Issues and Options Stage
Strategic Housing Market Assessment
(Part 1)
2016
Durham County Council
Final Report June 2016
Main Contact: Michael Bullock Email: [email protected] Telephone: 0191 386 0026 Website: www.arc4.co.uk
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Table of Contents Executive Summary ...... 7 1. Introduction ...... 11 Background and objectives ...... 11 National Planning Policy Framework (NPPF) requirements ...... 11 Planning Practice Guidance ...... 12 Definitions ...... 14 Geography ...... 15 Presentation of data ...... 19 Report structure ...... 19 2. Policy and strategic review ...... 21 Introduction ...... 21 Local strategic priorities ...... 21 Concluding comments ...... 23 3. Defining the Housing Market Area ...... 24 Introduction ...... 24 House prices and rates of change in house prices ...... 25 Relative affordability ...... 28 Household migration and search patterns ...... 29 Travel to work trends ...... 34 Concluding comments ...... 35 4. Establishing an objectively assessed need for housing ...... 36 Introduction ...... 36 Demographic Starting Point ...... 36 Adjusting household projection-based estimates: demography ...... 36 Adjusting household projection-based estimates: economic assumptions ..... 37 Economic Forecasts ...... 38 Market signals ...... 38 Establishing an Objectively Assessed Housing Need ...... 43 5. County Durham housing market review ...... 44 Introduction ...... 44 Estimates of current dwellings in terms of size, type, condition, tenure ...... 44 Tenure characteristics ...... 51 Development profile of market dwellings ...... 61 Key market drivers ...... 63 Current households in need...... 67 Affordable housing requirements ...... 72 6. The need for all types of housing...... 77 7. Conclusion: policy and strategic issues ...... 85
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The Housing Market Area ...... 85 Establishing an Objectively Assessed Housing Need ...... 85 The current housing market ...... 86 Housing markets and mobility...... 86 Future housing market ...... 87 NPPF requirements ...... 89 Final comments ...... 90 Introduction to Technical Appendices...... 91 Technical Appendix A: Research Methodology ...... 92 Technical Appendix B: Policy Review ...... 95 Technical Appendix C: Estate and letting agent review of the housing market ...... 108 Technical Appendix D: Housing need calculations ...... 117 Technical Appendix E: Monitoring and updating ...... 131 Technical Appendix F: National Planning Policy Framework and Planning Practice Guidance Checklist ...... 134
List of Tables Table ES1 Net annual affordable housing imbalance by property size and designation 2016/17 to 2020/21 ...... 9 Table ES2 Summary of open market dwelling stock and preferences ...... 10 Table 3.1 Comparative house price change 2000-2015 with neighbouring Districts, the North East and England ...... 25 Table 3.2 Relative affordability of lower quartile (LQ) prices by district (residence based) ...... 28 Table 3.3 Relative affordability of median prices by district (residence base) ...... 29 Table 3.4 Origin of moving households ...... 30 Table 3.5 Origin of moving households ...... 31 Table 3.6 Residential mobility – movement between different tenures ...... 33 Table 3.7 Residential mobility – profile of properties moved into by type and size ...... 33 Table 3.8 First choice destination of households planning to move in next five years ...... 34 Table 4.1 Housing Market Signals ...... 39 Table 4.2 Housing Market Signals in comparator districts, region and England ...... 40 Table 4.3 Dwelling completions 2002/03 to 2014/15 ...... 42 Table 5.1 Dwelling stock and occupancy across County Durham ...... 44
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Table 5.2 Property type and size of occupied dwellings across County Durham ...... 45 Table 5.3 Dissatisfaction with state of repair by monitoring area, property tenure, age and type ...... 48 Table 5.4 Lower Quartile and median price and income required to be affordable ...... 51 Table 5.5 Profile of private rented sector in County Durham ...... 54 Table 5.6 High income household dwelling aspirations and expectations ...... 59 Table 5.7 Open market dwelling stock and preferences ...... 62 Table 5.8 Summary of open market dwelling stock and preferences ...... 62 Table 5.9 Comparison between current dwelling stock and market aspirations ...... 63 Table 5.10 Primary market drivers ...... 63 Table 5.12 Ranking of proposed priorities by key stakeholders ...... 65 Table 5.13 Housing need in County Durham ...... 68 Table 5.14 Households in need across County Durham ...... 69 Table 5.15 Housing need by tenure ...... 69 Table 5.16 Housing need by household type ...... 70 Table 5.17 Homeless decisions and acceptances 2010/11 to 2014/15 ...... 70 Table 5.18 Characteristics of households previously homeless ...... 71 Table 5.19 Net annual affordable housing imbalance by property size and designation 2016/17 to 2020/21 ...... 72 Table 5.20 Tenure preferences of existing households in need and newly- forming households requiring affordable housing ...... 73 Table 5.21 Property type preferences ...... 73 Table 6.1 Property type preferences – Families ...... 79 Table 6.2 Older persons’ housing options ...... 80 Table 6.3 Client groups accommodated in social rented sector in County Durham 2010/11 to 2012/13 ...... 81 Table 6.4 All student households in County Durham ...... 83 Table A1 Summary of dwelling stock ...... 93 Table C1 CLG Needs Assessment Summary for County Durham ...... 119 Table C2 Summary of current housing need across County Durham ...... 120 Table C3 Homeless decisions and acceptances 2010/11 to 2014/15 ...... 121 Table C4 Lower quartile house prices by ward (2015) ...... 122 Table C5 Annual social rented re-lets and intermediate sales/re-sales ...... 127 Table C6 Gross annual affordable housing imbalance by Local Plan Monitoring Area, property size and designation 2016/17 to 2020/21 ...... 128
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Table C7 Net annual affordable housing imbalance by Local Plan Monitoring Area, property size and designation 2016/17 to 2020/21 ...... 129 Table C8 Affordable tenure preferences ...... 129 Table C9 Ability of existing households in need and newly-forming households requiring affordable housing to afford intermediate tenure dwellings ...... 130 Table C10 Property type preferences ...... 130
List of Figures Figure 3.1 Median house price trends 2000 to 2015: County Durham, the North East and England ...... 26 Figure 4.1 Dwelling completions and targets 2004/5 to 2014/15 ...... 42 Figure 5.1 Property type by Local Plan monitoring area ...... 46 Figure 5.2 Property size by Local Plan monitoring area ...... 47 Figure 5.3 County Durham: tenure profile of occupied dwellings ...... 49 Figure 5.4 County Durham tenure profile by Local Plan monitoring area ...... 50
List of Maps Map 1.1 County Durham context ...... 16 Map 1.2 County Durham Local Plan monitoring areas ...... 17 Map 3.3 Median house prices 2015 by ward ...... 27
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Please note that in this report some of the tables include rounded figures. This can result in some column or row totals not adding up to 100 or to the anticipated row or column ‘total’ due to the use of rounded decimal figures. We include this description here as it covers all tables and associated textual commentary included. If tables or figures are to be used in-house then we recommend the addition of a similarly worded statement being included as a note to each table used.
This report takes into account the particular instructions and requirements of our client. It is not intended for and should not be relied upon by any third party and no responsibility is undertaken to any third party. arc4 Limited accepts no responsibility or liability for, and makes no representation or warranty with respect to, the accuracy or completeness of any third party information (including data) that is contained in this document.
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Executive Summary
Introduction The Issues and Options Stage County Durham Strategic Housing Market Assessment (SHMA)(Part 1) provides the latest available evidence to help to shape the future planning and housing policies of the area. The study will help inform the production of the Council’s Local Plan and Housing Strategy. This research provides an up-to-date analysis of the social, economic, housing and demographic situation across the area. In particular, the June 2016 SHMA (Part 1) considers the Housing Market Area of County Durham and affordable housing need. Objectively Assessed Housing Need will be considered in the Preferred Options Stage SHMA (Part 2), later in 2016. The June 2016 SHMA (Part 1) has comprised: A review of existing (secondary) data; The preparation of demographic and dwelling forecasts by Edge Analytics; A refresh of the 2012 Household Survey data, which was completed by 6,216 households, representing an 17.8% response rate; An online survey of key stakeholders; and Interviews with estate and letting agents. The findings from the study provide an up-to-date, robust and defensible evidence base for policy development which conforms to the Government’s National Planning Policy Framework (NPPF, 2012) and National Planning Practice Guidance (NPPG), Housing and economic development needs assessments (last updated April 2016).
Housing market context House prices Median prices in County Durham have been consistently slightly lower than median prices for the North East, which are well below those for England as a whole. Overall, prices have increased from £47,500 in 2000 to £100,000 in 2015, an increase of 111%. Prices peaked at £107,000 in 2007 but have since fluctuated and fallen slightly. During 2015, median prices across County Durham were £100,000 and lower quartile prices were £62,000.
Dwelling stock Across County Durham there are a total of 239,685 dwellings and a total of 226,322 households1. Overall, the 2012 Household Survey (refreshed to 2015) shows that:
1 2015 Council Tax data
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79.4% of properties are houses, 15.0% are bungalows, 5.0% are flats/maisonettes, and 0.4% are other property types (e.g. caravans); 6.0% have one bedroom/bedsit, 35.2% have two bedrooms, 43.8% have three bedrooms and 15.0 % have four or more bedrooms; 18.2% of properties were built before 1919, a further 16.2% were built between 1919 and 1944, 21.4% between 1945 and 1964, 22.7% between 1965 and 1984, 15.1% between 1985 and 2004 and 6.3% have been built since 2005; and 65.86% of properties are owner-occupied, 20.20% are affordable and 13.94% are private rented.
Demographic drivers The population of County Durham is estimated to be 520,200 in 2015 and this is projected to increase by 7.0% to 556,700 by 2037. Over the next few decades, there will be a marked increase in the number and proportion of residents aged 65 and over which is expected to increase by 45.7% from 104,300 in 2015 to 152,000 in 2037.
Economic drivers Across County Durham, 45.0% of households receive less than £300 each week, 22.3% receive between £300 and £500 each week and 32.7% receive at least £500 each week. In terms of travel to work, the 2011 Census indicates that 69.5% live and work in County Durham, 8.9% in Newcastle and Gateshead, 7.3% in Sunderland, 1.7% elsewhere in Tyne and Wear and 8.3% in Tees Valley. A further 1.1% work in Northumberland, 1.2% in Yorkshire and the Humber, 0.4% in the North West and 1.6% elsewhere in the United Kingdom.
Market areas An analysis of 2011 Census migration data suggests that 72.0% of moving households originated from within County Durham and 69.5% of the workforce live and work within the County. Planning Practice guidance suggests that a housing market area can be defined with reference to household movement, and an area where typically 70% of moves take place can be described as being self-contained. Therefore, County Durham can be described as a self-contained housing market on the basis of migration patterns and similarly travel to work patterns indicate that the majority of economically active residents live and work in County Durham. Evidence would therefore confirm that County Durham is an appropriate Housing Market Area for the purposes of Local Plan policy making.
Objectively Assessed Housing Need The National Planning Policy Framework requires that local planning authorities identify Objectively Assessed Housing Need and that Local Plans translate those needs into land provision targets. Paragraph 159 of the NPPF recognises that the
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 9 objective assessment of housing need must be one that meets household and population projections, taking account migration and demographic change; meets the need for all types of housing including affordable, and caters for housing demand and the scale of housing supply necessary to meet that demand. The June 2016 SHMA (Part 1) sets out the method by which an OAN can be derived. OAN will be identified within the Preferred Options Stage SHMA (Part 2), later in 2016.
Affordable housing Planning Practice Guidance sets out that plan-makers “will need to estimate the number of households and projected households who lack their own housing or live in unsuitable housing and who cannot afford to meet their housing needs in the market.”2 A key element of the study is to explore the scale of housing need and the extent to which additional affordable housing is needed. Affordable housing is defined as either social/affordable rented or intermediate housing which is provided and made available to eligible households (i.e. those who lack their own housing or live in unsuitable housing) who cannot afford to meet their needs through the market. Intermediate affordable housing is housing at prices and rents above those of social rents, but below market prices or rents.3 The scale of affordable requirements has been assessed by taking into account the annual need from existing and newly-forming households across County Durham and comparing this with the supply of affordable (social/affordable rent and intermediate tenure dwellings). The overall gross need for affordable housing is 2,824 dwellings each year. However, there is good capacity, particularly of three bedroom dwellings across County Durham which results in an overall net capacity of 378 affordable dwellings each year. However, analysis demonstrates an overall net shortfall of 585 smaller one and two bedroom general needs and 148 older person dwellings each year, with a net surplus of 356 three bedroom dwellings each year. It is therefore appropriate for the continued delivery of affordable housing to reflect underlying need, particularly of smaller general needs and older person affordable dwellings, with the latter driven by the ageing of the population. In terms of the split between social/affordable rented and intermediate tenure products, the household survey identified tenure preferences of existing and newly- forming households. This suggests a tenure split of 76.5% affordable (social) rented and 23.5% intermediate tenure. Analysis of property type preferences suggests that, primarily, delivery of houses is a priority (with 66.6% stating an expectation of moving to a house), followed by bungalows (24.4%) and flats (9%).
Table ES1 Net annual affordable housing imbalance by property size and designation 2016/17 to 2020/21 Total General Older Person TOTAL HHs Smaller 1/2 Bed 3+Bed
2 DCLG Planning Practice Guidance, Housing and economic development needs assessments (last updated April 2016) 3 Based on the definition of ‘affordable housing’ in DCLG National Planning Policy Framework (2012), Annex 2: Glossary
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County Durham HMA 585 -356 148 378 226322 Sources: 2012 Household Survey rebased to 2015; RP CORE Lettings and Sales
Market demand Households intending to move in the open market were asked what type and size of property they would like and expect to move to. This could then be compared with the current stock profile to identify any mismatches between availability and aspirations/expectations (Table ES2). Of households moving, most would like to move to a house (74.2%), 17.2% would like to move to a bungalow and 8.8% to a flat. This compares with 74.2% who expect to move to a house, 15.1% to a bungalow and 8.5% a flat. A much higher proportion would like to move to a detached house (52.6%) but only 27.9% expect to. In contrast, higher proportions expect to move to a semi-detached house (30.6%) than would like to (17.1%). Future development should focus on delivering to address identified mismatches and reflect household aspirations.
Table ES2 Summary of open market dwelling stock and preferences % Profile of new dwelling stock based on: Dwelling type/size summary Current stock Like Expect House 1/2 Beds 23.4 9.1 12.9 House 3 Beds 45.0 31.8 40.8 House 4 or more Beds 18.1 33.4 20.4 Bungalow 9.6 17.2 15.2 Flat 3.5 8.4 10.3 Other 0.5 0.1 0.4 Total 100.0 100.0 100.0 Base 179,592 19,770 18,467 Source: 2012 Household Survey, rebased to 2015
Older people and adaptations The majority of older people (65%) want to stay in their own homes with help and support when needed. However, a range of other options were considered. Overall, 18.8% of older people would consider buying on the open market. Renting is a popular option; 25.3% would consider renting from a Housing Association, 25.1% would consider renting sheltered accommodation and 18.2% would consider renting Extra Care housing4. This evidence suggests a need to continue to diversify the range of older persons’ housing provision. Additionally, providing a wider range of older persons’ accommodation has the potential to free-up larger family accommodation.
4 Note that households could respond to more than one option
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1. Introduction
Background and objectives 1.1 A Strategic Housing Market Assessment (SHMA) for County Durham has been commissioned to provide an up-to-date evidence base to inform the development of the Council’s Local Plan and other strategies. The production of the SHMA is a two-stage process. 1.2 The June 2016 SHMA (Part 1) has been prepared alongside the Council’s Issues and Options for the Local Plan. The June 2016 SHMA (Part 1) includes a review of the Housing Market Area definition, Housing Market Signals, affordable housing need and Duty to Co-operate matters. It provides an up-to- date analysis of these topics based on the primary research undertaken for the SHMA 2013, which was also prepared by arc4 (Final Report, July 2013). The household survey undertaken in 2012 has been refreshed based on a thorough up-to-date review of secondary data and demographic and dwelling forecasts. New primary research, including an online stakeholder questionnaire and interviews with estate and letting agents, has also been undertaken to supplement the household survey findings for the June 2016 SHMA (Part 1). 1.3 The second stage of the SHMA (Part 2) will be prepared to accompany the forthcoming Preferred Options consultation, anticipated later in 2016. The SHMA (Part 2) will include the identification of an Objectively Assessed Housing Need (OAN). 1.4 The June 2016 SHMA (Part 1) and forthcoming SHMA (Part 2) will together satisfy the requirements of the National Planning Policy Framework (NPPF, March 2012) and Planning Practice Guidance, Housing and economic development needs assessments (last updated April 2016) which replace previous guidance including the DCLG Strategic Housing Market Assessment guidance (Version 2, 2007).
National Planning Policy Framework (NPPF) requirements 1.5 The NPPF provides the planning policy context for the June 2016 SHMA (Part 1). The key sections of the NPPF which need to be taken into account in the SHMA are now summarised. 1.6 Paragraph 159 of the NPPF states that “Local Planning Authorities should have a clear understanding of housing needs in their area and they should prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where housing market areas cross administrative boundaries. The SHMA should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period that: Meets household and population projections, taking account of migration and demographic change; Addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as, but not
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limited to families with children, older people, people with disabilities, service families and people wishing to build their own homes); and Caters for housing demand and the scale of housing supply necessary to meet this demand.” 1.7 Paragraph 47 of the NPPF makes it clear that local planning authorities should "use their evidence base to ensure that their Local Plan meets the full objectively assessed needs for market and affordable housing". The SHMA will provide robust evidence to help the Council "plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community" and should "identify the size, type tenure and range of housing that is required in particular locations, reflecting local demand" (NPPF paragraph 50). 1.8 Paragraph 173 of the NPPF states that “in order to ensure both viability and the deliverability of development, careful attention to viability and costs in plan-making and decision-taking is required.” 1.9 Moreover, the NPPF and the Localism Act 2011 both introduced the ‘Duty to Co-operate’ as a replacement for Regional Spatial Strategy. Section 110 of the Localism Act requires local authorities to co-operate with other local authorities in maximising the effectiveness with which strategic matters within development plan documents are prepared. The provision of housing development is a strategic priority and the Council will have to ensure that they are legally compliant with the Localism Act at Examination. The Duty to Co-operate applies to all local planning authorities, working with neighbouring authorities and other bodies, including Local Enterprise Partnerships, on strategic priorities. It also means collaborating on the evidence critical to understanding the needs of your area, and the wider economic and housing market areas, including through the preparation of a Strategic Housing Market Assessment. 1.10 Technical Appendix E provides a checklist of how the June 2016 SHMA (Part 1) satisfies the requirements of the National Planning Policy Framework and National Planning Practice Guidance.
Planning Practice Guidance 1.11 Planning Practice Guidance, Housing and economic development needs assessments (last updated April 2016) provides guidance for local authorities in how to assess their housing and economic development needs. 1.12 With regards to housing need, the Guidance sets out: The approach to assessing need (paragraphs 1-7); Scope of assessments (paragraphs 8-13); Methodology: Assessing Housing Need (paragraphs 14-29); and Core outputs and monitoring (paragraphs 35-37).
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1.13 The Guidance sets out that “the assessment of housing and economic development needs includes the Strategic Housing Market Assessment requirement as set out in the National Planning Policy Framework”5. It explains that the primary objective of identifying need (for housing) is to identify the future quantity of housing needed, including a breakdown by type, tenure and size.6 1.14 The Guidance also states that “the assessment of development needs is an objective assessment of need based on facts and unbiased evidence. Plan makers should not apply constraints to the overall assessment of need, such as limitations imposed by the supply of land for new development historic under-performance, ability, infrastructure or environmental constraints. However, these considerations will need to be addressed when bringing evidence bases together to identify specific policies within development plans.”7 1.15 The Guidance states that housing needs should be assessed in relation to the relevant functional area, i.e. Housing Market Area, and this may identify smaller sub-markets with specific features and it may be appropriate to investigate these specifically in order to create a detailed picture of local need. It states that is also important to recognise that there are 'market segments', i.e. not all housing types have the same appeal to different occupants. However, it notes that in some cases Housing Market Areas and Functional Economic Areas may be the same.8 1.16 In terms of information and data, the Guidance explains that, “No single source of information on needs will be comprehensive in identifying the appropriate assessment area; careful consideration should be given to the appropriateness of each source of information and how they relate to one another. For example, for housing, where there are issues of affordability or low demand, house price or rental level analyses will be particularly important in identifying the assessment area. Where there are relatively high or volatile rates of household movement, migration data will be particularly important. Plan makers will need to consider the usefulness of each source of information and approach for their purposes. Local planning authorities can use a combination of approaches where necessary.”9 1.17 The Guidance sets out that a Housing Market Area is “a geographical area defined by household demand and preferences for all types of housing, reflecting the key functional linkages between places where people live and work”. It explains that it might be the case that housing market areas overlap and the extent of the housing market areas identified will vary; many will in practice cut across various local planning authority administrative boundaries10.
5 Paragraph: 001 Reference ID: 2a-001-20140306 6 Paragraph: 002 Reference ID: 2a-002-20140306 7 Paragraph: 004 Reference ID: 2a-004-20140306 8 Paragraph: 008 Reference ID: 2a-008-20140306 9 Paragraph: 009 Reference ID: 2a-009-20140306 10 Paragraph: 010 Reference ID: 2a-010-20140306
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1.18 The Guidance sets out three different sources of information for defining Housing Market Areas: House prices and rates of change in house prices; Household migration and search patterns; and Contextual data (for example, travel to work area boundaries, retail and school catchment areas)11. 1.19 The June 2016 SHMA (Part 1) document signposts relevant paragraphs of the Guidance, where appropriate.
Definitions 1.20 Planning Practice Guidance, Housing and economic development needs assessments, defines need for housing at paragraph 4: “Need for housing in the context of the guidance refers to the scale and mix of housing and the range of tenures that is likely to be needed in the housing market area over the plan period – and should cater for the housing demand of the area and identify the scale of housing supply necessary to meet that demand.” 1.21 For the purposes of this study, the term housing need refers to “the housing that households are willing and able to buy or rent, either from their own resources or with assistance from the state”12. 1.22 Definitions relating to affordable housing have been revised in the National Planning Policy Framework (March 2012): Affordable Housing: Social rented, Affordable Rented and Intermediate Housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision. Social Rented housing is owned by local authorities and private Registered Providers (as defined in Section 80 of the Housing and Regeneration Act 2008), for which guideline target rents are determined through the national rent regime. It may also be owned by other persons and provided under equivalent rental arrangements to the above, as agreed with the local authority or with the Homes and Communities Agency. Affordable Rented housing is let by local authorities or private Registered Providers of social housing to households who are eligible for Social Rented housing. Affordable Rent is subject to rent controls that require a rent of no more than 80% of the local market rent (including service charges, where applicable).
11 Paragraph: 011 Reference ID: 2a-011-20140306 12 Planning Advisory Service Objectively Assessed Need and Housing Targets Technical Advice Note June 2014
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Intermediate Housing is homes for sale and rent provided at a cost above social rent, but below market levels subject to the criteria in the Affordable Housing definition above. These can include shared equity (shared ownership and equity loans), other low cost homes for sale and intermediate rent, but not Affordable Rented housing. Homes that do not meet the above definition of affordable housing, such as “low cost market” housing, may not be considered as affordable housing for planning. 1.23 Note that these definitions are subject to change and are being consulted upon by Government.
Geography 1.24 Map 1.1 illustrates the geographical context of Durham County and its neighbouring authorities. Household Survey data has been presented for the following nine Local Plan monitoring areas, as illustrated in Map 1.2: Central Durham, Durham City, East Durham, Mid Durham, North West Durham, North Durham, South Durham, South East Durham, and West Durham. 1.25 The Local Plan monitoring areas are designed to reflect the scale and diversity of County Durham but they do not constitute distinctive housing market areas.
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Map 1.1 County Durham context
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Map 1.2 County Durham Local Plan monitoring areas
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Research methodology 1.26 Regarding the overall methodological approach to assessing housing need, Planning Practice Guidance (Housing and economic development needs assessments) states that “there is no one methodology approach or use of a particular dataset(s) that will provide a definitive assessment of development need. But the use of this standard methodology set out in this guidance is strongly recommended because it will ensure that the assessment findings are transparently prepared. Local planning authorities may consider departing from the methodology, but they should explain why their particular local circumstances have led them to adopt a different approach where this is the case. The assessment should be thorough but proportionate, building where possible on existing information sources outlined within the guidance.”13 1.27 Planning Practice Guidance further comments that “establishing future need for housing is not an exact science. No single approach will provide a definitive answer. Plan makers should avoid expending significant resources on primary research (information that is collected through surveys, focus groups or interviews etc. and analysed to produce a new set of findings), as this will in many cases be a disproportionate way of establishing an evidence base. They should instead look to rely predominantly on secondary data (e.g. Census, national surveys) to inform their assessment which are identified within the guidance.” 14 1.28 To deliver the 2016 SHMA Update, a multi-method approach was adopted, which comprised: A review of relevant secondary data including the 2011 Census, house price data, private rental data, Housing Association CORE lettings data, CLG Statistics and Housing Register information; The preparation of demographic and dwelling forecasts by Edge Analytics using POPGROUP technology; A sample survey of households across the County Durham area that was carried out in 2012 to prepare the 2013 SHMA, with a total of 34,948 households contacted and 6,216 questionnaires returned. This household survey data has been used in this SHMA 2016 Update, but re-weighted to reflect the total number of occupied dwellings in 2015 apportioned on the basis of tenure and age profile from the 2011 Census. The 6,216 returned questionnaires represented a 17.8% response rate overall and the total number of questionnaires returned was well in excess of the 1,500 specified in former Government SHMA guidance; An on-line survey of key stakeholders including local authority representatives, parish councils, neighbourhood planning representatives, voluntary agencies, government agencies, public service providers, registered providers, private developers, private landlords and chartered surveyors, other stakeholders; and Interviews with estate and letting agents.
13 Paragraph: 005 Reference ID: 2a-005-20140306 14 Paragraph: 014 Reference ID: 2a-014-20140306
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1.29 Further information on the research methodology is presented at Appendix A.
Presentation of data 1.30 Data presented in this report is based on the 2012 Household Survey carried out as part of the Strategic Housing Market Assessment 2013 and refreshed in accordance with the up-to-date secondary data review, unless otherwise stated. 1.31 It is important to note that survey responses have been weighted to correct for response bias and then grossed up to reflect the total number of households and this process is explained in Appendix A. The 6,216 responses are therefore weighted and grossed up to 226,32215 occupied dwellings. All survey information presented in this report is for weighted and grossed responses which are rounded up where appropriate.
Report structure 1.32 The June 2016 SHMA (Part 1) report is structured as follows: Chapter 2 reviews the national and regional policy context within which the research needs to be positioned; Chapter 3 considers the definition of the Housing Market Area; Chapter 4 outlines how to establish an Objectively Assessed Need for housing; Chapter 5 presents a review of the housing market in County Durham; Chapter 6 considers the need for all types of housing; and Chapter 7 concludes the report with a summary of findings from the update and a consideration of strategic issues.
