Wiltshire Council Strategic Housing Market Assessment

Transcription

1 Wiltshire Council Strategic Housing Market Assessment December 2011 A report initiated by Fordham Research and completed by RS Drummond-Hay MRICS ACIH RS Drummond-Hay MRICS ACIH Bellgate, Casterton Kirkby Lonsdale, Cumbria. LA6 2LF

2 Important Notice RS Drummond-Hay MRICS ACIH has prepared this report for the sole use of Wiltshire Council in accordance with the proposal and instructions under which our services were performed. No other warranty, expressed or implied, is made as to the professional advice included in this report or any other services provided by us. This report may not be relied upon by any other party without the prior and express written agreement of RS Drummond-Hay MRICS ACIH. Some of the conclusions and recommendations contained in this report are based upon information provided by others (particularly Fordham Research) and upon the assumption that all relevant information has been provided by those parties from whom it has been requested. Information obtained from third parties has not been independently verified by RS Drummond-Hay MRICS ACIH, unless otherwise stated in the report. The recommendations contained in this report are concerned with the housing market, affordable housing and planning policy, guidance and regulations which may be subject to change. They reflect a Chartered Surveyor s perspective and do not reflect or constitute legal advice. Certain statements made in the report may constitute estimates, projections or other forward-looking statements and even though they are based on reasonable assumptions as of the date of the report, such forward-looking statements, by their nature, involve risks and uncertainties that could cause actual results to differ from the results predicted. RS Drummond-Hay MRICS ACIH does not guarantee or warrant any estimate or projections contained in this report. RS Drummond-Hay MRICS ACIH Bellgate, Casterton Kirkby Lonsdale Cumbria. LA6 2LF simon@drummond-hay.co.uk / COPYRIGHT This report is the copyright of RS Drummond-Hay MRICS ACIH. Any unauthorised reproduction or usage by any person other than the addressee is strictly prohibited

3 Table of Contents Table of Contents... i Executive Summary... v Information base for analysis... v Character of the population... v Housing market areas in Wiltshire... vi Housing market prices and rents... viii Housing need and meeting it... ix The needs of particular groups... x Urban/rural comparisons... xii Affordable Rent... xii Balancing the housing market... xiv Overall level of newbuild... xv Policy implications and issues... xv 1. Introduction... 1 Background... 1 The Brief... 2 Range of evidence used in this study... 5 Analysis contained in this report Primary data collection... 9 Introduction... 9 Gathering the data... 9 Sub-area analysis Weighting the dataset Quality, accuracy and data protection Demographic and economic context Population Tenure profile Employment Income Dwelling stock The current housing market Introduction i

4 Relative prices The cost of housing in Wiltshire Analysis of housing market gaps Defining the Housing Market Area Interviews with Estate and Letting Agents Agents views on Wiltshire s Housing Markets Wiltshire s housing markets Housing need Summary Introduction Current need Future need Affordable housing supply Location of housing need Type of affordable accommodation required Size of affordable housing required Sensitivity analysis Local Housing Allowance & the impact of household benefit cap The existence of a benefit trap Particular household groups Summary Households with support needs Older persons Black and Minority Ethnic (BME) households Sexual orientation Families with children Young people Rural as compared with urban housing Summary Introduction Rural housing policy background Wiltshire s rural area Household characteristics Financial situation Travel patterns Affordable Rent: scope in Wiltshire Summary Introduction ii

5 Affordable Rent: a new tenure The impact on social rents Local Housing Allowance Understanding Affordable Rent Understanding the private rented sector in Wiltshire Estimating the Affordable Rent Affordable Rents compared to open market rents Affordability of Affordable Rent Supply of affordable housing to meet Affordable Rent What is the need for Affordable Rent? Generating new affordable dwellings vs. meeting need Current Grant Funding Development Economics of Affordable Rents Value of Affordable Rented Homes The use of relets What level should the Affordable Rent be set at? Improving market balance over the longer term Summary Introduction Demographic projections Relating the ONS projections to the Council s work Adequacy of the housing stock Tenure of housing required Size of housing required within each tenure Future specialist housing needs LTBHM outputs in 2016 and Reconciling future estimates for affordable housing Tenure required if a 30% affordability threshold is used : Policy Implications & Monitoring Introduction Final housing market areas for policy Housing Need Particular groups Rural issues Affordable Rent New affordable housing required Type and tenure of new housing required over the period Effect of total numbers changes Monitoring Glossary iii

6 Appendix 1: Housing costs by sub-area Appendix 2: Sub-area and Community Area outputs Introduction Sub-Areas Community Areas Appendix 3: HMA characteristics Introduction Patterns in accommodation type Patterns in household circumstance Patterns of work and travel Patterns in previous homes evidence Type of home sought The choice of home Overview Appendix 4. Search patterns Past moves: size and type of dwelling considered Past moves: tenure choice and outcome Past moves: maximum price and actual purchase price Past moves: maximum rent and actual rent Search pattern areas Reasons for moving and reasons for choosing Satisfaction with housing and life Planned future moves Conclusions Appendix 5: Estate Agents Observations Appendix 6: Stakeholder discussion of the report s findings Minutes of Wiltshire and Swindon Housing Market Partnership meeting: item on Wiltshire SHMA List of attendees at the Partnership Meeting Appendix 7: Questionnaire iv

