North Devon Council and Torridge District Council
Affordable Housing Research
November 2019
Property People Strategy & Governance Finance
North Devon Council & Torridge District Council Affordable Housing Research
Contents
Chapter 1: Background to the Report 3 About the Report 4 About Altair 6 Chapter 2: Intermediate Affordable Housing Research 7 Example Affordability Methodologies 8 Chapter 3: Income Datasets and Household Composition 13 Income Datasets 14 Household Composition 21 Chapter 4: Establishing Average Property Prices 27 Establishing Whether High and Low Values Exist 28 Average Property Prices 34 Chapter 5: Discounted Market Sale Housing Affordability 38 Lenders’ Views on Intermediate Housing 39 Income Multiples Approach 40 Affordability Assessment Approach 42 Recommended Affordability Approach 45 Setting Market Sale Discounts 46 Chapter 6: Shared Ownership Affordability 48 Shared Ownership Affordability Scenarios 49 Chapter 7: Commuted Sums 53 Background 54 Commuted Sum Methodologies 58 Recommended Approach 63 Appendix 1: SW Local Authorities Researched 66 Appendix 2: Living Rents Framework for Affordable Housing 68 Appendix 3: North Devon and Torridge Postcodes 70 Appendix 4: Property Price Detailed Analysis 71
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Chapter 1: Background to the Report
This chapter summarises the purpose of the report and why the research has been commissioned by North Devon District Council and Torridge District Council.
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About the Report
Introduction
1.1.1. North Devon District Council (NDC) and Torridge District Council (TDC) (‘the Councils’) are preparing an updated Joint Local Plan that will contain several policies to directly manage the delivery of affordable housing through their planning processes. The Councils recognise it will be necessary to provide additional guidance on affordable housing to support the practical implementation of these policies, and they intend to deliver this through an Affordable Housing Supplementary Planning Document (AH SPD).
1.1.2. Altair Consultancy and Advisory Services Ltd (Altair) was commissioned to undertake research on the following areas, which will inform the proposed AH SPD and any supporting guidance published by the Councils, as appropriate:
▪ Establish criteria on the affordability of Discounted Market Sale Housing1 for those most in need.
▪ Research approaches to calculating financial contributions (commuted sums) for the delivery of affordable housing.
The Brief
1.2.1. The Councils’ brief for this research was to:
▪ Establish household income and purchasing power necessary for different sizes of dwelling (by bed spaces and persons), reflecting a deposit acceptable to mortgage lenders and taking into consideration the composition of the households forming and likely to purchase such properties.
▪ Research whether there are differentials in purchasing power across the districts, such as attributed to high and low value areas, or on any other geographical basis. If so, specifically identify such value areas across individual or combined local authority areas and set out the scope and nature of the applicable approaches and differentials.
▪ Research mortgage lender views on Discounted Open Market Housing and any issues on its practical use. Report on the acceptability of including clauses on income multipliers and/or an initial purchase prices within Section 106 agreements. Additionally, provide comparable advice for shared ownership dwellings.
1 The latest National Planning Policy Framework (NPPF) guidance defines Discounted Market Sale as housing sold at a discount of at least 20% below local market value. Eligibility is determined with regard to local incomes and local house prices and provisions should be in place to ensure housing remains at a discount for future eligible households.
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▪ Research alternatives and provide recommendations on the most appropriate method for the Councils to adopt in calculating commuted sums in lieu of on-site affordable housing.
The Report
1.3.1. This report summarises the key steps we have taken to develop a model to determine what households most in need can afford to spend on intermediate housing and the setting of appropriate Market Sale Housing discounts. The report also recommends an approach for calculating commuted sums in lieu of on-site affordable housing provision.
1.3.2. To inform our conclusions on these areas, we have researched local authorities across the South West, drawn on similar research we have conducted on housing affordability and referred to local authorities we are aware of having relatively detailed intermediate housing policies, in particular Discounted Market Sale Housing, set out in their AH SPDs (or similar documents). Our findings and recommendations are therefore informed by a desktop review of local authority planning policy and associated documents that we could readily find available on local authority websites and through secondary research.
1.3.3. This report is structured into the following key chapters:
▪ Chapter 1 – Background and purpose of the report.
▪ Chapter 2 – Overview of our intermediate affordable housing research, including examples of local authority / other approaches to determining housing affordability.
▪ Chapter 3 – Overview of key datasets and assumptions used to establish household income and household composition for different sized properties.
▪ Chapter 4 – Establishing a methodology for calculating average property prices for North Devon and Torridge for different sized properties.
▪ Chapter 5 – Establishing a methodology to determine what households most in need in North Devon and Torridge – defined as those with lower quartile incomes – can afford to spend on Discounted Market Sale Housing and the setting of appropriate Market Sale Housing discounts.
▪ Chapter 6 – Analysis of Shared Ownership affordability for those most in need in North Devon and Torridge.
▪ Chapter 7 – Overview of key approaches to calculating financial contributions (commuted sums) for the delivery of affordable housing and the recommended approach for the Councils.
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About Altair
1.3.4. Altair is a leading housing and property consultancy bringing together sector experts with a wealth of experience. Our clients cover a range of organisations in the housing sector, including registered providers, local authorities, Arm’s Length Management Organisations (ALMOs), private developers, contractors, Homes England and representative bodies.
1.3.5. We provide leading-edge strategic advice and support at a senior level. Our core services cover the following areas:
▪ Strategy and Governance – We provide strategic and practical advice on governance issues, growth strategies, risk management and more.
▪ Property (Development and Regeneration) – We add value by bringing together public and private sector partners to realise programmes and projects.
▪ Finance – We provide expert technical and practical advice on a wide range of financial and treasury matters.
▪ People (HR and Recruitment) – We provide interim management expertise and recruit to executive and non-executive positions, in addition to a range of HR services.
1.3.6. For more information about Altair, please visit our website: www.altairltd.co.uk
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Chapter 2: Intermediate Affordable Housing Research
This chapter summarises our research of approaches taken by local authorities and other organisations to establish the affordability of intermediate housing.
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Example Affordability Methodologies
Overview
2.1.1. Following a desktop and secondary research exercise of local authority and other organisations’ approaches to determining the affordability of intermediate housing, we concluded that there is not one standard / recognised approach taken across the sector.
2.1.2. While our research found a range of approaches taken, the key datasets and assumptions required to determine housing affordability could be categorised into the following two areas:
▪ The household composition of different sized households and their economic status (i.e. how many working adults are living in different sized properties, what are their incomes and are they full time or part time workers?); and
▪ The percentage of household income spent on housing costs (i.e. mortgage payments for Discounted Market Sale Housing) that is considered affordable.
2.1.3. The above datasets and assumptions can then be used to derive the ‘purchasing power’ of different sized households (i.e. what size mortgage can a household afford to pay for), and these can be compared to average property prices to determine appropriate discounts for Discounted Open Market Sale homes.
Purpose of the Research Exercise
2.2.1. The purpose of this initial research exercise was to establish whether there was a standard approach taken to establish the affordability of intermediate housing, including recognised or standard datasets and methodologies. We therefore:
▪ Undertook desktop research of local authorities across the South West (Appendix 1); and
▪ Referred to similar research we have conducted on housing affordability.
2.2.2. We refer in this section to local authorities we are aware of having relatively detailed intermediate housing policies, in particular Discounted Market Sale Housing, set out in their AH SPDs (or similar documents).
2.2.3. We found a range of approaches adopted by local authorities and provide examples of these in the ‘case study’ boxes below, along with a summary of the Living Rents methodology produced by Savills, in conjunction with Joseph Rowntree Foundation (JRF) and The National Housing Federation (NHF), which focuses on housing affordability.
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Example Affordability Approaches
2.3.1. The following case studies are examples of affordability approaches we found during our research. We have included the examples that had been published in the most detail.
Bath & North East Somerset Planning Obligations SPD – Ensuring Affordability of Homes
• Maximum ceiling on gross total income for households requiring an affordable home set at £60,000. • The Council expects an overarching affordability test where those living in an affordable home shouldn’t have to pay more than 25% of their total gross household income in meeting total housing costs. • Access to low cost home ownership should be equitable with the cost of accessing the local private rented market: ➢ For Shared Ownership products, total housing cost should reflect the total housing cost of accessing the lower quartile private rented market locally taking into consideration the overarching 25% income test for affordability. ➢ The total housing cost of other low-cost home ownership products is assessed in direct relation to the cost of accessing the private rental market and the agreed target audience for the development. ➢ Discounted market or shared equity homes will be sold at no more than 75% of the open market value.
Barnet Affordable Housing SPD – Provision of Intermediate Housing
• Intermediate housing is defined as housing available for people on moderate incomes who cannot afford to buy or rent general market housing (incomes of between £15,000 and £40,000 per year, updated by a measure of wage inflation). • Includes Shared Ownership, housing for sale at a discount (which it states as usually being around 20%), housing for rent and low-cost home ownership. • To purchase the homes for sale, households should not require a mortgage of greater than 3.5 times their income for the range of income groups. • A planning covenant (in the case of housing for sale) or involvement of a RSL ensures that the housing remains affordable in the long-term to households identified as being unable to afford market housing. • The costs to the household of purchasing or renting will be at least 30% lower than the costs of homes of similar type that can be acquired on the open market in the lowest price quartile for that size and type of accommodation.
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Cornwall Housing SPD – Provision of Intermediate Housing
• For Shared Ownership properties, to ensure affordability the Council will ‘sense check’ the total monthly costs (mortgage payment and rent) which should always be significantly less than renting or purchasing a similar home on the open market • Discounted Market Sale homes are sold for prices based on a guideline discount percentage for the relevant ‘value zone’ or the local purchasing power and target price, whichever is the lower. • Guideline discount percentages and target sales prices for each of the five ‘value zones’ are provided by the Council • Discount percentages are set based on local sales values and average ‘purchasing power’ for Cornwall of a typical household based on an assessment of local incomes. • The mortgage multiplier used is 4x single and 3x joint for all the calculations. • Earnings figures applied are a combination of FTE and PTE; the FTE uses the lower 25% as affordable homes should be targeting the lowest earners rather than average ones, and the PTE is the mean figure is used as this is a reduced earnings figure • Methodology also applies a combination of the above to reflect those who are between part- time and full-time. • 10% deposit is used as this is based on industry standard mortgages available for affordable properties
Cheshire East Affordable Housing SPD – Discounted Housing for Sale
• Accommodation is available at a fixed discount below the open market value to households in need. • Level of discount is that required to achieve the maximum selling price determined by the Council for those in need locally who cannot afford to buy on the open market. • Based on 3.5 times the average gross annual income of those identified by the Council as being in housing need. • Individual circumstances of each case and the area are taken into consideration and negotiated with the Council. • Council evidence shows that to achieve an affordable price, the level of discount will normally be required to be a minimum of 30% and up to 50% of the market price. • Discount applies on initial and all subsequent re-sales thus ensuring that the accommodation is retained as affordable.
London Community Land Trust Model – Discounted Housing for Sale
• Homes are priced according to local earnings. • Local earnings are assumed to be the average of median incomes using data published by the ONS in November each year. • Residents enter into contracts that ensure they sell the home to the next household again at a price according to local earnings. This means the homes can be sold on again at a similarly affordable level every time a new family moves in.
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Living Rents – A New Development Framework for Affordable Housing
• Research and methodology produced by Savills, in conjunction with Joseph Rowntree Foundation (JRF) and The National Housing Federation (NHF) in July 2015. • Key aim was to develop a mechanism that establishes links between the housing market, labour market, rents and the ability of people on low incomes to afford them (i.e. moving to a system whereby 'Living Rents' are linked to tenants' incomes). • While the research was focused on rents, the key principles and methodology used could be applied to the costs (i.e. mortgage requirements) of Discounted Market Sale Housing. • Basis was that 'Living Rent' should be affordable for a household with someone in full-time employment, working the average number of hours worked per week (including overtime) and earning around the minimum wage. The data was sourced from the Annual Survey of Hours and Earnings (ASHE) compiled by the ONS. • Income was adapted to reflect the differing composition of households in different-sized properties, which was determined through a sample of households moving into General Needs accommodation – taken from the Continuous Recording of Lettings and Sales in Social Housing in England (CORE)2. • The fact that household income for low-paid families with children is likely to be enhanced by benefits and tax credits was also assumed. • The Organisation for Economic Co-operation and Development (OECD) modified equivalence scale was applied to ASHE earnings data to adjust the base assumed average earnings for a single adult to account for different household compositions (and the effect of benefits and tax credits on household incomes).
Findings from the Research
2.4.1. Across our sample of local authorities in the South West, we consider Cornwall Council’s approach to be the most detailed with, for example, the publishing of ‘price zones’ and associated guide discount rates for Discounted Market Sale Housing (based on assumed household compositions).
2.4.2. Other local authorities have, for example:
▪ Published guideline discount rates (e.g. Dartmoor National Park);
▪ Stated that Discounted Market Sale Housing should be discounted by at least 20% below local market values (e.g. Barnet, Bath and North East Somerset East Devon, Forest of Dean, Tewksbury) in line with NPPF guidance; or
▪ Stated that outgoings on intermediate low-cost home ownership should not
2 CORE (COntinuous REcording) is a national information source funded by the Ministry of Housing, Communities and Local Government that records information on the characteristics of both Private Registered Providers’ and Local Authorities’ new social housing tenants and the homes they rent and buy.
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exceed the average market rent for comparable properties (e.g. Exeter).
2.4.3. Most appear to consider affordability on a case-by-case basis and none, based on our research, have published to the level of detail as Cornwall Council.
2.4.4. It is clear from our research that in assessing housing affordability there is not one standard recognised approach taken across the sector. The approaches we have identified tend to use, for example, different datasets, assumptions, calculations and definitions.
2.4.5. Our research found that the key datasets and assumptions required to determine housing affordability can be categorised into the following areas:
▪ Household income and household composition of different sized households and their economic status.
▪ The percentage of household income spent on housing costs (i.e. mortgage payments for Discounted Market Sale Housing) that is considered affordable.
2.4.6. Our recommended assumptions for household income and household composition are set out in chapter 3 and our recommended affordability threshold (i.e. percentage of household income to be spent on housing) is outlined in chapter 5.
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Chapter 3: Income Datasets and Household Composition
This chapter establishes the most appropriate income dataset and assumptions about household composition (and their economic status) for the Councils to use to determine average household income for different sized properties.
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Income Datasets
Overview
3.1.1. In this section we summarise the most common income datasets used to determine affordability and recommend the most appropriate one to use within the context of the Councils’ requirement to establish household income for those most in need across various household sizes.
3.1.2. There are several income datasets used by local authorities to determine affordability and need. We analysed a number of these considering their strengths and weaknesses and determined that the most appropriate dataset for the Councils to use is the Annual Survey of Hours and Earnings (ASHE).
3.1.3. There is a high demand for affordable housing in North Devon and Torridge and limited new supply and affordable housing, accordingly the Councils wish to focus on those most at need (i.e. those who face the greatest challenges in terms of home ownership affordability). We therefore recommend that ASHE lower quartile incomes should be used.
Purpose of the Research
3.2.1. The purpose of this research exercise was to identify the most appropriate income dataset for the Councils to use to determine the household income for different household compositions and property sizes. As part of this we tallied the main income datasets used by the sample of South West local authorities (Appendix 1) and assessed how the datasets met the Councils’ requirements and context.
3.2.2. For completeness, we have also referred to some other data sources and have provided rationale for why these have not been taken forward as viable options.
3.2.3. The following section contains analysis of several different datasets against their relative uses for calculating affordability in a local area. To ensure affordability calculations are fit for purpose and address the needs of the Councils, the following key characteristics are deemed necessary for any proposed dataset:
▪ Must be readily available and updated on a regular basis (ideally annually);
▪ Lower quartile data must be available (to account for those most in need); and
▪ Can be applied to different household composition assumptions so that the household income (and therefore purchasing power) for different property sizes can be established.
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Local Authority Approaches
3.3.1. From our local authority research, we identified seven potential datasets / sources for consideration for the purposes of modelling affordability for the Councils. To identify the most popular data sources we tallied which local authorities in our sample used which data sources, as summarised in Table 1 below.
Table 1: Average Earnings Data Sources
Source Number of Local Authorities
Annual Survey of Hours and Earnings (ASHE) 19
CACI Paycheck 10
English Housing Survey 9
ONS Modelled Income Estimates 8
Local Household Survey 1
Help to Buy Database 1
Experian Annual Household Income Statistics 1
Source: Altair Research of South West local authorities
3.3.2. From this, we were able to identify the most used data sources and therefore focus further analysis. Across the local authorities included in our research, the main data source used to establish average earnings in Strategic Housing Market Assessments (SHMA) was the Office for National Statistics’ Annual Survey of Hours and Earnings (ASHE), followed by CACI Paycheck data, English Survey Data and then other ONS modelled income estimates.
3.3.3. The English Housing Survey is a national survey and data is not readily available at a district level. We have therefore disregarded that dataset and analysed the following two main sources:
▪ Annual Survey of Hours and Earnings (ASHE); and
▪ CACI Paycheck Data.
Data Source 1: Annual Survey of Hours and Earnings (ASHE)
3.4.1. ASHE is undertaken annually by the ONS and compiles information about the levels, distribution and make-up of earnings and paid hours worked for employees in all industries and occupations. The ASHE data contains estimates of individual
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earnings for full-time equivalent (FTE) and part-time equivalent (PTE) employees and is based on a 1% sample of jobs from HM Revenue and Customs’ (HMRC) Pay- As-You-Earn (PAYE) records.
3.4.2. Table 2 summarises the key advantages and disadvantages of the ASHE dataset within the context of the Councils’ requirements.
Table 2: ASHE: Advantages and Challenges
Data Source Advantages Challenges
Annual Survey Dataset is made available by the Some lower quartile data is not of Hours and ONS annually, free of charge. currently available for North Devon Earnings and Torridge (though it is available at Provides individual earnings for (ASHE) Devon wide and South West region Full Time and Part Time levels). employees – so at a more granular level than other datasets. Assumptions on number of working residents (and their working Widely used across the sector. arrangements) per property type and size need to be made to reach overall assumed household income.
3.4.3. As per ASHE 2018 data, median 2018 gross annual earnings for FTE employees (by place of residence) for North Devon and Torridge were £23,599 and £24,139 respectively, and median PTE annual earnings were £10,504 and £8,710 respectively (ONS ASHE 2018 Home Geography Table 8.7a). The median is ONS's preferred measure of average earnings as it is less affected by very high earners and the skewed distribution of earnings.
Table 3: ONS ASHE Average Gross Annual Earnings (2018) ASHE Average Gross Annual Earnings (2018) North Devon Torridge Lower quartile earnings (FTE) Not Available £ 19,023
Median earnings (FTE) £ 23,599 £ 24,139 Upper quartile earnings (FTE) Not Available Not Available Lower quartile earnings (PTE) £ 6,121 Not Available Median earnings (PTE) £ 10,504 £ 8,710 Upper quartile earnings (PTE) Not Available Not Available Source: ONS ASHE 2018 Home Geography Table 8.7a
3.4.4. Up-to-date lower quartile FTE earnings data for North Devon and lower quartile PTE earnings data for Torridge are not available as the ONS considers these estimates for 2018 to be unreliable for practical purposes.
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3.4.5. In the absence of lower quartile FTE data for North Devon, the South West or Devon Wide lower quartile figures could be applied. Table 4 shows the lower quartile ASHE data for North Devon, Torridge, Devon and the South West for the last 10 years.
