housing market area.

4.04 This study has identified 8 sub-regional housing markets within the East Midlands that are,

for all practical purposes, wholly contained within the East Midlands2; and 2 housing markets where the core of housing market lies outside the region, but covers a significant area within the region3.

4.05 The East Midlands Housing Board should identify priorities in terms of the areas in which HMAs should be conducted. This may, for example, be on fostering the completion of HMAs for those sub-regional housing markets that are wholly within the East Midlands or, alternatively, for the sub-regions associated with the growth areas (most noticeably Peterborough), where there is currently a strong policy agenda. The EMHB also has an important role in liasing with the Housing Boards in adjacent regions (primarily the East of England with respect to Peterborough, Yorkshire and Humber regarding Sheffield/Rotherham and the North West in connection with Greater Manchester) to ensure consideration is given to analysis of the characteristics of those parts of the region that fall within these housing markets whose core area lies outside the region.

4.06 Table 4.1 and Map 4.1 identify the areas and authorities that DTZ would regard as being party to different HMAs (assuming it is decided that an HMA should be undertaken). In the great majority of cases we recommend that the focus of an HMA is on a single identified sub-regional market. However, we recommend that in three cases the area for which an HMA is undertaken be different from that implied by the extent of the sub-regional housing market. The three exceptions, and the reason why we believe they should be treated as exceptions are set out below.

4.07 DTZ would recommend that a single HMA be undertaken for the Central Lincolnshire and the Coastal Lincolnshire sub-regions. This recommendation reflects a number of considerations:

2 Northampton, Corby-Kettering and Wellingborough, Nottingham, Derby, Leicester, Central Lincolnshire, Coastal Lincolnshire and High Peak-Derbyshire Dales, 3 Sheffield/Rotherham and Peterborough,

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• There is considerable overlap between these two sub-regional markets which means that if two separate HMAs were undertaken there would be some duplication of effort.

• An HMA for Coastal Lincolnshire would only engage two districts, while in practice there appears to be a good working relationship between all the districts in Lincolnshire.

• The Coastal Lincolnshire area is not a true sub-regional housing market, but an amalgam of local markets subject to common influences.

4.08 In effect this means that we recommend a single HMA be undertaken for most of Lincolnshire, with the exception of South Holland and South Kesteven. It is important however that this HMA draws out the distinct and different influences on the Central and Coastal Lincolnshire areas, and within Coastal Lincolnshire, the local markets.

4.09 With respect to the Nottingham Housing Market, the extent of the housing market would imply that 8 separate local authorities work together, including one outside the county (Erewash). We are concerned that it might prove administratively cumbersome to undertake an HMA for the whole of this area, and the analysis has identified a core area comprising the urban core and a more peripheral area with its own connectivity comprising Ashfield, Mansfield and Newark and Sherwood Districts4.

4.10 In view of this DTZ would suggest that consideration be given to undertaking two HMAs for this area, one for the area comprising the urban core (Nottingham City, Rushcliffe, Gedling, Erewash, and Broxtowe), the other for the periphery (Newark and Sherwood, Mansfield and Ashfield). An important component of the brief for each of these HMAs will be to examine how these two sub-markets interrelate with one another.

4.11 There would be merit in undertaking the studies in sequence, so that the first study can be used to inform the subsequent one. There could be advantages in undertaking the study of the periphery first, since this is an area affected by pockets of low demand. It might be that such areas can find a solution to their problems in part by better integration with the Nottingham market. In turn it might be that these areas offer a solution to some of the issues facing the urban area itself. The read across between the two HMAs would be important and there should be some overlap in terms of steering arrangements.

4.12 Strict logic would say that a single HMA should be undertaken for all of the Northern (Sheffield/Rotherham) Housing Market. DTZ would recommend that the East Midlands Housing Board and the four local authorities in the East Midlands that fall within the Northern (Sheffield/Rotherham) housing market discuss this possibility with the Yorkshire and Humber Housing Board and the relevant local authorities. Without prejudging the outcome of these discussions, DTZ would comment that it is possible that the scale of issues being addressed in Sheffield and Rotherham themselves, combined with the added complexity of working across the regional boundary, might make the conduct of such an HMA difficult.

4.13 DTZ would therefore suggest that an alternative is to undertake an HMA for that part of the Northern (Sheffield/Rotherham) housing market that falls within the East Midlands. This would involve the districts of North East Derbyshire, Chesterfield, Bolsover and Bassetlaw and would constitute a ‘northern’ HMA area. These four authorities face many

4 This is unlike the Leicester market, which also spans 8 LA areas, but would be considerably more difficult to sub divide into smaller areas due to its characteristics and configuration.

