Housing Need and Demand Assessment (HNDA) A Practitioners Guide (2026)

Key Points for HNDA Managers

Guidance Aim

To give step-by-step guidance on how to produce an HNDA and use the HNDA Tool (Excel) to estimate the number of additional housing units, by tenure, that may be needed in twenty years.

It should be used in conjunction with the HNDA Manager’s Guide, the HNDA Tool Instruction and the HNDA Datapack as provided to Local and Planning Authorities by the CHMA. These will all be refreshed.

HNDAs and the Housing-Planning Process

HNDAs are designed to give broad, long-run estimates of what future housing need might be, rather than precision estimates. They provide an evidence-base to inform housing policy decisions in Local Housing Strategy (LHS) and LDPs.

The Tool output is one part of an HNDA: the full HNDA includes evidence on specialist housing need and stock profile, pressures and management issues. All parts are required for housing policy and planning decisions.

HNDAs should be around 100 pages for unitary authorities but somewhat longer for city regions where authorities are working together jointly. When referring to HNDA results the term is ‘housing estimate’ Not ‘housing requirement’

The housing-planning process is a sequence with each step informing the next. Therefore, a detailed timeline should be put in place jointly by housing and planning officials to ensure that each step takes place at the right time.

What Geographies are Used?

It is for Local Authorities to decide the geographic level at which HNDAs should be undertaken.

Housing Market Areas

HNDAs may be undertaken at Housing Market Area (HMA) level of which there are just over 100 across Scotland. HMAs are a widely accepted and used geography that is appropriate for the analysis of housing markets The HMAs are pre-programmed into the HNDA Tool, as provided by local authorities, and they allow a more localised estimate of need. In terms of the HNDA Tool outputs, HMAs are the lowest geography possible based on how disaggregated the input datasets are i.e. only one of the inputs, house price, is available at data zone level i.e. that would enable sub-HMA outputs.

If within HMAs there are any specific rurality considerations these should be set out in the relevant chapter of the HNDA. After national data sources and local administrative data sources have been exhausted, but there is still a need for more evidence, local studies or surveys should be considered. The CHMA can provide advice on gathering local data. Consideration should also be given to ensuring community representation either through stakeholder consultation or membership of the HMP. A paper on evidencing rurality and housing will be made available on the CHMA website shortly after the first set of guidance is published.

Rural and Island Considerations

The Local Housing Strategy (LHS) Guidance 2026 sets out that local authorities should consider the distinct nature, and characteristics of rural and island areas and any challenges related to existing housing supply, housing services and/or the supply of new homes.

The National Planning Framework 4 (NPF4) includes policy 17 on rural housing which sets out that LDPs should be informed by ‘locally specific needs and market circumstances in rural and island areas’ and that ‘LDPs should set out tailored approaches to rural housing’.

In addition, policy 15 highlights that the approach for local living in LDPs should take into account ‘local context, consider the varying settlement patterns and reflect the particular characteristics and challenges faced by each place.’ These policies provide the inbuilt flexibility for local authorities to plan at the diverse scales their communities require.

Islands local authorities should ensure that the distinct needs and circumstances of their island communities are fully considered and reflected in the HNDA. This includes Shetland Islands Council, Orkney Islands Council, and Comhairle nan Eilean Siar, as well as local authorities such as Argyll and Bute Council, Highland Council and North Ayrshire Council which include both mainland and island communities.

The Islands (Scotland) Act 2018 introduced measures to support and help meet the unique needs of Scotland's islands. Under the Islands Act, Scottish Ministers are required to produce a National Islands Plan outlining the measures they will implement to improve outcomes for island communities.

The Scottish Government published a new National Islands Plan in February 2026. Increased availability of affordable and suitable homes is one of strategic objectives in the document.

The Plan includes a range of outcomes which island local authorities are encouraged to consider when developing an LHS.

Island local authorities should also have regard to their duties in the Island (Scotland) Act 2018. This includes the completion of Island Communities Impact Assessments (ICIAs) in relation to any policy, strategy or service that is likely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities) in the area in which the authority exercises its functions.

If within HMAs there are any specific considerations concerning rural and island communities these should be set out in the relevant chapter of the HNDA.

To complement national and local administrative data, local authorities should consider drawing on local studies and surveys to evidence housing requirements in rural and island communities. Consideration should also be given to ensuring community representation either through stakeholder consultation or membership of the HMP. Communities hold knowledge that can be of critical value in assessing local housing needs and demand.