By Type of Affordable Housing (Numbers) 122

Hull Strategic Housing Market Assessment

Final Report

Hull City Council

November 2013

Prepared by

GL Hearn Limited 20 Soho Square London W1D 3QW

T +44 (0)20 7851 4900 F +44 (0)20 7851 4910 glhearn.com

Hull Strategic Housing Market Assessment Final Report: March 2014

Contents

Section Page

1 EXECUTIVE SUMMARY 11

2 INTRODUCTION 23

3 HOUSING STOCK AND SUPPLY TRENDS 29

4 HOUSING MARKET DYNAMICS 45

5 DEMOGRAPHIC AND ECONOMIC CONTEXT 61

6 DEMOGRAPHIC PROJECTIONS 77

7 AFFORDABLE HOUSING NEED 99

8 REQUIREMENTS FOR DIFFERENT SIZES OF HOMES 129

9 NEEDS OF SPECIFIC GROUPS 143

10 SHMA CONCLUSIONS 169

List of Figures

FIGURE 1: HULL STRATEGIC HOUSING MARKET AREA 11

FIGURE 2: THE HULL HOUSING MARKET AREA 24

FIGURE 3: DETAILED TENURE PROFILE, 2011 (%) 30

FIGURE 4: HOUSE TYPES, 2011 31

FIGURE 5: SIZES OF HOMES BY TENURE, CITY OF HULL 2011 33

FIGURE 6: PROFILE OF DWELLINGS BY COUNCIL TAX BAND, 2011 34

FIGURE 7: TRENDS IN VACANT HOMES, 2004-12 36

FIGURE 8: TRENDS IN % PROPERTIES VACANT (AND LONG-TERM VACANT), 2004-12 37

FIGURE 9: ADDITIONS TO THE HOUSING STOCK IN HULL (GROSS), 2004/5 – 2012/13 38

FIGURE 10: LOSSES THROUGH DEMOLITIONS, CONVERSIONS AND CHANGES OF USE (GROSS), 2004/5 – 2012/13 39

FIGURE 11: NET COMPLETIONS IN HULL, 2004/5 – 2012/13 40

FIGURE 12: GROSS COMPLETIONS IN HULL BY PROPERTY SIZE, 2004/5 – 2012/13 40

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FIGURE 13: GROSS COMPLETIONS BY PROPERTY SIZE IN HULL FOR KEY TIME PERIODS 41

FIGURE 14: NET COMPLETIONS, 2004/5 - 2010/11 IN EAST RIDING 43

FIGURE 15: UNDERSTANDING HOUSING DEMAND 45

FIGURE 16: UK ECONOMIC GROWTH, 2007-2013 47

FIGURE 17: TRENDS IN GROSS MORTGAGE LENDING 48

FIGURE 18: TRENDS IN MORTGAGE APPROVALS BY TYPE, UK 2011-2013 49

FIGURE 19: BASE INTEREST RATES 50

FIGURE 20: MORTGAGE PAYMENTS AS A % OF MONTHLY INCOME 51

FIGURE 21: MEDIAN HOUSE PRICE TRENDS, 1998 - 2007 53

FIGURE 22: MEDIAN HOUSE PRICE TRENDS, 2008 – 2012 (Q3) 54

FIGURE 23: MIX OF SALES BY PROPERTY TYPE 56

FIGURE 24: QUARTERLY SALES INDEX, 1995 – 2013 57

FIGURE 25: POPULATION TRENDS IN HULL, 1981-2011 61

FIGURE 26: POPULATION TRENDS (1981 – 2011) 62

FIGURE 27: CHANGE IN POPULATION AGE STRUCTURE (2001 – 2011) IN HULL 64

FIGURE 28: POPULATION BY ETHNIC GROUP, 2011 65

FIGURE 29: CHANGE IN ETHNIC COMPOSITION IN HULL (2001-2011) 66

FIGURE 30: EMPLOYMENT RATE, 2004 – 2012 69

FIGURE 31: UNEMPLOYMENT RATE, 2004 - 2012 70

FIGURE 32: JOBS DENSITY, 2011 71

FIGURE 33: ECONOMIC ACTIVITY IN 2011 BY SUB-AREA 72

FIGURE 34: EARNINGS, 2012 73

FIGURE 35: OVERVIEW OF METHODOLOGY 78

FIGURE 36: ONS MIGRATION ASSUMPTION 2011/12 TO 2029/30 81

FIGURE 37: POPULATION CHANGE, 2011 – 2030 87

FIGURE 38: EMPLOYMENT CHANGE, 2011 – 2030 89

FIGURE 39: HOUSEHOLD CHANGE, 2011 – 2030 90

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FIGURE 40: PAST AND PROJECTED TRENDS IN AVERAGE HOUSEHOLD SIZE 93

FIGURE 41: ENTRY-LEVEL PURCHASE PRICE AND PRIVATE RENT 103

FIGURE 42: VOLUME OF PROPERTIES ADVERTISED FOR SALE AND RENT 103

FIGURE 43: INDICATIVE INCOME REQUIRED TO PURCHASE/RENT WITHOUT ADDITIONAL SUBSIDY 106

FIGURE 44: DISTRIBUTION OF HOUSEHOLD INCOME IN HULL 107

FIGURE 45: OVERVIEW OF BASIC NEEDS ASSESSMENT MODEL 109

FIGURE 46: APPROACH TO HOUSING MARKET MODELLING 130

FIGURE 47: AVERAGE BEDROOMS BY AGE, SEX AND TENURE 132

FIGURE 48: IMPACT OF DEMOGRAPHIC TRENDS ON MARKET HOUSING NEED BY SIZE (2011-2030) 134

FIGURE 49: IMPACT OF DEMOGRAPHIC TRENDS ON AFFORDABLE HOUSING NEEDED BY HOUSE SIZE, 2011 TO 2030 136

FIGURE 50: SIZE OF HOUSING NEEDED IN HULL (2011 TO 2030) 137

FIGURE 51: TENURE OF OLDER PERSON HOUSEHOLDS - HULL 147

FIGURE 52: OCCUPANCY RATING OF OLDER PERSON HOUSEHOLDS - HULL 148

FIGURE 53: POPULATION WITH LTHPD IN EACH AGE BAND 153

FIGURE 54: POPULATION AGE PROFILE BY ETHNIC GROUP (2011) 156

FIGURE 55: TENURE BY ETHNIC GROUP IN HULL 157

FIGURE 56: OCCUPANCY RATING BY ETHNIC GROUP IN HULL 158

FIGURE 57: TENURE OF HOUSEHOLDS WITH DEPENDENT CHILDREN - HULL 160

FIGURE 58: OCCUPANCY RATING AND HOUSEHOLDS WITH DEPENDENT CHILDREN 161

FIGURE 59: TENURE BY AGE OF HRP - HULL 162

FIGURE 60: ECONOMIC ACTIVITY BY AGE OF HRP - HULL 163

FIGURE 61: NUMBERS OF PART-TIME AND FULL TIME UNIVERSITY STUDENTS – HULL UNIVERSITY (2002/3 – 2011/12) 165

FIGURE 62: PART-TIME AND FULL TIME UNIVERSITY STUDENTS – HULL UNIVERSITY (2002/3 – 2011/12) 165

FIGURE 63: NUMBERS OF UK AND NON UK STUDENTS – HULL UNIVERSITY (2002/3 -2011/12) 166

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FIGURE 64: NET MIGRATION TRENDS TO/FROM HULL 171

List of Tables

TABLE 1: HULL SHMA HEADLINE FINDINGS 20

TABLE 2: DEFINITION AND PROFILE OF SUB-AREAS 26

TABLE 3: DWELLINGS BY TENURE, 2011 29

TABLE 4: SIZE OF HOMES, 2011 32

TABLE 5: LEVEL OF OVERCROWDING, 2011 35

TABLE 6: VACANT AND SECOND HOMES, 2011 CENSUS 36

TABLE 7: GROSS COMPLETIONS BY PROPERTY TYPE IN HULL 42

TABLE 8: MEDIAN HOUSE PRICES, 2012 52

TABLE 9: HOUSE PRICES BY TYPE IN HULL, OCTOBER – DECEMBER, 2012 54

TABLE 10: MEDIAN HOUSE PRICES FOR SUB-AREAS, 2012 55

TABLE 11: MIX OF SALES BY PROPERTY TYPE 56

TABLE 12: POPULATION, 2011 61

TABLE 13: POPULATION STRUCTURE, 2011 63

TABLE 14: SKILLS AND QUALIFICATIONS, 2011 67

TABLE 15: OCCUPATIONAL PROFILE, 2011 68

TABLE 16: JSA CLAIMANTS 70

TABLE 17: MEDIAN INCOME BY SUB-AREA 74

TABLE 18: PLACE OF RESIDENCE FOR HULL WORKERS (2001 AND 2008) 74

TABLE 19: PLACES OF WORK FOR HULL RESIDENTS (2001 AND 2008). 75

TABLE20: SCOPE OF DEMOGRAPHIC PROJECTIONS 79

TABLE 21: COMPARING MIGRATION IN 2010- AND 2011-BASED SNPP (AVERAGE FIGURES 2011-2021) 80

TABLE 22: PAST TRENDS IN NET IN-MIGRATION 82

TABLE 23: EMPLOYMENT GROWTH ASSUMPTIONS USED IN MODELLING 84

TABLE 24: POPULATION ESTIMATES 2011 TO 2030 86

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TABLE 25: EMPLOYMENT ESTIMATES 2011 TO 2030 88

TABLE 26: HOUSEHOLD ESTIMATES 2011 TO 2030 90

TABLE 27: ESTIMATED HOUSING NUMBERS WITH 3% VACANCY ALLOWANCE (TO 2030) 91

TABLE 28: HOUSEHOLDS WITH NON-DEPENDENT CHILDREN (2001 AND 2011) 93

TABLE 29: CHANGE IN BME GROUPS 2001 TO 2011 (HULL) 94

TABLE30: SUMMARY OF PROJECTIONS 2011 TO 2030 – ANNUAL – HULL 98

TABLE 31: SUMMARY OF PROJECTIONS 2011 TO 2030 – TOTAL – HULL 98

TABLE 32: MAXIMUM LHA PAYMENTS BY SIZE 104

TABLE 33: MONTHLY AVERAGE SOCIAL RENT LEVELS IN HULL 105

TABLE 34: INCOME DISTRIBUTION BY SUB-AREA 107

TABLE 35: ESTIMATED PROPORTION OF HOUSEHOLDSUNABLE TO AFFORD MARKET HOUSING WITHOUT SUBSIDY 109

TABLE 36: HOUSING REGISTER APPLICANTS BY SUB-AREA 111

TABLE 37: ESTIMATED BACKLOG NEED BY SUB-AREA 111

TABLE 38: ESTIMATED HOUSING NEED FROM NEWLY FORMING HOUSEHOLDS (2013-18) 113

TABLE 39: ESTIMATED LEVEL OF HOUSING NEED FROM EXISTING HOUSEHOLDS (2013-18) 114

TABLE40: ESTIMATED FUTURE HOUSING NEED (2013-18) 114

TABLE 41: ANALYSIS OF PAST SOCIAL RENTED HOUSING SUPPLY (PAST 5 YEARS) 115

TABLE 42: SUPPLY OF AFFORDABLE HOUSING BY SUB-AREA 116

TABLE 43: ESTIMATED LEVEL OF HOUSING NEED (2013-18) EXCLUDING PIPELINE 117

TABLE 44: NUMBER OF PEOPLE CLAIMING LHA IN PRIVATE RENTED SECTOR (JAN 2010 AND JAN 2013) 117

TABLE 45: PRIVATE RENTED SECTOR LHA CLAIMANTS BY SUB-MARKET 118

TABLE 46: NEED FOR AFFORDABLE HOUSING 2013-30 121

TABLE 47: CATEGORIES OF AFFORDABLE HOUSING FOR ANALYTICAL PURPOSES 122

TABLE 48: HOUSING NEED (2013-18) BY TYPE OF AFFORDABLE HOUSING (NUMBERS) 122

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TABLE 49: HOUSING NEED (2013-18) BY TYPE OF AFFORDABLE HOUSING (PERCENTAGES) 123

TABLE50: LHA LEVELS AT MEDIAN AND 30TH CENTILE (JUNE 2010) – WEEKLY FIGURES 124

TABLE 51: ESTIMATED PROFILE OF DWELLINGS BY SIZE (2011) 133

TABLE 52: ESTIMATED SIZE OF DWELLINGS NEEDED (2011-2030): MARKET HOUSING 134

TABLE 53: ESTIMATED SIZE OF DWELLINGS NEEDED (2011-2030): AFFORDABLE HOUSING 136

TABLE 54: ESTIMATED HOUSING NEEDS BY BED-SIZE (2011-2030) 137

TABLE 55: ESTIMATES OF NEED FOR DIFFERENT SIZES OF HOMES BY SUB- AREA (2011-30): MARKET HOUSING 139

TABLE 56: ESTIMATES OF NEED FOR DIFFERENT SIZES OF HOMES BY SUB-AREA (2011-30): AFFORDABLE HOUSING 140

TABLE 57: INDICATIVE REQUIREMENTS FOR DIFFERENT DWELLING SIZES (2011-30) 140

TABLE 58: OLDER PERSON POPULATION (2011) 145

TABLE 59: PROJECTED CHANGE IN POPULATION OF OLDER PERSONS (2011 TO 2021) 145

TABLE60: PENSIONER HOUSEHOLDS (CENSUS 2011) 146

TABLE 61: PENSIONER HOUSEHOLDS WITH OCCUPANCY RATING OF +2 OR MORE BY TENURE 148

TABLE 62: ESTIMATED POPULATION CHANGE FOR RANGE OF HEALTH ISSUES (2011 TO 2030) 149

TABLE 63: ESTIMATED NEED FOR SPECIALIST HOUSING 150

TABLE 64: OLDER PERSON HOUSEHOLDS AND THE HOUSING REGISTER 151

TABLE 65: HOUSEHOLDS AND PEOPLE WITH LONG-TERM HEALTH PROBLEM OR DISABILITY (2011) 152

TABLE 66: BLACK AND MINORITY ETHNIC POPULATION (2011) 155

TABLE 67: CHANGE IN BME GROUPS 2001 TO 2011 (HULL) 156

TABLE 68: NUMBER OF HOUSEHOLDS BY ETHNIC GROUP (2011) AND AVERAGE HOUSEHOLD SIZE 157

TABLE 69: HOUSING REGISTER AND ETHNIC GROUPS 159

TABLE70: HOUSEHOLDS WITH DEPENDENT CHILDREN (2011) 160

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TABLE 71: HOUSEHOLDS WITH NON-DEPENDENT CHILDREN (2011) 162

TABLE 72: STUDENT ACCOMMODATION FOR UNIVERSITY OF HULL STUDENTS 166

TABLE 73: HULL SHMA HEADLINE FINDINGS 176

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Quality Standards Control

The signatories below verify that this document has been prepared in accordance with our quality control requirements. These procedures do not affect the content and views expressed by the originator.

This document must only be treated as a draft unless it is has been signed by the Originators and approved by a Business or Associate Director.

DATE ORIGINATORS APPROVED March 2014 Emma Powell, Assistant Planner Nick Ireland Justin Gardner, Director, JGC Planning Director

Limitations This document has been prepared for the stated objective and should not be used for any other purpose without the prior written authority of GL Hearn; we accept no responsibility or liability for the consequences of this document being used for a purpose other than for which it was commissioned.

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1 EXECUTIVE SUMMARY

Introduction

1.1 This Strategic Housing Market Assessment (SHMA) for Hull has been prepared to provide an understanding of housing market dynamics, and consider the future need for market and affordable housing provision and the housing needs of different groups within the local community.

1.2 The SHMA is intended to inform Hull City Council’s new Local Plan, which will guide development over the period to 2030. In order to provide a robust evidence base for the plan, the SHMA has been prepared in accordance with the requirements of the National Planning Policy Framework (NPPF), Government’s 2007 SHMA Practice Guidance and draft Planning Practice Guidance on Assessment of Housing and Economic Development Needs (CLG, Aug 2013). The SHMA will also inform housing policy and investment decisions, including the Council’s Housing Strategy and the work of its Neighbourhoods and Housing Department.

1.3 The NPPF sets out that Councils should prepare an SHMA to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The SHMA defines a Hull-focused Housing Market Area (HMA) which includes the City and the south-eastern part of the East Riding including Hessle, Willerby, Cottingham, Beverley and extending east to the Holderness Coast. The Hull SHMA considers the housing mix and market dynamics in this Hull HMA area; whilst future housing needs within the East Riding have been considered through an update East Riding of Yorkshire Council’s Local Housing Study 2014, using a common approach and key assumptions to this SHMA.

Figure 1: Hull Strategic Housing Market Area

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1.4 This SHMA has been prepared alongside the East Riding Local Housing Study 2014 in accordance with the Duty to Cooperate. This has included meetings between the authorities and their respective consultants, and a common stakeholder event to test emerging findings of this SHMA held in September 2013.

1.5 The NPPF outlines that the scope of a SHMA is to identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period which: meets household and population projections, taking account of migration and demographic change; addresses the needs for all types of housing, including affordable housing and the needs of different groups within the local community; and caters for housing demand and the scale of housing supply necessary to meet this demand. The SHMA does not set the housing target for the plan – it establishes the objectively assessed need for housing. The presumption in favour of sustainable development in the NPPF however sets out that local plans should meet objectively assessed needs, with sufficient flexibility to adapt to rapid change, unless the adverse impacts of doing so would significantly and demonstrably outweigh the benefits or other policies within the NPPF indicate that development should be restricted. The assessment of need herein thus provides an important starting point for considering housing policies in the City’s Local Plan.

1.6 The SHMA has been prepared by consultants GL Hearn and Justin Gardner Consulting. It has however been informed by a detailed programme of consultation with housebuilders, developers, estate and letting agents, social landlords, private landlords, the University of Hull, and officers of Hull City Council and East Riding of Yorkshire Council. A stakeholder consultation event was held jointly to cover the Hull SHMA and East Riding Housing Requirements Study Update on 3rd September 2013 to test the emerging findings, which have in turn informed the SHMA.

Overall Need for Housing

1.7 The draft Planning Practice Guidance issued by Government in August 2013 sets out a clear approach for providing an objective assessment of need for housing.

1.8 It sets out that the starting point should be the latest household projections published by Government (CLG). The Government’s latest household projections1 indicate growth in households in Hull of around 750 per year over the 2011-21 period. These are however interim projections rather than official statistics and are influenced by assumptions on migration which pre-date the release of data from the 2011 Census.

1.9 The draft Planning Practice Guidance indicates that household projections may require adjustment to take account of the latest evidence and to consider need over longer-term timeframes for

1 CLG 2011-based Interim Household Projections

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strategic planning. PROJ 1 within the SHMA does this, updating and extending the Office for National Statistics’ (ONS) 2011-based Sub-National Population Projections to 2030 based on data from the 2010- and 2011-based ONS Population Projections. This indicates a need for 14,440 homes over the 2011-30 period (760 per annum) based on a continuation of past population trends.

1.10 The draft Practice Guidance then effectively sets out a number of tests which need to be considered, which can be summarised as follows:

Is there evidence that household formation has been constrained? Do market signals suggest a need to increase housing supply to improve affordability? Will the projected housing need be capable of meeting affordable housing needs? Should higher housing numbers be considered to increase delivery of affordable housing? Will the projected housing need support expected growth in jobs, or is there a need to consider increasing housing supply to support economic growth?

1.11 These three tests effectively provide a basis for considering whether it would be appropriate to make an upward adjustment, in the case of this report to PROJ 1. The conclusions of the SHMA regarding the future need for housing have followed this approach. The draft Guidance specifically cautions against reducing migration assumptions based on economic evidence.

Market Signals

1.12 Hull has some of the cheapest housing in the Country. The average (median) house price of homes sold in 2012 was £89,000 in the City (and £115,000 across the wider HMA); with average house prices within the 10th lowest of all local authorities in England and Wales. There is a significant volume of terraced stock and flats available priced below £80,000 in the City.

1.13 House price grew in Hull between 2002-7, but to a more modest degree than those at a regional or national level; resulting in a growth in the differential in prices between Hull and other parts of the region and country. Over the past five years house prices in Hull have fallen by 2% compared to 9% growth across England.2

1.14 In 2012 the lower quartile house price-to-income ratio (the Government’s preferred measure of affordability) was 3.7 in Hull making the City one of the most affordable places to live in the country. This ratio is lower than in any other authority within the Yorkshire & Humber region. Affordability on this measure has improved since 2008. Nonetheless many households cannot afford to access market housing because whilst house prices and rents are low, so are household incomes. A high proportion of Hull households’ income is derived from welfare benefits, resulting in Hull being ranked as 10th in the overall 2010 Indices of Multiple Deprivation and 18th for income deprivation. Average gross weekly earnings of Hull residents in 2013 were 83% of the figure for England overall, based on the ONS Annual Survey of Hours and Earnings.

2 Based on trends between Q1 2008 and Q3 2012

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1.15 Low house prices within the City are partly a reflection of the City’s housing offer, which is biased strongly towards smaller and cheaper properties; but also weaker housing demand in relative terms with prices for specific types of properties between 22-32% below regional averages. Overcrowding has increased, but this appears principally to be a function of localised market conditions and particularly the mix of housing in certain parts of the City – an issue of limited local housing choice. Within the City relative demand is weakest in the NaSA, East and Bransholme areas; the latter two including larger social housing estates; and in relative terms stronger in the West and North of the City.

1.16 The local housing market has been significantly affected by the market downturn and issues relating to access to mortgage finance. Sales volumes remain 57% below the pre-recession average; and suggest that the strong investment demand which supported price growth between 2003-6 has fallen away. There is evidence that access to mortgage finance has been improving during the course of 2013, including through the introduction of the Government’s Help-to-Buy scheme, however within Hull the economic fundamentals remain poor and suggest that a recovery in the housing market is likely to be more modest and phased over a longer period relative to other parts of the UK.

1.17 Delivery of new housing has been modest for a City of Hull’s size: on average there have been 607 new homes added to the dwelling stock per year since 2004/5, however net growth in the housing stock has been of a modest 265 homes per year, in particular influenced by significant demolition programmes. The average households size in Hull has fallen notably over the 2001-11 period from 2.34 to 2.28; and there is no evidence that restricted housing supply has been constraining new household formation in Hull – the evidence instead suggesting that low housing delivery is a function of modest demand rather than constrained supply of land for housing development.

Affordable Housing Needs

1.18 The SHMA has considered the need for affordable housing using the approach set out in the CLG 2007 Practice Guidance. This considers the need for and supply of affordable housing to consider whether there is a shortfall or surplus of affordable housing provision at the time of the assessment.

1.19 The evidence indicates a continued need for affordable housing. Looking over the period to 2030 the SHMA identifies a net need for 338 affordable homes per annum across the City; but identifies that there is an apparent surplus of affordable housing in the East, Orchard Park and Bransholme sub-areas in numerical terms, as a result of a current mismatch between stock profile and local housing need. It is noted that these are areas of active neighbourhood renewal and that there may be a need for a different profile of affordable housing in these areas, supporting diversification of the stock profile and neighbourhood sustainability.

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1.20 Whilst a significant deficiency in affordable housing is identified, in practice many households in the City are able to live within the Private Rented Sector supported by Local Housing Allowance. An estimated 2,750 private lettings per annum are made to households in housing need; and many tenants are likely to turn to the private rented sector as they cannot secure affordable housing. However the sector is not an affordable solution for many households. The size of the private rented sector may constrict or increase, dependent on levels of rent achievable and the introduction of Universal Credit may affect this. Delivery of additional affordable housing will be necessary, funded through both developer contributions and public subsidy.

1.21 Thus whilst the analysis provides evidence of a need for affordable housing in support of policies in new development, it does not indicate a scale of need which would justify an upwards adjustment to the demographic-driven projections of overall housing need.

Economic Performance

1.22 Hull has a relatively young population, with an above average proportion of people aged in their 20s and growing population within younger Black and Minority Ethnic (BME) communities. Economic performance is one of a number of factors which may influence migration of people to and from the City, particularly as the HMA has a high level of commuting self-containment.

1.23 The economic fundamentals are not strong: skill levels are low and those in higher-paid jobs are more likely to choose to live outside the City and commute in to work. Unemployment at 16% of the working-age population is significant; and highlights the structural weakness of the local economy and is distance from other main employment sectors.

1.24 Baseline forecasts from the Regional Economic Intelligence Model (REIU) suggest that employment levels will remain broadly stable between 2013-30 (with a net loss of 200 jobs). There are however a number of key transformational projects which provide potential for stronger employment growth, particularly in the short-term. This has been developed into a Policy-On forecast which indicates a more positive outlook for growth in jobs of 2,900 over the period to 2030. This level of employment growth however remains relatively modest compared to the wider area, representing around 2.9% growth in jobs over the 2011-30 period.

1.25 The risk for Hull is that in-migration reduces and out-migration increases because of a lack of local job opportunities. The SHMA models that the Policy-On forecast might support housing need of around 680 homes per annum, but that housing demand could be notably lower if job growth was supported by improvements to economic participation from within the City’s current population through reductions to unemployment and worklessness. Overall economic performance provides a ‘downside risk’ to the deliverability of the trend-based demographic projections (PROJ 1) and

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highlights the importance of a proactive strategy to attract economic investment, grow the local economic base and deliver regeneration in the City.

Conclusions on Housing Need

1.26 The SHMA concludes that an objective assessment of need, taking account of the draft Planning Practice Guidance, would be for 14,400 net additional homes over the 2011-30 period (an average of 760 homes per year). This would meet need for market and affordable housing in full. It is based on meeting projected population and household growth.

1.27 The assessment of need for 760 homes per annum (net) in the City of Hull represents an assessment of need. The assessment of need makes no policy-based adjustment with a view to changing migration dynamics with adjoining authorities (such as to reduce out-migration from the City), as agreed with East Riding of Yorkshire Council.

1.28 This assessment of need should be brought together with other relevant planning issues, including land supply, infrastructure and sustainability appraisal; and engagement with adjoining authorities; in translating housing need into policy targets within the plan.

Mix of Market and Affordable Housing

1.29 Policies for housing mix in Hull need to be carefully considered, balancing: current housing need and demand evidence, understanding of the overall housing offer and ‘balance’ within this; the degree to which housing can support economic growth; and policy ambitions to develop the housing stock.

1.30 Hull has a high proportion of smaller properties with one and two-bedrooms (47%), within Council Tax Bands A and B (88%); and a high proportion of housing within the social housing sector or rented more generally. There is in effect an oversupply of older small terraced properties.

1.31 To ‘rebalance’ the housing offer there is arguably a strategic case for seeking to deliver more larger family homes for owner-occupation where opportunities exist to do so. This more aspirational housing, delivered in good quality neighbourhoods, could theoretically have a range of benefits – from improving the council tax base to reducing in-commuting for work from the East Riding and migration from Hull to the East Riding to live.

1.32 In tenure terms, the City has a high existing level of affordable housing with 30.2% of the housing stock in the social sector in 2011. There remains notable housing need – not least because of economic performance, with low economic participation rates and high unemployment. Addressing these issues would reduce the number of households requiring some form of housing support. The

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Private Rented Sector in the City is also substantial and effectively caters for those households ‘in need’ unable to secure affordable housing; however loss of assured short-hold tenancies remains a significant cause of homelessness.

1.33 Taken in context, the housing needs analysis suggests a net need for 4,612 affordable homes in the period to 2013-18 resulting in a net requirement for 338 new affordable homes per annum in the period 2013 to 2030 (subject to the affordable housing backlog being met). This reflects the substantial existing stock of affordable housing and a degree of competition between the affordable and private rented sectors for tenants. We would expect housing need in the City to be sensitive to economic performance; whereby addressing worklessness and skills has a housing impact. A strategic ambition to bring people back into work, if successful, could therefore feed through into housing need. It will be important to consider how housing policy supports this.

1.34 A review of the housing needs and viability evidence would suggest that an affordable housing target in the region of up to 15% might be appropriate, although this could be varied in different parts of the City to take account of need and viability. Specific policy targets for affordable housing will need to be informed by economic viability assessment which take account of current development economics and other policies within the plan which influence this (a ‘plan-wide’ viability assessment).

1.35 The SHMA has considered the need for different types of affordable housing, taking account of current supply (and the turnover of this) and what different households with an affordable housing need can afford. Applying standard assessments of market price / rent to household income would, if household size is not taken into account, indicate a tenure mix for affordable housing of 50% intermediate housing and 50% affordable/ social rented homes. However, households for whom intermediate housing may be an option, are likely to pursue Government initiatives such as Help to Buy to enable them to ultimately purchase market housing. This, coupled with evidence which indicates low levels of savings and low equivalised incomes which take into account household size,, would suggest that a high proportion of affordable housing should be affordable/ social rented with levels of intermediate housing determined on an individual site basis. In determining policies for affordable housing, the needs evidence herein will need to be considered alongside the viability of residential development schemes.

1.36 There are thus a range of factors which are relevant in considering policies for the mix of affordable housing sought through development schemes. The SHMA has considered the implications of demographic trends, welfare and benefit reforms and issues related to the management of stock. At a City-wide level, the analysis would support policies for the mix of affordable housing of:

1-bed properties: 35-40%

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2-bed properties: 25-40% 3-bed properties: 15-20% 4-bed properties: 5-10%

1.37 The need for affordable housing of different sizes will vary by area across the City and over time. In considering the mix of homes to be provided within specific development schemes, the strategic findings above are intended be brought together with details of households currently on the Housing Register in the City, the stock and turnover of existing properties and policy ambitions for regeneration.

1.38 In the market sector there are a range of factors which influence the need for different types of homes.

1.39 The SHMA indicates that the City has a large private rented sector which accommodates 20.5% of households, with a concentration of private rented housing in the NaSA and Central sub-areas. It identified that larger homes are concentrated in the Avenue, Newlands and Kings Park wards, with new delivery focused at Kingswood; but that there is a clear evidence of movement of households out of the City to access larger family homes in the East Riding.

1.40 The SHMA evidence indicates that the demand profile for market housing in Hull is likely to be focused towards two- and three-bed properties. It sets out that the following size mix could be appropriate:

5% 1-bed properties 35% 2-bed properties 45% 3-bed properties 15% 4+ bed properties

1.41 The balance will however be influenced by the profile of sites available for development; and the SHMA expects sites such as Kingwood to deliver a higher proportion of 4+ bed homes. This can help to improve the balance in the housing offer; and attract households from outside of the City.

Needs of Specific Groups

1.42 The SHMA has considered the needs of various groups within the community which might have specific housing needs. In particular it identifies the need to plan for an ageing population over the period to 2030 in the HMA. The demographic projections indicate a 60% increase in the population aged over 85 from 2011-30.

1.43 The evidence in the SHMA suggests as people get older, some may require support including adaptations to their properties to meet their changing needs, and provision of ‘floating’ support. It

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forecasts a growth of 40% in people with dementia and 40% in people with mobility problems over the period to 2030 (linked in particular to improvements in life expectancy). Linked principally to the ageing of the population the SHMA also estimates that households which include people with a disability can be expected to increase by 39% over the period to 2030. It will be important that the growth in need is recognised and adequately resourced. Homes can also be designed in accordance with the Lifetimes Homes Standard to enable adaptions to be made to people’s changing needs.

1.44 Many older households will want to remain in their existing homes. However with provision of suitable and attractive properties at the local level some older households may choose to downsize, to reduce property running costs or release equity from their homes. Some of these households may move into housing on the general market, whist some may seek more specifically accommodation targeted at older households (in both the market and affordable sectors).

1.45 A proportion of the growing older population will have more specialist needs. The SHMA provides an indicative assessment of a need for around 145 units of specialist housing for older people (sheltered and extra care) per annum in the HMA. This would provide a rationale for policies seeking or supporting provision of housing for older people within development schemes.

1.46 More widely the SHMA suggests that there are some groups within the population who are disadvantaged to some degree in accessing housing. These include BME households which are more likely to be overcrowded and living in rented accommodation (in part related to younger age structures in BME communities), low income lone-parent households and young people. These issues can be partly addressed by housing policy, including through ensuring access to advice about housing options, and that a range of good quality housing options can be accessed.

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Summary of Findings

1.47 A summary of the key findings of the report is set out in Table 1 below.

Table 1: Hull SHMA Headline Findings

Factor Key Findings

Objectively-Assessed Housing Net increase of 14,400 homes between 2011-30 Need: Hull City (760 net homes per annum)

This represents an assessment of housing need for Hull City. In identifying a target for housing provision in its Local Plan, the Council will need to consider other issues including those relating to land supply and potentially any unmet needs arising from adjoining authorities. At the date of completion of the SHMA, adjoining authorities had not identified an unmet need which might need to be considered.

% Affordable Housing Viability evidence coupled with evidence of housing needs from the SHMA indicates that provision of up to 15% affordable housing provision could be sought through Section 106 Agreements. This should be reviewed as appropriate through a Plan-wide Viability Assessment.

The SHMA identifies a need for 338 affordable homes per annum over the period to 2030 (net of demolitions and the pipeline of affordable housing); however this assumes that all households who cannot afford market housing would live in affordable housing. In reality the City also has a substantial private rented sector which contributes to meeting part of this identified affordable housing need.

Affordable Housing Tenure Mix The mix of affordable housing on individual development schemes should take into account information relating to the balance of existing stock at a local level and data from the Council’s Housing Register at the relevant time at which the housing mix in a new development scheme is being considered.

Affordable Housing Size Mix The mix of affordable housing on individual development schemes should take into account information relating to the balance of existing stock at a local level and data from the Council’s Housing Register at the relevant time at which the housing mix in a new development scheme is being

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considered.

The SHMA recommends a strategic policy at a City-wide is identified for monitoring purposes of:

1-bed properties: 35-40%

2-bed properties: 25-40%

3-bed properties: 15-20%

4+ bed properties: 5-10%

Market Housing Mix New market housing in the City is expected to be influenced by the nature of market demand as well as that of the site and location. For monitoring purposes the SHMA identifies the following strategic mix of housing:

1-bed properties: 5%

2-bed properties: 35%

3-bed properties: 45%

4+ bed properties: 15%

Development schemes which contribute to diversifying the housing offer at a local level, and City-wide, should be encouraged.

