North East Wales HMA
Wrexham CBC, Flintshire BC, Denbighshire BC
March 2008
www.gvagrimley.co.uk Wrexham CBC, Flintshire BC, Denbighshire BC
CONTENTS
1. INTRODUCTION...... 1 2. DEFINING THE HOUSING MARKET ...... 5 3. HOUSING MARKETS...... 20 4. DEMOGRAPHIC DRIVERS OF DEMAND...... 26 5. ECONOMIC DRIVERS OF CHANGE...... 71 6. HOUSING STOCK ASSESSMENT...... 119 7. ACTIVE MARKET ASSESSMENT...... 141 8. STRATEGIC DRIVERS OF THE NORTH EAST WALES HOUSING MARKET ...196 9. HOUSING NEED ...... 201 10. FUTURE HOUSING REQUIREMENTS...... 230 11. ASSESSING CAPACITY...... 262 12. SUB-MARKET AREA ANALYSIS...... 279 13. CONCLUSION ...... ERROR! BOOKMARK NOT DEFINED. 14. MONITORING FRAMEWORK...... 308
March 2008 Wrexham CBC, Flintshire BC, Denbighshire BC
1. INTRODUCTION
1.1 GVA Grimley LLP were commissioned alongside the University of Bangor by the Partnership of Flintshire and Denbighshire County Councils and Wrexham County Borough Council to undertake a joint Local Housing Market Assessment (LHMA) to broadly cover the administrative areas of the Partnership Councils.
1.2 The purpose of the study is to inform Local Authority Housing Strategies and Development Plans (UDP/LDP) for 2007.
Guidance
1.3 Methodologies for understanding and monitoring the housing supply/demand dynamic have become increasingly comprehensive and robust as approaches to assessing need and demand have been continuously refined. The need to understand and plan for the links between housing and the economy has become a key component of analysing and modelling future housing markets, as has the awareness of the importance of planning for ‘housing market areas’ which no longer are restricted by administrative boundaries.
1.4 The Welsh Assembly Government (WAG) Guidance on Local Housing Market Assessments reflects and further refines the comparable Guidance produced for England by the Department of Communities and Local Government (DCLG) which provides a clear indication of a proposed approach to producing Local HMA’s.
1.5 The approach taken within this LHMA follows this guidance and looks to answer the core questions and objectives which are outlined below.
Objectives
1.6 The National Housing Strategy for Wales, Better Homes for People in Wales, outlines the Assembly Government’s vision for housing:
“for everyone in Wales to have the opportunity to live in good quality, affordable housing, to be able to choose where they live and decide whether buying or renting is best for them and their families.”
1.7 In order to address this vision this assessment addresses five key questions:
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• Where are we now? – A clear understanding of the spatial extent of the current housing market is required and its inherent challenges and distinct characteristics based on a robust analysis of the evidence base;
• How did we get here? – Identification of the current and future drivers of change within the housing market using analysis of past trends impacting on the housing market;
• Where are we going? – Development of the key characteristics/nature of the projected housing market in 2012 and forwards up to 2021. A clear identification of the factors creating these future housing markets and the likely broad future scale, type and location of housing demand;
• What are the implications? – Identifying what will be required to deliver the change required in terms of meeting future need/demand; and
• How do we get there? – Proposals regarding the best way to meet these challenges and the required changes to ensure that the objectives of housing and planning policy are achieved. This includes recommendations regarding the future governance structures required to implement policy and the monitoring of future housing market change.
1.8 These questions establish the core objectives of this study upon which conclusions are reached.
Spatial context
1.9 The three authorities which have commissioned this research, Wrexham, Flintshire and Denbighshire, form the Core Study Area. This Study Area fits within a wider sub-region which looks to the East into Chester and Ellesmere Port in England and to the West to Conwy. To the south are the more rural areas of Shropshire, with Oswestry in close proximity to Wrexham.
1.10 The eastern area of North East Wales is relatively well connected by the road network with linkages to the major motorway network, including the M56, M53 and M6. Connections are therefore relatively good to the major English Cities of Chester, Manchester, Liverpool and even Birmingham. High levels of commuting do create capacity hotspots at key junctions on a number of the arterial roads. Rail connections, however, are relatively poor with infrequent services between the major towns in the authorities and English cities including Chester and Liverpool.
1.11 Significant parts of the three authorities are rural in nature, with this being particularly true of Denbighshire. These areas represent an extremely attractive natural environment with the
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Snowdonia National Park located in close proximity covering parts of Conwy. Access issues are however a significant issue for these rural areas in relation to both access to employment and key services.
1.12 The sea forms a natural boundary to Flintshire and Denbighshire to the north and east and has also helped to shape the evolution of settlements along the coast, including the tourist roles of Rhyl and Prestatyn in Denbighshire and the industrial related activities of towns along the Dee Estuary.
1.13 The study area has a distinct spatial geography shaped by natural geographies as well as economic linkages which stretch across the English border. These two factors are key in assessing the housing market as a whole and are given key consideration in evaluating the analysis and the conclusions reached.
Structure of the HMA
1.14 This document is structured to provide the following information:
• Section 2 - Defining the Housing Market – recapitulation of the Stage 11 findings
• Section 3 - Housing markets – headline assessment of the key drivers affecting the housing market
• Section 4 - Demographic Drivers of Demand – a critical review of population and household based drivers
• Section 5 - Economic Drivers of Change – examination of economic performance and prospects , including a review of the current labour force
• Section 6 - Housing Stock Assessment – a detailed examination of the housing stock characteristics including an assessment of the extent of imbalance within the current supply
• Section 7 - Active Market Assessment – an assessment of the ‘active market’ including an assessment of affordability and market change
• Section 8 - Strategic Drivers of the North East Wales Housing Market – a summary of the key messages emerging from the preceding chapters of analysis
• Section 9 - Housing Need – a review of the Housing Need Studies undertaken and an updating of key indicators
1 Stage 1 Report – Defining the Functional Housing Market and Strategic Context – GVA Grimley June 2007
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• Section 10 - Future Housing Requirements – identification of overall housing requirements over the plan period including a breakdown by type.
• Section 11 - Assessing Capacity – summary analysis of the available housing land within the authorities set against the conclusions of the previous section including delivery constraints for affordable housing
• Section 12 - Sub-Market Analysis – headline analysis of the sub-market areas and the unique housing issues faced based on the analysis within the study
• Section 13 - Conclusion – Outline of findings and policy recommendations
• Section 14 - Monitoring Framework – Framework to enable ongoing updating of research and analysis
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2. DEFINING THE HOUSING MARKET
2.1 The first Stage of the commission involved identifying the spatial geographies of the housing market and a separate report detailing this analysis accompanies this study2. The key findings of this analysis are included here and set the geographical study area for the remainder of this assessment.
2.2 As a result of research surrounding functional spatial areas such as City Regions there has been a steady recognition of the value of planning at this level. This is reflected within the WAG Local Housing Market Assessment guidance (referred to from now on as the WAG Guidance) which promotes authorities to work together and form partnerships for ‘functional housing market areas’.
2.3 The WAG Guidance defines functional housing markets as: “the geographical area within which there are clear links between where people both live and work”.
2.4 In functional terms a housing market should therefore be defined on the basis of economic linkages (work-live relationship) and to a lesser extent patterns of relocation (migration patterns), however the guidance also suggests there may be a need for pragmatism, with consideration given to existing partnership structures.
2.5 The authorities of Flintshire, Wrexham and Denbighshire have been grouped together as the ‘North East Wales’ functional area based on the analysis undertaken for the Welsh Spatial Plan and the Sub-regional ‘West Cheshire North East Wales Sub-regional Strategy’. These authorities represent the commissioning body for the Housing Market Assessment.
2.6 This section seeks to confirm this functional housing market area and assess the adjacency issues resulting from the strong connections identified with West Cheshire, in particular the economic centre of Chester but also Ellesmere Port. An assessment of the implications of these linkages is made along with analysis of the changing nature of linkages over time and the strategic drivers behind them.
2.7 Reference is also made to the linkages between Wrexham and the authorities to the south including Powys, Oswestry and North Shropshire, although it is important to note that sub regional strategy linkages are less formal with these authorities.
2 Stage 1 Report – Defining the Functional Housing Market and Strategic Context – GVA Grimley June 2007
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2.8 A detailed study of migration and travel to work flows were used to assess these factors alongside a number of supplementary indicators.
Travel to Work Patterns
2.9 Analysis of travel to work patterns is a key indicator for assessing the linkages between areas as they are driven by economic factors. Travel to work flows identify the relationships between the place of work and home, with housing markets reflecting areas where people live and work.
2.10 The flows from the 2004 Annual Population Survey have been mapped and are shown on the following plan. This clearly illustrates the complex nature of the area with significant flows running across North Wales and into England.
Figure 2.1: Gross Travel to Work Flows across North Wales3
3 Analysis conduced as part of the Conwy Denbighshire Sub-Regional Strategy commission.
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2.11 In order to understand the relationships and flows of people commuting within the sub-region the major flows affecting the three constituent authorities and those surrounding are shown on the following map using the 2001 Census4.
4 Note: this does not indicate all the flows to English Authorities e.g. Manchester, Stockport etc…
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Figure 2.2: Travel to Work – 2001
2.12 The mapped flows illustrate a number of clear relationships. Strong flows between Conwy and Denbighshire are clear as are the flows between Chester and Flintshire.
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2.13 Relatively strong flows can be seen between the three authorities, in particular from Flintshire into Wrexham. The plans also illustrate the relatively weak flows with the other adjoining authorities
2.14 The linkages between Wrexham and North Shropshire and Oswestry appear to be based on secondary level flows, with the quantity of movement lower than the major flows identified above. There does however, seem to be relatively strong linkages between Wirral and Flintshire.
2.15 The aim of the following section is to identify the level of self-containment represented by the three Partnership authorities as well as identifying linkages with adjacent authorities. Examining these economic linkages provides the best indicator when attempting to establish functional market areas based on self-containment.
2.16 The following table shows origin/destination of travel to work trips adapted from the 2001 Census in a matrix format which represents the most comprehensive data source for establishing commuting patterns. The North East Wales constituent authorities are shown as well as the adjacent authorities identified as having particularly strong links with the area.
Figure 2.3: Origin/Destination of Travel to Work Trips
Residence (Trip Workplace (Trip Destination) Origin) North Ellesmere Denbighshire Flintshire Wrexham East Chester Conwy Port Wales North East Wales Denbighshire 71.9% 8.4% 4.0% 84.3% 1.9% 0.4% 7.2% Flintshire 3.4% 64.7% 6.3% 74.4% 13.2% 2.6% 0.9% Wrexham 1.8% 5.7% 76.4% 83.8% 6.3% 0.8% 0.3% Wider sub-market Chester 0.3% 7.6% 2.8% 10.7% 62.4% 5.8% 0.1% Ellesmere Port 0.1% 7.1% 0.8% 8.1% 16.0% 49.5% 0.1% Conwy 11.7% 2.1% 0.8% 14.5% 0.7% 0.1% 75.2% Source: Census 2001
2.17 The matrix indicates:
• There is relatively low levels of cross commuting between the three constituent authorities, the strongest link being between Denbighshire and Flintshire with 8.4% of Denbighshire’s workforce travelling to Flintshire;
• Overall the three authorities show high levels of self-containment, Wrexham and Denbighshire both record over 70% with Flintshire still relatively high at 64.7%.
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• Flintshire shows very strong links with Chester, with 13.2% of its workforce commuting to Chester and 7.6% of Chester’s workforce commuting the other way. Wrexham’s relationship with Chester is notably lower (6.3% of workforce) and Denbighshire demonstrates ‘background’ levels of travel to work patterns;
• Denbighshire shows strong relationships with Conwy, marking it as separate from the other two North East Wales authorities.
2.18 Overall it is clear that the three authorities together represent a high level of self-containment, with all recording over 70% when looking at the North East functional market area as a whole. Indeed Wrexham and Denbighshire record over 80%.
2.19 The diagrams indicated that Wrexham also has linkages to the south with commuting movements from North Shropshire, Oswestry and Powys. These authorities have been added to the above matrix to explore their relationships with the Core Study Area.
Figure 2.4: Origin/Destination of Travel to Work Trips
Residence (Trip Workplace (Trip Destination) Origin) Denbighshire Flintshire Wrexham North East Chester Ellesmere Conwy North Oswestry Powys Wales Port Shropshire North East Wales Denbighshire 71.9% 8.4% 4.0% 84.3% 1.9% 0.4% 7.2% 0.1% 0.2% 0.1% Flintshire 3.4% 64.7% 6.3% 74.4% 13.2% 2.6% 0.9% 0.1% 0.1% 0.0% Wrexham 1.8% 5.7% 76.4% 83.8% 6.3% 0.8% 0.3% 1.2% 1.7% 0.1% Wider sub-market Chester 0.3% 7.6% 2.8% 10.7% 62.4% 5.8% 0.1% 0.4% 0.1% 0.0% Ellesmere Port 0.1% 7.1% 0.8% 8.1% 16.0% 49.5% 0.1% 0.1% 0.0% 0.0% Conwy 11.7% 2.1% 0.8% 14.5% 0.7% 0.1% 75.2% 0.0% 0.0% 0.0% Southern authorities North Shropshire 0.1% 0.2% 2.3% 2.6% 1.5% 0.1% 0.0% 62.5% 2.6% 0.2% Oswestry 0.4% 0.6% 7.0% 8.1% 0.9% 0.1% 0.1% 5.0% 68.3% 3.3% Powys 0.0% 0.1% 0.3% 0.4% 0.0% 0.0% 0.0% 0.2% 1.6% 82.9% Source: Census 2001
2.20 It is clear that of these authorities only Oswestry has relatively strong travel to work linkages with North East Wales and this relationship is almost exclusively with Wrexham. The movement is from Oswestry into Wrexham with very few people commuting the other way (only 1.7% of all trips). This does indicate that consideration needs to be given to Oswestry when assessing the southern parts of the functional housing market.
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Patterns of Relocation
Migration Flows
2.21 The following plan shows gross flows for the local authorities in the study area (the sum of in- and-out migration), a six year average flow is indicated from the years 2000 to 2005. Flows have only been included which exceed 100 people movements in order to establish strong linkages between areas.
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Figure 2.5: Gross Migration Flows – 2000-2005 average
2.22 The gross migration flows clearly show the strong relationships between the three constituent authorities, average flows between the authorities are:
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• Denbighshire – Flintshire (1,000)
• Flintshire – Wrexham (840)
• Denbighshire – Wrexham (490)
2.23 However, the plan also clearly shows that strong relationships exist between the three authorities and the adjacent authorities. Two very strong relationships can be identified:
• Flintshire – Chester (1,530)
• Denbighshire – Conwy (1,510)
2.24 These represent significant east/west relationships. A number of other relationships are apparent between the three authorities and other adjacent areas, these include:
• A relationship between Wrexham and Chester (620), though less than that of Flintshire is still significant;
• Wrexham and the authorities to the south, gross flows suggest relatively strong relationships between Wrexham and Oswestry (350) and North Shropshire (290);
• Flintshire and Ellesmere Port (400) and the Wirral (370), suggesting Flintshire looks not just to Chester in the adjacent English authorities but also across the Dee Estuary;
• Wrexham and Denbighshire show linkages with Gwynedd (flows of 350 and 400 respectively); and
• Links between all three authorities and the Isle of Anglesey (all authorities record flows of over 100)
2.25 Overall it is clear that there are strong linkages between the three authorities but there are also very strong relationships with adjacent authorities, with Chester clearly a significant component to the east and Conwy to the west. Arguably there is a division through the middle of the three authorities as a result of these linkages with Wrexham and Flintshire looking East and Denbighshire looking west. There is evidence of flows between Wrexham and the authorities to the south although these are notably smaller than the major flows outlined above.
2.26 It is instructive to look next at levels and patterns of net migration (subtraction of flows between authorities), this gives an indication of the overall direction of flow. The following plan illustrates the major net flows relating to the three authorities, again using an average over six years.
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Figure 2.6: Net Migration Flows – 2000-2005 average
2.27 This plan clearly indicates that there are strong flows from the English authorities to the east into both Wrexham and Flintshire, this is mainly fuelled by Chester but also in the case of Flintshire includes Wirral and Ellesmere Port.
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2.28 This direction of movement is continued with flows identified from Flintshire into Denbighshire and from Flintshire into Wrexham
2.29 The relationship between Denbighshire and Conwy in contrast is one of balanced movement with almost equal flows recorded on average annually. The same is true of the relationship between Wrexham and the authorities to the south.
2.30 In order to understand the changing nature of the gross and net migration flows an examination was made of the year-on-year absolute flows5. This identified a notable decline in the total flows between Flintshire and the English authorities of both Chester and Ellesmere Port, this would suggest the weakening of this relationship. However, it is clear that the flows with Chester remained very high despite the declining trend.
2.31 The other notable change includes the relationship between Denbighshire and its neighbouring authorities of Conwy and Gwynedd. In both cases these flows are declining, suggesting a weakening relationship, particularly with Gwynedd. Again it is important to note that the overall flow between Conwy and Denbighshire remains very high despite the decline noted.
2.32 The flows between Wrexham and the two English authorities to the south, Oswestry and North Shropshire, remain fairly constant over the five years. They are relatively strong but not of the same level as the major flows between the core authorities and Chester and Conwy.
2.33 Significantly, there were no flows which stand out as having witnessed significant increases over the five years to suggest that relationships are strengthening.
2.34 Looking at net migration over the same five year period a number of important alterations in the dynamics of relationships between authorities:
• The flow from Chester to Wrexham appears to have increased over the five year period on the whole, despite some cyclical movement;
• The direction of the flow between Conwy and Denbighshire appears to have reversed, with Denbighshire becoming the recipient of net moves from 2004;
• Looking at the relationships between Wrexham and the authorities to the south it is clear that in terms of the flows with Oswestry the trend has reversed from people moving to Wrexham to people moving from Wrexham to Oswestry;
5 Note: Full analysis and tables included within the Stage 1 Report – Defining the Functional Housing Market and Strategic Context – GVA Grimley June 2007
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• There has been a notable decline in the number of people moving from Flintshire to Denbighshire, particularly in 2005; and
• The net flows from Ellesmere Port to Flintshire appear to have experienced a significant decline over the five years to a level of zero migration in 2005.
Level of Self-Containment
2.35 In technical terms the extent of a housing market can be defined by the degree of self- containment – i.e. the extent to which people moving house move within the area. Previous HMA guidance6 suggested that “areas with below 70% self-containment would not be regarded as true markets”.
2.36 However, up-to-date data is not available for household movements from the available data sources: the most recent data records only the movement of persons. Hence, while it is possible to assess self-containment caution should be applied to rigorously applying the 70% benchmark.
2.37 An assessment of levels of self-containment has been undertaken for each of the three authorities. This analysis uses migration data, it combines data from the NHS Central Health Register (NHSCHR) records (2005 data) showing persons moving between local authorities; with data from the 2001 Census to estimate the level of moves contained within local authority districts7.
Figure 2.7: Self Containment – Migration Analysis – North East Wales area
Local Authority Total number of Percentage Households Movement people movements Within LA Within North East Wales Denbighshire 13850 43.0 53.0 Flintshire 16885 49.7 60.1 Wrexham 15165 56.5 64.9 Average 59.38 Source: NHSCHR 2005; Census 20019
6 HMA Manual ODPM 2004 – note: the 70% benchmark refers to household rather than person relocations. 7 Combining datasets from different periods does not allow for consistency, however, it does allow for the most up-to-date assessment. Analysis within the previous section has also indicated that annual flows tend on the whole to show relatively little change between years. 8 Simple average from above figures 9 Note: Two data sources are used to produce these figures: Within local authority movements are derived from Census 2001 data; while for larger spatial areas, movements are a composite of this 2001 Census data and NHSCHR records detailing movements between local authority areas.
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2.38 This analysis indicates that none of the authorities individually represents a self-contained housing market based on people movement, with Wrexham having the highest proportion of local relocations (proportion moving within the County Borough).
2.39 Significantly, the analysis also shows that the three authorities together, have a relatively weak level of self-containment, particularly in the case of Denbighshire. The North East Wales sub-regional work identified strong linkages between these authorities and the English authorities of Chester and Ellesmere Port and Conwy to the west. These strong linkages were reinforced in the analysis of travel to work which identified these authorities as having key economic linkages with the Core Study Area. In order to test the inclusion of these within the market area the analysis has been re-run to include these additional authorities.
Figure 2.8: Self Containment – Migration Analysis – Wider Study Area
Local Authority Total number of Percentage Households Movement people movements (Containment) Within LA Within Sub-region Denbighshire 13850 43.0 64.3 Flintshire 16885 49.7 71.9 Wrexham 15165 56.5 70.6 Chester 19445 34.7 50.9 Ellesmere Port and Neston 8969 40.9 57.3 Conwy 15778 48.0 61.2 Source: NHSCHR 2005; Census 2001
2.40 Wrexham and Flintshire both record self-containment levels of above 70% with Denbighshire also approaching this level when the additional neighbouring authorities are included. Significantly, though these additional authorities do not record such high levels of containment suggesting that the market for these authorities stretches further afield. This is particularly true of Chester whose housing market stretches further into other authorities, including Vale Royal and to a lesser extent Wirral10.
2.41 This analysis suggests that whilst the three authorities making up the North East Wales functional area can be considered as a housing market careful consideration needs to be given to the neighbouring authorities of Chester and Ellesmere Port, and to a lesser extent Conwy. This supports the West Cheshire North East Wales spatial strategy which aims to plan at this spatial level.
Key Conclusions
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2.42 This section has clearly identified that the study area, represented by the component authorities of Wrexham, Flintshire and Denbighshire, forms a functional housing market area. A divide is notable between the authorities with the relationship between Flintshire and Wrexham stronger than the relationship between these two authorities and Denbighshire. However, this market area can be studied as a whole.
2.43 The analysis has also identified the existence of significant relationships with bordering authorities creating adjacency issues with Chester and Ellesmere Port in the east and Conwy in the West. Resulting from this a core study area constituting the three authorities is identified with a wider reference area bounding this, including the addition of Chester, Ellesmere Port and Conwy. These spatial areas are shown on the plan on the following page. This reflects the political development of Strategy within North East Wales with Strategies clearly reflecting the cross border relationships and in Denbighshire’s case the strong relationship with Conwy. Linkages are also notable between Wrexham and Oswestry, however, do not extend beyond Wrexham to other authorities in North East Wales to any great extent. At the level of sub regional strategy, Oswestry is located outside the local authorities that comprise the West Cheshire- North East Wales Sub-Regional Spatial Strategy. In reflection of the weaker links between the wider study area and its relationship to the sub-regional tier of strategy, the authority has not been included within the Wider Reference Area for this study. It is recommended that linkages are continued to be monitored as the Local Housing Strategies for North East Wales are implemented.
10 Chester’s housing market is identified within the Liverpool City Region Housing Strategy and includes both Wrexham and Flintshire within its market area.
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Figure 2.9: Study area boundary and wider reference area
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3. HOUSING MARKETS
3.1 Housing markets operate through the interaction of a number of supply and demand variables. The balance within this dynamic is a key component of assessing the health of a housing market and indicating where change is required.
3.2 Nationally housing markets are increasingly coming into the public eye as a result of dramatic changes in house prices and new emerging markets including buy-to-let and the proliferation of city centre ‘apartments’. An imbalance between supply and demand is cited by the Barker Review of Housing Supply (March 2004) as being a fundamental problem facing the UK in terms of its housing market, with supply failing to keep apace with demand.
3.3 The future role of existing and emerging tenures are also starting to feature heavily in policy debate. The recently released Hills review of Social Housing (February 2007) introduce sfundamental questions in relation to the future role of the social rented sector and by implication alternative tenures such as the intermediate market.
3.4 The underlying complexities of housing markets are starting to be recognised in national policy. The result of this is an increasing emphasis on undertaking detailed evidence based studies which look to examine the impacts of the many variables operating within housing markets. This is clearly indicated within the recently released WAG Local Housing Market Assessment Guidance.
3.5 A key element of the Housing Market Assessment is assessing the future level of housing required to ensure that all households have access to suitable housing. However, this assessment of housing requirement is broken down into two distinct components.
Housing Demand – the quantity of housing of the type and quality that households both want and can afford to buy or rent in the open market without subsidy; and
Housing Need – the quantity of households who lack their own housing or live in unsuitable housing and who cannot afford to meet their housing needs in the market
3.6 A number of key drivers are assessed below which are currently impacting on housing markets nationally and impact on future housing requirements, in terms of overall numbers and need. Policy is not included as a driver although it clearly has an important role to play in ensuring that the housing market responds to these strategic drivers.
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3.7 These drivers set the context for the local level analysis which is included within the rest of the Housing Market Assessment.
Rising House Prices
3.8 The last six or seven years has been a period of unprecedented rises in house prices the impact of which has been felt in all parts of the UK. The term ‘overheated’ has started to increasingly be used in association with the housing market particularly with reference to parts of the South East of England and London. Historically house prices have tended to follow a relatively cyclical trend however, current predictions are for this increase to continue for the foreseeable future albeit at a reduced rate of increase. The forecast is currently therefore for a general slowing down of the market, although a failure to address supply issues is foreseen as potential exacerbating house price growth11.
3.9 The UK has for a significant period of time has placed great importance in home ownership, with this tenure being the tenure of choice or aspiration for the vast majority of the population. A number of factors have however, over the last ten years, contributed to house price rises beyond the amount of stock available. These have included; buoyant economic conditions, new lending mechanisms being offered by banks – including the buy-to-let mortgage and increasingly flexible mortgage rates – and a strong residential investor market with capital appreciation being viewed as a safer investment than other investment opportunities including the stock market.
3.10 The impact of house price rises has been an increasing financial pressure on First Time Buyers entering the owner occupier market and a greater divergence in terms of cost between social renting and market housing. Rises in income levels have failed to keep pace with the rapid growth of house prices the outcome of which is an increasing ‘affordability’ issue across the country with greater numbers of households priced out of the market.
11 Halifax House Price Index, February 2007
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Changes in the tenure balance
3.11 National Policy, economic factors and changes in finance availability have all led to a notable shift in the tenure balance of the housing stock nationally.
3.12 The social rented sector has been the subject of a recent research study produced by John Hills at the ESRC Research Centre for Analysis of Social Conclusion commissioned by the DCLG, titled ‘Ends and Means: The Future Roles of Social Housing in England’12.This study identified the need for a ‘shake up’ of the social rented sector and notes that the tenure has increasingly being viewed as one of ‘last resort’ with concentrations of the economically inactive and the location of stock within the most deprived areas of the country.
3.13 The Housing Act passed in 1980 by the Conservative Party provided formal legislation for the Right to Buy. The Right to Buy scheme is a policy which gives tenants of council housing the right to buy the home they are living in. The rules for purchase have been changed under the existing Labour government but the overall effect of this policy has been a significant reduction in the amount of social rented stock within the UK with large numbers taking advantage of this opportunity to enter the owner occupier market.
3.14 The turnover of property within the social rented sector has also decreased impacting on its capacity to respond to the market. The Hills report noted that the number of lettings available for new social tenants has fallen rapidly – from about 250,000 each year in the 1980s and 1990s to 170,000 in 2005 – as it has become harder for existing tenants to afford to move out and as the age structure of tenants has become younger13.
3.15 The government has committed to building an additional 10,000 social rented houses a year by 2007-08 and investing in all of the existing stock to bring it up to Decent Homes Standards by 201014. However, there is clearly increasing pressure on this tenure given the current affordability issues despite a sustained period of sustained low inflation and a stable economy.
3.16 The definition of affordable housing has been widened beyond simply social rented housing to include ‘Intermediate’ housing, with this tenure given increasing attention within policy over the recent years. WAG Guidance defines Intermediate housing as being: “provided by social landlords or the private sector provided prices or rents are below market housing prices or rents. It includes equity sharing schemes such as the WAG’s Homebuy scheme and the
12 John Hills (February 2007’ ‘Ends and Means: The Future Roles of Social Housing In England’ 13 ibid 14 DCLG 2005 ‘Extending Home Ownership’
March 2008 22 Wrexham CBC, Flintshire BC, Denbighshire BC
provision of housing at sub market rents where the appropriate arrangements [further defined] are in place”. The growth of this tenure is likely to represent a notable change in the tenure profile of housing markets and has a number of implications for authorities in delivering housing stock.
3.17 Nationally the private rented sector has witnessed a growth in its proportional share of the market following an increasing number of people looking to invest in property and those looking to take advantage of buy-to-let mortgages. This tenure is increasingly attracting people who would otherwise have entered the owner occupier market but are currently priced out of entering this tenure. This could have a number of effects, with increasing demand possibly resulting in higher rental levels. The result of this could be an increasing number of more ‘vulnerable’ households not being able to access this tenure creating additional pressure on the social rental sector.
Demographic Change
3.18 In terms of the overall requirement for housing in the future and the level of supply required to meet demand changing demographic trends represent a key driver. Two components impact upon the overall level of households, indigenous growth (driven by natural change and household size) and migration (movement into the area from elsewhere).
3.19 Looking first at indigenous factors the rate of population growth and the distribution of this population into households are key determinants in the overall quantum of stock required to meet needs.
3.20 Population projections prepared for Wales indicate a rising population, an increase of approximately 0.3% each year over the next 20 years. Simply put, more people require more housing. However, household projections for Wales also factor in the average household size which is set to fall from 2.34 persons to 2.09 over the 20 year period. This therefore drives the requirement for future housing even higher as a result of an increasing number of one person households. These factors are key components in planning for the future level of housing required.
3.21 Other demographic factors also influence the type of housing required including the changing age structure of the population, the level of BME households and the gender split. These factors are therefore also explored in relation to future requirements of the housing stock.
3.22 The second component of demographic change, migration is considerably less predictable with a range of factors influencing people’s decisions to relocate and move between areas.
March 2008 23 Wrexham CBC, Flintshire BC, Denbighshire BC
These factors include; new job/employment opportunities, house price differentials, and the available supply of new housing.
3.23 International migration is also becoming an increasing issue, particularly with the relaxation of labour movement within the EU, in particular with its recent expansion into Eastern Europe. Wales has experienced a considerable inflow of new workers from EU accession states which has helped to swell the population and place further pressure on housing stock.
Economic Change
3.24 As noted above the relative economic performance of an area and the number of jobs available are major factors in attracting in new households to live within an area. There is therefore clearly a need to link the future performance of the economy with future housing requirements, the assumption being that new jobs within an area will equate to new people looking to live within that area.
3.25 However, the types of jobs being created also impacts on the types of households which are attracted and the overall structure of the population as well as the income levels available to access housing. Therefore examination of economic change needs to stretch beyond simply examining the overall quantum of jobs forecast but the sectors in which these jobs will be created. These elements therefore play an important part in assessing future requirements and future need.
Sustainability
3.26 As a result of international concerns regarding the impact of climate change, sustainability has moved rapidly up the political agenda. The 2006 Pre-Budget Statement and amongst others the local Government White Paper, both influenced by the Stern Report15 ensures that this is likely to continue in the foreseeable future. This has a number of implications for the housing market both in terms of the actual housing stock and the location of future development.
3.27 Policy aimed at reducing commuting times and travel to work distances is likely to become an increasing factor in determining sustainable residential locations in the future. The emphasis is likely to be upon locating housing in close proximity to employment opportunities and where this is not possible ensuring that communication linkages are sustainable. For example areas that are well served by public transport and not dependent upon the road network.
15 Stern (2006) ‘Economics of Climate Change’
March 2008 24 Wrexham CBC, Flintshire BC, Denbighshire BC
3.28 Recent developments in policy and legislation have made it impossible to ignore the issue of long term sustainability in the location of new housing. The Sustainable Development Action Plan 2004 – 2007 places significant emphasis on achieving higher standard in sustainable development which has been continued within subsequent policy releases. This is also in line
with the climate change bill, which pledges a 60% reduction in CO2 by 2050, and an introduction of ‘carbon credits’ for trading all signal a major shift in UK sustainability policy.
3.29 The overall aim is to create sustainable communities and homes and an enhanced built environment, whilst protecting and enhancing the natural environment. This is to be achieved by promoting high quality urban design, architecture and construction standards (such as those set out in English Partnerships’ ‘Quality and Price Standards’), improving resource efficiency, and reducing waste.
Conclusion
3.30 The drivers identified above will all have implications for the future requirements and need within the housing market over the plan period. The analysis in the proceeding chapters is constructed with reference to these wider strategic drivers in order to recognise the distinct impacts for the three Core Study Area authorities.
March 2008 25 Wrexham CBC, Flintshire BC, Denbighshire BC
4. DEMOGRAPHIC DRIVERS OF DEMAND
4.1 Traditionally demographics have been a key component of determining both the current shape of housing markets and their future trajectory. Traditionally, planning for housing policy has combined demographic projections with supply side information and spatial policy bias.
4.2 Changing demographic conditions strongly influence the housing market, in terms of overall housing stock required and the requirements of the stock to meet specific needs, for example the needs of the elderly.
4.3 It is therefore vital to have a clear understanding of the population and household structure when assessing current and future housing demand. Consideration is given below to the age, gender and ethnic structure of the population within the Core Study Area and where relevant the Wider Reference Area.
4.4 This analysis presents both a robust assessment of the current population and also examines the forecast changes in population produced by WAG. The impact of changing demography in the future is explored further within Section 10 where the future stock requirements are calculated.
Population
4.5 The latest mid-year estimates released by the ONS are for 2005. The following table shows the estimated populations for each authority.
Figure 4.1: 2005 Mid-year Estimate Populations
Authority 2005 Mid-year estimate population Denbighshire 96,000 Flintshire 150,200 Wrexham 130,500 Core Study Area 376,700 Conwy 111,500 Chester 118,600 Ellesmere Port and Neston 80,600 Total Population 687,400 Source: ONS, Mid-year estimates 2005
March 2008 26 Wrexham CBC, Flintshire BC, Denbighshire BC
4.6 Denbighshire’s population is notably smaller than the other two authorities within the Core Study Area, with Flintshire having the greatest number of people within its borders. Overall the Core Study Area has a population of nearly 380,000 people.
4.7 The authorities within the Wider Reference Area are all smaller than Wrexham and Flintshire. The total population for the Core Study Area and the Wider Reference area is almost 690,000.
4.8 One of the significant factors for this area is the relative clustering of population within urban settlements, with large parts of the authorities classified as rural with sparsely distributed populations. In order to reflect this and identify the concentrations of population Census 2001 data has been used to calculate the people per hectare, this is illustrated on the following map at SOA level.
March 2008 27 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.2: People per hectare
4.9 Denbighshire in particular is characterised by having very few areas of concentrated population, these are located on the coast with the exception of Ruthin. Wrexham has a greater number of urban settlements with the town centre and surrounds standing out. Flintshires population is concentrated along the Dee Coast and within Mold and Buckley.
Historic Population Change
4.10 Tracking the way the population has changed assists in understanding its current level and gives an indication with regard to the direction of the current trajectory. The following charts
March 2008 28 Wrexham CBC, Flintshire BC, Denbighshire BC
show population change within the three Core authorities between 1985 and 2005 based on nationally released mid-year estimates.
Figure 4.3: Population change – Flintshire
Flints hire
155,000
150,000
145,000
140,000
135,000 Population ('000s) 130,000
9 5 9 5 85 8 91 9 9 01 0 9 9 9 0 0 1 1987 19 1 1993 1 1997 19 2 2003 2
Source: ONS mid-year estimates
Figure 4.4: Population change – Wrexham
W rex ham
132,000 130,000 128,000 126,000 124,000 122,000 120,000
Population ('000s) 118,000 116,000
9 87 03 991 1985 19 1989 1 1993 1995 1997 199 2001 20 2005
Source: ONS mid-year estimates
March 2008 29 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.5: Population change –Denbighshire
Denbighshire
98,000 96,000 94,000 92,000 90,000 88,000 86,000 84,000
Population ('000s) 82,000 80,000
1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005
Source: ONS mid-year estimates
4.11 It is evident that all three of the authorities have witnessed increases in population over the 20 years between 1985 and 2005. Indexed levels of population change are shown in the chart below for all the authorities within the Core study area and the Wider Reference area.
Figure 4.6: Indexed population change
Indexed population change 1985 - 2005
1.15
1.1
1.05
1 index (1 = 1985) (1 = index 0.95
0.9
1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Denb ighshire Flintshire Wrexham Conwy Chest er Ellesmere Po rt and Nest on Wales Eng land and Wales
Source: ONS mid-year estimates
March 2008 30 Wrexham CBC, Flintshire BC, Denbighshire BC
4.12 There is a clear differing in trends between the two English authorities and the Welsh authorities. Chester and Ellesmere Ports growth has been relatively limited and indeed since 1994 the trend has been one of decline. In contrast all of the Welsh authorities have witnessed relatively sustained periods of growth above and beyond national averages.
4.13 These trends are clearly illustrated in the following table, where the rates of growth are compared with the authorities within the wider reference authorities.
Figure 4.7: Population change
1985 1995 2005 1985-1995 1995-2005 1985-2005 Core Study Area 346,700 360,100 376,700 3.9% 4.6% 8.7% Denbighshire 86,200 89,900 96,000 4.3% 6.8% 11.4% Flintshire 138,800 144,800 150,200 4.3% 3.7% 8.2% Wrexham 121,700 125,400 130,500 3.0% 4.1% 7.2%
Wider Reference Area 299400 311100 310700 3.9% -0.1% 3.8% Conwy 100,300 108,900 111,500 8.6% 2.4% 11.2% Chester 118,200 120,400 118,600 1.9% -1.5% 0.3% Ellesmere Port 80,900 81,800 80,600 1.1% -1.5% -0.4%
Wales 2,803,400 2,888,500 2,958,600 3.0% 2.4% 5.5% England and Wales 49,860,700 51,272,000 53,390,200 2.8% 4.1% 7.1% Source: ONS mid-year estimates
4.14 Looking at the overall level of change between 1985 and 2005 it is clear that the Core Study Area has witnessed population growth of 8.7% which has exceeded the national average for both Wales and England and Wales. Denbighshire in particular has witnessed a significant growth of over 11% over this period.
4.15 Within the Wider Reference Area Conwy has matched Denbighshire in terms of its rate of growth, however, the two English authorities have witnessed almost stagnant growth rates, with Ellesmere Ports population having declined over the 20 years.
4.16 This growth within the Core Study area clearly relates to the migration patterns identified within the preceding chapter, with the Welsh authorities identified as having positive net migration. This is illustrated in the following charts which show components of population change for each of the authorities within the Core Study area.
March 2008 31 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.8: Components of population change – Flintshire
Flintshire - Components of population change 1991 - 2005
2.0
1.5
1.0
0.5 Natural change Net migration & other changes 000s 0.0 Total change 3 5 7 9 1 3 5 -0.5 1-2 2 3-4 4 5-6 6 7-8 8 9-0 0 1-2 2 3-4 4 199 199 199 199 199 199 199 199 199 200 200 200 200 200
-1.0
-1.5
Source: ONS mid-year estimates
4.17 Flintshire’s population growth has clearly been driven by both migration and natural change. Migration in particular has driven growth over the last seven years or so, however, in 2004-05 it is important to note that net migration was negative for the first time in nearly ten years.
Figure 4.9: Components of population change – Wrexham
Wrexham - Components of population change 1991 - 2005
1.0
0.8
0.6 Natural change 0.4 Net migration & other changes 000s Total change 0.2
0.0
3 5 7 9 1 3 5 91-2 92 93-4 94 95-6 96 97-8 98 99-0 00 01-2 02 03-4 04 -0.219 19 19 19 19 19 19 19 19 20 20 20 20 20
Source: ONS mid-year estimates
March 2008 32 Wrexham CBC, Flintshire BC, Denbighshire BC
4.18 Wrexham’s population growth has clearly been driven by strong levels of net migration, in particular between 1998 and 2003. Over this period natural population change has not really contributed to population growth. Importantly, the data appears to show a drop over the last few years in the levels of net migration within Wrexham.
Figure 4.10: Components of population change – Denbighshire
Denbighshire - Components of population change 1991 - 2005
1.6 1.4 1.2 1.0 0.8 Natural change 0.6 Net migration & other changes
000s 0.4 Total change 0.2 0.0
-0.2 2 4 6 8 0 2 4
-0.41991 1992 31993 1994 51995 1996 71997 1998 91999 2000 12001 2002 32003 2004 5 -0.6
Source: ONS mid-year estimates
4.19 Denbighshire’s population growth has clearly been driven by net migration with natural change actually countering the positive growth through migration, consistently year-on-year. As with the other two authorities the level of net migration appears to have been falling over the last three years creating a negative overall trend.
Future Population Change – Projections
4.20 WAG has produced 2003 based population projections for each of the sub-regions (North West, Mid Wales, South West Wales, South East Wales). These are based on assumptions regarding international and internal migration and look forward over a 25 year period using an apportionment model. They project forward trends arising from the assumptions made and only indicate what would happen if the assumptions were to be realised and no other factors arose to affect the resulting trends. These projections therefore do not make allowances for the effect of local or central government policies on future population levels, distribution or change.
March 2008 33 Wrexham CBC, Flintshire BC, Denbighshire BC
4.21 Significantly, at the sub-national level, the projections – as currently compiled – do not reflect recent, local trends. The authorities have produced local level population projections using a number of scenarios based upon variables around natural change and migration levels. These are explored in Section 10 as they represent a core component of calculating future housing requirements. However, the analysis here just looks to examine the forecasts produced by WAG.
4.22 The projections for North West Wales are indicated in the chart below. North West Wales includes the authorities; Isle of Anglesey, Gwynedd, Conwy, Denbighshire, Flintshire, and Wrexham. This therefore includes a number of authorities which fall outside of the Core Study area.
Figure 4.11: WAG 2003 projected population
North Wales sub-national population projections 2003 - 2028
700 695 690 685 680 675 670
Population (000s) 665 660 655
1 3 07 005 2003 2 20 2009 201 201 2015 2017 2019 2021 2023 2025 2027
Source: ONS, 2005
4.23 The trend clearly shows one of increase over the 25 years. This increase is forecast to be relatively rapid until around 2007 with the rate then decreasing and steadying out until 2025, where a slight fall in the population is forecast until 2027. Overall the forecast estimates an increase in the population between 2006 and 2021 of 13,900 people across the North West sub-region.
4.24 Within England the ONS has updated its population projections to a 2004 base. Projections are released at local authority level for the 25 years up to 2029. In order to illustrate the relative levels of change forecast the following chart shows indexed change for the authorities included within both the Core Study area and the Wider Reference area as well as national comparators.
March 2008 34 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.12: Indexed Population Change
Population Projections - Indexed Change
1.15 Wales 1.1
1.05 North Wales 1 England 0.95
0.9 Chester
0.85 Elles mer e 0.8 Por t & Nes ton Wales Index (2003 = 100) English Indix (2004 = 100) (2004 = Indix 100) English (2003 = Index Wales 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028 Source: ONS, 2003-Based National and Sub-National Population Projections for Wales, 2004 based Sub-national population projections for England
4.25 England’s population is forecast to increase at a greater rate than Wales, although it is important to note that England’s projection is based on more up-to-date data.
4.26 The North Wales sub-region is not forecast to grow its population at the same rate as Wales as a whole, with the rates of growth diverging around 2010.
4.27 Chester’s rate of growth is forecast to be steady over the 25 years and is set to exceed the North Wales sub-region at the end of this period. In contrast to all the other spatial areas Ellesmere Port & Neston is forecast to witness a population decrease, consistently year-on year over the 25 years.
4.28 Population projections represent an important element of projecting forward future housing requirements. As noted above more detailed projections produced by the local authorities are used within Section 10.
Age Structure
4.29 The LHMA guidance notes that the age structure of the population could influence migration trends and household formation. Age is also a key factor when assessing housing demand
March 2008 35 Wrexham CBC, Flintshire BC, Denbighshire BC
and need. It is therefore important to have a clear understanding of the current age structure and the way in which the structure has changed.
4.30 The table below shows the age structure breakdown of each of the authorities within the Core Study area and the Wider Reference area.
Figure 4.13: Age Structure breakdown
0-14 15-24 25-44 45-64 65-74 75+ Denbighshire 17.2% 11.3% 24.3% 26.8% 10.2% 10.1% Flintshire 18.2% 11.8% 27.7% 26.5% 8.7% 7.1% Wrexham 17.8% 12.5% 27.4% 26.1% 8.5% 7.7% Core Study Area 17.8% 11.9% 26.7% 26.4% 9.0% 8.1% Conwy 16.4% 10.5% 23.0% 26.8% 11.6% 11.7% Chester 16.4% 13.1% 26.8% 25.7% 9.4% 8.6% Ellesmere Port and Neston 18.4% 12.0% 26.6% 25.7% 9.8% 7.7% England and Wales 18.0% 13.0% 28.5% 24.4% 8.4% 7.7% Wales 17.8% 13.1% 25.7% 25.7% 9.2% 8.4% Source: Mid-year population estimates 2005
4.31 The following key conclusions can be reached from the data:
• The Core Study area has an average 0-14 population which is slightly below the England and Wales average, Denbighshire’s proportion is particularly low, however, Flintshire records an above average proportion of this age group;
• The same is true for the age category 15-24 where the difference is even greater and 25 44, with Denbighshire recording a proportion which is 1.7% below the England and Wales average for the 15-24 age category and 4.2% for the 25-44 age category;
• These lower proportions are reflected in higher proportion of the older age groupings, again with the most acute difference evident in Denbighshire;
• Conwy has an age structure profile which follows a similar trend as Denbighshire, however, the differences from the national average are even more pronounced; and
• Chester relatively closely reflects the national average. However, Ellesmere Ports structure breakdown differs from the other authorities with a high proportion of people aged 0-14
4.32 The following chart uses location quotient to benchmark the current age structure of the population using the 2005 Annual Population Survey against the England and Wales average. This clearly shows the trends identified above for the Core authorities.
March 2008 36 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.14: Age structure
Age Structure (2005)
0-14 1.6
1.1
75+ 0.6 15-24 Denbighshire 0.1 Flintshire -0.4 Wrexham Core Study Area England and Wales 65-74 25-44
45-64
Source: Mid-year population estimates, 2005
4.33 The following charts show the way in which the age structure has changed over recent years using the same data source as used above. In order to simplify the analysis the population is divided into three age groupings.
March 2008 37 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.15: Population structure by age – Flintshire
Flintshire
160.0
140.0 Older People 120.0 )
100.0
80.0 Working Age 60.0 Population ('000s Population 40.0
20.0 Children 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Mid-year estimates, ONS
4.34 Flintshires population growth has been reflected in growing levels of older and working age population. However, over recent years the level of children has fallen slightly.
Figure 4.16: Population structure by age – Wrexham
Wrexham
140.0
120.0 Older People
) 100.0
80.0
60.0 Working Age
Population ('000s Population 40.0
20.0 Children 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Mid-year estimates, ONS
March 2008 38 Wrexham CBC, Flintshire BC, Denbighshire BC
4.35 Wrexham has witnessed a similar population change to Flintshire, however, the proportional increase in the working age population is more pronounced as is the decline in the number of children.
Figure 4.17: Population structure by age – Denbighshire
Denbighshire
120.0
100.0
) 80.0 Older People
60.0
Working Age
Population ('000s Population 40.0
20.0
Children 0.0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Mid-year estimates, ONS
4.36 As with Wrexham, Denbighshire’s growth in the number of working age people is pronounced over the last ten years. The other sectors appear relatively steady with some increase in both children and older people.
4.37 The spatial spread of differing demographic groups is an important element in matching up future requirements with housing stock. A number of key demographic groups have been mapped at LSOA. The following map shows areas with high proportional shares of 0-15 years.
March 2008 39 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.18: Population – Areas with high proportions of younger people
4.38 This plan shows the urban settlements as having higher proportional shares of young people. This is likely to relate in part to the availability of services within these areas, including schools and health/leisure facilities. There is a notable absence of higher proportions of this age group through the central rural spine of the Study Area.
March 2008 40 Wrexham CBC, Flintshire BC, Denbighshire BC
4.39 The second map shows areas which have high concentrations people who are aged over 60 years. As noted above elderly households have specific requirements in terms of housing stock and service delivery.
Figure 4.19: Areas with high proportions of elderly households
4.40 Concentrations of elderly households are clearly evident within Rhyl and surrounding urban areas. Other urban settlements within the other authorities also show some evidence of concentrations, however, they are less pronounced.
March 2008 41 Wrexham CBC, Flintshire BC, Denbighshire BC
4.41 A number of the rural areas of Denbighshire also record relatively high proportions of this specific age group.
Gender
4.42 The gender breakdown of a population can have a strong influence on the mix and location of housing demand. Male and female-headed households tend to have different home ownership rates and it is therefore important to understand how demographic age groupings are changing by gender.
4.43 The following chart shows the breakdown of male and female populations across the three authorities and within the Core Study Area, on average there tend to be more women than men within the population.
Figure 4.20: Gender split
Proportional split of 2005 population by gender
53.0%
52.0%
51.0%
50.0%
49.0%
48.0%
47.0%
46.0% Denbighshire Flintshire Wrexham Core Study Area
Male Female
Source: Population mid-year estimates 2005
4.44 All of the authorities fit the national trend of having slightly more females than males within the population as a result of life expectancy. Denbighshire has the largest divergence in the proportional split with the other two authorities recording comparable proportions.
4.45 The following charts look to understand how the population has changed not only in terms of age groupings but also in terms of gender within each of the authorities. This provides a significant indication of housing requirements, particularly for elderly households.
March 2008 42 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.21: Population change by age and gender 2000 - 2005
Percentage change 2000-2005 population by age and gender - Denbighshire
20
15
10
% 5
0 0-14 15-24 25-44 45-64 65-74 75+ -5
-10
Female Male
Source: Population mid-year estimates
4.46 The largest increase in population is seen within males aged 15-24 with this rate of change considerably larger than that for females within this age bracket. This suggests a possible in migration linked to economic opportunities. Within Denbighshire it is also clear that there has been an increase of elderly males over the five years.
Figure 4.22: Population change by age and gender 2000 – 2005
Percentage change 2000-2005 population by age and gender - Flintshire
20
15
10
% 5
0 0-14 15-24 25-44 45-64 65-74 75+ -5
-10
Female Male
Source: Population mid-year estimates
March 2008 43 Wrexham CBC, Flintshire BC, Denbighshire BC
4.47 Flintshire does not exhibit the same divergence in the rates of growth in the 15-24 age bracket with both gender increasing at almost the same rate. Indeed within Flintshire the only divergence in terms of rates of growth by gender are shown in the older age brackets where the male population has witnessed a greater growth than the female population.
Figure 4.23: Population change by age and gender 2000 – 2005
Percentage change 2000-2005 population by age and gender - Wrexham
20
15
10
% 5
0 0-14 15-24 25-44 45-64 65-74 75+ -5
-10
Female Male
Source: Population mid-year estimates
4.48 Wrexham also shows a growth of the male elderly population above that of the rate of increase of female population. However, the County Borough also records a slight increase in the male population aged 25-44 as well as 15-24 which is not exhibited in the other two authorities.
4.49 Overall the three authorities have witnessed relatively similar population change by gender over the five years examined, with all of them having witnessed a growth in the number of elderly males. Denbighshire significantly has witnessed a significant change in the number of males in the 15-24 bracket which has implications for the housing market in terms of demand for affordable property.
Ethnicity
4.50 As with gender and age ethnicity is another factor which can have specific implications for the profile of household demand. The LHMA guidance states that different ethnic groups have different age structures, household formation rates, fertility rates, tenure and locational
March 2008 44 Wrexham CBC, Flintshire BC, Denbighshire BC
preferences. This section summarises these issues, additional analysis and implications for change has been produced alongside this HMA as part of the commission16
4.51 The following charts examine the overall quantum of BME households within each of the authorities, broken down by the specific ethnic groupings as defined within the 2001 Census. Significantly, the charts clearly show that none of the three authorities have a large BME population.
Figure 4.24: BME Population – Flintshire
Flintshire - BME Breakdown
0.59%
0.91%
0.09% 97.71% 2.29% 0.04% 0.11% 0.11% 0.07% 0.03% 0.05%
0.03%
0.02%
0.03% White: British White: Irish 0.01% Whit e: Ot her Whit e M ixed: Whit e and B lack Caribb ean M ixed: White and Black African M ixed: Whit e and A sian 0.13% Mixed: Other Mixed A sian or A sian B rit ish: Indian A sian o r A sian B rit ish: Pakist ani A sian or A sian B rit ish: B anglad eshi 0.07% A sian o r A sian B rit ish: Ot her A sian B lack or B lack B rit ish: Carib bean Black or Black British: African B lack or B lack B rit ish: Ot her B lack Chinese o r o t her et hnic g ro up: Chinese Chinese or ot her et hnic group : Ot her et hnic g ro up
Source: Census 2001
4.52 Only 2.3% of the population in Flintshire are not White British. The largest ethnic groups are White – Other White and White Irish. The remaining ethnic groups make up negligible amounts of the population.
