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Northern West Sussex Strategic Housing Market Assessment

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Northern West Sussex Strategic Housing Market Assessment 2019 NOVEMBER Northern West Sussex Strategic Housing Market Assessment Final Report Iceni Projects Limited on behalf of Crawley Borough Council and HORSHAM HORSHAM DISTRICT ON BEHALF OF CRAWLEY BOROUGH COUNCIL AND COUNCIL Horsham District Council ICENI PROJECTS LIMITED November 2019 Iceni Projects London: Da Vinci House, 44 Saffron Hill, London, EC1N 8FH Glasgow: 177 West George Street, Glasgow, G2 2LB Manchester: 68 Quay Street, Manchester, M3 3EJ Northern West Sussex West Northern t: 020 3640 8508 | w: iceniprojects.com | e: [email protected] linkedin: linkedin.com/company/iceni-projects | twitter: @iceniprojects 2 CONTENTS EXECUTIVE SUMMARY ............................................................................................. 2 INTRODUCTION ......................................................................................................... 9 HOUSING MARKET GEOGRAPHY AND SPATIAL RELATIONSHIPS ................... 13 HOUSING OFFER AND SUPPLY TRENDS ............................................................. 27 LOCAL HOUSING NEED .......................................................................................... 37 HOUSING MARKET DYNAMICS ............................................................................. 60 AFFORDABLE HOUSING NEED ............................................................................. 76 HOUSING NEEDS OF YOUNGER PEOPLE ........................................................... 92 NEEDS OF FAMILY HOUSEHOLDS ...................................................................... 111 NEEDS OF OLDER PERSONS & THOSE WITH DISABILITIES ........................... 121 NEED FOR DIFFERENT SIZES OF HOMES ......................................................... 135 EMERGING HOUSING MARKET SEGEMENTS ................................................... 145 CONCLUSIONS AND RECOMMENDATIONS ....................................................... 154 APPENDIX 1: MIGRATION FLOWS TO HORSHAM AND CRAWLEY .......................... 164 APPENDIX 2: COMPONENTS OF POPULATION CHANGE ........................................ 166 APPENDIX 3: ANALYSIS OF HOUSEHOLD REPRESENTATIVE RATES ................... 168 APPENDIX 4: ECONOMIC ACTIVITY RATE ASSUMPTIONS ...................................... 171 0 1 EXECUTIVE SUMMARY This Strategic Housing Market Assessment (SHMA) has been commissioned by Crawley Borough Council and Horsham District Council to inform the preparation of new Local Plans in their respective areas, and to support consideration of housing mix on individual development schemes. The SHMA has been prepared by a consultancy team comprising Iceni, Justin Gardner Consulting and Chilmark Consulting. It builds on previous studies to consider housing needs within the area. Local Housing Need The Government, through the 2019 NPPF and associated Planning Practice Guidance, has introduced a new ‘standard method’ to calculating areas minimum local housing need. This takes projected household growth and applies an upward adjustment based on the affordability characteristics of the area – the average house price-to-earnings ratio. The standard method formula points to a minimum local housing need for 752 dwellings per annum (dpa) in Crawley and 965 dwellings per annum in Horsham and a total of 2,819 dpa across the Northern West Sussex Housing Market Area (HMA). This is based on 2014-based Household Projections and 2018 affordability ratios; and takes account of the latest evidence. The implications of this level of growth are set out below. Implications of the Minimum Local Housing Need, 2019-39 Crawley Horsham Homes – 15,040 Homes – 19,300 Household Growth – 14,500 (32%) Household Growth – 18,700 (31%) Population Growth – 27,150 (24%) Population Growth – 34,700 (24%) Growth in 65+ Population – 9,600 (63%) Growth in 65+ Population – 20,000 (61%) Workforce Growth – 16,300 Workforce Growth – 15,100 Potential Jobs Supported – 24,200 Potential Jobs Supported – 13,500 The SHMA has explored whether higher levels of housing need might be justified, considering in particular the rail service enhancements through the Thameslink Programme and potential implications of the growth of Gatwick Airport. The Airport’s expansion to 70 million passengers per annum could create over 9,000 additional jobs and on the basis of current commuting patterns might draw around 3,000 of these from Crawley; with a more modest 700 (4.4%) from Horsham. For Horsham the impact is modest and would not be expected to have an upward impact on housing need; whilst for Crawley it could be more substantial but the evidence does not suggest that this 2 would necessarily generate additional housing need – depending on jobs growth more broadly within