The SHMA identifies that some specialist housing may be needed to meet Specialist Housing the needs of some households in the City, including those with learning and physical disabilities and older households.

Provision of appropriate housing to meet the needs of these groups should be supported in the City and should draw on relevant evidence and strategies including the Hull Joint Strategic Needs Assessment and the City Council’s Extra Care Housing Strategy.

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2 INTRODUCTION

2.1 This report provides a Strategic Housing Market Assessment (SHMA) for Hull. The purpose of the SHMA is to develop a robust understanding of housing market dynamics in the City, future needs for both market and affordable housing and the housing requirements of different groups within the City’s communities.

2.2 This SHMA meets the requirements of the National Planning Policy Framework (NPPF) and the CLG’s SHMA Practice Guidance (the Guidance). It has also been informed by draft Planning Practice Guidance on Assessment of Housing and Economic Development Needs (CLG, Aug 2013).

2.3 The SHMA provides the major housing evidence base for Hull City Council’s Local Plan which will cover the plan period to 2030 and support the development of policies to deliver affordable housing. A Gypsy and Traveller Accommodation Assessment (GTAA) was undertaken by SHUSU at the University of Salford in 2012. This evidence base will be subject to regular review.

Context

2.4 The previous Hull Housing Market Assessment was completed over a year period in 2007-8. An update to this was then produced between July and October 2009, reflecting fundamental changes in the market context as well as new demographic information. The Council has sought to update its housing evidence base through the preparation of a new SHMA which takes into account more recent information, including data from the 2011 Census. This SHMA Report thus supersedes the findings in the previous 2007-8 SHMA and 2009 Update.

2.1 Appendix 1 draws together evidence relating to migration and commuting patterns and house price differentials, together with existing research, to define the Hull Housing Market Area (HMA). This is shown in Figure 1. The evidence does point to a distinction within the East Riding whereby it is only areas in the south-eastern part of the District which relate particularly strongly to Hull. This is consistent with the definition of the housing market area within the DTZ research, and supported by analysis in the 2008 HMA. We consider that this is the appropriate functional housing market to use for strategic planning purposes. This has been tested and agreed with East Riding Council.

2.2 There is a clear interaction between Hull and areas within the East Riding and it will be important that there is an alignment of planning policies across the two authorities.

2.3 This SHMA considers dynamics across the Hull Housing Market Area (HMA) which covers the City of Kingston-upon-Hull and parts of the East Riding of Yorkshire including Hessle, Willerby, Cottingham, Beverley and extending east to the Holderness Coast. The boundary of the Housing Market area is shown in Figure 2 below.

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Figure 2: The Hull Housing Market Area

2.4 This report considers the housing mix and market dynamics in this Hull HMA area; as well as future housing need in Hull City. This Hull SHMA has thus been prepared alongside the update of a Housing Requirements Study for East Riding, with the consultants liaising to ensure consistency of approach and key assumptions. Future housing needs within the East Riding have been considered through an update to East Riding of Yorkshire Council’s Local Housing Study, using a common approach and key assumptions to this SHMA. Together these studies identify housing need across the Hull Housing Market Area3.

Overview of the Housing Market Area

2.5 The City of Hull covers just less than 28 square miles and the population is approximately 256,000; however together with the surrounding parts of the East Riding the HMA had a population of just under 456,000 in 20114.

2.6 The characteristics of the housing market can only be fully understood in the context of the history and development of the City. The economy of Hull was built on trading and seafaring centred on the Old Town, later shifting to the Humber Docks. Although the fishing industry declined in the 1970s,

3 The purpose of treating housing need in this way is that key demographic data, including projections, are not available below local authority level 4 Usual resident population, 2011

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the City remains a busy cargo and ferry port. Part of the former Town Docks in the centre of the City is now a large marina for yachts and small sailing craft which is part of modern Hull’s tourism and leisure industry. The modern dock infrastructure is now to the east of the City.

2.7 Other industry in the City is focused on the food processing, chemical and health care sectors, the latter have academic links to the University of Hull. Tourism, the arts, further and higher education sectors have played an increasingly prominent role in the economy. Retail is also a significant part of the local economy. As the biggest settlement in the East Riding and the local transport hub, Hull is a natural focus for shoppers both in the City Centre and in a number of outlying retail parks. Economic growth opportunities include the renewable energy sector, which is identified as a target sector by the Humber Local Enterprise Partnership (LEP).

2.8 Transport infrastructure is a key factor in housing and labour markets. The M62/A63 road is the principal east–west route enabling access to the A1 and M1. Hull is close to the Humber Bridge which enables connections to the south bank of Humber Estuary for commerce and commuting; however commuting from the south of the Estuary to the City to work is limited. Other access corridors to the City Centre tend to define the main residential and out-of-town service centres such as Hessle Road, Anlaby Road, Beverley Road and Holderness Road.

2.9 The University of Hull, has a total student population of around 20,000 with its main university campus in north Hull, on Cottingham Road. The Hull York Medical School is a joint venture between the Universities of Hull and York.

2.10 The East Riding surrounds the City to the west, north and east. It is a unitary authority covering an area of 930 square miles. It is largely rural with a number of prominent market and coastal towns. The market towns and villages in the south combine with Hull to form a functional housing market. Its economy is mainly based on agriculture and this, along with tourism, has contributed to the rural and seaside character of the district. The renewable energy sector is a developing feature of the economy.

Sub-Areas used for Analytical Purposes

2.11 Within the housing market area we have sought to define sub-areas which have common characteristics in regard to their housing mix and socio-economic composition or have been defined previously as ‘policy areas’ within the City for planning purposes. These are based on groupings of electoral wards (as key statistics are not consistently available below this level). The sub-areas are based on areas where a separate policy response around the housing mix may be appropriate.

2.12 The sub-areas are those with similar characteristics in terms of their housing offer (including tenure and type), and the economic and demographic characteristics of their resident population (including

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age, ethnicity and employment rates). In total, eight housing sub-areas in the Hull City area have been identified together with adjoining areas in the East Riding which fall within the HMA. These nine areas are identified and profiled in Table 2 below.

Table 2: Definition and Profile of Sub-Areas Sub-market Wards Key Characteristics Area Newington & Newington, St Andrews - Small dwellings – largely terraced St Andrews - High proportion of social stock and private rented (NaSA) - High unemployment rate - Higher than average ethnic diversity Ings & Ings, Southcoates East, - Largely terraced housing with some semi detached Southcoates Southcoates West - Higher than average proportion of retired population - High proportion of social rented with a reasonable proportion of owner occupation East Longhill, Marfleet - Mainly terraced with some semi-detached dwellings - High proportion of social renting - More elderly than average population - Low skills and income - High unemployment - Limited ethnic diversity Central Drypool, Myton, Newland - Higher than average proportion of flats and terraced stock - Includes student area (Newland) with high private renting and flatted accommodation - Overcrowding above average - Young and ethnically mixed population

Orchard Park Orchard Park & - Small dwellings with above average overcrowding. Greenwood, University - High proportion of social renting - Includes student area (part of University ward) of private renting. - Younger than average population West Avenue, Boothferry, - Older population, high owner-occupation, middle income Bricknell, Derringham, - Largely terraced and semi – detached dwellings Pickering - High proportion of full time employment and retirees - Limited ethnic diversity - High owner occupation (less social renting) - Includes student area (Avenue) of private renting North Beverley, Holderness, - Larger, detached dwellings Kings Park, Sutton - Similar housing offer to East Riding - High % in employment and in managerial roles - Higher incomes - High proportion of owner occupation - Limited ethnic diversity Bransholme Bransholme East, - Housing stock of small dwellings with higher proportion Bransholme West of terraced homes. - Overcrowding is above average. - High proportion of socially rented stock - High unemployment and low skills base; and higher overall levels of worklessness. - Lower incomes. - Younger than average population - Weaker housing demand East Riding Beverley Rural, - More affluent area with higher proportion of larger Areas (part) Cottingham North, detached dwellings

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Cottingham South, Dale, - More expensive dwellings Hessle, Mid Holderness, - More affluent and elderly population Minster and Woodmansey, North Holderness, South East Holderness, South Hunsley, South West Holderness, St Mary's, Tranby, Willerby and Kirk Ella

Approach

2.13 This SHMA meets the requirements of Paragraph 159 in the National Planning Policy Framework which sets out that local planning authorities should prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing markets cross administrative boundaries. This outlines that 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 which: 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 within the local community; and cater for housing demand and the scale of housing supply necessary to meet this demand.

2.14 The SHMA has been informed by the 2007 Practice Guidance on Strategic Housing Market Assessment (CLG, 2007) and the draft Planning Practice Guidance on Assessment of Housing and Economic Development Needs (CLG, Aug 2013). The draft Planning Practice Guidance clarifies the appropriate approach and range of factors to be considered in deriving an assessment of housing need.

2.15 The SHMA has been informed by a detailed programme of stakeholder engagement, which has included meeting the requirements of the Duty to Cooperate introduced by the 2011 Localism Act. The SHMA has included consultation with adjoining authorities within the housing market area, with local estate and letting agents, with housebuilders and registered providers, with the Humber Landlords Forum, with the City Council and with other interested parties. Details of the findings of stakeholder consultation are set out in Appendix 4.

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Report Structure

2.16 The remainder of this report is structured to address:

Section 3: Housing Stock & Supply Trends; Section 4: Housing Market Dynamics; Section 5: Demographic & Economic Context Section 6: Demographic Projections; Section 7: Affordable Housing Need; Section 8: Requirements for Different Sizes of Homes; Section 9: Needs of Specific Groups; Section 10: SHMA Conclusions.

2.17 The report is accompanied by a number of appendices.

Appendix 1: Hull’s Housing Market Area; Appendix 2: Policy & Existing Research Review; Appendix 3: Population/ Household Projections Methodology; Appendix 4: Stakeholder Consultation Findings; Appendix 5: Stakeholder Event Presentation; Appendix 6: Stakeholder Event Attendees; Appendix 7: Stakeholder Workshop Findings; Appendix 8: Consultation Meeting with Humber Landlords Association.

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3 HOUSING STOCK AND SUPPLY TRENDS

3.1 Much of the housing stock envisaged in Hull in 2030 already exists now; and it is thus important to understand the current ‘housing offer’ and how this has been changing, to consider what gaps in the offer new-build development might fill. In this section we profile the current housing offer, considering the profile of stock of different types, sizes and tenures of homes, how this has been changing and how it varies across the HMA.

Tenure Profile

3.2 In Kingston upon Hull there were 113,230 dwellings in 20115. 30.2% of dwellings are in public sector ownership. This is considerably higher than the average for Yorkshire and Humber (18.7%) and England (18%). Of the public sector housing, three quarters of Hull’s stock is local authority housing (owned by the Council).

3.3 Private sector ownership in Hull (69.8%) is approximately 10% lower than average than in Yorkshire and Humber (81.3%) and England (82%). Conversely, East Riding has much lower than average dwellings in public sector stock (9.3%) with an overwhelming proportion of dwellings in the private sector (90.7%).

Table 3: Dwellings by Tenure, 2011 Local Housing Other Public Total Public Private % Dwellings Authority Association Sector Sector sector Kingston upon 22.8% 7.3% 0.2% 30.2% 69.8% Hull 25,799 8,219 228 34,246 78,980 East Riding of 7.6% 1.6% 0.1% 9.3% 90.7% Yorkshire 11,350 2,424 166 13,940 135,200 Yorkshire & the 10.4% 8.1% 0.2% 18.7% 81.3% Humber 238,038 186,585 4,211 428,834 1,865,600 England 7.6% 10.2% 0.3% 18.0% 82.0% 1,725,905 2,319,511 63,237 4,108,653 18,705,000

Source: CLG, Table 100

3.4 A more detailed profile of the tenure is provided by the 2011 Census. This shows that across the Housing Market Area (HMA) as whole (which includes parts of the East Riding), over half of households live in owner occupied housing (61%), with 20.5% in the social rented sector and 17.0% in private rented accommodation. Relative to the region, both social and private renting is above average and this particularly reflects the City’s tenure profile.

55 CLG Table 100, based on Council Tax Data

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3.5 In the City of Hull, the 2011 Census showed that a substantial 28.1% of households live in the social rented sector – 10 percentage points above the regional average. Private renting is also notably above average and accommodates 20.4% of households compared to 15.9% across the region.

3.6 At a more local level, owner occupation is evidently higher in the North sub-area (77.7%) and those parts of the East Riding within the HMA (78.3%). It is below average in other parts of the City and particularly in the Central sub-area (31.2%) and Orchard Park (31.3%).

3.7 Social renting is high in Bransholme (52.6%) and Orchard Park (52.3%) where it accommodates around half of all households. In contrast we see high levels of private renting in the Central (38.1%) and NaSA (34.5%) sub-areas.

Figure 3: Detailed Tenure Profile, 2011 (%)

100%

90%

80%

70%

60% Other 50% Private Rented 40% Social Rented 30% Owned with a Mortgage or 20% Loan 10% Owned Outright

West

East Bransholme

HMA

Orchard Orchard Park Hull

NaSA North (Part) EastRiding / Humber Yorkshire

Central

England Ings and Southcotesand Ings

Source: 2011 Census

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House Types

3.8 The HMA has an above average proportion of terraced housing, accounting for 38.1% of the dwelling stock in 2011. The proportions of other housing types (and particularly semi-detached properties) are below average.

3.9 There is a particular concentration of terraced housing within the City of Hull, which accounts for 49.2% of the City’s dwelling stock. The proportion of flats/maisonettes (16.8%) is also above the regional average. There is a low proportion of semi-detached and detached housing, with the latter accounting for just 7.0% of the City’s housing stock in 2011 (compared to 20.5% across the region).

3.10 The housing stock in the East Riding parts of the HMA contrasts with that in the City. It is focused on semi-detached and detached housing (accounting for 37.0% and 33.0% of the stock respectively).

3.11 Within the City, terraced housing is particularly evident in Bransholme (65.3%), the West (57.0%), NaSA (52.9%) and Ings & Southcoates (51.5%) areas where it accounts for over half of the housing stock. The Northern area has the highest proportion of detached stock (14.3%) and a higher than the regional average (36.5%) of semi -detached stock (42.5). The proportion of flats is particularly high in the Central (40.7%) and NaSA (23%) areas.

Figure 4: House Types, 2011

100% 90% 80% 70% 60% 50% 40% Other 30% 20% Flat 10% Terraced

West

Orchard Orchard Park North Humber and Yorkshire

East Riding (part) EastRiding

East Central Bransholme

HMA

Ings and Southcotesand Ings Hull England

NaSA Semi -Detached

Detached

Source: 2011 Census

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House Sizes

3.12 The housing offer across the HMA is focused towards smaller and middle-sized dwellings, with over three quarters of the housing stock (83.8%) having three or less bedrooms.

3.13 The City’s housing offer is focused towards smaller properties. In the City, 47.2% of the housing stock in 2011 had one or two-bedrooms (compared to 38.3% across Yorkshire and Humber). There is a particular concentration of smaller homes in the Central and NaSA areas where over half of the housing stock comprises 1 and 2 bedrooms (66.1% and 52.9% respectively.)

3.14 Within the City, larger homes with 4 or more bedrooms are focused in the North sub-area (13.9%), Bransholme (11%), Orchard Park (10.3%) and the West (10.4%). In the East Riding parts of the HMA almost 25% of homes in 2011 had 4 or more bedrooms.

Table 4: Size of Homes, 2011

Studio & 2 3 4 5 or more Area Name 1-Bed bedrooms bedrooms bedrooms bedrooms NaSA 18.6% 34.7% 39.2% 5.6% 1.9% Ings & Southcoates 8.9% 36.4% 46.0% 7.5% 1.2% East 9.7% 39.6% 43.2% 6.7% 0.7% Central 24.9% 41.7% 24.5% 6.3% 2.6% Orchard Park 10.2% 30.0% 49.6% 7.0% 3.2% West 12.0% 34.8% 42.8% 7.6% 2.8% North 6.1% 26.4% 53.5% 11.5% 2.4% Bransholme 11.6% 28.4% 49.1% 8.1% 2.9% Hull 13.1% 34.4% 42.4% 7.8% 2.3% East Riding (part) 5.5% 26.5% 43.2% 19.6% 5.2% Hull HMA 10.0% 31.2% 42.8% 12.6% 3.5% Yorkshire and Humber 10.2% 28.3% 43.7% 13.6% 4.1% England 12.0% 27.9% 41.2% 14.4% 4.6%

Source: 2011 Census

3.15 Figure 5 compares the profile of homes of different sizes by tenure in the City. It shows that owner- occupied housing is focused particularly on larger properties with three or more bedrooms. In contrast over 60% of properties in the social and private rented sectors have one or two bedrooms.

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Figure 5: Sizes of Homes by Tenure, City of Hull 2011

100% 2.3% 2.4% 1.2% 3.5% 4.0% 7.8% 5.2% 90% 11.0% 80% 31.9% 26.8% 70% 42.4% 60% 55.3% 5+ Bed 50% 36.8% 4-bed 40% 43.3% 3-bed 30% 34.4%

% Households, Households, % 2011 2-bed 20% 29.2% 1-bed 26.2% 10% 21.2% 13.1% 0% 2.1% All Households Owner Social Rented Private Rented/ Occupied/ Rent Free Shared Ownership

Source: 2011 Census

Council Tax Band

3.16 The housing offer in Hull City is dominated by Council Tax Bands A and B (87.7%) with a minority of properties in Bands C – H. The proportion of housing in Bands A – B in Hull is notably higher than in Yorkshire and Humber (63.9%) and England (44.4%).

3.17 Dwellings in Bands E and above in Hull account for only 1.2% of the housing stock compared with 10.3% in Yorkshire and Humber and 18.5% in England. The housing offer in Hull is strongly skewed towards smaller and less expensive dwellings.

3.18 The East Riding has a much lower proportion of dwellings in Council Tax Bands A and B (49.5%) which is below the regional average (63.9%)

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Figure 6: Profile of Dwellings by Council Tax Band, 2011

80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 Band Band Band Band Band Band Band Band Band A B C D E F G H I Kingston upon Hull, City of 69.4 18.3 8.0 3.1 0.9 0.2 0.1 0.0 0.0 East Riding 26.3 23.2 19.5 15.2 9.6 4.2 2.0 0.2 0.0 Yorkshire and The Humber 43.9 20.0 16.6 9.3 5.8 2.8 1.6 0.1 0.0 England 24.8 19.6 21.8 15.3 9.4 5.0 3.5 0.6 0.0

Source: VOA/ ONS Neighbourhood Statistics

Overcrowding and Under-Occupation

3.19 Studying levels of overcrowding/ under occupation in the housing stock is an important part of the SHMA. It is particularly useful as an indicator of both housing need and possible mismatch between households and house sizes. The draft guidance also identified overcrowding as an important indicator of market stress.

3.20 Data about overcrowding is available from the 2011 Census based on the ‘bedroom standard’. This is defined by the difference between the number of bedrooms needed to avoid undesirable sharing (given the number, ages and relationships of the household members) and the number of bedrooms available to the household. A household is defined as overcrowded if there are fewer bedrooms available than required by the bedroom standard.

3.21 Table 5 shows the estimated proportion of households who were overcrowded in 2011 using the Census bedroom standard data. In the City of Hull there is a higher proportion of households living in overcrowded accommodation (4.4%) compared with the regional average (3.7%); but a below average level relative to the national average (4.8%).

3.22 There is a significant variation in levels of overcrowded households within the HMA. Overcrowding is focused towards those sub-areas which have a narrow housing offer focused towards smaller properties – the NaSA, and Central sub-areas. Over 6% of households are overcrowded in these

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areas. Overcrowding appears to be more a function of housing mix than overall supply-demand pressures.

3.23 Across the City there were just under 5,000 overcrowded households in 2011. Overcrowding in those parts of the East Riding which fall within the HMA was recorded as notably below average.

3.24 A household is defined as under-occupied if, taking account of the relationships between the members of the household, it has a higher number of rooms than it might necessarily need. A household with a guest room or a household which retains rooms for family members that might have moved away would be defined using this measure as under-occupying their home.

3.25 26% of households in Hull and 34% across the HMA were under-occupied. This compares with 35% of households across Yorkshire & Humber. Under-occupation within the HMA is highest within the East Riding, followed by the North and West sub-areas within the City.

Table 5: Level of Overcrowding, 2011 Area Overcrowded Under-occupied Households % Households % NaSA 541 6.3% 1,796 21.0% Ings & Southcoates 395 3.2% 3,270 26.7% East 491 4.6% 2,572 23.9% Central 1,309 6.6% 3,190 16.0% Orchard Park 561 5.7% 2,579 26.0% West 862 3.4% 7,361 28.9% North 456 2.5% 6,569 35.7% Bransholme 380 5.1% 1,881 25.4%

Hull 4,995 4.4% 29,218 25.9%

East Riding (part) 1,293 1.8% 32,535 45.4%

Hull HMA 6,288 3.4% 61,753 33.5% Yorkshire/Humber 82,156 3.7% 784,372 35.3% England 1,060,967 4.8% 7,558,815 34.3%

Source: Census: 2011

Vacant and Second Homes

3.26 The 2011 Census indicates that across the HMA 3.5% of household spaces had “no usual residents.” This compares to 4.3% across the Yorkshire and Humber region and nationally. These figures will include both vacant and second homes. The proportion of vacant and second homes using this measure is above the regional average in the Central (4.5%), NaSA (4.8%) and Orchard Park (5.5%) sub-areas.

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Table 6: Vacant and Second Homes, 2011 Census Household Household % Household All Household Spaces With At Spaces With Spaces with

Spaces Least One No Usual No Usual Usual Resident Residents Residents NaSA 8,965 8,539 426 4.8% Ings & Southcoates 12,585 12,231 354 2.8% East 11,047 10,776 271 2.5% Central 20,819 19,880 939 4.5% Orchard Park 10,496 9,921 575 5.5% West 26,254 25,463 791 3.0% North 18,897 18,379 518 2.7% Bransholme 7,588 7,407 181 2.4% East Riding (Part) 80,770 77,876 2,894 3.6% Hull HMA 197,421 190,472 6,949 3.5% Hull 116,651 112,596 4,055 3.5% East Riding 149,958 143,032 6,926 4.6% Yorkshire & Humber 2,324,385 2,224,059 100,326 4.3% England 23,044,097 22,063,368 980,729 4.3% Source: 2011 Census

3.27 Council tax data can be used to track trends in vacant properties over time. This also provides perhaps a better measure of vacancy levels. The level of vacant dwellings in Hull increased from around 6,000 to a peak of 8,900 in 2007 (most likely influenced in part by delivery of the Housing Market Renewal Initiative). The number of vacant properties has since fallen and stood at 5,890 in 2012.

Figure 7: Trends in Vacant Homes, 2004-12

10,000 9,000

8,000

7,000 6,000

5,000 Hull 4,000 East Riding

3,000 Vacant Dwellings Vacant 2,000 1,000

2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: CLG Housing Statistics Table 615

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3.28 We can compare this against similar data regarding the overall stock of homes to track trends in the proportion of properties which are vacant. This shows that the proportion of vacant properties has fallen from 7.8% in 2007 to 5.0% in 2012. The level of long-term vacant properties has also fallen and represents 1.5% of the housing stock in 2012 in Hull (c. 1,750 properties).

Figure 8: Trends in % Properties Vacant (and Long-Term Vacant), 2004-12

9.0% 8.0% 7.0%

6.0% Vacancy Rate: Hull 5.0% Vacancy Rate: East Riding 4.0% 3.0% % Dwellings Long-Term Vacant: Hull 2.0% 1.0% 0.0% 2004 2005 2006 2007 2008 2009 2010 2011 2012

Source: GLH based on CLG Housing Statistics Table 615 and 125

3.29 Vacancy levels in the City are likely to be influenced by regeneration programmes, with a number of vacant/ long-term vacant properties reflecting homes which were (or are) due to be demolished.

Housing Supply Trends

3.30 There are a number of different components which influence changes in the dwelling stock. These are:

Completions of new-build housing; Demolitions of homes; Conversions and changes of use of properties into homes; and Conversions and changes of use of residential properties to other uses.

3.31 In addition the effective supply of homes can also be influenced by regeneration programmes which bring empty homes back into use.

3.32 Figure 9 tracks trends in gross housing completions in the City over the period since 2004/5. It indicates an upward trend in housing delivery (set against a rising market) in the period to 2007/8

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when 942 new dwellings were delivered. However housing delivery has since fallen off, with gross completions of 514 dwellings recorded in 2010/11 and 536 in 2012/13.

Figure 9: Additions to the Housing Stock in Hull (Gross), 2004/5 – 2012/13

1000 942 900 853 800 659 700 626 591 541 600 514 Change of Use to Dwelling 500 380 Conversion to Dwelling 400 360 New Build 300

Addiutional Addiutional Dwellings Gross Completions 200 100

2004 2005 2006 2007 2008 2009 2010 2011 2012

------

05 06 07 08 09 10 11 12 13

Source: Hull City Council

3.33 In addition to the new-build delivery, conversion and changes of use, a number of properties have also been ‘brought back into use’ through housing regeneration programmes. Over the 2008-13 period a total of 407 dwellings have been brought back into use in the City6. These contribute to the ‘effective’ stock of dwellings.

3.34 These ‘additions’ to the dwelling stock in the City need to be assessed against the numbers of properties which have been demolished, or lost through conversions or changes of use away from residential. These are recorded in Figure 10. There has been a significant programme of demolitions in the City over the period since 2004/5, linked to the Housing Market Renewal Initiative (HMRI). Over the nine year period shown a total of 3,127 properties have been demolished or converted to other uses.

6 This data was not consistently recorded prior to 2008

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Figure 10: Losses through Demolitions, Conversions and Changes of Use (Gross), 2004/5 – 2012/13

500 476 471 450 398 399 400 356 343 350 324 300 Change of Use from Dwelling 250 211 Conversion from Dwelling 200 149 Demolition of Homes Dwelling Dwelling Losses 150 Total Losses 100 50

2008 2009 2010 2004 2005 2006 2007 2011 2012

------

09 10 11 05 06 07 08 12 13

Source: Hull City Council

3.35 Drawing this analysis together, Figure 11 tracks trends in net completions. Over the eight year period to 20011/12 net completions averaged 305 dwellings per annum. This falls to 260 homes per annum if we exclude homes brought back into use from the new supply. This is very low benchmarked against the housing stock.

3.36 The level of net completions is low particularly as the numbers have been influenced by the demolition of poor quality housing. This has contributes to a reduction in long-term vacant homes in Hull.

3.37 Figure 11 shows that completions were positive in most years, but in 2004/5 and 2009/10 there was a net reduction in the dwelling stock, as demolitions exceeded new-build development.

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Figure 11: Net Completions in Hull, 2004/5 – 2012/13

600 544 510 483 500 460

400 348

300 270 276

200

100 Net Completions Net -116 -29

2004 2005 2006 2007 2008 2009 2010 2011 2012

------

-100 -

05 06 07 08 09 10 11 12 13

-200

Source: Hull City Council (includes supply from homes brought back into use)

3.38 We have next sought to split down housing completions (gross) by property size. This is shown in Figure 12 below.

Figure 12: Gross Completions in Hull by Property Size, 2004/5 – 2012/13

1000 900 800 700 600 Four Bed + 500 Three Bed 400 Two Bed 300 One Bed 200 100

2005 2004 2006

2007 2008 2009 2010 2011 2012

- - -

------

6 5 7

08 09 10 11 12 13

Source: Hull City Council

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3.39 The graph highlights that the growth in completions between 2004/5 to the peak in 2007/8 was supported by an increase in completions across all property sizes including 1 and 2 bed homes. For social housing the approach in Hull (and more widely) promoted development of two or more bed affordable housing. Splitting the analysis down into key time periods in Figure 13 below we see that housing completions for 3- and 4+ bed properties in the City have recovered since the market downturn in 2008, but that completions of smaller properties – and particularly one-bed properties – have fallen.

3.40 The changes shown in the mix of properties developed are likely to partly reflect the impact of the change in housing market circumstances from 2008; whereby finance costs and the availability of mortgage finance for buyers seeking lower loan-to-value ratios impacted on the viability and demand profile for smaller properties and development of flats in particular.

Figure 13: Gross Completions by Property Size in Hull for Key Time Periods

300

250

200

2004-8 Average 150 2008-10 Average 2010-13 Average

100 Completions per Annum

0 1-Bed 2-Bed 3-Bed 4+ Bed

Source: Hull City Council

3.41 Analysing completions by property type, 38% of gross completions in the City have been of flats between 2004 and 2013. This proportion has remained consistent over time. 29% of completions have been of terraced properties, 16% of semi-detached and 15% detached.

3.42 Relative to the existing stock profile (shown in Table 7) we have seen proportionally higher delivery of flats and of detached housing. We would therefore expect the proportions of these types of stock to be increasing – helping diversify the housing offer.

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Table 7: Gross Completions by Property Type in Hull Semi- Detached Terraced Flat Bungalow Detached 2004-05 70 99 33 154 4 2005-06 115 90 153 268 0 2006-07 147 112 236 338 18 2007-08 148 128 332 291 43 2008-09 51 75 147 377 9 2009-10 32 3 57 288 0 2010-11 79 98 211 104 22 2011-12 101 138 199 124 29 2012-13 79 104 208 122 23 Total 822 847 1576 2066 148 % Total 15% 16% 29% 38% 3% Total: 2004-8 17% 16% 27% 38% 2% Total 2008-13 13% 16% 31% 38% 3%

Source: Hull City Council

3.43 The graph below shows the number of net additional dwellings provided in Hull City between 2002 / 2003 to 2011 / 2012. The number of net completions varies considerably over this period with year- on-year figures being impacted by both the number of new homes and the number of dwellings demolished. However, the decrease in net additional dwellings in 2008-9 and 2009-10 is likely to reflect the impact of the recession.

3.44 We have also sought to assess completions trends in East Riding. In the East Riding the market downturn since 2008 has had a clear impact on housing delivery, with net completions falling almost 80% from 1,635 net additional dwellings in 2007-8 to 341 net additional dwellings in 2009-10. We have seen some subsequent recovery but housebuilding remains below levels achieved prior to 2008.

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Figure 14: Net Completions, 2004/5 - 2010/11 in East Riding

1800 1635 1600 1440

1388 1400 1321

1200

1000 889 861 800 580 600 341 382

Net Additional Additional Net Dwellings 400

200

2005 2005 2004 2004 2006 2007 2008 2010 2011 2012

2009 2009

- - -

- - - - -

11 12 13

6 5 7 8 9

Source: East Riding Council AMR/ 2013 SHLAA

Summary & Implications

3.45 Hull’s housing offer is characterised by:

A high level of affordable housing, with 30.2% of the stock in public ownership and households living in the social rented sector 10 percentage points above the regional average. There are particular concentrations of social rented housing in the City in the Bransholme (52.6%), Orchard Park sub-areas (52.3%). There is a need to diversify the housing offer in these areas; A large private rented sector, with 20.5% of households living in the PRS in the City. There is a particularly strong concentration of private rented households in the NaSA (34.5%) and Central (38.1%) Sub-Markets; A housing stock overall which is focused towards smaller and cheaper properties. 47.2% of the housing stock in the City has 1 or 2 bedrooms, with a particular concentration of smaller properties in the NaSA (34.5%) and Central sub-areas. Larger homes are concentrated in the Avenue, Newland and Kings Park wards but with a clear suggestion that households move out of the City to access larger housing in the East Riding. Within the City 88% of properties fall within Council Tax Bands A and B.

3.46 The concentration of smaller housing results in localised pockets of overcrowding, particularly within the Bransholme, Central, Orchard Park and NaSA sub-areas within the City, but this is not a strategic problem across the HMA as a whole.

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3.47 There is a symbiotic relationship with East Riding which has a housing offer which contrasts with that in the City, providing larger family homes in more attractive neighbourhoods. This is an important driver of out-migration from the City.

3.48 Housing completions levels have been modest for a City of Hull’s size. Growth in the housing stock (as with population) has been particularly modest; and with the net growth in the dwelling stock influenced by significant demolitions programmes. As we will come onto, this is related to housing market and economic dynamics within the local market.

3.49 Within the City, housing completions trends have held up relatively better than might be expected (particularly if figures achieved at the peak of the market are discounted) – but this reflects the low base level of completions. In East Riding, completions levels have fallen dramatically since 2008.

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4 HOUSING MARKET DYNAMICS

4.1 We have sought to analyse housing market dynamics using a combination of quantitative and qualitative research. This section initially reviews housing market dynamics including national economic drivers and market trends and local prices and sales performance. Section 7 then develops this to provide a local qualitative perspective on housing market conditions, drawing on discussions with local estate and letting agents.

Overview of the UK Housing Market and Economy

Conceptual Framework

4.2 It is important to understand that the housing market is influenced by macro-economic factors, as well as the housing market conditions at a regional and local level. There are a number of key influences on housing demand, which are set out in the chart below (Figure 15).

Figure 15: Understanding Housing Demand

Existing Stock & Market

Accessibility to Quality of Employment Place Centres Demand Influences

Demographic Employment Changes & Earnings

Access to Finance

Source: GL Hearn

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4.3 The housing market is complex. It is influenced by economic trends nationally, in terms of interest rates and mortgage availability, as well as market sentiment (which is influenced by economic performance and prospects).

4.4 It is also influenced by economic performance at both regional and local levels, recognising that employment trends will influence migration patterns (as people move to and from areas to access jobs), and that the nature of employment growth and labour demand will influence changes in earnings (which influences affordability).

4.5 Housing demand over the longer-term is particularly influenced by population and economic trends. Changes in the size and structure of the population directly influence housing need and demand, and the nature of demand for different housing products. Economic performance influences migration between different areas and household wealth.

4.6 There are then a number of factors which play out at a more local level, within a functional housing market and influence demand in different locations. These include:

quality of place and neighbourhood character; school performance and the catchments of good schools; transport links and accessibility to employment centres; the existing housing market and local market conditions.

4.7 These factors influence the demand profile and pricing, against a context in which households compete within the market for housing.

