Coastal West Sussex Strategic Housing Market Assessment Update
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Coastal West Sussex Strategic Housing Market Assessment Update Final Report November 2012 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 Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 Contents Section Page EXECUTIVE SUMMARY 13 1 INTRODUCTION 31 2 DEFINING THE SUB REGIONAL HOUSING MARKET 33 3 POLICY CONTEXT 47 4 HOUSING STOCK & SUPPLY TRENDS 57 5 SOCIO ECONOMIC CHARACTERISTICS 73 6 HOUSING MARKET DYNAMICS 97 7 NEED FOR AFFORDABLE HOUSING 115 8 FUTURE HOUSING REQUIREMENTS 157 9 REQUIREMENTS FOR DIFFERENT SIZES OF HOMES 207 10 CONCLUSIONS AND RECOMMENDATIONS 251 LIST OF FIGURES FIGURE 1: SUSSEX COAST SUB-REGIONAL HOUSING MARKET 15 FIGURE 2: AFFORDABLE HOUSING STOCK, 2007 & 2011 16 FIGURE 3: HOUSEHOLD INCOME REQUIRED TO BUY OR RENT A 2-BED PROPERTY 19 FIGURE 4: HOUSEHOLDS IN AFFORDABLE HOUSING NEED (2011-16) 20 FIGURE 5: NEED FOR DIFFERENT TYPES OF AFFORDABLE HOUSING (2011-16) 22 FIGURE 6: PROPOSED MIX OF AFFORDABLE HOMES 24 FIGURE 7: MAIN DEMOGRAPHIC PROJECTIONS FOR SUSSEX COAST HOUSING MARKET, 2011-31 25 FIGURE 8: STRATEGIC HOUSING MARKETS DEFINED IN CLG RESEARCH 35 FIGURE 9: LOCAL HOUSING MARKETS DEFINED IN CLG RESEARCH 36 FIGURE 10: NET INTERNAL MIGRATION: 2005-10 37 FIGURE 11: NET INTERNATIONAL MIGRATION, 2005-10 37 FIGURE 12: COMBINED NET MIGRATION 38 GL Hearn Page 2 of 264 J: \Planning\Job Files\J027340 - Coastal West Sussex SHMA\Reports\Final Reports - Jan 2013\Final SHMA Main Report (22-02-13-nxi).doc Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 FIGURE 13: GROSS MIGRATION FLOWS BETWEEN LOCAL AUTHORITIES 39 FIGURE 14: PRICES FOR A STANDARD PROPERTY, SPRING 2012 41 FIGURE 15: HIERARCHY OF HOUSING MARKETS 43 FIGURE 16: SUB-AREAS USED IN THIS REPORT 44 FIGURE 17: HOUSING STOCK, 2011 57 FIGURE 18: CHANGES TO HOUSING STOCK, 2001-11 58 FIGURE 19: TENURE, 2011 58 FIGURE 20: AFFORDABLE HOUSING STOCK, 2007 AND 2011 59 FIGURE 21: TENURE, 2001 59 FIGURE 22: TENURE BY SUB-AREA, 2001 60 FIGURE 23: TENURE CHANGES ACROSS THE SOUTH EAST, 2000-2010 61 FIGURE 24: HOUSE TYPES, 2001 61 FIGURE 25: HOUSE TYPE PROFILE – SUB-AREAS 62 FIGURE 26: SIZE OF HOMES, 2001 63 FIGURE 27: SIZES OF HOMES – SUB-AREAS 64 FIGURE 28: DWELLINGS BY COUNCIL TAX BAND, 2011 65 FIGURE 29: DWELLINGS BY COUNCIL TAX BAND – SUB-AREAS 66 FIGURE 30: