Leeds Strategic Housing Market Assessment (SHMA) 2017 Leeds

Leeds

Strategic Housing Market Assessment (SHMA)

2017

Leeds City Council

Final Report

September 2017

Main Contact: Michael Bullock

Email: michael.bullock@arc4.co.uk

Telephone: 0800 612 9133

Website: www.arc4.co.uk

Limited (Company No. 06205180)

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Table of Contents

Executive summary ......................................................................................................................... 9

Introduction ........................................................................................................................ 9

The Housing Market Area ................................................................................................... 9

The current housing market .............................................................................................. 10

Objectively Assessed Housing Need (OAN) ....................................................................... 11

The need for all types of housing ...................................................................................... 12

Conclusion ......................................................................................................................... 15

1. Introduction ...................................................................................................................... 16

Background and objectives ............................................................................................... 16

National Planning Policy Framework (NPPF), Planning Practice Guidance (PPG) and

other requirements ........................................................................................................... 16

Definitions ......................................................................................................................... 17

Geography ......................................................................................................................... 19

Leeds strategic context ..................................................................................................... 19

Data analysis and presentation ......................................................................................... 21

Research methodology ..................................................................................................... 22

Report structure ................................................................................................................ 22

2. Defining the Housing Market Area ................................................................................... 24

Introduction ...................................................................................................................... 24

Leeds strategic context ..................................................................................................... 24

House prices and rates of change in house prices ............................................................ 25

Migration and self-containment ....................................................................................... 28

Commuting patterns ......................................................................................................... 30

Concluding comments ....................................................................................................... 31

3. Leeds housing market review .............................................. Error! Bookmark not defined.

Introduction ...................................................................................................................... 32

Property profile ................................................................................................................. 32

Tenure characteristics ....................................................................................................... 40

Key market drivers ............................................................................................................ 51

Current households in need .............................................................................................. 53

Homeless and previously homeless households .............................................................. 56

Relative affordability of housing options .......................................................................... 58

4. Housing market signals and past delivery ......................................................................... 63

Introduction ...................................................................................................................... 63

Market Signals ................................................................................................................... 63

Comparator areas.............................................................................................................. 66

Past trends in housing delivery ......................................................................................... 69

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Concluding comments ....................................................................................................... 71

5. Objectively Assessed Housing Need and Housing Requirement ...................................... 72

Introduction ...................................................................................................................... 72

Establishing the Housing Market Area .............................................................................. 73

LPEG model ....................................................................................................................... 73

PPG model ......................................................................................................................... 75

Objectively Assessed Housing Need ................................................................................. 83

From an OAN to a Housing Requirement ......................................................................... 84

DCLG consultation regarding the calculating of OAN ....................................................... 87

6. The need for all types of housing ...................................................................................... 88

Introduction ...................................................................................................................... 88

Dwelling mix and affordability .......................................................................................... 88

People wishing to build their own homes ........................................................................ 96

Family housing................................................................................................................... 97

Armed forces accommodation .......................................................................................... 97

Older people ...................................................................................................................... 97

Households with specific needs ...................................................................................... 102

7. Conclusion: policy and strategic issues ........................................................................... 104

The Housing Market Area ............................................................................................... 104

The current housing market ............................................................................................ 104

Objectively Assessed Housing Need, market signals and Housing Requirement ........... 104

The need for all types of housing .................................................................................... 105

Final comments ............................................................................................................... 105

Introduction to Technical Appendices ........................................................................................ 106

Technical Appendix A: Research methodology ........................................................................... 107

Overall approach ............................................................................................................. 107

Baseline dwelling stock information and survey sample errors ..................................... 107

Interviews with estate and letting agents ....................................................................... 108

Technical Appendix B: Housing policy review ............................................................................. 109

Introduction .................................................................................................................... 109

Legislative and policy background .................................................................................. 109

Emerging policy and legislation....................................................................................... 114

Overview of housing policy themes ................................................................................ 116

National housing reviews ................................................................................................ 123

Technical Appendix C: Housing need calculations ...................................................................... 125

Summary of contents ...................................................................................................... 125

Introduction .................................................................................................................... 126

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Stage 1: Current need .................................................................................................... 129

Stage 2: Future housing need ........................................................................................ 133

Stage 3: Affordable housing supply ................................................................................ 134

Stage 4: Estimate of annual housing need ..................................................................... 135

Total net imbalance ......................................................................................................... 136

Tenure and dwelling type profile of affordable dwellings .............................................. 137

Technical Appendix D: Monitoring and updating ....................................................................... 141

A framework for updating the housing needs model and assessment of affordable

housing requirements ..................................................................................................... 141

Introduction .................................................................................................................... 141

Updating of baseline housing needs and affordable housing requirements ................. 141

Concluding comments ..................................................................................................... 143

Technical Appendix E: National Planning Policy Framework and Planning Practice Guidance

Checklist 144

National Planning Policy Framework .............................................................................. 144

Planning Practice Guidance ............................................................................................. 144

List of Tables

Table ES1 Suggested dwelling mix by market and affordable dwellings based on OAN of

3789 each year ...................................................................................................... 12

Table 2.1 House prices in Leeds 2016 by sub-area ............................................................... 27

Table 2.2 House prices and price change in neighbouring areas, Yorkshire and the Humber

and England ........................................................................................................... 28

Table 2.3 Flows of residents (all moves) ............................................................................... 29

Table 2.4 Containment ratios ............................................................................................... 30

Table 2.5 Leeds 2011 Census commuting flows: workers (aged 16-74 years) ..................... 30

Table 3.1 Dwelling stock and occupancy by sub-area .......................................................... 32

Table 3.2 Property type and size of occupied dwellings across Leeds ................................. 33

Table 3.3 Age of dwelling ...................................................................................................... 36

Table 3.4 Dwelling stock condition in England and Leeds estimates ................................... 37

Table 3.5 Lower Quartile and median price and income required to be affordable ........... 40

Table 3.6 Profile of private rented sector in Leeds ............................................................... 46

Table 3.7 Private sector rental prices in Leeds 2010-2016 ................................................... 47

Table 3.8 Primary market drivers ......................................................................................... 51

Table 3.9 Projected population change, 2017 to 2033 ......................................................... 52

Table 3.10 Housing need in Leeds .......................................................................................... 54

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Table 3.11 Households in need by Affordable Housing Zone ................................................. 55

Table 3.12 Households in need by sub-area ........................................................................... 55

Table 3.13 Housing need by tenure ........................................................................................ 56

Table 3.14 Housing need by household type .......................................................................... 56

Table 3.15 Homeless decisions and acceptances 2009/10 to 2015/16 .................................. 57

Table 3.16 Characteristics of households previously homeless ............................................. 58

Table 3.17 Cost of alternative tenure options by sub-area .................................................... 59

Table 3.18 Annual income required for alternative tenure options by sub-area .................. 60

Table 3.19 Assumptions in assessing income required for alternative tenure options ......... 61

Table 4.1 Housing market signals 2005-2015 ....................................................................... 65

Table 4.2 Housing market signals in comparator districts, region and England 2010-2015 68

Table 4.3 Dwelling completions 2006/07 to 2015/16 .......................................................... 69

Table 5.1 Full Objectively Assessed Housing Need using the LPEG method ........................ 75

Table 5.2 Dwelling requirements under alternative scenarios using 2014-based and

alternative headship rates .................................................................................... 77

Table 5.3 Labour force and employment growth outcomes 2017-2033 .............................. 80

Table 5.4 Employment-led REM and Average employment growth outcomes 2017-2033 . 81

Table 5.5 Employment-led scenario Dwelling requirements under alternative scenarios

using 2014-based and alternative headship rates ................................................ 81

Table 5.6 Factors included in OAN calculation methods ...................................................... 87

Table 6.1 Overall market dwelling requirements compared with the current stock profile 89

Table 6.2 Comparison between current dwelling stock and market aspirations at sub-area

level ....................................................................................................................... 91

Table 6.3 Comparison between current dwelling stock and market expectations at sub-

area level ............................................................................................................... 92

Table 6.4 Net annual affordable housing imbalance by Affordable Housing Zone, property

size and designation 2017/18 to 2027/28 ............................................................ 93

Table 6.5 Affordable housing tenure options: existing and newly-forming households ..... 94

Table 6.6 Relative affordability of intermediate tenure prices ............................................ 94

Table 6.7 Suggested dwelling mix by market and affordable dwellings based on OAN of

3789 each year ...................................................................................................... 95

Table 6.8 Older persons’ housing options ............................................................................ 98

Table 6.9 Dwelling aspirations and expectations of households containing a HRP aged 65+99

Table 6.10 Future housing expectations (upsizing/downsizing) ............................................ 99

Table 6.11 Older persons’ dwelling requirements 2014 to 2035 ......................................... 100

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Table 6.12 Future market split of older persons’ accommodation by relative

deprivation/affluence of an area ........................................................................ 101

Table 6.13 Adaptations required either now or in next 5 years by age group ..................... 101

Table 6.14 Client groups accommodated in Social Rented sector in Leeds City 2010/11 to

2012/13 ............................................................................................................... 102

Table A1 Households surveyed, response rates and sample errors .................................. 107

Table C1 CLG Needs Assessment Summary for Leeds City Council ................................... 127

Table C2 CLG Needs Assessment Summary by Affordable Housing Zone ......................... 128

Table C3 Summary of current housing need across Leeds District ................................... 129

Table C4 Summary of current need by Affordable Housing Zone ..................................... 130

Table C5 Homeless decisions and acceptances 2009/10 to 2015/16 ................................ 131

Table C6 Lower quartile house prices by Housing Market Character Area ....................... 133

Table C7 Net annual affordable housing imbalance by Affordable Housing Zone, property

size and designation 2017/18 to 2026/27 .......................................................... 137

Table C8 Affordable housing tenure options: existing households in need ...................... 138

Table C9 Affordable housing tenure split .......................................................................... 138

Table C10 Affordable housing tenure options: newly-forming households ........................ 138

Table C11 Relative affordability of intermediate tenure prices .......................................... 139

Table C12 Property type preferences .................................................................................. 140

Table C13 Property type preferences by affordable housing zone ..................................... 140

List of Figures

Figure 2.1 Median house price trends 2005 to 2016: Leeds, North Yorkshire and England . 26

Figure 3.1 Property type by sub-area..................................................................................... 34

Figure 3.2 Property size by sub-area ...................................................................................... 35

Figure 3.3 Leeds tenure profile of occupied dwellings .......................................................... 38

Figure 3.4 Leeds tenure profile by sub-area .......................................................................... 39

Figure 3.5 Leeds City household income and housing costs comparison .............................. 62

Figure 4.1 Dwelling completions 2006/07 to 2015/16 compared with the annual target .... 70

Figure 4.2 Housing delivery test ............................................................................................. 71

Figure 5.1 Housing Needs Assessment for Leeds (based on PAS Guidance OAN advice note

July 2015 Figure 4.1) ............................................................................................. 86

Figure 6.1 Market development requirements compared with the current stock profile .... 89

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List of Maps

Map 1.1 Leeds location and geographical context.............................................................. 19

Map 1.2 Leeds City Region and local authority context ...................................................... 20

Map 1.3 Leeds sub-areas ..................................................................................................... 21

Map 2.3 Median house prices 2015 by sub-area ................................................................ 27

Map 3.1 Median rents 2016 by sub-area ............................................................................ 48

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Please note that in this report some of the tables include rounded figures. This can result in

some column or row totals not adding up to 100 or to the anticipated row or column ‘total’

due to the use of rounded decimal figures. We include this description here as it covers all

tables and associated textual commentary included. If tables or figures are to be used in-

house then we recommend the addition of a similarly worded statement being included as a

note to each table used.

This report takes into account the particular instructions and requirements of our client. It is not intended for and

should not be relied upon by any third party and no responsibility is undertaken to any third party.

arc

Limited accepts no responsibility or liability for, and makes no representation or warranty with respect to, the

accuracy or completeness of any third party information (including data) that is contained in this document.

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Executive summary

Introduction

The Leeds Strategic Housing Market Assessment (SHMA) (2017) provides the latest available

evidence to help to shape the future planning and housing policies of the area. The study will

help inform the production of the Council’s local plan and housing strategy. This research

provides an up-to-date analysis of the social, economic, housing and demographic situation

across the area.

The SHMA (2017) contains:

• A review of existing (secondary) data;

• Analysis of the findings of a household survey, completed by 5,383, representing a 19.3%

response rate;

• A consideration of the findings of interviews with estate and lettings agents;

• A consideration of research by Edge Analytics regarding Objectively Assessed Housing Need

(OAN);

• An assessment of housing need and affordable housing requirements; and

• Analysis of the housing needs of specific groups of people.

The findings from the study provide an up-to-date, robust and defensible evidence base for

policy development which conforms to the Government’s National Planning Policy Framework

(NPPF) and Planning Practice Guidance (PPG), Housing and economic development needs

assessments.

The Housing Market Area

Defining the housing market area

Leeds’s Housing Market Area (HMA) exhibits a degree of distinctiveness compared with

neighbouring areas as measured by median house price change 2000-2016 at a lower rate than

most neighbouring local authority areas and the Yorkshire and the Humber region as a whole.

The Leeds HMA is considered to be self-contained from the perspective of migration and in

terms of low levels of out-commuting by its working population but it has a significant

economic function that also draws commuters from the wider City Region.

Interactions with several neighbouring areas are recognised, research identifies relationships

with the northern part of Kirklees and with the Wharfedale part of Bradford. These local

authorities recognise that they operate as a wider functional area from an economic

perspective, but they do not consider Leeds as part of their respective Housing Market Areas

for the purposes of local planning policy.

In conclusion, although there are interactions with other areas, Leeds should be recognised as

an appropriate Housing Market Area for the purposes of local planning policy.

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The current housing market

The aim of the Leeds housing market review is to explore the housing market dynamics of

Leeds. The evidence is based upon household survey data, secondary data and information

from stakeholders.

The study finds that there are 337,302 households and 347,787 dwellings in Leeds City. With

8,578 vacant homes (of which 2,681 are long term vacant) and 2,038 are second homes. The

overall vacancy rate is around 2.5%, this compares with a vacancy rate of 2.6% across England.

Overall, the vast majority (70.4%) of properties are houses, 22.6% are flats/apartments and

maisonettes, 6.4% are bungalows, and 0.6% are other types of property including park

homes/caravans. Of all occupied properties, 14.90% have one bedroom/bedsit, 28.6% have

two bedrooms, 38.2% have three bedrooms and 18.3% have four or more bedrooms.

Regarding tenure, 57.7% of occupied dwellings are owner-occupied, some 29.9% of all

households (100,978) own outright and 27.7% of all households (93,482) have a mortgage.

19.9%. are private rented (including tied accommodation and student housing) and 22.5% are

affordable.

The mix of property size type and tenure varies greatly by sub-area. The size and type of

dwelling varies greatly within tenure. Some 21.7% of owner occupied homes are detached and

5.9% are flats, apartments and maisonettes, whereas, regarding the private rented sector 5.1%

are detached and 46.1% are flats and maisonettes.

In 2016, median house prices across the city were £159,000 and lower quartile prices were

£110,000. For open market housing, the minimum indicative income required is £24,768 for

lower quartile or entry-level renting in the City as a whole. For lower quartile or entry-level

house prices (owner occupation) the minimum income required is £28,929.

Median rents across the city were £676 per month and lower quartile rents were £516 per

month.

Estate agents told us that housing markets in Leeds have largely recovered from the 2008

recession with sales showing increased demand over the past 3 years. Leeds has traditionally

been a strong housing market. It is currently seen as offering better returns on investment

than Manchester, for example, and is anecdotally better value than other surrounding cities

e.g. Sheffield and Hull, etc. We were told that the housing market in the city centre is distinctly

different than in other parts of Leeds as the market offer is almost entirely apartments. We

were told that until recently the market was investor led. Agents told us that the main drivers

of the market include the level of inward investment fuelling expectation around the city; and

the skilled nature of jobs that have been created in Leeds which has created a good fit

between income, borrowing levels and mortgage rates which normally equates to a lot of

potential in the market. The concern is the general undersupply of properties to let.

Letting agents told us that the rental market has remained relatively strong buoyed by

customers unable / unwilling to buy in the current market either due to affordability pressures

or lack of supply. The typical renter is professional; is single and wants their independence; a

couple or a small family ready to settle down but can’t afford the deposit; ex-students who

have finished studying and want to remain local; newly arrived employees of the growing

business sector who want to rent. Agents also report that a growing number of households are

selling their homes and choosing to rent as a lifestyle choice. Increasingly, landlords across the

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city are refusing to let properties to people on benefits. Where lets are made to households on

benefits, landlords insist on a guarantor who is in employment and able to meet the full rent

requirement in the event of a default.

According to our survey some 31,740 existing households are in housing need (9.4% of all

households). Reasons for housing need are mostly overcrowding, cost, a tenancy ending,

households sharing facilities or due to people having special needs. Although housing need is

evidenced across the city, housing need issues are most prevalent in the inner area and the

city centre, in the private rented sector and amongst lone parent, large family households and

student households.

The Household Survey identified 4,831 households who had been previously homeless or living

in temporary accommodation and had moved to their present accommodation in the past five

years. These were mostly single adults and lone parents, occurring in flats and maisonettes and

within the private rented sector.

Objectively Assessed Housing Need (OAN)

The National Planning Policy Framework (NPPF) requires that Local Planning Authorities (LPAs)

identify Objectively Assessed Housing Need (OAN) and that Local Plans translate those needs

into land provision targets. Paragraph 159 of the NPPF recognises that the objective

assessment of housing need must be one that meets household and population projections,

taking account of migration and demographic change; meets the need for all types of housing

including affordable, and caters for housing demand and the scale of housing supply necessary

to meet that demand. Government Planning Practice Guidance (PPG) recognises that

‘establishing future need for housing is not an exact science’ (paragraph 14), although it should

be informed by reasonable and proportionate evidence.

The SHMA firstly sets out the OAN calculation based on the approach set out in the Local Plan

Experts Group report. Secondly, an OAN calculation based on the Planning Practice Guidance

(PPG) is undertaken. The key difference between the approaches is that the second approach

introduces some economic factors into the calculation.

The SHMA concludes that the challenge for the council is to deliver an appropriate and

proportionate level of dwelling growth that supports economic growth and carefully takes into

account the current demographic profile of the district.

Key features of the OAN recommended in the SHMA report are:

• Demographic factors: a baseline of 2,534 is adjusted to 2,765 to take account of higher

rates of household formation amongst the 25-44 age group;

• A market signals uplift of 15% of the basic demographic requirement (380 dwellings each

year) is also recommended, which also takes into account underlying affordable housing

need as evidenced in the 2017 SHMA household survey;

• After considering several employment growth scenarios it is recommended that the OAN is

expressed as a range and that the total dwelling need is between 44,240 and 60,528 over

the Plan period 2017-2033.

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The need for all types of housing

Having established the Objectively Assessed Need for housing, the SHMA goes on to consider

the range of need for all types of housing as identified in PPG paragraph 21. The SHMA

considers the needs of different groups, including the private rented sector, people wishing to

build their own homes, family housing, housing for older people, households with specific

needs and student housing.

Dwelling mix and affordability

The NPPF (paragraph 159) states that local authorities should identify the scale and mix of

housing and the range of tenures that the local population is likely to need over the Plan

period.

Table 6.5 below provides our recommendation on the potential dwelling tenure, type and size

split for housing delivery in Leeds. This assumes that 25% of homes delivered are affordable

based on past trends in affordable delivery.

Table ES1 Suggested dwelling mix by market and affordable dwellings based on OAN of 3789

each year

Overall dwelling size mix

Market

Affordable

Total

Overall tenure split

75%

25%

100%

House 1-2 Bed

613

243

856

House 3+ Bed

996

116

1,112

House 4+ Bed

491

549

Bungalow

167

250

Flat/Apartment

539

446

985

Other

Total

2,843

946

3,789

Source: arc4

People wishing to build their own homes

The 2017 Household Survey identified 812 households planning to move in the next five years

who would like to move into a self/custom-build property. The Household Survey identified

the characteristics of households considering self/custom-build:

• 43.7% lived in affordable housing, 43.0% in private rented housing and only 13.2% were

owner occupiers;

• 43.7% were couples with one or two children, 35.8% were singles under 65, 18.2% were

couples under 65 (no children) and 2.2% were couples over 65;

• 33.6% had an income of less than £15,600 per annum and 50.0% had an income of more

than £49,400 per year; and

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• 43.0% would like a two-bedroom property and 52.5% would like a property with four or

more bedrooms;

• All households considering self/custom build stated an open market tenure preference, but

additionally one third stated a preference for intermediate tenures and one-third stated a

preference for affordable renting. Therefore, self/custom build could have a role in

delivering affordable housing.

The level of demand for self/custom build should be monitored closely by the Council.

Family housing

Families (that is couples and lone parents with children including adult children living at home)

account for around 30.5% of households across Leeds. Of this number, 70.8% are couples with

children and 29.2% are lone parents with children (2017 Household Survey data).

Overall 73.8% of families live in owner-occupied dwellings, 15.5% live in the private rented

sector and 10.7% live in affordable dwellings. 24.3% of all families live in the North Leeds sub-

area.

The evidence shows that lone parent families are more likely to live in unsuitable housing or

experience homelessness especially if they reside in the private rented sector.

Armed forces accommodation

The 2011 Census identified that 691 residents in Leeds City are employed in the Armed Forces.

Of these, 95.2% lived in a household and 4.8% live in a communal establishment.

More recent records identify 80 Ministry of Defence personnel living within Leeds, which

represents 0.6% of the total for the region of Yorkshire and the Humber (12,320).

Older people

A major strategic challenge is to ensure a range of appropriate housing provision, adaptation

and support for the area’s older population. PPG paragraph 21 states that ‘the need to provide

housing for older people is critical given the projected increase in the number of households

aged 65 and over accounts for over half of new households’.

The number of people across Leeds City area aged 65 or over is projected to increase from

121,700 in 2017 to 158,500 by 2033 (a 30.2% increase) according to the ONS 2014-based

population projections.

The 2017 Household Survey identifies the following key findings:

• 23.6% of households across Leeds are either singles or couples aged 65 years or over;

• 54.4% live in owner-occupied properties, 8.4% live in the private rented sector and 37.2%

live in affordable accommodation;

• 21.6% of all older households live in the North Leeds sub-area, 19.7% in Inner Area and

15.9% in Outer West;

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• 77.3% want to stay in their own homes with help and support when needed;

• 14.3% would consider buying a property on the open market;

• Sheltered accommodation and Extra Care housing are identified as further options;

• Around 11.0% of older households would consider co-housing; and

• 43.8% of households are planning to downsize.

Of all older person households (HRP aged 65+), 3.4% intend to move in the next five years and

a further 11.5% stated that they would like to move but are unable to. Of households who are

unable to move, reasons stated included cannot afford to (32.1%), lack of suitable property in

the area wanted (21.8%) and lack of suitable property of the type wanted (14.2%).

A key feature of the survey is to understand the aspirations and expectations of older people:

• 54.5% would like to move to a bungalow, and 53.4% expect to;

• 23.1% would like move into a flat and 15.7% expect to;

• 62.1% would like a one or two-bedroom property and 72.8% expect to.

Information from Housing Learning and Information Network (LIN) estimates that over the

period 2014 to 2035, there is expected to be a 75% increase in the requirement for older

persons’ specialist provision. However, when the current (2014) supply of accommodation is

compared with change in demand to 2035, data would suggest a need to increase the current

level of provision for older people, particularly the provision of enhanced sheltered housing

and Extra Care 24/7 support.

The Household Survey asked respondents whether they need adaptations to their home,

either now or in the next five years. In respect of the 65+ cohort, the adaptations considered

most important included adaptations to bathrooms (16.0%), internal handrails (11.6%) and

better heating (9.7%).

This evidence suggests a need to continue to diversify the range of older persons’ housing

provision. Additionally, providing a wider range of older persons’ accommodation has the

potential to free-up larger family accommodation.

Households with specific needs

The evidence shows that single homeless people with support needs (an average of 1,036 per

year) and older people with support needs (an average of 550 per year) are the main groups

provided for.

The need for accessible dwellings has been explored and it is recommended that the Council

seeks, as a minimum, 17.5% of new dwellings to be accessible dwellings and, in addition, a

minimum of 5% to be wheelchair accessible.

Black, Asian and Minority Ethnic households

The 2011 Census reports that 91.0% of residents are White British and the next largest ethnic

group is White Other (including Irish and Gypsies and Travellers) (4.7%), Asian/Asian British

(1.8%), Black/Black British (0.7%) Mixed/Multiple Ethnic (1.5%), and other groups (0.2%).

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The 2017 Household Survey identified that 89.7% of households are White British, 2.5% White

Other, 2.3% Asian/Asian British, 1.7% White Central and Eastern European, 1.3% Black/Black

British, 1.2% Mixed/Multiple Ethnic and 1.3% other groups.

The 2011 Census identified 652 residents across 257 households who stated that they had

Gypsy or Irish Traveller ethnicity. 43 of these households lived in a caravan or other

mobile/temporary structure with the remainder in bricks and mortar (house, bungalow, flat or

maisonette).

The January 2017 DCLG Caravan Count identified a total of 122 Gypsy and Traveller caravans,

84 on local authority-owned sites and 38 on unauthorised sites. No Travelling Showpeople

caravans were identified.

A Gypsy and Traveller Accommodation Assessment was carried out in 2014 which identified a

current authorised residential provision of 48 pitches (41 on local authority sites and 7 on

private sites). A total need for 62 pitches up to 2027/28 was identified.

Conclusion

The evidence presented in this SHMA suggests that there are three main policy areas that

require special attention from both a planning policy and social policy perspective:

• The challenge of enabling the quantity and mix of housing that needs to be delivered;

• The challenge of ensuring that the housing and support needs of older people are met

going forward;

• The challenge of driving up the quality of the private rented sector and increasing the

sustainability of tenancies.

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1. Introduction

Background and objectives

This Strategic Housing Market Assessment (SHMA) for Leeds City Council (the Council)

has been commissioned to provide an up-to-date evidence base to help shape the

future planning and housing policies and strategies for the area.

The SHMA satisfies the requirements of the National Planning Policy Framework (NPPF,

March 2012) and National Planning Practice Guidance (NPPG), Housing and economic

development needs assessments (last updated February 2016), which replace previous

guidance including the DCLG Strategic Housing Market Assessment Guidance (Version

2, 2007).

The SHMA includes a review of the Housing Market Area definition, Objectively

Assessed Housing Need, Housing Market Signals and Duty to Co-operate matters. The

SHMA takes into account latest legislative requirements and updated population and

employment data.

National Planning Policy Framework (NPPF), Planning Practice

Guidance (PPG) and other requirements

The NPPF and PPG, Housing and economic development needs assessments, provide the

planning policy context for this SHMA. The key sections which need to be taken into

account in the SHMA are now summarised.

The NPPF (paragraph 159) states that Local Planning Authorities should have a clear

understanding of housing needs in their area and they should prepare a Strategic

Housing Market Assessment to assess their full housing needs, working with

neighbouring authorities where housing market areas cross administrative boundaries.