7 Executive Summary 1. The 2011 Strategic Housing Market Assessment (SHMA) is the first study of this type to be carried out across the authority of Wiltshire. The study conforms to the key CLG Guidance (PPS3 Housing 2010 and Practice Guidance Version 2 (2007)). It also takes account of the new Coalition Government s agenda in including a detailed examination of Affordable Rent. Information base for analysis 2. This study draws on a variety of sources to provide a substantial evidence base. These include the policy framework, secondary data, primary data from a new household survey and qualitative information from several stakeholder consultations and a large number of interviews with estate and letting agents in the County. 3. The household survey was a substantial piece of new research that provides an up-to-date information source on the Wiltshire housing market. It was carried out by a postal survey. The questionnaire was designed in consultation with the Steering Group to meet the requirements of the Brief for the study and those of the CLG Guidance. Some 26,500 questionnaires were sent out, and a total of 5,948 households completed the survey. This is more than enough for a robust analysis of the Council area and relevant Community Areas and sub-areas. The dataset has been weighted so as to be representative of the household population of the County, using ONS 2008 household projections alongside other robust secondary data. Character of the population 4. The total estimated Wiltshire population and household numbers are presented in the table below. They show significant growth over the past decade. The 193,000 households are contained within just over 200,000 dwellings: there are always some vacancies due to the movement of the population around the stock. There is no significant issue of property being empty for lack of demand or unfitness. As can be seen, average household size has declined slightly since 2001, from 2.45 to Table ES1 Household and population change, 2001 to 2008 and *** % change Households* 177, , , % Population** 432, , , % Average household size *CLG household estimates **ONS mid-year population estimates *** Data for 2011 are projections, not estimates v

8 5. The figure below shows the tenure profile in Wiltshire compared to the region and England as a whole. The figures show that Wiltshire s tenure profile more closely resembles that of the South West region rather than the national one. Figure ES1 Tenure (2001) Wiltshire 31.1% 40.9% 14.3% 7.9% 5.8% South West England 34.1% 29.2% 39.5% 39.0% 13.5% 19.3% 9.6% 8.8% 3.8% 3.2% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Owner-occupation (no mortgage) Owner-occupation (with mortgage) Social rented Private rented Other 6. There were 179,000 employee jobs in Wiltshire in The number of jobs has increased by over a tenth (12.6%) since The number of VAT registered businesses in the County at the end of 2007 was 18,370; this is an increase of 3,670 since 1997 (25.0%). The median earned income for full-time employed Wiltshire residents in 2010 was 25,392. Housing market areas in Wiltshire 7. Our analysis of the housing markets in existence in Wiltshire was based on existing (secondary) sources, discussions with stakeholders (mainly estate agents in this case) and analysis of the household survey. Our conclusions about housing markets in Wiltshire were at two levels (housing market area (HMA) and sub-market), as shown on the next map. The following is a list of the main HMA and sub-market areas which are mapped below: Housing Market Area The South the area to the south of Salisbury Plain. This area is centred on Salisbury and looks south. Salisbury Plain is a relatively sparsely populated area that forms a natural geographic boundary with areas to the north. Salisbury itself is sufficiently distinct from the rural areas and the towns to the west of it to justify being identified as a sub-market within this wider market. The West the area to the west of Devizes and Calne. The division of northern part of the County is broadly into two. Devizes and Calne can sit quite comfortably in either so have been defined as a single sub-market. The Northwest has strong links with the City of Bath and the major regional centre of Bristol. The M4 and links to the M5 are strong influences on this market. vi

9 The East the area to the east of Devizes and Calne. This part of the County looks towards the prosperous towns of Reading and Newbury and even further away to Oxford and London. Swindon in the northeast is a very strong influence on this part of the County. The areas close to Swindon have also been recognised as a separate sub-market. Distinct sub-markets Salisbury Plain This a distinct place overlapping the bottom portion of the Northeast and Northwest market areas. It is sparsely populated and those towns within the area tend to be lower priced areas than the remainder of the County. The area is not completely selfcontained however. The presence of the numerous military camps and towns and the emerging Super Garrison set the area a little apart from the rest of the County. Salisbury City is a relatively small city that it is in the heart of the southern market area that we have identified. Since much of the area is rural we have designated Salisbury a separate sub-market. Outer Swindon Swindon is a large and growing town. Swindon s boundaries are drawn closely to the edge of the built up area and so its influence on neighbouring villages outside its administrative area is strong. Devizes and Calne are similar in terms of housing market areas as they are both major towns in central Wiltshire. Devizes and Calne can sit quite comfortably in either the Northwest or the Northeast so have each been defined as a single sub-market. vii

10 Figure ES2 Wiltshire s Housing markets Housing market prices and rents 8. As can be seen from the figure below, Wiltshire is, on average, a high priced Council area: higher than both the England and South West averages. viii