Objectively Assessed Housing Need 1.33 A key element of the SHMA is to consider Objectively Assessed Need for Housing. Objectively Assessed Housing Need (OAN) is defined in a Planning Advisory Service advice note as ‘the housing that households are willing and able to buy or rent, either from their own resources or from the State’. 16 1.34 In order to establish Objectively Assessed Need, Planning Practice Guidance identifies a series of steps which are presented in this report: A. Defining the Housing Market Area (see Chapter 3); B. Using DCLG household projections as a starting point to establishing the need for housing (see Chapter 4); and
15 2015 Council Tax data Total dwelling stock minus vacants and second homes (but includes student housing) 16 Planning Advisory Service, Objectively Assessed Need and Housing Targets (Technical Advice Note), Second Edition, July 2015, Paragraph 3.3 http://www.pas.gov.uk/documents/332612/6549918/OANupdatedadvicenote/f1bfb748-11fc-4d93-834c-a32c0d2c984d
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C. Adjusting projections to take account of local demography, employment trends; and market signals relating to price and quantity of housing and past delivery (Chapter 4). 1.35 Chapter 4 draws evidence together to derive the parameters from which an Objectively Assessed Housing Need for County Durham can be established. It should be noted that the material in this report uses 2012-based population and household projections. 2014-based sub-national population projections were released in May 2016 and these will form the basis of further analysis to establish OAN in County Durham. This analysis will be included in the Preferred Options Stage SHMA (Part 2). 1.36 The report includes a substantial technical appendix, which provides detailed material that underpins the core outputs of the June 2016 SHMA (Part 1). The technical appendix material includes: General methodology (Appendix A); National policy review (Appendix B) Estate and letting agent review of the housing market (Appendix C); Housing need (Appendix D); Monitoring and updating (Appendix E) and Summary of conformity to National Planning Policy Guidance and Planning Practice Guidance (Appendix F).
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2. Policy and strategic review
Introduction 2.1 The purpose of this chapter is to set out the policy and strategic context for housing delivery in County Durham. 2.2 Under the previous Coalition Government, the five years 2010-2015 saw a radical and sustained programme of reform of welfare, housing and planning policy, set within the context of national austerity and an economic policy of deficit reduction and public spending cuts. These reforms championed localism, decentralisation and economic growth. 2.3 Since the election of a majority Conservative Government in May 2015 further welfare reforms have been accompanied by policies seeking to increase the rate of housebuilding and promoting home ownership as the tenure of choice. The recent passing of the Housing and Planning Act 2016 has put in place the legislation for some of the Government’s key policies, including Starter Homes, restrictions on lifetime tenancies and ‘Pay to Stay’. The research which informs this report was undertaken prior to the Housing and Planning Act being enacted (13 May 2016). Future versions of the SHMA will consider the Act, including the provision of Starter Homes (the details of which will be confirmed through emerging regulations). 2.4 A detailed national policy review is presented at Appendix B.
Local strategic priorities 2.5 In the absence of regional planning bodies and their associated strategies and targets, local strategies and plans have become increasingly important. The need for Local Plans and Housing Strategies to have evidence-based priorities, and demonstrate how they support economic growth is increasingly important.
Local Economic Partnership 2.6 The Local Growth White Paper (October 2010) set out the then Government’s vision for empowering locally driven economic growth, encouraging business investment and promoting economic development. The paper highlighted a series of measures aimed at stimulating growth including the Regional Growth Fund. The Paper also established 24 LEPs aimed at overseeing economic growth and job creation. 2.7 County Durham is part of the North East Local Enterprise Partnership (LEP). The North East LEP comprises the seven council areas of Durham, Gateshead, Newcastle, Northumberland, North Tyneside, South Tyneside and Sunderland. Whilst the LEP has no statutory land use planning powers, it is responsible for determining local economic priorities and undertaking activities to drive economic growth and local job creation. 2.8 The North East LEP is working ‘to make the North East a place where more businesses invest, grow and prosper, to deliver more and better jobs for
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everyone.’ The LEP is responsible driving the delivery of the North East’s Strategic Economic Plan, which is broken down into six key themes: Innovation; Business support and access to finance; Skills; Economic assets and infrastructure; Employability and inclusion; and Transport and connectivity. 2.9 In July 2014 the North East LEP secured £290 million of investment for the Region from Central Government’s growth deals. The North East Growth Deal is the fourth largest allocation of funding nationally. The Growth Deal supports capital projects across the North East through smart, strategic and focused investment of public and private sector funding – with the ultimate goal to deliver more and better jobs for the North East. 2.10 In tandem with the creation of the North East LEP, the seven authorities have also created the North East Combined Authority, a new legal body that has statutory status. This brings together the seven councils with the following joint objective: ‘Our ambition is to create the best possible conditions for growth in jobs, investment and living standards, to make the North East an excellent location for business, to prioritise and deliver high quality infrastructure and to enable residents to raise their skill levels and to benefit from economic growth long into the future.’ ‘To deliver these aims we have united to speak with one voice to Government, business, investors and partners.’ 2.11 On 23rd October 2015 the Chancellor of the Exchequer visited the North East to confirm the ‘devolution deal’17. Building on earlier Growth Deals, the Devolution Agreement gives the area more freedom to tailor services to local needs, support local businesses and create jobs.
Housing Strategy 2.12 The Council is developing a Housing Strategy which has the two overarching aims of ‘Altogether better Delivery and Standards’ and ‘Altogether Better Housing Support’. The Housing Strategy will be delivered in partnership with relevant stakeholders. The delivery of the Strategy will be monitored by the County Durham Housing Forum.
17 HM Treasury, North East Devolution Agreement, October 2015 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/472187/102915_DEVOLUTION_TO_THE_NOR TH_EAST_signed_pdf.pdf
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Concluding comments 2.13 The main purpose of this chapter has been to consider the general policy and strategic context within which this research needs to be positioned. The previous coalition Government had established its housing and planning priorities within the context of local decision making and accountability, reduced capital expenditure on housing, fundamental changes to welfare, a changing role for social rented housing, and a need for future housing investment to support economic growth. It is likely that this direction of travel will continue, with the new Conservative Government’s legislative programme prioritising measures to increase access to home ownership, further reduce welfare spending, control immigration and assist devolution to cities. 2.14 The importance of having robust and up-to-date information to help inform decision making at local authority level is essential. In a challenging economic climate, this SHMA Update provides the Council with an excellent range of material to inform policy debate and the Local Plan process, help influence strategic responses, and shape local and sub-regional strategic housing priorities to inform future investment decisions.
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3. Defining the Housing Market Area
Introduction 3.1 Planning Practice Guidance, Housing and economic development needs assessments (updated April 2016), paragraph 8 states that “[housing] needs should be assessed in relation to the relevant functional area, i.e. housing market area. Establishing the assessment area may identify smaller sub- markets with specific features and it may be appropriate to investigate these specifically in order to create a detailed picture of local need. It is also important to recognise that there are 'market segments' i.e. not all housing types have the same appeal to different occupants”. 18 3.2 Paragraph 10 of the Planning Practice Guidance defines a Housing Market Area as “a geographical area defined by household demand and preferences for all types of housing, reflecting the key functional linkages between places where people live and work. It might be the case that housing market areas overlap.” 19 Paragraph 11 of the Planning Practice guidance states “Migration flows and housing search patterns reflect preferences and the trade-offs made when choosing housing with different characteristics. Analysis of migration flow patterns can help to identify these relationships and the extent to which people move house within an area. The findings can identify the areas within which a relatively high proportion of household moves (typically 70 per cent) are contained. This excludes long distance moves (eg those due to a change of lifestyle or retirement), reflecting the fact that most people move relatively short distances due to connections to families, friends, jobs, and schools.” 3.3 Paragraph 11 suggests that Housing Market Areas can be broadly defined by using three different sources of information as follows: House prices and rates of change in house prices; Household migration and search patterns; Contextual data (for example travel to work area boundaries, retail and school catchment areas). 3.4 County Durham is located within North East England. The resident population of County Durham in 2015 is 520,20020. The County is bounded to the north by Gateshead, Sunderland (both in Tyne and Wear) and Northumberland; to the west by Eden (Cumbria); and to the south by Darlington, Stockton-on- Tees, Hartlepool (all in Tees Valley) and Richmondshire (North Yorkshire). 3.5 In establishing the extent to which County Durham is a Housing Market Area house price, migration, travel to work and contextual data have been assembled in line with Planning Practice Guidance.
18 Paragraph: 008 Reference ID: 2a-008-20140306 19 Paragraph: 010 Reference ID: 2a-010-20140306 20 2012 ONS SNPP
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House prices and rates of change in house prices 3.6 Figure 3.1 shows how house prices across the area have changed over the period 2000 to 2015. 3.7 Median prices in County Durham have been consistently slightly lower than median prices for the North East, which are well below those for England as a whole. Overall, prices have increased from £47,500 in 2000 to £100,000 in 2015, an increase of 110.5%. Prices peaked at £107,000 in 2007, dropped slightly, returning to £107,000 in 2010 and fluctuating slightly lower than this since. 3.8 During 2015, median prices across County Durham were £100,000 and lower quartile prices were £62,000. The distribution of median house prices by ward during 2015 is illustrated in Map 3.3 and indicates relatively higher prices in Durham City and parts of the West Durham, Central Durham and North West Durham Local Plan monitoring areas, and relatively lower prices in Mid Durham and East Durham monitoring areas. 3.9 Table 3.1 compares median price change in County Durham with surrounding areas, the North East and England over the period 2000 to 2015. This indicates that County-wide price change has lagged behind that of all neighbouring areas, the region and England.
Table 3.1 Comparative house price change 2000-2015 with neighbouring Districts, the North East and England Median price by year (£) % change Location 2000 2015 2000-2015 Eden £71,000 £185,000 160.6 Gateshead £48,000 £124,250 158.9 Northumberland £59,950 £149,725 149.7 Sunderland £45,000 £112,095 149.1 Richmondshire £78,200 £190,000 143.0 North East £52,000 £125,995 142.3 Darlington £52,000 £124,950 140.3 Stockton on Tees £55,750 £129,995 133.2 Hartlepool £47,000 £108,000 129.8 England £82,000 £182,463 122.5 Durham £47,500 £100,000 110.5 Source: Land Registry Price Paid data
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Figure 3.1 Median house price trends 2000 to 2015: County Durham, the North East and England
Source: DCLG; Land Registry
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Map 3.3 Median house prices 2015 by ward
Source: Land Registry House Price Data 1 Jan 2015 to 31 Dec 2015
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 28 Relative affordability 3.10 The relative affordability of open market dwellings in County Durham is compared with the other Local Authorities in the Region in Table 3.2. Table 3.2 presents lower quartile house prices, lower quartile gross earnings of full-time workers and a ratio of lower quartile earnings to house prices. 3.11 In terms of relative affordability, County Durham is the second most affordable area of the North East, with a lower quartile house price to income ratio of 3.3, i.e. lower quartile house prices are 3.3 times lower quartile gross earnings. However, while County Durham and Hartlepool have a similar lower quartile house price to income ratio, lower quartile house prices (in absolute terms) are slightly lower in County Durham. The ratio of 3.3 compares with the regional average of 4.5 for the North East as a whole.
Table 3.2 Relative affordability of lower quartile (LQ) prices by district (residence based) Lower LQ Gross LQ Income to Quartile Earnings per Annual Gross House Price Location House Price week Earnings ratio England £134,000 £382.50 £19,890 6.7 Newcastle upon Tyne £105,000 £362.10 £18,829 5.6 North Tyneside £103,000 £375.50 £19,526 5.3 Northumberland £95,000 £350.30 £18,216 5.2 Redcar and Cleveland £85,300 £339.50 £17,654 4.8 Gateshead £87,500 £351.20 £18,262 4.8 Stockton-on-Tees £89,000 £365.20 £18,990 4.7 North East £83,233 £359.10 £18,673 4.5 South Tyneside £82,000 £363.40 £18,897 4.3 Sunderland £76,000 £343.10 £17,841 4.3 Darlington £80,000 £373.00 £19,396 4.1 Middlesbrough £69,000 £351.80 £18,294 3.8 County Durham £62,000 £358.90 £18,663 3.3 Hartlepool £65,000 £376.60 £19,583 3.3
Sources: Land Registry Price Paid 2015; Annual Survey of Hours and Earnings 2015
3.12 In terms of relative affordability based on median prices, County Durham is the most affordable out of twelve districts in North East England, with a median income to house price ratio of 4.0, as illustrated on Table 3.3. It also has the lowest median house price.
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Table 3.3 Relative affordability of median prices by district (residence base) Median Median Gross Annual Income to Median House Income per Gross House Price District Price week Income ratio England £182,463 £532.60 £27,695 6.6 Northumberland £149,725 £479.60 £24,939 6.0 North Tyneside £150,000 £498.30 £25,912 5.8 Newcastle upon Tyne £147,500 £496.00 £25,792 5.7 North East £125,995 £484.80 £25,210 5.0 Stockton-on-Tees £129,995 £502.50 £26,130 5.0 Darlington £124,950 £484.00 £25,168 5.0 South Tyneside £122,500 £475.80 £24,742 5.0 Gateshead £124,250 £483.30 £25,132 4.9 Middlesbrough £117,500 £467.60 £24,315 4.8 Redcar and Cleveland £124,950 £505.50 £26,286 4.8 Sunderland £112,095 £455.90 £23,707 4.7 Hartlepool £108,000 £495.20 £25,750 4.2 County Durham £100,000 £480.70 £24,996 4.0
Source: Land Registry Price Paid 2015; Annual Survey of Hours and Earnings 2015
Household migration and search patterns 3.13 Data reported in the 2011 Census suggests that 72.0% of households who moved in the year preceding the Census originated from within County Durham and on the basis of a 70% self-containment threshold County Durham can be described as a self-contained housing market area. Table 3.4 summarises the origins of households based on 2011 Census data. Of the 53,083 households moving into County Durham, 28.0% originated from outside of County Durham with 7.1% overall from Tyne and Wear (particularly from Sunderland and Gateshead), 3.3% from Tees Valley, 1.0% from Northumberland, 0.5% from Cumbria, 1.9% from elsewhere in the North West, 3.5% from Yorkshire and the Humber and 10.8% from elsewhere in the UK. Overall, 10.2% of all in-migrant households originated from Sunderland and 6.9% from Gateshead.
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Table 3.4 Origin of moving households Origin of moving household Number % County Durham 38,210 72.0 Hartlepool 312 0.6 Stockton-on-Tees 507 1.0 Darlington 638 1.2 Elsewhere Tees Valley 282 0.5 Gateshead 1,000 1.9 Newcastle upon Tyne 684 1.3 North Tyneside 254 0.5 South Tyneside 316 0.6 Sunderland 1,516 2.9 Northumberland 517 1.0 Cumbria 258 0.5 Elsewhere NW 1,030 1.9 Richmondshire 193 0.4 Elsewhere Y&H 1,633 3.1 Elsewhere UK 5,733 10.8 Total 53,083 100.0 Source: 2011 Census
3.14 Data from the household survey indicated that around 54,769 households had moved home in the preceding five years (and origin data is available for 54,384 households). Of these households, 73.3% originated within County Durham and 26.7% originated from outside the area as summarised in Table 3.5.
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Table 3.5 Origin of moving households Origin % County Durham 73.3 Darlington 2.2 Hartlepool 0.9 Stockton on Tees 0.4 Middlesbrough/Redcar and Cleveland 0.5 Sunderland 2.4 South Tyneside 0.4 Gateshead 2.4 Newcastle/North Tyneside 1.4 Northumberland 0.6 Yorkshire and the Humber 1.9 North West 2.5 Elsewhere in the UK 6.4 Outside UK 1.1 Total 100.0 Base (Valid Responses) 54386.0 Source: 2012 Household Survey, rebased to 2015
Characteristics of in-migrant households 3.15 The household survey identified around 12,485 households who had moved into County Durham in the preceding five years. Information relating to in-migrant households includes: A majority (84.2%) moved into a house, particularly terraced (35.0%), semi- detached (29.5%) and detached (19.7%); a further 8.6% moved into a flat/apartment, 6.1% to a bungalow and 1.2% to other property types. Overall 17.4% moved into terraced houses with one or two bedrooms and 14.0% into semi-detached houses with three bedrooms; 44.1% moved into smaller properties with one or two bedrooms; and 55.8% moved into properties with three bedrooms or more; 46.8% moved into owner occupied properties; 46.9% into private renting and 6.3% moved into affordable (social rented/intermediate tenure) dwellings; Overall, by Local Plan monitoring area, 21.3% of in-migrant households moved to East Durham, 14.1% into North West Durham, 13.7% into South Durham, 12.3% into Durham City, 11.3% into North Durham, 10.1% into Central Durham, 8.7% into West Durham, 6.4% into Mid Durham and 2.0% into South East Durham; Couples with children accounted for 23.9% of in-migrant households, 22.8 couples under 60, 19.10% were older singles and couples, 17.2% were singles under 60, 7.0% were lone parents, 6.3% were parents with adult children and 3.8% were student households;
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48.7% of in-migrant Household Reference People (Heads of Household) were aged 16-39, a further 34.8% were aged 40-59 and 17.4% were aged 60 or over; The majority of Heads of Household of in-migrant households were in employment (59.9%) with a further 16.9% retired, 7.1% unemployed, 5.3% permanently sick/disabled, 3.8% in full-time education and 6.9% looking after the home or caring for someone; 30.1% of households had a weekly income of less than £300, 23.9% had an income of between £300 and £500 each week and 46.1% had an income of at least £500 each week; 45.4% of in-migrant Heads of Household in employment worked in County Durham, while 54.6% worked outside of the County, of whom 38.6% worked in Tyne and Wear and 11.7% in Tees Valley; The three main reasons for moving were to be closer to family/friends to give/receive support (19.1%), to be closer to work/new job (15.8%) and wanted a larger property or one that was better in some way (13.7%). 3.16 In summary, around 23.0% of households moving in the past five years originated from outside of County Durham. Of this number, 6.6% originated from Tyne and Wear, 3.9% from Tees Valley, 0.6% from Northumberland, 1.9% from Yorkshire and the Humber, 2.5% from the North West and 7.5% from elsewhere in the UK or from overseas. Most moved into the private housing sector, with around 46.8% moving into owner occupation and 46.9% into private renting. Moving to be near family and friends and for work were key migration drivers. 82.7% of in-migrant households had a Household Reference Person aged under 60 and 17.4% were aged 60 and over; overall 59.9% were in employment and 53.9% had an income (of Household Reference Person and partner) of less than £500 each week.
Residential mobility within County Durham 3.17 The household survey identified that the vast majority (77.0%) of households moving within the preceding five years had moved within County Durham (around 41,898 households). 3.18 Households moving within County Durham were doing so for a variety of reasons. The most frequently reported reasons were wanting a larger property (16.0%), to be closer to family/friends to give/receive support (9.8%) and wanting own home/to live independently (6.8%). 3.19 Table 3.6 reviews the tenure choices of households moving within County Durham. Those in affordable accommodation are most likely to remain in the same tenure (74.5%), followed by tenants in private renting (68.2%). One fifth (20.7%) of those in affordable accommodation moved into private renting and a similar proportion (19.4%) of previous private renters moved into affordable housing. Around a half (49.4%) of respondents who had previously lived with family and friends (i.e. newly forming households) moved into private rented housing, while 28.5% moved into owner occupation and 22.1% into affordable accommodation.
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Table 3.6 Residential mobility – movement between different tenures Previous Tenure Previously Social/Affordable Private living with Current Tenure Owned Rented Rented family/friends Other Total Owned 60.6 4.8 12.4 28.5 8.7 31.4 Private Rented 18.8 20.7 68.2 49.4 59.5 39.5 Social/Affordable 20.7 74.5 19.4 22.1 31.8 29.1 Total 100.0 100.0 100.0 100.0 100.0 100.0 Base 14818 6282 11980 6457 861 40398 Source: 2012 Household Survey, rebased to 2015
3.20 Table 3.7 considers the profile of dwellings being moved into by households moving within County Durham. Households are moving into a variety of dwelling types and sizes, most notably to: two (44.3%) and three (33.4%) bedroom dwellings; terraced houses (29.7%), semi-detached houses (25.6%) and bungalows (18.4%).
Table 3.7 Residential mobility – profile of properties moved into by type and size Property type (%) Semi- detached house/ No. Detached Town Terraced Flat/ Bedrooms house house house Bungalow Maisonette Other Total One 0.2 0.0 0.6 6.1 4.4 0.0 11.3 Two 1.0 10.5 15.7 10.2 6.4 0.6 44.3 Three 5.8 13.6 11.1 2.2 0.7 0.1 33.4 Four 6.1 1.1 2.1 0.0 0.0 0.0 9.4 Five or more 1.1 0.4 0.1 0.0 0.0 0.0 1.6 Total 14.2 25.6 29.7 18.4 11.5 0.7 100.0 Base (valid responses) 40,387 Source: 2012 Household Survey, rebased to 2015
Households planning to move 3.21 Around 29,937 (16.5%) households plan to move in the next five years. Table 3.8 summarises the moving intentions of households based on the first preference they stated. Overall, 81.7% of households intend on remaining in County Durham and 18.3% intend to move out. 3.22 Of the 18.3% of households planning to move out, 4.3% were planning to move to Tyne and Wear, 1.9% to Tees Valley, 1.7% to Northumberland, 3.0% to Yorkshire and the Humber and 7.4% to elsewhere in the UK or abroad.
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3.23 The main reasons why households plan to move out of County Durham were wanting a larger property (23.3%), wanting to buy (10.1%), needing housing suitable for older/disabled person (9.1%) and needing a smaller property for other reasons (8.4%).
Table 3.8 First choice destination of households planning to move in next five years Destination % stating as first preference Within County Durham 81.7 Darlington 1.3 Hartlepool 0.2 Middlesbrough/Redcar and Cleveland 0.2 Sunderland 2.2 South Tyneside 0.4 Gateshead 0.8 Newcastle/North Tyneside 0.9 Northumberland 1.7 Yorkshire and the Humber 3.0 North West 1.0 Elsewhere in the UK 5.7 Outside UK 0.6 Tyne and Wear (not specified) 0.2 Total within County Durham 81.7 Total outside County Durham 18.3 Total 100.0 Base (Valid responses) 27,864 Source: 2012 Household Survey, rebased to 2015
Travel to work trends 3.24 The 2011 Census provides an analysis of travel to work patterns and the extent to which residents in County Durham travel to other areas together with details of how many people commute into the County. The 2011 Census identified 227,894 workers aged 16-74 living within County Durham and 196,984 workers aged 16-74 working within County Durham. 3.25 Around 71% of County Durham’s labour force both lives and works within the county, with 19% commuting out to five neighbouring areas (Sunderland 6.9%, Gateshead 4.5%, Newcastle upon Tyne 3.8%, Darlington 3.7%) and 10% working elsewhere. 3.26 On this basis, County Durham is self-contained in terms of workplace, and there are notable interactions with Tees Valley (particularly Darlington) and Tyne and Wear (particularly Sunderland, Gateshead and Newcastle upon Tyne).
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 35 Concluding comments 3.27 The purpose of this chapter has been to consider the general housing market context of County Durham and its inter-relationships with other areas. This reflects the requirements of PPG Paragraph 2a-011. By reviewing house prices, migration and travel to work patterns, a picture of the market dynamics of County Durham emerges. 3.28 The Department of Communities and Local Government (DCLG) suggests that a housing market is self-contained if upwards of 70% of moves (migration and travel to work) take place within a defined area. An analysis of 2011 Census migration data suggests that 72% of households move within County Durham and 71% of residents in employment work within the County. 3.29 Therefore, on the basis of 2011 census data, County Durham can be described as a self-contained housing market on the basis of both migration and travel to work patterns. The 2012 Household Survey (rebased to 2015 households) found that of those who had moved home in the preceding five years, 77.0% originated within County Durham. It also found that 81.7% of households planning to move in the next five years intend on remaining in County Durham. 3.30 Evidence would therefore confirm that County Durham is an appropriate Housing Market Area for the purposes of Local Plan policy making.
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Introduction 4.1 Objectively Assessed Housing Need is defined in a Planning Advisory Service advice note as ‘the housing that households are willing and able to buy or rent, either from their own resources or from the State’.21 4.2 In order to establish Objectively Assessed Need, Planning Practice Guidance (PPG) identifies a series of steps: A. Defining the Housing Market Area; B. Using DCLG household projections as a starting point to establishing the need for housing; and C. Adjusting projections to take account of local demography, employment trends; and market signals relating to price and quantity of housing and past delivery. 4.3 Chapter 3 confirmed that County Durham is a Housing Market Area for the purposes of establishing an Objectively Assessed Need for housing.
Demographic Starting Point 4.4 PPG states that the official DCLG household projections provide the ‘starting point’ in the assessment of housing need as stated in PPG Paragraph 2a-015. The latest official population and household projections will be used in accordance with PPG Paragraph 2a-016. 4.5 Currently, both 2012-based population and household projections are available and these are used for the June 2016 SHMA (Part 1) analysis, in accordance with PPG. 2014-based population projections were released in May 2016 but the corresponding household formation rates are not available. If headship rates are published in advance, then 2014-based population and household projections will be used in preparing the Preferred Options Stage SHMA (Part 2). 4.6 The 2012-based population projections indicate a population increase of 42,100 (8.2%) over the period 2012 to 2037.
Adjusting household projection-based estimates: demography 4.7 There is no single definitive view on the likely level of population and household growth expected in County Durham. Ultimately, a mix of economic, demographic
21 Planning Advisory Service, Objectively Assessed Need and Housing Targets (Technical Advice Note), Second Edition, July 2015, Paragraph 3.3
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and national/local policy issues determines the speed and scale of change. Whilst the official 2014-based ONS population and DCLG household projections will form the ‘starting point’ of the assessment of housing need, the PPG states that it is appropriate to consider ‘alternative assumptions in relation to the underlying demographic projections and household formation rates’ of the local area (PPG Paragraph 2a-017). 4.8 In line with the PPG, Edge Analytics have developed a range of alternative demographic scenarios for County Durham, using POPGROUP technology. The 2012-based population projection from ONS provide the official ‘benchmark’ scenario, with household growth assessed using household headship rate assumptions from the DCLG household projection model. For comparison with this official benchmark, a number of ‘alternative trend’ scenarios will be developed, in which variant migration assumptions will be applied. 4.9 The PPG states that the likely change in the number of jobs in an area should be considered, as should the size and structure of the labour force (PPG paragraph 2a-018). Therefore, the labour force and job growth implications of the 2012- based SNPP will be evaluated, through the application of key assumptions on County Durham’s future economic activity rates, level of unemployment and balance of commuting between resident workers and local jobs.