The SHMA should identify the scale and mix of housing and the range of tenures that

the local population is likely to need over the Plan period that:

• Meets household and population projections, taking account of migration and

demographic change;

• Addresses the need for all types of housing, including affordable housing and the

needs of different groups in the community (such as, but not limited to families

with children, older people, people with disabilities, service families and people

wishing to build their own homes); and

• Caters for housing demand and the scale of housing supply necessary to meet this

demand.

PPG (paragraph 2) sets out that ‘the primary objective of identifying need is to identify

the future quantity of housing needed, including a breakdown by type, tenure, and size.’

PPG (paragraph 8) states that housing needs should be assessed in relation to the

relevant functional area i.e. Housing Market Area and this may identify smaller sub-

markets with specific features and it may be appropriate to investigate these

specifically in order to create a detailed picture of local need. It is also important to

Leeds SHMA 2017 Page | 17

September 2017

recognise that there are 'market segments' i.e. not all housing types have the same

appeal to different occupants.

The NPPF (paragraph 47) makes it clear that local planning authorities should ‘use their

evidence base to ensure that their Local Plan meets the full objectively assessed needs

for market and affordable housing’. The SHMA Update 2017 will provide robust

evidence to help the Council ‘plan for a mix of housing based on current and future

demographic trends, market trends and the needs of different groups in the community’

and will ‘identify the size, type tenure and range of housing that is required in particular

locations, reflecting local demand’ (NPPF paragraph 50).

The NPPF and the Localism Act 2011 both introduced the Duty to Co-operate as a

replacement for Regional Spatial Strategy (RSS). Section 110 of the Localism Act

requires local authorities to co-operate with other local authorities in maximising the

effectiveness with which strategic matters within development plan documents are

prepared. The provision of housing development is a strategic priority and the Council

will have to ensure that they are legally compliant with the Localism Act at Examination.

The Duty to Co-operate applies to all local planning authorities, working with

neighbouring authorities and other bodies, including Local Enterprise Partnerships, on

strategic priorities. It also means collaborating on the evidence critical to understanding

the needs of your area, and the wider economic and Housing Market Areas, including

through the preparation of a Strategic Housing Market Assessment.

Technical Appendix E provides a checklist of how the SHMA satisfies the requirements

of the NPPF and PPG.

Definitions

PPG (paragraph 3) provides a broad definition of need for housing:

‘…the scale and mix of housing and the range of tenures that is likely to be needed in the

housing market area over the Plan period – and should cater for the housing demand of

the area and identify the scale of housing supply necessary to meet that demand.’

Affordable housing need is defined in PPG (paragraph 22) as:

‘…the number of households and projected households who lack their own housing or

live in unsuitable housing and who cannot afford to meet their housing needs in the

market.’

For the purposes of this study, the term housing need refers to:

‘…the housing that households are willing and able to buy or rent, either from their own

resources or with assistance from the state’

Definitions relating to affordable housing are set out in the National Planning Policy

Framework (March 2012):

Planning Advisory Service Objectively Assessed Need and Housing Targets Technical Advice Note June 2014

Leeds SHMA 2017 Page | 18

September 2017

• Affordable Housing: Social Rented, Affordable Rented and Intermediate housing,

provided to eligible households whose needs are not met by the market. Eligibility is

determined with regard to local incomes and local house prices. Affordable housing

should include provisions to remain at an affordable price for future eligible

households or for the subsidy to be recycled for alternative affordable housing

provision.

• Social Rented housing is owned by local authorities and private Registered

Providers (as defined in Section 80 of the Housing and Regeneration Act 2008), for

which guideline target rents are determined through the national rent regime. It

may also be owned by other persons and provided under equivalent rental

arrangements to the above, as agreed with the local authority or with the Homes

and Communities Agency.

• Affordable Rented housing is let by local authorities or private Registered Providers

of social housing to households who are eligible for Social Rented housing.

Affordable rent is subject to rent controls that require a rent of no more than 80%

of the local market rent (including service charges, where applicable).

• Intermediate housing is homes for sale and rent provided at a cost above Social

rent, but below market levels subject to the criteria in the Affordable housing

definition above. These can include shared equity (shared ownership and equity

loans), other low cost homes for sale and Intermediate rent, but not Affordable

Rented housing.

• Homes that do not meet the above definition of affordable housing, such as “low

cost market” housing, may not be considered as affordable housing for planning.

These definitions of affordable housing are correct at the time of publication of this

report (mid-2017), although revisions to the NPPF are anticipated. Additionally, councils

are required to provide Starter Homes under the provisions of the Housing and

Planning Act 2016

. The Government has outlined the key characteristics of Starter

Homes

and the Housing and Planning Act 2016 officially introduced Starter Homes into

legislation, defined in Section 2 of the Act as:

• new dwellings available for purchase by ‘qualifying first-time buyers’ only; these are

defined as people who don’t already own a home and who are aged 23-40; and

• to be sold at a discount of at least 20% of their market value, and always for less

than the price cap (currently set to £450,000 in Greater London; £250,000 outside

London).

Many of the details relating to Starter Homes are to be specified in forthcoming

regulations (secondary legislation), which is still awaited following consultation in

2016

The Government consulted on proposals to change the NPPF (December 2015) including the definitions of affordable housing

National Planning Practice Guidance, paragraph 002, Reference ID 55-002-20150318

DCLG Starter Homes Regulations: Technical Consultation was published in March 2016

Leeds SHMA 2017 Page | 19

September 2017

Geography

Map 1.1 illustrates the geographical context of Leeds City, located within the County of

West Yorkshire and in the region of Yorkshire and the Humber. Located at the

intersection of the M1 and M62 motorways, Leeds is on the east coast mainline railway,

two hours from London Kings Cross.

Map 1.1 Leeds location and geographical context

Leeds strategic context

Following the abolition of regional planning bodies and their associated strategies and

targets, the last few years have seen ‘Local Enterprise Partnerships’ (LEPs) established

across England to help empower locally-driven economic growth at a strategic level. In

addition, ‘Combined Authorities’ (CA) have been established in several urban areas to

assist in strategic collaboration. In some cases, this has included devolution and the

election of regional mayors.

The Leeds City Region Enterprise Partnership (LEP) is a partnership between local

authorities and businesses whose aim is to “unlock the Leeds City Region’s vast

Leeds SHMA 2017 Page | 20

September 2017

economic potential by enabling businesses and enterprise to thrive”

. The Leeds City

Region is made up of ten local authority areas with Leeds City at the heart. This is

shown in Map 1.2.

The West Yorkshire Combined Authority (WYCA) is made up of the five metropolitan

districts of Leeds, Bradford, Calderdale, Kirklees and Wakefield.

The WYCA and the LEP are supported by an officer organisation that undertakes the

Boards’ policies and actions. The bodies have a joint vision for economic growth in the

Leeds City Region. As part of their strategic function, the WYCA and LEP have been

involved with a range of housing research, which forms the evidence base for housing

policy decisions at the strategic level. Relevant aspects of this strategic research will be

referenced in this SHMA for Leeds City.

Map 1.2 Leeds City Region and local authority context

http://www.the-lep.com/

Leeds SHMA 2017 Page | 21

September 2017

Data analysis and presentation

Data has been presented for the following 11 sub-areas within Leeds City, as illustrated

by Map 1.3:

• Aireborough,

• City Centre,

• East Leeds,

• Inner Area,

• North Leeds,

• Outer North East,

• Outer North West,

• Outer South,

• Outer South East,

• Outer South West, and

• Outer West.

Map 1.3 Leeds sub-areas

Leeds SHMA 2017 Page | 22

September 2017

Research methodology

Regarding the overall methodological approach to assessing housing need, PPG

(paragraph 5) states that, ‘there is no one methodology approach or use of a particular

dataset(s) that will provide a definitive assessment of development need. But the use of

this standard methodology set out in this guidance is strongly recommended because it

will ensure that the assessment findings are transparently prepared. Local planning

authorities may consider departing from the methodology, but they should explain why

their particular local circumstances have led them to adopt a different approach where

this is the case. The assessment should be thorough but proportionate, building where

possible on existing information sources outlined within the guidance’.

PPG (paragraph 14) comments that, ‘establishing future need for housing is not an exact

science. No single approach will provide a definitive answer. Plan makers should avoid

expending significant resources on primary research (information that is collected

through surveys, focus groups or interviews etc. and analysed to produce a new set of

findings) as this will in many cases be a disproportionate way of establishing an

evidence base. They should instead look to rely predominantly on secondary data (e.g.

Census, national surveys) to inform their assessment which are identified within the

guidance.’

To deliver the SHMA 2017, a multi-method approach has been adopted, comprising:

• A review of primary data obtained through a survey of 333,207 households across

the Leeds City Council area. The 2017 Household Survey involved a total of 27,867

households contacted and 5,383 questionnaires returned, representing a 19.3%

response rate overall. The number of questionnaires returned was well in excess of

the 1,500 specified in former Government guidance;

• A consideration of the findings of a stakeholder consultation and interviews with

estate and lettings agents;

• A review of relevant secondary data including the 2011 Census, house price data,

private rental data, Housing Association CORE lettings data, CLG Statistics and

Housing Register information;

• A consideration of research by Edge Analytics regarding Objectively Assessed

Housing Need (OAN); and

• Analysis of housing need and affordable housing requirements.

Further details of the research methodology are set out in Technical Appendix A.

Report structure

The Leeds SHMA 2017 report is structured as follows:

• Chapter 2 considers the definition of the Housing Market Area for Leeds;

• Chapter 3 provides a review of the current housing market;

• Chapter 4 looks at housing market signals;

• Chapter 5 considers the Objectively Assessed Housing Need;

Leeds SHMA 2017 Page | 23

September 2017

• Chapter 6 looks at the need for all types of housing and includes an analysis of

overall type/size mix, affordable housing need, overall tenure mix and the needs of

different groups; and

• Chapter 7 concludes the report with a summary of findings and a consideration of

strategic and policy issues.

The report includes technical appendices, which provide detailed material that

underpins the core outputs of the SHMA. The technical appendix material includes:

• Research methodology (Appendix A);

• Housing policy review (Appendix B);

• Affordable housing need calculations (Appendix C);

• Monitoring and updating (Appendix D); and

• Conformity to NPPF and PPG checklist (Appendix E).

Leeds SHMA 2017 Page | 24

September 2017

2. Defining the Housing Market Area

Introduction

PPG (paragraph 8) states that, ‘[housing] needs should be assessed in relation to the

relevant functional area i.e. Housing Market Area… Establishing the assessment area

may identify smaller sub-markets with specific features and it may be appropriate to

investigate these specifically in order to create a detailed picture of local need. It is also

important to recognise that there are 'market segments' i.e. not all housing types have

the same appeal to different occupants.’

PPG (paragraph 10) defines a Housing Market Area as, “a geographical area defined by

household demand and preferences for all types of housing, reflecting the key functional

linkages between places where people live and work. It might be the case that housing

market areas overlap”.

PPG (paragraph 11) suggests that Housing Market Areas can be broadly defined by

using three different sources of information as follows:

• House prices and rates of change in house prices;

• Household migration and search patterns; and

• Contextual data (for example travel to work area boundaries, retail and school

catchment areas).

In relation to migration and search patterns (the second bullet point, above), PPG

(paragraph 11) further comments that, “migration flows and housing search patterns

reflect preferences and the trade-offs made when choosing housing with different

characteristics. Analysis of migration flow patterns can help to identify these

relationships and the extent to which people move house within an area. The findings

can identify the areas within which a relatively high proportion of household moves

(typically 70 per cent) are contained. This excludes long distance moves (e.g. those due

to a change of lifestyle or retirement), reflecting the fact that most people move

relatively short distances due to connections to families, friends, jobs, and schools”.

In line with PPG, this SHMA reviews relevant data to establish the extent of the Leeds

Housing Market Area. Firstly, this chapter considers existing analysis on Housing Market

Areas, and then analyses house price, migration and commuting data.

Leeds strategic context

The Leeds City Region Housing Market Areas Study (July 2016) was undertaken for the

LEP and WYCA by the Centre for Urban and Regional Development Studies (CURDS) at

Newcastle University, in conjunction with Nathaniel Lichfield and Partners (NLP).

The core task for the study was to undertake new analyses defining housing market

areas (HMAs) with data from the 2011 Census, updating the National Housing and

Planning Advisory Unit (NHPAU) HMA definitions that CURDS had previously produced

using 2001 Census data.

Leeds SHMA 2017 Page | 25

September 2017

The study found that two Strategic HMAs cover West Yorkshire. Compared with the

previous NPHAU research:

• the Bradford Strategic HMA is now smaller;

• the Leeds Strategic HMA includes all of Calderdale, Kirklees and part of Wharfedale;

• the Leeds Strategic HMA has ‘lost’ the majority of Barnsley local authority area;

• the Leeds Strategic HMA has ‘gained’ Tadcaster and the northern part of Harrogate

local authority area to encompass Ripon.

The study found that there are only three Local HMAs within West Yorkshire and

findings relating to the Leeds Local HMA include:

• The previous NHPAU Leeds Local HMA north-south split is not replicated in the new

analysis;

• The Local Leeds HMA ‘gained’ parts of North Kirklees and Wharfedale from

Bradford;

• Leeds northern boundary with Harrogate is less permeable and Wetherby’s

allocation is volatile;

• Leeds:Bradford is a mostly impermeable boundary, but has ‘weakened’ in the

Wharfedale part of Bradford local authority area;

• Leeds:Wakefield is a mostly impermeable boundary, apart from in relation to the

wider strategic reach of Leeds.

House prices and rates of change in house prices

PPG (paragraph 11) states that,

‘Housing market areas can be identified by assessing patterns in the relationship

between housing demand and supply across different locations. This analysis uses house

prices to provide a ‘market-based’ reflection of housing market area boundaries. It

enables the identification of areas which have clearly different price levels compared to

surrounding areas. The findings provide information about differences across the area in

terms of the price people pay for similar housing, market ‘hotspots’, low demand areas

and volatility.’

Figure 2.1 shows how the median house price over the period 2000 to 2016 has

changed in Leeds, the region (Yorkshire and the Humber) and England.

Since 2000, the median house price in Leeds has increased 148.4% from £64,000 to

£159,000. The median price in Leeds has tracked below the national median, but has

been consistently higher than the regional median. As with England as a whole, the

fastest rate of median house price growth was experienced between 2000 (£64,000)

and 2007 (£146,428), followed by a period of fluctuation between 2008 and 2011.

House prices have risen since 2011, from £140,000 (2011) to £159,000 (2016).

Leeds SHMA 2017 Page | 26

September 2017

Figure 2.1 Median house price trends 2005 to 2016: Leeds, North Yorkshire and England

The lower quartile house price in Leeds has increased from £44,500 in 2000 to £110,000

during 2016, an increase of 147.2%.

The distribution of house prices (2016) across the City of Leeds is illustrated by Map 2.3

and Table 2.1. Map 2.3 shows median house prices by sub-area and indicates relatively

lower prices in the Inner Area and higher prices in Outer North East, Outer North West

and North Leeds. Table 2.1 sets out lower quartile, median and upper quartile house

prices by sub-area and reflects this spatial pattern.

50,000

100,000

150,000

200,000

250,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Median House Price (£)

Yorkshire and Humber

England

Leeds

Leeds SHMA 2017 Page | 27

September 2017

Map 2.3 Median house prices 2015 by sub-area

Table 2.1 House prices in Leeds 2016 by sub-area

Sub-Area

Price (£)

Lower Quartile (25%)

Median (£)

Upper Quartile (£)

Aireborough

158,000

198,000

279,000

City Centre

103,000

135,750

179,000

East Leeds

125,000

160,000

210,000

Inner Area

73,000

96,000

135,000

North Leeds

152,375

211,250

287,350

Outer North East

207,000

298,250

434,525

Outer North West

170,100

242,250

334,998

Outer South

129,000

160,000

228,500

Outer South East

127,000

160,000

189,995

Outer South West

98,000

134,000

180,000

Outer West

104,000

135,000

175,000

Leeds Total

112,500

159,000

230,000

Leeds SHMA 2017 Page | 28

September 2017

Table 2.2 considers how Leeds median prices and change over the period 2000-2016

compare with neighbouring areas, the region and England. This analysis demonstrates

that the median price increase in Leeds has been lower than most neighbouring local

authority areas and the Yorkshire and the Humber region. However, percentage change

has been greater than that for England as a whole.

Table 2.2 House prices and price change in neighbouring areas, Yorkshire and the Humber

and England

Location

Year

% change 2000-2016

2000

2016

York

£75,500

£215,000

184.8

Harrogate

£90,500

£255,000

181.8

Craven

£69,950

£189,475

170.9

Calderdale

£48,000

£130,000

170.8

Selby

£65,000

£175,000

169.2

Yorkshire and Humber

£56,000

£145,000

158.9

Kirklees

£53,000

£135,000

154.7

Bradford

£49,500

£125,000

152.5

Barnsley

£44,000

£110,000

150.0

Leeds

£64,000

£159,000

148.4

England

£82,000

£202,000

146.3

Wakefield

£53,500

£131,500

145.8

Migration and self-containment

In relation to migration, PPG (paragraph 11) states:

‘Migration flows and housing search patterns reflect preferences and the trade-offs

made when choosing housing with different characteristics. Analysis of migration flow

patterns can help to identify these relationships and the extent to which people move

house within an area. The findings can identify the areas within which a relatively high

proportion of household moves (typically 70 per cent) are contained. This excludes long

distance moves (e.g. those due to a change of lifestyle or retirement), reflecting the fact

that most people move relatively short distances due to connections to families, friends,

jobs, and schools.’

That said, previous CLG guidance recognised that ‘rural areas typically have less locally

self-contained migration patterns, reflecting the influence of long-distance movers who

are opting for lifestyle change or retirement.’

Data reported in the 2011 Census provides evidence from which the degree of self-

containment of Leeds can be derived. PAS guidance recommends that migration data

are tested against the PPG criterion for self-containment, that at least 70% of all

DC Advice Note: Identifying sub-regional housing market areas 2007

Leeds SHMA 2017 Page | 29

September 2017

migration excluding long-distance migration should be contained within the HMA. A

suitable test are two migration containment ratios:

• Supply side (origin): moves within the area divided by all moves whose origin is in

the area, excluding long-distance moves; and

• Demand side (destination): moves within the area divided by all moves whose

destination is in the area, excluding long-distance migration.

Table 2.3 presents the relevant migration data for Leeds. This illustrates that 69.2% of

all residents moving in the year preceding the Census originated from within Leeds. Of

the total 108,802 moving residents, 69.2% originated in Leeds, 2.6% from Bradford,

1.5% from Wakefield, 1.4% from Kirklees, 5.8% from elsewhere in Yorkshire and the

Humber, 5.0% from the North West and 14.6% from elsewhere in the UK. Excluding

long-distance moves and only analysing the 87,542 movements from within Yorkshire

and the Humber, 85.9% originated within Leeds, 3.2% from Bradford, 1.9% from

Wakefield, 1.7% from Kirklees and 7.1% from elsewhere in the region.

Table 2.4 summarises the containment ratios that apply to the origin and destination of

moving residents. In line with PPG guidance, this excludes long-distance migration

(which in this case is taken as moves from outside Yorkshire and the Humber). Based on

these criteria, the origin containment ratio is 85.95% and the destination is 85.92%. This

indicates a high level of self-containment in terms of population migration.

Table 2.3 Flows of residents (all moves)

Origin/

Destination

Supply Side (Origin)

Demand Side (Destination)

All Moves

Excluding

Long

Distance

Moves

All Moves

Excluding

Long

Distance

Moves

Number

Leeds

75,242

69.2

85.9

75,242

71.8

85.9

Bradford

2,831

2.6

3.2

2,563

2.4

2.9

Wakefield

1,672

1.5

1.9

1,773

1.7

2.0

Kirklees

1,522

1.4

1.7

1,825

1.7

2.1

Harrogate

823

0.8

0.9

1,097

1.0

1.3

Sheffield

809

0.7

0.9

761

0.7

0.9

East Riding of Yorkshire

664

0.6

0.8

609

0.6

0.7

York

653

0.6

0.7

727

0.7

0.8

Elsewhere Y&H

3,326

3.1

3.8

2,976

2.8

3.4

North West

5,388

5.0

3,739

3.6

London

2,570

2.4

3,669

3.5

East Midlands

2,605

2.4

1,731

1.7

Elsewhere UK

10,697

9.8

8,066

7.7

Total

108,802

100.0

104,778

100.0

Base (excluding long-distance moves)

87,542

87,573

Source: 2011 Census

Leeds SHMA 2017 Page | 30

September 2017

Table 2.4 Containment ratios

Origin

Moves within the area

All moves originating in the

area

Containment

Ratio

75,242 87,542 85.95%

Destination

Moves within the area

All moves whose

destination is in the area

Containment

Ratio

75,242 87,573 85.92%

Source: 2011 Census

Commuting patterns

The 2011 Census provides an analysis of travel to work patterns and the extent to which

residents in Leeds travel to other areas, together with details of how many people

commute into the City area. Table 2.5 presents this data and indicates that 83.1% of

people who live in Leeds work in the City; by comparison, 68.9% of workers in Leeds live

in the City. This indicates a clear net inward movement of workers and illustrates the

strength of Leeds as an economic centre within the region.

Table 2.5 Leeds 2011 Census commuting flows: workers (aged 16-74 years)

Where do people who live in Leeds work?

Live

Work

Number

Leeds

266,323

83.1

Bradford

16,957

5.3

Wakefield

12,682

4.0

Kirklees

6,950

2.2

Other

17,565

5.4

Workers

320,477

100.0

Where to people who work in Leeds live?

Live

Work

Number

Leeds

236,326

68.9

Bradford

27,508

8.0

Wakefield

21,568

6.3

Kirklees

19,725

5.7

Other

38,147

11.1

Jobs

343,274

100.0

Source 2011 Census

In terms of defining market areas, PPG does not suggest an appropriate self-

containment figure. However, the ONS provides a definition of Travel to Work areas as

follows:

‘The current criterion for defining TTWs is that generally at least 75% of an area’s

resident workforce in the area and at least 75% of the people who work in the area also

Leeds SHMA 2017 Page | 31

September 2017

live in the area…however, for areas with a working population in excess of 25,000, self-

containment rates as low as 66.7% are accepted’

On this basis, it is concluded that Leeds can be considered to be highly self-contained in

terms of the travel-to-work patterns of its own resident working population; however,

it has a wider economic function within the City Region which draws a significant

number of commuters into the City administrative area.

Concluding comments

The purpose of this chapter has been to consider the general housing market context of

Leeds and its inter-relationships with other areas. This reflects the requirements of PPG

(paragraph 11). By reviewing house prices, migration and travel to work patterns, the

extent to which Leeds is a self-contained Housing Market Area can be determined. PPG

establishes that areas within which a relatively high proportion of household moves

(typically 70%) are contained can be defined as a self-contained Housing Market Area.

Leeds’s Housing Market Area exhibits a degree of distinctiveness compared with

neighbouring areas as measured by median price change 2000-2016 at a lower rate

than most neighbouring local authority areas and the Yorkshire and the Humber region

as a whole. Percentage growth has been slightly greater than that for England as a

whole.

Regarding migration, analysis of the 2011 Census data identifies containment ratios of

85.95% (origin) and 85.92% (destination). From a migration perspective, Leeds is

therefore considered to be self-contained.

Regarding travel to work, 83.1% of employees living in Leeds also work Leeds, indicating

low levels of out-commuting to work elsewhere. However, there is a higher amount of

in-commuting, with 68.9% of Leeds’ workforce living in the City administrative area,

while 8.0% travel in from Bradford, 6.3% from Wakefield and 5.7% from Kirklees. From

a travel-to-work perspective it is therefore concluded that Leeds is self-contained in

terms of its own working population but has a significant economic function that also

draws commuters from the wider City Region.

Interactions with several neighbouring areas are recognised, as also highlighted in the

Leeds City Region research that has been undertaken at the strategic level to update

the NHPAU research (using 2011 Census information). This research particularly

identifies relationships with the northern part of Kirklees and with the Wharfedale part

of Bradford. These local authorities recognise that they operate as a wider functional

area from an economic perspective, but they do not consider Leeds as part of their

respective Housing Market Areas for the purposes of local planning policy.

In conclusion, although there are interactions with other areas, Leeds should be

recognised as an appropriate Housing Market Area for the purposes of local planning

policy.

https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/articles/commutingtoworkchangestot

raveltoworkareas/2001to2011

Leeds SHMA 2017 Page | 32

September 2017

3. Leeds housing market review

Introduction

The purpose of this chapter is to explore the housing market dynamics of Leeds. This

includes a review of the current stock profile along with an analysis of the tenure

characteristics. It also considers the key housing market drivers, a consideration of

housing need and the affordability of different tenure options.

Property profile

This study assumes a total of 337,302 households

and 347,787 dwellings in Leeds City.

With 8,578 vacant homes (of which 2,681 are long term vacant) and 2,038 are second

homes

. The overall vacancy rate is around 2.5%, this compares with a vacancy rate of

2.6% across England

. Data by sub-area is set out in Table 3.1.

Table 3.1 Dwelling stock and occupancy by sub-area

Sub-area

Total Dwellings

Second Homes

Total Vacant

(empty/

unoccupied)

Vacant %

Aireborough

15,495

382

4.5

City Centre

11,676

288

3.4

East Leeds

19,956

117

492

5.7

Inner Area

75,264

441

1,856

21.6

North Leeds

74,155

435

1,829

21.3

Outer North East

17,725

104

437

5.1

Outer North West

9,671

239

2.8

Outer South

12,914

319

3.7

Outer South East

16,700

412

4.8

Outer South West

43,456

255

1,072

12.5

Outer West

50,775

298

1,252

14.6

Leeds Total

347,787

2,038

8,578

2.5

Source: 2017 household survey data and 2015/2016 Council Tax data

Property size and type

Table 3.2 reviews the profile of occupied dwelling stock by size and type across Leeds.

Overall, the vast majority (70.4%) of properties are houses, 22.6% are flats/apartments

and maisonettes, 6.4% are bungalows, and 0.6% are other types of property including

park homes/caravans. Of all occupied properties, 14.9% have one bedroom/bedsit,

Household survey 2017

Council Tax 2015/2016

2015 CLG Dwelling and Vacancy data

Leeds SHMA 2017 Page | 33

September 2017

28.6% have two bedrooms, 38.2% have three bedrooms and 18.3% have four or more

bedrooms.

Table 3.2 Property type and size of occupied dwellings across Leeds

Property Type

No. Bedrooms (Table %)

Total

Base

(Valid

response)

One/

Bedsit

Two

Three

Four

Five or

Detached house

0.8

2.8

13.6

44.6

48.0

14.4

47,567

Semi-detached

house/

Town house

0.3 23.2 55.8 32.5 19.2 33.4 110,496

Terraced house

9.2

29.2

23.2

19.5

30.9

22.6

74,556

Bungalow

8.4

11.2

4.2

2.1

1.2

6.4

21,243

Maisonette

1.0

0.2

0.6

0.0

0.5

1,709

Flat / Apartment

79.5

32.1

2.2

1.1

0.8

22.1

72,964

Caravan/ Park

Home

0.1 0.3 0.0 0.0 0.0 0.1 321

Other

0.7

0.6

0.4

0.1

0.0

0.5

1,545

Total

14.9

28.6

38.2

14.6

3.7

100.0

330,401

Base (Valid

response)

49,298 94,518 126,117 48,147 12,321 330,401

Source: 2017 Household Survey and excludes missing data

How property type varies by sub-area is illustrated in Figure 3.1 and variations in

number of bedrooms by sub-area in Figure 3.2. Notable sub-area variations in type of

property include the relatively higher proportion of detached properties in the Outer

North East (43.7%); higher proportions of semi-detached houses in North Leeds

(44.3%), East Leeds (43.3%) and Outer South (43.1%); higher proportions of terraced

housing in the Outer West (32.2%); and higher proportions of flats/apartments in the

City Centre (95.9%). In terms of dwelling size, there is a high proportion of small

properties with one bedroom/bedsit in the City Centre (52.2%) and a relative high

proportion of larger properties with four or more bedrooms in the Outer North East

(37.6%) and the Outer North West (32.0%).