4.8 At a local level, this means that the housing market (in terms of the profile of buyers) tends to be influenced by the existing stock and neighbourhood characteristics. However, regenerative investment or delivery of new transport infrastructure can influence the profile of housing demand in a location, by affecting its attractiveness to different households.

4.9 Local housing markets or sub-markets are also influenced by dynamics in surrounding areas, in regard to the relative balance between supply and demand in different markets; and the relative pricing of housing within them. Understanding relative pricing and price trends is thus important.

Understanding Key Drivers of Housing Market Dynamics

4.10 Much has been written over the last few years about economic performance and outlook. The UK economy, as well as a number of the major global economies, experienced an economic recession which lasted six quarters from Q3 2008 until the end of 2009. The economy began to recover in 2010. However, the economy entered a double dip recession for three quarters at the end of 2011 and middle of 2012 before exiting it later in Q3 2012 (aided by the Olympic Games).

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4.11 Since late 2010 any growth in the economy (at the macro-level) has been from exports and government spending; with trends in consumer spending and investment negative. Inflation has been running at significantly above long-term trends. In essence, economic recovery since 2010 has been relatively weak – we have seen both a deep recession and weak recovery. As Figure 16 indicates during the course of 2012 there was minimal growth in the UK economy. The economy has begun to pick up during the course of 2013.

Figure 16: UK Economic Growth, 2007-2013

8.0

6.0

4.0

2.0

2006 Q3 2007 Q3 2008 Q3 2001 Q3 2002 Q1 2002 Q3 2003 Q1 2003 Q3 2004 Q1 2004 Q3 2005 Q1 2005 Q3 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2009 Q3 2010 Q1 2010 Q3 2011 Q1 2011 Q3 2012 Q1 2012 Q3 2013 Q1 0.0 2001 Q1

-2.0

Percentage Percentage change

-4.0

-6.0

Change on previous quarter (%) Change on corresponding quarter previous year (%)

Source: ONS

4.12 Over the last few years we have seen historically low levels of market activity (sales) and housebuilding. This has been influenced by low mortgage lending and buyer confidence.

4.13 Key issues affecting the ability of households and investors to secure mortgage finance are:

Savings and Capital: the ability to raise a deposit; Earnings and Interest Rates: affecting the ability to afford repayments; Lending Criteria: key criteria which have to be met to secure finance.

4.14 One of the key triggers to the recent economic difficulties on an international level was the ‘credit crunch.’ The downturn in the world economy was led to a large extent by the sub-prime lending crisis in the United States: this crisis has generated a fundamental shift in not only interbank lending but more significantly, attitudes towards customer lending (including home purchasers, landlords and developers).

4.15 From the onset of the economic downturn, banks sought to increase the inter-bank lending rate (LIBOR) and sought to adjust their exposure to risk by adopting much more cautious lending practices. This sharply reduced liquidity in the financial markets and credit available and in

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tightening lending criteria for current and prospective homeowners. This tightening of lending criteria increased ‘barriers’ to entry for marginal mortgage applicants by reducing loan to value ratios (LTVs), increasing costs associated with obtaining mortgages and reducing the income multiples accepted.

4.16 The tight lending criteria initiated by the credit crunch have continued to have an impact on mortgage lending over the last four years, with households’ ability to obtain mortgage finance functioning as a notable constraint on effective demand for market homes. As the figure below demonstrates, there is virtually no evident recovery in lending since 2010; with trends flat during the past few years. There are however signs that mortgage lending is picking up in 2013, particularly owing to Government-backed schemes.

Figure 17: Trends in Gross Mortgage Lending

400,000

350,000

300,000

250,000

200,000

150,000

100,000 Gross Mortgage Mortgage Gross Lending (£m) 50,000

0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013e

Source: Council for Mortgage Lenders 2012

4.17 Combined, the Funding for Lending Scheme and Help-to-Buy have had a notable impact in stimulating the housing market during the course of 2013. Figure 18 shows the trends in mortgage approvals over the last two years. It is notable that there has been an upturn in both house purchase activity and re-mortgaging over the last year; albeit that levels of approvals remain notably below pre-2008 levels.

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Figure 18: Trends in Mortgage Approvals by Type, UK 2011-2013

120.0

100.0

80.0

60.0 Other

40.0 Remortgaging House purchase 20.0

0.0

Oct Oct 2012 Apr2013 Oct Oct 2011 Feb2012 Apr2012 Feb2013

Dec Dec 2011 Dec 2012

Aug2011 Jun 2012 Aug2012 Jun 2013 Aug2013

Source: Bank of England

4.18 The relatively strong upward trend in lending activity coupled with growth in house prices in some areas has led some commentators to question whether we are heading for another housing market bubble7. To counter this potential, in November 2013 the Bank of England announced that the Funding for Lending Scheme would be reprioritised on lending to businesses (effective from January 2013).

4.19 Average loan-to-value ratios fell sharply post-2008 and currently stand at 80%. There has however been a gradual improvement in the proportion of First-time Buyers (FTBs) with a deposit of 10% or less (albeit that for these loans the interest rates charged are often punitive), with 25% of FTBs putting down a deposit of 10% or less in early 2013.

4.20 For those with a sufficient deposit, housing is now actually relatively affordable given the reductions in the value of homes since the peak of the market in 2007 and low interest rates by historic standards. The figure below demonstrates the trend in mortgage interest rates over the past 15 years.

7 Meaning growth in house prices which is unsustainable and followed by a correction in which prices fall

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Figure 19: Base Interest Rates

10 9

7 6 5 4

3 Interest Rate InterestRate (%) 2 1

11 97 99 01 03 05 07 09 13

99 97 01 03 05 07 09 11 13

98 00 02 04 06 08 10 12

------

Jan Jan Jan Jan Jan Jan Jan Jan Jan

Sep Sep Sep Sep Sep Sep Sep Sep Sep

May May May May May May May May

------

1 1 1 1 1 1 1 1 1

1 1 1 1 1 1 1 1

Tracker Mortgage Variable Rate Tracker

Source: Bank of England Statistics 2013

4.21 Figure 20 assesses long-term trends in the balance between housing costs and incomes as an indicator of the affordability of market housing. It considers the cost of mortgage payments as a percentage of monthly income.

4.22 The persistence of low interest rates has helped to make monthly mortgage payments for first-time buyers the most affordable (at a national level) for almost eight years – for those with the necessary capital. In January 2013 the average first time buyer was due to spend 12.2% of their gross income on mortgage repayments (consistent with a year previously), according to the Council for Mortgage Lenders.

4.23 With reductions in house prices and low interest rates, market housing is now as affordable as it was in the late 1990s on this measure. Mortgage repayments are on average 22.7% of (gross) household income in Yorkshire & the Humber (and 27.8% across the UK) as at Q1 2013. This is significantly down on the peak of the market in Q3 2008 when mortgage repayments were on average 38.1% of gross income across the region. Indeed affordability on this measure is similar to 1998. Thus the key constraint on the market is not the affordability of housing (in terms of the ability of households to cover mortgage repayments8), but the ability of households to raise a sufficient deposit and to meet lending criteria to secure mortgage finance. This is an area in which the Government’s Help-to-Buy scheme has helped to support the housing market and improve levels of market activity (at a national level).

8 Notwithstanding that there are likely to be some repossessions associated with high unemployment

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Figure 20: Mortgage Payments as a % of Monthly Income

70.0

60.0

50.0

40.0

30.0

20.0

10.0

0.0

Mortgage Payments Mortgage Payments asof % Income

2013Q1

1991 Q1 1991 1983 Q1 1983 Q1 1984 Q1 1985 Q1 1986 Q1 1987 Q1 1988 Q1 1989 Q1 1990 Q1 1992 Q1 1993 Q1 1994 Q1 1995 Q1 1996 Q1 1997 Q1 1998 Q1 1999 Q1 2000 Q1 2001 Q1 2002 Q1 2003 Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009 Q1 2010 Q1 2011 Q1 2012

Yorkshire & Humber UK

Source: Halifax House Price Index

4.24 Market sales are also influence by investment activity - that is properties bought to be rented privately. The buy-to-let sector continues to grow, with the Council for Mortgage Lenders indicating that by the end of March 2013 buy-to-let lending accounted for 13.4% of total outstanding mortgage lending in the UK. This was up from 13% the previous quarter and 12.9% at the end of the first quarter of 2012. The increase in buy-to-let lending is partly related by improved access to finance. With growth in rents over the last few years and lower capital costs for house purchases, housing also represents an improved investment proposition. There is evidently occupier demand from households looking to rent homes from a combination of demographic factors, limited recent new- build development and households’ ability to afford to buy a home.

Housing Demand Indicators in Hull

4.25 Across the Hull HMA the average (median) house price in 2012 was £115,000. In Hull the average house prices was £89,000. This compares to £148,000 in the parts of the East Riding which fall within the HMA.

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Table 8: Median House Prices, 2012 Hull East Riding (Part) Hull HMA Detached £167,500 £220,833 £209,999 Semi-Detached £104,500 £139,998 £124,400 Terraced £76,838 £115,000 £86,967 Flat £68,000 £82,996 £79,317 Average £88,973 £148,333 £114,961

Source: HMLR Price Paid Data

4.26 Average house prices in the City were within the 10 lowest of all local authorities in England and Wales. Within England, only Stoke-on-Trent and parts of East Lancashire have lower average house prices.

4.27 Table 9 shows comparative house prices in Hull and surrounding areas within the East Riding. It shows that there is a house price differential across house types (suggesting higher quality of place / neighbourhood quality within East Riding neighbourhoods in relative terms). Relative to other house types there is also an evident premium for detached housing.

4.28 Figure 21 below profiles the house prices from 1998 – 2007 (the pre-recession decade) in Hull, Yorkshire and Humber and England. Between Q1 1998 and Q4 2007, median house prices in Hull largely followed national trends, increasing by 183% compared with 188% regionally and 186% nationally (albeit from a lower base). House prices in Hull have remained consistently below regional and national levels in the pre-recession period.

4.29 House price growth in Hull was strongest between 2003 and 2005 but remained below regional and national growth levels.

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Figure 21: Median House Price Trends, 1998 - 2007

£200,000 £180,000 £160,000 £140,000 £120,000 £100,000 £80,000 £60,000 £40,000 £20,000

Median House Median Price Trends(£) £0

Q3 Q3 Q1 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q1 Q3 Q1 Q3 Q3 Q1 Q3

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Hull Yorkshire and Humber England

Source: HM Land Registry / CLG9

4.30 Since 2008 house prices have not increased. Prices have been largely flat in Hull during this period falling in nominal terms by 2% between Q1 2008 – Q3 2012 (a reduction of £1,500) whilst house prices have increased slightly (by 9%, increasing from £175, 000 to £190, 000) across the UK. If we strip out inflation the value of housing has fallen more substantially.

9 CLG House Price Indices are not available below LA level. It has therefore not been possible to track price trends for the HMA as a whole

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Figure 22: Median House Price Trends, 2008 – 2012 (Q3)

200,000

180,000

160,000 140,000 120,000

100,000 Hull 80,000 Yorkshire and Humber England 60,000

40,000 Median House Median Price Trends(£) 20,000 0 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 Q1 Q3 2008 2009 2010 2011 2012

Source: HM Land Registry / CLG. Note data for 2012 is not available for Yorkshire and Humber

4.31 Turning to consider house prices by type, average house prices are influenced by the mix of homes sold. Table 9 below profiles the average price of properties sold between October and December 2012.

4.32 House prices in Hull are below the regional average for all house types. This suggests lower than average housing demand in relative terms. There is a particular price ‘mark down’ for terraced housing and flats in Hull compared with the regional average, reflecting the oversupply of smaller house types in Hull. Flat prices are approximately 32% lower and terraced house prices are 29% lower in Hull than the regional average.

Table 9: House Prices by Type in Hull, October – December, 2012 Yorkshire and Hull Differential Differential (%) Humber Detached £178,419 £247,296 £68,877 28% Semi-detached £111,394 £141,925 £30,531 22% Terraced £83,590 £118,402 £34,812 29% Flat £77,471 £113,884 £36,413 32%

Source: HM Land Registry

4.33 Differences in house prices across the sub-areas tell us about relative demand in different areas and for different housing products. Table 10 shows median house prices for properties sold in 2012.

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We have excluded from the analysis prices where these would be based on less than 10 sales in the year.

Table 10: Median House Prices for Sub-Areas, 2012 Semi- Flat/ Detached Terraced Detached Maisonette NaSA - £94,995 £58,650 £30,400 Ings and Southcoates £151,500 £99,950 £70,125 - East - £76,333 £58,200 - Central £172,500 £103,000 £67,300 £91,667 Orchard Park - £88,750 £66,000 £42,900 West £163,333 £112,475 £86,938 £98,950 North £177,332 £110,400 £90,667 £56,667 Bransholme - £98,000 £59,750 - East Riding (Part) £220,833 £139,998 £115,000 £82,996 Hull HMA £209,999 £124,400 £86,967 £79,317

Source: HM Land Registry

4.34 To draw some sensible conclusions we need to consider house prices alongside the mix of sales, which is set out in Figure 23 and Table 11 below.

The NaSA, East and Bransholme sub-areas have the lowest house prices (indicating the lowest relative levels of housing demand). In the NaSA and Bransholme sub-areas almost three-quarters of sales are of terraced properties, with a very narrow housing mix evident. In the East sub-area, whilst terraced sales predominate, there is a higher level of semi-detached sales but these achieve low prices (lower than in any other sub-area). In these areas terraced properties achieved £58,000 - £60,000 in 2012. In the Ings and Southcoates sub-area, terraced house prices are moderately higher (c. £70,000) even though they still account for over 60% of sales. Prices for semi-detached housing are below average. There are few flatted sales; In the Central and Orchard Park areas, whilst prices for terraced and semi-detached homes are broadly similar to those in the Ings and Southcoates area, there is a stronger flatted market accounting for just under14% of sales at Orchard Park and just under 18% in the Central submarket area. These are the only areas in which flats account for more than 10% of sales; Within Hull, higher house prices are found within the North and West sub-areas. Prices for semi- detached and terraced housing in these areas are higher (over £110,000 for semi-detached and £85,000 for terraced properties) suggesting stronger relative demand. The North sub-area has a higher proportion of detached sales relative to other areas (being the only Hull sub-area with more than 15% of sales of detached properties). With the exception of flats, there is a notable price premium for areas within the East Riding part of the Hull HMA. The profile of sales is also more focused towards larger detached and semi- detached properties.

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Figure 23: Mix of Sales by Property Type

Bransholme

North

West

Orchard Park Detached Semi Detached Central Terraced Flat / Maisonette East

Ings and Southcoates

NaSA

0% 20% 40% 60% 80% 100%

Source: HM Land Registry

Table 11: Mix of Sales by Property Type Semi - Detached Terraced Flats Detached NaSA 0.6% 17.5% 74.0% 7.8% Ings and Southcoates 9.2% 26.5% 61.9% 2.3% East 5.0% 38.5% 54.7% 1.9% Central 6.9% 14.9% 60.3% 17.9% Orchard Park 2.8% 29.4% 54.1% 13.8% West 4.7% 22.5% 69.1% 3.6% North 18.4% 39.5% 37.9% 4.2% Bransholme 5.1% 16.7% 76.9% 1.3%

Source: HM Land Registry

4.35 We next look in further detail at the profile of sales. Housing sales are an indicator of relative demand for market housing. We have benchmarked sales performance against long term trends to assess relative demand. Figure 24 benchmarks annual sales in Hull and the wider geographies between 1998 and 2013. It uses an index where 1 represents the average annual sales over the pre-recession decade (1998 – 2007). A rolling annual average has been used to smooth out trends.

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4.36 The graph shows that the credit crunch has resulted in the significant reduction in effective demand, with sales more than halving. We have since seen very limited subsequent recovery. In 2011, housing sales were 54% down on the pre- 2007 annual average compared with 45% in England.

4.37 Hull’s housing market performed relatively strongly in comparative terms between 2002 and 2007 (albeit from a weaker base), but has been significantly affected by economic conditions since 2007. The very notable downturn in sales volumes particularly reflects the nature of the housing offer and market – which is more focused towards first-time buyer and investment purchases, and less towards groups with existing equity in their homes.

Figure 24: Quarterly Sales Index, 1995 – 2013

1.40

1.20

1.00

0.80

2007) - 0.60 Hull (LA)

1998 East Riding (LA) 0.40 Yorkshire & Humber

0.20 Index (1 = Average (1 Index = Average Sales PCM

0.00

6/1/1995 7/1/1996 8/1/1997 9/1/1998 1/1/2003 2/1/2004 3/1/2005 4/1/2006 5/1/2007 6/1/2008 7/1/2009 8/1/2010 9/1/2011

10/1/1999 11/1/2000 12/1/2001 10/1/2012

Source: HM Land Registry / CLG

4.38 The similarity between the sales trend since 2008 in Hull and wider geographies reflects the key influence of macro-economic dynamics on local market conditions.

4.39 Since 2009 the housing market in Hull has been depressed to a greater degree than in the East Riding or the wider region (in terms of sales volumes). During the course of 2013 we have seen a modest improvement in market conditions; but sales in Hull in September 2013 still remained 49% down on the 1998-2007 average in the City (compared to 42% across the region and 37% in the East Riding district).

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Summary and Implications

4.40 The Hull HMA is a relatively low value housing market, with an average (median) house price in 2012 of £115,000. This compares to over £180,000 across England. It is a market which has been hard hit by the downturn in the housing market since 2008.

4.41 More specifically, the City of Hull has some of the cheapest housing in the country. This reflects partly a housing offer which is biased strongly towards smaller and cheaper properties; but also weaker demand in relative terms. The average house price in 2012 in the City of Hull was £89,000 with a significant volume of terraced stock and flats available priced below £80,000.

4.42 Within the City relative demand is weakest in the NaSA, East and Bransholme areas. The latter two areas include large social housing estates. The more desirable areas within the City are the West and North; but prices in these areas still remain notably below those in areas within the East Riding close to the City.

4.43 Within the City there are very few sales for detached housing (influenced partly by a lack of supply); and a relatively weak market for flats. Those looking for detached housing in many cases are likely to look to areas within the East Riding. We would expect (particularly in the short-term) the market for new-build flats to be limited – as these would need to be priced at a level above much of the second hand stock, and development of flatted schemes can incur higher finance costs which has made viability challenging over the last few years (linked to a slower rate of sales as a result of market conditions).

4.44 In part reflecting the stock mix, the local market has been significantly affected by the market downturn and issues relating to access to mortgage finance. Sales in Hull in 2011 were a very substantial 54% below the pre-recession average (compared to 45% across England). The sales evidence suggests that the strong investment demand which we saw between 2003 and 2006 has also fallen away to some degree.

4.45 Our analysis points to the impact of national economic factors – of constraints on access to mortgage finance, the savings households require to access mortgage finance and the wider poor macro-economic environment – as the key underpinning drivers. High inflation has also restricted growth in earnings (with real earnings falling since 2008) and inhibited households’ ability to save a deposit for a home. Many first-time buyers are reliant on the ‘bank of mum and dad.

4.46 The market has begun to improve during the course of 2013, but from a very low base. This has been driven by some improvement to access to mortgage finance, with some return to 90% or more loan-to-value ratios; by the Government’s Help-to-Buy Scheme; and by an improvement in economic performance and outlook at a national level. However the scale of recovery to date has

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been modest within the region, and the Hull HMA within this. We expect a gradual recovery in housing market conditions phased over a number of years, rather than a ‘bounceback’ in demand. We would expect market recovery in Hull to be more modest and phased over a longer period relative to other parts of the UK.

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5 DEMOGRAPHIC AND ECONOMIC CONTEXT

5.1 In this section, we consider the socio- economic characteristics of the population as well as the characteristics of the economy and the labour market.

Demographic Context

5.2 The 2011 Census recorded the population of the HMA as 455,900 in 2011. Of this 56% live within the City of Hull and 44% within the East Riding.

Table 12: Population, 2011 Usual Resident Population, 2011

Hull 256,406 East Riding 334,179 Hull HMA 455,863 Yorkshire and Humber 5,283,733 England 53,012,456

Source: 2011 Census

5.3 Figure 25 below shows population trends in Hull using data from ONS Mid–Year Population Estimates between 1981 and 2011 (the most recent data year available).

Figure 25: Population Trends in Hull, 1981-2011

280,000 275,000

270,000 265,000 260,000 255,000 250,000

Resident Resident Population 245,000 240,000

235,000

1994 1995 1996 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: ONS Mid-Year Population Estimates

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5.4 Hull’s population fell between 1981 and 1987. Over the period to 1994 it recovered some of these losses; before falling again between 1995 and 2001. The population grew between 2002 and 2008 but has since remained relatively static.

5.5 Hull’s population in 2011 was 2.5% above that in 2001, but -6.4% below the City’s population in 1981 and below the 1991 level.

5.6 Figure 26 benchmarks population trends against wider geographies. Whilst the population of England has grown by 13% between 1981 and 2011 and the population across the Yorkshire and Humber region has increased by 8%, Hull’s population has fallen by 6%. However the East Riding’s population has increased by 23% between 1981 and 2011.

Figure 26: Population Trends (1981 – 2011)

1.40

1.30

1.20

1.10 East Riding 1.00 Hull 0.90 England Yorkshire & Humber

0.80 Index (1981 Population (1981 Index Population =1) 0.70

0.60

2005 2011 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2007 2009

Source: ONS Mid-Year Estimates

Households by Age

5.7 The HMA as a whole has a relatively similar population structure to the region (Table 13). In contrast, Hull’s population structure is younger than average with an above average proportion of people aged 15-29 in particular. This contrasts with those parts of the East Riding which fall within the HMA, which have an above average proportion of residents in the age groups over 45.

5.8 Across the Hull HMA, 63% of the population is aged 15-59 compared with 59.6% regionally and 60% nationally.

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5.9 The structure of the population across the HMA is similar to that more widely across the region. The HMA has a slightly older population structure, with a modestly higher proportion of people aged over 60.

5.10 At a more local level, the proportion of students and young adults (15-29 year olds) accounts for 24.1% of the population in Hull compared with 20.0% nationally and 20.4% across the region. Conversely, the proportion of older age groups (75+) is lower in Hull (6.8%) compared with 7.8% of the population in older age groups regionally and 7.7% nationally. However, the population over 75 (9.7%) in the HMA areas of East Riding is above average.

Table 13: Population Structure, 2011 Under 75 and % Population, 2011 15-29 30-44 45-59 60-74 15 over Bransholme 23.6% 23.7% 19.4% 16.2% 12.6% 4.5% Central 13.7% 32.6% 22.7% 16.0% 9.9% 5.1% East 20.4% 21.8% 18.5% 18.2% 12.3% 8.9% Ings & Southcoates 17.6% 20.0% 18.8% 20.0% 14.1% 9.5% NaSA 19.1% 24.0% 21.7% 18.8% 10.7% 5.6% North 16.8% 21.1% 21.1% 21.1% 14.3% 5.7% Orchard Park 21.3% 28.9% 17.3% 16.3% 10.4% 5.7% West 15.9% 21.3% 20.7% 19.8% 14.0% 8.2% Hull 17.7% 24.1% 20.3% 18.6% 12.5% 6.8% East Riding Areas (Part) 15.5% 15.4% 18.2% 22.0% 19.2% 9.7% Hull HMA 16.7% 20.3% 19.4% 20.1% 15.5% 8.1% Yorkshire and The Humber 17.6% 20.4% 19.7% 19.5% 14.9% 7.8% England 17.7% 20.0% 20.6% 19.4% 14.6% 7.7% Source: 2011 Census

5.11 Changes in the age structure of Hull’s population have been profiled in Figure 27 below. Over the 2001-11 decade the population in their 20s increased, as well as those aged between 45-65 and over 80. The population aged 0-4 increased (linked to a rising birth rate).

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Figure 27: Change in Population Age Structure (2001 – 2011) in Hull

30,000

25,000

20,000

15,000 Change 10,000 2001 2011 5,000

0 0 to 5 to 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 -5,000 4 9 to to to to to to to to to to to to to to to + 14 19 24 29 34 39 44 49 54 59 65 70 74 80 85 -10,000

Source: ONS Mid–Year Population Estimates

Ethnicity

5.12 Figure 28 profiles the population by ethnic group from the 2011 Census. The majority of the population in the Hull HMA are White British / Irish (92.9%). This is over 10% higher than the proportion of White British / Irish in England (80.7%) and implies that there is limited ethnic diversity in the Hull HMA.

5.13 Of the Black and Minority Ethnic (BME) groups in Hull, the largest proportion is in ‘White Other’ category (4.1%) which is above the Yorkshire and Humber average (2.5%) but is still lower than the England average (4.6%). This is followed by Asian (2.4%) which is notably below both the regional (7.3%) and national average (7.7%).

5.14 Looking at the Sub-Markets within the Hull HMA, the level of ethnic diversity is higher in Hull than in the parts of East Riding. The proportion of BME residents is particularly notable in the NaSA and Central sub-areas.

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Figure 28: Population by Ethnic Group, 2011

30.0%

25.1% 25.0%

18.9% 20.0% 18.8%

15.0% 13.4% 13.7%

9.8% 10.0% 7.8% 7.1%

4.2% 3.7% 3.7% 3.4%

5.0% 2.6% % Population % fromBME Group, 2011

0.0%

West

YorkshireHumber and The Bransholme

East

NaSA Orchard Park North Hull

Holderness Road Corridor Road Holderness HullHMA

Central (Part) Areas EastRiding

England

White Other Multi Ethnic Asian / Asian British Black British Other BME

Source: Census 2011

5.15 Figure 29 profiles the change in population of ethnic groups between 2001 and 2011 in Hull City. Population growth has been concentrated in the ‘White Other’ groups which has seen population growth of 8,389. Increases have also been seen in the mixed, Asian, Black British and Arab/ Other groups. This corresponds with increases in the proportion of 20 – 30 year olds over the past decade and other indicators which suggest an increase in international migration into Hull over this period. However, there has been an evident decrease in the White British / Irish category (with a drop of 5, 007).

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Figure 29: Change in Ethnic Composition in Hull (2001-2011)

10,000

8,000

6,000

4,000

2,000

White British / White Other Multi Ethnic Asian Black Arab / Other -2,000 Irish

-4,000

-6,000

Source: 2001 and 2011 Census

Economic Context

5.16 Next we move on to profile economic and labour market characteristics in Hull.

Skills and Occupations

5.17 The skills profile at an HMA and sub-area level is shown in Table 14. The Hull HMA has a lower than average skills profile. It has a much lower proportion of its population with Level 4 (degree or equivalent) qualifications and above (13.0%) compared with the regional (23.3%) and national (27.4%) average. The proportion of people with no qualifications across Hull HMA is above average.

5.18 The City has a skills profile focused towards lower level skills. It has a higher proportion of its population with no qualifications (31.7%) than the regional (25.8 %) and national (22.5%) average; and also has a lower proportion of the population qualified to NVQ4+ (equivalent to degree level) at 15.2% compared with the regional (23.3%) and national average (27.4%).

5.19 In contrast the skill levels of residents in the East Riding hinterland are stronger, and more similar to the region. The evidence suggests that those with higher level skills tend to commute into Hull to work.

5.20 Within Hull, the Bransolme, East, NaSA, Ings and Southcoates and Orchard Park sub-areas have a skills profile focused more towards no or lower-level skills.

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Table 14: Skills and Qualifications, 2011

Apprenti

Qualifications Qualifications Qualifications Qualifications Qualifications

Qualifications Qualifications

and Above and

Level 1 Level 2 Level 3 Level 4 Level

Other Other

No No

ceship

Bransholme 17.3% 15.8% 9.2% 6.5% 4.6% 3.5% 43.2% Central 12.2% 12.6% 17.3% 19.5% 8.2% 2.7% 27.5% East 16.5% 16.3% 9.1% 7.4% 4.9% 3.6% 42.2% Ings and Southcoates 15.2% 16.1% 11.2% 10.7% 5.2% 4.8% 36.8% NaSA 14.9% 15.0% 8.8% 11.0% 9.9% 3.2% 37.2% North 15.5% 17.4% 15.0% 17.8% 4.8% 5.5% 24.0% Orchard Park 14.4% 13.8% 13.6% 12.4% 6.5% 2.7% 36.5% West 13.8% 16.0% 13.5% 20.7% 5.0% 4.6% 26.4% Hull 14.6% 15.4% 13.1% 15.2% 6.0% 4.0% 31.7% East Riding (part) 12.3% 16.1% 12.8% 29.1% 4.0% 5.1% 20.7% Hull HMA 13.6% 15.7% 4.5% 13.0% 21.1% 5.1% 27.0% Yorkshire and Humber 13.6% 15.5% 12.8% 23.3% 4.9% 4.2% 25.8% England 13.3% 15.2% 12.4% 27.4% 5.7% 3.6% 22.5%

Source: 2011 Census

5.21 The lower than average proportion of Hulls residents with NVQ 4+ level and above is reflected in Hull’s occupational profile whereby there is a lower percentage of residents employed in managerial, professional and associate professional roles (26.4%) compared with the regional (36.8%) and national (41.1%) averages (Table 15). Indeed, the percentage of Hull residents employed in managerial, professional and associate professional roles is more than 10 percentage points lower than the England average.

5.22 Whilst Hull’s industrial base has declined over the past 25 years, the percentage employed in plant, process and other elementary occupations remains higher in Hull (27.8%) compared with 21.3% for the region and 18.3% in England.

5.23 The occupation profile in those parts of the East Riding which fall in the Hull HMA are more similar to the regional profile; with 43.5% employed in managerial, professional and associate professional roles and only 14.9% employed in plant, process and other elementary occupations (lower than both the national and regional averages).

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Table 15: Occupational Profile, 2011

Associate Professional Professional Associate

Service Occupations Service

Managers, Directors Directors Managers, and Customer Sales

Machine Operatives Machine

and Senior Officials Senior and

Caring, Leisure and Leisure Caring,

Administrative and and Administrative

Process, Plant and and Plant Process,

Skilled Trades Trades Skilled

and Technical Technical and

Other Service Service Other

Occupations Occupations Occupations Occupations Occupations Occupations

Professional Professional

Elementary Elementary

Secretarial Secretarial

Bransholme 4.7% 4.2% 6.2% 7.3% 14.3% 13.4% 14.4% 14.3% 21.1% Central 7.2% 13.3% 9.3% 8.5% 12.8% 8.0% 10.9% 11.8% 18.3% East 5.2% 5.3% 6.6% 8.7% 14.6% 13.0% 12.7% 13.8% 20.2% Ings and Southcoates 6.2% 7.3% 9.6% 10.8% 14.8% 11.4% 11.4% 12.2% 16.2% NaSA 4.9% 6.7% 6.7% 7.1% 13.4% 10.1% 11.1% 15.6% 24.3% North 7.6% 11.4% 11.3% 12.3% 14.9% 9.7% 11.1% 10.0% 11.6% Orchard Park 4.8% 8.7% 7.0% 7.5% 12.7% 12.4% 12.8% 11.8% 22.2% West 7.4% 14.0% 10.7% 11.0% 14.0% 10.1% 10.4% 8.8% 13.4% East Riding Areas (Part) 12.1% 18.7% 12.6% 12.1% 12.9% 9.2% 7.4% 6.1% 8.8% Hull HMA 9.1% 14.1% 10.8% 10.9% 13.5% 9.9% 9.6% 9.0% 13.1% Hull 6.6% 10.5% 9.4% 9.9% 14.0% 10.4% 11.4% 11.3% 16.5% Yorkshire and The Humber 9.9% 15.4% 11.4% 10.9% 12.3% 9.7% 9.1% 8.8% 12.5% England 10.9% 17.5% 12.8% 11.5% 11.4% 9.3% 8.4% 7.2% 11.1%

Source: 2011 Census

5.24 The occupational profile at a sub-area level can be seen in Table 15. This highlights that the proportion of people employed in managerial and professional occupations is below the regional and national averages throughout the City’s sub-areas. It is highest in the Central, West and North sub-areas. Lower skilled/ paid occupations particularly predominate in the NaSA, East, Orchard Park and Bransholme sub-areas.

Labour Market Dynamics

5.25 Figure 30 below tracks changes in employment rate (the proportion of residents aged 16 – 64 who are in employment) at a local authority level. The employment rate has fluctuated more in Hull than in Yorkshire and Humber or England since 2004, although the impact of the recession can be seen in all areas, with a decrease in the employment rate in all areas in 2008.

5.26 Overall, Hull has shown a decline in the employment rate from 68.6% in 2004 to 60.8% in 2012. At 60.8% in 2012, the employment rate in Hull is lower than in both Yorkshire and Humber (69.0%) and England (70.9%).

5.27 In contrast the employment rate in the East Riding (73.7%) is above the national and regional average and has been since 2004.

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Figure 30: Employment Rate, 2004 – 2012

78.0

76.0 74.0 72.0 70.0 68.0

64 64 in Employment Hull

- 66.0 East Riding of Yorkshire 64.0

% 16 16 % Yorkshire and Humber 62.0

60.0 England

Jan 2004 Jan 2012 Jan Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2009 Jan 2010 Jan 2011

------

Dec 2004 Dec 2012 Dec Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2009 Dec 2010 Dec 2011 Dec

Source: Annual Population Survey (2004-2012)

5.28 Data from the Annual Population Survey (Figure 31) shows that in Hull unemployment in 2012 (16.1%) was significantly higher than across Yorkshire and Humber (9.6%) and England (8%). The unemployment rate has increased notably since the beginning of the economic recession in 2007/8. The unemployment rate in East Riding was 7.3% in 2012, and has remained below average since 2004.

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Figure 31: Unemployment Rate, 2004 - 2012

18.0

16.0

64 14.0

- 12.0 10.0 8.0 6.0 Hull

4.0 East Riding of Yorkshire % Population Population % 16 2.0 Yorkshire and Humber

0.0 England

Jan 2009 Jan Jan 2004 Jan 2005 Jan 2006 Jan 2007 Jan 2008 Jan 2010 Jan 2011 Jan 2012

------

Dec 2009 Dec Dec 2004 Dec 2005 Dec 2006 Dec 2007 Dec 2008 Dec 2010 Dec 2011 Dec 2012 Dec

Source: Annual Population Survey

5.29 Job Seekers Allowance claimants are a subset of overall unemployment (Table 16). In March 2013, the JSA claimant rate in Hull at 8.8% was notably above the regional average (4.9%) and more than double the rate across England (3.8%) and in the East Riding (3.3%).