Table 4: ONS ASHE Lower Quartile Gross Annual FTE Earnings (2009 to 2018)
North Devon Torridge Devon South West Year LQ Earnings Change (%) LQ Earnings Change (%) LQ Earnings Change (%) LQ Earnings Change (%) 2009 14,493 15,248 16,565 17,682 2010 15,092 4.1% 15,310 0.4% 17,011 2.7% 17,839 0.9% 2011 15,626 3.5% 14,277 -6.7% 17,170 0.9% 18,040 1.1% 2012 17,192 10.0% 15,760 10.4% 17,321 0.9% 18,500 2.5% 2013 16,003 -6.9% 15,001 -4.8% 17,547 1.3% 18,643 0.8% 2014 16,472 2.9% 16,857 12.4% 17,736 1.1% 18,809 0.9% 2015 17,225 4.6% 16,211 -3.8% 18,567 4.7% 19,331 2.8% 2016 17,482 1.5% 17,302 6.7% 18,952 2.1% 19,762 2.2% 2017 # 20,057 15.9% 19,067 0.6% 20,125 1.8% 2018 # 19,023 -5.2% 19,701 3.3% 20,694 2.8% 2009 - 2016 20.6% 13.5% 14.4% 11.8% 2009 - 2018 24.8% 18.9% 17.0% Source: ONS ASHE Dataset (via NOMIS)
3.4.6. North Devon and Torridge lower quartile figures for 2016 (i.e. the year North Devon was last available) are broadly the same, and the 2018 median ASHE and CACI figures for both districts are broadly the same. This indicates a similar direction of travel and could suggest that the lower quartile figure for North Devon would be around £19,000. The Devon Wide lower quartile figure for 2018 is also circa £19,000.
3.4.7. An alternative could be to take the 2016 North Devon lower quartile figure and apply the Devon or South West annual changes for the following years (circa 4%) which would give an approximate lower quartile figure for 2018 of around £18,200. However, we consider this to be a more complicated approach which will need recalculating whenever the North Devon data is not available.
3.4.8. In the absence of lower quartile PTE data for Torridge, the Devon Wide lower quartile figure could also be applied (Table 5).
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Table 5: ONS ASHE Lower Quartile Gross Annual PTE Earnings (2009 to 2018)
North Devon Torridge Devon South West Year LQ Earnings Change (%) LQ Earnings Change (%) LQ Earnings Change (%)LQ Earnings Change (%) 2009 5,080 4,964 5,173 2010 4,747 -6.6% 4,970 5,329 7.4% 5,208 0.7% 2011 4,822 1.6% 5,166 -3.1% 5,068 -2.7% 2012 5,438 5.3% 5,307 4.7% 2013 5,394 - 5,448 0.2% 5,459 2.9% 2014 4,673 5,653 3.8% 5,462 0.1% 2015 6,427 5,905 4.5% 5,757 5.4% 2016 4,932 6,135 3.9% 5,835 1.4% 2017 6,262 2.1% 5,982 2.5% 2018 6,121 6,695 6.9% 6,309 5.5% 2009-2018 20.5% 34.9% 22.0% Source: ONS ASHE Dataset (via NOMIS)
Data Source 2: CACI Paycheck Data
3.5.1. CACI Paycheck data is based on information from CACI's lifestyle database and data from the ONS’s Average Weekly Earnings and Living Costs and Food Survey. CACI Paycheck estimates gross household income from all sources including earnings, benefits and investments. This explains, in part, why averages are generally higher than ASHE datasets. CACI is often preferred to other datasets by local authorities and developers when assessing affordability as it provides a high- level estimate of average gross household income whereas, for example, ASHE looks at individual earnings.
3.5.2. Table 6 summarises the key advantages and disadvantages of the CACI Paycheck dataset within the context of the Councils’ requirements.
Table 6: CACI Paycheck: Advantages and Challenges
Data Source Advantages Challenges
CACI Paycheck – Currently purchased by the Councils. Data set is an average income across Gross Household household size and types. Widely used across the sector. Income Household income includes earnings, Median, lower and upper quartile data benefits and investments – some of available for both Councils at a district which may be disregarded by some level. mortgage lenders.
3.5.3. As per CACI Paycheck data3, median household incomes to April 2019 for North Devon and Torridge were £31,848 and £31,124, respectively (Table 7). Lower
3 © 1996 – 2019 CACI Limited. This report shall be used solely for academic, personal and/or non- commercial purposes.
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quartile household incomes to April 2019 for North Devon and Torridge were £18,336 and £18,187, respectively.
Table 7: CACI Paycheck Average Gross Household Income (to April 2019)
CACI Average Gross Household Income (to April 2019) North Devon Torridge Lower quartile income £ 18,336 £ 18,187 Median income £ 31,848 £ 31,124 Upper quartile income £ 51,584 £ 49,865 Source: CACI Paycheck Report (to April 2019)
3.5.4. CACI data is available at a district level and at a postcode level. Analysing incomes at a postcode level would add a level of detail that we feel is not required and would make any future updating of the analysis more complicated and costly. Analysing at a postcode level may also be deemed to assume that only residents currently living within a specific postcode would look to move within that postcode and not, for example, across the two district areas. We are not aware of any local authorities in our sample that have looked at average household incomes at a detailed postcode level.
Other Income Datasets
3.6.1. Other income datasets exist, for example the Family Resource Survey or National Living Wage data published annually by the Department for Work and Pensions (DWP), but these are not considered detailed enough to establish incomes at a local level and in line with the Councils’ requirements.
3.6.2. Cornwall Council’s approach uses the average incomes of purchasers of Discounted Market Sale Housing sourced from the Help to Buy South West (formerly South West Homes) database. This element of the Help to Buy dataset is not deemed to be an appropriate source to establish average earnings as it is based on households that have purchased homes and therefore excludes those wishing (and potentially unable) to do so – a section of the population the Councils wish to better support through planning policy.
Key Conclusions
3.7.1. Given that the CACI Paycheck data is based on average household incomes and does not differentiate between household sizes, it does not easily lend itself to the Councils’ aims of establishing purchasing power for different sizes of dwellings and household compositions. The CACI dataset could potentially be cross referenced with other data on assumed household compositions, but we consider this to be a complicated approach requiring several high-level assumptions. We are not aware of any multiple assumptions to convert average household income into estimated individual earnings.
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3.7.2. We therefore recommend the Councils use ASHE earnings data, which is better suited to the Councils' requirements:
▪ It is readily available and updated on a regular basis;
▪ Lower quartile data is available (to account for those most in need); and
▪ It can be applied to different household composition assumptions so that the household income (and therefore purchasing power) for different property sizes can be established.
3.7.3. We recommend the following lower quartile ASHE earning figures are used by the Councils:
▪ North Devon FTE - £19,701 (Devon wide lower quartile);
▪ North Devon PTE - £6,121 (North Devon lower quartile);
▪ Torridge FTE - £19,023 (Torridge lower quartile); and
▪ Torridge PTE - £6,695 (Devon wide lower quartile).
3.7.4. We recommend this data is updated annually.
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Household Composition
Overview
3.8.1. We have concluded that the Councils should use ASHE lower quartile earnings data to calculate household income. However, to link earnings with property types, the Councils must determine appropriate household compositions (i.e. how many earners live, on average, in a given property size) and the working status of those households. In this section we establish a methodology for determining household compositions for different sized properties.
3.8.2. Our research of local authority and other approaches concluded that there is not a standard dataset or sector approach to establishing the household composition of different size properties.
3.8.3. However, to help ensure the affordability of Discounted Market Sale Housing for those most in need, an assumption needs to be made. We therefore suggest the following compositions – which are closely linked to the Living Rent and Cornwall Council methodology outcomes – would be a reasonable starting assumption for the Councils to take in the absence of a standard, recognised methodology:
▪ 1 bed – x1 FTE;
▪ 2 bed – x1 FTE and x1 PTE;
▪ 3 bed – x1 FTE and x1 PTE; and
▪ 4 bed – x2 FTE.
Assuming Household Composition
3.9.1. Determining average household compositions is challenging. The Torridge and North Devon Housing and Economic Needs Assessment (HEDNA), GL Hearn, May 2016, noted: “Whilst the demographic projections provide a good indication of how the population and household structure will develop, it is not a simple task to convert the net increase in the number of households into a suggested profile for additional housing to be provided. The main reason for this is that in the market sector households are able to buy or rent any size of property (subject to what they can afford)……...” “The size of housing which households occupy relates more to their wealth and age than the number of people which they contain. For example, there is no reason why a single person cannot buy (or choose to live in) a four-bedroom home as long as they can afford it…….”
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3.9.2. There are various sources of information relating to household composition, all with varying limitations when considered in the context of the Councils’ requirements. We identified several different sources as part of our research:
▪ The CORE (COntinuous REcording) system is a national information source funded by the Ministry of Housing, Communities and Local Government that records information on the characteristics of private registered providers’ and local authorities’ new tenants, rental homes and sale homes. However, given the dataset is based on registered providers’ and local authorities’, it is more skewed towards General Needs housing for rent rather than housing for sale.
▪ The 2011 Census data could be used to profile the average household size per number of rooms, but this data is 8-years old.
▪ The English Housing Survey provides data on household composition but establishing the economic activity of those living in the different households is also a challenging area.
3.9.3. We are not aware of any up-to-date datasets that estimate the average number of FTE and PTE workers by size and composition of household.
Joseph Rowntree Foundation: Living Rent Methodology
3.10.1. In JRF’s Living Rent methodology, the Organisation for Economic Co-operation and Development (OECD)4 modified equivalence scale was applied to ASHE earnings data to adjust the base assumed average earnings for a single adult to account for different household compositions and the effect of benefits and tax credits on household incomes.
3.10.2. The equivalence value applied to the first adult in a household was 1.0 (i.e. the base position / assumption), for each additional adult an equivalence value of 0.5 is applied, and equivalence values of 0.5 and 0.3 for each child greater than and less than 14 years, respectively. Table 8 shows how assumed household income increases for each additional household member.
4 The OCED-modified scale is the standard scale for the Statistical Office of the European Union (EUROSTAT) and several UK government departments.
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Table 8: OECD-Modified Equivalence Scale as Applied by Household Composition
Household Equivalence Member Value First Adult 1.0 Additional Adult 0.5 Child => 14 years 0.5 Child 0 - 13 years 0.3 Source: Living Rent Methodology, June 2015
3.10.3. The Living Rent methodology used CORE data covering working-age households moving into General Needs properties to form a picture of those moving into different size properties (e.g. single adults, lone parents, couples with and without children etc). Table 9 shows the average household composition for one, two, and three- bedroom properties based on the research. The equivalence score was then applied to the households to estimate household income multiples by property size.
Table 9: OECD-Modified Equivalence Scale
Bedrooms Household Equivalence Value One Bed Single Adult 1.0 Two Bed One Working Adult; One Child Under 14 1.3 Three Bed One Working Adult; Two Children Under 14 1.6 Source: Living Rent Methodology, June 2015
3.10.4. While JRF’s research was focused on rented properties, the key principles and methodology used could be applied to Discounted Market Sale Housing.
Cornwall Council: Discounted Market Sale Housing Methodology
3.11.1. Cornwall Council’s Housing SPD methodology (see case study below) uses salary multiples of 4x (single) and 3x (joint) for assumed household compositions5. The earning figures are applied to a combination of FTE, PTE and PFTE (the latter being the average of the FTE and PTE salaries) to reach average household incomes by property sizes.
3.11.2. Cornwall’s Housing SPD does not detail how the combinations of FTE, PTE and PFTE by property size were determined, but Cornwall Council has confirmed that these are generalised assumptions (and therefore have limitations) but were considered to be a best estimate and were intended to arrive at affordable prices for different households and different life stages.
5 Mortgage lenders previously used salary multiples as a key criterion when establishing how much mortgage applicants could borrow.
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Cornwall Housing SPD – Local Purchasing Power • Affordability calculations based on local incomes and purchasing power together with up to date house price data are used to draw up guideline discount percentages.
House Type Purchasing Power Deposit 10% Rounded 4 Bed House 3 x 2FTE £ 104,502 £ 116,113 £ 116,000 3 Bed House 3 x 1FTE + 1PFTE £ 94,778 £ 105,308 £ 105,500 2 Bed House 3 x 1FTE + 1PTE £ 85,053 £ 94,503 £ 94,500 1 Bed Flat 4 x 1FTE £ 69,668 £ 77,409 £ 77,500
• The mortgage multiplier used is the standard multiples of 4x single and 3x joint for all the calculations. • The earnings figures applied are a combination of Full Time Earnings (FTE), and Part Time Earnings (PTE). The FTE uses the lower 25% as affordable homes should be targeting the lowest earners rather than average ones. The FTE 25% percentile figure is £17,417 currently. For PTE the mean figure is used as this is a reduced earnings figure, this is currently £10,934. • The methodology also applies a third figure; a combination of the above to reflect those who are between part-time and full-time. The figure used is the average of the FTE 25% percentile and the PTE figure; this is currently £14,175.50 (Part-Time Full Time Earner PFTE).
Source: Cornwall Council Housing SPD
3.11.3. Interestingly, while the Living Rent equivalence approach and the Cornwall Council approach are based on different methodologies and are used for different purposes (i.e. the former for establishing Living Rent levels and the latter for establishing Discounted Market Sale Housing ‘purchasing power’), they derive similar household incomes. This is shown in Table 10 and Table 11 using the proposed North Devon and Torridge lower quartile salaries (the 4 bed is assumed to have an additional child), respectively.
3.11.4. The outputs produced by the Living Rent and Cornwall Council’s methodologies in terms of assumed household incomes are broadly consistent and could be used to sense check / benchmark / verify, in part, the others approach.
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Table 10: OECD-Modified Equivalence Scale v Cornwall Council Salary Multiples: Applied to North Devon Lower Quartile Salaries
Cornwall Approach OECD Derived Cornwall Derived Household OECD Equivalence Household Income Bedrooms Assumed Income (FTE / PTE LQ Value (FTE LQ Salary x Household Mix Salary x HH Equiv. Value) Composition) One Bed 1.0 £ 19,701 1 FTE £ 19,701 Two Bed 1.3 £ 25,611 1 FTE; 1 PTE £ 25,822 Three Bed 1.6 £ 31,522 1 FTE; 1 PFTE £ 32,612 Four Bed 2.1 £ 41,372 2 FTE £ 39,402 Note: FTE Lower Quartile Salary: £19,701 PTE Lower Quartile Salary: £6,121 Source: Altair Analysis
Table 11: OECD-Modified Equivalence Scale v Cornwall Council Salary Multiples: Applied to Torridge Lower Quartile Salaries
Cornwall Approach OECD Derived Cornwall Derived Household OECD Equivalence Household Income Bedrooms Assumed Income (FTE / PTE LQ Value (FTE LQ Salary x Household Mix Salary x HH Equiv. Value) Composition) One Bed 1.0 £ 19,023 1 FTE £ 19,023 Two Bed 1.3 £ 24,730 1 FTE; 1 PTE £ 25,718 Three Bed 1.6 £ 30,437 1 FTE; 1 PFTE £ 31,882 Four Bed 2.1 £ 39,948 2 FTE £ 38,046 Note: FTE Lower Quartile Salary: £19,023 PTE Lower Quartile Salary: £6,695 Source: Altair Analysis
Key Conclusions
3.12.1. In the absence of a standard sector approach, defining the assumed household composition of different size properties by economic status involves an element of judgement. It is also important to note that there will not be a single approach that will accommodate for all possible eventualities.
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3.12.2. However, to help ensure affordability of Discounted Market Sale Housing for those most in need through planning policy, the Councils need to make an assumption. We therefore suggest the following compositions – which are closely linked to the Living Rent and Cornwall Council methodology outcomes – would be a reasonable starting assumption for the Councils to take in the absence of a standard, recognised methodology:
▪ 1 bed – x1 FTE;
▪ 2 bed – x1 FTE and x1 PTE;
▪ 3 bed – x1 FTE and x1 PTE; and
▪ 4 bed – x2 FTE.
3.12.3. Proposed average incomes and household compositions established in this chapter are used to derive purchasing power (i.e. what households most in need can affordable to pay for Discounted Market Sale Housing) for different sized properties in chapter 5.
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Chapter 4: Establishing Average Property Prices
Due to the local geography and market conditions, considerable variance in property prices is likely to exist in North Devon, with less variability in Torridge. This chapter establishes whether high and low value areas exist across the two districts and derives a methodology for calculating average property prices for different sized properties.
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Establishing Whether High and Low Values Exist
Overview
4.1.1. Establishing whether high and low value areas exist across the two districts and the corresponding average property prices is an important step to establishing the purchasing power of those most at need. In this section we have analysed property sale data to establish whether high and low value areas exist in North Devon and Torridge.
4.1.2. For North Devon, our analysis concluded that median and lower quartile property values across property types in several key Wards were consistently above (e.g. Braunton West and Georgeham and Mortehoe) or below (e.g. Barnstaple with Westacott) district levels. These findings are in line with the characteristics of some of these areas (e.g. higher value Wards centred around the key coastal areas of North Devon), and suggested that separate ‘price zones’ should be established to reflect the differential in values.
4.1.3. For Torridge, our analysis concluded that while there is evidence of greater than 15% variances in median and lower quartile values in some Wards, there was insufficient evidence to suggest significant value ranges exist across the district as a whole and therefore establishing ‘price zones’ is not appropriate.
Property Price Datasets
4.2.1. Across all the local authorities included in our research, the main data source used to establish average property values is Land Registry sold price data. A few local authorities have supplemented this information with surveys of current selling price detail from estate agents, but these are, in general terms, in the minority and mean that the data is based on asking prices not sold data.
4.2.2. Sold data is considered a better source for this exercise as it is based on actual transaction prices whereas asking prices tend to be subject to negotiation and change. Our analysis focuses on median average values as this measure is less affected by very high and low property values and any skewed distribution of property prices.
Approach to Identifying Property Prices
4.3.1. We analysed sold price data from Rightmove, the UK real estate portal and property website, which uses Land Registry sold price data. The postcodes and Wards analysed were sourced from North Devon Council and Doogal.co.uk (Appendix 3) and these were cross referenced against the Land Registry data.
4.3.2. The following methodology was undertaken to establish whether ‘price zones’ existed across the districts:
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▪ Historic Land Registry data on sold prices obtained from the Rightmove website (spanning back to 2015).
▪ Historic sold prices uplifted to ‘today’s’ prices using local HPI data (sourced from ONS).
▪ Properties grouped by Land Registry definitions (i.e. flat, terrace, semi- detached, detached) and by bedroom numbers (i.e. 1 bed, 2 bed, 3 bed and 4 bed) where Rightmove data is available6.
▪ Lower quartile and median property values were then calculated for each postcode (outcode) area by property type and by bedroom number.
▪ Lower quartile and median property values for each postcode were then compared to the lower quartile and mean property values for the district as a whole – those that varied between 10-15% highlighted amber and those that varied greater than 15% highlighted red.
North Devon Analysis
4.4.1. Local knowledge suggests that due to the size, nature and characteristics of North Devon’s geography and variable local housing market conditions, average property values are likely to differ across the district with, for example, higher value areas located in desirable coastal areas. Table 12 summarises our analysis for North Devon across all property types.