Adjusting household projection-based estimates: economic assumptions 4.10 In the assessment of housing need, the PPG paragraph 2a-018 states that “plan makers should make an assessment of the likely change in the number of jobs 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” 4.11 In POGPROUP, it is possible to derive the size and structure of the resident labour force and the number of jobs that an implied level of population growth could support, through the application of the following three key economic assumptions: The economic activity rates determine the proportion of the working-age population that is economically active, i.e. the labour force. The labour force includes those who are in work (i.e. ‘workers’) and also those who are unemployed; The unemployment rate determines the proportion of the labour force that is in employment (i.e. the number of workers); and The commuting ratio determines the balance between the resident number of ‘workers’ (i.e. employed labour force) and the number of jobs in an area. A commuting ratio greater than 1.0 indicates a net out-commute (the number of workers resident in an area is greater than the number of jobs). A commuting ratio less than 1.0 indicates a net in-commute (i.e. the number of jobs is greater than the number of resident workers). 4.12 In a trend-based scenario, the size of the resident labour force and the number of jobs that can be supported are therefore sensitive to adjustments to these key factors.
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Economic Forecasts 4.13 In the consideration of future jobs growth in an area, the PPG states that ‘economic forecasts’ should be considered (PPG paragraph 2a-018). Whilst the jobs growth estimates are derived through the application of economic assumptions to scenarios of demographic change, economic forecasts of jobs growth are derived using a different methodology. 4.14 Economic forecasts combine a national and regional economic outlook, with data on the sectoral mix of businesses, to produce a forecast of jobs growth for a local area. These forecasts typically incorporate the latest ONS projection (SNPP-2012) but do not adjust the migration assumptions associated with this projection to account for higher or lower population growth to support a forecast level of jobs growth. Instead, economic forecasting models will typically balance jobs and population growth through changes to economic activity and unemployment rates and, in some instances, the commuting ratio. 4.15 The alignment of the demographic approach, with the approach used by the economic forecasting models seeks to provide evidence for the assessment of long-term housing need. The balance between employment rates, commuting and migration are key considerations when linking demographic and economic evidence in an OAN.
Market signals 4.16 PPG Paragraph 2a-19 states that ‘the housing need number suggested by household projections (the starting point) should be adjusted to reflect appropriate market signals, as well as other market indicators of the balance between the demand for and supply of dwellings’. PPG Paragraph 2a-20 suggest that ‘in broad terms, the assessment should take account both of indicators relating to price (such as house prices, rents, affordability ratios) and quantity (such as overcrowding and rates of development).’ 4.17 PPG Paragraph 2a-20 comments that ‘market signals are affected by a number of economic factors and plan makers should not attempt to estimate the precise impact of an increase in housing supply. Rather they should increase planned supply by an amount that, on reasonable assumptions and consistent with the principles of sustainable development, should be expected to improve affordability, and monitor the response of the market over the Plan period.’ 4.18 In line with PPG Paragraph 2a-19, Table 7.1 considers a range of Housing Market Signals for County Durham. These include house prices, rents, affordability and overcrowding.
Price indicators 4.19 In terms of price/transaction indicators, a key message from Table 4.1 is that the market prices have seen a slight decline over the period 2010-2015, although the number of transactions has been increasing. Over the period 2010 to 2015,
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lower quartile prices have decreased year-on-year from £73,500 to £62,000. Median prices have fluctuated slightly, but overall have fallen from £107,500 in 2010 to £100,000 in 2015. Relative affordability has improved from a ratio of 4.3x earnings in 2010 to 3.3x in 2015. Lower quartile rents were stable at £394 for four years before dropping slightly to £386 in 2014 and £377 in 2015. Median rents fluctuated between £446 and £451 between 2010-2013, dropping to £433 in 2014 and £425 in 2015.
Table 4.1 Housing Market Signals Price/transaction indicators 2010 2011 2012 2013 2014 2015 Lower Quartile House Prices £73,500 £69,500 £67,500 £66,000 £65,000 £62,000
Median House Prices £107,500 £100,000 £100,000 £105,000 £103,000 £100,000
Lower Quartile Rents (per £394 £394 £394 £394 £386 £377 calendar month) Median Rents (per calendar £446 £446 £451 £451 £433 £425 month) Relative affordability (LQ 4.3 4.1 3.8 3.7 3.6 3.3 earnings to LQ house price) No. Property sales 5,225 5,257 4,946 5,980 6,002 7,280 Quantity indicators 2010 2011 2012 2013 2014 2015 Total dwelling stock (at 1 April) 231,990 233,490 234,760 235,900 236,680 237,750
Total vacant dwellings (at 9,925 10,416 9,999 9,659 10,163 11,522 October)
Total vacancy rate (at October) 4.28% 4.46% 4.26% 4.09% 4.29% 4.85%
Long-term vacancy rate (at 2.04% 2.24% 1.90% 1.63% 1.87% 2.02% October)
Overcrowding (2011 Census) 2.29%
No. of households on the 13,467 20,344 17,352 12,930 11,302 11,132 housing register (at 1st April)
Notes: House Prices. Source: Land Registry Price Paid Data. No. households on housing register at 1 April. Source: CLG Local Authority Housing Statistics. Total dwelling stock/vacancy. Source: HSSA Rent data: Zoopla Overcrowding: 2011 Census
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Quantity indicators 4.20 In terms of quantity indicators, there has been a growth in the total number of dwellings. Total vacancy rates have fluctuated between 4.09% and 4.85%, which compares with an English rate of 2.6%. The long-term vacancy has fluctuated around 2% over the 2010-2015 period. 4.21 According to the 2011 Census, 2.29% of households were overcrowded. This compares with 3.1% across England. The 2001 Census reported an overcrowding rate of 4.1% (7.1% across England), suggesting that levels of overcrowding have fallen both nationally and locally. 4.22 The number of households on the Housing Register has fluctuated between 11,132 and 20,344 and averaged around 14,421 over the period 2010 to 2015.
Comparator areas 4.23 Table 4.2 considers how the Market Signals observed in County Durham compare with similar districts and with regional and national trends. Comparator districts have been identified using the CIPFA Nearest Neighbour Index data22.
Table 4.2 Housing Market Signals in comparator districts, region and England
County Comparator Districts* Comparator 2010-2014 Durham Wakefield Barnsley Rotherham North East England Lower Quartile House -11.6 0.5 2.7 1.2 -1.2 5.6 Price change Median House Price -4.2 -0.8 10.0 0.8 1.6 5.4 change Lower Quartile Rents (per -2.0 0.9 -4.3 -3.1 0.0 -0.7 calendar month) change Median Rents (per -2.9 0.0 0.0 1.1 0.0 4.4 calendar month) change Change in relative affordability (ratio of lower -15.6 -2.3 -0.2 2.5 -7.2 1.6 quartile earnings to house prices) No. Property sales 14.9 46.1 20.2 35.4 22.3 26.0 change Total vacancy change 2.4 -26.2 -27.5 -13.3 -16.3 -17.2 Total long-term vacancy -6.4 -51.2 -28.5 -24.8 -25.5 -31.4 change Overcrowding change -48.0 -34.6 -34.0 -17.1 -39.1 -29.7 2001-11 Source: CIPFA Nearest Neighbour Index *Three most similar LA based on ONS 2011 Area Classification for Local Authorities
22 www.cipfastats.net
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4.24 Compared with comparator, regional and national data over the period 2010- 2014, house price change (both lower quartile and median) and private rental price change has been negative in County Durham, with market performance in terms of price change worse than that experienced across the North East. 4.25 The overall relative affordability of properties to buy has improved, with the ratio of lower quartile house prices to incomes falling, which has also been experienced across comparator districts and across the North East generally, although affordability has worsened at national level. The fall in County Durham has been greater than that experienced in comparator districts or the region, however. 4.26 The number of property sales has increased, but not at the rate of comparators, the region or national trends. Levels of vacancy have increased slightly, while comparator districts, the North East and England as a whole have seen a fall in vacancies over the period. Overcrowding has fallen; whilst this has been experienced in comparator districts, the region and nationally, the decrease in overcrowding has been greater in County Durham.
Past trends in housing delivery 4.27 PPG Paragraph 2a-19 refers to the rate of development as a market signal. 4.28 Historic targets for housing delivery had been set in the Regional Spatial Strategy. The targets for County Durham were: 1,890 gross and 1,670 net dwellings each year (2004-2011); 1,620 gross and 1,335 net dwellings each year (2011-2016); 1,225 gross and 1,035 net dwellings each year (2016-2021); and overall 1,615 gross and 1,390 net dwellings each year over the period 2004-2021. 4.29 Although the RSS has been revoked, it provides a useful context in which housing delivery can be positioned. Over the period 2004/5 to 2014/15, a total of 15,945 dwellings have been built across County Durham, representing an annual gross rate of 1,450 (Table 4.3). The highest rates of housing completion were experienced during 2006/07 (2,361 dwellings) and 2007/08 (2,397 dwellings). Figure 4.1 compares overall completions with RSS dwelling targets. Overall, gross rates of development were in line with RSS targets but the impact of the recessionary environment post 2007 has affected delivery rates. It would be suggested that underperformance against RSS targets was heavily influenced by the economic downturn and not due to development constraint.
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Table 4.3 Dwelling completions 2002/03 to 2014/15 Year Total 2004/05 1,021 2005/06 1,800 2006/07 2,361 2007/08 2,397 2008/09 1,426 2009/10 1,179 2010/11 1,046 2011/12 1,297 2012/13 1,165 2013/14 1,055 2014/15 1,198 Total (11 years) 15,945 Annual average 1,450 Source: Durham County Council
Figure 4.1 Dwelling completions and targets 2004/5 to 2014/15
4.30 In conclusion, a review of Market Signal data would suggest there are no indicators prompting a need for adjusting the housing dwelling need on the basis of Market Signals. These should be monitored on a regular (at least annual) basis and the scale of dwelling delivery should be adjusted where the Council believes it is appropriate to do so.
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Establishing an Objectively Assessed Housing Need 4.31 An OAN should be based on reasonable assumptions which take into account baseline demography, adjustments to reflect local demographic trends, past delivery, market signals, future jobs and other local circumstances: the SHMA has explored these factors in detail. PAS guidance suggests that the OAN should exclude any policy objectives and value judgements and evidence should be entirely about need and demand, to the exclusion of any supply-side factors such as physical constraints, policy designations and adverse impacts of development. However, these factors should be considered when translating the OAN into a provision target. 4.32 The challenge for the Council is to deliver an appropriate and proportionate level of dwelling growth which supports economic growth and carefully takes into account the current demographic profile of the District. 4.33 Further work to establish the Objectively Assessed Need for housing will be presented in the Preferred Options Stage SHMA (Part 2).
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Introduction 5.1 The purpose of this chapter is to explore the housing market dynamics of County Durham and present a housing market review focusing on: current stock profile and condition; tenure characteristics; housing need and affordable requirements; market demand and aspirations; overcrowding and under-occupancy; the needs of particular groups including older people, people with disabilities and Black, Asian and Minority Ethnic Groups. A review of market signals informs the Objectively Assessed Housing Need calculations and considers indicators of housing quantity and price for County Durham and comparator areas.
Estimates of current dwellings in terms of size, type, condition, tenure 5.2 This study assumes a total of 239,685 dwellings in County Durham, of which 1,841 are second homes and 11,522 are vacant, resulting in a total of 226,322 occupied dwellings (Table 5.1)23. The overall vacancy rate is around 4.8%. This compares with vacancy rates of 2.7% across England24.
Table 5.1 Dwelling stock and occupancy across County Durham Total Second Total Total County Durham Dwellings Homes Vacant Households % Vacant Total 239685 1841 11522 226322 4.8% Source: 2015 Council Tax
Property size and type 5.3 Table 5.2 reviews the profile of occupied dwelling stock by size and type across County Durham. Overall, the vast majority (79.4%) of properties are houses, 15.1% are bungalows, 5.0% are flats/apartments and maisonettes and 0.4% are other types of property including park homes/caravans. Of all occupied properties, 6.1% have one bedroom/studio, 35.2% have two bedrooms, 43.8% have three bedrooms and 15.0% have four or more bedrooms. How property type varies by Local Plan monitoring area is illustrated in Figure 5.1 and variations in number of bedrooms by Local Plan monitoring area in Figure 5.2.
23 2015 Council Tax data 24 2013 CLG Dwelling and Vacancy data
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Table 5.2 Property type and size of occupied dwellings across County Durham
No. Bedrooms (Table %) Base One/ Five or (Valid Property Type studio Two Three Four more Total response) Detached house 0.1 1.0 6.9 7.8 1.8 17.6 39605 Semi-detached house 0.2 8.7 19.4 2.5 0.5 31.4 70529 Terraced house / town 0.3 13.9 14.3 1.7 0.2 30.4 68242 house Bungalow 3.3 8.8 2.8 0.2 0.1 15.1 33884 Maisonette 0.1 0.1 0.0 0.0 0.0 0.2 493 Flat / apartment 2.1 2.4 0.2 0.0 0.1 4.8 10768 Caravan / Park Home 0.1 0.1 0.0 0.0 0.0 0.1 316 Other 0.0 0.1 0.1 0.1 0.0 0.3 758 Total 6.1 35.2 43.8 12.4 2.6 100.0 224595 Base (Valid response) 13673 78987 98282 27830 5823 224595 Source: 2012 Household Survey, rebased to 2015
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Figure 5.1 Property type by Local Plan monitoring area
100%
90%
80%
70%
60% Other Flat /Apartment / Maisonette 50% Bungalow Terraced house / town house 40% Semi-detached house Detached house 30%
20%
10%
0% Central Durham East Mid North West North South South East West TOTAL Durham City Durham Durham Durham Durham Durham Durham Durham
Source: 2012 Household Survey, rebased to 2015
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Figure 5.2 Property size by Local Plan monitoring area
100%
90%
80%
70% Five or more 60% Four 50% Three
40% Two
30% One
20%
10%
0% Central Durham City East Mid Durham North West North South South East West TOTAL Durham Durham Durham Durham Durham Durham Durham
Source: 2012 Household Survey, rebased to 2015
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Property condition 5.4 The 2012 Household Survey reviewed the extent to which households were satisfied with the state of repair of their dwellings. Overall 88.9% of respondents expressed satisfaction (54.2% were very satisfied and 34.7% were satisfied); 6.9% were neither satisfied nor dissatisfied; a total of 4.2% expressed degrees of dissatisfaction, of whom 3.2% were dissatisfied and 1.0% were very dissatisfied. Table 5.3 explores how the level of dissatisfaction varied by dwelling tenure, age and type. 5.5 Levels of dissatisfaction were highest amongst private renters, at 11.6%. In terms of property type and age, dissatisfaction was highest amongst respondents living in flats/maisonettes (8.6%) and amongst residents in properties built between 1919 and 1944 (7.2 %).
Table 5.3 Dissatisfaction with state of repair by monitoring area, property tenure, age and type Tenure No. Dissatisfied % Dissatisfied Base Owner Occupier 2175 1.46 148920 Private Rented 3648 11.60 31459 Affordable 3483 7.58 45943 Total 9306 4.1 226322 Property Type No. Dissatisfied % Dissatisfied Base Detached house 698 1.8 39606 Semi-detached house 2931 4.2 70612 Terraced house / Town house 3155 4.6 68349 Bungalow 1535 4.5 33948 Flat / Apartment / Maisonette 968 8.6 11316 Other 19 0.8 2491 Total 9306 4.1 226322 Property Age No. Dissatisfied % Dissatisfied Base Pre 1919 1926 4.7 41126 1919 to 1944 2634 7.2 36678 1945 to 1964 2671 5.5 48590 1965 to 1984 1340 2.6 51275 1985 to 2004 633 1.8 34302 2005 onwards 102 0.7 14351 Total 9306 4.1 226322 Source: 2012 Household Survey, rebased to 2015
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Property tenure 5.6 The tenure profile of County Durham is summarised in Figure 5.3. Overall, based on survey evidence, 65.9% of occupied dwellings are owner-occupied, 13.9% are private rented (including tied accommodation) and 20.0% are rented from a social housing provider and 0.1% are intermediate tenure dwellings.
Figure 5.3 County Durham: tenure profile of occupied dwellings
Tied accommodation 937
Shared Ownership etc 306
Rented from social housing provider 44961
Rented Privately (unfurnished) 25767
Rented Privately (furnished) 4529
Owned (with mortgage) 68027
Owned (no mortgage) 79553
0 10000 20000 30000 40000 50000 60000 70000 80000 90000
Source: 2012 Household Survey, rebased to 2015
5.7 Variations in broad tenure groups by monitoring area are summarised in Figure 5.4. The proportion of owner occupied dwellings is highest in South East Durham (72.3%) and North Durham (70.7%); private renting in Durham City (20.3%) and West Durham (17.8%); and affordable accommodation in Mid Durham (24.4%), East Durham (22.8%) and South Durham (22.2%).
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Figure 5.4 County Durham tenure profile by Local Plan monitoring area
100%
90%
80%
70%
60% Social/Affordable Rented/Intermediate 50%
Private Rented 40%
30% Owner occupied
20%
10%
0% Central Durham East Mid North West North South South East West TOTAL Durham City Durham Durham Durham Durham Durham Durham Durham
Source: 2012 Household Survey, rebased to 2015
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Owner-occupied market 5.8 According to the 2012 Household Survey (rebased to 2015), 65.9% (148,933) of households across County Durham are owner occupiers. 35.5% of all households (80,423) own outright and 30.3% of all households (68,510) have a mortgage. 5.9 The household survey provides the following information on owner occupied stock: Most owner-occupied properties are houses (87.8%), with 33.2% semi- detached, 31.2% terraced and 23.3% detached; a further 10.4% are bungalows, 1.4% flats/maisonettes and 0.4% other property types; 50.9% of properties have three bedrooms, 27.4% have two bedrooms, 20.9% have four or more bedrooms and 0.9% have one bedroom; Around 21.2% of owner-occupied stock was built pre-1919, 33.0% was built between 1919 and 1964; 22.3% was built between 1965 and 1984 and 23.4% has been built since 1985; and 94.9% of owner-occupier households are satisfied or very satisfied with the state of repair in their accommodation, 3.6% are neither satisfied nor dissatisfied and 1.4% expressed degrees of dissatisfaction. 5.10 Over the period 2000 to 2015, lower quartile and median house prices across County Durham have increased dramatically as summarised in Table 5.4. 5.11 It is interesting to note that in 2000, a household income of £8,857 was required for a lower quartile price to be affordable; by 2015 this had increased to £17,714. In comparison, an income of £13,571 was required for a median priced property to be affordable in 2000 compared with £28,571 in 2015.
Table 5.4 Lower Quartile and median price and income required to be affordable House Price (£) Income to be affordable* County Durham 2000 2015 2000 2012 Lower Quartile 31,000 62,000 £8,857 £17,714 Median 47,500 100,000 £13,571 £28,571 Source: DCLG / Land Registry *Assuming a 3.5x income multiple
5.12 A range of socio-economic and demographic information on residents has been obtained from the household survey. Some interesting observations relating to owner-occupiers include: In terms of household type, 41.8% are older (60+) singles or couples, 16.2% are couples with children, 14.6% are couples (under 60 with no children),
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9.0% are singles (under 60), 2.6% are lone parents, 13.9% are parents with adult children living at home and 2.2% are other household types; Just over half of Household Reference People (Heads of Household) living in owner occupied dwellings are in employment (56.0%) and a further 34.7% are wholly retired from work. The proportion retired is considerably higher for outright owners (59.3%); In terms of length of residency, 42.3% of owner occupiers have lived in the same property for 20 years or more (and the figure is 63.1% for outright owners).
Private rented sector 5.13 The Government’s Housing Strategy, published in November 201125, set out the Government’s plans to boost housing supply. It recognised an increasingly important role for the private rented sector, both in meeting people’s housing needs and in supporting economic growth by enabling people to move to take up jobs elsewhere and to respond to changing circumstances. 5.14 The private rented sector is growing; the recently published Census figures for 2011, confirmed that the sector now totals 18.1%, an increase of 31.2% from 13.8% in 2001. Increasing house prices pre 2007 and the struggling sales market when the down turn came are both factors that have underpinned the growth of the rental market for both ‘active choice’ renters and ‘frustrated would be’ homeowners. Tenure reform and less accessible social rented housing are also likely to be an increasing factor to the growth in the private rented sector and the sector clearly now plays a vital role in meeting housing needs as well as providing an alternative to homeownership. 5.15 Local authorities have an important role in ensuring that the private rented sector meets both these requirements. Balancing good quality supply with demand will help to stabilise rents and encouraging good quality management will improve the reputation of the sector and encourage longer term lets and lower turnover. However, this is a challenging task where existing partners need to be encouraged to participate and new partners and investors need to be identified. 5.16 The private rented sector accommodates around 13.9% (31,234) of households across County Durham. Of these households, 25,767 rent unfurnished properties, 4,529 rent furnished accommodation and 937 rent with their job (tied accommodation). Table 5.5 summarises the number of private rented dwellings in County Durham.
25 DCLG Laying The Foundations; A Housing Strategy for England, 2011
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5.17 Most private rented properties (79.9%) are houses (of which 42.5% are terraced, 24.9% are semi-detached and 12.6% are detached); a further 13.5% are flats, 5.6% are bungalows and 0.9% are other property types. 6.1% of privately rented properties have one bedroom/bedsit, 48.3% have two bedrooms, 38.2% have three bedrooms and 7.4% have four or more bedrooms. 5.18 The characteristics of tenants are diverse and in particular the private rented sector accommodates single adults (under 60)(23.3%), couples with no children (17.9%), older households (60+ singles and couples)(17.5%), couples with children (14.5%), lone parents (13.8%), parents with adult children (7.5%) and other household types including students and friends sharing (5.6%). 5.19 46.4% of private renting households have lived in their accommodation for less than two years. 5.20 In terms of income, 60.5% of privately renting households receive less than £300 per week, 19.3% receive between £300 and £500 per week and 20.3% receive at least £500 per week, indicating that the private rented sector tends to accommodate lower income households. 5.21 52.6% of Household Reference People (Heads of Household) living in private rented accommodation are employed, 12.6% are permanently sick/disabled, 13.3% are retired, 8.9% are looking after the home or caring for someone, 8.8% are unemployed and 3.8% are in full-time education.
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Table 5.5 Profile of private rented sector in County Durham Tenure Rented Privately Rented Privately (furnished) (unfurnished) Tied accommodation Total Count % of PRS Count % of PRS Count % of PRS Count % of PRS County Durham 4529 14.5 25768 82.5 937 3.0 31234 100.0 Source: 2012 Household Survey, rebased to 2015
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Stakeholder views on the private rented sector 5.22 The online stakeholder survey obtained the views of 44 representatives from local authorities, parish councils, neighbourhood forums, voluntary agencies, government agencies, public service providers, registered providers, private developers, private landlords and chartered surveyors. They were invited to answer a range of questions relating to the housing market in County Durham. 5.23 Stakeholders were asked their views on the size of the private rented sector in County Durham. The feedback was varied with some believing it was “too big” and others feeling that it was, “too small”. This view may have been influenced by the presence of different localised market conditions within the County as most agreed that the biggest challenge for the private rented sector is the limited number of “good quality” homes available. Most felt that there was a vast oversupply of “low value terraced property” and an undersupply of “reasonable to good homes”. 5.24 Stakeholders were asked their views on the type and condition of the available housing stock. The consensus was that a broad range of housing was needed to cater to demand however the current market is dominated by smaller terraced properties offering two or three bedrooms. Stakeholders felt that these were often “poor quality” and not suitable to cater to demand from executives or larger families. Furthermore, stakeholders recognised that there were high numbers of empty properties and increasing numbers of “bad landlords”. They felt that this was having a negative effect on the housing market in the area and one stakeholder suggested “…Private landlords would always prefer to put their property on the market”. 5.25 Respondents indicated that the private rented sector in County Durham is focused around two- to three-bedroom family homes, older properties and terraced housing. These properties are located across the County however the most buoyant demand was noted in Durham City due to the consistent, high levels of students and contract worker demand present here. Lower demand was noted in some of the rural and/or economically depressed villages across the county. One stakeholder indicated that the “poor infrastructure” in these areas contributed to the low demand present. 5.26 The private rented sector attracts a range of demographics including; families, single people, those on low incomes, students, the homeless. Yet, feedback about the role of buy-to-let within the local market was limited. However, one stakeholder noted that it can be “high cost so that is putting people off” and another stated, “…Demand has slowed down in recent years…” and suggested that it tends to be focused around “…older properties…” 5.27 When asked about the impact of changes in the economy and welfare on the sector, the overall view was that more people are looking for private rented accommodation, as they cannot afford a mortgage due to increased house prices. In addition, the introduction of universal credit and the bedroom tax is believed to have increased demand for property within the private rented sector as property within this market is now viewed as “more affordable”. Despite this, it has also led to concerns amongst landlords which one stakeholder described as “fearful” when letting property to those in receipt of housing benefit. This often due to bad experiences in the past or social stigmas. Another stakeholder
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further indicated that changes to the level of housing allowance now available has led to a reduction in rent levels so that landlords ensure they remain competitive and an affordable option for those seeking property. 5.28 Stakeholders did not provide much information on movement between tenures. Some movement between private rented and social rented accommodation was noted with one stakeholder explaining that this was due to the “impact of the bedroom tax”. An increase in movement from the public sector to property ownership as the economic recovery continues was also noted however most felt that this was limited and mainly within the first time buyer market. 5.29 In terms of key strategic messages about the sector to be identified in the SHMA, stakeholders identified the following: That the PRS is as an important part of the property mix and supplying the needs of the county; Better quality accommodation is required across County Durham; There will continue to be a need for quality new homes in this market alongside a better regulated sector. It’s not a homogeneous sector and there is a range in quality and size of properties needed; As a growing sector, provision for high quality new homes should be encouraged as despite Government's drive for homeownership not everyone is able to afford to buy; More commitment to driving up standards by engaging with landlords for example via the introduction of a landlord registration scheme that may help improve standards; and More willingness from the Council to work with landlords managing tenants on benefits.
Affordable sector 5.30 There are around 46,028 households who live in an affordable accommodation across County Durham, accounting for 20.3% of all occupied dwellings. Of these, 45,635 are rented from a social housing provider and 393 are intermediate tenure (shared ownership). 5.31 According to the household survey, houses account for 51.4% of occupied affordable dwelling stock, 37.1% are bungalows and 11.5% are flats/apartments, maisonettes and other types of property. Affordable dwellings tend to have one (23.1%), two (51.6%) or three (24.5%) bedrooms, with a further 0.9% having four or more bedrooms. 5.32 51.8% are older singles and couples, a further 18.2% of households living in affordable dwellings are singles under 60, 9.4% are parents with adult children living at home, 7.3% are lone parents with dependent children, 6.1% are couples with dependent children, 5.3% are couples with no children and 2.0% are other household types. 5.33 21.7% of Household Reference People living in affordable housing are in employment. 38.8% are wholly retired from work, 23.4% are permanently
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sick/disabled, 7.7% are unemployed, 7.6% look after the home/are caring for someone and 1.0% are in full-time education/training. 5.34 Incomes are generally low, with 84.6% receiving an income of less than £300 per week and 60.6% receiving less than £200 per week.