Leeds SHMA 2017 Page | 34

September 2017

Figure 3.1 Property type by sub-area

Source: 2017 Household Survey

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aireborough City Centre East Leeds Inner Area North Leeds Outer North

East

Outer North

West

Outer South Outer South

East

Outer South

West

Outer West Total

Detached house

Semi-detached house

Terraced house/town

house

Bungalow

Maisonette

Flat/apartment

Caravan/Park Home

Other

Leeds SHMA 2017 Page | 35

September 2017

Figure 3.2 Property size by sub-area

Source: 2017 Household Survey

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aireborough City Centre East Leeds Inner Area North Leeds Outer North

East

Outer North

West

Outer South Outer South

East

Outer South

West

Outer West Total

One/bedsit

Two

Three

Four

Five or more

Leeds SHMA 2017 Page | 36

September 2017

Property age and condition

The age profile of dwelling stock in Leeds is summarised in Table 3.3. The majority of

the City’s dwellings (60.2%) were built in the period before 1965.

Table 3.3 Age of dwelling

Age of Dwellings

Number

pre-1919

63840

18.7%

1919-44

70740

20.7%

1945-64

71000

20.8%

1965-82

63820

18.7%

1983-99

32900

9.6%

post 1999

39100

11.5%

Total

341400

100.0%

Unknown

5080

Grand Total

346,480

Source: Valuation Office Agency 2016

The English Housing Survey (EHS) produces national data on dwelling condition.

Applying national trends to the stock profile of Leeds would suggest that around 21.1%

of dwelling stock is non-decent, which is similar to the national average of 20.6%. The

number of dwellings likely to fail the minimum standard of decent homes criteria is

estimated to be 12.0% (compared with 11.9% nationally).

A full definition of what constitutes a decent home is available from CLG

but in

summary a decent home meets the following four criteria:

a. It meets the current statutory minimum for housing;

b. It is in a reasonable state of repair;

c. It has reasonably modern facilities and services; and

d. It provides a reasonable degree of thermal comfort.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/7812/138355.pdf

Leeds SHMA 2017 Page | 37

September 2017

Table 3.4 Dwelling stock condition in England and Leeds estimates

England

Fails decent homes criteria

All dwellings

in group (000s)

% dwellings

Dwelling age (EHS)

Dwelling age (VOA)

Non-decent

Minimum

standard

Repair

Modern

facilities and

services

Thermal

comfort

pre-1919

40.1

28.7

11.2

3.9

11.9

4,648

20.0

1919-44

24.1

13.1

7.6

1.7

7.6

3,930

16.9

1945-64

16.6

8.0

3.6

2.0

5.7

4,505

19.4

1965-80

1965-82

17.5

8.8

1.8

1.9

7.6

4,757

20.5

1981-90

1983-99

17.6

4.7

0.9

13.5

1,953

8.4

post 1990

post 1999

1.5

3,460

14.9

Total

20.6

11.9

4.6

1.9

7.5

23,254

100.0

Leeds City

Fails decent homes criteria (estimate)

All dwellings

% dwellings

Dwelling age (EHS)

Dwelling age (VOA)

Non-decent

Minimum

standard

Repair

Modern

facilities

and services

Thermal

comfort

pre-1919

25,614

18,314

7,151

2,461

7,617

63,840

18.7

1919-44

17,015

9,269

5,342

1,213

5,373

70,740

20.7

1945-64

11,813

5,654

2,586

1,385

4,058

71,000

20.8

1965-80

1965-82

11,150

5,596

1,167

1,213

4,834

63,820

18.7

1981-90

1983-99

5,791

1,557

310

4,431

32,900

9.6

post 1990

post 1999

573

39,100

11.5

Total

71,956

40,962

16,246

6,581

26,313

341,400

100.0

% of all stock

21.1

12.0

4.8

1.9

7.7

National % (as above)

20.6

11.9

4.6

1.9

7.5

Source: English Housing Survey (EHS) 2013 data applied to Valuation Office Agency (VOA) 2016 dwelling stock age profile

Note ‘*’ indicates sample size too small for reliable estimate

Leeds SHMA 2017 Page | 38

September 2017

Property tenure

The tenure profile of the Leeds City administrative area is summarised in Figure 3.3.

This is based on the findings of the Household Survey 2017, undertaken to inform this

SHMA. Variations in broad tenure groups by sub-area are summarised in Figure 4.4.

Overall, based on survey evidence, 57.7% of occupied dwellings are owner-occupied,

19.9% are private rented (including tied accommodation and student housing) and

22.5% are affordable. Affordable housing includes dwellings rented from a social

housing provider (Council or housing association) and intermediate tenures (shared

ownership, shared equity, discounted sale, low cost home ownership and Starter

Homes).

Figure 3.3 Leeds tenure profile of occupied dwellings

Source: 2017 Household Survey

The tenure profile varies across Leeds and this is shown by sub-area in Figure 3.4. The

proportion of owner occupied dwellings is highest in the Outer North East (79.7%) and

Outer North West (76.7%); private renting is significantly higher in City Centre (73.3%)

compared with the other sub-areas and affordable accommodation in the Inner Area

(42.0%).

Leeds SHMA 2017 Page | 39

September 2017

Figure 3.4 Leeds tenure profile by sub-area

Source: 2017 Household Survey

73.9%

14.8%

70.7%

30.7%

62.3%

79.7%

76.7%

73.3%

76.3%

65.3%

62.6%

12.5%

73.3%

10.3%

27.3%

20.4%

10.5%

11.3%

10.7%

9.9%

16.1%

15.3%

13.6%

11.9%

19.0%

42.0%

17.3%

9.8%

12.0%

16.0%

13.8%

18.6%

22.0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Aireborough City Centre East Leeds Inner Area North Leeds Outer North

East

Outer North

West

Outer South Outer South

East

Outer South

West

Outer West

Owner occupied

private rented

affordable

Leeds SHMA 2017 Page | 40

September 2017

Tenure characteristics

Owner-occupied sector

57.7% (194,460) of households across Leeds are owner occupiers. 29.9% of all

households (100,978) own outright and 27.7% of all households (93,482) have a

mortgage.

The Household Survey provides the following information on owner occupied stock:

• Most owner-occupied properties are houses, with 42.4% semi-detached, 22.2%

terraced and 21.7% detached; a further 7.5% are bungalows, 5.9% are

flats/apartments and 0.3% other property types;

• 48.5% of properties have three bedrooms, 21.7% have two bedrooms 27.2% have

four or more bedrooms, and 2.6% have one bedroom/bedsit; and

• Around 13.4% of owner-occupied stock was built pre-1919, 43.6% was built

between 1919 and 1964; 22.0% was built between 1965 and 1984 and 21.0% has

been built since 1985.

Over the period 2000 to 2016, lower quartile and median house prices across Leeds

have increased significantly, as summarised in Table 3.5.

It is interesting to note that in 2000, a household income of £11,443 was required for a

lower quartile price to be affordable; by 2016 this had increased to £28,286. In

comparison, an income of £16,457 was required for a median priced property to be

affordable in 2000 compared with £40,886 in 2016.

Table 3.5 Lower Quartile and median price and income required to be affordable

Leeds

House Price (£) Income to be affordable*

2000

2016

2000

2016

Lower Quartile

£44,500

£110,000

£11,443

£28,286

Median

£64,000

£159,000

£16,457

£40,886

*Assuming a 10% deposit and 3.5x income multiple is required for a mortgage

A range of socio-economic and demographic information on residents has been

obtained from the Household Survey. Some interesting observations relating to owner-

occupiers include:

• In terms of household type, around 28.0% of owner occupiers are couples with

children, 27.7% are older (65 or over) singles and couples, 21.1% are couples (under

65 with no children), 14.4% are singles (under 65), 5.2% are lone parents and 3.5%

are other household types;

• The majority of Household Reference People (Heads of Household) living in owner

occupied dwellings are in employment (63.9%) and a further 31.2% are wholly

Leeds SHMA 2017 Page | 41

September 2017

retired from work. The proportion retired is considerably higher for outright owners

(58.7%);

• Incomes amongst owner occupiers tend to be high, with 40.4% receiving at least

£500 each week. That said, incomes amongst outright owners tend to be lower than

for mortgaged owners, with 28.5% receiving less than £300 each week compared

with just 6.0% of mortgaged owners. This reflects the different age profile and

economic status of outright owners;

• In terms of length of residency, 37.6% of owner occupiers have lived in the same

property for 20 years or more (and the figure is 59.8% for outright owners).

Views of estate agents

Views were sought about current market activity from a range of estate and letting

agents working across Leeds to inform the SHMA 2017. Interviews were carried out

with

• Hunters Sales - City Centre

• Hunters Lettings - City Centre

• Linley & Simpson - Inner Area

• Manning Stainton - North Leeds

• Martin & Co – East Leeds

• Whitegates - Outer South West

• Preston Baker - Outer South East

• Kath Wells – Pudsey

• Dale Eddison – Aireborough

• Dacre, Son & Hartley - Outer North West

• Martin & Co - Outer South

The feedback from agents is that housing markets in Leeds have largely recovered from

the 2008 recession with sales showing increased demand over the past 3 years. Leeds

has traditionally been a strong housing market. It is currently seen as offering better

returns on investment than Manchester, for example, and is anecdotally better value

than other surrounding cities e.g. Sheffield and Hull, etc. Leeds - referred to as the

“Gateway to the Dales” - recently had one of its towns (Horsforth) voted in the top 10

places to live in England. The city is growing; it is positioning itself as the finance capital

of the north. Major companies e.g. Asda, The Yorkshire Bank, HSBC, Yorkshire

Television, etc have relocated headquarters or made major investment in the city.

The two main features emerging from interviews with agents are:

• The polarisation of the market between the City Centre and elsewhere in Leeds;

• The general undersupply of homes to buy and rent.

The City Centre’s housing market

The housing market in the city centre is distinctly different than in other parts of Leeds.

For one thing, the market offer is almost entirely apartments. They are high

Leeds SHMA 2017 Page | 42

September 2017

specification and highly priced. Car parking is limited in the centre so apartments with

car parking attract premiums up to £30k. The City Centre market is largely driven by

employees of the city’s business investors. These employees are buying properties

“aggressively” in the expectation of price increases. This has led to increased values in

the City Centre and an accompanying increase of new developments which has

exacerbated the “polarisation” of the housing market between the centre and other

parts of the city.

Prices in the City Centre range from:-

• Studio / 1-bed apartment £135k - £145k

• 2-bed apartment £180k (no parking) - £210k (parking)

• Larger apartments are rare and are marketed up to £1m

Sales Markets (outside the centre)

Trends

Agents believe the sales market across Leeds is strong. Houses are selling quickly and

prices are on the rise. The main drivers of the market include the level of inward

investment fuelling expectation around the city; and the skilled nature of jobs that have

been created in Leeds which has created a good fit between income, borrowing levels

and mortgage rates which normally equates to a lot of potential in the market. The

concern is the general undersupply of properties to let.

What is popular?

Agents believe that there is a divide between what buyers are looking for and what is

available on the current market. In this type of market it is likely that properties sell

quickly because they are available rather than because they are popular. Properties

which agents would expect to be a “tough sell” are achieving close to (and sometimes

above) market valuation. To emphasise the point an agent in Beeston who wishes to

remain anonymous recently sold a property for 50% above its valuation.

Most agents would like to have more 3-bed semi-detached properties with garden and

car-parking on their books and whilst there are some variations on this theme, it is

likely down to availability rather than ideal choice. So, for example:

• In the North sub-area, Victorian terraced houses and back-to-back properties with a

garden are attractive to buyers who believe these terraces offer more character and

a certain style not evident in boxy new builds. Smaller property types i.e. 1 and 2-

bed apartments are also popular with first time buyers and young couples.

• In Outer West sub-area, houses and apartments at £80k-£95k are popular,

especially with investors and first time buyers.

• Buyers in Guiseley prefer older homes needing work at the lower end of the market

or the family home that’s ready to move into at a price range £170k-£250k.

The more popular locations are:

Leeds SHMA 2017 Page | 43

September 2017

• Horsforth, Moortown, Oakwood and Roundhay(North sub-area)

• Woodesford (South sub-area)

• Wortley and Gildersome (Outer West sub-area)

• Yeadon, Menston and Guiseley (Aireborough sub-area)

• Beeston (Inner sub area)

Although there are popular areas further east (Temple Newsam and Whinmoor), agents

tend to carry fewer properties in this area of the city. Areas closer to the centre on the

east side like Harehills are generally unpopular with traditional estate and lettings

agents.

Supply

Most agents expressed varying levels of concern about the shortage in supply. As an

example, Manning Stainton are carrying a third of the properties they would normally

expect to have in order to offer customers a good choice. Agents in North Leeds, Outer

North West and Outer South market areas report supply at least 20% down on typical

stock. The shortage of properties; uncertainty in the market and competition from

investors for properties at the entry level has made (especially) first time buyers more

reluctant to enter the market.

The most obvious under-supply is of 2-bed properties selling at £60k to attract first time

buyers. Unfortunately, this is precisely the type and value of property that attracts

investors. When asked what properties they would like to have on their books, most

sales agents opt for 3-bed semi-detached properties with a garden.

All sales agents interviewed were of the opinion that to a greater or lesser degree, the

market is heading into choppy waters. This view is based on current prices, the lack of

supply and the speed at which properties are being sold. The lack of supply isn’t

sustainable. Agents have a sense of déjà vu. The current market has the same feel

about it as it did just prior to the 2008 depression. The Brexit effect has yet to play out

and may further impact lending which, in turn, could further complicate the housing

market.

Currently, properties are being sold almost as soon as they come onto the market. This

isn’t necessarily because properties are immaculate – it is more a function of the lack of

supply. This is distorting the market.

Who is buying?

For the past 3 years or so, the market was heavily investor led accounting for as much

as 70% of sales of smaller apartments and cheaper houses especially in areas with a

significant private rented sector e.g. the North sub-area. More recently, there has been

a slowing down of investor activity which agents believe is to do with rising property

prices, the uncertainty of Brexit and the change to tax incentives for second home

owners etc.

Leeds SHMA 2017 Page | 44

September 2017

The slowed investor market has removed some competition for first time buyers.

However, agents are finding it difficult to profile the typical buyer in the current market.

The relatively positive financial position in Leeds means there is always someone

looking to buy whatever comes onto the market and reduced investor competition for

entry level properties means first time buyers (younger couples in their late 20s / early

thirties) are more able to purchase properties at up to £200k.

At the same time, fewer people are trading up. With reduced investor activity and

continued uncertainty about the market, more homeowners are prepared to “break the

chain” and sit tight. Some have chosen to make improvements to their existing homes

rather than trade up.

There has also been a noticeable reduction in parents buying homes for their children

studying at University which agents feel is a direct consequence of the “second home

tax”. These parents are putting their children in private renting.

Valuation

Property prices outside the City Centre are beginning to creep up. Some investors are

selling their homes to take advantage of the shortage of supply. Other homeowners

with an eye on the market in the City Centre are attempting to cash in. They are asking

inflated prices for their homes and increasingly, these prices are being achieved.

The level of undersupply generally coupled with speculative buying in the City Centre is

impacting the market. Agents have talked of “frantic” buying and one agent recounted

a recent experience of selling a 2-bed terraced house for £95k that in normal

circumstances would sell for less than £60k.

Private rented sector

The Coalition Government’s Housing Strategy, published in November 2011

, set out

the Government’s plans to boost housing supply. It recognised an increasingly

important role for the private rented sector, both in meeting people’s housing needs

and in supporting economic growth by enabling people to move to take up jobs

elsewhere and to respond to changing circumstances.

The private rented sector is growing; the Census figures for 2011 confirmed that the

sector accounted for 18.1% of housing stock in England, an increase of 31.2% from

13.8% in 2001. More recent 2014-15 English Housing Survey data reports that 19% of

households rent privately. Increasing house prices pre-2007 and the struggling sales

market when the down turn came are both factors that have underpinned the growth

of the rental market for both ‘active choice’ renters and ‘frustrated would-be’

homeowners. Tenure reform and less accessible social rented housing are contributing

factors in the ongoing growth of the private rented sector.

Laying the Foundations; A Housing Strategy for England, 2011

Leeds SHMA 2017 Page | 45

September 2017

The private rented sector now clearly plays a vital role in meeting housing needs as well

as providing an alternative to homeownership. Local authorities have an important role

in ensuring that the private rented sector meets both these requirements. Balancing

good quality supply with demand will help to stabilise rents and encouraging good

quality management will improve the reputation of the sector and encourage longer

term lets and lower turnover. However, this is a challenging task where existing

partners need to be encouraged to participate and new partners and investors need to

be identified.

According to the Household Survey 2017, the private rented sector accommodates

around 19.9% (66,964) of households across Leeds. Of these households, 37,430 rent

unfurnished properties, 26,325 rent furnished accommodation, 1,435 rent with their

job (tied accommodation) and 1,774 rent student accommodation. Table 3.5

summarises the number of private rented dwellings by sub-area and indicates that

29.8% of all private rented dwellings are in the Inner Area and 22.0% in North Leeds.

Most private rented properties (50.2%) are houses (of which 30.8% are terraced, 14.3%

are semi-detached and 5.1% are detached); a further 46.1% are flats/maisonettes, 3.0%

are bungalows and 0.7% are other property types. 29.3% of privately rented properties

have one bedroom/bedsit, 40.7% have two bedrooms, 22.7% have three bedrooms and

7.4% have four or more bedrooms.

Leeds SHMA 2017 Page | 46

September 2017

Table 3.6 Profile of private rented sector in Leeds

Sub-Area

Tenure

Total

Rented Privately

(furnished)

Rented Privately

(unfurnished)

Tied accommodation

Student

accommodation

Count

% of PRS

Count

% of PRS

Count

% of PRS

Count

% of PRS

Count

% of PRS

Aireborough

0.0

1,820

2.7

0.1

0.0

1,880

2.8

City Centre

6,998

10.5

1,147

1.7

0.0

153

0.2

8,297

12.4

East Leeds

306

0.5

1,683

2.5

0.0

1,989

3.0

Inner Area

9,277

13.9

8,315

12.4

751

1.1

1,621

2.4

19,964

29.8

North Leeds

6,481

9.7

7,885

11.8

333

0.5

0.0

14,699

22.0

Outer North East

0.1

1,647

2.5

0.1

0.0

1,801

2.7

Outer North West

0.1

889

1.3

0.1

0.0

1,055

1.6

Outer South

0.1

1,245

1.9

0.0

1,338

2.0

Outer South East

0.1

1,503

2.2

0.0

1,601

2.4

Outer South West

1,012

1.5

5,778

8.6

0.0

6,790

10.1

Outer West

1,909

2.9

5,519

8.2

122

0.2

0.0

7,550

11.3

Leeds Total

26,325

39.3

37,430

55.9

1,435

2.1

1,774

2.6

66,964

100.0

Source: 2017 Household Survey

Leeds SHMA 2017 Page | 47

September 2017

In terms of private rented sector prices, Table 3.7 presents Zoopla data for Leeds City

for 2010-2016. This indicates that median rents have increased during the seven-year

period, from £559 per month in 2010 to £676 per month in 2016. Lower quartile rents

have also increased, from £472 pcm in 2010 to £516 pcm in 2016.

Table 3.7 Private sector rental prices in Leeds 2010-2016

Year

Price per calendar month (£)

Lower

quartile

Mean

Median

No. Rentals

2010

£472 £611 £559

8,918

2011

£451 £622 £550

14,578

2012

£472

£643

£572

20,666

2013

£477

£721

£594

26,902

2014

£451 £708 £594

21,827

2015

£490 £809 £624

23,397

2016

£516 £939 £676

22,191

Source: Zoopla 2017

The distribution of median rents (2016) across the City by ward is shown in Map 3.1.

This indicates that the rental costs are highest in North Leeds and the Outer North East

and lowest in the southern sub-areas.

Leeds SHMA 2017 Page | 48

September 2017

Map 3.1 Median rents 2016 by sub-area

Source: Zoopla 2017

The characteristics of private sector tenants are diverse and in particular the private

rented sector in Leeds accommodates singles under 65 (32.4%), lone parents (9.3%),

couples (no children) (24.3%) and couples with children (13.5%).

56.9% of private renting households have lived in their accommodation for less than

two years. In terms of income, 61.8% of privately renting households receive less than

£300 gross each week, 24.5% receive between £300 and £500 each week and 13.7%

receive at least £500 each week, indicating that the private rented sector tends to

accommodate lower income households. 70.6% of Household Reference People (Heads

of Household) living in private rented accommodation are employed, 8.4% are wholly

retired from work, 4.7% are permanently sick/disabled, 2.3% are unemployed and 0.9%

are carers or looking after the home.

Leeds SHMA 2017 Page | 49

September 2017

Estate agent views on the private rented sector

Views were sought about the private rental market activity from a range of estate and

letting agents working across Leeds to inform the SHMA 2017. Interviews were carried

out with:-

• Hunters Sales - City Centre

• Hunters Lettings - City Centre

• Linley & Simpson - Inner Area

• Manning Stainton - North Leeds

• Martin & Co – East Leeds

• Whitegates - Outer South West

• Preston Baker - Outer South East

• Kath Wells – Pudsey

• Dale Eddison – Aireborough

• Dacre, Son & Hartley - Outer North West

• Martin & Co - Outer South

The rental market has remained relatively strong buoyed by customers unable /

unwilling to buy in the current market either due to affordability pressures or lack of

supply.

Whilst there is no obvious under-supply of properties on the private rented market,

properties let quickly, sometimes within a week of coming onto the market. In some

areas landlords are still able to get good yields, as much as 8%-10% on student

accommodation and 5%-7% on private rentals. Even so, agents report that landlords are

continuing to leave the market. They cite a combination of reasons including changes to

tax rules and concerns about an unsteady economic future post-Brexit.

However, a growing concern for lettings agents and landlords is the proposed ban on

up-front fees. Agents believe the impact of this will be felt most by tenants as the loss

of the fee will inevitably lead to a lessening in the quality of property coming onto the

market. Most agents will automatically pass the cost onto the landlord who will either

raise rents or reduce the amount of maintenance on their property. Martin & Co in the

East Leeds Market Area anticipates landlords will seek a one-off rent increase of up to

10% next year to compensate for the loss of up-front fees.

Who is renting

The lack of supply in the sales market has boosted the already buoyant rental market.

The typical renter is professional; is single and want their independence; a couple or a

small family ready to settle down but can’t afford the deposit; ex-students who have

finished studying and want to remain local; newly arrived employees of the growing

business sector who want to rent. Agents also report that a growing number of

households are selling their homes and choosing to rent as a lifestyle choice.

Leeds SHMA 2017 Page | 50

September 2017

Preferences

The typical property sought is a 2-bed apartment or 3-bed house at a reasonable rent

though increasingly renters will pay the requested rate just to have a home.

Apart from the City Centre, Horsforth (North Market Area) is a popular area. It has good

schools, parks, bars and restaurants, a golf course and is reasonably priced. Other

popular areas sought by renters include Yeadon; Gipton; Roundhay and Chapel

Allerton; Meanwood; Bramley and Farsley.

In fact, agents report that most places in Leeds are popular with renters and that most

properties in most areas of Leeds will let within a couple of weeks of coming onto the

market. In some areas e.g. Beeston, agents have queues of people waiting for

properties and will call them up before the properties even get listed. Harehills which

performs less well on the sales market has a large call for rentals as prices are cheaper.

Furnished accommodation is more popular which agents believe is a reflection of many

renters’ short-term approach to the market. Tenancies are let on 6 month Assured

Shorthold and average tenancy duration is 12 – 18 months. Again this is fairly standard

across Leeds except for areas with high numbers of students where properties are let

over 51 weeks or 44 weeks.

There is cautious optimism that the private rental market is sustainable though agents

have a nagging concern that the increasing values being achieved from sales may

encourage more landlords to take advantage of favourable conditions to sell properties

especially in light of the loss of tax relief on second homes.

Agents feel that at the higher end, rents are increasing. Some landlords with an eye on

the sales market are making annual rent increases to maximise returns. Even so, agents

believe there is enough scope to cater for renters on lower incomes or with smaller

budgets.

There are pressures of affordability but this isn’t a particular concern for agents. Their

focus is on getting the rent. Where arrears occur tenants are dealt with quickly. Agents

reported that few tenants were in arrears and those who were would only be allowed

to remain in arrears for a maximum 2 months.

Increasingly, landlords across the city are refusing to let properties to people on

benefits. Some landlords are concerned at having to make good on over-payment or

fraudulent claims for benefits made by their tenants. In some cases, the terms of their

mortgage or their insurance specifically precludes letting to people claiming a welfare

benefit. Where lets are made to households on benefits, landlords insist on a guarantor

who is in employment and able to meet the full rent requirement in the event of a

default.

Affordable sector

There are around 75,877 households who live in an affordable accommodation within

Leeds, accounting for 22.5% of all occupied dwellings.

Houses account for 46.1% of occupied affordable dwelling stock, 46.0% are

flats/maisonettes and 6.8% are bungalows. Affordable dwellings tend to have

Leeds SHMA 2017 Page | 51

September 2017

one/bedsit (34.7%), two (35.6%) or three (25.3%) bedrooms, with a further 4.4% having

four or more bedrooms.

26.6% of households living in affordable dwellings are older singles and couples, a

further 31.0% are singles under 65, 11.9% are lone parents (children under 18), 9.0%

are couples with children under 18, 9.5% are couples/lone parents with adult children,

8.9% are couples with no children and 3.0% are other household types.

35.8% of Household Reference People (formerly termed ‘Head of Household’) living in

affordable housing are in employment. A further 26.3% are wholly retired from work,

19.4% are permanently sick/disabled, 9.1% are unemployed, 6.7% look after the

home/are caring for someone and 2.7% are in full-time education/training.

Incomes are generally low, with 80.4% receiving an income of less than £300 gross each

week and 49.6% receiving less than £200 gross each week.

Key market drivers

Essentially, there are three key primary drivers influencing the current (and future)

housing market: demographic, economic and dwelling stock characteristics, as

summarised in Table 3.8.

Table 3.8 Primary market drivers

Primary Driver

Attributes

Impact on overall demand

through:

Demography

Changing no. of households, household

structure, ethnicity

Natural Change

Economy

Jobs, income, activity rates, unemployment

Economic migration

Housing stock and

aspirations

Quality vs. aspirations, relative prices,

accessibility, development programmes

Residential migration

In summary, the following demographic drivers will continue to underpin the operation

of the Leeds City Housing Market Area:

• An increasing population size overall during the Plan period, with a projected 9.2%

increase (72,300 additional people) between 2017 and 2033

;

• There is a projected increase in the 15-29 years age cohort of (9.3%) and most

notably an increase of 22.6% in the 65-79 years age cohort;

• The number of people aged 65 and over is projected to increase by 30.2% (36,800

additional people), with the proportion of the total population aged 65 and over

increasing from 15.5% of the population in 2017 to 18.5% of the population in 2033.