6 Land Registry analysis is by property category (flat, terrace, semi-detached and detached). Rightmove sold data however also includes number of bedrooms for a proportion of the sold property data
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Table 12: North Devon – All Property Prices
All Properties Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 131 £ 136,761 -25% £ 164,579 -33% £ 191,030 -41% 40% Barnstaple with Pilton Ward 235 £ 162,794 -10% £ 196,433 -20% £ 241,426 -25% 48% Barnstaple with Westacott Ward 201 £ 149,607 -17% £ 176,641 -28% £ 237,092 -26% 58% Bickington Ward 178 £ 202,243 12% £ 238,518 -2% £ 292,454 -9% 45% Bishop's Nympton 143 £ 245,158 35% £ 311,314 27% £ 431,247 34% 76% Bratton Fleming 61 £ 270,000 49% £ 345,681 41% £ 515,627 61% 91% Braunton East 462 £ 232,860 28% £ 289,810 19% £ 362,460 13% 56% Braunton West & Georgeham 426 £ 245,133 35% £ 303,154 24% £ 456,998 42% 86% Chittlehampton 126 £ 231,632 28% £ 312,377 28% £ 473,844 48% 105% Chulmleigh 378 £ 167,951 -7% £ 238,117 -3% £ 311,025 -3% 85% Combe Martin 124 £ 188,348 4% £ 235,843 -4% £ 294,730 -8% 56% Fremington 121 £ 219,793 21% £ 253,722 4% £ 301,218 -6% 37% Heanton Punchardon 42 £ 194,738 7% £ 244,360 0% £ 308,680 -4% 59% Ilfracombe East 361 £ 140,946 -22% £ 191,267 -22% £ 262,848 -18% 86% Ilfracombe West 155 £ 164,933 -9% £ 194,676 -20% £ 251,086 -22% 52% Instow 63 £ 281,668 55% £ 371,117 52% £ 464,633 45% 65% Landkey 163 £ 226,927 25% £ 295,704 21% £ 392,967 22% 73% Lynton & Lynmouth 181 £ 171,015 -6% £ 243,249 0% £ 334,860 4% 96% Marwood 39 £ 229,953 27% £ 313,568 28% £ 454,309 41% 98% Mortehoe 101 £ 261,285 44% £ 321,135 31% £ 447,080 39% 71% Newport 181 £ 170,084 -6% £ 197,920 -19% £ 281,892 -12% 66% North Molton 73 £ 194,240 7% £ 232,954 -5% £ 297,605 -7% 53% Roundswell 90 £ 238,754 32% £ 282,451 16% £ 332,352 4% 39% South Molton 363 £ 158,883 -12% £ 193,860 -21% £ 261,179 -19% 64% Witheridge 62 £ 187,194 3% £ 230,413 -6% £ 291,027 -9% 55% North Devon 4460 £ 181,223 £ 244,444 £ 321,112 77%
>15% variance from district total UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
4.4.2. Looking at North Devon on an overall basis – ignoring property size and type – there are greater than 15% variances in median / lower quartile values in a significant number of Wards when compared to the district wide median / lower quartile figures. While this may indicate pockets of high and low property values, the data is likely to be skewed at this level of analysis by property types and sizes. We therefore carried out the same analysis by property type (i.e. flat, terraced, semi-detached and detached) and property size (i.e. bedroom numbers) – see Appendix 4.
4.4.3. Our analysis concludes that median and lower quartile property values across property types in several key Wards are consistently above (e.g. Braunton West and Georgeham and Mortehoe) or below (e.g. Barnstaple with Westacott) district levels.
4.4.4. These findings are in line with the characteristics of some of these areas (e.g. higher value Wards centred around the key coastal areas of North Devon), and suggests that separate ‘price zones’ should be established to reflect the differential in values. We reached similar conclusions when looking at the data based on bedroom numbers. We therefore derive proposed ‘price zones’ for North Devon below.
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North Devon ‘Price Zones’
4.5.1. When establishing property 'price zones' for North Devon we have sought to mitigate areas with, for example, a greater proportion of a certain property type (e.g. flat, terraced, semi-detached, detached) or with more new build sales, from skewing the results. The following methodology has therefore been followed to set 'price zones' for North Devon (the approach is broadly in line with the methodology applied by Cornwall Council):
▪ Historic Land Registry data on sold prices obtained from the Rightmove website (spanning back to 2015).
▪ A 5% 'new build premium' applied to base prices of 'non-new / existing' properties.
▪ Historic sold prices uplifted to 'today's' prices using North Devon HPI rates (sourced from ONS).
▪ Properties grouped by Land Registry definitions (i.e. flat, terrace, semi- detached, detached) and median property values calculated for each property type and by Ward.
▪ Average property prices used to establish the ratio of prices by property type to each other, and these ratios then used to calculate an 'equivalent price' for each dwelling.
▪ The dwelling type distribution for North Devon was calculated and applied to each equivalent price for each property type to reach a 'normalised' price for each property. These steps were taken to help mitigate areas with a large proportion of a particular property type from skewing the data.
▪ The median house price (normalised price) was then calculated for each Ward and used to set proposed price zones.
4.5.2. Table 13 sets out the proposed price zone arrangements for North Devon, based on four zones.
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Table 13: North Devon: Price Zones Median Diff from Diff from District Proposed Ward 'Normalised' District Median (%) Zone Price Median (£) Witheridge £ 203,638 -£ 51,781 -20% Barnstaple with Westacott Ward £ 206,410 -£ 49,008 -19% Barnstaple Central Ward £ 221,781 -£ 33,638 -13% Ilfracombe West £ 222,638 -£ 32,780 -13% Zone 1 South Molton £ 223,149 -£ 32,270 -13% North Molton £ 225,462 -£ 29,956 -12% Chulmleigh £ 232,027 -£ 23,391 -9% Barnstaple with Pilton Ward £ 235,746 -£ 19,672 -8% Bickington Ward £ 238,997 -£ 16,421 -6% Newport £ 248,630 -£ 6,788 -3% Combe Martin £ 248,686 -£ 6,733 -3% Fremington £ 249,821 -£ 5,598 -2% Zone 2 Ilfracombe East £ 256,920 £ 1,502 1% Roundswell £ 259,947 £ 4,529 2% Landkey £ 266,378 £ 10,960 4% Lynton & Lynmouth £ 277,134 £ 21,716 9% Heanton Punchardon £ 283,270 £ 27,852 11% Marwood £ 285,009 £ 29,591 12% Zone 3 Braunton East £ 287,914 £ 32,495 13% Chittlehampton £ 298,474 £ 43,055 17% Bratton Fleming £ 312,326 £ 56,908 22% Braunton West & Georgeham £ 313,714 £ 58,296 23% Bishop's Nympton £ 333,545 £ 78,127 31% Zone 4 Instow £ 370,645 £ 115,227 45% Mortehoe £ 374,369 £ 118,951 47% North Devon £ 255,418 Source: Altair Analysis
4.5.3. We recommend this ‘price zone’ analysis is updated biannually or following a significant shift in the local housing market.
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Torridge Analysis
4.6.1. Local knowledge suggests there is less of an issue of significant variance of average property prices across Torridge. Table 14 summarises our analysis for Torridge across all property types.
Table 14: Torridge – Property Prices: All Properties
All Properties - Base Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 94 £ 206,762 19% £ 252,717 11% £ 336,160 13% 63% Bideford East 136 £ 153,566 -11% £ 177,885 -22% £ 223,753 -25% 46% Bideford North 162 £ 132,979 -23% £ 168,234 -26% £ 234,433 -21% 76% Bideford South 174 £ 150,889 -13% £ 188,294 -17% £ 258,993 -13% 72% Broadheath 75 £ 192,433 11% £ 297,853 31% £ 381,585 28% 98% Clinton 70 £ 191,684 11% £ 247,876 9% £ 372,998 25% 95% Clovelly Bay 20 £ 150,941 -13% £ 202,196 -11% £ 285,270 -4% 89% Coham Bridge 94 £ 235,096 36% £ 293,608 29% £ 357,890 20% 52% Forest 103 £ 209,605 21% £ 256,249 12% £ 317,648 7% 52% Hartland and Bradworthy 101 £ 185,256 7% £ 232,556 2% £ 296,525 -1% 60% Holsworthy 435 £ 165,270 -5% £ 203,476 -11% £ 255,507 -14% 55% Kenwith 29 £ 203,020 17% £ 310,161 36% £ 392,931 32% 94% Monkleigh and Littleham 38 £ 222,680 29% £ 252,500 11% £ 333,566 12% 50% Northam 174 £ 151,376 -13% £ 237,977 4% £ 324,470 9% 114% Orchard Hill 37 £ 247,330 43% £ 312,325 37% £ 385,718 29% 56% Shebbear and Langtree 120 £ 226,814 31% £ 281,579 23% £ 351,228 18% 55% Tamarside 134 £ 226,809 31% £ 279,620 23% £ 327,206 10% 44% Three Moors 160 £ 191,442 11% £ 274,004 20% £ 367,822 23% 92% Torrington 454 £ 158,717 -8% £ 192,345 -16% £ 239,266 -20% 51% Two Rivers 131 £ 193,120 12% £ 234,738 3% £ 314,681 6% 63% Waldon 74 £ 211,532 22% £ 281,938 24% £ 372,367 25% 76% Westward Ho! 77 £ 232,321 34% £ 274,611 20% £ 318,024 7% 37% Winkleigh 229 £ 200,119 16% £ 254,762 12% £ 374,325 26% 87% Torridge 3121 £ 173,180 £ 228,195 £ 298,170 72%
>15% variance from district total UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
4.6.2. Looking at Torridge on an overall basis – ignoring property size and type – there are greater than 15% variances in median / lower quartile values in a significant number of Wards when compared to the district wide median / lower quartile figures.
4.6.3. As with North Devon, while this may indicate pockets of high and low property values, the data is likely to be skewed at this level of analysis by property types and sizes. We therefore carried out the same analysis by property type (i.e. flat, terraced, semi-detached and detached) and property size (i.e. bedroom numbers) – see Appendix 4.
4.6.4. Our analysis concludes that while there is evidence of greater than 15% variances in median and lower quartile values in some Torridge Wards, there is insufficient evidence to suggest significant value ranges exist across the district as a whole and therefore establishing ‘price zones’ is not appropriate. We reached the same conclusions when looking at the data based on bedroom numbers (i.e. 1 bed, 2 bed, 3 bed and 4 bed).
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Average Property Prices
Overview
4.7.1. In this section we set average property prices for the North Devon price zones established in the previous section and for Torridge.
4.7.2. Our preferred dataset is actual new build property sale prices as this, for example, avoids having to use all property sale price data and applying a ‘new build’ premium assumption to older properties. There is little consensus on what premium percentage should be applied and this is likely to vary by Ward and year.
4.7.3. Due to insufficient sample sizes, we propose average sale prices for all properties plus a ‘new build’ premium is used for North Devon price zones (being the next best alternative dataset available). We propose average sale prices for new build properties is used for Torridge as we feel there is a sufficient dataset size.
4.7.4. Average prices are set for different size properties and are used to establish recommended Market Sale Housing discounts in chapter 5. We recommend average property price data is initially updated annually.
Property Pricing Approach
4.8.1. Historic Land Registry data includes new build and older properties that have been resold. Prices used by North Devon and Torridge to set discount rates for new Discounted Market Sale Housing should ideally reflect new build property prices as the policy will relate to new developments. However, there are often challenges to this, including a lack of available current market comparable information.
4.8.2. We have analysed three approaches to establishing average property prices and derived average values by size of property (e.g. 1-bed, 2-bed etc) for each:
▪ Average property prices utilising the base data used to establish whether ‘price zones’ should be established across the districts (i.e. 5-years of Land Registry sold data, uplift of historic prices to current day estimates using HPI).
▪ Average property prices utilising the base data (as per the above bullet point) but applying a 5% ‘new build premium’7 to base prices of non-new properties.
▪ Average property prices utilising the base data (as per the first bullet point) but excluding all non-new build properties.
7 Various sources on this area suggest a new-build premium can range between 10%-20%; analysis of North Devon and Torridge lower quartile new build and non-new build prices suggests a 5% premium is reasonable (based on Torridge all data and North Devon 3-bedroom properties – being the largest dataset). A 5% premium is taken to be prudent.
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4.8.3. Our preferred approach is to use actual new build property prices. This would avoid having to use a ‘new build’ premium assumption where there is little consensus on what percentage should be applied and any proposed premium is likely to vary by Ward and each year.
4.8.4. Using actual new build data would also be simpler to update in future years. However, if new build prices are used, there needs to be a sufficient dataset to draw meaningful conclusions.
North Devon Average Prices by ‘Price Zone’
4.9.1. Tables 15 to 17 summarise the average property prices established by applying the three approaches detailed above. Datasets that are considered too small to derive meaningful conclusions from are highlighted red.
Table 15: North Devon – Average Property Prices (Base) Type Zone 1 Zone 2 Zone 3 Zone 4 1 Bedroom £ 102,613 £ 94,158 £ 184,736 £ 144,609 Sample 32 15 15 18 2 Bedrooms £ 165,168 £ 188,865 £ 210,318 £ 246,019 Sample 317 232 130 142 3 Bedrooms £ 200,323 £ 236,146 £ 271,542 £ 305,890 Sample 522 438 270 212 4 Bedrooms £ 278,920 £ 314,247 £ 349,727 £ 394,827 Sample 190 203 93 77 Source: Altair Analysis
Table 16: North Devon – Average Property Prices (Base with New Build Premium)
Type Zone 1 Zone 2 Zone 3 Zone 4 1 Bedroom £ 107,743 £ 98,866 £ 193,973 £ 148,743 Sample 32 15 15 18 2 Bedrooms £ 171,910 £ 195,511 £ 220,523 £ 257,348 Sample 317 232 130 142 3 Bedrooms £ 209,003 £ 246,473 £ 285,119 £ 321,184 Sample 522 438 270 212 4 Bedrooms £ 289,554 £ 324,133 £ 367,213 £ 414,568 Sample 190 203 93 77 Source: Altair Analysis
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Table 17: North Devon – Average Property Prices (New Builds Only)
Type Zone 1 Zone 2 Zone 3 Zone 4 1 Bedroom £ - £ 232,372 £ - £ 142,165 Sample 0 2 0 8 2 Bedrooms £ 140,465 £ 172,324 £ 203,428 £ 187,488 Sample 3 30 42 25 3 Bedrooms £ 259,450 £ 208,189 £ 246,515 £ 329,182 Sample 8 29 72 10 4 Bedrooms £ 283,652 £ 273,252 £ 319,636 £ 272,748 Sample 6 25 32 7 Source: Altair Analysis
4.9.2. The size of our preferred dataset – new build actual sale prices – is significantly smaller than the other two datasets. In the absence of a meaningful sample sizes for new build properties, an alternative is to look at properties currently on the market. However, we envisage similar issues regarding sample sizes and an appropriate ‘discount’ from advertised asking prices (to account for negotiations on asking prices) would also need to be considered, which is also a subjective area.
4.9.3. We therefore propose that the average prices with a ‘new build’ premium dataset (Table 16) is used for North Devon. As noted above, there are limitations to this dataset, including debate about what an appropriate new build premium is and whether a premium should be applied to certain property types at all (for example higher value period properties). However, we consider this to be the next best alternative dataset available.
4.9.4. Table 18 therefore sets out the proposed average prices for North Devon. We feel that there is an insufficient sample size to set average prices for 1 bed properties, but these are included for presentational purposes.
Table 18: North Devon – Proposed Average Property Prices
Type Zone 1 Zone 2 Zone 3 Zone 4 1 Bedroom £ 108,000 £ 99,000 £ 194,000 £ 149,000 2 Bedrooms £ 172,000 £ 196,000 £ 221,000 £ 258,000 3 Bedrooms £ 210,000 £ 247,000 £ 286,000 £ 322,000 4 Bedrooms £ 290,000 £ 325,000 £ 368,000 £ 415,000 Source: Altair Analysis
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Torridge Average Prices
4.10.1. Table 19 summarises the average property prices established by applying the three approaches detailed above. Datasets that are considered too small to derive meaningful conclusions from are highlighted red.
Table 19: Torridge – Average Property Price Alternatives Base With New Type Base New Build Only Build Prem 1 Bedroom £ 106,008 £ 108,635 £ 115,079 Sample 35 35 7 2 Bedroom £ 167,000 £ 170,758 £ 183,028 Sample 561 561 118 3 Bedroom £ 212,913 £ 216,998 £ 235,729 Sample 834 834 205 4 Bedroom £ 282,996 £ 288,967 £ 294,814 Sample 344 344 121 Source: Altair Analysis
4.10.2. Table 20 shows the proposed average prices for Torridge, which are based on the new build dataset (as we feel there is a sufficient dataset size except for 1 bed properties, which are included for presentational purposes).
Table 20: Torridge – Proposed Average Property Prices Type Proposed Average Price 1 Bedroom £ 116,000 2 Bedroom £ 184,000 3 Bedroom £ 236,000 4 Bedroom £ 295,000 Source: Altair Analysis
4.10.3. Average prices are set for different size properties and are used to establish recommended Market Sale Housing discounts in chapter 5.
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Chapter 5: Discounted Market Sale Housing Affordability
This chapter summarises our research into mortgage lenders’ views on intermediate housing and establishes a methodology for determining what households most in need can afford to spend on Discounted Market Sale Housing. We do this by comparing two key methodologies – an income multiples approach and an affordability assessment approach – and recommending the most suitable approach given the Councils’ requirements.
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Lenders’ Views on Intermediate Housing
Approach
5.1.1. We contacted 15 mortgage advisors listed on the Help to Buy South West website and several mortgage lenders (including key contacts provided by the Councils). At the time of drafting this report we were not able to obtain a detailed and broad enough set of responses to provide a representative view for the Councils. Therefore, to help supplement this area of research and provide further insight, we undertook a desktop review of lenders’ published mortgage / lending criteria.
Key Observations
5.2.1. While the desktop research was a high-level search of published criteria for a sample of lenders, we made the following general observations:
▪ Salary multiple caps didn’t tend to differ between single and joint applicants – this is expected as the sector has moved away from basing lending on salary multiples and is more focused on individual household affordability assessments. Actual salary multiples applied will therefore differ case by case based on the relevant lender’s affordability assessment.
▪ Only one lender specifically published different multiples for Shared Ownership, with other lenders, for example, restricting Loan to Value criteria. However, this does not necessarily mean there are not different multiples for Shared Ownership – lenders may just publish their standard lending criteria.
▪ Lenders tend to be clear about whether they supported Shared Ownership, but far less so about Discounted Market Sale Housing.
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Income Multiples Approach
Overview
5.3.1. One approach is for the Councils to establish purchasing power8 based on an income multiples approach similar to the methodology adopted by Cornwall Council (i.e. by applying salary multiples for different household compositions / sizes) but to apply lower quartile ASHE earnings and the household composition and the salary multiples recommended above.
Analysis
5.4.1. Tables 21 and 22 summarise the outputs of this approach for North Devon and Torridge, respectively, assuming a 10% mortgage deposit is applied and salary multiples of 3.5x. This salary multiple is set below the range found in our research of lenders’ criteria to be prudent and ensure the approach takes account of those most in need.