Stakeholder views on affordable housing 5.35 The majority of stakeholders recognised that Decent Homes Standard had been met within the County’s affordable housing stock. The stakeholder survey included a range of affordable housing providers from across the County offering a mix of flats, two- and three-bedroom homes – most noticeably terraced properties, and one- and two-bedroom bungalows in both central and rural locations as well as some larger properties offering up to six bedrooms. 5.36 The majority of stakeholder believed that affordability was an issue within the County. Durham City and properties towards the lower end of the market were highlighted as the key areas where issues around affordability was prominent. However, not all agreed and some felt that it was far less challenging here than in other areas within the UK. 5.37 Stakeholders strongly felt that that the reduction in rental income imposed by the budget is likely to affect the number and type of affordable housing developed within the county. One stakeholder went on to suggest that “…this has made providers more cautious” and another felt that “…the new way of making a single monthly payment to families is totally wrong and will lead to many landlords going bankrupt and huge evictions…” 5.38 Demand is focused around larger towns such as Peterlee, Easington, Seaham, Durham City, Bishop Auckland and Crook. Locations within East Durham as considered less popular this is most noticeable in smaller villages with one stakeholder suggesting they were “run down” and that the stock available in these geographies was in “poor condition”. Three bedroom properties were described as the most popular type of property alongside bungalows – ideally offering two bedrooms as well as ground floor properties that are able to cater to the needs of the elderly. 5.39 Some thought anti-social behaviour was a problem in the area however most agreed that this was limited to certain “pockets” across the county. Problems with anti-social behaviour usually take place on or around local authority estates and typically involve single males living in one-bedroom properties. South Stanley, Acton Dene Estate, Burnhope, Moorside, Catchgate and the Grove were all highlighted as specific areas where anti-social behaviour is present. 5.40 The majority of stakeholders felt that their tenants were satisfied with the service they received and indicated that they did not believe there was any “significant problems” for their tenants. 5.41 A number of stakeholders stated that they are currently developing affordable housing within County Durham including affordable products (for rent, intermediate tenure product (for instance shared ownership) along with market housing products including rent to buy and starter homes. A range of family homes and older persons’ housing was being built. Most felt that they were too
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early in the development process to state who these would appeal to however, the general view was that families and retired couples would be at the core of the demand. 5.42 In terms of key messages for the SHMA in respect of affordable housing, stakeholders identified the following: There needs to be flexibility to accommodate the recent changes the government has announced as Registered Providers are going to struggle to move forward to deliver affordable rented properties due to the reduced valuations; The need for a better balance between supply and demand. This could be best delivered through a mix of new build and effective investment in current stock. Such decisions need to be based on a thorough assessment of current and longer term demand; Demand for affordable/social rented homes is predicted to increase however, concerns around the suitable levels of funding present to meet this demand and make schemes viable remains. One stakeholder noted that this “…may require more cross subsidy or free land to stack up in the future”; Homes should be provided in areas of high demand as failure to provide this can easily tip balance of existing stock in some areas into ‘difficult to let’ category; An assessment of need for family size homes would be helpful; More well designed older person accommodation; More supply overall but properties with three or more bedrooms are particularly required; and More support for villages by providing investment in infrastructure and affordable homes for keyworkers such as shop assistants, cleaners carers etc.
Executive housing 5.43 Although it is difficult to define executive housing, distinctive features include: High property values linked to desirable locations, with high incomes/ equity required to support the purchase; and High quality construction including exterior and interior fittings. 5.44 This SHMA Update has sought to investigate the requirements for executive housing through a review of existing provision, stakeholder discussions and analysis of household survey evidence. Overall, in County Durham, executive housing provision will have a role in response to the need for diversification and expansion of the sub-regional economy and in contributing towards achieving wider population and economic growth objectives for the Region. It should be noted that a development of executive housing is going ahead in Lambton. 5.45 Stakeholders highlighted a need for additional executive housing in County Durham.
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5.46 The household survey can be used to explore the housing options being considered by higher income groups (with a weekly income of at least £950). Although the executive housing market is a niche market, reviewing the housing aspirations of high income groups is an appropriate way of investigating the potential demand for executive housing. 5.47 The household survey identifies 22,180 households with an income of at least £950 each week. Of these households, 19.3% are intending to move in the next five years (3,638 households). Of this group of high income households, a majority (64.4%) stated a first preference location within County Durham (with 24.0% stating Durham City). A further 8% stated Northumberland, 5.6% Tyne and Wear, 2.6% Tees Valley, 2.2% Yorkshire and the Humber, 13.5% elsewhere in the UK and 3.6% outside of the UK. The main reasons for intending to move included wanting a larger property (42.3%), a move to a better neighbourhood (12.3%) and to be closer to work/a new job (10.5%). 5.48 In terms of dwelling preferences, likes and expectations are summarised in Table 5.6. This indicates strongest aspiration towards detached houses with four bedrooms. This broadly in line with what households expect to move to, although more people expect to move into three bedroom properties and semi- detached houses than would prefer to.
Table 5.6 High income household dwelling aspirations and expectations Like/Aspiration Property type (Table %) Semi- Detached detached Terraced No. Beds house house house Flat/Apartment Bungalow Total Two 1.7% 0.0% 0.0% 1.0% 5.7% 8.4% Three 13.9% 4.2% 2.1% 2.3% 4.7% 27.4% Four 45.2% 2.2% 0.0% 0.0% 1.6% 49.0% Five or more 15.3% 0.0% 0.0% 0.0% 0.0% 15.3% Total 76.1% 6.5% 2.1% 3.3% 12.0% 100.0%
Expectation Property type (Table %) Semi- Detached detached Terraced No. Beds house house house Flat/Apartment Bungalow Total Two 0.5% 1.2% 0.0% 2.4% 5.8% 9.8% Three 17.3% 10.3% 4.9% 0.0% 5.6% 38.1% Four 36.2% 4.9% 0.0% 0.0% 0.0% 41.0% Five or more 11.0% 0.0% 0.0% 0.0% 0.0% 11.0% Total 65.0% 16.3% 4.9% 2.4% 11.4% 100.0% Base: 3,638 households with an income of more than £950 planning to move in next 5 years Source: 2012 Household Survey, rebased to 2015
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Estate and letting agent review of the housing market 5.49 Views were sought about current market activity from a range of estate and letting agents operating across County Durham. arc4 conducted interviews with two to three agents in each of the survey areas. The agents were asked a series of questions about the local housing market. A full analysis of the findings of this research is set out at Technical Appendix C. This section provides a summary of the analysis. 5.50 Agents were generally of the view that the housing market within County Durham is far more mixed that it has ever been. This is particularly visible in Durham City where there is a high population of students and professionals who are drawn to the area for work. The trend is also emerging in other towns across the County with areas such as Sedgefield, Spennymoor and Peterlee receiving increased demand from in-migrants. 5.51 The housing market in all geographies has shown significant signs of recovery over the last year. Demand from investors has increased and agents believe that the overall confidence in the market has dramatically improved amongst all demographics. 5.52 Some agents felt that the current activity witnessed in the market is partly due to a backlog of those who may have wished to move two to three years ago but chose not to due to the uncertainty that was present within the economy and housing market. 5.53 Properties at the lower end of the market, below the level of stamp duty, are some of the most sought after, particularly amongst investors and first time buyers. Family homes are also performing well, with location being the key issue in the desirability of individual dwellings. 5.54 Estate agents are reporting that vendors can be unrealistic about the value of their property. They believe that access to information: online, via news reports and TV programmes are often the reason for this. Agents advise that although the market is showing signs of recovery it is still very price sensitive; therefore if a property is not selling, it is usually due to the asking price being too high. 5.55 Geographically those areas that are in close proximity to strategic transport links, centres of employment, have good schools, have benefitted from extensive regeneration programmes or have a good quality environment tend to have stronger housing markets. 5.56 Access to finance has been a major barrier to purchasing property in recent years. Problems obtaining deposits, low incomes, restriction to the amount people can borrow and stricter lending criteria have presented challenges across all demographics. Although this is still the case for some, the general view was that obtaining finance is becoming easier. This is particularly prominent in the first-time buyer market where agents believe that Government- led schemes such as “Help to Buy” and “gifted deposits” have contributed to a recent surge in activity within this market. 5.57 Incentives provided by developers including providing deposits, part-exchange and high quality fixtures and fittings at a competitive price are making new-build properties more attractive than older stock. However, agents note that some people are getting stuck in these properties as clauses in the contract often
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leave them unable to rent the property if they chose to move. This has become an emerging problem when break-ups occur and it is a growing trend amongst first-time buyer couples. As a result, one will have to stay in the property as they simply cannot afford to sell and are not allowed to rent the property out. 5.58 A shortage of bungalows is still present across the market. Agents highlighted that with an ageing population demand for this type of property continues to increase yet supply is inadequate when aiming to cater for this. 5.59 Although supply is not limited at present, agents noted that family homes are always in demand. Some raised concerns that as demand from in-migrants increases additional pressure is being placed on this section of the market. Furthermore, agents note that first time buyers are more aspirational than ever before and are now seeking family homes as a first home to ensure they do not have to move again in the short term. As a result, agents feel that more family homes would receive significant demand. 5.60 Repossessions in areas of County Durham have historically been stated as being “relatively high”. One agent noted that at the peak of the recession there were around 14 repossessions per week. As these properties were priced lower than others within the market they were very attractive to buyers, mainly investors. All agents now note that the current level of repossessions is much lower and felt that this highlighted the strength that is returning to the local housing market. 5.61 Purchasing properties at auction continues to receive growing demand. Estate agents recognise that programmes such as Homes under the Hammer, combined with “savvier” purchasers who are on the hunt for a bargain, continues to make this a popular option. 5.62 The rental market is extremely buoyant and there continues to be demand from investors, particularly in and around Durham City. Due to the strong demand for rental properties, people who are unable to sell their properties are becoming landlords. Rental values tend to average £400 per calendar month for a two- bedroom property. However, due to changes in the payment of tax credits landlords are still reluctant to rent to those in receipt of housing benefit.
Development profile of market dwellings 5.63 The current stock of open market dwellings is set out in Table 5.7, alongside household aspirations and expectations. Table 5.8 provides a summary of this information. Of households moving, most would like to move to a house (74.2%), 17.2% would like to move to a bungalow and 8.4% to a flat. A much higher proportion would like to move to a detached house (52.6%) than expect to (27.9%). In contrast, higher proportions expect to move to a semi-detached house (30.6%) than would like to (17.1%). 5.64 This analysis would suggest a particular focus on the delivery of three and four bedroom houses, detached properties and bungalows.
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Table 5.7 Open market dwelling stock and preferences Dwelling stock, likes and expectations Current Private Stock Dwelling type/size % Like % Expect % Detached house /cottage 1-2 Beds 1.0 3.4 1.7 Detached house /cottage 3 Beds 8.5 20.7 11.3 Detached house /cottage 4 or more Beds 11.9 28.4 14.9 Semi-detached house /cottage 1-2 Beds 7.3 3.6 4.7 Semi-detached house /cottage with 3 Beds 20.7 9.5 21.0 Semi-detached house /cottage 4 or more Beds 3.7 4.1 4.8 Terraced house /cottage 1-2 Beds 15.1 2.1 6.4 Terraced house /cottage 3 Beds 15.7 1.6 8.5 Terraced house /cottage 4+ Beds 2.4 0.9 0.7 Bungalow 1-2 Beds 5.9 8.7 9.1 Bungalow 3+ Beds 3.6 8.5 6.1 Flat /Apartment 1 Bed 0.9 1.8 3.3 Flat /Apartment 2 Beds 2.3 4.8 6.1 Flat /Apartment 3+ Beds 0.3 1.9 0.9 Other 1-2 Bed 0.3 0.1 0.4 Other 3 Bed 0.1 0.0 0.0 Other 4+ Bed 0.1 0.0 0.0 Total 100.0 100.0 100.0 Base 179592 19770 18467 Source: 2012 Household Survey, rebased to 2015
Table 5.8 Summary of open market dwelling stock and preferences % Profile of new dwelling stock based on: Dwelling type/size summary Current stock Like Expect House 1/2 Beds 23.4 9.1 12.9 House 3 Beds 45.0 31.8 40.8 House 4 or more Beds 18.1 33.4 20.4 Bungalow 9.6 17.2 15.2 Flat 3.5 8.4 10.3 Other 0.5 0.1 0.4 Total 100.0 100.0 100.0 Base 179592 19770 18467 Source: 2012 Household Survey, rebased to 2015
5.65 Table 5.9 considers the current dwelling stock profile of open market dwellings across County Durham and then the extent to which this varies from the stock profile based on the aspirations and expectations of households planning to move (using County-level data). This is a tool to assist in considering type and
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mix and is not a mechanism for considering distribution of development. Where cells are colour coded: a green spot indicates that the current proportion of dwelling stock is greater than the aspiration for that dwelling stock; a red spot indicates that the proportion of dwelling stock is lower than the aspiration.
Table 5.9 Comparison between current dwelling stock and market aspirations
Source: 2012 Household Survey, rebased to 2015
Key market drivers 5.66 Essentially, there are three key primary drivers influencing the current (and future) housing market: demographic; economic and dwelling stock characteristics, as summarised in Table 5.10.
Table 5.10 Primary market drivers Primary Driver Attributes Impact on overall demand through: Demography Changing no. of households, Natural Change household structure, ethnicity Economy Jobs, income, activity rates, Economic migration unemployment Housing stock and Quality vs. aspirations, relative prices, Residential migration aspirations accessibility, development programmes
Stakeholder views on housing market drivers 5.67 The online survey asked key stakeholders to identify what they perceive to be the main drivers of housing demand in County Durham. Respondents acknowledged that housing demand varies significantly across the District. Drivers included: Quality issues including problem tenants and poor quality housing;
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Population increase and the ageing population; The economy; A large number of people on low incomes; Employment opportunities; Lack of affordable homes for young people; Quality of and proximity to transport links; Student demand; and Welfare reform. 5.68 The general characteristics of households driving demand in the area was considered to be very mixed with the market needing a wide variety of housing to cater to demand. Stakeholders believe there are variations in demand levels, current supply, income levels and socio-economic status across the County. However, most generally felt that family demand is the most buoyant across all geographies yet housing supply across the area is not often suitable to cater to this demand. Stakeholders’ note that many families (particularly young families) are struggling to obtain a larger property due to issues with affordability and difficulties obtaining mortgages and most felt that overall housing market offered; “limited choice”. Furthermore one stakeholder felt that the high levels of those buying or renting homes in the area to use as a “base” for work and going home at weekends was negatively affecting the ability to build strong communities in the area. They noted Bishop Auckland as an area where this is a growing trend. 5.69 Stakeholders were asked to identify what they felt to be the current weaknesses of the housing market in County Durham and these include: The quality of the housing stock available particularly to the west of the County; High levels of empty homes; Market variation across the County leading to vast changes in demands, needs, desirability and wealth levels; Continued affordability struggle and challenge for some households to get a mortgage Poor infrastructure and transportation links in the more rural towns and villages; Limited supply of good quality social housing; An insufficient amount of affordable homes; A limited range and style of properties coming on to the market; The impact of negative equity from the previous housing crash; A lack of specialist housing – particularly for the elderly; and High levels of poor quality older housing stock.
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5.70 Stakeholders were asked for their views on house price trends and the impact they expect economic changes will have on housing markets in the future. Respondents views were varied however, the majority considered house prices to be ‘low’ and/or ‘falling’. The exception to this was any locations in Durham City or along the A1 corridor where stakeholders felt that higher incomes and demand supported these housing markets. In the remaining geographies stakeholders highlighted high house prices and low wages as characteristics present in most markets. As a result, access to finances in the form of mortgages and being able to save for a deposit were noted as key challenges for most. One stakeholder added that “Help to buy has significantly helped” and a number of others agreed with this statement. 5.71 Stakeholders were asked to rank a range of priorities as high, medium or low, their responses are summarised in Table 5.12. 5.72 ‘Building properties designed for older people’ was ranked the highest overall priority by stakeholders. 71% ranked it a high priority and 23.1% felt it was a medium priority for the County. ‘Building new affordable homes to rent’ and ‘improving the quality of existing stock’ were also both ranked as a high to medium by over 92% of respondents. 5.73 ‘Building affordable homes to buy on the open market’ was most strongly considered a medium priority for the County by 61.1% of respondents. 27.8% felt it was a high priority and 11.1% deemed this a low priority for the area. Equally, ‘building properties designed for people with specialist needs’ was considered a medium to high priority for over 94% of respondents as was ‘building properties designed for older people’ which was also ranked a medium to high priority for 94% of respondents. 5.74 ‘Building executive homes’ was considered a medium to low priority for stakeholders with 42.9% believing it was a medium priority and 40% feeling that it was a low priority for the area. The remaining 17.1% believed that this was a high priority. The overall consensus was that ‘Encouraging and enabling self- build’ was low (44.4%) or medium (41.7%) in terms of its priority for the area by stakeholders.
Table 5.12 Ranking of proposed priorities by key stakeholders
Proposed priorities Low Medium High
Building homes to buy on the open market (36) 11.1% 61.1% 27.8%
Building affordable homes to rent (38) 7.9% 42.1% 50%
Building affordable homes to buy (shared ownership, shared 5.6% 50% 44.4% equity) (36)
Building executive homes (34) 40% 42.9% 17.1%
Building properties designed for older people (39) 5.9% 23.1% 71%
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Table 5.12 Ranking of proposed priorities by key stakeholders
Proposed priorities Low Medium High
Building properties designed for people with specialist needs 5.6% 52.8% 41.7% (36)
Improving the quality of existing stock (37) 7.9% 47.4% 44.7%
Encouraging and enabling self-build (36) 44.4% 41.7% 13.9%
5.75 Stakeholders gave a range of reasons for identifying these priorities, including: Demographic change, particularly population growth and an ageing population; Not enough affordable homes are being built to effectively cater to the need present; Building executive homes is necessary to attract investment to the County; A general shortage of housing supply in recent years, but especially in relation to affordable and older persons housing where demand is increasing; Much of the current housing stock is in poor condition and needs improving to boost the image and reputation of some areas within the County whilst being able to cater to the demand for housing that is present; The lack of building within County Durham in recent years has led to increased demand for housing and; The building of new properties should be encouraged to attract investment and development within the County. 5.76 Asked what other key housing priorities there are in the Durham County Council area, stakeholders felt that: The Council should aim to boost supply of all types of housing however, low cost housing for both rent and sale should be prioritised; Landlords should be regulated to ensure that absentee landlords are still managing properties to a good standard as this is currently problematic in some parts of the County and potentially undermining community cohesion; More purpose built student accommodation is needed to support demand levels and; Encourage the conversion of larger buildings to provide smaller 1-bed units to cater to single and younger person demand. One stakeholder noted that “Changes to the welfare system has made it difficult for under 21’s due to plans to stop housing benefit payments.” they went on to add that, “sensibly priced homes close to town centres for younger people would help stabilise communities.”
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Current households in need 5.77 A robust and defensible assessment of housing need is essential for the development of affordable housing policies. Planning Practice Guidance sets out that: “Plan makers working with relevant colleagues within their local authority (eg housing, health and social care departments) will need to estimate the number of households and projected households who lack their own housing or live in unsuitable housing and who cannot afford to meet their housing needs in the market. This calculation involves adding together the current unmet housing need and the projected future housing need and then subtracting this from the current supply of affordable housing stock.”26 5.78 The 2012 Household Survey and a range of secondary data provide the robust and transparent evidence base required to assess housing need across the County Durham area. This is presented in detail at Appendix D of this report and follows CLG modelling guidance. 5.79 Across County Durham there are 14,638 existing households in need which represents 6.4% of all households. Reasons for housing need are summarised in Table 5.13. 5.80 Table 5.14 summarises overall housing need (before further analysis to test the extent to which households can afford open market provision to offset their need) across County Durham.
26 DCLG Planning Practice Guidance, Housing and economic development needs assessments, last updated April 2016
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Table 5.13 Housing need in County Durham Category Factor County Durham Homeless households N1 Under notice, real threat of notice or lease or with insecure tenure coming to an end 1956 N2 Too expensive, and in receipt of housing benefit or in arrears due to expense 1822
Mismatch of housing N3 Overcrowded according to the 'bedroom need and dwellings standard' model 2807 N4 Too difficult to maintain 3751 N5 Couples, people with children and single adults over 25 sharing a kitchen, bathroom or WC with 0 another household
N6 Household containing people with mobility Social/physical impairment or other special needs living in impairment 4558 unsuitable Accommodation
Dwelling amenities and N7 Lacks a bathroom, kitchen or inside WC and condition household does not have resource to make fit 149
N8 Subject to major disrepair or unfitness and household does not have resource to make fit 1307
Social needs N9 Harassment or threats of harassment from neighbours or others living in the vicinity which 1228 cannot be resolved except through a move
Total no. households in need (with one or more housing need) 14,713 Total Households 226,322 % households in need 6.5% Note: A household may have more than one housing need. Source: 2012 Household Survey, rebased to 2015
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Table 5.14 Households in need across County Durham No. H'holds in Total no. % H'holds in Sub-area need households need Total 14713 226322 6.5 Source: 2012 Household Survey, rebased to 2015
5.81 Tables 5.15 and 5.16 demonstrate how the proportion of households in housing need varies by tenure and household type for County Durham. Private renters are more likely to be in housing need (13.2%); along with student households (33.3%)27, lone parents with three or more dependent children (24.0%), other types of household (15.5%), friends sharing (14.4%), couples with three or more dependent children (13.3%) and couples with adult children (11.3%). The research identifies around 27,180 households with adult children living with parent(s) (of whom 2,705 were in housing need), which provides a broad indication of the scale of hidden housing need.
Table 5.15 Housing need by tenure No. H'holds Total no. % H'holds Tenure in need households in need Owner Occupier 8049 148933 5.4 Private Rented 4144 31363 13.2 Affordable 2520 46026 5.5 Total (All households in need) 14713 226322 6.5 Source: 2012 Household Survey, rebased to 2015
27 Note based on a low sample of student households
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Table 5.16 Housing need by household type No. H'holds Total no. % H'holds Household Type in need households in need Single Adult (under 60) 2296 28829 8.0 Single Adult (60 or over) 2170 40741 5.3 Couple only (both under 60) 1106 29590 3.7 Couple only (one or both over 60) 2998 50181 6.0 Couple with 1 or 2 child(ren) under 18 698 27045 2.6 Couple with 3 or more children under 18 580 4352 13.3 Lone parent with 1 or 2 child(ren) under 18 874 10701 8.2 Lone parent with 3 or more children under 18 168 701 24.0 Student household 235 705 33.3 Friends sharing 210 1458 14.4 Other type of household 565 3642 15.5 Couple with child(ren) aged 18+ 2387 21073 11.3 Lone parent with child(ren) aged 18+ 318 6107 5.2 Total 14605 225124 6.5 Missing 108 1198 Source: 2012 Household Survey, rebased to 2015
Homeless households 5.82 Homelessness statistics for 2014/1528 indicate that a total of 310 decisions were made on households declaring themselves as homeless across County Durham (Table 5.17). Of these households, 185 were classified as homeless and in priority need. Over the five years 2010/11 to 2014/15, an annual average of 623 decisions has been made across County Durham and an average of 302 households each year have been declared as homeless and in priority need.
Table 5.17 Homeless decisions and acceptances 2010/11 to 2014/15 Year Decisions made Accepted as homeless 2010/11 911 361 2011/12 850 425 2012/13 810 339 2013/14 383 198 2014/15 310 185 Total 3264 1508 Annual Average 623 302 Source: CLG Homelessness Statistics
28 CLG Homeless Statistics Table 627: Local Authorities' action under the homelessness provisions of the 1985 and 1996 Housing Acts, by sub-area
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Households previously homeless 5.83 The household survey identified 2,063 households who had been previously homeless or living in temporary accommodation and had moved to their present accommodation in the past five years. 5.84 Table 5.18 presents a range of information relating to the characteristics of previously homeless households and the dwelling choices that they have made. 52.9% of households previously homeless have moved into social/affordable rented accommodation and 36.2% have moved into the private rented sector. They have moved into predominantly two-bedroom dwellings (57.2%), with a further 19.0% moving to bedsits/one-bedroom dwellings and 23.7% moving into three plus bedroom dwellings. The incomes of previously homeless households are generally low with 59.8% receiving less than £200 each week and 12.0% receiving between £200 and £300 each week. 49.5% are singles under 60, 17.6% are couples with one/two dependent children and 9.5% are lone parents with one/two dependent children.
Table 5.18 Characteristics of households previously homeless Household Type % Property Type % Single adult (under 60) 49.5 House 73.7 Single adult (60 or over) 8.7 Bungalow 9.5 Couple only (both under 60) 4.7 Flat 16.8 Couple only (one or both over 60) 2.5 Total 100.0 Couple 1/2 child(ren) under 18 17.6 Lone parent with 1/2 child(ren) under 18 9.5 Friends sharing 3.7 Lone parent with adult child(ren) 3.7 Total 100.0 Current tenure % Origin % Owner Occupied 10.9 Within County Durham 74.1 Private Rented 36.2 From outside County Durham 25.9 Social/Affordable Rented 52.9 Total 100.0 Total 100.0 Current income (Gross weekly) % Property size % Under £200 59.8 0/1 Bed 19.0 £200 to <£300 12.0 2 Beds 57.2 £300+ 28.2 3 or more Beds 23.7 Total 100.0 Total 100.0 Base: 2,063 households previously homeless Source: 2012 Household Survey, rebased to 2015
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Affordable housing requirements 5.85 A detailed analysis of the following factors determines overall affordable housing requirements: Households currently in housing which is unsuitable for their use and who are unable to afford to buy or rent in the market (backlog need); New households forming who cannot afford to buy or rent in the market; Existing households expected to fall into need; The supply of affordable housing through social renting and intermediate tenure stock. 5.86 The needs assessment model advocated by the DCLG has been used and detailed analysis of each stage of the model is presented at Appendix D. 5.87 In addition to establishing the overall affordable housing requirements, analysis considers the supply/demand variations by sub-area, property designation (i.e. general needs and older person) and property size (number of bedrooms). Analysis provides a gross figure (absolute shortfalls in affordable provision) and a net figure (which takes into account supply of existing affordable accommodation). Modelling suggests a net imbalance of 378 affordable dwellings each year across County Durham as shown in Table 5.19. 5.88 Analysis is based on the next five years and in the absence of any updated information this should be extrapolated forward to cover the plan period to 2033.
Table 5.19 Net annual affordable housing imbalance by property size and designation 2016/17 to 2020/21 Total General Older Person TOTAL HHs Smaller 1/2 Bed 3+Bed County Durham 585 -356 148 378 226322 Sources: 2012 Household Survey rebased to 2015; RP CORE Lettings and Sales
Tenure split 5.89 In terms of the split between social rented and intermediate tenure products, the household survey identified tenure preferences of existing and newly- forming households and also the extent to which intermediate tenure products could be afforded. 5.90 Table 5.20 indicates that existing households in need mainly considered social/affordable renting as a preferred tenure option but newly-forming households had a stronger preference for intermediate tenure options.
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Table 5.20 Tenure preferences of existing households in need and newly-forming households requiring affordable housing Existing households Newly-forming Tenure in need (%) households (%) Total (%) Social/Affordable Rented 83.7 73.6 76.5 Intermediate 16.3 26.4 23.5 Total 100.0 100.0 100.0 Base (annual requirement) 807 1973 2780 Source: 2012 Household Survey, rebased to 2015
5.91 Overall, analysis would suggest a tenure split of 76.5% affordable rent and 23.5% intermediate tenure based on household preferences.