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similar issues, and are also bound by the common factor that their housing markets are all subject to strong influences from the major urban areas of Sheffield and Rotherham just across the regional border. An important component of the brief for this HMA should, however, be to explore the relationship and influence of the employment and housing markets of Sheffield and Rotheram on these areas. It would also make sense for there to be close liaison with Rotherham and Sheffield in undertaking such work, and representatives of those authorities should probably be involved in steering arrangements for any HMA undertaken for this sub-region.

4.14 It is also relevant to outline our recommendations for the Peterborough sub-regional housing market. DTZ believe that it makes good sense for an HMA to be undertaken for the whole of the sub-region, and there is little merit in undertaking an HMA solely for that part of the Peterborough housing market in the East Midlands. This is particularly so since Peterborough is now being considered as part of the Sustainable Communities growth area agenda, and the decisions about growth will have potential implications for the whole sub-region. The core of the market lies in Peterborough and such an HMA would logically be led by the East of England Housing Board and Peterborough City Council. We recommend that the EMHB and the relevant authorities liase with their counterparts in the East of England to establish a way forward.

4.15 Finally it is worth making special mention of the decision to include Melton District within the area of the Leicester HMA. Melton exhibits a high degree of self containment in terms of household movement and little in the way of travel to work or household migration to and from surrounding districts. However DTZ do not believe that it is practical or of benefit to conduct an HMA solely for Melton – though it might be a candidate for a Local Housing Assessment following the emerging ODPM guidance. On balance, however, we would recommend that it forms part of the Leicester HMA, to which it demonstrates greatest connectivity. Additional consultation with relevant stakeholders should inform the outcome of this decision.

4.16 Based upon the preceding discussion and the analysis presented in Section 3, the potential HMA groupings for the East Midlands are outlined in Table 4.1 and Map 4.1 below.

Table 4.1 Recommended/Potential HMA Groupings in the East Midlands

Name of Sub-Region Name of Districts Within sub-Region

HMA Area

South Northamptonshire Northampton Daventry Northampton

Northampton

Northampton Northampton Corby Corby-Kettering-Wellingborough Kettering Corby-Kettering-Wellingborough Wellingborough Corby-Kettering-Wellingborough

Corby-Kettering-Wellingborough

East Northamptonshire* Corby-Kettering-Wellingborough Leicester Leicester Harborough* Leicester Blaby Leicester Oadby and Wigston Leicester Charnwood Leicester Hinkley and Bosworth Leicester Melton* Leicester

Leicester

North West Leicestershire Leicester

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Derby City Derby South Derbyshire* Derby

Derby

Amber Valley Derby Nottingham Nottingham Core Rushcliffe Nottingham Core Gedling Nottingham Core Erewash* Nottingham Core Broxtowe Nottingham Core Newark and Sherwood* Newark-Ashfield-Mansfield Ashfield Newark-Ashfield-Mansfield

Nottingham

Mansfield Newark-Ashfield-Mansfield High Peak* High Peak- Derbyshire Dales High Peak- Derbyshire Dales

Derbyshire Dales* High Peak- Derbyshire Dales

North East Derbyshire* Northern Chesterfield* Northern Bolsover* Northern

Northern (Sheffield and Rotherham)

Bassetlaw* Northern Lincoln Lincolnshire West Lindsey* Lincolnshire

Central Lincolnshire North Kesteven Lincolnshire

East Lindsey* Lincolnshire Coastal Lincolnshire

Boston Lincolnshire

South Holland Peterborough South Kesteven* Peterborough Rutland Peterborough (Huntingdonshire) Peterborough (Fenland) Peterborough

Peterborough/Welland

(Peterborough) Peterborough

* Denotes district that is likely to be under the influence of more than one HMA area

29

Map 4.1: Proposed HMA Groupings in the East Midlands

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4.17 Further discussions will be need to be undertaken in every area to secure sign up to the proposals presented in this section for the conduct of HMAs.

What is the relationship between existing housing partnership arrangements and the recommended HMA areas?

4.18 A number of sub-regional partnerships and joint working arrangements currently exist in

the East Midlands which aim to tackle housing issues on a pan-district basis. DTZ would encourage existing housing partnerships to continue in their ongoing arrangements and joint-working structures, but suggest that the particular housing market areas that cover these partnerships should inform this work.

4.19 Partnerships will need to have regard to their particular housing market boundaries, but this

does not mean that a partnership has to immediately change its composition to conform with the boundaries of a particular housing market area. Furthermore, the proposed HMA groupings of LAs largely conform with current partnership arrangements, as reflected in a comparison of Map/Table 4.1 with Map/Table 4.2, which present these existing arrangements.