Table 16: JSA Claimants JSA Claimant Rate . Claimants as a % of the Population

March 2013 Hull 8.8 East Riding 3.3 Yorkshire and Humber 4.9 England 3.8

Source: NOMIS

5.30 Jobs density represents the number of jobs per working age (16 – 64 years old) residents of an area (Figure 32). Hull’s jobs density (0.74) is higher than the jobs density in East Riding (0.66) and matches the jobs density at a regional level. Typically we would expect larger urban areas to have an above average jobs density.

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Figure 32: Jobs Density, 2011

0.80 0.78 0.78

0.76 0.74 0.74 0.74

0.72 0.70

0.68 0.66 0.66 0.64

0.62 0.60 Kingston upon Hull, East Riding Yorkshire and The England City of Humber

Source: NOMIS

5.31 Figure 33 below profiles the socio-economic characteristics in the Hull HMA. There is considerable variation in the proportion of full time workers within Hull’s sub-areas – full-time employment is highest in the North (51.2%) but much lower in Orchard Park (29.7%) and the East (32.4%). Unemployment is more than double the regional average of 3.6% in a number of sub-areas including NaSA (11.1%), the East (9.7%), Central (8.9%), Orchard Park (9.8%) and Bransholme (9.6%).

5.32 There is also a great deal of variation in the proportion of retired people. The proportion of retirees is highest in East Riding wards (31.4%) and notably lower in the Central sub-area (16.2%) and NaSA (17.9%).

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Figure 33: Economic Activity in 2011 by Sub-Area

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Yorks Ings East hire & Orcha Ridin Centr Brans Hull and Engla NaSA South East rd West North Hull g al holme HMA The nd coate Park Areas Humb s (part) er Other 6.3% 4.4% 7.0% 4.8% 7.9% 2.9% 2.2% 8.7% 4.7% 1.6% 3.5% 3.3% 3.3% Sick / Disabled 7.3% 4.8% 7.4% 7.4% 8.3% 3.6% 2.5% 8.0% 5.6% 1.7% 4.1% 3.9% 3.6% Retired 17.9% 28.9% 26.9% 16.2% 22.4% 25.5% 21.5% 21.5% 22.6% 31.4% 26.0% 26.1% 24.9% Student 1.7% 0.9% 1.2% 7.6% 7.0% 1.9% 1.6% 1.3% 3.1% 0.6% 2.1% 2.0% 1.9% Unemployed 11.1% 5.6% 9.7% 8.9% 9.8% 4.4% 3.2% 9.6% 7.0% 1.8% 5.0% 3.6% 3.1% Self - Employed 6.0% 6.1% 4.9% 5.5% 4.6% 7.6% 8.3% 4.5% 6.3% 11.7% 8.4% 10.1% 11.5% Part Time 11.3% 9.4% 10.5% 8.6% 10.5% 9.9% 9.5% 13.1% 10.0% 8.6% 9.4% 9.3% 8.8% Full Time 38.5% 39.9% 32.4% 41.2% 29.7% 44.2% 51.2% 33.2% 40.8% 42.6% 41.5% 41.8% 42.9%

Source: Census 2011

Earnings and Commuting

5.33 Resident and work place earnings are both below regional and national averages in Hull; reflecting the skills profile and nature of the employment offer (Figure 34). Resident earnings in Hull (£22, 208 per annum gross) are lower than annual work place earnings (£23,363) which suggests that there is some in-commuting (particularly from the East Riding) to higher paid jobs in the City. Resident earnings in East Riding are higher than workplace earnings at £26,470 compared to £24,010.

5.34 Larger employers in Hull including: BP, Reckitt Benckiser and Smith and Nephew (a global medical technology business). They are particularly concentrated in the chemical and healthcare sectors.

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Figure 34: Earnings, 2012

£30,000

£25,000

£26,804 £26,804

£20,000 £26,800

£26,470 £26,470

£24,288 £24,288

£24,283 £24,283

£24,010 £24,010

£23,363 £23,363

£22,208 £22,208

£15,000

£10,000

£5,000

£- City of Kingston East Riding Yorkshire and England upon Hull Humber

Gross Annual Work Place Earnings (£) 2012 Gross Annual Resident Earnings (£) 2012

Source: Annual Survey of Hours and Earnings, 2012

5.35 Table 17 gives a more detailed picture of the earnings at HMA level, using data provided by the Council. It is evident that people resident in the East Riding part of the Hull HMA earn higher wages on average (£36,640) than residents within Hull itself (£25,490). This is influenced by the differences in the housing/ quality of place offer.

5.36 Within Hull, residents’ earnings also vary significantly, with residents in Bransholme earning £17,743 per year and residents in the North sub-area earning over £32,000.

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Table 17: Median Income by Sub-Area Mean Income NaSA £24,856 Ings & Southcoates £25,189 East £19,471 Central £26,061 Orchard Park £19,675 West £27,905 North £32,048 Bransholme £17,743 Hull £25,490 East Riding (part) £36,640 Hull HMA £29,872 Source: Experian/ Hull City Council

5.37 To understand differences between residence- and workplace-based earnings it is useful to assess commuting dynamics. Commuting data is available from the (dated) 2001 Census and the Annual Population Survey in 2008. Commuting data from the 2011 Census is unlikely to be available before Autumn 2013.

5.38 Hull sees net in-commuting from surrounding areas, largely from the East Riding (Table 18). Just over a third of Hull’s workforce commutes into Hull to work from the East Riding. Flows from other areas are negligible.

Table 18: Place of Residence for Hull workers (2001 and 2008)

% Hull Workers living in … 2001 flow 2008 flow

Hull 62.2% 60.8% East Riding of Yorkshire 34.3% 34.8% North Lincolnshire 0.6% 0.9% York .. 0.4%

5.39 The place of work for Hull residents tends to be either Hull (78.4%) or East Riding (12%) (Table 19). Whilst the place of work for Hull residents is more varied, the proportion of residents commuting out to other areas, including North East Lincolnshire and North Lincolnshire, account for less than 5% of residents in work in Hull. The minority of Hull residents who work ‘Abroad/at sea/in air’ are likely to be employed by port related activities.

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Table 19: Places of Work for Hull Residents (2001 and 2008). % Hull Residents working in 2001 flow 2008 flow … Hull 83.8% 78.4% East Riding of Yorkshire 9.3% 12.0% North East Lincolnshire 0.6% 1.5% North Lincolnshire .. 0.6% York .. 0.6% Abroad/at sea/in air 0.8% 0.5% Source: 2001 Census and 2008 Annual Population Survey

5.40 The level of East Riding residents who commute to Kingston upon Hull is high (28.8% based on the 2008 Annual Population Survey) with over a quarter of East Riding residents travelling into Hull to work.

Summary and Implications

5.41 Hull’s population is younger than average population with a particularly higher than average (and growing) proportion of people aged 20-30. This partly reflects the City’s student and international migrant population. The population however has been falling over the longer-term – and in 2011 was 6.4% below the City’s population in 1981. It has grown modestly over the 2001-11 period, by 2.5%, but this growth appears to have been driven by increases in the population within BME communities. The White British/ Irish population has reduced.

5.42 The future scale of development within Hull relative to the East Riding (to which there is consistent net out-migration from the City) could clearly influence population dynamics; as could economic performance and will influence housing need across the HMA. Economic performance is clearly an important driver of the movement of people to and from this relatively self-contained HMA.

5.43 Economic growth prospects are less strong than in other parts of the region (or country). Skill levels are low, with those in higher paid jobs effectively choosing to live outside of the City (principally in the East Riding) in areas which offer more attractive housing and quality of place. Given the jobs density, net in-commuting into Hull seems to be particularly driven not by a differential in the numerical balance between ‘homes and jobs’ but an issue of quality; with a lack of family/ executive housing in good neighbourhoods.

5.44 Within the City unemployment is significant – 16.1%. In theory this alone could support any economic growth over the plan period. There is clearly a significant latent labour force here and the scale of unemployment highlights the structural weakness of the local/ sub-regional economy and the area’s distance or disconnection from other main employment centres. The question perhaps is one of skills – the degree to which the skills of the local ‘latent labour force’ match those required to

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fill new job opportunities. Where specialist / higher skilled job opportunities are created there may be some opportunities to develop the higher value housing offer. It should also be recognised that housing investment within the City will also support some job creation. Housing need will be sensitive to the degree to which employment opportunities can be filled by up-skilling and bringing local people back into work.

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6 DEMOGRAPHIC PROJECTIONS

Introduction

6.1 In March 2012 the Government published the National Planning Policy Framework (NPPF), which replaces most of the previous planning policy statements including PPS3: Housing.

6.2 The NPPF introduces a presumption in favour of sustainable development, whereby local planning authorities should prepare new Local Plans on the basis that objectively assessed development needs (both for housing and other types of development) should be met, unless the adverse impacts of doing so would significantly and demonstrably outweigh the benefits when assessed against the document as a whole.

6.3 The starting point is that Local Plans should meet the full requirements for market and affordable housing in their housing market area. Any under-provision is expected to be addressed through collaborative working with neighbouring authorities, and this is included within the tests of soundness for the plan. The NPPF emphasises the need for Strategic Housing Market Assessments to assess full housing requirements.

6.4 In this section we have therefore developed a series of demographic projections to assess the likely requirement for additional housing to be provided over the next twenty years (the period from 2011 to 2030). The full methodology and background data for the projections can be found in Appendix 3.

CLG 2011-based Household Projections

6.5 The latest Sub-National Population and Household Projections provide a starting point for considering future levels of housing provision. The Department of Communities and Local Government’s (CLG) 2011-based Household Projections run to 2021. These indicate household growth of 7,500 households over the 2011-21 decade (an average of 750 households per annum). These projections are however ‘interim’ rather than official statistics and were released prior to the remodelling of implications of the 2011 Census on population trends over the 2001-11 period. In particular its assumptions on migration pre-date the release of data from the Census. Updated demographic projections have therefore been considered herein.

Methodology

6.6 The methodology used to determine population growth and hence housing requirements is based on fairly standard population projection methodology consistent with the methodology used by the Office for National Statistics (ONS) and CLG in their population and household projections. Essentially the method establishes the current population and how will this change in the period

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from 2011 to 2030. It considers how likely it is that women will give birth (the fertility rate); how likely it is that people will die (the death rate) and how likely it is that people will move into or out of the City. These are the principal components of population change and are used to construct our principal trend-based population projections.

6.7 Figure 35 below shows the key stages of the projection analysis through to the assessment of housing requirements.

Figure 35: Overview of Methodology

6.8 Much of the data for the projections draws on ONS information contained within the 2010- and 2011-based Sub-national Population Projections (SNPP) and the 2011-based CLG Household Projections. In particular we have used this source to look at fertility rates, mortality rates and the profile of in- and out-migrants (by age and sex).

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Projections Run

6.9 As part of this assessment we have run eight projections to assess how the population and local economy (number of people in employment) might change under different assumptions. The projections can broadly be split into three categories:

Table 20: Scope of Demographic Projections

Projection Type Projections Run

PROJ 1 (Linked to 2010- and 2011-based SNPP) Demographic-Driven PROJ 2 (10-year migration trends) PROJ 3 (5-year migration trends)

PROJ A (Jobs baseline) Economic-Driven PROJ B (Residents in Employment) PROJ C (Stable economic activity)

PROJ W (Zero net migration) Component Projections PROJ X (Zero Employment Growth)

6.10 In considering future demographic trends and housing requirements, the starting point is the latest national projections (PROJ 1). The housing requirements arising from the demographic projections are particularly sensitive to assumptions around migration. PROJ 2 and PROJ 3 consider alternative scenarios for migration, based on trends over the last 5 and 10 years.

6.11 The NPPF emphasises the alignment of housing and economic strategies in local plans; whilst the draft Planning Practice Guidance outlines that local authorities should test the degree to which demographic projections will support expected growth in employment. Projections A, B and C consider different scenarios for employment growth and the potential level of housing which might be required to support this. Employment growth at a local authority level is difficult to forecast accurately and both this, and the implications of employment growth on demography and the housing market, will be sensitive to a range of factors. These are discussed later in the report.

6.12 The ‘component’ projections are developed to aid understanding of demographic dynamics; but do not represent an assessment of ‘demand’ for homes per se.

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6.13 The eight projections run are listed below with a brief description of each following – all projections cover the period from 2011 to 2030:

PROJ 1 (linked to ONS 2010- and 2011-based SNPP)

6.14 Our first projection uses information in the ONS 2010- and 2011-based Sub-National Population Projections (SNPP). The last full set of SNPPs published by ONS were 2010-based figures. These have subsequently been updated by 2011-based ‘Interim’ Projections which look at the ten year period to 2021. These interim projections use the same assumptions around fertility, mortality and migration profiles as 2010-based figures. However the 2011-based figures have updated estimates of future levels of migration (both in- and out-migration and by type of migration (e.g. international vs. internal).

6.15 Our projections therefore use the same assumptions as in the ONS 2010-based SNPP with regards to fertility, mortality and migration rates but with some adjustments to overall levels of migration on the basis of the 2011-based figures (the assumptions around fertility, mortality and migration rates from the 2010-based SNPP are also used in all other projections within this report).

6.16 Table 21 below shows the average level of migration assumed in each of the 2010- and 2011- based projections for the period from 2011 to 2021 (the maximum period used in the 2011-based projections). We have used averages for the purpose of comparison although ONS projections do build in some small year-on-year differences.

Table 21: Comparing Migration in 2010- and 2011-based SNPP (average figures 2011-2021) 2010-based SNPP 2011-based interim SNPP Internal in-migration 8,531 8,530 Internal out-migration 10,271 10,085 Internal net migration -1,740 -1,555 Cross-border in-migration 288 288 Cross-border out-migration 368 368 Cross-border net migration -80 -80 International in-migration 2,875 2,875 International out-migration 1,687 1,521 International net migration 1,187 1,353 All in-migration 11,693 11,692 All out-migration 12,327 11,974 All net migration -634 -282 Source: 2010- and 2011-based SNPP

6.17 The data shows that the overall level of net out-migration is projected to be lower in the 2011-based projections than the 2010-based version (average net out-migration of 282 people per annum

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compared with 634). The difference is largely driven by different expected levels of out-migration which are lower in the 2011–based projections for both internal and international migration. The projected figures for in-migration do not vary much between the two projection runs.

6.18 In taking this data forward in to the projection modelling we have taken the migration patterns from the 2011-based SNPP for the period from 2011 to 2021. Beyond 2021 we have used 2010-based SNPP data, but adjusted this to take account of the differences as shown in the table above. In keeping with the methodology used by ONS, figures for cross-border and international migration are held constant with internal figures changing slightly on the basis of the projected change in the 2010-based data (but from the adjusted baseline position for 2021 shown in 2011-based projections.

6.19 Figure 36 below shows the levels of net migration assumed by our projections from 2011/12 to 2030/31. The projections start in 2011/12 with a net out-migration figure of around 40. This is expected to increase over time to reach a net out-migration of around 420 people in 2020/21. This figure is then expected to reduce up to 2029/30. For the projection period studied as a whole, the average level of net migration is an out-migration of 213 people per annum.

Figure 36: ONS Migration assumption 2011/12 to 2029/30

2014/15 2025/26 2011/12 2012/13 2013/14 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 2026/27 2027/28 2028/29 2029/30

-50

-100

-150

-200

-250 Net migration Net -300

-350

-400

-450

Source: ONS 2010- and 2011-based Sub-national Population Projections

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PROJ 2 (10-year migration trends) PROJ 3 (5-year migration trends)

6.20 Our second two projections look at recorded trends in migration over the past ten (and five) years. The figure below shows estimated net migration into the City from 2001/2 to 2010/11. The figures have been taken from ONS mid-year Population Estimates. Figures have been rounded to the nearest hundred which reflects the rounding of published ONS data.

6.21 The data shows that the figures can be quite variable over time, with the highest figure for any individual year being seen back in 2003/4 with higher levels of net out-migration over the past three years in particular. In developing our two projections, we have simply taken an overall average and projected this forward – over the last ten years (2001-11) the average level of net migration has been an out-migration of 200 people with a higher net out-migration figure (of 1,060) if we look at 5- year trends (2006-11).

6.22 For the purposes of the projections we have assumed a constant level of net migration throughout the period. Given variability in the migration data it seems reasonable to assume a constant level for the purposes of projection modelling. In comparing this information with the SNPP it is notable that the figures over the past five years are significantly higher than have been assumed in the most recent ONS projections. It may be that the ONS projections will therefore over-estimate population growth moving forward.

Table 22: Past Trends in Net In-Migration Year Net Migration 2001/2 -700 2002/3 1,000 2003/4 1,900 2004/5 1,500 2005/6 -400 2006/7 -700 2007/8 -100 2008/9 -1,800 2009/10 -1,200 2010/11 -1,500 Average (last ten years) -200 Average (last five years) -1,060 Source: ONS

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Economic-Driven Projections (PROJ A to C)

6.23 In addition to developing the three scenarios above linked to past demographic trends, we have developed three projections to consider the implications on population change and housing requirements of different levels of employment growth in the City. To model potential levels of economic growth, two forecasts were provided to GL Hearn by Nathaniel Lichfield and Partners (NLP) who are updating Hull City Council’s Employment Land Review. These are derived from the Regional Economic Intelligence Unit’s (REIU’s) Economic Model. A third projection has been run considering levels of housing provision necessary to support stable levels of economic activity.

6.24 The three economic-driven projections are:

PROJ A – Economic Core Forecast

6.25 PROJ A is based on the “Core” (or baseline) forecast from the REIU Model. This projection looks at the forecast change in jobs in the City from 2011 to 2030. The baseline forecast assumes that historical relative performance of economic sectors within Hull relative to the region hold true moving forwards (so that for instance if a sector has seen stronger relative growth in Hull than across the region, it is expected to continue to do so). This forecast indicates broadly stable levels of jobs in the City between 2013-30 (with a net loss of under 100 jobs).

6.26 In modelling the demographic implications of this we have assumed a 1:1 relationship between the number of jobs created and the number of local residents in employment. This projection essentially does not include any assumptions about commuting patterns with all new jobs being filled by local people. It can alternatively be viewed as being based on no changes to commuting patterns with equal numbers of people in- and out-commuting as a result of new employment opportunities.

6.27 The projection assumes that there are some improvements to employment rates linked to changes to pensionable ages which are to be introduced nationally over the period to 2030. Detailed assumptions regarding employment rates are set out in Appendix 3.

6.28 Overall PROJ A sees no notable change in the number of residents in employment – a 305 increase over the 19-year period – equivalent to about 16 per annum.

PROJ B – Economic Policy-On Uplift

6.29 The second projection draws on an alternative forecast developed using the REIU to take account of the possible impact of a range of transformational projects to increase the number of jobs in the City. This “policy on” forecast has been developed in consultation with Hull CC. It considers the additional economic growth which could result from the delivery of key regeneration initiatives in the

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City and enhanced performance of key economic sectors such as the energy and tourism sectors. Full details will be set out in the forthcoming Employment Land Review.

6.30 As with the first projection, it is assumed that there will be a 1:1 relationship between the change in jobs and the change in the number of people in employment. This is arguably optimistic given current commuting patterns and skill levels.

6.31 This projection shows a more positive outlook with the number of jobs forecast to increase by 2,908 over the 19-year projection period (153 per annum).

6.32 Table 23 below shows the estimated change in the number of residents in employment in broad time periods for each of the first two economic-led scenarios (annual averages are also provided). The data shows that there is expected to be stronger employment growth at the start of the period with a decrease from 2016 onwards in the policy-on uplift projection (and from 2021 in the case of the Core Forecast).

Table 23: Employment Growth Assumptions used in Modelling Period PROJ A – Core Forecast PROJ B – Policy-on uplift Annual Total in period Annual Total in period 2011-2016 167 836 768 3,840 2016-2021 91 453 -11 -54 2021-2030 -109 -984 -98 -878 Total 305 2,908 Source: REIU 2013

6.33 The two projections described above have an assumption in the modelling that employment rates in the City will improve as we move out of recession. The methodology for this is explained in more detail in Appendix 3. Essentially, it is assumed that unemployment will fall from current levels to reach an approximate pre-economic downturn average.

PROJ C – Stable Economic Activity

6.34 This third economic-driven projection models the implications of the Policy-On Forecast (PROJ B) of there being no improvement in participation in the labour market (i.e. that unemployment stays at 2011 levels through to 2030). As with other projections, this does however make an assumption about increased economic participation for certain groups due to changes in pensionable age. The modelled change in employment is therefore the same as shown for PROJ B in the table above.

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PROJ W (Zero Net Migration) PROJ X (Zero Employment Growth)

6.35 The next two projections might be called ‘component’ projections and look at the impact on population, employment and housing requirements of holding certain aspects of the projection constant over time.

6.36 The first projection looks at housing requirements if there were to be no net migration into the City for the 19 years projection period to 2030. Whilst net migration is held at zero this projection does allow for in- and out-migration so there will be changes in the age structure due to migration trends as well as those created by natural change (i.e. births minus deaths).

6.37 The second ‘component’ projection looks at what level of housing growth would be required to achieve no employment growth. Within this projection (and indeed all other projections) we have also looked at the impact of the economic downturn on the number of people in employment and considered the scope for some local residents to return to work if additional jobs were available. We have also considered the likely impact of changes in pensionable age throughout the projection period as and when these become relevant.

Projection Outputs

Population Growth

6.38 Table 24 and Figure 37 show the expected growth in population under each of the eight scenarios. The data shows that the first two demographic projections (PROJ 1 and 2) show similar levels of population growth (of around 8% for the full 19-year projection). In numerical terms this represents an increase of between about 19,800 and 20,200 people.

6.39 The third demographic projection (PROJ 3 – linked to five year migration trends) shows virtually no population growth over the period studied. This effectively projects forward net out-migration from the City (including significant levels of net out-migration over the 2008-11 period).

6.40 The two economic-driven projections (PROJ A and PROJ B) adjust levels of out-migration to reflect the expected availability of job opportunities. This results in a projected decline in the City’s population of between 1% and 3% over the 19-year period to 2030. In these two projections, we have assumed that some of the jobs created will be taken by bringing down unemployment (rather than by migrants moving into the City).

6.41 What PROJ C does is model the impact of growth in employment of 2,900 jobs to 2030 (consistent with PROJ B) but assumes that unemployment levels remain at 2011 levels. This results in a

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greater increase in population, of 6.4%, as jobs are taken more by people moving into the City (which could be expected to occur where unemployed residents don’t have the necessary skills to fill posts).

6.42 With no net migration we would expect to see a more substantial increase in the population (9.7% to 2030). To maintain employment at current (2011) levels could actually see a decrease in the total population of the City – albeit this is based on the assumption that there will be improvements to employment rates and a decrease in unemployment.

Table 24: Population Estimates 2011 to 2030 2011 2016 2021 2026 2030 PROJ 1 (SNPP) 256,123 261,766 266,500 271,525 275,901 0.0% 2.2% 4.1% 6.0% 7.7% PROJ 2 (10-year migration 256,123 261,673 267,320 272,523 276,347 trends) 0.0% 2.2% 4.4% 6.4% 7.9% PROJ 3 (5-year migration 256,123 257,162 257,721 257,331 256,427 trends) 0.0% 0.4% 0.6% 0.5% 0.1% PROJ A (Economic Core 256,123 253,679 252,491 249,807 247,624 Forecast) 0.0% -1.0% -1.4% -2.5% -3.3% PROJ B (Policy-On Uplift) 256,123 259,197 257,093 254,933 253,025 0.0% 1.2% 0.4% -0.5% -1.2% PROJ C (Stable Economic 256,123 264,272 267,150 270,080 272,503 Activity) 0.0% 3.2% 4.3% 5.4% 6.4% PROJ W (Zero net migration) 256,123 262,722 269,552 276,056 280,979 0.0% 2.6% 5.2% 7.8% 9.7% PROJ X (Zero employment 256,123 252,153 250,126 248,480 246,725 growth) 0.0% -1.5% -2.3% -3.0% -3.7%

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Figure 37: Population Change, 2011 – 2030

285,000

280,000

275,000

270,000

265,000

260,000

255,000 Population

250,000

245,000

240,000

2022 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2023 2024 2025 2026 2027 2028 2029 2030

PROJ 1 (SNPP) PROJ 2 (10-year migration trends) PROJ 3 (5-year migration trends)

PROJ A (Economic Core Forecast) PROJ B (Policy-on Uplift) PROJ C (Stable Economic Activity)

PROJ W (Zero net migration) PROJ X (Zero employment growth)

Labour Force (Residents in Employment)

6.43 Table 25 and Figure 38 below show the estimated number of people living in the City who are working (residents in employment) under each of our eight projections. The first two demographic projections (PROJ 1 and 2) show a fairly strong increase in the number of residents in employment (up 14%) whilst the lower migration projection (PROJ 3 – 5-year trends) shows a more moderate increase of about 4.4%.

6.44 The three economic projections (PROJ A to C) show moderate increases in the number of people working as per the REIU Forecasts.

6.45 The projections serve to raise some questions regarding the degree to which forecast economic growth in Hull can be expected to support the level of population growth forecast in the SNPP (PROJ 1) and 5 & 10 year migration projections (PROJ 2 and 3). Compared to wider areas, in both the baseline and Policy-On Economic Forecast we are looking at modest levels of job growth overall for a City of Hull’s size; and a likelihood of continuing net out-migration. Net out-migration is not uncommon for UK cities – as they typically have a younger age structure – but the scale of out- migration and weaker economic growth forecast in Hull relative to other cities is notable.

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6.46 PROJ A and PROJ B serve to illustrate that taking into account the age structure of the City’s population and expected levels of economic growth; we could see net out-migration levels above 5- and 10-year averages.

6.47 With no net migration we would expect to see a notable increase in the working population. This would rise from 110,903 people in 2011 to 129,034 in 2030 – an increase of 16%.

Table 25: Employment Estimates 2011 to 2030 2011 2016 2021 2026 2030 PROJ 1 (SNPP) 110,903 116,141 119,875 123,187 126,318 0.0% 4.7% 8.1% 11.1% 13.9% PROJ 2 (10-year migration 110,903 116,089 120,336 123,761 126,542 trends) 0.0% 4.7% 8.5% 11.6% 14.1% PROJ 3 (5-year migration 110,903 113,634 115,062 115,530 115,828 trends) 0.0% 2.5% 3.8% 4.2% 4.4% PROJ A (Economic Core 110,903 111,739 112,192 111,518 111,208 Forecast) 0.0% 0.8% 1.2% 0.6% 0.3% PROJ B (Policy-on Uplift) 110,903 114,743 114,689 114,053 113,811 0.0% 3.5% 3.4% 2.8% 2.6% PROJ C (Stable Economic 110,903 114,743 114,689 113,990 113,811 Activity) 0.0% 3.5% 3.4% 2.8% 2.6% PROJ W (Zero net 110,903 116,660 121,562 125,675 129,034 migration) 0.0% 5.2% 9.6% 13.3% 16.3% PROJ X (Zero employment 110,903 110,903 110,903 110,903 110,903 growth) 0.0% 0.0% 0.0% 0.0% 0.0%

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Figure 38: Employment Change, 2011 – 2030

130,000

125,000

120,000

115,000

No. of people people of working No. 110,000

105,000

2014 2024 2011 2012 2013 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025 2026 2027 2028 2029 2030

PROJ 1 (SNPP) PROJ 2 (10-year migration trends) PROJ 3 (5-year migration trends) PROJ A (Economic Core Forecast) PROJ B (Policy-on Uplift) PROJ C (Stable Economic Activity) PROJ W (Zero net migration) PROJ X (Zero employment growth)

Household Growth

6.48 Table 26 and Figure 39 show the projected growth in the number of households under each of the eight scenarios. The first two demographic projections (PROJ 1 and 2) show household growth of about 12.5% (roughly 14,000 more households) whilst figures derived under the projection linked to 5-year migration trends (PROJ 3) are somewhat lower – around 6,000 additional households (317 per annum).

6.49 The first two economic projections (PROJ A & B) are lower and suggest virtually no change in the number of households over time (both seeing increases of between 2% and 4% for the whole 19- year projection period). Delivering the Policy-ON economic forecast, but with no improvements to economic activity (PROJ C) would be expected to see some increase in households with the number increasing by around 12,500 (about 650 per annum).

6.50 With no net migration we would expect to see an increase in households of 14% whilst to achieve no employment growth it is expected that the number of households would increase by about 2%.

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Table 26: Household Estimates 2011 to 2030 2011 2016 2021 2026 2030 PROJ 1 (SNPP) 112,453 116,463 119,988 123,430 126,397 0.0% 3.6% 6.7% 9.8% 12.4% PROJ 2 (10-year migration 112,453 116,420 120,315 123,870 126,603 trends) 0.0% 3.5% 7.0% 10.2% 12.6% PROJ 3 (5-year migration 112,453 114,623 116,345 117,615 118,476 trends) 0.0% 1.9% 3.5% 4.6% 5.4% PROJ A (Economic Core 112,453 113,242 114,154 114,530 114,911 Forecast) 0.0% 0.7% 1.5% 1.8% 2.2% PROJ B (Policy-on Uplift) 112,453 115,440 116,143 116,559 116,989 0.0% 2.7% 3.3% 3.7% 4.0% PROJ C (Stable Economic 112,453 117,462 120,312 122,792 124,914 Activity) 0.0% 4.5% 7.0% 9.2% 11.1% PROJ W (Zero net migration) 112,453 116,838 121,238 125,324 128,494 0.0% 3.9% 7.8% 11.4% 14.3% PROJ X (Zero employment 112,453 112,620 113,155 113,991 114,615 growth) 0.0% 0.1% 0.6% 1.4% 1.9%

Figure 39: Household Change, 2011 – 2030

130,000 128,000 126,000

124,000 122,000

120,000 Households 118,000 116,000 114,000 112,000

110,000

2013 2018 2023 2011 2012 2014 2015 2016 2017 2019 2020 2021 2022 2024 2025 2026 2027 2028 2029 2030

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Dwellings

6.51 The analysis above concentrated on the number of additional households. In reality there are always likely to be some vacant homes in the area and so the number of properties required to house all of these households will be slightly greater than the projected household numbers. We have therefore added a vacancy allowance of 3% to all of the above figures to estimate the dwelling requirements associated with the above scenarios (Table 27).

6.52 The vacancy rate applied (3%) is lower than the current vacancy rate in the City (c. 5%). However current vacancy levels are influenced by the quality of the stock and the delivery of regeneration programmes. It is reasonable to assume that the vacancy level within new-build stock is lower at around 3%.

Table 27: Estimated Housing Numbers with 3% Vacancy Allowance (to 2030) Projection variant Annual Annual Requirement Household Requirement with over 19-years Growth Vacancy Allowance PROJ 1 (SNPP) 734 756 14,363 PROJ 2 (10-year migration trends) 745 767 14,575 PROJ 3 (5-year migration trends) 317 327 6,204 PROJ A (Economic Core Forecast) 129 133 2,532 PROJ B (Policy-on Uplift) 239 246 4,672 PROJ C (Stable Economic Activity) 656 676 12,835 PROJ W (Zero net migration) 844 870 16,522 PROJ X (Zero employment growth) 114 117 2,227

Sensitivity to Household Formation Rates

6.53 The projections above are all predicated on applying the most recent (2011-based) headship rates from CLG projections when converting population into households. We have also run a sensitivity analysis on these figures to test the impact on household growth of different assumptions. To do this we have used older (2008-based) figures against the population outputs to test what difference this might make to estimates of future household growth and housing requirements. The analysis has been carried out against PROJ 1 (linked to the Sub-national Population Projections). A second sensitivity is provided based on future headship rates being at the midpoint between 2011- and 2008-based rates.

6.54 The figures below show the impact of using these different assumptions. It can clearly be seen that using older headship rates does show a potentially higher housing need (rising from 756 dwellings

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per annum (dpa) with 2011-based rates to 858 dpa with a midpoint and 960 dpa if 2008-based rates are used.

PROJ 1 – 756 dpa PROJ 1A (midpoint headship) – 858 dpa PROJ 1B (2008-based headship) – 960 dpa

6.55 These figures would suggest that the latest CLG projections could include some degree of suppression of household formation moving forward. However, it is important to understand recent changes in Hull to see if this is the case. We have analysed this through an understanding of average household sizes and also the number of households containing non-dependent children (such households will in the main involve grown-up children living with their parents and it could be consider that a significant increase provides some evidence of households not being able to form).

6.56 Figure 40 below shows changes in average household size from 2001 to 2011 and how this is projected to change moving forward under a number of different scenarios. The data shows that average household sizes have been falling over the past decade (albeit at a rate slower than was forecast in the 2008-based projections). However, the fall in household sizes is at odds with national data which shows no change in the period from 2001 to 2011. This suggests that any suppression of household formation has been fairly limited.

6.57 Looking at the forward projections it looks like the 2011-based figures are broadly expecting household sizes to continue to fall. Hence the projections do not appear to be building in any significant degree of suppression in the future. Overall, this analysis supports the 2011-based CLG projections as being reasonable, taking account of past trends. Both the midpoint and to a greater extent the 2008-based projections appear to be moving further away from the trend position and may therefore be considered as less realistic in the context of Hull.

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Figure 40: Past and projected trends in Average Household Size

2.35

2.30

2.25

2.20

2.15 Average Household Household Average Size

2.10

2.05

2003 2013 2014 2024 2001 2002 2004 2005 2006 2007 2008 2009 2010 2011 2012 2015 2016 2017 2018 2019 2020 2021 2022 2023 2025 2026 2027 2028 2029 2030

Trend 2011-based 2008-based Midpoint 2008-based projection

Source: Derived from ONS and CLG data (including 2011 Census)

6.58 The second analysis looks at households containing dependent children and how this has changed over time. The analysis shows that there has been an increase in such households of about 1,000 over the 2001-11 decade (about 100 per annum); however, as a proportion of all households this is a very small change (going from 9.4% of households up to 9.6%). Whilst this could include some ‘concealed households’ it is also likely that it includes some multi-generational households (such as older persons living with families). Again this does not suggest any significant constraints in the ability of households to form.