16 ‘BME / Gypsy & Traveller / Economic Migrants – An Assessment of Housing Service Provision’ – GVA Grimley, June 2007
March 2008 45 Wrexham CBC, Flintshire BC, Denbighshire BC
March 2008 46 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.25: BME Population – Wrexham
Wrexham - BME Breakdown
0.49%
1. 0 3 %
97.39% 2.61%
0.10% 0.04% 0.13% 0.08% 0.18% 0.10% 0.04% 0.03% 0.03% White: British White: Irish Whit e: Ot her Whit e M ixed : Whit e and B lack Carib bean 0.07% M ixed: White and Black African M ixed : Whit e and A sian 0.01% M ixed: Other M ixed A sian o r A sian B rit ish: Ind ian A sian or A sian B rit ish: Pakist ani A sian o r A sian B rit ish: B ang ladeshi 0.13% A sian or A sian B rit ish: Ot her A sian B lack o r B lack B rit ish: Caribb ean 0.15% Black or Black British: African B lack o r B lack B rit ish: Ot her B lack Chinese or ot her et hnic group : Chinese Chinese o r o t her et hnic g ro up: Ot her et hnic group
Source: Census 2001
4.53 Within Wrexham only 2.6% of the population are classified as not being White British. As with Flintshire there is very little representation by any of the other ethnic groups apart from White – Other White (1%) and White Irish (0.5%).
March 2008 47 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.26: BME Population – Denbighshire
Denbighshire - BME Breakdown 0.66%
1.02%
0.06% 97.15% 2.85% 0.12%
0.14%
0.15%
0.15%
0.11%
0.02%
0.05%
White: British White: Irish 0.03% Whit e: Ot her Whit e M ixed: Whit e and B lack Caribb ean 0.04% M ixed: White and Black African M ixed: Whit e and A sian M ixed: Other M ixed A sian or A sian B rit ish: Indian 0.05% A sian o r A sian B rit ish: Pakist ani A sian or A sian B rit ish: B anglad eshi A sian o r A sian B rit ish: Ot her A sian B lack or B lack B rit ish: Carib bean 0.16% Black or Black British: African B lack or B lack B rit ish: Ot her B lack Chinese o r o t her et hnic g ro up: Chinese Chinese or ot her et hnic group : Ot her et hnic g ro up 0.09%
Source: Census 2001
4.54 Denbighshire has all but 2.85% of its population classified as White British. Of this almost 1.7% is classified as White Irish or White Other. Just over 1% of the population is therefore classified as being of a non-white ethnic grouping.
4.55 As noted within the guidance BME households often have different requirements and preferences in terms of housing. The following analysis examines preferences of BME households in terms of housing tenure.
4.56 The following table shows the relative proportion of the population BME households constitute against the proportion they represent within the key tenures. Note this only classifies BME groups which are ‘non-White’ and classifies the household’s ethnic group by the head of the household.
March 2008 48 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.27: BME by tenure
% of % of social % of private % of owner- households rented sector rental sector occupancy BME sector Denbighshire 0.85% 0.78% 2.30% 0.62%
Flintshire 0.64% 0.61% 1.45% 0.57% Wrexham 0.91% 0.82% 3.83% 0.63% Source: Census 2001
4.57 The private rented sector stands out in terms of the tenure which has above proportional representation of BME households. This is particularly notable within Wrexham where the BME population makes up almost 4% of the population and represent less than 1% of the overall population.
4.58 In contrast the proportional representation of BME population is notably lower in the other two tenures, in particular within the owner-occupied tenure.
4.59 The level of BME groups accessing social housing is explored in more detail. The following charts breakdown the level of the population accessing social housing by specific ethnic grouping, whilst also indicating the proportion of the population the ethnic group make of the whole population.
March 2008 49 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.28: Flintshire BME groupings accessing social housing
Flintshire BME groupings accessing social housing
0.14%
0.12%
0.10%
0.08%
0.06%
0.04%
0.02%
0.00%
% of population BME % accessing social housing BME
Source: Census 2001
4.60 A number of the groups classified as BME show a propensity to access social housing. Mixed other, White and Black Caribbean and White and Black African in particular show high proportional levels.
March 2008 50 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.29: Wrexham BME groupings accessing social housing
Wrexham BME groupings accessing social housing
0.25%
0.20%
0.15%
0.10%
0.05%
0.00%
% of population BME % accessing social housing BME
Source: Census 2001
4.61 Within there are few ethnic groupings which register widely disproportionate levels of accessing social housing. Exceptions include the ‘Indian’ ethnic grouping which appear to record a low representation within this tenure and the opposite being true of the ‘White and Black Caribbean’ ethnic group.
March 2008 51 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.30: Denbighshire BME groupings accessing social housing
Denbighshire BME groupings accessing social housing
0.20% 0.18% 0.16% 0.14% 0.12% 0.10% 0.08% 0.06% 0.04% 0.02% 0.00%
% of population BME % accessing social housing BME
Source: Census 2001
4.62 Within Denbighshire a number of ethnic groups appear to not be accessing the social rented sector, these include ‘Chinese’ groups and ‘Black or Black British Other’ and ‘Black Caribbean’ ethnic groups. In comparison the ‘Indian’ ethnic grouping appears to register a high proportionate share within this tenure as do ‘Mixed Other’ and ‘White and Asian’
4.63 Overall it is clear there are unique preferences within the ethnic community regarding tenure. It is important to note that these proportions are all extremely low as a result of a low representation of ethnic groups within the three Core Study area authorities and should therefore be treated with caution.
Migrant Workers
4.64 The issue of migrant workers is one which has taken increasing precedence within the Core Study area with significant numbers of workers attracted to the area over the last couple of years.
4.65 The Department for Work and Pensions (DWP) has recently started to release information on National Insurance Number (NINo) allocations at local authority. This data has its limitations
March 2008 52 Wrexham CBC, Flintshire BC, Denbighshire BC
as it is only records those who apply formally for a National Insurance number and it is widely acknowledged that this does not represent all in-migrants.
4.66 In the UK Total NINo registrations have risen by 69,000, from 371,000 to 440,000 between 2003/04 and 2004/05. In 2005/06 this rose again by 223,000 to 662,000. Registrations to Accession nationals increased from 20,000 to 111,000 between 2003/04 and 2004/05 and reached 271,000 in 2005/06. Over both years Poland was the largest country represented (57% of total registrations from Accession nationals in 2004/05 and 63% in 2005/06).
4.67 The following table shows the number of NINo allocations for each of the Core authorities. Nationalities which record relatively high proportions to one or more of the authorities are included.
Figure 4.31: National Insurance Number Allocations to overseas nationals entering the UK – 2006
All Poland India Rep of Lithuania Slovak Rep Portugal Philippines No. No. % No. % No. % No. % No. % No. % All (UK) 662,390 171,380 25.9% 45,980 6.9% 30,850 4.7% 27,420 4.1% 11,600 1.8% 8,790 1.3% Denbighshire 500 110 22.0% 50 10.0% 20 4.0% 40 8.0% - 50 10.0% Flintshire 730 390 53.4% - 90 12.3% 80 11.0% 10 1.4% 10 1.4% Wrexham 1,400 970 69.3% 50 3.6% 20 1.4% 50 3.6% 60 4.3% 30 2.1% Source: annual statistics on National Insurance Number (NINo) allocations, 2006
4.68 In terms of overall figures Wrexham has clearly received the largest number of ‘migrant workers’ of the three authorities, with its total for 2005/06 almost twice that of Flintshire which has received the second largest total.
4.69 Anecdotally the numbers of migrant workers within Wrexham is thought to be higher with large numbers employed within the large manufacturing plants located on Wrexham Industrial Estate and other industrial estates within the County Borough.
4.70 Polish nationals make up a significant proportion of these migrant workers particularly in Wrexham and Flintshire. The Republic of Lithuania also records a significant level of migrant workers locating in Flintshire. A number of distinct nationalities also seem to have links with certain authorities including the Philippines with Denbighshire and Portugal with Wrexham.
4.71 Flintshire Community Safety Partnership published in 2007 a study examining ‘Migrant Workers in Flintshire’ which drew on the above data source as well as an interview process with migrant workers living within Flintshire.
March 2008 53 Wrexham CBC, Flintshire BC, Denbighshire BC
4.72 This study identified that since 2002 there had been a total of 1,290 NINos in Flintshire, in respect of all non-UK Nationals. The numbers of registrations rose by over 100% in 2004-5 on the previous year and by a further 200% in 2005-6. It also identified the impact of accession to the EU of the new Central and Eastern European countries with 730 of the total registrations coming from the A8 countries since 2004. Poland makes up the largest quantity, with 480 registrations followed by Slovakia (120) and Lithuania (110).
4.73 Significantly, the report also notes that these figures may provide an under-representation. The Wales Rural Observatory noted in 2006 that the true figure in Wales is likely to be between five and ten times higher than the officially recorded data from NINos and Worker Registrations. Using these multipliers would suggest a migrant population in Flintshire of between 6000 and 12000. The study by Flintshire concludes that the ‘best guess’ estimate of this research, using data from NINos and Worker Registrations of A8 national is 2500. This currently equates to approximately 1.5% of the population of Flintshire. This therefore means that in terms of absolute numbers, the ‘new’ migrant population of Flintshire is now greater than the resident BME population.
4.74 Reference is made within the study to the housing requirements of these migrant workers. It notes that at the moment the profile of this population places little pressure on the local authority as most migrant workers are young, flexible and prepared to share accommodation (although this can place increasing pressure on elements of the housing stock). All of the respondents involved in the study would currently not qualify for local authority housing, however, it was concluded that this would change in the future as the migrants stay exceeds one year and they are joined by dependants.
4.75 This is therefore an issue which will need monitoring in the future, an issue which is reflected within the recommendations of the study. This issue is likely to apply to the migrant workers living in Wrexham and Denbighshire as well as Flintshire, with pressures for housing migrant workers likely to become greater. This will impact on all tenures including demand for stock managed by the local authority and therefore requires careful monitoring in the future. It is therefore important that Wrexham and Denbighshire also explore the issues associated with economic migrant workers in more detail in order to explore the implications for housing policy.
Households
March 2008 54 Wrexham CBC, Flintshire BC, Denbighshire BC
4.76 Household numbers are clearly directly related to housing stock and the supply of housing. Examining the change in household numbers is clearly a critical element of assessing the dynamics of the housing market.
4.77 Of key importance is changing household types and composition related to social and cultural trends as these have clear implications for current and future demand in terms of housing stock. The number of households nationally has increased beyond natural population change with the average number of people per household (headship rate) having declined consistently, therefore requiring a greater number of houses for the population.
4.78 Household composition and type also impacts on housing affordability issues. The number of earners within a household increases or decreases the level of mortgage available. This section therefore analyses the data underpinning household numbers, including household size and household composition.
Household Growth
4.79 Comparing the 1991 Census with the 2001 Census provides an indication of changing household numbers over this ten-year period. The following table shows the absolute numbers recorded and the rates of change.
Figure 4.32: Household growth (1991 – 2001)
Denbighshire Flintshire Wrexham Chester Ellesmere Conwy England Wales Port and Wales Total Households 1991 35965 52918 48026 46369 30858 43862 19789166 1105829 Total Households 2001 39891 60542 53227 50128 33168 48063 21660475 1209048 % Change 10.9 14.4 10.8 8.1 7.5 9.6 9.5 9.3 Source: Nomis, 1991 Census and 2001 Census
4.80 The three Core Study area authorities have all witnessed a rate of increase of households in excess of both the Welsh and England and Wales over the ten years. Significantly, these rates are notably higher than the two English authorities, Chester and Ellesmere Port which both record levels below the national averages.
4.81 These trends are illustrated in the following chart.
March 2008 55 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.33: Household growth (1991 – 2001)
Change in households 1991-2001
70000 16.0
60000 14.0 12.0 50000 10.0 40000 Total Households 1991
8.0 % 30000 Total Households 6.0 2001 20000 4.0 % Change
10000 2.0
0 0.0
m y hire ha ex r Chester Conw Flintshire W Denbighs Ellesmere Port
Source: Nomis, 1991 Census, 2001 Census
4.82 The Welsh Assembly Government has issued sub national household projections. These projections estimate household formation by applying headship rates (i.e. household representative rates) to each household type and have been prepared by Anglia Ruskin University.
4.83 A key input into the model is the sub-national population projections which have been analysed within this section. As with the population projections these forecasts do therefore not make allowances for the effects of local or central government policies on future population levels, distribution and change. Net new household formation is calculated by assessing changes in headship rates for a particular age cohort as it is rolled forward over time.
4.84 The following table and chart illustrate the household projections forecast for North Wales. The table also indicates the breakdown in types of households as well as the overall population and therefore the average household size.
March 2008 56 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.34: Household Projections by type of household 2003-2026 North West Wales
000s 2003 2006 2011 2016 2021 2026 Percentage Percentage Absolute change change 2006- change 2006 - 2003-2026 2021 (%) 2021, 000s (%)
Married couple 136.4 135.0 132.0 129.7 127.5 124.6 -8.7 -5.6 -7.5 Cohabiting couple 23.7 27.2 31.2 34.2 36.3 37.7 59.1 33.5 9.1 Lone parent 20.4 21.4 22.0 22.0 21.6 21.1 3.5 0.9 0.2 One person 87.9 93.3 102.4 112.0 121.3 129.1 46.8 30.0 28.0 Other multi-person 16.7 16.9 17.3 17.8 18.2 18.4 10.3 7.7 1.3
All households 285.2 293.9 304.8 315.7 324.8 330.9 16.0 10.5 30.9
Private household population 660.2 669.7 674.9 679.4 682.2 681.3 3.2 1.9 12.5
Average household size 2.32 2.28 2.21 2.15 2.10 2.06 -11.1 -7.9 -0.2 Source: ONS 2003-Based National and Sub-National Household Projections for Wales, 2006
Figure 4.35: WAG produced Household Projections for North West Wales
WAG - North Wales Household projections
340,000
330,000
320,000
310,000
300,000
Households 290,000
280,000
270,000
260,000
6 9 21 023 024 026 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 201 2017 2018 201 2020 20 2022 2 2 2025 2
Source: WAG, 2007
4.85 Looking at the overall projected households it is evident that the sub-region is expected to grow over the forecast period. Between 2003 and 2026 North West Wales is projected to witness an increase of 16% in the number of households this compares with a Welsh projected growth rate of 19.7%. Therefore the growth within the sub-region is not anticipated to match the national rates of growth although clearly represents a significant increase in the overall number of people within the area over this time period.
March 2008 57 Wrexham CBC, Flintshire BC, Denbighshire BC
4.86 Looking at the period 2006 – 2021 which this HMA examines, the household projections suggest an absolute increase of 30,900 households within North Wales.
4.87 Significantly, headship rates are projected to fall from 2.28 to 2.10 between 2006 and 2021 (compares with Welsh figures of 2.30 to 2.12) with this depreciation in the average size of household a significant driver in the levels of forecast household demand identified above (i.e. a smaller average household size means a greater number of houses are required to house the population).
4.88 This reduction in the overall average households size is driven by the forecast large increase in one person households that has it own implications regarding future housing requirements, an issue which is examined further in the final sections of this HMA.
4.89 The changing composition of the household structure is clearly shown on the following chart. An increase of 28,000 one person households is forecast between 2006 and 2021, a 30% rise. In contrast two person households are forecast to grow by a significantly lower amount, taking Married couple households and Cohabiting couple households together these are only forecast to grow by 1,600 households over the period.
Figure 4.36: WAG Household Projections – Component household types
Household types - components of WAG Household projections
350,000
300,000
250,000 one person 200,000 other multi-person lone parent 150,000 cohabiting couple Households married couple 100,000
50,000
0
2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 2025
Source: WAG, 2007
March 2008 58 Wrexham CBC, Flintshire BC, Denbighshire BC
4.90 More detailed population and household projections have been produced by the local authorities, these are examined in more detail in Section 10 as they are used as the basis of assessing future housing requirement within the Core Study Area.
4.91 The ONS also issues household projections for the English Authorities. These are created through a similar process as adopted by WAG. The following table displays the household projections for Ellesmere Port and Chester.
Figure 4.37: Household Projections 2003-2026
Percentage Percentage Absolute change change 000s 2003 2006 2011 2016 2021 2026 Change 2003-2026 2006-2021 2006-2021 (%) (%) ENGLAND 20,904 21,485 22,566 23,705 24,781 25,713 23.0 15.3 3,296 Chester 51 51 53 54 56 57 11.8 9.8 5 Ellesmere Port and Neston 33 34 34 35 36 36 9.1 5.9 2 Source: DCLG Sub-regional household projections 2003 based England, 2006
4.92 These projections indicate a lower rate of growth for the English authorities compared to the North West sub-region, although it is important to note that the rate overall for England is higher than Wales.
4.93 Ellesmere Port and Nestons rate of growth in particular is relatively low, although this needs to be considered in light of the fact that the authority is projected to witness a decrease in population over this period.
Household Composition
4.94 The 2001 Census remains the most comprehensive data source for assessing the composition of households. The following table shows the proportional breakdown of household using the key defined household types specified through the Census.
March 2008 59 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.38: Household Composition
Core Ellesmere England Study Port & and Denbighshire Flintshire Wrexham Area Conwy Chester Neston Wales All Households 39892 60539 53226 153657 48062 50130 33167 21660475 Single Pensioner 18% 14% 15% 15% 19% 15% 15% 14% Single Adult 14% 13% 14% 14% 14% 15% 12% 16% Elderly Couple 11% 9% 8% 9% 13% 10% 10% 9% Couple and No Children 16% 19% 18% 18% 17% 19% 18% 18% Couple and dependents 20% 23% 22% 22% 18% 20% 23% 21% Couple and non- dependent children 6% 8% 8% 8% 5% 7% 9% 6% Lone parent and dependents 6% 6% 6% 6% 6% 5% 6% 6% Lone parent and no dependents 3% 3% 4% 3% 3% 3% 3% 3% Other households with dependents 2% 2% 2% 2% 2% 2% 2% 2% Students 0% 0% 0% 0% 0% 1% 0% 0% Other households all pensioners 0% 0% 0% 0% 1% 0% 0% 0% Other 2% 2% 2% 2% 3% 3% 2% 4% Source: Census 2001
4.95 Nationally couple and dependants households proportionally represent the most common household type, this characteristic is shared by all of the Core authorities and is reflected within the average for the three authorities.
4.96 A number of key distinctions can be identified regarding the household profile of the Core Study area and the Wider Reference Area:
• The Core Study area has an above national average proportion of single pensioner households, however, this is driven by a very high proportion of this household type within Denbighshire. Denbighshire also has a high proportion of elderly couple households 11% compared to a national average 9%;
• All of the authorities within the Core Study area have a below average proportion of single adult households, a characteristic also true of all the authorities within the Wider Reference Area;
• Flintshire has a disproportionately high number of couple households, both with or without children; and
• All of the authorities have an average proportion of households classified as lone parent and dependants.
4.97 These trends are clearly illustrated on the following chart.
March 2008 60 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.39: Household Composition radar diagram
Household Composition Single Pensioner 25% Other Single Adult 20%
15% Other households all pensioners Elderly Couple 10%
5%
Students 0% Couple and No Children
Other households w ith dependents Couple and dependents
Lone parent and no dependents Couple and non-dependent children
Lone parent and dependents
Denbighshire Flintshire Wrexham Core Study A rea Conw y Chester Ellesmere Port & Neston England and Wales
Source: Census 2001
4.98 Clusters of certain types of households are often apparent within different areas. The Census provides data down to small localities therefore allowing concentrations of household types to be identified. A number of key household types have been mapped using LSOA data and are displayed over the next couple of pages.
4.99 The following plan shows that on the whole single person households appear to be clustered around urban areas across the Wider Reference Area. This includes Wrexham town, Rhyl and Ruthin. Chester also stands out as having a high proportion of this household type.
March 2008 61 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.40: Single Person Households
March 2008 62 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 4.41: Couple households with children
March 2008 63 Wrexham CBC, Flintshire BC, Denbighshire BC
4.100 Despite the forecast and recently observed rise in single person households couple households continue to represent a significant part of the market in large parts of the Core Study Area. In particular this household type is prevalent in the more suburban areas of settlements reflecting the type of housing available in these areas.
Figure 4.42: Lone Parent households
March 2008 64 Wrexham CBC, Flintshire BC, Denbighshire BC
4.101 Lone parent households are associated with specific housing needs as a result of generally limited income resources and the need to be close to key services.
4.102 Within the Core Study Area concentrations are apparent within Ryhl and Wrexham town and a number of small concentrations of social housing including Cefn-mawr.
4.103 In terms of assessing current and future housing needs it is important to understand the relationships between certain household types and the tenures they occupy. The following chart illustrates the proportional representation of the different household types within the three main tenure types using Census 2001 data.
Figure 4.43: Household composition by tenure
Household Composition by Tenure - Core Study Area authorities 100% Ot her households 90%
80% Lone Parent Households, all children non dependent 70% Lone Parent Households, 60% with dependent child(ren)
50% Couple Households, all children non dependent 40%
30% Couple Households, wit h dependent child(ren) 20% Couple Households, no 10% children
0% One Family, A ll Pensioners
One Person, Ot her
One Person, Pensioner
Source: Census 2001
4.104 There are obviously distinct differences in the proportional breakdown of household representation between the tenures. The following distinctions can be identified for the three authorities:
• The social rented sector in all three authorities shows a disproportionately high amount of one person pensioner households and lone parent households with dependent children, particularly in Denbighshire and Flintshire. In contrast this tenure has low representations of couple households with or without children;
March 2008 65 Wrexham CBC, Flintshire BC, Denbighshire BC
• The owner occupier sector has a higher proportion of couple households with all children non-dependent compared to the other tenure types;
• The private rented sector has very high proportions of singe person households, particularly non-pensioner households. This reflects the greater flexibility offered by this tenure both financially and in terms of commitment to an area. This tenure type also has a large proportion of lone parent households with dependent children, again particularly within Denbighshire and Flintshire;
• Of the three authorities Denbighshire has the highest proportions of one person pensioner households in the owner occupier and private rented sectors, however, Flintshire has the highest proportion of this household type within the social rented sector; and
• Wrexham has a higher proportion of couple households without children within the social rented sector than the other two authorities but a lower proportion of lone parent households with dependent children within this tenure.
Household Size and number of Rooms per Household
4.105 The analysis above provides an indication of differing household sizes, with households broken down into single person, couple, couple with children etc… However, the Census also provides the average household size clearly indicating the cumulative effect of differing profiles of household composition.
4.106 The changing size of households has already been indicated as a significant factor in estimated the number of households required now and in the future. However, as noted the headship rates calculated for the household projections for WAG are only broken down to the sub-regional level. The analysis below uses Census 2001 data to provide an indication of the difference between the average household size between authorities.
4.107 The following chart indicates the variance across the authorities with regard to average household size.
Figure 4.44: Average Household size
March 2008 66 Wrexham CBC, Flintshire BC, Denbighshire BC
Average household size
2.5
2.45
2.4
2.35
2.3
2.25
People per household household per People 2.2
2.15
2.1 Conw y Denbighshire Flintshire Wrexham Chester Ellesmere Wales England and Por t & Nes ton Wales
Source: Census 2001
4.108 Within the Core Study Area, Flintshire and Wrexham have larger average household sizes than Denbighshire, this reflects the high proportion of single person households within this authority identified through the preceding analysis.
4.109 Flintshire’s average household size is notably above the English and Wales average as is Wrexham’s albeit to a much lesser extent. Of the authorities within the Wider Reference Area Conwy has by far the lowest average household size, even smaller than Denbighshire. In contrast Ellesmere Port’s average household size is of a par with Flintshire and notably higher than Chester.
4.110 Examining the average number of rooms per household gives a headline indication of the size of housing stock and the levels of overcrowding. These factors are assessed in more detail in proceeding chapters.
Figure 4.45: Number of Rooms per Household
March 2008 67 Wrexham CBC, Flintshire BC, Denbighshire BC
Average number of rooms per household
5.8
5.7
5.6
5.5
5.4
5.3 Rooms per household household per Rooms 5.2
5.1 Conw y Denbighshire Flintshire Wrexham Chester Ellesmere Wales England and Por t & Nes ton Wales
Source: Census 2001
4.111 Of the three Core authorities Flintshire has the highest average number of rooms per household, with Wrexham having the smallest. However, all three record averages which are above the England and Wales average but only Flintshire exceeds the Wales average.
4.112 Chester records a very high average number of rooms per household reflecting the large amount of detached properties apparent within the authority, an issue explored in more detail in section 6.
Key Messages
4.113 The analysis within this section had identified a number of key messages relating to the demographic constitution of the Core Study Area and its constituent authorities, these are listed below:
• The Core Study Areas geography helps to shape the location of people within its boundary. The topography of the area has led to a clustering of population within settlements along the coast in Denbighshire and Flintshire and a number of inland settlements, with large areas sparsely populated as a result of natural barriers. Within Wrexham the population is clustered in and around Wrexham Town with settlements growing up alongside industry;
• All of the authorities within the Core Study Area have witnessed population growth since 1985, growing considerably faster than the neighbouring English authorities to the west
March 2008 68 Wrexham CBC, Flintshire BC, Denbighshire BC
and also above national levels. Nationally produced projections published by WAG forecast this growth to continue until around 2023;
• Positive net migration has played a significant role in generating this growth in population in all of the authorities, with Flintshire also posting positive natural change over recent years;
• In terms of the age profile of the population all three authorities have a below average proportion of 15-24 year olds which could be the result of employment opportunities and the footloose nature of this age group. Interestingly Wrexham and Denbighshire also record relatively low proportions of those aged below 14, with Denbighshire notable for the proportion of elderly people making up its population. Since 1992 all three authorities show an overall increase in their working age population and elderly populations, the former representing a positive in terms of the economy;
• All three authorities have very low proportions of the population classified as anything other than ‘White British’. Following the Census classifications the two next largest ethnic groupings within the authorities are ‘White Irish’ and ‘White Other’;
• Looking at the tenure of housing occupied by the population classified as BME there is a higher propensity for private rented stock. In terms of social rented stock there is some divergence between the authorities in terms of the ethnic groupings which are proportionally over represented;
• There is growing evidence of the levels of migrant workers entering the three authorities, with Wrexham appearing to record the highest level of in-migration in 2006. A study conducted by Flintshire CC suggested that currently this new population is not placing pressure on the housing market, however, this is likely to change as families start to settle;
• As a result of population growth and the changing size of households all three households have witnessed notable growth in the number of households. This growth is projected to continue within North Wales according to forecasts produced nationally by WAG;
• Examining the composition of households the Core Study Area has an above average proportion of single pensioner households, with this particularly being true in Denbighshire. All three authorities have a below average proportion of single adult households, with Flintshire recording an above average proportion of couple households; and
March 2008 69 Wrexham CBC, Flintshire BC, Denbighshire BC
• Examining household composition and tenure, the social rented sector is identified as having a disproportionately high level of one-person pensioner households and lone parent households with dependent children. The private rented sector is identified as containing a high proportion of single person households. Wrexham has a higher proportion of couple households without children within the social rented sector than the other two authorities but a lower proportion of lone parent households with dependent children within this tenure.
March 2008 70 Wrexham CBC, Flintshire BC, Denbighshire BC
5. ECONOMIC DRIVERS OF CHANGE
5.1 Emerging policy has continued to place increasing emphasis on the linkages between housing and the economy. Economic growth is considered a core component of developing sustainable communities and developing a quality housing market is a vital element of assisting in ensuring that economic growth potential is realised.
5.2 This section aims to establish the key economic drivers impacting upon the Core Study Area of Wrexham, Flintshire and Denbighshire as well as the wider sub-regional area which also includes Conwy, Chester and Ellesmere Port. Assessment is made of the current economic structure as well as the anticipated future change. This analysis of the changing economy in the future will play an integral part in assessing the future levels of housing requirement within the three core authorities. Use is made of newly commissioned economic forecasts sourced from Cheshire County Council and prepared by Cambridge Econometrics.
5.3 A preliminary examination of national and regional economic policy is undertaken initially to set the context for both the current economic climate and the aspirations for future change.
National and Regional Economic Policy
5.4 The Economic Development Strategy Document, Wales: A Vibrant Economy identifies that the Flintshire/Wrexham area has witnessed strong economic growth over the last two decades. The Wales Spatial Plan ‘People, Places, Futures also assigns North East Wales as a key driver of the Welsh Economy, with the strengthening of the areas modern manufacturing base a key element of this growth.
5.5 The growth of large employers, notably Airbus and the successful development of a European-scale business park at Deeside Lane, has contributed to this growth. However, a vital factor in this growth has been the areas close proximity to the major growth poles in Cheshire, Manchester and Merseyside and the employment opportunities these offer.
5.6 Wrexham and Flintshire fall within the core area of the West Cheshire / North East Wales Sub-Regional Spatial Strategy, with Denbighshire recognised as part of the ‘wider reference area’ based on its strong linkages with the sub-region. This Strategy recognises the central economic importance of Chester and Wrexham to the economic growth of the sub-region and also notes the sharp contrast in the distribution (and growth prospects) of manufacturing and service industries.
March 2008 71 Wrexham CBC, Flintshire BC, Denbighshire BC
5.7 The evidence base for the Sub-Regional Spatial Strategy prepared by GVA Grimley in 2004 recognises sector strengths in automotive, chemical engineering and tourism/ retail as well as (secondary) financial services, food and aerospace. However, one key issue identified was the strong dichotomy within the Strategies Core Study Area whereby the bulk of industrial activity is located in Flintshire, Wrexham and Ellesmere Port and Neston and by contrast, almost one-half of the business activity in the service economy is concentrated in Chester.
5.8 Concern is therefore raised regarding the degree of economic exposure evident, particularly in the manufacturing sectors. The Strategy therefore aims to diversify the economy and enable those sectors set to grow (largely focused on service sectors) to flourish within the Sub- Region.
5.9 The Strategy identifies a broad spatial distribution of economic activity and also recognises the need to meet the support requirement of that activity in the most sustainable manner. This includes consideration of the location of housing and related services with existing links between housing and employment being relatively poor in the sub region.
5.10 These policy goals will clearly impact on the economy over the plan period and in turn affect the housing market.
Employment change by broad sector
Denbighshire
5.11 Denbighshire has total employment17 of just over 40,000. The chart below provides a broad industry breakdown of total employment in the county.
17 Does not include self-employment.
March 2008 72 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.1: Denbighshire broad industrial sector breakdown
45
40
35
30
25 % 20
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Dist hotels & restaurants Transport & communications Banking & finance Public sector Other services
Source: ABI, 2005
5.12 The dominant sector in Denbighshire’s economy is the public sector. The share of public sector employment in overall employment rises gradually from 38% in 2001 to 41% in 2005 making the public sector a very important driver of the Denbighshire economy.
5.13 What we can loosely refer to as the tourism sector (i.e. Distribution hotels and restaurants) is the second most important driver. Its share in total employment, however, gradually falls between 2001 and 2003 before rising slightly in 2004 and then falling again in 2005. The share of ‘tourism’ in overall employment is slightly lower in 2005 than it was in 2001. Manufacturing on the other hand is becoming less and less important with levels falling gradually from 14% in 2001 to 11% in 2005.
March 2008 73 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.2: Annual average employment in GB, Wales and Denbighshire and Location Quotients all for 2005.
Percentage of Total Annual Average Employment Employment Location Quotient Compared with: GB Wales Denbighshire GB Wales Denbighshire GB Wales Agriculture and fishing 232,125 14,344 59 0.9 1.2 0.2 0.18 0.13 Energy and water 149,062 5,455 n/a 0.6 0.5 n/a n/a n/a Manufacturing 2,944,388 168,772 4,332 11.1 14.2 11.4 1.03 0.81 Construction 1,215,772 55,746 2,765 4.6 4.7 7.3 1.59 1.56 Distribution, hotels and restaurants 6,386,358 281,906 9,276 24.1 23.7 24.5 1.02 1.03 Transport and communications 1,586,138 53,115 1,377 6.0 4.5 3.6 0.61 0.82 Banking, finance and insurance, etc 5,495,970 155,862 2,936 20.7 13.1 7.8 0.37 0.59 Public administration,education & 7,126,979 389,998 15,372 health 26.9 32.8 40.6 1.51 1.24 Other services 1,366,351 64,829 1,676 5.2 5.4 4.4 0.86 0.81 26,503,142 1,190,025 37,854
Source: ABI, 2005
5.14 The above table shows annual average employment for all broad industry groups in GB, Wales and Denbighshire in 2005. The idea is to compare the share of employment in each industry in Denbighshire with the national and GB average. To this end we use location quotients (LQ). These compare how concentrated / specialised an industry is in a given location by comparing levels with a national average or benchmark.
5.15 The most striking result from this analysis is the location quotient comparing the share of public sector employment in Denbighshire with that of Great Britain. A LQ of 1.51 signifying that the level of concentration of the public sector in Denbighshire is significantly higher than the national benchmark. This sector is outweighing the local demand for private sector goods and services.
5.16 Another key trend is observed in the Construction industry in Denbighshire which has a high LQ compared to the Welsh and GB averages which is not necessarily picked up in the previous graph where levels of employment in Construction tended to be low. We can surmise that the Construction sector is significantly more important to the Denbighshire economy than is the case nationally.
5.17 At the other end of the scale we see that the concentration of the Banking and Finance sector in Denbighshire is much lower than the average for GB as a whole. This entails a lack of employment in this sector, a sector where average wages tend to be disproportionally higher than most other sectors. Insofar as this is true this may have implications for the housing
March 2008 74 Wrexham CBC, Flintshire BC, Denbighshire BC
market as lack of high paid employment may transfer into a lower or ‘different’ demand for housing.
5.18 If we look at a deeper grain in terms of industry sectors we can suggest reasons for the trends that we see above. It is obvious from what has been said above that the public sector is the main driver of Denbighshire’s economy in terms of percentage of total employment and concentration. If we break this sector down further however we see that most of this growth comes from Education. Levels in public administration and defence have stayed roughly the same, while levels in health and social work have actually gone down since 2003. The same can be said of Distribution, Hotels and Catering.
5.19 Actual figures for H&C have gone down according to table 2 between 200318 and 2005, so the main driver of this sector in a way is ‘retail trade’ where percentage share of employment has gone up from 11.39% to 12.28%.
Figure 5.3: Sub sectors of industry: ABI employment.
2003 % 2004 % 2005 %
45 : Construction 2,034 6.04 2,077 5.68 2,765 7.30 51 : Wholesale trade and commission trade, except of motor 731 781 869 vehicles and motorcycles 2.17 2.14 2.30 52 : Retail trade, except of motor vehicles and motorcycles; 3,837 4,834 4,647 repair of personal and household goods 11.39 13.23 12.28 55 : Hotels and restaurants 2,959 8.78 3,527 9.65 2,915 7.70 75 : Public administration and defence; compulsory social 1,910 1,949 2,155 security 5.67 5.33 5.69 80 : Education 3,159 9.38 3,738 10.23 3,944 10.42 85 : Health and social work 8,539 25.35 8,976 24.56 9,273 24.50
Source: ABI employee analysis 2003-2005
Flintshire
5.20 There are some 70,000 employed in Flint. The chart below provides a broad breakdown of industry sector for employment.
18 We can only go as far back as 2003 because the total employment cannot be calculated before this because it is ‘not possible to convert the source data (based on the 1992 SIC) into the 2003 Standard Industrial Classification.’
March 2008 75 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.4: Flintshire broad industrial sector breakdown
40
35
30
25
% 20
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Dist hotels & restaurants Transport & communications Banking & finance Public sector Other services
Source: ABI, 2005
5.21 In Flintshire manufacturing is extremely important to the local economy. It has stayed at a level of around 35% of all employment throughout the timescale considered here, that is 2001-2005, and is undoubtedly the most important driver for this economy.
5.22 Growth in plants such as Airbus clearly ‘buck the trend’ locally offsetting losses elsewhere in the county. It is no surprise that manufacturing is expected to continue dominating Flintshire’s economy. The secondary drivers in this economy are ‘Tourism’ (i.e. distribution, hotels and restaurants) and the public sector, each contributing to about a fifth of the economy and staying at this level throughout.
March 2008 76 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.5: Annual average employment in GB, Wales and Flintshire and Location Quotients all for 2005.
Percentage of Total Annual Average Employment Employment Location Quotient Compared with: GB Wales Flintshire GB Wales Flintshire GB Wales Agriculture and fishing 232,125 14,344 88 0.9 1.2 0.1 0.15 0.11 Energy and water 149,062 5,455 n/a 0.6 0.5 n/a n/a n/a Manufacturing 2,944,388 168,772 23,148 11.1 14.2 34.8 3.13 2.45 Construction 1,215,772 55,746 4,770 4.6 4.7 7.2 1.56 1.53 Distribution, hotels and restaurants 6,386,358 281,906 15,061 24.1 23.7 22.6 0.94 0.95 Transport and communications 1,586,138 53,115 2,428 6.0 4.5 3.6 0.61 0.82 Banking, finance and insurance, etc 5,495,970 155,862 7,199 20.7 13.1 10.8 0.52 0.83 Public administration,education & 7,126,979 389,998 11,327 health 26.9 32.8 17.0 0.63 0.52 Other services 1,366,351 64,829 2,176 5.2 5.4 3.3 0.63 0.60 26,503,142 1,190,025 66,574
Source: ABI, 2005
5.23 The continued dominance of manufacturing in Flintshire’s economy as shown by the previous graph is also captured by the location quotients for this sector. Compared to the GB / national average this sector is highly concentrated in Flintshire with LQ’s of 3.13 and 2.45 respectively. The only other sector to have relatively higher concentration is the Construction sector with levels, although quite low if we go by the previous graph, that are obviously higher than the percentage of construction in GB and Wales as a whole. All other industries are somewhat ‘under-represented’ compared to the national benchmarks.
5.24 On a sub-sectoral level we can analyse the dominance of the manufacturing sector. We see that employment in the manufacturing of transport equipment has increased from 2003 to 2005, a direct result of the new A380 contract at Airbus, Broughton. Manufacturing of food and beverages has reduced over the same period.
March 2008 77 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.6: Sub sectors of industry: ABI employment
2001 % 2002 % 2003 %
15 : Manufacturing of food and beverages 2,926 4.85 3,143 4.93 3,027 4.55 35 : Manufacture of transport equipment 4,361 7.22 5,443 8.53 6,389 9.60 45 : Construction 3,169 5.25 3,584 5.62 4,770 7.16 51 : Wholesale trade and commission trade, except of motor 1,606 2,038 2,268 vehicles and motorcycles 2.66 3.19 3.41 52 : Retail trade, except of motor vehicles and motorcycles; 6,053 7,173 6,645 repair of personal and household goods 10.03 11.24 9.98 55 : Hotels and restaurants 4,492 7.44 4,556 7.14 4,397 6.60 75 : Public administration and defence; compulsory social 3,374 2,441 1,808 security 5.59 3.83 2.72 80 : Education 5,267 8.73 5,986 9.38 5,435 8.16 85 : Health and social work 4,122 6.83 4,156 6.51 4,084 6.13
Source: ABI employee analysis 2003-2005
5.25 However, this also reflects in our view a very high level of exposure within the local economy for Flint. With around 8000 people currently employed at Broughton this highlights the degree of exposure in Flint; effectively closure of this plant would have a devastating effect on the local and indeed wider economy19.
Wrexham
5.26 Total employment in Wrexham is approaching 60,000. The analysis in the chart below provides a broad industry breakdown for the economy.
19 At the extreme this would amount to around a fifth of total employment in the county.
March 2008 78 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.7: Wrexham broad industrial sector breakdown
35
30
25
20 %
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Dist hotels & restaurants Transport & communications Banking & finance Public sector Other services
Source: ABI, 2005
5.27 Manufacturing dominated the economy of Wrexham in 2001 at close to 30% of total employment. But since 2001 the county has been haemorrhaging manufacturing jobs so that by 2005 it had lost a 7% point share of the total and ranks as now the second most powerful driver of the economy at 23% of total employment. It is still very important but the change over the last 5 years or so is significant and serves to illustrate how vulnerable an area can be with the wrong mix of manufacturing. It has been overtaken by the public sector as the current most dominant employer in the economy.
5.28 ‘Tourism’ is relatively important here as well with levels staying roughly the same between 2001 and 2005 albeit falling slightly. Banking and finance has grown substantially between 2004 and 2005, rising share from 7% to 11%. Critically this is the sort of replacement sector jobs necessary to make up for losses in manufacturing jobs where ‘values’ are more likely to equate and therefore the local economy maintains GVA and income levels.
March 2008 79 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.8: Annual average employment in GB, Wales and Wrexham and Location Quotients all for 2005.
Percentage of Total Annual Average Employment Employment Location Quotient Compared with: GB Wales Wrexham GB Wales Wrexham GB Wales Agriculture and fishing 232,125 14,344 84 0.9 1.2 0.2 0.19 0.14 Energy and water 149,062 5,455 n/a 0.6 0.5 n/a n/a n/a Manufacturing 2,944,388 168,772 11,982 11.1 14.2 23.4 2.10 1.65 Construction 1,215,772 55,746 2,564 4.6 4.7 5.0 1.09 1.07 Distribution, hotels and restaurants 6,386,358 281,906 11,353 24.1 23.7 22.1 0.92 0.93 Transport and communications 1,586,138 53,115 1,867 6.0 4.5 3.6 0.61 0.82 Banking, finance and insurance, etc 5,495,970 155,862 5,737 20.7 13.1 11.2 0.54 0.85 Public administration,education & 7,126,979 389,998 14,887 health 26.9 32.8 29.0 1.08 0.89 Other services 1,366,351 64,829 2,444 5.2 5.4 4.8 0.92 0.87 26,503,142 1,190,025 51,289
Source: ABI, 2005
5.29 Although the public sector is the strongest sector in 2005 the concentration of this industry remains at levels close to the GB and Welsh average. Location quotients close to one imply that the public sector is as important to the economy of Wrexham as it is to the GB and national economies. Indeed it is slightly less concentrated in Wrexham than it is in Wales, with a location quotient of 0.89. Manufacturing is more concentrated in Wrexham than it is in GB and Wales but less so than Flintshire. Construction is slightly above the GB and Welsh average at 1.09 and 1.07 respectively.
5.30 Looking at the sub sectors we see that the growth in Wrexham’s main driver, the public sector has come from education and health and social work, each increasing its share of total employment between 2003 and 2005. Public administration and defence has actually fallen in this period.
Figure 5.9: Sub sectors of industry: ABI employment.
2003 % 2004 % 2005 %
45 : Construction 1,830 3.74 2,244 4.45 2,564 5.00 51 : Wholesale trade and commission trade, except of motor 1,595 1,535 1,712 vehicles and motorcycles 3.26 3.04 3.34 52 : Retail trade, except of motor vehicles and motorcycles; 6,309 6,097 5,745 repair of personal and household goods 12.89 12.09 11.20 55 : Hotels and restaurants 2,844 5.81 3,033 6.01 2,790 5.44 75 : Public administration and defence; compulsory social 2,877 3,289 2,133 security 5.88 6.52 4.16 80 : Education 3,578 7.31 3,770 7.48 4,373 8.53
March 2008 80 Wrexham CBC, Flintshire BC, Denbighshire BC
85 : Health and social work 7,672 15.67 8,180 16.22 8,381 16.34 Source: ABI employee analysis 2003-2005
Core Study Area
Figure 5.10: Core Study Area broad industrial sector breakdown
35
30
25
20 %
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Distribution hotels & restaurants Transport & communication Banking & finance Public sector Other services
Source: ABI, 2005
5.31 If we aggregate the figures for our three main areas of study to produce a ‘core study area’ we see that the three main drivers are manufacturing, ‘tourism’ (or distribution, hotels and restaurants) and the public sector, with the public sector remaining the strongest of the three. In 2005 the banking and finance sector gains some ground reaching near 10% of total employment.
5.32 Below we consider some of the hinterland areas that are important to the housing economy in North East Wales.
March 2008 81 Wrexham CBC, Flintshire BC, Denbighshire BC
Chester
Figure 5.11: Chester broad industrial sector breakdown
35
30
25
20 %
15
10
5
0 2001 2002 2003 2004 2005 Agriculture & fishing Energy & water Manufacturing Construction Distribution hotels & restaurants Transport & communications Banking & finance Public sector Other services
Source: ABI, 2005
5.33 Chester’s economy is dominated by three main sectors: ‘Tourism’, Banking and finance and the public sector. ‘Tourism’, which constitutes the distribution, hotels and restaurants sector, has fluctuated around the 30% mark over the time period considered but never more than about two or three percentage points.
5.34 Banking and finance, compared to Flintshire, Denbighshire and Wrexham, is a strong sector in Chester’s economy with levels staying at around 25% of total employment. To say that one in four employees are in the banking and finance sector is a strong statement about Chester’s economy as jobs in this sector tend to be highly paid. Also fluctuating around the 25% level is employment in the public sector. This is not as much as Denbighshire or Wrexham, where levels of public sector employment tend to be higher.
March 2008 82 Wrexham CBC, Flintshire BC, Denbighshire BC
Ellesmere Port and Neston
Figure 5.12: Ellesmere Port and Neston broad industrial sector breakdown
35
30
25
20 %
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Distribution hotels & restaurants Transport & communications Banking & finance Public sector Other services
Source: ABI, 2005
5.35 Ellesmere Port’s economy is similar to Wrexham’s in many respect. Both have a high levels of employment in the manufacturing sector. The difference being that there are more jobs in the public sector in Wrexham than there is in Ellesmere Port – public sector employment fluctuates around the 15% mark here.
5.36 Distribution, hotels and restaurants, or ‘Tourism’ is also a strong driver in this economy with levels rising slightly from 2001 to 2002, before falling somewhat and the rising again between 2003 and 2005. Banking and finance has increased in importance between 2001 and 2004 before falling slightly to 13% in 2005 though still more significant than Wrexham for example.
March 2008 83 Wrexham CBC, Flintshire BC, Denbighshire BC
Conwy
Figure 5.13: Conwy broad industrial sector breakdown
45
40
35
30
25 % 20
15
10
5
0 2001 2002 2003 2004 2005
Agriculture & fishing Energy & water Manufacturing Construction Distribution hotels and restaurants Transport & communication Banking & finance Public sector Other services
Source: ABI, 2005
5.37 In Conwy it is obvious that we have two main drivers of the economy: distribution hotels and restaurants and the public sector respectively. The first has continuous employment of over 35% of total employment over the time period considered, while the second stays at levels of more than 30% throughout. Compared to these drivers all the other sectors are of negligible importance in driving Conwy’s economy forward.
Indexed Employment Growth
5.38 The following table and chart provides analysis of employment growth for the study between 1995 – 2005.
March 2008 84 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.14: Indexed employment growth 1995-2005
1995* 1996* 1997* 1998 1999 2000 2001 2002 2003 2004 2005
Denbighshire 100 111.20 114.24 110.41 114.32 116.84 113.64 114.59 117.94 127.96 132.53 Fintshire 100 105.90 111.12 108.62 114.97 112.20 113.02 113.76 114.43 120.94 126.21 Wrexham 100 104.53 108.55 106.01 110.29 107.46 110.18 107.67 103.78 106.91 108.72 Core Study Area 100 106.58 110.87 108.06 113.11 111.49 112.11 111.71 111.30 117.35 121.19 Conwy 100 114.71 115.87 112.05 112.67 113.67 116.82 115.78 121.04 122.20 127.94 Chester 100 100.95 116.23 113.11 123.70 116.04 121.69 124.52 124.68 125.18 124.58 Ellesmere Port and Neston 100 108.39 106.61 100.22 103.53 93.81 99.11 101.12 107.09 103.31 100.47 Great Britain 100 101.80 104.48 107.15 109.23 110.94 112.15 112.60 113.12 114.69 116.61 Wales 100 102.51 103.00 103.69 106.83 107.90 108.83 109.62 111.61 116.09 118.86
Source: ABI employee analysis. * are from Annual Employment Survey Rescaled Analysis
Figure 5.15: Indexed Employment Growth
135
130
125
120
Denbighshire 115 Fintshire Wrexham 110 Great Britain Wales
105
100
95
90 1995* 1996* 1997* 1998 1999 2000 2001 2002 2003 2004 2005
Source: ABI employee analysis. * are from Annual Employment Survey Rescaled Analysis
5.39 Employment growth in Denbighshire outstrips the GB and Welsh average as well as employment growth in the other two economies under consideration, that of Flintshire and Wrexham.
March 2008 85 Wrexham CBC, Flintshire BC, Denbighshire BC
5.40 From 1995 to 2001 Denbighshire’s employment figures closely resemble those of Flintshire but from 2003 onwards especially Denbighshire’s employment rate grows at a much faster rate.
5.41 Wrexham’s employment figures initially outgrow the GB and Welsh averages from 1995 to 1997 but then rise and fall at a level which is below that of GB and Wales finishing in 2005 at a rate which is substantially lower than the GB and Welsh averages. This in part illustrates the ‘transitional’ period for Wrexham as noted above.
5.42 It is interesting to note, from figure 5.14 that Ellesmere Port’s employment figures haven’t changed at all from 1995 to 2005 so that in 2005 the level of employment is roughly the same as it was in 1995.
Summary
• Employment growth in Denbighshire outstrips the GB and Welsh average as well as employment growth in the other two economies under consideration, that of Flintshire and Wrexham
• The strongest sector in Denbighshire’s economy is the public sector. Levels of concentration in this sector are higher than the GB and Welsh average. There has been growth of around 4% in the public sector between 2001 and 2005: the largest growth of all broad industry sectors in Denbighshire.
• There is also a high concentration of activity in the Construction sector in Denbighshire in 2005. But the concentration levels for banking and finance in Denbighshire is much lower than the national average.
• Manufacturing is the most important driver of the Flintshire economy. There hasn’t been much growth but it has stayed at high levels throughout 2001 to 2005. Location quotients show that the concentration of manufacturing in Flintshire is much higher than is the case nationally.
• Manufacturing in Wrexham has declined from 2001 to 2005 by about 10 percentage points. Although, at the moment it remains an important driver (but not as much as in Flintshire), recent decline does not bode well for manufacturing if the trend continues.
• In our Core Study Area, which is an average of all three economies, the most obvious drivers are Manufacturing, ‘Tourism’ (or hotels, distribution and restaurants) and the public sector.
March 2008 86 Wrexham CBC, Flintshire BC, Denbighshire BC
• Chester is currently taking the lead within this area for ‘professional’ services including banking and finance. Levels of employment in banking and finance in Chester stay at around 25% of total employment throughout the time period considered.
• Ellesmere Port’s economy is similar to Wrexham insofar as both have high levels of employment in manufacturing and are therefore faced with challenges to maintain employment and value added.
Labour Market Dynamics
Economic Activity / Inactivity and Unemployment
5.43 Economic activity rates are a key indicator in establishing the level of the population which is active within the economy. This has implications for housing requirements and the ability of households to access open market housing.
5.44 The following chart shows the economic activity rates for the authorities within the core study area as well as a composite average and the comparable figures for authorities within the wider reference area.
Figure 5.16: Economic Activity
Economic activity rate - working age
84.0 82.0 80.0 78.0 76.0 % 74.0 72.0 70.0 68.0 66.0
s re m y s e hi ha al nts ex Wale r Conw Chester d W Fli W Denbighshire land an Core Study Area ng E
Ellesmere Port and Neston
Source: Annual Population Survey Apr 2005 – Mar 2006 Nomis
March 2008 87 Wrexham CBC, Flintshire BC, Denbighshire BC
5.45 All three of the core authorities have relatively high levels of economic activity, with Flintshire and Denbighshire in particular having notably high levels which exceed the England and Wales average. Denbighshire outperforms the rest of Wales but is notably lower than Wrexham and Flintshire.
5.46 Within the wider reference area Chester stands out as recording a very high economic activity rate which is considerably higher than all the authorities and the national proportion. The same is not true of Ellesmere Port which performs relatively poorly. Conwy’s rate is broadly in line with the other three Welsh authorities.
5.47 In contrast to economic activity the following chart shows levels of economic inactivity and also unemployment. These two variables are distinct in nature with economic inactivity covering a much broader range of people a number of which choose not to access the economy as a result of circumstances, for example, students, carers etc…
Figure 5.17: Economic inactivity and unemployment
Economic inactivity and Unemployment - Working age population
6.0 30.0
5.0 25.0
4.0 20.0
% 3.0 15.0 % Unemployment rate - w orking age 2.0 10.0
1.0 5.0
0.0 0.0
n s Economic inactivity y e am ea to es h Ar rate - w orking age ex Nes Wal r Conw Chester Flintshire W t and Denbighshire e Study Cor re Por England and Wal me
Elles Source: Annual Population Survey Apr 2005 – Mar 2006 Nomis
5.48 Looking at unemployment rates there is some divergence between the three authorities, with Flintshire recording a very low level of below 3% with Wrexham and Denbighshire recording levels of just over 4%. Together they record an average of just under 3.7% which is below both the Welsh and England and Wales average. Chester once again performs very well with
March 2008 88 Wrexham CBC, Flintshire BC, Denbighshire BC
an unemployment rate of only 1.6%, in Ellesmere Port unemployment is also below that recorded by the Welsh authorities.
5.49 In terms of economic inactivity the three core authorities all record similar levels in line with the England and Wales average with Denbighshires rate marginally higher. Ellesmere Port records by far the highest level of economic inactivity.
5.50 Using Census 2001 data at Lower Super Output Area (LSOA) level unemployment has been mapped to show the geographical spread. This is shown on the following page.
March 2008 89 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.18: Unemployment geographical spread
5.51 There are clear concentrations within a number of the urban settlements around Deeside and in Wrexham town centre. Rhyl in Denbighshire also shows a high concentration of
March 2008 90 Wrexham CBC, Flintshire BC, Denbighshire BC
unemployment. Overall the plan illustrates the general low level of unemployment across the core study area.