According to ONS 2014-based sub-national population projections

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September 2017

The proportion of the total population aged 80 years and over is projected to

increase from 4.3% in 2017 to 5.9% in 2033; and

• The 2017 Household Survey indicates that the following range of household groups

currently live in Leeds: singles under 65 (21.7%); couples (under 65 with no

children) (18.3%); couples with children under 18 (16.6%); couples with adult

children (5.0%); couples 65 or over (11.7%); singles aged 65 or over (11.9%), lone

parents with children under 18 (5.7%); lone parents with adult children (3.2%) and

other household types including students (5.8%).

Table 3.9 Projected population change, 2017 to 2033

Age Group

2017

2033

Change

2017-33

% Change

2017-33

0-14

141,800

152,400

10,600

7.5

15-29

187,500

205,000

17,500

9.3

30-44

154,100

160,400

6,300

4.1

45-64

179,600

180,700

1,100

0.6

65-79

88,100

108,000

19,900

22.6

80+

33,600

50,500

16,900

50.3

Total

784,700

857,000

72,300

9.2

% aged 65+

15.5

18.5

% aged 80+

4.3

5.9

Source: ONS 2014-based Subnational population projections

Note: Data subject to rounding

The following economic drivers underpin the operation of the Leeds City Housing

Market Area:

• 59.3% of Household Reference People are economically active and are in

employment according to the 2017 Household Survey; a further 25.4% are retired;

5.6% are permanently sick/disabled; 3.7% are either looking after the home or

provide full-time care; 3.1% are unemployed and available for work; and 2.9% are in

education/training;

• The 2011 Census data shows that 83.1% of residents in employment work in Leeds

City administrative area. A further 5.3% work in Bradford, 4.0% work in Wakefield,

2.2% in Kirklees and 5.4% elsewhere;

• According to the Office for National Statistics (ONS) Annual Survey of Hours and

Earnings, lower quartile earnings in 2016 across Leeds were £20,203 each year

which compares with £18,817 for the Yorkshire and Humber region and £20,253 for

England. Median incomes were £27,861, compared with a regional median of

£25,957 and a national median of £28,503;

• There is considerable income polarisation across Leeds, with the 2017 Household

Survey identifying that 27.2% of households receive less than £13,000 per annum,

Leeds SHMA 2017 Page | 53

September 2017

27.1% receive more than £13,000 and less than £26,000 per annum and 45.6%

receive more than £26,000 per annum.

In terms of dwelling stock, the 2017 Household Survey reports that, across the Leeds

City area:

• 70.4% of properties are houses, 22.6% are flats/maisonettes, 6.4% are bungalows

and 0.6% are other property types (e.g. park homes or caravans);

• 15.0% have one bedroom/bedsit/studio, 28.6% have two bedrooms, 38.2% have

three bedrooms and 18.2% have four or more bedrooms;

• 12.2% of properties were built before 1919, a further 18.3% were built between

1919 and 1944, 23.3% between 1945 and 1964, 21.6% between 1965 and 1984,

13.7% between 1985 and 2004 and 10.9% have been built since 2005; and

• 58.3% of properties are owner-occupied, 19.4% are private rented (including tied

accommodation and student lets) and 22.2% are affordable (including rented from

a social landlord and intermediate tenures).

Current households in need

A robust and defensible assessment of housing need is essential for the development of

housing policies. Housing need is defined in PPG as:

‘The number of households and projected households who lack their own

housing or live in unsuitable housing and who cannot afford to meet their

housing needs in the market’’

The 2017 Household Survey and a range of secondary data provide the robust and

transparent evidence base required to assess housing need across the Leeds City area.

This is presented in detail at Appendix B of this report and follows CLG modelling

guidance.

Across Leeds there are 31,740 existing households in need which represents 9.4% of all

households. Reasons for housing need are summarised in Table 3.10.

DCLG, PPG, Housing and economic development needs assessments, paragraph 22

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September 2017

Table 3.10 Housing need in Leeds

Category

Factor

Leeds

Homeless households or

with insecure tenure

N1 Under notice, real threat of notice or lease

coming to an end

5,704

N2 Too expensive, and in receipt of housing

benefit or in arrears due to expense 6,713

Mismatch of housing

need and dwellings

N3 Overcrowded according to the 'bedroom

standard' model

9,893

N4 Too difficult to maintain

2,313

N5 Couples, people with children and single

adults over 25 sharing a kitchen, bathroom or

WC with another household

4,032

N6 Household containing people with mobility

impairment or other special needs living in

unsuitable accommodation

3,936

Dwelling amenities and

condition

N7 Lacks a bathroom, kitchen or inside WC

and household does not have resource to

make fit

850

N8 Subject to major disrepair or unfitness and

household does not have resource to make fit

2,041

Social needs

N9 Harassment or threats of harassment from

neighbours or

others living in the vicinity

which cannot be resolved except through a

move

3,465

Total no. households in need (with one or more housing needs)

31,740

Total Households

337,302

% households in need

9.4%

Note: A household may have more than one housing need.

Source: 2017 Household Survey

Table 3.11 summarises overall housing need (before further analysis to test the extent

to which households can afford open market provision to offset their need) by

Affordable Housing Zone and the extent to which housing need varies across Leeds. The

proportion of households in need varies significantly between the Housing Zones. The

proportion is highest in the City Centre Housing Zone (17.9%) and Inner Area Housing

Zone (17.3%) and lowest in the Outer Northern/Golden Triangle Housing Zone (4.4%)

and Outer Southern Housing Zone (7.8%).

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September 2017

Table 3.11 Households in need by Affordable Housing Zone

Affordable Housing Zone

No. H'holds in need

% H'holds in

need

Total no.

households

Zone 1: Outer Northern/Golden Triangle

3,231

4.4%

73,434

Zone 2: Outer Southern

14,162

7.8%

181,216

Zone 3: Inner Area

12,111

17.3%

70,151

Zone 4: City Centre

2,236

17.9%

12,501

Total (all households in need)

31,740

9.4%

337,302

Source: 2017 Household Survey

Tables 3.11 and 3.12 summarise overall housing need (before further analysis to test

the extent to which households can afford open market provision to offset their need)

by sub-area. The proportion of households in need varies significantly between the

Affordable Housing Zones. The proportion is highest in the City Centre Housing Zone

(17.9%) and Inner Area Housing Zone (17.3%) and lowest in the Outer Northern/Golden

Triangle Housing Zone (4.4%) and Outer Southern Housing Zone (7.8%).

Table 3.12 Households in need by sub-area

Affordable Housing Zone

No. H'holds in need

% H'holds in need

Total no.

households

Aireborough

768

5.1

15,028

City Centre

2,331

20.6

11,324

East Leeds

906

4.7

19,354

Inner Area

12,015

16.5

72,995

North Leeds

5768

8.0

71,919

Outer North East

576

3.4

17,191

Outer North West

500

5.3

9,379

Outer South

501

4.0

12,525

Outer South East

872

5.4

16,197

Outer South West

3,912

9.3

42,146

Outer West

3,589

7.3

49,244

Total (all households in need)

31,740

9.4%

337,302

Source: 2017 Household Survey

Tables 3.13 and 3.14 demonstrate how the proportion of households in housing need

varies by tenure and household type for Leeds. Those in private rent tend to be in

greater housing need, 15,462. The research identifies around 27,680 households with

adult children living with parent(s), which provides a broad indication of the scale of

hidden housing need (of whom 2,050 are classified as being in need unless the person

wants to remain in the family home).

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September 2017

Table 3.13 Housing need by tenure

Tenure

No. H'holds in

need

% H'holds in

need

Total no.

households

Owner Occupied

8,662

4.5

194,460

Private Rented

15,462 23.1 66,964

Affordable (Social/Affordable Rented and

Intermediate)

7,616 10.0 75,877

Total (All households in need)

31,740

9.4%

337,302

Source: 2017 Household Survey

Table 3.14 Housing need by household type

Household Type

No. H'holds in

need

% H'holds in

need

Total no.

households

Single Adult (under 65)

5,274

7.2

73,259

Single Adult (65 or over)

754

1.9

40,266

Couple only (both under 65)

4,013

6.5

61,778

Couple only (one or both over 65)

1,659

4.2

39,478

Couple with 1 or 2 child(ren) under 18

3,788

8.1

47,025

Couple with 3 or more children under 18

2,052

22.4

9,160

Couple with child(ren) aged 18+

983

5.9

16,776

Lone parent with 1 or 2 child(ren) under 18

3,034

18.9

16,028

Lone parent with 3 or more children under 18

1,012

32.2

3,141

Lone parent with child(ren) aged 18+

1,067

9.8

10,904

Student Household

2,923

71.3

4,101

Other type of household

5,180

33.7

15,386

Total (All households in need)

31,740

9.4%

337,302

Source: 2017 Household Survey

Homeless and previously homeless households

Homelessness statistics for 2015/16 indicate that a total of 2,029 decisions were made

on households declaring themselves as homeless across Leeds (Table 3.15). Of these

households, 505 were classified as homeless and in priority need. Over the seven years

2009/10 to 2015/16, an annual average of 3,096 decisions has been made across Leeds

and an annual average of 528 households have been declared as homeless and in

priority need.

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September 2017

Table 3.15 Homeless decisions and acceptances 2009/10 to 2015/16

Year

Decisions made

Accepted as homeless

2009/10

2,718

427

2010/11

4,225

553

2011/12

4,409

697

2012/13

4,650

762

2013/14

2,136

371

2014/15

1,504

378

2015/16

2,029

505

Total

21,671

3,693

Annual Average

3,096

528

Source: DCLG P1E Homelessness Returns, Table 784

The Household Survey identified 4,831 households who had been previously homeless

or living in temporary accommodation and had moved to their present accommodation

in the past five years.

Table 3.16 presents a range of information relating to the characteristics of previously

homeless households and the dwelling choices that they have made. 38.5% of

households previously homeless have moved to the private rented sector and 59.6%

into affordable housing. They have moved into a range of dwelling sizes, with 31.2%

moving to one bedroom dwellings, 46.3% moving into two bedroom dwellings and

22.5% into dwellings with three or more bedrooms. The incomes of previously

homeless households are generally low with 72.7% receiving less than £250 each week

and 23.5% receiving between £250 and £500 each week. 40.4% are singles under 65,

36.3% are lone parents and 11.3% are couples (no children).

Leeds SHMA 2017 Page | 58

September 2017

Table 3.16 Characteristics of households previously homeless

Household Type

Property Type

Single Adult (under 65)

40.4

House

37.2

Single Adult (65 or over)

5.9

Bungalow

3.2

Couple only (both under 65)

11.3

Flat/maisonette

58.8

Couple with 1 or 2 child(ren) under 18

1.0

Total 100.0

Lone parent with 1 or 2 child(ren) under 18

27.5

Lone parent with 3 or more child(ren) under 18

3.0

Lone parent with children aged 18+

5.8

Other types of household

5.1

Total

100.0

Current tenure

Origin

Owner Occupied

1.9

Within Leeds

69.9

Private Rented

38.5

From outside Leeds

30.1

Social/Affordable Rented

59.6

Total 100.0

Total

100.0

Current income (Gross weekly)

Property size

Under £250

72.7

1 Bed/bedsit

31.2

£250 to <£500

23.5

2 Beds

46.3

£500+

3.8

3 or more Beds

22.5

Total

100.0

Total

100.0

Base: 4,831 households previously homeless

Source: 2017 Household Survey

Relative affordability of housing options

Tenure costs

The relative cost of alternative housing options across Leeds and by sub-area is

explored in Table 3.17. This includes affordable and market rent options, owner

occupation and intermediate tenure options, as well as Starter Homes. Table 3.18

shows the income (annual) required for alternative tenure options to be affordable by

sub-area.

Assumptions underpinning the calculations are set out in Table 3.19.

Leeds SHMA 2017 Page | 59

September 2017

Table 3.17 Cost of alternative tenure options by sub-area

Tenure option

Price by sub-area (2016)

Aireborough

City

Centre

East

Leeds

Inner

Area

North

Leeds

Outer

North

East

Outer

North

West

Outer

South

Outer

South

East

Outer

South

West

Outer

West Total

Social Rent (average)

£362 £362 £362 £362 £362 £362 £362 £362 £362 £362 £362 £362

Affordable Rent

(80% of median private rent)

£520 £600 £475 £520 £658 £642 £548 £478 £478 £440 £461 £541

Market Rent

Lower Quartile

£550 £646 £494 £477 £550 £650 £594 £550 £524 £494 £494 £516

Market Rent

– Median £650 £750 £594 £650 £823 £802 £685 £598 £598 £550 £576 £676

Market Rent

– Average £852 £665 £835 £621 £980 £1,116 £1,004 £825 £643 £615 £571 £596

Market Sale

- Lower Quartile

(assumes 10% deposit)

£158,000 £103,000

£125,000

£73,000 £152,375

£207,000

£170,100

£129,000

£127,000

£98,000 £104,000

£112,500

Market Sale

– Median

(assumes 10%

deposit)

£198,000 £135,750

£160,000

£96,000 £211,250

£298,250

£242,250

£160,000

£134,000

£135,000

£158,000

Market Sale

– Average

(assumes 10% deposit)

£246,197 £229,630

£180,767

£124,794

£243,212

£354,570

£282,236

£194,173

£170,924

£149,583

£151,259

£197,101

Starter Home (20% discount)

£158,400 £108,600

£128,000

£76,800 £169,000

£238,600

£193,800

£128,000

£107,200

£108,000

£126,400

Starter Home (30% discount)

£138,600 £95,025 £112,000

£67,200 £147,875

£208,775

£169,575

£112,000

£93,800 £94,500 £110,600

Shared ownership (50%)

£99,000 £67,875 £80,000 £48,000 £105,625

£149,125

£121,125

£80,000 £80,000 £67,000 £67,500 £79,000

Shared ownership (25%)

£49,500 £33,938 £40,000 £24,000 £52,812 £74,563 £60,563 £40,000 £40,000 £33,500 £33,750 £39,500

Help to Buy

£198,000 £135,750

£160,000

£96,000 £211,250

£298,250

£242,250

£160,000

£134,000

£135,000

£158,000

Leeds SHMA 2017 Page | 60

September 2017

Table 3.18 Annual income required for alternative tenure options by sub-area

Tenure option

Price by sub-area (2016)

Aireborough

City

Centre

East Leeds

Inner Area

North

Leeds

Outer

North East

Outer

North

West

Outer

South

Outer

South East

Outer

South

West

Outer

West

Total

Social Rent (average)

£17,393

Affordable Rent

(80% of median private

rent)

£24,960 £28,800 £22,810 £24,960 £31,603 £30,797 £26,285 £22,963 £22,963 £21,120 £22,118 £25,958

Market Rent - Lower

Quartile

£26,400 £31,008 £23,712 £22,896 £26,400 £31,200 £28,512 £26,400 £25,152 £23,712 £23,712 £24,768

Market Rent – Median

£31,200

£36,000

£28,512

£31,200

£39,504

£38,496

£32,856

£28,704

£26,400

£27,648

£32,448

Market Rent – Average

£40,896

£31,920

£40,080

£29,808

£47,040

£53,568

£48,192

£39,600

£30,864

£29,520

£27,408

£28,608

Market Sale - Lower

Quartile

(assumes 10% deposit)

£40,629 £26,486 £32,143 £18,771 £39,182 £53,229 £43,740 £33,171 £32,657 £25,200 £26,743 £28,929

Market Sale – Median

(assumes 10% deposit)

£50,914 £34,907 £41,143 £24,686 £54,321 £76,693 £62,293 £41,143 £41,143 £34,457 £34,714 £40,629

Market Sale – Average

(assumes 10% deposit)

£63,308 £59,048 £46,483 £32,090 £62,540 £91,175 £72,575 £49,930 £43,952 £38,464 £38,895 £50,683

Starter Home (20%

discount)

£40,731 £27,926 £32,914 £19,749 £43,457 £61,354 £49,834 £32,914 £32,914 £27,566 £27,771 £32,503

Starter Home (30%

discount)

£35,640 £24,435 £28,800 £17,280 £38,025 £53,685 £43,605 £28,800 £28,800 £24,120 £24,300 £28,440

Shared ownership (50%)

£39,371

£27,944

£32,395

£20,647

£41,803

£57,774

£47,494

£32,395

£27,623

£27,806

£32,028

Shared ownership (25%)

£32,795

£23,435

£27,081

£17,458

£34,787

£47,868

£39,448

£27,081

£23,172

£23,322

£26,780

Help to Buy

£28,286

£19,393

£22,857

£13,714

£30,179

£42,607

£34,607

£22,857

£19,143

£19,286

£22,571

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September 2017

Table 3.19 Assumptions in assessing income required for alternative tenure options

Tenure

Tenure price assumptions

Affordability

assumptions

Social rent

Prevailing prices

Affordability 25% of

income

Affordable rent

80% of median market rent

Affordability 25% of

income

Market Rent –

lower quartile

Prevailing prices

Affordability 25% of

income

Market Rent –

median

Prevailing prices

Affordability 25% of

income

Market Sale –

lower quartile

Prevailing prices

90% LTV, 3.5x income

Market Sale – median

Prevailing prices

90% LTV, 3.5x income

Market Sale - average

Prevailing prices

90% LTV, 3.5x income

Starter Home

(20% discount)

20% discount on full value (assumed to be

median), 10% deposit on discounted portion,

remainder mortgage based on 3.5x income

90% LTV, 3.5x income

Starter Home

(30% discount)

30% discount on full value (assumed to be

median), 10% deposit on discounted portion,

remainder mortgage based on 3.5x income

90% LTV, 3.5x income

Shared ownership (50%)

Total price based on median price and 50%

ownership. Mortgage based on 40%. 10%

deposit required, annual service charge £395,

Annual rent based on 2.75% of remaining

equity

90% LTV, 3.5x income

for equity and 25% of

income for rental

element

Shared ownership (25%)

Total price based on median price and 25%

ownership. Mortgage based on 20%. 5%

deposit required, annual service charge £395,

Annual rent based on 2.75% of remaining

equity

90% LTV, 3.5x income

for equity and 25% of

income for rental

element

Help to Buy

Total price based on median price. Mortgage

based on 75% equity. 20% loan and deposit of

5%. Loan fee of 1.75% in year 6 of outstanding

equity loan increasing annually from yr7 at

RPI+1%

70% LTV, 3.5x income

This analysis indicates that for open market housing, the minimum indicative income

required is £24,768 for lower quartile or entry-level renting in the City as a whole.

For lower quartile or entry-level house prices (owner occupation) the minimum

income required is £28,929.

Relative affordability of tenure options

Figure 3.5 sets out the relative affordability of alternative tenures in the study area.

It uses lower quartile and median earnings derived from the 2017 household survey.

Leeds SHMA 2017 Page | 62

September 2017

Figure 3.5 Leeds City household income and housing costs comparison

Leeds SHMA 2017 Page | 63

September 2017

4. Housing market signals and past delivery

Introduction

PPG (paragraph 19) states that, ‘the housing need number suggested by household

projections (the starting point) should be adjusted to reflect appropriate market

signals, as well as other market indicators of the balance between the demand for and

supply of dwellings’. PPG (paragraph 20) suggests that, ‘in broad terms, the

assessment should take account both of indicators relating to price (such as house

prices, rents, affordability ratios) and quantity (such as overcrowding and rates of

development).’

This chapter therefore considers a range of market signals and compares the trends in

Leeds with those of comparator local authorities, the region and England as whole. It

also looks at development activity (housing completions) in Leeds.

Market Signals

PPG (paragraph 20) comments that ‘market signals are affected by a number of

economic factors and plan makers should not attempt to estimate the precise impact

of an increase in housing supply. Rather they should increase planned supply by an

amount that, on reasonable assumptions and consistent with the principles of

sustainable development, should be expected to improve affordability, and monitor

the response of the market over the Plan period.’

In line with PPG, Table 4.1 considers a range of Housing Market Signals for Leeds.

These include house prices, rents, affordability and overcrowding.

Price indicators

In terms of price/transaction indicators, a key message from Table 4.1 is that market

prices have fluctuated slightly over the period 2005-2015, but experienced an overall

increase during the eleven-year period.

Lower quartile houses started at £97,500 in 2005, peaking at £115,000 in 2007 but

falling to £100,000 in 2009. They have oscillated slightly since, but increased overall to

£108,500 in 2015. Median prices have risen over the period; starting at £132,950 in

2005 they averaged £142,313 over the period, reaching a high of £150,000 in 2014

and 2015. The number of property sales peaked at 19,133 in 2006 before falling

significantly from 2008 but rising since 2013. Property sales have averaged around

11,455 each year over the period and there were 11,979 sales in 2015.

Several measures of affordability are reported in Table 4.1. The House Price Ratio

(HPR) considers median price to median earnings; this has fluctuated, but fallen

overall during the period 2008-2015, from 5.9 (2008) to 5.7 (2015). The Rental

Affordability Ratio (RAR) considers lower quartile prices to lower quartile rents; this

has dropped slightly during the period 2010-2015, from 31.5% (2010) to 30.5% (2015).

ONS data on relative affordability indicates the same trend, with some fluctuation but

Leeds SHMA 2017 Page | 64

September 2017

overall a small drop in ratios. This indicates that relative affordability has improved

during the period, although this does not take account of other living costs.

Regarding land values, there is no trend-based data available.

Quantity indicators

In terms of quantity indicators, there has been an increase of 22,305 dwellings over

the period 2005 to 2015

. According to DCLG data, vacancy rates have averaged

4.06% during this period but have seen an overall fall, from 4.44% in 2005 to 2.99% in

2015, which compares with the Yorkshire and the Humber average of 3.2% (2015) and

the English average of 2.5% (2015). Assuming the English average as a ‘target’ vacancy

rate (which would suggest a target of 8,488 vacant dwellings in 2015, compared with

actual vacancies of 10,135), it could be suggested that in 2015 there were around

1,647 surplus vacant dwellings across Leeds. The current vacancy rate allows for a

greater degree of household mobility within dwelling stock compared to the English

average.

According to the 2011 Census, 3.9% of households were overcrowded. This compares

with 3.7% across Yorkshire and the Humber and 4.6% across England. The scale of

housing need as measured by the Housing Register has fluctuated between 18,118

(2015) and 30,699 (2005)

, averaging 22,795 over the period 2005-2015. The total

number of households on the Housing Register was 18,118 in 2015, equivalent to 55

per 1,000 households across the City.

clog Dwelling Stock statistics

This figure is markedly different than subsequent years and likely to be due to how the register has been administered. Average data for

2006-2015 has therefore been used.

Leeds SHMA 2017 Page | 65

September 2017

Table 4.1 Housing market signals 2005-2015

Price/transaction indicators 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Lower Quartile House Prices £97,500 £108,950

£115,000

£107,500

£100,000

£105,000

£101,540

£102,500

£105,000 £110,000

£108,500

Median House Prices £132,950 £140,000

£146,000

£139,995

£135,000

£144,000

£140,000

£142,495

£145,000 £150,000

£150,000

Lower Quartile Rents (per calendar month) £472 £451 £472 £468 £451 £490

Median Rents (per calendar month) £559 £550 £572 £576 £594 £624

House Price Ratio HPR

(median price to median earnings)(resident-based)

5.9 5.5 5.9 5.7 5.8 5.5 5.7 5.7

Rental Affordability Ratio RAR (lower quartile rents to

lower quartile earnings)(resident-based)

31.5% 29.9% 30.9% 29.4% 28.4% 30.5%

ONS Table 576 LQ Earnings to LQ Price 5.88 6.27 6.72 6.34 5.19 5.71 5.33 5.51 5.24 5.72 5.80

ONS Table 577 Median Earnings to Median Price 5.89 6.07 6.41 5.91 5.14 5.69 5.49 5.69 5.34 5.73 5.76

No. Property sales 14,530 19,133 17,641 8,625 8,098 8,004 7,798 7,959 10,229 12,005 11,979

Quantity indicators

Total dwelling stock (at 1 April) 317,215 319,600 322,456 328,201 334,083 330,630 331,820 333,750 335,310 337,540 339,520

Total vacant dwellings (at October) 14,074 15,093 14,324 14,631 14,828 14,057 13,946 13,307 11,853 10,724 10,135

Total vacancy rate (at October) 4.44% 4.72% 4.44% 4.46% 4.44% 4.25% 4.20% 3.99% 3.53% 3.18% 2.99%

Long-term vacant dwellings (at October) 4,542 4,070 4,525 4,712 4,724 4,370 4,115 3,676 3,292 2,915 2,679

Long-term vacancy rate (at October) 1.43% 1.27% 1.40% 1.44% 1.41% 1.32% 1.24% 1.10% 0.98% 0.86% 0.79%

Overcrowding (2011 Census) 3.90%

No. of households on the housing register (at 1st

April)

30,699 23,851 24,780 24,444 24,314 22,802 21,881 21,252 20,334 18,269 18,118

Sources: Land Registry Price Paid Data; Zoopla Rental Data; Annual Survey of Hours and Earnings; Local Authority Housing Statistics and Housing Strategy Statistical Appendix; CLG

Dwelling/Vacancy statistics; 2011 Census. Note: Private rental data for 2005-2009 not available

Leeds SHMA 2017 Page | 66

September 2017

Comparator areas

Table 4.2 considers how key price and quality market signals observed in

Leeds compare with neighbouring districts and with regional and national

data over the more recent 2010 to 2015 period.

Comparative price indicators

House prices in Leeds have been relatively static overall, with small increases

in both lower quartile prices (+3.3%) and median prices (+4.2%) during the

period 2010-2015. This is similar to the regional trends (+3.2% and +3.7%,

respectively), and lower than the national trend (+8.8% and +12.4%,

respectively). Lower quartile and median prices have tended to have increase

across most comparator areas, although lower quartile prices dropped in

Bradford, Wakefield, Barnsley and Calderdale during the period 2010-2015.

Regarding rents, both lower quartile and median rents have increased in

Leeds, by +3.8% and +11.6%, respectively. This compares with virtually static

rental prices across the Yorkshire and the Humber region as a whole during

the period (-0.9% and 0.0%, respectively). Trends in rental prices in Leeds

have been within the range experienced in most comparator areas, but rental

price growth has been considerably lower than the growth seen at national

level (+8.7% and +23.3%, respectively).

The House Price Ratio (HPR) in Leeds during 2015 (5.7) was similar to that for

the region (5.6) and was fairly typical when considering other comparator

districts. It was slightly lower than that for England (7.5) The Rental

Affordability Ratio (RAR) in 2015 (30.5%) was comparable with most

neighbouring districts and the region (27.9%), but lower than that for England

(39.6%).

The number of property sales has increased by 49.7% in Leeds from 2010-15,

which is at the higher end of the range experienced in comparator areas

(except for Wakefield which has experienced 88.8% growth), but below the

regional trend (60.2%) and above national figure (35.3%).