Table 4.2: Current Housing Partnership Sub-Groups in the East Midlands Name of Housing Partnership Name of Districts Within Partnership

Derby City Amber Valley South Derbyshire

Derby

Erewash Leicester City Charnwood NW Leicestershire Hinckly and Bosworth Blaby

Leicester

Oadby & Wigston Nottingham City Gelding Broxtowe

Nottingham

Rushcliffe High Peak Peak Park National Park Area Derbyshire Dales

Melton Harborough Rutland

Welland

South Kesteven Lincoln City Boston East Lindsey West Lindsey South Holland

Eastern/Lincolnshire

North Kesteven

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Bolsover Chesterfiled North East Derbyshire Newark and Sherwood Mansfield Ashfield

Northern

Bassetlaw Daventry South Northamptonshire Northampton Corby Kettering East Northamptonshire

Southern/.Northamptonshire

Wellingborough

4.20 These existing partnership arrangements are illustrated in Map 4.2 below.

Map 4.2: Illustration of Current Housing Partnership Arrangements

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Who should take the lead on preparation of HMAs?

4.21 It is clear that the completion of HMAs have the potential to serve the needs of both regional organisations such as the Regional Assembly and the East Midlands Housing Board and of sub-regional partnerships based primarily on local authorities but including other organisations. But the purposes for which regional and sub-regional organisations need HMAs are not identical.

• Regional organisations in particular need sub-regional analysis to inform the

development of the Regional Housing Strategy and the Regional Spatial Strategy. They are also interested in using the information derived from HMAs to inform resource allocation decisions and for this they need information to be provided on a consistent and comparable basis.

• Sub-Regional Partnerships need to enhance their understanding of how the sub-regional housing market operates to inform local housing strategy and the development of joint working. They are also likely to be interested in the information to help them influence resource allocation decisions by highlighting the needs of their area over and above those of other areas.

4.22 There is clearly a significant overlap in the interests of regional organisations and sub-

regional partnerships in conducting HMAs but the subtle differences in agendas could translate into differences of emphasis in the conduct of HMAs.

• For example regional organisations are likely to want to be able to compare and

contrast the different sub-regional housing markets in the East Midlands to understand how they differ and where they are similar, and to do so on a consistent basis. Consistency in data analysis (in terms of which sources are used, time periods for analysis, and creation of secondary variables) is vital if information is to inform resource allocation decisions.

• In contrast, sub-regional partnerships are likely to be more interested in differences within the sub-regional housing market – essentially the overlay of local market characteristics within the sub-regional housing market context. They may also wish to present data and analysis in a particular way to highlight the needs of the sub-region, and therefore, each area would present sub-regional data in a different way.

4.23 The question therefore arises: Should the RHB specify the format and content of HMAs to

be undertaken in the East Midlands? Or should sub-regional partnerships be allowed to develop briefs for HMAs that reflect the particular issues that are of most concern to that partnership and to adjust the approach to fit their requirements? These questions cannot be totally divorced from the question of ‘who pays for HMAs?’

4.24 Both a purely top down, prescriptive approach, and a bottom up, locally determined

approach have strengths and weaknesses as outlined in the box below. The challenge is therefore to find an approach to the conduct of HMAs that harnesses the strengths of both the top down and the bottom up approach, and addresses the weaknesses of each approach. The right solution is clearly for regional organisations to work in partnership with sub-regional partnerships to create a win-win solution.

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Advantages and Disadvantages of Top Down and Bottom Up Approaches to HMAs

Top Down Bottom Up Strengths Can ensure consistency across sub-

regions in terms of analysis Ensures transfer of best practice and learning between sub-regions Can help ensure that difficult political issues (eg scale and location of new housing development) are not ducked Helps to ensure consistent quality by development of central core of expertise in conduct of HMAs Provides the consistency and comparisons that are required for development of regional strategy and to inform resource allocation

Ensures the work is focused on issues of concern to sub-regional partners Likely to encourage sub-regional partners to make data available Fosters greater insights into local housing markets and differences within the sub-region Allows scope for sub-regional partners to make the case for investment in their area More likely to help focus local housing strategies Helps build partnership approaches and hence encourages joint working

Weaknesses Can demotivate sub-regional partners who are important to the HMA process in terms of providing data and local insights May fail to explore issues of particular concern to the sub-region due to imposition of ‘one size fits all’ approach Lack of local ownership of the process can mean that the implications for local housing strategy are not drawn out May do nothing to foster joint working