Table 21: North Devon – Income Multiples Approach
A B C D = (B*C) E F = (D + E) Assumed Household Income Mortgage Afforded Purchase Power (Based on £19,701 Lower (Rounded) (Income Multiple Assumption x Property Size Quartile FTE, £6,121 Lower Deposit (10%) Assumed Household Income) Quartile PTE Income and (Mortgage + 10% Assumed Household Deposit) Composition) 1 bed £ 19,701 (1 FTE) 3.5 £ 68,954 £ 8,047 £ 77,000 2 bed £ 25,822 (1 FTE, 1 PTE) 3.5 £ 90,377 £ 10,623 £ 101,000 3 bed £ 25,822 (1 FTE, 1 PTE) 3.5 £ 90,377 £ 10,623 £ 101,000 4 bed £ 39,402 (2 FTE) 3.5 £ 137,907 £ 16,093 £ 154,000
Average Earnings: FTE (LQ) £ 19,701 PTE (LQ) £ 6,121 Source: Altair Worked Example
8 ‘Purchase Power’ is defined as the total capital amount an assumed household can pay for a property (based on either the income multiples or affordability assessment approaches detailed in this research, plus an assumed deposit).
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Table 22: Torridge – Income Multiples Approach
A B C D = (B*C) E F = (D + E) Assumed Household Income Mortgage Afforded Purchase Power (Based on £19,023 Lower (Rounded) (Income Multiple Assumption x Property Size Quartile FTE, £6,6695 Lower Deposit (10%) Assumed Household Income) Quartile PTE Income and (Mortgage + 10% Assumed Household Deposit) Composition) 1 bed £ 19,023 (1 FTE) 3.5 £ 66,581 £ 7,420 £ 74,000 2 bed £ 25,718 (1 FTE, 1 PTE) 3.5 £ 90,013 £ 10,987 £ 101,000 3 bed £ 25,718 (1 FTE, 1 PTE) 3.5 £ 90,013 £ 10,987 £ 101,000 4 bed £ 38,046 (2 FTE) 3.5 £ 133,161 £ 14,839 £ 148,000
Average Earnings: FTE (LQ) £ 19,023 PTE (LQ) £ 6,695 Source: Altair Worked Example
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Affordability Assessment Approach
Overview
5.5.1. The income multiples approach is based on a methodology that starts with average earnings / household income and estimates the ‘purchasing power’ by applying income multipliers and accounting for an assumed minimum deposit amount.
5.5.2. An alternative approach is to make an affordability assessment based on the assumed household income for different sized properties and determining the percentage of household income spent on housing that is considered ‘affordable’.
Defining Housing Affordability
5.6.1. There is not an agreed standard model for defining housing affordability or a standard percentage of household income (be that gross or net income) spent on housing that is agreed to be ‘affordable’. Our research shows that views range from 25% to 40% of gross income (we provide some examples below).
5.6.2. Latest research undertaken by the Affordable Housing Commission9 found “that when rents or purchase costs exceed a third of household income, for those in work, the housing costs can lead to financial difficulties, arrears, debts and consequent personal problems”. The research took “40% of income figure as signalling a very serious affordability issue”.
5.6.3. The Affordable Housing Commission research refers to a paper published by the UK Collaborative Centre for Housing Evidence10, which found that the probability of someone facing housing stress (i.e. being or having been behind in their rent or struggling to meet rent payments) increases if they pay over 25% of their gross income on housing.
5.6.4. In terms of determining the percentage of income that should be used for assessing the affordability of rents for social housing, JRF’s Living Rent research concluded that there is no generally agreed method but there is a general bunching of views of between 25% to 35% of net income (30% to 40% of gross income using JRF’s assumptions for tax, NI costs, benefits and tax credits). The methodology used 28% of net earnings as the basis for calculating Living Rents (33% gross to account for tax, NI costs, benefits and tax credits).
5.6.5. The Living Rent methodology refers to JRF’s Monitoring Poverty and Social Exclusion report, 2014, which found that the poorest households spent, on average,
9 Defining and Measuring Housing Affordability – An Alternative Approach, Affordable Housing Commission, 2019. 10 How Should Housing Affordability be Measured?, Meen, G, UK Collaborative Centre for Housing Evidence, 2018
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29% of their net income on housing and social renters in the poorest fifth spend, on average, 33%.
5.6.6. Work published by the Cambridge Centre for Housing & Planning Research11 looked at the annual income necessary to purchase a home and was based on the assumption that total outgoings should not exceed 25% of gross household income to be affordable.
5.6.7. Research undertaken as part of the Torridge and North Devon HEDNA showed that calculations based on 25% to 40% of gross income could be considered as a reasonable starting assumption for housing affordability. For the purpose of the HEDNA analysis, a threshold of 30% of gross income was considered reasonable.
5.6.8. Based on the above research and taking into consideration the Councils’ aim to focus on those most at need we propose a threshold of 25% of gross income is used as the affordability threshold for North Devon and Torridge. While this is towards the lower end of the range found in the above research, it addresses the Councils’ aim to focus on those most at need and is intended to help avoid pushing households on the borders of affordability into hardship should, for example, mortgage interest rates and / or non-housing related costs increase significantly.
Affordability Assessment Methodology
5.7.1. Table 23 summarises the key affordability assumptions, based on the research and conclusions drawn in previous sections, that could be applied under this affordability assessment approach.
Table 23: Key Affordability Assumptions
Criteria Assumption Comment Mortgage Interest 5.50% Desktop review of standard variable rates Mortgage Period 25yrs Industry standard Deposit 10% 10% industry standard Salary Multiple Cap x3.5 Desktop review of lenders criteria. Prudent assumption applied as policy is focused on those most at need Housing Affordability 25% Percentage of gross household income spent on housing (i.e. mortgage / rent). At lower end of range referenced in several research articles / reports taken (i.e. 25% - 35%), reflecting councils' aim to help those most in need Source: Altair Desktop Research
5.7.2. Table 24 and Table 25 show how this approach (using the base assumptions in Table 23) could be applied to North Devon and Torridge using ASHE lower quartile incomes, respectively.
11 Measuring Housing Affordability: A Review of Data Sources, 2008
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Table 24: North Devon – Affordability Assessment Approach
A B C = (B * 25%) D E F = (D + E) Assumed Household Income Annual Income Spent on Mortgage Afforded Housing Purchase Power (Based on £19,701 Lower (Rounded) (Based on Key Property Size Quartile FTE, £6,121 Lower (Based on 25% Gross Deposit (10%) Mortgage / Quartile PTE Income and Household Income Being Mortgage Afforded Affordability Assumed Household 'Affordable' For Those Most + 10% Deposit Assumptions) Composition) in Need) 1 bed £ 19,701 (1 FTE) £ 4,925 £ 69,697 £ 8,303 £ 78,000 2 bed £ 25,822 (1 FTE, 1 PTE) £ 6,456 £ 91,363 £ 10,637 £ 102,000 3 bed £ 25,822 (1 FTE, 1 PTE) £ 6,456 £ 91,363 £ 10,637 £ 102,000 4 bed £ 39,402 (2 FTE) £ 9,851 £ 139,408 £ 15,592 £ 155,000
Lower Quartile Earnings: Mortgage Affordability: FTE (LQ) £ 19,701 Mortgage Interest 5.5% PTE (LQ) £ 6,121 Mortgage Term 25 Deposit 10% Affordability % 25% Source: Altair Worked Example
Table 25: Torridge – Affordability Assessment Approach
A B C = (B * 25%) D E F = (D + E) Assumed Household Income Annual Income Spent on Mortgage Afforded Purchase Power Housing (Rounded) (Based on £19,023 Lower (Based on Key Property Size Quartile FTE, £6,695 Lower (Based on 25% Gross Deposit (10%) Mortgage / Mortgage Quartile PTE Income and Household Income Being Affordability Afforded + 10% Assumed Household 'Affordable' For Those Assumptions) Deposit Composition) Most in Need) 1 bed £ 19,023 (1 FTE) £ 4,756 £ 67,305 £ 7,695 £ 75,000 2 bed £ 25,718 (1 FTE, 1 PTE) £ 6,430 £ 90,995 £ 11,005 £ 102,000 3 bed £ 25,718 (1 FTE, 1 PTE) £ 6,430 £ 90,995 £ 11,005 £ 102,000 4 bed £ 38,046 (2 FTE) £ 9,512 £ 134,611 £ 15,389 £ 150,000
Lower Quartile Earnings: Mortgage Affordability: FTE (LQ) £ 19,023 Mortgage Interest 5.5% PTE (LQ) £ 6,695 Mortgage Term 25 Deposit 10% Affordability % 25% Source: Altair Worked Example
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Recommended Affordability Approach
Overview
5.8.1. When applying each of the above approaches to Discounted Market Sale Housing, the relevant median property price would be discounted to a value equivalent to the relevant ‘purchase power’ amount.
5.8.2. The income multiples approach is relatively simple to document and, as it has been adopted by other local authorities, could be referenced as a comparable example of a methodology being used in practice. However, the approach:
▪ Ignores the ‘affordability’ of assumed mortgage requirements (though this can be sense checked); and
▪ Is more difficult to specifically stress test on key mortgage variables such as interest rate changes.
5.8.3. The affordability assessment approach:
▪ Clearly links to the affordability of households;
▪ Is easier to stress test across key variables such as mortgage interest costs and affordability ratios; and
▪ Clearly aligns to the approach mortgage lenders currently take to assessing affordability.
5.8.4. However, the approach requires a greater number of assumptions and judgements to be taken, which will need to be clearly defined.
Key Conclusions
5.9.1. While the salary multiple approach is potentially easier to understand and translate into planning policy, it is a more crude / high-level approach and risks overlooking the true affordability of housing. We therefore recommend using the affordability- based approach as the methodology better aligns to the Councils’ brief of meeting the housing needs of those most in housing need.
5.9.2. The affordability approach aligns with the approach taken by the Affordable Housing Commission in its latest report, Defining and Measuring Housing Affordability – An Alternative Approach, though it is important that the approach adjusts household income according to household size and composition – which this research has reflected.
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Setting Market Sale Discounts
Overview
5.10.1. In this section, we apply the recommended affordability assessment approach to derive Market Sale Housing discounts by property size for North Devon and Torridge.
Purchasing Power and Market Sale Discounts
5.11.1. Table 26 shows the assumed ‘purchasing power’ and average property price by property size for the North Devon ‘price zones’ and the associated guideline Market Sale discount. We feel there is an insufficient dataset size for 1 bed properties, but these are included for presentational purposes. We recommend that the detail relating to 1 bed properties is not published by the Councils in their AH SPD and relating guidance, and that valuations are sought on a scheme by scheme basis for these property sizes and the recommended affordability ratio applied.
Table 26: North Devon – Proposed Market Sale Housing Discounts Purchase Power (Rounded) Market Sale Property Size Average Values Housing Discount (Mortgage + 10% Deposit) Zone 1 1 bed £ 78,000 £ 108,000 28% 2 bed £ 102,000 £ 172,000 41% 3 bed £ 102,000 £ 210,000 51% 4 bed £ 155,000 £ 290,000 47% Zone 2 1 bed £ 78,000 £ 99,000 21% 2 bed £ 102,000 £ 196,000 48% 3 bed £ 102,000 £ 247,000 59% 4 bed £ 155,000 £ 325,000 52% Zone 3 1 bed £ 78,000 £ 194,000 60% 2 bed £ 102,000 £ 221,000 54% 3 bed £ 102,000 £ 286,000 64% 4 bed £ 155,000 £ 368,000 58% Zone 4 1 bed £ 78,000 £ 149,000 48% 2 bed £ 102,000 £ 258,000 60% 3 bed £ 102,000 £ 322,000 68% 4 bed £ 155,000 £ 415,000 63% Source: Altair Analysis
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5.11.2. Table 27 shows the assumed purchasing power by property size for Torridge and translates that into guideline Market Sale discounts. We feel there is an insufficient dataset size for 1 bed properties, but these are included for presentational purposes. We recommend that the detail relating to 1 bed properties is not published by the Councils in their AH SPD and relating guidance, and that valuations are sought on a scheme by scheme basis for these property sizes and the recommended affordability ratio applied.
Table 27: Torridge – Proposed Market Sale Housing Discounts
Purchase Power (Rounded) Market Sale Property Size Average Values Housing Discount (Mortgage + 10% Deposit) 1 bed £ 75,000 £ 116,000 35% 2 bed £ 102,000 £ 184,000 45% 3 bed £ 102,000 £ 236,000 57% 4 bed £ 150,000 £ 295,000 49% Source: Altair Analysis
5.11.3. We recommend any published discounts are reviewed annually alongside income data and average property prices as defined in Chapter 4, and that the Councils update published discounts subject to any material changes.
The Viability of Proposed Discounts
5.12.1. Discounted Market Sale Housing is deemed an intermediate tenure for which developers aren’t necessarily expected to make a ‘profit’ on. In broad terms, when selling other intermediate housing (most commonly Shared Ownership) to registered providers, developers might typically achieve between 55% to 75% of open market values.
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Chapter 6: Shared Ownership Affordability
This chapter considers shared ownership affordability. To help inform the Councils’ work around drafting a new AH SPD, we have analysed potential shared ownership affordability for the two district areas across four first tranche sale scenarios (25%, 30%, 35% and 40%).
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Shared Ownership Affordability Scenarios
Overview
6.1.1. To help inform the Councils’ work around drafting a new AH SPD, we have analysed potential shared ownership affordability for the two district areas across four first tranche sale scenarios (25%, 30%, 35% and 40%).
6.1.2. Assumed property values, mortgage interest terms and rates, household compositions and incomes, and affordability assumptions are as per those used in earlier sections of this briefing note (and are set out below in each table).
Affordability Scenarios
6.2.1. Scenarios where the assumed income required to afford the shared ownership unit (based on 25% affordability) exceeds the assumed household income for that size of tenure (based on lower quartile and median FT / PT earnings) are highlighted red (i.e. where a potential affordability gap may exist).
Conclusions
6.3.1. Based on the assumed household compositions and median property prices, our analysis suggests Shared Ownership is not affordable for lower quartile earners across all first tranche sale scenarios and all property sizes (with the exception of 2 bed properties for North Devon ‘Zone 1’ at a 25% first tranche level – though this is marginal).
6.3.2. While the analysis suggests that Shared Ownership is more affordable for household compositions assuming median average earnings, it still remains largely unaffordable for most North Devon Zones (except for Zone 1, and 2 bed properties in Zone 2 and Zone 3). The analysis suggests Shared Ownership is affordable for Torridge across all scenarios assuming median earnings, except for 3 bed properties across all first tranche sale scenarios and 4 bed properties at a 40% first tranche sale level.