Property type preferences 5.92 Analysis of property type preferences (Table 5.21) suggests that a range of dwellings are required, with 66.6% preferring houses, 24.4% bungalows and 9% flats/apartments.
Table 5.21 Property type preferences Type preferences Existing (%) Newly-forming (%) Total (%) Detached 14.7 6.9 9.2 Semi-detached 19.7 32.5 28.8 Terraced 13.0 35.0 28.6 Flat 12.3 7.8 9.1 Bungalow 40.4 17.8 24.4 Total 100.0 100.0 100.0 Base 807 1973 2780 Based on expectations of existing households in need and what newly-formed households have moved to in the past 5 years Source: 2012 Household Survey, rebased to 2015
Stakeholder views on new housing provision 5.93 The key stakeholders who responded to the online survey were aware of a range of new housing provision across the County. Many questioned whether the current supply of new build housing being built was suitable to cater to the demand and/or needs of those seeking housing in the area. Some described these properties as “overpriced and out of reach” for most people. One stakeholder also questioned the speed of development noting; “activity is present but building can be slow”. The overall consensus amongst stakeholders was that the supply of new build housing was “insufficient” with most suggesting that more new build housing is needed. 5.94 The demand profile of those seeking new build properties was mixed with demand coming from both inside and outside of the County. Stakeholders
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highlighted that there needed to be a wide variety of properties to cater to the needs and demands of those seeking property in the area. They recognised that housing that is suitable for older people, starter homes, traditional family homes and homes that are attainable for those under 30 receive the strongest demand. One stakeholder felt that all properties receive “…fairly good demand but felt that “…re-sale is low”. 5.95 Stakeholders believe that the demand for new housing provision will increase in the future. The feedback suggests that both internal and external demand will drive growth alongside employment hubs and opportunities. Despite this, the general view of stakeholders was that any growth is fragile as it is greatly affected by fiscal and political changes however, one stakeholder added that; “Help to Buy” schemes were “here to stay”. Another was concerned that the market would remain “…static unless more housing sites are provided” 5.96 Stakeholders were asked about the main barriers to development. The key points were identified as: Viability; Uncertainty in the planning system; Lack of funding; Lack of confidence amongst developers; and The lack of an up to date development plan. 5.97 Stakeholders were asked what locations of the County should be prioritised for housing growth. A range of views were provided as to where new housing should be built including: Sites should be identified in sustainable locations, close to major infrastructure and areas of employment with a focus on Durham City, Central Durham and Northern Durham; In the popular areas where people want to live for sustainability. Key locations mentioned included; Lanchester, Consett, Chester-le–Street, Seaham, Murton, Bishop Auckland, Newton Aycliffe, Sedgefield, Barnard Castle and Durham City; Less investment to be made in older ex pit villages unless it is part of an ambitious plan to regenerate an area - where demolition and large scale site assembly are part of the master plan; To provide the type and quantity of housing required it is important that all parts of Durham are considered and not just those locations close to transport links and employment opportunities; Locations should include both inner urban brown field sites as well as urban extensions; and It is also strongly recommended that the Council provide more housing sites than is necessary to meet its housing requirement. This will ensure that the plan is flexible and provide a buffer should some sites/ locations not deliver as anticipated.
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5.98 The general view was that demand for new housing came from a mixed demographic and that the demand type varied greatly in different parts of the County. Demand was identified as coming from households currently living within County Durham as well as increasing levels of in-migration. The feedback indicates that County Durham is becoming a more popular option due to the employment opportunities it offers and desirable quality of life on offer in some geographies within the County. 5.99 Asked to identify what types of housing they thought should be built, the general view was that a broad range of new housing is required in County Durham to meet a spectrum of needs, cater to demand and to continue to attract people to the area. Some properties were highlighted and these included; Starter homes offering one or two bedrooms; Small family homes; Affordable and specialist homes; Bungalows for older people offering homeownership or shared equity purchase options; and Family homes offering three bedrooms. 5.100 Generally, stakeholders felt that the broad geographic spread within County Durham meant that demand needs should be accessed on an ‘area by area’ basis as location greatly affects the demand level of a property and the economic status of those who are looking. 5.101 Stakeholders were holding varied portfolios with number of green and brown field development sites across County Durham. A number of stakeholders were developing affordable housing products in the area including; rent to buy options, affordable houses for rent, bungalows and one stakeholder highlighted that they were “exploring the idea of rent to buy”. 5.102 They were asked why they were interested in developing in the area and most felt that strong demand across all markets within the area greatly boosted its desirability. Others recognised that long standing links with and experience of the market and its geographies contributes to the appeal development within County Durham. A number of stakeholders highlighted their particular commitment to promoting growth within the specialist housing sector. 5.103 In relation to Black and Minority Ethnic (BAME) households, very little feedback was given in terms of demand levels and market trends as most felt that limited numbers of BAME communities were present within the area and therefore demand from this demographic was considered low. 5.104 In terms of the key messages for the SHMA in respect of new housing provision in County Durham, respondents made the following points: Increased housing provision for more affordable homes for younger people; Greater support for older people particularly around purpose built accommodation; More involvement and or consideration to the needs and demands of those seeking property within the local market;
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Ensuring that any new build products are attractive to both the local community and those looking to move to the area; Greater focus to be placed on a potential sites links to transport, employment and amenities as this can greatly impact demand; The need for an increase in supply of executive homes that will continue to attract people to the area; and To develop better relationships between the local housing market and the surrounding local authority areas.
Black, Asian and Minority Ethnic households 5.105 The 2011 Census reports that 96.6% of residents are White British and the next largest ethnic group is White Other (1.6%). Other groups include Asian/Asian British (0.9%), Mixed/Multiple Ethnic (0.6%), Black/Black British (0.1%) and other groups (0.2%). 5.106 The 2011 Census identified 165 households where the Household Reference Person stated Gypsy and Traveller ethnicity (467 people). Caravan Count data for January 2015 showed a total of 148 caravans located on private authorised (4), social rented (134) and unauthorised (10) pitches. 5.107 The Durham County Traveller Site Needs Assessment 2013 identified the planned refurbishment of the six local authority Gypsy and Traveller sites, increasing the total number of pitches from 116 to 124. The assessment concluded that there will be a small surplus in supply (by three pitches) over the period 2015-2025. The study identified three sites for Showpeople, two of which are considered likely to meet existing and future needs for the period to 2030. The third has a planned extension and further future needs are uncertain so will be met through planning applications, if necessary. This Assessment is currently being updated for the Preferred Options stage consultation.
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6. The need for all types of housing
Introduction 6.1 Planning Practice Guidance, Housing and economic development needs assessments (updated April 2016) paragraph 21 considers how the needs for all types of housing should be addressed. The SHMA has evidenced the range of market and affordable housing requirements across County Durham. PPG also suggests planning authorities consider the need for certain types of housing and the needs of different groups, including the private rented sector, people wishing to build their own homes, family housing, housing for older people, households with specific needs and student housing29.
The private rented sector 6.2 The role and dynamics of the private rented sector are discussed in Chapter 5, paragraph 5.15-5.31.
People wishing to build their own homes 6.3 The Government made clear in its Housing Strategy for England Laying the Foundations that it wished to unlock the growth potential of the custom homes market and double its size over the next decade. It has defined the main critical barriers to custom build in this country as access to suitable plots to build on; access to development finance to enable the purchase of land and start of construction; and the hurdles that many custom builders face when they engage with the regulatory regimes that govern the development process. 6.4 As part of this agenda the Government enacted the Self-Build and Custom Housebuilding Act 2015, requiring authorities to keep a register of individuals and associations of individuals who are seeking to acquire serviced plots of land in the authority’s area in order to build houses for those individuals to occupy as homes. The Self-Build and Custom Housebuilding (Register) Regulations 2016 came into force on 1st April 2016, under Section 5 of the Act, making provision in relation to the definition of a serviced plot of land and registers kept under the Act. Planning Practice Guidance on Self-build and custom housebuilding (April 2016) was published at the same time as the new Regulations. Paragraph 3 states that self-build and custom housebuilding registers provide valuable information on the demand for self-build and custom housebuilding in a relevant authority’s area and should form a key part of a relevant authority’s evidence base of demand for this type of housing30. Paragraph 11 sets out that local planning authorities should use the demand from registers, supported as necessary by additional data from secondary sources, when preparing their SHMA to understand and consider future need
29 Paragraph: 021 Reference ID: 2a-021-20160401 30 Paragraph: 003 Reference ID: 57-003-20160401
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for this type of housing in their area. It further states that plan-makers will need to make reasonable assumptions using the data on their registers to avoid double-counting households31. 6.5 Until registers have been fully established and publicised, as required by Section 1(2) of the Self-build and Custom Housebuilding Act 2015, it is impossible to measure the level of demand for self-build or custom build housing over and above that which is already being supported by current market condition. In 2012 and 2013 around 6-7% of housing completions across County Durham were on plots for one or two houses, with this type of modest development likely to be self-build or custom build. In 2013 and 2014, this halved to between 3-4% of completions, perhaps because of mortgage availability or difficulties in achieving values on sales of existing homes to fund a self-build project. It should also be borne in mind that over-all house completions in these recessionary years were, of course, very modest. Historic information for the previous ten-year period suggests that development on similar sized small plots varied between 4-10% of annual completions. This suggests that the Council should seek to encourage self-build and custom build at a minimum level of 4%. Some of this self-build will continue to take place in the context of general market conditions and without the need for support from the Local Authority. Housing developers can also gain a financial advantage in their overall borrowing on schemes by making a proportion of plots available for self-build. This needs to be encouraged.
Family housing 6.6 Families (that is couples and lone parents with dependent children) account for around 19.0% of households across County Durham. A further 12.1% are couples and lone parents with adult children (aged 18 or over) living with them. The analysis assumes therefore a total of 31.1% of households who are families (including those with adult children still living at home). The current dwelling profile and market aspirations of families are summarised in Table 6.1. This suggests a particular aspiration for houses with four or more bedrooms (52.1% of families), but more are expecting to move to houses with three bedrooms (48.0%). 6.7 In terms of housing need (Table 5.16), compared with the overall proportion of households in need of 6.5%, 7.2% of all families (including those with adult children) are in housing need. This rises to 24.0% of lone parents with three or more children and 13.3% of couples with three or more children. By comparison, couples with one or two children (2.6%) and lone parents with adult children (5.3%) are less likely to be in housing need. Modelling of affordable housing need suggests that a range of affordable dwellings are required which will help to address the needs of families but there is a good supply of three bedroom dwellings to help accommodate their needs.
31 Paragraph: 011 Reference ID: 57-011-20160401
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Table 6.1 Property type preferences – Families Dwelling type Current dwelling Like Expect Detached house /cottage 1-2 Beds 0.6 0.6 0.4 Detached house /cottage 3 Beds 10.0 22.3 16.2 Detached house /cottage 4 or more Beds 15.6 47.7 26.2 Semi-detached house /cottage 1-2 Beds 7.2 0.7 2.4 Semi-detached house /cottage with 3 Beds 24.3 12.3 24.2 Semi-detached house /cottage 4 or more Beds 5.4 3.0 8.1 Terraced house /cottage 1-2 Beds 9.4 0.0 2.4 Terraced house /cottage 3 Beds 19.3 1.0 7.6 Terraced house /cottage 4+ Beds 2.9 1.4 1.6 Bungalow 1-2 Beds 2.2 2.9 5.3 Bungalow 3+ Beds 2.1 6.4 4.3 Flat /Apartment 2 Beds 0.5 0.7 0.9 Flat /Apartment 3 Beds 0.1 0.6 0.0 Other 1-2 Beds 0.1 0.2 0.2 Other 3 Beds 0.2 0.0 0.0 Other 4+ Beds 0.1 0.0 0.0 Total 100.0 100.0 100.0 Base (Valid responses) 69623 7768 7271 SUMMARY Houses 1/2 Bed 17.2 1.4 5.3 Houses 3 Bed 53.6 35.7 48.0 Houses 4+ Bed 23.9 52.1 35.9 Bungalow 4.3 9.3 9.7 Other 1.0 1.5 1.1 Total 100.0 100.0 100.0 Base (Valid responses) 69623 7768 7271 Source: 2012 Household Survey, rebased to 2015
Older people, support and adaptations 6.8 A major strategic challenge for the Council is to ensure a range of appropriate housing provision, adaptation and support for the area’s older population. PPG Paragraph 2a-21 states that ‘the need to provide housing for older people is critical given the projected increase in the number of households aged 65 and over accounts for over half of new households’. 6.9 Across County Durham, the number of residents aged 65 or over is projected to increase from 104,300 in 2015 to 152,000 by 2037 (a 45.7% increase). Table 6.2 shows the housing options that older households were willing to consider. The majority of older people (65%) want to stay in their own homes with help and support when needed. Renting is a popular option; overall, 25.3% would consider renting from a Housing Association, 25.1% would consider renting Sheltered Accommodation and 18.2% would consider renting Extra Care housing. In addition, 18.8% would consider buying a property on the open
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market. However, only 5.5% overall would consider renting from a private landlord. 6.10 Table 6.2 also provides a breakdown of housing options by age group. This indicates that the oldest households are more likely to wish to stay in their current home with support when needed, while younger groups are more open to consider buying a property on the open market or to rent from a Housing Association. Whilst similar proportions would consider renting Sheltered accommodation or Extra Care housing, fewer of the oldest households would consider buying or part-buying these forms of housing. 6.11 This evidence suggests a need to continue to diversify the range of older persons’ housing provision. Additionally, providing a wider range of older persons’ accommodation has the potential to free-up larger family accommodation.
Table 6.2 Older persons’ housing options % would consider by age group Housing option 55-64 years 65-74 years 75+ years Total Continue to live in current home with support when 57.5% 66.1% 80.9% 65.0% needed Buy a property on the open 26.3% 16.7% 4.0% 18.8% market Rent a property from a 7.8% 5.3% 0.5% 5.5% private landlord Rent from an Housing 29.7% 25.0% 15.8% 25.3% Association Sheltered accommodation - 24.0% 28.2% 23.9% 25.1% To Rent Sheltered accommodation - 9.7% 11.6% 4.6% 9.0% To Buy Sheltered accommodation - 4.1% 5.7% 2.5% 4.2% Part Rent/Buy Extra Care housing - To Rent 17.2% 18.6% 19.8% 18.2% Extra Care housing - To Buy 5.8% 8.2% 4.3% 6.1% Residential care home 3.1% 3.9% 2.7% 3.2% Co-housing 3.1% 3.9% 8.7% 4.6% Base (total households responding) 30283 15432 13313 59028 Source: 2012 Household Survey, rebased to 2015
Households with specific needs 6.12 The Adult Social Care team has a particular responsibility to ensure that there is adequate accommodation and support provision for a range of specialist client requirements e.g. domestic violence, HIV/Aids, Offending/Ex-Offending and Teenage Pregnancy.
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6.13 Table 6.3 summarises the type of client groups accommodated in social rented housing across County Durham over the three-year period 2010/11 to 2012/13. Data indicates that a range of groups are accommodated in RP specialist provision, most notably older people with support needs and young people leaving care.
Table 6.3 Client groups accommodated in social rented sector in County Durham 2010/11 to 2012/13 Client group Number People with physical or sensory disabilities 125 People with learning disabilities 126 People with mental health problems 110 Offenders and people at risk of offending 129 Women at risk of domestic violence 183 Older people with support needs 1495 Single homeless people with support needs 100 Young people leaving care 294 Young people at risk 78 Teenage parents 51 Total 2691 Source: Supported CORE lettings data
Stakeholder views on specialist housing provision 6.14 Survey respondents working in this area were working with people from a range of demographics including; those in receipt of DSS, general needs, older people, the disabled, people suffering with mental illness, learning difficulties and young parents. Asked what changes providers are seeing in their client groups, the following were mentioned: Greater diversity in the types of people looking for specialist housing; An increase in older people demand and need due to increasing levels of vulnerability; Increasing demand from young and unemployed singles and couples; and More people with higher levels of needs falling into crisis. 6.15 The future demand needs of these demographics were focused around older people. Stakeholders’ felt that demand amongst this demographic was increasing and that the levels of care required were becoming more diverse. One stakeholder added that many of this demographic are now living longer and therefore are becoming “more frail”. 6.16 Stakeholders identified all types of specialist accommodation were suffering from stock shortages for those seeking independent living. However, modern properties aimed at the elderly, dementia schemes, extra care schemes, ground floor apartments and 2 bed bungalows were are highlighted as key areas. In terms of stock shortages amongst older people stakeholders recognised; energy efficient homes for life, extra care facilities, sheltered
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accommodation and affordable rent schemes as priorities. One stakeholder noted that “the availability of grants” was also an important area that should be looked at to help support this demographic. Whilst smaller extra care developments and specialist dementia housing in locations linked to high demand were noted as the key areas of growth for those with additional needs. 6.17 The key issues around the physical adaptation of a property were overwhelmingly the availability of grants and/or funding. However, not all agreed and one stakeholder remarked “adaptations do not necessarily provide the best solution”. Another stakeholder added that due to the high numbers of older properties, adapting these properties can be challenging at best with some unable to undergo any adaptation. 6.18 Several stakeholders remarked on the significant affect that a reduction in government grants has had on housing provision. Less funding has meant many have reduced the number of services they are able to offer. However, not all felt that this has had a major impact on them. One stakeholder highlighted that they had “not received any SP funds since 2007…” and went on to add that this has had “…no impact on sheltered schemes services funded through rent and service charges”. 6.19 The biggest barriers to the delivery of specialist housing in County Durham were identified as; The lack and availability of finances; Lack of confidence about future revenue streams and; The availability of stock in the right location. 6.20 In terms of key messages for the SHMA in respect of specialist housing provision in County Durham, respondents made the following points: The need for more support and choice for older people; More specialist housing built to a ‘lifetime home’ standard; Increase the number of extra care facilities available; As people are living longer more awareness needs to be present about future needs as well as current needs; The importance of a range of solutions to meet the varying needs present considering the problems faced when aiming to generate long term revenue; and The importance of a robust assessment of specialist housing for the elderly taking in to account the range of provision (i.e. sheltered, extra care, etc.) and tenure.
Student accommodation 6.21 The demand for student accommodation is a key housing market driver in Durham City. According to the latest statistics from the University, in 2014/15 47% of students (undergraduates and postgraduates) lived in university accommodation.
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6.22 According to Council Tax data, there are 1,763 properties across County Durham occupied exclusively by students. The vast majority (82%) are located in Durham City and these account for 9.5% of all households in the Durham City Local Plan monitoring area (Table 6.4).
Table 6.4 All student households in County Durham No. All Student All % of all Local Plan monitoring area Households % households households Central Durham 138 7.8 27967 0.5 Durham City 1445 82.0 15145 9.5 East Durham 39 2.2 42167 0.1 Mid Durham 26 1.5 29133 0.1 North West Durham 41 2.3 35819 0.1 North Durham 30 1.7 24177 0.1 South Durham 25 1.4 30646 0.1 South East Durham 7 0.4 6277 0.1 West Durham 12 0.7 14991 0.1 Total 1763 100.0 226322 0.8 Source: 2015 Council Tax
6.23 Further information on student accommodation issues will be presented in the Part 2 Preferred Options SHMA.
Feedback from estate agents on student rental demand 6.24 Discussions with estate agents indicates that Student rental demand is County Durham is exceptionally high, with demand focused on Durham City where agents describe the market for student accommodation as “incredibly competitive”. Agents note that this demand remains consistent all year round however, it typically peaks around April – August when most students will be actively seeking a new property. The most noticeable challenge within this market as highlighted by agents is that demand for all rental accommodation within the City is strong and comes from a mixed demographic including the elderly, professionals and families. This can make finding a suitable property a challenge for students with some agents suggesting that this can also lead to properties being “below a suitable standard”.
Location 6.25 All types of property are in demand within the student market and agents note that location is the most important factor considered by student renters. Any property that is close to the city centre will receive significant interest particularly from undergraduate students who wish to be close to social activities and amenities. Agents further noted that The Viaduct, Church Street,
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Neville’s Cross and Gilesgate are the locations that receive the highest demand. Some post-graduates are happy to live further out and will sometimes seek a smaller, more private accommodation to live in during their studies. Amongst post-graduates, 1 and 2 bed flats are in very high demand. By comparison, undergraduates often seek larger 3 or 4 bed-terraced properties and agents suggest that this is often done to reduce the cost of living, which is at a “premium” in the desirable locations.
Re-lets and Tenancies 6.26 Agents report rapid re-let times for student rental properties and note that good properties can let within a matter of days of coming on to the market and most will let no longer than a week of entering the market. 6.27 Tenancies are usually between 6-12 months and agents report that students are less mobile than they have been previously. This is due to the difficulty they face when seeking a suitable property within a desirable area. They note that if a student is in good accommodation that they deem affordable, they will often stay there for the duration of their studies. This is also common amongst post- graduates who will typically stay in one property for the duration of their study. 6.28 The investor market is considered strong and agents’ report that most will opt to rent a property to students where possible due to the higher rental yields this presents them when compared with renting to families or professionals.
Investor Demand 6.29 Landlords are mixed and include both local and non-local buy-to-let investors as well as parents who often buy a property for their child to live in during their studies. This property will either be sold or “gifted” to the child once they have graduated. Many landlords are southern investors who are attracted to the market due to the high demand and rental yields available. Agents report that amongst non-local investors, agents will often undertake management of the property. Larger 4 bed terraced properties receive the highest demand however, agents note that as this are commonly let to students and rental demand is consistent, it is rare that these properties will come on to the market. Landlords are currently charging £60 to £80 per room per week.
The Future 6.30 Agents were of the view that it is common for students to stay in the area once they have graduated. If they are able to obtain employment locally, many will continue to rent or look to buy a property locally. However, most will seek smaller property or property in a less central location. 6.31 Agents considered that the historical high demand for private rented properties from students in Durham city is unlikely to slow down in the near future.
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7. Conclusion: policy and strategic issues
7.1 This document has been prepared to equip the Council and their partners with robust, defensible and transparent information to help inform strategic decision- making and the formulation of appropriate housing and planning policies. The work also takes account of the new National Planning Policy Framework which came into effect in March 2012 and Planning Practice Guidance (updated April 2016). 7.2 The June 2016 SHMA (Part 1) will help the Council plan for a mix of housing based on current and future demographic trends, market trends and the needs of different groups in the community. Specifically, the SHMA (Part 1) identifies the size, type and tenure of market housing required by sub-area by considering current market demand relative to supply; and also identifies a continued affordable housing imbalance across County Durham. 7.3 This concluding chapter summarises key messages from the research findings, structured around a commentary on the current and future housing markets; the interactions of County Durham with other areas; and relates findings to key local strategic issues.
The Housing Market Area 7.4 An analysis of 2011 Census migration data suggests that 72.0% of moving households originated from within County Durham and 69.5% of the workforce live and work within the County. Planning Practice guidance suggests that a housing market area can be defined with reference to household movement, and an area where typically 70% of moves take place can be described as being self-contained. 7.5 The 2012 Household Survey (rebased to 2015 households) found that of those who had moved home in the preceding five years, 77.0% originated within County Durham. It also found that 81.7% of households planning to move in the next five years intend on remaining in County Durham. 7.6 Therefore, County Durham can be described as a self-contained housing market on the basis of migration patterns and similarly travel to work patterns indicate that the majority of economically active residents live and work in County Durham. Evidence would therefore confirm that County Durham is an appropriate Housing Market Area for the purposes of Local Plan policy making.
Establishing an Objectively Assessed Housing Need 7.7 The National Planning Policy Framework requires that local planning authorities identify Objectively Assessed Housing Need and that Local Plans translate those needs into land provision targets. Paragraph 159 of the NPPF recognises that the objective assessment of housing need must be one that meets household and population projections, taking account migration and demographic change; meets the need for all types of housing including
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affordable, and caters for housing demand and the scale of housing supply necessary to meet that demand. 7.8 An OAN should be based on reasonable assumptions which take into baseline demography, adjustments to reflect local demographic trends, past delivery, market signals, future jobs and other local circumstances: the June 2016 SHMA (Part 1) has outlined the process by which an OAN will be derived for County Durham. PAS guidance suggests that the OAN should exclude any policy objectives and value judgements and evidence should be entirely about need and demand, to the exclusion of any supply-side factors such as physical constraints, policy designations and adverse impacts of development. However, these factors should be considered when translating the OAN into a provision target. A detailed consideration of the OAN for County Durham will be set out in the Preferred Options Stage SHMA (Part 2).
The current housing market 7.9 This study provides up to date information on the housing stock in the Council area and how the stock profile varies by market area is presented in data tabulations accompanying this report. 7.10 Across County Durham there are a total of 239,685 dwellings and a total of 226,322 households32. Overall, the 2012 Household Survey shows that: 79.4% of properties are houses, 15.0% are bungalows, 5.0% are flats/maisonettes, and 0.4% are other property types (e.g. caravans); 6.0% have one bedroom/bedsit, 35.2% have two bedrooms, 43.8% have three bedrooms and 15.0 % have four or more bedrooms; 18.2% of properties were built before 1919, a further 16.2% were built between 1919 and 1944, 21.4% between 1945 and 1964, 22.7% between 1965 and 1984, 15.1% between 1985 and 2004 and 6.3% have been built since 2005; and 65.86% of properties are owner-occupied, 20.20% are affordable and 13.94% are private rented.
Housing markets and mobility 7.11 A range of material has been gathered to help identify market drivers and the characteristics of County Durham Housing Market Area and linkages with other areas. 7.12 An analysis of household mobility using survey data suggests that of households moving in the past five years, 77.0% originated in County Durham and 23.0% moved into the County. Of this number, 6.6% originated from Tyne and Wear, 3.9% from Tees Valley, 0.6% from Northumberland, 1.9% from Yorkshire and the Humber, 2.5% from the North West and 7.5% from
32 2015 Council Tax data
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elsewhere in the UK or from overseas. Most moved into the private housing sector, with around 46.8% moving into owner occupation and 46.9% into private renting. Moving to be near family and friends and for work were key migration drivers. 82.7% of in-migrant households had a Household Reference Person aged under 60 and 17.4% were aged 60 and over; overall 59.9% were in employment and 53.9% had an income (of Household Reference Person and partner) of less than £500 each week.
Future housing market 7.13 The population of County Durham is estimated to be 520,200 in 201533 and this is projected to increase by 7.0% to 556,700 by 203734. Over the next few decades, there will be a marked increase in the number and proportion of residents aged 65 and over which is expected to increase by 45.7% from 104,300 in 2015 to 152,000 in 2037. 7.14 Data relating to future housing numbers and a broad review of Objectively Assessed Need for Housing has been explored in detail in this research. A detailed review of the OAN for County Durham will be undertaken in the SHMA (Part 2).