Lack of consistency between HMAs undertaken for different sub-regions HMAs may contain an element of advocacy for the sub-region May as a consequence fail to be of value in informing resource allocation decisions Awkward but important issues that threaten partnership approaches (eg scale and location of new housing development) may be parked or sidelined More difficult to encourage learning in the conduct of HMAs and the adoption of best practice

4.25 DTZ would recommend the following approach to the funding and roll out of HMAs in the East Midlands region.

• The EMHB and Regional Assembly should maintain a strategic oversight of the

entire HMA process and have responsibility for transferring good practice and ensuring a degree of consistency between all HMAs; but sub-regional partnerships should be fully engaged in the process of undertaking HMAs

• The preparation of HMAs should therefore be seen as a joint responsibility of the EMHB, RPB and sub-regional partnerships. Thus the EMHB should work with sub-regional partnerships to develop the brief for HMAs; where appropriate to appoint external consultants; and participate fully on steering groups.

• This partnership should be reflected in funding arrangements with costs of preparing HMAs shared between the EMHB, RPB and sub-regional partnerships in equal measure. DTZ suggest that the EMHB should match the funding put up by sub-regional partnerships.

• DTZ recommend that the EMHB and RPB prepare a ‘Housing in the East Midlands’ report containing a comprehensive analysis of those housing data sets available on a consistent basis across the whole of the East Midlands. This document would be a

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core source of information for HMAs and would build upon the analysis contained in the March 2003 CURS report “Background Information on the Housing Market in the East Midlands”. We set out in more detail below what this document would contain.

How should one frame the terms of reference for an HMA to maximise the benefits of the study?

4.26 Undertaking HMAs has become increasingly important given the requirements on Local Authorities, under Comprehensive Performance Assessments (CPAs), to develop and achieve balanced housing markets. The Audit Commission's Comprehensive Performance Assessment (CPA) will assess local authority management of local housing. Where the council has transferred its social housing stock, the Audit Commission will assess the local authority's contribution to the management of housing markets. This will assess:

• how well the council understands its housing market and uses this knowledge to help to balance markets;

• the council's actions and achievements in helping to balance markets;

• how well the council monitors its progress and impact in helping to balance housing markets and uses this information to inform future strategies.

4.27 The Housing Market Assessment provides a platform for local authorities and their partners to demonstrate engagement with all these requirements. It also offers an analytical basis for Local Authorities in setting and justifying policy on affordable housing.

4.28 The approach DTZ are advocating for the conduct of HMAs in the East Midlands is a

partnership approach between the EMHB, RPB and sub-regional partnerships. Implicit in this approach is that the scope and focus of HMAs can vary between sub-regions, so as to allow focus on the particular challenges and opportunities in that sub-region; but there will be a consistent core of information and analysis that will allow the regional bodies to derive a consistent overview of all sub-regional housing markets in the East Midlands.

4.29 In view of this it is not possible to be prescriptive about the precise scope of each HMA.

However DTZ would emphasise the importance of developing a clear brief for an HMA to ensure the quality of the eventual outputs. This applies whether or not the HMA is to be prepared using in-house staff or if an external organisation (eg. consultants or an academic institution) is to be commissioned.

4.30 A small group representing the key partners should undertake the process of developing the

brief. Ideally you want to engage senior personnel in this since they are the ones most likely to see the big picture. The key to getting what you want out the HMA process is to know what you want out of the process at the start. There are a number of techniques that can be used to help partnerships develop a clear set of objectives for an HMA.

• Debate among the key partners why you are undertaking an HMA. In this it may

be helpful to refer back to the potential functions of the HMA process outlined in Section 2. Is your HMA more about addressing sub-regional housing and planning issues or is it more about identifying areas for joint action? Note that the approach that DTZ are recommending will in all cases yield a core of information that will inform resource allocation decisions.

• You may find it difficult to start the above discussion. In which case you may wish to take a step backwards and brainstorm to identify housing and planning related

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issues where you feel you have inadequate information. Then translate those into specific questions, in as much detail as possible, for which you would like to have answers. Then prioritise those questions – which of these are ‘must know’ and which would be ‘nice to know’.

• Speculate about what the desired outcomes of the HMA might be. Specifically ask yourselves ‘what might we expect to do differently as a result of the information that the HMA will provide’. It may help to use hypotheses; ask yourself the question ‘if the HMA were to show that …… is the case, what would we expect to do about it? What options for intervention do we have? This will allow you to identify if there are specific hypotheses or anticipated interventions that you want the HMA to test.