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Table 28: North Devon (Zone 1) Shared Ownership Affordability
Annual Assumed First First Mortgage Rent % on Total Median Annual Income Assumed Household Assumed Household Bed Size Tranche Tranche (Assuming Unsold Housing Values Rent Required (25% Income (Median) Income (LQ) Sale (%) Sale (£) 10% Equity Costs Affordability) Deposit) 1 Bed N/A 2 Bed £ 172,000 25% £ 43,000 £2,735 2.75% £ 3,548 £ 6,282 £ 25,129 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 210,000 25% £ 52,500 £3,339 2.75% £ 4,331 £ 7,670 £ 30,680 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 290,000 25% £ 72,500 £4,611 2.75% £ 5,981 £ 10,592 £ 42,368 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 172,000 30% £ 51,600 £3,282 2.75% £ 3,311 £ 6,593 £ 26,370 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 210,000 30% £ 63,000 £4,007 2.75% £ 4,043 £ 8,049 £ 32,196 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 290,000 30% £ 87,000 £5,533 2.75% £ 5,583 £ 11,115 £ 44,462 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 172,000 35% £ 60,200 £3,829 2.75% £ 3,075 £ 6,903 £ 27,612 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 210,000 35% £ 73,500 £4,674 2.75% £ 3,754 £ 8,428 £ 33,712 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 290,000 35% £ 101,500 £6,455 2.75% £ 5,184 £ 11,639 £ 46,555 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 172,000 40% £ 68,800 £4,375 2.75% £ 2,838 £ 7,213 £ 28,854 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 210,000 40% £ 84,000 £5,342 2.75% £ 3,465 £ 8,807 £ 35,228 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 290,000 40% £ 116,000 £7,377 2.75% £ 4,785 £ 12,162 £ 48,649 2 FTE £ 47,198 2 FTE £ 39,402
Mortgage Interest 5.5% Earnings: Mortgage Term 25 FTE (LQ) £ 19,701 Deposit 10% PTE (LQ) £ 6,121 Affordability % 25% FTE (Median) £ 23,599 PTE (Median) £ 10,504
Table 29: North Devon (Zone 2) Shared Ownership Affordability Annual Assumed First First Mortgage Rent % on Total Median Annual Income Assumed Household Assumed Household Bed Size Tranche Tranche (Assuming Unsold Housing Values Rent Required (25% Income (Median) Income (LQ) Sale (%) Sale (£) 10% Equity Costs Affordability) Deposit) 1 Bed N/A 2 Bed £ 196,000 25% £ 49,000 £3,116 2.75% £ 4,043 £ 7,159 £ 28,635 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 247,000 25% £ 61,750 £3,927 2.75% £ 5,094 £ 9,021 £ 36,086 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 325,000 25% £ 81,250 £5,167 2.75% £ 6,703 £ 11,870 £ 47,481 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 196,000 30% £ 58,800 £3,739 2.75% £ 3,773 £ 7,512 £ 30,050 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 247,000 30% £ 74,100 £4,713 2.75% £ 4,755 £ 9,467 £ 37,869 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 325,000 30% £ 97,500 £6,201 2.75% £ 6,256 £ 12,457 £ 49,828 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 196,000 35% £ 68,600 £4,363 2.75% £ 3,504 £ 7,866 £ 31,465 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 247,000 35% £ 86,450 £5,498 2.75% £ 4,415 £ 9,913 £ 39,652 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 325,000 35% £ 113,750 £7,234 2.75% £ 5,809 £ 13,043 £ 52,174 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 196,000 40% £ 78,400 £4,986 2.75% £ 3,234 £ 8,220 £ 32,880 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 247,000 40% £ 98,800 £6,283 2.75% £ 4,076 £ 10,359 £ 41,435 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 325,000 40% £ 130,000 £8,268 2.75% £ 5,363 £ 13,630 £ 54,520 2 FTE £ 47,198 2 FTE £ 39,402
Mortgage Interest 5.5% Earnings: Mortgage Term 25 FTE (LQ) £ 19,701 Deposit 10% PTE (LQ) £ 6,121 Affordability % 25% FTE (Median) £ 23,599 PTE (Median) £ 10,504
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Table 30: North Devon (Zone 3) Shared Ownership Affordability Annual Assumed First First Mortgage Rent % on Total Median Annual Income Assumed Household Assumed Household Bed Size Tranche Tranche (Assuming Unsold Housing Values Rent Required (25% Income (Median) Income (LQ) Sale (%) Sale (£) 10% Equity Costs Affordability) Deposit) 1 Bed N/A 2 Bed £ 221,000 25% £ 55,250 £3,514 2.75% £ 4,558 £ 8,072 £ 32,287 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 286,000 25% £ 71,500 £4,547 2.75% £ 5,899 £ 10,446 £ 41,784 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 368,000 25% £ 92,000 £5,851 2.75% £ 7,590 £ 13,441 £ 53,764 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 221,000 30% £ 66,300 £4,216 2.75% £ 4,254 £ 8,471 £ 33,883 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 286,000 30% £ 85,800 £5,457 2.75% £ 5,506 £ 10,962 £ 43,848 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 368,000 30% £ 110,400 £7,021 2.75% £ 7,084 £ 14,105 £ 56,420 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 221,000 35% £ 77,350 £4,919 2.75% £ 3,950 £ 8,870 £ 35,478 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 286,000 35% £ 100,100 £6,366 2.75% £ 5,112 £ 11,478 £ 45,913 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 368,000 35% £ 128,800 £8,191 2.75% £ 6,578 £ 14,769 £ 59,077 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 221,000 40% £ 88,400 £5,622 2.75% £ 3,647 £ 9,268 £ 37,074 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 286,000 40% £ 114,400 £7,275 2.75% £ 4,719 £ 11,994 £ 47,978 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 368,000 40% £ 147,200 £9,361 2.75% £ 6,072 £ 15,433 £ 61,734 2 FTE £ 47,198 2 FTE £ 39,402
Mortgage Interest 5.5% Earnings: Mortgage Term 25 FTE (LQ) £ 19,701 Deposit 10% PTE (LQ) £ 6,121 Affordability % 25% FTE (Median) £ 23,599 PTE (Median) £ 10,504
Table 31: North Devon (Zone 4) Shared Ownership Affordability Annual Assumed First First Mortgage Rent % on Total Median Annual Income Assumed Household Assumed Household Bed Size Tranche Tranche (Assuming Unsold Housing Values Rent Required (25% Income (Median) Income (LQ) Sale (%) Sale (£) 10% Equity Costs Affordability) Deposit) 1 Bed N/A 2 Bed £ 258,000 25% £ 64,500 £4,102 2.75% £ 5,321 £ 9,423 £ 37,693 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 322,000 25% £ 80,500 £5,120 2.75% £ 6,641 £ 11,761 £ 47,043 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 415,000 25% £ 103,750 £6,598 2.75% £ 8,559 £ 15,158 £ 60,630 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 258,000 30% £ 77,400 £4,922 2.75% £ 4,967 £ 9,889 £ 39,556 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 322,000 30% £ 96,600 £6,143 2.75% £ 6,199 £ 12,342 £ 49,368 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 415,000 30% £ 124,500 £7,918 2.75% £ 7,989 £ 15,907 £ 63,626 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 258,000 35% £ 90,300 £5,743 2.75% £ 4,612 £ 10,355 £ 41,418 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 322,000 35% £ 112,700 £7,167 2.75% £ 5,756 £ 12,923 £ 51,692 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 415,000 35% £ 145,250 £9,237 2.75% £ 7,418 £ 16,656 £ 66,622 2 FTE £ 47,198 2 FTE £ 39,402 1 Bed N/A 2 Bed £ 258,000 40% £ 103,200 £6,563 2.75% £ 4,257 £ 10,820 £ 43,281 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 3 Bed £ 322,000 40% £ 128,800 £8,191 2.75% £ 5,313 £ 13,504 £ 54,017 1 FTE, 1 PTE £ 34,103 1 FTE, 1 PTE £ 25,822 4 Bed £ 415,000 40% £ 166,000 £10,557 2.75% £ 6,848 £ 17,405 £ 69,618 2 FTE £ 47,198 2 FTE £ 39,402
Mortgage Interest 5.5% Earnings: Mortgage Term 25 FTE (LQ) £ 19,701 Deposit 10% PTE (LQ) £ 6,121 Affordability % 25% FTE (Median) £ 23,599 PTE (Median) £ 10,504
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Table 32: Torridge Shared Ownership Affordability
Annual Assumed First First Mortgage Rent % on Total Income Median Annual Assumed Household Assumed Household Bed Size Tranche Tranche (Assuming Unsold Housing Required Values Rent Income (Median) Income (LQ) Sale (%) Sale (£) 10% Equity Costs (25% Deposit) Affordability) 1 Bed N/A 2 Bed £ 184,000 25% £ 46,000 £2,925 2.75% £ 3,795 £ 6,720 £ 26,882 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 3 Bed £ 236,000 25% £ 59,000 £3,752 2.75% £ 4,868 £ 8,620 £ 34,479 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 4 Bed £ 295,000 25% £ 73,750 £4,690 2.75% £ 6,084 £ 10,775 £ 43,098 2 FTE £ 48,278 2 FTE £ 38,046 1 Bed N/A 2 Bed £ 184,000 30% £ 55,200 £3,511 2.75% £ 3,542 £ 7,053 £ 28,210 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 3 Bed £ 236,000 30% £ 70,800 £4,503 2.75% £ 4,543 £ 9,046 £ 36,183 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 4 Bed £ 295,000 30% £ 88,500 £5,628 2.75% £ 5,679 £ 11,307 £ 45,228 2 FTE £ 48,278 2 FTE £ 38,046 1 Bed N/A 2 Bed £ 184,000 35% £ 64,400 £4,096 2.75% £ 3,289 £ 7,385 £ 29,538 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 3 Bed £ 236,000 35% £ 82,600 £5,253 2.75% £ 4,219 £ 9,472 £ 37,886 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 4 Bed £ 295,000 35% £ 103,250 £6,566 2.75% £ 5,273 £ 11,839 £ 47,358 2 FTE £ 48,278 2 FTE £ 38,046 1 Bed N/A 2 Bed £ 184,000 40% £ 73,600 £4,681 2.75% £ 3,036 £ 7,717 £ 30,867 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 3 Bed £ 236,000 40% £ 94,400 £6,004 2.75% £ 3,894 £ 9,898 £ 39,590 1 FTE, 1 PTE £ 32,849 1 FTE, 1 PTE £ 25,718 4 Bed £ 295,000 40% £ 118,000 £7,504 2.75% £ 4,868 £ 12,372 £ 49,488 2 FTE £ 48,278 2 FTE £ 38,046
Mortgage Interest 5.5% Earnings: Mortgage Term 25 FTE (LQ) £ 19,023 Deposit 10% PTE (LQ) £ 6,695 Affordability % 25% FTE (Median) £ 24,139 PTE (Median) £ 8,710
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Chapter 7: Commuted Sums
This chapter of our report provides an overview of key approaches to calculating financial contributions (commuted sums) for the delivery of affordable housing and the recommended approach for North Devon and Torridge.
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Background
Overview
7.1.1. This section provides background on the planning policy framework that enables affordable housing and contributions via commuted sums to be made towards affordable housing which are captured as part of the granting of planning consent and secured through a section 106 agreement. The section:
▪ Sets out the context of both local and national planning policy in relation to financial contributions towards affordable housing;
▪ Suggests an appropriate calculation with justification as to why the methodology should be preferred over others including reference to other local authority approaches; and
▪ Demonstrates how the calculation will allow the Councils to attribute a monetary value to account for the lack of on-site affordable housing delivery.
7.1.2. This will inform North Devon and Torridge District Councils’ approach to commuted sums and their policy formulation in the future. It will give certainty to both applicants and the Councils to the calculation of commuted sums where they are applicable and the level that should be paid.
7.1.3. TDC and NDC, has until now, operated a commuted sum (and Vacant Buildings Credit) approach. The methodology applied is the “Open Market Value of the homes less the RP Affordable Housing Value = Commuted Sum”. This is a method used by several Local Authorities, however, the briefing note provides no details on how the inputs and supporting evidence should be provided to inform the calculation. Albeit, this is an interim note until the emerging Local Plan is adopted.
National Policy
7.2.1. The National Planning Policy Framework (2019: 17, para. 62 and 63) states: “Where a need for affordable housing is identified, planning policies should specify the type of affordable housing required, and expect it to be met on-site unless: a) off-site provision or an appropriate financial contribution in lieu can be robustly justified; and b) the agreed approach contributes to the objective of creating mixed and balanced communities.
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Provision of affordable housing should not be sought for developments that are not on major sites, other than in designated rural areas (where policies may set out a lower threshold of 5 units or fewer). To support the re-use of brownfield land, where vacant buildings are being reused or redeveloped, any affordable housing contribution due should be reduced by a proportionate amount.”
7.2.2. National Planning Policy Guidance (NPPG) provides further clarity on circumstances where contributions are inappropriate, how they should be secured and how they should be used.
7.2.3. The starting point in the NPPG is paragraphs 023 which set outs circumstances where contributions should not be sought such:
“Provision of affordable housing should only be sought for residential developments that are major developments.
For housing development, major development is defined in the National Planning Policy Framework as development where 10 or more homes will be provided, or the site has an area of 0.5 hectares or more. For non-residential development it means additional floorspace of 1,000 square metres or more, or a site of 1 hectare or more, or as otherwise provided in the Town and Country Planning (Development Management Procedure) (England) Order 2015.
In designated rural areas local planning authorities may instead choose to set their own lower threshold in plans and seek affordable housing contributions from developments above that threshold. Designated rural areas applies to rural areas described under section 157(1) of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty.
Affordable housing contributions should not be sought from any development consisting only of the construction of a residential annex or extension to an existing home.”
7.2.4. The restrictions on seeking planning obligations contributions do not apply to development on Rural Exception Sites – although affordable housing and tariff-style contributions should not be sought from any development consisting only of the construction of a residential annex or extension within the curtilage of the buildings comprising an existing home.
7.2.5. The NPPG also clarifies at paragraph 025 that any planning obligations agreement should:
“…include clauses stating when the local planning authority should be notified of the completion of units within the development and when the funds should be paid”
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7.2.6. Other factors such as vacant building credit and 10-unit threshold for contributions will also influence the level of contribution applicable on any site and where relevant. It also confirms that contributions should be subject to viability.
7.2.7. This sets the national context that allows for Local Planning Authorities to seek financial contributions towards affordable housing from schemes where on-site provision is not possible.
Local Policy
7.3.1. The Councils are committed to providing mixed and balanced communities including the delivery of affordable housing.
7.3.2. The North Devon and Torridge Local Plan 2011-2031 (the Plan) and associated Policies Maps were formally adopted by North Devon Council and Torridge District Council on 29th October 2019.
7.3.3. Policy ST18 in the Plan – as amended (January 2019 within Practice Note 1 to reflect new NPPF and NPPG) sets out the approach to affordable housing. This includes:
i) Recognising the provision to do so in Policy ST18 of the NDTLP, the thresholds for seeking affordable housing on development sites in Clauses (1)(a) and (b) of Policy ST18 in the NDTLP will be set aside, rather applying those thresholds provided through paragraph 63 of the revised NPPF: o Outside of “designated rural areas” (see appendix A) affordable housing will be sought on-site at a level of 30% from housing developments of 10 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed. o In “designated rural areas” (see appendix A) affordable housing will be sought on-site at a level of 30% from housing developments of 6 or more dwellings or where the site has an area of 0.5 hectares or more, irrespective of the number of dwellings proposed. ii) The provision stipulating that only financial contributions towards affordable housing will be sought on sites in designated rural areas is set aside. In “designated rural areas”, affordable housing will now be sought
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onsite from qualifying developments of six or more dwellings and on sites of 0.5 hectares or more; rather than previously only being sought in the form of a financial contribution; iii) The starting point is now an expectation for on-site delivery from all qualifying development, with off-site delivery or provision through financial contributions of broadly equivalent value to be negotiated only where it can be demonstrated that on-site provision is not possible or appropriate. iv) Applying the enabled exemption, the requirement in the NPPF (para. 64) for 10% of homes to be available for affordable home ownership on major developments will not be applied; considering that doing so would prejudice the ability to meet the affordable housing need of specific groups across northern Devon. The starting point for the tenure split sought for affordable housing will remain unaltered from the requirements of clause (7) of Policy ST18 in the NDTLP (75% Social Rented/ 25% Intermediate); and v) The approach to the calculation of appropriate sales values (and associated discount) for affordable home ownership will not change in light of changes to the definition of affordable housing in the revised NPPF.
7.3.4. The policy is also clear that the Council will seek a financial contribution where:
“…. alternative off-site delivery or provision through financial contributions of broadly equivalent value may be negotiated where it can be demonstrated that on-site provision is not possible or appropriate”
7.3.5. Where applicants propose a financial contribution in lieu of on-site provision, a justification grounded in housing need is required for the Council to consider the acceptability of the proposal and it should produce a better affordable housing outcome. The Council may want to consider setting out in any SPD the circumstances where it considers a financial contribution to be appropriate, subject to site specific analysis.
7.3.6. Both national and local planning policy provide a framework for the Council to seek and secure financial contributions towards affordable housing.
7.3.7. Planning policy and guidance doesn’t specify a specific methodology; however, it does clearly reference equivalence and therefore the local authority or applicant should be better off from providing a commuted sum in lieu of on-site affordable.
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Commuted Sum Methodologies
Methodologies
7.4.1. There are four principle methodologies available for calculating a commuted sum payable in relation to qualifying and applicable developments (Table 33).
Table 33: Commuted Sum Approaches
Approach Commuted Sum Calculation Authorities Using Methodology (or Similar)
Method 1: Equals
The equivalent The Value of Affordable Housing value of providing Less Affordable Housing on Site RP On Costs
Method 2: Equals Southend Borough Council
The equivalent Open Market Value of Homes Waverley Borough Council value of providing Multiplied by Mole Valley Council Affordable Housing on Site Average Residual (Alternative calculation) Land Value Percentage Plus
Cost of Site Acquisition
Method 3: Equals Bournemouth Council
The equivalent No. of Private Units Gained Wokingham Borough Council value of the Multiplied By increase in the residual land value Average Open Market Value gained by substituting private Multiplied by for affordable Average Residual Land Value Percentage
Method 4: Equals Cornwall Council, Forest of Dean
The equivalent Open Market Value of Homes Bristol City Council, Brighton & Hove Council value of the Less LB Richmond additional benefit of providing Value of the Homes as LB Waltham Forest (Draft) additional market sale properties on Affordable Housing LB Wandsworth the development. LB Havering
Torridge District Council, North Devon District Council
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7.4.2. There could be other methodologies available, however, these are the main methodologies we have identified through our research and are generally used by several local authorities.
7.4.3. The difference between local authorities on how these methodologies are used tends to be in presentation to the applicant. This tends to be around whether a calculation is used for each application based on scheme specific costs and values or a ‘tariff type’ table that can be applied relatively simply where a commuted sum is the agreed approach.
7.4.4. Our research of a sample of Councils found methodology 4 to be the most widely used methodology where we identified Councils with a formal policy (or draft).
Worked Examples of Methodologies
7.5.1. To evaluate the different methodologies outlined in the table above, we have assessed the impact on a notional scheme of 40 units. We will consider the following elements and measure the impact of each methodology:
▪ The level of Commuted Sum calculated
▪ The impact this level of Commuted has on the applicants profit levels
Table 34: Commuted Sum Example Outputs
Approach Commuted Sum Council Position Applicant Position Calculation
Planning Policy n/a 30% Affordable Housing GDV: £10,757,192 Compliant Scheme Cost (Excl Profit & Contr): £6,815,808
Contribution: £0
Profit: £1,797,860 (17%)
RLV: £2,143,524
Method 1: Equals Commuted Sum = GDV: £14,000,000 £2,357,192 The equivalent value of The Value of Affordable Cost (Excl Profit & Contr): providing Affordable Housing (£2,773,167 - £415,975) £6,983,808 Housing on Site Less Contribution: £2,357,191
RP On Costs Profit: £2,515,476 (18%)
RLV: £2,143,524
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Method 2: Equals Commuted Sum = GDV: £14,000,000 £2,058,000 The equivalent value of Open Market Value of Cost (Excl Profit & Contr): providing Affordable Homes (£5,600,000 x 35% = £6,983,808 Housing on Site Multiplied by £1,960,000 + 10%) Contribution: £2,058,000 (Alternative calculation) Average Residual Profit: £2,814,667 (20%)
Land Value Percentage RLV: £2,143,524
Plus
Cost of Site Acquisition
Method 3: Equals Commuted Sum = GDV: £14,000,000 £2,058,000 The equivalent value of No. of Private Units Cost (Excl Profit & Contr): the increase in the Gained (£5,600,000 x 35% = £6,983,808 residual land value Multiplied By £1,960,000 + 10%) Contribution: £2,058,000 gained by substituting private for affordable Average Open Market Profit: £2,814,667 (20%) Value RLV: £2,143,524 Multiplied by
Average Residual Land Value Percentage
Method 4: Equals Commuted Sum = GDV: £14,000,000 £3,242,809 The equivalent value of The Open Market Value Cost (Excl Profit & Contr): the additional benefit of of (£5,600,000 - £2,357,191) £6,983,808 providing additional the Affordable Housing Contribution: £3,242,809 market sale properties on the development. Less Profit: £2,189,859 (16%)
Value of the RLV: £2,143,524
Affordable Housing
Outcome of Methods
7.6.1. Methodology 1 is effectively the offer a Registered Provider would make for the affordable housing element of a scheme. Whilst providing the second highest contribution, it provides a profit level above that of the planning policy compliant scheme. If the principle that the applicant should be the no better, but no worse off. by providing a commuted sum in lieu of affordable housing is applied, this does not occur under this methodology.
7.6.2. The formula could be tweaked to remove the subtraction of RP on-costs and would deliver a lower profit margin, adhering to the principle of financial neutrality via a commuted sum, however, the RP on-costs shouldn’t be the balancing variable in the calculation.
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7.6.3. This method is likely to be challenged as is does not take account of wider scheme economics (e.g. open market values or costs) and could be disproportionately punitive on applicants. In addition, the NPPF and NPPG advise that policy should take account of changing market conditions and it is challenging to see a direct link between this methodology and this policy requirement.
7.6.4. In addition, this methodology is not one we have seen widely used from our research suggesting challenges in implementing this approach.
7.6.5. Methodology 2is like the above method but uses a different approach to calculate the value of the Affordable Housing and includes a notional allowance for land value.
7.6.6. It is used by other Councils as an approach, however, the council would need to undertake a study to determine the Average Residual Land Value percentage, as well as determining an appropriate cost to the site acquisition, without this, the methodology would be too crude and could lead to significantly different outcomes on sites across the local authority area. It would also need the land value study to be revisited periodically to ensure the approach was reflective of market conditions at the time.
7.6.7. It is a relatively simple and straight forward methodology to apply and could work well in local authority areas where there are a lot of similar development typologies.
7.6.8. Methodology 3 attempts to determine the increase in land value through the additional private housing.
7.6.9. It’s not as widely used as methodologies 2 and 4 and based on our analysis, does not adhere to the principle of financial neutrality (providing the greatest benefit to the applicant of all the methodologies identified).
7.6.10. It has similar issues to methodology 3 in the arbitrary application of land value and therefore not evolving with market conditions as required by guidance.
7.6.11. Methodology 4 is the most widely used model we have come across by local authorities. It allows the calculation of the commuted sum to be carried out at a high level or with significant levels of detail. This means the application of this method differs slightly between authorities in terms of levels of information that feed into the calculation.
7.6.12. For example, Wandsworth apply a very simple version of this methodology where they seek two appraisals from the applicant. The first is to assume that the scheme incorporates the viable percentage of affordable housing on-site. The second assumes that the scheme is 100% private. The payment in lieu is determined by
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deducting the residual land value generated by the second appraisal from the residual land value generated by the first. Whereas local authority areas such as Richmond and Thurrock have a more in-depth analysis of the commuted sum based on several inputs into an Excel spreadsheet.
7.6.13. Cornwall Council and Bristol City Council also use this approach. For example, Bristol City set an expected value of affordable housing (on a % of market value) for any calculation and then market values are subject to site by site analysis. Others use this methodology to inform a tariff style table of contributions that is then reviewed annually to stay up to date with market conditions.