5.52 As noted above the relationship between economic circumstance and housing choice is an important one. The following chart shows the economic breakdown by tenure to draw conclusions regarding cross-tabulated trends.
Figure 5.19: Economic classification against tenure
Economic Activity against Tenure Core Study Area
10 0 %
90% Econ inactive - Other 80%
70% Econ inactive Permanently sick or 60% disabled Econ inactive - Looking 50% after home/family
40% Econ inactive - Student
30% Econ inactive - Retired 20%
10 % Econ active - Full-time student 0% Econ active - Unemployed
Econ active - Self employed
Econ active - Employee
Source: Census 2001
5.53 It is clear that the social rented sector records notably low levels of economically active – employee and economically active – self employed compared to the other tenures. Owner- occupation records the highest levels of the former category within all three authorities.
5.54 The level of economically active employees is notably high within the private rented sector in Flintshire.
5.55 In contrast levels of economically inactivity are considerably higher within the social rented tenure than owner-occupation and private rented. Interestingly the private rented sector in Denbighshire has a high concentration of economically inactive – permanently sick or disabled which is in line with the proportion evident within the social rented sector.
March 2008 91 Wrexham CBC, Flintshire BC, Denbighshire BC
5.56 Retirees show similar proportions within both the owner-occupied sector and the social rented sector but are poorly represented within the private rented sector within all three authorities. Wrexham is the only authority which records a high proportion of students within the private rented sector, with students making up a small proportion in the other tenures in all of the other authorities.
5.57 The following chart indicates changing levels of unemployment between 1991 and 2001. Between these years England and Wale experienced a relatively buoyant economic shift with unemployment rates reaching high levels in the early to mid 1990s.
Figure 5.20: Unemployment change 1991 – 2001
1991 1991 % 2001 2001 % % Change Unemployment unemployment Unemployment unemployment 91 - 01 (16+) (16 - 74) Flintshire 4,905 4.4% 3,246 3.0% -33.8 Wrexham 5,150 5.3% 3,061 3.3% -40.6 Conwy 3,814 4.3% 2,832 3.7% -25.7 Chester 4,279 4.6% 2,097 2.4% -51.0 Ellesmere Port 3,558 5.6% 1,864 3.2% -47.6 and Neston Denbighshire 3,331 4.6% 2,232 3.4% -33.0 England and 2,235,341 5.6% 1,261,343 3.4% -43.6 Wales Wales 127,200 5.6% 72,488 3.5% -43.0 Source: 1991 Census and 2001 Census
5.58 It is clear that all of the authorities witnessed a significant reduction in their overall unemployment levels. This is particularly true of Wrexham, of the three core authorities, which recorded a 40% decrease over the ten years. Chester also recorded a very high rate of change, over 50%, resulting in, as noted above, a very low level of unemployment.
5.59 Job Seekers Allowance claimant data provides another indication of the changing levels of those failing to access the economy. The following chart shows residence-based proportions which express the number of claimants resident in an area as a percentage of the working age population resident in that area between January 1992 and January 2007.
March 2008 92 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.21: JSA Claimant Count
Claimant Count (JSA) - % of Working Age Population
10.0
9.0 England and 8.0 Wales 7.0 Wales 6.0 Chester
% 5.0 4.0 Ellesmere Port and Neston 3.0 Conw y 2.0 1.0 Denbighshire 0.0 Flintshire 5 6 199 199 1997 1998 1999 y y y y y Wrexham uary 2002uary 2003uary 2004 nuary 2000nuary 2001 a a an an an JanuaryJanuary 1992January 1993 Januar 1994 JanuarJanuarJanuarJanuar J J J J J JanuaryJanuary 2005January 2006 2007 Source: Nomis 2007
5.60 All of the authorities have witnessed a significant reduction in JSA claimant counts, With all of the authorities recording relatively similar levels in January 2007. Once again Chester has the lowest level indicating the proportion of economically active residents.
Occupational Structure
5.61 The occupational structure of the authorities is significant as in further sections occupation is linked with housing type choice. The following table shows the relative proportional splits within the core authorities, the wider reference authorities and national benchmarks.
March 2008 93 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.22: Occupational Structure – Proportional breakdown
Denbighshire Flintshire Wrexham Core Conwy Chester Ellesmere Wales England Study Port and and Wales Area Neston
Managers and 12.2 13.7 11.1 12.5 11.8 18.2 10.2 12.2 15.1 Senior Officials Professional 12.3 10.6 9.9 10.8 11.1 17.7 13.9 11.2 12.7 Associate 14.4 10.3 13.4 12.4 11.5 13.7 13.5 13.3 14.3 Professional and Technical Administrative and 10.4 11.1 11.5 11.1 12.3 10.7 11.9 12.2 12.5 Secretarial Skilled Trades 13.9 13.4 11.6 12.9 15.2 9.2 12.4 12.2 10.9 Personal Service 8.6 8.7 8.3 8.5 10.2 7.5 6.1 8.4 7.9 Sales and Customer 7.5 8.8 8.2 8.3 7.0 8.8 10.8 8.4 7.6 Service Process, Plant and 7.6 10.9 13.0 10.9 7.3 4.7 10.2 8.8 7.5 Machine Operatives Elementary 13.1 12.3 12.8 12.7 13.3 9.3 11.0 12.9 11.3 Source: Annual Population Survey Apr 05 – Mar 06 Nomis
5.62 The core study area has a composite average of managers and professionals which exceeds the Welsh average but falls below the England and Wales average and considerably below the proportion recorded for Chester.
5.63 In terms of the proportion of people classed as professional the average for the core area shows the relatively poor proportional representation of this occupation class within the three authorities, 10.8% compared with an England and Wales average of 12.7%. This is particularly driven by low proportions in Wrexham and Flintshire with Denbighshire recording a proportion above the Welsh average.
5.64 Reflecting this the core study area has above national average (England and Wales) proportions of people employed in skilled trades, personal service and elementary occupations.
5.65 In order to more clearly identify the relative proportional shares for the three core authorities the following chart shows location quotients. Location quotients (LQ) identify the relative concentration of each occupation type compared with the average for England and Wales as a whole for each area. A score greater than one indicates a relative concentration of employment, and a score of less than one represents a relative scarcity of employment for the occupation type.
March 2008 94 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.23: Occupational Structure Location Quotients
Location Quotient - Occupation Structure Core Study Area (2005/2006) England and Wales
Denbighshire
M anagers and Senior Officials 1.8 Flintshire 1.6 Elementary 1.4 Professional Wrexham 1.2 1.0 0.8 Core Study Area 0.6 0.4 Plant and M achine Operatives Associate Professional and Technical 0.2 0.0
Sales and Customer Service Administrative and Secretarial
Personal Service Skilled Trades
Source: Annual Population Survey Apr 05 – Mar 06 Nomis
5.66 This reinforces the conclusions reached above. The authorities all show disproportionately high levels of plan and machine operatives associated with the legacy of employment within manufacturing sectors and the continued dominance of these sectors within the economy. Linked to this skilled trades also shows disproportionate levels within all of the authorities constituting the core study area.
5.67 The following table looks to track changes in the occupational structure between January 2004 and March 2006.
March 2008 95 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.24: Change in occupational structure
% Change in occupation between Jan 04 - Dec 04 and Apr 05 and Mar 06
Denbighshire Flintshire Wrexham Managers and Senior Officials -7.0 0.0 -6.8 Professional 8.2 -1.2 0.0 Associate Professional and Technical 3.3 8.3 2.4 Administrative and Secretarial -13.5 -17.8 12.5 Skilled Trades 0.0 16.1 -16.3 Personal Service -19.6 14.0 0.0 Sales and Customer Service 14.3 -4.3 2.0 Process, Plant and Machine Operatives 3.1 -26.8 2.5 Elementary 23.9 24.3 25.0 Source: Annual Population Survey, Nomis
5.68 Denbighshire and Wrexham appear to have witnessed a decline in people employed as managers and senior officials over this short time period, with Flintshire showing no change in this sector but a decline in professional occupations. Significantly, Flintshire shows a strong decline in the process, plant and machine operatives sector over this time period.
5.69 The following page shows a plan identifying concentrations of higher-managerial professionals, this illustrates the geographical location and distribution of this occupation type.
March 2008 96 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.25: Higher Managerial and Professional Occupations
5.70 The plan shows the clear spread of this occupation group out from Chester into Wrexham and Flintshire with concentrations evident along the national border. A central spine of
March 2008 97 Wrexham CBC, Flintshire BC, Denbighshire BC
concentrations of this occupation are also clear spreading down through Flintshire and Denbighshire.
Figure 5.26: Elementary occupations
March 2008 98 Wrexham CBC, Flintshire BC, Denbighshire BC
5.71 Examining the spatial location of those employed in elementary occupations indicates a different spatial spread. Concentrations of this occupation type are found along the coastal areas and around a number of inland urban settlements including Wrexham town centre.
Commuting
5.72 Sustainable travel movement is continuing to rise up the political agenda with increasing emphasis placed upon reducing the distance travelled between work and home. The following chart indicates the proportional split in the distances travelled by employees within the core authorities.
Figure 5.27: Distance of commute
Commuting within the Core Authorities 100%
90% Other
60km and over 80% 40km to less than 70% 60km 20km to less than 40km 60% 10km to less than 20 km 50% 5km to less than 10 k m 40% 2km to less than 5km Less than 2km 30%
20%
10%
0% Denbighshire Flintshire Wrexham
Source: Census 2001
5.73 Distances commuted appear to be relatively small with 50% or more persons commuting less than 10km. Denbighshire has the greatest spread of distances with a significant number of people travelling 20km to 40km but also the largest proportion travelling less than 2km. This reflects the urban/rural make up of the Borough with significant parts of the borough rural in nature and employment centres clustered in particular locations.
5.74 Indeed the following chart shows the proportion of people who work mainly at or from home.
March 2008 99 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.28: People working mainly at or from home
Work mainly at or from home
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0% Denbighshire Flintshire Wrexham
Source: Census 2001
5.75 Denbighshire has a significant proportion, almost 12%, of people who work mainly at or from home. As noted above this is likely to be a direct result of the significant proportion of the borough which is rural and therefore not as well connected via road and public transport infrastructure. The other two authorities also record notable levels of home working likely to be linked to their rural areas.
Household Incomes / Deprivation
5.76 Incomes are linked to economic occupation and industry and have a direct implication for the type and tenure of housing available to households. Further analysis is undertaken of income compared with house prices to assess the extent of the affordability issue within the three authorities in Sections 7 and 9. The analysis here looks to provide a broad overview of income levels within the core study area as compared with national benchmarks.
5.77 The following chart shows the comparable workplace and residence based levels of income for the core authorities compared to the wider reference area and national benchmarks. It is important to note that these incomes are for individuals rather than households.
March 2008 100 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.29: Workplace / Residence based income
Full Time Weekly Gross Pay - Residence and Workplace Based
600.0
500.0
400.0
300.0 Total M edian Weekly gross pay 200.0 Residence
100.0 Total M edian Weekly Gro ss 0.0 Pay - Denbighshire Flint shire Wrexham Conwy Chest er Ellesmere Wales England and Wo rkplace Port and Wal es Nest on Source: Annual Survey of Hours and Earnings (ASHE), 2006
5.78 There are a number of key conclusions identifiable from the data:
• Of the three authorities Denbighshire appears to have the lowest overall level of income. Flintshire has the highest levels which exceed the Welsh and England and Wales averages.
• There appears to be little difference between workplace and residence based incomes within the three authorities for full time work.
• Residence based earnings are notably higher in Chester and Ellesmere Port and lower in Conwy.
• Ellesmere Port records the highest workplace based earnings followed by Flintshire both of which are above the England and Wales average.
5.79 Part-time working plays an important element within the three authorities constituting 23.5%, 22.3% and 22.8% of those in employment in Denbighshire, Flintshire and Wrexham respectively20. These figures are however lower than the Welsh average of 24.7%. The following chart indicates the comparable gross weekly total pay between full and part time workers.
20 Source: Local area labour force survey, March 2003 – February 2004 (most recent data)
March 2008 101 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.30: Full / Part time incomes, residence based
Median Gross Weekly Pay - Full/Part time employment 600.0
500.0
400.0
300.0
Residence Based 200.0 Gross Pay Full- time Workers 10 0 . 0 Median Gross Weekly Pay £ Gross Weekly Median
Residence Based 0.0 Gross Pay Part- time Workers
Source: Annual Survey of Hours and Earnings, 2006
5.80 As would be expected earnings from part-time work are considerably lower than those for full- time workers. There is little difference in the gross wages for part-time workers between the authorities, although Wrexham records a notably low level compared with the other authorities.
5.81 All three authorities have commissioned CACI Paycheck data. This data shows household incomes as opposed to the individual incomes recorded within ASHE and allows for analysis at six-digit postcode level. This therefore ensures a very thorough way of understanding spatial disparities in levels of income.
5.82 The following plan shows these incomes mapped out across the three authorities. A number of key spatial trends can be identified:
• A cluster of postcodes with high incomes can be identified around Ruthin and areas to the north east of the town;
• The area around St Asaph and Boldelwydden shows a contrasting mix of incomes with postcodes classified in high and low income bands in close proximity;
• Within Wrexham there appear to be clusters of relatively high income along the borders with England and in a belt to the north of Wrexham town along the A528 and A539; and
March 2008 102 Wrexham CBC, Flintshire BC, Denbighshire BC
• There is a cluster of postcodes with low incomes along stretches of the A55 particularly in the northern parts of Flintshire.
Figure 5.31: CACI Paycheck incomes
Source: CACI Paycheck data, 2007
5.83 Economic circumstance is one driver behind areas being classed as ‘deprived’. The Welsh Index of Multiple Deprivation (IMD) was released in 2005 replacing the earlier 2000 version. It
March 2008 103 Wrexham CBC, Flintshire BC, Denbighshire BC
provides a way of ranking local areas in Wales from the most to the least “deprived” and is used by the Welsh Assembly Government to target resources towards particular areas.
5.84 The areas classed as within the top percentiles of ‘most deprived’ within the three authorities are shown on the following plan. This represents the composite of the index made up of the constituent domains.
Figure 5.32: WIMD, 2005
March 2008 104 Wrexham CBC, Flintshire BC, Denbighshire BC
5.85 The plan shows the areas with the most acute levels of multiple deprivation are located within Wrexham town centre, Cefn-mawr, Rhyl and a number of other coastal areas along the Dee Coast including parts of Deeside.
5.86 It is clear that deprivation is concentrated and largely contained within urban settlements within the core study area, although it is important to be aware that the rural areas face their own issues in particular with regard to access to services.
March 2008 105 Wrexham CBC, Flintshire BC, Denbighshire BC
5.87 A separate ranking exercise was undertaken from the data underpinning access to services within the WIMD to highlight those areas where access is limited21. Those areas which are ranked in the top 15% across Wales are shown on the following plan, this clearly shows the issues faced by rural areas within the three authorities.
21 No attempts at weighting were included within this index
March 2008 106 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.33: Ranked Access to Services – Source: WIMD 2005
March 2008 107 Wrexham CBC, Flintshire BC, Denbighshire BC
Employment Projections
5.88 The following is based on forecasts provided by Cambridge Econometric which have been updated by CBR.
5.89 Overall employment trends according to the forecasts indicate that Denbigh is predicted to post the strongest growth in the North sub-region up to 2021 – and this by some considerable margin. Previous work that has been undertaken for this area has indicated that Denbighshire has been attracting significant inflow of population expecting to domicile but commute out the County mainly eastwards. However, this is not a vacuous trend; it has economic and social implication for the host area (in this case Denbighshire) and this appears in part at least the explanation supporting the growth trend we observe below.
Figure 5.34: Forecast Employment: Core Area and Authorities
Forecast Employment: Core Area and Authorities
1.25
1.20
1.15
1.10
1.05
1.00
0.95
0.90 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Denbigh Flint Wrexham Core Area
Source: Cheshire County Council, CE Forecasts, 2007
5.90 Another observation of note there that Wrexham demonstrates what appears to be an average trend amongst the three counties – in that overall growth tracks neatly with projected growth for the core area. Of most concern perhaps is the static trend forecast for Flint with barely any growth predicted beyond 2005 in employment terms. Our observations about the two border counties in ‘transition’ are germane here.
March 2008 108 Wrexham CBC, Flintshire BC, Denbighshire BC
Dynamics
5.91 The next section therefore is an attempt at least at explaining some of the dynamics that we observe around these overall forecasts. In particular these trends are reflective of industrial structure as well as potentially more active and different ‘aspirations’ being deployed by the respective counties. Briefly summarised we would comment that:
• Flint continues to struggle to maintain its manufacturing base and even where blue chip companies such as Airbus reside in the area there are no guarantees of future growth in employment – indeed quite the converse in the current climate.
• Wrexham on the other hand whilst ensuring it has active policies to support as much as possible its manufacturing base (eg link road to the Wrexham industrial park) is also very actively targeting retail and related spillover opportunities from Chester. Indeed Wrexham is growing in stature and is actively promoting itself to the market as a viable and attractive alternative retail / financial centre for North and Mid Wales
• Denbighshire is reaping some reward from a degree of ‘overheating’ taking place in West Cheshire. Critically, and despite some very deprived hot spots in the county, the county combines value for money with logistic efficiency that is proving ever more attractive to the commuter. In turn this is inducing secondary spending in the county that is supporting future optimism in the county’s core products – the retail and tourism sectors.
Sub- sector analysis
5.92 Figure 5.37below is a sub-sector analysis of forecast high growth sectors in Denbighshire. It is no surprise here that the top growth sectors are expected to be in services. As hypothesised earlier, this perhaps is being partly driven by growing household demand and services therein as well as activity to upgrade the retail and tourism product more generally. The County has always nurtured a high concentration of public sector services and the forecast indicate that this is likely to be maintained.
March 2008 109 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.35: Denbighshire - Significant Growth sectors
Sub - sector @2021 % change (03 – 21) Wood & Paper 0.240 0.59 Manufacturing - Other 0.323 0.78 Distribution 1.908 0.38 Retailing 5.915 0.51 Hotels & Catering 4.570 0.35 Computing Services 0.528 0.57 Education 4.204 0.36 Health & Social Work 12.820 0.41 Miscellaneous Services 3.582 0.46 Source: Cheshire County Council, CE Forecasts, 2007
5.93 Analysis which identifies the weak employment areas in the County draws a particular reference towards the primary or manufacturing sector – as well as construction. However, relative to its peer areas, predicted losses are at the margin.
Figure 5.36: Denbighshire - Significant Declining sectors
Sub - sector @2021 % change (03 – 21) Agriculture, Forestry & Fishing 0.858 -0.10 Food, Drink & Tobacco 0.314 -0.21 Non-Metallic Mineral Products 0.313 -0.25 Mechanical Engineering 0.792 -0.27 Motor Vehicles 0.327 -0.50 Construction 3.110 -0.13 Source: Cheshire County Council, CE Forecasts, 2007
5.94 Analysis of growth sectors for Flint draws on a much wider mix of sub-sectors from which future employment is expected. Critically of the county is that it appears to be gaining some ground in areas which have been weak principally because of the dominance of manufacturing and the proximity of Chester to services these with professional support.
March 2008 110 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.37: Flint - Significant Growth Sectors
Sub - sector @2021 % change (03 – 21) Food, Drink & Tobacco 3.208 0.08 Printing & Publishing 1.481 0.70 Manufacture of Fuels 0.024 0.83 Manufacturing - Other 1.521 0.38 Construction 5.852 0.05 Distribution 4.308 0.40 Retailing 8.569 0.37 Banking & Finance 0.739 0.05 Computing Services 1.102 1.10 Professional Services 3.141 0.12 Other Business Services 2.763 0.07 Education 6.169 0.20 Health & Social Work 5.572 0.27 Miscellaneous Services 5.063 0.36 Source: Cheshire County Council, CE Forecasts, 2007
5.95 However with such a high concentration of manufacturing (as noted earlier) then forecast employment losses almost counteract the projected gains – the significant employment losses are almost exclusively manufacturing. These are detailed below.
Figure 5.38: Flint - Significant Declining Sectors
Sub - sector @2021 % change (03 – 21) Agriculture, Forestry & Fishing 0.358 -0.48 Textiles, Clothing & Leather 0.754 -0.42 Wood & Paper 1.435 -0.36 Chemicals 1.274 -0.29 Rubber & Plastics 0.756 -0.24 Non-Metallic Mineral Products 0.570 -0.29 Basic Metals 0.295 -0.67 Metal Goods 0.643 -0.46 Mechanical Engineering 0.440 -0.38 Motor Vehicles 0.895 -0.17 Communications 0.530 -0.09 Public Admin. & Defence 2.803 -0.26 Source: Cheshire County Council, CE Forecasts, 2007
5.96 This perhaps reflects a period of ‘adjustment’ for Flint again with market forces realigning the structure more towards the regional / national average. However, the underlying implications of these predicted changes are far more pervasive to the Flint economy particularly in terms of wages and income locally.
March 2008 111 Wrexham CBC, Flintshire BC, Denbighshire BC
5.97 Where a substantial majority of these job losses are local with a propensity to pay much higher wages than the replacement jobs implied then this may lead to some ‘displacement’ effects locally. This could have implications for hosuing requirements and impact on the level of affordable housing required, issues which are explored in more detail in the final sections of the HMA.
5.98 Figures 3.39 and 5.40 below illustrates the analysis for Wrexham which reveals similarity to the trends in Flint; growing replacement services and decline in manufacturing employment with the potential downward ratchet effects on local income a real possibility.
Figure 5.39: Wrexham - Significant Growth sectors
Sub – sector @2021 % change (03 – 21) Food, Drink & Tobacco 2.659 0.11 Printing & Publishing 0.232 1.52 Manufacturing - Other 0.726 0.18 Construction 3.808 0.19 Distribution 3.425 0.17 Retailing 7.243 0.11 Hotels & Catering 3.765 0.14 Banking & Finance 0.820 0.44 Computing Services 0.329 0.34 Public Admin. & Defence 3.588 0.12 Education 4.144 0.18 Health & Social Work 11.414 0.40 Miscellaneous Services 5.795 0.64 Source: Cheshire County Council, CE Forecasts, 2007
Figure 5.40: Wrexham - Significant Declining sectors
Sub - sector @2021 % change (03 – 21) Agriculture, Forestry & Fishing 0.656 -0.54 Textiles, Clothing & Leather 0.103 -0.51 Wood & Paper 1.132 -0.47 Chemicals 0.176 -0.59 Rubber & Plastics 1.107 -0.13 Non-Metallic Mineral Products 0.360 -0.25 Metal Goods 0.608 -0.36 Mechanical Engineering 0.550 -0.35 Electrical Engineering & Instruments 1.158 -0.12 Other Transport Equipment 0.172 -0.54 Water Supply 0.115 -0.52 Communications 0.426 -0.10 Source: Cheshire County Council, CE Forecasts, 2007
March 2008 112 Wrexham CBC, Flintshire BC, Denbighshire BC
5.99 Overall therefore and despite it’s Objective 1 / Convergence Fund status, Denbighshire appears to be better structured to claim the benefits of future growth in employment. This assertion is tested below through a detailed analysis of the aggregate Core Area below.
Core Area Analysis
5.100 This section includes a more detailed analysis of the sub-sector change in employment for the aggregate Core Area and a matching exercise of these results with the individual results for the local authorities. This aims to:
• substantiate what we might observe overall for the study area
• isolate which sectors and sub areas are going to be important for employment
5.101 The analysis below provides the aggregate results for the top growing sectors up to 2021 for the core area. It is quite evident from these results that services will dominate employment opportunities in North West Wales over the medium term. In particular growth will be related to:
• the public sector (esp Health and Education)
• Tourism and Retail / Distribution
• Finance and Business Services
Figure 5.41: Core Study Area Forecast Growth Sub-Sectors
Sub - sector @2021 % change (03 – 21) Printing & Publishing 2.009 0.59 Manufacturing - Other 2.569 0.36 Distribution 9.641 0.31 Retailing 21.727 0.30 Hotels & Catering 13.754 0.15 Banking & Finance 1.959 0.14 Computing Services 1.959 0.77 Other Business Services 5.758 0.08 Education 14.516 0.24 Health & Social Work 29.806 0.38 Miscellaneous Services 14.440 0.49 Source: Cheshire County Council, CE Forecasts, 2007
5.102 It is therefore of interest to understand where exactly these jobs currently located as a basis of perhaps attracting more (ie specialisation or concentrations). Table 5.42 below indicates that for the base year:
March 2008 113 Wrexham CBC, Flintshire BC, Denbighshire BC
• Denbighshire has by far the greatest proportion of its employment related to the future growth sectors with 64% of total employment related to these future growth sectors compared to 55% in Wrexham and 48% in Flint; and
• In absolute terms of course Flint has the edge with some 33,000 people employed across these sectors compared to 25,000 in Denbigh and 31,000 in Wrexham
Figure 5.42: Density of Employment by Authority 2003: Forecast Top Growth Sub-sectors
Denbighshire Flintshire 2003 Wrexham 2003 2003 Printing & Publishing 0.76% 1.24% 0.16% Manufacturing - Other 0.46% 1.56% 1.08% Distribution 3.52% 4.36% 5.11% Retailing 9.95% 8.87% 11.42% Hotels & Catering 8.59% 7.46% 5.78% Banking & Finance 1.12% 1.00% 1.00% Computing Services 0.85% 0.75% 0.43% Other Business Services 1.80% 3.66% 3.54% Education 7.86% 7.31% 6.15% Health & Social Work 23.06% 6.24% 14.30% Miscellaneous Services 6.22% 5.29% 6.20% Total 64.18% 47.73% 55.17% Source: Cheshire County Council, CE Forecasts, 2007
5.103 More detailed analysis of the linkage between current projected high growth sectors and sub areas. Figure 5.43 below draws on a further LQ analysis to identify which areas are expected to accrue further employment gains given their current disposition.
March 2008 114 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 5.43: Areas expected to witness employment gains
Core Core Core % Denbigh Flint (% Wrexham LQ LQ LQ (% Nos Dist (% Dist Dist (Dist D F W change (2021) (2021) 2021) 2021) 2021%) 2021) Printing & 0.59 2.0091 1.08% 0.61% 2.00% 0.37% 0.57 1.85 0.34 Publishing Manufacturing 0.36 2.5694 1.38% 0.67% 2.05% 1.15% 0.48 1.48 0.83 - Other Distribution 0.31 9.6407 5.19% 3.94% 5.81% 5.42% 0.76 1.12 1.04 Retailing 0.30 21.7274 11.71% 12.22% 11.57% 11.47% 1.04 0.99 0.98 Hotels & 0.15 13.7541 7.41% 9.44% 7.31% 5.96% 1.27 0.99 0.80 Catering Banking & 0.14 1.9591 1.06% 0.83% 1.00% 1.30% 0.78 0.95 1.23 Finance Computing 0.77 1.9585 1.06% 1.09% 1.49% 0.52% 1.03 1.41 0.49 Services Other 0.08 5.7576 3.10% 1.60% 3.73% 3.52% 0.52 1.20 1.13 Business Services Education 0.24 14.5161 7.82% 8.69% 8.33% 6.56% 1.11 1.06 0.84 Health & 0.38 29.8059 16.06% 26.49% 7.52% 18.08% 1.65 0.47 1.13 Social Work 0.49 14.4396 7.78% 7.40% 6.83% 9.18% 0.95 0.88 1.18 Miscellaneous Services Total 118.1375 63.64% 72.99% 57.64% 63.53% Source: Cheshire County Council, CE Forecasts, 2007
5.104 There is, as highlighted, a clear link between sectors and subareas with:
• current ‘high’ concentration levels;
• future or growing concentration levels; and
• ‘high’ levels of employment growth.
5.105 The key sectors for our purposes here are:
• retailing
• hotels and catering
• computing services
• education
• health and social work
• miscellaneous services
March 2008 115 Wrexham CBC, Flintshire BC, Denbighshire BC
5.106 Figure 5.44 below provides a more definitive illustration of the forecast outcome by 2021 according to these forecasts.
Figure 5.44: Forecast Location Quotient analysis: High Growth Sub-sectors
Fore c a s t LQ an al y s i s : H igh Gr ow th Sub-se c t or s
1. 8 1. 6 1. 4 1. 2 1 0. 8 0. 6 0. 4
Reta Ho Comput E Heal M ducation i tel scel il s th & in l g & Cat aneous ing Ser S oci er ing al vi W S ces e. ork . .
LQ D LQ F LQ W
LQD = Denbigh; LQF = Flint; LQW = Wrexham.
Source: Cheshire County Council, CE Forecasts, 2007
5.107 For the top growing sectors Denbighshire appears to have the upper hand in terms of forecast employment growth where the LQ is in excess of the baseline average (i.e. 1) for 5 of the 6 top growing sectors and in excess of its counterparts for at least 4 of the sectors. We can conclude from this that the industrial mix slightly favours Denbighshire going forward certainly in terms of employment growth whilst Flint and Wrexham are entering a further period of industrial transition.
5.108 In the case of Wrexham, then the town has already started the process of re-positioning its product offering relative to Chester and this is providing a wider impetus for the whole county.
5.109 As for Flint then Deeside Industrial Park remains an important cornerstone for the county but the trend forecast indicates that there are challenges ahead.
Implications for Housing
5.110 The trends and future forecasts identified will have implications for North East Wales in terms of its housing market. With economic changes potentially subtle and long-term, care is
March 2008 116 Wrexham CBC, Flintshire BC, Denbighshire BC
necessary when predicting potential impacts on the basis of these sorts of results. That said, the historical and forecast results are very consistent and clearly reveal important trends within the economy. The following considerations have been identified through the analysis within this sub-section and Section 10 looks in more detail at applying change in the economy to future housing requirement:s for each of the authorities and the Core Study Area as a whole.
• Manufacturing employment is under pressure more generally in the UK and whilst Flint and perhaps to a lesser extent Wrexham have remained robust and loyal to the industry the area is not in any way immune to the vagaries of the market. The forecasts indicate that all three local authorities should expect a reduction in employment within manufacturing;
• However, there is room for optimism in this area as a result of its linkage to West Cheshire which is likely to present it with a buoyant market and new opportunities. Service employment is therefore expected to increase and more than compensate for the manufacturing job losses overall;
• Earnings differentials between manufacturing and replacement employment – notably in this case, Retail / Leisure / Tourism sectors and the public sector – are likely to have a dampening effect on earnings and income in those areas where the former manufacturing sectors were previously located; and
• It is difficult to predict what the combined effect of stronger service employment growth will have. However, the stronger relative growth in employment apparent in Denbighshire and the dampening effect of manufacturing job earnings in Flint / Wrexham could have implications. One outcome could be a possible displacement effect as housing demand intensifies westwards in the short to medium-term, although it is important to note here the links that Wrexham and Flintshire have to the strongly performing West Cheshire markets and the linked demand for housing.
Key Messages
5.111 In summary a number of key messages have emerged from the current review of the economy, these are listed below:
• The West Cheshire North East Wales Sub-Regional Strategy portrays a positive picture of the sub-region economy identifying a significant number of inherent strengths and opportunities for economic growth. However, the Strategy also recognises the potential threat of economic exposure as a result of the industrial structure and the dominance of
March 2008 117 Wrexham CBC, Flintshire BC, Denbighshire BC
manufacturing within a number of the constituent authorities (including Wrexham and Flintshire). Emphasis is therefore placed on ensuring the future diversification of the economy to mitigate this exposure;
• All three economies within the Core Study Area are characterised by the dominance of the public and manufacturing sectors with ‘Tourism’ (hotels, distribution and restaurants) also registering a high proportion of employment. Flintshire in particular is characterised by its high proportion of manufacturing employment, with Wrexham witnessing a decline in this sector although it still remains an important driver;
• In contrast to the Core Study Area Chester is clearly taking the lead within this sub-region in terms of employment in ‘professional services’ including banking and finance;
• All three authorities have high levels of economic activity and low levels of unemployment. This has not always been the case and represents a very positive position considering the state of the economy in the 1980s and early 1990s;
• In linking participation within the economy to housing it is clear in all three authorities that the social rented sector includes a disproportionately high level of people who are economically inactive reflecting the role this tenure plays as a ‘safety net’;
• The Core Study Area has a composite average of managers and professionals which exceeds the Welsh average but falls below the England and Wales averages and considerably lower than the proportion recorded for Chester. Reflecting this it also has an above average proportion of people employed in skilled trades, personal service and elementary occupations;
• Recent change suggests that the levels of managers and senior officials is declining, however, the proportion of professional and associate professionals appears to be rising. Significantly, the number of employees in Sales and Customer Services have also increased over recent years within Denbighshire and Flintshire;
• Commuting statistics show a considerable amount of local working with 50% or more people in all three authorities commuting less than 10km. Interestingly Denbighshire has a high proportion of people working from home, probably a result of the large number of rural areas within the County; and
• Incomes suggest little difference between workplace and residence based incomes, however, significantly the residence based incomes are notably higher in Chester and Ellesmere Port reflecting the aspirations of higher earners to live in localities within these authorities.
March 2008 118 Wrexham CBC, Flintshire BC, Denbighshire BC
6. HOUSING STOCK ASSESSMENT
6.1 This section aims to provide a detailed understanding of the baseline position with regards to the existing housing stock evident within Core Housing Market Area. By way of achieving this, the pursuant analysis will be broken down according to the following structure:
• Housing Stock Profile
• Housing Stock Change
• Gypsy and Traveller Sites/Caravans
6.2 Wherever possible, the most up to date evidence has been gathered directly from the stakeholder concerned. Failing this, statistical information has been procured through secondary sources such as independent research reports, or national statistical releases etc. (e.g. Welsh Housing Statistics). Emphasis has been placed on ensuring a consistency of evidence between the authorities in order tocapture a true and accurate snapshot of NE Wales’ current housing stock.
6.3 As with the previous two sections focus has been placed on trend anlalysis in order to build up a picture of change and therefore assess the supply / demand dynamic and provide a base for the final Sections which examine possible future trajectories for the housing market and required policy responses.
Housing Stock Profile
6.4 The following table summarises the stock profile of the Core Study Area set against the Wales and England wider context.
Figure 6.1: Housing Stock Profile – Core Study Area & Wider Context (2001)
Semi- Flat, maisonette Detached Terraced detached or apartment England 22.69% 31.82% 26.04% 19.45% Wales 27.22% 31.87% 29.62% 11.29%
Wrexham 31.20% 36.94% 21.66% 10.20% Denbighshire 44.51% 31.50% 13.27% 10.73% Flintshire 37.68% 41.60% 14.70% 6.02%
Core Study Area Average 37.80% 36.68% 16.54% 8.98% Source: Census 2001
March 2008 119 Wrexham CBC, Flintshire BC, Denbighshire BC
6.5 It is clear that placed in the wider national contexts, the Core Study Area and its authorities have an above average supply of detached and semi-detached properties, and a below average supply of terraced and flat/maisonette properties. Within this, the above average trend is particularly pronounced in Denbighshire and Flintshire for detached, and Wrexham and Flintshire in terms of semi-detached properties. At the same time, the below average trend is particularly acute in Denbighshire and Flintshire for terraced, and for flats/maisonettes in Flintshire.
6.6 By way of illustrating this analysis spatially, the following plans (Figures 6.2, 6.3, 6.4 and 6.5) demonstrate the percentage concentration of each of the four key dwelling types; detached, semi-detached, terraces and flats/maisonettes at Census super-output area level.
March 2008 120 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.2: Percentage of Detached Properties (2001)
March 2008 121 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.3: Percentage of Semi-Detached Properties (2001)
March 2008 122 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.4: Percentage of Terraced Properties (2001)
March 2008 123 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.5: Percentage of Flat/Maisonette Properties (2001)
6.7 These plans reinforce the assertions made regarding the comparable prevalence of Semi detached and detached housing within the Core Study Area. In particular, higher levels of detached housing (i.e. 72.4% – 90.2%) are focussed primarily in the rural areas of all
March 2008 124 Wrexham CBC, Flintshire BC, Denbighshire BC
authorities, which in Denbighshire and Conwy accounts for much of their spatial area. In Flintshire those areas with this market typology are primarily concentrated in the south western belt, and in Wrexham within an eastern belt of areas. This proliferation of the larger, inherently more expensive dwelling types places increased emphasis on the need to ascertain levels of affordability at a functional housing market area level and within smaller sub-areas rather than county-wide basis. This level of analysis is undertaken with the next Section and fed through thorough to the key conclusions of the HMA.
6.8 Semi-detached housing is essentially focussed on the urban and to a greater extent suburban areas of the authorities, particularly around the northern coastline, east Flintshire and into Cheshire), and west of Wrexham. In terms of what might be considered entry-level dwellings, unsurprisingly, terraced stock is located in greatest concentrations in the more urbanised areas, particularly in Rhyl, Denbigh, Ruthin, Llangollen, Wrexham, Holywell, Flint, and a particularly strong belt to the north east of Flintshire (Connah’s Quay, Queensferry etc.) and into Cheshire. In terms of flats/maisonettes, there are very few pockets with high concentrations (over 19.2%), these being limited to the urban settlements of Rhyl, Flint, Mold, Llangollen, Wrexham town, and Chester.
6.9 In terms of absolute numbers of housing stock for each area, the following table breaks down total unit numbers by house type.
Figure 6.6: Unshared Housing Stock by Type (2001)
Semi - Flat, maisonette Detached Terraced detached or apartment Totals Wrexham 17,115 20,262 11,880 5,594 54,851 Denbighshire 18,467 13,068 5,504 4,451 41,490 Flintshire 23,378 25,804 9,119 3,735 62,036 Core Study Area Total 58,960 59,134 26,503 13,780 158,377 Source: Census 2001
6.10 The above table illustrates a total housing profile across the Core Study Area, where in terms of total unit numbers, Flintshire has the highest number of dwellings of the three component authorities, followed by Wrexham, then Denbighshire reflecting the relative size of their populations. As at 2001, there were a total of 158,377 unshared dwellings across the three authorities. Shared dwellings, for which there is no stock type breakdown, offer only 211 properties across the Core Study Area.
6.11 In terms of housing stock by tenure, the following graph analysis tenure composition as at 2005, broken down by each constituent authority.
March 2008 125 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.7: Housing Stock by Tenure – Units (2005)
Housing Stock Composition by Tenure - 2005
70,000 60,000 50,000 40,000 30,000 Total Units Units Total 20,000 10,000
0 Denbighshire Flintshire Wrexham
Rented from local authorities Rented from registered social landlords Owner-occupied, privately rented and other tenures
Source: Welsh Housing Statistics
6.12 In terms of percentages, the following table illustrates how this breaks down proportionally to allow for direct comparison between authorities.
Figure 6.8: Housing Stock by Tenure – Percentage Composition (2005)
% Rented from local % Rented from registered % Owner-occupied, privately 2005 authorities social landlords rented and other tenures Denbighshire 8.8% 4.6% 86.6% Flintshire 12.4% 3.4% 84.1% Wrexham 21.2% 2.8% 76.0% Source: Welsh Housing Statistics
6.13 It is clear from the above illustrations that there is a strong emphasis within the Core Study Area on owner-occupied/privately rented/other tenure stock. This, however, is not untypical in national comparisons. As at 2001, the England and Wales percentage of owner occupied/privately rented/other tenure households was 80.81%, set against 13.24% renting from Councils and 5.95% renting from other social landlords.
6.14 Therefore this suggests that the stock profile in Flintshire and Denbighshire is distinguished by having above average representations of market housing and a below average proportion of social rented or ‘affordable’ housing, with the opposite being true of Wrexham where the proportion of social rented stock is relatively high.
March 2008 126 Wrexham CBC, Flintshire BC, Denbighshire BC
6.15 In terms of the breakdown of social rented stock into LA and RSL managed properties, it is immediately apparent that Wrexham has a strong reliance on local authority stock compared to Flintshire and Denbighshire, with over 21% of all stock falling within this category. In turn, Wrexham shows the smallest representation of RSL stock, set at just 2.8%.
6.16 The following spatial plan illustrates the percentage of housing stock taken up by second homes within the Core Study Area and Wider Reference Areas.
March 2008 127 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.9: Percentage of Second Homes as Proportion of Total Housing Stock (2001)
6.17 It is clear that there exists an increasing proportion of second homes as the analysis moves north east to south west, with a very small component percentage existing within Ellesmere Port, Chester, Wrexham and Flintshire. However, in moving from Denbighshire into Conwy
March 2008 128 Wrexham CBC, Flintshire BC, Denbighshire BC
and Gwynedd, it is evident that there is an increasing proportion of second homes in existence. Having a high concentration of second homes can have significant implications for house prices in these areas, whereby housing markets and associated prices are inflated by demand pressure originating from second homeowners who do not necessarily inhabit or work within the areas. This in turn can have implications regarding the affordability of housing and lead to first time buyers and newly forming households being priced out of these areas.
6.18 The following graphs illustrate the size of existing housing stock as measured by room numbers, set against each local authority and tenure type, and measured as a percentage of total housing stock.
Figure 6.10: Size of Housing Stock by Room Numbers and Tenure – Denbighshire (2001)
Denbighshire Housing Stock - Room & Tenure Composition (2001)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0% 1 Room 2 Rooms 3 Rooms 4 Rooms 5 Rooms 6 Rooms 7 Rooms 8 or More Rooms
All Households Ow ned LA Rented Other Social Rented Private Rented
Source: Census 2001
Figure 6.11: Size of Housing Stock by Room Numbers and Tenure – Wrexham (2001)
Wrexham Housing Stock - Room & Tenure Composition (2001)
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0 1 Room 2 Rooms 3 Rooms 4 Rooms 5 Rooms 6 Rooms 7 Rooms 8 or M ore Rooms
A ll Households Owned LA Rent ed Ot her Social Rent ed Privat e Rent ed
March 2008 129 Wrexham CBC, Flintshire BC, Denbighshire BC
Source: Census 2001
Figure 6.12: Size of Housing Stock by Room Numbers and Tenure – Flintshire (2001)
Flintshire Housing Stock - Room & Tenure Composition (2001)
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0 1 Room 2 Rooms 3 Rooms 4 Rooms 5 Rooms 6 Rooms 7 Rooms 8 or More Rooms
All Households Owned LA Rent ed Ot her Social Rent ed Privat e Rent ed
Source: Census 2001
6.19 There are several key characteristics evident within the Core Study Area, some of which are consistent across all three constituent authorities and some of which are particular to individual authorities.
6.20 It is initially apparent that housing stock across the Core Study Area is dominated by 4,5 and 6 room properties, with 5 room properties offering the largest proportion consistent across all tenures, with this proportion being highest in Flintshire.
6.21 It is also apparent that there is a very low proportion of 3 room properties in all three authorities, particularly privately owned or privately rented. Indeed, the majority of this stock is offered through social rented tenures.
6.22 4 room properties across the Core Study Area are offered predominantly through all three rental tenures, which together with the previous point suggests a stronger rental market within these smaller property sizes.
6.23 Within the Core Study Area there is also a very small proportion of 1 and 2 room properties, with the majority of this supply stemming again from the social and private rental markets. This suggests a degree of transience within these smaller property categories, whereby homeowners instead tend to enter the market at the 3 and (particularly) 4 room size category.
March 2008 130 Wrexham CBC, Flintshire BC, Denbighshire BC
6.24 The following graph assimilates this analysis together to compare dwelling sizes across the three authorities irrespective of tenure.
Figure 6.13: Size of Housing Stock by Room Numbers (2001) – Core Study Area
Room Composition as Proportion of Total Dwellings (2001)
0.35 0.3 0.25 0.2 0.15 0.1 0.05 0 1 Room 2 Rooms 3 Rooms 4 Rooms 5 Rooms 6 Rooms 7 Rooms 8 or More
Rooms
Denbighshire Flintshire Wrexham
Source: Census 2001
6.25 The previous analysis is reinforced in terms of the dominance of larger dwelling sizes throughout the local authorities. However, when compared with national figures (see Figure 6.14 below), it is apparent that this profile is more typical of Wales figures than of England’s figures, whereby there is a similar proportion of 1, 2 and 3 room properties in the Core Study Area (average 0.4%, 1.2% and 6%) to that demonstrated throughout Wales (0.4%, 1.4% and 5.8%).
Figure 6.14: Size of Housing Stock by Room Numbers (2001) – National
England and England Wales Wales 1 Room 0.9% 0.9% 0.4% 2 Rooms 2.5% 2.5% 1.4% 3 Rooms 9.2% 9.0% 5.8% 4 Rooms 20.0% 19.8% 17.0% 5 Rooms 27.1% 27.1% 27.5% 6 Rooms 20.5% 20.7% 25.2% 7 Rooms 9.2% 9.3% 11.0% 8 or More Rooms 10.6% 10.7% 11.6% Source: Census 2001
6.26 In terms of the condition of existing stock within the Core Study Area, the most accurate assessment originates from stock condition surveys, which have been carried out by each
March 2008 131 Wrexham CBC, Flintshire BC, Denbighshire BC
local authority at different points in time. A brief summary of the key findings are included below:
Flintshire (2005) – Private Sector Stock Condition Survey
• An estimated 1,770 dwellings are unfit, accounting for 3.2% of the housing stock. This compares to an unfitness rate of 4.2% in England and 8.5% in Wales;
• The most common reasons for unfitness in Flintshire are bath, shower, wash hand basin – 530 dwellings (29.9%) and disrepair– 527 dwellings (29.8%);
• Private rented dwellings are most likely to be unfit – 9.3% of all private rented dwellings were found to be unfit;
• Older dwellings were particularly likely to be unfit – 12.0% of pre-1919 were unfit;
• 22.1% of all vacant dwellings in the County are estimated to be unfit;
• An additional 1,899 dwellings are estimated to be ‘fit but defective’ (representing 3.4% of the dwelling stock).
Wrexham (2006) – Private Sector Stock Condition Survey
• An estimated 1,775 dwellings are unfit, accounting for 4.0% of the housing stock;
• The most common reasons for unfitness in Wrexham County Borough are food preparation – 907 dwellings (51.1% of unfit dwellings) and disrepair – 858 dwellings (48.3%);
• Owner occupied (no mortgage) dwellings are most likely to be unfit as are pre-1919 dwellings and terraced dwellings;
• Single member households, households with special needs and vulnerable households are more likely to live in unfit housing;
• An additional 4,380 dwellings are estimated to be ‘fit but defective’ (representing 15.0% of the private sector dwelling stock), most commonly owing to reasons of ‘disrepair’ and ‘food preparation’.
Denbighshire (2002) –House Condition Survey22
• 10.9% of stock classified as ‘unfit’ or on the ‘borderline of unfitness’ by first impression.
22 The 2002 House Condition Survey is the most up to date survey available as at July 2007. However, this survey is based on a statistically representative sample and cross section, therefore Denbighshire CC advise that the findings are appropriate for inclusion within this HMA.
March 2008 132 Wrexham CBC, Flintshire BC, Denbighshire BC
• In June 2002, 7.3% of Denbighshire housing stock was estimated, in the BRELASS statistical program, to be unfit for human habitation in accordance with the relevant statutory provisions
• The level of owner occupation in Denbighshire was 83.6% of the total stock total, representing 31,003 dwellings. The unfitness rate of 7.3% in Denbighshire therefore represents 1 in 14 dwellings;
• The incidence of unfitness in the owner occupied sector in Denbighshire was 5.4%, which was below the 7.6% identified at national level (WHCS 1998). The rate for social housing, of 2.0% in the RSL sector is lower than the 8.2% recorded at national level for social housing. Within the private rented sector the level of unfitness was 22.9% considerably above the Welsh average of 18%; and
• The level of vacancy (empty homes) was identified as 5.1%, 1,892 properties.
Housing Stock Change
6.27 An increasing or decreasing level of housing stock is a result of the net difference between completions and demolitions. Analysis within this section is largely focused on levels of completions as demolition data is not recorded consistently between the authorities and over recent years the levels of demolition in each of the authorities within the Core Study Area has been relatively minimal.
6.28 The following graph shows residential unit completions, between 2000 – 2006 in each of the Authorities in the Core Study Area.
Figure 6.15: Housing Completions (2000 – 2006)23
23 No completion data available for Flintshire 2005 & 2006
March 2008 133 Wrexham CBC, Flintshire BC, Denbighshire BC
Housing Completions (All Tenures) (2000 - 2006)
600 500 400 300 200 100 Units Completed Completed Units 0 2000 2001 2002 2003 2004 2005 2006
Denbighshire Flintshire Wrexham
Source: Welsh Housing Statistics, AMRs & Constituent LAs (direct)24
6.29 It is clear that Wrexham has in all years completed more units than either Denbighshire or Flintshire. In fact, Wrexham has delivered an average of 470 units per annum, as compared to 336 in Flintshire and 248 in Denbighshire.
6.30 Taking into account UDP requirements, this means that Denbighshire has delivered an average shortfall of 25 units per annum, Flintshire an average shortfall of 97 units per annum, whilst Wrexham had as of 2006 exceeded the annual requirement by 85 units per annum.
6.31 Flintshire’s shortfall can to some extent be explained by the un-adopted status of the Unitary Development Plan (2000), which has significantly constrained the authority’s ability to bring forward sites of significant scale. It should therefore be pointed out that a number of sites are likely to come forward for development subject to objections, although these sites are not guaranteed for inclusion, this issue is reflected in the analysis and conclusions of Section 11.
6.32 For illustrative purposes, this information is tabulated below, note a negative score in the shortfall column indicates provision over and above policy targets.
Figure 6.16: Housing Completions (2000 – 2006) – Tabulated25
24 It should be noted Denbighshire completion rates are sourced directly from the Council, Wrexham figures are taken from the AMR 2005 – 2006, whilst 2006-2007 figures taken from Council sources, and Flintshire is sourced from Flintshire Housing Land Availability Study 2005. 25 No completion data available for Flintshire 2005 & 2006
March 2008 134 Wrexham CBC, Flintshire BC, Denbighshire BC
UDP 2000 2001 2002 2003 2004 2005 2006 Average Requirement (pa) Shortfall Denbighshire 208 177 275 331 344 229 172 248 273 25 Flintshire 474 239 310 311 347 336 433 97 Wrexham 544 553 358 431 394 440 567 470 385 -85
Source: Welsh Housing Statistics & Constituent LAs
6.33 As noted earlier consistent data on demolitions is difficult to source for the three authorities, however, there have been no renewal related demolitions recorded with the Welsh Housing Statistics since 2000, although it is expected that a small proportion of properties will have been demolished within this 6 year period.
6.34 By way of spatial context, the following map shows the number of completions (average per year) over the last ten years by settlement.
March 2008 135 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.17: Annual Average Completions by Settlement 1996 – 200626
26 No completion data available by settlement March 2008 136 Wrexham CBC, Flintshire BC, Denbighshire BC
6.35 Reflecting the annual completion by authority information above, this illustration clearly shows the proliferation of housing completions evident within Wrexham in particular, evident across a number of settlement clusters along the A483, including Wrexham town, settlements to the north and west of Wrexham town (e.g. Brymbo and Gwersyllt), and a small cluster further south along the A483 (e.g. Ruabon).
6.36 Unsurprisingly the majority of housing development in Denbighshire has been focussed in Rhyl and Prestatyn, whilst the larger settlements of Denbigh and Ruthin have also provided a focus for activity.
6.37 Alongside changes in the overall quantum of stock, the proportional tenure profile within the housing stock can change as a result of RTB sales of social rented stock. Where this occurs the result is a reduction in the quantum of social rented stock and an increase in market housing without new stock being built. The graph below sets out the total number of local authority sales (including Right to Buy) year on year 2000 – 2004.
Figure 6.18: Total Local Authority Sales (2000 – 2004)
Total Local Authority Sales (incl. RTB and other) (2000 - 2004)
600 500 400 300 200 100 Total Unit Sales Sales Unit Total 0 2000 2001 2002 2003 2004
Wrexham Flintshire Denbighshire
Source: Welsh Housing Statistics
6.38 There is a clear trend within the above illustration of sales of local authority properties increasing year on year between 2000 and 2003, then decreasing since 2003. On average, 126 properties have been sold a year in Denbighshire, 190 in Flintshire, and 377 in Wrexham27. The implication of this is that the overall levell of social rented stock in each
27 Figures of 2005 have yet to be released by the Welsh Data Unit
March 2008 137 Wrexham CBC, Flintshire BC, Denbighshire BC
authority will have reduced with none of the authorities embarking on an active process of constructing new social rented housing over this period.
Gypsy / Travellers
6.39 The need to provide for gypsy/traveller sites is a critical element in assessing future housing provision. This section provides a summary of the overall issues of ths particularl component of the housing market, however, more detailed information has been collated in a separate report provided in tandem with this HMA28.
6.40 An assessment of the needs of Gypsy-Travellers in Wales produced by CURS in 200629 identified that very little information is currently available on this specific population group. The report estimated that there were only approximately 2,000 Gypsy-Travellers in Wales with these largely concentrated along the key transport routes in the North and South of Wales. It identified that the Gypsy-Traveller population is notably ethnically diverse, including in particular Welsh and English Gypsies, Scottish and Irish Travellers, with there also being numbers of ‘New Travellers’, especially in parts of Pembrokeshire, Powys and rural North Wales.
6.41 The following table illustrates the statistical returns provided by each constituent authority in July 2006, first showing the number of gypsy and traveller caravans on authorised and unauthorised sites, then showing the number of gypsy sites provided by each local authority.