Table 28: Households with non-dependent children (2001 and 2011) 2001 2011 Household type Number % Number % Married couple 5,973 5.7% 5,724 5.1% Cohabiting couple 470 0.5% 824 0.7% Lone parent 3,333 3.2% 4,231 3.8% All other households 94,512 90.6% 101,817 90.4% Total 104,288 100.0% 112,596 100.0% Total with non-dependent children 9,776 9.4% 10,779 9.6% Source: ONS (2001 and 2011 Census)

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6.59 Whilst our analysis does not point to a strong suppression of household formation, there will potentially be other reasons for household sizes not having fallen as much as previously expected. A recent (September 2013) study produced by CCHPR on behalf of the TCPA does shed some light on this issue, stating:

“The central question for the household projection is whether what happened in 2001 – 11 was a structural break from a 40-year trend; or whether household formation was forced downwards by economic and housing market pressures that are likely to ease with time. At the time of the 2011 Census, the British economy was still in recession and the housing market was depressed. The working assumption in this study is that a considerable part but not all of the 375,000 shortfall of households relative to trend was due to the state of the economy and the housing market. 200,000 is attributed to over-projection of households due to the much larger proportion of recent immigrants in the population, whose household formation rates are lower than for the population as a whole. This effect will not be reversed. The other 175,000 is attributed to the economy and the state of the housing market and is assumed to gradually reverse.”

6.60 This highlights that international migration can be an important influence on changes in household structures.

6.61 We have already considered issues around suppressed household formation which does not suggest any strong trend in Hull and so below we consider the issue of international migration. The table below shows growth in the BME population from 2001 to 2011. This analysis shows that the white (British/ Irish) population has declined whilst there has been a significant increase in all BME groups. The change in household size being below that expected in the 2008-based Projections may well therefore be explained by this dynamic (noting that BME groups typically live in larger households).

Table 29: Change in BME groups 2001 to 2011 (Hull) Ethnic Group 2001 2011 Change % change White (British/Irish) 235,477 230,470 -5,007 -2.1% White - Other 2,462 10,851 8,389 340.7% Mixed 1,619 3,454 1,835 113.3% Asian or Asian British 2,656 6,471 3,815 143.6% Black or Black British 872 2,996 2,124 243.6% Chinese and other 503 2,164 1,661 330.2% Total 243,589 256,406 12,817 5.3% Source: Census 2001 and 2011

6.62 A second analysis can consider levels of international migration compared with migration to/ from other parts of the Country. In Hull this analysis also shows some stark results. According to ONS Components of Change data, there were 1,947 international migrants (net) per annum over the 2001-11 period. This compares with a significant level of net out-migration to other parts of the Country (a net out-migration of 1,647 per annum). This data points to a population change which is very heavily influenced by international migrants.

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6.63 Overall the analysis suggests that household sizes have fallen over the past decade, but at a lesser rate than expected in the 2008-based Household Projections. Were data to be modelled on the basis of 2008-based projections (or a midpoint between 2011- and 2008-based figures) then a higher level of housing need is shown. However, all of the evidence points towards the changes in household size being due to BME groups and international migration rather than suppressed household formation. For these reasons it is considered that the 2011-based projections do provide the most robust source of data for modelling headship rates moving forward.

Interpreting the Demographic Projections

6.64 To assist in the interrogation of the demographic projections we have sought to bring together the suite of projections undertaken in Tables 30 and 31 below. Each of the projections has been run for a 19-year period from 2011 to 2030 with outputs provided for each year within this. The projections link population growth to changes in the size of the labour force (using age/sex specific employment rates). By applying household formation rates to the population projections (by age and sex), growth in households is projected. An allowance for vacant (and second) homes is then made to relate these to changes in the dwelling stock.

6.65 Base data for our projections has been taken from published material from both ONS and CLG (including the 2011-based household projections). In converting household numbers into housing figures we have additionally applied a 3% vacancy rate.

6.66 The NPPF sets out that plans should be prepared on the basis of meeting full needs for market and affordable housing. The draft Planning Practice Guidance sets out that the latest national projections should be seen as a ‘starting point’ for assessing housing need, but that authorities may need to consider extending these to cover the relevant plan period, and can consider sensitivity testing projections in response to local circumstances and the latest demographic evidence.

6.67 The CLG 2011-based Household Projections indicate household growth between 2011-21 of 7,500 (750 households per annum). These projections are however ‘interim’ rather than official statistics and were released prior to the remodelling of implications of the 2011 Census on population trends over the 2001-11 period. In particular its assumptions on migration pre-date the release of data from the Census.

6.68 Extending these based on data within the 2010-based Sub-national Population Projections results in a need for 14,400 homes (760 homes per year) over the period from 2011 to 2030. This represents the main demographic-based projection prepared. It supports growth in the housing stock at a rate of around 0.7% per annum (which is towards the lower end of the range of growth

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rates found nationally, consistent with the market characteristics) and modest net out-migration from the City of just over -200 persons per annum.

6.69 Demographic projections are however particularly sensitive to balance between in- and out- migration. As Table 29 demonstrates, whilst there was net in-migration to Hull between 2002/3 and 2004/5, there has been a net out-migration of people year-on-year since; with high notable net out- migration of over 1,500 people per annum over the 2008-11 period. Should net out-migration in line with five year trends (2006-11) continue, projected forward on a linear basis, this would result in a significantly lower level of housing (relative to PROJ 1) of 6,200 homes over the 2011-30 period (327 homes per year). This serve to highlight the sensitivity of the demographic projections to trends in migration.

6.70 The guidance then effectively sets out a number of tests which should be applied in order to consider whether there is a case to adjust the level of housing provision (particularly upwards relative to the demographic evidence). Paraphrasing the guidance, these tests can be broadly described as follows:

Is there evidence that household formation rates in the projections have been constrained? Do market signals point to a need to increase housing supply?

How do the demographic projections ‘sit’ with the affordable housing needs evidence, and should housing supply be increased to meet affordable needs?

What do economic forecasts say about jobs growth? Is there evidence that an increase in housing numbers would be needed to support this?

6.71 Relative to other parts of the region and country, Hull is a relative low value market. The City in particular has some of the lowest house prices in the country. Whilst incomes are low, household sizes have continued to fall over the 2001-11 decade. Population growth has also been driven by growth within BME communities, in part influenced by international migration. The evidence overall does not point to a situation in which household formation has been suppressed.

6.72 Affordable housing need is considered in the next section of this report. The concluding section, Section 11, draws this together with the analysis herein to identify overall conclusions regarding future housing need.

6.73 The draft Planning Practice Guidance sets out that “Plan makers should make an assessment of the likely growth 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 … Where the supply of working age population (labour force supply) is less than the projected job growth, this will result in unsustainable commuting patterns and could reduce the resilience of local

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businesses. In such circumstances, plan makers will need to consider increasing their housing numbers to address these problems.”

6.74 In interpreting the economic-driven projections we are therefore assessing in particular the degree to which they might provide pressure to adjust upwards the assessment of housing need based on past demographic trends.

6.75 The REIU base economic projection forecasts a very small (0.3%) increase in employment between 2011 and 2030. This compares with a 3.0% growth forecast for Humberside and 10.4% across the region (these latter figures provided by Experian). Even taking into account key investment projects and sectors with enhanced growth potential, employment growth of just 2.6% is expected over the period to 2030. Economic performance does therefore not result in any need for an upward adjustment to the demographic-driven projection (PROJ 1). Indeed economic performance clearly represents a downside risk to the SNPP Projection (PROJ 1); with the potential impact of the economy on the housing market illustrated by short-term migration trends (PROJ 3). However PROJ C does clearly demonstrate that the relationship between jobs and homes is very sensitive to changes in employment rates.

6.76 It is also useful to compare the projections to past housing delivery. Completions over the 2004-12 period averaged just 300 dwellings per annum in the City; with only two years in which delivery (in net terms) exceeded 500 dwellings per annum. Benchmarked against the existing housing stock this represents one of the lowest rates of net growth in the housing stock of local authorities nationally. It illustrates relative weak demand for homes in Hull.

6.77 What this serves to illustrate is that to meet demographic-projections which indicate a need for 760 homes per annum would require a step change in housing supply relative to past trends, This is consistent with the emphasis in the NPPF in boosting housing supply.

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Table 30: Summary of Projections 2011 to 2030 – Annual – Hull Projection Population Housing Numbers Employment Growth Growth Per % Per % Per % annum change annum change annum change PROJ 1 (SNPP) 1,041 0.4% 756 0.7% 811 0.7% PROJ 2 (10-year migration trends) 1,064 0.4% 767 0.7% 823 0.7% PROJ 3 (5-year migration trends) 16 0.0% 327 0.3% 259 0.2% PROJ A (Economic Core Forecast) -447 -0.2% 133 0.1% 16 0.0% PROJ B (Policy-on Uplift) -163 -0.1% 246 0.2% 153 0.1% PROJ C (Stable Economic Activity) 862 0.3% 676 0.6% 153 0.1% PROJ W (Zero net migration) 1,308 0.5% 870 0.8% 954 0.9% PROJ X (Zero employment growth) -495 -0.2% 117 0.1% 0 0.0%

Table 31: Summary of Projections 2011 to 2030 – Total – Hull Projection Population Growth Housing Numbers Employment Growth Total % Total % Total % change change change PROJ 1 (SNPP) 19,778 7.7% 14,363 12.4% 15,415 13.9% PROJ 2 (10-year migration trends) 20,224 7.9% 14,575 12.6% 15,639 14.1% PROJ 3 (5-year migration trends) 304 0.1% 6,204 5.4% 4,925 4.4% PROJ A (Economic Core Forecast) -8,499 -3.3% 2,532 2.2% 305 0.3% PROJ B (Policy-on Uplift) -3,098 -1.2% 4,672 4.0% 2,908 2.6% PROJ C (Stable Economic Activity) 16,380 6.4% 12,835 11.1% 2,908 2.6% PROJ W (Zero net migration) 24,856 9.7% 16,522 14.3% 18,131 16.3% PROJ X (Zero employment growth) -9,398 -3.7% 2,227 1.9% 0 0.0%

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7 AFFORDABLE HOUSING NEED

Introduction

7.1 In this section we discuss levels of affordable housing need in the City of Hull and each of the eight sub-areas identified. Hull however is a compact and entirely urban city where needs in one area can usually be met in neighbouring areas within the City. Housing need is defined in SHMA guidance as the quantity of housing required for households who are unable to access suitable housing without financial assistance. These households will be eligible for affordable housing. Affordable housing is defined in the National Planning Policy Framework as social rented, affordable rented and intermediate housing provided to eligible households whose needs are not met by the market. To meet this definition, affordable housing must be provided in perpetuity and it does not include lower priced private market housing which may in practice be affordable to individual households. Full definitions of each of these housing types are set out overleaf.

7.2 Government guidance on Strategic Housing Market Assessments sets out a model for assessing affordable housing need (known as the Basic Needs Assessment Model). This model has been used herein10.

7.3 It should be recognised that in establishing the overall need for housing, evidence of both housing need and demand should be considered. This section, addressing housing need specifically, needs to be considered alongside the evidence of demand presented; and the demographic and economic-led projections of housing requirements. Land availability, infrastructure requirements, viability (as well as funding available for affordable housing), Sustainability Appraisal and the views of the local community and wider stakeholders also need to be considered in the development of planning policy. It is not a simple ‘predict and provide’ issue.

7.4 The analysis is based on secondary data sources. It draws on a number of sources of information including the Housing Register, demographic projections, house prices/rents and income information. Hull City Council will be undertaking a more detailed assessment of household income based on 2013 data from Experian and analysis of the income of households in receipt of welfare benefits. This, together with a summary of the recent Hull People’s Panel survey about income and household spend, will be published in a supporting document. This will be subject to regular updates and provide evidence not only to support the SHMA and new housing proposals, but also revision of the Tenancy Strategy and registered providers’ Tenancy Policies which provide information about the balance between social rent and affordable rent provision.

10 It should be noted that in addition, Hull City Council publishes evidence annually regarding housing affordability in connection with its Tenancy Strategy.

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7.5 The housing needs model is based largely on housing market conditions (and particularly the relationship of housing costs and incomes) at a particular point in time – the time of the assessment – as well as the existing supply of affordable housing (and that within the development pipeline) which can be used to meet housing need. On this basis, estimates of housing need are provided in this section for the five year period between 2013 and 2018. A longer-term analysis is also included which considers affordable housing need over the plan period to 2030. A starting point of 2013 is used as this represents the base data of the assessment.

Key Definitions

7.6 We begin by setting out key definitions relating to housing need, affordability and affordable housing.

Housing Need

7.7 Housing need is defined as the number of households who lack their own housing or who live in unsuitable housing and who cannot afford to meet their housing needs in the market. In this assessment we have based this measure on information from the Housing Register.

Newly-Arising Need

7.8 Newly-arising (or future) need is a measure of the number of households who are expected to have an affordable housing need at some point in the future (measured annually). In this assessment we have used trend data from the Housing Register and CORE along with demographic projections about the number of new households forming (along with affordability) to estimate future needs.

Supply of Affordable Housing

7.9 An estimate of the likely future supply of affordable housing is also made (drawing on secondary data sources about past lettings). The future supply of affordable housing is subtracted from the newly-arising need to make an assessment of the net future need for affordable housing.

Affordability

7.10 Affordability is assessed by comparing household incomes, based on income data modelled by Experian against the cost of suitable market housing (to either buy or rent). Separate tests are applied for home ownership and private renting (in line with the SHMA Guidance) and are summarised below:

Assessing whether a household can afford home ownership: A household is considered able to afford to buy a home if it costs 3.5 times the gross household income – CLG guidance suggests using different measures for households with multiple incomes (2.9 ) and those with a single income (3.5 ), however (partly due to data availability) we have only used a 3.5 time multiplier for analysis. This ensures that housing need figures are not over-estimated. In practical terms the

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income multiples used makes little difference to the overall affordable housing needs analysis due to the inclusion of a rental test (below) which tends to require lower incomes for households to be able to afford access to market housing; Assessing whether a household can afford market renting: A household is considered able to afford market rented housing in cases where the rent payable would constitute no more than 25% of gross income.

7.11 It should be recognised that a key challenge in assessing housing need using secondary sources is the lack of information available regarding households’ existing savings. This is a key factor in affecting the ability of households to purchase housing and to secure competitive mortgage deals. In some cases, households who do not have sufficient savings to purchase have sufficient income to rent housing privately without support; however they will require savings or other assistance to furnish a bond and if required, rent in advance. Recent information from Hull People’s Panel (to be published in the HCC supporting document) gives an indication of saving habits and use of various forms of credit to meet household needs.

Affordable Housing

7.12 The NPPF provides the definition of affordable housing (as used in this report). The following is taken from Annex 2 of NPPF.

“Affordable housing includes social rented, affordable rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:

Meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices;

Include provision for the home to remain at an affordable price for future eligible households or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision.”

7.13 Within the definition of affordable housing there is also the distinction between social rented affordable rented, and intermediate housing. Social rented housing is defined as:

“Rented housing owned and managed by local authorities and registered social landlords, for which guideline target rents are determined through the national rent regime. It may also include rented housing owned or managed 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 as a condition of grant.”

7.14 Affordable rented housing is defined as:

“Rented housing let by registered providers of social housing to households who are eligible for social rented housing. Affordable Rent is not subject to the national rent regime but is

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subject to other rent controls that require a rent of no more than 80 per cent of the local market rent.”

7.15 The definition of intermediate housing is shown below:

“Intermediate affordable housing is ‘Housing at prices and rents above those of social rent, but below market price or rents. These can include shared equity products (e.g. HomeBuy), other low cost homes for sale and intermediate rent but does not include affordable rented housing.”

7.16 It should be noted however that products such as the mortgage guarantee element of the Help to Buy scheme result ultimately in provision of an equity loan allowing households to access market housing. Whilst this (and similar products) may make housing more affordable for some households, they do not fit the definition of affordable housing.

7.17 As part of our analysis in this report we have therefore studied the extent to which both social rented, intermediate housing and affordable rented housing can meet housing need in Hull.

Survey of Local Prices & Rents

7.18 An important part of the SHMA is to establish the entry-level costs of housing to buy and rent – this data is then used in the assessment of the need for affordable housing. The housing needs assessment compares prices and rents with the incomes of households within the each sub-area of the City to establish what proportion of households can meet their needs in the market, and what proportion require support and are thus defined as having a ‘housing need.’

7.19 In this section we establish the entry-level costs of housing to both buy and rent across the City. Whilst differences also exist in different parts of the City the analysis concentrates on establishing costs for the whole Council area. Given that the area is quite compact it would be reasonable to expect households to seek to meet their needs anywhere in the City rather than necessarily in the location in which they currently live. Our approach has been to carry out a desktop survey using internet sources. For both prices and rents we looked at costs for different sizes of property from one to four bedrooms. For the purposes of analysis (and to be consistent with CLG guidance) we have taken lower quartile prices and rents to reflect the entry-level point into the market.

7.20 Figure 41 below shows estimated lower quartile property prices and rents obtained from this search for the whole City. The prices of homes to buy have been reduced slightly (on average by about 8%) to take account of the difference between asking prices and prices paid based on information from the Hometrack website.

7.21 The data shows that entry-level costs to buy are estimated to start from about £52,500 for a one- bedroom home and rising to £107,500 for four bedrooms. For privately renting the costs range from £325 to £595 per month depending on the size of property. Taking all dwellings available to

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buy/rent at the time of the survey it was estimated that the lower quartile purchase price is around £69,000 with a lower quartile private rent being £375 per month – these figures have been taken forward into affordability analysis.

Figure 41: Entry-level Purchase Price and Private Rent Lower quartile prices Lower quartile private rents

£107,500 £700

£595 £120,000 £600

£475 £100,000 £78,000 £500

£380

£58,000

£80,000 £325 £52,500 £400

£60,000 £300

£40,000 £200

£20,000 Entry-levelprivate month)(perrent Entry-levelpurchase price (£'000s) £100

£0 £0 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms

Source: Online Estate and Letting Agents Survey (May 2013)

7.22 Figure 42 below shows the volume of properties for sale and rent in the City. The data clearly shows that the sale market is biased towards larger properties with the opposite being true for private rentals. In total, some 59% of homes advertised for sale had three or more bedrooms compared with less than a third of homes to rent. It is also notable that around a fifth of homes to rent had only one-bedroom (compared with just 4% of sale properties).

Figure 42: Volume of Properties advertised for Sale and Rent

To buy 3.6% 37.2% 44.4% 14.8%

To rent 19.9% 49.5% 23.3% 7.2%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms

Source: Online Estate and Letting Agents Survey (May 2013)

7.23 At the time of the survey in May 2013 there were 1,838 properties available for sale and 888 properties to rent.

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7.24 In addition to rental costs from our internet survey we have looked at the maximum amount of Local Housing Allowance (LHA) payable on different sized properties within the City. Maximum LHA payments are based on estimates of rents at the 30th percentile and should therefore be roughly comparable with our estimates of lower quartile costs. However, due to the boundaries of the Broad Rental Market Areas (BRMA) used by the Valuation Office Agency (VOA) it is not possible to make direct comparison.

7.25 The entire City is within the Hull BRMA although the BRMA extends beyond the City boundary – most notably to include the settlements of Beverley, Driffield and Bridlington in East Riding. The table below compares the LHA payment limits with our estimates of rental costs from the market survey. It is notable that for all sizes of accommodation our market survey suggests slightly higher rents than the VOA figures although the differences are not significant. This may reflect the fixing of LHA which is now uprated in line with inflation (rather than changes in rents).

7.26 To Table 32 below we have also added LHA rates for room only accommodation. The amount able to be claimed for a room is 81% of the figure for a self-contained one bedroom property. This in our experience is a high proportion (typically room rents are 50%-70% of the one bedroom figure).

Table 32: Maximum LHA payments by Size Size Monthly LHA limit Market survey estimate (lower quartile) Room only £244 - 1 bedroom £300 £325 2 bedrooms £370 £380 3 bedrooms £450 £475 4 bedrooms £570 £595 Source: VOA data (May 2013)

Cost of Affordable Housing

7.27 Traditionally the main type of affordable housing available in an area is social rented housing and the cost of social rented accommodation by dwelling size can be obtained from Continuous Recording (CORE) - a national information source on social rented lettings. Table 33 illustrates the rental cost of lettings of social rented properties by size in 2011/12. As can be seen the costs are below those for private rented housing indicating a gap between the social rented and market sectors. This gap increases for larger properties. The figures in the table include service charges.

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Table 33: Monthly Average Social Rent levels in Hull Size Monthly rent (including service charges) 1 bedroom £269 2 bedrooms £292 3+ bedrooms £319 Source: CORE (2013)

7.28 For consistency we have used the CORE data (including information about the number of lettings) to estimate a lower quartile social rent across the whole stock. This has been estimated to be £274 per month which is about £100 less than the equivalent figure in the private rented sector.

7.29 Changes in affordable housing provision has seen the introduction of a new tenure of affordable housing (Affordable Rented). Affordable rented housing is defined in the NPPF as being ‘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)’. In the short-term it is likely that this tenure will replace social rented housing for new delivery, however, the tenure is initially only being trialled for four years and so this situation may change in the future.

7.30 Affordable Rented housing can therefore be considered to be similar to social rented housing but at a potentially higher rent. The 80% (maximum) rent is to be based on the open market rental value of the individual property and so it is not possible to say what this will exactly mean in terms of cost (for example the rent for a two-bedroom flat is likely to be significantly different to a two-bedroom detached bungalow). In addition, market rents for new-build homes are likely to be higher than within the existing stock and may well be in excess of 80% of lower quartile rents.

7.31 Whilst there are some complications regarding affordable rent and likely costs in a local context, we have for the purposes of analysis assumed that the 80% figure can be applied to the lower quartile private rented cost data derived from our market survey. On the basis of rental average for the whole City, 80% of market rent would equate to around £70 per week (£303 per month) for a two- bedroom home and £88 per week (£381 per month) for three-bedrooms.

Gaps in the Housing Market

7.32 Figure 43 estimates how current prices and rents in the City might equate to income levels required to afford such housing (without recourse to benefits). The figures are based on the analysis above and include four different tenures (buying, private rent, affordable rent and social rent). The data clearly indicates a gap between the costs of ‘entry-level’ market housing and the social rented sector – demonstrating the potential for intermediate and affordable rented housing to meet some of the affordable need.

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Figure 43: Indicative Income required to Purchase/Rent without Additional Subsidy

£25,000

£19,700

£18,000

£20,000

£14,400

£13,100

£15,000

£10,000 Incomerequired

£5,000

£0 Buy Private rent Affordable rent Social rent

Source: Online Estate and Letting Agents Survey (May 2013) and CORE

7.33 For illustrative purposes the calculations are based on 3.5 times household income for house purchase and 25% of income to be spent on housing for rented properties. The figures for house purchase are based on a 100% mortgage for the purposes of comparing the different types of housing. It should be noted that a household income of £23,793 per annum would be required if the multiplier for households with multiple incomes is used to purchase a lower quartile home.

7.34 In reality it is likely that households would most likely need to have higher earnings and would need savings to contribute towards a deposit in order to be able to afford to buy a home. However, for the purposes of assessing a need for affordable housing, the impact on the assessment is minimal, as the income necessary to afford private rented housing without financial support falls below that necessary to buy a home.

Income Levels and Affordability

7.35 Following on from our assessment of local prices and rents, it is important to understand local income levels as these (along with the price/rent data) will determine levels of affordability and also provide an indication of the potential for intermediate housing to meet needs. Data about total household income was provided by the Council from an Experian data base dated 201111. For the purposes of analysis it has been assumed that the 2011 figures are still broadly correct – there is no evidence of a significant change in income levels in the City over the past couple of years. Information about household income from Experian for 2013 will be analysed in the HCC supporting document and is expected to show limited change in income levels in the City but considerable changes in some parts of the broader housing market area.

11 The Experian data includes all forms of income, including from benefits.

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7.36 Figure 44 below shows the distribution of household incomes for the whole of the City. The data shows that around a third (31.1%) of households have an income (from all sources) below £15,000 with a further 34.4% in the range of £15,000 to £30,000. The overall average (median) income of all households in the City was estimated to be £24,000. Around 35% of Hull households are in receipt of housing benefit/ council tax support and in the Orchard Park, Bransholme and East sub-areas nearly 50% of households are in receipt of housing benefit / council tax support.

Figure 44: Distribution of Household Income in Hull

35% 31.1% 30% 26.4% 25%

20% 17.1%

15% 10.2% 10% 8.0%

Proportionhouseholdsof groupin 3.9% 5% 1.7% 1.3% 0.2% 0% < £15,000 £15,000 - £20,000 - £30,000 - £40,000 - £50,000 - £60,000 - £70,000 - £100,000 + £19,999 £29,999 £39,999 £49,999 £59,999 £69,999 £99,999

Source: Experian

7.37 Table 34 shows how the distribution of income varies for each of the eight sub-areas. Incomes are lowest in Bransholme (median of £15,585) and highest in the North (median of £31,533).

Table 34: Income Distribution by Sub-Area Income band NaSA Ings East Central Orch- West North Brans- HULL and ard holme Southc park oates Under £15k 22.6% 34.7% 44.7% 28.1% 45.5% 25.5% 20.3% 50.6% 31.1% £15k to £20k 8.7% 8.6% 10.2% 8.2% 9.7% 7.1% 5.3% 10.5% 8.0% £20k to £30k 30.7% 25.8% 25.2% 31.5% 26.0% 26.8% 20.6% 23.6% 26.4% £30k to £40k 21.9% 15.7% 12.8% 15.4% 10.4% 20.3% 22.6% 9.3% 17.1% £40k to £50k 12.2% 8.5% 5.0% 8.9% 5.0% 11.2% 18.5% 4.2% 10.2% £50k to £60k 2.7% 3.7% 1.5% 4.3% 1.8% 5.0% 6.3% 1.3% 3.9% £60k to £70k 0.7% 1.6% 0.2% 1.7% 0.8% 2.2% 3.7% 0.2% 1.7% £70k to £100k 0.5% 1.1% 0.3% 1.5% 0.7% 1.6% 2.4% 0.2% 1.3% Over £100k 0.0% 0.2% 0.1% 0.4% 0.1% 0.4% 0.3% 0.0% 0.2% Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Median £26,260 £22,285 £17,575 £24,228 £17,379 £26,694 £31,533 £15,585 £23,968 Source: Experian

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7.38 To assess affordability we have looked at households ability to afford either home ownership or private rented housing (whichever is the cheapest), without financial support. The distribution of household incomes, within each sub-area, is then used to estimate the likely proportion of households who are unable to afford to meet their needs in the private sector without support, on the basis of their existing incomes. This analysis brings together the data on household incomes with the estimated incomes required to access private sector housing. Entry level housing costs for market housing are based principally on the costs for private rented homes (as the income thresholds necessary to afford private rented accommodation, without benefit, are lower than those that households would need to buy a home).

7.39 Table 35 below shows the number of households unable to afford and the proportion of total households. It has been assumed that an income of £18,000 per annum is required to access market housing without financial support – this equates to the lower quartile rent of £375 per month assuming a household does not spend more than 25% of its income on housing costs.

7.40 It should be noted that an income of £18,000 does not take into account varying household size and income on household expenditure. The supporting document to be prepared by Hull City Council will include analysis of Hull People’s Panel survey of household income and expenditure and will examine those areas where more than 25% of household income is being spent on rent or mortgage. It will include area-based estimates of the proportion of household income available to support individual household members (the larger the household, the more limited the income available to individuals within it).

7.41 Table 35 shows across the City that it is estimated that around 36% of households are unable to access market housing on the basis of income levels. This is a simplistic analysis which does not take account of households’ savings or equity; but does provide some comparative assessment of the variations in the affordability of market housing relative to incomes in the different sub-areas. The area with the highest proportion unable to afford is Bransholme (at 56.9%) with the lowest proportion unable to afford being estimated to be in the North sub-area (23.5%).

7.42 It should be remembered that this analysis only considers income levels, may include income from some benefits, and does not consider a full range of financial information (such as savings and equity or reliance on borrowing and credit to meet household needs). In Hull, where around 50% of households are already owner-occupiers, it is clear that a proportion will have sufficient funds to be able to access housing were there to be a need to move home. The lack of information about savings and equity does not fundamentally impact on the overall housing needs analysis which is predominantly focussed on non-owners.

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Table 35: Estimated Proportion of Households Unable to Afford Market Housing without Subsidy Area Number unable to Estimated households % of households afford (2013) unable to afford NaSA 2,395 8,596 27.9% Ings and Southcoates 4,914 12,322 39.9% East 5,514 10,844 50.8% Central 6,578 19,943 33.0% Orchard Park 5,115 9,969 51.3% West 7,639 25,649 29.8% North 4,340 18,490 23.5% Bransholme 4,233 7,441 56.9% Hull 40,730 113,255 36.0% Source: Online Estate and Letting Agents Survey (May 2013) and Income modelling

7.43 Further information regarding sources of income and the proportion derived from benefits will be examined in the supporting document to be produced by Hull City Council.

Housing Needs Assessment

7.44 Affordable housing need has been assessed using the Basic Needs Assessment Model, in accordance with the CLG Practice Guidance. This model is summarised in Figure 45.

Figure 45: Overview of Basic Needs Assessment Model

7.45 The figures presented in this report for affordable housing needs have been based on secondary data sources including analysis of the Housing Register. The housing needs modelling undertaken provides an assessment of housing need for a five year period (which is then annualised). Each of the stages of the housing needs model calculation are discussed in more detail below.

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7.46 The base date of the assessment is 2013 as this was when the assessment was undertaken (and current need for affordable housing assessed). The model (as set out in Government Guidance) is based on assessing affordable housing needs over short-term time frames. The core analysis is thus based on assessing need between 2013-18. A sensitivity analysis is set out which assumes that the backlog of affordable housing need is met over the longer-term to 2030, providing figures relating to the annual need for affordable housing which can be compared against other evidence (such as from demographic projections).

7.47 For all parts of the analysis we have provided estimates at a sub-area level. Within this it should be noted that the figures are largely based on areas of residence and do not necessarily reflect household preferences of where they wish to live. In addition, the finding of a housing need in a particular location does not mean that the need should be met in that area. Hull is a relatively compact area and it would be reasonable to expect that affordable housing delivery in one part of the City could meet a need arising elsewhere, as well as increasing the sustainability of areas with limited types of housing which currently demonstrate low demand.

Current Housing Need (Backlog)

7.48 The backlog of affordable housing need has been based on the number of households registered on the Housing Register and who are considered to be in housing need. The Council’s Housing Register uses a banding system with households being given different levels of priority depending on their circumstances. Different levels of priority are given for a wide variety of reasons including overcrowding, medical issues, sharing facilities and homelessness. However the Housing Register excludes people who may be in housing need but who have not registered for whatever reason.

7.49 For our analysis we have taken any household in the top three bands (A to C) as reflecting those in housing need. At the time of the assessment there were a total of 11,415 households on the Council’s Housing Register. Of this total, 7,411 are defined as being in housing need. However of these households 2,272 currently occupy affordable housing (and are thus seeking transfer to an alternative home).

7.50 At the time of the assessment there were therefore 5,139 households registered for housing in the City (excluding transfer applicants) who are also in need. Table 36 below shows the current locations of these households. Around a third of households in need did not have any locational information attached mainly due to being classified as “out-of-area” or of no fixed abode – these households have been assigned to a sub-area on a pro-rata basis.

7.51 The data shows that the number of households registered and in need represents around 4.5% of the number of households in the City. This proportion varies from 2.3% in the North sub-area up to 7.3% in the NaSA sub-area. In certain parts of the City there is a limited affordable housing offer,

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either in absolute numbers (such as the North area), or in type of housing (such as Orchard Park). This will influence the number of people registering if they do not perceive there to be the type of housing that they wish to access, or that they will be eligible for.

Table 36: Housing Register Applicants by Sub-Area Area On Register and in Total number of % on register and need households in need NaSA 626 8,596 7.3% Ings and Southcoates 499 12,322 4.0% East 564 10,844 5.2% Central 1,212 19,943 6.1% Orchard Park 491 9,969 4.9% West 847 25,649 3.3% North 418 18,490 2.3% Bransholme 482 7,441 6.5% Hull 5,139 113,255 4.5% Source: Housing Register

7.52 Our estimated level of backlog need is therefore 5,139. We can however additionally consider the fact that a number of these households might be able to afford market housing without the need for subsidy. For an affordability test we have used the income data and adjusted the distribution to reflect the fact that typically (nationally) households living in the social rented sector have an average income which is around 48% of the figure for all households in an area. Overall, around 20% of households with a current need are estimated to be likely to have sufficient income to afford market housing and so our estimate of the total backlog need is reduced to 4,138 households (Table 37).

Table 37: Estimated Backlog Need by Sub-Area Area Gross Need % Unable to Revised Gross (Housing Afford Need (including Register) Affordability) NaSA 626 78.4% 491 Ings and Southcoates 499 80.9% 404 East 564 89.7% 506 Central 1212 79.4% 962 Orchard Park 491 89.0% 437 West 847 74.6% 632 North 418 63.1% 264 Bransholme 482 91.7% 442 Hull 5,139 80.5% 4,138 Source: Housing Register/Income analysis

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Newly-Arising Need

7.53 To estimate newly-arising (projected future) need we have looked at two key groups of households based on the CLGs SHMA Guidance. These are:

Newly forming households; and Existing households falling into need.

Newly-Forming Households

7.54 For newly-forming households we have estimated (through our demographic modelling) the number of new households likely to form over the five year period and then applied an affordability test (Table 38). This has been undertaken by considering the changes in households in specific 5-year age bands in 2018 relative to numbers in the age band below 5 years previously to provide an estimate of gross household formation. This differs from numbers presented in the demographic projections which are for net household growth 12. The number of newly-forming households is limited to households forming who are aged under 45. This methodology is recognised in guidance as a robust method for assessing the number of newly forming households.