7.6.14. Depending on implementation, it takes account of wider economics of the scheme and therefore market conditions at the time of implementing the policy. Key to the success of this methodology will be clear guidance on inputs, for example, calculation of affordable housing values and acceptable profit levels / costs.
7.6.15. As it is a relatively widely used approach, it has a track record of standing up to scrutiny and consultation with interested stakeholders.
7.6.16. Due to the new NDC / TDC Local Plan including for the affordable housing calculation on the basis of fractions of units, whichever method is chosen will need to account for a fraction calculation. Taking method 4 as an example, when calculating the value of the homes, this will need to be agreed on a unit basis (this can be done on a broad basis by unit type) and then the unit type the fraction is to be applied to then multiplied by the relevant multiplier (e.g. value per unit to be paid is £150,000 and 0.2 of a unit is also required so £150,000 x 0.2 is paid as the fractional denomination).
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Recommended Approach
7.6.17. Based on our analysis of policy and guidance as well as available methodologies and consideration of initial consultation feedback, we recommend using Methodology 4 to inform the commuted sum calculation and policy to be adopted by the Councils.
7.6.18. In summary, this methodology is calculated as follows:
The Open Market Value of the Homes
Less
Value of the Homes as Affordable Housing
7.6.19. This approach will best capture the economics of a scheme at the time of application, therefore taking account of economics at the time of calculation and best aligns with the principles and requirements set out in national and local planning policy. This methodology is applied following agreement of the viable level of affordable housing and agreement of the circumstances where on-site delivery is not applicable.
7.6.20. It can be applied on a site by site basis through a calculator approach based on scheme specific economics or a tariff type basis on, for example, an agreed geographical area based on e.g. low / high value areas updated annually to reflect the change in costs and values over the year. The benefit of taking a site-based approach is accuracy relevant to site specifics, however, this will likely require resource to oversee negotiation of various inputs to the calculation and there will be lack of certainty around the amount to be derived from negotiations.
7.6.21. An example of how a tariff type approach might look is shown in the following tables (Tables 35 to 39).
Table 35: North Devon (Zone 1) Example Tariff Values
North Devon 1 bed 2 bed 3 bed 4 bed Open market value No Comparables £172,000 £210,000 £290,000 Shared ownership value (@ n/a £111,800 £136,500 £188,500 65% of open market) Social Rent value (@ 35% of n/a £60,200 £73,500 £101,500 open market)
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Table 36: North Devon (Zone 2) Example Tariff Values
North Devon 1 bed 2 bed 3 bed 4 bed Open market value No Comparables £196,000 £247,000 £325,000 Shared ownership value (@ n/a £127,400 £160,550 £211,250 65% of open market) Social Rent value (@ 35% of n/a £68,600 £86,450 £113,750 open market)
Table 37: North Devon (Zone 3) Example Tariff Values
North Devon 1 bed 2 bed 3 bed 4 bed Open market value No Comparables £221,000 £286,000 £368,000 Shared ownership value (@ n/a £143,650 £185,900 £239,200 65% of open market) Social Rent value (@ 35% of n/a £77,350 £100,100 £128,800 open market)
Table 38: North Devon (Zone 4) Example Tariff Values
North Devon 1 bed 2 bed 3 bed 4 bed Open market value No Comparables £258,000 £322,000 £415,000 Shared ownership value (@ n/a £167,700 £209,300 £269,750 65% of open market) Social Rent value (@ 35% of n/a £90,300 £112,700 £145,250 open market)
Table 39: Torridge Example Tariff Values
Torridge 1 bed 2 bed 3 bed 4 bed Open market value No Comparables £184,000 £236,000 £295,000 Shared ownership value (@ n/a £119,600 £153,400 £191,750 65% of open market) Social Rent value (@ 35% of n/a £64,400 £82,600 £103,250 open market)
7.6.22. Using Table 35 as an example, this can then be used to calculate the contribution once the notional on-site affordable mix is agreed. A worked example is set out in Table 40 based on 3.2 affordable homes (2.2 x 2 bed social rent and 1 x 3 bed Shared Ownership).
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Table 40: North Devon (Zone 1) Worked Example
Tenure Unit type No. Homes Unit Values Total Value Open Market 2 Bed 2.2 £172,000 £378,400 Open Market 3 Bed 1 £210,000 £210,000 Total Open Market Value £588,400
Social Rent 2 Bed 2.2 £68,800 £151,360 Shared Ownership 3 Bed 1 £147,000 £147,000 Total Affordable Value £298,360
Commuted Sum (Open Market Value Less Affordable Value) £290,040
7.6.23. The above example results in a Commuted Sum payment of £290,040.
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Appendix 1: SW Local Authorities Researched
South West Local Authorities
Bath & North East Somerset
Bournemouth Borough Council (now Bournemouth, Christchurch & Poole Council)
Bristol City Council
Cheltenham Borough Council
Christchurch Borough Council (now Bournemouth, Christchurch & Poole Council)
Cornwall Council
Cotswold District Council
Council of the Isles of Scilly
Dartmoor National Park
East Devon District Council
East Dorset District Council (now Dorset Council)
Exeter City Council
Exmoor National Park
Forest of Dean District Council
Gloucester City Council
Mendip District Council
Mid Devon District Council
North Dorset District Council (now Dorset Council)
North Somerset Council
Plymouth City Council
Borough of Poole (now Bournemouth, Christchurch & Poole Council)
Purbeck District Council (now Dorset Council)
Sedgemoor District Council
Somerset West and Taunton
South Gloucestershire Council
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South Hams District Council
South Somerset District Council
Stroud District Council
Swindon Borough Council
Teignbridge District Council
Tewkesbury Borough Council
Torbay Council
Torridge District Council
West Devon Borough Council
West Dorset, Weymouth & Portland (now Dorset Council)
Wiltshire Council
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Appendix 2: Living Rents Framework for Affordable Housing
Living Rents – A New Development Framework for Affordable Housing was produced by Savills, in conjunction with Joseph Rowntree Foundation (JRF) and The National Housing Federation (NHF) in July 201512. The key aim of the research13 was to develop a mechanism that establishes links between the housing market, labour market, rents and the ability of people on low incomes to afford them. The research therefore looked at the implications of moving to a system whereby ‘Living Rents’ are linked to tenants' incomes. While the research was focused on rents, the key principles and methodology used could be applied to the costs (i.e. mortgage requirements) of Discounted Market Sale Housing. The starting point was that the ‘Living Rent’ should be affordable for a household with someone in full-time employment, working the average number of hours worked per week (including overtime) and earning around the minimum wage. However, this income needed to be adapted to reflect:
▪ The differing composition of households in different-sized properties; and
▪ The fact that household income for low-paid families with children is likely to be enhanced by benefits and tax credits.
For this model, the lower quartile national earnings figure was used. This equates to the earnings of someone in full-time employment, working the average number of hours worked per week on the minimum wage. The data was sourced from the Annual Survey of Hours and Earnings (ASHE) compiled by the ONS. The Organisation for Economic Co-operation and Development (OECD)14 modified equivalence scale was applied to ASHE earnings data – this was used to adjust the base assumed average earnings for a single adult to account for different household compositions (and the effect of benefits and tax credits on household incomes). For example, the equivalence value applied to the first adult in a household was 1.0 (i.e. the base position / assumption); for each additional adult an equivalence value of 0.5 is applied; and equivalence values of 0.5 and 0.3 for each child greater than and less than 14 years, respectively.
12 http://pdf.savills.com/documents/Living%20Rents%20Final%20Report%20June%202015%20- %20with%20links%20-%2019%2006%202015.pdf 13 http://pdf.savills.com/documents/Living_Rent_Methodology.pdf?_ga=1.123272841.345168137.14302 33577 14 The OCED-modified scale is the standard scale for the Statistical Office of the European Union (EUROSTAT) and several UK government departments.
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The following Table shows how assumed household income increases for each additional household member.
OECD-Modified Equivalence Scale as Applied by Household Composition
Household Equivalence Member Value First Adult 1.0 Additional Adult 0.5 Child => 14 years 0.5 Child 0 - 13 years 0.3 Source: Living Rent Methodology, June 2015
The Savills, JRF and NHF research used information from Continuous Recording of Lettings and Sales in Social Housing in England (CORE) data to establish typical household compositions moving into different property sizes. Data for working-age households moving into general needs properties was used to form a picture of those moving into different size properties (e.g. single adults, lone parents, couples with and without children etc). The Table below shows the average household composition for one, two, and three- bedroom properties based on the research analysis. The equivalence score is then applied to the households to estimate household income by property type.
OECD-Modified Equivalence Scale
Bedrooms Household Equivalence Value One Bed Single Adult 1.0 Two Bed One Working Adult; One Child Under 14 1.3 Three Bed One Working Adult; Two Children Under 14 1.6 Source: Living Rent Methodology, June 2015
The equivalence approach is designed to adjust the cost of living rather than income, but the Savills, JRF and NHF research findings concluded that it could be used as a suitable proxy to relate rent levels to household and property sizes. In terms of determining the percentage of earnings/income that should be used for assessing the affordability of rents for social housing, the research concluded that there is no generally agreed method bit there is a general bunching of views of between 25% to 35% of net income. The Living Rent methodology refers to JRF’s Monitoring Poverty and Social Exclusion report which shows that the poorest households spent on average 29% of their income on housing and the poorest fifth spend on average 33%. The methodology used 28% of net earnings as the basis for calculating Living Rents (33% gross figure discounted to account for tax and NI costs and benefits and tax credits).
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Appendix 3: North Devon and Torridge Postcodes
North Devon Wards / Postcodes Torridge Wards / Postcodes
Wards Postcodes Wards Postcodes Barnstaple Central Ward EX31, EX32 Appledore EX39 Barnstaple with Pilton Ward EX31, EX32 Bideford East EX31, EX38, EX39 Barnstaple with Westacott Ward EX32 Bideford North EX39 Bickington Ward EX31, EX32 Bideford South EX39 Bishop's Nympton EX16, EX36, EX37, TA22 Broadheath EX20, EX21, EX22, PL15, PL16 Bratton Fleming EX31, EX32, EX34, EX35, TA24 Clinton EX20, EX21, EX38 Braunton East EX33, EX34 Clovelly Bay EX39 Braunton West & Georgeham EX31, EX33, EX34, EX39 Coham Bridge EX21, EX22 Chittlehampton EX18, EX32, EX36, EX37 Forest EX21, EX22 Chulmleigh EX17, EX18, EX36, EX37 Hartland and Bradworthy EX22, EX23, EX39 Combe Martin EX31, EX34 Holsworthy EX22 Fremington EX31, EX33, EX39 Kenwith EX39 Heanton Punchardon EX31, EX33 Monkleigh and Littleham EX38, EX39 Ilfracombe East EX34 Northam EX39 Ilfracombe West EX34 Orchard Hill EX39 Instow EX31, EX32, EX33, EX37, EX39 Shebbear and Langtree EX21, EX22, EX38 Landkey EX32, EX37 Tamarside EX22 Lynton & Lynmouth EX31, EX34, EX35 Three Moors EX19, EX38 Marwood EX31, EX32, EX34 Torrington EX38 Mortehoe EX31, EX33, EX34 Two Rivers EX31, EX37, EX38 Newport EX31, EX32 Waldon EX22, EX38, EX39 North Molton EX31, EX32, EX36, TA22 Westward Ho! EX39 Roundswell EX31, EX32 Winkleigh EX18, EX19, EX20, EX37 South Molton EX32, EX36, EX37 Witheridge EX16, EX17, EX18, EX36
Source: North Devon Council Source: Doogal.co.uk
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Appendix 4: Property Price Detailed Analysis
North Devon Analysis
North Devon – All Property Prices
All Properties Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 131 £ 136,761 -25% £ 164,579 -33% £ 191,030 -41% 40% Barnstaple with Pilton Ward 235 £ 162,794 -10% £ 196,433 -20% £ 241,426 -25% 48% Barnstaple with Westacott Ward 201 £ 149,607 -17% £ 176,641 -28% £ 237,092 -26% 58% Bickington Ward 178 £ 202,243 12% £ 238,518 -2% £ 292,454 -9% 45% Bishop's Nympton 143 £ 245,158 35% £ 311,314 27% £ 431,247 34% 76% Bratton Fleming 61 £ 270,000 49% £ 345,681 41% £ 515,627 61% 91% Braunton East 462 £ 232,860 28% £ 289,810 19% £ 362,460 13% 56% Braunton West & Georgeham 426 £ 245,133 35% £ 303,154 24% £ 456,998 42% 86% Chittlehampton 126 £ 231,632 28% £ 312,377 28% £ 473,844 48% 105% Chulmleigh 378 £ 167,951 -7% £ 238,117 -3% £ 311,025 -3% 85% Combe Martin 124 £ 188,348 4% £ 235,843 -4% £ 294,730 -8% 56% Fremington 121 £ 219,793 21% £ 253,722 4% £ 301,218 -6% 37% Heanton Punchardon 42 £ 194,738 7% £ 244,360 0% £ 308,680 -4% 59% Ilfracombe East 361 £ 140,946 -22% £ 191,267 -22% £ 262,848 -18% 86% Ilfracombe West 155 £ 164,933 -9% £ 194,676 -20% £ 251,086 -22% 52% Instow 63 £ 281,668 55% £ 371,117 52% £ 464,633 45% 65% Landkey 163 £ 226,927 25% £ 295,704 21% £ 392,967 22% 73% Lynton & Lynmouth 181 £ 171,015 -6% £ 243,249 0% £ 334,860 4% 96% Marwood 39 £ 229,953 27% £ 313,568 28% £ 454,309 41% 98% Mortehoe 101 £ 261,285 44% £ 321,135 31% £ 447,080 39% 71% Newport 181 £ 170,084 -6% £ 197,920 -19% £ 281,892 -12% 66% North Molton 73 £ 194,240 7% £ 232,954 -5% £ 297,605 -7% 53% Roundswell 90 £ 238,754 32% £ 282,451 16% £ 332,352 4% 39% South Molton 363 £ 158,883 -12% £ 193,860 -21% £ 261,179 -19% 64% Witheridge 62 £ 187,194 3% £ 230,413 -6% £ 291,027 -9% 55% North Devon 4460 £ 181,223 £ 244,444 £ 321,112 77%
>15% variance from district total UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
Looking at North Devon on an overall basis – ignoring property size and type – there are >15% variances in median / lower quartile values in a significant number of Wards when compared to the district wide median / lower quartile figures. While this may indicate pockets of high and low property values, the data is likely to be skewed at this level of analysis by property types and sizes. The following tables therefore summarise the analysis by property type (i.e. flat, terraced, semi-detached and detached) and property size (i.e. 1 to 4 bed properties).
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: Flats
Flat, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 39 £ 117,747 11% £ 133,091 -6% £ 164,430 -15% 40% Barnstaple with Pilton Ward 21 £ 154,719 46% £ 193,617 37% £ 220,579 14% 43% Barnstaple with Westacott Ward 33 £ 78,081 -26% £ 95,031 -33% £ 119,968 -38% 54% Bickington Ward 6 £ 149,918 41% £ 156,697 11% £ 163,070 -16% 9% Bishop's Nympton 1 £ 634,106 498% £ 634,106 350% £ 634,106 227% 0% Bratton Fleming 1 £ 122,067 15% £ 122,067 -13% £ 122,067 -37% 0% Braunton East 27 £ 131,355 24% £ 148,428 5% £ 168,007 -13% 28% Braunton West & Georgeham 36 £ 146,267 38% £ 171,847 22% £ 368,200 90% 152% Chittlehampton 0 £ - - £ - - £ - - Chulmleigh 19 £ 91,797 -13% £ 120,204 -15% £ 150,696 -22% 64% Combe Martin 5 £ 91,133 -14% £ 133,700 -5% £ 164,579 -15% 81% Fremington 3 £ 152,880 44% £ 167,767 19% £ 184,243 -5% 21% Heanton Punchardon 1 £ 126,214 19% £ 126,214 -10% £ 126,214 -35% 0% Ilfracombe East 135 £ 93,176 -12% £ 127,416 -10% £ 175,435 -10% 88% Ilfracombe West 15 £ 98,719 -7% £ 117,426 -17% £ 133,614 -31% 35% Instow 6 £ 195,354 84% £ 275,387 95% £ 286,252 47% 47% Landkey 0 £ - - £ - - £ - - Lynton & Lynmouth 34 £ 124,048 17% £ 158,456 12% £ 237,002 22% 91% Marwood 0 £ - - £ - - £ - - Mortehoe 41 £ 246,862 133% £ 287,313 104% £ 356,832 84% 45% Newport 12 £ 109,751 4% £ 132,437 -6% £ 152,621 -21% 39% North Molton 0 £ - - £ - - £ - - Roundswell 10 £ 115,775 9% £ 152,156 8% £ 209,671 8% 81% South Molton 28 £ 105,006 -1% £ 132,110 -6% £ 139,224 -28% 33% Witheridge 0 £ - - £ - - £ - - North Devon 473 £ 106,020 £ 140,946 £ 194,089 83% 11% Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%)
Source: Altair Analysis of Rightmove Data
For flats, there are >15% variances in median and lower quartile values when compared to the district level figures in the following Wards: Barnstaple with Westacott Ward, Braunton West & Georgeham; Lynton & Lynmouth; Mortehoe.
