Hart, Rushmoor and Surrey Heath SHMA Published in December 2014

HOU1a Hart, Rushmoor and Surrey Heath Strategic Housing Market Assessment 2014 -2032 Final Report Clients: Hart District Council, Rushmoor Borough Council & Surrey Heath Borough Council November 2016 Berkshire House 252-256 Kings Road, Reading RG1 4HP T: 0118 938 0940 Wessex Economics Ltd M: 07881 348 244 25-27 Queen Victoria Street E: [email protected] Reading RG1 1SY T: 0118 938 0940 P a g e | 1 P a g e | 2 Main Report: Volume 1 Executive Summary .............................................................................................................................................................. 4 1. Introduction ........................................................................................................................................................................ 10 2. The Housing Market Area ................................................................................................................................................... 18 3. People and Households ...................................................................................................................................................... 28 4. Resident Employment and Incomes ................................................................................................................................... 38 5. Past Trends in Employment and Forecast Employment Growth ........................................................................................ 46 6. Housing Stock and Supply ................................................................................................................................................... 72 7. The Process of Determining Objectively Assessed Housing Need ...................................................................................... 82 8. OAHN Step 1: Population and Household Growth ............................................................................................................. 88 9. OAHN Step 2: Market Signals ........................................................................................................................................... 116 10. OAHN Step 3: Need for Affordable Housing ..................................................................................................................... 140 11. OAHN Step 4: Housing Requirements Arising from Employment Growth ....................................................................... 170 12. OAHN Step 5: Objectively Assessed Housing Need .......................................................................................................... 188 13. Mix of Housing Required .................................................................................................................................................. 196 14. Specific Groups in the Housing Market ............................................................................................................................ 206 Appendices: Volume 2 A. The Housing Market Area B. Hart, Rushmoor and Surrey Heath Household Movement Analysis C. Hart, Rushmoor and Surrey Heath Commuting Analysis D. Forecasts for HRSH by Forecasting House E. Commentary on Sectoral Pattern of Employment Growth F. Projection Methodology G. Detailed Projection Outputs H. Review of ONS 2014-based SNPPs and CLG 2014-based Household Projections I. Migration Flows Linked to Employment Growth J. Review of Influences on Household Formation Rates K. Affordable Housing Policy Discussion P a g e | 3 P a g e | 4 Executive Summary 1. The primary objective of this Strategic Housing Market Assessment (SHMA) is to develop an up to date evidence base that will underpin the core strategies and development plan documents being developed by Hart, Rushmoor and Surrey Heath Councils. The core requirement of this study is to develop evidence of the ‘full, objectively assessed needs for market and affordable housing in the housing market area’ (Paragraph 47, National Planning Policy Framework). 2. The administrative areas of Rushmoor, Surrey Heath and Hart Councils together comprise a Housing Market Area (HMA) defined by Wessex Economics through analysis of commuting and migration data. The three authorities account for the majority of the population of the Farnborough-Aldershot Built-up Area, Rushmoor is wholly within the Farnborough/Aldershot Built up Area and over half of the population of both Hart and Surrey Heath live in the Built-up-Area. 3. Previous research on housing markets and up to date analysis of migration and travel to work patterns undertaken as part of this study supports the particular importance of Hart, Rushmoor and Surrey Heath working together. However, the three authorities in the Hart, Rushmoor and Surrey Heath (HRSH) HMA will need to work with other neighbouring authorities in adjacent housing market areas given the close links with these adjacent areas in terms of travel-to-work patterns and overlapping housing markets. 4. The population of the HMA in 2014 was 276,100, having grown by 31,600 people since 1991, an increase of 13%. In 2014 there were around 108,700 households living in the HMA, a 22% increase on the number of households in 1991. This indicates that there is significant potential for demographic change in the next 20 years. 5. A key issue evident from the review of past trends is the ageing of the population and particularly growth of the number of people in advanced old age (85+). 6. Economic and employment growth impact directly on housing demand through in-migration, as workers move to access jobs, and through increases in income and earnings. This feeds through into demand for more or better housing. Employment in the HMA has grown by between 1,050 and 1,380 jobs pa over the last 20 years depending on the data sources used and the time frame for analysis (peak to peak or trough to trough business cycle). 7. Different economic forecasters anticipate very different rates of future employment growth for the HRSH area over the period 2014 to 2032 ranging from an average annual rate of employment growth of 945 jobs pa to 1,480 jobs pa. This reflects differences in the forecasters’ assessment of past employment growth and the inherent uncertainty of employment forecasts over a 22 year period. 8. Local income levels (along with house prices and rents) determine levels of affordability and provide an indication of the potential for intermediate housing. Median household incomes in the market area are just over £40,000 and earnings are above the levels in the South East and England as a whole. Nevertheless, the majority of new households in the market area have insufficient incomes to afford home ownership. 9. Households with an income of around £42,000 would be able to access of the cheapest properties in Rushmoor. Households would need an income of between £52,000 and £55,000 to afford one of the cheapest properties in Hart and Surrey Heath. P a g e | 5 10. Households need an income of £26,000 - £32,000 to afford one of the lowest priced private rented properties in the three authorities, the cheapest rents being in Rushmoor. Around 35% of newly forming households in the market area have incomes lower than this threshold and on this basis would be unable to afford one of the cheapest private rented properties. 11. Given the relationship between rents and household incomes it is unsurprising that 12,500 households in the market area receive housing benefit to enable them to access accommodation. 12. In addition, one fifth of private and social rented dwellings in Rushmoor are overcrowded – that is lacking in one or more bedrooms. This means that as families grow they often spend a long time waiting to be re- housed. Many may never be re-housed under current policies given the lack of larger social rented properties available and difficulties in securing funding to develop such properties. 13. There were dramatic changes in tenure over the decade 2001-11 with the rapid expansion of the private rented sector. These changes are tied very closely to declining affordability and reduction in the stock of social rented accommodation. The Private Rented Sector (PRS) has expanded to meet housing needs. The number and proportion of owner occupiers has fallen over the last 10 years. There are 1,200 fewer home owners in the housing market area in 2011 compared to 2001. 14. The majority of homes in the market area have three or more bedrooms although there are significant differences in the stock of the three authorities with a higher proportion of smaller (one and two bedroom) properties in Rushmoor (40% of all homes) compared to Hart (26%) and Surrey Heath (27%). The tenure mix by area reflects both the stock of properties, and socio-economic factors. Smaller homes are more likely to be privately rented and larger homes more likely to be owner occupied. Completions in recent years have largely reinforced the profile of the existing stock in the three authority areas. 15. This SHMA has developed evidence on the requirement for new housing in the housing market area using a process based on National Planning Policy Guidance (NPPG). The stages in this process can be summarised as follows: Step 1: The Starting Point: the most recent Government Household Projections Step 2: Uplift in Planned Housing Provision in response to Market Signals Step 3: Assessment of Affordable Housing Requirements – the Implications for Housing Requirements Step 4: Prospective Job and Labour Force Growth – the Implications for Housing Requirements Step

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