4.31 Once the core team is clear about the objectives of the HMA you can turn to other parts of

the brief. Key elements of the process of developing the brief are:

• Consider how you would anticipate that the objectives of the study will be met. If you anticipate using external contractors to prepare the HMA, then you need only to outline the key elements of the approach – you can ask the contractors to outline their recommendations. However if there are certain ‘must have’ components of work (eg analysis of a common core of data, any surveys etc) these should be specified.

• Consider the level of resource required to complete the study. There is a rule of thumb that is worth observing in commissioning external consultants.

• If you can be very specific about the work you require, then there is no benefit in giving consultants a guide price. You should receive tenders that are directly comparable against your specification and where you can compare prices on a like for like basis.

• If you wish to get ideas from consultants about how best to meet your (clearly specified) objectives, then you should think about providing a guide budget. Failure to do so may result in you receiving tenders that are very difficult to compare because they vary considerably in scope and price.

How important is consistency of approach between HMAs and how can this be achieved?

4.32 Consistent information is important particularly to regional organisations since they need to understand the differences in the character, needs and opportunities of the different sub-regional housing markets in the East Midlands. It is also of value to sub-regional partnerships to know how they differ from other sub-regions and which sub-regions they are similar to, since this will cause them to think about whether certain interventions made elsewhere may be appropriate to their sub-region or not.

4.33 It is also the case that some ways of analysing information are simply more robust or

communicate better with the audience than others. For example it is always preferable to look at trends over time rather than a snapshot of information for one year. There are also insights into the quirks of data that are not always widely understood – for example it is not possible to undertake a straight forward comparison of households living in the private rented sector between the 2001 and 1991 Censuses because of changes in the treatment of tied accommodation.

4.34 For both these reasons DTZ recommend that the EMHB produce a ‘Housing in the East

Midlands’ report that would analyse the standard data sets available for each local authority and for housing associations on a common basis for all sub-regional housing

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markets in the East Midlands. Data could be aggregated up for sub-regional housing markets, using a best fit between local authority areas and housing markets. An option would be to use this data to produce a set of common sub-regional housing profiles.

4.35 Undertaking the analysis for the whole region at the same time would not only provide

consistency but be more cost effective and comprehensive than doing this as part of the preparation of individual HMAs. Material would be presented through a mix of tables, charts and maps. It would be underpinned by a set of easily accessible spreadsheets that would allow analysis by local authority.

4.36 This ‘Housing in the East Midlands’ digest would provide each HMA partnership with a

common core of information that they could incorporate into their HMA. As part of the HMA process additional quantitative and qualitative information would be used to supplement the core statistical information provided in the ‘Housing in the East Midlands’ digest. Individual HMAs would use this additional information to provide greater depth of analysis and an interpretation of the drivers and characteristics of the sub-regional housing market.

4.37 Further work is required to develop the specification for the Housing in the East Midlands

report but an initial indication of the data and sources, which such a digest should bring together, is given in Table 4.3 below.

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Table 4.3: Proposed Datasets to be Collected at a Regional Level

Heading Indicator Specifics Source Date Lowest Level Total Population Total Current Population Mid Year Population Estimates 2003 District

Population Trends Total Annual Population Mid Year Population Estimates 1981-2003 District Population- Age Structure 0-15, 16-24, 25-44,45-64,65-74,75+ Mid Year Population Estimates 2003 District Population Trends- Age Structure 0-15, 16-24, 25-44,45-64,65-74,75+ Mid Year Population Estimates 1983, 1993,

2003 District

Population Characteristics Long Term Ill/ Disabled/BME Population Census 2001 Ward

Demographic Drivers Of Demand Household Movements Inter And Intra Housing Market Area

Movements, Movements From Outside Census 2000/01 District

Household Composition Concentrate On Key Groups Census 2001 Ward Household Composition Trends Concentrate On Key Groups Census 1991-2001 Ward

Demographic Structure Household Size Average People Per Household Census 2001 Ward

GDP Per Head ONS/ DTZ- Locus 2000 District Output Growth GVA Trends And Projections ONS/ DTZ- Locus 2001- 2011 District

Employment Trends Total Employment Change ABI/ AES 1991-2002 Ward Economic Activity Levels % Employed, Unemployed, Retired Etc Census 2001 Ward Socio-Economic Structure Occupation Status Census 2001 Ward

Incomes Average Gross Weekly Wage New Earnings Survey 2003 Ward

Economic Drivers Of Demand Commuter Patterns Inflows/ Outflows Of Commuters Census 2001 District