11 Figure ES3 Land Registry price changes (mean) Average price 300, , , , ,000 Wiltshire South West England 50, This is consistent with its rural character (discussed below): the price differentials are significant between urban and rural housing. Figure ES4 Entry-level purchase price by size of dwelling 300, ,931 Entry-level purchase price 250, , , ,000 93,195 81, , , , , ,315 50, bed 2 bed 3 bed 4 bed Rural Urban Housing need and meeting it 10. The estimated net annual housing need across Wiltshire is 3,862 households. The largest net need is found in West Towns followed by North and Central Rural. The number of households in need would decrease from 3,862 to 2,721 if 30% of gross household income rather than 25%, were spent on housing. ix

12 11. The data suggests that almost half of new affordable housing should be Affordable Rent, 36.8% Shared Ownership and 14.6% social rented properties in terms of affordability. However, the actual proportion of Affordable Rent and shared ownership built should be determined by local demand. Some 46% of the net need is for one bedroom accommodation, 28% for two bedroom dwellings and a quarter for homes with three or more bedrooms. 12. There has recently been a reduction in the overall limit ( cap ) on benefit paid to help households with their rent (local Housing Allowance (LHA)) from the median private rented value to the 30th percentile. An overall benefit cap based on the average income of working households is also potentially going to be introduced. We examined the likely effect of these changes in Wiltshire. We found that the LHA cap is unlikely to affect many households. The total benefit cap may affect a few hundred households across the Council area, especially those requiring four-bed or larger dwellings. 13. We also analysed the issue of a benefit trap: whether the benefit system creates a substantial disincentive to enter employment by resulting in a fall in overall income from doing so. We found that there was a trap for very low income jobs, where the pay would not make up for benefits lost, but not for medium and higher earning jobs. The Coalition Government is planning to introduce a Universal Credit system where graduated payments mean that households will always be better off in employment. The needs of particular groups 14. There is a substantial analysis of the various particular groups identified in Guidance as requiring examination. There are an estimated 41,465 households in Wiltshire with one or more members in an identified support needs group - this represents 21.5% of all households. Just under half (43.2%) of all social rented dwellings contain a person with a support need. Support needs households report a lower than average income per head and are less likely to be able to afford market housing. x

13 Figure ES5 Proportion of households within tenure containing a support needs member 50.0% 43.2% 40.0% 30.0% 20.8% 20.0% 11.8% 15.0% 10.0% 0.0% Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented 15. Some 54,484 households in Wiltshire contain only older 1 people (28.2%) and a further 14,622 (7.6%) contain both older and non-older people. Less than a quarter (22.7%) of older person households are unable to afford market housing in Wiltshire. 16. Black and Minority Ethnic (BME) households tend to be more likely to live in rented accommodation. About two thirds of households where the household head is non-white are renters, compared to 36.6% among White British households. 17. Non-heterosexual households were considerably more likely to be private renters, and less likely to own their house without a mortgage 18. There are 54,582 households which contain at least one child in Wiltshire. Of these 17.8% are lone parent families, 53.2% are two parent families with at least one young child (aged 9 or under) and 28.9% are two parent families with only older children (aged 10-18). 78.4% of single parent families live in social/private rented accommodation About 8,995 households in Wiltshire (4.7%) are estimated to be composed entirely of people under 30 and do not contain children. Half of young households (51.4%) live in the private rented sector. 1 Older people are defined as those over the state pension eligibility age (currently 65 for men, 60 for women). xi

14 Urban/rural comparisons 20. The Defra definition of rural allows settlements under 10,000 to exist within rural areas. By this measure about 20% of England s population live in rural areas. In Wiltshire the figure is 69%. We created an urban/rural typology for Wiltshire, which was used to analyse and understand the differences across the County using the household survey data. 21. There a high concentration of pensioners in rural areas. Lone parents and single non-pensioners decline as rurality increases. Income and capital (savings and equity) are higher in rural areas than in urban Wiltshire. 22. Car ownership is higher in rural areas among both high and low income families. Rural households are both most likely to work from home and to travel outside of Wiltshire for work. Area Not in employment Table ES2 Commuting by typology Work from home / mobile worker Work in local area* Work elsewhere in Wiltshire Work outside Wiltshire Urban % 7.2% 22.2% 21.8% 15.6% 51,462 Urban % 7.2% 20.5% 22.9% 13.5% 46,893 Urban % 5.7% 24.5% 24.6% 20.5% 12,620 Rural % 8.8% 12.7% 15.4% 26.5% 16,576 Rural % 15.3% 9.5% 22.3% 21.4% 65,448 Countywide Total 33.0% 10.0% 16.8% 21.9% 18.3% 193,000 * working in an area which is both in the same Community Area and sub-area Affordable Rent 23. Flexible Tenancies are being introduced as a new tenure. They will not give the tenant security of tenure for life and will allow Affordable Rent to be charged. Affordable Rent will be based on the open market value of each property and the intention is that it should be set at 80% of this value. We modelled the potential cost of Affordable Rent at 80% of median of the middle market of private rents. We also worked out equivalent costs for Affordable Rent at 70% and 60%. 24. The ability of these products to be afforded by suitable households could then be tested. The following table shows how many households on the Register (only some of whom will be in housing need as defined by CLG) can afford Affordable Rent at 80% of the median, and down to 60% of the median: xii