Figure 6.19: Count of Gypsy and Traveller Caravans (July 2006)30
On Authorised Sites On Unauthorised Sites Gypsy Owned Land Non-Gypsy Owned Land Social Rented Private Tolerated Not Tolerated Tolerated Not Tolerated Denbighshire 0 0 0 0 4 0 Flintshire 30 40 0 0 0 5 Wrexham Source: National Assembly for Wales
28 BME / Gypsy And Traveller / Economic Migrants – An Assessment of Housing Service Provision’ GVA Grimley – June 2007 29 ‘Accommodation needs of Gypsy-Travellers in Wales – Report to the Welsh Assembly Government’ Pat Niven, CURS, 2006 30 No statistical return received from Wrexham
March 2008 138 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 6.20: Gypsy Sites Provided by LAs (July 2006)31
Number of Pitches Residential Transit Total Caravan Capacity Denbighshire 0 0 0 0 Flintshire 20 0 20 40 Wrexham Source: National Assembly for Wales
6.42 The above returns suggest that Flintshire has a stronger demand for gypsy and traveller caravan sites when compared to Denbighshire, which accommodates only 4 caravans on a tolerated basis on an unauthorised site, non-gypsy owned site. This compares to 70 caravans in Flintshire on authorised sites, and 5 caravans on non-tolerated, unauthorised sites. Flintshire also has a capacity for 40 caravans on LA provided sites, where as Denbighshire has no capacity on such sites.
6.43 In 2007 Fordhams produced a Gypsy and Traveller Accommodation Assessment for Wrexham CBC which followed national guidance to highlight specific issues and estimate the total level of current and future demand. The conclusions of this study are included within Section 8 which includes an assessment of future housing requirements. However, in terms of the current numbers Wrexham’s homelessness strategy identifies that there were 103 Gypsy and Travellers, 49 of which are on the Local Authority site at Ruthin Road32.
Key Messages
6.44 The analysis within this section indicates the following key messages:
• In the wider national contexts, the Core Study Area and its authorities have an above average supply of detached and semi-detached properties, and a below average supply of terraced and flat/maisonette properties.
• Higher levels of detached housing (i.e. 72.4% – 90.2%) are focussed primarily in the rural areas of all authorities.
• Flintshire has the highest number of dwellings of the three component authorities, followed by Wrexham, then Denbighshire reflecting the relative populations of each authority.
31 No statistical return received from Wrexham 32 Wrexham CBC Homelessness Strategy 2003-2008
March 2008 139 Wrexham CBC, Flintshire BC, Denbighshire BC
• Although not untypical, there is a strong emphasis within the Core Study Area on owner occupied/privately rented/other tenure stock.
• Wrexham has a distinct reliance on local authority stock compared to Flintshire and Denbighshire, with over 21% of all stock falling within this category.
• There exists an increasing proportion of second homes as the analysis moves north east to south west within the Core Study Area.
• In Flintshire there are an estimated 1,770 dwellings that are unfit, accounting for 3.2% of the housing stock. In Wrexham there are an estimated 1,775 dwellings that are unfit, accounting for 4.0% of the housing stock. Denbighshire has the highest levels of unfitness, although this is based on assessment which is now relatively dated (2002).
• When compared to UDP policy targets, Denbighshire has delivered an average shortfall of 25 units per annum, Flintshire an average shortfall of 97 units per annum, whilst Wrexham had as of 2005 exceeded the annual requirement by 68 units per annum.
• There is a clear trend of sales of local authority properties increasing year on year between 2000 and 2003, then decreasing since 2003. The overall level of sales has resulted in a proportional reduction in the size of the social rented sector in the Core Study Area as a whole.
• Flintshire and Wrexham have a number of Gypsy and Traveller sites which are well occupied. Denbighshire does not have any authorised Gypsy and Traveller sites currently.
March 2008 140 Wrexham CBC, Flintshire BC, Denbighshire BC
7. ACTIVE MARKET ASSESSMENT
7.1 The following section provides an assessment of the ‘active market’ evident within NE Wales, analysed at the levels of Core Study Area and the Wider Reference Area.
7.2 The analysis is broken down to cover:
• Private Sector Market
• Social Sector Market
• Vacancy / Turnover
• Affordability
Private Sector Market
House Prices
7.3 By way of context, an assessment is initially made of average house prices across the Core Study Area both in 2001 and 2006, using four-digit postcode analysis through the Land Registry.
7.4 The following illustrations show the overall average property prices both in 2001 and 2006, followed by an analysis of overall average property price changes between these years (Figures 7.1, 7.2 and 7.3).
March 2008 141 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.1: Average House Prices October 2000 – September 2001- All Property Types
March 2008 142 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.2: Average House Prices October 2005 – September 2006- All Property Types
March 2008 143 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.3: % Change in Average House Prices October 2000 – September 2006- All Property Types
7.5 It is apparent from the above illustrations that there are several ‘pockets’ of greatest house price growth (i.e. of between 171% and 201%) within the three authorities. In particular there
March 2008 144 Wrexham CBC, Flintshire BC, Denbighshire BC
are two large pockets of growth crossing the boarders of both Flintshire and Denbighshire, located around the Dyserth/Axton area, and a larger pocket located around the Llanarmon-yn lal/Mold/Leeswood area.
7.6 There are also two small pockets of upper bracket growth located to the south of Wrexham, in Chirk and Ruabon areas. All these areas started within the bottom two price brackets (i.e. £39,000 – £109,000) at the base year 2000/2001.
7.7 Overall average house prices were highest in both comparison years to the north east of Flintshire, crossing into Elllesmere Port and Chester authorities, whilst west Wrexham, north Flintshire and the majority of Denbighshire saw middle level (111% - 141%) growth in this period.
7.8 As at 2005/2006, overall average house prices were highest in the north east pocket of Flintshire (£281,000 - £327,000), followed by the Ruthin/Derwen area in Denbighshire and the Penyffordd area of Flintshire (£236,000 - £281,000).
7.9 Figure 7.4 below sets out the average price of all residential property transactions on an authority wide basis between Q3 2000 and Q4 2006, including the wider reference area LAs of Chester, Ellesmere Port & Neston, and Conwy.
Figure 7.4: Average Prices – All Properties (Q3 2000 – Q4 2006)
Average Prices for all Properties (Q3 2000 to Q4 2006)
250000
200000
150000
£ 100000
50000
0
003 006 2001 2001 2002 2003 2004 2005 2005 2005 ec 2000 ec 2001 pt 2004 ec jun 2006 ec 2006 -Sept -dec 2004 -D an-mar Jul-septOct-D 2000 Jan-marApr-JunJul 2001 Oct-D J Apr-junJul-sept 2002 Oct-dec 2002 Jan-mar 2002 Apr-JunJul-sept 2003 Oct-dec 2003 Jan-mar 2 Apr-junJul-se 2004 Oct Jan-mar Apr-junJul-Sept 2005 Oct-D Jan-mar 2006Apr Oct Jul - Sept 2
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
March 2008 145 Wrexham CBC, Flintshire BC, Denbighshire BC
7.10 It is apparent that since Q3 2000, all LAs have broadly followed the same price growth trends. Chester, however, has maintained its distinct price premium over other authorities throughout this period, with the margin in fact growing by Q4 2006 as compared to Q3 2000. Whilst Ellesmere Port & Neston has for the most part during this period offered the second highest average property prices, since Q3 2004 the Conwy area has on five occasions (including Q3 & Q4 2006) taken the place of Ellesmere Port & Neston in this position.
7.11 By way of illustrating price growth performance, the following graph sets out the indexed annual price averages for the authorities within the Core Study Area and Wider Reference Area. The index shows relative levels of change from the year 2000 baseline figure.
Figure 7.5: Indexed Annual Price Averages (2000 = Index 100)
Sales Activity in Housing Markets Annual Price Averages (2000 average = Index 100)
400
350
300
250
200 2001 = Index 100 Index 2001 = 150
100
50 2000 2001 2002 2003 2004 2005 2006
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2000
7.12 It is apparent that from the 2000 baseline, Chester has witnessed by quite some margin the greatest annual average price increases throughout this period, followed by Ellesmere Port & Neston and Conwy. Flintshire, Wrexham and Wales as a whole have exhibited similar growth trends, whilst Denbighshire has performed marginally better than its sub-regional comparators. All areas have largely followed the same 5 year growth trend.
7.13 Figure 7.6 sets out the total number of sales on an authority wide basis between Q3 2000 and Q4 2006, including the wider reference area LAs of Chester, Ellesmere Port & Neston, and Conwy.
March 2008 146 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.6: Total Sales of all Properties (Q1 2000 – Q4 2006)
Total Sales - All Properties (Q3 2000 - Q4 2006)
1200
1000
800
600
Total Sales 400 200 0
02 02 04 0 003 003 004 004 2 2 2 2 2 2005 t 2001 t ar 2002 c c c ar 2005 pt 2006 ep ec 2001 jun 2002 jun ept 20 jun 2005 e ec 2006 -Jun 2001 D m sept 20 -Jun 2003 de - -de m D pr t S an-mar 2001 ul-S ct- an- Apr- ul ct- A ul-s an- Apr- Apr-jun 2006 ct- Jul-septOct-Dec 2000 J 2000 Apr J O J J Oct-deJan-marApr Jul-septO 2003 Jan-mar 2004 J Oc J Jul-SepOct-DecJan-mar 2005 2006 ul O J Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy
Source: Land Registry 2007
7.14 The first pint to note here is the seasonal influence upon quantity of property sales. The second is a slight slowdown in overall sales figures that may denote the rise in house prices in relation to income levels and affordability issues.
7.15 It is also apparent that all LA areas are inextricably linked in terms of transactional rates, although Ellesmere Port & Neston consistently offers fewer sales transactions despite mirroring the wider market cyclical trends, followed by Denbighshire and Wrexham. Whilst this does not take into account the concentration of sales (i.e. sales per property), it does indicate that all LA markets have showed similar cyclical trends in this period.
7.16 The fact that all areas show similarly timed trends suggests that their markets are dictated more by the wider housing market (and its cycles) than each other, which might have been illustrated by delayed market reactions.
Performance of Dwelling Types
7.17 The following analysis seeks to break this property market performance down by dwelling type by analysing both sales values and total sales transacted across Core Study Area and the Wider Reference Area.
7.18 An analysis of average prices for detached properties over the last five years is shown in figure 7.7.
March 2008 147 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.7: Average Prices – Detached Properties
Average Prices for Detached Properties (Q3 2000 - Q4 2006)
350000
300000
250000 200000 £ 150000 100000 50000 0
2 4 5 5 6 0 004 2000 2001 2001 200 2003 2003 200 2004 200 200 2005 2006 t 2000 r r 2002 t 2002 r 2003 t r 2 t r r ec ec a un p a un a un a pt 2006 j Jun -j dec 2004m j ept -sep -D - -sep -sep - S m Se l pr-Jun 2001 pr pr ct - Ju Oct Jan-ma A Jul-SeptOct-D 2001 Jan-m Apr- Jul-se Oct-decJan-m 2002 A Jul Oct-decJan-ma 2003 A Jul O Jan- Apr- Jul Oct-DecJan- 2005 Apr-jun 20 Oct-Dec 2006 Jul
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.19 It is important to note the uniform trend of price appreciation across all local authorities. It is also apparent that despite previously demonstrating improved price growth as compared to Wrexham and Flintshire, Denbighshire posts consistently lower average prices for detached properties throughout this period. Chester and Ellesmere Port & Neston again post the most expensive transactioned prices, indicating a strong market for detached properties in these areas.
7.20 Figure 7.8 indexes these price movements against Q3 2001 levels.
March 2008 148 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.8: Average Price Movements – Detached Properties
Average Price Movements for Detached Properties (Q3 2001 to Q4 2006) Q3 2001 = Index 100
250
200
150
100 Movement Indicies Indicies Movement 50
0 Jul- Oct- Jan- Apr Jul Oct Jan- Apr- Jul Oct Jan- Apr Jul Oct Jan- Apr Jul- Oct- Jan- Apr Jul - Oct- Sept Dec mar jun sept dec mar Jun sept dec mar jun sept dec mar jun Sept Dec mar jun Sept Dec 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006
Source:Wrexham Land RegistryFlintshire 2007Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.21 Despite consistently posting the lowest values for detached properties, Denbighshire here shows improved price performance as compared to all comparators apart from Wales from its base point in Q3 2001. In contrast, Conwy has been consistently outperformed.
7.22 By way of assessing market vibrancy, transactional activity is monitored in Figure 7.9, illustrating the indexed movement in total detached property sales.
Figure 7.9: Movements in the Number of Sales – Detached Properties
Movements in the Number of Sales of Detached Properties (Q3 2001 to Q4 2006) Q3 2001 = index 100
140 120 100
80 60 40
Movement Indicies 20 0
1 3 3 3 4 5 6 02 02 02 03 0 04 00 001 0 0 00 00 0 004 00 005 006 00 2 20 2 2002 2 2 2 20 2 20 2005 2 t 2 t 2004 r t 2 r 2 t 2 p n pt c n 200 p c n 2005 p ept ju u ep -ju -mar s mar l-Se pr l-se n r-Jun t-de n- pr t-de n-ma l-Se n-ma -S u A u a p c a A c a Apr-j u a Apr-junl 2006 J Oct-DecJan-mar 2 J Oct-decJ A Jul- O J Jul-se O J J Oct-DecJ u Oct-Dec 2006 J
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
March 2008 149 Wrexham CBC, Flintshire BC, Denbighshire BC
Source: Land Registry 2007
7.23 It is immediately clear that the market for detached properties has stagnated significantly since Q3 2001, despite cyclical peaks and troughs, following a downward linear trend over the 5-year interval. This downward trend was particularly pronounced between Q2 2004 and Q1 2005.
7.24 Figure 7.10 illustrates the average prices for semi-detached properties over the last five years.
Figure 7.10: Average Prices – Semi-Detached Properties
Average Prices for Semi-Detached Properties (Q3 2000 - Q4 2006)
250000
200000
150000
£
100000
50000
0
0 1 1 1 5 6 6 00 0 0 03 05 05 06 06 0 0 002 002 003 004 004 0 2002 2 20 2003 2004 2 2 2005 20 200 20 200 t 2 c 200 pt 2 r n r e un un ept 2 jun ec ar 20 ec -Jun 200 r-j -J m l-sept 2 r p l-se r l-s pr-ju l sep -Sept t-D - ct-D an-mar 20p ct-dec p u ct-D Ju O J A Jul-Sept Oct-Dec2001 Jan-mar20 2002A Ju O Jan-ma A Ju Oct-dec Jan-mar2003 2004A J Oct-decJan-ma Apr- Jul Oc Jan Apr-jun O Jul - Sept 20
W rexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.25 It is apparent that average semi-detached prices during this period have been broadly similar across all comparators apart from Chester, which posts significantly higher semi-detached values. Generally Denbighshire has remained the cheapest LA within this category, whilst Conwy and Ellesmere Port & Neston have been marginally the most expensive.
7.26 Indexed price movements of semi-detached properties, set against Q3 2001 levels, are illustrated below in Figure 7.11.
March 2008 150 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.11: Average Price Movements – Semi-Detached Properties
Average Price Movements for Semi-Detached Properties (Q3 2001 to Q4 2006) Q3 2001 = Index 100
300
250
200
150
100 Movement Indicies 50
0 Jul- Oct- Jan- Apr Jul Oct Jan- Apr- Jul Oct Jan- Apr Jul Oct Jan- Apr Jul- Oct- Jan- Apr Jul - Oct- Sept Dec mar jun sept dec mar Jun sept dec mar jun sept dec mar jun Sept Dec mar jun Sept Dec 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.27 The above graph reinforces the close relationship that average semi-detached property prices have across local authority areas.
7.28 The number of sales transactions associated with semi-detached property is illustrated below, indexed against Q3 2001 levels.
Figure 7.12: Movements in the Number of Sales – Semi-Detached Properties
Movements in the Number of Sales of Semi-Detached Properties (Q3 2001 to Q4 2006) Q3 2001 = index 100
160
140
120
100
80
60
Movement Indicies Movement 40
20
0 Jul- Oct- Jan- Apr-jun Jul Oct Jan- Apr- Jul Oct Jan- Apr-jun Jul Oct Jan- Apr-jun Jul- Oct- Jan- Apr-jun Jul - Oct- Sept Dec mar 2002 sept dec mar Jun sept dec mar 2004 sept dec mar 2005 Sept Dec mar 2006 Sept Dec 2001 2001 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2005 2005 2005 2006 2006 2006 Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
March 2008 151 Wrexham CBC, Flintshire BC, Denbighshire BC
7.29 Broadly reflecting the trend evidenced for detached properties, is it clear that there is a broad trend of falling transactions during this 5-year period, although less pronounced than that seen within the detached market. Again cyclical activity is reflected in all LA areas, with a noticeable fall after Q2 2004.
7.30 Figure 7.13 illustrates the average prices for terraced properties over the last five years.
Figure 7.13: Average Prices – Terraced Properties
Average Prices for Terraced Properties (Q3 2001 - Q4 2006)
180000
160000
140000 120000 100000 £ 80000
60000
40000 20000 0
0 1 1 2 4 5 6 6 0 0 0 02 0 0 5 6 0 0 0 01 0 0 03 0 04 0 0 0 0 0 2 200 0 2 0 2 0 2005 2 t 2 r 2001 r 2 t t 2003 2 r 2004 2 t r 2006 20 p n 2 pt 20 c p p c a pt c n 2 n u e e e ju ma -J -De ma -dec 2002 -Jun 2003 -d -mar ma -ju -Dec 20 l-S n- l-se n r l-Sep n- r ul-se ct-Dec 2000an- ul-se ct d an-m u p ct-Dec 2005 p J O J Apr Ju Oct Ja Apr-jun 2002J Oct Jan-mar Apr2003 Jul-se O J Apr-jun 2004J Oct Ja A Ju O Ja A Oct Jul Sept Wrex ham Flints hire Denbighs hire Elles mere Port & Nes ton Ches ter Conw y Wales
Source: Land Registry 2007
7.31 Reflecting wider trends identified, terraced properties command a significant premium in the Chester area over all other authority areas. Conwy also continues its trend as commanding the second highest price premium, particularly since Q4 2002, whilst Denbighshire persistently provides the lowest average prices within this house type category. Indeed, this comparative premium has grown over the last five years, with Ellesmere Port & Neston following behind.
7.32 By way of extending this analysis, figure 7.14 indexes these price movements against Q3 2001 levels.
March 2008 152 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.14: Average Price Movements – Terraced Properties
Average Price Movements for Terraced Properties (Q3 2001 to Q4 2006) Q3 2001 = Index 100
300
250
200
150
100 Movement Indicies Indicies Movement 50
0 Jul- Oct- Jan- Apr-jun Jul Oct Jan- Apr- Jul- Oct Jan- Apr-jun Jul Oct Jan- Apr-jun Jul- Oct- Jan- Apr-jun Jul - Oct- Sept Dec mar 2002 sept dec mar Jun sept dec mar 2004 sept dec mar 2005 Sept Dec mar 2006 Sept Dec 2001 2001 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2005 2005 2005 2006 2006 2006
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.33 Interestingly the above graph shows us that in terms of terraced property, Chester offers the least growth in comparison with its Q3 2001 levels, ending the period with 83% price growth. This compares with 164% in Denbighshire and 162% in Flintshire (although these two areas did start from the lowest base point in Q3 2001), whilst Ellesmere Port & Neston offers the most indexed price volatility during this period.
7.34 The number of sales transactions associated with terraced property and indexed against Q3 2001 levels is illustrated below.
Figure 7.15: Movements in the Number of Sales – Terraced Properties
Movements in the Number of Sales of Terraced Properties (Q3 2001 to Q4 2006) Q3 2001 = index 100
180 160 140
120
100
80
60
Indicies Movement 40
20 0 Jul- Oct- Jan- Apr-jun Jul Oct Jan- Apr- Jul Oct Jan- Apr-jun Jul- Oct Jan- Apr-jun Jul- Oct- Jan- Apr-jun Jul - Oct- Sept Dec mar 2002 sept dec mar Jun sept dec mar 2004 sept dec mar 2005 Sept Dec mar 2006 Sept Dec 2001 2001 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2005 2005 2005 2006 2006 2006
Wrexham Flintshire Denbighshire Chester Conwy Wales Wales
Source: Land Registry 2007
March 2008 153 Wrexham CBC, Flintshire BC, Denbighshire BC
7.35 The above graph shows a downward trend in the indexed sales of terraced property during this period of circa 20%. Within this, the most significant fall came after Q2 2004, where all comparator areas witnessed a significant decrease in transaction levels. The graph also shows us that all areas are inextricably linked in terms of transactional volume behaviour, although Denbighshire was less so in the first three years of analysis.
7.36 Average sales prices achieved for apartments and maisonettes during the last 6 years are displayed below.
Figure 7.16: Average Prices – Apartments/Maisonette Properties
Average Prices for Apartment/Maisonette Properties (Q3 2001 - Q4 2006)
250000
200000
150000 £ 100000
50000
0
1 4 5 0 03 06 06 001 001 003 004 004 005 005 20 2 2 2002 2002 20 2 2 2 2005 2 2 2006 n c n c 2003 c pt e ec 2002 u ar 200 ar 200 pt ec pt 20 ec 20 ept d ept de ept de e e -Dec 2000 -Ju Se -D -jun s m s - m -D S -D t r t pr n-mar 2003r-J l- l- t t - t ul- A ul-s ct- a p ct- an- Apr-jun 2004 c an- Apr-jun ul-S Apr-jun Jul-septOc 2000 Jan-mar Ap2001 J Oc Jan-mar 2002 J O J A Ju O J Ju O J J Oc Jan-mar 2006 ul Oc J Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.37 Whilst again Chester commands the greatest price premium in terms of apartments/ maisonettes, Denbighshire again consistently offers the lowest valued property in comparison with other areas. All authorities demonstrate continued price growth during this period, in line with wider property market trends.
7.38 By way of indexing these movements, figure 7.16 below illustrates the average price movements within this category set against Q3 2001 levels.
March 2008 154 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.16: Average Price Movements – Apartments/Maisonette Properties
Average Price Movements for Apartment/Maisonette Properties (Q3 2001 to Q4 2006) Q3 2001 = Index 100
350
300
250
200
150
100 Movement Indicies 50
0 Jul- Oct- Jan- Apr Jul Oct Jan- Apr- Jul Oct Jan- Apr Jul Oct Jan- Apr Jul- Oct- Jan- Apr Jul - Oct- Sept Dec mar jun sept dec mar Jun sept dec mar jun sept dec mar jun Sept Dec mar jun Sept Dec 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006
Wrexham Flintshire Denbighshire Ellesmere Port & Neston Chester Conwy Wales
Source: Land Registry 2007
7.39 It is immediately apparent that set against Q3 2001 levels, Ellesmere Port & Neston is the only area to witness average price reduction during this period, despite some recovery being evident since Q3 2003. In contrast, the composite areas of Wrexham, Flintshire and Denbighshire have demonstrated significant price volatility within this category since Q4 2004, with Denbighshire witnessing the greatest indexed price growth over the whole period of circa 227% and Flintshire seeing a significant fall in indexed average prices since Q2 2006.
7.40 The number of sales transactions associated with of apartments/ maisonettes, indexed against Q3 2001 levels is illustrated below.
March 2008 155 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.17: Movements in the Number of Sales – Apartment/Maisonette Properties
Movements in the Number of Sales of Apartments/Maisonette Properties (Q3 2001 to Q4 2006) Q3 2001 = index 100
600
500
400
300
200 Movement Indicies 100
0 Jul- Oct- Jan- Apr Jul Oct Jan- Apr- Jul Oct Jan- Apr Jul Oct Jan- Apr Jul- Oct- Jan- Apr Jul - Oct- Sept Dec mar jun sept dec mar Jun sept dec mar jun sept dec mar jun Sept Dec mar jun Sept Dec 2001 2001 2002 2002 2002 2002 2003 2003 2003 2003 2004 2004 2004 2004 2005 2005 2005 2005 2006 2006 2006 2006
Wrexham Flintshire Denbighshire Elles mer e Por t & Nes ton Chester Conw y Wales
Source: Land Registry 2007
7.41 It seems apparent from the above graph that whilst Ellesmere Port & Neston has witnessed the only price reduction over this period, it has also witnessed the most transactional volatility by quite some margin, following broader trend but remaining more sensitive to the market than comparators in this respect. Wrexham also demonstrates significant transactional volatility.
7.42 On the whole, the number of transactions has not changed significantly during this period in Denbighshire, Conwy, Chester, and Wales, whilst Ellesmere Port & Neston, Flintshire and Wrexham have all witnessed over 100% growth in sales.
Current Prices & Sales
7.43 In order to compare price averages with national figures, figure 7.18 illustrates the indexed mean price of individual property types as at Q4 2006, based upon the all Wales average (Q4 2006).
March 2008 156 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.18: Indexed Annual Price Averages (2000 = Index 100)
Indexed Mean Price Q4 2006 by Dwelling Type (Index 100 = Wales Average)
160
140
120
100
80
60 40
Index (Wales Q4 100) = 2006 20
0 Wales Wrexham Flintshire Denbighshire Ellesmere Port & Chester Conw y Nes ton
Detac hed Semi-Detached Terraced Flat/Maisonette Overall
Source: Land Registry 2007
7.44 As is evident from the previous analysis, both Wrexham and Flintshire post similar transactioned prices to national figures, although Wrexham’s semi-detached properties are discounted by some 10%, and Flintshire’s flats/maisonettes discounted by some 35%. For all dwelling types other than terraces, Denbighshire offers more modest values than the national average, particularly for detached and flat/maisonette properties.
7.45 In terms of adjoining authorities, both Ellesmere Port & Neston and Conwy post higher property values for all dwelling types other than flats/maisonettes, compared to Wales. Chester unsurprisingly posts significantly higher values than all other comparators, ranging between circa 112% and 140% against the Welsh average.
7.46 Figure 7.19 demonstrates the composite sales as at Q4 2006 across all comparators.
March 2008 157 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.19: Composite Sales as at Q4 2006
Composite Sales Q4 2006
800 700 600 500 400
300
Number of Sales 200 100 0 Wrexham Flintshire Denbighshire Ellesmere Port Chester Conw y & Neston
Detached Semi-Detached Terraced Flat/Maisonette
Source: Land Registry
7.47 This snapshot allows us to see the major transactional components of each housing market in terms of dwelling type. The three composite areas of Wrexham, Flintshire and Denbighshire all follow broadly similar patterns in terms of sales compositions, although Wrexham shows a greater reliance on detached property (41% of total sales), compared to 37% and 33% in Flintshire and Denbighshire respectively. In turn, Denbighshire shows the greatest reliance on detached property (43% of total sales), compared to 37% and 30% in Flintshire and Wrexham respectively.
7.48 Sales of terraced property is more aligned, comprising 23% of total sales in Wrexham, against 21% in Flintshire and Denbighshire, whilst Wrexham posts the greatest reliance on flat/maisonette sales, although this dwelling type only accounts for 6% of sales in Wrexham against 5% and 3% in Flintshire and Denbighshire respectively.
7.49 These trends are reflected similarly in the wider reference araes, although Chester and Conwy both show a greater reliance on flats/maisonettes, which comprise 11% and 12% of sales in each respective authority.
Summary
7.50 Market performance provides a clear indicator of the relative strength of the housing dynamic and reflects the relationship currently between supply and demand. The following key issues have been identified:
March 2008 158 Wrexham CBC, Flintshire BC, Denbighshire BC
• The last five years have been characterised by wider national housing market trends, facilitated to a large extent by benign economic conditions, which have seen consistent house price growth on a year on year basis throughout England and Wales.
• There are several hot spots of greatest house price growth around the NE Wales HMA area. These areas are not defined by any overriding spatial characteristics in terms of transport routes/ connections and/or proximity to key nodes such as West Cheshire. Instead, both local authority and four-digit postcode areas demonstrating the greatest house price growth between 2000 and 2006 are largely areas starting with the lowest base values as at 2000, illustrating the growing pressure on what was traditionally affordable stock.
• At local authority level, overall average house price growth over the last six years has been consistent across all areas, including the wider reference areas of Chester, Ellesmere Port & Neston, and Conwy.
• Chester has maintained its price premium over other authorities, with overall annual house price growth actually accelerating faster and by quite some margin.
• In terms of overall transactional activity, all authorities have followed similar patterns and fluctuating trends, suggesting a close relationship with the wider property market.
• The wider reference area in general offers a distinct housing market in terms of average house prices from the NE Wales authority areas. Within this, Chester consistently offers the most expensive average prices across all property type categories, with the price premium margin comparable in each case.
• Within the three component authorities, Denbighshire is in all four house type categories the lowest price area in terms of average house prices, whilst Flintshire and Wrexham are relatively closely matched.
• There has been consistent price growth across all property types since Q3 2000. Within this Chester has seen the greatest indexed growth in terms of detached property, Conwy marginally in terms of semi-detached, and Denbighshire in terms of flats/maisonettes. Indexed growth is comparable for terraced property across all component authorities, whilst Chester has seen distinctly less growth in this category.
• Sales transactions of individual property types fluctuate highly, suggesting a close link with the wider cyclical trends evident within the national markets. Within this there has been a distinct fall in sales transactions across all property types since Q2 2004.
Market Perceptions
March 2008 159 Wrexham CBC, Flintshire BC, Denbighshire BC
7.51 A number of estate agents and developers active in each of the component authorities were consulted in March 2007. The purpose of the survey was to collate “soft data” on current market perceptions within each area in the context of perceived strengths, weaknesses, opportunities and constraints. The results are presented around a framework of research questions.
7.52 Consultees were selected based primarily upon the degree of activity within the Core Study Area, as well as upon further suggestions put forward by relevant stakeholders throughout the research process. The principal intention of the consultation was to allow such key housing supply stakeholders to have an input into the HMA process, one which might provide valuable contextual insight to what is otherwise a data focussed baseline analysis of the housing market.
7.53 Consultation was structured around a series of questions conducted either via telephone, postal forms, or through face-to-face meetings where desired by the consultee parties. The results of this survey are presented first according to questions posed to developers, offering an invaluable insight into current market perceptions in terms of both broad trends and settlement specific intelligence. This is then followed by the results of RSL consultation, which was structured around a different series of questions.
7.54 Estate agents consulted were:
• Jones & Redfearn (Denbighshire)
• Clough & Co. (Denbighshire)
• Cavendish Ikin (Denbighshire)
• Peter Large (Denbighshire)
• Thomas C Adams (Wrexham)
• Whitegates (Wrexham)
• Peter Large (Flintshire)
• Cavendish Ikin (Flintshire)
• Whitegates (Flintshire)
• Beresford Adams (Flintshire)
March 2008 160 Wrexham CBC, Flintshire BC, Denbighshire BC
7.55 Developers consulted included33:
• Gower Homes
• Redrow Homes
• Anwyl
• MacBryde Homes
• George Mytton Developments
Question: How would you define the housing markets in NE Wales?
7.56 A general picture emerged through consulting developers of two clear markets within NE Wales. The first includes the major settlements stretching from Wrexham, through Mold/Buckley/Hawarden and along the A55 through to St. Asaph, Rhyl and Prestatyn. The second ‘sub-market’ emerging was within the rural settlements to the south of each county, particularly prominent in Denbighshire.
7.57 A strong element within this perception was the accessibility of settlements to the major economic drivers of the NE Wales economy, in particular Deeside, West Cheshire and Wrexham, as driven by major infrastructure and natural boundaries.
7.58 It was also felt that the historic boundaries between in Chester and Wrexham/ Flintshire in terms of values were increasingly less pronounced. Whilst there is some overlap with the Chester market, in which comparable prices are achieved for similar standard products (mostly up-market), lower to mid-value products are more distinguished between the authorities in terms of values achieved.
Question: What is your perception of the current market in your area, and how does this contrast with recent years?
7.59 Estate agents in Flintshire and Denbighshire stated that the market has been fairly static and plenty of choice existed for buyers. The general picture seems to be one of reasonable but inconsistent turnover. The exception to this is Wrexham itself, which was reported to be booming as a result of in-migration and new/larger retail provision.
33 It should be noted that both Anwyl and Redrow Homes requested that their involvement in the consultation process does not represent an endorsement of the manner in which the Local Housing Market Assessment is being administered in North East Wales.
March 2008 161 Wrexham CBC, Flintshire BC, Denbighshire BC
7.60 Most developer consultees felt that the market remained fairly strong after a period of instability over the last two years. This was being reflected in both the pace of sales and values achieved, with most areas performing reasonably well. Despite this, however, the use of sales incentives was widespread, becoming almost the market norm in seeking to compete for sales.
7.61 Within the NE Wales market there were several areas of focus, with a localised pattern of development emerging within most major and medium sized settlements of the Core Study Area for smaller developers with strong connections to the area. Increasingly, however, larger national developers with a wider focus and remit were looking throughout the Core Study Area, particularly in Wrexham and Flintshire where they felt larger scale opportunities and a stronger demand market remained.
Question: How would you characterise current demand, with particular reference to product types?
7.62 Agents offered a consensus for there being a consistent and stable demand for housing, although Cavendish Ikin in Denbighshire noted a weaker demand since Q3 2006.
7.63 Peter Large in Denbighshire noted that it is currently a buyers market in all properties above around £100,000. Below this level the competition for first time buyer (FTB) properties is intense.
7.64 Cavendish Ikin stated that the market for stock properties (built between 1970 and 2000 on estates) priced between £150,000 and £350,000 has been stagnant for the last 15 to 16 months.
7.65 The feedback in relation to the success of different product types from developers was fairly mixed, with most developers reporting that smaller units, including apartments right through to 3 bed semis doing well. Area mentioned here were Prestatyn and Wrexham, with a sales pace of circa 2 - 4 a month achieved (similar to market average).
7.66 An emerging trend within the Core Study Area was for the successful development and sale of apartments, which had previously been untested. Whilst much of this was based within Wrexham, a number of developers showed a desire to role out apartment development to Flintshire and Denbighshire. A critical factor within this was a growing demand from customers looking to downsize into smaller accommodation, such as the elderly.
Question: How long would you say that typical sales were taking in each price bracket, and was this different for new build properties?
March 2008 162 Wrexham CBC, Flintshire BC, Denbighshire BC
7.67 Cavendish Ikin stated that many vendors were placing larger properties on the market at unreasonable prices, with the consequence that some properties could be on the market for up to 2 years. More typically though, Peter Large stated that most properties were sold in under six months, and smaller properties market at under £130,000 generally sold within weeks.
7.68 Both Whitegates in Wrexham and Clough & Co. in Denbighshire stated that properties marketed for over £200,000 took much longer to sell, with the exception of larger rural ‘character’ homes which sold quickly. In Wrexham this was attributed to a glut of 3 and 4 room detached new-builds over recent months, which has swamped the local market. A similar scenario was reported by Beresford Adams, which had led to intensive price competition in Flinthshire.
7.69 However, all other agents stated that new-build units were in high demand, particularly with younger buyers, and that the market could support new supply.
Question: Are there any clear locations of geographical strength or weakness in your authority area?
7.70 Rural areas and the entire Vale of Clwyd were cited as being particularly strong areas, as were Wrexham, Ruthin, Mold and Prestatyn. Whitegates of Wrexham stated that the presence of good schools was a major driver of local housing markets.
7.71 As would be expected, the agents noted that ex-council estates with a continued predominance of social housing stock were particularly difficult to sell, particularly to purchasers from outside each particular settlement. One example from Whitegates in Wrexham was such an area that contained un-mortgageable properties due to the unusual steel and pre-fab construction materials used. This had the effect of freezing the tenure profile, making the area unattractive to buyers.
7.72 In terms of developer feedback, Wrexham in particular was noted as being ‘on the up’, with a growing diversity of new build provision both in the town centre area and within some of the ‘urban villages’ such as Byrmbo and Ruabon. This success was in part placed down to the broader customer mix apparent in the area, originating from both within the County and externally (particularly in West Cheshire), as well as the availability of larger sites which has enabled step-change development over the last five years.
7.73 A number of localised developers also noted the continued vibrancy of the coastal town markets, which were continuing to perform well.
March 2008 163 Wrexham CBC, Flintshire BC, Denbighshire BC
7.74 In terms of marketed developments, most developers noted few geographical areas of weakness. Most comments revolved around the capacity of rural settlements to attract significant numbers of buyers. However, it should be noted here that a number of larger developers had appraised rural sites and decided that they were unviable in terms of residual value as a result of either policy or market constraints (e.g. values not sufficiently high or affordable housing policy too onerous).
Question: What factors do you believe are inhibiting the current market in your authority area, and how could these be overcome?
7.75 The vast majority of agents cited affordability as the main inhibiting factor for markets in all three areas. This has resulted from increased house prices, inflationary pressures on the costs of living, and interest rate increases. Beresford Adams (Flintshire) emphasised the increasing pressure placed upon first time buyers from rising market values and stagnant incomes, whilst Thomas C Adams (Wrexham) pointed to micro and macro economic concerns held locally, with Wrexham having seen significant job losses recently.
7.76 Cavendish Ikin in Denbigh also stated that the price difference between a 3 bedroom detached and a 4 bedroom detached house was prohibitive.
7.77 Beresford Adams (Flintshire) felt that the macro economy would need to stabilise before the localised housing market would regain its strength, with particular emphasis on household incomes.
7.78 Two agents also attributed a glut of properties on the market to the impending introduction of Home Information Packs (HIPs) on June 1st. Concern over the cost of commissioning the packs or any remedial work resulting from them has apparently stimulated more people than normal to put their home on the market in order to sell before the June deadline.
Question: How do you believe the first time buyer market is operating in your authority area (agents only)?
7.79 Agents again indicated that extremely strong demand for first time buyer properties exists, with demand still far outstripping supply in all areas. In Flintshire, Beresford Adams noted that first time buyers were being forced to look further afield for cheaper, more affordable properties so that they could enter the housing market. Cavendish Ikin in Denbigh noted that many first time buyers now needed to be couples both on full time incomes to get onto the housing ladder.
March 2008 164 Wrexham CBC, Flintshire BC, Denbighshire BC
7.80 Pressures are being made more acute by competition with investors, for whom it is not economical to buy houses over £130,000, and divorcees looking for a fresh start.
Question: What is your perception of the private rental market in your authority area (agents only)?
7.81 Many agents stated that the private rental market was strong, with demand outstripping supply. Prices varied considerably across the component authorities, with example prices including £300-400 pcm for a 1 bed flat, £400-475 for a 2 bed terrace, and £475-550 for a 3 bed semi detached. Agents in Flintshire highlighted sustained pressure on rents to remain competitive as increasing number of buy to lets entered the market, although they maintained that demand remained extremely strong.
Question: Have you witnessed a specific demand from BME Groups?
7.82 By and large developers were not witnessing notable demand from BME groups, including the economic migrant population. Indeed, rather than direct acquisitions some developers noted that there was a growing demand from investor purchasers seeking to buy to let to this demographic. As a result, no developers suggested any efforts to directly market to such ethnic groups.
7.83 Where BME demand was noted it was often localised to major employers such as hospitals.
Question: What are the major constraints to development in the Core Study Area (Developers only)?
7.84 Aside from location specific constraints noted in some areas, such as Deeside, Rhyl and Prestatyn where flood risk remained a significant constraint, developers noted few major constraints to development, particularly in respect of securing land. One consistent issue, however, was the extremely common problem of ecological constraints, and the way in which such constraints were discussed and overcome with the Countryside Council for Wales (CCW). It was felt in this respect that Local Authorities (LAs) needed enhanced cooperation and collaboration between departments in order to speed up the development process and through this enhance viability.
7.85 A significant proportion of conversation in this respect, however, revolved around the provision of affordable housing. Developers in general seemed accepting of the fact that affordable housing was required and in greater numbers than that currently being achieved, in order that the market could maintain accessibility and sufficient customer diversity and fluidity to be healthy.
March 2008 165 Wrexham CBC, Flintshire BC, Denbighshire BC
7.86 In terms of reasons for constrained supply, a number of conditions were noted as being at the root of continued unaffordability. Whilst some consultees felt that this remained an issue of land availability and associated value, others thought that current policy and its inflexibility in light of site viability were to blame. In particular, some consultees felt that affordable housing obligations must be assessed in the context of other planning obligations/requirements (e.g. infrastructure improvements) as and when they emerged (i.e. obligations needed to remain flexible to the inherent viability of each proposed development as negotiations evolved), rather than through an incrementally created ‘shopping list’.
7.87 In terms of selling-on affordable housing, some developers felt that there was insufficient grant funding for Registered Social Landlord’s (RSL) to purchase S106 housing, and in some cases a lack of desire or pro-activity within the RSLs when negotiating with developers. This was noted to be in part down to the inflexibility of SHG funding in terms of development timescales. These problems are particularly acute for Low Cost Home Ownership products, which consultees had in a number of cases sold directly to the market at discounted values sealed in perpetuity through the property interest rather than through a 3rd party such as an RSL.
7.88 Underlying this some developers felt that there remained problems in negotiating with LPAs when discussing affordable housing obligations at the outset with regards to site viability, affordable pricing thresholds, and overall policy clarity.
7.89 Aside from this, developers noted a constrained supply of sizeable land in Denbighshire and Flintshire as reasons for constrained development, particularly in Flintshire where the market viability of such large sites is increased significantly by comparison. However, it was noted that this situation was likely to change in the short-term in Flintshire due to the evolving policy position.
Market Developments
7.90 A varying number of developments are currently being marketed within each component authority, including a range of private for sale, mixed tenure and some exclusively ‘affordable’ housing developments. A representative sample-based assessment of these gives an indication as to the local market supply beyond simply looking at property prices. The results are presented according to component authority area.
Flintshire
• St Clares, Pantasaph, North Wales, CH8 8PN
March 2008 166 Wrexham CBC, Flintshire BC, Denbighshire BC
7.91 This David McLean development, comprising 40 2,3,4 and 5 bedroom homes, is part- refurbishment, part new build, and is located on a former convent site in the rural location of Pantasaph. Prices on the development range from £199,995 through to £447,995.
• Heritage Court, Brunswick Road, Buckley CH7
7.92 This Castlemead development comprises of 2 and 3 bedroom houses and 2 bed apartments. The development will be brought forward in two phases, 36 units in the first, and 14 units in the second. Prices have yet to be released.
• Soughton Park, Mold, CH7
7.93 A Morris Homes development of apartments, 3 bedroom Mews houses and Townhouses and 3 and 4 bedroom detached homes situated just outside of Mold Town Centre. Prices are between £201,500 and £269,500.
• High Grove, Seahill Road, Saughall, Flintshire CH1 6HB
7.94 Antler Homes is currently developing twenty eight 4 bedroom detached homes ranging in price from £329,500 to £384,500.
• Berthengam Park, CH8 9BA
7.95 A new development of only 9 highly specified four bedroomed homes by Alex Construction from £360,000 to £370,000.
Wrexham
• Byrmbo Hall/Plas Byrmbo, Wrexham, LL11 5
7.96 Located in a rural setting, this George Wimpey development offers 2 bedroom apartments, 2 and 3 bedroom news houses, 3 bedroom townhouses, and 3 and 4 bedroom detached homes. In all, 326 units will be built on the scheme, which is located in a rural setting close to Wrexham and the City of Chester.
7.97 Prices on the scheme start at £116,950 for a 2 bedroom apartment, and rise to £259,950 for a 4 bedroom detached property. Sales commenced in August 2005, and with 114 units having been released, only 5 remain unsold or unreserved. Agents reported that the development had been popular with first time buyers, families and investors alike. There are no ‘affordable’ homes on the scheme.
• Mountain View, Brymbo & Tanyffron Link Road, Brymbo, LL11 5
March 2008 167 Wrexham CBC, Flintshire BC, Denbighshire BC
7.98 Another George Wimpey development totalling 266 units, offering a range of 2 bedroom apartments, 3 bedroom townhouses & 4 & 5 bedroom detached family homes. Prices start at £254,950. Around 40 apartments and 1 detached house have been sold in the last 6 months.
• Penmere Park, Penley, Wrexham, LL13
7.99 This development of 1,2,3 and 4 bedroom homes, developed by Morris Homes, is situated off Overton Road in Penley, Wrexham. Prices range from £180,000 through to £281,500 on this exclusively private for sale scheme. In 12 months of sales, only 21 units out of 103 have been released, with 18 having been sold or reserved, and 3 remaining.
7.100 Agents reported that the homes have been popular with first time buyers, couples of all age groups and families alike, although there are no ‘affordable’ homes on the site.
• St. Giles Park , Wrexham
7.101 Located just outside Wrexham town centre, St Giles Park is a collection of 67 three and four bedroom detached homes by Morris Homes. Prices are between £202,500 and £254,500.
• Bryn Glas, Stryd Las, Johnstown, Wrexham LL14 2AN
7.102 This is a Barratt development of forty eight 2 bedroom apartments with a price range of £138,300 to £142,350. Nine units have been sold in less than a year, though sales were disrupted by the need to apply for a newt licence on site.
• Wynnstay Gardens, Ruabon, Wrexham, LL14 6EJ
7.103 ‘Wynnstay Gardens’ is a 52 unit cul-de-sac development by Castlemead, with a mix of two and three bedroom mews and semi-detached houses and four bedroom detached houses. Prices range from £139,500 to £195,000. 18 units remain available.
Denbighshire
• Cwrt Glan Camlas, Abbey Road, Llangollen, LL20 8SN
7.104 A McCarthy & Stone development of one & two bedroom retirement apartments, exclusively for the over 60's. Specialist facilities include: house manager, guest suite, security entry system, lift to all floors, 24 hour careline, all external maintenance taken care of. 1 Bedroom flats on the scheme are offered from £154,950, and 2 Bedroom flats from £210950
7.105 In summary, the following key messages emerge from the analysis regarding the levels of demand within the North East Wales housing market area:
March 2008 168 Wrexham CBC, Flintshire BC, Denbighshire BC
• Though some local areas are described as buoyant, the general picture is one of reasonable performance. However, this appears to be stratified according to price – properties below £150,000 to £200,000 generally sell well, while those marketed between £150,000 and £350,000 are experiencing sluggish sales. Above £350,000 the majority of houses on offer tend to be rural or character houses, and agents report waiting lists and brisk sales for these homes.
• All agents consulted confirmed that affordability is becoming an acute problem.
• An examination of active developments suggests relatively few affordable units being built.
Private Rents
7.106 Following analysis of the active housing market in terms of sales activity and average values achieved, the following analysis seeks to establish the key characteristics of the private sector market through rental values, key stakeholder views, currently marketed new developments, and levels of vacancy evident throughout the Core Study Area.
7.107 An analysis of properties marketed for rent on the private market is undertaken below, using a representative sample of properties within each dwelling size category in order to establish current private rental values.
March 2008 169 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.20: Private Rents (March 2007)
Bedrooms 12 34 Average Wrexham £83 £117 £141 £201 £135 Flintshire £95 £124 £150 £233 £151 Denbighshire £82 £108 £157 £181 £132 Average £87 £116 £150 £205 Source: Rightmove
7.108 It is apparent that Flintshire commands the highest average private rental values within the Core Study Area, whilst Wrexham and Denbighshire command broadly the same values. When analysed on a bedroom basis, however, it may be seen that Denbighshire actually commands the highest rental values for 3 bedroom property.
Social Sector Market
7.109 Figure 7.21 sets out the rents commanded within the social rented sector between 2002 and 2005, including both RSL and LA units across all three constituent authorities.
Figure 7.21: Average Social Rents (2002 – 2006)
Average Social Rents (LA & RSL) - All Dw ellings
60 50 40 30 20 £ per Week 10 0 2002 2003 2004 2005 2006 Year
Denbighshire Flintshire Wrexham
Source: Welsh Housing Statistics34
34 Includes Quarterly Tables released by Data Unit Wales for 2006, which include rental data for LA properties but not RSL properties, therefore rental average for 2006 only includes LA rentals.
March 2008 170 Wrexham CBC, Flintshire BC, Denbighshire BC
7.110 It is clear that average social rents have risen incrementally year on year since 2002, although rents in Denbighshire did fall for the first time in 2006. However, there is an absence of data for 2006 in terms of RSL rents, which generally (as illustrated below) command a price premium over LA rents, therefore this fall may be misleading. In all there has been a 14% increase in average dual (LA and RSL) rents over this period. Within this Flintshire has maintained a rental premium (until 2006) over neighbouring authorities, whilst Denbighshire has consistently commanded the lowest social rental levels.
7.111 The following graphs (Figures 7.22 and 7.23) isolates this rental growth between RSL and LA stock, for the years 2002 – 2005.
Figure 7.22: Average RSL Rents (2002 – 200535)
Average RSL Rents - All Dwellings
£56.00
£54.00
£52.00
£50.00
£48.00 £ per Week £46.00
£44.00 2002 2003 2004 2005 Year
Source: Welsh Housing StatisticsDenbighshire (No LA level Flintshireinformation Wrexham available for 2001)
Source: Welsh Housing Statistics
35 No Data Unit Wales Quarterly Tables for RSL Rents are available, therefore 2006 figures are not illustrated
March 2008 171 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.23: Average RSL Rents (2002 – 200536.)
Average LA Rents - All Dw ellings
60 50 40 30 20 £ Per Week Week £ Per 10 0 20022 0032 0042 0052 006 Year
Denbighshire Flintshire Wrexham
Source: Data Unit Wales, Welsh Housing Statistics
7.112 Local Authority stock has witnessed incremental rental growth over the 2002 - 2006 period. RSL average rents have risen faster over the same period.
7.113 Wrexham has commanded the highest RSL rents in all years, whilst Denbighshire has commanded the lowest rents in all years since 2002. Within this, Flintshire has actually witnessed the highest RSL rent rise, which has increased from £48 to £55 per week (14.4% rise).
7.114 In terms of Local Authority stock, Flintshire commands the highest LA rents across all years, followed by Denbighshire.
7.115 The above graphs also demonstrate that RSL rents command a premium over LA social housing provision, although this premium has in fact reduced over time from 20% in 2002 through to 14% in 2005. The following table illustrates this rental premium for the years 2002 to 200537.
36 2006 figures taken from Data Unit Wales Quarterly Tables 37 No Local Authority area information available for 2001
March 2008 172 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.24: Price Premium – RSL Rents as compared to LA Rents (2002 – 2005)
Denbighshire Flintshire Wrexham Average 2002 17.3% 11.2% 30.0% 19.5% 2003 16.7% 14.0% 22.7% 17.8% 2004 14.9% 9.3% 21.3% 15.2% 2005 11.8% 8.0% 21.0% 13.6% Source: Welsh Housing Statistics & Data Unit Wales
7.116 It is clear that whilst RSL properties have continued to maintain a distinct rental premium over LA properties, these premiums have actually fallen year on year during this four year period. Within this, Wrexham has offered the cheapest LA rents in comparison with RSL rents, followed (although by quite some way) by Denbighshire, then Flintshire. Whilst this is not a result of free market dynamics as in the private sector (i.e. because rents are controlled), it does illustrate the dual accessibility of these tenure types taking into account income levels.
Social Sector Consultation
7.117 As with the private sector, a number of social sector stakeholders were consulted in June 2007 in order to understand the current social sector climate, in terms of opportunities and threats, strengths and weaknesses.
7.118 Consultees here included:
• Wales & West Housing Association
• Clwyd Alyn Housing Association
• Cymdeithas Tai Clwyd
7.119 The results of this consultation are again presented according to questions posed.
Question: What is the broad tenure breakdown of your stock in the Core Study Area?
7.120 Not unusually the RSLs consulted all owned and/or managed a predominance of general needs rented stock, ranging from 70% - 80% of total stock across the 3 consulted RSLs within the Core Study Area. For example, Wales & West had a strong focus on sheltered units primarily for the elderly, which accounted for circa 12% of total stock, whilst low cost homes ownership (LCHO) accounted for only 3%-5% of stock. Clwyd Alyn mirrored this picture, with
March 2008 173 Wrexham CBC, Flintshire BC, Denbighshire BC
71% of its stock within the Core Study Area being general needs rented, 13% being care & support, and 32% being shared ownership38.
Question: Where geographically have you focussed recent interventions in the Core Study Area?
7.121 Interventions within the Core Study Area were tellingly limited, with Wales & West explaining that most for the most part activities were limited to either Welsh Housing Quality Standard orientated refurbishment work, or the acquisition of S106 planning delivered new housing through negotiation with developers.
Question: What are your plans for adding additional stock in the Core Study Area?
7.122 Apart from negotiation new social rented and LCHO homes through S106 affordable development provision, none of the consulted RSLs had significant plans to add additional stock within the Core Study Area, apart from piecemeal small-scale development within areas of greatest need.
Question: Do you have any plans for demolishing stock in the Core Study Area? If so, where and why?
7.123 None of the consulted RSLs had plans to demolish stock within the Core Study Area, apart from selective demolition where required due to safety concerns etc.
Question: What is the overall demand picture? Are there any particular house types/ tenures that are particularly popular/ unpopular?
7.124 Consultees felt that demand remained very strong overall. Indeed, a trend was notified of a growing demand for LCHO units, together with a continued strong demand for general needs rented accommodation. Within this, there remained a dearth of 2 bedroom properties throughout the core study area.
7.125 At the same time however, there emerged a growing problem of older properties, in particular smaller bedsit and sheltered accommodation, which were increasingly unpopular due to a failure to accommodate for modern needs and requirements. An example was made here of ‘out-of-town’ Rhyl in Denbighshire.