Type Of Dwelling % Detached, Semi, Terrace Etc Census 2001 Ward

Type And Age Of Dwelling Absolute Changes In Number Of Detached, Semi, Terraced Etc

Census 1991-2001 Ward

Size Of Dwelling Number Of Rooms/ Average Number Of Rooms

Census 2001 Ward

Council Tax Bandings % Of Properties In Each Band Census 2001 Ward Occupancy Status Principal Residence, 2nd Home, Vacant

Dwellings Etc Census 2001 Ward

Households In Temporary Accommodation With A Dependent Child Or In Priority Need

Absolute Numbers ODPM HIP Returns 2003 District

Scale And Structure Of Supply

Right To Buy Sales Absolute Numbers Housing Corporation 1998-2003 District Stock Total Change 1995-2003 Source Is ODPM- Take From

Community Data Services 1995-2003 District

Stock Tenure Proportion Of Social (LA And RSL) Stock 2003

ODPM HIP Returns 2003 District

Completion Levels Net Completions Regional Assembly Monitoring Report

As Available District

Large Development Sites (500+ Dwellings)

Number Of Sites Of 500+ Dwellings In Each LA

Regional Assembly Monitoring Report

As Available N/A

Future Housing Supply This Is A Total Of Extant Planning Permissions, Allocations Made In Local Plans, And Dwellings Forecasted From Unidentified Sites.

Regional Assembly As Available District

Provision of Gypsy/Traveller Sites Provision and Quality of Sites ODPM Future/tbc District

Housing Targets Number Of Dwellings (LA Proportion Of Structure Plan)

County Structure Plans As Decided By Counties

District

Supply Trends

Affordable Housing Supply (Rented And Bought)

% Of Completions That Are Affordable Regional Assembly Monitoring Report

As Available District

House Prices Overall And By Dwelling Type Land Registry 2004 District House Price Trends Hold Constant For One Type Of

Dwelling- Semi-Detached Land Registry 1999-2004 District

House Price Sales Trends Quarterly Sales Volumes Land Registry 1999-2004 District

Private Sector Rents Average Private Sector Weekly Rent Housing Corporation 2001 District Affordability House Price To Income Ratio Land Registry/Inland Revenue 2004/2001 District Affordability Joseph Rowntree Foundation Measure Can Work Can't Buy Report 2002 District

Number Of Shared Households Shared Households Census 2000/01 Ward Numbers Waiting For Housing Trends To See Change In Waiting Lists

To Establish Housing Needs ODPM HIP Returns District

Demand Meets Supply

Homelessness Proxy For Housing Need ODPM HIP Returns District

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What should be the relationship between HMAs and Housing Needs Assessments?

4.38 It is generally unlikely to be the case that HMAs will include much in the way of primary research5. Nor can HMAs generally provide the sort of detailed information on housing needs produced by Housing Needs Assessments, since they tend to focus on the big picture. For the foreseeable future there will be an ongoing requirement for Housing Needs Assessments to provide the sort of detailed information that local authority planning staff need in order to back up their planning policies on affordable housing and their negotiation with developers.

4.39 There will also be an increasing requirement for a perspective on affordable housing

provision across the region. The current Regional Spatial Strategy’s affordable housing indicator equates to approximately 25% of annual housing provision. As a result of recommendations in the Barker review it is likely that the RSS will in time need to address affordability targets.

4.40 There is, therefore, a clear need to integrate HMAs and HNAs and to address some of the

weaknesses of HNAs undertaken in the past. ODPM is currently preparing revised guidance on HNAs and how they should relate to HMAs and revised guidance under the title Local Housing Assessment will be published in early 2005. The guidance in effect integrates the guidance on HMAs and HNAs.

4.41 Some of the themes that the new guidance is likely to feature are as follows:

• The commissioning of Joint Housing Needs Assessments. There is little merit in undertaking HNAs for single authorities, though it is accepted that local authorities will need to ensure that data can be analysed solely for their area in order to support their affordable housing policies set out in Local Plans/Local Development Frameworks. This can be done by ensuring that all survey data is geo-coded (probably using 7 figure post codes). By working in partnership, local authorities should be able to secure better value for money, as well as creating the opportunity to compare and contrast needs with adjacent areas. It would clearly make sense to promote HNA for sub-regional housing markets. It may even make sense to commission HNAs for even larger areas than this such as counties providing data is geo-coded and capable of analysis for sub-regional housing markets and by local authority district.