Comparative quality indicators

Over the period 2010-2015, there has been a +2.7% increase in total dwelling

stock in Leeds. In neighbouring areas, this has ranged between +1.4% and

+5.1%; regionally it has increased +2.7% and nationally +3.1%.

The proportion of vacant dwelling stock in Leeds during 2015 (3.0%) was

typical of the range seen in neighbouring districts (1.0% to 4.4%) and regional

(3.2%) proportions, but above the national rate of 2.5%. There has been a

significant decrease in the proportion of stock that is vacant (-27.9%%) but

this is not out of keeping with trends in comparator areas or the regional

trend of -19.2%.

Leeds SHMA 2017 Page | 67

September 2017

The long-term vacancy rate (0.8%) is typical of neighbouring areas (0.1% to

2.0%), lower than the regional rate (1.1%) and similar to the national rate

(0.9%). The long-term vacancy rate relates to dwellings vacant for at least 6

months.

According to the 2011 Census, 3.9% of households in Leeds were

overcrowded. This compares with a range of between 1.9% and 6.4% across

comparator areas; a regional rate of 3.7% and a national rate of 4.6%.

The number of households on the Housing Register per 1,000 occupied

dwellings was 55 in Leeds City. This was fairly typical of neighbouring areas,

which ranged between 13 and 143 per 1,000. This compares with 63 per

1,000 in Yorkshire and the Humber region and 54 per 1,000 across the UK.

Leeds SHMA 2017 Page | 68

September 2017

Table 4.2 Housing market signals in comparator districts, region and England 2010-2015

Price/transaction indicators

Leeds

Bradford

Selby

Harrogate

Kirklees

Wakefield

Craven

Barnsley

York

Calderdale

Yorkshire

and

Humber

England

Lower Quartile House Prices % change 2010-15

3.3 -4.7 8.3 9.4 2.2 -1.1 3.8 -1.3 16.8 -3.3 3.2 8.8

Median House Price % change 2010-15

4.2 2.5 7.7 10.5 4.0 0.0 0.1 8.0 19.3 1.2 3.7 12.4

Lower Quartile Rent % change 2010-2015 (per

calendar month)

3.8 -0.8 0.0 0.7 7.0 1.1 10.8 -2.0 9.1 6.6 -0.9 8.7

Median Rent % change 2010-15 (per calendar

month)

11.6 -4.4 -3.0 4.5 11.2 0.0 0.7 0.0 12.1 7.0 0.0 23.3

House Price Ratio (Median Price to Median

Earnings) 2015

5.7 5.2 6.2 9.0 5.2 5.3 7.7 4.2 8.2 4.9 5.6 7.5

Rental Affordability Ratio (Lower quartile rents to

lower quartile earnings) 2015

30.5 26.0 31.1 36.7 25.9 31.1 33.6 26.3 38.9 27.9 27.9 39.6

No. Property sales change 2010-15

49.7 44.8 37.8 29.7 36.0 88.8 38.8 36.8 22.7 37.9 60.2 35.3

Quality indicators

Total dwelling stock % change 2010-15

2.7 2.4 5.1 1.5 2.4 3.0 3.0 3.7 1.4 2.5 2.7 3.1

Total vacant dwellings % change 2010-15

-27.9 -23.1 -17.1 -10.7 -27.2 -26.0 31.1 -34.8 -42.6 -18.5 -19.2 -18.6

Total vacancy rate 2015

3.0% 4.4% 2.5% 3.2% 2.9% 2.9% 3.6% 2.8% 1.0% 4.0% 3.2% 2.5%

Long-term vacant dwellings % change 2010-15

-38.7 -27.8 -30.8 -13.1 -40.0 -44.7 31.1 -39.6 -66.8 -29.7 -29.9 -32.1

Long-term vacancy rate (at October)

0.8% 2.0% 0.8% 1.1% 1.2% 1.1% 1.2% 1.2% 0.1% 1.8% 1.1% 0.9%

Overcrowding (2011 census)

3.9% 6.4% 2.1% 2.3% 4.9% 2.8% 1.9% 2.4% 3.7% 3.4% 3.7% 4.6%

No. of households on the housing register (at 1st

April 2015)

18118 8708 517 1687 9160 20853 560 5858 1105 10657 144780 1240855

No. households on housing register per 1,000

occupied dwellings

55 43 14 24 51 143 21 56 13 118 63 54

Sources: Land Registry Price Paid Data; Zoopla Rental Data; Annual Survey of Hours and Earnings; Local Authority Housing Statistics and Housing Strategy Statistical Appendix; CLG

Dwelling/Vacancy statistics; 2011 Census. Note: Private rental data for 2005-2009 not available

Leeds SHMA 2017 Page | 69

September 2017

Past trends in housing delivery

PPG (paragraph 19) refers to the rate of development as a market signal.

Over the ten-year period 2006/07 to 2015/16, a total of 17,740 dwellings have been

built across Leeds (Table 4.3).

Table 4.3 Dwelling completions 2006/07 to 2015/16

Year Private Enterprise Housing Associations Local Authority

All

Completions

2006/07 3700 50 0 3750

2007/08 2740 70 0 2810

2008/09 950 120 0 1070

2009/10 850 180 0 1030

2010/11 1220 140 0 1360

2011/12

1050

1060

2012/13

1330

1380

2013/14

1940

170

2110

2014/15

1600

100

1750

2015/16

1300

120

1,420

Total (ten years)

16,680

1,010

17,740

Annual average

1,668

101

1,774

Source: DCLG Live Table 253 Housebuilding

Figure 4.1 shows these completions set against the annual target of 3,660. This clearly

illustrates the fall in dwelling completions that occurred during the four-year period

2009/10 to 2012/13, with another drop in 2014/15.

Leeds SHMA 2017 Page | 70

September 2017

Figure 4.1 Dwelling completions 2006/07 to 2015/16 compared with the annual target

Sources: Leeds AMR 2013, AMR 2016

The Government’s Housing White Paper, Fixing our broken housing market (February

2017), sets out the concept of a ‘housing delivery test’ to highlight whether the

number of new homes being built by a local authority is achieving the identified

housing target for the area. If the target is not being reached, the test will assist in

triggering appropriate policy responses to ensure that additional land come forward

for development.

Figure 4.2 shows the delivery test information for Leeds City, including dwellings

completed, target completions, the difference between completions and target and

the percentage of the target achieved. Figure 4.2 shows that in 2015/16 and 2016/17

the City achieved over 90% of their target, up from just over 60% of the target in

2014/15.

The White Paper proposes that from November 2017, if delivery falls below 95% of the

annual requirement, the local authority should publish an action plan which sets out

the reasons for under-delivery and the actions that the authority and others need to

take to reverse the situation. If delivery falls below 85% then, in addition to the action

plan, the authority must plan for a 20% buffer on its five-year housing land supply.

500

1000

1500

2000

2500

3000

3500

4000

4500

Total

Dwellings

Built

Target

Leeds SHMA 2017 Page | 71

September 2017

Figure 4.2 Housing delivery test

Sources: Leeds AMR 2016, Leeds Local Plan Newsletter May 2017

Concluding comments

In conclusion, a review of Market Signal data would suggest there are no indicators

prompting a need for adjusting the Objectively Assessed Need on the basis of market

signals.

However, it is recommended that market signals are monitored on an annual basis and

if the Council considers that these indicate that there is a need to reconsider the

Objectively Assessed Need in the City then a review of the SHMA could be triggered.

An analysis of past dwelling completion data for Leeds indicates that annual

completions since 2009/10 have been below the target rate of 3,660 dwellings per

year. Undertaking the White Paper ‘housing delivery test’ analysis for the three-year

period 2014/15 to 2016/17 indicates that the City achieved only 60.8% of its target in

2015/16, but in 2015/16 and 2016/17 this has risen to over 90% of target.

-1434

-364

-354

60.8%

90.1%

90.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

-2000

-1000

1000

2000

3000

4000

2014/2015 2015/2016 2016/2017

Dwellings Completed Target Difference (%) of target

Leeds SHMA 2017 Page | 72

September 2017

5. Objectively Assessed Housing Need and Housing

Requirement

Introduction

The National Planning Policy Framework (NPPF) requires that Local Planning

Authorities (LPAs) identify Objectively Assessed Housing Need (OAN) and that Local

Plans translate those needs into land provision targets. Paragraph 159 of the NPPF

recognises that the objective assessment of housing need must be one that meets

household and population projections, taking account of migration and demographic

change; meets the need for all types of housing including Affordable, and caters for

housing demand and the scale of housing supply necessary to meet that demand. PPG

recognises that ‘establishing future need for housing is not an exact science’

(paragraph 14), although it should be informed by reasonable and proportionate

evidence.

The purpose of this chapter is to consider the evidence base which establishes an

Objectively Assessed Housing Need for Leeds over the Plan period 2017-2033. The

chapter is structured in accordance with the approach set out in PPG and also

considers further guidance which supports PPG, namely the Planning Advisory Service

Objectively Assessed Need and Housing Targets Technical Advice Note, Second Edition,

July 2015; and the Local Plan Experts Group report, Local Plans: report to the

Communities Secretary and the Minister of Housing and Planning, March 2016 (the

LPEG report).

Firstly, the chapter sets out the OAN calculation based on the approach set out in the

LPEG report. This considers demographic analysis prepared by Edge Analytics

and

considers:

• Baseline 2014-based ONS and CLG population projections for Leeds;

• Market signals; and

• Affordable housing need.

Secondly, the chapter sets out the OAN calculation based on the Planning Practice

Guidance (PPG). This draws upon demographic analysis prepared by Edge Analytics

and considers:

• Baseline 2014-based ONS and CLG population projections for Leeds;

• Alternative migration impacts/assumptions;

• Jobs-led forecasts; and

• Market signals, past trends in delivery and affordable housing need.

Leeds SHMA Demographic Analysis and Forecasts June 2017

Leeds SHMA 2017 Page | 73

September 2017

Establishing the Housing Market Area

PPG (paragraph 10) states a requirement to establish the relevant functional area to

assess needs. For housing need, this is the Housing Market Area. Chapter 2 of this

SHMA considered the evidence and on the basis of migration, Leeds is a self-contained

Housing Market Area. It is also self-contained in terms of travel to work patterns.

LPEG model

The LPEG report proposes that an OAN is derived through a four-step process:

Step A Demographic Starting Point

Step B Market Signals

Step C Affordable housing needs

Step D Full Objectively Assessed Housing Need (FOAHN)

Table 5.1 sets out the detailed components of the stepwise progression to establishing

a Full Objectively Assessed Housing Need for Leeds based on the LPEG model. Note

that Edge Analytics have provided a dwelling requirement figure for the components

of the LPEG Model.

Step A: Demographic starting point and adjustments

The demographic starting point is the latest 2014-based projections. This establishes a

baseline annual need of 2,534 dwellings. The methodology also recommends

sensitivity testing of a 10-year migration scenario which takes into account longer-

term economic and housing market cycles. In the case of Leeds, this results in a lower

dwelling need (2,282) and therefore discounted in the calculation.

An adjustment is also considered for alternative household formation rates. The LPEG

report comments that ‘the household projection-based estimates of housing need will

require adjustment to reflect factors affecting local demography and household

formation rates which are not captured in past trends or where past trends do not

accurately reflect the need for homes. In many areas, formation rates will have been

supressed historically by under-supply and worsening affordability of housing, and the

assessment should therefore make an adjustment to household representative rates to

reflect and respond to the consequences of this’

. The LPEG report recommends the

application of the latest CLG household formation rates with an adjustment for those

in 25-44 age cohorts to make up half the difference with the 2008-based projections.

This results in an uplift of 231 dwellings to 2,765 each year.

Local rates of vacancy and second homes are also considered which translate

households into an estimate of dwellings. A vacancy rate of 3.4% is assumed and is

already factored into the dwelling need outputs prepared by Edge Analytics.

LPEG Appendix 6

Leeds SHMA 2017 Page | 74

September 2017

The dwelling need figure presented at Output A of the LPEG model, the demographic

starting point, is 2,765.

Step B: Market signals

The LPEG report sets out percentage increases in dwelling requirement linked to

house price/rent and income ratios. The relevant ratios are now set out:

• House price ratio (2015) of 5.76 based on median prices to median incomes (which

would warrant a 10% uplift based on LPEG)

• Rental affordability ratio (2015) of 30.7% based on lower quartile price to lower

quartile rents (which would warrant a 20% uplift based on LPEG).

Given that the uplift percentages differ under each ratio, it is proposed that a blended

uplift of 15% is applied to baseline demographic data. This results in an uplift of 415

dwellings each year based on the demographic starting point of 2,765.

The dwelling need figure presented at Output B of the LPEG model, the number of

dwellings with upwards adjustment based on market signals the demographic starting

point, is 3,180.

Step C: Affordable housing needs

This step of the calculation will be based on household survey evidence using the PPG

methodology for assessing need. In summary, this calculation involves adding together

the current unmet housing need and the projected future housing need and then

subtracting this from the current supply of affordable housing stock.

Analysis of housing need using the methodology set out in PPG establishes an annual

imbalance of 1,230 affordable dwellings each year. As this is higher than the 415 figure

for the market signals adjustment, a 10% uplift of Output A would be recommended

under the LPEG model. This results in an upwards adjustment of 277 to take account

of affordable housing need.

Step D: Full Objectively Assessed Housing Need (FOAHN)

The FOAHN for Leeds would be 3,456 each year or a total of 55,296 over the Plan

period 2017-2033.

Note however that LPEG is only a recommended approach and in establishing an OAN

focus has to be given to the PPG calculation method.

Leeds SHMA 2017 Page | 75

September 2017

Table 5.1 Full Objectively Assessed Housing Need using the LPEG method

Step Consideration Output (dwellings)

A. Demographic

Starting Point

A1. Latest official projection 2,534

A2. Sensitivity test 10 year migration scenario 2,282

A3. Higher of A1 and A2 is the population for the

demographic starting point

2,534

A4. Apply the latest CLG household formation rates

(adjustment for those aged 25-44 age cohorts to make up

half the difference with the 2008-based projections)

2,765

A5. Apply local area rates of vacancy and second homes (to

translate households into estimate of dwellings)

3.4% and included in

above

OUTPUT A:

This is the demographic starting point for

estimating FOAHN in each local area and the HMA

2,765

B. Market signals

B1. Identify levels of local affordability (Lower quartile

house prices/rents vs incomes

Price = 5.63

Rent = 30.7%

B2. Apply upwards adjustment 0-25% to Output A based on

affordability thresholds

Price = 10%

Rent = 20%

Overall = 15% or

415 dwellings

OUTPUT B:

The number of dwellings with upwards

adjustment based on market signals

3,180

C. Affordable

housing needs

C1. Estimate affordable housing need based on standard

methodology

1,230 each year

C2. Convert into the total number of dwellings necessary to

meet affordable needs (at the likely rate of delivery as % of

market housing)

3,514 (based on 35%

affordable housing target)

OUTPUT C:

The number of dwellings required to meet

affordable housing need

Max 10% of Output A

(277)

Step D: Full

Objectively Assessed

Housing Need

(FOAHN)

OUTPUT D: Full Objectively Assessed Housing Need. If

Output C is greater than Output B, then FOAHN is reached

by a further upward adjustment to the lower of either

meeting Output C in total or adding an amount equivalent

to 10% of Output A

3,456 dwellings each year

55,296 dwellings for the

period (2017-2033)

PPG model

In order to establish Objectively Assessed Need, PPG recommends a logical

progression of steps which form the structure of this section:

Leeds SHMA 2017 Page | 76

September 2017

• The use of DCLG household projections as the starting point estimating the OAN;

• Sensitivity testing specific to local circumstances, based on alternative assumptions

in relation to the underlying demographic projections and household formation

rates;

• Take account of employment trends;

• Take account of market signals; and

• Consider an increase in the total housing figures where it could help deliver the

total number of affordable homes.

Demographic starting point

PPG (paragraph 15) states that plan makers should make use of the household

projections published by DCLG as the starting point estimate of housing need. PPG

(paragraph 16) states that ‘wherever possible, local needs assessments should be

informed by the latest available information’.

In line with PPG, the demographic starting point is the latest 2014-based projection.

This establishes a baseline annual requirement of 2,534 dwellings.

Adjusting the projections

The PPG recommends adjustments are made to the household projections with

reference to local demographic trends, future jobs, past delivery and market signals

and other local circumstances not captured by past trends. Each of these is now

considered in turn.

Local demographic trends

Whilst the official 2014-based ONS population and DCLG household projections form

the ‘starting point’ of the assessment of housing need, the PPG states that it is

appropriate to consider ‘alternative assumptions in relation to the underlying

demographic projections and household formation rates’ of the local area (PPG

Paragraph 17).

To consider the impact of varying migration histories on population change, the

following ‘alternative trend’ scenarios have been developed for Leeds by Edge

Analytics:

• PG-5Yr: Internal migration rates and international migration flow assumptions are

based on the latest five years of historical evidence (2010/11-2014/15). This

scenario considers a shorter historical period than the SNPP-2014 scenario,

however includes the latest mid-year estimate;

• PG-10Yr: Internal migration rates and international migration flow assumptions are

based on the latest ten years of historical evidence (2005/06-2014/15), considering

a longer historical period;

Leeds SHMA 2017 Page | 77

September 2017

• PG Long-Term: Internal migration rates and international migration flow

assumptions are based on the latest fourteen years of historical evidence

(2001/02-2014/15), considering the full historical period from which to draw

migration assumptions.

The Edge analysis also considers headship rate sensitivities. Nationally, younger age

groups have been more adversely affected by housing supply and unaffordability

issues, which in some areas may have led to ‘suppressed’ rates of household

formation. Therefore, two modified sets of headship rates have been generated for

Leeds in which the headship rates for the younger 25-44 age groups are adjusted:

• ‘Return’ sensitivity whereby headship rates return to 2008-based values by 2033,

following their original trend thereafter; and

• ‘Partial return’ sensitivity whereby headship rates return to a mid-point between

the 2008-based and 2014-based headship rates to 2033, following their original

trend thereafter.

Planning Advisory Service (PAS) guidance makes a particular comment that ‘CLG 2008

rates are no longer helpful because they are based on very old evidence and anyway

may not reflect the true long-term trend’

. This is borne out in research

which

concludes that the 2008-based rates never did provide a robust view of long-term

trends and are now irrelevant, because societal change is slowing down historical rise

in Household Representative Rates and a resulting fall in household sizes. Therefore,

the ‘partial return’ sensitivity is considered and this also accords with LPEG guidance.

Table 5.2 summarises the range of scenarios and dwelling requirements. These

outputs also assume a 3.4% dwelling vacancy rate fixed over the Plan period.

Table 5.2 Dwelling requirements under alternative scenarios using 2014-based and alternative

headship rates

Scenario Headship rates

HH-14

Partial Return

HH-14

Return

PG – Long Term

2,638

2,881

3,112

SNPP-2014

2,534

2,765

2,984

PG – 5yr

2,354

2,578

2,790

PG – 10yr

2,282

2,508

2,722

Having reviewed the latest demographic and household projections and considered

alternative assumptions relating to migration and headship rates in line with PPG, it is

recommended that:

I. the baseline dwelling requirement is 2,534 based on the latest 2014-based

projections and accords with PPG Paragraph 2a-016;

Planning Advisory Service Objectively Assessed Need and Housing Targets Technical Advice Note July 2015 para 6.41

L Simpson, Wither household projections? In Town and Country Planning, December 2014

Leeds SHMA 2017 Page | 78

September 2017

II. That an adjustment is made to reflect alternative assumptions in relation to the

underlying demographic projections and household formation rates which

accords with PPG paragraph 2a-017. This requires a consideration of migration

assumptions and alternative headship rates.

III. Regarding migration assumptions, scenarios have considered dwelling

requirements based on short- and long-term trends. The favoured approach in

OAN analysis is to consider the PG-10 year scenario output which takes

account several economic and housing market cycles: this approach is also

advocated by LPEG. As this would result in a reduction in dwelling

requirements (2,282), it is recommended that no adjustment is made for

alternative migration assumptions, and SNPP 2014 should be the starting point.

IV. Regarding alternative headships rates, each of the demographic scenarios have

been run with an alternative headship rate assumption which reflects a

‘recovery’ in household formation rates in the younger age groups (25-44). This

reflects the approach recommended by LPEG which considers an adjustment to

local household formation rates to reflect upon the potential impact of higher

headship rates if achieved amongst younger age groups. Under the 2014-based

projections, this increases dwelling need to 231 each year to 2,765.

V. In conclusion, an analysis of ‘alternative assumptions in relation to the

underlying demographic projections and household formation rates’ of the

local area results in a recommendation of a need to adjust the baseline need of

2,534 upwards to 2,765 to take account of alternative headship rates over the

2017-33 Plan period. It is recommended therefore that the baseline

demographic requirement for Leeds is within the range 2,534 to 2,765.

Employment trends

PPG (paragraph 18) states that ‘plan makers should make an assessment of the likely

change in job numbers based on past trends and/or economic forecasts as appropriate

and also having regard to the growth of the working age population in the housing

market area’.

Edge Analytics note that ‘alignment of demographic and economic model forecasts is

challenging due to different methodologies, data inputs and assumptions’. However,

using POPGROUP, it is possible to derive the size and structure of the labour force and

the level of employment through the application of three key assumptions: economic

activity rates, unemployment rates and a commuting ratio.

REM Employment forecasts

Economic forecasts (from the Regional Economic Model or REM) combine a national

and regional economic outlook, with data on the sectoral mix of businesses, to

produce a forecast of employment growth for Leeds. These forecasts incorporate the

latest OAN sub-national population projection data, balancing employment and

population growth through changes to economic activity and unemployment rates

and, in some instances, commuting ratios.

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September 2017

The latest forecasts for Leeds (March 2017 REM) provide a trajectory of jobs growth,

measured as an annual change to identify the number of Workplace-Based (WPB) jobs.

The WPB annual employment growth trajectory for the 2017-2033 period is +3,138.

The March 2017 REM forecasts are derived using a different, economic-led

methodology to POPGROUP but include outputs indicating how economic activity

rates, unemployment and commuting are expected to influence employment growth.

Economic activity rates

These determine the size of the labour force and is the sum of the employed and

unemployed population. Changes to economic activity rates resulting from changes to

the State Pension Age (SPA) and a trend towards higher rates of participation in older

age groups (particularly females) have a direct impact upon the level of employment

growth that could be supported within local populations.

The March 2017 REM assumes an overall increase in economic activity, from 64.6% in

2017 to 65.2% by 2033, assuming a greater proportion of the resident population is

maintained in the labour force.

Unemployment rate

The unemployment rate determines the proportion of the labour force that is

unemployed (and as a result, the proportion that is employed). The March 2017 REM

assumes a small decrease in the unemployment rate from 5.9% in 2017 to 5.3% in

2033. These are deemed by Edge Analytics to appropriately reflect economic recovery

in Leeds and compare with ONS modelled unemployment rates of 6.2% in 2015 and a

pre-recession average of 5.4%.

Commuting ratio

This is the balance between the level of employment in an area and the size of the

resident workforce, and under the March 2017 REM, a net in-commute is implied

throughout the Plan period (i.e. the number of jobs in the district exceeds the size of

the labour force). A commuting ratio of 0.875 is assumed, reducing slightly to 0.874 by

the end of the forecast period. This compares with the 2011 Census commuting ratio

of 0.87.

Outcomes

Edge Analytics have aligned demographic and economic forecasts and economic

activity, unemployment and commuting ratio assumptions from the March 2017 REM

to each of the demographic scenarios to derive an estimate of the changing size of the

labour force that the population growth under the demographic scenarios implies.

Additionally, the level of employment growth (equivalent to the WPB employment

estimated by the REM) that could be supported using these assumptions has been

calculated (Table 5.3). This analysis shows how higher or lower population growth

might influence economic change.

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September 2017

Note that under the benchmark scenario, employment growth of 3,099 is close to the

March 2017 REM figure of 3,138.

Table 5.3 Labour force and employment growth outcomes 2017-2033

Scenario Average Annual Employment Growth

PG – Long Term 3,310

SNPP-2014 3,099

PG – 5yr 2,766

PG – 10yr 2,702

Employment-led scenarios and sensitivities

The impact of variant employment growth trajectories on population change in Leeds

has also been considered by Edge Analytics. This analysis evaluates the impact of an

employment growth trajectory by measuring the relationship between the workplace-

based employment in Leeds (as defined by the economic forecasts), the size of the

resident labour force and the size of the resident population. The level of population

growth required to meet a defined jobs growth trajectory are the three assumptions

on economic activity, unemployment and commuting.

Employment-led scenarios have been developed in which alternative economic

forecasts are considered:

• Employment-led REM 2017: the annual change in workplace-based employment as

defined in the March 2017 REM is applied in each year of the forecast period;

• A ‘high employment growth’ scenario: developed by the Regional Economic

Intelligence Unit which considers a pragmatic level of higher economic growth in

Leeds whilst taking account of wider growth strategies for the City. Under this

trajectory, annual growth in employment averages +3,650 each year.

Edge Analytics have also run a sensitivity variant that considers the Office for Budget

Responsibility (OBR) age-specific economic activity rates:

• CORE: Economic activity rates, unemployment rates and commuting ratios are

derived from the March 2017 REM;

• OBR: Economic activity rates by five year age groups (16-75+ and sex from the

2011 Census, with OBR adjustments made to all age groups).

In recognition that there are inherent challenges and uncertainty in forecasting future

economic activity rates, Edge Analytics have configured two scenarios with an

alternative set of economic activity rates which achieve a ‘mid-point’ between the

REM 2017 and the OBR assumptions:

• Employment-led REM 2017 Mid: Unemployment rate assumptions are consistent

with the core Employment-led REM 2017 scenario (i.e. derived from the March

2017 REM which assumes a reduction from 5.9% in 2017 to 5.3% by 2033);

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September 2017

• Employment-led REM High Growth Mid: Unemployment rate assumptions are

consistent with the core Employment-led High Growth scenario (i.e. derived from

the ‘High Growth’ model which assumes a reduction from 6.0% in 2017 to 5.0% by

2033).

Table 5.4 summarises employment growth outcomes under alternative employment-

led forecasts.

Table 5.4 Employment-led REM and Average employment growth outcomes 2017-2033

Employment-led scenario Average Annual Employment Growth

REM 2017 3,137

High Growth 3,650

Table 5.5 summarises the outputs from the employment-let scenarios on dwelling

requirements. Under the baseline SNPP-2014 headship rates, the range of dwelling

requirements under all employment-led scenarios ranges between 2,587 and 3,403

each year. Under the ‘partial return’ headship sensitivity, dwelling requirements range

between 2,839 and 3,656.

Table 5.5 Employment-led scenario Dwelling requirements under alternative scenarios using

2014-based and alternative headship rates

Scenario

Headship rates

HH-14

Partial Return

HH-14

Return

High Growth (OBR)

3,403

3,656

3,897

High Growth (Mid)

3,155

3,403

3,638

REM 2017 (OBR)

3,101

3,347

3,580

High Growth (REM)

2,978

3,222

3,453

REM 2017 (Mid)

2,858

3,098

3,326

REM 2017 (Core)

2,604

2,839

3,062

High Growth (Core)

2,587

2,821

3,044

Summary of employment trends

This section has summarised material in the Edge Analytics has aligned demographic

and economic forecasts and economic activity, unemployment and commuting ratio

assumptions from the March 2017 REM to each of the demographic scenarios to

derive an estimate of the changing size of the labour force that the population growth

under the demographic scenarios implies. The impact of variant employment growth

trajectories on population growth has also been considered by Edge Analytics.