Question: Are there any specific geographical areas of strength or weakness?
38 As of 1st April 2006
March 2008 174 Wrexham CBC, Flintshire BC, Denbighshire BC
7.126 In general low demand seemed fairly localised, with small pockets of weakness associated with perceived and historic based deprivation. Areas within this included Holywell, Flynt town, Pen-y-Cae, Ruabon, Chirk, and some parts of Rhyl. Consultees otherwise reported a good demand for social housing throughout the study area.
Question: What factors do you think are inhibiting the social/affordable housing market, if any? How could these issues be overcome?
7.127 Perhaps surprisingly one consultee felt that new developments were focussing too much on apartment development rather than traditional housing, which in itself was limiting the social/affordable housing sector. In response to this, the consultee felt that more land should be made available to develop specifically affordable housing.
Question: Are you actively engaged with the private sector to develop social/affordable housing? (e.g. mixed tenure development)
7.128 Consultees reported limited engagement with the private sector to develop social/affordable housing, limited on the whole to negotiating for planning procured (S106) dwellings. Within this many consultees felt that the timescales for development were too lengthy, leading to protracted negotiations and an incompatibility with social housing grant availability.
Question: Do you have much in the way of specific demands from BME Groups? If so, where geographically is this most concentrated and what products are in demand?
7.129 All consulted RSLs stated demand from the BME population was highly dependent on location with BME populations relatively small within the three authorities as a whole. As a result, consultees reported that BME demand throughout these areas was thus extremely limited. They were, however, aware that demand from BME groups was often highly design specific, with requirements ranging from 2 reception rooms through to large houses with four or more bedrooms.
Vacancy / Turnover
7.130 As a key indicator of the supply/demand imbalance, the following analysis seeks to assess levels of vacancy across the Core Study Area. Figure 7.26 maps vacancy levels across the Core Study Area as at 2001.
7.131 This shows relatively low levels of vacancy across the three authorities with a number of small concentrations, including Wrexham town, Ruthin and the Deeside area close to Ellesmere Port and Chester.
March 2008 175 Wrexham CBC, Flintshire BC, Denbighshire BC
March 2008 176 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.25: Property Vacancy Levels – Core Study Area (2001)
March 2008 177 Wrexham CBC, Flintshire BC, Denbighshire BC
7.132 By way of illustrating changes in vacancy levels over time, figure 7.26 illustrates LA dwelling vacancy between the years 2001 and 2005.
Figure 7.26: Long-term Vacancy Levels for Local Authority Stock (2001 – 2005)
LA Stock - Total Dwellings Vacant for More Than 6 Months
200
150 100 50
0 Total Vacant Units 2001 2002 2003 2004 2005
Denbighshire 5 2 3 6 0 Flintshire 24 34 23 22 23 Wrexham 144 174 78 97 89
Source: Welsh Housing Statistics
7.133 It is first clear that Denbighshire has a very low level problem of long-term voids in its LA social housing stock, as compared to Flintshire and in particular Wrexham. Indeed, whilst vacancy levels have in fact been falling in most years in all three authorities (apart from Denbighshire where void levels are extremely low), Wrexham has consistently had considerably more long-term vacancies that the other two authorities.
7.134 Overall though it is clear that there is very little ‘available’ supply within this tenure with vacancy very low suggesting very high demand for stock.
Stock Turnover
7.135 The turnover of social stock also acts as a key indicator of the supply/demand dynamic both within the social and (to an extent) private housing sectors. Figure 7.27 below sets out the turnover of LA social stock for the years 2001 to 200539.
39RSL Rental Figures unavailable through Welsh Housing Statistics
March 2008 178 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.27: LA Stock Turnover (2001 – 2005)
LA Stock Turnover
10.00%
8.00%
6.00% 4.00%
% Turnover 2.00%
0.00% 2001 2002 2003 2004 2005 Year
Denbighshire Flintshire Wrexham
Source: Welsh Housing Statistics
7.136 It is apparent from the above graph that each constituent authority has experienced differing turnover trends throughout this period. Whilst Wrexham has witnessed a falling turnover year on year, which indicates a movement towards the demand/supply equilibrium, both Flintshire and Denbighshire have seen a fluctuating supply/demand dynamic as manifested in a fluctuating turnover rate.
7.137 Overall all three authorities show relatively low levels of turnover, which suggests increasing pressure resulting from high demand for stock. Low turnover means that fewer household are able to enter the tenure elevating issues associated with housing need, this is addressed in more detail in Section 9.
Affordability
7.138 This section assesses a particular symptom of the supply / demand dynamic, issues around affordability and entry into market housing. This provides a basis for the analysis of this issue and related policy implications in the proceeding chapters.
7.139 The ability of households to access owner-occupied housing has become a national problem with the Government continuing to explore mechanisms and policy approaches which can start to assist First Time Buyers (FTBs) and other market segments to enter and move within this tenure.
March 2008 179 Wrexham CBC, Flintshire BC, Denbighshire BC
7.140 The rapid increase in house prices nation-wide has far outstripped the growth of average household earnings. It is well reported that this has left many FTB unable to enter the property market and also left lower income households struggling to find suitably sized properties in the locations they wish to live in.
7.141 English and Welsh guidance has recognised the need to address this increasing issue through the delivery of affordable housing40. PPS 3 in England defines this as including both social rented housing and intermediate housing41.
Lower Quartile House Prices
7.142 The DCLG records the lower quartile house prices for each authority across the UK. These properties represent the lower levels of the housing market and are considered to be those most likely to be able to be purchased for households on lower incomes or households entering the market for the first time. The following chart shows these lower quartile prices between 1997 and 2005 for each of the authorities within the Core Study Area as well as the Wider Reference area.
40 PPS 3 defines Affordable Housing as: ‘Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:– Meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices.– Include provision for the home to remain at an affordable price for future eligible households or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision’.
41 PPS 3 defines Intermediate housing as: ‘Housing at prices and rents above those of social rent, but below market price or rents and which meet the criteria set out above. These can include shared equity products (eg HomeBuy), other low cost homes for sale and intermediate rent.’
March 2008 180 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.28: Lower Quartile house prices 1997 – 2005
Lower Quartile House Prices, 1997-2005 (£)
140,000 Denb ighshire
120,000 Flintshire 100,000 Wrexham 80,000 Chest er 60,000
Ellesmere Port 40,000 and Nest o n 20,000 Conwy
0 England & Wales 99 997 9 000 001 002 003 004 005 1 1998 1 2 2 2 2 2 2 Wales
Source: DCLG, 2006
7.143 It is clear that of all the authorities Chester has consistently had the highest lower quartile house prices. Significantly since 1997 there has been greater divergence in the average prices between the authorities, with prices in 1996 comparatively clustered.
7.144 Importantly all of the authorities within the Core Study Area have averages which exceed the Welsh national average. Of the three authorities Flintshire records the highest levels and this likely to be a result of its close proximity and close market ties with Chester. This would appear to supply further evidence that the ‘Chester effect’ is increasingly impacting on the neighbouring Welsh authorities and compounding affordability issues.
7.145 The graph below shows the price paid for FTB and previous owner-occupiers month by month between 2002 and 2007. This data is only available at the national level and therefore only provides an indication of the Welsh trends. The difference between these two values is also illustrated to illustrate the relationship over time, with the values referenced on the right-hand axis.
March 2008 181 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.29: House Prices Variance between FTB and Previous Owner Occupier.
House Prices variance between FTB and previous Owner Occupier (2002-2007) - Wales (£)
200,000 60,000
180,000 50,000 160,000
140,000 40,000 120,000
100,000 30,000
80,000 20,000 60,000
40,000 10,000 20,000
0 0 2002 2003 2004 2005 2006
First time buyer Former ow ner occupier Difference
Source: DCLG
7.146 It is clear that the prices for FTB have risen significantly over the time period examined, however, generally this has been in line with the rises witnessed for former owner occupied buyers. Importantly after a sharp rise between 2002 and 2004 FTB prices appear to have stagnated to some extent.
7.147 There is a notable dropping of the gap prior to the last six months with FTB house price values rising steeply. However, the market then appears to have corrected itself with the gap widening again. This would fit in with the market trends evidenced with the market slowing down within 2005. This is particularly shown in 2006 where the difference between prices paid by FTB and former owner-occupiers is considerably higher than previously recorded.
7.148 If FTB buyers are priced out of the market this impacts on other elements of the market as the chain is broken at the bottom. In the long term this will prevent the accumulation of personal equity in property and may limit access to other ‘rungs’ of the housing ladder.
Affordability Ratios
7.149 The Core Study Area authorities all have access to CACI Paycheck data which offers a robust source for income levels. All three authorities have data which shows the mean, median and mode household incomes down to very small spatial levels (6-digit postcode).
March 2008 182 Wrexham CBC, Flintshire BC, Denbighshire BC
7.150 The following table shows the Lower Quartile average house price for each authority and the median income according to the CACI ‘Wealth of the Nation Report’. These two variables are used to provide a simple income/house price ratio for each of the authorities.
Figure 7.30: Lower Quartile House Price to Income ratio
Lower Quartile Price CACI average Income/LQ price (2006 Q3) Income 2006 ratio
Denbighshire 112000 24000 4.7 Flintshire 111938 26000 4.3 Wrexham 110000 24000 4.6 Source: DCLG, CACI Paycheck 2006
7.151 All three authorities record high ratios illustrating the extent of the affordability problem. All of the ratios are considerably above the ratios suggested within the guidance as being affordable (2.9 for single income households, 3.5 for joint income households).
Lower Level Geographical analysis of income/house price ratios
7.152 As the CACI Paycheck data is provided for 6-digit postcodes it can be used to provide a localised indicator of affordability when ratios are calculated against house prices. This section therefore uses this data to identify concentrations of areas where affordability is particularly acute and therefore providing spatial distinction with regard to the issue.
7.153 The analysis identifies areas in which the current housing market is likely to preclude households from purchasing a house, this is driven by two factors, house prices and income levels. Types of households affected include:
• First Time Buyers (FTB), and
• Low income households, including those looking to move out of the social rented sector
7.154 It is important to note that these households play a critical role in ensuring the continuity of the housing market. If households are unable to buy entry level properties other elements of the ‘housing chain’ cannot operate smoothly therefore impacting on all components of the housing market.
7.155 An initial assessment is made of the spatial patterns of household incomes across the Core Study Area. Following this examination is made of the affordability issues across the same spatial area using ratios based on household income and house prices. Using ONS definitions
March 2008 183 Wrexham CBC, Flintshire BC, Denbighshire BC
distinctions are made between rural and urban areas to provide greater understanding of the differing scale of affordability issues between these different types of markets.
7.156 The indicator for affordability is generally accepted to be the ratio between household income and house prices42. This provides an indication of the level of mortgage borrowing required in order to secure purchase. Areas with high ratios are deemed unaffordable, ratios have been calculated for each output area.
7.157 House price data is sourced from the Land Registry and an average sales value has been calculated over the period October 2005 to September 2006 and provided at the 4-digit postcode spatial level. Detached house prices have been removed from the analysis as these properties are considered to be outside the First Time Buyer (FTB) market and significantly skew average house prices.
7.158 Household incomes are sourced from the CACI Paycheck data and have been used at the 6 digit postcode level. Section 4 included analysis of areas which recorded particularly low levels of income and it is clear that this is an important element in driving affordability issues in those more deprived areas.
7.159 Average ratios as well as the highest and lowest recorded for an output area in each authority is shown in the following table.
Figure 7.31: Income/House Price ratios across the Core Study Area
District Average ratio Minimum ratio Maximum ratio (Income to Price) Denbighshire 5.0 2.2 10.2 Flintshire 4.7 1.8 10.6 Wrexham 5.1 2.1 11.5 Source43
7.160 All three authorities record relatively similar average ratios from these composites of the small spatial areas. The three averages are all relatively high. Flintshire records a marginally lower overall ratio and also has the postcode area which has the lowest ratio.
7.161 It is important to note that these averages are built up from the small level and should therefore take account of local differences.
42 Wilcox (2005) for the Joseph Rowntree Foundation 43 House Prices Land Registry average October 2005 to September 2006 (semi-detached, terraced, flats). Household Income CACI Paycheck data 2006
March 2008 184 Wrexham CBC, Flintshire BC, Denbighshire BC
7.162 The spatial level of the data means that concentrations of areas where affordability is a significant issue can be identified through mapping. The following analysis looks to identify those areas which record notably high income/price ratios but also indicate the spatial extent of areas classed as unaffordable using the single earner multiplier of 3.544.
7.163 In order to reflect these benchmarks a number of bands of ratios are identified to distinguish affordable areas and differing levels of unaffordability:
• ratio of 3.5 and below, with areas falling within this category to be considered as affordable
• ratio of between 3.5 – 4.25, these areas are deemed unaffordable, however, present lending rates could mean purchase is possible
• ratio of 4.25 and above, considered unaffordable for households without current personal equity in property
• ratios of above 6, considered to be extremely unaffordable and well beyond the means of households entering the open market without current personal equity in property
7.164 The following plans indicate the location of areas that are above and below these income/house price ratio bands. It is important to note that some areas are not classified, as there have been no house price sales over the year.
44 Wilcox’s (2005) report for the JRF into the Intermediate Housing Market used an income multiplier of 3.25 for household incomes as in 2003 rates exceeded 3.25 to 1 in only about a quarter of all cases where more than one income was taken into account. Mortgage lenders have been more inclined to extend borrowing to greater mortgage ratios over recent years, with some lenders offering mortgages of five times income levels. The DCLG guidance suggests a mortgage multiplier for single income households of 3.5.
March 2008 185 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.32: Average income to house price ratio - <3.5
March 2008 186 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 7.33: Average income to house price ratio – 3.5 – 4.25
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Figure 7.34: Average income to house price ratio - >4.25
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Figure 7.35: Average income to house price – above 6
7.165 The plans illustrate the geographical spread of affordability as an issue across the whole of the Core Study Area. There are a number of areas which do record income ratios below 3.5 and could therefore be considered as more ‘affordable’ areas, these include:
March 2008 189 Wrexham CBC, Flintshire BC, Denbighshire BC
• The mountainous areas on the border between Wrexham and Flintshire;
• Areas along the A55 in Flintshire;
• Small pockets of areas around the peripheral areas of Rhyl;
• Localised neighbourhoods in and around Wrexham town;
• Small areas around Llandyrnog in Denbighshire and Llanfynydd in Flintshire; and
• Peripheral areas of Buckley and Shotton.
7.166 It is important to note that there are relatively few areas which have ratios below 3.5 but also below 4.25. Where there are areas they tend to be contained within specific neighbourhoods often on the edges of small settlements.
7.167 There are a notable number of areas which record ratios above 4.25 and therefore suffer from acute levels of affordability problems. Areas where these ratios are so high would mean that it is likely that local first time buyers looking to purchase in this area would struggle. These areas include:
• Areas along the A494 through Flintshire and Denbighshire;
• The northern coastal area covering much of Rhyl and Prestatyn;
• Areas to the east of the A483 in Wrexham concentrated to the border with England;
• The peripheral areas of Denbigh and St Asaph;
• A concentrated cluster to the west of Holywell stretching to the border with Denbighshire;
• A large area stretching around Queensferry and Buckley stretching to the border with Chester; and
• Rural areas in the south of the Core Study Area, including the western part of Wrexham.
7.168 The final plan which shows areas where the ratio is above 6 indicate those areas where house prices and income are significantly diverged and therefore represent those areas with the greatest affordability issue. These areas appear to be relatively scatted across the Core Study area with many on the peripheral edges of the urban settlements. There appears to be a concentration of areas along the borders with England as well as a cluster to the west of Holywell.
7.169 Terraced housing on the whole represents the most consistently affordable housing product. As the housing market analysis has shown some of the authorities have markets where flats are cheaper, although sales values tend to vary more within this stock type and they don’t
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always meet the aspirations of those looking to purchase. Therefore, similar analysis has been undertaken simply using terraced average sales prices across the three authorities. It is important to note that despite this house type being prevalent there are areas where there are relatively few terraced houses and therefore sales values can be skewed upwards.
7.170 The following table show the proportions of postcodes for each authority, which fall within each of the three ratio bands assessed against sales prices of; all properties without detached and, also just terraced sales. This indicates the proportion of postcode areas which are classed as ‘affordable’ using the joint income multiplier of 3.5 and those which are unaffordable (ratio above 3.5) and finally those which classified as having a high affordability ratio (over 4.25).
Figure 7.36: Proportions of authorities falling within the ratio bands
Ratio Proportion of postcodes within the three ratio bands using average house prices Wrexham Flintshire Denbighshire Average Terraced Average Terraced Average Terraced house price average house price average house price average without house price without house price without house price detached detached detached < 3.5 7.80% 18.90% 13.80% 24.00% 6.40% 15.70% 3.5 - 4.25 18.40% 28.90% 23.80% 29.10% 19.90% 26.90% > 4.25 78.80% 52.40% 62.50% 46.90% 73.70% 57.40% Source: GVA Grimley, 2007
7.171 Wrexham and Denbighshire have relatively similar profiles. With very few areas recording ratios which are below the threshold of 3.5. They also both record significantly high proportions of postcode areas where the ratio is above 4.25, almost 79% in Wrexham and 74% in Denbighshire. It is important to note that Flintshire has a lower proportion of areas where the ratio is over 4.25 compared to the other two authorities, although this is still high at over 60%.
7.172 Terraces would appear to offer the more affordable product across the three authorities when looked at spatially with a lower figure of around 50% (slightly higher in Denbighshire) of postcode areas classified as having a ratio of over 4.25.
7.173 It is important to note that a number of the areas with low household incomes record no sales data, this is probably a result of many of these areas being within mono-tenure social rented estates. These areas are clearly marked on the maps as white areas within the City Region boundary.
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Urban / Rural distinctions
7.174 ONS provides a classification between urban and rural areas it breaks down areas into three categories:
• Urban
• Town & Urban Fringe
• Village, Hamlet & Isolated Dwellings
7.175 Using these spatial distinctions GIS analysis has been used to assess the differences in the income/house price ratios between these defined types of areas within each of the authorities. As with the earlier analysis average house prices have been calculated which exclude detached property sales.
7.176 The following tables show the spatial breakdown for each of the authorities.
Figure 7.37: Urban / Rural affordability assessment – Denbighshire
Affordability ratio Proportion of postcode areas falling within each category Urban Town & Urban Fringe Village, Hamlet & Isolated Dwellings < 3.5 3.4% 5.9% 12.6% 3.5 - 4.25 18.5% 18.9% 24.6% > 4.25 78.1% 75.1% 62.5% Source: GVA Grimley, 2007
Figure 7.38: Urban / Rural affordability assessment – Flintshire
Affordability ratio Proportion of postcode areas falling within each category Urban Town & Urban Fringe Village, Hamlet & Isolated Dwellings < 3.5 15.1% 10.5% 15.5% 3.5 - 4.25 24.9% 25.7% 21.9% > 4.25 59.6% 63.8% 62.5% Source: GVA Grimley, 2007
Figure 7.39: Urban / Rural affordability assessment – Wrexham
Affordability ratio Proportion of postcode areas falling within each category Urban Town & Urban Fringe Village, Hamlet & Isolated Dwellings < 3.5 8.1% 4.5% 12.2% 3.5 - 4.25 20.5% 19.9% 15.4% > 4.25 71.4% 75.6% 72.4%
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Source: GVA Grimley, 2007
7.177 Overall there does not appear to be a marked difference in the proportion of postcodes falling within the different affordability ratio bands across the various spatial classifications. This supports the preceding analysis which identifies that affordability is an issue which affects the majority of the Core Study Area and is linked to property type and size, being less dependent upon location. However, it is possible to pick out a number of key distinctions:
• Within Denbighshire affordability appears to be more acute within urban areas including those areas classed as Town and Fringe, with a higher proportion of rural areas classed as having ratios below 3.5;
• Within Flintshire it is the Town and Fringe areas which appear to record the highest prevalence of areas classed as unaffordable. In line with the ratios identified Flintshire overall appears to have the lowest proportion of areas with ratios above 4.25.
• As with Denbighshire Wrexham’s rural areas appear to include a greater proportion of postcodes which have ratios below 3.5 when compared with the other spatial classifications. However, looking at the proportions of ratios above 4.25 shows considerable similarity across the three spatial classifications.
7.178 The analysis has clear shown that affordability is an issue for all three authorities with the vast majority of areas within the Core Study Area recording income/house price ratios which are above the level suggested as being ‘affordable’ for joint income households.
Key Messages
7.179 This section has provided a comprehensive assessment of the active market within the Core Study Area. A detailed picture has been built up of the way the market is operating currently and therefore the level of demand for property across the three authorities. The following key messages have been identified:
• Both local authority and four-digit postcode areas demonstrating the greatest house price growth between 2000 and 2006 are largely areas starting with the lowest base values as at 2000, illustrating the growing pressure on what was traditionally affordable stock.
• In terms of overall transactional activity, all authorities have followed similar patterns and fluctuating trends, suggesting a close relationship with the wider property market.
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• Within the three component authorities, Denbighshire is in all four house type categories the lowest price area in terms of average house prices, whilst Flintshire and Wrexham are relatively closely matched.
• Sales transactions of individual property types fluctuate highly, suggesting a close link with the wider cyclical trends evident within the national markets. Within this there has been a distinct fall in sales transactions across all property types since Q2 2004.
• In terms of agent consultation, housing market performance appears to be stratified according to price – properties below £150,000 to £200,000 generally sell well, while those marketed between £150,000 and £350,000 are experiencing sluggish sales. Above £350,000 the majority of houses on offer tend to be rural or character houses, and agents report waiting lists and brisk sales for these homes.
• An examination of active developments suggests relatively few affordable units being built.
• Flintshire commands the highest average private rental values within the Core Study Area, whilst Wrexham and Denbighshire command broadly the same values
• In terms of social rents, Flintshire has maintained a rental premium (until 2006) over neighbouring authorities, whilst Denbighshire has consistently commanded the lowest social rental levels.
• Whilst Local Authority stock has witnessed incremental rental growth over the 2002 - 2006 period, RSL average rents have risen faster over the same period, making these properties less affordable by comparison.
• Wrexham commands the highest RSL rents, whilst Denbighshire has commanded the lowest rents in all years since 2002.
• Denbighshire has a very low level problem of long-term voids in its LA social housing stock, as compared to Flintshire and in particular Wrexham
• Low levels of turnover in the social rented sector indicates the high demand for property in this tenure which in turn has implications for new households who are unable to afford entry into market housing or those households in inappropriate housing within the social rented sector and therefore requiring a transfer.
• The scale of the ratios of house prices to income suggest that many first time buyers are being priced out of the market and are therefore unable to purchase housing without having substantial savings, or assistance from family;
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• House prices have led to the rapid rise in all levels of the housing market with even those properties which in the past would have been considered as entry level properties now recording prices which are beyond the reach of those on low income or lacking existing equity;
• Of the three authorities Flintshire on average has a slightly lower ratio than the other two authorities as a result of marginally higher average income;
• Those areas which appear to have remained affordable have been identified. These are relatively few and far between but are distributed through much of the Core Study Area; and
• There are many areas where the ratio is above 4.25 with concentrations evident along the English border as well as in many areas within Denbighshire. Access to employment via the major arterial roads and the superior quality of place evident within these areas are considered to be major factors in driving up prices and therefore creating affordability issues.
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8. STRATEGIC DRIVERS OF THE NORTH EAST WALES HOUSING MARKET
8.1 A detailed picture of the current demographic, economic and housing profile has been built up in the preceding sections of the HMA. This section aims to draw these factors together and understand the relationships which impact on the overall housing market.
8.2 Prior to the analysis around the future housing market this section outlines the ‘high level’ strategic drivers behind the current housing market whilst also highlighting how these drivers will impact on future requirements.
8.3 The analysis thus far has focused on the following two key questions:
• Where are we now? – A clear understanding of the spatial extent of the current housing market and its inherent challenges and distinct characteristics based on a robust analysis of the evidence base.
• How did we get here? – Identification of the current and future drivers of change within the housing market using analysis of past trends impacting on the housing market.
8.4 It has also started to establish the base for answering the following questions which the proceeding sections answer:
• Where are we going? – Development of the key characteristics/nature of the projected housing market in 2012 and forwards up to 2021. A clear identification of the factors creating these future housing markets and the likely broad future scale, type and location of housing demand.
• What are the implications? – Identifying what will be required to deliver the change required in terms of meeting future need/demand and providing an indication of the role that will be played through the provision of new housing as well as the conversion/regeneration of existing stock; and
• How do we get there? – The best way to meet these challenges and the required changes to ensure that the objectives of housing and planning policy are achieved.
8.5 Emphasis has been placed within the analysis upon examining in detail the Core Study Area made up of the authorities of Wrexham, Flintshire and Denbighshire whilst also referencing
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where relevant the relative performance and characteristics of the authorities classified in the Wider Reference Area.
Key Housing Stock Characteristics
8.6 The Core Study Area is made up of 376,700 people. The total dwelling stock comprises 158,441 dwellings. Over the last five years stock has grown by almost 2% (2,917 units) spread across the three authorities.
8.7 Examining the tenure composition reveals 82% private sector housing and almost 18% social housing, although this masks distinctions between the three authorities and settlement areas. Within this, there is a strong reliance on local authorities to house social occupiers, with over 14% of all occupiers renting local authority property, as compared to just under 4% renting from registered social landlords. This is particularly acute in Wrexham, where over 21% of all occupiers rent from the local authority.
8.8 Overall the existing housing stock within the Core Study Area represents a relatively balanced offer, although there is an above average level of detached and semi-detached houses as compared to Wales and England, and a below average number of terraced and flats/maisonettes set against Wales and England proportions45.
8.9 The Core Study Area exhibits relatively low levels of vacancy indicating the degree of demand for stock. As at 2001, the Core Study Area had a vacancy level of just 3.08% in terms of dwelling numbers, set against 3.13% in England and 3.99% in Wales.
Strategic Drivers of the Housing Market
8.10 A number of key drivers have been identified through a detailed assessment of the current housing market which have impacted on its evolution and will continue to impact on future housing requirements. These are defined under a number of headings below:
Demographic Drivers
8.11 Historical population growth - The populations of all three authorities have grown over the last 20 years, with the Core Study Area witnessing an increase in population of 8.7% between 1985 and 2005. Migration has played a major role in this growth over this time period. Locally produced population projections and sub-regional projections produced by WAG indicate that this trend is set to continue. These projections, combined with reducing household sizes,
45 Proportions calculated from 2001 Census
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forecast a continued growth in the number of households creating additional demand for housing until 2021.
8.12 A changing age structure - The age structure of the population has changed over recent years with the three areas witnessing growing working age and elderly populations. This trend will continue to affect household need and demand.
Economic Drivers
8.13 Historical and projected employment growth - All three authorities have witnessed a period of employment growth with the most obvious drivers being Manufacturing, ‘Tourism’ (or hotels, distribution and restaurants) and the public sector. This has led to a significant drop in unemployment with the economy almost reaching full employment. Despite this growth trend, the structure of the sub-regional economy is skewed towards manufacturing sectors, which are exposed to increasing globally competitive pressures. In this context Flintshire is particularly exposed with approximately 35% of its workforce employed in manufacturing. The sub-regional economy is projected to witness employment growth in the period up to 2021, with Denbighshire in particular forecast to experience high levels of growth. This growth will have an impact on the level of housing required in the future in relation to the changing economic circumstances of existing households and the requirements of incoming households.
8.14 A changing economy – Manufacturing employment is under increasing pressure within the UK, the impact of which has been evidenced through falling employment levels within the Core Study Area and recent job losses in major employers in Wales. However, the proximity of the Study Area to the buoyant markets of Chester and evidence of industrial transition, particularly in Wrexham, provides forecast continued employment growth albeit in the service sectors more than compensating for the manufacturing jobs losses overall. This changing employment structure will have implications on levels of income and the ability to purchase housing.
Housing Supply Side Drivers
8.15 A declining affordable housing supply - A falling quantum of social rented stock is further compounding the rising level of housing need. This has been driven by Right To Buys and a notable lack of development activity to replace stock lost. Between 2000 and 200446 there were 3,392 local authority Right To Buy sales in all three core authorities. In contrast there
46 Figures represent the latest recorded Welsh Housing Statistics
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were 307 affordable units developed directly by registered social landlords in the same period and no units developed by local authorities.
8.16 Issues with the supply of new housing - On average 785 private sector units have been delivered each year between 2000 – 2004, with levels growing year-on-year since 2001. However, market evidence suggests that new supply have been heavily dominated over recent years by developments of 3-4 bedroom housing. Flintshire has also seen a lack of large-scale development in the last few years as a result of the current status of its UDP, which remains un-adopted.
Housing Demand Side Drivers
8.17 Rising house prices - House prices within the Core Study Area have risen exponentially over recent years, the average house price within the area has risen from £74,753 to £155,032 between 2001 and 200647. These rapid increases in values follows national trends and also reflect the rapid house prices seen over the border in Chester. Market evidence suggests that there is very high demand for products which are in the lower sectors of the market (priced below £150,000 - £200,000), whilst the level of supply and the suppressed nature of the market is creating a stagnating effect for mid-range family housing.
8.18 Transactions – This study has revealed emerging evidence of the volume of market transactions slowing somewhat, coinciding with a period of unprecedented price growth and affordability concerns. This suggests that the market is relatively unresponsive in price terms to changes in realised demand, and certainly over the short term. Lack of movement, particularly at the lower end of the market may exert increasing demand for private rental and other tenures.
8.19 Affordability - This rise in prices has created a significant affordability issue across much of the area with growth in house prices far outpacing the rise in income levels. Average income to price ratios in the authorities range from 4.3 in Flintshire to 4.7 in Denbighshire based on lower quartile house prices and median income48. This has significant implications for First Time Buyers and other households looking to purchase housing who do have existing levels of equity, leading in turn to increasing pressure on other housing tenures.
8.20 Increased pressure on the social rented sector - Demand for social rented housing has led to long term local authority void rates falling since 2001, with Denbighshire and Flintshire
47 Overall average prices rises taken from quarter 4 (Land Registry) 48 Sourced from CACI Paycheck data
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recording almost no vacancies in this tenure. Turnover of properties is also notably low across all three authorities.
Other Drivers
8.21 Capacity in terms of the quantum of land available and its location is an important driver with regard to the development of the future housing market. This will be assessed in detail within section 11 of this assessment.
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9. HOUSING NEED
9.1 ‘Housing need’ refers to households who lack their own housing or live in unsuitable housing and who cannot afford to meet their needs in the market. All of the three authorities have recently completed housing needs surveys which reach estimates of housing need to support affordable housing policies and housing strategy.
9.2 However, the housing market has moved very rapidly over recent years and this has had serious repercussions for the number of households able to access market housing both currently and in the future. This section does not look to conduct new primary research in the form of surveys but looks at key indicators to outline how the market has changed recently and the likely implications this will have on the level of housing need and therefore requirements for affordable housing.
9.3 Given the changing market conditions this is largely done through an assessment of the affordability of housing building on the work in Section 7 which included a detailed assessment of this issue at a very low spatial level as well as at the wider housing market and authority level.
9.4 A key element of this section is looking to forecast the likely tenure requirements of newly forming households in the future with this being based on an assessment of the changing economic structure of the area and therefore households wages and ability to purchase set against current benchmarks for entry into different tenures.
9.5 Initially it is worth establishing a clear definition of affordable housing as the definition has
been broadened out over recent years. Within England PPS3 defines it as follows:
Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should:
• Meet the needs of eligible housing including availability at a cost low enough for them to afford, determined with regard to local incomes and house prices.
• Include provision for the home to remain at an affordable price for future eligible households, or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision.
9.6 Intermediate housing is housing at prices and rents above those of social rent, but below market prices or rents, and which meet the criteria above for affordable housing. It effectively
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caters for the segment of the market between social renting and the private sector market (owner occupation and private renting).
9.7 The range of intermediate housing options include the following, with new products also emerging:
• New build Homebuy – where a purchaser buys a minimum 25% share in a property and pays rent on the unowned share (normally at 2.75%) which is commonly owned by an RSL.
• Open market Homebuy – where an equity loan of up to £50,000 (or around 25% of the sale price) is provided to assist households in purchasing a home in the open market.
• Social Homebuy – whereby social rented tenants are able to acquire an equity stake in their home (at a minimum of 25%) but continue to pay rent on the unowned share (normally at 2.75%).
• Intermediate Rent – homes for rent on assured short-hold tenancies where the rental charged is below 80% of market rent in the locality.
• Low cost market housing – homes sold to the open market on the basis of an applied equity discount in perpetuity, enforced by the local planning authority through planning policy and development control processes. Housing Need Surveys
9.8 Housing Needs Studies are intended to provide a firm basis upon which to assess, and indeed calculate net affordable housing need over a five-year period.
9.9 All of the authorities within the Core Study Area have housing needs studies however; they have not been produced to the same timetable. Denbighshire holds the most dated study (2003), followed by Flintshire (2005), with Wrexham’s only undertaken last year (2006). All three of the studies have been produced by Fordham Research following a similar methodology. A separate document has been produced reviewing and exploring this methodology, however, the following section summarises the approach and key findings.
Methodology
9.10 The Housing Needs Studies rely primarily on a Housing Needs Survey, which seeks to capture the needs and aspirations of current and future households through surveying a suitably robust representative sample of households.
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9.11 Fundamentally housing needs surveys provide a means of identifying a range of aspirations, perceptions, and financial information which is very hard to obtain from secondary data sources. However, they are limited by the fact that they are based on an often small sample of the population which is then assumed to be representative of the wider population. The issue being that many of the questions within the survey are extremely specific and influenced by personal circumstance which differs significantly from household to household and changes over time.
9.12 This primary data is supplemented with secondary housing market data analysis and statistical returns provided by each Local Authority to provide a net annual affordable housing requirement for each authority using the then ODPM’s recommended 18 stage ‘Basic Needs Assessment Model’.
9.13 As noted all of the authorities survey’s have been conducted by Fordham Research Ltd. In concluding their assessment of need a further level of ‘Balancing Housing Market’ analysis is undertaken by, which seeks to assist Councils with assessing the degree of balance within their housing market, and the extent of convergence towards this balance. This is intended, together with further analysis of specific themes within each housing market (e.g. special housing needs), to then feed into the development of Affordable Housing Policies at the local authority level. However, the conclusions of the assessments regarding overall need are presented within this section in order to assess against the updateable secondary evidence.
Findings
9.14 A key output of the studies is an affordable housing requirement. As noted above this factors in meeting backlogged need, future need and the current and future supply of affordable housing. The figures calculated for each authority for the five years from the date of publication are shown in the following table.
Figure 9.1: Affordable Housing Requirement – Core Study Area
Flintshire Denbighshire Wrexham (2005) (2003) (2006) Affordable Requirement Per Annum 808 645 147 Source: Fordham Research Ltd
March 2008 203 Wrexham CBC, Flintshire BC, Denbighshire BC
Source: Housing Needs Studies – Wrexham (2006), Flintshire (2005) and Denbighshire (2003)
9.15 It is very clear that in the case of Flintshire and Denbighshire these figures are not deliverable in practice given the current levels of housing allocated under respective planning frameworks. Even with Wrexham’s lower level this still represents approximately 40% of the planned annual supply of all tenures of housing in the County Borough.
9.16 This would appear to reinforce the severity of the issue, the key conclusion being that in all authorities there is a significant justification for setting a high threshold in terms of the proportion of affordable housing developed.
9.17 The key additional findings of each of the studies are listed below:
Flintshire
• A high target of 50% affordable housing on development sites is justified given the identified level of need;
• Affordable provision should mainly consist of social rented housing;
• 17% of all the County’s households contain special needs members – higher than average. ‘Physically disabled’ is the largest special needs category; and
• 22% of households in Flintshire contain older persons only, and a further 9% contain a mix of both older and younger persons;
Wrexham
• A high target of affordable housing of up to 40% on development sites is justified on the basis of calculated levels of need;
• The size of accommodation in greatest need is 2 bedroom properties, and a large proportion of all need is within Wrexham Town;
• 42.1% of households in Wrexham County Borough contain “over 50s” only, and a further;
• 15.9% contain a mix of those over and under the age of 50; and
• A fifth of all the County’s households contain special needs members – higher than average. 'Physically disabled' is the largest special needs category.
Denbighshire
• There is an estimated annual shortfall of 645 affordable homes within Denbighshire;
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• In total it is estimated that 4,112 households are currently living in unsuitable housing (10.3% of all households);
• Some 19.1% of all the County’s households (7,635) contain special needs members;
• 31.4% of households contain older persons only, whilst a further 9.5% contain both older and non-older persons;
• 64.3% could not afford local market housing of a suitable size; and
• Households in the private rented sector are most likely to be in need as are lone parent households;
Reinforcing the analysis
9.18 Given the relatively consistent methodologies adopted and their fit with nationally produced guidance the Housing Needs Studies provide a key indicator in terms of the level of future affordable housing required. However, in the case of both Denbighshire and Flintshire they provide very high levels which are not deliverable given the current levels of housing allocated.
9.19 This section looks to provide complementary analysis to investigate further the findings of these studies. Section eleven looks to complement this by starting to identify capacity issues which will impact on the ability to deliver future affordable housing and starting to illustrate the levels which are likely to be achievable.
9.20 The separate report produced to accompany this HMA outlines in some details the problems associated with updating the model in detail. Significantly this identifies that the outcomes of the model are dependent upon the responses within the survey and therefore in order to update a new survey would need to be commissioned. In order to ensure consistency surveys would need to be conducted at the same time in each authority in the future.
9.21 Given the fact that surveys represent the only way to actually obtain peoples aspirations and perceptions it is advisable for a cross-authority survey to be undertaken in the next couple of years. Ideally this would look to gain a greater number of survey responses representing a larger proportion of the overall population therefore making the findings of the model more robust.
9.22 Very few components of the Basic Needs Assessment Model may be accurately updated using secondary data sources, these being the Market Analysis, and the WHO12 and WHO4 Council returns. The Survey results themselves are not updateable with any degree of
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accuracy, given their reliance on the subjective opinions and information passed over by respondents.
9.23 There are issues in terms of updating certain elements using secondary data and re-feeding them back into the model. For example, should housing market analysis be updated, perhaps showing rising values, survey based income analysis should also be updated in tandem to enable truly representative conclusions to be reached. It is noted that currently there are gaps within the data sources available as a result of differing monitoring procedures within England than Wales and also the reliability of nationally collected Welsh Housing Statistics which impact on the ability to update in whole using secondary data sources. The monitoring section of this report looks to identify future approaches to ensuring these gaps are filled and facilitating this approach in the future.
9.24 However, despite these issues it is possible to use secondary data sources to provide an indication of the validity of the conclusions reached and the likely trajectory of change, which offers the opportunity for providing an indicative update of housing need without the need to commission a new housing survey.
9.25 The following section looks to undertake more detailed analysis of the relative affordability of different tenure products benchmarking this against incomes of households within the authorities. The analysis has been conducted to identify the likely role of ‘intermediate housing’ as well as the more general label of affordable housing. Reference is also made to recent changes in the levels of homelessness and the length of waiting lists for social rented housing.
9.26 A new approach to forecasting the future level of affordable housing required to meet additional household growth builds on this analysis and provides a further tool in justifying the level of affordable housing required.
Assessing the extent of the affordability problem
9.27 As Section 7 has identified affordability is an increasing issue for the Core Study Area. The gap between income levels and house prices has witnessed a period of rapid divergence nationally over the last five years. This has implications for all households within the housing market, however, it particularly affects those households looking to enter the owner-occupied market for the first time i.e. first time buyers (FTBs).
9.28 This section starts by exploring the findings of a national piece of research conducted by the Joseph Rowntree Foundation which looked to isolate the severity of affordability issues on this
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particular element of the market labelled through this research as the ‘intermediate housing market’. The advantage of including the conclusions of this research for the three authorities in the Core Study Area is that it offers a unique opportunity to compare the extent of affordability issues against the national picture and other authorities.
9.29 However, the research was undertaken in 2004 and given the pace of change in the housing market over the subsequent three years the key elements factored into the model - house price and income – now appear comparatively low and should be considered with reference to this issue. In order to therefore provide a more updated assessment of affordability further analysis is undertaken using more up-to-date data to asses the relationship between income and house prices for all households within the three authorities. This analysis builds on the analysis already undertaken in Section 7 which involved the calculation of affordability ratios across the local authorities at a low spatial level to identify those areas where affordability is a particularly acute problem.
Joseph Rowntreee Research into the ‘Intermediate Housing Market’
9.30 Recent research by the Joseph Rowntree Foundation49 examined the capacity of younger working households to buy in their area. As noted above the findings of this report are examined within this HMA as this remains the only research available which provides comparable data across the UK specifically examining the intermediate market using incomes for young workers to specifically show the issues for first time buyers.
9.31 The following table shows annual household earnings, average house prices for 2/3 bedroom properties and the house price to income ratio for young workers (aged 20-39).
Figure 9.2: House Price to Income Ratio (2004)
Authority Annual household Average house House price to earnings (£) prices (£) income ratios Flintshire 27492 111865 4.07 Wrexham 25716 104474 4.06 Denbighshire 27128 108821 4.01 Chester 39829 147315 3.7 Ellesmere Port and Neston 35014 115188 3.29 Conwy 30765 126314 4.11 Wales 27039 107864 3.99 Great Britain 36865 152273 4.13 Source: Wilcox S. (2005) Affordability and the Intermediate Housing Market, Joseph Rowntree Foundation
49 Wilcox, S. (2005) Affordability and the Intermediate Housing Market, Joseph Rowntree Foundation
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9.32 Wales has an average income to house price ratio of 3.99. All of the authorities within the Core Study Area exceed this average, however, they do not record ratios higher than the GB average which is heavily influenced by the South East of England.
9.33 This study indicates that the three authorities actually have higher house price to income ratios than recorded over the border in Chester and considerably higher than Ellesmere Port and Neston. Significantly, Conwy records the highest ratio almost on a par with the GB average.
9.34 The study attempted to provide an assessment of the intermediate housing market using lowest decile and lower quartile house price figure rather than mean house prices. The table below shows the mean, lower quartile and lower decile prices and the annual income required to afford the lower quartile and lower decile prices, for both single and multiple person households (mortgage multiplier of 3.75 used for single person household, 3.25 for multiple earner household).
Figure 9.3: Local House Prices and Incomes that Single and Multiple Earner Households Require to Purchase
Authority 2004 house prices (£) average Annual income required to purchase (£) for two-and three-bedroom dwellings (sample) lowest decile prices lower quartile prices mean lower lowest single multiple single multiple quartile decile earner earner earner earner Flintshire 111865 84982 65000 14213 16400 18583 21442 Wrexham 10474 75000 55600 12158 14028 16400 18923 Denbighshire 108821 82000 58785 12854 14832 17931 20689 Chester 147315 115000 85250 18641 21509 25147 29015 Ellesmere Port and Neston 115188 79500 63999 13994 16147 17384 20058 Conwy 126314 92500 73200 16006 18469 20227 23338 Source: Wilcox S. (2005) Affordability and the Intermediate Housing Market, Joseph Rowntree Foundation
9.35 The lowest income required to purchase the lower decile price for a multiple earner varies between £14,028 in Wrexham and £21,509 in Chester. For the lower quartile house prices this rises to between £18,923 again in Wrexham and £29,015 in Chester.
9.36 The high ratios in Chester are clearly driven by the high property prices, with 2004 prices clearly considerably higher than recorded in the authorities within the Core Study Area, this fits with the more up-to-date analysis undertaken as part of the review of the active market within this report.
March 2008 208 Wrexham CBC, Flintshire BC, Denbighshire BC
9.37 The pace of the housing market identified through this analysis indicates the need to use as up-to-date data as possible. The following section looks to provide a number of benchmarks with regard to the affordability of various types of tenure
Assessing Affordability Issues – Updated Analysis
9.38 This section uses the same data sources as those used in Section 7, which represent the most up-to-date data available, to advance the assessment of affordability issues and relate it to modelling housing need now and in the future.
9.39 The HMA guidance suggests a number of critical levels to test against income in order to evaluate the extent of the issue of affordability. The two core elements are:
• Assessing whether a household can afford to buy a home; and
• Assessing whether a household can afford to rent a home
9.40 Looking at the first strand the following assumptions have been used with regard to open market housing:
• Lower Quartile house prices sourced from the DCLG have been used to represent lower market entry properties;
• In line with the guidance a single income is considered able to buy a home if it costs 3.5 times the gross household income; and
• A dual income household should be able to buy a home if it costs 2.9 times the gross household income.
9.41 In terms of access to rented accommodation this includes both private and social rented tenures. Within the social rented tenure rent is fixed to ensure affordability, however, it provides a useful benchmark to indicate the gap between the social tenure and open market affordability. The following assumptions are used in the analysis:
• A household is considered able to afford market housing in cases where the rent payable would constitute no more than 25% of their gross household income;
• ‘Rent payable’ is defined as the entire rent due, even if it is partially or entirely met by housing benefit;
• In terms of annual social housing rents these have been calculated from an average taken of local authority and RSL rental levels; and
March 2008 209 Wrexham CBC, Flintshire BC, Denbighshire BC
• Private rental levels have been calculated through a survey of available property on Rightmove.co.uk. An average was calculated taken from a sample of 1, 2, 3 and 4 bedroom properties to provide a representative average of the rental cost of private rented housing. In addition to this overall average an additional average was taken of only 1 and 2 bed properties to represent the more affordable end of the market (i.e. smaller properties which represent entry level properties for younger newly forming households).
9.42 The average annual costs for each tenure are presented below:
Figure 9.4: Income thresholds for entry into different tenures
Denbighshire Flintshire Wrexham Entry level dual income for lower quartile house (2.9 mortgage multiplier) £ 38,621 £ 38,599 £ 37,931
Entry level single earner income for lower quartile house (3.5 mortgage multiplier) £ 32,000 £ 31,982 £ 31,429 Income required for average private rented property (average all properties) £ 27,431 £ 31,312 £ 28,182 Income required for average 2-bed private rented property £ 22,385 £ 25,775 £ 24,240
Income required for social rented sector under same assumptions £ 10,604 £ 11,019 £ 10,474 Source: GVA Grimley LLP
9.43 Using these assumptions the following chart indicates the income required to access these different elements of the housing market for each of the authorities within the Core Study Area.
March 2008 210 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 9.5: Affordability benchmarks for entry to different tenures and the bottom end of the housing market
Assessing Affordability
45000 Entry level dual income for low er quartile house (2.9 40000 mortgage multiplier)
35000 Entry level single earner income for low er quartile house (3.5 mortgage 30000 multiplier) Income required for average 25000 private rented property (average all properties) (£) 20000 Income Income required for average 2-bed private rented 15000 property
10000 Income required for social rented sector under same assumptions 5000
0 Denbighshire Flintshire Wrexham
Source: CACI, 2007 / Land Registry 2007 / Rightmove 2007 / Welsh Housing Statistics 2006
9.44 The chart clearly shows that in terms of income there is a significant gap between the social rented sector and entry to the owner-occupier market. The rapid increase in house prices identified earlier has clearly assisted in widening this gap with incomes failing to keep pace.
9.45 The outcome of this can only be an increasing affordability problem for those who have not already entered the property market and therefore benefiting from the accumulation of equity.
9.46 It is clear that the private rented sector plays a role in accommodating those who have means beyond the social rented sector (and therefore not classified as in need of social rented housing) but who are unable, or choose not to, enter the owner-occupier market. Although it is important to note that there is a significant gap between the rental levels in the social rented sector and those in the private rented sector. This would suggest that there are a relatively large amount of households who are unable to move out of the social rented sector once they acquire an income from employment.
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9.47 Significantly the gap in income levels between the income required to rent a 2–bed property and that required to purchase a lower quartile property with a mortgage is also relatively large. These two slices of the profile together would be considered to be that which could be classified as the intermediate housing market. They represent the benchmarks for those household income levels which would not allow for entry into the owner-occupier market, and the private rented market, but above those required for the social rented sector.
9.48 CACI Paycheck data breaks down the total households within an authority by a range of income bands (representing household income), with the number of household falling within each band calculated. This provides a valuable source for quantifying the level of households falling within those sectors which are classified in need of affordable housing.
9.49 The following charts indicate the income profile for the three authorities using the CACI Paycheck data. The key benchmarks are included on the charts and the income bands colour coded to reflect different elements of the market.
March 2008 212 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 9.6: Denbighshire – Income Distribution
Denbighshire - Income Distribution
7000 Social Income required for average 2-bed private rented property - £22,385 rented 6000 sector Single earner income requrired for LQ house price - £32,000 income 5000 required £10,604 Joint earner income requrired for LQ house price - £38,621 4000
3000 households
2000
1000
0
+ -5k 0k 0 -1 20k 25k 35k 40k 50k 65k 80k 90k 95k 00k 5 0-15k 5 0 5-30k 0 5 0-45k 5 0-55k 5-60k 0 5-70k 0-75k 5 0-85k 5 0 1 00k 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 1 95
Source: CACI Paycheck data, 2006
March 2008 213 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 9.7: Wrexham – Income Distribution
Wrexham - Income Distribution
8000 Social Income required for average 2-bed private rented property - £24,240 rented 7000 sector income 6000 Single earner income requrired for LQ house price - £31,429 required £10,474 5000 Single earner income requrired for LQ house price - £37,931
4000
households 3000
2000
1000
0
k k 0k 5k + 0 5k -10 -30k 40k 45k 55k 65k 70k 80k 95k 00k 5 5-2 0-2 5 0-35 5 0 5-50k 0 5-60k 0 5 0-75k 5 0-85k 5-90k 0 1 00k 10-15k 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 1 95
Source: CACI Paycheck, 2006
March 2008 214 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 9.8: Flintshire– Income Distribution
Flintshire - Income Distribution
9000 Social Income required for average 2-bed private rented property - £25,775 8000 rented sector Single earner income requrired for LQ house price - £31,982 7000 income required 6000 £11,019 Joint earner income requrired for LQ house price - £38,599 5000
4000 households 3000
2000
1000
0
k k k + -5k 0k 0 10 -15k -20 -25 -35k -40k -45k -50k -55k -60k -65k -70k -75k -80k -85k -90k -95k 0k 5 0 10 1 15 20 25-30k 30 35 40 45 50 55 60 65 70 75 80 85 90 10 95
Source: CACI Paycheck, 2006X
9.50 The income profiles of the authorities are very similar. The apex of the curves fall in the £15 - £20,000 income bracket. They all also have a longer ‘tail’ to the right showing a greater spread in the higher income brackets. Interestingly all three indicate a relatively high number of households falling within the £100,000+ bracket.
9.51 It is important to note that these incomes reflect all people within the housing market and do not isolate out those households which do not have equity in property already, this is therefore not directly comparable with the research undertaken within the Wilcox (2005)50 study. For example this income profile will include elderly households whose current income is negligible but they have over their lifetime accrued significant equity in property. Despite these limitations it still provides a clear indicator of the general level of incomes in relation to the various housing tenures.
9.52 The distribution clearly shows that the vast majority of households fall below the threshold for purchasing lower quarter priced housing based solely on income levels and discounting equity in both authorities.
50 Wilcox S. (2005) Affordability and the Intermediate Housing Market, Joseph Rowntree Foundation
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9.53 It is also significant to note the significant number of households whose level of income does not allow them to enter the private rented sector, even when only using the average rental values for the smaller 2-bedroom properties.
9.54 In terms of housing need, the income profile also reinforces the requirements for social rented housing with a significant proportion of households shown to have income levels which could only allow for accommodation within this tenure.
9.55 In order to further this analysis with regard to First Time Buyers the following tables use joint income mortgage multipliers (2.9) to assess the level at which different housing products become affordable without equity or a deposit requirement. The latest quarters house price data (Q4 2006) is used to assess affordability.