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: Terraced
Terraced, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 82 £ 149,972 -8% £ 169,021 -11% £ 192,130 -17% 28% Barnstaple with Pilton Ward 120 £ 152,479 -6% £ 173,438 -9% £ 203,321 -12% 33% Barnstaple with Westacott Ward 68 £ 152,593 -6% £ 165,822 -13% £ 179,810 -22% 18% Bickington Ward 33 £ 178,623 10% £ 199,143 5% £ 221,175 -4% 24% Bishop's Nympton 20 £ 156,204 -4% £ 174,208 -8% £ 257,069 11% 65% Bratton Fleming 11 £ 182,533 12% £ 206,294 9% £ 266,424 15% 46% Braunton East 100 £ 200,074 23% £ 230,993 22% £ 278,214 21% 39% Braunton West & Georgeham 92 £ 208,460 28% £ 239,558 26% £ 298,369 29% 43% Chittlehampton 22 £ 168,972 4% £ 225,830 19% £ 251,159 9% 49% Chulmleigh 97 £ 137,069 -16% £ 188,398 -1% £ 228,239 -1% 67% Combe Martin 48 £ 173,442 7% £ 189,533 0% £ 210,615 -9% 21% Fremington 26 £ 199,682 23% £ 215,579 13% £ 247,464 7% 24% Heanton Punchardon 19 £ 179,516 10% £ 204,138 7% £ 230,006 0% 28% Ilfracombe East 108 £ 164,170 1% £ 192,059 1% £ 237,780 3% 45% Ilfracombe West 67 £ 160,125 -2% £ 178,547 -6% £ 199,026 -14% 24% Instow 9 £ 247,292 52% £ 334,036 76% £ 418,163 81% 69% Landkey 52 £ 177,799 9% £ 210,536 11% £ 265,732 15% 49% Lynton & Lynmouth 66 £ 189,240 16% £ 215,494 13% £ 277,551 20% 47% Marwood 10 £ 211,141 30% £ 225,774 19% £ 230,786 0% 9% Mortehoe 13 £ 211,895 30% £ 305,561 61% £ 397,558 72% 88% Newport 93 £ 162,141 0% £ 176,912 -7% £ 194,724 -16% 20% North Molton 20 £ 184,271 13% £ 205,647 8% £ 264,769 15% 44% Roundswell 6 £ 168,274 3% £ 183,616 -3% £ 217,172 -6% 29% South Molton 164 £ 144,958 -11% £ 170,511 -10% £ 192,088 -17% 33% Witheridge 13 £ 171,392 5% £ 208,085 10% £ 230,826 0% 35% North Devon 1359 £ 162,667 £ 190,000 £ 230,736 42% 30% Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%)
Source: Altair Analysis of Rightmove Data
For terraced properties, there are >15% variances in median and lower quartile values when compared to the district level figures in the following Wards: Braunton East; Braunton West & Georgeham; Lynton and Lynmouth and Chulmeigh. For other Wards with >15% variance in median and lower quartile prices, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: Semi-Detached
Semi-Detached, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 5 £ 174,606 -10% £ 193,517 -19% £ 269,975 -7% 55% Barnstaple with Pilton Ward 47 £ 177,417 -8% £ 209,118 -13% £ 245,710 -15% 38% Barnstaple with Westacott Ward 49 £ 173,073 -11% £ 195,974 -18% £ 225,583 -22% 30% Bickington Ward 54 £ 190,877 -1% £ 214,902 -10% £ 239,432 -18% 25% Bishop's Nympton 25 £ 204,531 6% £ 271,026 13% £ 310,648 7% 52% Bratton Fleming 7 £ 175,828 -9% £ 297,939 25% £ 388,142 34% 121% Braunton East 107 £ 243,248 26% £ 266,649 12% £ 304,086 5% 25% Braunton West & Georgeham 88 £ 245,379 27% £ 286,174 20% £ 345,887 19% 41% Chittlehampton 31 £ 194,304 0% £ 233,100 -2% £ 300,668 3% 55% Chulmleigh 51 £ 156,875 -19% £ 212,048 -11% £ 261,703 -10% 67% Combe Martin 21 £ 204,767 6% £ 239,924 0% £ 260,110 -11% 27% Fremington 25 £ 214,904 11% £ 230,000 -4% £ 253,148 -13% 18% Heanton Punchardon 12 £ 234,574 21% £ 257,652 8% £ 293,429 1% 25% Ilfracombe East 54 £ 186,046 -4% £ 231,504 -3% £ 304,708 5% 64% Ilfracombe West 28 £ 180,693 -7% £ 221,399 -7% £ 310,787 7% 72% Instow 11 £ 278,034 44% £ 318,748 33% £ 405,749 40% 46% Landkey 21 £ 227,106 17% £ 247,291 3% £ 308,393 6% 36% Lynton & Lynmouth 22 £ 160,584 -17% £ 210,441 -12% £ 323,556 11% 101% Marwood 3 £ 177,560 -8% £ 182,039 -24% £ 238,770 -18% 34% Mortehoe 15 £ 231,417 20% £ 265,410 11% £ 353,075 21% 53% Newport 29 £ 200,989 4% £ 254,779 7% £ 293,132 1% 46% North Molton 20 £ 181,622 -6% £ 216,912 -9% £ 254,287 -13% 40% Roundswell 18 £ 231,180 19% £ 266,302 11% £ 286,589 -1% 24% South Molton 61 £ 180,170 -7% £ 198,172 -17% £ 250,585 -14% 39% Witheridge 18 £ 175,667 -9% £ 197,483 -17% £ 246,885 -15% 41% North Devon 822 £ 193,502 £ 239,062 £ 290,727 50% 18% Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%)
Source: Altair Analysis of Rightmove Data
For semi-detached properties, there are >15% variances in median and lower quartile values when compared to the district level figures in the following Wards: Barnstaple with Westacott; Braunton East; Braunton West & Georgeham; Chumleigh; South Molton. For other Wards with >15% variance in median and lower quartile prices, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: Detached
Detached, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 5 £ 202,157 -23% £ 271,493 -14% £ 344,982 -20% 71% Barnstaple with Pilton Ward 47 £ 234,989 -10% £ 281,275 -11% £ 360,121 -17% 53% Barnstaple with Westacott Ward 51 £ 236,280 -10% £ 250,769 -21% £ 270,338 -37% 14% Bickington Ward 85 £ 247,595 -6% £ 277,446 -12% £ 362,408 -16% 46% Bishop's Nympton 97 £ 277,845 6% £ 363,957 15% £ 510,000 18% 84% Bratton Fleming 42 £ 313,707 20% £ 411,764 30% £ 584,469 35% 86% Braunton East 228 £ 293,751 12% £ 343,762 9% £ 477,061 10% 62% Braunton West & Georgeham 210 £ 292,661 12% £ 385,378 22% £ 593,509 37% 103% Chittlehampton 73 £ 301,180 15% £ 425,964 34% £ 515,115 19% 71% Chulmleigh 211 £ 225,616 -14% £ 283,616 -10% £ 371,829 -14% 65% Combe Martin 50 £ 266,309 1% £ 301,499 -5% £ 349,964 -19% 31% Fremington 67 £ 249,814 -5% £ 278,813 -12% £ 346,283 -20% 39% Heanton Punchardon 10 £ 314,201 20% £ 362,299 14% £ 415,159 -4% 32% Ilfracombe East 64 £ 237,721 -9% £ 321,001 1% £ 399,092 -8% 68% Ilfracombe West 45 £ 224,055 -15% £ 257,754 -19% £ 359,257 -17% 60% Instow 37 £ 329,989 26% £ 403,177 27% £ 522,700 21% 58% Landkey 90 £ 295,841 13% £ 356,622 13% £ 439,698 2% 49% Lynton & Lynmouth 59 £ 272,674 4% £ 352,365 11% £ 420,804 -3% 54% Marwood 26 £ 308,912 18% £ 417,580 32% £ 518,513 20% 68% Mortehoe 32 £ 373,082 42% £ 454,515 43% £ 553,238 28% 48% Newport 47 £ 281,104 7% £ 308,393 -3% £ 384,877 -11% 37% North Molton 33 £ 229,532 -13% £ 276,800 -13% £ 398,175 -8% 73% Roundswell 56 £ 279,172 6% £ 313,227 -1% £ 362,977 -16% 30% South Molton 110 £ 242,651 -8% £ 275,765 -13% £ 324,699 -25% 34% Witheridge 31 £ 219,079 -17% £ 240,835 -24% £ 416,680 -4% 90% North Devon 1806 £ 262,435 £ 316,774 £ 432,312 65% 40% Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%)
Source: Altair Analysis of Rightmove Data
For detached properties, there are >15% variances in median and lower quartile values when compared to the district level figures in the following Wards: Barnstaple with Westacott; Bratton Fleming; Braunton West & Georgeham; Chittlehampton; Ilfracombe West; Instow; Mortehoe; Witheridge. For other Wards with >15% variance in median and lower quartile prices, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: 1 Beds
1 bedroom Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 4 £ 101,128 12% £ 126,705 2% £ 184,697 21% 83% Barnstaple with Pilton Ward 3 £ 107,974 20% £ 139,116 12% £ 153,379 1% 42% Barnstaple with Westacott Ward 11 £ 71,858 -20% £ 79,104 -37% £ 85,996 -44% 20% Bickington Ward 0 £ - - £ - - £ - - Bishop's Nympton 0 £ - - £ - - £ - - Bratton Fleming 1 £ 122,067 35% £ 122,067 -2% £ 122,067 -20% 0% Braunton East 9 £ 184,474 104% £ 185,110 48% £ 237,886 56% 29% Braunton West & Georgeham 11 £ 141,390 57% £ 142,713 14% £ 153,274 1% 8% Chittlehampton 1 £ 128,891 43% £ 128,891 3% £ 128,891 -15% 0% Chulmleigh 4 £ 104,715 16% £ 107,754 -14% £ 114,952 -25% 10% Combe Martin 1 £ 91,133 1% £ 91,133 -27% £ 91,133 -40% 0% Fremington 0 £ - - £ - - £ - - Heanton Punchardon 1 £ 147,562 63% £ 147,562 18% £ 147,562 -3% 0% Ilfracombe East 10 £ 86,748 -4% £ 93,521 -25% £ 120,486 -21% 39% Ilfracombe West 3 £ 125,974 39% £ 147,388 18% £ 399,861 162% 217% Instow 0 £ - - £ - - £ - - Landkey 0 £ - - £ - - £ - - Lynton & Lynmouth 3 £ 117,148 30% £ 124,522 0% £ 179,959 18% 54% Marwood 1 £ 231,620 156% £ 231,620 86% £ 231,620 52% 0% Mortehoe 6 £ 106,920 18% £ 155,234 24% £ 166,389 9% 56% Newport 4 £ 106,583 18% £ 115,238 -8% £ 122,118 -20% 15% North Molton 0 £ - - £ - - £ - - Roundswell 0 £ - - £ - - £ - - South Molton 7 £ 73,236 -19% £ 97,491 -22% £ 106,069 -30% 45% Witheridge 0 £ - - £ - - £ - - North Devon 80 £ 90,331 £ 124,752 £ 152,463 69%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: 2 Beds
2 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 25 £ 121,016 -22% £ 135,902 -27% £ 153,567 -36% 27% Barnstaple with Pilton Ward 40 £ 154,398 0% £ 168,721 -9% £ 194,536 -19% 26% Barnstaple with Westacott Ward 63 £ 146,543 -5% £ 163,732 -12% £ 176,546 -27% 20% Bickington Ward 48 £ 184,748 20% £ 205,274 11% £ 236,412 -2% 28% Bishop's Nympton 18 £ 156,058 1% £ 174,208 -6% £ 222,844 -8% 43% Bratton Fleming 4 £ 157,400 2% £ 167,961 -9% £ 178,213 -26% 13% Braunton East 78 £ 190,913 24% £ 228,435 23% £ 278,873 16% 46% Braunton West & Georgeham 95 £ 206,349 34% £ 242,040 31% £ 298,721 24% 45% Chittlehampton 6 £ 154,805 0% £ 163,084 -12% £ 168,651 -30% 9% Chulmleigh 38 £ 153,564 -1% £ 196,757 6% £ 240,260 0% 56% Combe Martin 23 £ 173,993 13% £ 197,136 6% £ 247,538 3% 42% Fremington 24 £ 221,838 44% £ 245,201 32% £ 269,085 12% 21% Heanton Punchardon 5 £ 170,736 11% £ 172,577 -7% £ 183,541 -24% 7% Ilfracombe East 69 £ 129,980 -16% £ 159,674 -14% £ 206,294 -14% 59% Ilfracombe West 47 £ 154,908 0% £ 178,547 -4% £ 218,258 -9% 41% Instow 10 £ 299,568 94% £ 449,303 143% £ 499,751 107% 67% Landkey 17 £ 174,272 13% £ 202,285 9% £ 254,439 6% 46% Lynton & Lynmouth 38 £ 149,307 -3% £ 184,261 0% £ 271,667 13% 82% Marwood 3 £ 169,471 10% £ 210,562 14% £ 263,126 9% 55% Mortehoe 15 £ 279,733 81% £ 304,667 65% £ 367,972 53% 32% Newport 35 £ 143,784 -7% £ 170,084 -8% £ 186,808 -22% 30% North Molton 6 £ 153,049 -1% £ 194,264 5% £ 221,859 -8% 45% Roundswell 16 £ 176,667 14% £ 241,865 31% £ 280,925 17% 59% South Molton 84 £ 135,602 -12% £ 152,442 -18% £ 174,325 -28% 29% Witheridge 14 £ 171,521 11% £ 180,804 -2% £ 214,696 -11% 25% North Devon 821 £ 154,426 £ 185,157 £ 240,944 56%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: 3 Beds
3 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 37 £ 155,797 -19% £ 174,944 -27% £ 195,767 -33% 26% Barnstaple with Pilton Ward 99 £ 167,169 -13% £ 199,160 -17% £ 227,625 -22% 36% Barnstaple with Westacott Ward 64 £ 173,334 -9% £ 201,376 -16% £ 248,895 -15% 44% Bickington Ward 55 £ 222,633 16% £ 243,113 2% £ 277,120 -5% 24% Bishop's Nympton 24 £ 227,427 19% £ 263,556 10% £ 301,376 3% 33% Bratton Fleming 12 £ 199,291 4% £ 274,713 15% £ 400,407 37% 101% Braunton East 173 £ 251,900 32% £ 281,240 18% £ 328,664 12% 30% Braunton West & Georgeham 139 £ 261,723 37% £ 303,050 27% £ 416,684 42% 59% Chittlehampton 22 £ 205,258 7% £ 230,302 -3% £ 307,289 5% 50% Chulmleigh 78 £ 201,917 5% £ 238,117 0% £ 276,455 -6% 37% Combe Martin 54 £ 190,698 0% £ 236,459 -1% £ 272,910 -7% 43% Fremington 51 £ 215,579 13% £ 245,669 3% £ 302,338 3% 40% Heanton Punchardon 20 £ 211,795 11% £ 238,638 0% £ 303,376 4% 43% Ilfracombe East 120 £ 167,083 -13% £ 196,677 -18% £ 249,492 -15% 49% Ilfracombe West 55 £ 172,600 -10% £ 194,676 -18% £ 241,689 -17% 40% Instow 11 £ 279,699 46% £ 325,466 36% £ 362,610 24% 30% Landkey 57 £ 227,106 19% £ 265,368 11% £ 315,690 8% 39% Lynton & Lynmouth 46 £ 193,643 1% £ 229,785 -4% £ 308,017 5% 59% Marwood 9 £ 225,020 18% £ 301,923 27% £ 408,450 40% 82% Mortehoe 26 £ 295,785 55% £ 373,364 57% £ 466,655 59% 58% Newport 70 £ 171,414 -10% £ 190,952 -20% £ 261,215 -11% 52% North Molton 29 £ 189,472 -1% £ 223,364 -6% £ 273,850 -6% 45% Roundswell 31 £ 270,329 41% £ 312,103 31% £ 357,117 22% 32% South Molton 141 £ 177,854 -7% £ 196,764 -18% £ 237,185 -19% 33% Witheridge 19 £ 191,329 0% £ 208,085 -13% £ 235,868 -19% 23% North Devon 1442 £ 191,444 £ 238,524 £ 292,699 53%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
North Devon – Property Prices: 4 Beds
4 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Barnstaple Central Ward 17 £ 179,643 -29% £ 188,830 -39% £ 241,824 -38% 35% Barnstaple with Pilton Ward 19 £ 245,948 -3% £ 282,160 -9% £ 386,463 -2% 57% Barnstaple with Westacott Ward 23 £ 191,575 -24% £ 259,230 -16% £ 284,032 -28% 48% Bickington Ward 19 £ 295,502 17% £ 331,475 7% £ 402,818 3% 36% Bishop's Nympton 0 £ - - £ - - £ - - Bratton Fleming 5 £ 189,719 -25% £ 294,084 -5% £ 313,345 -20% 65% Braunton East 53 £ 314,633 24% £ 365,759 18% £ 473,680 21% 51% Braunton West & Georgeham 56 £ 287,517 14% £ 389,784 26% £ 620,775 58% 116% Chittlehampton 5 £ 410,397 62% £ 417,448 35% £ 441,356 12% 8% Chulmleigh 40 £ 267,426 6% £ 309,653 0% £ 333,952 -15% 25% Combe Martin 24 £ 206,468 -18% £ 292,270 -6% £ 360,246 -8% 74% Fremington 19 £ 248,389 -2% £ 284,087 -8% £ 333,157 -15% 34% Heanton Punchardon 7 £ 261,513 3% £ 288,463 -7% £ 366,372 -7% 40% Ilfracombe East 52 £ 164,810 -35% £ 269,310 -13% £ 335,325 -15% 103% Ilfracombe West 23 £ 196,260 -22% £ 223,264 -28% £ 311,343 -21% 59% Instow 3 £ 438,115 73% £ 458,068 48% £ 466,572 19% 6% Landkey 34 £ 322,549 28% £ 390,096 26% £ 436,603 11% 35% Lynton & Lynmouth 20 £ 239,088 -5% £ 309,795 0% £ 404,505 3% 69% Marwood 8 £ 258,187 2% £ 286,786 -7% £ 434,190 10% 68% Mortehoe 13 £ 250,516 -1% £ 398,022 29% £ 458,958 17% 83% Newport 36 £ 260,711 3% £ 303,994 -2% £ 361,176 -8% 39% North Molton 9 £ 253,148 0% £ 355,198 15% £ 473,535 21% 87% Roundswell 19 £ 291,496 15% £ 319,899 3% £ 367,793 -6% 26% South Molton 56 £ 254,501 1% £ 286,026 -8% £ 375,047 -5% 47% Witheridge 3 £ 264,557 5% £ 298,289 -4% £ 329,614 -16% 25% North Devon 563 £ 252,718 £ 309,403 £ 392,970 55%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge Analysis
Torridge – Property Prices: All Properties
All Properties - Base Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 94 £ 206,762 19% £ 252,717 11% £ 336,160 13% 63% Bideford East 136 £ 153,566 -11% £ 177,885 -22% £ 223,753 -25% 46% Bideford North 162 £ 132,979 -23% £ 168,234 -26% £ 234,433 -21% 76% Bideford South 174 £ 150,889 -13% £ 188,294 -17% £ 258,993 -13% 72% Broadheath 75 £ 192,433 11% £ 297,853 31% £ 381,585 28% 98% Clinton 70 £ 191,684 11% £ 247,876 9% £ 372,998 25% 95% Clovelly Bay 20 £ 150,941 -13% £ 202,196 -11% £ 285,270 -4% 89% Coham Bridge 94 £ 235,096 36% £ 293,608 29% £ 357,890 20% 52% Forest 103 £ 209,605 21% £ 256,249 12% £ 317,648 7% 52% Hartland and Bradworthy 101 £ 185,256 7% £ 232,556 2% £ 296,525 -1% 60% Holsworthy 435 £ 165,270 -5% £ 203,476 -11% £ 255,507 -14% 55% Kenwith 29 £ 203,020 17% £ 310,161 36% £ 392,931 32% 94% Monkleigh and Littleham 38 £ 222,680 29% £ 252,500 11% £ 333,566 12% 50% Northam 174 £ 151,376 -13% £ 237,977 4% £ 324,470 9% 114% Orchard Hill 37 £ 247,330 43% £ 312,325 37% £ 385,718 29% 56% Shebbear and Langtree 120 £ 226,814 31% £ 281,579 23% £ 351,228 18% 55% Tamarside 134 £ 226,809 31% £ 279,620 23% £ 327,206 10% 44% Three Moors 160 £ 191,442 11% £ 274,004 20% £ 367,822 23% 92% Torrington 454 £ 158,717 -8% £ 192,345 -16% £ 239,266 -20% 51% Two Rivers 131 £ 193,120 12% £ 234,738 3% £ 314,681 6% 63% Waldon 74 £ 211,532 22% £ 281,938 24% £ 372,367 25% 76% Westward Ho! 77 £ 232,321 34% £ 274,611 20% £ 318,024 7% 37% Winkleigh 229 £ 200,119 16% £ 254,762 12% £ 374,325 26% 87% Torridge 3121 £ 173,180 £ 228,195 £ 298,170 72%
>15% variance from district total UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
Looking at Torridge on an overall basis – ignoring property size and type – there are >15% variances in median / lower quartile values in a significant number of Wards when compared to the district wide median / lower quartile figures. As with North Devon, while this may indicate pockets of high and low property values, the data is likely to be skewed at this level of analysis by property types and sizes. The following tables therefore summarise the analysis by property type (i.e. flat, terraced, semi-detached and detached) and property size (i.e. 1 to 4 bed properties).