Having considered the potential change in future employment, it can be concluded

that:

Leeds SHMA 2017 Page | 82

September 2017

I. All demographic scenarios support an increase in the working age population

and therefore support jobs growth. The 2014-SNPP baseline scenario supports

an average annual employment growth of 3,099 and the PG-10 year variant

migration assumption results in an employment growth of 2,702 jobs

II. Over the 2017-2033 plan period, employment forecasts suggest an increase of

between 3,137 and 3,650 jobs each year. Under alternative scenarios, this

translates to an annual dwelling need of between 2,587 and 3,403.

III. Under the REM 2017 employment-led scenario, dwelling need ranges between

2,604 and 3,101, with a mid-point of OBR/REM economic activity rates

resulting in a need for 2,858 dwellings each year. With a headship rate

adjustment, this increases the need to 3,098 each year.

IV. Under the High Growth employment-led scenario, dwelling need ranges

between 2,587 and 3,403, with a mid-point of OBR/REM economic activity

rates resulting in a need for 3,155 dwellings each year. With a headship rate

adjustment, this increases the need to 3,403 each year.

V. In summary, an assessment of the ‘likely change in job numbers based on past

trends and/or economic forecasts as appropriate and also having regard to the

growth of the working age population in the housing market area’ would

suggest that an upward adjustment is required to take account of employment

trends. Under the REM 2017 mid-point OBR/REM economic activity rate

assumption, the annual dwelling need is 3,098 (which includes a headship rate

adjustment). Under the High Growth scenario, dwelling need increases to

3,403 (based on the mid-point OBR/REM economic activity rate assumption

and a headship rate adjustment).

Market signals and past trends in delivery

Chapter 4 presented information on market signals and past trends in delivery. This

considered signals relating to price and quantity and compared Leeds with

neighbouring districts, the region and England. Given prevailing income and house

price/rent ratios, an uplift is recommended. PPG does not provide guidance on how an

uplift should be derived but the LPEG report sets out percentage increases in dwelling

requirement linked to house price/rent and income ratios. The relevant ratios are now

set out:

• House price ratio (2015) of 5.76 based on median prices to median incomes (which

would warrant a 10% uplift based on LPEG)

• Rental affordability ratio (2015) of 30.7% based on lower quartile price to lower

quartile rents (which would warrant a 20% uplift based on LPEG)

Given that the uplift percentages differ under each ratio, it is proposed that a blended

uplift of 15% is applied to baseline demographic data. This results in an uplift of 380

dwellings each year based on the starting point of 2,534.

Regarding past trends in delivery the Edge report comments that housing completions

fell from an average of approximately 3,145 each year 2001/2 to 2009/10 to 2,058

2011/12 to 2015/16).

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September 2017

Regarding market signals and past trends in delivery:

VI. It is recommended that the OAN is adjusted upwards by 15% (380 dwellings) to

take account of market signals; and

VII. No adjustment is necessary to take account of past delivery.

Affordable need and housing provision targets

PPG paragraph 29 advises on how housing needs assessments should take account of

affordable housing need: ‘the total affordable housing need should be considered in

the context of its likely delivery as a proportion of mixed market and affordable

housing developments, given the probable percentage of affordable housing to be

delivered by market housing-led developments. An increase in the total housing figures

included in the local plan should be considered where it could help deliver the required

number of affordable homes’.

The analysis of housing need based on 2017 household survey evidence suggests there

is an annual net imbalance of 1,230 affordable dwellings each year. This figure

expresses the overall need from household survey evidence compared with the

current supply of affordable housing. The 1,230 figure assumes that backlog need is

cleared over a 10 year period. If the backlog is cleared over the Plan period, the annual

net imbalance reduces to 931 each year.

PAS

guidance provides helpful guidance in interpreting affordable need in the

context of objectively assessed need. Paragraph 9.6 states ‘in practical terms, there is

no arithmetical way of combining the two calculations set out in PPG to produce a

joined-up assessment of overall housing need’. We cannot add together the calculated

OAN and the calculated affordable need, because they overlap: the OAN of course

covers both affordable and market housing, but we cannot measure these

components separately, because demographic projections – which are the starting

point for the OAN – do not distinguish between different sectors of the housing

market. Paragraph 9.7 continues ‘in summary, it seems logically clear that affordable

need, as defined and measured in paragraphs 22-29 of the PPG, cannot be a

component of the OAN. The OAN does have an affordable component – which cannot

be measured separately but will normally be much smaller than the affordable need

discussed at paragraphs 22-30’. When paragraph 47 of the NPPF says that plans

should meet in full ‘the need for market and affordable housing’, it is referring to that

component rather than the separately calculated affordable need.

Objectively Assessed Housing Need

An OAN should be based on reasonable assumptions which take into account baseline

demography, adjustments to reflect local demographic trends, past delivery, market

signals, future jobs and other local circumstances: the SHMA has explored these

factors in detail. PAS guidance suggests that the OAN should exclude any policy

Planning Advisory Service Objectively Assessed Need and Housing Targets Technical Advice Note Second Edition July 2015

Leeds SHMA 2017 Page | 84

September 2017

objectives and value judgements and evidence should be entirely about need and

demand, to the exclusion of any supply-side factors such as physical constraints, policy

designations and adverse impacts of development. However, these factors should be

considered when translating the OAN into a Housing Requirement.

The challenge for the Council is to deliver an appropriate and proportionate level of

dwelling growth that supports economic growth and carefully takes into account the

current demographic profile of the district.

It is proposed that the Objectively Assessed Housing Need for Leeds over the Plan

period 2017-2033 is established from a baseline of 2,534 (using the latest 2014-based

SNPP). An adjustment to take account of longer-term (10 year) migration trends is not

recommended. An upward adjustment to take account of higher rates of household

formation amongst the 25-44 age group is recommended and increases dwelling need

to 2,765. A market signals uplift of 15% of the basic demographic requirement (380

dwellings each year) is also recommended, which also takes into account underlying

affordable housing need as evidenced in the 2017 SHMA household survey.

The OAN needs to take account of employment growth. The SNPP 2014 baseline

scenario supports jobs growth of 3,099 each year. The REM 2017 results in jobs growth

of 3,137 each year and the high growth scenario result in jobs growth of 3,650. When

the mid-point of OBR/REM economic activity rates are considered along with a

headship rate adjustment, under the REM 2017 scenario, this translates to a dwelling

need of 3,098 (including a headship rate adjustment). When the market signals

adjustment is included, this results in an overall dwelling need of 3,478. This translates

to a need for 55,648 dwellings over the Plan period 2017-33. Under the High Growth

economic scenario, the dwelling need is 3,403 (including a headship rate adjustment)

and when a market signals adjustment is also included this results in an overall annual

dwelling need of 3,783.

In conclusion, it is proposed that the Objectively Assessed Housing Need figure for

Leeds is within the broad range 2,765 (2014-SNPP with ‘partial return’ headship

sensitivity) and 3,783 (High Growth scenario with mid-point of OBR/REM activity rate

assumptions including a ‘partial return’ headship rate sensitivity). This translates to a

total dwelling need in the range of 44,240 to 60,528 over the Plan period 2017-2033.

This range takes account of the need to deliver more affordable and market housing

for an increasing number of households, takes account of the latest demographic

evidence, long-term trends in migration and supports economic growth. It also takes

into account potential changes to headship rates amongst younger households and a

market signals adjustment.

From an OAN to a Housing Requirement

Having established an up to date OAN, it is necessary to translate this into a growth

target for the purposes of future plan-making. This is referred to as the ‘Housing

Requirement’. The Housing Requirement should, in normal circumstances, reflect the

Objectively Assessed Need but can be adjusted either upwards or downwards. An OAN

could be adjusted downwards due to development constraints or upwards to support

economic or other growth ambitions. The OAN is in effect a ‘policy off’ need for

Leeds SHMA 2017 Page | 85

September 2017

housing over the Plan period. Once planning policy considerations have been applied

to the OAN figure, the result is a ‘policy on’ figure for the Housing Requirement. The

Housing Requirement figure will be the target against which housing supply will

normally be measured.

A further uplift to the Housing Requirement figure to help deliver additional affordable

housing is not suggested.

The data for Leeds which underpins the analysis of OAN is summarised in Figure 5.1

overleaf. This replicates Figure 4.1 in the PAS guidance note on OAN (Second Edition

July 2015).

Leeds SHMA 2017 Page | 86

September 2017

Figure 5.1 Housing Needs Assessment for Leeds (based on PAS Guidance OAN advice note July

2015 Figure 4.1)

CLG HOUSEHOLD PROJECTIONS

2014-based = 2,534

OBJECTIVELY ASSESSED NEED

Range 2,765 to 3,783

DEFINE HOUSING MARKET AREA

Affordable housing need

Annual imbalance of 1,230

(assumes backlog clearance over

10 yrs and 931 if over plan period

so no adjustment)

Supply capacity

Other local circumstances

not captured by pasts trends –no

adjustment

Future employment up to

3,403 (High Growth including

headship rate adjustment)

Past delivery

in line with existing

targets & market signals indicate

15% uplift (380)

Demographic inputs

- 10 year migration = 2,272

- Headship adjustment = 2,765

ADJUST PROJECTIONS FOR:

HOUSING PROVISION TARGET

Authorities’ policy objectives

Area profile

Cross boundary unmet need

POLICY AND SUPPLY FACTORS

Leeds SHMA 2017 Page | 87

September 2017

DCLG consultation regarding the calculating of OAN

In September 2017, the DCLG issued a consultation document ‘Planning for the right

homes in the right places: consultation proposals’. This sets out a simplified and

standardised approach to assessing local housing need that has three components:

• A baseline which is based on household growth over a 10 year period;

• An adjustment to take account of market signals based on workplace-based

median house price to median earnings ratio; and

• Capping the level of increase according to the status of the Local Plan (for areas

which do not have an up-to-date local plan the figure is capped at 40% above the

higher of the projected household growth for their area or the annual housing

requirement figure currently set out in their local plan.

The CLG recognises that an upward adjustment also may be necessary to take account

of anticipated employment growth.

For Leeds, the proposed 2017 DCLG methodology results in an annual dwelling

requirement of 2,649. This compares with an OAN of 3,478 established using the

existing PPG method (2017 SHMA/PPG) and an LPEG figure of 3,456. Table 5.2

summarises the aspects of objectively assessed housing need that are considered in

the three approaches (2017 SHMA/PPG; LPEG method and the DCLG 2017 proposed

method). Crucially, the output for Leeds under the 2017 DCLG proposed method does

not take into account jobs growth. As this is a key strategic driver for Leeds, an uplift of

the baseline 2,649 figure would be recommended. For illustrative purposes a 40%

uplift would result in a revised objectively assessed need under the new methodology

of up to 3,709: this is a higher figure compared with the 2017 PPG and LPEG

approaches.

The proposed transitional arrangements for the new OAN calculation are set out in

Table 1 of the consultation document. For plans submitted for examination before 31

March 2018, the OAN should be calculated using the existing methodology set out in

PPG. Therefore, the SHMA concludes that the appropriate OAN for Leeds is 3,478.

Table 5.6 Factors included in OAN calculation methods

Considerations

2017 SHMA/PPG

LPEG

2017 DCLG

Annual Dwellings

3,478

3,456

2,649

ONS Projection



Affordable housing



Migration





Household Size





Economy / Jobs

 



(unless 40% uplift)

Commuting





Leeds SHMA 2017 Page | 88

September 2017

6. The need for all types of housing

Introduction

Having established the Objectively Assessed Need for housing, the purpose of this

chapter is to consider the range of need for all types of housing as identified in PPG

paragraph 21. PPG recommends that planning authorities consider the need for

certain types of housing and the needs of different groups, including the private

rented sector, people wishing to build their own homes, family housing, housing for

older people, households with specific needs and student housing.

This chapter begins with an analysis of the mix of dwellings by type and size over the

Plan period and then considers affordable housing need as a component of future

dwelling requirements.

Dwelling mix and affordability

The NPPF (paragraph 159) states that local authorities should identify the scale and

mix of housing and the range of tenures that the local population is likely to need over

the Plan period.

Having reflected upon the Objectively Assessed Need for housing and Housing

Requirement, this section considers the overall dwelling mix which is appropriate for

consideration by the Council.

In order to determine the potential range of new dwelling stock appropriate for Leeds,

analysis has considered the following, based on the findings of the 2017 Household

Survey:-

• Current market dwelling stock,

• Aspirations (what households would ‘like’), and

• Expectations (what households actually ‘expect’ to achieve).

In addition, the analysis takes into account the impact of new household formation.

Table 6.1 summarises the profile of market dwellings (by type and size) required

across Leeds City as a whole and compares these future market development

requirements with the current stock profile. This indicates that the greatest demand is

for small (one and two bedroom) and medium-size (three bedroom) houses and

flats/apartments.

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September 2017

Table 6.1 Overall market dwelling requirements compared with the current stock profile

Dwelling type and size

Current stock profile

Future market dwelling

requirements

1/2 Bed House

16.4%

21.6%

3 Bed House

39.3%

35.1%

4+ Bed House

21.5%

17.3%

Bungalow

6.3%

5.9%

Flat/apartment

16.0%

19.0%

Other

0.4%

1.3%

Total

100.0%

Base

258,236

73,856

Source: 2017 Household Survey

This data is set out in graphical form in Figure 6.1, contrasting the future market

dwelling requirements with the current stock profile. This shows that in the case of

smaller (one and two bedroom) houses and flats there will be a greater demand

(shown in red) than there is supply within the current stock profile (shown in blue).

Figure 6.1 Market development requirements compared with the current stock profile

Source: 2017 Household Survey

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

House 1/2 Beds House 3 Beds House 4 or more

Beds

Bungalow Flat Other

Current stock Future market development

Leeds SHMA 2017 Page | 90

September 2017

Table 6.2 considers the current dwelling stock profile of open market dwellings by sub-

area and then the extent to which this varies from the development profile based on

the aspirations (‘likes’) of households planning to move. Where cells are colour coded:

• a green spot indicates that the current proportion of dwelling stock is greater than

the aspiration for that dwelling stock;

• a red spot indicates that the proportion of dwelling stock is lower than the

aspiration.

• Therefore a red spot suggests there is a lack of that particular type of dwelling type

and size in the sub-area.

Table 6.3 considers the current dwelling stock profile of open market dwellings by sub-

area compared with the development profile based on the expectations of households

planning to move. The same colour-coding is used, with red spots indicating those sub-

areas and dwelling types/sizes where the demand (based on expectation) exceeds

current supply.

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September 2017

Table 6.2 Comparison between current dwelling stock and market aspirations at sub-area level

Leeds SHMA 2017 Page | 92

September 2017

Table 6.3 Comparison between current dwelling stock and market expectations at sub-area level

Leeds SHMA 2017 Page | 93

September 2017

Affordable housing requirements

A detailed analysis of the following factors determines the extent to which there is a

shortfall of affordable housing:

• households currently in housing which is unsuitable for their use and who are

unable to afford to buy or rent in the market (backlog need);

• New households forming who cannot afford to buy or rent in the market;

• Existing households expected to fall into need; and

• The supply of affordable housing through social/affordable renting and

intermediate tenure stock.

The needs assessment model advocated by the DCLG has been used and a detailed

analysis of each stage of the model is presented in Appendix C.

Modelling suggests a gross imbalance (not taking account of affordable supply through

lettings and intermediate tenure sales) of 5,272 affordable dwellings each year and a

net imbalance of 1,230 affordable dwellings each year across Leeds City.

In addition to establishing the overall affordable housing requirements, the analysis

considers variations by Affordable Housing Zone, designation (general needs and older

person) and property size. It should be also noted that 60.8% of households

considering an intermediate tenure dwelling aspire to a property with 3 or more

bedrooms which would suggest scope for increasing the proportion of larger

affordable dwellings on development sites.

Table 6.4 Net annual affordable housing imbalance by Affordable Housing Zone, property size

and designation 2017/18 to 2027/28

Affordable Housing Zone

General Needs

Older Person

Total

1/2 Bed

3+ Bed

1 Bed

Zone 1 Outer Northern / Golden Triangle Housing Zone

120

Zone 2 Outer Southern Housing Zone

457

220

117

794

Zone 3 Inner Area Housing Zone

153

168

Zone 4 City Centre

151

-3

148

TOTAL

853

238

139

1,230

Sources: 2017 Household Survey; RSL CORE Lettings and Sales

Affordable housing tenure split

Determining an appropriate tenure split for housing has been traditionally based on

the incomes and tenure aspirations of existing households in need and newly forming

households. This is used to determine an appropriate split between rented and

intermediate tenure dwellings. However, the increasing emphasis of Government

policy to build affordable homes for sale through intermediate tenure options and the

Starter Homes initiative, coupled with housing associations having to fund schemes for

rent without subsidy, is expected to have a major impact on the scale and range of

affordable housing to be delivered.

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September 2017

Analysis has carefully considered the range of affordable tenures that may be

appropriate for existing households in need and newly-forming households. This is set

out in detail in Appendix C.

Table 6.5 summarises an appropriate tenure split on the basis of the tenure

considerations of existing and newly-forming households. Analysis would suggest that

a tenure split of 67.2% rented and 32.8% intermediate tenure would be appropriate

across Leeds, with variations by Affordable Housing Zones as shown in Table 6.3.

Table 6.5 Affordable housing tenure options: existing and newly-forming households

Affordable tenure

Zone 1 Outer

Northern / Golden

Triangle Housing

Zone

Zone 2 Outer

Southern

Housing

Zone

Zone 3

Inner

Area Housing

Zone

Zone 4

City Centre

TOTAL

Affordable Rented

39.3

64.2

79.8

71.2

67.2

Intermediate Tenure

60.7

35.8

20.2

28.8

32.8

Total

100.0

Base (annual rate of

household formation

over past 5 years)

542 2,617 1958 155 5,272

Source: 2017 Household Survey

Analysis suggests that a reasonable proportion of households could afford

intermediate tenure prices based on equity shares of between £100,000 and £160,000

(Table 6.6). With the recommended split of 67.2% affordable rent to 32.8%

intermediate tenure (as above), economic viability work and discussions with

developers and Registered Providers should be undertaken to determine the overall

potential for such a tenure split in the light of Government policy, with a strong

emphasis on intermediate tenure and Starter Home development.

Table 6.6 Relative affordability of intermediate tenure prices

Equity price and

percentage who

could afford

Zone 1 Outer

Northern / Golden

Triangle Housing

Zone

Zone 2 Outer

Southern

Housing

Zone

Zone 3 Inner

Area Housing

Zone

Zone 4

City Centre

TOTAL

Could afford £100k

64.6

38.3

17.1

65.0

36.3

Could afford £120k

36.8

28.7

1.9

47.7

22.7

Could afford £140k

36.9

24.9

1.9

39.1

20.2

Could afford £160k

33.9

17.6

1.1

31.4

15.2

Base (Annual

affordable need from

existing and newly-

forming households)

542 2617 1958 155 5,272

Source: 2017 Household Survey

Leeds SHMA 2017 Page | 95

September 2017

Starter Homes

The Government introduced the concept of Starter Homes to help meet the housing

needs of young first-time buyers by offering properties to buy at below their open

market value. The NPPF (2012) outlines the key characteristics of Starter Homes

They are to be well-designed and suitable for young first-time buyers (between 23 and

under 40 years of age). Starter Homes area also available to ex-Armed Forces

personnel of any age.

The Housing and Planning Act 2016 put in place the legislative structure for the

provision of Starter Homes, which was one of the Government’s key policies to help

younger households access owner-occupation. Whilst it is subject to secondary

legislation, the principle is established that new housing developments will be

expected to provide a proportion of Starter Homes, made available to eligible

households at a 20% discount from market price up to a maximum house price of

£250,000 outside of London and £450,000 within London.

Analysis of market prices indicates that a Starter Home price would be between

£138,600 (30% discount on median house price 2016) and £158,400 (20% discount on

median house price 2016).

Analysis of the potential need for Starter Homes considers two types of household:

existing households who meet the criteria for Starter Homes and newly-forming

households who would consider owner occupation which could be achieved through

Starter Homes.

Conclusions on dwelling mix and affordability

Table 6.7 provides our recommendation on the potential dwelling tenure, type and

size split for housing delivery in Leeds. This assumes that 25% of homes delivered are

affordable overall.

Table 6.7 Suggested dwelling mix by market and affordable dwellings based on OAN of 3789

each year

Overall dwelling size mix

Market

Affordable

Total

Overall tenure split

75%

25%

100%

House 1-2 Bed

613

243

856

House 3+ Bed

996

116

1,112

House 4+ Bed

491

549

Bungalow

167

250

Flat/Apartment

539

446

985

Other

Total

2,843

946

3,789

Source: arc

National Planning Policy Framework, paragraph 002, Reference ID 55-002-20150318

Leeds SHMA 2017 Page | 96

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People wishing to build their own homes

The Coalition Government made clear in its Housing Strategy for England, Laying the

Foundations (2011), that it wished to unlock the growth potential of the self-build and

custom homes market and double its size over the next decade. It defined the main

critical barriers to custom build in this country as access to suitable plots to build on;

access to development finance to enable the purchase of land and start of

construction; and the hurdles that many custom builders face when they engage with

the regulatory regimes that govern the development process.

The National Planning Policy Framework (NPPF) sets out that the Government wants

to enable more people to build their own homes and wants to make this form of

housing a mainstream housing option

. The Self-Build and Custom Housebuilding Act

2015 and subsequent Self-Build and Custom Housebuilding (Register) Regulations

2016 require authorities to maintain a register of those who have expressed an

interest in buying serviced plots. Local authorities are under a duty to have regard to

these registers in carrying out their planning function.

The 2017 Household Survey identified 812 households planning to move in the next

five years who would like to move into a self-build property. The Household Survey

identified that households considering self-build:

• 43.7% lived in affordable housing, 43.0% in private rented housing and only 13.2%

were owner occupiers;

• 43.7% were couples with one or two children, 35.8% were singles under 65, 18.2%

were couples under 65 (no children) and 2.2% were couples over 65;

• Incomes were polarised, with 33.6% having an income of less than £15,600 per

annum and 50.0% having an income of more than £49,400 per year; and

• 43.0% would like a two-bedroom property and 52.5% would like a property with

four or more bedrooms.

All households considering self/custom build stated an open market tenure

preference, but additionally one third stated a preference for intermediate tenures

and one-third stated a preference for affordable renting. Therefore, self/custom build

could have a role in delivering affordable housing.

The Council currently has 219 households on its self/custom build register. The level of

demand for self/custom build should be monitored closely by the Council.

Additionally, the proportion of completions on plots for one or two houses should be

monitored to review the extent to which this development is self/custom build.

National Planning Policy Framework, paragraph 021, Reference ID 2a-021-20150326

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Family housing

Families (that is couples and lone parents with children including adult children living

at home) account for around 30.5% of households across Leeds. Of this number, 70.8%

are couples with children and 29.2% are lone parents with children (2017 Household

Survey data).

Overall 73.8% of families live in owner-occupied dwellings, 15.5% live in the private

rented sector and 10.7% live in affordable dwellings. 24.3% of all families live in the

North Leeds sub-area.

Armed forces accommodation

The 2011 Census identified that 691 residents in Leeds City are employed in the Armed

Forces. Of these, 95.2% live in a household and 4.8% live in a communal

establishment.

More recent records identify 80 Ministry of Defence personnel living within Leeds,

which represents 0.6% of the total for the region of Yorkshire and the Humber

(12,320).

Older people

A major strategic challenge is to ensure a range of appropriate housing provision,

adaptation and support for the area’s older population. PPG paragraph 21 states that

‘the need to provide housing for older people is critical given the projected increase in

the number of households aged 65 and over accounts for over half of new households’.

The number of people across Leeds City area aged 65 or over is projected to increase

from 121,700 in 2017 to 158,500 by 2033 (a 30.2% increase) according to the ONS

2014-based population projections.

The 2017 Household Survey identifies that 23.6% of households across Leeds are

either singles or couples aged 65 years or over. Of these older households, 54.4% live

in owner-occupied properties, 8.4% live in the private rented sector and 37.2% live in

affordable accommodation.

In terms of location, 21.6% of all older households live in the North Leeds sub-area,

19.7% in Inner Area and 15.9% in Outer West.

The 2017 Household Survey found that the majority of older people (77.3%) want to

stay in their own homes with help and support when needed (Table 6.6) and around

14.3% would consider buying a property on the open market. It is interesting to note

that a higher proportion of households aged 60-74 years would consider buying on the

open market compared with those households aged 75+ (19.2% v 3.9%). Sheltered

accommodation and Extra Care housing are attractive options, with a slight preference

for sheltered accommodation. Around 11.0% of older households would consider co-

housing. This evidence suggests a need to continue to diversify the range of older

persons’ housing provision. Additionally, providing a wider range of older persons’

accommodation has the potential to free-up larger family accommodation.

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September 2017

Table 6.8 Older persons’ housing options

Housing option

% would consider

60-74 years

75 years+

Total

Continue to live in current home with support when

needed

74.2 83.8 77.3

Buying a property on the open market 19.2 3.9 14.3

Rent a property from a private landlord 3.6 0.7 2.7

Rent from Housing Association

9.7

3.6

7.7

Sheltered accommodation - To Rent

22.1

21.8

22.0

Sheltered accommodation - To Buy

16.3

8.9

13.9

Sheltered accommodation - Part Rent/Buy

5.3

2.7

4.5

Extra Care housing - To Rent

15.0

17.4

15.7

Extra Care housing - To Buy

11.3

6.8

9.9

Extra Care housing - Part Rent/Buy

4.3

2.6

3.7

Residential Care home

7.4

11.3

8.7

Co-housing

12.6

7.5

11.0

Go to live with children or other relatives / friends 5.7 2.4 4.7

Other 3.9 1.6 3.2

Base (total households responding) 50,191 23,591 73,782

Source: 2017 Household Survey

Of all older person households (HRP aged 65+), 3.4% intend to move in the next five

years and a further 11.5% stated that they would like to move but are unable to. Of

households who are unable to move, reasons stated included cannot afford to

(32.1%), lack of suitable property in the area wanted (21.8%) and lack of suitable

property of the type wanted (14.2%).

Table 6.9 summarises the dwelling type and size aspirations and expectations of

households containing an older person, as identified by the 2017 Household Survey. In

terms of dwelling type, 54.5% of older (65+) households would like to move to a

bungalow, and 53.4% expect to. On the other hand, a higher proportion of older

households expect to move into flats (23.1%) than would like to (15.7%). Regarding

the size of property, 62.1% of households would like a one- or two-bedroom property

and this compares with 72.8% who expect to achieve this.

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Table 6.9 Dwelling aspirations and expectations of households containing a HRP aged 65+

Dwelling type

Aspiration (%)

Expectation (%)

House

26.3

19.0

Bungalow

54.5

53.4

Flat

15.7

23.1

Other

0.0

Older/supported

3.5

4.5

Total

100.0

No. bedrooms

Aspiration (%)

Expectation (%)

1/2 Beds

62.1

72.8

3 Beds

33.9

26.8

4 or more beds

4.0

0.4

Total

100.0

Source: 2017 Household Survey

Table 6.10 considers the future housing choices being considered by households with a

HRP aged 65+ with reference to the number of bedrooms in their current property and

the number of bedrooms expected in their next home (if planning to move in the next

five years). This shows that 43.8% of households are planning to downsize (i.e. move

to a property with fewer bedrooms).