15 Table ES3 Affordability of households on housing register Households on Register % of households on Register Market housing 4, % Shared Ownership (75%) % Shared Ownership (50%) 1, % Affordable Rent at 80% % Affordable Rent at 70% 1, % Affordable Rent at 60% 2, % Social rent % Need LHA 6, % Total number of households 18, % 25. This table shows that very few households on the Register could afford Affordable Rent at 80%, that could not also afford a shared ownership property. If the Affordable Rent were set at 60% the potential demand for it (excluding those able to afford shared ownership) from households on the Register is 3,130. If the Affordable Rent level were set at 70%, it would generate a potential demand from 1,150 households. 26. The housing needs model suggests that the future annual supply of affordable dwellings will consist of 97 shared ownership homes, 2,282 social rented properties and 9 Affordable rent units. If all social rented re-lets were converted to Affordable Rent the supply of this tenure could be 2,291 units per year. The registered housing providers in Wiltshire are currently considering converting 50% of all social rented relets to an Affordable Rent tenure. This would lead to a potential supply of 1,150 homes per year. This is exactly the same as the potential demand for Affordable Rent at 70%. 27. Using these figures, the most sensible rate at which to set Affordable Rent is: 70%. If this fails to generate sufficient demand from the Register a rate of 60% would be more appropriate. 28. We examined the costs of building various kinds of affordable housing. The following diagram illustrates the level of profit or subsidy involved in them. As can be seen, it is not possible to build Affordable Rent at below 80% without subsidy. The level of subsidy required for 70% and 60% Affordable Rent is not great compared with social rent. Moreover if existing social relets are converted to Affordable Rent there is a net profit (when considering future income streams). If Affordable Rent were set at 70%, one conversion of a social relet to Affordable Rent would pay the net subsidy required to build 5 dwellings of at the same price. This is quite an efficient trade off. xiii

16 Figure ES6 Development Surplus by Tenure (3 Bedroom) 50,000 44,624 40,000 32,577 30,000 20,000 19,984 10,000 7,392-41,376 2,947-3,976-7,853-16,253-29,553-26, ,000-20,000-30,000 Freehold Purchase Shared Ownership 60% Shared Ownership 50% Shared Ownership 40% Open Market Rent Affordable Rent 80% Affordable Rent 70% Affordable Rent 65% Affordable Rent 60% Affordable Rent 50% Social Rent - 40,000-50,000 NB this table takes into account the varying land price paid by developers for different types of housing land. Balancing the housing market 29. In order to provide a long term view of the changes required to the housing stock, the Long Term Balancing Housing Markets model (LTBHM) has been developed. This takes the population and household projections and, adjusting occupation patterns to ensure all households are adequately housed, determines an ideal stock profile for Wiltshire in The overall ONS forecast for households is 34,000 in Wiltshire. The LTBHM suggests that about 55% of the additional housing should be market housing and 45% affordable. However in terms of subsidy cost the affordable housing would be much cheaper to produce than the traditional social housing. About 40% of it would be shared ownership and 60% Affordable Rent. There is hardly any net requirement for social rent over the period. Tenure Table ES4 Tenure of new accommodation required in Wiltshire over the next 15 years Current tenure profile Tenure profile 2026 Change required % of change required Market 148, ,701 18, % Shared Ownership 825 6,642* 5, % Affordable Rent 0 8,907 8, % Social rented 16,757 LHA 26,454 } 43, % Total 193, ,000 34, % *Indicates the ability of households to afford Shared ownership rather than the demand for this tenure, which is particularly low in Wiltshire. xiv