the Borough. Rail service enhancements will improve capacity but are not considered to increase the need for homes locally to a level above the standard method. The implications of Gatwick’s growth will need to be kept under review as new information emerges; and it may also be necessary to updating the local housing need figures prior to the submission of the local plans to take account of either new evidence; or any changes to the methodology introduced by Government. Crawley Borough’s boundaries are drawn relatively tightly around the Borough’s existing urban area and will limit what scale of development can be met within the Borough. Should significant development occur adjacent to Crawley’s administrative boundaries, this would contribute to meeting Crawley’s housing needs, and would thus be expected to have regard to the nature of Crawley’s housing need identified within this Study. The projected growth in different types of households is shown in the chart below. Growth in Households by Type, 2019-39 2289 Multi-Adult/ Other 3455 2349 Single Persons (< 65) 3485 4216 Families 3697 11474 Older Households (65+) 5216 0 2000 4000 6000 8000 10000 12000 14000 Horsham Crawley Housing Market Geographies and the Duty to Cooperate The SHMA confirms the findings of previous studies that Crawley, Horsham and Mid Sussex fall within a Northern West Sussex Housing Market Area as a best-fit to local authority boundaries. This is the principal grouping around which discussions on meeting housing need should take place and these discussions are likely in particular to need to address land supply constraints within Crawley Borough. Steyning, Hassocks and potentially Burgess Hill fall within an overlap with a Brighton-focused Sussex Coast Housing Market Area. In the northern part of the area there are functional relationships into Surrey, particularly with Horley and areas to the south of the M25. It will therefore be important that 3 the Councils actively engage with authorities within these areas on any cross-boundary issues arising in regard to housing provision. The evidence also points to functional housing market relationships between Northern West Sussex and London with movement of households from London to the area seeking family housing. The SHMA finds that in the instance that an unmet housing need arises from London and that it is accepted that it cannot be met within London’s boundaries, it will be necessary for the Councils to engage through to wider South East Councils Group to consider whether they can contribute to addressing the unmet need. The Draft London Plan Inspector’s report published in October 2019 states that the proposed approach to development in the wider South East and beyond is justified and consistent with national policy and that it should be effective in helping to implement the Plan. This is of greater relevance to Horsham given land supply constraints in Crawley but there are potential unmet need issues within the HMA and immediately adjoining areas with which there is a closer spatial relationship. Affordable Housing Need The cost of market housing to sale and rent in Horsham and Crawley is significant. Median house prices in 2018 stood at £295,000 in Crawley and £380,000 in Horsham; with median rents of £975 per month in Crawley and £995 per month in Horsham. Both house prices and rents have been growing, with median house prices now standing at 9.1 times earnings in Crawley and 13.9 times earnings in Horsham. The significant costs of market housing, and the difficulties facing younger households and those on lower incomes in being able to afford them, influence the need for affordable housing. The SHMA analysis indicates a net need for 739 affordable homes per year in Crawley and 503 affordable homes per year in Horsham (2019-39). It points to a significant level of need for affordable housing influenced by households’ inability to afford market housing and the current stock of affordable housing. It provides evidence justifying policies seeking affordable housing in new development schemes. Policies regarding the level of affordable housing sought on new development schemes need to take account of the affordable housing need, together with evidence regarding the viability of residential development schemes and contributions to other forms of infrastructure. The delivery of and access to affordable housing will be particularly important in ensuring that younger people can afford to live in Crawley and Horsham. Given the level of affordable housing need, consideration should be given to a range of means of increasing affordable housing delivery and increasing access to housing. The SHMA shows that the Government’s Help-to-Buy Programme will play a role in this, but consideration should be given to other means of enhancing affordable housing provision as well including
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