7.55 The estimates of gross new household formation have been based on outputs from our projection linked to zero net-migration (across the whole City). In looking at the likely affordability of newly- forming households we have drawn on data from the Survey of English Housing (now English Housing Survey) over a number of years. This establishes that the average income of newly- forming households is around 78% of the figure for all households. This figure is remarkably consistent over time.

7.56 We have therefore adjusted the overall household income data to reflect the lower average income for newly-forming households. The adjustments have been made by changing the distribution of income by bands such that average income level is 78% of the all household average. In doing this we are able to calculate the proportion of households unable to afford market housing without any form of subsidy (such as LHA/HB).

7.57 Our assessment suggests that overall around 47.1% of newly-forming households will be unable to afford market housing. There is some variation by sub-area with 32% of new households in the North sub-area estimated to be unable to afford compared with 68% in Bransholme.

12 Net household growth relates to the change in the total number of households. Gross new household formation relates to the number of newly-forming households (such as people moving out of a parents home, or forming a new household as a result of divorce etc).

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Table 38: Estimated Housing Need from Newly Forming Households (2013-18) Area Number of new % unable to Total in need households afford NaSA 978 40.8% 399 Ings and Southcaotes 1,165 51.3% 597 East 1,083 62.7% 679 Central 2,162 46.0% 994 Orchard Park 974 63.2% 616 West 2,625 40.9% 1,072 North 1,980 31.9% 633 Bransholme 832 68.3% 569 Hull 11,799 47.1% 5,559 Source: Projection Modelling/Income analysis

Existing Households falling into Housing Need

7.58 The second element of newly arising need is existing households falling into need. To assess this we have again used the Housing Register data and also information from CORE. We have looked at households who have been housed over the past five years - this group will represent the flow of households onto the Housing Register over a five year period. From this we have discounted any newly forming households (e.g. those currently living with family) as well as households who have transferred from another social rented property. An affordability test has also been applied, although as was seen for the backlog need, relatively few households have sufficient income to afford market housing.

7.59 This method for assessing existing households falling into need is consistent with the SHMA guide which says (on page 46) that ‘Partnerships should estimate the number of existing households falling into need each year by looking at recent trends. This should include households who have entered the housing register and been housed within the year as well as households housed outside of the register (such as priority homeless households applicants)’.

7.60 Table 39 below therefore shows our estimate of likely new need from existing households over the next five years by sub-area. The projections are based on a period which includes the housing market downturn; and as a result we would expect the figures to be influenced by changes to lending practices and growth in housing costs in the private rented sector. The data shows an additional need arising from 7,702 households, with over a quarter of these being in the Central sub-area.

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Table 39: Estimated level of Housing Need from Existing Households (2013-18) Area Number of Existing % of Need Households falling into Need NaSA 1,041 13.5% Ings and Southcoates 694 9.0% East 820 10.6% Central 2,124 27.6% Orchard Park 741 9.6% West 1,232 16.0% North 429 5.6% Bransholme 622 8.1% Hull 7,702 100.0% Source: CORE/Housing Register and affordability analysis

7.61 Estimates of total future housing need which is likely to arise over the next five years (2013-18) are shown in Table40, by combining the estimates of need arising from newly-forming households and from existing households falling into need. Total newly-arising need is estimated at 13,261 households over the 2013-18 period.

Table 40: Estimated Future Housing Need (2013-18) Area Newly-forming Existing Total Newly- Households in Households Arising Need Need falling into Need 2013-18 NaSA 399 1,041 1,439 Ings and Southcoates 597 694 1,291 East 679 820 1,499 Central 994 2,124 3,118 Orchard Park 616 741 1,357 West 1,072 1,232 2,304 North 633 429 1,061 Bransholme 569 622 1,191 Hull 5,559 7,702 13,261

Supply of Affordable Housing

7.62 The future supply of affordable housing is the flow of affordable housing arising from the existing stock that is available to meet future need. It is split between the annual supply of social relets and the annual supply of relets/ sales within the intermediate sector.

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Social Rented Housing

7.63 The Practice Guidance suggests that the estimate of likely future relets from the social rented stock should be based on past trend data which can be taken as a prediction for the future. We have used information from the Continuous Recording system (CORE) to establish past patterns of social housing availability. Our figures include general needs and supported lettings but exclude lettings to new properties plus an estimate of the number of transfers from other social rented homes. These exclusions are made to ensure that the figures presented reflect relets from the existing stock.

7.64 On the basis of past trend data is has been estimated that 2,518 units of social rented housing are likely to become available each year moving forward (12,590 over the five-year projection period). Table 41 breaks this information down by source of supply and it is notable that over a third is in supported rather than general needs housing.

Table 41: Analysis of past Social Rented Housing Supply (past 5 years) Total lettings 12,255 % as non-newbuild 94.5% General needs Lettings in existing stock 11,584 % non-transfers 70.5% Total lettings to new tenants 8,171 Total lettings 7,004 % as non-newbuild 95.7% Supported Lettings in existing stock 6,706 % non-transfers 65.9% Total lettings to new tenants 4,419 Total lettings to new tenants 12,590 Source: CORE

7.65 The supply figure is for social rented housing only and whilst the stock of intermediate housing in Hull is not significant compared to the social rented stock it is likely that some housing does become available each year (e.g. resales of shared ownership). For the purposes of this assessment we have estimated the likely size and turnover in the intermediate stock on the basis of 2011 Census data. From this it is estimated that around 40 additional properties might become available per annum (197 over the five year projection period).

7.66 The total supply of affordable housing is therefore estimated to be 2,557 per annum (or 12,787 over the next five years). Table 42 shows the locations where supply is expected to arise – this has been based on analysis of both the current stock of different types of affordable housing in each area and data on recent turnover provided by the Council. Supply is affected by turnover and perception of the area, but with evidence that renewal activities can increase interest in a location.

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Table 42: Supply of Affordable Housing by Sub-Area Area Social rented Intermediate Total supply relets housing ‘relets’ (2013-2018) NaSA 710 15 725 Ings and Southcoates 1,280 27 1,307 East 2,419 28 2,447 Central 2,275 34 2,309 Orchard Park 1,876 5 1,882 West 1,627 62 1,689 North 696 19 715 Bransholme 1,706 7 1,713 Hull 12,590 197 12,787

Net Housing Need

7.67 Table 43 shows our overall calculation of housing need. This excludes supply arising from sites with planning consent (the ‘development pipeline’). The data shows an overall need for affordable housing of 4,612 units over the next five years. The net need is calculated as follows:

Net Need = Backlog Need + Need from Newly-Forming Households + Existing Households falling into Need – Supply of Affordable Housing

7.68 The analysis finds a theoretical surplus of affordable housing in the East and Bransholme areas. This finding is largely supported by the fact that these areas already have high concentrations of social rented stock which can be used to meet needs as they arise. These are also areas where there is active regeneration activity.

7.69 All other areas show a net need for additional affordable housing to be provided – the highest figure being seen in the Central area (with a net need for around 1,800 units over the next five years). It should be noted that the areas showing a potential surplus of housing are areas with lower household incomes, where current residents have limited housing options and where there are active neighbourhood renewal programmes. A level of remodelling of the housing offer is required in order to meet need and reduce churn or turnover of housing contributing to neighbourhood sustainability.

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Table 43: Estimated level of Housing Need (2013-18) excluding Pipeline Area Backlog Newly Existing Total Supply Net Need need forming households Need households falling into need NaSA 491 399 1,041 1,930 725 1,205 Ings and Southcoates 404 597 694 1,695 1,307 389 East 506 679 820 2,005 2,447 -443 Central 962 994 2,124 4,080 2,309 1,771 Orchard Park 437 616 741 1,794 1,882 -88 West 632 1,072 1,232 2,936 1,689 1,247 North 264 633 429 1,325 715 610 Bransholme 442 569 622 1,633 1,713 -80 Hull 4,138 5,559 7,702 17,399 12,787 4,612 Source: Housing Register/CORE/Projection Modelling and affordability analysis

Role of the Private Rented Sector in Meeting Housing Need

7.70 The Strategic Housing Market Assessment Guidance requires consideration of the extent of the private rented sector (through the Local Housing Allowance (LHA) system) and its ability to meet the needs of households in need to be estimated. We have therefore used data from the Department of Work and Pensions (DWP) to look at the number of LHA supported private rented homes. As of January 2013 it is estimated that there were 10,490 benefit claimants in the private rented sector in the City (more recent data from the Council puts this figure at about 10,100 as of May 2013).

7.71 The data in the Table 44 shows that in all areas studied the number of LHA claimants has increased over the two and a half year period although the proportionate increase in Hull is high relative to national figures. This reflects income deprivation in the City as demonstrated in the National Indices of Deprivation. It is likely to reflect both the City’s income profile and the supply of homes in the Private Rented Sector.

Table 44: Number of people claiming LHA in Private Rented Sector (Jan 2010 and Jan 2013) Area January 2010 January 2013 Absolute % change change Hull 8,350 10,490 2,140 25.6% Yorkshire/Humber 117,550 150,685 33,135 28.2% Great Britain 1,386,510 1,667,923 281,413 20.3% Source: Department of Work and Pensions

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7.72 This information does not tell us how many lettings are made each year to tenants claiming benefit as this will depend on the turnover of stock. Nationally (from the 2010/11 English Housing Survey) it is estimated that the turnover of private rented properties is around 35% (the highest of any tenure category 13 ). In addition, comparing EHS data with DWP data suggests that the number of households claiming is around 75% of the number of claimants (this arises due to multiple claimants living in the same dwelling). If these figures are applied to Hull then this would equate to around 2,750 lettings per annum on the basis of the DWP data for January 2013.

7.73 Over the five year projection period used for analysis we also need to take account of households making multiple moves within the private rented sector. Again assuming a turnover rate of 35% we estimate that this would mean that over five years some 6,955 households will have their needs met through the private rented sector.

7.74 Table 45 below takes data from the Council and uses it to show concentrations of households living in the private rented sector (PRS) by area along with an estimate of the number of lettings in this sector over a five year period. Some caution should be used in interpreting this data given the different data sources used. In addition it should be noted that the number of claimants is individuals and in some cases there may be more than one claimant per household. The data shows that, as a proportion of the whole PRS, claimant rates are highest in the NaSA area and lowest in the Orchard Park sub-area, reflecting the tenure mix in those areas.

Table 45: Private Rented Sector LHA Claimants by Sub-Market Area LHA claimants Households in Claimants Estimated in PRS PRS as % of lettings (over households 5-years) NaSA 1,977 2,949 67.0% 1,311 Ings and Southcoates 916 1,616 56.7% 607 East 557 986 56.5% 369 Central 2,766 7,578 36.5% 1,834 Orchard Park 442 1,409 31.4% 293 West 2,482 5,378 46.1% 1,645 North 968 2,374 40.8% 642 Bransholme 384 694 55.3% 255 HULL 10,490 22,984 45.6% 6,955 Source: Hull City Council, Census (2011), DWP

7.75 The overall estimated number of lettings in the LHA part of the PRS can be seen to be in excess of the total net need derived through housing needs modelling (this is also true for each individual sub- area). It is not however appropriate to treat this sector as a form of affordable housing and net it from the overall annual housing needs estimate of 4,612 affordable homes (2013-18). Neither the

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SHMA Guidance (CLG, 2007) nor the NPPF (CLG, 2012) recognise this sector as affordable housing. It cannot be assumed that it will be available in perpetuity as private housing can and does easily switch between owner occupation and rent and vice versa, dependent on market conditions.

7.76 However, it should be recognised that, in practice, the private rented sector does make a significant contribution to filling the gap in relation to meeting housing need and given the levels of affordable housing need shown in this study, the private rented sector is likely to continue to be used to some degree to make up for the shortfall of genuine affordable housing for the foreseeable future.

7.77 The extent to which the Council wish to see the private rented sector being used to make up for shortages of affordable housing is a matter for policy intervention and is outside the scope of this report. However it should be recognised that the Private Rented Sector does not provide secure tenancies and that standards within the sector are likely to be lower than for social rented properties. Furthermore there are households with specific housing needs (such as those with disabilities or mobility problems) who may not be able to find suitable accommodation within the Private Rented Sector.

Understanding the Context to the Housing Needs Assessment

7.78 The housing needs analysis concludes that there is a shortfall of 4,612 affordable homes over the period from 2013 to 2018. However there are a number of things that need to be remembered in interpreting the housing needs analysis.

7.79 The Basic Needs Assessment Model which has been used was designed specifically to identify whether there is a shortfall or surplus of affordable housing. It is a statutory requirement to underpin affordable housing policies.

7.80 The needs assessment therefore does not look at all housing needs, but specifically the needs of those who can’t afford market housing (assuming no more than 25% of households’ gross income is spent on housing costs). It assumes that all households are adequately housed in a home that they can afford.

7.81 The needs assessment is a ‘snapshot’ assessment at a point in time, which is affected by the differential between housing costs and incomes at that point; as well as the existing supply of affordable housing. In the case of Hull, the stock of affordable housing has decreased by about 10% over the last decade and has reduced significantly as a proportion of all housing in the area. The turnover of the stock has also decreased over time. This has affected the level of affordable housing need. The shortfall of affordable housing identified is therefore to some extent affected by past investment decisions and national policy such as encouragement of Right to Buy which took properties out of the affordable housing stock..

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7.82 Moreover, as the Basic Needs Assessment Model is designed to identify a shortfall of genuine affordable housing, it assumes that all households in ‘housing need’ are housed in affordable homes (which includes provision that the home remains at an affordable price for future eligible households).

7.83 In reality, there are two key factors which need to be considered:

Some households defined as in housing need may choose to spend more than 25% of their gross income on housing costs or may not actively seek an affordable home; and Some households defined as in housing need are accommodated in the Private Rented Sector, supported by Local Housing Allowance.

7.84 It is estimated that there are currently over 10,000 Local Housing Allowance claimants housed in the Private Rented Sector with many more expected to be in this sector and paying more than 25% of their income on housing but not claiming Housing Benefit.

7.85 As the level of housing need is very sensitive to differences between housing costs and incomes, changes in the difference between incomes and housing costs over time will affect the level of housing need identified.

7.86 Given the role which the private rented sector is playing in meeting housing need, there is no evidence of a shortfall in overall housing provision to meet local housing requirements (albeit there is arguably some tenure and property type mismatch). The affordable housing needs analysis per se therefore does not provide a basis for considering overall future housing requirements or whether there is a backlog of housing that has not been delivered in the recent past.

7.87 Given the current stock of affordable housing in the City, the funding mechanisms for delivery of new affordable housing and policies affecting sales of existing properties, it is unrealistic to assume that all households in housing need will be provided with an affordable home. It is realistic to assume that the Private Rented Sector will continue to play an important role in meeting housing need in the short-to-medium term.

Longer-Term Affordable Needs to 2030

7.88 The above analysis assumes that the backlog of affordable need is met over a five year period and recognises that the private rented sector plays an important contribution in the City to meeting affordable housing needs, supported by Local Housing Allowance.

7.89 The draft Planning Practice Guidance suggests that affordable housing need should be considered over the longer-term, and expressed as an annual need. The data allows us to do this, particularly by looking at the period over which the current housing need is addressed.

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7.90 Table 46 below remodels the data to look at the period to 2030 to provide annual figures for the need for affordable housing. To allow comparison against the demographic projections, this does not include the supply of affordable housing in the development pipeline nor losses from demolition programmes. It assumes that current need is met over the 18 year period from 2013-30.

Table 46: Need for Affordable Housing 2013-30 Existing Newly Backlog households Total Net Area forming Supply need falling into Need Need households need Hull 243 1112 1540 2895 2557 338

7.91 In purely numerical terms, the analysis reveals a net need for 338 affordable homes per annum.

Need for Different Types of Affordable Housing

7.92 Having studied housing costs, incomes and housing need the next step is to make an estimate of the proportion of affordable housing need that should be met through provision of different housing products. We therefore use the income information presented earlier in this section to estimate the proportion of households who are likely to be able to afford intermediate housing and the number for whom only social or affordable rented housing will be affordable. The main data sources for establishing housing need are the Housing Register and projections of newly-forming households (along with local income estimates).

7.93 We have assessed requirements in the form of three income bands which have been associated with three different tenures of housing – intermediate, affordable rented and social rented. Households are considered able to afford intermediate housing if their income is greater than that required to rent at 80% of market rental costs (a figure which equates with possible affordable rent maximum costs) and the income falls below that required to access the market without subsidy. Although technically an intermediate product could be provided at below this level, the reality is that most intermediate housing is priced closer to market costs than social housing costs. Households whose income falls in the gap between intermediate housing and social rented housing are allocated to affordable rented housing with lower income households placed in the social rent group. The categories of affordable housing are described in Table 47.

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Table 47: Categories of Affordable Housing for Analytical Purposes Housing type Description Intermediate housing Assigned to households who can afford a housing cost at or above 80% of market rents but cannot afford full market costs Affordable rent Assigned to households who could afford a social rent without the need to claim housing benefit but would need to claim benefit to afford an Affordable Rented home (priced at 80% of market rental costs) Social rent Households who would need to claim housing benefit regardless of the cost of the property

7.94 In fact there will be a considerable overlap between these categories – the first would potentially represent households who could afford affordable rented housing without the need to claim housing benefit whilst the latter category (called social rent for analytical purposes) could have their needs met through affordable rented housing (with benefit assistance).

7.95 Table 48 shows our estimate of the number of households in need in each of the above categories and estimated net need levels (for the purposes of analysis the affordable and social rent figures have been combined). The data shows that across the City some 62% of the need could be met through products priced at the 80% of market level suggested by affordable rented housing without the need for benefit assistance. However, this assumes that household income is not itself derived from benefits. The table below illustrates the potential need, based on type of affordable housing at a citywide level if income does not include housing benefit. The supporting document prepared by Hull City Council will provide analysis of income breakdown, including information derived from Call Credit which only covers residents in receipt of housing benefit or council tax support.

Table 48: Housing Need (2013-18) by type of Affordable Housing (Numbers) Area Intermediate Social/affordable rented Total Supply Net need Total Supply Net need need need Hull 3,071 197 2,875 14,327 12,590 1,737 Source: Housing Needs Analysis

7.96 Table 49 shows the same theoretical information in percentage terms along with separating out affordable rent from social rent. However in practice, because of high dependence on housing benefit and low levels of savings, the need for social rent will be higher than illustrated below and the number of people able to access intermediate housing lower.

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Table 49: Housing Need (2013-18) by Type of Affordable Housing (Percentages) Area Intermediate Affordable rent Social rent

Hull 49.4% 5.8% 44.8% Source: Housing Needs Analysis

Impact of Welfare Reforms

7.97 The Coalition Government has heralded a period of considerable change by way of welfare reforms which will have an effect on the City’s residents. The reforms are set against a backdrop of government spending cuts, which has seen funding levels drop, and an economic recession which has led to changes to the country’s housing market and how housing can be accessed. A summary of the proposed welfare reforms and potential impact are shown below:

Reducing the Local Housing Allowance (LHA) from the median rent in a Broad Rental Market Area (BRMA) to the 30th centile from October 2011 (this is discussed in more detail below). Up rating and increasing the non-dependent rate from April 2011 is likely to place pressure on households with adult children still living at home who cannot contribute towards household expenses. Capping the Local Housing Allowance is likely to make applicants for private sector lettings less attractive to landlords. Capping the total benefits to a household at no more than the national average wage is likely to impact larger families. Limiting payments for people under 35 to the shared room rate (up from 25), making it harder to place young single people in private rented accommodation (this is discussed in more detail below). Limiting Housing Benefit entitlements for working age people in social housing sector to reflect family size could increase arrears (this is discussed in more detail below). From April 2013 LHA was uprated in line with Consumer Price Index (CPI) instead of actual rents14. This may impact on the number of private sector homes available for rent as well as the affordability of housing for claimants. The move towards a Universal Credit is likely to end Housing Benefit payments direct to landlords, making benefit claimants potentially less attractive as tenants.

Changes to Maximum LHA Payments

7.98 In looking at the extent to which the private rented sector is being used to meet housing need (through LHA) it is important to consider the likely impact of the changes made as of April 2011. The key change is that calculations of the maximum amount that can be claimed has gone from the median rent in an area to the 30th centile. Table 50 shows figures for the Hull and East Riding Broad Rental Market Area for median and 30th centile rents for different property sizes. The figures are taken from the Rent Service website for June 2010 (contained within a set of tables studying the impact of LHA changes).

14 Information about how increases will be applied in 2014/15 can be found here and will vary between housing market areas: http://www.voa.gov.uk/corporate/_downloads/pdf/RentOfficerAndLocalHousingAllowanceFactsheetDec2013.pdf

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7.99 Generally the differences are not big although there will be a number of households previously able to claim their full rent back who would no longer be able to do so. Research by the Department of Work and Pensions (DWP) suggests that around 5,990 claimants would have been affected by this change with an average loss of about £10 per week. It is not clear how many of these claimants were significantly affected (e.g. unable to pay the rent and potentially became homeless) but this change may well have put additional stress of household finances and may at the very least have forced some households to move home to seek cheaper accommodation.

Table 50: LHA levels at median and 30th centile (June 2010) – Weekly Figures Property size Median 30th centile % difference Room only £54 £50 -7.4% 1 bedroom £74 £68 -8.1% 2 bedrooms £92 £81 -12.0% 3 bedrooms £114 £104 -8.8% 4 bedrooms £150 £127 -15.3% 5 bedrooms £167 NA - Source: Rent Service

Changes to the Shared Accommodation Rate

7.100 There may be further issues relating to changes to the single room allowance. From January 2012 benefit claimants aged 35 and under are only able to claim the single room allowance rather than the allowance for a 1-bed property. Previously this only applied to claimants aged 25 or under. Research by DWP indicates that 570 households may have been affected by this change with their LHA reduced by an average of £16 per week.

7.101 Compared with many areas, the difference between the LHA maximum for a one-bedroom property and the single room allowance is not huge (the latter is typically around half of the figure for self- contained accommodation) although the loss of £16 per week is thought through stakeholder discussions to have partly driven an increase in the demand for shared rather than self-contained accommodation. Some people are additionally likely to have been affected by changes to Council Tax Relief.

Limiting Benefit Entitlements in the Social Rented Sector

7.102 The final key area of the welfare reforms studied here relates to changes in the amount of Housing Benefit working age households can claim in the social rented sector. Up until April 2013 the amount of Housing Benefit to which they were entitled, and the eligible rent part of the Housing Benefit calculation, was unrelated to the size of accommodation that claimants actually required – it was based simply on the accommodation that they actually occupied. This was in contrast to the rules that applied in the private rented sector.

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7.103 From 1st April 2013 size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector were introduced. The size criteria replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules. The applicable maximum rent is reduced by a national percentage rate depending on how many bedrooms the household is considered not to require.

7.104 A DWP Equality Assessment (October 2011) estimates that in the Yorkshire/Humber region some 80,000 households will have been affected by this change (43% of working-age households in the social rented sector) and that these households will lose an average of £13 per week. In Hull, it is estimated that around 5,500 household will be affected.

7.105 Given that at the time of writing this change had only been in place for two months it is not certain how many of these households will be put into significantly financial difficulty as a result of this change but it is quite possible that this change will see an increase in households seeking to move home and potentially requiring smaller accommodation. The limiting of benefits to working-age households is however seen as a key concern in Hull where it is reported that some 1,200 people called a dedicated helpline on its first day alone.

Comparing Needs Estimates with 2008 SHMA

7.106 This section has provided estimates of the overall need for affordable housing by following the CLG SHMA guide. It is of interest to compare the outputs of this analysis with those in the SHMA update of 2008 (by GVA Grimley). In the 2008 study GVA estimated a net annual need for 254 units of affordable housing (1,270 over a five year period). This figure is significantly below the figure estimated in this study of 922 affordable homes per annum.

7.107 On closer inspection of the GVA report it becomes clear that the difference between the two is largely methodological rather than reflecting any real change over the past five years or so. Of particular note is the fact that GVA in estimating the number of newly forming households have used the figure for total household growth rather than gross household formation (as suggested in CLG Guidance).

7.108 Total (net) household growth records the overall change in the number of households. This is a reflection both of new household formation, such as from households moving out of a parents home or as a result of divorces (gross new household formation) but also takes into account households which have ceased to exist, such as where a person in a single person household has died or has moved in with a partner. Figures for gross household formation (which are an input to the affordable housing needs modelling) are thus notably larger than those for net household growth (which is what is considered in the demographic projections).

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7.109 This difference in methodology is significant and it is estimated that the GVA report may have underestimated need by around 4,000 over a five year period due to this factor. This methodological difference alone more than explains the difference between figures in the two reports.

7.110 Although a direct comparison of figures between different SHMAs is therefore not possible it is worth noting that both this and the previous SHMA demonstrate a requirement to provide additional affordable housing in the City if all needs are to be met.

Summary and Implications

7.111 An assessment of housing need has been undertaken which is compliant with 2007 Practice Guidance to identify whether there is a shortfall or surplus of affordable housing in Hull. This has estimated current housing need in 2013 of 4,138 households, based on the number of households on the Housing Register in housing need, excluding existing social housing tenants where they would release a home for another household in need.

7.112 The housing needs model then looked at the balance between needs arising and the supply of affordable housing between 2013 and 2018. Over this period an estimated 13,261 households are expected to fall into housing need and 12,788 properties are expected to come up for relet. Overall a net deficit of 4,612 affordable homes is identified (922 per annum) to 2018. This figure excludes affordable housing in the development pipeline and replacement of planned demolitions. There is thus a significant requirement for new affordable housing in the City and the Council is justified in seeking to secure additional affordable housing.

7.113 If the backlog of affordable housing need is met over the plan period to 2030, the net need for affordable housing per annum can be expressed as for 338 homes per annum. Again this excludes replacement provision for demolitions and the affordable housing within the development pipeline; but on this basis is comparable with figures for net housing need derived from the demographic- based projections.

7.114 While a significant deficiency in affordable housing is identified, in practice many households who are unable to secure affordable housing are able to live within the Private Rented Sector supported by housing benefit. An estimated 2,750 lettings per annum of PRS properties are made to households in housing need, with the sector capable of accommodating an estimated 6,955 households over 5 years.

7.115 Many tenants are likely to turn to the private rented sector as they cannot secure affordable housing, although evidence about rent levels and maximum benefit payments suggests that some households will need to top up their benefit payments in order to afford rents. This means that the

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sector is not really an affordable solution for many households. There is also a noticeable difference in costs between social and private rents; growing private sector rents plus LHA caps and Universal Credit may limit future growth in the number of households in need who can be housed in the PRS.

7.116 However taking account of the level of need identified, it is likely that the PRS will continue to contribute to meeting housing need. The Council should work proactively to assist tenants in securing appropriate, good quality accommodation which they can afford.

7.117 The housing needs analysis provides evidence of housing need in support of policies seeking affordable housing in new developments. However specific policy targets for affordable housing provision should be informed by economic viability assessments which take account of current development economics. In line with the NPPF, policies for affordable housing should be considered alongside other plan policies which impact on development costs including the Community Infrastructure Levy (CIL).

7.118 Subject to further testing as the project progresses, an initial review of the housing needs and viability evidence would suggest that an affordable housing target in the region of 15% might be appropriate. Limited data about sources of income and household size means that it is not appropriate to set an affordable housing mix citywide.

7.119 Suggestions about the sizes of affordable homes required are discussed in the next section.

7.120 There may however be a case for a differentiated policy to be adopted which relates the level and mix of affordable housing sought in different parts of the City more closely to aspirations to provide quality and choice within the housing stock, and taking into account variations in viability across the City.

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8 REQUIREMENTS FOR DIFFERENT SIZES OF HOMES

8.1 As discussed in Section 6, there are a range of factors which influence housing demand. These factors play out at different spatial scales and influence both the level of housing demand (in terms of aggregate household growth) and the nature of demand for different types, tenures and sizes of homes.

8.2 In this section we consider in some detail the implications of demographic drivers on demand for different housing products. The assessment is intended to provide an understanding of the implications of demographic dynamics on need and demand for different sizes of homes. This however needs to be brought together with an understanding of wider factors including:

The need and opportunity to develop the housing offer;

The findings of the housing needs analysis which provide a short-term view of requirements;

Economic factors, such as trends in employment, overall and by occupation; and

Local policy objectives.

8.3 The analysis in this section seeks to use the information available about the size and structure of the population and household structures; and consider what impact this may have on the sizes of housing required in the future. For the purposes of this analysis we have looked at the demographic change as indicated in our projection linked to the 2011-based SNPP - delivery of 14,360 additional homes from 2011 to 2030.

8.4 It should be noted that this projection will not necessarily be translated into policy but has been used to indicate the likely size requirements of homes moving forward. Were a projection with a different housing figure used then the outputs (in terms of the proportion of need for different sizes of homes) would be expected to be broadly similar.

Methodology of Market Modelling

8.5 Figure 46 describes the broad methodology employed in the housing market modelling. Data is drawn from a range of sources including the 2011 Census and our demographic projections and below we briefly discuss key information sources.

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Figure 46: Approach to Housing Market Modelling

Establish how households of different ages occupy homes (by tenure)

Project how the profile of households of different ages will change in future

Draw together housing needs, viability and funding issues to consider affordable housing delivery

Model future requirements for market and affordable housing by size and compare to existing profile of homes

Output recommendations for housing requirements by tenure and size of housing

Understanding how Households Occupy Homes

8.6 Whilst the demographic projections provide a good indication of how the population and household structure will develop, it is not a simple task to convert the net increase in the number of households in to a suggested profile for additional housing to be provided. The main reason for this is that in the market sector households are able to buy or rent any size of property (subject to what they can afford) and therefore knowledge of the profile of households in an area does not directly transfer into the sizes of property to be provided. The size of housing which households occupy relates more to their wealth and age than the number of people which they contain.

8.7 For example, there is no reason why a single person cannot buy (or choose to live in) a four bedroom home as long as they can afford it and hence projecting an increase in single person households does not automatically translate into demand for smaller units.

8.8 In the affordable housing sector, households are allocated a home which meets their needs. Allocations (based on social housing providers’ allocations policies) are based on making the best use of limited resources, and hence individuals are often able to exercise less choice than in the private sector. Furthermore the sizes of homes households occupy may also be affected by the level of housing benefit which they can claim; and the Government has changed how this is calculated for working-age households.

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8.9 The general methodology is to use the information derived in the projections about the number of household reference persons (HRPs) in each age and sex group and apply this to the profile of housing within these groups. The data for this analysis has been formed from a commissioned table by ONS (Table C1213 which provides relevant data for all local authorities in England) with data then calibrated to be consistent with 2011 Census data (e.g. about house sizes in different tenure groups and locations). However, in applying these statistics, it should be noted that current demographic (and household) composition may have been skewed by the suppression of a particular type of household in the recent past (i.e. through lack of affordability or availability) and this may lead to the size needs of such households being masked in future projections.

8.10 Figure 47 shows an estimate of how the average number of bedrooms rooms varies by different ages of HRP and different sexes by broad tenure group. The size and composition of households varies by age, with for instance proportions of larger households with dependent children with a head of a household in their 30s and 40s, and a trend towards smaller households (with less children living at home and more single person households) for older age groups such as those in their 70s and 80s. The relationship between the size of household and size of home also varies between the market and affordable sectors as discussed.

8.11 In the market sector the average size of accommodation rises over time to typically reach a peak around the 40-49 age groups. In the affordable sector this peak appears earlier. After sizes peak the average dwelling size decreases, which reflects smaller household sizes and potentially a number of households down-sizing as they get older. It is also notable that the average size for affordable housing dwellings are lower than those for market housing whilst in market housing male HRPs live in larger accommodation for all age groups (with no particular trend being seen in the affordable sector).

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Figure 47: Average bedrooms by age, sex and tenure

3.0

2.5

2.0

1.5

1.0 Male - market Averagenumber bedroomsof Female - market Male - affordable 0.5 Female - affordable

0.0 Under 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80 - 84 85 + 25 Age band

Source: Derived from ONS Commissioned Table C1213 and 2011 Census

Establishing a Baseline Position

8.12 As of 2011 it is estimated that there were 112,453 households living in Hull. Analysis of Census data linked to the demographic baseline provides us with an estimate of the profile of the housing stock in 2011, as shown in Table 51. The table shows that an estimated 28.6% of households live in affordable housing with 71.4% being in the market sector (the size of the affordable sector has been fixed by reference to an estimate of the number of occupied social rented and shared ownership homes in 2011). The data also suggests that homes in the market sector are generally bigger than in the affordable sector with 59% having three or more bedrooms compared to 37% for affordable housing.

8.13 These figures are for households rather than dwellings due to information about the sizes of vacant homes across the whole stock (i.e. market and affordable) not being readily available. For the purposes of analysis this will not make any notable difference to the outputs. We have however translated the household projections into dwelling figures by including a 3% vacancy allowance when studying the final outputs of the market modelling.

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Table 51: Estimated Profile of Dwellings by Size (2011) Size of Market Affordable Total housing Number % Number % Number % 1 bedroom 6,364 7.9% 8,459 26.3% 14,823 13.2% 2 bedrooms 26,906 33.5% 11,813 36.8% 38,719 34.4% 3 bedrooms 37,429 46.6% 10,221 31.8% 47,650 42.4% 4+ bedrooms 9,614 12.0% 1,646 5.1% 11,260 10.0% Total 80,314 100.0% 32,139 100.0% 112,453 100.0% % in tenure 71.4% 28.6% 100.0% Source: Derived from 2011 Census

Tenure Assumptions

8.14 The housing market model has been used to estimate future requirements for different sizes of property over the next 19-years. The model works by looking at the types and sizes of accommodation occupied by households headed by a person of different ages, and attaching projected changes in the population to this to project need and demand for different sizes of homes. However the way households of different ages occupy homes differs between the market and affordable sectors (as shown earlier). Thus it is necessary to consider what mix of future housing will be in the market and affordable sectors.