Delivering new housing 7.15 Households intending to move in the open market were asked what type and size of property they would like and expect to move to. This could then be compared with the current stock profile to identify any mismatches between availability and aspirations/expectation. Of households moving, most would like to move to a house (63.2%), 28.5% would like to move to a bungalow and 8.0% to a flat. A much higher proportion would like to move to a detached house (40.1%) than expect to (22.5%). In contrast, higher proportions expect to move to a semi-detached house (29.2%) than would like to (17.3%). 7.16 Future development should focus on delivering to address identified mismatches and reflect household aspirations. Analysis would suggest a particular focus on the delivery of three and four bedroom houses, detached properties and bungalows 7.17 The scale of affordable requirements has been assessed by taking into account the annual need from existing and newly-forming households within each Local Plan monitoring area and comparing this with the supply of affordable (social/affordable rent and intermediate tenure dwellings). The overall gross need for affordable housing is 2,824 dwellings each year. However, there is good capacity, particularly of three bedroom dwellings across County Durham which results in an overall net capacity of 378 affordable dwellings each year. However, analysis demonstrates an overall net shortfall of 585 smaller one and two bedroom general needs and 148 older person dwellings each year, with a
33 ONS 2012-based population projections 34 ONS 2012-based population projections
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net surplus of 356 three bedroom dwellings each year. It is therefore appropriate for the continued delivery of affordable housing to reflect underlying need, particularly of smaller general needs and older person affordable dwellings, with the latter driven by the ageing of the population 7.18 A tenure split of 76.5% affordable (social) rented and 23.5% intermediate tenure is suggested. 7.19 In summary, key drivers in determining the tenure and type of future development include: The need to continue development to satisfy household aspirations, in particular the development of three and four bedroom houses, detached properties and bungalows; Developing an increasing range of housing and support products for older people; Delivering additional affordable housing to help offset the identified net shortfalls; and diversifying the range of affordable options by developing intermediate tenure dwellings and products; and The economic viability of delivering affordable housing on sites across County Durham.
Improving the quality of existing stock 7.20 Strategic challenges include reducing the level of vacant dwellings and improving the quality of existing dwellings through better energy efficiency and modernisation.
Vacant stock 7.21 There are an estimated 11,522 (4.8%) unoccupied properties across County Durham35 and these are mainly in the private sector. Properties can be empty for a variety of reasons which include: the properties are too difficult to repair or are in the process of being repaired; they are in the process of being sold; they have been bought for capital investment; or they are in probate. 7.22 The Council should continue to consider identifying the reasons why properties are empty and identify mechanisms for bringing them back into use. Mechanisms could include: Financial/professional help for repairs and improvements in the form of equity loans; grant aid for renovation and subsequent leasing to a Housing Association for a fixed term; a professional service to manage repairs or full renovation; and Assistance with letting management or the sale of a property.
35 2015 Council Tax data
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Satisfaction and repair 7.23 Although the vast majority of households (88.9%) are satisfied with the condition of their dwellings, 4.2% of households were dissatisfied or very dissatisfied. Levels of dissatisfaction were highest amongst private renters, those living in flats/maisonettes and in properties built between 1919 and 1944. 7.24 Improving the energy efficiency of dwellings and modernisation of stock is an important driver to improving the quality of existing stock and extends beyond those households expressing dissatisfaction. Given the need to reduce energy consumption, improve thermal comfort and future proof households from spikes in energy prices, retrofitting stock with improved insulation, heating systems and solar panels is likely to become a significant strategic issue.
The ageing population and addressing the needs of vulnerable people 7.25 A key challenge for the Council is to ensure a greater diversity of support services are made available to older people wanting to stay in their own home and develop funding mechanisms to achieve this. 7.26 Additionally, the range of housing options available to older people needs to be diversified, for instance through the development of open market housing marketed at older people and the development of Extra Care accommodation and co-housing.
NPPF requirements 7.27 Paragraph 159 of the NPPF states that Local Planning Authorities should have a clear understanding of housing needs in their area and they should: Prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where Housing Market Areas cross administrative boundaries. The SHMA should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period that: - Meets household and population projections, taking account of migration and demographic change; - Addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as, but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes); and - Caters for housing demand and the scale of housing supply necessary to meet this demand. 7.28 The material in this SHMA (Part 1) provides an evidence base to inform strategic decision making. 7.29 The June 2016 SHMA (Part 1) has:
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Considered how the Objectively Assessed Need for housing will be identified; evidenced the scale of Affordable Housing need and the specific affordable requirements necessary to offset the imbalance between supply and need; reviewed market demand and the range of dwellings required to satisfy household expectations and aspirations; and reflected upon the needs of different groups of the population, in particular older people and those requiring specialist support requirements.
Final comments 7.30 Appropriate housing and planning policies have a fundamental role to play in the delivery of thriving, inclusive and sustainable areas. These policies need to be underpinned with high quality data. This study has provided a wealth of up- to-date social, economic, demographic and housing data for County Durham. 7.31 This research has reflected upon the housing market attributes of County Durham and interactions with other areas. The report signposts future strategic challenges which include the ongoing delivery of new market and affordable housing to address need and support economic growth; diversifying the range of affordable tenures available to local residents; improving the condition and energy efficiency of existing stock; and addressing the requirements of older people and vulnerable groups.
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Introduction to Technical Appendices
Technical Appendix A: Research methodology Technical Appendix B: Policy review Technical Appendix C: Estate and letting agent housing market review Technical Appendix D: Housing need Technical Appendix E: Monitoring and updating Technical Appendix F: National Planning Policy Framework and Planning Practice Guidance Checklist
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Technical Appendix A: Research Methodology
Overall approach B.1 A multi-method approach was adopted in order to prepare a robust and credible Strategic Housing Market Assessment for Durham County Council: A review of relevant secondary data including the 2011 Census, house price data, private rental data, Housing Association CORE lettings data, CLG Statistics and Housing Register information; The preparation of demographic and dwelling forecasts by Edge Analytics using POPGROUP technology; A sample survey of households across the County Durham area. This Household Survey was undertaken in 2012 to prepare the SHMA 2013, with a total of 34,948 households contacted and 6,216 questionnaires returned. This household survey data has been used in this SHMA Update, but re- weighted based on the up-to-date secondary data review and demographic and dwelling forecasts. The 6,216 returned questionnaires represented a 17.8% response rate overall and the total number of questionnaires returned was well in excess of the 1,500 specified in former Government guidance; An on-line survey of key stakeholders including local authority representatives, parish councils, voluntary agencies, government agencies, public service providers, registered providers, private developers, private landlords and chartered surveyors; and Interviews with estate and letting agents.
Baseline dwelling stock information and survey sample errors B.2 Table A1 summarises total dwelling stock and the number of households contacted by survey area, achieved response rates and sample errors. Note that the survey was carried out using a different geographical base. Data have been recast to reflect the Local Plan Monitoring Areas.
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Table A1 Summary of dwelling stock
Total Total Mail Actual Response Sample Survey Area Dwellings Occupied out returns rate (%) error Barnard Castle 4624 4317 2113 446 21.1 4.4% Bishop Auckland 22694 21155 2240 341 15.2 5.3% Central 23980 22894 2247 427 19.0 4.7% Chester-le-Street 22475 21521 2240 441 19.7 4.6% Consett 21316 20245 2240 397 17.7 4.9% Crook and Willington 11439 10775 2207 334 15.1 5.3% Durham City 18226 17285 2233 439 19.7 4.6% Easington and Peterlee 22379 21345 2240 365 16.3 5.1% Newton Aycliffe 11928 11576 2213 375 16.9 5.0% Seaham 19362 18441 2240 362 16.2 5.1% Sedgefield 7133 6809 2167 415 19.2 4.7% Spennymoor 17649 16580 2233 369 16.5 5.0% Stanley 15464 14693 2227 404 18.1 4.8% Upper Teesdale 1925 1774 1774 348 19.6 4.7% Weardale 6140 5534 2147 397 18.5 4.7% Wingate 8625 8137 2187 356 16.3 5.1% Total 235360 223081 34948 6216 17.8 1.2% Source: Council Tax Data 1. Where ‘sample’ is indicated in the column this means that a random sample of households were selected for that area and issued with a survey. 2. Sample error is based on the 95% confidence interval which is the industry standard to establish result accuracy
Weighting and grossing B.3 In order to proceed with data analysis, it is critical that survey data is weighted to take into account non-response bias and grossed up to reflect the total number of households. Weighting for each survey area was based on: tenure (the proportion of affordable (social rented and intermediate tenure) and open market dwellings based on 2011 census data; age of household reference person based on the proportions of household reference people aged under 65 and 65 or over living in affordable and open market provision derived from the 2011 Census. B.4 Ultimately, the survey element of the assessment is sufficiently statistically robust to undertake detailed analysis and underpin core outputs of the study down to the survey areas presented in Table B1. Furthermore, the survey findings are enhanced and corroborated through analysis of secondary data and stakeholder consultation.
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List of stakeholders interviewed as part of the SHMA process B.5 An online survey was carried out with a range of stakeholders drawn from: Local authority representatives; Parish councils; Voluntary agencies; Government agencies; Public service providers; Registered Providers; Private developers; Private landlords; and Chartered surveyors.
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Technical Appendix B: Policy Review
B.1 The purpose of this Appendix is to set out the national policy agenda of relevance to this housing needs assessment.
Introduction B.2 Housing policy in England is managed through the Department for Communities and Local Government (DCLG), but is managed by the devolved governments in Scotland, Wales and Northern Ireland. In addition to policies that apply directly to housing matters, there is significant overlap with a number of other policy areas, including planning, welfare, political devolution and the wider economy. B.3 Under the previous Coalition Government, the five years 2010-2015 saw a radical and sustained programme of reform of welfare, housing and planning policy, set within the context of national austerity and an economic policy of deficit reduction and public spending cuts. These reforms championed localism, decentralisation and economic growth. B.4 Since the election of a majority Conservative Government in May 2015 further welfare reforms have been accompanied by policies seeking to increase the rate of housebuilding and promoting home ownership as the tenure of choice.
Legislative and policy background B.5 Following the Coalition Agreement of May 2010, the previous Government passed the Localism Act 2011, with the express intention of devolving power from central government towards local people. The Localism Act sets out a series of measures to seek a substantial and lasting shift of powers including: new freedoms and flexibilities for local government, including directly elected mayors and empowering cities and other local areas; new rights and powers for communities and individuals; reform to make the planning system more democratic and more effective, including the abolition of regional spatial strategies (RSS), the introduction of the ‘Duty to Cooperate’, neighbourhood planning, Community ‘Right to Build’, reforming the community infrastructure levy and reforming the Local Plan process; and reform to ensure that decisions about housing are taken locally. B.6 In terms of housing reform, the Localism Act reforms aim to enable more decisions about housing to be made at the local level, making the system fairer and more effective. Local authorities have greater freedom to set their own policies about who can qualify to go on the waiting list in their area. In addition, the Act allows for more flexible tenure arrangements for people entering social housing, with social landlords able to grant tenancies for a fixed length of term rather than lifetime tenancies for all. In respect to homelessness, the Act allows
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local authorities to meet their homelessness duty by providing private rented accommodation, rather than in temporary accommodation until long-term social housing becomes available. The Act also reforms social housing funding, allowing local councils to keep the rent they collect and use it locally to maintain their housing stock. It facilitates a national ‘Home Swap’ scheme to facilitate house moves between social housing tenants. In addition, the Localism Act reforms the regulation of social housing, promoting tenant panels and changing the way complaints are handled. B.7 The National Housing Strategy for England, Laying the Foundations: A Housing Strategy for England, was published in November 2011 under the Coalition Administration and it currently remains in place. The Strategy acknowledges some of the problems within the housing market and sets out the Government’s policy response, along the following themes: Increasing supply: more homes, stable growth; Social and affordable housing reform; A thriving private rented sector; A strategy for empty homes; Quality of housing experience and support; and Quality, sustainability and design. B.8 The measures promote home ownership, including a new-build mortgage indemnity scheme to provide up to 95% loan-to-value mortgages guaranteed by Government and a ‘FirstBuy’ 20% equity loan scheme for first-time buyers. There is an emphasis on providing new infrastructure, with the announcement of a ‘Growing Places’ Fund, and the freeing-up of public sector land for development. Community-led planning and design is championed, with financial incentives such as the ‘New Homes Bonus’ to promote increased housebuilding at the local authority level. B.9 The National Housing Strategy acknowledges the importance of social housing and the need for more affordable housing. However, the Government reaffirm their programme to reform this sector, including “changes to the way people access social housing, the types of tenancies that are provided and the way the homelessness duty is discharged”36. The private rented sector is considered to play “an essential role in the housing market, offering flexibility and choice to people and supporting economic growth and access to jobs”37. The Government sets out an intention to support the growth of the private rented sector through innovation and investment, to meet continuing demand for rental properties. B.10 The National Housing Strategy reaffirms the Government’s commitment to bringing empty homes back into use, using the New Homes Bonus as an incentive. It also set out the objectives of preventing homelessness, protecting the most vulnerable and providing for older people’s housing needs. It confirms
36 Laying the Foundations: A Housing Strategy for England (Nov 2011), page 22 para.11 37 Laying the Foundations: A Housing Strategy for England (Nov 2011), page 33 Summary
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a radical package of welfare reforms, including a reduction in Housing Benefit, changes to the Local Housing Allowance (Housing Benefit in the private sector) and the introduction of ‘Universal Credit’ to replace other means-tested working age benefits and tax credits. Finally, the Housing Strategy addresses environmental concerns, with energy efficiency and reduced carbon emissions being required from both new and existing homes in order to promote sustainability. B.11 The National Planning Policy Framework (NPPF) was published in March 2012. It sets out the Government’s planning policies for England and how these are expected to be applied. The NPPF formed a key part of the Coalition Government’s planning system reforms, simplifying national guidance (previously contained in multiple Planning Policy Statements and Planning Policy Guidance) and reducing the quantity of policy pages. Fundamentally, it must be taken into account in the preparation of local and neighbourhood plans and is a material consideration in planning decisions. The document states that “at the heart of the National Planning Policy Framework is a presumption in favour of sustainable development, which should be seen as a golden thread running through both plan-making and decision-taking.”38 B.12 The NPPF sets out 12 core planning principles to underpin both plan-making and decision-taking. It also establishes 13 aspects to achieving sustainable development, which include delivering a wide choice of high quality homes (#6) and promoting healthy communities (#8). The Framework also introduces new definitions of affordable housing covering social rented housing, affordable rented housing and intermediate housing. B.13 The NPPF is to be read alongside other national planning policies on Waste, Travellers, Planning for Schools Development, Sustainable Drainage Systems, Parking and Starter Homes39. Planning Practice Guidance on a range of more detailed topics has been revised and updated and made available through an online system since March 201440. Planning Practice Guidance document topics include Duty to Cooperate, Housing and Economic Development Needs Assessments, Housing and Economic Land Availability Assessment, Housing - Optional Technical Standards, Local Plans, Neighbourhood Planning, Rural Housing, Self-Build and Custom Housebuilding and Starter Homes.
Current and emerging policy B.14 Following the election of a majority Conservative Government in May 2015, the Government’s Summer Budget 2015 was presented to Parliament by the Chancellor George Osbourne on 8th July 2015. The Budget set out proposed reforms to the welfare system, including a four-year freeze on working-age benefits; a reduction in the household benefit cap; restrictions on Child Tax Credit; and training requirements for those on Universal Credit aged 18 to 21. Alongside these welfare cuts, the Chancellor announced that rents for social
38 National Planning Policy Framework (November 2012), para. 14 39 http://planningguidance.communities.gov.uk/ 40 http://planningguidance.communities.gov.uk/
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housing will be reduced by 1% per year for four years, while tenants on incomes of over £30,000, or £40,000 in London, will be required to pay market rate (or near market rate) rents. A review of ‘lifetime tenancies’ was confirmed, with a view to limiting their use to ensure the best use of social housing stock. Support for home ownership measures was reiterated with measures such as the extension of the Right to Buy to housing association tenants and the introduction of Help to Buy ISAs. B.15 Alongside the Summer Budget the Government published a ‘Productivity Plan’, Fixing the foundations: Creating a more prosperous nation (10th July 2015). This sets out a 15-point plan that the Government will put into action to boost the UK’s productivity growth, centred around two key pillars: encouraging long-term investment and promoting a dynamic economy. B.16 Of particular relevance to housing are the following points in the plan: Planning freedoms and more houses to buy: In order to increase the rate of housebuilding and enable more people to own their own home, a number of actions are identified including a zonal system to give automatic planning permission on suitable brownfield sites; speeding up local plans and land release, stronger compulsory purchase powers and devolution of planning powers to the Mayors of London and Manchester, extending the Right to Buy to housing association tenants, delivering 200,000 Starter Homes and restricting tax relief to landlords. Resurgent cities, a rebalanced economy and a thriving Northern Powerhouse: In order to rebalance the economy, which is skewed towards London and the South East, the Government is committed to building a Northern Powerhouse through £13 billion of investment in transport in the North of England during this Parliament, backing new science, technology and culture projects, devolving significant powers to an elected Mayor for Manchester, taking steps to enable the Midlands Engine for Growth to reach its full potential and working towards devolution deals with the Sheffield City Region, Liverpool City Region and Leeds, West Yorkshire and partner authorities. B.17 The Chancellor of the Exchequer delivered his Spending Review and Autumn Statement 2015 to Parliament on 25th November 2015. Of relevance to housing are: An improvement in public finances, so a moderated approach to the reform of Tax Credits/Universal Credit; A new ‘Help to Buy Shared Ownership’ scheme, removing current restrictions on who can buy shared ownership properties to anyone with a household income of less than £80,000 outside London and £90,000 in London; ‘London Help to Buy’ – a new equity loan scheme giving buyers 40% of the new home value (as opposed to 20% under the Help to Buy scheme); 200,000 ‘Starter Homes’ will be built over the next five years; these are new build homes available at 20% off the market price to first-time buyers under 40, where the discounted price is less than £250,000 outside London and
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£450,000 in London. £2.3 billion will be given to housebuilders to provide the 20% discount on new homes; From 1st April 2016 an extra 3% in stamp duty will be levied on people purchasing additional properties such as buy-to-let properties or second homes; Right to Buy will be extended to housing association tenants during 2016, giving 1.3 million households the chance to become homeowners; £400 million for housing associations and the private sector to build more than 8,000 new ‘specialist’ homes for older people and people with disabilities; and Consulting on reforms to the New Homes Bonus, with a preferred option for savings of at least £800 million which can be used for social care. B.18 In November 2015, DCLG announced a review of the Community Infrastructure Levy (CIL), which has been in use since April 2010 and seeks to provide a faster, fairer, more certain and transparent means of collecting developer contributions to infrastructure than individually-negotiated Section 106 planning obligations. B.19 In December 2015, DCLG published a Consultation on proposed changes to national planning policy, which is open for comment until 22nd February 2016. This consultation is seeking views on some specific changes to NPPF in terms of the following: broadening the definition of affordable housing, to expand the range of low cost housing opportunities for those aspiring to own their new home; increasing residential density around commuter hubs, to make more efficient use of land in suitable locations; supporting sustainable new settlements, development on brownfield land and small sites, and delivery of housing allocated in plans; and supporting the delivery of Starter Homes. B.20 On 16th March 2016, the Chancellor presented the Budget 2016 to Parliament. This continued the policy emphasis on promoting home ownership and facilitating first-time buyers to enter the market. A new ‘Lifetime ISA’ was announced, extending the principle of the Help to Buy ISA by incentivising saving for under-40s. Of relevance to the private rented sector were stamp duty increases for institutional investors and the withholding of capital gains reductions from companies investing in residential property. In seeking to deliver more homes for ownership, announcements were made of further planning reforms; releasing public land for development; and a £1.2 billion Starter Homes Fund for brownfield remediation. The anticipated ‘duty to prevent’ homelessness was not announced, but instead the Chancellor committed £115 million to preventing and reducing rough sleeping. B.21 A technical consultation on Starter Homes regulations was announced by Brandon Lewis on 23rd March 2016. Whilst the Housing Minister has ruled out maintaining the 20% initial house price discount in perpetuity, the Government has indicated that they will consider extending the discount period from ten to
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fifteen years. This issue has been a major topic of discussion in Parliament in relation to the Housing and Planning Act.
Emerging legislation B.22 Since Summer 2015, the Conservative Government has introduced several Bills to Parliament that have direct relevance to housing issues. These have now all been passed as Acts of Parliament, as follows: B.23 The Housing and Planning Act 2016 received Royal Assent on 12th May 2016 after a range of oppositions and amendments by both the House of Lords and the House of Commons. Through this Act, the Government aims to take forward proposals to build more homes that people can afford, give more people the chance to own their own home and ensure housing management is improved. The Act sets out the legislative framework for the Government’s flagship Starter Homes scheme and includes provisions relating to other important aspects of housing policy such as Pay to Stay, Right to Buy, high value sales and ending lifetime tenancies. B.24 The Immigration Act 2016 also received Royal Assent on 12th May 2016. The Act includes provisions relating various aspects of illegal immigration, some with implications for landlords of private rented accommodation. If new tenants in private rented housing are found to be living in the UK illegally then there are requirements for landlords to evict illegal immigrants. Action could also be taken against landlords themselves. B.25 The Welfare Reform and Work Act 2016 received Royal Assent on 16th March 2016. The Act makes provisions relating to a range of welfare benefits and employment schemes, including the benefit cap, social security and Tax Credits, loans for mortgage interest, social housing rents and apprenticeships. Secondary legislation (Social Housing Rents Regulations, March 2016) sets out that the 1% cut to social housing rents will not apply to households with an income of £60,000 or more. B.26 The Cities and Local Government Devolution Act 2016 received Royal Assent on 28th January 2016. This Act makes provision for the election of mayors for the areas of, and for conferring additional functions on, combined authorities established under Part 6 of the Local Democracy, Economic Development and Construction Act 2009. It makes provision about local authority governance and functions; to confer power to establish, and to make provision about, sub-national transport bodies; and for connected purposes. This Act is central to the Government’s devolution plans for England, facilitating its vision of a ‘Northern Powerhouse’.
Overview of housing policy themes B.27 The ‘Housing’ Policy Area of the Department for Communities and Local Government website states that: ‘The government is helping local councils and developers work with local communities to plan and build better places to live for everyone. This includes building affordable housing, improving the quality of rented housing, helping
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more people to buy a home, and providing housing support for vulnerable people.’41 B.28 Thus the policy focus for Government can be broken down into four areas: Building affordable housing; Improving the quality of rented housing; Helping more people to buy a home; and Providing housing support for vulnerable people.
Building affordable housing B.29 In line with successive governments, the current Administration continues to seek an increase in the rate of housebuilding, setting a target of delivering one million new homes by 2020. Ongoing reform of the planning system and removing complex regulations are intended to speed up delivery. However, the policy focus is increasingly towards home ownership, with a shift from traditional social rented affordable housing to Starter Homes and shared ownership. B.30 Following consultation in December 2014, the previous Government launched a national Starter Homes exception site planning policy in March 2015 through a written ministerial statement “to make it easier for developers to gain planning permission for a new generation of Starter Homes on under-used commercial and industrial land.”42 Sites where these homes are to be delivered are exempt from affordable housing requirements and the CIL. B.31 In January 2016, the Prime Minister announced43 that the Government will step in and directly commission thousands of new affordable homes, seeking to fast- track housebuilding on publicly-owned land starting with five pilot sites: Northstowe, Cambridgeshire; Daedalus Waterfront, Hampshire; Old Oak Common, London; Connaught Barracks, Kent; and Lower Graylingwell, Chichester. B.32 A range of financial incentives to encourage new housing development have been implemented. Since New Year 2016, a £1.2 billion Starter Homes Fund has been announced44, designed to prepare brownfield sites for at least 30,000 homes, along with £6.3 million of Housing Zones funding45 for the 20 Housing Zones designated in March 2015. Together with eight further potential Zones
41 https://www.gov.uk/government/topics/housing 42 https://www.gov.uk/government/speeches/housing-and-planning 43 https://www.gov.uk/government/news/pm-the-government-will-directly-build-affordable-homes 44 https://www.gov.uk/government/news/pm-the-government-will-directly-build-affordable-homes 45 https://www.gov.uk/government/news/tens-of-thousands-of-homes-supported-by-housing-zone-funding
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these areas are considered to have the potential to deliver up to 45,000 new homes. B.33 Other projects to help finance housing development include: Get Britain Building programme, Builders Finance Fund, New Homes Bonus, Build to Rent Fund, Community Right to Build. B.34 To increase the supply of affordable rented homes the previous Government introduced the affordable rent model46, aimed at giving providers greater flexibility on rents and use of assets, whilst at the same time providing affordable housing for people in need. In July 2014 the Homes and Communities Agency announced the Affordable Homes Programme for 2015 to 2018, which aims to invest £1.7 billion in new affordable housing to deliver 165,000 new homes by March 2018. B.35 In addition to the affordable rent model, the Affordable Homes Guarantee scheme was launched in 2013 to support the building of new affordable homes. The scheme offers a guarantee to providers on debt that they raise to deliver additional new build affordable homes. The guarantee aims to help reduce the borrowing costs of providers thus enabling them to provide more homes. As part of the 2013 budget, £450 million was announced to support the delivery of up to 30,000 affordable homes in this way.
Improving the quality of rented housing B.36 The Government have implemented a number of actions to improve the quality and quantity of properties for rent.
Social rented housing B.37 Since 2010 a series of social housing reforms have been introduced including: Allowing local flexibility on waiting lists (allocations) and tenancy arrangements; Helping social landlords stop tenant fraud and anti-social behaviour; Changing the housing revenue account subsidy system to a locally- controlled system where local authorities are responsible for their housing services; Funding local authorities to refurbish their housing stock; Introduction of a national home swap scheme for social housing tenants;
46 Allows Registered Providers to charge no more than 80% of local market rent for affordable housing.
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Supporting tenants to play a bigger role in managing their accommodation through the tenant empowerment programme; and Allowing local authorities to discharge their homelessness duty in the private rented sector. B.38 Alongside social housing reform sit reforms to the welfare system, which, with changes to benefit, eligibility and entitlement, impact significantly on housing supply and demand. There have been a number of policy changes with implications for social rented accommodation since the General Election 2015. Many of these are now implemented through the Housing and Planning Act 2016: Limiting new secure tenancies (for new council tenants); ‘Pay to Stay’, whereby higher earning households will pay more for their housing. After considerable debate in Parliament, the Government conceded a taper of 15p in the pound for every pound over the threshold of £31,000 (or £40,000 in London) with only taxable income being assessed; Voluntary Right to Buy for housing associations; The Summer Budget 2015 announced a rent cut of 1% per year for social renters with a household income of less than £60,000, for four years from April 2016; and In October 2015, English housing associations were reclassified by ONS as being part of the public sector, adding £60 billion of debt to the national balance sheet. The consequent economic and political implications have led to the Government pledging to repeal the powers in the Housing and Regeneration Act 2008 which caused the reclassification.