• Regional bodies have an interest in ensuring that development of consistent and comparable information emerges from the HNAs, just as it does in ensuring consistent and comparable information emerges from HMAs. It is expected that the new guidance will encourage greater consistency in the conduct of HNAs and place more emphasis on ongoing monitoring of housing needs. The EMHB should promote best practice and the transfer of experience between local authorities. There would be merit in exploring if there is scope to develop a common core to the survey questionnaires used, and a general acceptance of what is best practice in terms of sampling methodology, data storage and analysis.

• It is of increasing importance that HNAs not only provide crude numbers of households in need of affordable housing, but information on tenure preferences and ability to afford intermediate housing products such as shared ownership and other

5 The West of England HMA (http://www.jsptu-avon.gov.uk/publications/documents/housingstudymain.pdf) was perhaps unusual that around 40% of the total budget was used to undertake qualitative research into the housing aspirations and perceptions of consumers. This entailed the organisation of 17 focus groups with people at different lifestages, in different tenures and in different parts of the sub-region.

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forms of subsidised housing other than conventional social rented housing. This implies developing effective means of collecting information on household income and wealth (particularly existing housing equity) and greater sophistication in analysing the ability to afford different sub-market housing products.

4.42 The issues explored above highlight the need for a clear conceptual framework to be in

place to guide the overall direction of the HMAs and to understand the relationship with the HNA. The conceptual framework presented in Figure 2.2 and Annex E offers an overview of the structure of the HMA and how it links with housing need.

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5 RECOMMENDATIONS TO THE EAST MIDLANDS REGIONAL HOUSING BOARD AND THE EAST MIDLANDS REGIONAL ASSEMBLY

5.01 We have made recommendations throughout the course of this report. This section brings together the various recommendations that we have made, splitting them out into recommendations for the EMHB and Regional Assembly and for HMA partnerships.

Recommendations for the East Midlands Housing Board and East Midlands Regional Assembly

5.02 We have identified three broad purposes that HMAs can fulfil. We recommend that the

EMHB endorse our conclusion that the primary purposes of HMAs in the East Midlands will be to contribute to the process of sub-regional planning and encouraging joint working on housing and planning issues at the sub-regional level.

5.03 We identify that HMAs can play a role in resource allocation but recommend that in the East Midlands the HMA process should be used to inform allocation decisions by providing a consistent set of information for each sub-region. There should be no attempt to develop a new formulaic allocation system based on data from the HMA process.

5.04 The report has identified the different sub-regional housing markets in the East Midlands. We recommend that the EMHB and Regional Assembly endorse these findings and start to reflect this analysis in the Regional Housing Strategy. The Regional Assembly should consider how the structure of sub-regional housing markets should inform the Regional Spatial Strategy.

5.05 In general we recommend that an HMA be undertaken for a single identified housing market. However, in the case of Nottingham we believe that the sub-region should be split to make the HMA process more manageable, and that in the case of Central Lincolnshire and Coastal Lincolnshire the two sub-regions work together to produce a single HMA.

5.06 In the case of those parts of the region that fall within the Northern (Sheffield/Rotherham) housing market, we recommend that the EMHB have initial discussions with the Yorkshire and Humber Housing Board to explore their views of whether an HMA should be promoted for the whole market area. DTZ believe, however, that it would be a viable option to undertake an HMA solely for that part of the Northern (Sheffield/Rotherham) housing market that falls within the East Midlands.

5.07 With regard to the Peterborough HMA we recommend that the EMHB explore the possibility of an HMA being undertaken for the whole of the Peterborough sub-regional housing market. We are less convinced of the value of an HMA being undertaken solely for that part of the East Midlands that falls within the Peterborough housing market, and excluding Peterborough. It seems to us it is important given the inclusion of Peterborough in growth areas agenda that the implications for the whole sub-region be considered.

5.08 We recommend that the EMHB promote the completion of HMAs for each sub-regional housing market in the region, over a period of the next 3 years. If our recommendations are endorsed this would imply undertaking 9 HMAs in the East Midlands plus participation of East Midland authorities in a Peterborough sub-regional HMA. This would imply aiming to complete around 3 HMAs each year.

5.09 The recommended 3 year timescale should be viewed as a maximum timeframe. DTZ recommend that every effort should be made, as far as is practicable, to speed up the HMA process to fit with the timescale for the Regional Spatial Strategy.

5.10 Regional partners need to consider how they can assist with the future development of the briefs for HMAs. Regional partners should work with LAs to ensure that the overarching questions that are seeking to be addressed by the preparation of HMAs are established before undertaking an HMA, to help ensure that the maximum benefit from the process is derived. DTZ recommend that housing market profiles of each of the 10 sub-regions be undertaken to help inform this process. These would seek to analyse the dynamics of the housing market in each sub-region and would play an important role in determining the key issues that need to be addressed by each HMA.