Figure 9.9: Denbighshire - Income levels and equity deposits
Equity or deposit requirement at average dwelling prices in Denbighshire Amount Q4 2006 (rounded) Number of Household available for Comparator - Households Income mortgage - Lower (Within CACI CACI (middle of Capitalised at Quartille (£ income Household income 2.9 Joint Flat Terrace Semi Detached Averge 112,000 2006 band) income band band) Income (£104,370) (£116,260) (£133,170) (£176,300) (£146,950) Q3) Below 5281 0-10k £10,000 Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant 5297 10-15k £12,500 £ 36,250 £ 68,120 £ 80,010 £ 96,920 £ 140,050 £ 110,700 £ 75,750 5874 15-20k £17,500 £ 50,750 £ 53,620 £ 65,510 £ 82,420 £ 125,550 £ 96,200 £ 61,250 5498 20-25k £22,500 £ 65,250 £ 39,120 £ 51,010 £ 67,920 £ 111,050 £ 81,700 £ 46,750 4662 25-30k £27,500 £ 79,750 £ 24,620 £ 36,510 £ 53,420 £ 96,550 £ 67,200 £ 32,250 3728 30-35k £32,500 £ 94,250 £ 10,120 £ 22,010 £ 38,920 £ 82,050 £ 52,700 £ 17,750 2879 35-40k £37,500 £ 108,750 £ - £ 7,510 £ 24,420 £ 67,550 £ 38,200 £ 3,250 2179 40-45k £42,500 £ 123,250 £ - £ 9,920 £ 53,050 £ 23,700 £ - 1630 45-50k £47,500 £ 137,750 £ - £ 38,550 £ 9,200 1212 50-55k £52,500 £ 152,250 £ 24,050 £ - 899 55-60k £57,500 £ 166,750 £ 9,550 667 60-65k £62,500 £ 181,250 £ - Approximate proportion of households requiring equity or deposit to purchase house type 73% 79% 85% 94% 89% 79%
March 2008 216 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 9.10: Wrexham – Income levels and equity deposits
Equity or deposit requirement at average dwelling prices in Wrexham Q4 Amount 2006 (rounded) Number of Household available for Comparator - Households Income mortgage - Lower (Within CACI CACI (middle of Capitalised at Quartille (£ income Household income 2.9 Joint Flat Terrace Semi Detached Averge 110,000 2006 band) income band band) Income (£124,500) (£109,880) (£129,600) (£231,160) (£155,140) Q3) Below 6846 0-10k £10,000 Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant 6889 10-15k £12,500 £ 36,250 £ 88,250 £ 73,630 £ 93,350 £ 194,910 £ 118,890 £ 73,750 7618 15-20k £17,500 £ 50,750 £ 73,750 £ 59,130 £ 78,850 £ 180,410 £ 104,390 £ 59,250 7131 20-25k £22,500 £ 65,250 £ 59,250 £ 44,630 £ 64,350 £ 165,910 £ 89,890 £ 44,750 6072 25-30k £27,500 £ 79,750 £ 44,750 £ 30,130 £ 49,850 £ 151,410 £ 75,390 £ 30,250 4895 30-35k £32,500 £ 94,250 £ 30,250 £ 15,630 £ 35,350 £ 136,910 £ 60,890 £ 15,750 3823 35-40k £37,500 £ 108,750 £ 15,750 £ 1,130 £ 20,850 £ 122,410 £ 46,390 £ 1,250 2935 40-45k £42,500 £ 123,250 £ 1,250 £ - £ 6,350 £ 107,910 £ 31,890 £ - 2232 45-50k £47,500 £ 137,750 £ - £ - £ 93,410 £ 17,390 1690 50-55k £52,500 £ 152,250 £ 78,910 £ 2,890 1279 55-60k £57,500 £ 166,750 £ 64,410 £ - 968 60-65k £62,500 £ 181,250 £ 49,910 735 65-70k £67,500 £ 195,750 £ 35,410 560 70-75k £72,500 £ 210,250 £ 20,910 428 75-80k £77,500 £ 224,750 £ 6,410 328 80-85k £82,500 £ 239,250 £ -
Approximate proportion of households requiring equity or deposit to purchase house type 83% 78% 83% 97% 90% 78%
Figure 9.11: Flintshire – Income levels and equity deposits
Amount Equity or deposit requirement at average dwelling prices in Flintshire Q4 Number of Household available for 2006 (rounded) Comparator - Households Income mortgage - Lower (Within CACI CACI (middle of Capitalised at Quartille (£ income Household income 2.9 Joint Terrace Semi Detached Averge 111,938 2006 band) income band band) Income Flat (£85,970) (£117,440) (£139,670) (£222,730) (£163,010) Q3) Below 6930 0-10k £10,000 Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant Not relevant 7060 10-15k £12,500 £ 36,250 £ 49,720 £ 81,190 £ 103,420 £ 186,480 £ 126,760 £ 75,688 8002 15-20k £17,500 £ 50,750 £ 35,220 £ 66,690 £ 88,920 £ 171,980 £ 112,260 £ 61,188 7726 20-25k £22,500 £ 65,250 £ 20,720 £ 52,190 £ 74,420 £ 157,480 £ 97,760 £ 46,688 6804 25-30k £27,500 £ 79,750 £ 6,220 £ 37,690 £ 59,920 £ 142,980 £ 83,260 £ 32,188 5677 30-35k £32,500 £ 94,250 £ - £ 23,190 £ 45,420 £ 128,480 £ 68,760 £ 17,688 4583 35-40k £37,500 £ 108,750 £ 8,690 £ 30,920 £ 113,980 £ 54,260 £ 3,188 3627 40-45k £42,500 £ 123,250 £ - £ 16,420 £ 99,480 £ 39,760 £ - 2835 45-50k £47,500 £ 137,750 £ 1,920 £ 84,980 £ 25,260 2200 50-55k £52,500 £ 152,250 £ - £ 70,480 £ 10,760 1700 55-60k £57,500 £ 166,750 £ 55,980 £ - 1311 60-65k £62,500 £ 181,250 £ 41,480 1010 65-70k £67,500 £ 195,750 £ 26,980 779 70-75k £72,500 £ 210,250 £ 12,480 601 75-80k £77,500 £ 224,750 £ -
Approximate proportion of households requiring equity or deposit to purchase house type 58% 74% 85% 96% 88% 74%
9.56 The analysis undertaken does not aim to quantify the level of need in terms of the number of households requiring affordable housing as included within the Housing Needs Studies. Due to a lack of local data disaggregating incomes by age and position within the housing market
March 2008 217 Wrexham CBC, Flintshire BC, Denbighshire BC
for the three authorities the primary survey data collected within the housing needs surveys represents a strong indicator of this issue.
9.57 However, the analysis within this section has clearly illustrated that the affordability situation facing new and existing households has worsened over recent years with house prices continuing to rise at a considerably faster rate than incomes. This has led to the level of income required to purchase market housing rising and therefore creating a wider gap between the social rented and private markets.
9.58 The analysis undertaken above clearly illustrates the scale of the issue and reinforces the requirement for housing solutions which offer households the opportunity to enter the private housing market. Further consideration therefore needs to be given to developing new ‘intermediate housing’ although it is clear from the analysis that this needs to be targeted at those on relatively low incomes with options likely to require loans of up to 50% of the property or significantly discounted housing products. Simply providing housing which is, for example, 20% below market value will not meet the housing needs of first time buyers looking to enter the market in the majority of areas within the Core Study Area.
Existing Housing Need
9.59 The surveys provide a relatively up-to-date assessment of existing household need. The analysis of affordability suggests that if newly forming households are unable to enter the housing market the number of concealed households and households in need is likely to have increased, with this being particularly relevant to Denbighshire whose study was conducted in 2004.
9.60 The analysis below looks at a couple of key indicators available using secondary data. It is important to note that the secondary data held by the authorities is currently relatively limited and consideration needs to be given to improving the process of monitoring in the future (this is addressed in the final section of this report)
9.61 One of the key indicators of existing housing need is the number of homeless people and of these those classed as in priority need. The following figures illustrate both the total number of homeless presentations and those found to be in priority need during the years 2001 – 2005 for the three authorities.
Figure 9.12: Homeless Presentations 2001 - 2005
March 2008 218 Wrexham CBC, Flintshire BC, Denbighshire BC
Homelessness Presentations (2001 - 2005)
1200
1000 800 600 400 Number of Number
Presentations 200 0 2001/2 2002/3 2003/4 2004/5 2005/6 Year
Flintshire Wrexham Denbighshire
Source: Welsh Housing Statistics and Constituent Local Authorities51
Figure 9.13: Homeless Presentations 2001 – 2005 – Priority Need Decisions
Homelessness Decisions - Priority Need (2001 - 2005)
700 600 500 400 300 200 100
Number of People People of Number 0 2001/2 2002/3 2003/4 2004/5 2005/6 Year
Flintshire Wrexham Denbighshire
Source: Welsh Housing Statistics and Constituent Local Authorities52
51 All years apart from 2005/6 taken from WHS for consistency, otherwise direct from LA.
March 2008 219 Wrexham CBC, Flintshire BC, Denbighshire BC
9.62 The above graphs demonstrate a growing number of homeless presentations during this period, with a marginal overall decline witnessed in 2005/6 in Flintshire and Wrexham. This trend is reflected in the number of ‘priority need’ decisions taken by local authorities. In terms of those found to be in priority need, it is clear that Flintshire has the most acute problem of homelessness, followed by Wrexham and then Denbighshire53.
9.63 This suggests that there has been growing pressure on the supply of affordable housing and therefore a further build up of existing levels of household need.
9.64 Another indicator of increased levels of pressure on the existing supply of affordable housing is the number of applicants on the housing register. This is an imperfect indicator as people may put themselves forward despite not being in for example ‘priority need’ there also tends to be double counting with people applying for different types of housing. Significantly this data also doesn’t include the waiting list data of RSL’s. The compilation of a composite list of RSL and local authority applicants would be very useful and combined with an exercise of ‘cleaning’ the data to remove double counting would represent a very useful tool for monitoring the specific quantum and requirements of those in housing need at any one point in time.
9.65 The following graph illustrates the number of housing register applicants for the years 2001 to 2006 for Wrexham and Denbighshire comparable time series data is not available for Flintshire54.
Figure 9.14: Housing Register Applications (2001 – 2006)
52 All years apart from 2005/6 taken from WHS for consistency, otherwise direct from LA. 53 It is possible that part of the increase identified has resulted from changing methodologies in identifying homeless households, however, it is difficult to ascertain precisely the impact of this. 54 Flintshire County Council’s waiting list database is continuously updated and does not allow for historical point-in-time snapshots to be extracted and does not therefore allow a consistent historical analysis to be undertaken.
March 2008 220 Wrexham CBC, Flintshire BC, Denbighshire BC
Housing Register Applicants (2001 - 2006)
5000
4000
3000
2000
1000 Applicant Numbers Numbers Applicant 0 2001 2002 2003 2004 2005 2006
Wrexham Flintshire Denbighshire
Source: Constituent Local Authorities
9.66 It is clear that both Wrexham and Denbighshire experienced a growing number of housing register applicants in the years 2001 – 2005. However, 2006 saw a significant fall in the number of registered applicants for social housing in Wrexham, from 4349 to 3029, which represents less applicants than that witnessed at the start of the period in 2001.
9.67 It is possible that the actual level of demand is higher than the figures suggest. Low vacancy within this tenure and reduced levels of lettings annually impact on the level of turnover may act as a disincentive for households to put themselves forward to be included on the housing register. Therefore some houses which may actually be in need may not register on the waiting list finding alternative housing solutions which may not be suitable or as sustainable in the longer term.
9.68 Overall it is clear from the waiting list data and the level of households presenting themselves that the level of demand for social rented property is high suggesting a significant number of households in housing need currently.
9.69 The most up-to-date data for Flintshire shows that the total number of applicants on the general list stands at 4,846 (as of February 2007). This is higher still than either Wrexham or
March 2008 221 Wrexham CBC, Flintshire BC, Denbighshire BC
Denbighsire and suggests a significant backlog of need suggesting that the current provision of affordable housing is not meeting requirements55.
9.70 Combined with the analysis of the level of households priced out of market housing this analysis suggests that there is no reason to question the high levels of households classified as currently in housing need within the Housing Need Studies prepared by the Council. Indeed it is likely that the situation has worsened given the increase in house prices and rental levels, an assertion which is reinforced by increased applicants on waiting lists.
Supply of Affordable Housing
9.71 Section 6 provided a detailed assessment of the tenure breakdown of stock within each of the authorities. This indicated that Wrexham had a relatively high level of social rented stock, 24% in 2005, with the two other authorities notably lower, Denbighshire 13.4% and Flintshire 15.8%. In 2001 the average for Wales was approximately 17.9% (local authority 13.7%, HA/RSL 4.2%) therefore only Wrexham has an above average proportion of this tenure type.
9.72 The analysis also indicated that as a result of RTB and a lack of new build social rented housing all three authorities had witnessed falling levels of stock within this tenure. This clearly has implications regarding the ability of the existing stock to meet current and emerging need.
9.73 Welsh Housing Statistics record the level of vacancy within the social rented sector with the most up-to-date data available being 2005. This showed that for each of the authorities the levels of vacancy within this tenure are very low; Denbighshire 39 vacant units, Flintshire 106 vacant units, Wrexham 175 units. Where there are vacancies these are largely because these properties are being improved or allocated for demolition and not because there is a lack of demand. This data does not include vacant RSL units but it is understood that these also have relatively few vacant units.
9.74 This evidence suggests that the social rented stock available within each authority has not kept pace with the rising level of demand and has therefore not contributed significantly to alleviating the problem over recent years. Section 11 provides an initial overview of issues facing further delivery of affordable housing and indications of future levels which are likely to come on-line in the future.
55 The sub-division of households within the waiting list within Flintshire CC shows a total of 237 households classified as ‘being with a homeless enquiry’ and 599 households who consider their current housing to be inappropriate.
March 2008 222 Wrexham CBC, Flintshire BC, Denbighshire BC
Future Tenure requirements
9.75 The analysis within Section 7 and this section has already indicated that there is a growing affordability problem within the Core Study Area. This is largely the result of rapidly rising house prices, fuelled in part by the overheated housing market in the Chester area, and the failure of income levels to keep pace. The lack of affordable housing being developed has meant that this problem has continued to worsen and is widely considered to be the priority issue facing the housing market of North East Wales.
9.76 This section builds upon the analysis of current affordability issues and looks to project forward the proportion of future housing which should be ‘affordable’. The analysis therefore only assesses future requirements and does not take account of backlogged need. This need resulting from the state of the current market and the supply and demand dynamic has already been examined above in relation to the Housing Needs Studies prepared for each authority.
9.77 The proportions produced should not be directly related to the levels set through planning policy however, they represent a strong justification for setting high levels in line with those suggested through the Housing Needs Studies.
Calculating future requirements
9.78 The methodology used to assess the proportional split between open market property and ‘affordable’ property (including both social rented and intermediate stock) is based upon identifying links between growth in occupations, as with the analysis in the preceding section looking at housing type, and the levels of income associated with the changing occupation profile. A proportional split between these two tenure classifications is provided rather than a quantum of units as this can therefore be used as an indicator for the level of provision on a scheme by scheme basis.
9.79 Reflecting the need to plan at a local authority level all of the analysis is produced at this spatial level rather than at a wider housing market area.
9.80 In order to be consistent with the methodology for examining future requirements (Section 10) the economic forecasts prepared by CE are used to drive the model in terms of the levels of growth or decline in different occupations.
9.81 The methodological steps undertaken to arrive at the overall proportional breakdown are explained below.
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Step 1: Changing Occupational Profile
9.82 Using the CE forecasts the first stage involves identifying the proportional level of change of occupation groups between 2003 and 2021. This indicates where different occupational groupings are expanding and where others are declining in scale.
9.83 The proportional share of the overall level of growth is then calculated for each occupation and the following table shows the proportional level of change by occupation for each of the authorities.
Figure 9.15: Occupational change 2003-2021
Denbighshire Flintshire Wrexham % of overall % of overall % of overall Employment Employment Employment Employment Employment Employment Occupation Group Change Change Change Change Change Change Managers & Senior Officials 322 4% 79 2% 707 12% Professional Occupations 1929 22% 1363 36% 1890 31% Associate Professional & Technical Occupations 1443 16% 915 24% 1826 30% Administrative, Clerical & Secretarial Occupations 78 1% -18 0% 185 3% Skilled Trades Occupations -522 -6% -1783 -47% -1426 -24% Personal Service Occupations 3070 34% 1651 43% 2982 49% Sales & Customer Service Occupations 2300 26% 3352 88% 1440 24% Process Plant & Machine Operators -152 -2% -649 -17% -274 -5% Elementary Occupations 464 5% -1105 -29% -1271 -21% Sum 8931 100% 3803 100% 6059 100% Source: Cambridge Econometrics, Cheshire County Council, 2007
Step 2: Linking Earnings with Occupations
9.84 In order to assess households abilities to enter different tenures it is necessary to assign incomes to different occupation groupings.
9.85 The Annual Survey of Hours and Earnings (ASHE) provides a UK average income by occupation. For this analysis full-time gross annual incomes have been used, with the most up-to-date data available for 2006. Unfortunately it is not possible to accurately project future increases in income, therefore for this analysis income levels are frozen as of 2006.
March 2008 224 Wrexham CBC, Flintshire BC, Denbighshire BC
9.86 The following incomes have therefore being used as a proxy for income by occupational group across the three authorities. It is important to note that these reflect individual incomes rather than household incomes.
Figure 9.16: Incomes by Occupation
Occupation Group Earnings Potential Managers & Senior Officials £ 34,856 Professional Occupations £ 33,677
Associate Professional & Technical Occupations £ 26,867
Administrative, Clerical & Secretarial Occupations £ 17,816 Skilled Trades Occupations £ 21,890 Personal Service Occupations £ 15,022
Sales & Customer Service Occupations £ 13,693
Process Plant & Machine Operators £ 19,995 Elementary Occupations £ 15,904 Source: ASHE, 2006
Step 3: Income Thresholds for Different Tenures
9.87 Within this section a number of thresholds were calculated for entry into different tenures, e.g. owner-occupation, private renting and the social rented sector. In the previous Step incomes have been held constant and therefore to provide comparable analysis the entry levels required into different tenures are also held constant. The following thresholds have been used for the three authorities as calculated in Section 7.
Figure 9.17: Income thresholds for entry into different tenures
Denbighshire Flintshire Wrexham Entry level dual income for lower quartile house (2.9 mortgage multiplier) £ 38,621 £ 38,599 £ 37,931
Entry level single earner income for lower quartile house (3.5 mortgage multiplier) £ 32,000 £ 31,982 £ 31,429 Income required for average private rented property (average all properties) £ 27,431 £ 31,312 £ 28,182
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Income required for average 2-bed private rented property £ 22,385 £ 25,775 £ 24,240
Income required for social rented sector under same assumptions £ 10,604 £ 11,019 £ 10,474 Source: GVA Grimley LLP
9.88 In order to link the proportion of emerging additional households to the tenure choice associated with this occupational earnings level the thresholds above have been applied. Therefore where the earnings potential is above the threshold then the proportional share of the additional households is summed56. This is displayed in the following table.
Figure 9.18: Proportional share of emerging households able to entering each tenure category based upon potential income
Denbighshire Flintshire Wrexham Proportionate Proportionate Proportionate Share of Share of Share of Income emerging Income emerging Income emerging Tenure Choices required jobs required jobs required jobs Entry level dual income for lower £ 38,621 £ 38,599 £37,931 quartile house (2.9 mortgage multiplier) Entry level single 25% 38% 43% earner income for lower quartile house £ 32,000 £ 31,982 £31,429 (3.5 mortgage multiplier) Income required for average private rented property £ 27,431 £ 31,312 £28,182 (average all properties) 16% 24% 30% Income required for average 2-bed £ 22,385 £ 25,775 £24,240 private rented property Income required for social rented sector £ 10,604 59% £ 11,019 38% £10,474 27% under same assumptions Source: GVA Grimley LLP
Step 4: Calculating the Tenure Split
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9.89 In terms of delivering a range of tenures the analysis has been categorised into two classifications:
• Open Market Housing (owner-occupied and private rented property); and
• ‘Affordable Housing’ – this includes a combination of ‘intermediate housing’ and social rented housing57.
9.90 The proportional split between these two tenures should be considered in the development of new housing schemes. Assessments of the breakdown of ‘Affordable Housing’ into different elements should be considered at a more localised level to suit the needs of the immediate neighbourhood.
9.91 Dividing the tenure choices outlined in Step 3 into these two classifications with owner- occupied (joint and single mortgage ratios) and private rented classified as ‘open market’ and the last category (social rented tenure) classified as an affordable requirement produces the following proportional splits for each authority. In terms of the proportional levels calculated for ‘affordable’ products these should be treated as maximum thresholds as they necessarily hold equity constant58.
Figure 9.19: Tenure – Net additional demand 2003-2021
Private Market (owner occupied/ Social Rented/ Tenure rented) Intermediate Total Denbighshire 41% 59% 100% Flintshire 62% 38% 100% Wrexham 73% 27% 100%
Housing Need – Key Messages
9.92 The three Housing Need Studies prepared for the three authorities all show a significant shortfall of affordable housing units. This is translated into annual figures which show the number of houses which are required for the next five years to meet future and current (including backlog) need. In the case of Flintshire and Denbighshire these figures are very
56 Note: this does not take into account equity held by households (for example through the sale of a current property or a loan from family members), it therefore is likely to represent first-time-buyers and other households moving into the owner-occupied tenure for the first time. 57 Note: This does not pre-suppose a supply strategy which local authorities will necessarily work up in consultation with social housing partners.
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high and are actually higher than the overall level of housing as set within planning policy, clearly therefore causing delivery issues.
9.93 The analysis undertaken within this section has reinforced the assertion that there is a serious undersupply of affordable housing within the core study area and each of the authorities given the recent increases in house prices, the reduction in the amount of available social rented housing and the current lack of development activity to bring forward new affordable (including intermediate) housing.
9.94 House prices have led to the rapid rise in all levels of the housing market with even those properties which in the past would have been considered as entry level properties now recording prices which are beyond the reach of those on low income or lacking existing equity.
9.95 In all three authorities the rise in house prices and the linked rise in private rental levels has produced a wide gap between the social rented sector and housing on the open market. This suggests a role for ‘intermediate’ housing in bridging this gap and assisting in alleviating pressure on the social rented sector allowing those most in need to access this housing tenure.
9.96 Importantly it is clear that despite the rises in property there is still demand indicating that these properties are affordable for some households searching for property. However, significantly as the Housing Needs Studies identified the wage profiles of areas suggest that they are not affordable for those living locally. This therefore represents a significant latent housing need within the Core Study Area and a mismatch between supply and demand within the property offer.
9.97 The analysis has also indicated that there will be a future requirement for additional affordable housing, to differing degrees, within each of the authorities based on the projected economic structure of the population.
9.98 Assessing the different benchmarks for entry into different tenures and the spread of household incomes has suggested that where intermediate housing is developed it is important that it offers significant discount against market value. This is supported by the income profile and the ratios of affordability which suggest that simply reducing the value of market housing by a small percentage will not make it affordable to newly forming households.
58 At the current time there is not a reliable estimate of private equity in property, disaggregated by occupational groupings. It is therefore necessary to hold equity levels constant.
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9.99 The relatively low levels of social rented stock within Flintshire and Denbighshire and the high demand for stock and increasing affordability issues associated with house prices and shifts in the economic structure means that there is justification for developing further social rented housing to meet demand in the future. This stock should be sufficiently flexible to meet future needs and should be integrated within new mixed community developments.
9.100 In summary, North East Wales is in many respects a victim of its own success and its connectedness with buoyant market areas in West Cheshire, Merseyside (Wirral) and to a limited extent Shropshire.
9.101 Housing supply has come forward over recent years that has met what is essentially externally fuelled demand, albeit meeting elements of local, indigenous household demand. However, the local occupational profile has been less ‘dynamic’ than the changing stock profile and this, when combined with a ‘rising tide’ of house values, has exacerbated issues of housing affordability. Coupled with market forces, the static social stock profile and relatively narrow range of affordable housing that has been delivered intensifies unmet demand for affordable housing.
9.102 The prognosis for the economy and housing market implications suggest that there will not be a structural break with the trends that have caused current conditions. The policy implications emerging therefore relate to:
• The need to secure greater levels of affordable housing as part of market housing developments;
• The need to protect the existing stock of social rental housing (albeit with a managed approach to ensuring the stock profile matches demand);
• The need to deliver a greater choice of intermediate housing products to ‘boost’ the stock of affordable homes; alongside
• The necessary provision of market housing to sustain economic growth and prosperity.
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10. FUTURE HOUSING REQUIREMENTS
10.1 In Section 8 we established that demographic, economic and price trends are the key structural drivers of change in the housing market. Together these provide a sound basis from which to consider future housing requirements over the medium to long-term.
10.2 Population trends influence both the level and, as a result of a changing age structure, the types of housing which will be required. Employment trends influence both the level and type of migration and also, because of changes in economic structure (and particularly the profile of occupations) influence household income and hence the ability to afford different housing products as well as the propensity to occupy certain types of housing. We consider that together, population and economic trends provide a robust basis to assess long-term demand trends in housing demand.
10.3 Sections 7 and 9 have shown that price dynamics and relative affordability also affect housing demand. This is having a tangible effect on housing tenure propensities of different occupational groups. In effect, price changes have made access to the owner occupied sector more difficult, reducing the overall volume of FTBs and generating demand for the rented and intermediate sectors. Hence someone with occupational circumstances who may have been able to buy five years ago with their wage may well be priced out of owner occupation today.
10.4 House prices are however highly sensitive to the macro-economic context and interest rates. There has been rapid growth in prices over the last five years and we have witnessed associated significant growth in housing need. However we do not consider there to be a robust basis to project market or price dynamics over a ten-year timeframe or longer, due to distortions in the property market cycle.
10.5 An effective framework for planning for housing provision needs to consider both short-term needs and achieve a balanced housing market over the longer-term.
10.6 Our approach to assessing future housing requirements reflects these factors and the complexity of the housing market. This analysis is detached from the assessment of housing need in Section 9 as economic and demographic trends provide a more dynamic basis to assessing future housing requirements over the medium-to long-term: we believe that a housing market profile which reflects and supports the economic profile will represent a broadly balanced market under a range of different market circumstances.
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10.7 This section considers the structural drivers of change – economic and demographic trends – and the implications of these for maintaining a balanced housing market. It first develops quantitative scenarios to consider the level of housing demand (i.e. household growth) using demographic drivers. The impact of economic change is then assessed.
10.8 Finally, this analysis is used to assess the current housing mix (structure of housing types) against the projected requirements indicated by economic change to identify the mix of housing which should be provided up to 2021. This should be read in conjunction with the findings of Section 9 which assessed future tenure requirements following a similar methodology.
Quantitative assessment of Housing Demand
10.9 The importance of delivering sufficient housing to meet demand has been highlighted at a national level within England through the Barker review of planning59 and the recently released Housing Green Paper60. Emphasis is placed through these documents on the failure to deliver sufficient housing over the last twenty years to meet demand and therefore the need to raise current levels of housebuilding where there a rationale in terms of demographic and economically driven pressure.
10.10 In line with the strategic drivers identified the assessment of the quantitative demand for future housing is split into two components; demographic led demand and the contribution of the economy. This split is reflected in the use of two Scenarios throughout this analysis.
10.11 The analysis of demographic trends within Section 5 revealed that in the case of North East Wales migration levels have been the most significant driver of increased household demand over recent years with these being driven by other elements such as comparable house prices, development activity, new economic-migrants and the residential environment of settlements in the three authorities. The assessment of the economy has not suggested that these migratory levels are fuelled significantly by increased employment opportunities, although the analysis has suggested that this may change in the future especially if the authorities progress actively the development of new higher quality employment space and inter alia higher value job opportunities.
10.12 As a result of these assertions the first Scenario explores a range of demographic led trends to produce an estimate of net additional households. These forecasts project forward
59 Barker K (2006) Barker Review of Land Use Planning Final Report – Recommendations, London: HM Treasury 60 DCLG (2007) Homes for the Future: more affordable, more sustainable, DCLG
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historical levels of change varying the period upon which projections are based and therefore anticipated rates of migratory growth and represent the most up-to-date projections available for each of the authorities.
10.13 A second scenario is introduced which factors in forecast economic change within the three authorities. Econometric forecasting as analysed within Section 6 is used to ascertain future housing requirements linked to altering levels of employment opportunities for the residents of the Core Study area. This scenario is underpinned by forecast demographic change as examined in Scenario 1 but also factors in employment change including an assessment of the potential impact of changing commuting patterns to meet labour force requirements.
10.14 Econometric forecasting is a widely used tool for identifying the changing economic structure of areas and a bespoke forecast for the North Wales Population Group has been utilised in estimating the level and rate of economic change. Projections are however based on historical performance and the wider changes evident in the wider national economy. Forecasts do not provide certainty therefore but an indication of a possible trajectory of change which could be altered by wider global shifts in the economy or indeed local change, including for example the closure or downsizing of a major employer. The housing figures identified within this scenario are therefore indicative and should be considered in the light of these limitations.
10.15 In order to illustrate the kind of economic development that can be expected a list of major future employment projects and developments has been compiled through dialogue with economic development teams within each of the authorities. Indicative levels of additional employment have been identified, however, given the speculative nature of many of these projects these have not been modelled through to create additional housing requirements. However, analysis has been made of the potential impact of the successful delivery of these projects and the subsequent increase in employment levels. Local authorities will in the future need to monitor economic change and changing pressures on the housing market as their economies evolve.
10.16 The analysis in this section does not factor in an appreciation of housing land supply, potential for the ‘re-occupation’ of vacant dwellings or the capacity of local authority areas to absorb latent household demand. It exclusively assesses gross levels of demand rather than stipulating how supply should change to match this. The proceeding chapter factors in these elements and provides a strategic perspective on future supply requirements.
Scenario 1: Demographic Led Change
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10.17 WAG produce at a national level population and household projections which have then been drawn down to produce sub-national projections. Section 4 analysed these projections for North East Wales authorities, however, the authorities within North West Wales have been looking to produce local projections which forecast change at the local authority level and also reflect local circumstances to a greater degree. This is in line with National planning policy for Housing as set out in Ministerial Planning Policy – Housing of June 2006. Paragraph 9.2.2. of the MIPPS states:
“The latest Assembly Government National and Sub-National Household projections for Wales should form the starting point for assembling housing requirements. Within each region local planning authorities should work together collaboratively, and with appropriate stakeholders, (for example house builders and utility companies) as necessary, to apportion to each authority the Assembly Government household projections, or agree their own regional policy-based projections. The Assembly Government encourages the development of this process wherever possible under the auspices of the Wales Spatial Plan regional groups”
10.18 The North Wales Population and Housing Research Group has used the POPGROUP and HOUSEGROUP modelling software to produce population and household projections factoring in demographic change and migration trends. These therefore represent a bottom-up approach, building a North Wales total from each individual authority’s projections, which have been modelled according to their local characteristics. The resultant figures were then controlled against the North Wales regional population and households forecasts as produced by ONS.
10.19 A number of scenarios were used to provide a range of projections in terms of population projections, these included:
• Natural Change – based on change resulting from demographic change
• Static Population – assume no change in the population
• 5 year migration trend – projecting forward migration at levels evidenced over the last five years
• 10 year migration trend – projecting forward migration at levels evidenced over the last ten years
• 12 year migration trend – projecting forward migration at levels evidenced over the last 12 years.
• Migration trended from all data – assimilation of migration trends
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10.20 In addition to these a trend based on the last five years of completions was included in order to ‘check’ the level of demand against the reality of recent supply levels.
10.21 The following charts show the key population projection scenarios for each of the authorities. Overall it is clear that under the migration scenarios all the authorities are projected to witness increases in the overall population. This reflects the analysis within section 4 which showed high levels of net migration into each of the authorities.
10.22 Significantly, Denbighshire and Wrexham are forecast to witness population decline based on natural population change over the period, with Flintshire showing slight growth. Denbighshire in particular appears to show a significant decrease in population if migration is factored out and demographic change is considered in isolation. This again reflects the analysis undertaken in section 4 which showed only Flintshire to have had positive contributions to its population as a result of natural change over recent years.
Figure 10.1: Population projections for each authority within the Core Study Area
Denbighshire Population Projections - various demographic scenarios Flintshire Population Projections - various demographic scenarios
118,000 5 year 165,000 5 year migration migr ation 113,000 160,000 108,000 10 year 10 year migr ation 103,000 migration 155,000 98,000
Population Population Migr ation 93,000 Migration Population 150,000 trended from trended from all 88,000 all data data 145,000 83,000 Natural Natural 78,000 Change Change 140,000 5 05 07 09 11 13 15 17 19 21 23 2 0 0 5 1 7 1 2003 20 2 20 2 20 20 20 20 20 20 20 0 07 1 1 2 23 0 0 0 0 2003 20 2 2009 2 2013 2015 2 2019 20 2 2025
Wrexham Population Projections - various demographic scenarios
5 year 150,000 migration
145,000
10 year 140,000 migration
135,000
Population Population Migration 130,000 trended from all data
125,000
Natural 120,000 Change
3 5 7 9 1 3 5 0 0 0 0 1 1 1 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2017 2019 2021 2023 2025
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Source: North Wales Population and Housing Research Group, 2006
10.23 Calculated headship rates were applied to these projections to produce household projections, with an additional scenario included which based the increase in households on previous completion rates (supply led) and a scenario which noted migration trended from all data included.
10.24 It is important to note that within the model the headship rates are projected to fall year-on year with little variance in the size of households between the different scenarios. This has the impact of creating higher household projections than would be directly attributable to population change.
10.25 The following chart shows these projections for the Core Study Area (sum of the three authorities). The 12 year trend has been omitted as has the static population trend. An additional trendline has been inserted which takes an average between the 5 and 10 year migration trends to represent an averaged higher migration trend.
Figure 10.2: Household Projections – Scenarios
Core Study Area Household Projections - various demographic scenarios
5 year migration 200,000
190,000 10 year migration
180,000 Migration totalled from all data 170,000
5 year housing Households 160,000 completions trend
150,000 Natural Change
140,000 Mid-point migration (average 5-10 year 003 005 007 009 011 013 015 017 019 021 023 025 2 2 2 2 2 2 2 2 2 2 2 2 scenarios)
Source: North Wales Population and Housing Research Group, 2006. Plus additional mid point migration scenario included by GVA Grimley.
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10.26 The Core Study Area is forecast to witness household growth based on all of the scenarios with higher rates of migration over recent years leading to the five year migration trend to project the highest level of household growth. Changing headship rates over the period clearly play a role in increasing the number of households when compared with population projections.
10.27 Comparable graphs are shown for each of the local authorities, with similar trends evident between the three. It is significant to note that under the natural change scenario Denbighshire shows a static trend in contrast to the other two authorities.
Figure 10.3: Household Projections – Constituent authorities
Denbighshire Household Projections - various demographic scenarios Flintshire Household Projections - various demographic scenarios
5 year 5 year 52,000 migr ation 72,000 migration
70,000 50,000 10 year 10 year migr ation migration 68,000 48,000 Migr ation Migration 66,000 46,000 trended from trended all data from all 64,000 data 44,000 5 year 5 year
Households Households housing
housing Households 62,000 completions completions 42,000 trend Natural Natural 60,000 Change 40,000 Change 58,000 Mid-point 38,000 Mid- point migration migr ation 56,000 5 9 3 5 9 3 0 0 1 003 007 011 01 01 02 2 20 2 20 2 20 2 2017 2 2021 2 2025 9 1 07 09 11 23 013 025 2003 2005 20 20 20 2 2015 2017 201 202 20 2
Wrexham Household Projections - various demographic scenarios 5 year migration 68,000
66,000 10 year migration 64,000
62,000 Migration trended from 60,000 all data
58,000 5 year housing Households Households 56,000 completions trend 54,000 Natural Change 52,000 Mid-point 50,000 migration 3 5 7 1 3 5 9 1 5 0 1 2 00 01 01 200 2 20 2009 201 2 20 2017 2 20 2023 202
Source: North Wales Population and Housing Research Group, 2006
10.28 The following tables shows the projected household change for each of the authorities between 2003 and 2021 for each of the scenarios. Figures have been rounded and annualised growth rates included.
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Figure 10.4: Denbighshire annual household change
Scenario Households Households Change in Annual 2003 2021 Households Household 2003-2021 Change
5 year migration trend 40,100 48,950 8,850 490 10 year migration trend 40,100 46,800 6,700 370 Migration trended from all data 40,100 45,950 5,850 330 5 year housing completions trend 40,100 45,050 4,950 280 Natural change 40,100 40,300 200 10 Mid-point migration trend 40,100 47,875 7,775 430
Figure 10.5: Flintshire annual household change
Scenario Households Households Change in Annual 2003 2021 Households Household 2003-2021 Change
5 year migration trend 59,400 68,600 9,200 510 10 year migration trend 59,400 67,350 7,950 440 Migration trended from all data 59,400 67,800 8,400 470 5 year housing completions trend 59,400 66,450 7,050 390 Natural change 59,400 64,950 5,550 310 Mid-point migration trend 59,400 67,975 8,575 480
Figure 10.6: Wrexham annual household change
Scenario Households Households Change in Annual 2003 2021 Households Household 2003-2021 Change
5 year migration trend 53,650 64,150 10,500 580 10 year migration trend 53,650 61,700 8,050 450 Migration trended from all data 53,650 61,400 7,750 430 5 year housing completions trend 53,650 60,900 7,250 400 Natural change 53,650 58,000 4,350 240 Mid-point migration trend 53,650 62,925 9,275 520
10.29 It is clear that the significant variations between the natural change scenario and the migration scenarios has implications for the overall annual levels of household change. This is particularly true of Denbighshire where the difference between the natural change scenario and the 5 year migration trend is 480 a year.
10.30 Using the mid-point migration trend as a benchmark it is evident that Wrexham has the highest annual requirement followed closely by Flintshire with Denbighshire having a slightly
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lower figure. This reflects the size of the authorities along with the high levels of population change forecast within Wrexham.
10.31 The following table shows the composite figures for the Core Study Area
Figure 10.7: Core Study Area annual household change
Scenario Households Households Change in Annual 2003 2021 Households Household 2003-2021 Change 5 year migration trend 153,150 181,700 28,550 1590 10 year migration trend 153,150 175,850 22,700 1260 Migration trended from all data 153,150 175,150 22,000 1220 5 year housing completions trend 153,150 172,400 19,250 1070 Natural change 153,150 163,250 10,100 560 Mid-point migration trend 153,150 178,775 25,625 1420
10.32 This highlights the variance between the scenarios with the natural change scenario providing by far the lowest level of change at 560 per annum and the 5 year migration trend the highest, almost three times this level, at 1590 per annum. Again it should be noted that these are gross estimates of demand holding supply constant.
10.33 The annual figures provide a broad spectrum of the levels of additional housing required to meet demand based on the demographic drivers. However, the assessment of the scope of the functional housing market clearly identified that policy and the levels of housebuilding in adjacent areas have impacted on migration levels over the years upon which these forecasts are based.
10.34 The section below therefore looks to examine the current and future housing positions of adjacent areas to identify how this is likely to affect demand and therefore dwelling requirements up to 2021. It is important to note that consideration should be given to these elements, however, the identification of the Core Study Area as a functional housing market means that the three authorities should collectively identify housing requirements based on their own levels of identified demand.
Policy Drivers
10.35 The planning situation for housing in Chester has been a key driver for the levels of demand evident within the three Welsh authorities. For a number of years Chester has had a moratoria in place against housing development in order to deliver against the low housing requirement figures set out within RPG13 (which subsequently became RSS). Development has largely
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been limited to brownfield and windfall sites which has in turn limited the type of housing which has being brought to the market. An increasing emphasis on the provision of flatted accommodation and 1-2 bedroom stock has been a particular characteristic of this period.
10.36 The higher housing numbers within the Welsh authorities has led to high levels of development which in turn has assisted in fuelling migration from the over-heated market over the English border.
10.37 The West Cheshire North East Wales Sub-regional Strategy has looked to create a greater balance between the housing numbers and looks to provide more sustainable levels of development. Representations were made to the Examination in Public of the Draft North West Regional Spatial Strategy (RSS) to ensure that the prescribed housing numbers reflected this goal.
10.38 The Panel Report on the Draft RSS was published on the 8th May 2007. This is now being considered by the Secretary of State together with representations made on the draft RSS and Proposed Changes are due to be published in Autumn 2007. A second consultation period will then invite comment on the proposed changes with the final North West Plan due to be published in early 2008. With regard to the two English authorities identified within the wider reference areas the housing requirements within the draft document show notable change from the previous regional guidance, RPG13. These figures are shown below.
Figure 10.8: Draft RSS vs RPG13 Chester, Ellesmere Port and Wirral
Annual averages rates of Housing Provision (net of clearance) Strategic Planning Authority Cheshire Structure Draft RSS North Difference Plan 2002-2016 West Chester 235 (average) 417 182 Ellesmere Port 220 (average) 400 180 Source: Draft North West RSS, Cheshire Structure Plan
10.39 It is evident that both authorities are set to have a significant increase in the annual requirement for housing. It would follow that this will ease the pressure on the Welsh authorities, which in turn could result in a lowering of the levels of migration across the border.
10.40 However, it is important to note that price differentials in property may continue to attract people to purchase property within the Core Study Area. The analysis within section 7 illustrated that despite high levels of growth there are still absolute price differences when examining overall averages for the authorities, with Chester’s average price notably higher
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than the Core Study Area. However, spatially those areas near the border have relatively similar price levels now and therefore people would have to look further west to find the cheaper properties increasing their commute.
10.41 Overall it would appear that the migration from Chester into Wrexham and Flintshire in particular could be set for a drop in quantum as a result of the changes in policy and the levelling of house prices in those areas in closest proximity to the border. This would mean that the high levels of migration seen over recent years will not be repeated for the next 15 years impacting on the annual dwelling requirements for the Core Study Area.
10.42 Other neighbouring authorities in North Wales also through migration trends influence the level of household and dwelling requirements in the Core Study Area. Should these authorities adopt low housing requirement figures which then this could place further pressure on the Core Study Area to provide additional housing above and beyond currently projected.
10.43 As policy is being developed across the North Wales authorities this needs to be given further consideration through policy development.
Conclusions regarding Demographic Led Change
10.44 It is clear that migration levels are the principal determinant of changing household demand, with demographic change (natural change) playing a subsidiary role.
10.45 Policy changes suggest that the level of migration witnessed over the last five years may fall in subsequent years. Therefore the mid-point migration scenario (average of the five and ten year migration led forecasts) represents a moderated forecast which would reflect the changing housing policy context in neighbouring authorities in England. Depending upon the level of housebuilding within Chester and surrounds the level of migration may drop further especially given the reduction in the price gap between those areas near the border and therefore household demand would be more in line with the longer-term ten year migration trend.
10.46 However, the effects of policy change are as yet untested. Indeed the increased levels of international migration into the authorities may counter any reduction in those migrating out of England into the area and further monitoring will required to identify the number of newly forming settled households created by this new population dynamic.
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10.47 In the short term it is unlikely that the level of demand will fall dramatically and therefore consideration should be given to creating a supply of housing which reflects approximately the mid-point scenario within the Core Study Area at the minimum.
10.48 The above projections provide a valuable indication of future household change and have been instrumental in leading the authorities towards identifying housing requirement figures in the development of their Local Development Plans and UDPs.
Scenario 2: Factoring in the Economy
10.49 Notwithstanding the need to plan for a supply of housing that meets local needs and demand arising from a ‘moderated’ migration trend (Scenario 1), it is instructive to consider how demand might change as the areas economy evolves.
10.50 The purpose of Scenario 2 is therefore to suggest the likely impact of economic change on housing demand. This does not supersede the recommendations made under Scenario 1 but it does provide a basis for monitoring change in future years.
10.51 Economic growth has been identified as a strategic driver of change within the Core Study Area. The analysis in section 5 indicated that the economies of all three authorities are set to witness economic growth up to 2021 therefore potentially creating additional household demand as new households settle in the area to access these opportunities.
10.52 The second scenario therefore employs a methodology to factor in the likely impact of economic change upon latent household demand. It is important to note however that because these estimates are produced on the basis of a forecast, the actual and observed trend in household demand needs to be monitored and policy adapted in relation to the observed relationship between employment and resident household levels.
10.53 The linkages between the economy and housing are complex. Employment growth demands a larger labour supply which in turn need to be housed. Taken the other way housing is a long-term requirement for growth as there is a need for a labour pool to resource employment needs. However, commuting patterns and the relatively slow responsive nature of the housing market means it is difficult to draw direct metric links between the two elements.
10.54 The following chart tracks change in two variables between 1998 and 2005 for the Core Study Area:
• ABI Workplace based number of employees
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• ONS population estimates
Figure 10.9: Linking employment and population
Employee and population change - Core Study Area
160000 380000
155000 375000 150000
370000 145000 Employees Population 140000 365000 Population
135000 360000
Employees - Index (1998 = 100) 130000
125000 355000 1998 1999 2000 2001 2002 2003 2004 2005
Source: ABI, 2007 and ONS population estimates
10.55 As would be expected the number of employees varies to a greater extent than the population with the economy tending to be more sensitive to change. However, the important point to note is that both variables have moved in the same direction with both registering positive growth within the study area. The implication therefore is that if employment continues to be generated the population in turn will increase.
10.56 Calculating a ratio between these two core variables provides an indication of the relative impact of new jobs on the population. This ratio is calculated at approximately 0.71, therefore for every job created over this period the population has increased by 0.71 persons. It is important to note that this does not factor in the increase in population generated through people moving into the Core Study Area and working outside its boundaries. This exclusively measures population change attributable to workplaces.
Commuting Patterns
10.57 The analysis within Section 2 clearly showed the complex commuting patterns between the three authorities and in relation to major economic hubs over the border, including Chester.
10.58 It is evident that the location of job opportunities and the transport infrastructure means that there is a significant amount of cross-authority commuting. The analysis of housing market
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areas showed a relatively strong containment within the Core Study Area, however, there were also very strong links out to adjacent areas such as Chester and Conwy. This impacts on the location of housing requirements as there are clearly households who reside in the three authorities but work outside of their boundaries.
10.59 This is reinforced by the following table which shows the levels of in and out commuting for each of the authorities.
Figure 10.10: Levels of in and out commuting
Persons Commuting Total number of people: Wrexham Flintshire Denbighshire Commuting to work in Authority 55526 65558 37319 Commuting within the authority (assume live and work in authority) 43581 44979 27488 Travelling to work in the authority from outside 11945 20579 9831 Travelling out of the authority to work 13480 24499 10736 Net Commuting -1535 -3920 -905 % of the total TTW movements in the authority from outside the authority (proportion of jobs not taken up by people living and working in the authority) 21.5% 31.4% 26.3% Source: Census 2001
10.60 Significantly this analysis clearly shows that each of the authorities are currently net outsourcers of labour (more people commute out of the authority to access work than commute in). This is particularly true of Flintshire and reflects the proximity of employment hubs (City of Chester and Chester Business Park).
10.61 The proportion of jobs not taken up by people living and working in each of the three authorities are high, ranging from 21.5% in Wrexham to 31.4% in Flintshire. This clearly has implications regarding household demand as these households take up a job in the authority but do not reside (and therefore require a house) in the authority.
10.62 There needs to be future consideration through policy whether these high levels of commuting are sustainable given pressures on infrastructure and the impacts on the environment. A decision to reduce the flow of commuting patterns both in and out of the Core Study Area would have implications regarding the level of housing required as this would be more closely related to the quantum of employment available and therefore changes in the local economies.
Economic Forecasting
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10.63 The analysis undertaken here draws upon the economic forecasts compiled by Cheshire County Council sourced from Cambridge Econometrics. It is important to note that these forecasts take into account labour market factors and are therefore constrained in their projections by assumptions regarding the demographic profile. Critically it should be noted that the model uses the 5 year migration derived population projection. Essentially then, by using an econometric base for forecasting household demand the following population scenarios have to be discounted due to the non-availability of essential labour market data:
• 10 year migration trend
• Migration trended from all data
• 5 year housing completions trend
• Natural change
• Mid-point migration trend
10.64 The previous section identified that the five year migration trend was identified as being too high for the plan period with demographic growth anticipated to be lower than the levels seen over the last five years and policy change in the bordering English authorities potentially leading to greater levels of housing supply. The analysis of the impact of the economy should therefore be read in the context of this limitation.
10.65 The employment forecasts used are ‘policy off’61 being based upon historical performance which is then projected forwards and therefore assume that the impacts of policy intervention will be consummate with past trends.
10.66 The analysis in section 5 showed that since 1995 all three authorities have witnessed relatively healthy employment growth a trend which is forecast to continue, with Denbighshire in particular forecast to witness high levels of employment growth.
10.67 The analysis also indicated that the economies were currently undergoing a period of transition. All three authorities are looking to diversify their economies recognising the current vulnerability through an over dependence on manufacturing sectors, a policy position which is reinforced by the West Cheshire North East Wales Sub-Regional Strategy. This has implications regarding the economy in 2021 which in turn will impact on future housing requirements. The following analysis looks to identify the implications of economic change within the Core Study Area on future housing requirements.
61 With the assumption being policy off for the forecast period
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10.68 The following steps were undertaken to arrive at an estimate of household demand using the CE economic forecasts which were analysed in detail within Section 6.
• Step 1: The 5 year migration based population projections form the base of the forecast.
• Step 2: Annual employment growth by local authority area is identified
• Step 3: The projected size of the labour-force is calculated using the demographic projections with a rate of unemployment assumed at 4%62.
• Step 4: The absolute level of net commuting is held constant using the latest TTW data (sourced from the 2001Census analysis) and deducted from the available labour force to show the nominal size of the labour force available to take up new jobs.
• Step 5: A net labour requirement to meet forecast growth is calculated (considering the difference between change in jobs and change in available labour force).
• Step 6: A multiplier is applied to account for the additional level of population that each job will attract. A rate of 0.71 persons per job has been assumed. This is based on a ratio calculated between the level of workplace based employee growth (ABI) and the level of population growth (mid-year population estimates, ONS) for the Core Study Area between 1998 and 2005.
• Step 7: The population projection is then revised to take account of net additional labour force and population multipliers.
• Step 8: A revised household estimate is produced by applying average household sizes, based on the 5 year migration projection headship rates, to the population projection.
10.69 To summarise, this scenario converts employment to labour force demands and further refines this to reflect a net additional household requirement. It is assumed, under this scenario that additional household demand is captured within the Core Study Area. The assumption is therefore that all available and economically active labour force is utilised. Over and above this latent capacity there is a requirement for additional labour (and consequently households requiring accommodation).
10.70 In order for the authorities to ensure that they encourage spatial linkages between the place of work and the place of residence there is therefore a need to match workforce skills with the economic opportunities that will be created in the future
62 Considered reasonable level of planned unemployment given economic circumstances assessed in Section 5 and national levels.
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10.71 The following table indicates the projected household demand following the Economic Led Scenario for each of the three authorities between 2003 and 2020. The annual level of household change is also shown for this period, calculated as an average over the 17 years.
Figure 10.11: Economic Led Scenario – Approximated Household Demand
Household growth 2003- 2020 Annual Requirement Denbighshire 9,251 545 Flintshire 10,026 590 Wrexham 9,645 565 Core Study Area 28,922 1,700 Source: GVA Grimley
10.72 When considering these annual requirements it is important to note that they are calculated against the level of population growth forecast under the five year migration scenario. This has particular implications for Wrexham where this projection was identified as being very high and unlikely to be sustained over the longer plan period.
10.73 The requirements represent the amount of housing required to service the local economy under the assumption that the commuting patterns identified in 2001 are held constant all available labour is utilised and net additional labour force relates to additional household requirements. Within Wrexham the model indicates a lower requirement than that calculated through the five year demographic projection. This reflects the fact that the population forecasts predict a considerably higher active workforce than is required to meet the demand created through growth in its own economy. This reinforces the assertion that in relation to Wrexham this level of population growth should not be planned for and the limitations with modelling against this demographic scenario.
10.74 The figure for Flintshire reflects the relatively strong economic growth forecast which through the model equates to the development of additional households. It is important to note that Flintshire plays an important role given the location of a significant number of settlements in close proximity to both Deeside and the City of Chester in supplying labour to these economic growth points.
10.75 The model factors in a sustained level of high net out commuting, however, with an increase in job opportunities within Flintshire forecast this figure may drop as people elect to travel shorter distances to access work. This additional capacity would reduce the level of additional household growth forecast and suggest a figure more in line with the demographic scenarios.
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This is something which needs to be monitored carefully with reference to the housing requirements of the wider reference area and the distribution of employment generation.
10.76 Factoring in the economy in Denbighshire results in a very high annual requirement. This is driven by the strong economic performance forecast within the CE model. Denbighshire currently out-sources labour however, given the level of forecast growth in its own employment opportunities this could reverse in the future. In order not to threaten this growth potential consideration needs to be given to ensuring an adequate supply of housing. This has implications for Denbighshire as well as the other authorities in the Core Study Area but also Conwy given the strong linkages between the two authorities identified in Section 2.
10.77 Currently all of the authorities provide a valuable role in offering housing for a wider housing market including neighbouring authorities in England, as indicated by the net commuting flows, where economic growth is also forecast to be strong63 and therefore this figure should be viewed as being too low in this wider context.
10.78 The linkages between the various areas and the distribution of housing within the Wider Reference Area is clearly a critical element and one which is reflected within the West Cheshire North East Wales Sub-regional Spatial Strategy (April 2007). This identifies that as a result of full employment and strong economic prospects there is an extremely tight labour market which will inevitably post a threat to future economic growth opportunities, which will in turn lead to increasing travel to work journeys.
10.79 The future performance of the economy is hard to project with accuracy as it is influenced by a number of wider macro and micro factors which can lead to significant fluctuations as identified at the start of this section. However, it is clear that the performance of the economy is linked with the residential offer and therefore careful monitoring of the situation is required to ensure that the supply of housing being delivered assists in facilitating economic growth rather than precluding it.
10.80 The Core Study Area as a whole clearly currently acts as an outsourcer of labour and therefore when studying this study area in isolation it is difficult to identify the requirements for housing driven by the economy. This section has looked at matching indigenous economic growth and the requirements this will generate for future housing, whilst holding current levels of commuting constant, however, continued joint working between the partners in the Wider
63 Strong potential for economic growth identified within the West Cheshire, North East Wales Sub-regional Spatial Strategy (April 2007) and also within the Liverpool City Region Housing Strategy (April 2007) for the Southern Housing Market Area which includes Wrexham, Flintshire, Chester, Ellesmere Port, and Vale Royal
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Reference Area is required to ensure a balanced housing market which meets the needs of the economy.