Private rented housing B.39 The private rented sector has grown significantly in recent years and the Government sees it as playing a vital role in meeting housing needs and supporting economic growth. Measures to promote the private rented sector include: The Build to Rent Fund, providing equity finance for purpose-built private rented housing, alongside a £10 billion debt guarantee scheme to support the provision of these homes; Proposals to ensure tenants receive proper protection from their landlords, including a new model tenancy agreement; £4.1 million funding allocated to 23 local authority areas to tackle rogue landlords and £2.6 million to tackle ‘beds in sheds’; and The Government has also set up a Private Rented Sector Taskforce to improve the quality and choice of rented housing available to tenants nationally. The Taskforce is made up of developers, investors, and housing management bodies.
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Helping more people to buy a home B.40 The primacy of home ownership remains central to the Government’s housing policy approach. A number of measures promote homeownership47, including: Starter Homes, a major element of the Housing and Planning Act 2016, available to first-time buyers aged under 40 years old. New-build homes will be offered for sale with a 20% discount to eligible households. The maximum cost of a home will be £250,000, or £450,000 inside London. However, the cost for the developer of providing the 20% discount is to be met in lieu of delivering affordable housing on these sites. Help to Buy, which includes several current products48: - Help to Buy ISA – since Autumn 2015 first time buyers can save money towards a new home deposit and the Government will boost the value of their savings by 25%. The minimum bonus is £400 and the maximum is £3,000, meaning individual savers need to save between £1,600 and £12,000 to be eligible. The bonus is available on homes worth up to £250,000, or £450,000 in London. - Help to Buy Equity Loan, where the Government lends up to 20% of the value of a new-build home so buyers only need a 5% cash deposit. - Help to Buy Mortgage Guarantee, enabling lenders to offer more high- loan-to-value mortgages (80% to 95%). - Shared Ownership, where purchasers can buy between 25% and 75% of their home and pay rent on the remaining share. From April 2016, Help to Buy Shared Ownership will lift the existing limits so that anyone with a household income of less than £80,000, or £90,000 in London can buy a shared ownership home, with only military personnel being given priority. Discounted Sales, where councils and housing associations build new homes for sale, some may be sold at a 25-50% discount. There are a number of criteria, including some set locally by the relevant council and housing associations who run the scheme. Buyers must usually have a local connection to the area. Right to Buy, where council tenants with at least five years’ tenancy might be eligible to buy their homes. Maximum discounts have been increased to £77,000, or £102,700 within London. In the case of secure council tenants living in their home when it was transferred to a housing association or similar there is also a ‘Preserved’ Right to Buy. A smaller discount has also been available under the Right to Acquire. Voluntary Right to Buy is a pilot scheme amongst a small number of housing associations, trialling the Conservative Government’s flagship policy of extending the Right to Buy to housing associations. The Government plans to extend the Right to Buy beyond those in the pilot scheme but this will have significant funding implications.
47 https://www.ownyourhome.gov.uk/ 48 https://www.helptobuy.gov.uk/
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Self-Build, where households find a plot of land and build or commission the construction of their own home, or work with a group in a Community Self Build project. The Self-Build and Custom Housebuilding Act 2015 and subsequent Self-Build and Custom Housebuilding (Register) Regulations 2016 require councils to maintain a register of those who have expressed an interest in buying serviced plots.
Housing for older and vulnerable people B.41 The Care Act 2014 came into effect in April 2015, replacing existing legislation and positioning housing as a key factor in the overhaul of the care system in England. The Act encourages providers to establish and develop services that help drive change, services which: Promote people’s independence, connections and wellbeing; Prevent or postpone the need for care and support; Put people in control, ensuring that services respond to what people need; Give carers a right to assessment for support; and Promote the integration of health and social care. B.42 The NHS Five Year Forward Review (October 2014) recognises the role that housing can play in promoting wellbeing and in particular keeping older people independent and healthy. This provides evidence of the strong and growing links between housing, health and social care. B.43 Schemes to support older and vulnerable people in their housing needs include: Disabled Facilities Grant, funding adaptations to properties to allow people to live in their homes for longer. This is now part of the Better Care Fund, which aims to better integrate health and adult social services. In 2016/17 there is £394 million funding available and in his Autumn Statement 2015 the Chancellor committed to making a further £500 million available by 2019/20; Care and Support Specialised Housing Fund, to stimulate the market in specialist housing provision. The Government committed an additional £400 million to build 8,000 new specialist homes in the Autumn Statement 2015. The Care and Support Specialised Housing Fund is on track to deliver 4,000 new homes with a further allocation of £155 million expected early in 2016. However wider housing and welfare reforms, including the 1% reduction in social rents, will impact on the financial viability of both existing and proposed supported housing schemes; FirstStop, an independent, impartial and free service offering advice and information to older people, their families and carers about housing and care options for later life; Home Improvement Agencies, providing help and advice to older and disabled people, housing associations and charities; and Handyperson services, delivering small home repairs and adaptations.
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B.44 Other projects of relevance to housing include the Prime Minister’s Challenge on Dementia. Launched in 2012, the Challenge sought to deliver major improvements in dementia care and research by 2015, including raising awareness of the housing, care and support needs of people living with dementia and their families. In February 2015, the Prime Minister’s Challenge on Dementia 2020 was published, highlighting progress and launching the next phase of the work. B.45 Also relating to older people’s housing is the World Health Organisation’s Age Friendly Cities programme, which in 2014 saw Manchester recognised as the UK’s first Age Friendly city. B.46 In terms of safeguarding vulnerable adults, housing has a strong role to play alongside social services, health, the police and other agencies. The Care Act 2014 set out a new safeguarding power and places a duty on local authorities to respond to safeguarding concerns by making enquiries as necessary to decide on whether, and what, action is needed. B.47 From the April 1st 2013, Health and Wellbeing Boards (including Directors of Public Health) became statutory committees of local authorities. They are responsible for encouraging integrated working on health and wellbeing issues, including development of Joint Health and Wellbeing Strategies, and Joint Strategic Needs Assessments. B.48 In August 2012 the Government published its Homelessness Strategy, Making every contact count: A joint approach to preventing homelessness. The Strategy focuses on prevention and identifies ten local challenges that need to be addressed by local authorities. These include having a Homelessness Strategy setting out a proactive approach; not placing any young person aged 16 or 17 in Bed and Breakfast accommodation; and not placing any families in Bed and Breakfast accommodation, except in an emergency and for no longer than six weeks. B.49 In order to prevent and tackle homelessness and rough sleeping, a range of Government funding has been provided in recent years, including: The Homelessness Prevention Funding, providing grants for local homelessness services; The Homelessness Transition Fund, supporting ‘No Second Night Out’; and The Crisis Private Rented Sector Access Development Programme to help single homeless people find privately rented accommodation. B.50 On 17th December 2015 the DCLG announced “a radical new package of measures to help tackle homelessness and ensure that there is a strong safety net in place for the most vulnerable people in society”49. At the same time, the Communities and Local Government Committee announced a parliamentary inquiry into the causes of homelessness and the approaches taken by national and local government to prevent and tackle homelessness. Ministers are also
49 https://www.gov.uk/government/news/radical-package-of-measures-announced-to-tackle-homelessness
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set to consider the option of imposing a new legal ‘duty to prevent’ on local authorities.
National housing reviews B.51 Over recent years a number of housing reviews have been undertaken to assess the housing situation and recommend ways in which it can be addressed. B.52 In October 2014 the Lyons Housing Review was published. The review was commissioned by the Labour Party and identified that: Insufficient land is being brought forward for new housing and that communities are not able to take responsibility for the homes required, or are using planning powers reactively; and The capacity to build more housing has reduced significantly as it has become concentrated in the hands of a small number of volume house builders, whilst the number of smaller builders has reduced. Overall the report recommended that the delivery of new homes be increased to 200,000 per annum by 2020. It also recommended that capital investment should be made in housing and that housing should be a priority for the new (post-election) Government. B.53 The Elphicke-House Report (January 2015) reviewed the role of local authorities in increasing housing supply. It recommended that local authorities become housing delivery enablers in their areas, to proactively assess and lead on facilitating new housing development in their areas. To enhance the role of authorities as delivery enablers, the report recommended increased community involvement; clearer housing market assessments; increased housebuilding by reduced bureaucracy and more flexible funding.
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Technical Appendix C: Estate and letting agent review of the housing market
Introduction C.1 Views on the current housing market position were sought from estate agents operating across County Durham. Interviews were conducted with two to three estate agents in each of the survey areas and their views were sought on current trends and levels of activity within the open market, buy to let and rental market. The following narrative presents key findings for County Durham and localities across the County.
Location C.2 The housing market within County Durham has historically been more localised with the majority of buyers living in the town or village in which they are looking to buy a property. However, agents feel the market is becoming far more diverse. Areas that attract people from outside County Durham tend to be either close to or are centres of employment such as Durham and Chester-le-Street or more rural locations such as Barnard Castle and Sedgefield. C.3 Housing demand in Newton Aycliffe and surrounding geographies is also predicted to see a dramatic rise due to the creation of 730 jobs at the Hitachi factory. Agents predict that this will hold more of a short term impact on the housing market and note that investor demand has already started to increase due to the amount of contract workers that will be seeking property within the area. The investor market has become stronger in recent years and continues to attract buyers from outside the SHMA. C.4 Geographically Chester-le-Street due to its proximity to Newcastle and Gateshead combined with its amenities remains a popular place to buy. Properties in Seaham also receive high demand due to its proximity to Sunderland and extensive regeneration, Peterlee for its employment offer, Spennymoore for its proximity to Durham city and local schools and Barnard Castle due to its rural location. Other areas are attracting lower levels of buyers particularly outlying ex coalfield villages although this demand tends to be more localised.
House Prices C.5 Estate Agents are currently citing that market trends are difficult to identify. They note that there are no one overriding set of characteristics in terms of location, type of housing or type of buyer as the areas boasts a broad geography that appeals to a varied demographic. Agents believe that the varied demand present is positively affecting the market and is a reflection of the overall confidence that is gradually returning across the housing market as a whole. Agents note that this is strongly reflected in the increasing number of cash buyers now present. Investors, the elderly and towards the higher end of
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the market where people may have released equity from their previous home are the key sections of the market highlighted by agents where this trend is emerging. C.6 The lower end of the market has been performing well and remains attractive to first time buyers and investors. Properties in a town centre location at an affordable price of up to £125,000 receive very high demand. In the SR8 postcode, terraces can currently be purchased for as little as £20,000. C.7 Larger more expensive properties have also started receiving increased demand across all geographies within the county. Properties at around £200,000 upwards have been generating significant interest. Many agents feel that this could partly be due to a backlog of buyers who were reluctant to buy or sell property during the last 3 -5 years. Agents also felt that the increasing number of non-locals who are seeking property in the area may be supporting this trend as buyers from the South of England view these properties as ‘cheap’ when compared with the prices they have been used to. C.8 The current economic recovery has contributed to significantly more movement within the housing market and agents are confident that growth will continue for the foreseeable future - although it may be slower in parts of the County. Vendors can be unrealistic about the value of their property however agents described most as being “far more flexible” than they have been in the past. Sellers will often consider offers more seriously even if they are below the asking price. Agents noted that changes to council tax rules which make the owner responsible for the council tax on a property even if it is empty have greatly influenced this and suggest that the “cost of an empty property” now outweighs a reduced offer but an opportunity to sell. C.9 The level of repossessions have fallen compared to previous year and any that do occur are typically located in the less affluent areas of the county such as Ferryhill and Bishop Auckland. Repossessions sell quickly and at a low price, primarily to investors. Auctions are also becoming more popular attracting property owners who traditionally wouldn’t have used an auction, enabling them to sell their property more quickly. Agents believe this is due to the rise in TV programmes about auctions that has made people more comfortable with the process involved combined with the desire to “bag a bargain”.
First time buyer market C.10 The first time buyer market has seen a dramatic improvement in the last 2 years with performance rising year on year. Agents feel very positive about this market and indicated that more readily available mortgages, help to buy schemes, gifted deposits and government incentives have greatly influenced this growth. Despite this, agents were concerned that the aspirational nature of first time buyers may be placing additional pressure on the “middle market”. As the activity from first time buyers has changed so have the demands. Most are now far older than they used to be and will seek a larger home as a first home to avoid the costs associated with moving in the short term.
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Rental market C.11 The rental market is particularly buoyant in most towns and villages across the County with average rental prices for a two-bed property commanding between £400 and £500 per calendar month. People are looking to rent predominantly in central locations close to amenities. Demand for rental properties is strong with properties quickly securing a tenant. Increasingly homeowners who cannot sell their properties are looking to rent to enable them to move up the property ladder. Many landlords will now not accept tenants who are in receipt of housing benefit often due to bad experiences in the past. The changes to the payment of tax credits is believed to have further bolstered this and agents are concerned that this may put many off all together.
New Build C.12 Estate agents are reporting that developers are offering significant incentives for new build properties including providing deposits, part exchange as well as being able to offers buyers a choice of fixture and fittings and holding “deal days”. This is making new build properties attractive to potential buyers.
Future Trends C.13 Agents remain confident in the market performance and anticipate that the market will continue to grow for the foreseeable future. Although most predict that this will be much slower and steadier than it has been in the past as caution is still present within the market. The increase in non-locals moving to the area for work and the creation of new jobs in the area continues to generate interest from investors and professionals that agents have identified as key demographics that will support this growth. C.14 More easily accessibly finance and an increase in first time buyers will continue to support demand across all sections of the housing market. Demand for rental properties is predicted to increase in specific geographies however agents believe that the sales market will see the highest overall growth due to a return in confidence in the market. C.15 Areas which are close to employment and more affluent rural areas will continue to be popular locations for buyers, with the ex-coalfield villages being less so and also primarily attractive to their indigenous population.
Characteristics of localities within County Durham
Barnard Castle C.16 Barnard Castle due to its rural location, amenities, transportation links, schools and relative affordability compared to rural areas in North Yorkshire makes it an attractive place for buyers. Most agents recognised that the demographic in Barnard Castle is generally older than in other parts of County Durham and feel that this supports the more affluent market that is present in the area.
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C.17 Properties in the Barnard Castle survey area are currently priced from less than £120,000 for a terraced property within Barnard Castle to in excess £700,000 in the surrounding dales. Agents describe the local market as still very price sensitive indicating that they believe the market has slowed down yet prices are stagnant. C.18 Buyers centre around those looking to live in the area, professionals who work in the surrounding geographies and increasingly, those who have children attending the local boarding school who purchase or renting a second home for family visits during the weekend and school holidays. C.19 The rental market is good however; this tends to be focused around the town centre. The average rent is £550pcm. C.20 Estate Agents indicated that activity is focused towards the higher and lower end of the market. The middle market has been the slowest and agents believe this is due to a lack in confidence in the market. They went on to suggest that many people will now opt to spend money on improving their current home rather than incur the costs associated with moving. They believe that this has been bolstered by the increasing number of TV programmes on home improvement in recent years. C.21 Moving forward, the market still presents some uncertainty in terms of growth. There are an increasing number of people buying deceased properties, which agents feel is not pushing the market forward. The activity towards the higher end of the market is positive however; most predict that any growth witnessed will be slow.
Bishop Auckland C.22 Demand for property within Bishop Auckland has begun to rise within the last year and agents predict that this trend will continue. Growth is due to the creation of creation of 730 jobs at the Hitachi factory in Newton Aycliffe that agents anticipate will stimulate the housing market within the area and the neighbouring geographies. Agents recognised that although the impact of this on the housing market will be more short-term all are positive about the wider impact this is likely to have on the housing market and local economy. Demand has already increased amongst investors who are seeking buy-to-let properties to allow them to capitalise on the increased amount of contract workers that will be seeking property within the area. C.23 Further plans to build a £100 million leisure park in the area predicted to generate around 1000 jobs has also had a significant effect on the market. Local agents spoke very positively about the leisure park and felt that if approved, the area would receive significant investment that could “totally reinvigorate” the local housing market that has proved “slow and challenging” in the past. The long-term impact of the plans presents an opportunity to boost not only the housing market but also the local economy and amenities. C.24 Agents are preparing for a rise in demand from both the rental and sales market across the area and report that the local market is becoming far more buoyant than it has been previously. Good properties can now sell within weeks
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particularly amongst investors. Repossessions are still common in the local market however this has reduced significantly in recent years. C.25 Agents anticipate a rise in house prices and rents over the coming years. Rents in Bishop Auckland range from £325pcm to £550pcm. The rental market has historically been the more active market however agents predict that the demand may become more balanced in the coming years with the amount of investment coming to the area. C.26 3-bed family homes typically receive the greatest demand whilst properties that fall under the level of stamp duty will also prove popular. Any property located on Durham Road is deemed very desirable with period properties here commanding a sales value of around £300,000 - £400,000. Areas that are less popular include Eldon, Gurney Valley, Tindale and Coundon.
Chester-le-Street C.27 Chester-le-Street continues to hold a buoyant housing market attracting buyers from all segments of the market (first time buyers, families, investors) as well as people from outside the area. Its proximity to Newcastle and Durham, good transport links, amenities including schools, a retail centre and parks make it an attractive location for buyers. C.28 All properties in the area receive significant demand in both the rental and sales markets. The area remains a very popular location for families subsequently, three-bedroom semi-detached properties perform very well and usually generate significant interest when they come on to the market. Terraced properties also receive significant demand from a mixed demographic including first time buyers, investors and small families although some non-locals are less attracted to these properties due to the lack of gardens often associated with them. C.29 The rental market in the area is also considered very buoyant due to the desirability of the area amongst students and people moving to the area. The types of properties in demand is mixed and the market is considered fast paced. One agent noted that they now no longer advertise properties in the area until there is two weeks of the notice period left, as competition for these properties is so high. C.30 Average rents in the area have risen over the last year and currently stand at around £485pcm and can reach around £900+ for larger, executive homes. The value of property within the area has also increased slightly over the last year and agents state that demand within this locality will always remain strong.
Durham City C.31 Durham City Centre remains an employment hub due to the University, passport office and hospitals located here. As a result, it continues to be popular amongst buyers and investors from both inside and outside the area. The housing markets in the small pit villages surrounding Durham is weaker and remains predominantly attractive to buyers who live in these villages.
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C.32 Agents describe the market is Durham as “very active” they feel this is equally balanced throughout all sections of the market. Most properties receive significant demand, although agents were keen to stress that despite its popularity the local market is still very price sensitive. C.33 Agents report that asking prices are now more aligned with offers and note that this is likely due to the competitive nature of the market. Most fear losing out on a property due to the high levels of demand present and would rather offer closer to the asking price to secure a property. C.34 Demand within the City Centre centres around larger 4 bed terrace properties. These remain a popular choice for those looking to buy to rent to students’, purchasers include both investors and parents of students. Family demand for properties in the City Centre has increased however most investors will opt to rent to students due to this being the more lucrative option. Landlords are currently charging £60 to £80 per room per week. C.35 Flats have been receiving demand from first time buyers many of whom have attended University in the area and stay once they have finished their studies. C.36 Other areas that have strong demand particularly from families are the catchment area of Shincliffe/High Shincliffe, Langley Park and Bowburn. Smaller pit villages boast a more localised demographic and demand here is considered more “niche” when compared with other more desirable areas in Durham. Terraced properties in the locations are available for around £20,000. C.37 Demand from in-migrants from the south of England has risen further in recent years and agents predict this will only continue. Demand comes from investors wishing to capitalise on the cheaper property prices and constant demand. Equally, many move to the area for work and one agent noted that some Cambridge University graduates had been moving to the area as it held similar characteristic to Cambridge yet offered them a more affordable housing market. C.38 There has also been an increase in elderly demand many of which are opting to downsize and seek smaller houses or flats that are close to the centre of Durham. Agents report that demand for sales and rental properties is mixed however, stated that the number of cash buyers amongst this demographic has risen in recent years.
Consett C.39 Popular locations in Consett remain in its surrounding villages with the Town Centre, Blackhill and Shotley Bridge receiving strong demand. Agents note that house prices in the area have seen a small rise over the last year and most feel confidence within the local housing market is returning. Family demand has been driving the market most strongly with three-bedroom semi-detached properties performing best. Terraced properties are also performing well appealing to first time buyers, small families and investors. C.40 Consett has also received a boost to the local housing market due to the increase in demand from non-locals. Many will now seek property from the areas of Newcastle, Gateshead and Northumberland due to value for money factors especially when compared with other areas within County Durham.
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C.41 Shildon remains a popular location for investors due to the lower house prices and good rental demand present within the area. The rental market is strong and rents have risen slight over the last year in line with the economic recovery. Average rents within the area are around £400pcm.
Peterlee, Easington and Horden C.42 Due to a healthy supply of family housing in the area, there is a good demand for houses with estate agents stating that the housing market has improved compared to last year. One agent noted that they had seen an increase in activity year on year and went on to suggest that this year has been the strongest they had seen since before the recession. C.43 The market has been greatly stimulated by the increase in first time buyers due more easily accessible mortgages, government supported schemes and a rise in the number of ‘gifted deposits’. Agents went on to add that this movement has also helped to generate activity in all other sections of the market. C.44 The sales market has outperformed the rental market over the last year and agents note that rental properties are letting slower than they have been previously. Agents explained that they felt this was due to people wishing to capitalise on the recovery and support currently available within the housing market. They went on to suggest that some of the activity is likely a backlog of those who have stayed in their current property during the economic hardship of late with agents stating that the cost of moving has put people off doing so over the last few years. C.45 The employment opportunities available within the area continue to stimulate the housing market in both the rental and sales market and ensure that area remains popular amongst locals and non-locals. C.46 Average rental prices in the area are around £500pcm although the area a property is in will greatly affect rent levels. Families will opt to rent properties in the more desirable areas if it ensures they are within the catchment area for local schools. C.47 The price of properties varies greatly and can range from £20,000 up to around £380,000. Popular areas include Oakerside, Bellister Park and Castle Eden where properties can sell up to £380,000. These areas remain a most popular choice for families due to excellent local schools. C.48 The surrounding villages, Wheatley Hill, Easington, Blackhall and Wingate also have a relatively healthy housing market although buyers remain mainly from within the villages. C.49 Estate agents identified that the new build properties available in the area have helped the market recovery and growth and continue to receive significant demand. However, all felt that there was a severe shortage of bungalows.
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Sedgefield C.50 Sedgefield due to its proximity to strategic transport links, the amenities within the village and its semi-rural location makes it a popular location for buyers from in and outside the area. C.51 Any property usually receives significant demand from locals and non-local with demand for both home ownership and rented accommodation being high. Agents note that some may view property within the local market as unaffordable as the high demand and limited supply is leading to inflation in local house prices. This is a particularly common viewpoint held by first time buyers who often aspire to buy property in the area yet can be priced out of the market. C.52 Agents’ report that plans for a new build housing development towards the bottom of the village has received hostility from locals. Most are concerned about the additional pressure this will place on the local infrastructure believing it will negatively affect the area in the long term. C.53 Historically rental demand was highest in the area however, agents recognise that this is now more balanced. They believe this highlights to rise in popularity of the area and suggest this has been further stimulated by the demand from non-locals. C.54 Rental properties move very quickly and prices range from between £425 - £650+ and the rental market is more active within the surrounding areas of Fishburn and Trimdon.
Spennymoor C.55 New housing development within Spennymoor has positively impacted this market and boosted its desirability. Agents report that prices in the last year have risen and this is due to the increase in demand from non-locals who are attracted to the new build developments in the mining town. C.56 Non-locals are often drawn to the area as it offers lower house prices than other parts of the County and is an easily commuTable Cestination particularly for those who work in Durham. In the context of this, properties that fall around the £170,000 - £180,000 price bracket usually perform very well. C.57 Properties in Tudhoe village are deemed very desirable whilst Grange Estate and Middleton Moor, Stratton, York Hill Estate and Craddick were all cited as being unpopular due to poor reputations and negative social stigmas attached to these areas.
Stanley C.58 The housing market in Stanley remains primarily localised with agents describing the area as more “deprived” than other localities within the survey area. Agents noted that higher unemployment and crime rates can put people off seeking property in the area. C.59 Stanley Town Centre, New Kyo and South Moor remain popular locations for both local and non-local investors. Demand for housing is heavily focused
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towards the rental market and agents suggest that the lower income households located in the area drive this. C.60 Rental prices are lower than in other geographies with the average rental value £390pcm. The average house price is around £105,000 and although agent report a slight rise in prices over the last year they recognise these are still much lower than in other localities. C.61 Agents predict that these market trends will continue in the short term and feel that the market here is unlikely to see any major changes in the future.
Seaham C.62 The significant regeneration of Seaham, alongside its coastal location and proximity to Sunderland continues to make the area popular particularly amongst non-locals who often move to the area and commute out for work. C.63 Agents noted that bungalows remain in short supply however; they felt that there are no other major housing shortages within this area. The first time buyer market is stronger than it has been previously but agents still feel that despite higher demand for homeownership amongst this demographic many still struggle to afford property. Seaton Village, East Shaw and Dalton-le-Dale are the most popular locations for buyers. C.64 Positively, asking prices have become more aligned with offers over the past year and agents describe the market “fast if properties are priced correctly”. Larger properties around the £250,000 have been performing better than in recent years; agents feel this is a reflection of the confidence returning to the market and indicated that most of this demand comes from non-locals. C.65 Two- and three-bedroom family homes typically receive the most interest within this market and the average rent for this type of property ranges from £425pcm to £600pcm.
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Technical Appendix D: Housing need calculations
Summary of contents
Stage 1: Current housing need (gross backlog) Step 1.1 Homeless households and those in temporary accommodation Step 1.2 Overcrowding and concealed households Step 1.3 Other groups Step 1.4 Total current housing need (gross) Stage 2: Future housing need (gross annual estimate) Step 2.1 New household formation (gross per year) Step 2.2 Proportion of new households unable to buy or rent in the market Step 2.3 Existing households falling in to need Step 2.4 Total newly-arising housing need (gross per year) Stage 3: Affordable housing supply Step 3.1 Affordable dwellings occupied by households in need Step 3.2 Surplus stock Step 3.3 Committed supply of new affordable housing Step 3.4 Units to be taken out of management Step 3.5 Total affordable housing stock available Step 3.6 Total supply of social re-lets (net) Step 3.7 Annual supply of intermediate affordable housing available for re-let or resale at sub-market levels Step 3.8 Annual supply of affordable housing Stage 4: Estimate of annual housing need Step 4.1 Total backlog need Step 4.2 Quota to reduce over 5 years (2) Step 4.3 Annual backlog reduction Step 4.4 Newly-arising need Step 4.5 Total annual affordable need Step 4.6 Annual social rented capacity Step 4.7 Net Annual Shortfall
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Introduction D.1 A working definition of housing need is ‘the quantity of housing required for households who are unable to access suitable housing without financial assistance’. The 2012 Household Survey and secondary data provide a robust range of information to quantify housing need in County Durham and the extent to which additional affordable housing is required. D.2 Housing needs analysis and affordable housing modelling has been prepared in accordance PPG Paragraph 2a-22 and involves adding together the current unmet housing need and the projected future housing need and then subtracting this from the current supply of affordable stock. D.3 The model used to derive affordable need is based on the CLG model advocated in former SHMA guidance. Analysis has been carried out at delivery and county level and in summary the needs assessment model reviews in a step-wise process: Stage 1: Current housing need (gross backlog) Stage 2: Future housing need Stage 3: Affordable housing supply Stage 4: Estimate of annual housing need D.4 Table C1 summarises the different steps taken in assessing housing need and evidencing the extent to which there is a surplus or shortfall in affordable housing across County Durham. Please note that in Stage 1, Step 1.4 reports the total number of households in need and avoids double counting as in some cases households have more than one housing need. Table C2 summarises the data by monitoring area.