Table 6.10 Future housing expectations (upsizing/downsizing)

Housing choice

Expectation (%)

Downsizing (moving to a smaller property)

43.8

Staying same

55.7

Moving to larger property

0.5

Total

100.0

Base

2,150

Source: 2017 Household Survey

Current and future need

The Housing Learning and Improvement Network (LIN) Strategic Housing for Older

People ‘SHOP@’ tool

helps to estimate current and future needs for specialist older

person’s housing 2014-2030

. Data specifically relates to people aged 75 and over.

The data for need is calculated by applying the prevalence rates to the 2014

population aged 75+ derived from May 2014 ONS sub-national population projections.

The data on supply is the current number of specialist housing and registered care

beds from the Elderly Accommodation Counsel national housing database 2014 which

http://www.housinglin.org.uk/Topics/browse/HousingExtraCare/ExtraCareStrategy/SHOP/

Note this particular dataset covers the period 2014 to 2030

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September 2017

includes the following categories: Sheltered Housing, Enhanced Sheltered Housing,

Extra Care, Residential Care and Nursing Care. Detailed definitions are presented

below:

Sheltered Housing: Schemes / properties are included where some form of scheme

manager (warden) service is provided on site on a regular basis but where no

registered personal care is provided. A regularly visiting scheme manager service may

qualify as long as s/he is available to all residents when on site. An on-call-only service

does not qualify a scheme to be included in sheltered stats. In most cases schemes will

also include traditional shared facilities - a residents' lounge and possibly laundry and

garden.

Enhanced Sheltered Housing: Schemes / properties are included where service

provision is higher than for sheltered housing but below extra care level. Typically

there may be 24/7 staffing cover, at least one daily meal will be provided and there

may be additional shared facilities.

Extra Care Housing: Schemes / properties are included where care (registered

personal care) is available on site 24/7.

Residential Care: Where a care homes is registered with Care Quality Commission to

provide residential (personal) care only, all beds are allocated to residential care.

Nursing Care: Where a care homes is registered with Care Quality Commission to

provide nursing care all beds are allocated to nursing care, although in practice not all

residents might be in need of or receiving nursing care.

The SHOP data for Leeds is presented in Table 6.9. This calculates housing demand per

1,000 residents aged 75 and over based on the population of 75+ residents in 2014

and 2035. The table also shows the 2014 profile of specialist older persons provision

and highlights that against the 2014 prevalence rates there are shortfalls in provision

across all types with the exception of Extra Care.

Over the period 2014 to 2035, there is expected to be a 75% increase in the

requirement for older persons’ specialist provision. However, when the current (2014)

supply of accommodation is compared with change in demand to 2035, data would

suggest a need to increase the current level of provision for older people, particularly

the provision of enhanced sheltered housing and Extra Care 24/7 support.

Table 6.11 Older persons’ dwelling requirements 2014 to 2035

Type of provision

Housing

demand per

1,000 75+

Current supply

2014

Demand

2035

Demand

Change 2014

(supply) to 2035

(demand)

% change

2014-2035

Sheltered housing

125

7,958

6,913

10,675

2,717

34%

Enhanced

Sheltered housing

20 179 1,106 1,708 1,529 854%

Extra Care 24/7

support

25 360 1,383 2,135 1,775 493%

Residential care

5,172

6,083

9,394

4,222

82%

Total

13,669

15,485

23,912

10,243

75%

Source: HousingLIN Note this dataset covers the period 2014 to 2035

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September 2017

Table 6.12

Future market split of older persons’ accommodation by relative

deprivation/affluence of an area

Type of provision

Most Deprived

Deprived

Affluent

Most Affluent

Rented

Leasehold

Rented

Leasehold

Rented

Leasehold

Rented

Leasehold

Sheltered

Enhanced

Sheltered

80 20 67 33 50 50 20 80

Extra care

Source: Housing LIN

http://www.housinglin.org.uk/Topics/browse/HousingExtraCare/ExtraCareStrategy/SHOP/SHOPAT/Dashboard/F

utureMarketSplit/

Adaptation requirements

The Household Survey asked respondents whether they need adaptations to their

home, either now or in the next five years. Table 6.13 sets out the responses of all

households, including those under 65 and those aged 65+. Across all respondents,

better heating, more insulation and double glazing were the most frequently-

mentioned adaptation requirements. In respect of the 65+ cohort, the adaptations

considered most important included adaptations to bathrooms (16.0%), internal

handrails (11.6%) and better heating (9.7%).

Table 6.13 Adaptations required either now or in next 5 years by age group

Adaptation required

Age group (% of households)

Total

Under 65 years

65+ years

Better Heating

18.3

9.7

16.3

More Insulation

19.0

5.8

15.9

Double Glazing

14.9

7.6

13.2

Adaptations to kitchen

9.8

0.6

8.8

Adaptations to bathroom

8.9

16.0

1.1

Internal handrails

6.1

11.6

7.4

External handrails

4.4

9.9

5.7

Downstairs WC

6.7

7.9

7.0

Stair lift

4.6

0.0

5.7

To access

3.9

4.7

4.1

Wheelchair

3.1

4.2

3.3

Lever Door

2.9

1.9

2.6

Carer

3.2

1.9

2.9

Community Alarm

3.4

6.8

4.2

Security Alarm

10.6

6.1

9.6

Property Size

9.8

2.2

8.1

Sound proofing

9.6

3.3

8.1

Ventilation

8.8

2.1

7.2

Base (all households)

259103

78199

337302

Source: 2017 Household Survey

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Overall, 8.7% of dwellings across Leeds have been adapted or purpose-built for a

person with a long-term illness, health problem or disability. A further 8.8% of

households require their dwelling to be adapted to improve accessibility and 3.7%

require properties to be adapted for wheelchair use. This implies an overall need for at

least 20.8% of properties to be accessible

. Given the ageing demographic of the

population, this proportion is likely to increase over the Plan period and it is

recommended that the Council seeks, as a minimum, 17.5% of new dwellings to be

accessible dwellings and, in addition, a minimum of 5% to be wheelchair accessible.

Households with specific needs

Table 6.14 summarises the type of client groups accommodated in social rented

housing across Leeds area over the three-year period 2010/11 to 2012/13. Data

indicates that single homeless people with support needs (an average of 1,036 per

year) and older people with support needs (an average of 550 per year) are the main

groups provided for.

Table 6.14 Client groups accommodated in Social Rented sector in Leeds City

2010/11 to

2012/13

Client group

Number

(over 3 years)

Average Annual

Number

People with physical or sensory disabilities

People with drug problems

People with alcohol problems

235

Offenders and people at risk of offending

402

134

Refugees (permanent)

207

People with learning disabilities

217

Women at risk of domestic violence

476

159

People with mental health problems

387

129

Older people with support needs 1651 550

Single homeless people with support needs 3107 1036

Homeless families with support needs 531 177

Young people leaving care 24 8

Young people at risk 454 151

Missing 12 4

Total 7805 2602

Source: Supported CORE Lettings data

These are households stating a need for downstairs toilet, stair lift, improvements to access, wheelchair access and lever door handles are

assumed

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Black, Asian and Minority Ethnic households

The 2011 Census reports that 91.0% of residents are White British and the next largest

ethnic group is White Other (including Irish and Gypsies and Travellers) (4.7%),

Asian/Asian British (1.8%), Black/Black British (0.7%) Mixed/Multiple Ethnic (1.5%),

and other groups (0.2%).

The 2017 Household Survey identified that 89.7% of households are White British,

2.5% White Other, 2.3% Asian/Asian British, 1.7% White Central and Eastern

European, 1.3% Black/Black British, 1.2% Mixed/Multiple Ethnic and 1.3% other

groups.

The 2011 Census identified 652 residents across 257 households who stated that they

had Gypsy or Irish Traveller ethnicity. 43 of these households lived in a caravan or

other mobile/temporary structure with the remainder in bricks and mortar (house,

bungalow, flat or maisonette).

The January 2017 DCLG Caravan Count identified a total of 122 Gypsy and Traveller

caravans, 84 on local authority-owned sites and 38 on unauthorised sites. No

Travelling Showpeople caravans were identified.

A Gypsy and Traveller Accommodation Assessment was carried out in 2014 which

identified a current authorised residential provision of 48 pitches (41 on local authority

sites and 7 on private sites). A total need for 62 pitches up to 2027/28 was identified.

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7. Conclusion: policy and strategic issues

This document has been prepared to equip the Council and their partners with robust,

defensible and transparent information to help inform strategic decision-making and

the formulation of appropriate housing and planning policies. The work also takes

account of the National Planning Policy Framework (March 2012) and Planning

Practice Guidance (February 2014).

The SHMA will help the Council plan for a mix of housing based on current and future

demographic trends, market trends and the needs of different groups in the

community. Specifically, the SHMA identifies the size, type and tenure of market

housing required by considering current market demand relative to supply; and also

identifies a continued affordable housing imbalance across Leeds.

This concluding chapter summarises key messages from the research findings,

structured around a commentary on the current and future housing markets; the

interactions of Leeds with other areas; and relates findings to key local strategic issues.

The Housing Market Area

The Leeds housing market area is self-contained due to low levels of in and out-

migration and low levels of out-commuting of its workforce.

The current housing market

There is a great variation in the balance of house type size tenure and prices across the

city’s sub areas. The city centre is particularly un-balanced as a high proportion of the

housing stock is apartments many of which are private rented sector tenancies.

Stakeholders told us that prices have largely recovered since the losses experienced in

2008.

Objectively Assessed Housing Need, market signals and Housing

Requirement

Many significant factors have been taken into account when estimating the OAN.

• The council has consistently not met house building targets since 2008/9;

• House prices have been relatively static overall, with small increases in both lower

quartile prices (+3.3%) and median prices (+4.2%) during the period 2010-2015.

This is similar to the regional trends (+3.2% and +3.7%, respectively;

• Private rents have increased with lower quartile and median prices increasing by

+3.8% and +11.6%, respectively. This compares with virtually static rental prices

across the Yorkshire and the Humber region as a whole;

• The House Price Ratio (HPR) during 2015 (5.7) was similar to that for the region

(5.6) The Rental Affordability Ratio (RAR) in 2015 (30.5%) was comparable with

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September 2017

most neighbouring districts and the region (27.9%), but lower than that for

England (39.6%);

• The number of property sales has increased by 49.7% in Leeds from 2010-15,

which is at the higher end of the range experienced in comparator areas;

• Nearly 10% of households are in some form of housing need and these are housed

mostly in the private rented sector;

• The number of households on the Housing Register per 1,000 occupied dwellings

was 55. This compares with 63 per 1,000 in Yorkshire and the Humber region and

54 per 1,000 across the UK.

After considering several employment growth scenarios it is recommended that the

OAN is expressed as a range and that the total dwelling need is between 44,240 and

60,528 over the Plan period 2017-2033.

The need for all types of housing

The survey identifies a large number of households that would consider self and

custom building as a means of meeting their housing aspirations. This demand needs

monitoring closely and the Council needs to consider how these needs can be met

through the planning process.

There is projected to be a significant increase in the number and proportion of older

people living in Leeds. These people will place an increased demand on specialist

housing, residential care and support services. It is recommended that the Council

seeks, as a minimum, 17.% of new dwellings to be accessible and in addition to this 5%

to be wheelchair accessible.

Final comments

The evidence presented in this SHMA suggests that there are three main policy areas

that require special attention from both a planning policy and social policy

perspective:

• The challenge of enabling the quantity and mix of housing that needs to be

delivered;

• The challenge of ensuring that the housing and support needs of older people are

met going forward;

• The challenge of driving up the quality of the private rented sector and increase

the sustainability of tenancies.

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Introduction to Technical Appendices

• Technical Appendix A: Research methodology

• Technical Appendix B: Housing policy review

• Technical Appendix C: Affordable housing need calculations

• Technical Appendix D: Monitoring and updating

• Technical Appendix E: National Planning Policy Framework and Planning Practice

Guidance Checklist

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Technical Appendix A: Research methodology

Overall approach

A.1 A multi-method approach was adopted in order to prepare a robust and credible

Strategic Housing Market Assessment for Leeds City Council:

• A review of primary data obtained through a 5,383 survey of households across

the Leeds City Council area. The 2017 Household Survey involved a total of 27,867

households contacted and 5,383 questionnaires returned, representing a 19.3%

response rate overall. The number of questionnaires returned was well in excess of

the 1,500 specified in former Government guidance;

• A consideration of the findings of interviews with estate and lettings agents;

• A review of relevant secondary data including the 2011 Census, house price data,

private rental data, Housing Association CORE lettings data, CLG Statistics and

Housing Register information;

• A consideration of research by Edge Analytics regarding Objectively Assessed

Housing Need (OAN); and

• Analysis of housing need and affordable housing requirements.

Baseline dwelling stock information and survey sample errors

A.2 Table A1 summarises total dwelling stock and the number of households contacted by

survey area and sample errors. All accuracy levels are based on the Census 2011 as this

was used as the core data when weighting the sub-area responses.

Table A1 Households surveyed, response rates and sample errors

Sub-area

Total occupied

dwellings

Achieved

Sample

Achieved Sample

Error

Aireborough

15,028

819

3.3%

City Centre

11,324

184

7.2%

East Leeds

19,354

455

4.5%

Inner Area

72,995

260

6.1%

North Leeds

71,919

553

4.2%

Outer North East

17,191

613

3.9%

Outer North West

9,379

659

3.7%

Outer South

12,525

469

4.4%

Outer South East

16,197

488

4.4%

Outer South West

42,146

441

4.6%

Outer West

49,244

442

4.6%

Leeds Total

337,302

5,383

1.3%

Source: arc4

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Weighting and grossing

A.3 In order to proceed with data analysis, it is critical that survey data is weighted to take

into account non-response bias and grossed up to reflect the total number of

households. Weighting for each survey area was based on:

• tenure (the proportion of affordable (social rented and intermediate tenure) and

open market dwellings based on 2011 Census data;

• age of household reference person based on the proportions of household

reference people aged under 65 and 65 or over living in affordable and open

market provision derived from the 2011 Census; and

• 2016 baseline households derived from Council Tax data (total dwellings minus

vacant dwellings)

A.4 Ultimately, the survey element of the assessment is sufficiently statistically robust to

undertake detailed analysis and underpin core outputs of the study down to the

survey areas presented in Table A1. Furthermore, the survey findings are enhanced

and corroborated through analysis of secondary data and stakeholder consultation.

Interviews with estate and letting agents

A.5 Eleven estate and letting agents were approached and face-to-face/telephone

interviews were undertaken with agents who operate in Leeds and the surrounding

area. Their views were sought on the local housing market and related issues, and an

analysis of the findings has been incorporated within Chapter 4 of the SHMA Report.

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Technical Appendix B: Housing policy review

B.1 The purpose of this Appendix is to set out the national policy agenda of relevance to

this housing needs assessment.

Introduction

B.2 Housing policy in England is managed through the Department for Communities and

Local Government (DCLG), but is managed by the devolved governments in Scotland,

Wales and Northern Ireland. In addition to policies that apply directly to housing

matters, there is significant overlap with a number of other policy areas, including

planning, welfare, political devolution and the wider economy.

B.3 Under the previous Coalition Government, the five years 2010-2015 saw a radical and

sustained programme of reform of welfare, housing and planning policy, set within the

context of national austerity and an economic policy of deficit reduction and public

spending cuts. These reforms championed localism, decentralisation and economic

growth.

B.4 Since the election of a majority Conservative Government in May 2015 further welfare

reforms were accompanied by policies seeking to increase the rate of housebuilding

and promoting home ownership as the tenure of choice. The Housing and Planning Act

was passed in May 2016, setting out the legislative framework for the flagship Starter

Homes scheme and including provisions relating to other aspects of housing policy

such as Pay to Stay, Right to Buy, high value sales and ending lifetime tenancies.

B.5 However, the European Union Referendum of 23rd June 2016 and subsequent

changes in Government leadership are beginning to impact emerging policy. ‘Brexit’

discussions have created uncertainty regarding economic issues and the new

Conservation Party leadership have signalled some changes in policy direction in their

Autumn Statement and the Housing White Paper (February 2017).

Legislative and policy background

B.6 Following the Coalition Agreement of May 2010, the previous Government passed the

Localism Act 2011, with the express intention of devolving power from central

government towards local people. The Localism Act sets out a series of measures to

seek a substantial and lasting shift of powers including:

• new freedoms and flexibilities for local government, including directly elected

mayors and empowering cities and other local areas;

• new rights and powers for communities and individuals;

• reform to make the planning system more democratic and more effective,

including the abolition of regional spatial strategies (RSS), the introduction of the

‘Duty to Cooperate’, neighbourhood planning, Community ‘Right to Build’,

reforming the community infrastructure levy and reforming the Local Plan process;

and

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• reform to ensure that decisions about housing are taken locally.

B.7 In terms of housing reform, the Localism Act reforms aim to enable more decisions

about housing to be made at the local level, making the system fairer and more

effective. Local authorities have greater freedom to set their own policies about who

can qualify to go on the waiting list in their area. In addition, the Act allows for more

flexible tenure arrangements for people entering social housing, with social landlords

able to grant tenancies for a fixed length of term rather than lifetime tenancies for all.

In respect to homelessness, the Act allows local authorities to meet their

homelessness duty by providing private rented accommodation, rather than in

temporary accommodation until long-term social housing becomes available. The Act

also reforms social housing funding, allowing local councils to keep the rent they

collect and use it locally to maintain their housing stock. It facilitates a national ‘Home

Swap’ scheme to facilitate house moves between social housing tenants. In addition,

the Localism Act reforms the regulation of social housing, promoting tenant panels

and changing the way complaints are handled.

B.8 The National Housing Strategy for England, Laying the Foundations: A Housing

Strategy for England, was published in November 2011 under the Coalition

Administration and it currently remains in place. The Strategy acknowledges some of

the problems within the housing market and sets out the policy response, along the

following themes:

• Increasing supply: more homes, stable growth;

• Social and affordable housing reform;

• A thriving private rented sector;

• A strategy for empty homes;

• Quality of housing experience and support; and

• Quality, sustainability and design.

B.9 The measures set out promote home ownership, including a new-build mortgage

indemnity scheme to provide up to 95% loan-to-value mortgages guaranteed by

Government and a ‘FirstBuy’ 20% equity loan scheme for first-time buyers. There is an

emphasis on providing new infrastructure, with the announcement of a ‘Growing

Places’ Fund, and the freeing-up of public sector land for development. Community-

led planning and design is championed, with financial incentives such as the ‘New

Homes Bonus’ to promote increased housebuilding at the local authority level.

B.10 The National Housing Strategy acknowledges the importance of social housing and the

need for more affordable housing. However, the document reaffirms the programme

of reforming this sector, including ‘changes to the way people access social housing,

the types of tenancies that are provided and the way the homelessness duty is

discharged’

. The private rented sector is considered to play ‘an essential role in the

housing market, offering flexibility and choice to people and supporting economic

Laying the Foundations: A Housing Strategy for England (Nov 2011), page 22 para.11

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growth and access to jobs’

. The document sets out an intention to support the

growth of the private rented sector through innovation and investment, to meet

continuing demand for rental properties.

B.11 The National Housing Strategy reaffirms the commitment to bringing empty homes

back into use, using the New Homes Bonus as an incentive. It also set out the

objectives of preventing homelessness, protecting the most vulnerable and providing

for older people’s housing needs. It confirms a radical package of welfare reforms,

including a reduction in Housing Benefit, changes to the Local Housing Allowance

(Housing Benefit in the private sector) and the introduction of ‘Universal Credit’ to

replace other means-tested working age benefits and tax credits. Finally, the Housing

Strategy addresses environmental concerns, with energy efficiency and reduced

carbon emissions being required from both new and existing homes in order to

promote sustainability.

B.12 The National Planning Policy Framework (NPPF) was published in March 2012. It sets

out the Government’s planning policies for England and how these are expected to be

applied. The NPPF formed a key part of the Coalition Government’s planning system

reforms, simplifying national guidance (previously contained in multiple Planning

Policy Statements and Planning Policy Guidance) and reducing the quantity of policy

pages. Fundamentally, it must be taken into account in the preparation of local and

neighbourhood plans and is a material consideration in planning decisions. The

document states that ‘at the heart of the National Planning Policy Framework is a

presumption in favour of sustainable development, which should be seen as a golden

thread running through both plan-making and decision-taking.’

B.13 The NPPF sets out 12 core planning principles to underpin both plan-making and

decision-taking. It also establishes 13 aspects to achieving sustainable development,

which include delivering a wide choice of high quality homes (#6) and promoting

healthy communities (#8). The Framework also introduces new definitions of

affordable housing covering social rented housing, affordable rented housing and

intermediate housing.

B.14 The NPPF is to be read alongside other national planning policies on Waste, Travellers,

Planning for Schools Development, Sustainable Drainage Systems, Parking and Starter

Homes

. National Planning Practice Guidance (NPPG) on a range of more detailed

topics has been revised and updated and made available through an online system

since March 2014

. NPPG topics include Duty to Cooperate, Housing and Economic

Development Needs Assessments, Housing and Economic Land Availability

Assessment, Housing - Optional Technical Standards, Local Plans, Neighbourhood

Planning, Rural Housing and Starter Homes.

B.15 Following the election of a majority Conservative Government in May 2015, the

Government’s Summer Budget 2015 was presented to Parliament by the then-

Chancellor George Osborne in July 2015. The Budget set out proposed reforms to the

Laying the Foundations: A Housing Strategy for England (Nov 2011), page 33 Summary

National Planning Policy Framework (November 2012), para. 14

http://planningguidance.communities.gov.uk/

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welfare system, including a four-year freeze on working-age benefits; a reduction in

the household benefit cap; restrictions on Child Tax Credit; training requirements for

those on Universal Credit aged 18 to 21; the removal of automatic entitlement to

Housing Benefit for those on Universal Credit aged 18 to 21; and the removal of the

Family Premium element of Housing Benefit for new claims from April 2016. Alongside

these welfare cuts, it was announced that rents for social housing will be reduced by

1% per year for four years, while tenants on incomes of over £30,000, or £40,000 in

London, will be required to pay market rate (or near market rate) rents. A review of

‘lifetime tenancies’ was confirmed, with a view to limiting their use to ensure the best

use of social housing stock. Support for home ownership measures was reiterated with

measures such as the extension of the Right to Buy to housing association tenants and

the introduction of Help to Buy ISAs.

B.16 Alongside the Summer 2015 Budget the Government published a ‘Productivity Plan’,

Fixing the foundations: Creating a more prosperous nation (10

July 2015). This sets

out a 15-point plan that the Government will put into action to boost the UK’s

productivity growth, centred around two key pillars: encouraging long-term

investment and promoting a dynamic economy.

B.17 Of particular relevance to housing are the following points in the plan:

• Planning freedoms and more houses to buy: In order to increase the rate of

housebuilding and enable more people to own their own home, a number of

actions are identified including a zonal system to give automatic planning

permission on suitable brownfield sites; speeding up local plans and land release,

stronger compulsory purchase powers and devolution of planning powers to the

Mayors of London and Manchester, extending the Right to Buy to housing

association tenants, delivering 200,000 Starter Homes and restricting tax relief to

landlords.

• Resurgent cities, a rebalanced economy and a thriving Northern Powerhouse: In

order to rebalance the economy, which is skewed towards London and the South

East, the Government is committed to building a Northern Powerhouse through

£13 billion of investment in transport in the North of England during this

Parliament, backing new science, technology and culture projects, devolving

significant powers to an elected Mayor for Manchester, taking steps to enable the

Midlands Engine for Growth to reach its full potential and working towards

devolution deals with the Sheffield City Region, Liverpool City Region and Leeds,

West Yorkshire and partner authorities.

B.18 The Spending Review and Autumn Statement 2015 of November 2015 continued

these policy themes:

• Plans to extend the ‘Local Housing Allowance’ to social landlords so that the

Housing Benefit payed to tenants living in housing association properties will be

capped at the LHA rate;

• A new ‘Help to Buy Shared Ownership’ scheme, removing restrictions on who can

buy shared ownership properties to anyone with a household income of less than

£80,000 outside London and £90,000 in London;

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• ‘London Help to Buy’ – an equity loan scheme giving buyers 40% of the new home

value (as opposed to 20% under the Help to Buy scheme);

• 200,000 ‘Starter Homes’ to be built over the following five years;

• From 1

April 2016 an extra 3% in stamp duty to be levied on people purchasing

additional properties such as buy-to-let properties or second homes;

• Right to Buy extension to housing association tenants;

• £400 million for housing associations and the private sector to build more than

8,000 new ‘specialist’ homes for older people and people with disabilities;

• Consulting on reforms to the New Homes Bonus, with a preferred option for

savings of at least £800 million which can be used for social care; and

• A commitment to extra funding for targeted homelessness intervention.

B.19 In December 2015, DCLG published a Consultation on proposed changes to national

planning policy, which was open for consultation until February 2016. This

consultation sought views on some specific changes to NPPF in terms of the following:

• broadening the definition of affordable housing, to expand the range of low cost

housing opportunities for those aspiring to own their new home;

• increasing residential density around commuter hubs, to make more efficient use

of land in suitable locations;

• supporting sustainable new settlements, development on brownfield land and

small sites, and delivery of housing allocated in plans; and

• supporting the delivery of Starter Homes.

B.20 The publication of a revised NPPF document has been delayed during 2016 and is still

awaited.

B.21 The Cities and Local Government Devolution Act 2016 received Royal Assent on 28th

January 2016. This Act makes provision for the election of mayors for the areas of, and

for conferring additional functions on, combined authorities established under Part 6

of the Local Democracy, Economic Development and Construction Act 2009. It makes

provision about local authority governance and functions; to confer power to

establish, and to make provision about, sub-national transport bodies; and for

connected purposes. This Act is central to the Government’s devolution plans for

England, facilitating its vision of a ‘Northern Powerhouse’.

B.22 The Welfare Reform and Work Act 2016 received Royal Assent on 16th March 2016.

The Act makes provisions relating to a range of welfare benefits and employment

schemes, including the benefit cap, social security and Tax Credits, loans for mortgage

interest, social housing rents and apprenticeships. Secondary legislation (Social

Housing Rents Regulations, March 2016) sets out that the 1% cut to social housing

rents will not apply to households with an income of £60,000 or more.

B.23 On 16th March 2016, the Budget 2016 was announced. This continued the policy

emphasis of promoting home ownership and facilitating first-time buyers to enter the

market. A new ‘Lifetime ISA’ was announced, extending the principle of the Help to

Buy ISA by incentivising saving for under-40s. Of relevance to the private rented sector

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September 2017

were stamp duty increases for institutional investors and the withholding of capital

gains reductions from companies investing in residential property. In seeking to deliver

more homes for ownership, announcements were made of further planning reforms;

releasing public land for development; and a £1.2 billion Starter Homes Fund for

brownfield remediation. The anticipated ‘duty to prevent’ homelessness was not

announced, but instead the Chancellor committed £115 million to preventing and

reducing rough sleeping.