10.81 For the reasons outlined in this section, Scenario 2, while useful for illustrative purposes is not currently recommended as the preferred scenario. The noted changes in policy, demography and supply are likely to change some of the factors which have produced high levels of intra- authority migration over the last 5 years.
Potential Employment Generators
10.82 Econometric forecasts are based on historical trends and therefore the forecasts presented in Scenario 2 do not factor in speculative economic development projects which are planned or not sufficiently advanced to produce economic outcomes. As the analysis in Section 5 indicated the authorities economies are currently in a transitional phase with new service sector employment replacing declining levels of manufacturing employment, with this being particularly true of Wrexham and Flintshire. In order to attract higher-value service sector employment the Council’s are looking to progress new employment generating opportunities which will impact on household requirements.
10.83 In order to estimate additional jobs to the econometric forecast each of the authorities were invited to suggest major projects which they are currently aware of which are likely to be delivered within the plan period. These projects included the following:
• Warren Hall, Flintshire
• Northern Gateway, Flintshire
• Broughton Retail Park, Flintshire
• Wrexham Gateway, Wrexham
• Eagles Meadow Retail Development, Wrexham
• Rhyl Queen Street, Denbighshire
• Rhyl Ocean Plaza, Denbighshire
• Prestatyn Tesco, Denbighshire
• Prestatyn Liberty Properties, Denbighshire
10.84 The scale of many of the projects are clearly of a sub-regional magnitude and the assumption is therefore that the associated job growth could over time exceed that currently factored into the economic projections produced by CE.
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10.85 A number of the projects are retail oriented or associated with generating part-time relatively low paid jobs which tend to have weaker links in terms of delivering associated household demand with people less likely to move to an area to take advantage of these job opportunities. However, if these projects were delivered in part or in full it is fair to assume that the outcome would be some associated rise in the level of demand for housing.
10.86 As the earlier analysis identified all of the authorities are currently outsourcers of labour, however, with increasing pressure to reduce the levels of commuting due to the impact on the environment it is likely that there will be a growth in households looking to live and work in close proximity to one another. Therefore in order to achieve the above projects and reduce out-commuting there would be a requirement for a complementary growth in the provision of housing therefore raising the level of supply required.
10.87 It is important to note that many of these projects are speculative. It is difficult to assess with certainty whether they would be delivered prior to 2021 and therefore the extent to which they would impact upon housing requirements over this period. Given these uncertainties, economic growth derived from speculative projects has not been factored into the analysis. However, it is important that as part of the monitoring of future housing requirements that the successful delivery and attraction of new employment generating opportunities is assessed in relation to it its impact on the population and therefore the overall quantum as well as type/tenure of housing required to meet demand and need.
Interpreting Potential Demand
10.88 The analysis within this section provides a demonstration of the potential impacts of a number of variables, for instance they explore the impact of differing migration levels and illustrate the impact of the economy on the future level of demand for housing.
10.89 Examination of the indicative annual household requirements provides the following key issues:
• Under the 5 year migration scenario Wrexham has a very high household growth. This is a result of the high levels of migration, in part driven by high levels of house building, over recent years which are then projected forward. Examining the requirements under the economic led scenario it is clear that Wrexham has been building at a rate which exceeds the requirements of its own economy, further evidenced by the levels of net out commuting from the authority in 2001, which given the rate of building are likely to have increased over recent years. As a result of future projected economic performance and a changing policy environment in England it is therefore likely that whilst Wrexham will
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continue to have a high demand for housing this level will be tempered by policy changes in neighbouring authorities which will counter migration. It is therefore appropriate to plan for growth at a more moderate level, akin with longer-term migration trends.
• Denbighshire has the lowest household growth rates as a result of projected migration, however, an examination of the potential impact of changes in the economy suggests a higher associated growth may emerge in the longer-term. Therefore in the short-medium term there is justification for Denbighshire planning for growth in line with the mid-point migration scenario given the analysis around the economy.
• The demographic scenarios show relatively strong projected growth in households in Flintshire with both the five year and ten year trends showing relatively similar levels. This supports the need to plan at a level which is roughly in line with the mid-point of these scenarios as there is little evidence that this rate is likely to fall. Flintshire has very strong interconnections with the economic hub of the City of Chester and currently has very high net out commuting beyond its boundaries. The analysis around the economy shows relatively moderate economic growth over the plan period. A reduction in the rate of out commuting associated with a strengthening economy would suggest that the authority should plan for a level of household growth which reflects that experienced under the mid-point migration scenario. Dwelling Requirements
10.90 The North Wales Local Planning Authorities have been co-operating to apportion household demand and derive dwelling requirements. As noted at the start of the section a paper was produced in May 2007 which explored the analysis undertaken by the North Wales Population and Housing Research Group as explored under Scenario 1and reached conclusions regarding the annual levels of housing required for each authority within North Wales. This paper was prepared in accordance with the requirements of paragraph 9.2.2 of the Ministerial Interim Planning Policy Statement 01/2006 and was introduced for discussion by all of the LPA’s in North Wales.
10.91 These figures were derived from the various demographic scenarios explored, with the figures finally reached reflecting and starting to address some of the infrastructure, environmental constraints and regeneration objectives within the constituent authorities.
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10.92 Household figures were converted into dwelling figures by taking into account vacant dwellings, dwellings not used as a main residence, and a household sharing factor64. These factors reflect the need for a certain level of churn within an operational housing market.
10.93 The proposed apportionment by Local Planning Authority is shown in the following table which shows the annual requirement.
Figure 10.12: Proposed annual requirements
Requirement 2003 - 2020 Annual requirement (17 years) Denbighshire 425 7225 Flintshire 480 8160 Wrexham 420 7140 Core Study Area 1325 22525 Source: Annual requirement figures sourced from the North Wales Local Planning Authorities Discussion Paper – May 2007
10.94 Considerable negotiation has already occurred around these figures within the North Wales authorities, however, there is a certain degree of flexibility in terms of their inclusion within Local Development Plans as national policy allows regard to be made to locally derived policies.
10.95 The analysis of both demographic and economic drivers indicates that these figures are largely in line with the level of household demand forecast as explored through the interpretation of demand based on the two scenarios. The ‘pure’ analysis of the economy suggests that there may be justification for monitoring in the future relative levels of growth in employment in order to ensure that in the longer term there is not a widening mismatch in terms of supply and demand of housing.
10.96 In the medium term the likely changes in the levels of housing requirements in the English authorities proposed through Draft RSS is likely to lead to a reduction in the levels of migration which have been witnessed over recent years. The analysis therefore justifies not planning to the highest migratory led demographic trend but adopting a more moderate perspective that is in line with the longer-term trends.
Future Requirements by House Type
64 The 2001 Census showed North Wales to have a households:dwellings conversion factor of 936:1000.
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10.97 This section breaks down the overall level of demand into different housing product types. It should be noted that a ‘policy neutral’ assessment of demand is adopted (assuming that policy impact is consistent with past trends). It is also important to note that it considers demand per se, in terms of the quantum of housing requiring different types of housing, rather than considering specifically how supply should be altered.
10.98 The methodology adopted converts household demand in to demand for broad categories of housing based upon the likely economic characteristics (occupations) of existing and additional households in 2021 and their propensity to demand particular types of housing. The conclusions reached are then considered in light of demographic trends explored within Section 5 which indicated an overall ageing of the population which will also impact on the type of housing required in the future.
10.99 There are a number of methodological steps that have been applied in order to deliver this outcome and this section explains each ot the steps in turn.
10.100 The overall quantum of housing provided is in line with the figures proposed by the North Wales Local Planning Authorities in the May 2007 discussion paper. These do not factor in through a quantifiable methodology the impact of the economy. However, the forecast changing economic characteristics of the authorities are based upon the trends underpinning the employment projections used in Scenario 2. This is necessary as the assumption within the model is that the characteristics of the population will change in line with the changing profile of the economy even if the overall growth in households is not directly driven by employment levels.
10.101 This section presents the findings of this model by progressing through the stepped methodology.
Step 1: Understand likely Occupational Profile
10.102 The CE forecasts include a breakdown of employment by occupations which are forecast forwards to reflect the changing industrial structure and employment numbers. Section 5 provided analysis of the changing occupational profile between 2003 and 2020, however for this analysis it is necessary to profile occupations in 2020 as this represents the absolute change in the plan period.
10.103 The proportional breakdown of occupations in each of the authorities and the average for the Core Study Area is shown in the following table.
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Figure 10.13: Occupational profile in 2020
Occupation Proportional occupational breakdown in 2020 Classifications Denbighshire Flintshire Wrexham Core Study Area Managers & Senior Officials 10.6% 12.2% 11.1% 11.4% Professional Occupations 12.4% 11.3% 10.8% 11.4% Associate Professional & Technical Occupations 13.2% 13.0% 14.2% 13.5% Administrative, Clerical & Secretarial Occupations 8.9% 9.6% 9.8% 9.5% Skilled Trades Occupations 9.6% 11.9% 9.8% 10.6% Personal Service Occupations 15.9% 8.3% 12.7% 11.7% Sales & Customer Service Occupations 11.3% 11.8% 10.2% 11.2% Process Plant & Machine Operators 5.9% 11.6% 11.6% 10.1% Elementary Occupations 12.2% 10.4% 9.9% 10.7%
10.104 It is clear that all three authorities are forecast to have relatively similar occupational profiles, however, a number of key differences can be identified:
• Denbighshire has a higher proportion of people employed in Professional Occupations, but a lower proportion of those employed as Managers and Senior Officials;
• Flintshire continues to have a high proportion of those employed in Skilled Trades Occupations;
• Denbighshire has a very high proportion of people employed in Personal Service Occupations compared to the other two authorities, with Flintshire showing a notably low proportion; and
• Flintshire and Wrexham both have high proportions of people employed as Process Plant & Machine Operators and all three authorities have high proportions working in Elementary Occupations.
Step 2: Distribute total Dwelling Requirements by Occupation
10.105 A simple process of distributing the overall dwelling requirements calculated in Step 1 by the proportional occupational profile in Step 2 is required. This provides the following outputs.
Figure 10.14: Dwelling Requirements Driven by Occupation Profile
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Dwelling Requirements 2003-2020 Core Study Occupation Classifications Denbighshire Flintshire Wrexham Area Managers & Senior Officials 768 992 792 2,566 Professional Occupations 894 921 768 2,565 Associate Professional & Technical Occupations 952 1,063 1,015 3,033 Administrative, Clerical & Secretarial Occupations 641 781 701 2,133 Skilled Trades Occupations 694 971 700 2,385 Personal Service Occupations 1,149 673 905 2,645 Sales & Customer Service Occupations 817 967 730 2,512 Process Plant & Machine Operators 429 947 827 2,280 Elementary Occupations 882 847 703 2,405 Total 7,225 8,160 7,140 22,525 Source: GVA Grimley
Step 3: Linking Occupation with Housing Type
10.106 A crucial element of the methodology is linking the occupation of individuals with their propensity to access certain types of housing.
10.107 A bespoke cross tabulation of occupations by house type was sourced from the ONS at an England and Wales level based upon the results of the 2001 Census. This represents the most robust source of mapping the mix of people in occupations and their propensity to live in certain types of housing. The assumption is made that the national housing market is ‘balanced’ and enables choice to be exercised more freely than lower geographies of analysis.
10.108 The following table indicates the propensities used to link these two variables and therefore represents a ‘propensity matrix’ which can be applied to the identified dwelling requirements.
10.109 The types of housing are limited by the groupings used in the Census and should be seen as being broadly representative of house types, therefore new housing types such as ‘Mews’ or ‘Townhouses’ properties should be viewed as being broadly grouped into the Terraced category.
Figure 10.15: Occupation by House Type (Census 2001) – England and Wales
Occupation Accommodation Type
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Flat, Caravan or other Terraced maisonette mobile or temporary Semi (incl. end or structure, or in a Detached detached of terrace) apartment shared dwelling % % % % % Managers & Senior Officials 37.7 27.9 20.0 14.2 0.3 Professional Occupations 33.9 27.5 22.1 16.3 0.3 Associate Professional & Technical Occupations 25.0 30.8 26.0 17.8 0.4 Administrative, Clerical & Secretarial Occupations 20.3 31.3 28.9 19.1 0.5 Skilled Trades Occupations 24.1 38.1 27.6 9.7 0.5 Personal Service Occupations 15.2 32.8 31.4 19.9 0.7 Sales & Customer Service Occupations 15.0 32.4 32.2 19.6 0.7 Process Plant & Machine Operators 15.8 39.5 33.2 10.9 0.6 Elementary Occupations 12.3 35.6 34.0 17.2 0.9 Overall Average 20.3 31.4 24.1 23.2 1.0 Source: Census 2001
Step 4: Applying Propensity Matrix to Demand by Occupation
10.110 Applying the proportions stipulated by the propensity matrix to the breakdown of requirements identified in Step 3 provides a simple breakdown of the numbers of different types of housing required in each authority and therefore the wider Core Study Area.
10.111 It is important to note that this is based on the assumption that the profile of housing in 2001 at a national level represents a desirable breakdown and reflects future aspirations linked to local occupational change. It is possible that with an increasingly elderly population in reality there will be a slight shift in aspirations and therefore propensities will adjust accordingly. However, the breakdown below represents a robust profile for which to plan future housing delivery against.
Figure 10.16: Housing Requirements by broad House Type
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Caravan/ Mobile/ Temporary Authority Detached Semi Terrace Flat Accom. Total Denbighshire 1,600 2,343 2,041 1,200 40 7,225 % 22% 32% 28% 17% 1% 100% Flintshire 1,844 2,681 2,296 1,294 44 8,160 % 23% 33% 28% 16% 1% 100% Wrexham 1,587 2,341 2,020 1,153 39 7,140 % 22% 33% 28% 16% 1% 100% Core Study Area 5,032 7,366 6,358 3,648 123 22,527 % 22% 33% 28% 16% 1% 100% Source: GVA Grimley
10.112 It is clear that all three authorities as a result of similarities regarding their occupational profiles in terms of the grouped classifications share a similar required mix of housing by type.
10.113 This profile suggests the largest proportional shares for smaller family housing – classified under semi-detached and terraced stock types.
10.114 However, significantly there are clearly requirements for the development of a mixed profile of housing types, with all of the four major house types showing requirements for development in the future. This is an important conclusion given the analysis of recent housing completions and market evidence assessed within this HMA which has suggested that recent supply has been too heavily dominated by three and four bedroom properties serving the family market.
10.115 Policy should therefore look for opportunities to develop new types of housing in appropriate locations and where opportunities arise. For example this could involve new quality flatted developments in urban location as are starting to be seen within Wrexham town as part of wider developments. This could also involve housing particularly targeted at those demographic segments forecast to rise through the demographic forecasts including elderly households, this is examined in more detail below.
Providing housing which meets the needs of an Ageing Population
10.116 As noted above analysis of the forecasts for each of the authorites suggests that their will be an increase in the number of elderly households in the future with life expectancy continuing to rise.
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10.117 Ensuring that as part of the mix of future housing provided within the authorities matches need and demand it is therefore important that housing is sufficiently flexible to accommodate elderly needs. Increasing the number of Lifetime homes built within each of the authorities is an important element of ensuring this housing offer is correct and meets the needs of the population.
10.118 Consideration of the location of new housing developments intended to meet the needs of elderly households is also important and needs to factor in mobility and access issues. Where possible accommodation should be delivered in close proximity to services, such as shops, medical centre and a major public transport hub.
10.119 The analysis in Section 5 suggests that Denbighshire in particular has a high proportion of elderly residents currently who are attracted to the residential offer in a number of the coastal towns and it is important that further research is undertaken to assess whether their needs are being met specifically. The demographic projections ,as noted, suggest that as a proportionate share this demographic element will increase through the plan period and therefore the issue will become increasingly important to address and consider in the delivery of new housing in the future.
Gypsy and Traveller Future housing requirements
10.120 The analysis of housing type includes reference to future requirements for caravan stock. These are included as they incorporated within the national stock profile, however, they should be treated with caution as given the small quantum it is harder to relate back to local characteristics. The following analysis provides a summary of additional research on this specific group.
10.121 All of the authorities within North East Wales plan to undertake further research to ascertain the future housing requirements of their Gypsy and Traveller communities. An accompanying paper has been prepared by GVA Grimley LLP which establishes recommendations regarding the approach to undertaking future work alongside an assessment of current service provision65.
10.122 This highlighted the limited level of research and monitoring in place currently to identify the housing requirements of Gypsy and Travellers in the Core Study Area. Wrexham is the only one of the three authorities which has a Gypsy and Traveller Accommodation Assessment and the key findings of this are presented below. Given the absence of primary or secondary
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analysis for the other two authorities it is not possible to quantify demand in these areas without further work being undertaken.
10.123 Wrexham had a Gypsy and Traveller Accommodation Assessment prepared by Fordhams in 2007, which followed national guidance to highlight specific issues and estimate the total level of current and future demand. This provided a robust assessment of the future requirements of the Gypsy and Traveller community, however, it is important to note that similar studies are required for each of the two authorities and future requirements should be assessed at the sub-regional level.
10.124 The Wrexham research included 19 interviews with local Gypsy and Travellers which made up 83% of the site residents or 54% of the total Gypsy and Traveller population in Wrexham. The key conclusions of this research are shown below:
• Despite Wrexham not having a large Gypsy and Traveller population (103 Gypsy and Travellers, 49 of which are on the Local Authority site at Ruthin Road66), there is currently some unmet accommodation need, largely created by overcrowding on the local authority site. Indeed the main issue for Gypsy and Travellers in Wrexham were living conditions on the LA owned site, with overcrowding and a lack of accommodation for newly forming families also noted as a concern.
• Newly forming families are expected to create significant need over the next five years and their requirements should be considered at an early stage. Family formation rates mean that the demand for pitches is expected to grow by 14 pitches over the next five years.
• In total using the WAG Guidance to establish total need a total of 18 additional pitches are likely to be required in the next 5 years (up to 2011).
• The Gypsy and Traveller community’s preference is for small privately owned sites, a view supported by recent government advice in England. The recommendation is reached that the CBC should assist in the development of small privately owned sites, with early planning advice a critical element of this assistance.
• Specific sites should be identified in future Local Development Plans or alternatively Supplementary Planning Guidance.
65 BME / Gypsy & Irish Traveller / Economic Migrants – An assessment of housing service provision – GVA Grimley LLP, August 2007 66 Wrexham CBC Homelessness Strategy 2003-2008
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• Between 12 and 18 new socially rented pitches are needed up to 2011 and efforts should be made to ensure that the LA owned site at Ruthin Road is fully used.
• Councils should work together to identify the requirement in North Wales and neighbouring English local authorities, possibly through contributing to a sub-regional needs assessment. Key Messages
10.125 This section has looked to explore the level of future household demand over the plan period within the three authorities which make up the Core Study Area. This analysis has built upon the identification of strategic drivers related to both demographic and economic trends and projections.
10.126 The authorities have experienced an unprecedented period of growth. Research included in this report has demonstrated that the underlying cause of this growth has been migration in to the authorities. This trend of growth and the pace at which it has occurred needs to be understood in the context of North Wales’ wider relationships. In order to fully understand these relationships and their implications on the future housing requirements of the authorities it is necessary to accept that:
• North East Wales is not a self-contained economy. Over time it has developed strong labourforce and business links with neighbouring authorities and in particular the City of Chester, Ellesmere Port and Neston and part of Wirral
• These related areas have emerged as strong economic drivers in the North West economy and inter alia of great importance to North East Wales
• This economic growth has contributed to increasing houseshold demand, rising house prices and increasing competition for housing
• Over time this has extended demand for housing over a wider area with commuting patterns increasing between North East Wales authorities and those bordering the area
10.127 Therefore North East Wales has played an important role in the economic growth by the provision of new housing to meet emerging demand. In forecasting future housing requirements, the following factors are likely to change these relationships in the future and lead to a different set of outcomes than those experienced over the last 5 years:
• A narrowing of the house price gap in those areas bordering English authorities;
• Generation of increased employment opportunities in Denbighshire;
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• A pipeline of speculative economic development projects which will continue to enhance local employment opportunities;
• A changing policy environment within the bordering English authorities with higher rates of housing permitted under the draft RSS;
• Increasing commitment from Central Government to boosting the supply of new housing in English authorities;
• A forecast decrease in household size;
• The increasing importance of international migration; but
• Relatively stable patterns of natural change.
10.128 For the above reasons caution needs to be applied in the use of trend data from the last five years to forecast future demand. However, it is anticipated that these drivers will take time to impact on the level of household demand – in the short term demand is likely to remain high. In particular demand for affordable housing is likely to remain at the forefront of the policy agenda and increasing the stock of affordable products is key to maintaining a balanced housing market and facilitating economic growth.
10.129 Therefore it is recommended that the authorities jointly plan to deliver future growth which is informed by longer term trends in household growth. Extending the analysis beyond five years reveals a more moderate rate of increase, at which it is appropriate to plan over the forthcoming period.
10.130 However, housing markets and the local economy are dynamic and by their nature require careful monitoring in order to track their development and inter-relationship. Given the pipeline of major economic development projects that is recorded, the future impacts of economic growth need to be monitored and this information disseminated to influence policy.
10.131 The stock profile analysed in Section 6 indicates that all three authorities had higher than average quantities of larger houses (detached/ semi-detached). Recent supply of new housing has perpetuated this stock profile. The analysis of future housing types required has revealed a need to build a more balanced stock of new houses. In practice this means not exclusively building one type of housing and demanding that developers not only provide a mix of tenures but a range of house sizes. Given the prevailing trend towards smaller household sizes, this should include smaller stock that comprises units that are suitable for single and family occupation.
March 2008 260 Wrexham CBC, Flintshire BC, Denbighshire BC
10.132 Emphasis should be placed on delivering housing which is flexible including Lifetime Homes and is able therefore to meet the future demand resulting from an increasing elderly population as indicated by the demographic projections for each authority.
March 2008 261 Wrexham CBC, Flintshire BC, Denbighshire BC
11. ASSESSING CAPACITY
11.1 The capacity of the Core Study Area to deliver the future housing requirements established in the preceding chapter is a critical element in assessing the future housing market and the pressures that will be placed upon it.
11.2 This chapter will therefore establish each component authority’s ability to deliver new housing in the context of current land supply. This will be analysed through the following:
• Sites with Planning Permission
• Sites with Outline Planning Permission
• Allocated Sites Remaining
• Review of Land Availability Studies
• Summary
• Review of Urban Potential Studies
• Delivering Affordable Housing
11.3 This analysis of current supply will be assessed with respect to location (e.g. urban/rural distinction, distance from settlements etc.), plot sizes, and total unit capacity. The commentary will also assess the potential impact of current affordable housing policies on this capacity, and any constraint that this might cause.
Sites with Planning Permission
11.4 The following statistical and spatial analysis is based upon sites that have secured either full planning permission or approval with reserved matters. These sites have been grouped together to represent sites likely to come forward in the short/medium term having secured planning approval. The unit numbers applied to these sites are taken directly from each Local Planning Authority (LPA), based upon associated decision notices.
11.5 The figure below illustrates secured pipeline housing supply as at March 2007, based upon sites with planning permission (incl. approval with reserved matters) with over 10 residential units. It should be noted here that estimates for Wrexham in terms of unit numbers are taken from the 2006 Land Availability Study, updated with permissions granted between April 2006 and March 2007.
March 2008 262 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 11.1: Extant Full or Reserved Matters Planning Permissions (March 2007)
11.6 It is clear that Wrexham contrasts greatly with both Denbighshire and Flintshire in terms of both the size and quantum of sites that have gained planning permission. The majority of these sites in Wrexham are located to the west and north west of Wrexham town, including
March 2008 263 Wrexham CBC, Flintshire BC, Denbighshire BC
the former Brymbo Steelworks (493 units) and Ruthin Road (420 units). Denbighshire has a number of sites with over 100 units with planning permission; Glasdir in Ruthin, Denbigh Hospital, Denbigh and Ryhl South East67. Flintshire by contrast has no sites with planning permission of over 100 units.
11.7 In terms of total unit numbers, Wrexham is forecast to deliver (i.e. post March 2007) 2,426 units through sites that have secured planning permission; Denbighshire is forecast to deliver 92868, whilst Flintshire is to deliver 703.
11.8 It is also apparent that there exists a distinct lack of sites of over 10 units in the rural areas of Denbighshire, particularly outside of the larger settlements such as Denbigh and Ruthin.
11.9 In terms of location, the picture is stark in terms of the number of sites located within ‘village, hamlet or isolated dwelling’ areas, with the vast majority of sites being located within the ‘urban’ and ‘town and fringe’ areas. This is particularly the case in Denbighshire, where only two sites of between 10 and 50 dwellings are to come forward within this category, and in Flintshire, where no such sites are secured. This trend has implications for rural affordability, given the shortage in supply of new housing and the lack of sites coming forward in rural areas that can deliver planning based (i.e. S106) affordable housing.
11.10 A summary of these pipeline developments, categorised according to unit numbers remaining, is included below.
Figure 11.2: Pipeline - Sites with Planning Permission (Units Remaining – March 2007)
Units Remaining Wrexham Denbighshire Flintshire 10 to 50 29 26 30 51 to 100 8 5 4 101 to 200 3 0 0 201 to 300 1 0 0 301 to 500 1 0 0 501> 0 0 0 Total 42 31 34
Source: Constituent LAs
11.11 This table illustrates the complete lack of sites of over 101 units in either Denbighshire or Flintshire, as opposed to Wrexham which has 5 sites within these categories. It may also be
67 Note: these figures were inserted in April 2008 and are therefore not reflected in the graphic 68 Note: This had risen to 1,800 units by January 2008 based on data recorded within the Housing Land Availability Study.
March 2008 264 Wrexham CBC, Flintshire BC, Denbighshire BC
seen that Wrexham has secured planning permission for 42 sites in all, compared to just 31 in Denbighshire and 34 in Flintshire.
11.12 Flintshire’s shortfall of large sites can to some extent be explained by the un-adopted status of the Unitary Development Plan (2000), which has significantly constrained the authority’s ability to bring forward sites of significant scale. It should therefore be pointed out that a number of sites are likely to come forward for development subject to objections in the short to medium term, although these sites are not guaranteed for inclusion.
Sites with Outline Planning Permission
11.13 By way of establishing sites that are likely to come forward but have not yet secured full (or reserved matters) planning permission, the following analysis is based upon sites that have outline planning permission status as at April 200769.
11.14 It should be noted that the unit numbers applied to these sites are largely based upon the PPS 3 minimum density requirements of 30 units to the hectare, due to the fact that such permissions tend not to include unit number specifics. MIPS Housing (2006) also fails to provide number specific guidance on densities. It is likely, therefore, in applying a minimum density requirement, that actual unit delivery will exceed estimates included below for sites with outline planning permission. Site areas are based upon information provided by each component LPA.
11.15 The figure below illustrates sites with outline planning permission in the Core Study Area as at April 2007, including only sites with over a 10 residential unit capacity (i.e. over 0.33 hectares).
Figure 11.3: Extant Outline Planning Permissions (April 2007)
69 Estimates for Wrexham in terms of unit numbers are taken from the 2006 Land Availability Study, updated with permissions granted between April 2006 and March 2007.
March 2008 265 Wrexham CBC, Flintshire BC, Denbighshire BC
11.16 It is initially clear that Wrexham has a significant number of sites that have secured outline planning permission when compared to Flintshire and particularly Denbighshire. Within this, Wrexham’s ‘outline sites’ are spread across the County Borough, with a particular focus in Wrexham town and north west of the town, where there a number of larger sites within the
March 2008 266 Wrexham CBC, Flintshire BC, Denbighshire BC
200 – 400 unit bracket. There are also a number of 10-100 unit sites located around the Borough, specifically off the A483 corridor to the north and south of Wrexham town. Based upon a density of 30 units to the hectare, the County Borough is forecast to deliver 1,744 units through its ‘outline supply’.
11.17 Flintshire by contrast has one major site in Flint that has secured outline planning permission, whilst there are several 10-100 unit sites located towards the south of the County around the major settlements of Mold, Buckley, and Leeswood. In all, the County has a minimum capacity to deliver 765 units through its ‘outline supply’70.
11.18 In contrast to Wrexham, Denbighshire has very few sites that have secured outline planning permission, although there is an upper bracket (400+ units) sites located in Rhyl, and a 200 400 bracket site located in Ruthin. In all, the County has a minimum capacity to deliver 1,011 units through its ‘outline supply’71. Again there is a distinct lack of site with outline permission in the rural areas of Denbighshire.
11.19 In terms of the location dynamic, it is again clear that there exist very few sites coming forward within the rural areas of the Core Study Area. This is particularly the case again in Denbighshire, where only two recorded sites within the 10-100 unit capacity have secured outline planning permission, and in Wrexham, where only one such site exists. Again this will compound the affordability problems associated with rural areas given the reasons described above.
11.20 By way of categorising the sites according to unit capacity, the following table summarises the supply of land with outline planning permission across the three authorities.
Figure 11.4: Pipeline - Sites with Outline Planning Permission (April 2007)
Units Remaining Wrexham Denbighshire Flintshire 10 to 50 22 7 6 51 to 100 3 0 1 101 to 200 1 0 0 201 to 300 4 0 0 301 to 500 0 1 0 501> 0 1 0 Total 30 9 7
Source: Constituent LAs
70 Based upon PPS 3: Housing minimum density requirement of 30 units to the hectare 71 Based upon PPS 3: Housing minimum density requirement of 30 units to the hectare
March 2008 267 Wrexham CBC, Flintshire BC, Denbighshire BC
11.21 In similarity with the findings for sites with full or reserved matter planning permission, it is clear that Denbighshire and Flintshire have a lack of larger sites with outline permission (over 51 units) when compared to Wrexham. However, Denbighshire does have one site within the 500+ category, located in Rhyl. Wrexham again has the most sites that have secured outline permission; 30 compared to just 9 in Denbighshire and 7 in Flintshire.
Allocated Sites Remaining
11.22 To further assess the capacity of each authority to deliver housing outside of sites that have already secured some kind of planning permission, the following analysis quantifies the number and associated size of sites remaining available net of existing permissions, as at April 2007.
11.23 The figure below spatially illustrates sites remaining (of over 10 units capacity) in each authority net of planning permissions (full, reserved matters and outline). Again this assessment is based upon a density assumption of 30 units to the hectares, which for the reasons outline above will represent only the minimum unit capacity given the likelihood of sites being brought forward at greater densities.
March 2008 268 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 11.5: Allocated Sites Remaining Available (April 2007)
11.24 Wrexham has a lack of available sites remaining, whilst Flintshire has a limited number of small (10-100 unit) sites. These sites are largely clustered around the larger settlements of Mold and Buckley.
March 2008 269 Wrexham CBC, Flintshire BC, Denbighshire BC
11.25 Denbighshire by contrast has a number of allocated sites remaining, with a large geographical spread across the County. Most of these sites are within the 10-100 capacity bracket, although there are two large sites remaining in Ruthin and Rhyl (South East).
11.26 Interestingly, a number of lower bracket (10-100 dwelling capacity) sites remain available within the county in rural areas, suggesting that these sites may suffer from viability issues impacting development. This might be for a number of reasons; including low market values, high remediation costs, high land values, high construction costs, current policy constraints, or land banking.
11.27 However, given the fact that such development factors are likely to be relatively consistent (perhaps apart from market values and/or land values) across rural areas throughout the Core Study Area, one might suggest that these sites have not been brought forward by the market because at this lower bracket level development viability is particularly sensitive to affordable housing requirements, which are set at their lowest thresholds in Denbighshire. This emphasises the point that constituent authorities should be cognitive of/flexible to individual development constraints, particularly on small sites, when setting affordable housing policies, an approach which is supported by TAN 2: Planning & Affordable Housing.
11.28 In terms of total unit potential within this category, Wrexham has no unit capacity remaining, Flintshire has capacity to deliver 161 units, whilst Denbighshire has capacity for a further 1,269 units72.
11.29 By way of categorising the sites according to unit capacity, the following table summarises the remaining supply of land (net of previous categories) across the three authorities.
Figure 11.6: Pipeline – Allocated Sites Remaining Available (April 2007)
Units Remaining Wrexham Denbighshire Flintshire 10 to 50 0 13 6 51 to 100 0 4 2 101 to 200 0 0 0 201 to 300 0 1 0 301 to 500 0 1 1 501> 0 0 0 Total 0 19 9
Source: Constituent LAs
72 Based upon PPS3: Housing minimum density requirements of 30 dwellings to the hectare.
March 2008 270 Wrexham CBC, Flintshire BC, Denbighshire BC
11.30 This table reinforces the spatial analysis by demonstrating how Denbighshire still has significant capacity within its allocated land supply for future housing provision, with 19 sites in all falling within a range of ‘unit capacity’ brackets. Flintshire also has further capacity based upon 9 sites remaining available, the majority of which are within the 10-50 unit bracket. Wrexham clearly has no sites of over a 10 unit capacity remaining within its allocate land supply.
Summary
11.31 The following table summarises the estimated forward capacity provision within each component authority, based upon the above findings and associated methodology.
Figure 11.7: Total Unit Capacity (Sites of 10 dwelling capacity or more - April 2007)
Status Wrexham Denbighshire Flintshire Source Full/Reserved Matters Planning Permission (June 2007) 1,248 928 703 Outline Planning Permission (June 2007) 1,850 1,011 765 Allocated Sites Remaining (June 2007) 0 1,269 161
Total Development Plan JHLAS 2007)
Residual Supply (June Statistics (Wrexham 2007) Development Plannning 3,098 3,208 1,629
Source: Constituent LAs
11.32 Denbighshire offers the most capacity in terms of future housing provision, followed by Wrexham and Flintshire.
Review of Land Availability Studies
Introduction
11.33 Guided by Technical Advice Note (TAN) 1: Joint Housing Land Availability Studies, ‘Study Groups’ (usually led by LPAs) are required to ensure that sufficient land is genuinely available to provide a 5 year supply of land for housing. These provide information on previous house building rates and the current supply of land for housing as inputs into the LDP strategy and policy development process.
March 2008 271 Wrexham CBC, Flintshire BC, Denbighshire BC
11.34 In assessing land availability, the Housing Land Availability Study (HLAS) must include sites that have either:
• Been granted full or outline planning permission for residential purposes (10 or more units/capacity for 10 or more units);
• Been identified for residential purposes in an adopted development plan (10 or more units/capacity for 10 or more units).
11.35 As such, in carrying out the HLAS, LPAs must account for the same sites that have been assessed in the above undertaken analysis.
11.36 However, in addition to this, LPAs are required to agree an estimate for sites likely to be brought forward of under 10 units/capacity for under 10 units, over the next five years. This estimate should include an allowance for sites not specifically identified at the time of the study (i.e. windfall sites), based upon the recorded contribution that such sites have made to housing provision in the area over the last five years.
Application
11.37 As a result, this study may use these estimates of windfall housing provision to add to the (contemporary) capacity analysis undertaken above, in order that a robust assessment is made of land availability within the Core Study Area, against which previously established requirements may be assessed.
11.38 To achieve this, the following table first summarises estimates of windfall site land availability, based upon the respective Land Availability Reports undertaken for each composite authority, and including site of 10 dwellings or less and conversions73.
Figure 11.8: Total Unit Capacity from Windfall Sites (April 2007)
Wrexham Denbighshire Flintshire Sites 10 Dwellings or less (windfall sites) - 5 Year 754 (includes Supply 256 608 conversions) Contribution from Conversions 302 y
Source: Core Study Area Joint Housing Land Availability Studies
73 Wrexham Joint Housing Land Availability Study (2006), Denbighshire Joint Housing Land Availability Study (2006), Flintshire Joint Housing Land Availability Study (2005) (this study contains no specific figure for conversions)
March 2008 272 Wrexham CBC, Flintshire BC, Denbighshire BC
Summary
11.39 The following table illustrates current assessed capacity on sites of 10 dwelling capacity or more, plus notional windfall capacity based on historic trends.
Figure 11.9: Total Composite Unit Capacity (April 2007)74
Status Wrexham Denbighshire Flintshire Source Full/Reserved Matters Planning Permission (June 2007) 1,248 928 703 Outline Planning Permission (June 2007) 1,850 1,011 765 Allocated Sites Remaining (June 2007) 0 1,269 161
Total Development Plan JHLAS 2007)
Residual Supply (June - (Wrexham Statistics 2007) 3,098 3,208 1,629 Development Plannning
Sites 10 Dwellings or less (windfall sites) - 5 Year Supply 726 (includes 256 608
conversions) Land
Contribution from Studies Availability
Conversions 302 y Joint Housing
Total Current Capacity 3,824 3,766 2,237+ y
11.40 It is apparent that Wrexham has significant capacity to deliver housing, although 33% of this capacity is likely to be delivered in the short/medium term through sites that have secured full/reserved matters planning permission. This compares to 25% in Denbighshire and circa 31% in Flintshire75.
11.41 When taking into account the annual requirements as set out by the recent dwelling requirement discussion paper76, the number of years supply accounted for within current land supply is illustrated in the table below:
74 No specific figures are included with Flintshire’s Joint Housing Land Availability Study for conversions, therefore this is denoted under ‘y’ in the table 75 Note this figure doesn’t account for conversions 76 “Discussion Paper: Population Projections, implications for dwelling requirements and Local Development Plan Land Allocations across North Wales 2003 – 2018”
March 2008 273 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 11.10: Total Years Supply Remaining within Existing Capacity (April 2007)
Status Wrexham Denbighshire Flintshire Source Full/Reserved Matters Planning Permission (June 2007) 1,248 928 703 Outline Planning Permission (June 2007) 1,850 1,011 765 Allocated Sites Remaining (June 2007) 0 1,269 161
Total Development Plan JHLAS 2007)
Residual Supply (June - (Wrexham Statistics 2007) 3,098 3,208 1,629 Development Plannning
Sites 10 Dwellings or less (windfall sites) - 5 Year Supply 726 (includes 256 608
conversions) Land
Contribution from Studies Availability
Conversions 302 y Joint Housing Total Current Capacity 3,824 3,766 2,237+ y *Discussion Paper May Annual Requirement 420 425 480 2007
Years Supply 9.10 8.86 4.66 + y
Source: Local Authorities, 2007
11.42 While the Flintshire figures do not currently allow for the contributions to be made from conversions, the authority does have significant capacity constraints with only 4.66 years supply remaining as of April 2007. Denbighshire has almost double this supply, at 8.86 years worth of supply, whilst Wrexham has the most capacity with 9.10 years worth of supply accounted for within existing supply.
Review of Urban Potential Studies
11.43 In assessing capacity it is also important to acknowledge the ‘discounted unconstrained capacity of all sites’ as assessed from a range of land sources such as the subdivision of existing housing, and under used and potentially surplus allotments etc. Such data is supplied within Urban Potential Studies, which have thus far been carried out in Wrexham and Denbighshire by Entec.
11.44 Whilst it is not possible to separate such figures from the sites assessed above (due to dating crossover), such an assessment of urban potential taking into account County
March 2008 274 Wrexham CBC, Flintshire BC, Denbighshire BC
Borough/County regeneration priorities and site sustainability (i.e. more qualitative based assessment), is important in creating a contextual understanding of capacity.
11.45 For the purposes of context therefore, the results of these studies in terms of the total discounted unconstrained capacity (net of TAN 1 sites) are set out below.
• Wrexham (January 2007) – 3,954 dwellings
• Denbighshire (May 2007) – 7,925 dwellings
• Flintshire – No Urban Capacity study undertaken Delivering Affordable Housing
Headline Capacity
11.46 In assessing housing capacity, it is important to acknowledge first the potential of each authority to deliver affordable housing in the short, medium and long-term at headline level.
11.47 By way of reference, a brief analysis of quantum to be delivered in each authority through unsecured sites (i.e. sites with outline planning permission or allocated sites remaining) is therefore included below for reference. This is based upon total capacity within these sites (based upon the assumptions outlined above), applied to the current affordable housing policy requirements adopted within each authority (therefore including only those sites that fall within each particular affordable housing policy threshold).
• Denbighshire – Total Capacity 2,280 units, 30% affordable obligation, equals circa 684 affordable units
• Flintshire – Total Capacity 926 units, 25% affordable obligation, equals circa 232 affordable units
• Wrexham – Total Capacity 1,544 units, 25% affordable obligation, equals circa 386 affordable units
11.48 It should be noted that this is based on very circumspect calculations that fail to take into account the various intricacies of each site and associations negotiations that would take place within the planning process. It is also based upon the assumption that all sites with outline planning permission do not yet have S106 agreements agreed and signed. This is likely not to reflect reality depending on a number of variables (e.g. the intentions of current owners). The development activity of RSLs themselves is also not taken into account here,
March 2008 275 Wrexham CBC, Flintshire BC, Denbighshire BC
although discussions with such development partners suggests that such development is likely to be extremely limited given constraints on public sector funding.
11.49 However, the figures do serve as a useful reflection of likely affordable capacity within each authority, the through this the degree to which they can fulfil existing affordable housing targets in the future.
Constraints to Delivery
11.50 The study has established that there is currently a lack of affordable housing being delivered throughout the core study area. However, the study process (and particularly stakeholder consultation) has also served to highlight a number of constraints to the delivery of affordable housing which should be highlighted here so that realistic expectations may be made as to the capacity of each authority to deliver such dwellings.
11.51 The factors impacting on delivery of affordable housing are summarised as:
• The ‘pending’ status of some existing potential stock transfers (e.g. Wrexham) is withholding investment and strategic asset management;
• A number of plot sizes brought forward by the market have been too small to make affordable housing viable without external subsidy, even when they qualify within existing policy thresholds. This issue may be particularly acute in rural areas where greater land constraints and lower inherent development value (e.g. through density) mean that residual values are particularly sensitive to affordable housing discounts;
• Existing policy and associated negotiation processes may not be sufficiently cognitive of site viability and inherent residual values. Within this the selective review of the National Housing Strategy for Wales77 has identified a lack of co-ordination and joint working between Housing and Planning functions as a potential source of influence;
• Existing affordable housing policy may not be sufficiently robust to stand up to developer negotiations. Examples here include Wrexham (until current policy H7 was adopted) and Flintshire where the pending nature of policy has allowed for a number of sites to be delivered with insufficient affordable housing. However, it has also been suggested, in line with TAN2 Wales, that policy should allow for sufficient flexibility within the negotiation process to take account of development variables so that negotiations are informed by site specifics;
77 Welsh Assembly Government, National Housing Strategy for Wales, A Selective Review (November 2006)
March 2008 276 Wrexham CBC, Flintshire BC, Denbighshire BC
• Registered social landlord’s (RSLs) have highlighted that the existing public grant mechanism is too limited in terms of quantum and tenure flexibility to significantly increase supply;
• Existing land values are pricing RSLs out from acquiring sites and self-developing;
• ‘Affordable discounts’ (i.e. discount off open market value) as prescribed through S106 negotiations are still too high for RSLs to acquire within existing public subsidy arrangements;
• There is limited RSL and local authority owned vacant land available to secure private investment and through this further social stock;
• A lack of understanding and/or organisational commitment among RSLs to alternative methods of affordable housing, including specifically intermediate products such as Low Cost Home Ownership models.
11.52 The above list is not intended as an exhaustive review of constraints to affordable housing delivery, only as a signposting to issues raised by various stakeholders during the study. Each element may therefore benefit from further analysis outside of the confines of this study.
11.53 In terms of solutions, the study has highlighted that there may be some key ‘early wins’; these being process related solutions which might be resolved in the short-term without the need for significant structural (e.g. policy) changes. These should build on the positive progress already being made by authorities, for example through the Affordable Housing Liaison Group set up within Denbighshire:
• A greater dialogue between RSLs and LAs regarding affordable housing and specific delivery models, perhaps in the form of monthly meetings between relevant stakeholders including planning and housing LA functions, and key active RSLs;
• Improved monitoring of the performance of affordable housing policy in terms of successes, failures, reasons etc. (e.g. types being delivered, locations, partners, mechanism structures and associated best practice). Current monitoring is de centralised and inconsistent. This may be built into the previous point, although it may be beneficial also to involve private developers here;
• A more transparent process of negotiation between developers and LAs, involving key delivery partners (e.g. RSLs) at an early stage to establish key success factors. LAs may seek to view and interrogate developer appraisals here, should such information be available.
March 2008 277 Wrexham CBC, Flintshire BC, Denbighshire BC
11.54 In terms of more structural remedies, it is clear that the authorities may wish to revaluate their existing affordable housing policies given the shortfall in delivery. Within this, the selective review of the National Housing Strategy for Wales78 has identified that a lack of consistency between local authorities in a sub-region may be a barrier to delivery. Given the sharp difference between existing policies there may be scope for such cross-boundary policy working to enhance the sub-regional approach.
11.55 It is suggested that any future approach be more transparent at the outset, with clear and more structured (perhaps tiered) methodologies, and involving the early identification of key delivery partners (e.g. RSLs). Such a policy should also be cognisant of specific site constraints and inherent development values.
78 Welsh Assembly Government, National Housing Strategy for Wales, A Selective Review (November 2006)
March 2008 278 Wrexham CBC, Flintshire BC, Denbighshire BC
12. SUB-MARKET AREA ANALYSIS
12.1 This section looks to identify lower-level sub-market areas within the Core Study Area. Strategic Policy development will need to take account of the different characteristics of areas and consider the future priorities for areas and their future role in the wider housing market.
12.2 This section uses analysis of ward level TTW flows to look to identify areas with strong linkages created as a result of economic connections. These represent functional sub-market areas and provide clearly defined areas from which to develop policy.
12.3 The characteristics of the housing stock and occupational breakdown of these sub-markets is included in order to highlight the different issues faced by these areas now and the likely implications of future market change.
12.4 Initially the geographical context of the area is examined as this has a key role in defining areas from which people commute to and from with natural barriers often acting as obstacles in peoples ability to commute.
12.5 Further analysis of a number of mapped socio-economic indicators can be viewed in the First Stage Report which accompanies this assessment. This report took a different approach and looked to identify character areas on the basis of shared characteristics and common typologies.
Physical Appraisal
12.6 The following plan highlights the rural / urban breakdown of the area based upon Census classifications. The plan also shows the key communication corridors and the major settlements which they link.
March 2008 279 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 12.1: North East Wales – Urban / Rural breakdown
12.7 The rural nature of much of the study area, in particular within Denbighshire and the western parts of Wrexham is clearly shown through the plan.
March 2008 280 Wrexham CBC, Flintshire BC, Denbighshire BC
12.8 Settlements within the area are on the whole clustered along the Flintshire and Denbighshire coast, following the A55 into Denbighshire, with Wrexham Town also standing out as a larger settlement. Denbighshire also includes a number of more isolated settlements including Ruthin and Mold.
12.9 Wrexham is the major settlement within the County Borough with a string of settlements following the major road links focusing on the A494.
12.10 The residential settlements around Deeside, Connah’s Quay, Shotton, Hawarden and Buckley represent a significant cluster which is in close proximity to the English border.
12.11 The spine of hills from north to south within the area form a natural break and help to create a number of local areas of beauty. The rural parts of Denbighshire and Wrexham stretch into the rural areas of surrounding authorities including Gwynedd, Powys and Shropshire/Oswestry.
12.12 The Irish Sea and the Dee Estuary form a natural boundary to the north of Denbighshire and Flintshire and in Flintshire’s case down its eastern boundary. The coastal location has helped to define many of the settlements along this boundary including Rhyl and Prestatyn both of which have had and continue to play a role for tourists and visitors to the area.
12.13 It is clear that the topography of the area plays an important role in defining the housing and economic functionality of areas within the authorities.
Housing Sub-markets
12.14 Section 2 of this report looked to identify the extent of the functional housing market area and the linkages between the three Core Study Area authorities. A similar approach has been adopted within this section to identify more localised housing sub-markets using ward level Travel to Work Data from the 2001 Census. This identifies the linkages between work and home and therefore represents functional areas.
12.15 The following plans show ward level TTW flows using 100, 50 and 30 people movements. Wards where there are flows of 100 persons or more moving between are clearly strongly linked in terms of market areas. However, large parts of the Core Study Area are rural in character and therefore there limited levels of movement in terms of TTW therefore flows as low as 30 have been mapped to identify connections in these areas.
March 2008 281 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 12.2: Ward level TTW flows of 100 people or more
Strong evidence of containment of Wrexham sub-market with the town of Wrexham at the centre whilst the Industrial Estate also generates movement.
Clear flows between the major employment centres in Flintshire and Chester town centre and to a lesser extent the business park.
The strong linkages between Conwy and Denbighshire are also evident along the A55. However, there are two distinct sub-markets the first focused around Bodalwyddan, Rhyl and Prestatyn and the second created by the cluster of Llandudno, Conwy and Colwyn Bay.
As would be expected there is little evidence of strong movements within the rural areas.
March 2008 282 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 12.3: Ward level TTW flows of 50 people or more
With flows of 50 persons or more the areas of influence of the already identified sub-markets are larger. Chester and Deeside expand their area of influence further along the A55 and into the Wirral with strong connections to Mold also shown.
Denbigh and Ruthin start to emerge as drivers within the large rural area of Denbighshire, with connections also shown to the sub-market areas to the north.
March 2008 283 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 12.4: Ward level TTW flows of 30 people or more
At flows of 30 people or more most wards are shown to be connected with an area of employment.
The identified sub-markets are reinforced and the complex levels of interplay between smaller markets identifiable.
Significantly there remains a clear split east to west with Flintshire and Wrexham shown to be looking to the east and Denbighshire to the west.
The strong linkages along the A55 are also clearly evident linking a number of sub- markets.
12.16 The analysis of TTW data clearly shows the existence of lower level functional sub-market areas. In order to assess the key differences between these markets wards have been assigned to one of six identified market areas as shown on the following plan.
March 2008 284 Wrexham CBC, Flintshire BC, Denbighshire BC
Figure 12.5: Sub-market housing areas
12.17 This analysis has using ward level TTW flows identified six sub-market areas five of which lie directly within the Core Study Area. These areas are defined by flows of people to core towns within their boundaries and are listed below. These functional areas form the spatial basis for the analysis within the rest of this section which looks to identify their key distinguishing
March 2008 285 Wrexham CBC, Flintshire BC, Denbighshire BC
characteristics building on the earlier assessment of a range of socio-economic and housing factors.
• Conwy Coast (Outside Core Study Area) – includes towns of Conwy, Llandudno and Colwyn Bay
• Deeside, Chester and hinterland – stretches into the authorities of Chester and Ellesmere Port and includes the towns of Buckley, Mold, Connah’s Quay, Shotton, Queensferry, Flint in Wales
• South rural Denbighshire – dominated by rural areas but includes the towns of Ruthin and Denbigh
• North Denbighshire – dominated by the economic driver of Bodalwydden and St Asaph as well as the towns of Rhyl and Prestatyn
• South west Wrexham – includes the settlements of Chirk, Ruabon and Llangollen in Wrexham
• Wrexham – dominated by the town of Wrexham and to a lesser extent the large industrial estate to the east and stretches across the border into Flintshire
12.18 Using Census 2001 statistics it is possible to build up composite averages from ward data for these sub-markets to allow for direct comparison of their housing stock, including price and the breakdown of the population by occupation.
12.19 The table below shows selected key indicators which allow for assertions to be made regarding the future role of these housing market areas based on the analysis in the preceding section.
Figure 12.6: Key indicators for Sub-market areas
Chester Deeside South South rural and North West Indicator Denbighshire Hinterland Denbighshire Wrexham Wrexham % Owner-Occupied 72.0% 73.4% 74.3% 61.1% 67.1% Tenure % Social Rented 14.5% 17.9% 12.1% 28.5% 24.7% % Private Rented 9.2% 6.1% 10.7% 7.3% 6.0% Vacant % Properties vacant 5.4% 3.4% 4.0% 4.8% 3.1% % Detached 49.5% 30.4% 43.7% 32.0% 31.9% House % Semi-detached 26.2% 40.2% 33.7% 34.1% 36.9% Type % Terraced 17.2% 20.0% 11.2% 25.3% 20.6% % Flats 6.9% 9.2% 11.0% 8.4% 10.4%
March 2008 286 Wrexham CBC, Flintshire BC, Denbighshire BC
% 2 rooms or more 1.1% 1.6% 2.0% 1.3% 1.6% Size of % with 3 - 4 rooms 24.1% 20.7% 32.2% 27.1% 25.1% House % with 5 - 8 rooms 74.8% 77.7% 65.9% 71.7% 73.3% House Overall house price 176,918 164,103 140,335 150,582 162,004 Price Overall without 129,468 130,581 115,946 116,102 126,817 (Average) £ detached % Managers and 12.4% 13.0% 13.3% 11.2% 11.3% senior officials
% Professional 12.3% 9.8% 8.4% 8.7% 9.5% occupations
% Associate professional and 13.5% 12.8% 12.0% 11.0% 12.3% technical occupations % Administrative and 9.8% 12.1% 11.3% 9.3% 11.1% Occupation secretarial occupations (% of people % Skilled trades 16.2% 12.1% 13.7% 16.0% 12.9% aged 16-74) occupations % Personal service 10.1% 6.4% 9.8% 8.2% 7.4% occupations % Sales and customer service 5.0% 9.0% 9.1% 6.3% 8.2% occupations
% Process; plant and 9.4% 12.0% 9.2% 15.6% 14.6% machine operatives
% Elementary 11.4% 12.9% 13.3% 13.6% 12.7% occupations Source: Census 2001, Land Registry 2007, CACI 2006
12.20 A number of key distinctions can be made when comparing the different sub-areas, these are listed below under the umbrella headings:
Tenure
• The two sub-markets covering Denbighshire and the sub-market stretching from Flintshire into Chester all contain high levels of owner-occupancy, all being over 70%. In contrast South West Wrexham records a relatively low percentage at only 61% reflecting the location of a number of social housing estates in this market area;
• The higher levels of social rented stock within the two sub-markets covering much of Wrexham set them apart from the other market areas and have implications for the differing requirements for affordable housing in these areas; and
• The North Denbighshire sub-market is notable for having a low proportion of social rented stock, just over 12%. However, it is notable for having a comparably large proportion of
March 2008 287 Wrexham CBC, Flintshire BC, Denbighshire BC
private rented stock reflecting the concentration of HMOs within the seaside towns of Rhyl and Prestatyn. This is a defining characteristic of parts of this sub-market;
Vacancy
• The sub-market of south rural Denbighshire records the highest vacancy rate at over 5%. This is likely to reflect a number of vacant run-down properties within those more peripheral rural areas which have not witnessed a surge in demand; and
• The sub-markets with the highest urban concentrations appear to have the lowest vacancy levels, these being the Deeside submarket and the Wrexham sub-market.