17 31. In terms of size of new homes required over the next 15 years, most of the market and shared ownership housing should be of 2- and 3-bed sizes. The other major element, Affordable Rent, has a requirement spread mainly over the 1- to 3- bed range. Overall level of newbuild 32. Whilst the LTBHM model has been based on the ONS population and household projections which indicate household growth of 34,000 in Wiltshire over the next 15 years, the Council have now adopted a target of 37,000 new homes across the County between 2006 and This equates to 27,188 new dwelling between 2011 and 2026, once dwellings that have been completed in the last five years have been taken into account. This does not affect the proportions of tenure and size mix discussed in the previous subsection; the proportionate results of the LTBHM can be adjusted to the lower target being pursued by the Council. Policy implications and issues 33. The final chapter of the SHMA reviews policy implications. It is of course for the Council to set policy, studies such as this provide only part of the evidence base. However some implications are drawn out in this chapter. They include: i) Housing need is quite high, and although relatively lower in rural areas, it is there that the policy issue is strongest. That is because of the very low supply in rural areas. The two main rural areas (West and South) have affordable relet supply of (well) below 20%. Of urban areas only Trowbridge shows this pattern. It is common in England to find low affordable supply in rural areas due to the effects of Right to Buy on the former affordable stock in villages. Clearly this is an important policy issue. ii) In relation to particular groups the outstanding policy issue is the ageing population. One response to that which is available in Wiltshire concerns equity release for the many older owner-occupiers. This is likely to become an ever more important policy issues. This is especially true given the high older population in rural parts of Wiltshire. iii) Affordable Rent could be a valuable tenure in Wiltshire. We suggest that a level of 70% of median market rent, rather than the standard 80%, would be the best level. However this is just a policy suggestion: there are several possible choices. iv) In terms of recommended tenure split, the existing 40% target could be maintained or increased slightly. In relation to the types of affordable housing the evidence suggests 40% shared ownership and 60% Affordable Rent, but there is not historically been a high level of take-up for shared ownership products within Wiltshire, at least on the types of sites on which it has been made available. It may be that this is an issue for policy consideration. v) The analysis throughout the SHMA has found that there are three housing markets areas in Wiltshire. The map below depicts how they correspond to the Community Areas and should be defined in terms of housing policy. xv

18 Figure ES 7 Comprehensive Housing Market Areas in Wiltshire xvi

19 1. Introduction Summary i) This Strategic Housing Market Assessment (SHMA) report is a comprehensive analysis of the Wiltshire Housing Market. It includes a review of the current local situation, a discussion of the housing market dynamics and suggested policy responses. This Strategic Housing Market Assessment (SHMA) is a key element of the evidence base for developing the Wiltshire Local Development Framework (LDF). ii) The report follows the general structure of the CLG Strategic Housing Market Assessment Practice Guidance of August The research has been carried out to the requirements of Planning Policy Statement 3 (PPS3) and Planning Policy Statement 12 (PPS12). The document also takes account of changes since the publication of the main CLG Guidance; in particular as regards Affordable Rents, the new social tenure and reforms to Local Housing Allowance. iii) A range of evidence was used to inform the outputs of this study. This includes data from a survey of local households (primary data), secondary sources a consultation with key stakeholders in the County and face-to face-interviews with estate/letting agents. Background 1.1 Wiltshire Council is a Unitary Authority. It is a substantially rural county, though containing a number of towns and a city within it. The following map from the 2009 Draft South West Spatial Strategy shows the four districts of the former two tier County (Swindon being excluded from the new authority and also the scope of the present study). 1.2 The recent change in administrative status inevitably revealed that the existing district studies of the housing market and housing needs in Wiltshire were not consistent across the County. After some consideration it was decided by the Council to carry out a new household survey to enable analysis across the whole area of the new authority and provide a robust up-to-date information source on the local population. 1

20 Figure 1.1 Market areas in Wiltshire Source: Draft South West Spatial Strategy This study a key element in the developing Wiltshire Local Development Framework (LDF), and is designed to be a robust part of the information base for that framework. This is a substantial piece of work that will inform the Council s wider planning and decision making particularly concerning housing. 1.4 Early in 2011 Wiltshire Council commissioned Fordham Research to undertake this Strategic Housing Market Assessment (SHMA). Fordham Research ceased trading on 20th July 2011 and the business was closed. Wiltshire Council then commissioned RS Drummond-Hay MRICS ACIH to complete the report. The Brief 1.5 The Brief requires a robust study, covering the whole of the County: The aim of this study is to deliver robust evidence to inform and justify policy proposals relating to housing, capable of withstanding scrutiny at an Examination in Public, and which is fully compliant with appropriate planning guidance, in particular, PPS3 and the SHMA PGv2 (page 8 of Request for Quotation) 2

21 1.6 The most specific output required by PPS 3 (and echoed at greater length in the Practice Guidance (Figure 1.1 of the Practice Guidance Version 2)) is: Based on the findings of the Strategic Housing Market Assessment and other local evidence, Local Planning Authorities should set out in Local Development Documents: i) The likely overall proportions of households that require market or affordable housing, for example, x% market housing and y% affordable housing ii) iii) The likely profile of household types requiring market housing e.g. multi-person, including families and children (x %), single persons (y %), couples (z %) The size and type of affordable housing required. [Planning Policy Statement 3: Housing (June 2010) paragraph 22] 1.7 The following table lists the detailed requirements of the Guidance and where they are found in the report: 3