8.15 To do so we have sought to consider the balance between the potential future delivery of market and affordable housing. The analysis of affordable housing need in this report indicates a significant level of affordable housing need, but also highlights the inter-relationships between affordable housing and the private rented sector in accommodating low income households. The Councils Affordable Housing Viability Assessment (Three Dragons, April 2011) suggests that private sector- led development schemes may be able to deliver up to 15% affordable housing provision. There will however be other schemes brought forward by the Council’s development partners on regeneration sites and by Registered Providers where higher affordable housing provision may be achieved. For modelling purposes herein we have assumed that on average 15% of net new housing completions are of affordable housing. It should be stressed that this is not intended to prejudge the development of policies. It has been applied as a high level assumption for modelling purposes only. To deliver 15% affordable housing some sites will need to deliver notably more than this, to compensate for demolitions and lower delivery on other schemes.

Mix Findings: Market Housing

8.16 As we have previously identified there are a range of factors which can be expected to influence demand for housing. This analysis specifically looks at the implications of demographic drivers. It uses a demographic-driven approach to quantify demand for different sizes of properties over the 19-year period from 2011 to 2030.

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8.17 Table 52 and Figure 48 shows estimates of the sizes of market housing needed from 2011 to 2030 based on demographic trends for the whole of the City. The data suggests a need for homes for 11,853 additional households with the majority of these being two- and three-bedroom homes.

Table 52: Estimated Size of Dwellings Needed (2011-2030): Market Housing Additional % of additional Size 2011 2030 households households 2011-2030 1 bedroom 6,364 7,285 920 7.8% 2 bedrooms 26,906 31,248 4,342 36.6% 3 bedrooms 37,429 42,930 5,501 46.4% 4+ bedrooms 9,614 10,704 1,090 9.2% Total 80,314 92,166 11,853 100.0% Source: Housing Market Model

8.18 Figure 48 shows how our estimated market housing need compares with the current stock of housing (based on households (i.e. excluding the 3% vacancy allowance)). The data suggests a slight shift towards need for smaller dwellings relative to the distribution of existing housing. This is understandable given the fact that household sizes are projected to fall slightly in the future (which itself is partly due to the ageing of the population).

Figure 48: Impact of Demographic Trends on Market Housing Need by Size (2011-2030)

50,000

45,000

40,000 5,501

35,000 2030 2011 30,000 4,342 25,000

20,000 37,429 15,000

26,906 Numberhouseholdsof groupin 10,000 1,090 920 5,000 9,614 6,364 0 1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms

Source: Housing Market Model

8.19 The graphs and statistics are based upon our modelling of demographic trends. As we have identified, it should be recognised that a range of factors including affordability pressures and market signals will continue to be important in understanding market demand; this may include an increased demand in the private rented sector for rooms in a shared house due to changes in

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housing benefit for single people. In determining policies for housing mix, policy aspirations are also relevant.

8.20 As the last few years have shown, there are a range of inter-dependencies which affect housing demand, with recent effective demand for entry-level market housing constrained by the availability of mortgage finance for first-time buyers and those on lower earnings. Access to mortgage finance and households’ ability to save are likely to continue to influence demand for entry-level market homes for sale.

8.21 We are of the view that it is appropriate through the planning system to seek to influence the balance of types and sizes of market housing through considering the mix of sites allocated for development rather than specific policies relating to the proportion of homes of different sizes which are then applied to specific sites. This approach is implicit within NPPF which requires local planning authorities to ‘identify the size, type, tenure and range of housing that is required’.

8.22 At the strategic level, a local authority in considering which sites to allocate, can consider what type of development would likely be delivered on these sites. It can also provide guidance on housing mix implicitly through policies on development densities.

Key Findings: Affordable Housing

8.23 Table 53 and Figure 49 show estimates of the sizes of affordable housing needed based on our understanding of demographic trends. The data suggests in the period between 2011 and 2030 that around 80% of need is for homes with one- or two-bedrooms with around 20% of need being for larger homes with three or more bedrooms.

8.24 This analysis provides a longer-term view of the need for affordable housing of different sizes and does not reflect any specific priorities such as for family households in need rather than single people. In addition we would note that smaller properties (i.e. one bedroom homes) typically offer limited flexibility in accommodating the changing requirements of households, whilst delivery of larger properties can help to meet the needs of households in high priority and to manage the housing stock by releasing supply of smaller properties. That said, there may in the short-term be an increased need for smaller homes as a result of welfare reforms limiting the amount of housing benefit being paid to some working-age households.

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Table 53: Estimated Size of Dwellings Needed (2011-2030): Affordable Housing Additional % of additional Size 2011 2030 households households 2011-2030 1 bedroom 8,459 9,310 851 40.7% 2 bedrooms 11,813 12,651 838 40.0% 3 bedrooms 10,221 10,597 376 18.0% 4+ bedrooms 1,646 1,673 27 1.3% Total 32,139 34,231 2,092 100.0% Source: Housing Market Model

8.25 Figure 49 shows how our estimated profile of need for different sizes of affordable homes compares with the stock of affordable housing in 2011 – the figures are based on households (i.e. before adding in a vacancy allowance). The data shows that relative to the current profile, there is a slight move towards a greater proportion of smaller homes being required. This makes sense given that in the future household sizes are expected to drop whilst the population of older people will increase – older person households (as shown earlier) are more likely to occupy smaller dwellings. However, the analysis still identifies a need for more larger units (particularly three bedroom accommodation).

Figure 49: Impact of Demographic Trends on Affordable Housing Needed by House Size, 2011 to 2030

14,000

12,000 838

376 10,000 2030 851 2011 8,000

6,000 11,813 10,221

4,000 8,459 Numberhouseholdsof groupin

2,000 27 1,646 0 1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms

Source: Housing Market Model

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Indicative Targets by Dwelling Size

8.26 Table 54 and Figure 50 summarises the above data in both the market and affordable sectors under the modelling exercise. We have also factored in a 3% vacancy allowance in moving from household figures to estimates of housing requirements.

Table 54: Estimated Housing Needs by Bed-Size (2011-2030) Market Affordable Number of % of % of bedrooms Households Dwellings Households Dwellings dwellings dwellings 1 bedroom 920 948 7.8% 851 877 40.7% 2 bedrooms 4,342 4,472 36.6% 838 863 40.0% 3 bedrooms 5,501 5,666 46.4% 376 387 18.0% 4+ bedrooms 1,090 1,122 9.2% 27 28 1.3% Total 11,853 12,208 100.0% 2,092 2,154 100.0% Source: Housing Market Model

Figure 50: Size of Housing Needed in Hull (2011 to 2030) Market Affordable

1 bedroom 7.8% 1 bedroom 40.7%

2 bedrooms 36.6% 2 bedrooms 40.0%

3 bedrooms 46.4% 3 bedrooms 18.0%

4+ bedrooms 9.2% 4+ bedrooms 1.3%

0% 20% 40% 60% 0% 20% 40% 60%

% of additional dwellings required % of additional dwellings required

Source: Housing Market Model

8.27 Whilst the outputs of the modelling provide estimates of the proportion of homes of different sizes that are needed there are a range of factors which should be taken into account in setting policies for provision. This is particularly the case in the affordable sector where there are typically issues around the demand for and turnover of one bedroom homes. We also need to consider that the stock of four bedroom affordable housing is very limited and tends to have a very low turnover. As a result, whilst the number of households coming forward for four or more bedroom homes is typically quite small the ability for these needs to be met is even more limited.

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8.28 It should also be recognised that local authorities have statutory homeless responsibilities towards families with children and would therefore prioritise the needs of families over single person households and couples. On this basis the profile of affordable housing to be provided would be further weighted to two or more bedroom housing. In the short-term however there may be a need to increase the supply of one-bedroom homes due to the ‘bedroom tax’.

8.29 For these reasons we would suggest in converting the long-term modelled outputs into a profile of housing to be provided (in the affordable sector) that the proportion of one bedroom homes required is reduced slightly from these outputs with a commensurate increase in four or more bedroom homes also being appropriate.

8.30 There are thus a range of factors which are relevant in considering policies for the mix of affordable housing sought through development schemes. At a City-wide level, the analysis would support policies for the mix of affordable housing of:

1-bed properties: 35%-40%

2-bed properties: 35%-40%

3-bed properties: 15%-20%

4-bed properties: 5%-10%

8.31 Our strategic conclusions recognise the role which delivery of larger family homes can play in releasing supply of smaller properties for other households; together with the limited flexibility which one-bed properties offer to changing household circumstances which feed through into higher turnover and management issues.

8.32 The need for affordable housing of different sizes will vary by area across the City and over time. In considering the mix of homes to be provided within specific development schemes, the information herein should be brought together with details of households currently on the Housing Register in the local area and the stock and turnover of existing properties.

8.33 In the market sector we would suggests a profile of housing that more closely matches the outputs of the modelling. The recommendations take some account of the time period used for the modelling and the fact that the full impact of the ageing population will not be experienced in the short-term.

8.34 On the basis of these factors we consider that the provision of market housing should be more explicitly focused on delivering family housing for younger households. On this basis we would recommend the following mix of market housing be sought:

1-bed properties: 5%

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2-bed properties: 35%

3-bed properties: 45%

4-bed properties: 15%

8.35 Although we have quantified this on the basis of the market modelling and our understanding of the current housing market, we do not strongly believe that such prescriptive figures should be included in the plan making process and that the ‘market’ is to some degree a better judge of what is the most appropriate profile of homes to deliver at any point in time. The figures can however be used as a monitoring tool to ensure that future delivery is not unbalanced when compared with the likely requirements as driven by demographic change in the area.

Sub-area Housing Market Modelling Outputs

8.36 Whilst the analysis above has focussed on outputs for the whole Council area the data itself has been built up from analysis at a smaller area level. Tables 55 and 56 provide the outputs of this analysis in terms of the implications of demographic trends on need for different sizes of properties at a sub-area level.

8.37 To a considerable degree the outputs show a reinforcing of the current housing offer in each area with larger homes expected to be required in areas which traditionally have provided larger housing units. This is largely a function of the expected demographic change in these areas and the fact that household types requiring larger homes are expected to continue seeking these locations.

Table 55: Estimates of Need for Different Sizes of Homes by Sub-Area (2011-30): Market Housing Sub-area 1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms NaSA 15.2% 38.0% 40.5% 6.3% Holderness Rd Corridor 3.7% 36.5% 51.2% 8.6% East 2.8% 39.7% 49.3% 8.2% Central 17.4% 47.4% 27.0% 8.2% Orchard Park 7.4% 24.5% 55.7% 12.4% West 7.5% 39.4% 44.5% 8.6% North 3.8% 30.3% 55.1% 10.8% Bransholme 2.8% 24.8% 60.8% 11.6% HULL 7.8% 36.6% 46.4% 9.2% Source: Housing Market Model

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Table 56: Estimates of Need for Different Sizes of Homes by Sub-Area (2011-30): Affordable Housing Sub-area 1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms NaSA 43.1% 37.6% 17.6% 1.7% Holderness Rd Corridor 32.0% 50.8% 16.5% 0.7% East 32.6% 54.4% 13.0% -0.1% Central 54.5% 35.8% 8.7% 1.0% Orchard Park 26.2% 51.8% 21.9% 0.1% West 45.4% 34.6% 18.4% 1.6% North 39.1% 28.5% 28.9% 3.5% Bransholme 38.3% 43.9% 18.2% -0.4% HULL 40.7% 40.0% 18.0% 1.3% Source: Housing Market Model

8.38 This modelling should be regarded as indicative of local needs. In translating this into policies for housing mix in different parts of the City, the City Council will also need to consider:

Regeneration ambitions, including to improve housing quality and choice; The nature of the land supply and its suitability for delivering different types of homes; Quality of place and market factors and how this influences the potential profile of buyers.

Summary of Key Findings

8.39 There are a range of factors which will influence demand for different sizes of homes, including demographic changes; future growth in real earnings and households’ ability to save; economic performance and housing affordability. Our analysis linked to long-term (19-year) demographic change concludes that the following (Table 57) represents an appropriate strategic policy for the mix of affordable and market homes:

Table 57: Indicative Requirements for Different Dwelling Sizes (2011-30) 1-bed 2-bed 3-bed 4+ bed Market 5% 35% 45% 15% Affordable 35-40% 35-40% 15-20% 5-10%

8.40 Our strategic conclusions in the affordable sector recognise the role which delivery of larger family homes can play in releasing supply of smaller properties for other households; together with the limited flexibility which one-bed properties offer to changing household circumstances which feed through into higher turnover and management issues.

8.41 The mix identified above should inform strategic City-wide policies. In applying these to individual development sites regard should be had to the nature of the development site and character of the

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area, and to up-to-date evidence of need as well as the existing mix and turnover of properties at the local level.

8.42 Based on the evidence, we would expect the focus of new market housing provision to be on two and three-bed properties. Continued demand for family housing can be expected from newly forming households. There may also be some demand for medium-sized properties (2 and 3 beds) from older households downsizing and looking to release equity in existing homes, but still retain flexibility for friends and family to come and stay.

8.43 The analysis of an appropriate mix of dwellings should also inform the ‘portfolio’ of sites which are considered through the Local Plan process, including: Site Allocations, Neighbourhood Plans and other planning documents. Equally it will be of relevance to affordable housing negotiations.

8.44 The Council should also consider whether it is appropriate to set out specific space standards for new development, particularly to encourage provision of decent sized family housing (e.g. 3 bed properties). It should also consider whether it is appropriate to limit the sub-division of existing larger properties which can help to attract and retain family households in certain parts of the City.

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9 NEEDS OF SPECIFIC GROUPS

Introduction

9.1 We have established overall housing requirements for different sizes of properties over the next 19- years, however there can be specific groups within the population who require specialist housing solutions or for whom housing needs may differ from the wider population. These groups are considered within this section.

9.2 Estimates of household groups who have particular housing needs is a key output of the SHMA Guidance whilst the National Planning Policy Framework identifies that local planning authorities should plan for a mix of housing which takes account of the needs of different groups in the community.

9.3 The following key groups have been identified which may have housing needs which differ from those of the wider population:

Older Persons; People with disabilities; Black and Minority Ethnic (BME) households; Households with children; Young people; Students; Gypsies and Travellers.

Housing Needs of Older People

9.4 The SHMA Guidance recognises the need to provide housing for older people as part of achieving a good mix of housing. A key driver of change in the housing market over the next few years is expected to be the growth in the population of older persons.

9.5 Indeed as population projections show, the number of older people is expected to increase significantly over the next few years. In this section we draw on a range of sources including our population projections, 2011 Census information and data from POPPI (Projecting Older People Population Information)15.

9.6 Many older persons are likely to continue to live in the homes which they have lived in for many years (in both the market and affordable sectors). Some may require some support to do so, for

15 www.poppi.org.uk

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instance in making adaptions to properties to meet their changing needs. Provision of floating support and telecare may also be important moving forwards in helping households to stay in their homes.

9.7 Some households may choose to move to a smaller home (downsize), for instance once children have moved out, or in order to reduce housing, heating or maintenance costs. This is however a choice which households may exercise if the right alternative housing products are available. It is likely that many older households will continue to under-occupy homes.

9.8 However some households may require either a level of additional support or some form of specialist housing. This is particularly the case for the older age groups (for instance those in their later 70s and 80s). In a number of areas across the country we see falling demand for residential care (which can be expensive), and a rapidly rising average age of people living in sheltered housing over 20-years, requiring higher levels of support. Many local authorities, including Hull, have struggled to contain expenditure on services for older people.

9.9 New models of enhanced and extra care housing have emerged. These aim to meet the needs of those who require high levels of care and support alongside those who are still generally able to care for themselves. These models often allow for changing circumstances in situ rather than requiring a move.

Current Population of Older Persons

9.10 In Table 58 below we have provided some baseline population data about older persons and compared this with other areas. The data for has been taken from the published ONS mid-year population estimates and is provided for age groups from 55 and upwards. In reality, those aged 55 might not be considered as ‘old’ but we have started the analysis from this age group due to the fact that some housing developments are specifically targeted at the over 55 age group.

9.11 The data shows that, when compared with both the region and England, the City has a lower proportion of older persons. In 2011 it is estimated that 24.8% of the population of Hull was aged 55 or over compared with 28.6% in the Yorkshire/Humber region and 28.0% for the whole of England.

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Table 58: Older Person Population (2011) Yorkshire/ S Hull England Age group Humber o Population % of popn % of popn % of popn uUnder 55 192,658 75.2% 71.4% 72.0% r55-64 27,558 10.8% 11.9% 11.6% 65-74 18,429 7.2% 8.8% 8.6% c 75-84 12,836 5.0% 5.6% 5.5% e85+ 4,642 1.8% 2.2% 2.2% :Total 256,123 100.0% 100.0% 100.0% Total 55+ 63,465 24.8% 28.6% 28.0%

ONS Mid-Year Estimates

Future Changes in the Population of Older Persons

9.12 As well as providing a baseline position for the proportion of older persons in the City we can use published population projections to provide an indication of how the numbers might change in the future compared with other areas. The data provided in Table 59 is based on the 2011-based SNPP which is the latest source available consistently across areas. The data is only taken to 2021 (due to the timescales used by ONS although for Hull this report does look at the changing age structure through to 2030).

9.13 The data shows that Hull (in line with other areas) is expected to see a notable increase in the older person population with the total number of people aged 55 and over expected to increase by 15% over just 10-years. This figure is however lower than projected for both the region and England. Hull is projected to have relatively strong growth in the population aged 65-74 when compared with other areas although to some degree this is linked to the size of the population in this age group in 2011.

Table 59: Projected Change in Population of Older Persons (2011 to 2021) Age group Hull Yorkshire/Humber England Under 55 0.5% 2.8% 4.4% 55-64 12.0% 10.5% 13.5% 65-74 23.9% 19.6% 20.3% 75-84 3.1% 20.1% 22.6% 85+ 26.9% 37.8% 38.5% Total 4.1% 7.0% 8.6% Total 55+ 14.7% 17.3% 19.4% Source: JGC Projections

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Characteristics of Older Persons Households

9.14 We have used 2011 Census data to explore in more detail the characteristics of older person households in Hull (based on the population aged 65 and over). Table 60 shows the number of households compared with the region and England. The data shows that in 2011 around 18% of households were comprised entirely of people aged 65 and over. This is below the figure for the region and England.

Table 60: Pensioner households (Census 2011) Pensioner households Hull Yorkshire/Humber England Single pensioner 13,075 281,870 2,725,596 2 or more pensioners 6,868 191,913 1,851,180 All households 112,596 2,224,059 22,063,368 Single pensioner 11.6% 12.7% 12.4% 2 or more pensioners 6.1% 8.6% 8.4% All households 100.0% 100.0% 100.0% Total % pensioner only 17.7% 21.3% 20.7% Source: 2011 Census

9.15 Figure 51 shows the tenure of older person households – the data has been split between single pensioner households and those with two or more pensioners (which will largely be couples). The data shows that pensioner households are relatively likely to live in outright owned accommodation (46%) and are also more likely than other households to be in the social rented sector. The City has a proportionally high supply of social rented accommodation for older persons. The proportion of pensioner households living in the private rented sector is relatively low (5% compared with 20% of all households in the City).

9.16 There are however notable differences for different types of pensioner households with single pensioners having a much lower level of owner-occupation than larger pensioner households – this group also has a much higher proportion living in the social rented sector.

9.17 Given that the number of older people is expected to increase in the future and that the number of single person households is expected to increase this would suggest (if occupancy patterns remain the same) that there will be a notable demand for affordable housing from the ageing population.

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Figure 51: Tenure of Older Person Households - Hull

100% 5.0% 3.5%1.6% 3.8% 1.5% 6.1% 5.2% 90% 20.4% 24.7% 80% 70% 38.8% 46.3% 7.4% 28.1% 60%

50% 6.0% 40% 5.2% 30.1%

30% 62.9% % of households of % groupin 46.2% 20% 37.5% 10% 19.9% 0% Single pensioner 2 or more pensioners All pensioner only All other households Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented Other

Source: 2011 Census

9.18 A key theme that is often brought out in Housing Market Assessment work is the large proportion of older person households who under-occupy their dwellings. Data from the Census allows us to investigate this using the bedroom standard (Figure 52). The Census data suggests that older person households are more likely to under-occupy their housing than other households in the City. In total 40% have an occupancy rating of +2 or more (meaning there are at least two more bedrooms than are technically required by the household). This compares with 23% for non- pensioner households. Further analysis suggests that under-occupancy is far more common in households with two or more pensioners than single pensioner households.

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Figure 52: Occupancy rating of Older Person Households - Hull

100% 0.2% 0.1% 0.2% 6.9% 5.3% 4.4% 90% 20.0% 26.6% 80% 32.3% 30.2% 39.2% 70%

60% 40.2% 40.8% 50% 39.4% 39.3% 40% 30% % of households of % groupin 53.8% 20% 39.6% 32.4% 25.9% 10% 23.1% 0% Single pensioner 2 or more pensioners All pensioner only All other households All households +2 or more +1 0 -1 or less

Source: 2011 Census

9.19 It is of interest to study the above information by tenure. Table 61 shows the number of pensioner households who had an occupancy rating of +2 or more in each of three broad tenure groups in 2011. Whilst the majority of older person households with an occupancy rating of +2 or more were in the owner-occupied sector, there were nearly 1,500 properties in the social rented sector occupied by pensioner only households with an occupancy rating of +2 or more. This may therefore present some opportunity to reduce under-occupation over the longer-term although to achieve this it may be necessary to provide housing in areas where households currently live and where they have social and community ties.

Table 61: Pensioner Households with Occupancy Rating of +2 or more by Tenure 2 or more All pensioner only Tenure Single pensioner pensioners households Owner-occupied 2,942 2,957 5,899 Social rented 977 481 1,458 Private rented 319 114 433 All tenures 4,238 3,552 7,790 Source: 2011 Census

9.20 It should however be recognised that many older households in the private sector will have built up equity in their existing homes. In the private sector many older households may be able to afford a larger home than they need (and thus under-occupy housing). Some may look to downsize to release equity from homes to support their retirement (or may move away from the area); however we would expect many older households to want to retain family housing with space to allow friends and relatives to come to stay.

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Health-related Population Projections

9.21 In addition to providing projections about how the number and proportion of older people is expected to change in the future we can look at the likely impact on the number of people with specific illnesses or disabilities. For this we have used data from the Projecting Older People Information System (POPPI) website which provides prevalence rates for different disabilities by age and sex. For the purposes of the SHMA analysis has focussed on estimates of the number of people with dementia and mobility problems.

9.22 For both of the health issues analysed the figures relate to the population aged 65 and over. The figures from POPPI are based on prevalence rates from a range of different sources and whilst these might change in the future (e.g. as general health of the older person population improves) the estimates are likely to be of the right order.

9.23 Table 62 shows that both of the illnesses/ disabilities are expected to increase significantly in the future although this would be expected given the increasing population. In particular there is projected to be a large rise in the number of people with dementia, with numbers of dementia sufferers expected to increase by 47% between 2011-30, along with a 40% increase in the number people with mobility problems over this period.

Table 62: Estimated population change for range of health issues (2011 to 2030) Type of illness/disability 2011 2030 Change % increase Dementia 2,537 3,719 1,182 46.6% Mobility problems 6,664 9,345 2,681 40.2% Source: Data from POPPI and Demographic Projections

9.24 We have also accessed data from the Housing LIN website’s Strategic Housing for Older People (SHOP) analysis toolkit. This source estimates potential need for housing for older persons such as for sheltered, extra care and residential care housing. A broad summary of the outputs for Hull (using the SHOP standard settings) are shown in Table 63.

9.25 The data suggests a current need for 1,562 units with an additional 1,737 expected to be needed over the period to 2030. This is a total of 3,299 with the majority of this expected to be required as affordable housing. In total (and excluding the figures for registered care) the Housing LIN data suggests a requirement for some 2,592 additional units of accommodation specifically for older people by 2030. This would form part of the overall housing need identified (for instance by reference to the demographic projections). It includes provision of both market and affordable provision.

9.26 The precise need for specialist accommodation for older persons will be influenced by strategic decisions regarding how households needs will be met moving forwards, and potentially by other

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factors such as improving technologies. It is anticipated that the City Council will seek to provide a range of options to people by providing appropriate personalised care packages focusing on caring for people in their own homes where feasible.

9.27 Some households are however likely to require a higher level of support and the City Council has prepared an Extra Care Housing Strategy 2010-15. A detailed analysis of the need for extra care housing will be set out and reviewed in updates to this. On this basis the figures set out in Table 63 should be considered as indicative.

Table 63: Estimated Need for Specialist Housing

Additional Need (to Current need Total need 2030)

Sheltered/ Extra Care 1,537 1,055 2,592 Residential Care 25 682 707 Total 1,562 1,737 3,299 Source: Housing LIN

9.28 Whilst this analysis should be treated as indicative given the number of assumptions feeding into it, there is clearly a case for the Council seeking to provide additional ‘specialist’ accommodation for older persons as the population ages.

Affordable Housing Need

9.29 The final topic we have looked at with regard to older persons is around the numbers on the Housing Register and in need (Table 64). The data shows that an appreciable proportion of those registered and in need are aged 56 and over (56 has been used in this case rather than 55 due to way in which data is held on the register). In total, some 18% of households registered and in need are aged 56 and over with a figure of just 8.5% for those aged 65 and over. When compared with data about the proportion of older person only households within the population these figures are quite low (the 2011 Census suggested that 18% of all households are solely made up of people aged 65 and over).

9.30 It is unclear from this information whether or not these figures suggest that older people are less likely to be in housing need or whether to some extent the figures might relate to the speed at which they are typically rehoused on joining the register. The levels of people registered may also reflect demand for the housing on offer. Further information is available within the 2012 Hull Joint Strategic Needs Assessment (JSNA)16.

9.31 We would however note that a good proportion of older person households are owner-occupiers and that older people tend to be less mobile (in terms of moving home) than other groups. Overall

16 www.hullpublichealth.org/

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the data does not suggest that older persons have particularly high levels of housing need when compared with the wider population. However, changes in the older person population may mean that additional and specialist provision may be required in the future. The Council should monitor older persons housing needs through the Housing Register and also through referrals from other bodies (such as the NHS).

Table 64: Older person households and the Housing Register Age group On Register and in need % on Register and in need Under 56 6,093 82.2% 56-65 686 9.3% Over 65 632 8.5% Total 7,411 100.0% Source: Housing Register

Summary of Findings on Older Person Households

9.32 The older person population of Hull is relatively small when compared with regional and national figures although it is projected to increase significantly up until 2030.

9.33 Older persons are more likely to under-occupy homes. The Council and Registered Providers provide support to older households to downsize to a property which may be more suitable to their needs. In the short-term the impacts of changes to how housing benefit is calculated are however creating demand pressures for smaller homes. An analysis of older person households suggest that they are more likely to live in social rented housing (especially single pensioner households). With the projected increases in older persons there may therefore be additional pressure on the affordable housing stock from such households.

9.34 A growing older population is also expected to result in a need for adaptions to properties to meet households’ changing needs. Typically the greatest support needs are for alterations to properties (such as to bathrooms, showers and toilets, provision of emergency alarms or help maintaining homes). Many of these can be resolved in situ through adaptations to existing properties and the resource implications of this will need to be planned for.

9.35 The growing older population is however likely to lead to some growth in need for specialist housing. The analysis above suggests a 47% growth in older population with dementia (an increase of 1,182 persons), and a 40% increase (an additional 2,681 persons) in the older population with mobility problems between 2011-30 based on demographic projections. From a planning point of view, some of these people will require specialist housing such as sheltered or extra care provision. Increasing numbers of older people with health problems will also require joint-working between housing and health (Council and NHS). Analysis of Housing LIN data suggests a requirement for

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around 144 additional housing units to be specialist accommodation to meet the needs of the older person population each year moving to 2030.

Housing Needs of People with Disabilities

9.36 This section concentrates on the housing situation of people/ households that contain someone with some form of disability. We have again drawn on Census data although at the time of writing the level of available Census data was quite limited. It should also be recognised that an analysis of people with disabilities is somewhat linked with the above analysis about older people; however, there are other groups in population with disability related needs.

9.37 Further information and assessment of the housing needs of people with disabilities is set out within the Hull Joint Strategic Needs Assessment (2012)17.

9.38 Table 65 shows the proportion of people with a long-term health problem or disability (LTHPD) and the proportion of households where at least one person has a LTHPD. The data suggests that across Hull some 27.5% of households contain someone with a LTHPD. This figure is slightly higher than the equivalent figure for both the region and nationally. The figures for the population with a LTHPD again show a higher proportion when compared with regional and national figures (an estimated 19.7% of the population of Hull have a LTHPD).

Table 65: Households and people with Long-Term Health Problem or Disability (2011) Households containing Population with health Area someone with health problem problem Number % Number % Hull 30,984 27.5% 50,391 19.7% Yorkshire/Humber 593,043 26.7% 993,649 18.8% England 5,659,606 25.7% 9,352,586 17.6% Source: Census (2011)

9.39 It is likely that the age profile of the area will heavily impact upon the numbers of people with a LTHPD, as older people tend to be more likely to have a LTHPD. Therefore Figure 53 shows the age bands of people with a LTHPD. It is clear from this analysis that those people in the oldest age bands are more likely to have a LTHPD – for example some 86% of people aged 85 and over have a LTHPD. It should be noted that the base for the figure below is slightly different to the above table in that it excludes people living in communal establishments.

17 www.hullpublichealth.org

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Figure 53: Population with LTHPD in each Age Band

Age 0 to 15 4.1%

Age 16 to 24 5.1%

Age 25 to 34 7.6%

Age 35 to 49 15.3%

Age 50 to 64 29.8%

Age 65 to 74 49.5%

Age 75 to 84 68.3%

Age 85 and over 85.7%

All ages 19.0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

LTHPD

Source: Census (2011)

9.40 The age specific prevalence rates shown above can be applied to the demographic data to estimate the likely increase over time of the number of people with a LTHPD. In applying this information to our projection linked to the SNPP (PROJ 1) it is estimated that the number of people with a LTHPD will increase by around 9,300 (a 19% increase). The vast majority of this increase (94%) is expected to be in age groups aged 65 and over. The population increase of people with a LTHPD represents 47% of the total increase in the population projected by the demographic modelling.

9.41 In looking at households with disabilities we have also been able to draw on Housing Register data to look at housing needs. The Housing Register suggests that relatively few people have a disability (although the definition is likely to differ somewhat from that used in the Census) with just 4.2% of those on the register and in need also recorded as having a (self-certified) disability.

Summary of Findings on People with Disabilities

9.42 Currently 28% of households contain someone with a long-term health problem or disability. Demographic trends are expected to lead to a significant growth in the population and number of households with disabilities over the period to 2030. Housing support services, including provision of adaptations to properties, will need to be adequately resourced to take account of this.

9.43 Hull City Council in the development of future housing strategies, and developers in considering housing developments, should draw on information not just from this SHMA Report but from the

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Hull Joint Strategic Needs Assessment to establish the need for housing designed to meet the requirements of people with disabilities. Developers should consider the impact of the social and health care personalisation agenda in determining whether there is a need for specialist communal housing.

9.44 The Council has an Extra Care Housing Strategy 2010-15. This will be subject to regular reviews, including evidence of levels of need amongst people with learning and physical disabilities and mental health issues who may benefit from extra care housing or other specialist housing solutions.

BME Households

9.45 Black or Minority Ethnic (BME) households, as a group, are quite often found to have distinct characteristics in terms of their housing needs, or may be disadvantaged in some way.

9.46 From 2011 Census data we find that around 10% of the population of Hull came from a non-White (British/Irish) background (Table 66). This figure is slightly lower than found across the region and notably lower than the figure for England (of 19%). The key BME group in Hull is Other-White (which is likely to contain a number of Eastern European migrants) – the Other-White population makes up 4.1% of all people in the City which is significantly higher than any other group. When compared with regional data the low proportion of Pakistani people is notable with only 0.3% of the population from this ethnic group (compared with 4.3% for the Yorkshire/Humber region.

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Table 66: Black and Minority Ethnic Population (2011)

Ethnic Group Hull Yorkshire/Humber England

White: British 89.7% 85.8% 79.8% White: Irish 0.2% 0.5% 1.0% White: Gypsy or Irish Traveller 0.1% 0.1% 0.1% White: Other White 4.1% 2.5% 4.6% Mixed: White and Black Caribbean 0.3% 0.6% 0.8% Mixed: White and Black African 0.3% 0.2% 0.3% Mixed: White and Asian 0.4% 0.5% 0.6% Mixed: Other Mixed 0.3% 0.3% 0.5% Asian: Indian 0.4% 1.3% 2.6% Asian: Pakistani 0.3% 4.3% 2.1% Asian: Bangladeshi 0.3% 0.4% 0.8% Asian: Chinese 0.8% 0.5% 0.7% Asian: Other Asian 0.6% 0.8% 1.5% Black: African 1.0% 0.9% 1.8% Black: Caribbean 0.1% 0.4% 1.1% Black: Other Black 0.1% 0.2% 0.5% Other ethnic group: Arab 0.4% 0.4% 0.4% Any other ethnic group 0.4% 0.4% 0.6% Total 100.0% 100.0% 100.0% Total population 256,406 5,283,733 53,012,456 % non-White (British/Irish) 10.1% 13.7% 19.3% Source: ONS (2011 Census)

9.47 Since 2001 the BME population in the City can be seen to have increased significantly as shown in Table 67. We have condensed some categories together in the table as the list of ethnic groups differs slightly between the 2001 and 2011 Censuses. The data shows that the BME population (comprising all groups other than White British/ Irish) has increased by 17,824 persons (220%) over the 2001-11 period. In contrast the White British/ Irish population has fallen by just over 5,000 (a 2.1% fall) over this period.

9.48 Looking at particular BME groups we see that the largest rise in terms of population has been for White (Other) people – increasing by 8,389 over the ten years. In proportionate terms the greatest increase has also been in the White (Other) population which has increased by over 340% over the decade.