5.11 HMAs should be undertaken initially either in those sub-regions where the EMHB identify there are particularly difficult and pressing housing and planning issues that could be addressed through the HMA process; or in those sub-regions where an effective sub-regional partnership is in place that wishes to proceed with an HMA.

5.12 The relationship between the proposed groupings of local authorities for the preparation of HMAs, current housing partnership arrangements and the existing sub-regional designations in the East Midlands is an important consideration. DTZ would encourage existing housing partnerships to continue in their ongoing arrangements and joint-working structures, but recommend that the particular housing market areas that cover these partnerships should inform this work.

5.13 Partnerships will need to have regard to their respective housing market boundaries, but this does not mean that a partnership has to immediately adjust its membership to conform to that implied by the boundaries of sub-regional housing markets. These groupings have a purpose outside the HMA process. There is also the scope to promote the conduct of HMAs as part of the sub-regional studies process to ensure that housing issues are given full consideration as part of the spatial planning process.

5.14 To complete a programme of HMAs for all the sub-regional housing markets in the East Midlands over a period of 3 years, the EMHB will need to promote the development of effective HMA partnerships. The key requirements are to ensure greater joint working of housing, planning and economic development staff in local authorities, and the engagement of private sector interests.

5.15 We recommend that the EMHB and Regional Assembly maintain oversight of the HMA process throughout the region and is an active partner in all HMAs. This implies helping to develop the brief for HMAs (which is required whether or not external contractors are to be used or not) and participating in steering arrangements for studies.

5.16 The conduct of HMAs must however ensure the full engagement of partners from within the sub-region to ensure that the findings are translated into local housing strategies and opportunities for joint working. There must be scope therefore for the brief for HMAs to reflect the particular issues and priorities of the sub-regional partners.

5.17 There is a requirement to make clear to local authorities and existing sub-regional partnerships the budgetary and resource allocation implications of rolling out the HMA process. DTZ recommend that HMAs be jointly funded by EMHB and the sub-regional partners. This will reinforce the message that responsibility for the HMA process is jointly owned and that it is expected that both the EMHB and the sub-regional partners will derive benefits from the process.

5.18 We recommend that the EMHB support the HMA process as well as meeting its own requirement for consistent sub-regional housing profiles by preparing a ‘Housing in the East Midlands’ report. This would contain a comprehensive analysis of those housing data sets available on a consistent basis across the whole of the East Midlands and preparation of sub-regional housing market profiles and would build upon the analysis already undertaken by CURS in the 2003 “Background Information on the Housing Markets of the East Midlands” report.

5.19 The document should be supported by data at the individual authority level made available in a series of easily accessible spreadsheets. This would, for example, allow analysis of the differences between different parts of sub-regions. The spreadsheets should indicate where ward level data is available so that local area analysis can be readily undertaken if required.

5.20 We recommend that the EMHB encourage local authorities to work together in commissioning new Local Housing Assessments once the LHA guidance is available, and ensure that newly commissioned studies will permit analysis for sub-regional housing markets. New LHAs should yield information on the scope for intermediate housing products. All survey data should be geo-coded.

5.21 The EMHB should also take an active role in promoting quality and consistency across the region in the conduct of LHAs. There is much to be gained in increasing standardisation of core questions, survey methods and the format of analysis in allowing comparison between local authority areas and sub-regions. The revised guidance on LHAs that ODPM is due to issue early in 2005 will assist the EMHB in this role.

Recommendations for HMA Partnerships

5.22 We recommend that the authorities in each of the sub-regional housing markets should come together to agree upon a timetable and process by which they will take forward the completion of an HMA for their area within the next 3 years. Key issues to be addressed are the composition of the HMA partnership and the timeframe in which the sub-region wishes to undertake and HMA.

5.23 At the sub-regional level, the local authority partners will probably wish to identify a lead authority. The local partners will need to identify its core and partner members. Guidance on this process is contained in the HMA Manual published by ODPM, and should also be available from EMHB.

5.24 This report provides guidance (see Section 4) on the process of developing the brief for an HMA. This is a key part of securing a worthwhile outcome from the HMA process and should not be rushed. More detailed information on the HMA process itself is contained in the HMA Manual.

5.25 Some local authorities might potentially need to be involved in more than one HMA because they are on the edge of a number of sub-regional housing markets. We recommend that these authorities participate in one HMA, but that part of the brief for that HMA is to examine the overlap with adjacent housing markets and the implication of this for strategy in the overlap areas.

identifying the sub-regional housing markets of the...

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