22 Table 1.1 Practice Guidance Steps in Wiltshire HMA Report Chapter of the SHMA report Step identified in the Practice Guidance Version 2 (August 2007) Page in Practice Guidance Ch 1 Step National and Regional Economic Policy 20 Ch 3 Step Demography and Household Types Step Employment Levels and Structure Step Incomes & Earnings Step Dwelling Profile Step Stock Condition Step Shared Housing and Communal Establishments Ch 4 Step The cost of buying or renting a property 26 Ch 3, 4 Ch 5,8 Step Affordability of housing Step Overcrowding and Under-Occupation Step Vacancies, Available Supply and Turnover by Tenure Step Homeless households and those in temporary accommodation Step Over-crowding and concealed households Step Other groups Step Total current housing need Step New household formation Step Proportion unable to afford entry-level market housing Step Existing households falling into need Step Total newly arising need Step Affordable dwellings occupied by households in need Step Surplus stock Step Committed supply of new affordable units Step Units to be taken out of management Step Total affordable housing stock available Step Future annual supply of social re-lets (net) Step Future annual supply of intermediate affordable housing Step Future annual supply of affordable housing units Step Choices with the existing affordable housing stock Step Requirement for affordable housing of different sizes Step The private-rented sector Step Estimate of net annual housing need Ch 7, App 4 Step Trends and drivers 33 Ch 9 Step 4.1 Projecting changes in the future numbers of households Step 4.2 Future Economic Performance Step 4.3 Future affordability Ch 6 Specific Groups (no formal steps) Ch 10 Step Issues for future policy/strategy Step 4.4 Bringing the evidence together Step Key issues for future policy/strategy Step Joining across the assessment Throughout Step Mapping market characteristics and future growth 32 Source: CLG Practice Guidance

23 1.8 To this are added various requirements of the Localism Act. The most notable for the purposes of this study is Affordable Rent. This new social tenure is the main object of planned future housing investment by the HCA (Homes and Communities Agency) so we have included a detailed analysis of it s potential scope within chapter 8. Range of evidence used in this study 1.9 In accordance with Practice Guidance a range of data sources were used to create a robust and diverse evidence base. In addition to the use of data, information was gathered from a number of relevant publications and through discussions with local stakeholders. Below we provide a brief summary of the main sources of information used in this report: 1.10 Secondary data: There are a range of data sources already available at the local, regional and national level which provide a good background to the housing market and how it is changing. Data sources considered in analysis include Land Registry data, the 2001 Census, the Annual Survey of Hours and Earnings (ASHE), Housing Strategy Statistical Appendix (HSSA) data and published household/population projections. In addition, a number of relevant documents were reviewed to inform the policy context in which the Wiltshire housing market exists Primary data: In addition to studying secondary data sources it was necessary to conduct a local household survey for Wiltshire. The survey data allowed many of the gaps in secondary data to be filled. Most notably the survey data established how households act within the housing market and an understanding of why they do so. It should be noted that the survey dataset is wide-ranging, and; the analysis presented in this report is mostly restricted to those issues directly related to the functioning of the housing market. However, the dataset is available to the Council for use in further research. The methodology used to collect and validate the data that forms the household survey is described in chapter Estate agent information: A key part of the project was a series of face-to-face interviews with estate/letting agents in the local area. The dynamics of the housing market (e.g. what types of households are seeking properties) were discussed at these interviews, which provided a good overview of what has actually been happening locally. The interviews were supplemented by an internet property/rent price search to establish the costs of housing in the local area Stakeholder consultation: Stakeholder views have been sought through the process and incorporated into the study. Stakeholders were consulted at two events, one prior to the survey analysis, in order to inform and direct the work, and one afterwards to obtain feedback on the results. The notes from these meetings are contained at Appendix The production of the SHMA has been an iterative process; the views of stakeholders have been necessary to help the research evolve. The resultant document addresses the particular situation in Wiltshire in addition to presenting the outputs required by both PPS3 and the Practice Guidance. 5

24 1.15 An SHMA is designed to be an ongoing process, and the Steering Group will build on the relationships developed through discussions both before and during the present SHMA process to ensure the sustained involvement of a wide range of agencies in developing further understanding of the Wiltshire housing market. Analysis contained in this report 1.16 This SHMA report presents a comprehensive analysis of the Wiltshire Housing Market. It contains two housing models, each with a different objective. Chapter 5 presents the CLG housing need model, calculated in accordance with (chapter five of) the Practice Guidance. This assesses the absolute need for affordable housing in Wiltshire using established definitions. The outputs produced enable comparison with previous estimates and estimates made in other areas of the country. The model is an analysis of the situation now A second model, the Long Term Balancing Housing Markets model (LTBHM) is detailed in Chapter 9 of the report. This model considers the nature of housing required in Wiltshire over the longer plan period (the majority of outputs address changes required over fifteen years). This model addresses the full housing market rather than focusing principally on the affordable sector. Whilst the two models address different aspects of the housing market, the results from both of them are used together to inform the suggested policy responses that are presented in chapter 10 of this document The full structure of the report is: Chapter 2 sets out the approach to data collection and sample validation of the household survey, which forms a crucial component of the evidence base used in this report and therefore needs to be transparently described. This chapter also introduces the sub-areas and Community Areas that the County has been divided into to provide lower-level analysis. The results of the lower-level analysis are presented in Appendix 2. Chapter 3 of the report provides socioeconomic context to the study area based primarily on secondary data. The chapter presents the latest background information available on the local population, the labour market in the County and the nature of the housing stock Chapters 4 examines the housing markets in Wiltshire in considerable detail. The chapter establishes the cost of different tenures of housing and how they vary across the County. It considers the evidence for different housing markets that exist in Wiltshire before concluding on a typology that best fits the County. This chapter is supported by Appendix 3 which provides more detail on the evidence of the housing market boundaries concluded. Appendix 4 further investigates the search patterns used by households to determine what time of home they move to, which provides considerable insight into the dynamics of the Wiltshire housing market. As indicated above Chapter 5 contains the results of the CLG housing need model in Wiltshire. Chapter 5 also considers the changes to the Local Housing Allowance cap, identifying the number of households in Wiltshire likely to be affected. 6