OVERCROWDING & UNDER-OCCUPATION, 2001 66 FIGURE 31: VACANCY, 2011 67 FIGURE 32: SECOND AND HOLIDAY HOMES, 2007 67 FIGURE 33: SECOND AND HOLIDAY HOMES BY SUB-MARKET, 2008 68 FIGURE 34: NET HOUSING COMPLETIONS, 2003/4 – 2010/11 69 FIGURE 35: NET COMPLETIONS, 2001/2 – 2010/11 69 FIGURE 36: HOUSING COMPLETIONS BY SIZE OF PROPERTY, COASTAL WEST SUSSEX 70 FIGURE 37: HOUSING COMPLETIONS BY SIZE OF PROPERTY, DISTRICTS (2006-11) 71 FIGURE 38: INDEX OF POPULATION GROWTH ACROSS THE HOUSING MARKET AREA 73 FIGURE 39: INDEX OF POPULATION GROWTH 2000-10, DISTRICTS 74 GL Hearn Page 3 of 264 J: \Planning\Job Files\J027340 - Coastal West Sussex SHMA\Reports\Final Reports - Jan 2013\Final SHMA Main Report (22-02-13-nxi).doc Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 FIGURE 40: POPULATION AGE STRUCTURE 2010 75 FIGURE 41: POPULATION AGE STRUCTURE 2010 – DISTRICTS 75 FIGURE 42: ETHNIC COMPOSITION OF POPULATION, 2009 76 FIGURE 43: CHANGES IN ETHNIC COMPOSITION, 2001-2009 77 FIGURE 44: HOUSEHOLD COMPOSITION, 2008 77 FIGURE 45: CHANGES IN HOUSEHOLD COMPOSITION, 1998-2008 78 FIGURE 46: CHANGES IN THE POPULATION AGE STRUCTURE, 1998-2008 79 FIGURE 47: ECONOMIC PRODUCTIVITY (GVA PER HEAD), 1997-2009 80 FIGURE 48: WORKPLACE EARNINGS (FULL-TIME WORKERS) 81 FIGURE 49: EARNINGS DIFFERENTIALS, 2011 82 FIGURE 50: COMMUTING DYNAMICS, 2008 83 FIGURE 51: JOBS DENSITY, 2007 AND 2010 84 FIGURE 52: TOTAL EMPLOYMENT, 2008-10 85 FIGURE 53: EMPLOYMENT GROWTH, 2000-10 86 FIGURE 54: SELF-EMPLOYMENT 87 FIGURE 55: BUSINESS DENSITY, 2010 87 FIGURE 56: ECONOMIC STRUCTURE – COASTAL WEST SUSSEX, 2010 88 FIGURE 57: EMPLOYMENT RATE 90 FIGURE 58: EMPLOYMENT RATE – COASTAL WEST SUSSEX 91 FIGURE 59: UNEMPLOYMENT, OCT 2010-SEP 2011 92 FIGURE 60: JSA CLAIMANTS, MARCH 2012 92 FIGURE 61: QUALIFICATIONS OF RESIDENT ECONOMICALLY-ACTIVE POPULATION, 2010-11 93 FIGURE 62: OCCUPATIONAL PROFILE, 2010-11 94 FIGURE 63: UNDERSTANDING HOUSING DEMAND 97 FIGURE 64: LONG-TERM HOUSE PRICE TRENDS, UK & SOUTH EAST 99 FIGURE 65: MORTGAGE ADVANCES, UK 100 FIGURE 66: DEPOSIT REQUIREMENTS AS PERCENTAGE OF PURCHASE PRICE, UK 101 GL Hearn Page 4 of 264 J: \Planning\Job Files\J027340 - Coastal West Sussex SHMA\Reports\Final Reports - Jan 2013\Final SHMA Main Report (22-02-13-nxi).doc Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 FIGURE 67: AFFORDABILITY OF MARKET HOUSING – MORTGAGE PAYMENTS AS PERCENTAGE OF