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Table C1 CLG Needs Assessment Summary for County Durham Step Stage and Step description Calculation County Durham Stage1: CURRENT NEED Homeless households and those in 1.1 Annual requirement 1,956 temporary accommodation 1.2 Overcrowding and concealed households Current need 2,806 1.3 Other groups Current need 9,950 Total no. Oo 14,173 1.4 Total current housing need (gross) households with one or more needs A. % cannot afford open market (buying or 44.5% renting) A. TOTAL cannot afford open market Total 6,557 (buying or renting) Stage 2: FUTURE NEED Based on national 3,820 2.1 New household formation (Gross per year) formation rate of 1.688% Number of new households requiring 2.2 % 51.5% affordable housing 2.2 Number 1,973 2.3 Existing households falling into need Annual requirement 44 TOTAL newly-arising housing need 2.4 2.2 + 2.3 2,017 (gross each year) Stage 3: AFFORDABLE HOUSING SUPPLY Affordable dwellings occupied by 3.1 (based on 1.4) 2,520 households in need Vacancy rate <2% so 3.2 Surplus stock no surplus stock assumed 3.3 Committed supply of new affordable units Annual 3.4 Units to be taken out of management None assumed 3.5 Total affordable housing stock available 3.1+3.2+3.3-3.4 2,520 Annual Supply (3yr 3.6 Annual supply of social re-lets (net) 2,429 ave) Annual supply of intermediate affordable Annual Supply (3yr 18 3.7 housing available for re-let or resale at ave) sub-market levels 3.8 Annual supply of affordable housing 3.6+3.7 2,447 Stage 4: ESTIMATE OF ANNUAL HOUSING NEED 4.1 Total backlog need 1.4A-3.5 4,037 4.2 Quota to reduce over 1 year 20% 4.3 Annual backlog reduction Annual requirement 807 4.4 Newly-arising need 2.4 2,017 4.5 Total annual affordable need 4.3+4.4 2,824 4.6 Annual social rented capacity 3.8 2,447 4.7 NET ANNUAL SHORTFALL (4.5-4.6) NET 378 Source 2012 Household Survey; RP Core Lettings and Sales data
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 120 Stage 1: Current need (Unmet gross need) D.5 A working definition of housing need is ‘the quantity of housing required for households who are unable to access suitable housing without financial assistance’. PPG Paragraph 2a-23 identifies the following types of household to be considered in housing need: Homeless households or insecure tenure; Households where there is a mismatch between the housing needed and the actual dwelling; Households containing people with social or physical impairment or other specific needs living in unsuitable dwellings; Households that lack basic facilities; Households containing people with particular social needs which cannot be resolved expect through a move D.6 Table C2 summaries the range of housing need in County Durham.
Table C2 Summary of current housing need across County Durham Category Factor County Durham Homeless households or N1 Under notice, real threat of notice or 1,956 with insecure tenure lease coming to an end N2 Too expensive, and in receipt of housing benefit or in arrears due to 1,822 expense Mismatch of housing need N3 Overcrowded according to the 2,807 and dwellings 'bedroom standard' model N4 Too difficult to maintain 3,751 N5 Couples, people with children and single adults over 25 sharing a kitchen, 0 bathroom or WC with another household N6 Household containing people with mobility impairment or other special Social/physical impairment 4,569 needs living in unsuitable Accommodation Dwelling amenities and N7 Lacks a bathroom, kitchen or inside condition WC and household does not have 149 resource to make fit N8 Subject to major disrepair or unfitness and household does not have resource to 1,307 make fit Social needs N9 Harassment or threats of harassment from neighbours or others living in the 1,228 vicinity which cannot be resolved except through a move Total no. households in need (with one or more housing need) 14,713 Total Households 226,322 % households in need 6.5% Note: A household may have more than one housing need. Source: 2012 Household Survey
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Step 1.1 Homeless households and those in temporary accommodation D.7 CLG SHMA guidance suggests that information on homeless households and those in priority need who are currently housed in temporary accommodation should be considered in needs modelling. The scale of need from these types of household can be derived from several sources. D.8 Homelessness statistics for 2014/1550 indicate that a total of 310 decisions were made on households declaring themselves as homeless across County Durham (Table C3). Of these households, 185 were classified as homeless and in priority need. Over the five years 2010/11 to 2014/15, an annual average of 616 decisions has been made across County Durham and an average of 339 households each year have been declared as homeless and in priority need.
Table C3 Homeless decisions and acceptances 2010/11 to 2014/15 Year Decisions made Accepted as homeless 2010/11 911 361 2011/12 850 425 2012/13 810 339 2013/14 383 198 2014/15 310 185 Total 3079 1693 Annual Average 616 339 Source: CLG Homelessness Statistics
D.9 The household survey identified a total of 1,956 households who were either under threat of homelessness or were living in temporary accommodation across County Durham. This figure has been used in needs assessment modelling.
Step 1.2 Overcrowding and concealed households D.10 The extent to which households are overcrowded is measured using the ‘bedroom standard’. This allocates a standard number of bedrooms to each household in accordance with its age/sex/marital status composition. A separate bedroom is allocated to each married couple, any other person aged 21 or over, each pair of adolescents aged 10-20 of the same sex and each pair of children under 10. Any unpaired person aged 10-20 is paired if possible with a child under 10 of the same sex, or, if that is not possible, is given a separate bedroom, as is any unpaired child under 10. This standard is then compared with the actual number of bedrooms (including bedsits) available for the sole use of the household.
50 CLG Homeless Statistics Table 627: Local Authorities' action under the homelessness provisions of the 1985 and 1996 Housing Acts, by sub-area
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D.11 Analysis identifies 2,806 households who are currently living in overcrowded accommodation or are concealed households and are intending on moving in the next five years.
Step 1.3 Other groups D.12 Table C2 identified a series of households who were in housing need for other reasons including the property is too expensive, difficult to maintain, household containing people with mobility impairment/special need, lacking amenities, disrepair and harassment. D.13 A total of 9,950 households across County Durham were identified to be experiencing one or more of these needs factors and intending to move in the next five years. This figure is taken as the five year backlog of need from other groups.
Step 1.4 Total current housing need summary D.14 Having established the scale of need in Steps 1.1, 1.2 and 1.3, total current housing need from existing households across County Durham before any analysis of the ability of households to afford open market solutions is 14,713. D.15 The extent to which these households could afford open market prices is then considered. An ‘affordability threshold’ of households is calculated which takes into account household income, equity and savings. The household income component of the affordability threshold is based on 3.5 x gross annual income of the respondent and partner (if applicable). D.16 The affordability threshold was then tested against lower quartile property prices and the cost of privately renting. Lower quartile prices at ward level for 2014 were derived using Land Registry address-level data (Table C4) and private rent prices using Zoopla rental data.
Table C4 Lower quartile house prices by ward (2015) Lower quartile Ward Lower quartile price (£) private rent (£) Annfield Plain £48,000 £377 Aycliffe East £75,000 £451 Aycliffe North and Middridge £103,000 £451 Aycliffe West £57,500 £442 Barnard Castle East £108,000 £451 Barnard Castle West £125,000 £438 Belmont £109,995 £325 Benfieldside £88,998 £399 Bishop Auckland Town £53,000 £360 Bishop Middleham and Cornforth £33,625 £325 Blackhalls £47,750 £390 Brandon £79,000 £399
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Burnopfield and Dipton £89,500 £446 Chester-le-Street East £90,000 £451 Chester-le-Street North £85,000 £451 Chester-le-Street South £112,000 £438 Chester-le-Street West Central £79,000 £451 Chilton £40,000 £338 Consett North £67,000 £394 Consett South £65,000 £399 Coundon £42,750 £351 Coxhoe £74,000 £399 Craghead and South Moor £35,000 £325 Crook £60,000 £351 Dawdon £51,000 £399 Deerness £55,500 £399 Delves Lane £62,500 £394 Deneside £64,000 £429 Durham South £210,000 £546 Easington £37,000 £351 Elvet and Gilesgate £197,500 £433 Esh and Witton Gilbert £69,500 £399 Evenwood £54,975 £336 Ferryhill £32,000 £325 Framwellgate and Newton Hall £115,000 £477 Horden £30,000 £351 Lanchester £103,000 £464 Leadgate and Medomsley £64,000 £377 Lumley £71,500 £399 Murton £50,000 £390 Neville's Cross £197,500 £412 North Lodge £155,000 £529 Passfield £78,500 £425 Pelton £69,500 £325 Peterlee East £51,500 £451 Peterlee West £65,000 £468 Sacriston £65,000 £399 Seaham £93,000 £477 Sedgefield £91,000 £425 Sherburn £82,250 £425 Shildon and Dene Valley £34,350 £351 Shotton and South Hetton £52,500 £399 Spennymoor £57,000 £368 Stanley £49,000 £377 Tanfield £61,750 £377 Tow Law £47,300 £351 Trimdon and Thornley £41,500 £351 Tudhoe £68,000 £377 Weardale £80,000 £377
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West Auckland £57,000 £390 Willington and Hunwick £52,000 £377 Wingate £45,750 £394 Woodhouse Close £52,500 £351 Total £62,000 £377 Source: Land Registry Price Paid 1 Jan 2015 to 31 Dec 2015; Zoopla rental data
D.17 Using evidence from the household survey, the extent to which households identified in Steps 1.1, 1.2 and 1.3 could afford open market prices has been assessed. Overall, a total of 6,557 existing households in need wanted to move to offset their need and could not afford open market solutions.
Step 2.1 New household formation (gross per year) D.18 PPG Paragraph 2a-25 states that ‘projections of affordable housing need will need to take into account new household formation, the proportion of new households unable to buy or rent in the market area, and an estimation of the number of existing households falling into need’. D.19 The scale of household formation is based on the latest national gross formation rate of 1.688% as reported in the English Housing Survey over the period 2011/12 to 2013/14.
Step 2.2 New households unable to buy or rent in the open market D.20 Analysis of lower quartile market prices relative to the income/savings of households who have formed in the past five years suggests that 51.6% could not afford lower quartile house prices or private sector rents. D.21 Therefore, the total number of newly-forming households who could not afford open market prices or rents across County Durham is calculated to be 1,973 each year.
Step 2.3 Existing households expected to fall into need D.22 An estimate of the number of existing households falling into need each year has been established by drawing upon the RP lettings data. This suggests that over the three year period 2010/11, 2011/12 and 2012/13, an annual average of 44 households moved into the social rented sector because they had fallen into housing need and were homeless.
Step 2.4 Total newly arising housing need (gross per year) D.23 Total newly arising need is calculated to be 2,017 households each year across County Durham.
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 125 Stage 3: Affordable housing supply D.24 PPG Paragraph 2a-26 suggests that ‘there will be a current supply of housing stock that can be used to accommodate households in affordable housing need as well as future supply.’ The needs modelling takes account of the number of affordable dwellings that are going to be vacated by current occupiers that are fit to use by other households, stock surpluses, committed supply of new affordable dwellings and dwellings being taken out of management (for instance pending demolition or being used for decanting).
Step 3.1 Affordable dwellings occupied by households in need D.25 This is an important consideration in establishing the net levels of housing need as the movement of these households within affordable housing will have a nil effect in terms of housing need51. D.26 A total of 2,520 households are current occupiers of affordable housing in need. Although the movement of these households within affordable housing will have a nil effect in terms of housing need (i.e. they already live in affordable housing), the types of property they would ‘free up’ if they moved is considered in modelling.
Step 3.2 Surplus stock D.27 A proportion of vacant properties are needed to allow households to move within housing stock. Across the social rented sector, this proportion is generally recognised as being 2%. Stock above this proportion is usually assumed to be surplus stock. Modelling assumes no surplus social rented stock across County Durham.
Step 3.3 Committed supply of new affordable units D.28 Additional dwellings coming forward with help to reduce the annual affordable imbalance. Given the uncertainty regarding the future delivery of affordable housing, the model currently assumes no additional supply of affordable units.
Step 3.4 Units to be taken out of management D.29 The model assumes there will be no social rented units taken out of management over the next five years.
Step 3.5 Total affordable housing stock available D.30 It is assumed that there are 2,520 social (affordable) rented dwellings available over the five year period arising from households moving within the stock.
51 Strategic Housing Market Assessment Guidance (CLG, August 2007)
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Step 3.6 Annual supply of social re-lets D.31 PPG Paragraph 2a-27 states that ‘plan makers should calculate the level of likely future affordable housing supply taking into account future annual supply of social housing re-lets (net), calculated on the basis of past trends (generally the average number of re-lets over the previous three years should be taken as the predicted annual levels), and the future supply of intermediate affordable housing.’ D.32 The needs model considers the annual supply of social re-lets. Address-level RP CORE lettings data has been analysed for the three years 2010/11, 2011/12 and 2012/1352. This information can be used to accurately assess the likely capacity of the social rented sector by location, size of property and designation (whether the property is general needs or older person). For the purposes of analysis, it is important to focus on the ability of households requiring affordable housing to access it. Therefore, the annual supply figures derived from CORE lettings data and used in modelling: Exclude those moving into accommodation from outside County Durham and households moving within the social rented stock; and Include households who moved from within County Durham into social renting from another tenure; newly-forming households originating in County Durham and moving in social renting; and households moving from specialist/supporting housing from within County Durham into affordable housing. D.33 Analysis suggests that there is an annual average of 2,429 social rented dwellings let to new tenants i.e. households originating in County Durham who either moved into social renting from another tenure, were newly-forming households, or who moved from supported/specialist accommodation. D.34 Modelling therefore assumes an annual capacity of 2,429 dwellings for new tenants across County Durham. Table C5 illustrates how the annual capacity figure is broken down by designation (general needs and older person) and property size.
Step 3.7 Annual supply of intermediate re-lets/sales D.35 Table C5 also presents a summary of the average supply of intermediate tenure dwellings which have either been sold or relet over the three year period 2010/11, 2011/12 and 2012/13 as recorded in CORE Sales data. The average annual supply is 18 dwellings.
52 Detailed lettings data for subsequent years are not currently available but annual summary data suggests the scale of lettings is similar to this 3 year period
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Table C5 Annual social rented re-lets and intermediate sales/re-sales
No. Social/Affordable Intemediate sales/re- Designation Beds Lettings sales General needs 1 422 0 2 1213 7 3 568 5 4 18 0 5 0 0 6 0 0 Older person 1 88 1 2 115 5 3 4 0 4 0 0 5 0 0 6 0 0 Total 2429 18
Source: RP CORE data annual average 2010/11, 2011/12 and 2012/13
Summary of Stage 3 D.36 Overall, the model assumes an existing affordable supply of 2,520 and an annual supply of 2,429 social (affordable) lettings and 18 intermediate tenure lettings/sales.
Stage 4: Estimate of annual housing need
Overview D.37 Analysis has carefully considered how housing need is arising within County Durham by identifying existing households in need (and who cannot afford market solutions), newly-forming households in need and existing households likely to fall into need. D.38 This has been reconciled with the supply of affordable dwellings which considers location, size and designation (i.e. for general needs or older person). Based on the CLG modelling process, analysis suggests that there is an overall annual net imbalance of 378 dwellings. D.39 For critical stages of the needs assessment model (Step 1.1, Step 1.4, Step 2.4 and Step 3.8), information is broken down by designation (general needs and older) and property size. This accords with PPG Paragraph 2a-28 which asks plan makers to ‘look at the house size in the current stock and assess whether these match current and future needs’. Analysis therefore provides a detailed assessment of the overall housing requirements of households in need and
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provides clear affordable requirement information. In turn, this can help identify where there are shortfalls and sufficient capacity of affordable housing, and help to shape policy responses. D.40 Stage 4 brings together the individual components of the needs assessment to establish the total net annual shortfall. This includes the conversion of total need into annual flows in accordance with PPG Paragraph 2a-29.
Step 4.1 Total backlog need D.41 Step 4.1 is the total backlog need which is derived from the number of households in Step 1.4A minus total affordable housing stock available (Step 3.5). The total backlog need is 4,037.
Steps 4.2 to 4.6 D.42 Step 4.2 is a quota to reduce the total backlog need which is assumed to be 20% each year (which is a standard modelling assumption suggested by the CLG guidance). D.43 Step 4.3 is the annual backlog reduction based on Step 4.2 (807 each year). D.44 Step 4.4 is a summary of newly-arising need from both newly forming households and existing households falling into need (2,017 each year). D.45 Step 4.5 is the total annual affordable need based on Steps 4.3 and 4.4 (2,824 each year). D.46 Step 4.6 is the annual social rented/intermediate tenure capacity based on Step 3.8 (2,447 each year).
Total gross imbalance D.47 Table C6 summarises the overall annual gross affordable housing requirements for County Durham by designation (general needs and older person) and property size. This does not factor in potential capacity from affordable stock being let / intermediate tenure relets or sales.
Table C6 Gross annual affordable housing imbalance by Local Plan Monitoring Area, property size and designation 2016/17 to 2020/21
General Needs Total Gross Rate /1,000 1/2 Bed 3+ Bed Older Person Total Households Households County Durham 2227 236 361 2824 226322 12.5 Sources: 2012 Household Survey; RP CORE Lettings and Sales
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 129 Total net imbalance D.48 Table C7 summarises the overall annual net affordable housing requirements for County Durham by designation (general needs and older person) and property size.
Table C7 Net annual affordable housing imbalance by Local Plan Monitoring Area, property size and designation 2016/17 to 2020/21 Total General Older Person TOTAL HHs Smaller 1/2 Bed 3+Bed County Durham 585 -356 148 378 226322 Sources: 2012 Household Survey rebased on 2015; RP CORE Lettings and Sales
Tenure and dwelling type profile of affordable dwellings D.49 Affordable housing includes social rented, affordable rented and intermediate tenure dwellings. New affordable development by Registered Providers will be affordable rented (with rents of up to 80% of open market rent) and in order to recommend an appropriate split between social rented and intermediate tenure, the stated preferences of households and the relative affordability of intermediate tenure products is now reviewed.
Household preferences D.50 Households were asked to state tenure preferences. Table C8 summarises the preferences of both existing households in need and newly forming households by tenure. Overall, this gives a tenure split of 76.5% social/affordable rented and 23.5% intermediate tenure across County Durham.
Table C8 Affordable tenure preferences Existing households Newly-forming Tenure in need (%) households (%) Total (%) Social/Affordable Rented 83.7 73.6 76.5 Intermediate 16.3 26.4 23.5 Total 100.0 100.0 100.0 Base (annual requirement) 807 1973 2780 Source: 2012 Household Survey, rebased to 2015
D.51 An analysis of the ability of existing households in need and newly-forming households to afford intermediate tenure is summarised in Table C9. Analysis suggests that intermediate tenure options remain affordable to households in need and newly-forming households, with 29.2% able to afford a property priced
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at up to £80,000, 23.9% a property priced at up to £100,000 and 15.4% a property priced at up to £120,000.
Table C9 Ability of existing households in need and newly-forming households requiring affordable housing to afford intermediate tenure dwellings % could afford Existing households Newly-forming Price in need households Total up to £80,000 30.1 28.5 29.2 up to £100,000 23.7 24.1 23.9 Up to £120,000 16.1 14.9 15.4 Base 904 1226 2130 Source: 2012 Household Survey
D.52 There is potential scope for an intermediate tenure market in County Durham. The final proportion of intermediate tenure dwellings to be delivered needs to be reconciled with the economic viability of delivering affordable housing on sites; the appetite of the HCA to fund intermediate tenure dwellings; and the ability of households to secure mortgages.
Dwelling type D.53 Table C10 considers the range of affordable property types households would consider, based on the aspirations of existing households in need and newly- forming households requiring affordable accommodation. Analysis of property type preferences suggests that, primarily, delivery of houses is a priority (with 66.6% stating an expectation of moving to a house), followed by bungalows (24.4%) and flats (9%).
Table C10 Property type preferences Type preferences Existing (%) Newly-forming (%) Total (%) Detached 14.7 6.9 9.2 Semi-detached 19.7 32.5 28.8 Terraced 13.0 35.0 28.6 Flat 12.3 7.8 9.1 Bungalow 40.4 17.8 24.4 Total 100.0 100.0 100.0 Base 807 1973 2780 Based on expectations of existing households in need and what newly-formed households have moved to in the past 5 years Source: 2012 Household Survey rebased to 2015
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 131 Technical Appendix E: Monitoring and updating A framework for updating the housing needs model and assessment of affordable housing requirements
Introduction E.1 Having invested considerable resources in obtaining an excellent range of primary and secondary data, it is vital that this information be used to the maximum effect and updated on a regular basis. The purpose of this appendix is to establish a framework for updating the housing needs model and affordable housing requirements. In addition, it recommends the regular monitoring and review of housing market activity and regular reflections on the wider strategic context.
Updating of baseline housing needs and affordable housing requirements E.2 A baseline assessment of housing need across County Durham has been derived from the household survey. This information should be taken as a baseline from which annual reviews of key aspects of the model proceed. It is recommended that the baseline information has a shelf-life of three to five years (with a recommended refresh of household information after 2018/19 through primary surveying). E.3 Key elements of the needs assessment model can be readily updated on an annual basis to reflect: changes in house prices and rental costs; capacity of the social rented sector; and availability of intermediate tenure housing.
Changes in house prices and rental costs E.4 It is recommended that the annual purchase of address-level house prices to complement the existing dataset continues. This will result in an annual refresh of house price data by survey area and provide an indication of changing lower quartile prices. In turn, these can be applied to Step 1.4 of the needs assessment model which considers the extent to which households in need can afford open market prices. As part of this analysis, updated information on private rented sector rents needs to be secured. Several websites can provide a snapshot of private rents and help inform this element of the update. E.5 Lower quartile prices and private sector rents should also be compared with the income profile of newly-forming households at Step 2.2 of the needs assessment model.
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Capacity of the social rented sector E.6 The capacity of the social rented sector needs to be reviewed annually using RP CORE lettings data (Step 3.6). E.7 A dataset has been prepared for RSL CORE data for 2010/11, 2011/12 and 2012/13 as part of this research. This includes some additional variables identifying the characteristics of households (by designation i.e. under 65 or over 65) and previous housing circumstances (from out of area, previously social renter, previously other tenure and from supported/specialist accommodation). The capacity of the social rented sector is based on the number of lettings to households from within the County who were previously living in (non social rented or intermediate) tenure.
Availability of intermediate tenure housing E.8 CORE Sales data can identify the availability of intermediate tenure housing (Step 3.7). Data has been assembled for 2010/11, 2011/12 and 2012/13.
Annual adjustments to affordable requirements E.9 Datasets can be provided from which annual reviews of affordable requirements can proceed. This will point to any adjustment in net requirements by survey area, designation and property size.
Updating of contextual information E.10 This report has presented a range of contextual information relating to the economy, demography (including population projections and migration) and dwelling stock. This information should be updated where possible and in particular progression with economic growth and diversification should be carefully monitored.
Reflections on the general strategic context and emerging issues E.11 As part of its strategic housing function, all local authorities need to understand the general strategic housing market context and respond to emerging issues. Given the dynamic nature of housing markets, the Central and Local Government policy agenda and bidding for resources, any update of housing needs must be positioned within a wider strategic context. E.12 Ongoing stakeholder consultation and engagement with local communities is also vital to maintain up-to-date intelligence on housing market issues.
Concluding comments E.13 It is vital that mechanisms are in place to derive robust, credible and defensible estimates of housing need and affordable requirements across County Durham.
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We believe that this study provides a robust evidence base which has the capacity to be updated. E.14 Having established a baseline position on affordable housing and advice on open market provision to reflect aspirations, it is essential that housing market activity is regularly monitored. This is highly relevant given current housing market uncertainty. A range of methods have been suggested to ensure that housing need and affordability modelling is revised on an annual basis. Annual reviews should also take into account the changing strategic context and impact on housing market activity.
June 2016 County Durham Issues and Options SHMA (Part 1) June 2016 Page | 134 Technical Appendix F: National Planning Policy Framework and Planning Practice Guidance Checklist
National Planning Policy Framework F.1 Paragraph 159 of the NPPF states that Local Planning Authorities should have a clear understanding of housing needs in their area and they should: Prepare a Strategic Housing Market Assessment to assess their full housing needs, working with neighbouring authorities where Housing Market Areas cross administrative boundaries. The SHMA should identify the scale and mix of housing and the range of tenures that the local population is likely to need over the plan period that: - Meets household and population projections, taking account of migration and demographic change; - Addresses the need for all types of housing, including affordable housing and the needs of different groups in the community (such as, but not limited to, families with children, older people, people with disabilities, service families and people wishing to build their own homes); and - Caters for housing demand and the scale of housing supply necessary to meet this demand. D.1 The SHMA has delivered the requirements of the NPPF
Planning Practice Guidance
Paragraph (no.) Response
Methodological Guidance states that establishing future need is not an exact science and no single approach will provide a definitive answer. Approach (14) This SHMA has used a multi-method approach involving secondary data analysis, primary household survey data and a review of demographic scenario analysis
Starting point for Household projections published by the DCLG have provided the starting establishing the point to establish the need for housing. The latest projections (2012- need for housing based) have been used and use of projections (15)
Adjusting The SHMA has considered sensitivity testing of CLG household household projections using alternative assumptions in relation to underlying projections (17) demographics and household formation rates.
Employment trends The likely change in jobs numbers using economic forecasts has been (18) considered in Edge Analytics scenario work.
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Paragraph (no.) Response
Market signals (19) The SHMA has considered market signals relating to dwelling price and quantity. This has included comparative analysis of trends in similar districts, the North East and England
Response to Market signals have been considered but would suggest no uplift in market signals (20) dwelling delivery is required
Need for all types The SHMA has considered the range of market and affordable dwellings of housing (21) required for all household types, including family housing, housing for older people, people wanting to build their own homes and households with specific needs. The role of the Private Rented Sector and student housing has also been considered
Calculating Current unmet need and projected future housing need has been affordable housing calculated and subtracted from the current supply of affordable housing need (22) stock
Households Analysis has considered the groups specified in guidance, namely: considered to be in homeless households or insecure tenure; mismatch between need and need (23) dwelling; social or physical impairment and living in unsuitable housing; lacking basic facilities; particular social needs
Calculating unmet This has been calculated using household survey evidence gross need (24)
Newly arising Calculations have taken account of the proportion of newly-forming affordable need households who cannot afford lower quartile market housing (to buy or (25) rent)
Total affordable Calculations take account of current supply of affordable housing through supply (26) households in need moving, surplus stock, committed supply and units taken out of management
Future relets and Calculations take account of the likely level of dwellings being let/sold intermediate tenure based on the most recent 3 year trends in lettings and sales sales (27)
Total affordable Annual flow (imbalance) of affordable need has been calculated based need (28) on total need from existing households and newly-forming households minus supply. The split between rented and intermediate tenure dwellings has been calculated along with the size (no. beds) and designation (general needs/older person) of affordable dwellings.
June 2016