25 1.20 The household survey is a vast resource and contains robust information on subsets of the population as well as the County as a whole. Chapter 6 therefore provides detailed analysis of the housing market situation of various sub-groups of households that the Practice Guidance indicates as appropriate for specific consideration. These include ethnic minorities, support needs groups, pensioners, younger people and families Wiltshire is a large and diverse County and there are a range of ways that it can be logically divided to present data at a more geographically detailed level. This includes the sub-area and Community Area analysis noted above, but the dataset can also be disaggregated by the rurality of the location. This enables a comparison of the rural and urban areas of Wiltshire. This is presented in chapter Chapter 8 introduces the new tenure of Affordable Rent and assesses it s ability to meet housing need. The chapter goes on to consider the relative viability of different Affordable Rent options before concluding at what level that it should usefully be set at. As described above chapter 9 presents the Long Term Balancing Housing Markets model. Finally chapter 10 summarises the key conclusions of the report and the potential policy actions that these imply are presented for consideration. 7

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27 2. Primary data collection Summary i) Primary data analysed within the report is based on a postal questionnaire completed by Wiltshire residents in February The survey was distributed to a stratified random sample of 26,500 households in the County. A total of 5,948 households completed the survey. The dataset is weighted using ONS 2008 household projections alongside other robust secondary data. ii) The study was designed to provide outputs for two sets of areas; comprehensive outputs for eleven sub-areas, and descriptive outputs for each of twenty Community Areas. Introduction 2.1 A household survey was undertaken in Wiltshire in February This was a substantial piece of new research and provides an up-to-date information source on the Wiltshire housing market. The household survey provides primary data that can be used to undertake statistical analysis of the area. It forms a major part of the evidence base used to produce this SHMA, therefore it is important to explain how this household survey was conducted and the data collected used. Gathering the data 2.2 The postal questionnaire survey was sent to 26,500 households across Wiltshire. These households (the sample) were drawn at random from the Council Tax Register, covering all areas and tenure groups in Wiltshire. Although random, the sample was stratified in order to achieve a sufficient response rate for each of the sub-areas and Community Areas the Council wanted to provide individual analysis for (shown below). The total sample of 26,500 was calculated as the minimum required for this level of analysis. 2.3 The survey included questions intended to examine current housing circumstances, the detail of past and future moves, and the general situation of the household (e.g. number of children, income, education levels). A copy of the questionnaire is provided in Appendix 7. In total 5,948 completed postal surveys were returned. This is significantly in excess of the 1,500 per local authority recommended by the Practice Guidance and allows reliable analysis at a County-wide and sub-area level. The overall response rate to the survey was good at 22.4%. 9

28 Sub-area analysis 2.4 The study was designed to provide outputs for two sets of areas; comprehensive outputs for eleven sub-areas, and descriptive outputs for each of twenty Community Areas. The eleven sub-areas used are shown in the table and map below. The sub-areas are intended to separate out urban and rural areas, and provide insights into the housing circumstances at this scale. Many of the smaller towns have been grouped together in order to allow statistically robust analysis. Table 2.1 Sub-areas in Wiltshire Sub-area name Areas contained Bradford-on-Avon Chippenham Devizes Rural North and Central North Small Towns North Towns Salisbury Salisbury Plain Rural South Trowbridge West Towns Bradford-on-Avon Chippenham Devizes Rural areas in the former districts of Kennet, North Wiltshire and West Wiltshire Cricklade, Malmesbury, Marlborough and Pewsey Calne, Corsham and Wootton Bassett Salisbury and Wilton Amesbury, Bulford, Durrington, Larkhall, Ludgershall and Tidworth Rural areas in the former district of South Wiltshire, including Mere, Tisbury and Downton Trowbridge Melksham, Warminster and Westbury Source: Wiltshire Council (2011) 10

29 Figure 2.1 Sub-areas in Wiltshire Source: Wiltshire Council (2011) 2.5 Descriptive analysis was also possible for the Community Areas of Wiltshire, shown on the map below. These areas are used by the Council for various administrative and statistical purposes. Survey outputs for these both the sub-areas and the Community Areas are provided in Appendix 2 11

30 Figure 2.2 Community Areas in Wiltshire Source: Wiltshire Council (2011) 2.6 The response rate to the household survey varied from 27.3% of surveys returned in Bradford-on- Avon to 18.0% in the military part of Salisbury Plain. Overall, the number of responses to the survey in each area was sufficient to provide accurate analysis at the level originally envisaged. 12