INCOME 102 FIGURE 68: MEDIAN HOUSE PRICES, 1996-2007 103 FIGURE 69: MEDIAN HOUSE PRICE, 2008-11 104 FIGURE 70: HOUSE PRICES BY PROPERTY TYPE 105 FIGURE 71: HOUSE PRICE DIFFERENTIALS RELATIVE TO SOUTH EAST AVERAGE (SPRING 2012) 106 FIGURE 72: PRICES & PRICE CHANGES FOR A STANDARD PROPERTY 107 FIGURE 73: QUARTERLY SALES TRENDS, 1997-2008 108 FIGURE 74: SALES BY PROPERTY TYPE, FEB-APRIL 2012 109 FIGURE 75: PEOPLE IN THEIR 20S LIVING IN PRIVATE RENTED ACCOMMODATION, ENGLAND 111 FIGURE 76: FIRST-TIME BUYER AND BUY-TO-LET LENDING, ENGLAND 111 FIGURE 77: ENTRY-LEVEL PURCHASE PRICE BY DISTRICT 118 FIGURE 78: ESTIMATED ENTRY-LEVEL PURCHASE PRICE BY SUB-AREA 119 FIGURE 79: VOLUME OF PROPERTIES ADVERTISED FOR SALE 120 FIGURE 80: ENTRY-LEVEL PRIVATE RENTS BY DISTRICT 121 FIGURE 81: ESTIMATED ENTRY-LEVEL PRIVATE RENTS BY SUB-AREA (PCM) 121 FIGURE 82: VOLUME OF PROPERTIES ADVERTISED FOR RENT 122 FIGURE 83: MAXIMUM LHA PAYMENTS BY SIZE AND MARKET AREA 123 FIGURE 84: MONTHLY AVERAGE SOCIAL RENT LEVELS IN THE COASTAL WEST SUSSEX HMA 123 FIGURE 85: COST OF AFFORDABLE RENTED HOUSING BY SIZE AND SUB-AREA (PER MONTH) 124 FIGURE 86: AVERAGE SOCIAL RENT AS PROPORTION OF LOWER QUARTILE MARKET RENT 124 FIGURE 87: INDICATIVE INCOME REQUIRED TO PURCHASE/RENT WITHOUT ADDITIONAL SUBSIDY 125 FIGURE 88: DIFFERENCES IN INCOME REQUIRED TO BUY/RENT, 2011 (2 BEDROOM) 126 FIGURE 89: DISTRIBUTION OF HOUSEHOLD INCOME IN COASTAL WEST SUSSEX (2011) 127 FIGURE 90: HOUSEHOLD INCOME LEVELS BY DISTRICT 127 FIGURE 91: DISTRIBUTION OF HOUSEHOLD INCOME IN COASTAL WEST SUSSEX HMA 128 FIGURE 92: LOWER QUARTILE PRICE INCOME RATIOS BY SUB-AREA (PRICES BASED ON 2 BED HOME) 129 GL Hearn Page 5 of 264 J: \Planning\Job Files\J027340 - Coastal West Sussex SHMA\Reports\Final Reports - Jan 2013\Final SHMA Main Report (22-02-13-nxi).doc Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 FIGURE 93: ESTIMATED PROPORTION OF HOUSEHOLDS UNABLE TO AFFORD MARKET HOUSING WITHOUT SUBSIDY 130 FIGURE 94: OVERVIEW OF BASIC NEEDS ASSESSMENT MODEL 131 FIGURE 95: HOUSING REGISTER APPLICANTS BY DISTRICT (AND SUB-AREA) 132 FIGURE 96: HOUSING REGISTER HOUSING NEED BY DISTRICT (AND SUB-AREA) 133 FIGURE 97: ESTIMATED CURRENT HOUSING NEED (BACKLOG) BY DISTRICT (AND SUB-AREA) 134 FIGURE 98: ESTIMATED BACKLOG NEED BY DISTRICT (AND SUB-AREA) 135 FIGURE 99: ESTIMATED LEVEL OF HOUSING NEED FROM NEWLY FORMING HOUSEHOLDS (FIVE