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Table 67: Change in BME groups 2001 to 2011 (Hull) Ethnic Group 2001 2011 Change % change White (British/Irish) 235,477 230,470 -5,007 -2.1% White - Other 2,462 10,851 8,389 340.7% Mixed 1,619 3,454 1,835 113.3% Asian or Asian British 2,656 6,471 3,815 143.6% Black or Black British 872 2,996 2,124 243.6% Chinese and other 503 2,164 1,661 330.2% Total 243,589 256,406 12,817 5.3% Source: Census 2001 and 2011

BME Household Characteristics

9.49 Census data can also be used to provide some broad information about the household and housing characteristics of the BME population in the City. Figure 54 looks at the population age structure of six broad age groups using data from the 2011 Census.

9.50 The age profile of the BME population is striking when compared with White: British/ Irish people. All BME groups are considerably younger than the White (British/ Irish) group with people from a Mixed background being particularly likely to be aged under 15 when compared with any other group. The proportions of older persons are also notable with 21.2% of White; British/ Irish people being age 60 or over compared with all BME groups showing proportions of no more than 5%.

Figure 54: Population Age Profile by Ethnic Group (2011)

White: British/Irish 17.1% 22.6% 19.4% 19.7% 13.7% 7.5%

White: Other 17.9% 38.2% 30.9% 9.9% 2.3%0.8%

Mixed 39.6% 26.4% 19.8% 9.4% 3.8%1.0%

Asian 20.1% 43.4% 25.0% 8.2% 2.5%0.9%

Black 20.2% 33.2% 33.2% 10.2% 2.4%0.8%

Other 24.9% 32.0% 33.4% 7.7%1.8% 0.3%

Hull 17.7% 24.1% 20.3% 18.6% 12.5% 6.8%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Under 15 15-29 30-44 45-59 60-74 75 and over Source: Census (2011)

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9.51 We have used 2011 Census data to provide an indication of the characteristics of BME households. Table 68 shows estimates of the number of households in each BME group. Whilst the data broadly follows patterns for population, it is notable that BME households make up a lower proportion of total households when compared with population proportions. This suggests higher average household sizes for most BME groups (as shown in the last column of the table).

Table 68: Number of Households by Ethnic Group (2011) and average Household Size Households Population Average Ethnic Group No. % No. % hh size White: British/Irish 103,070 91.5% 230,470 89.9% 2.24 White: Other White 4,155 3.7% 10,851 4.2% 2.61 Mixed 1,127 1.0% 3,454 1.3% 3.06 Asian 1,994 1.8% 6,471 2.5% 3.25 Black 1,367 1.2% 2,996 1.2% 2.19 Other ethnic group 883 0.8% 2,164 0.8% 2.45 Total 112,596 100.0% 256,406 100.0% 2.28 Source: Census (2011)

9.52 There are notable differences between the household characteristics of BME households when compared with the White (British) population. Figure 55 indicates that all BME groups are significantly less likely to be owner-occupiers and far more likely to live in private rented accommodation. Arguably the starkest trend is the 65% of White (Other) households living in the private rented sector.

Figure 55: Tenure by ethnic group in Hull

100% 2.5% 2.8% 4.3% 7.8% 4.0% 4.4% 90% 16.1% 80% 30.8% 43.5% 37.5% 44.4% 70% 28.7% 64.9% 60% 50% 37.6% 16.2% 40% 31.4% 31.4% 35.3% 30% % of households in group in householdsof % 14.6% 26.6% 20% 19.3% 15.4% 10% 21.0% 12.7% 10.9% 11.9% 8.1% 5.8% 0% 5.3% 5.0% White (British/Irish) White (Other) Mixed Asian Black Other

Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented Other

Source: 2011 Census data (from NOMIS)

9.53 As BME communities mature over time, the level of owner occupation may increase. The pace at which this happens may be influenced by economic opportunities available as well as the level of

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enterprise within the local community. For some communities there may be support mechanisms which can work within the community, such as availability of interest free loans or support raising a deposit to buy a home, depending on cultural factors.

9.54 Figure 56 shows ‘occupancy ratings’ by BME group; this is based on the bedroom standard where a positive figure indicates under-occupancy and negative figures suggest some degree of overcrowding. BME groups are more likely to be overcrowded (i.e. have a negative occupancy rating) than White (British) households. In particular, the Census data suggests that around 15% of White (Other) and Asian households are overcrowded - this compares with only 4% of the White (British) group. Levels of under-occupancy amongst BME communities are generally low.

Figure 56: Occupancy rating by Ethnic Group in Hull

100% 3.7% 6.0% 8.6% 14.5% 11.8% 90% 15.3%

80% 29.0% 40.1% 70% 37.3% 45.6% 43.7% 60% 51.2%

50% 40.2% 40% 36.9% 30.1% 30% 30.4%

% of households in group in householdsof % 29.7% 28.1% 20% 27.1% 10% 16.9% 18.1% 15.4% 11.3% 8.9% 0% White British White (Irish/Other) Mixed Asian Black Other

+2 or more +1 0 -1 or less

Source: 2011 Census data (from NOMIS)

Housing Register (Housing Need)

9.55 At the time of carrying out the housing needs modelling there were 7,411 households on the register who were also defined as being in need (prior to any affordability testing). Not all of these households have provided information about their ethnic group and in total ethnic group data is available for 6,922 households (93% of those registered and in need) (Table 69). The data shows that of those for whom we have information some 87.5% are White (British/ Irish). This would suggest that BME households are slightly more likely to be registered for housing than White (British/ Irish) households. The data for individual BME groups is also interesting with White (Other) households looking to be over-represented (as indeed are all other groups apart from Mixed.

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Table 69: Housing Register and Ethnic Groups On Register and in need Total population BME group Total % Total % White: British/Irish 6,056 87.5% 103,070 91.5% White: Other 436 6.3% 4,155 3.7% Mixed 70 1.0% 1,127 1.0% Asian 145 2.1% 1,994 1.8% Black 127 1.8% 1,367 1.2% Other ethnic group 88 1.3% 883 0.8% Total 6,922 100.0% 112,596 100.0% Source: Housing Register

Summary of Findings on BME Households

9.56 The BME population in Hull has grown strongly since 2001. The 2011 Census shows that BME groups make up 10% of the City’s population. The Asian and White (Other) populations (which includes eastern European migrants) have both grown notably.

9.57 BME households appear to be typically younger (and thus more likely to grow) and less likely to be owner occupiers than the White (British/Irish) population; there is also a greater reliance on the private rented sector. BME households are also more likely to be overcrowded and less likely to under-occupy dwellings. This may be a reflection of larger families within some BME groups, but also a higher degree of people from some BME groups (such as those from the eight countries which joined the European Union in 2004) living in shared or multi-occupancy housing.

9.58 The implications of this are more for housing strategy than planning, and suggest a need to consider particularly how the needs of different groups are met within the local housing market, to explore further the reasons for higher levels of overcrowding in BME communities and how this can be addressed. It will also be important to consider the role which the Private Rented Sector plays in meeting needs of new migrant communities and the standards of housing in this sector. Investigating these issues in greater detail may assist development of strategic housing policies.

Households with Children (Family Households)

9.59 The number of families in Hull (defined for the purpose of this assessment as any household which contains at least one dependent child) currently totals 32,015 accounting for 28.4% of households (Table 70). The demographic projection (linked to the SNPP) suggests that the number of children (aged Under 15) is expected to remain largely unchanged from 2011 to 2030 (an increase of about 600).

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Table 70: Households with Dependent Children (2011) Household type Number % of Households Married couple 12,287 10.9% Cohabiting couple 6,868 6.1% Lone parent 10,292 9.1% Other households 2,568 2.3% All other households (no dependent children) 80,581 71.6% Total with dependent children 32,015 28.4% Source: ONS (2011 Census)

9.60 Figure 57 shows the current tenure of households with dependent children. There are some considerable differences by household type with lone parents having a very high proportion living in the social rented sector and also in private rented accommodation. Only around a fifth of lone parent households are owner-occupiers compared with over 70% of married couples with children.

Figure 57: Tenure of Households with Dependent Children - Hull

100% 0.5% 0.7% 1.6% 0.7% 1.7% 1.5% 13.1% 90% 23.5% 20.1% 20.4% 28.1% 25.4% 80% 14.8% 70% 27.4% 28.1% 60% 29.8% 31.1% 50% 47.7% 40% 65.2% 24.9% 30.1% 30% 42.7% 34.2% % of households of % groupin 20% 10% 19.7% 25.8% 19.9% 6.4% 8.6% 0% 3.3% 2.9% Married couple Cohabiting couple Lone parent Other housheolds All other All households households (no dependent children) Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented Other

Source: 2011 Census

9.61 Overcrowding is often a key theme when looking at the housing needs of households with children and Figure 58 shows that households with children are about four times more likely than other households to be overcrowded using the occupancy rating18. In total, some 9.9% of all households with dependent children are overcrowded and included within this the data shows 9% of lone parent households are overcrowded along with 35% of ‘other’ households with dependent children. Levels of under-occupancy are also very low.

18 For a definition of how this is calculated see http://www.neighbourhood.statistics.gov.uk/dissemination/LeadMetadataDownloadPDF.do?downloadId=188

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Figure 58: Occupancy Rating and Households with Dependent Children

100% 2.3% 6.8% 6.9% 9.3% 4.4% 9.9% 90% 24.1% 80% 35.4% 30.2%

38.3% 70% 48.6% 45.6% 52.9% 60% 40.3% 50% 43.0% 39.4% 40% 43.3% 30% 38.7% 37.2% % ofgrouphouseholds %in 20% 33.8% 33.3% 17.3% 10% 25.9% 11.6% 7.3% 0% 5.8% 4.0% 4.4% Married couple Cohabiting Lone parent Other All other All households All households couple households households (no with dependent dependent children children) +2 or more +1 0 -1 or less Source: 2011 Census data (from NOMIS)

Summary of Findings – Households with Children

9.62 Overall, the data available about family households suggests that this group may be quite polarised. Whilst married couple households have high levels of owner-occupation and may well be slightly better off than the general population the data does point to lone parent (and other) households being more disadvantaged. Given that households with children should be seen as a priority for the Council this points towards ensuring that the housing offer meets the needs of such households and in particular the need to ensure a reasonable quality of housing in the private rented sector.

Young People

9.63 Providing for the needs of younger person households is an important consideration for the Council. Given ageing populations the ability to retain young people in an area can assist in providing a more balanced demographic profile as well as providing a vital part of the local workforce. Young people may however find barriers to accessing housing given typically low incomes and potential difficulties in securing mortgage finance due to deposit requirements. It is also important to consider the specific needs which may arise within this group, particularly in respect of young parents (especially young single parents).

9.64 The demographic projections (linked to the SNPP) suggest that in 2011 there were around 28,100 households headed by someone aged under 35 and that this is set to increase by around 2,100 over the period from 2011 to 2030.

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9.65 As well as households headed by a younger person there will be others living as part of another household (typically with parents). Table 71 shows the number of households in the City with non- dependent children. In total, nearly 10% of households (10,800) contain non-dependent children. This may to some degree highlight the difficulties faced by young people in accessing housing.

9.66 The supply of social housing, lower household incomes and the unaffordability of owner occupation for such age groups all contribute to the current trend for young people moving in with or continuing to live with parents. The benefit changes introduced in 2012 whereby single households aged under 35 living in the Private Rented Sector can only claim the Local Housing Allowance ‘room rate’ is likely to have further restricted housing options for younger people on low incomes.

Table 71: Households with non-dependent children (2011) Household type Number % Married couple 5,724 5.1% Cohabiting couple 824 0.7% Lone parent 4,231 3.8% All other households 101,817 90.4% Total 112,596 100.0% Total with non-dependent children 10,779 9.6% Source: ONS (2011 Census)

9.67 Moving back to study households that are currently headed by a younger person (taken for this analysis as being aged under 34) we can use Census data to look at some key characteristics. Figure 59 shows the tenure groups of these households (compared with other age groups). The data clearly shows that very few younger households are owner-occupiers with a particular reliance on the private rented sector and to a lesser degree social rented housing.

Figure 59: Tenure by age of HRP - Hull

100% 3.6% 1.7% 1.6% 2.7% 4.2% 2.9% 7.2% 9.5% 5.1% 3.5% 7.3% 4.5% 90% 19.3% 19.0% 80% 36.7% 26.5% 34.1% 70% 39.4% 53.1% 25.0% 45.3% 28.1% 60% 8.9% 50% 5.8% 23.1% 33.6% 40% 4.1% 30.1% 30% 47.3% % of households of % groupin 29.0% 49.2% 47.1% 20% 33.9% 38.7% 28.8% 10% 19.9% 8.8% 6.7% 0% 1.9% 2.6% Age 24 and Age 25 to 34 Age 35 to 49 Age 50 to 64 Age 65 to 74 Age 75 to 84 Age 85 and All under over households Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented Other

Source: 2011 Census

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9.68 Census data can also be used to look at economic activity rates; including employment and unemployment levels. Data about this is shown in Figure 60 (again based on the head of household/household reference person age). The data shows that whilst the vast majority of HRPs aged 16 to 34 are in employment there are a notable proportion unemployed or not economically active. A total of 12.9% of HRPs aged 16-34 are unemployed compared with a City-wide figure of just 7.3%.

9.69 Figure 60 however does not tell the full story around unemployment as the data is based on people who are already living in their own household (or in this case are considered as the HRP or head of household). Additional Census data shows that of the population aged 16-24 who are economically active some 16% are unemployed.

Figure 60: Economic activity by age of HRP - Hull

100% 12.0% 11.4% 90% 0.6% 26.0% 5.1% 9.5% 32.9% 80% 12.9% 0.1% 70% 5.4% 1.5% 60% 7.3% 92.5% 50%

40% 78.4% 70.0% 68.5%

30% 58.4% % of households of % groupin 20% 10% 7.3% 0% Age 16 to 34 Age 35 to 49 Age 50 to 64 Age 65 and over All households Working Unemployed Student Other

Source: 2011 Census

Summary of Findings – Young Person Households

9.70 Analysis of younger person households shows a high reliance on rented housing. Younger age cohorts may therefore be forced into private rented (including shared) housing as the only means of meeting their housing needs, aside from residing with parents, where they would not form a head of household. Factors such as a balanced approach to housing in terms of bedroom sizes and property types, along with high standards for shared housing options (including HMOs) will help support younger households to access housing.

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Gypsies and Travellers

9.71 The needs of gypsies and travellers are considered within Hull City Council’s Gypsy, Traveller and Travelling Showpeople Accommodation Assessment 2012. This indicates a current supply of 70 residential pitches. Over the 2012-17 period it identifies that an additional 24 pitches would be needed. Over the longer-term, between 2012/13 – 2027/28, it identifies a total need for 51 additional pitches.

Students

9.72 The higher education sector has been turbulent over the past year with University fee increases from September 2012. It is currently unclear what the impact of this will be on student numbers and, as a result, how this will impact on student housing numbers.

9.73 This increase in fees may result in the University of Hull attracting a higher proportion of local students than previously. It is, therefore, likely that there may be fewer students requiring University accommodation to save money in the context of rising fees.

Student Numbers, Mix and Halls

9.74 Hull University’s website states there are 23,043 students by headcount of which approximately 11% of which are based at the Scarborough campus. There are 2,014 full time international students studying at both campuses, with China the largest market providing 48% of the full time international students. In total the numbers studying in Hull are 20,500 persons.

9.75 Figure 61 shows the increase of the number of students studying at Hull University between 2000/1 – 2010/11 rising from approximately 21,940 students in 2002/3 to over 23,300 in 2011/12 (6%).

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Figure 61: Numbers of Part-Time and Full Time University Students – Hull University (2002/3 – 2011/12)

23500

23000

22500

22000

21500

21000 All Students

20500

20000

19500

2004/5 2009/10 2002/3 2003/4 2005/6 2006/7 2007/8 2008/9 2010/11 2011/12

Source: Higher Education Statistics Agency

9.76 Over this period, the number of part time students has fallen whilst the number of full time students has increased (Figure 62).

Figure 62: Part-Time and Full Time University Students – Hull University (2002/3 – 2011/12)

18000 16000 14000 12000 10000 8000 Full time 6000 Part time 4000 2000

2005/6 2011/12 2002/3 2003/4 2004/5 2006/7 2007/8 2008/9 2009/10 2010/11

Source: Higher Education Statistics Agency

9.77 Figure 63 shows an increase in the number of students by origin. The UK students account for the largest percentage of student numbers (83% of all students in 2011/12) compared to 4% from other

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countries in the EU and 13% from non EU countries. However, the proportion of international students has increased more significantly between 2002/3 – 2011/12 (Other EU students by 29% and Non–EU students by 19%).

Figure 63: Numbers of UK and Non UK Students – Hull University (2002/3 -2011/12)

25000

20000

15000 Non EU 10000 EU UK 5000

2003/4 2008/9 2002/3 2004/5 2005/6 2006/7 2007/8 2009/10 2010/11 2011/12

Source: Higher Education Statistics Agency

Halls of Residence

9.78 The University of Hull has four halls of residence in Hull/ Cottingham (Thwaite Hall, The Lawns Halls, Needler Hall and Taylor Court). It was estimated that there were approximately 2,890 total (student) bed spaces in Hull in 2010 (Table 72).

9.79 The flats within these halls range from flats with single rooms and shared bathrooms to en-suite rooms. Other facilities include the kitchen, car parking and bike storage which vary for each student hall. Most students not living in halls are either living in the private rented sector or are living with their parents.

Table 72: Student Accommodation for University of Hull Students Student Hall Number of Bedspaces / students Thwaite Hall 178 rooms The Lawns Halls 970 rooms - Grant Hall - Reckitt Hall - Nicholson Hall - Lambert Hall - Ferens Hall

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Needler Hall 167 Taylor Court 288 rooms University-owned student houses Rooms for approx. 700 undergraduate and 190 postgraduate students.

Each house accommodates between 4 to 8 students

Head leasing (privately owned, 307 rooms. University managed properties) The Scheme (private, University N / A arranged properties) Source: University of Hull (Accommodation)

9.80 The University has been undertaking a programme of investment and refurbishment of its accommodation. It is currently reviewing its future accommodation needs and accommodation investment programme.

Summary of Key Findings

9.81 The key challenge with older person households will be scale – in particular how to meet the needs of an over 65 population which is expected to grow substantially by 14,100 people (39%) from 2011 to 2030. Whilst many older households will continue to live in general needs housing, often in homes which they may have lived in for many years, a proportion of older persons may need some form of care and support. A growing older population, particularly of those in their late 70s and 80s linked particularly to improvements in life expectancy, can be expected to result for increasing needs for support and for some growth in need for specialist housing or housing with an element of care (such as extra care homes), in both the market and affordable sectors.

9.82 The number of people with disabilities is closely related to the age of the population and many of the conclusions related to older persons are relevant for this group. Demographic projections suggest a 60% increase in the population aged over 85 from 2011 to 2030 with Census data suggesting that 86% of this age group have some level of disability. However, there are other groups under this broad definition which generate specific housing needs and as such there is a need to consider adaptation (and adaptability) in both existing stock and new homes. Provision of more accessible types of accommodation, such as bungalows, may also be of benefit. There are also groups with mental and learning difficulties who are likely to generate a need for supported housing, both in terms of shared housing but also independent living units.

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9.83 Moving forward improvements in technology, including the development of telecare, and a policy approach seeking to deliver personalised care pakages, may however moderate the growth in number of households who need to move to specialist housing. Moving forward the policy emphasis is likely to support an increasing proportion of people requiring care to stay in their own homes.

9.84 The BME population of Hull is relatively small but has grown significantly over the past decade. Characteristics of BME groups (including tenure profiles and occupancy patterns) suggest that such households may be disadvantaged in the housing market. Where possible the Council should provide advice to BME groups and in particular ensure that accommodation quality (particularly in the private rented sector) can meet the needs of such households which are disproportionately likely to contain children.

9.85 Data about family households suggests that lone parents are particularly disadvantaged with a high reliance on rented housing. Projections suggest a small increase in the number of children in Hull over the next few years and if past trends are repeated this will also see a notable increase in the number of lone parents. Again advice about housing options and maintaining a good quality of accommodation will be critical to ensure that such households’ needs are best met and that children are provided with a full range of opportunities (e.g. education) as they grow up.

9.86 Young people (aged under 35) are important for any area due to the long-term economic potential they can bring. As with other groups there are some indications of this group being disadvantaged with a reliance on rented accommodation and high levels of unemployment. Given that the housing options for young people may be more limited than for other groups it will be important to monitor the accommodation quality, particularly in the shared housing sector (such as HMOs) given general trends of an increase in house sharing over time. The specific needs of young lone parents will also need to be considered.

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10 SHMA CONCLUSIONS

10.1 This final section draws together the conclusions of this SHMA Report in respect of overall housing needs, and the evidence regarding need for different types and sizes of homes as well as need from different groups within the population. We can divide the conclusions of the report into two – addressing first issues relating to overall housing need; and then to need for different housing products.

Overall Housing Need

10.2 The NPPF sets the parameters for assessing housing need, outlining that planning should be based on identifying and meeting full objectively-assessed needs for market and affordable housing across the HMA. The expectation is that this will be informed by consideration of housing need and demand, and will be based on meeting need for market and affordable housing in full.

10.3 The conclusions of this SHMA have been framed by the draft Planning Practice Guidance (CLG, Aug 2013) and the approach described therein to assessing housing need. This outlines that the starting point is the latest set of household projections published by CLG – in this case the 2011- based Interim Household Projections.

10.4 The Government’s latest household projections indicate growth of households of around 750 per year over the 2011-21 period. These are however interim projections rather than official statistics and are influenced by migration assumptions which pre-date the release of data from the 2011 Census.

10.5 The draft Practice Guidance outlines that the household projections may require adjustment to take account of the latest evidence and to consider need over longer-term timeframes for strategic planning. This has been done in the development PROJ 1 which takes into account what the 2011 Census shows regarding population trends (and particularly migration) over the 2001-11 period.

10.6 PROJ 1 indicates housing need for 14,440 dwellings (760 per annum) over the 2011-30 period, representing a growth rate of a modest 0.7% in the housing stock.

10.7 The draft Planning Practice Guidance then effectively sets out a number of tests which need to be considered. We can paraphrase these as follows:

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Will the housing numbers support expected growth in jobs, or is there a need to consider increasing housing supply to support economic growth?

10.8 These three tests effectively provide a basis for considering whether it would be appropriate to make an upward adjustment, in the case of this report to the PROJ 1 projections.

10.9 The draft Planning Practice Guidance sets out that “Plan makers should make an assessment of the likely growth 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 … Where the supply of working age population (labour force supply) is less than the projected job growth, this will result in unsustainable commuting patterns and could reduce the resilience of local businesses. In such circumstances, plan makers will need to consider increasing their housing numbers to address these problems.”

10.10 In interpreting the economic-driven projections we are therefore assessing in particular the degree to which they might provide pressure to adjust upwards the assessment of housing need based on past demographic trends.

10.11 The REIU base economic projection forecasts a very small (0.3%) increase in employment between 2011 and 2030. This compares with a 3.0% growth forecast for Humberside and 10.4% across the region (these latter figures provided by Experian). Even taking into account key investment projects and sectors with enhanced growth potential, employment growth of just 2.6% is expected over the period to 2030. Economic performance does therefore not result in any need for an upward adjustment to the demographic-driven projection (PROJ 1). Indeed economic performance clearly represents a downside risk to the SNPP Projection (PROJ 1); with the potential impact of the economy on the housing market illustrated by short-term migration trends (PROJ 3). However PROJ C does clearly demonstrate that the relationship between jobs and homes is very sensitive to changes in employment rates.

10.12 We saw net in-migration into Hull between 2002/3 – 2004/5 but since have seen a net out-migration, with increasing numbers of people moving out since the onset of the economic recession and market downturn in 2008 (Figure 64). Looking forward, modest economic growth could lead to a higher level of out-migration than assumed within the SNPP or PROJ 1. It does not however seem appropriate to plan for a continuation of ‘recessionary’ conditions right through to 2030.

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Figure 64: Net Migration Trends to/from Hull

2500 2000

1500 1000 500 0 2001/2 2002/3 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11 -500

PersonsAnnum per -1000 -1500 -2000

Source: ONS

10.13 The economic projections suggest that the improvements in economic participation assumed in PROJ A and B could be arguably considered optimistic; and that in the absence of employment opportunities we could see higher levels of net out-migration from the City. However whist this should be recognised as a risk, it needs to be balanced against a recognition that housing investment can be a driver of economic growth; that long-term economic forecasting is inherently uncertain and that it is important that planning policies do not constrain or supress housing supply. This is inherent within national policy and guidance.

10.14 The draft Planning Policy Guidance in particular provides very limited scope for the downwards adjustment to assessments of housing need based on economic evidence. Its focus is on considering whether there is a case for an upwards adjustment (which in this case there is not).

10.15 Addressing the market signals, there is no evidence of any substantive constraint on housing formation in Hull. It has some of the lowest housing costs in England, the difference between 2008- and 2011-based headship rates is very modest relative to other areas, and past housing delivery performance points more towards a lack of demand than under-supply of land.

10.16 Figure 8 in Appendix 3 indicates that household sizes have been falling in a linear way, and are projected to continue to do so. There is no indication from this that a restricted supply of housing has been constraining new household formation in Hull. Differences in headship rates between the 2008- and 2011-based household projections in Hull’s case are considered to be relative particularly to differences in changes in household structures associated with international migration to the City over the 2001-11 decade.

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10.17 We then come to the affordable housing needs evidence. The evidence does point towards a notable need for affordable housing. This particularly reflects low incomes and levels of worklessness in the City (given for instance that the size of the affordable sector is above average at 30% of the housing stock). Looking over the period to 2030 a need for 338 affordable homes per annum is identified (net of demolitions and the pipeline of affordable housing); however this assumes that all households who cannot afford market housing would live in affordable housing. In reality the City also has a substantial private rented sector which contributes to meeting part of this identified affordable housing need. Taking this into account, we do not consider that there is a particular case for adjusting upwards the assessment of overall housing need based on the demographic projections.

10.18 Net housing completions over the last decade (against a stronger economic and market context for a significant period than now exists) averaged only 300 homes per annum. There are thus a number of risks to delivery of 760 dwellings per annum (as shown in PROJ 1) in regard to the scale of demand and the degree to which economic performance in particular will support this. However this level of provision is consistent to the Government’s recommended approach to establishing housing need, as set out in the NPPF and draft Planning Practice Guidance.

10.19 To deliver this level of provision would, in our view, need to be supported by a proactive strategy to attract economic investment and deliver regeneration within the City.

10.20 Our assessment of need for 760 homes per annum (14,400 homes over the 2011-30 period) makes no policy-based adjustment with a view to changing migration dynamics with adjoining authorities (such as to reduce out-migration relative to past trends). This Hull SHMA is aligned to East Riding Council’s Local Housing Study Update (Jan 2014). Both studies were consulted on together at a joint stakeholder event in September 2013. East Riding Council’s consultants has confirmed that its assessment of housing need, in the Local Housing Study Update, takes account of demographic and economic trends; and that its recommendations do not assume that there is any adjustment to migration or commuting dynamics between the East Riding and Hull (such as based on policy factors)19. This approach is consistent across the two studies which thus present a consistent evidence base, but one which does not make policy decisions regarding the future distribution of housing provision. Any adjustments to housing provision based on policy aspirations would need to be agreed by the two authorities through the duty to cooperate.

10.21 The SHMA provides an assessment of housing need. It does not set policy targets for future housing provision. To do so, the Council will need to bring the SHMA evidence together with other parts of its evidence base – including relating to land supply and infrastructure – and test options

19 Confirmed through telephone conference call on 17th July 2013; through joint meeting on 3rd September 2013 and in follow-up phone call with GVA on 21st January 2014.

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through Sustainability Appraisal. It will also need to work with other local authorities, and take account as appropriate of any unmet housing needs. The evidence from the SHMA does not point at the point of time of the assessment to particular unmet needs from adjoining authorities, but this issue will need to be kept under review. It will be important that the authorities continue to liaise with one another as plan preparation progresses.

Housing Mix

10.22 Policies for housing mix need to be carefully considered balancing:

Current housing need and demand evidence; Understanding of the overall housing offer and ‘balance’ within this; The degree to which housing can support economic growth; Policy ambitions to develop the housing stock (at both a strategic and local level).

10.23 From the analysis it is clear that within Hull there is a high proportion of smaller properties with one and two bedrooms (47%), within Council Tax Bands A and B (88%), and a high proportion in the social housing sector (30.2%) or rented more generally.

10.24 To ‘rebalance’ the housing offer there is arguably a strategic case for seeking to deliver more larger family homes for owner-occupation. This more aspirational housing, delivered in good quality neighbourhoods, could theoretically have a range of benefits – from improving the council tax base to reducing in-commuting from the East Riding. Perhaps the critical question is the degree to which there are the sites/ land opportunities available to do this (or to what extent)?

10.25 In tenure terms, the City has a high existing level of affordable housing with 30.2% of the housing stock in the social sector in 2011. There remains notable housing need – not least because of economic performance, with low economic participation rates and high unemployment. Improving economic performance, reducing worklessness and increasing the provision of higher-paid employment opportunities would reduce the number of households requiring some form of housing support.

10.26 Taken in context, the housing needs analysis suggests a modest need for additional affordable housing provision in terms of net overall numbers, but a need for new affordable homes in particular to meet specific needs, to improve energy efficiency and the quality of stock. This reflects the substantial existing stock of affordable housing (30.2% of the total housing stock); and a degree of competition between the affordable and private rented sectors for tenants.

10.27 We would expect housing need in the City to be sensitive to economic performance; whereby addressing worklessness and skills has a housing impact. A strategic ambition to bring people back

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into work, if successful, could therefore feed through into housing need. It will be important to consider how housing policy supports this.

10.28 A review of the housing needs and viability evidence would suggest that an affordable housing target in the region of up to 15% might be appropriate. This would be provided through section 106 agreements, and it is recommended that additional mechanisms such as the HCA Affordable Housing Programme be used to deliver additional affordable housing.

10.29 There are thus a range of factors which are relevant in considering policies for the mix of affordable housing sought through development schemes. At a City-wide level, the analysis would support policies for the mix of affordable housing of:

1-bed properties: 35-40% 2-bed properties: 25-40% 3-bed properties: 15-20% 4-bed properties: 5-10%

10.30 The need for different types and sizes of affordable housing will vary by area across the City and over time. In considering the mix of homes to be provided within specific development schemes, the information herein should be brought together with details of households currently on the Housing Register in the City and the stock and turnover of existing properties and policy ambitions for regeneration. The needs analysis in Section 7 may provide some input to this.

10.31 In the market sector there are a range of factors which need to be drawn together. We would expect the demand profile, based on the evidence presented, to be focused towards two- and three-bed properties. Provision of larger four-bed properties would cater more specifically for in-migration households. The following size mix could be appropriate:

5% 1-bed properties 35% 2-bed properties 45% 3-bed properties 15% 4+ bed properties

10.32 The balance will however be influenced by the profile of sites available for development; and we would expect for instance sites such as Kingswood to deliver a higher proportion of 4+ bed homes. This can help to improve the balance in the housing offer; and as our analysis has shown may attract households from outside of the City.

10.33 The analysis of the mix of dwellings should also inform the ‘portfolio’ of sites which are considered through the Local Plan process, including: Site Allocations, Area Action Plans, Neighbourhood Plans and other planning documents. Equally it will be of relevance to affordable housing negotiations.

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10.34 The affordable housing mix identified above is intended to inform strategic planning policies. In applying these to individual development sites regard should be had to the nature of the development site and character of the area, and to up-to-date evidence of need as well as the existing mix and turnover of properties at the local level.

10.35 The Council should also consider whether it is appropriate to set out specific space standards for new development, particularly to encourage provision of decent sized family housing (e.g. 3 bed properties).

Needs of Specific Groups

10.36 The SHMA has considered the needs of various groups within the community which might have specific housing needs. In particular it identifies the need to plan for an ageing population over the period to 2030 in the HMA. The demographic projections indicate a 60% increase in the population aged over 85 from 2011-30 (an increase of over 2,700 persons).

10.37 The evidence in the SHMA suggests as people get older, some may require support including adaptations to their properties to meet their changing needs, and provision of ‘floating’ support. It forecasts a growth of 40% in people with dementia and 40% in people with mobility problems over the period to 2030 (linked in particular to improvements in life expectancy). It will be important that the growth in need is recognised and adequately resourced. Homes can also be designed in accordance with the Lifetimes Homes Standard to enable adaptions to be made to people’s changing needs.

10.38 Many older households will want to remain in their existing homes. However with provision of suitable and attractive properties at the local level some older households may choose to downsize, to reduce property running costs or release equity from their homes. Some of these households may move into housing on the general market, whist some may seek more specifically accommodation targeted at older households (in both the market and affordable sectors). Linked principally to the ageing of the population, the SHMA also estimates that households which include people with a disability can be expected to increase by 39% over the period to 2030. This would provide a rationale for policies seeking or supporting provision of housing for older people within development schemes, and a potential need to provide support for adaptions to existing stock.

10.39 A proportion of the growing older population will have more specialist needs. The SHMA suggests that of the housing need identified, there is a need for around 145 units per annum of specialist housing (both market and affordable) for older people (sheltered and extra care).

10.40 The wider SHMA analysis suggests that there are some groups within the population who are disadvantaged to some degree in accessing housing. These include BME households which are

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more likely to be overcrowded and living in rented accommodation (in part related to younger age structures in BME communities), low income lone-parent households and young people. These issues can be partly addressed by housing policy, including through ensuring access to advice about housing options and a range of good quality housing options.

Summary of Key Findings

10.41 Table 73 summarises the headline findings of the SHMA.

Table 73: Hull SHMA Headline Findings

Factor Key Findings

Objectively-Assessed Housing Net increase of 14,400 homes between 2011-30 Need: Hull City (760 net homes per annum)

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The SHMA recommends a strategic policy at a City-wide is identified for monitoring purposes of:

1-bed properties: 35-40%

2-bed properties: 25-40%

3-bed properties: 15-20%

4+ bed properties: 5-10%

1-bed properties: 5%

2-bed properties: 35%

3-bed properties: 45%

4+ bed properties: 15%

Development schemes which contribute to diversifying the housing offer at a local level, and City-wide, should be encouraged.

Specialist Housing The SHMA identifies that some specialist housing may be needed to meet the needs of some households in the City, including those with learning and physical disabilities and older households.

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