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: Flats
Flat, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 10 £ 163,916 53% £ 202,762 54% £ 251,375 46% 53% Bideford East 12 £ 69,803 -35% £ 124,955 -5% £ 129,974 -24% 86% Bideford North 35 £ 104,834 -2% £ 141,928 8% £ 169,047 -2% 61% Bideford South 18 £ 107,637 0% £ 123,432 -6% £ 154,353 -10% 43% Broadheath 0 £ - - £ - - £ - - Clinton 0 £ - - £ - - £ - - Clovelly Bay 0 £ - - £ - - £ - - Coham Bridge 0 £ - - £ - - £ - - Forest 3 £ 59,014 -45% £ 61,390 -53% £ 71,853 -58% 22% Hartland and Bradworthy 0 £ - - £ - - £ - - Holsworthy 22 £ 103,210 -4% £ 128,900 -2% £ 148,491 -14% 44% Kenwith 0 £ - - £ - - £ - - Monkleigh and Littleham 0 £ - - £ - - £ - - Northam 31 £ 104,887 -2% £ 126,200 -4% £ 215,441 25% 105% Orchard Hill 0 £ - - £ - - £ - - Shebbear and Langtree 0 £ - - £ - - £ - - Tamarside 0 £ - - £ - - £ - - Three Moors 0 £ - - £ - - £ - - Torrington 6 £ 109,009 2% £ 110,554 -16% £ 119,214 -31% 9% Two Rivers 1 £ 94,350 -12% £ 94,350 -28% £ 94,350 -45% 0% Waldon 1 £ 219,429 105% £ 219,429 66% £ 219,429 27% 0% Westward Ho! 21 £ 155,766 45% £ 230,466 75% £ 322,400 87% 107% Winkleigh 3 £ 118,592 11% £ 125,486 -5% £ 128,666 -25% 8% Torridge 163 £ 107,178 £ 131,846 £ 172,124 61%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
For flats, while there are >15% variances in median and lower quartile values across several Wards when compared to the district level median / lower quartile figures, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: Terraced
Terraced, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 48 £ 199,579 35% £ 238,515 39% £ 284,495 40% 43% Bideford East 64 £ 146,452 -1% £ 163,925 -4% £ 176,112 -13% 20% Bideford North 78 £ 126,417 -14% £ 149,588 -13% £ 181,796 -11% 44% Bideford South 66 £ 141,581 -4% £ 156,423 -9% £ 173,332 -15% 22% Broadheath 7 £ 131,382 -11% £ 135,018 -21% £ 198,663 -2% 51% Clinton 18 £ 162,322 10% £ 185,907 8% £ 227,931 12% 40% Clovelly Bay 7 £ 144,609 -2% £ 151,605 -12% £ 175,974 -14% 22% Coham Bridge 8 £ 146,636 -1% £ 160,020 -7% £ 227,793 12% 55% Forest 14 £ 151,022 2% £ 159,041 -7% £ 205,674 1% 36% Hartland and Bradworthy 24 £ 130,064 -12% £ 165,560 -3% £ 196,615 -3% 51% Holsworthy 151 £ 148,782 1% £ 170,706 0% £ 191,322 -6% 29% Kenwith 5 £ 182,505 24% £ 186,388 9% £ 203,020 0% 11% Monkleigh and Littleham 11 £ 187,751 27% £ 225,093 31% £ 244,807 20% 30% Northam 36 £ 142,069 -4% £ 170,377 -1% £ 187,688 -8% 32% Orchard Hill 4 £ 166,847 13% £ 175,765 3% £ 187,749 -8% 13% Shebbear and Langtree 15 £ 151,340 2% £ 201,520 18% £ 215,247 6% 42% Tamarside 12 £ 165,697 12% £ 179,317 5% £ 199,680 -2% 21% Three Moors 35 £ 159,916 8% £ 184,867 8% £ 268,659 32% 68% Torrington 212 £ 147,394 0% £ 166,207 -3% £ 194,079 -5% 32% Two Rivers 34 £ 172,846 17% £ 197,919 15% £ 242,087 19% 40% Waldon 8 £ 168,807 14% £ 172,236 1% £ 175,457 -14% 4% Westward Ho! 10 £ 194,311 32% £ 229,035 34% £ 254,244 25% 31% Winkleigh 40 £ 155,701 5% £ 193,643 13% £ 233,893 15% 50% Torridge 907 £ 147,676 £ 171,369 £ 203,512 38%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
For terraced properties, there are two Wards with >15% variances in lower quartile and / or median values when compared to the district level: Appledore and Two Rivers. While there are >15% variances in median and lower quartile values across other Wards when compared to the district level median / lower quartile figures, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: Semi-Detached
Semi-Detached, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 15 £ 214,635 22% £ 377,622 87% £ 395,834 67% 84% Bideford East 28 £ 179,887 2% £ 199,511 -1% £ 219,359 -8% 22% Bideford North 15 £ 164,518 -6% £ 182,556 -10% £ 244,601 3% 49% Bideford South 38 £ 183,164 4% £ 204,860 1% £ 241,004 1% 32% Broadheath 14 £ 162,122 -8% £ 187,715 -7% £ 228,047 -4% 41% Clinton 12 £ 189,042 8% £ 201,419 -1% £ 214,102 -10% 13% Clovelly Bay 3 £ 125,874 -28% £ 148,947 -26% £ 215,824 -9% 71% Coham Bridge 19 £ 196,293 12% £ 218,880 8% £ 261,815 10% 33% Forest 18 £ 210,447 20% £ 233,676 15% £ 257,526 8% 22% Hartland and Bradworthy 18 £ 175,636 0% £ 211,148 4% £ 252,732 6% 44% Holsworthy 107 £ 167,091 -5% £ 191,532 -5% £ 220,650 -7% 32% Kenwith 7 £ 186,471 6% £ 201,230 -1% £ 295,194 24% 58% Monkleigh and Littleham 7 £ 209,846 19% £ 227,084 12% £ 261,358 10% 25% Northam 22 £ 192,565 10% £ 212,720 5% £ 227,279 -4% 18% Orchard Hill 5 £ 175,736 0% £ 211,575 5% £ 223,665 -6% 27% Shebbear and Langtree 16 £ 181,237 3% £ 231,811 14% £ 271,166 14% 50% Tamarside 23 £ 187,601 7% £ 202,527 0% £ 241,190 1% 29% Three Moors 30 £ 179,445 2% £ 227,461 12% £ 327,638 38% 83% Torrington 96 £ 168,766 -4% £ 190,905 -6% £ 208,774 -12% 24% Two Rivers 19 £ 176,952 1% £ 186,116 -8% £ 207,951 -12% 18% Waldon 9 £ 178,265 2% £ 209,777 4% £ 270,565 14% 52% Westward Ho! 11 £ 233,704 33% £ 249,664 23% £ 258,697 9% 11% Winkleigh 45 £ 182,971 4% £ 214,385 6% £ 266,558 12% 46% Torridge 577 £ 175,612 £ 202,464 £ 237,638 35%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
For semi-detached properties, while there are >15% variances in median and lower quartile values across several Wards when compared to the district level median / lower quartile figures, the sample sizes are deemed too small to draw meaningful conclusions.
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: Detached
Detached, Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 21 £ 247,728 2% £ 291,413 1% £ 346,360 -6% 40% Bideford East 32 £ 245,786 2% £ 302,563 4% £ 445,431 21% 81% Bideford North 34 £ 232,950 -4% £ 252,020 -13% £ 298,452 -19% 28% Bideford South 52 £ 257,965 7% £ 284,243 -2% £ 317,611 -14% 23% Broadheath 54 £ 270,225 12% £ 350,631 21% £ 412,979 12% 53% Clinton 40 £ 250,890 4% £ 349,076 21% £ 411,894 12% 64% Clovelly Bay 10 £ 212,537 -12% £ 262,973 -9% £ 340,791 -7% 60% Coham Bridge 67 £ 276,973 14% £ 340,282 18% £ 375,126 2% 35% Forest 68 £ 243,260 0% £ 279,996 -3% £ 358,172 -3% 47% Hartland and Bradworthy 59 £ 221,791 -8% £ 270,000 -7% £ 317,528 -14% 43% Holsworthy 155 £ 239,281 -1% £ 274,152 -5% £ 319,886 -13% 34% Kenwith 17 £ 310,161 28% £ 380,996 32% £ 465,238 27% 50% Monkleigh and Littleham 20 £ 252,500 4% £ 314,559 9% £ 363,439 -1% 44% Northam 85 £ 253,499 5% £ 309,660 7% £ 378,600 3% 49% Orchard Hill 28 £ 282,657 17% £ 347,650 20% £ 394,102 7% 39% Shebbear and Langtree 89 £ 261,116 8% £ 311,580 8% £ 372,096 1% 43% Tamarside 99 £ 255,863 6% £ 296,525 2% £ 339,896 -8% 33% Three Moors 95 £ 231,011 -5% £ 309,891 7% £ 401,096 9% 74% Torrington 140 £ 225,106 -7% £ 247,045 -15% £ 280,282 -24% 25% Two Rivers 77 £ 229,635 -5% £ 275,100 -5% £ 364,650 -1% 59% Waldon 56 £ 264,150 9% £ 328,641 13% £ 411,640 12% 56% Westward Ho! 35 £ 278,321 15% £ 295,969 2% £ 346,765 -6% 25% Winkleigh 141 £ 239,470 -1% £ 309,212 7% £ 433,086 18% 81% Torridge 1474 £ 242,108 £ 289,565 £ 367,534 52%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
For detached properties, Broadheath, Clinton and Coham Bridge have >15% variances in median values when compared to the district level median figures. For other Wards the sample sizes are deemed too small to draw meaningful conclusions. While the analysis of detached property prices may suggest there are pockets of high and low values, the data is likely to be skewed by larger (>4 bedroom) detached properties (as analysis of 3-bedroom and 4-bedroom properties does not indicate significant price differences – see below).
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: 1 Beds
1 bedroom Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 1 £ 182,505 101% £ 182,505 72% £ 182,505 43% 0% Bideford East 3 £ 61,090 -33% £ 67,870 -36% £ 69,159 -46% 13% Bideford North 5 £ 103,659 14% £ 106,008 0% £ 109,194 -15% 5% Bideford South 3 £ 149,677 65% £ 165,758 56% £ 382,610 200% 156% Broadheath 0 £ - - £ - - £ - - Clinton 0 £ - - £ - - £ - - Clovelly Bay 1 £ 99,730 10% £ 99,730 -6% £ 99,730 -22% 0% Coham Bridge 1 £ 136,917 51% £ 136,917 29% £ 136,917 7% 0% Forest 3 £ 59,014 -35% £ 61,390 -42% £ 71,853 -44% 22% Hartland and Bradworthy 0 £ - - £ - - £ - - Holsworthy 8 £ 99,694 10% £ 105,419 -1% £ 110,349 -14% 11% Kenwith 0 £ - - £ - - £ - - Monkleigh and Littleham 0 £ - - £ - - £ - - Northam 3 £ 95,565 5% £ 104,102 -2% £ 113,415 -11% 19% Orchard Hill 0 £ - - £ - - £ - - Shebbear and Langtree 0 £ - - £ - - £ - - Tamarside 0 £ - - £ - - £ - - Three Moors 1 £ 132,730 46% £ 132,730 25% £ 132,730 4% 0% Torrington 5 £ 108,596 20% £ 108,635 2% £ 111,390 -13% 3% Two Rivers 0 £ - - £ - - £ - - Waldon 0 £ - - £ - - £ - - Westward Ho! 1 £ 96,435 6% £ 96,435 -9% £ 96,435 -25% 0% Winkleigh 0 £ - - £ - - £ - - Torridge 35 £ 90,712 £ 106,008 £ 127,729 41%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: 2 Beds
2 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 30 £ 189,014 33% £ 226,573 36% £ 237,515 13% 26% Bideford East 32 £ 133,476 -6% £ 147,750 -12% £ 170,160 -19% 27% Bideford North 42 £ 120,768 -15% £ 133,640 -20% £ 155,702 -26% 29% Bideford South 43 £ 137,462 -3% £ 152,265 -9% £ 173,026 -17% 26% Broadheath 12 £ 162,049 14% £ 188,562 13% £ 249,727 19% 54% Clinton 7 £ 155,610 10% £ 194,275 16% £ 217,122 4% 40% Clovelly Bay 8 £ 153,688 9% £ 177,967 7% £ 209,586 0% 36% Coham Bridge 8 £ 145,112 2% £ 160,609 -4% £ 222,822 6% 54% Forest 16 £ 160,656 13% £ 189,552 14% £ 209,138 0% 30% Hartland and Bradworthy 19 £ 136,113 -4% £ 184,001 10% £ 215,310 3% 58% Holsworthy 72 £ 145,002 2% £ 165,914 -1% £ 218,065 4% 50% Kenwith 2 £ 154,007 9% £ 163,507 -2% £ 173,006 -18% 12% Monkleigh and Littleham 7 £ 206,440 46% £ 244,633 46% £ 249,077 19% 21% Northam 48 £ 127,699 -10% £ 158,739 -5% £ 216,101 3% 69% Orchard Hill 6 £ 162,493 15% £ 172,380 3% £ 195,059 -7% 20% Shebbear and Langtree 9 £ 139,812 -1% £ 160,440 -4% £ 179,410 -14% 28% Tamarside 8 £ 205,894 45% £ 223,654 34% £ 238,262 14% 16% Three Moors 30 £ 157,549 11% £ 175,951 5% £ 204,526 -2% 30% Torrington 98 £ 140,008 -1% £ 153,720 -8% £ 181,815 -13% 30% Two Rivers 8 £ 158,122 12% £ 167,303 0% £ 182,833 -13% 16% Waldon 5 £ 174,442 23% £ 175,457 5% £ 205,002 -2% 18% Westward Ho! 12 £ 239,329 69% £ 272,059 63% £ 332,303 58% 39% Winkleigh 39 £ 158,668 12% £ 182,833 9% £ 234,322 12% 48% Torridge 561 £ 141,618 £ 167,000 £ 209,718 48%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: 3 Beds
3 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 30 £ 236,420 31% £ 285,999 34% £ 356,290 38% 51% Bideford East 46 £ 159,516 -11% £ 172,772 -19% £ 198,655 -23% 25% Bideford North 48 £ 161,787 -10% £ 185,816 -13% £ 233,740 -10% 44% Bideford South 51 £ 160,357 -11% £ 187,219 -12% £ 224,583 -13% 40% Broadheath 14 £ 187,556 4% £ 227,357 7% £ 272,672 5% 45% Clinton 22 £ 184,031 2% £ 208,090 -2% £ 250,890 -3% 36% Clovelly Bay 3 £ 149,017 -17% £ 195,234 -8% £ 324,057 25% 117% Coham Bridge 16 £ 220,340 22% £ 261,815 23% £ 314,239 21% 43% Forest 18 £ 225,878 26% £ 249,121 17% £ 262,274 1% 16% Hartland and Bradworthy 32 £ 197,350 10% £ 232,524 9% £ 275,105 6% 39% Holsworthy 98 £ 176,309 -2% £ 208,249 -2% £ 259,493 0% 47% Kenwith 5 £ 186,388 4% £ 201,230 -5% £ 298,157 15% 60% Monkleigh and Littleham 6 £ 227,445 26% £ 236,542 11% £ 250,514 -3% 10% Northam 56 £ 194,786 8% £ 242,558 14% £ 295,676 14% 52% Orchard Hill 13 £ 223,665 24% £ 269,271 26% £ 368,906 43% 65% Shebbear and Langtree 13 £ 196,872 9% £ 249,895 17% £ 259,298 0% 32% Tamarside 29 £ 228,460 27% £ 250,558 18% £ 286,296 11% 25% Three Moors 40 £ 202,835 13% £ 231,873 9% £ 285,338 10% 41% Torrington 171 £ 164,772 -8% £ 189,295 -11% £ 217,657 -16% 32% Two Rivers 33 £ 192,382 7% £ 223,660 5% £ 269,002 4% 40% Waldon 15 £ 170,029 -5% £ 182,768 -14% £ 268,316 4% 58% Westward Ho! 26 £ 244,534 36% £ 283,710 33% £ 346,858 34% 42% Winkleigh 49 £ 195,007 8% £ 214,752 1% £ 254,433 -2% 30% Torridge 834 £ 179,924 £ 212,913 £ 258,745 44%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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North Devon Council & Torridge District Council Affordable Housing Research
Torridge – Property Prices: 4 Beds
4 bedrooms Sample LQ Variance Med Variance UQ Variance UQ - LQ (%) Appledore 11 £ 262,659 10% £ 286,824 1% £ 332,154 1% 26% Bideford East 18 £ 212,932 -11% £ 229,032 -19% £ 263,410 -20% 24% Bideford North 20 £ 175,290 -27% £ 256,409 -9% £ 297,457 -9% 70% Bideford South 26 £ 194,345 -19% £ 278,789 -1% £ 310,502 -5% 60% Broadheath 3 £ 254,738 6% £ 300,454 6% £ 302,494 -8% 19% Clinton 6 £ 194,498 -19% £ 207,408 -27% £ 295,330 -10% 52% Clovelly Bay 1 £ 292,980 22% £ 292,980 4% £ 292,980 -11% 0% Coham Bridge 7 £ 290,726 21% £ 303,188 7% £ 361,798 10% 24% Forest 5 £ 276,268 15% £ 286,468 1% £ 318,837 -3% 15% Hartland and Bradworthy 12 £ 248,771 4% £ 278,740 -2% £ 305,807 -7% 23% Holsworthy 34 £ 238,160 -1% £ 266,589 -6% £ 303,090 -8% 27% Kenwith 3 £ 352,510 47% £ 385,500 36% £ 474,826 45% 35% Monkleigh and Littleham 4 £ 261,689 9% £ 309,523 9% £ 361,872 10% 38% Northam 23 £ 296,137 23% £ 337,513 19% £ 387,676 18% 31% Orchard Hill 11 £ 320,717 34% £ 379,013 34% £ 389,107 19% 21% Shebbear and Langtree 18 £ 261,040 9% £ 274,222 -3% £ 314,484 -4% 20% Tamarside 21 £ 272,600 14% £ 286,824 1% £ 318,826 -3% 17% Three Moors 20 £ 308,971 29% £ 365,446 29% £ 410,608 25% 33% Torrington 53 £ 214,578 -11% £ 244,483 -14% £ 279,838 -15% 30% Two Rivers 13 £ 275,304 15% £ 332,467 17% £ 381,966 16% 39% Waldon 6 £ 249,726 4% £ 349,802 24% £ 375,890 15% 51% Westward Ho! 8 £ 116,153 -52% £ 245,353 -13% £ 301,850 -8% 160% Winkleigh 21 £ 244,598 2% £ 268,962 -5% £ 309,212 -6% 26% Torridge 344 £ 239,829 £ 282,996 £ 328,265 37%
Sample size >30 properties >15% variance from district total; sample size >30 properties UQ - LQ variance (%) > district level UQ - LQ variance (%) Source: Altair Analysis of Rightmove Data
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