House Type
• High levels of detached properties are shown in the sub-markets located across Denbighshire in particular in the south rural Denbighshire market where it nearly reaches 50% of the stock. These rural areas offer attractive areas to live in terms of their natural environment and historical and current development has been skewed towards larger properties;
• In contrast the more urban areas show higher proportions of semi-detached properties, these high proportions are shown in the Deeside sub-market and the Wrexham sub- market. This reflects the building of large suburbs around urban areas often dominated by this housing type;
• All of the sub-market record relatively low levels of terraced housing, however, this is particularly true of the North Denbighshire sub-market where this property type only makes up just over 11% of stock. However, significantly this sub-market area has the highest proportion of flatted properties a direct result of the concentration of these properties within the seaside towns; and
• The Wrexham sub-market also records a relatively high level of flatted properties at 10.4%.
Size of House
• Reflecting the higher proportion of flatted properties, North Denbighshire shows the highest proportions of dwellings with 2 rooms or fewer and those with 3 – 4 rooms. Both of these categories represent smaller house types and clearly show the concentration of bed-sits and smaller dwellings within the seaside resorts in this sub-market area.
House Price
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• South Rural Denbighshire clearly records the highest overall average house price, although significantly the two housing market sub-areas which cross over the English border into Chester also show high average house prices lending credence to the noted ‘Chester effect’ on prices;
• Looking at the prices when detached properties are removed provides an indication of the relative differences in terms of the more ‘entry level’ priced properties. It is clear that North Denbighshire is the sub-market with the lowest average price, closely followed by South West Wrexham;
• It is clear that the Deeside sub-market has the highest average price without detached providing further evidence of the issues regarding affordability which have spread across the English border. Significantly though, south rural Denbighshire’s average without detached price is relatively close indicating that this sub-market is also facing acute affordability problems.
Occupation
12.21 As noted within the future markets section the link between occupation and income has implications for housing choice and the ability to access different tenures within the housing market. The following key distinctions can be identified from the different occupational breakdowns of the sub-markets:
• The two sub-markets covering Wrexham record notably low proportions of people employed in occupations associated with higher earnings and higher skill levels. They both record low averages of managers and senior officials and professional occupations. Significantly North Denbighshire records the lowest level of professional occupants despite having the highest proportion of managers and senior officials;
• South rural Denbighshire stands out as having a high proportion of these higher earning occupations, particularly in terms of professional occupations and associate professional and technical occupations;
• The Deeside / Chester sub-market records the highest proportion of administrative and secretarial occupations, this is likely to reflect the higher number of office related employment opportunities both in Deeside and in Chester over the border;
• The sub-markets of south rural Denbighshire and south west Wrexham are clearly distinct in terms of having high proportions of people employed in skilled trade occupations. This is likely to reflect the concentration of people who have been traditionally employed in specific industries within these more rural areas;
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• In contrast the higher proportions of sales and customer service occupations can be found within those sub-markets with greater urban concentrations. These jobs are associated with relatively low levels of pay and are often located within town centres or business parks and attract people to work relatively locally to cut down on commuting costs;
• These more urban sub-markets also include the larger industrial estates within the Core Study Area, people’s choice to live and work in relatively close proximity is reflected in the higher proportion of people employed as process, plant and machine operatives; and
• In terms of elementary occupations south rural Denbighshire stands out as having the lowest proportion of this occupation type with the other sub-markets all recording relatively similar levels. Implications of future housing market change
12.22 The key distinctions between the sub-markets suggest that they are likely to be affected in differing ways by the changing housing market and require different policy approaches to deal with their key issues. This section looks to apply the assertions made regarding the future direction of the housing market in the preceding section to these sub-market areas. It is likely that distinctions will need to be made within strategic policy between the types and tenures and levels of development to be required within these functional areas in order to deliver balanced housing markets.
Locating housing within the sub-areas
12.23 Significant levels of future housing requirements have been proposed through the Discussion paper produced by the North Wales Local Authorities examined in section 10. In Denbighshire and Flintshire rates of building are likely to be increased in order to meet these targets. The capacity section has reviewed the location of existing potential sites to deliver this new supply of housing within each of the authorities, however, consideration needs to be given to the location of future housing both in relation to the existing capacity and future new sites.
12.24 The map of extant planning permissions in section 11 clearly shows that there is a significant pipeline of housing development in and around Wrexham town centre stretching along the A541 up towards Flintshire and therefore falling within the Wrexham sub-market. There is an absence of other large clusters within the other authorities although there are a significant number of smaller pipeline housing developments within the Deeside, Chester sub-market area.
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12.25 These two sub-market areas include employment hubs and also both have very good linkages to Chester (another significant employment hub) via the A483 and the A55. This reinforces the location of significant proportions of the future housing requirements within these areas ensuring that housing is delivered in close proximity to employment. It is important however, that good quality employment sites are not compromised along these routes as this transport network and the proximity to Chester represents the best strategic locations for developing new office space to assist in the future economic growth of the area.
12.26 Significant employment is forecast in Denbighshire and the major employment hubs and infrastructure are located within the North Denbighshire sub-market. This area is well connected to other elements of the Core Study Area and Conwy by the A55. Preference should therefore be given to locating housing within those areas where connections are strong and where sustainable links can be created to employment opportunities.
12.27 A key element of supplying new housing is looking to alleviate affordability issues which have been identified as existing with each of the sub-market areas. Consideration therefore needs to be given in distributing future housing growth to ensuring that the supply of housing addresses this issue, with this including the need for new housing in the more rural sub- markets.
Affordable Housing
12.28 The assessment of housing need stressed the importance of delivering affordable housing throughout the Core Study Area. However, an assessment of the current tenure profiles of the sub-markets and the location of areas with particularly acute affordability issues has been considered leading to the following conclusions:
• North Denbighshire has a particularly low level of social rented housing, however, it has been identified as having affordability issues relating to particularly low levels of income. These are concentrated along the coastal towns and one of the impacts noted by stakeholders has been an increase in Houses of Multiple Occupation (HMO) which can be unlicensed and impact on the overall quality of stock. Delivering alternative affordable housing, including social rented stock, in areas within this housing market through mixed- tenure housing sites is considered to be an important consideration in alleviating this problem. This will ensure that existing stock can be used in a more sustainable manner potentially providing better quality family housing or quality flatted conversions.
• The Wrexham sub market contains a significant concentration of areas where affordability issues are particularly acute as a result of house price pressures from the adjacent
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‘Cheshire market’. Wrexham as a whole has a relatively large social rented stock and therefore following the analysis of housing need focus should be placed on delivering intermediate housing stock in this area in line with the recommendations included at the end of section 9.
• A similar situation is observed within the Chester, Deeside sub market although this area contains a lower proportion of social rented stock. In order to address building affordability issues within this area and the need to ensure that housing is delivered which meets the need of local employees emphasis should be placed on delivering a mix of both social rented and intermediate stock. A focus for this delivery should be those areas to the west of the sub market where affordability ratios are particularly high.
• The more rural sub markets also clearly have affordability issues and it is important that affordable housing is delivered in these areas to ensure that there is a choice for households to remain within these market areas. A mix of affordable housing should be provided within these areas again through the delivery of mixed tenure developments and further consideration needs to be given to the capacity to deliver the quantum of supply indicated as being required through the housing needs studies.
Type of Housing
12.29 Section 10 has provided an indication of the type of housing, by broad housing groups, required at an authority level over the plan period. The profile of each of the sub markets includes a 2001 breakdown by house type and therefore it is possible to infer the type of housing which should be prioritised within areas.
12.30 It is clear that the more rural sub areas contain high concentrations of the larger stock types and therefore it follows given the relatively high requirement for smaller stock 44% of overall stock (made up of categories terraced and flatted which are considered to represent smaller stock) that there is a need to deliver higher quantities of this housing type within these areas to create balance.
12.31 Within the other three sub markets (Wrexham, Deeside-Chester, and North Denbighshire) it is important that a mix of housing types are delivered in order to meet the requirements of different household types and ensure choice is available.
12.32 In delivering flatted accommodation consideration should be given to the target market. Wrexham town centre is already starting to see the development of significant numbers of flatted properties and this will start to ensure the development of further choice for first time buyers as well as other households at whom this product is targeted.
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13. CONCLUSION
13.1 In this concluding section we return to the 5 key questions posed at the beginning of the Housing Market Assessment and provide a précis of the study findings in relation to these questions. The key questions are:
• Where are we now? – A clear understanding of the current housing market has been presented along with an identification of inherent challenges and distinct characteristics based on a robust analysis of the evidence base;
• How did we get here? – Identification of the current and future drivers of change within the housing market using analysis of past trends impacting on the housing market;
• Where are we going? – Assessment of the key strategic drivers of change within the housing market to identify a likely future trajectory of change and the development of the key characteristics/nature of the projected housing market forward up to 2021;
• What are the implications? – A clear identification of the likely broad future scale, type and location of housing demand; and
• How do we get there? – Recommendations regarding the best way to meet these challenges and the required changes to ensure that the objectives of housing and planning policy are achieved.
13.2 The section concludes with a series of policy recommendations for consideration by the authorities in their development of housing policy.
A note on Housing Market Definition
13.3 A key part of the housing market assessment is the examination of the key flows of people, jobs and housing transactions which together define the housing market area.
13.4 This study is the first HMA to be undertaken across the three authorities which make up North East Wales. The analysis of housing market areas clearly identified that this study area forms a functional housing market area reinforcing the need for continued joint working between the authorities.
13.5 Given the close spatial relationships between the three authorities defined as the Core Study Area it is the recommendation of this report that the authorities consider developing complementary housing policy through their respective planning policy frameworks. The production of this HMA has ensured that the three Housing Strategies being produced by the
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authorities all share a joint evidence base and on this basis are therefore complementary in their content. In the medium to long term there may be potential to undertake a closer partnership approach to policy on key issues such as housing supply and distribution and potentially to develop joint Housing Policy/Strategy.
13.6 However, the existence of significant relationships with bordering authorities creating adjacency issues with Chester and Ellesmere Port in the east and Conwy in the West were also identified. Consideration has therefore been given throughout the assessment to these adjacency issues.
13.7 This HMA also proposes a monitoring framework which is designed to enable the evidence to be updated by partners periodically.
Where are we now?
13.8 The HMA has used a range of socio-economic, housing and market indicators to profile the current operation of the housing market and its distinguishing features.
13.9 The Core Study Area is made up of 376,700 people and the total dwelling stock comprises 158,441 dwellings.
13.10 The housing market has been consistently strong across the three authorities with marked house price increases over the last five years. In line with the national market house prices within the Core Study Area have risen exponentially over recent years, the average house price within the area has risen from £74,753 to £155,032 between 2001 and 200679.
13.11 This has followed wider national trends but has also been driven through market pressures exerted from across the border in particular in relation to the housing market in Chester. This high level of demand is reflected in low levels of vacancy across all three authorities leaving limited capacity to absorb new and additional demand using existing stock.
13.12 In terms of the physical stock of housing the tenure composition reveals 82% private sector housing and almost 18% social housing, although this masks distinctions between the three authorities and settlement areas. Within this, there is a strong reliance on local authorities to house social occupiers, with over 14% of total stock made up by local authority property, as compared to just under 4% being registered social landlords. This is particularly acute in Wrexham, where over 21% of all stock is local authority managed.
79 Overall average prices rises taken from quarter 4 (Land Registry)
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13.13 Overall the existing housing stock within the Core Study Area represents a relatively balanced offer, although there is an above average level of detached and semi-detached houses as compared to Wales and England, and a below average proportion of terraced and flats/maisonettes set against Wales and England averages80. Recent development have not really contributed to re-addressing this balance with the new build stock profile skewed towards the delivery of medium sized family properties (e.g. 3-bed mews or semi-detached properties). However, pressure to deliver higher densities and meet new emerging demands has led to the development of new products in for example Wrexham town centre, where town centre flatted developments have started to be seen with a pipeline also planned for the future.
How did we get here?
13.14 A number of key drivers have been identified through a detailed assessment of the current housing market which have impacted on its evolution and will continue to impact on future housing requirements.
13.15 The HMA has highlighted that the authorities have experienced an unprecedented period of growth over recent years driven in the major part by high levels of migration. This trend of growth and the pace at which it has occurred needs to be understood in the context of North Wales’ wider relationships and how. In order to fully understand these relationships and their implications on the current level of housing demand and indeed the future level of demand for the Core Study Area it is necessary to accept that:
• North East Wales is not a self-contained economy. Over time it has developed strong labourforce and business links with neighbouring authorities and in particular the City of Chester, Ellesmere Port and Neston and part of Wirral
• These related areas have emerged as strong economic drivers in the North West economy and inter alia of great importance to North East Wales
• This economic growth has contributed to increasing household demand, rising house prices and increasing competition for housing
• Over time this has extended demand for housing over a wider area with commuting patterns increasing between North East Wales authorities and those bordering the area
13.16 These drivers are explored in more detail broken down under a number of specific sub headings below.
80 Proportions calculated from 2001 Census
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Demographic Drivers
13.17 The populations of all three authorities have grown over the last 20 years, with the Core Study Area witnessing an increase in population of 8.7% between 1985 and 2005 with migration playing a major role in this growth over this time period. This has been driven in part by pressure from the overheating housing market in Chester.
13.18 Alongside this the age structure of the population has changed over recent years with the three areas witnessing growing working age and elderly populations.
13.19 Changing demography, increased rates of household dissolution and changing lifestyle aspirations have also led to changing trends in household sizes, with the average household size having fallen notably over recent years therefore contributing significantly to an increased demand for housing.
Economic Drivers
13.20 All three authorities have witnessed a period of employment growth with the most obvious drivers being Manufacturing, ‘Tourism’ (or hotels, distribution and restaurants) and the public sector. This has led to a significant drop in unemployment with the economy almost reaching full employment.
13.21 Despite this growth trend, the structure of the sub-regional economy is skewed towards manufacturing sectors, which are exposed to increasing globally competitive pressures. Manufacturing employment is under increasing pressure within the UK, the impact of which has been evidenced through falling employment levels within these sectors in the Core Study Area and recent job losses in major employers in Wales.
Housing Demand Drivers
13.22 The analysis indicated that all three authorities are undergoing a period of transition with new service sector jobs replacing employment losses in traditional manufacturing sectors. This changing employment structure has also had implications with regard to the levels of income and the ability to purchase housing shown by households within the authorities in relation to the rise in house price rises. The relative level of income change against house price change has led to a notable gap calculated through an affordability ratio using these two indicators.
13.23 The analysis within the HMA has shown that all three authorities have seen affordability issues becoming a problem for an increasing amount of households. Average income to price ratios in the authorities range from 4.3 in Flintshire to 4.7 in Denbighshire based on lower
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quartile house prices and median income81. This has significant implications for First Time Buyers and other households looking to purchase housing who do have existing levels of equity, leading in turn to increasing pressure on other housing tenures. It is important to note that this is a national trend but that the ratios recorded in the Core Study Area are of notable concern when benchmarked against other authorities in the north of England.
Housing Supply Drivers
13.24 On average 785 private sector units have been delivered each year between 2000 – 2004, with levels growing year-on-year since 2001. However, market evidence suggests that the new supply of stock has been heavily dominated over recent years by developments of 3-4 bedroom housing. Flintshire has also seen a lack of large-scale development in the last few years as a result of the current status of its UDP, which remains un-adopted and is currently undergoing a Planning Enquiry.
13.25 A falling quantum of social rented stock has impacted on the balance of housing choice available to households, with this trend identifiable across all three authorities.. This has been driven by Right To Buys and a notable lack of development activity to replace stock lost. Between 2000 and 200482 there were 3,392 local authority Right To Buy sales in all three core authorities. In contrast there were 307 affordable units developed directly by registered social landlords in the same period and no units developed by local authorities this has further compounding the rising level of housing need driven by house price rises which have outstripped increases in salary.
Where are we going and what are the Implications?
13.26 A detailed assessment of the likely requirements of future housing provision has been undertaken taking into account the major drivers identified and summarised in answering the preceding questions. These drivers are closely related to those which have driven the housing market historically and the most up-to-date projections for demographic and economic drivers have been used to explore a range of scenarios generating additional pressure on the housing market.
13.27 Examining the drivers behind the current housing market it is clear that this Core Study Area has played an important role in the economic growth of the sub-region through the provision of new housing to meet emerging economic and associated housing demand in the Wider Reference Area which includes authorities in England, in particular Chester.
81 Sourced from CACI Paycheck data
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13.28 This has been reflected in high levels of migration into each of the authorities over the last five years fuelling high levels of demand for housing which has been matched through high levels of completions.
13.29 In forecasting future housing requirements the analysis within the HMA has identified that a number of factors are likely to change these relationships and therefore potentially the role of the Core Study Area in the future. These factors are listed below and will have been identified as critical in assessing the likely quantum/type/tenure of housing within the Core Study Area in the future:
• A narrowing of the house price gap in those areas bordering English authorities;
• Generation of increased employment opportunities in Denbighshire;
• A pipeline of speculative economic development projects which will continue to enhance local employment opportunities;
• A changing policy environment within the bordering English authorities with higher rates of housing permitted under the draft RSS;
• Increasing commitment from Central Government to boosting the supply of new housing in English authorities83;
• A forecast decrease in household size;
• The increasing importance of international migration; but
• Relatively stable patterns of natural change.
13.30 The inter-relationship between these factors will be key to levels of demand for housing in the Core Study Area in the future. The increased supply of housing in the bordering English authorities and the narrowing of the price differential could lead to a reduction in migration of households into the Core Study Area which coupled with a forecast stable level of natural population change would lead to a level of demand which is lower than that witnessed over the last five years. However, this will not happen quickly with a notable lag-time likely to be witnessed. A number of the other factors could also offset the impact of this reduced demand on recent levels including the strengthening of local economies, falling household size and the continued attraction of international economic migrant workers to the area.
Future Quantum of Housing Required
82 Figures represent the latest recorded Welsh Housing Statistics 83 ‘Housing Green Paper – Homes for the future: more affordable more sustainable’ CLG – July 2007
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13.31 A range of scenarios regarding future housing requirements have been explored in Section 10. This analysis concluded that for the above reasons caution needs to be applied in the use of trend data from the last five years to forecast future demand, i.e. planning at levels of growth witnessed over recent years. However, despite this assertion it is anticipated that these drivers will take time to impact on the level of household demand – in the short term demand is likely to remain high. In particular demand for affordable housing is likely to remain at the forefront of the policy agenda and increasing the stock of affordable products is key to maintaining a balanced housing market and facilitating economic growth.
13.32 Therefore it is recommended that over the plan period the authorities jointly plan to deliver future growth which is informed by longer term trends in household growth but importantly ensures that policy takes into account the fact that demand is likely to remain high over the next few years. Extending the analysis of previous rates of growth beyond the last five years reveals a more moderate rate of increase, at which it is appropriate to plan over the forthcoming period. This therefore projects a moderated level of growth which takes into account the factors outlined above which are likely to affect demand within the Core Study Area.
13.33 The following housing requirements are presented in Section 10 and have been agreed by the authorities in North East Wales as part of a wider process which has run alongside the production of this HMA.
Figure 13.1: Proposed annual requirements
Requirement 2003 - 2020 Annual requirement (17 years) Denbighshire 425 7225 Flintshire 480 8160 Wrexham 420 7140 Core Study Area 1325 22525 Source: Annual requirement figures sourced from the North Wales Local Planning Authorities Discussion Paper – May 2007
13.34 The analysis within the HMA has reinforced the arguments for planning at this projected rate of growth however, a number of other scenarios have also been explored and should be given consideration in developing a responsive planning framework. As this HMA has sought to illustrate housing markets and the local economy are dynamic and by their nature require careful monitoring in order to track their development and inter-relationship. Given the pipeline of major economic development projects that is recorded, the future impacts of economic growth need to be monitored and this information disseminated to influence policy.
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The Type and Tenure of Housing Required in the Future
13.35 The stock profile analysed in Section 6 indicates that all three authorities had higher than average quantities of larger houses (detached/ semi-detached). Recent supply of new housing has perpetuated this stock profile. The analysis of future housing types required has revealed a need to build a more balanced stock of new houses. In practice this means not exclusively building one type of housing and demanding that developers not only provide a mix of tenures but a range of house sizes. Given the prevailing trend towards smaller household sizes, this should include smaller stock that comprises units that are suitable for single and family occupation, including the elderly.
13.36 The analysis undertaken within this HMA has reinforced the assertion that there is a significant undersupply of affordable housing within the core study area and each of the constituent authorities given the recent increases in house prices, the reduction in the amount of available social rented housing and the current lack of development activity to bring forward new affordable (including intermediate) housing.
13.37 House prices have led to the rapid rise in all levels of the housing market with even those properties which in the past would have been considered as entry level properties now recording prices which are beyond the reach of those on low income or lacking existing equity.
13.38 In all three authorities the rise in house prices and the linked rise in private rental levels has produced a wide gap between the social rented sector and housing on the open market. This suggests a role for ‘intermediate’ housing in bridging this gap and assisting in alleviating pressure on the social rented sector allowing those most in need to access this housing tenure. It is a recommendation of this report that the authorities work with social housing providers to design appropriate intermediate housing products tailored to their areas.
13.39 Affordability for indigenous households and first time buyers remains one of the biggest delivery challenges for all three authorities. The housing needs work considered as part of this study shows marked differences between local income levels and house prices. This therefore represents a significant latent housing need within the Core Study Area and a mismatch between supply and demand.
13.40 The analysis has also indicated that more affordable housing will be required in the future as the economic circumstances of households change.
13.41 Assessing the different benchmarks for entry into different tenures and the spread of household incomes has suggested that where intermediate housing is developed it is
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important that it offers significant discount against market value. This is supported by the income profile and the ratios of affordability which suggest that simply reducing the value of market housing by a small percentage will not make it affordable to newly forming households. The methodology undertaken to establish benchmarks into certain tenures should be considered when new housing developments are proposed and the level and type of affordable housing provided reflective of the level of need established84.
13.42 The following table shows a headline assessment of the level of finance which could be reasonably expected to be raised against average household income levels for each of the authorities to serve as an example of the approach noted above. Obviously these represent average incomes and the analysis within Sections 7 and 9 has refined this to show the differing spread of incomes and indeed the spatial differentiation across the Core Study Area with a significant proportion of households identified as having notably low levels of income. Therefore the incomes fed into this assessment should be based on the local average income identified within and around the development, where the development is of a major scale consideration should be given to the affordability assessment of the whole authority as undertaken within this HMA.
Figure 13.2: Indicative Finance available based on Average Income
Entry Level price Entry level Entry level assuming mortgage CACI purchase purchase constituting no Average price price more than 25% Income assuming 3.5 assuming 5 x monthly income86 200685 x income income (approx) Denbighshire £24,000 £84,000 £120,000 £100,000 Flintshire £26,000 £91,000 £130,000 £111,000 Wrexham £24,000 £84,000 £120,000 £100,000 Source: GVA Grimley, 2007
13.43 The relatively low levels of social rented stock within Flintshire and Denbighshire and the high demand for stock and increasing affordability issues associated with house prices and shifts in
84 This should recognise through an assessment of the local level of household income (CACI data as analysed in Section 7 goes down to 6 digit postcode level) that housing costs should not represent more than 25% of overall income e.g. interest only mortgage repayment or rent should not exceed this level. Relative levels of mortgage lending available to households should be considered i.e. around 3.5x income to provide a robust assessment of whether proposed housing is affordable or not. 85 Note: these incomes should be varied to reflect the local average income in proximity to where the development is proposed. Consideration should also be given to the spread of incomes as the analysis within Section 9 identifies.
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the economic structure means that there is justification for developing further social rented housing to meet demand in the future. Within Wrexham emphasis should be placed on delivering intermediate housing to provide greater choice of affordable housing options and looking to adapt low demand social rented properties and align with future requirements.
How do we get there?
13.44 In this final section the conclusions reached in answering the preceding questions are translated into policy recommendations and considerations. Consideration has been given to the issues raised through stakeholder consultations and the cross authority consultation event held in Wrexham in April.
13.45 These recommendations are the opinion of the consultancy team and are provided for the purpose of informing policy discussions and decisions amongst the three authorities in the development of future policy.
1. Continuing to plan for the real economic and housing geography
13.46 The HMA has identified a strong level of functionality between the three authorities defined as the Core Study Area and has reinforced the existence of a shared housing market within this area and the strong linkages with adjacent authorities, particularly Chester, Ellesmere Port and Conwy.
13.47 Housing markets are dynamic by their nature and over time it is more than likely that the extent of the market area and the strength of functional relationships will alter. Changes in policy influencing the level of supply and location of housing and new employment opportunities will both influence choices available to those moving house and will therefore affect the scope of the ‘market area’ and impact on the demand and need for the planned level of future housing required.
13.48 Continuing to plan across the three authorities of North East Wales is therefore very important in ensuing that the level of housing planned for reflects this functional geographical area. If relationships with adjacent authorities continue to strengthen there will be a need to ensure that plans are prepared in tandem following the same timetable and methodologies.
13.49 Through policy partners should therefore:
86 Based upon interest only repayments on a 25 year mortgage at 6% interest, monthly payments are therefore £500 for Denbighshire and Wrexham and £550 for Flintshire. Note respective repayment monthly charges would be £652 and £717 respectively.
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1.1 - Continue to plan together to delivery future housing policy.
1.2 - Ensure dialogue with adjacent authorities and discuss changes in policy.
1.3 - Consistently monitor and update housing market research as part of a phased programme. 2. Planning for the right level of growth
13.50 The HMA has illustrated that North East Wales has been in many respects a victim of its own success and its connectedness with buoyant market areas in West Cheshire, Merseyside (Wirral) and to a limited extent Shropshire. The delivery of comparatively high levels of housing completions within the three authorities has attracted the migration of households to this area with adjacent authorities including Chester limiting the supply of housing through policy further fuelling this movement.
13.51 Housing supply has therefore come forward over recent years that has met what is essentially externally fuelled demand, albeit meeting elements of local, indigenous household demand.
13.52 A number of factors have been identified within the analysis which suggest that this high level of in-migration and therefore demand in housing resulting from a rapidly growing population is unlikely to be sustained throughout the plan period. Demand is likely to remain high in the short-term, however, the overall level of future housing to be planned for should represent a more moderated picture reflecting a reduction in levels of migration.
13.53 It is clear through an examination of the economy that the three authorities are forecast to generate additional employment opportunities, the delivery of housing advocated by the HMA will assist in facilitating this growth. However, should employment generation be accelerated through the successful delivery of economic projects or the attraction of new inward investment rates of housing delivery may need to be raised to ensure this growth is sustainable.
13.54 The policy implications emerging therefore relate to:
2.1 - The necessary provision of market housing to sustain economic growth and prosperity. The following annual provision targets are therefore suggested: Denbighshire 425, Flintshire 480, and Wrexham 420.
2.2 - Delivering a level of housing which meets current high demand but also reflects the possible reduction in demand over the longer term.
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2.3 - Ensuring that the impact of new employment generating projects are reflected through the delivery of housing which assists in encouraging sustainable travel movement. 3. Meeting current and future housing needs
13.55 Within the three local authorities the local occupational profile has been less ‘dynamic’ than the changing stock profile over recent years which as noted above has been meeting external as well as local demand. This factor, when combined with a ‘rising tide’ of house values, has exacerbated issues of housing affordability. Coupled with market forces, the static social stock profile and relatively narrow range of affordable housing that has been delivered intensifies unmet demand for affordable housing.
13.56 The prognosis for the economy and housing market implications suggest that there will not be a structural break with the trends that have caused and created the identified affordability issues facing all three authorities. The policy implications emerging therefore relate to:
3.1 - The need to secure greater levels of affordable housing as part of market housing developments.
3.2 - The need to protect the existing stock of social rental housing in all three authorities (albeit with a managed approach to ensuring the stock profile matches demand).
3.3 - The need to deliver a greater choice of intermediate housing products to ‘boost’ the stock of affordable homes.
3.4 - Development of new social rented stock within Denbighshire and to a lesser extent Flintshire which both have relatively low levels of this tenure as part of their overall housing offer.
3.5 – Retention of social rented stock within Wrexham and future consideration of the need to realign stock to meet household demand for this tenure e.g. smaller households and elderly provision alongside the provision of adequate family housing.
3.6 - Ensuring that the indigenous housing needs of rural areas are met: Maximise the delivery of affordable housing units on remaining potential housing sites.
13.57 A number of additional specific recommendations regarding specific requirements of BME households, international economic migrants and the Gypsy and Traveller population are included within a report produced alongside this HMA87.
87 ‘BME / Gypsy & Traveller / Economic migrants – An assessment of housing service provision’ – GVA Grimley, June 2007
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4. Achieving a good housing mix
13.58 The occupational forecasts suggest the need to continue to ensure the delivery of a range of housing types to ensure the delivery of a balanced market in the future.
13.59 The current stock profile across the Core Study Area is distinguished by above average proportions of semi-detached and detached properties, which has been further compounded by high levels of completions of this type of property. Emphasis should therefore be placed within policy on encouraging a more diverse mix of properties within new developments.
13.60 The centre of Wrexham has started to witness the introduction of flatted properties. Continuing to develop this market, at an appropriate level, will help to develop a greater mix of housing and vary the overall housing offer whilst also creating a resident population to sustain shops and services. Opportunities should also be identified in other urban centres for delivering a quality flatted product which aimed at new households which will contribute towards meeting the increased demand for smaller single person or couple households projected through the demographic projections.
13.61 The demographic projections forecast an increasingly ageing population which will place additional pressure on the existing housing stock, an issue which was also confirmed through the market testing exercise. New housing developments should therefore look to integrate Lifetime Home Standards88 in order to ensure that units are sufficiently flexible to continue to meet household requirements in the future. The delivery of new housing targeted at the elderly demographic should be included within new large developments where it is appropriate. The location of these properties is important with proximity to services and public transport links important to assist those with mobility issues.
13.62 A range of provision for elderly households should be explored, with further work required across the authorities to ascertain the level of specialist housing required. Housing options could include:
• Sheltered housing – schemes typically consist of between 15 and 60 dwellings which may be self-contained flats, bungalows or luxury apartments for purchase or rent.
• Extra care housing – Often self-contained houses which can be represented by many built forms, including blocks of flats, bungalow estates or retirement villages.
88 ‘Lifetime homes 21st Century Living – Quality, Flexibility and Choice’ – www.lifetimehomes.org.uk
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• Care homes – units owned and operated by a separate body which could be a private company/individual, charity or the local authority.
13.63 Although this HMA has not examined specifically issues relating to increasing numbers of HMO’s, particularly along the coastal areas of Denbighshire given the high levels of migration into the authorities, including new economic migrants, this is likely to become an increasing issue89. Management measures are therefore required in order to ensure that the housing offer meets this particular ‘demand’ without impacting negatively on neighbourhoods and the wider housing market.
13.64 The policy implications emerging therefore relate to:
4.1 - Ensuring that new housing developments of a sufficient size incorporate a good mix of housing, incorporating family housing alongside starter homes and homes which are suitable for elderly households.
4.2 - Identifying appropriate areas to develop new housing products which are relatively underrepresented within the Core Study Area including quality flatted developments within urban centres reflecting the forecast increase in smaller single person and couple households.
4.3 - Monitoring market led changes in tenure from owner-occupied to rented properties to meet increasing demand resulting in part from affordability issues but also from increasing numbers of economic migrants. The introduction of the licensing of private landlords should be considered in areas where the private rented sector has grown significantly. Again this may be of greatest significance to coastal towns with seasonal economies. 5. Planning to accommodate future demand
13.65 Sufficient capacity has been identified within each of the authorities with the exception of Flintshire to deliver the projected rates of housing required over the forthcoming years. Consideration needs to be given to the correct phasing of opportunity sites to ensure that supply of sites is linked to economic opportunities.
13.66 In the case of Flintshire the current supply is not representative of the true capacity as the authority is currently undergoing a UDP enquiry, the outcome of which will be a new supply of housing sites to meet future housing requirements. The identification of sites is intended to reflect the requirements for future growth already established and identified within this HMA.
89 Note: the analysis in Section 4 suggested a propensity for economic migrants and BME households to be proportionally over-represented within the private rented sector.
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13.67 The levels of extant planning permissions indicate a significant amount of pipeline supply with the Core Study Area this impacts on the ability to shape the market in the short-medium term in both the type of housing and also the potential to extract planning gain to deliver new tenures and service provision. This issue is particularly apparent in Wrexham which has recently seen a very large amount of residential application granted permission.
13.68 Where new social rented stock is intended to be delivered (in particular relating to Flintshire and Denbighshire) this stock should be sufficiently flexible to meet future needs, adhering to the Lifetime Homes Standards90 and should be integrated within new mixed community developments.
13.69 The policy implications emerging therefore relate to:
5.1 - Maximising the delivery of affordable housing on remaining land, with this being particularly important in Wrexham where a considerable amount of future capacity consists of site which already have planning permission.
5.2 - Ensuring the careful management of the land supply in Flintshire following the adoption of the UDP to ensure that development is phased and achieves the policy recommendations made within this HMA.
5.3 - Monitor carefully level of windfall development and the contribution this makes to meeting future housing requirements.
90 ‘Lifetime homes 21st Century Living – Quality, Flexibility and Choice’ – www.lifetimehomes.org.uk
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14. MONITORING FRAMEWORK
14.1 The Housing Market Assessment has benchmarked performance, assessed trends and identified key drivers of change within the housing market. This has then been drawn together to consider, based upon the best evidence available now, the future trajectory of change.
14.2 Housing markets are though, by their very nature, dynamic. The Partners within North East Wales will therefore need to monitor trends and activity in the housing market in a co ordinated and timely manner. This reflects the national ‘plan, monitor and manage’ approach to the planning system and the need to be responsive to changes in the economic and demographic assumptions underpinning the Strategy.
14.3 DCLG guidance91 suggests that monitoring helps to address the following questions:
• Are policies achieving their objectives and in particular are they delivering sustainable development?
• Have polices had unintended consequences?
• Are the assumptions and objectives behind policies still relevant?
• Are the targets being achieved?
14.4 The HMA provides a robust evidence base upon which to construct policy however monitoring plays a vital element in validating and identify fluctuations within the trajectory of the housing market. Throughout the HMA the need to monitor certain elements has been raised in order to raise the level of understanding and identify future issues in relation to both supply and demand.
14.5 Monitoring is intended to be a continuous and proactive process which informs policy development and how and when policies are implemented. A consistent assessment of indicators provides an indication where change is occurring and the direction of that change therefore allowing for corrections to be made and the development of responsive policy.
14.6 Government guidance92 suggests four broad principles which should underpin the development of monitoring frameworks:
• Making use of existing information;
91 Local Development Framework Monitoring: A Good Practice Guide – ODPM, March 2005 92 ibid
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• Being consistent – in particular with regional and national monitoring;
• Setting objectives, policies, targets and indicators; and
• Taking a forward looking approach – in line with ‘plan, monitor and manage’, monitoring should take an analytical and action-oriented approach.
14.7 The fact that the North East Wales study area is composed of three authorities means that comprehensive monitoring is likely to be a time and resource-intensive process. It is therefore critical as stated within the first principle that there is an emphasis on efficiency with existing mechanisms and resources used wherever possible. This has informed our suggested approach and the identification of indicators which should be monitored.
Scope of Current Monitoring Activity Across North East Wales
14.8 Recently emerging national planning guidance has placed increasing emphasis on developing a robust evidence base from which to develop strategy, evaluate delivery levels and assess planning applications against. The vast majority of authorities are therefore now monitoring key indicators relating to society, housing and employment
14.9 Wrexham produces an Annual Monitoring Report which looks to pull together the key planning indicators. This includes updating the housing trajectory through an examination of the supply of properties against the assigned housing requirement figure. A compilation of housing supply data is therefore provided, including the level of houses built over the past year (completions) and the number of planning permissions which have been approved (pipeline). An assessment is also made of the level of housing land available within the authority reflecting development.
14.10 Flintshire and Denbighshire also collect data in order to monitor progress against key indicators as required to feed into Welsh Housing Statistics. However, it is important that all of the authorities collect data in a consistent manner in order to ensure greater consistency when looking to update key elements of the housing market assessment.
14.11 A number of other independent sources collect data on an annual basis and these are assessed briefly below.
RSL monitoring
14.12 RSLs record their own letting information as an ongoing process. In Wales, some of this data is compiled centrally as part of the Welsh Housing Statistics, now undertaken by Data Unit Wales on behalf of the Welsh Assembly Government. However, there are some questions
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regarding compatibility with the way authorities record the data and greater efforts should be undertaken to encourage dialogue between RSLs and the local authority to ensure a consistent and more comprehensive data source is amassed. In particular, RSLs should be encouraged to collect and share more data on lettings made (e.g. who to, where from etc.), tenancy terminations, completions (e.g. mechanism used, unit types, tenure etc.), and overall development activity.
Mersey-Dee Alliance
14.13 The Mersey-Dee Alliance has over recent years commissioned studies which examine the sub-regional area of North East Wales and West Cheshire. This has involved the collection of consistent data across this area. The focus is currently on economic development indicators, with consistent economic forecast data held for the sub-region. However, the intention is to strengthen the agreements and extend analysis to include consistent assessment of housing need. It is important that the authorities of NE Wales ensure that they continue to hold compatible forecast data within this sub-region as this provides a sound base upon which to understand the influence economic change has on household movement.
Welsh Housing Statistics
14.14 A significant amount of data is compiled nationally as part of the Welsh Housing Statistics. As noted above, this work is now undertaken by Data Unit Wales on behalf of the Welsh Assembly Government. They produce a range of housing related statistics on a quarterly basis, made available through their web site. Annual reports meanwhile continue to be produced in May/June of each year, which assimilate quarterly data and cover a wider range of topics.
14.15 However, it should be noted that elements of the Welsh Housing Statistic data appear to conflict between the data collected locally, due largely to the fact that Welsh Housing Statistics are based on the calendar year, whilst local data tends to be assimilated at the end of the financial year. It is important therefore that a more consistent approach is adopted to passing across the data as this provides an easy resource for ensuring compatibility and benchmarking between authorities.
The Housing Strategy Monitoring Framework
14.16 The following monitoring framework is established on the basis of future partnership working between the authorities of North East Wales. In order to ensure consistency across North
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Wales this framework should be shared with the University of Bangor team working on producing a similar study for the North West Wales authorities.
14.17 Further work needs to be undertaken to ensure continued partnership working. The current steering group should continue to procure future work affecting housing markets and also assist in fostering greater officer working between authorities. Continued dialogue between the officers will help in generating continued partnership working.
14.18 The monitoring framework looks to establish the core drivers of the housing market across the city region and establish a structure based around these themes for the purposes of monitoring. This is followed by the identification of key indicators which should be assessed on a regular basis in order to continually validate the objectives of the Housing Strategy.
14.19 Recommendations are included regarding future protocol and the use of resources to implement the process of monitoring across the three authorities.
Market Drivers
14.20 The evidence constructed within the Housing Market Assessments has led to the identification of key strategic drivers impacting upon the housing market within North East Wales.
14.21 Consideration is required of the wider demographic and economic trends which influence the operation of the housing market alongside measuring changes in market dynamics (including supply, demand and price variables) and housing land availability.
14.22 These factors can be broadly captured under five themes. These themes linked to the drivers of change establish the framework for monitoring.
• Market Performance – the housing market is dynamic and this is reflected in changes within the market. Market change has significant implications for the development of new stock and the ability for people to access different sections of the market;
• Demographic Factors – housing need is partially driven by varying demographic dynamics. North East Wales is characterised by a period of sustained population growth driven largely by in-migration. Continued assessment of the level of in-migration is therefore key in identifying the future housing pressures this will cause.
• Economy and Labour Market – the changing nature of the economy and the linked labour market is a key component in assessing housing need. The transformation of the three economies is currently underway and is being directly encouraged by economic development policy. New housing pressures will result from this transformation and
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ensuring a clear understanding of the direction of change is vital if housing is to be provided in tandem.
• Supply Trends – the dynamics between demand and supply of stock represents the critical issue for developing balanced and sustainable housing markets. Evaluating the level of housebuilding and the type of product delivered is a core element of monitoring the ‘health’ of the housing market.
• Capacity – development within the housing market has implications for future capacity. Existing infrastructure (communications and services) and land availability represent finite inhibitors of future development. The monitoring of supply and demand should be performed in line with an assessment of the capacity of areas to deliver development. The intention being to identify areas where capacity is becoming an issue but also recognising where it represents an opportunity (under-used or new schemes).
Key Indicators for Monitoring
14.23 Using the five established themes the following table outlines the key indicators for monitoring across North East Wales.
Figure 14.1: Monitoring Framework
Theme Indicator Geography Data Source Availability of Responsibility Updates Total Population Local Authority ONS Mid-Year Annual Housing Population Estimates
Population by Age Local Authority ONS Mid-Year Annual Housing Cohort Population Estimates
Components of Local Authority ONS Mid-Year Annual Housing Population Change Population (I.e. Natural Estimates Change/Migration Balance) Demographic Factors Spatial Patterns of Local Authority NHS CHR (Table Annual Housing Migration 2a available on request from ONS)
Quantity of Local Authority National Insurance Annual Housing migrant workers Number Allocations (NINos)
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Theme Indicator Geography Data Source Availability of Responsibility Updates Numbers in Local Authority Annual Business Annual Economic employment Inquiry - Check Development (Resident and against forecast Workplace based) figures
Economic Activity Local Authority Annual Population Annual Economic Rates Survey Development Employment by Local Authority Annual Business Annual Economic Sector Inquiry - Check Development
against forecast figures
Workplace-based Local Authority Annual Survey of Annual Economic Earnings Hours & Earnings Development Residence-based Local Authority Annual Survey of Annual Economic Earnings Hours & Earnings Development Household Local Authority CACI Paycheck Annual Housing/Economic Incomes (six-digit Development -
Economy & Labour Market Economy & Labour postcode) Sourced from WAG Jobseekers Local Authority NOMIS Annual Economic Claimant Count Development Incapacity Local Authority Department for Annual Economic Benefit/Severe Work & Pensions Development Disability Allowance Claimants - Joint Measure
Housing Local Authority Planning Dept. End of year figures Planning Completions Geographic calculated but specific available at any point in the year
Completions by Local Authority Planning Dept. End of year figures Planning Tenure and Size Geographic calculated but specific available at any point in the year Housing Local Authority Planning Dept. Calculation on an Planning Trajectory annual basis – (performance review work against ongoing requirements throughout year Housing Supply Trends factoring in loss of stock) Delivery of Local Authority Planning Dept. End of year figures Planning Affordable calculated but Housing - available at any Distinguishing point in the year
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Theme Indicator Geography Data Source Availability of Responsibility Updates between intermediate and social rented as well as size of property
Average House Local Authority HM Land Registry Annual (Quarterly) Housing Prices Postcode sector
Lowest Quartile Local Authority DCLG - Annual (Quarterly) Housing House Prices Consultation with estate agents to supplement
Assessment of Local Authority HM Land Ratios can be Housing affordability Registry, CACI calculated when (entry-level) Paycheck (or house prices are alternative income updated. A full re- dataset) calculation would require updating of CACI paycheck data which is available annually % Private Renting Local Authority Council Tax Annual Housing Geographic Records specific
Private Sector Local Authority Local Estate Available online at Housing Rents Agents, Rightmove all times. Housing Market Performance Performance Market Housing
Social Sector Local Authority RSLs / LA records Annual - monthly Housing Turnover - Waiting monitoring may be list/letting available information Levels of Local Authority Housing Strategy Annual Housing homelessness Dept.
Vacancy by Local Authority Local Authority Annual Housing Tenure records / Council Tax Records / RSLs Housing Land Local Authority Planning Dept - Dependent upon Planning Supply Monitoring of commissioning of Housing Land new studies. Availability Studies - Factoring Annual data in loss of available on take-
Capacity employment land up of sites
Investment in Local Authority Planning Dept - Longer-term Planning Infrastructure Progress against timescales
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Theme Indicator Geography Data Source Availability of Responsibility Updates Regional Transport Plan
Updating the Housing Market Assessment
14.24 The monitoring of key indicators means that the authorities within the Core Study Area will not need to undertake new Housing Market Assessments on an annual basis. However, given the pace of change in the housing market and the release of new forecasts and projections it is important that the key elements are updated regularly. The release of the next national Census would present an opportunity for undertaking a new HMA, this would therefore likely to be within 4 to 5 years.
14.25 Through the intermediary period it is important that the HMA is updated through an assessment of the key indicators listed in the table above. This would not involve rewriting the HMA but rather focusing on statistical analysis of newly released data building on the analysis already undertaken. The outcome of this would be a short report which indicated where change had occurred that year, highlighting those indicators where the trend had changed significantly. This could include for example a notable drop in house prices or a notable increase in the level of housing stock above stipulated requirement figures.
14.26 The report would highlight through the identification of significant movement in the direction of trends from projections requiring strategy responses in order to ensure that policy is pro-active rather than reactive to change. The production of this report should be tied into any current monitoring reports produced by the authorities in order to avoid replication of work.
14.27 An indicative work programme has been included below to provide an example of how partners may update the HMA. An example is included regarding additional workstreams related to affordable housing as a result of analysis conducted within the annual monitoring report. Within this example it is assumed that the monitoring report through an examination of key indictors related to affordability (CACI income data, House Price data, supply of affordable stock etc…) identified that this issue was not being addressed sufficiently through policy.
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Figure 14.2: Example Work Programme
2007 2008 2009 2010 2011 Joint HMA Published Commission Joint HNS Annual Monitoring Report Annual Monitoring Report Annual Monitoring Report Commissioning of new Joint HMA and HNS Monitoring report identifies significant increase in affordability ratio
Separate report analysing key indicators e.g. affordability ratio, supply, house movers survey findings Update to LPA's affordable housing policy
14.28 The example clearly indicates the benefits of progressive monitoring in developing more responsive policy to deal with issues associated with the housing market for each of the authorities in the Core Study Area.
14.29 As noted in Section 9 monitoring will be required of population and economic performance against those forecast within the CE economic and North Wales demographic projections. Where there was significant divergence this would need to be raised and the potential for commissioning new forecasts considered. As these are the major driving factors behind calculating future housing requirements where there was concern that data suggested that the trends used within the current HMA were no longer true to ‘reality’ work would be required to re-run the housing requirement model to assess the robustness of figures included within policy.
Additional future indicators
14.30 Housing markets continue to rapidly evolve with new tenure options and new housing types emerging in order to ensure that the market responds to housing need and demand. Given the emergence of new issues within other parts of the country which could in turn increasingly affect the authorities of North East Wales the list below includes a number of additional indicators which should be given consideration in future monitoring activity including subsequent annually produced assessments of key indicators.
14.31 These indicators look to reflect the current housing market conditions which are increasingly dominated by affordability issues and the emerging buy-to-let phenomenon which has emerged following the introduction of new and more flexible lending products by mortgage lenders.
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• Number and location of Buy-to-Let mortgages;
• Level of investor owned properties at low geographies;
• Aggregated household incomes to identify critical sections of the market (e.g. first time buyers);
• Detailed information regarding movers (those active within the housing market) e.g. reason for movement, position within the ‘housing ladder’, and type of property vacated and purchased;
• Particular concentrations of over-crowding, houses of multiple occupation and links to economic migrant workers; and
• Levels of repossessions following households defaulting on mortgage payments.
Spatial Geographies
14.32 Emphasis is placed throughout the housing market assessment on the need to ensure that consideration is given to the wider reference area which includes a number of authorities in England. Partnership working is already developing as a result of the West Cheshire North East Wales Sub-regional strategy and it is vital that this joint working continues in order to ensure the development of more balanced and responsive housing markets within the component authorities.
14.33 Where possible the authorities of North East Wales should look to collect data related to housing market performance within similar timescales and using similar methodologies to those collected within the English authorities. As part of the RSS process English authorities are expected to contribute to a detailed monitoring approach and the Welsh authorities could through the implementation of the monitoring framework look to match and complement this process.
14.34 The Housing Market Assessment also identifies a number of sub-market areas based upon TTW ward flows suggesting that these new spatial geographies should be given greater consideration in the future within strategic policy planning. However, currently it is difficult to obtain lower level data as a result of the limited amount of information which is kept with geo code references.
14.35 Census data on the whole offered the only possibility for compiling data as it provided unique low level spatial data, however, this is increasingly out of data and given its ten year updating period does not provide a useful tool for monitoring short-term change. A number of the indicators above, assuming that they are geo-referenced, could be compiled for small spatial
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geographies which in turn could be assimilated into market areas. This would include housing stock development as well as a number of socio-economic indicators. Consideration should be given to the possibility of mapping an increasing number of indicators possibly through a process of joint working with the University of Bangor.
14.36 With this data collection analysis in place it is proposed that where possible the indicators listed above should be monitored for sub-market areas as well as the wider housing market area of North East Wales if they are to be given increasing weight in policy formation.
Commissioned Research
14.37 Local authorities currently commission research into factors impacting on the housing market as and when updates are required. Where research is directly relevant to monitoring housing markets within the Core Study Area consideration should be given to ensuring similar research questions and approaches are used between authorities.
14.38 In particular this is likely to include Housing Needs Surveys and Housing Stock Condition Surveys. The analysis within the Housing Market Assessment indicated that there was significant discrepancy in terms of the timescales of the production of the Surveys across the City Region. This has implications for allowing the direct comparison of housing need across the authorities.
14.39 Future commissioning of these surveys, and other relevant pieces of research, should be undertaken following an agreed detailed brief formulated by the partners within the three authorities. This brief should set out the minimum questions to be posed, with authorities free to add additional questions required to meet their own unique problems and research goals. Ideally Surveys should also be carried out to similar timescales as their findings are heavily dependent upon the state of the current market and related, peoples circumstances.
Data Collection and Protocols
14.40 In order to ensure a more consistent approach to monitoring between the authorities of North East Wales, authorities within the Wider Reference Area and other authorities in North West Wales a number of actions would be required:
• Agreement between the local authorities within the City Region as to a standard proforma for data collection. This would ensure consistent data was assimilated and therefore permit comparable analysis to be undertaken between authorities.
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• A required data specification would need to be agreed between the partners and completed by relevant elements of the authority. This would then guide data collection from planning, economic development and housing departments.
• Within the three authorities making up the Core Study Area clear protocols would need to be established for ensuring that data was compiled and held together. This would require a clear framework of responsibility within the authorities with a nominated contact responsible for assimilating internal data from the relevant departments. Local authorities would need to identify a suitable lead officer to co-ordinate data and ensure a complete database was held.
• An agreed timetable for collection would be required in order to facilitate annual monitoring of the key indicators. It is proposed that the existing timetable for collection of data to feed into annual monitoring reports as collected by Wrexham CBC and the submissions to the WAG as part of the WHS would provide a clear template to follow. This would ensure that data was collected with the maximum of efficiency and create minimal extra work within the authorities.
• In the longer term it could be agreed that a single external body would look to hold and collect data. Given the work with the University of Bangor for the North West Wales authorities it is possible that something could be developed from the data resource they are looking to construct. Skills and Human Resource Implications
14.41 The monitoring framework has at its core the need to develop an efficient process which does not produce significant additional pressure on local authority resources.
14.42 Data is already collected in order to feed into nationally held datasets and it is proposed that this process is developed to ensure greater coverage and consistency between the authorities.
14.43 In order to achieve this local authorities would need to nominate a dedicated manager who would be responsible for ensuring that data is compiled within the authority following the agreed approach and established proforma. This staff member would also be responsible for ensuring that tendered additional research is commissioned in a consistent manner (for example new Housing Needs and House Condition Surveys).
14.44 In addition to this managerial position local authorities would need to ensure that there was sufficient staff time available for collating and compiling the data. Departments are currently
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required to consolidate key data for the evaluation of local and national strategy and therefore relatively little additional time would be required within departments.
14.45 Options should be explored with regard to the potential available for an outside agency to analyse and produce update reports to ensure that Strategy fits the changing need and demand of the housing market. The appointment of a sufficiently experienced agency should be discussed with other authorities in North West Wales to ensure greater value for money. The option of increasing linkages with the data collection and compilation process as part of the Sub-Regional Spatial Strategy may also present opportunities to analyse composite data efficiently.
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