31 Weighting the dataset 2.7 The dataset is weighted so that the survey response best reflect all households in the area studied. Weighting a dataset is a process whereby every response to the survey is assigned a number, equivalent to the number of real households in the County it is taken to represent. Where a type of household is thought to be over-represented in the response to the survey, the number attached to this group of respondents (the weight ) is lowered. On the other hand if a type of household is thought to be under-represented in the survey response, they are assigned a higher weight. 2.8 This process uses secondary data to determine the real numbers of households in particular categories. For example, the number of households living in social rented housing is known by the Council, and so the data can be weighted to reflect this, compensating for this group having a lower or higher response rate than average. 2.9 It is particularly important to determine the total number of households in the County. To determine the number of households in 2011, we used the ONS 2008-based household projections (published in 2010). The estimated total number of households in 2011 in Wiltshire used by the report is therefore 193, The other variables used to weight the data are listed below, alongside an indication of the secondary data source the appropriate profile was derived from. Secondary data sources are projected forward where possible to produce estimated figures for tenure: Wiltshire Housing Strategy Statistical Appendix (HSSA) (2011), Census (2001), English Housing Survey (EHS) (2009) sub-areas: Wiltshire Council Tax Registers (2011) Council Tax Band: Wiltshire Council Tax Registers (2011) household type: ONS 2008-based household projections (2010), Census (2001) population age groups: ONS 2008-based population projections (2010), Census (2001) accommodation type: Census (2001), Survey of English Housing (2008), English Housing Survey (EHS) (2009) car ownership: Census (2001), National Travel Survey (2009) As an example, the table below shows an estimate of the current tenure split in Wiltshire and also the sample achieved for each tenure. The data shows that in 2011 around 62.7% of households are owner-occupiers with 19.2% living in the social rented sector and 18.1% resident in private rented accommodation. 13

32 Table 2.1 Number of households in each tenure group: changes since the 2005 HNA Tenure Weighted SHMA data Total number of households % of households Unweighted SHMA data Total number of households % of households Owner-occupied (no mortgage) 65, % 2, % Owner-occupied (with mortgage) 55, % 2, % Social rented 37, % % Private rented 35, % % Total 193, % 5, % Source: Wiltshire SHMA, (2011) Quality, accuracy and data protection 2.12 Quality is paramount to work carried of this type. The methodology used is established and has always found to be robust. The work has been undertaken by people with considerable knowledge and experience in their field The data entry system (used for inputting the data from postal questionnaires) has built-in logic checks that come into effect if illogical data are inputted. This is important to ensure the accuracy of the data as it cannot be assumed to be precise without careful checking and, where necessary, correction. On receipt of inputted data we apply various checks. By carrying out such checks we ensure that all data sets are logical and correct All the information that respondents provide is treated as confidential and used only for the purpose of this SHMA. This report contains grouped responses only (i.e. does not provide results for any individual household). The household-level dataset which is supplied to the Council is anonymous; addresses of properties surveyed are not supplied The postal questionnaires forms contain a unique reference number for each household sampled, from which the Project Manager can identify the respondent s postcode. This enables the number of responses in each ward or sub-area to be ascertained The files containing ID numbers and address details are saved in separate locations in order to safeguard against computer fraud. Names of respondents are never requested (and are not provided to us in the first instance), to comply with the Data Protection Act RS Drummond-Hay MRICS ACIH is data protection registered. 14

33 3. Demographic and economic context Summary i) The household population in Wiltshire in 2011 is 462,000 and the number of households is 193,000. The population as a whole and the number of resident households in Wiltshire appears to have been increasing at a similar rate since The average household size in the County has remained stable at 2.4 persons per household. ii) Levels of owner-occupation are generally high in all areas except Salisbury and Chippenham. The far south west of the County has the highest proportion of private rented accommodation. iii) There were 179,000 employee jobs in Wiltshire in The number of jobs has increased by over a tenth (12.6%) since The number of VAT registered businesses in the County at the end of 2007 was 18,370; this is an increase of 3,670 since 1997 (25.0%). The median earned income for full-time employed Wiltshire residents in 2010 was 25,392. iv) HSSA data indicates that the overall increase in the housing stock in Wiltshire over the period 2000 to 2010 was lower than experienced regionally but higher than the national rate. 3.1 Two of the main drivers of the housing market are the resident population and the local labour market. They affect the nature of housing demand including household formation rates and households investment in housing. This chapter documents the current socio-economic profile in Wiltshire and recent trends that have occurred. The information presented compares the circumstances in the County to the regional and national situation. This provide useful background knowledge before the local housing market is examined in more detail in subsequent chapters. Population 3.2 Between 1981 and 1991, the population of Wiltshire increased slightly slower than was the case regionally. However since 1991, the population increase in Wiltshire has been greater than the increase in the population of the South West. Since 1981 the rate of population increase in Wiltshire and across the South West has been consistently greater than that of England as a whole. Between 1981 and 2009, the increase in population in Wiltshire was 21.6%. Regionally, the increase was 19.3% and nationally 10.7%. 15