B.24 A Technical consultation on Starter Homes regulations was announced on 23

March

2016. This sought views on the framework to be established in the forthcoming

regulations, including the restrictions that should be placed on Starter Homes, how

age eligibility criteria should work, what threshold (size of site/development) should

apply, what the percentage requirement should be, whether exemptions should apply

and whether off-site payments should be acceptable. The consultation document set

out that, in terms of the period within which Starter Homes should not be sold at full

market value, the DCLG does not support a period of longer than 8 years. The paper

proposes that the requirement to provide 20% of dwellings as Starter Homes should

apply to sites of 10 dwellings or more (or 0.5 hectares). Secondary legislation relating

to Starter Homes is still awaited from Parliament.

B.25 The Housing and Planning Act 2016 received Royal Assent on 12th May 2016 after a

range of oppositions and amendments by both the House of Lords and the House of

Commons. The Act sets out the legislative framework for the Government’s flagship

Starter Homes scheme and includes provisions relating to other important aspects of

housing policy such as Pay to Stay, Right to Buy, high value sales and ending lifetime

tenancies.

Emerging policy and legislation

B.26 Announced in the Queen’s Speech (May 2016), the Neighbourhood Planning Bill 2016-

17 was laid before Parliament on 7

September 2016. With the objective of speeding

up the delivery of new homes, relevant clauses of the Bill include strengthening

neighbourhood planning, limiting the use of pre-commencement planning conditions,

the planning register and reform of compulsory purchase. The Bill has been subject to

amendments, including proposed changes to the Local Plan process to allow the

Secretary of State to intervene and invite County Councils to prepare or revise Local

Plans where districts have not delivered and to allow the preparation of joint Local

Plans where there are cross-boundary issues between two or more local authorities.

This follows the recommendations of the Local Plans Expert Group (LPEG) report of

March 2016

. The Bill has been through the House of Lords, who have returned it to

the Commons with amendments.

B.27 The Autumn Statement (2016) was announced on 23

November by Chancellor Philip

Hammond. With an important focus on housing, the Statement has revealed some key

changes in policy direction from the Cameron/Osborne era. Provisions include:

Local Plans Expert Group, Local Plans: Report to the Communities Secretary and to the Minister of Housing and Planning, March 2016

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September 2017

• £1.4 billion of extra cash to build 40,000 affordable homes, with a relaxation of

restrictions on grant funding;

• £2.3 billion Housing Infrastructure Fund to pave the way for up to 100,000 new

homes to be built in areas of high demand;

• £3.15 billion of the Affordable Homes Programme will be given to London to

deliver 90,000 homes;

• New regional pilots of the Right to Buy extension, allowing more than 3,000

tenants to buy their properties;

• £1.7 billion to pilot ‘accelerated construction’ on public sector land;

• Letting agents in the private rented sector to be banned from charging fees; and

• Confirmation that compulsory Pay to Stay will not be implemented for councils.

B.28 In keeping with various statements and comments made by Sajid Javid (Communities

Secretary) and Gavin Barwell (Housing Minister) during Autumn 2016, the Autumn

Statement indicates a clear shift in Government policy, away from an exclusive focus

on homeownership and towards boosting overall housing supply. A removal of grant-

funding restrictions will allow housing associations to increase the delivery of sub-

market rented housing, including affordable rented, shared ownership and rent-to-buy

homes.

B.29 The Autumn Statement announced a second pilot scheme for the extension of Right to

Buy. Lasting five years, these ‘large-scale’

B.30 Regional Right to Buy pilots will expand on the five pilots launched in November 2015,

allowing 3,000 tenants to purchase their homes from housing associations. A £250

million fund has been set aside to finance these pilots up to 2021.

B.31 Many of the ‘flagship’ housing policies of the Conservative Manifesto have their

legislative basis in the provisions of the Housing and Planning Act 2016, but require

further secondary legislation. Their implementation is subject to the ongoing evolution

of housing policy under the new Government leadership and are subject to significant

delay and/or amendment:

• The extension of Right to Buy to housing association tenants has been delayed.

Guidelines for the Voluntary Right to Buy programme now have no fixed

publication date. In addition, the new pilot scheme announced as part of the

Autumn Statement is interpreted to signal a significant delay to the full roll-out of

the Right to Buy extension;

• Detailed regulations relating to the higher value asset levy, which was intended to

fund the building of new homes to replace those sold through the extension of

Right to Buy, have been delayed. These were expected to be published in draft

form by July 2016. Whilst the levy was expected to commence in April 2017, the

lack of statutory consultation will result in a delay to implementation; and

• Similarly, compulsory Pay to Stay was originally scheduled to be implemented in

April 2017, but Gavin Barwell (Housing Minister) announced in November 2016

that this scheme will no longer be compulsory for councils.

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September 2017

B.32 The Housing White Paper, Fixing our broken housing market, was published in

February 2017. The White Paper proposes a number of changes to reshape the

approach to housebuilding and increase housing supply. These changes are centred

around the following four areas:

• Planning for the right homes in the right places, by making it simpler for local

authorities to put Local Plans in place and keep them up-to-date, ensuring

sufficient land is allocated to meet housing needs and building upon

neighbourhood planning to ensure communities have control over development in

their area. The White Paper aims to make more land available for homes by

maximising the contribution from brownfield and surplus public land, regenerating

estates, releasing more small and medium sized sites, allowing rural communities

to grow and making it easier to build new settlements. It reaffirms that the existing

protections for the Green Belt remain unchanged and emphasises that authorities

should only make exceptional amendments to Green Belt boundaries.

• Building homes faster, by increasing certainty around housing numbers, aligning

new infrastructure with housing, supporting developers to build more quickly and

improving transparency. White Paper proposals include amending the NPPF to give

local authorities the opportunity to have their housing land supply agreed on an

annual basis and fixed for a one-year period, in order to create more certainty

about when an adequate land supply exists. Authorities taking advantage of this

would have to provide a 10% larger buffer on their five-year land supply. In

addition, the White Paper suggests changing the NPPF to introduce a housing

delivery test for local authorities. If delivery falls below specified thresholds extra

land would be added onto the five-year land supply as well as further thresholds

which would allow the presumption in favour of sustainable development to apply

automatically.

• Diversifying the market, by establishing a new Accelerated Construction

Programme, supporting more Build to Rent developments, supporting housing

associations to build more housing and boosting innovation. The White Paper

proposes ensuring that the public sector plays its part by encouraging more

building by councils and reforming the Homes and Communities Agency.

• Helping people through Help to Buy, Right to Buy, the Shared Ownership and

Affordable Homes Programme (SOAHP), the new Lifetime ISA, amendments to

Starter Homes requirements and the announcement of a new statutory duty on

planning to meet the needs of older and disabled people.

Overview of housing policy themes

B.33 The ‘Housing’ Policy Area of the Department for Communities and Local Government

website states that:

‘The government is helping local councils and developers work with local communities

to plan and build better places to live for everyone. This includes building affordable

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September 2017

housing, improving the quality of rented housing, helping more people to buy a home,

and providing housing support for vulnerable people.’

B.34 Therefore the policy focus for Government can be broken down into four areas:

• Building affordable housing;

• Improving the quality of rented housing;

• Helping more people to buy a home; and

• Providing housing support for vulnerable people.

Building affordable housing

B.35 In line with successive governments, the Conservative Government has continued to

seek an increase in the rate of housebuilding. Ongoing reform of the planning system

and removing complex regulations are intended to speed up delivery. The policy focus

of the Cameron/Osborne era was increasingly towards home ownership, with a shift

away from traditional social rented affordable housing to Starter Homes.

B.36 A national Starter Homes exception site planning policy was launched in March 2015

through a written ministerial statement “to make it easier for developers to gain

planning permission for a new generation of Starter Homes on under-used commercial

and industrial land.”

Sites where these homes were delivered were to be exempt

from affordable housing requirements and the Community Infrastructure Levy (CIL).

B.37 In January 2016, the Prime Minister announced

that the Government will step in and

directly commission thousands of new affordable homes, seeking to fast-track

housebuilding on publicly-owned land starting with five pilot sites including

Northstowe (Cambridgeshire), Daedalus Waterfront (Hampshire), Old Oak Common

(London), Connaught Barracks (Kent) and Lower Graylingwell (Chichester).

B.38 A range of financial incentives to encourage new housing development have been

implemented. Since early 2016, a £1.2 billion Starter Homes Fund has been

announced

, designed to prepare brownfield sites for at least 30,000 homes, along

with £6.3 million of Housing Zones funding

for the 20 Housing Zones designated in

March 2015.

B.39 Other projects to help finance housing development include:

• Get Britain Building programme,

• Builders Finance Fund,

• New Homes Bonus,

• Build to Rent Fund, and the

https://www.gov.uk/government/topics/housing

https://www.gov.uk/government/speeches/housing-and-planning

https://www.gov.uk/government/news/pm-the-government-will-directly-build-affordable-homes

https://www.gov.uk/government/news/tens-of-thousands-of-homes-supported-by-housing-zone-funding

Leeds SHMA 2017 Page | 118

September 2017

• Community Right to Build.

B.40 To increase the supply of affordable rented homes the previous Government

introduced the affordable rent model

, aimed at giving providers greater flexibility on

rents and use of assets, whilst at the same time providing affordable housing for

people in need.

B.41 In addition to the affordable rent model, the Affordable Homes Guarantee scheme

was launched in 2013 to support the building of new affordable homes. The scheme

offers a guarantee to providers on debt that they raise to deliver additional new build

affordable homes. The guarantee aims to help reduce the borrowing costs of providers

thus enabling them to provide more homes.

Improving the quality of rented housing

B.42 The Government have implemented a number of actions to improve the quality and

quantity of properties for rent.

Social rented housing

B.43 Between 2010-2015 a series of social housing reforms were introduced including:

• Allowing local flexibility on waiting lists (allocations) and tenancy arrangements;

• Helping social landlords stop tenant fraud and anti-social behaviour;

• Changing the housing revenue account subsidy system to a locally-controlled

system where local authorities are responsible for their housing services;

• Funding local authorities to refurbish their housing stock;

• Introduction of a national home swap scheme for social housing tenants;

• Supporting tenants to play a bigger role in managing their accommodation through

the tenant empowerment programme; and

• Allowing local authorities to discharge their homelessness duty in the private

rented sector.

B.44 Alongside social housing reform sit reforms to the welfare system, which, with

changes to benefit, eligibility and entitlement, impact significantly on housing supply

and demand. From 7

November 2016, the overall benefit cap has been cut to

£20,000 (or £23,000 in London), with implications for households living in both social

and private rented sectors.

B.45 The Autumn Statement 2015 set out a policy of capping housing benefit at Local

Housing Allowance (LHA) levels. A range of concerns were expressed in relation to this

proposal, particularly the impact the policy would have on supported housing. As a

result, implementation has been delayed (originally planned for April 2016). In

November 2016, Lord Freud (Work and Pensions Minister) announced that the cap for

Allows Registered Providers to charge no more than 80% of local market rent for affordable housing.

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September 2017

general needs accommodation will now be stalled until 2019. However, it will now

apply to all tenants on Universal Credit, rather than just those who start new tenancies

(the previous policy).

B.46 Along with the plans to cap benefits at LHA levels, the 1% rent cut for social renters

that was announced as part of the Summer 2015 Budget has significant implications

for new affordable housing development. Due to financial uncertainties, many housing

associations have put development plans on hold or scaled back their building

programmes.

B.47 In October 2015, English housing associations were reclassified by ONS as being part of

the public sector, adding £60 billion of debt to the national balance sheet. The

consequent economic and political implications led to the Government immediately

pledging to bring in changes to reverse this decision. Deregulatory provisions were

included within the Housing and Planning Act 2016; however, secondary legislation to

implement these changes is yet to be issued and is expected early in 2017. Once these

changes come into force it is anticipated that the Government will ask ONS to carry

out a new review.

Private rented housing

B.48 The private rented sector has grown significantly in recent years and the Government

sees it as playing a vital role in meeting housing needs and supporting economic

growth. Measures to promote the private rented sector in recent years have included:

• The Build to Rent Fund, providing equity finance for purpose-built private rented

housing, alongside a £10 billion debt guarantee scheme to support the provision of

these homes;

• Proposals to ensure tenants receive proper protection from their landlords,

including a new model tenancy agreement;

• The Housing and Planning Act 2016 includes provisions to tackle ‘rogue landlords’

and create a central database of rogue landlords and property agents;

• £4.1 million funding allocated to 23 local authority areas to tackle rogue landlords

and £2.6 million to tackle ‘beds in sheds’; and

• The Government has also set up a Private Rented Sector Taskforce to improve the

quality and choice of rented housing available to tenants nationally. The Taskforce

is made up of developers, investors, and housing management bodies.

Helping more people to buy a home

B.49 The primacy of home ownership remains central to the Government’s housing policy

approach. A number of measures promote homeownership

, including:

https://www.ownyourhome.gov.uk/

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September 2017

• Starter Homes, a major element of the Housing and Planning Act 2016, available to

first-time buyers aged under 40 years old. New-build homes will be offered for sale

with a 20% discount to eligible households. The maximum cost of a home will be

£250,000, or £450,000 inside London. However, the cost for the developer of

providing the 20% discount may be met in lieu of delivering affordable housing on

these sites. Draft regulations have been consulted upon but finalised legislation is

still awaited.

• Help to Buy, which includes several current products

- Help to Buy ISA – since Autumn 2015 first time buyers can save money towards

a new home deposit and the Government will boost the value of their savings

by 25%. The minimum bonus is £400 and the maximum is £3,000, meaning

individual savers need to save between £1,600 and £12,000 to be eligible. The

bonus is available on homes worth up to £250,000, or £450,000 in London.

- Help to Buy Equity Loan, where the Government lends up to 20% of the value

of a new-build home so buyers only need a 5% cash deposit.

- Help to Buy Mortgage Guarantee, enabling lenders to offer more high-loan-to-

value mortgages (80% to 95%).

- Shared Ownership, where purchasers can buy between 25% and 75% of their

home and pay rent on the remaining share. From April 2016, Help to Buy

Shared Ownership will lift the existing limits so that anyone with a household

income of less than £80,000, or £90,000 in London can buy a shared ownership

home, with only military personnel being given priority.

• Discounted Sales, where councils and housing associations build new homes for

sale and sell some at a 25-50% discount. There are a number of criteria, including

some set locally by the relevant council and housing associations who run the

scheme. Buyers must usually have a local connection to the area.

• Right to Buy, where council tenants with at least five years’ tenancy might be

eligible to buy their homes. Maximum discounts have been increased to £77,000,

or £102,700 within London. In the case of secure council tenants living in their

home when it was transferred to a housing association or similar there is also a

‘Preserved’ Right to Buy. A smaller discount has also been available under the

Right to Acquire.

• Voluntary Right to Buy is a pilot scheme amongst a small number of housing

associations, trialling the Conservative Government’s flagship policy of extending

the Right to Buy to housing associations. The Government plans to extend the

Right to Buy beyond those in the pilot scheme but this will have significant funding

implications.

• Self-Build, where households find a plot of land and build or commission the

construction of their own home, or work with a group in a Community Self Build

project. Self-Build was promoted by the Coalition Government, with eleven

https://www.helptobuy.gov.uk/

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September 2017

authorities announced as Right to Build ‘vanguards’ in September 2014. The Self-

Build and Custom Housebuilding Act 2015 and subsequent Self-Build and Custom

Housebuilding (Register) Regulations 2016 require authorities to maintain a

authorities are under a duty to have regard to these registers in carrying out their

planning function.

• The March 2016 Budget included plans for a new ‘Lifetime ISA’. Available to

individuals aged under 40 in April 2017, the Government propose to add £1 for

every £4 saved, to be used to buy homes worth up to £450,000 or for retirement

funds. The proposals have been criticised for causing confusion between ISAs and

pensions, but the scheme is intended to facilitate younger households saving,

either towards a house purchase or their pension.

Housing for older and vulnerable people

B.50 The Care Act 2014 came into effect in April 2015, replacing existing legislation and

positioning housing as a key factor in the overhaul of the care system in England. The

Act encourages providers to establish and develop services that help drive change,

services which:

• Promote people’s independence, connections and wellbeing;

• Prevent or postpone the need for care and support;

• Put people in control, ensuring that services respond to what people need;

• Give carers a right to assessment for support; and

• Promote the integration of health and social care.

B.51 In addition, the Care Act introduces a cap on care costs, whereby people will be

responsible for their own care costs up to a capital limit of £72,000. This may have an

impact on the provision of supported housing.

B.52 The NHS Five Year Forward Review (October 2014) recognises the role that housing

can play in promoting wellbeing and in particular keeping older people independent

and healthy. This provides evidence of the strong and growing links between housing,

health and social care.

B.53 Schemes to support older and vulnerable people in their housing needs include:

• Disabled Facilities Grant, funding adaptations to properties to allow people to live

in their homes for longer. This is now part of the Better Care Fund, which aims to

better integrate health and adult social services. In 2016/17 there is £394 million

funding available and in his Autumn Statement 2015 the Chancellor committed to

making a further £500 million available by 2019/20;

• Care and Support Specialised Housing Fund, to stimulate the market in specialist

housing provision. The Government committed an additional £400 million to build

8,000 new specialist homes in the Autumn Statement 2015. A further allocation of

£84.2 million announced in March 2016 is intended to provide a further 2,000

homes.

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September 2017

• Supported housing has been exempted from the 1% rent cuts and potential

exemption from the LHA cap is also being considered by Government, although

wider welfare and funding reforms have already had a significant impact on the

financial viability of both existing and proposed supported housing schemes;

• FirstStop, an independent, impartial and free service offering advice and

information to older people, their families and carers about housing and care

options for later life;

• Home Improvement Agencies, providing help and advice to older and disabled

people, housing associations and charities; and

• Handyperson services, delivering small home repairs and adaptations.

B.54 Other projects of relevance to housing include the previous Prime Minister’s Challenge

on Dementia. Launched in 2012, the Challenge sought to deliver major improvements

in dementia care and research by 2015, including raising awareness of the housing,

care and support needs of people living with dementia and their families. In February

2015, the Prime Minister’s Challenge on Dementia 2020 was published, highlighting

progress and launching the next phase of the work.

B.55 Also relating to older people’s housing is the World Health Organisation’s Age Friendly

Cities programme, which in 2014 saw Manchester recognised as the UK’s first ‘Age

Friendly’ city. Launched in February 2016, the NHS’s Healthy New Towns initiative

seeks to deliver 76,000 new homes on 10 sites throughout the UK.

B.56 In terms of safeguarding vulnerable adults, housing has a strong role to play alongside

social services, health, the police and other agencies. The Care Act 2014 set out a new

safeguarding power and places a duty on local authorities to respond to safeguarding

concerns by making enquiries as necessary to decide on whether, and what, action is

needed.

B.57 From the April 1

2013, Health and Wellbeing Boards (including Directors of Public

Health) became statutory committees of local authorities. They are responsible for

encouraging integrated working on health and wellbeing issues, including

development of Joint Health and Wellbeing Strategies, and Joint Strategic Needs

Assessments.

B.58 In August 2012 the Government published its Homelessness Strategy, Making every

contact count: A joint approach to preventing homelessness. The Strategy focuses on

prevention and identifies ten local challenges that need to be addressed by local

authorities. These include having a Homelessness Strategy setting out a proactive

approach; not placing any young person aged 16 or 17 in Bed and Breakfast

accommodation; and not placing any families in Bed and Breakfast accommodation,

except in an emergency and for no longer than six weeks.

B.59 In order to prevent and tackle homelessness and rough sleeping, a range of

Government funding has been provided in recent years, including:

• The Homelessness Prevention Fund, providing grants for local homelessness

services;

• The Homelessness Transition Fund, supporting ‘No Second Night Out’; and

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September 2017

• The Crisis Private Rented Sector Access Development Programme to help single

homeless people find privately rented accommodation.

B.60 On 17

December 2015 the DCLG announced ‘a radical new package of measures to

help tackle homelessness and ensure that there is a strong safety net in place for the

most vulnerable people in society’

. At the same time, the Communities and Local

Government Committee announced a parliamentary inquiry into the causes of

homelessness and the approaches taken by national and local government to prevent

and tackle homelessness.

B.61 The March 2016 Budget included a commitment of £100 million to build

accommodation for rough sleepers; £10 million to fund new ways to prevent and

reduce rough sleeping; and a £5 million increase to funding for the Rough Sleeping

Social Impact Bond. However, Ministers the imposition on local authorities of a new

legal ‘duty to prevent’ was not included in the March Budget as expected.

B.62 The Conservative MP Bob Blackman tabled the Homelessness Reduction Bill in

September 2017. It proposed the introduction of new duties on councils, including

requiring them to provide emergency accommodation for 56 days for people with a

local connection but not in priority need. Following negotiations, a new version of the

Bill was published in October 2016. This does not include the above clause, which was

considered would place too much pressure on local authorities and would be too

costly. The central thrust of the Bill remains, however, which is to place duties on

councils to take steps to prevent homelessness The Bill has been backed by

Government and has progressed to its third reading in the House of Lords (23rd March

2017).

National housing reviews

B.63 Over recent years a number of housing reviews have been undertaken to assess the

housing situation and recommend ways in which it can be addressed.

B.64 In October 2014 the Lyons Housing Review was published. The review was

commissioned by the Labour Party and identified that:

• Insufficient land is being brought forward for new housing and that communities

are not able to take responsibility for the homes required, or are using planning

powers reactively; and

• The capacity to build more housing has reduced significantly as it has become

concentrated in the hands of a small number of volume house builders, whilst the

number of smaller builders has reduced.

• Overall the report recommended that the delivery of new homes be increased to

200,000 per annum by 2020. It also recommended that capital investment should

be made in housing and that housing should be a priority for the new (post-

election) Government.

https://www.gov.uk/government/news/radical-package-of-measures-announced-to-tackle-homelessness

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September 2017

B.65 The Elphicke-House Report (January 2015) reviewed the role of local authorities in

increasing housing supply. It recommended that local authorities become housing

delivery enablers in their areas, to proactively assess and lead on facilitating new

housing development in their areas. To enhance the role of authorities as delivery

enablers, the report recommended increased community involvement; clearer

housing market assessments; increased housebuilding by reduced bureaucracy and

more flexible funding.

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September 2017

Technical Appendix C: Housing need calculations

Summary of contents

Stage 1: Current housing need (gross backlog)

Step 1.1

Homeless households and those in temporary

accommodation

Step 1.2

Overcrowding and concealed households

Step 1.3

Other groups

Step 1.4

Total current housing need (gross)

Stage 2: Future housing need (gross annual estimate)

Step 2.1

New household formation (gross per year)

Step 2.2

Proportion of new households unable to buy or rent in

the market

Step 2.3

Existing households falling in to need

Step 2.4

Total newly-arising housing need (gross per year)

Stage 3: Affordable housing supply

Step 3.1

Affordable dwellings occupied by households in need

Step 3.2

Surplus stock

Step 3.3

Committed supply of new affordable housing

Step 3.4

Units to be taken out of management

Step 3.5

Total affordable housing stock available

Step 3.6

Total supply of social re-lets (net)

Step 3.7

Annual supply of intermediate affordable housing

available for re-let or resale at sub-market levels

Step 3.8

Annual supply of affordable housing

Stage 4: Estimate of annual housing need

Step 4.1

Total backlog need

Step 4.2

Quota to reduce over 5 years (2)

Step 4.3

Annual backlog reduction

Step 4.4

Newly-arising need

Step 4.5

Total annual affordable need

Step 4.6

Annual social rented capacity

Step 4.7

Net Annual Shortfall

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September 2017

Introduction

C.1 A working definition of housing need is ‘the quantity of housing required for

households who are unable to access suitable housing without financial assistance’.

The 2017 Household Survey and secondary data provide a robust range of information

to quantify housing need in Leeds and the extent to which additional affordable

housing is required.

C.2 Housing needs analysis and affordable housing modelling has been prepared in

accordance with CLG guidance at City Council and Affordable Housing Zone level. In

summary, the model reviews in a step-wise process:

Stage 1: Current housing need (gross backlog)

Stage 2: Future housing need

Stage 3: Affordable housing supply

Stage 4: Estimate of annual housing need

C.3 Table C1 summarises the different steps taken in assessing housing need and

evidencing the extent to which there is a surplus or shortfall in affordable housing

across Leeds. Please note that in Stage 1, Step 1.4 reports the total number of

households in need and avoids double counting as in some cases households have

more than one housing need. Table C2 summarises the data by Affordable Housing

Zone.

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September 2017

Table C1 CLG Needs Assessment Summary for Leeds City Council

Step

Stage and Step description

Calculation

Leeds MB Total

Stage1: CURRENT NEED

1.1

Homeless households and those in temporary

accommodation

Annual requirement 5,702

1.2

Overcrowding and concealed households

Current need

9,892

1.3

Other groups

Current need

20,775

1.4 Total current housing need (gross)

Total no. of households

with one or more needs

31,740

1.4A

TOTAL cannot afford open market (buying or

renting)

58.7% 18,623

Stage 2: FUTURE NEED

2.1

New household formation (Gross per year)

Blended rate of

national and local

evidence

6,154

2.2

% of new households requiring affordable

housing

Total cannot afford

overall

57.8%

2.2

Number of new households requiring

affordable housing

Number cannot afford 3,560

2.3

Existing households falling into need

Annual requirement

916

2.4

TOTAL newly-arising housing need (gross

each year)

2.2 + 2.3 4,476

Stage 3: AFFORDABLE HOUSING SUPPLY

3.1

Affordable dwellings occupied by households

in need

(based on 1.4) 7,614

3.2 Surplus stock

Vacancy rate <2% so no

surplus stock assumed

3.3

Committed supply of new affordable units

Annual

3,050

3.4

Units to be taken out of management

None assumed

3.5

Total affordable housing stock available

3.1+3.2+3.3-3.4

10,664

3.6

Annual supply of social re-lets (net)

Annual Supply (3yr ave)

4,042

3.7

Annual supply of intermediate affordable

housing available for re-let or resale at sub-

market levels

Annual Supply (3yr ave) 0

3.8

Annual supply of affordable housing

3.6+3.7

4,042

Stage 4: ESTIMATE OF ANNUAL HOUSING NEED

4.1

Total backlog need

1.4A-3.5

7,960

4.2

Quota to reduce over Plan period

Annual reduction

10%

4.3

Annual backlog reduction

Annual requirement

796

4.4 Newly-arising need 2.4 4,476

4.5

Total annual affordable need

4.3+4.4

5,272

4.6

Annual social rented capacity

3.8

4,042

4.7

NET ANNUAL SHORTFALL (4.5-4.6)

NET

1,230

Source 2017 Household Survey; Social Rented lettings data

Data presented in the table may be subject to rounding errors

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September 2017

Table C2 CLG Needs Assessment Summary by Affordable Housing Zone

Source 2017 Household Survey; Social Rented lettings data

Data presented in the table may be subject to rounding errors

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September 2017

Stage 1: Current need

C.4 A working definition of housing need is ‘the quantity of housing required for households

who are unable to access suitable housing without financial assistance’

. The SHMA

Guidance suggests types of housing that should be considered unsuitable, as

summarised in Table C3. Data for Affordable Housing Zones are presented in Table C4.

Table C3 Summary of current housing need across Leeds District