YEAR PERIOD) BY DISTRICT (AND SUB-AREA) 137 FIGURE 100: ESTIMATED LEVEL OF HOUSING NEED FROM EXISTING HOUSEHOLDS (2011-16) BY DISTRICT (AND SUB-AREA) 138 FIGURE 101: ESTIMATED FUTURE AFFORDABLE HOUSING NEED (2011-16) BY DISTRICT (AND SUB-AREA) 139 FIGURE 102: ANALYSIS OF PAST HOUSING SUPPLY - ADUR 140 FIGURE 103: ANALYSIS OF PAST HOUSING SUPPLY - ARUN 141 FIGURE 104: ANALYSIS OF PAST HOUSING SUPPLY - CHICHESTER 141 FIGURE 105: ANALYSIS OF PAST HOUSING SUPPLY - WORTHING 142 FIGURE 106: ESTIMATED SUPPLY OF AFFORDABLE HOUSING FROM EXISTING STOCK (2011-16) BY DISTRICT (AND SUB-AREA) 143 FIGURE 107: ESTIMATED LEVEL OF AFFORDABLE HOUSING NEED (2011-16) EXCLUDING PIPELINE 144 FIGURE 108: ESTIMATED AFFORDABLE HOUSING NEED (2011-16) INCLUDING PIPELINE 145 FIGURE 109: NUMBER OF PEOPLE CLAIMING LHA IN PRIVATE RENTED SECTOR (SEPTEMBER 2009 AND DECEMBER 2011) 146 FIGURE 110: ESTIMATED LHA SUPPORTED LETTINGS IN THE PRIVATE RENTED SECTOR TO UNIQUE HOUSEHOLDS OVER FIVE YEARS 146 FIGURE 111: CATEGORIES OF AFFORDABLE HOUSING USED FOR ANALYSIS 150 FIGURE 112: INCOME RANGE FOR ACCESS TO INTERMEDIATE HOUSING 150 FIGURE 113: ESTIMATED LEVEL OF HOUSING NEED (2011-16) BY TYPE OF AFFORDABLE HOUSING (NUMBERS) 151 FIGURE 114: ESTIMATED LEVEL OF HOUSING NEED (2011-16) BY TYPE OF AFFORDABLE HOUSING (%) 152 FIGURE 115: ESTIMATED LEVEL OF HOUSING NEED (2011-16) BY TYPE OF AFFORDABLE HOUSING (PERCENTAGES) – INTERMEDIATE/AFFORDABLE RENT THRESHOLD SET AT 70% OF MARKET COSTS 153 GL Hearn Page 6 of 264 J: \Planning\Job Files\J027340 - Coastal West Sussex SHMA\Reports\Final Reports - Jan 2013\Final SHMA Main Report (22-02-13-nxi).doc Coastal West Sussex Strategic Housing Market Assessment Update, November 2012 FIGURE 116: LHA LEVELS AT MEDIAN AND 30TH CENTILE (JUNE 2010) 154 FIGURE 117: OVERVIEW OF METHODOLOGY 158 FIGURE 118: PAST TRENDS IN NET MIGRATION (2000-2010) 160 FIGURE 119: FORECAST ANNUAL GROWTH IN GVA, 2011-31 161 FIGURE 120: FORECAST EMPLOYMENT GROWTH, 2011-31 161 FIGURE 121: INTERACTION BETWEEN DEMOGRAPHIC AND ECONOMIC FORECASTS 162 FIGURE 122: FORECAST EMPLOYMENT GROWTH BY SECTOR, COASTAL WEST SUSSEX 163 FIGURE 123: FORECAST CHANGES IN RESIDENCE-BASED EMPLOYMENT, 2011-31 164 FIGURE 124: POPULATION OF COASTAL WEST SUSSEX HMA (5 YEAR AGE BANDS) – 2011 165 FIGURE 125: AGE PROFILE (2011) – SUSSEX COAST HOUSING MARKET 166 FIGURE 126: AGE PROFILE (2011) – WIDER HOUSING