Tyne and Wear Strategic Housing Market Assessment

in association with Storeys SSP

Tyne and Wear Housing Partnership Tyne and Wear Strategic Housing Market Assessment

Final Report

July 2010 Policy and Strategy

Document control sheet

Client Tyne and Wear Housing Partnership

Document Title Tyne & Wear Strategic Market Housing Assessment

Version 10

Status Final

Reference 22061_009_TWCR SHMA 2010.doc

Author VS / LM / POB

Date July 2010

Further copies from email: [email protected] quoting reference

Quality assurance by: Valerie Strachan

Document history Version Date Author Comments

1 22 June 2009 POB Draft 1

2 01 August 2009 VS / LMcM / POB / SB / VA Draft 2 – bulk of baseline elements complete

3 27 September 09 VS / LMcM / POB / SB / VA Draft 3 – major update of OO section – original tables in version 2

4 02 October 09 VS / LMcM / POB / SB / VA Draft 4 – formatting

5 05 October 09 VS / LMcM / POB / SB / VA Draft 5 – needs and demand section

6 04 November 09 VS / LMcM / POB / SB / VA Draft 6

7 03 December 09 VS / LMcM / POB / SB / VA Draft 7 – substantial revisions based on stakeholder feedback

8 04 January VS / LMcM / POB / VA Draft 8 – draft final

9 05 March VS / LMcM / POB Version 9 - final

10 12 July 2010 VS Version 10 – SG comments and insertions

Contact details Main point of contact Telephone number Email address Postal address

Valerie Strachan 07974 392 768 [email protected] Tribune Court, 2 Roman Road, Bearsden, Glasgow, G61 2SW

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CONTENTS SECTION 1: Introduction and Context (Chapter 1) SECTION 2: The Current Housing Market (Chapters 2-6) SECTION 3: The Future Housing Market (Chapter 7) SECTION 4: Housing Need (Chapter 8) SECTION 5: Housing Demand Assessment (Chapter 9) SECTION 6: Housing for Specific Household Groups (Chapter 10) SECTION 7: Conclusions and Monitoring (Chapter 11) 1 Introduction ...... 7 1.1 Overview...... 7 1.2 Purpose ...... 7 1.3 Approach ...... 8 1.4 Housing market areas ...... 9 2 Understanding the drivers shaping the housing market ...... 21 2.1 Overview...... 21 2.2 Policy and Strategy ...... 21 2.3 Demographic ...... 27 2.4 The economy...... 30 3 Characteristics of the housing stock ...... 34 3.1 The housing stock ...... 35 3.2 Stock conditions in the private sector...... 40 3.3 Stock conditions in the social rented sector...... 44 4 Owner occupied sector ...... 46 4.2 Structure of the owner-occupied market ...... 47 4.3 Affordability...... 52 4.4 Current market context...... 59 4.5 The view from the market place – the estate agents’ perspective...... 63 4.6 Housing market activity ...... 66 5 Private rented sector...... 82 5.1 Structure of the PRS ...... 83 5.2 Characteristics of the PRS ...... 85 5.3 Demand – Household Profiles ...... 87 5.4 Private sector rents ...... 93 5.5 Market changes...... 94 6 Social rented sector ...... 97 6.1 Profile of the stock...... 98 6.2 Stock change...... 105

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6.3 Market analysis ...... 108 7 Section 2: Bringing the evidence together ...... 121 7.1 Impact of drivers on the Tyne & Wear housing market...... 121 7.2 The rented sectors: tenure change ...... 123 7.3 The cost between tenure options – a role for intermediate housing? ...... 123 8 The future housing market ...... 126 8.1 Demographic change ...... 127 8.2 Economic change...... 136 8.3 Housing Supply ...... 143 9 Housing need ...... 153 9.1 Introduction...... 153 9.2 Estimating housing need...... 154 9.3 Current housing need...... 154 9.4 Future housing need ...... 160 9.5 Total housing need...... 162 9.6 Profile of households in housing need ...... 166 10 Future housing market – demand assessment...... 170 10.1 Introduction...... 171 10.2 Housing need and demand ...... 172 10.3 Local markets ...... Error! Bookmark not defined. 11 Housing for vulnerable groups ...... 176 11.1 Overview...... 177 11.2 Housing needs of older people ...... 178 11.3 Families and overcrowding...... 179 11.4 Households with support needs ...... 181 11.5 Asylum Seekers ...... 184 11.6 Gypsy, Traveller and Travelling Showpeople households ...... 187 11.7 Homelessness...... 188 11.8 Alternative forms of provision...... 191 12 Conclusions and recommendations...... 193 Appendix A: Additional SRS tables...... 199 Appendix B: Migration tables ...... 206 Appendix C: Hometrack affordability maps, May 2009...... 212 Appendix D: Weekly cost of different tenure options by size of property ...... 219 Appendix E: Additional PRS tables...... 226 Appendix F: Additional tables on SRS...... 229 Appendix G: Additional notes on supply figures ...... 237 Appendix H: Local Authority Needs Tables ...... Error! Bookmark not defined.

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Appendix I: Alternative Needs Estimates...... Error! Bookmark not defined. Alternative needs estimates...... Error! Bookmark not defined. 1: Needs estimate drawing on Local HNA data ...... Error! Bookmark not defined. 2: Alternative Gateshead demolition scenario ...... Error! Bookmark not defined.

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SECTION 1: INTRODUCTION This section outlines the structure of the SHMA, its compliance with national guidance, as well as providing different policy users with a guide to accessing key evidence contained within this document and its associated documents.

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1 Introduction

1.1 Overview

1.1.1 This report sets out the findings from the Tyne and Wear Strategic Housing Market Assessment (SHMA). The SHMA has been led by the Tyne & Wear Housing Partnership and developed in close cooperation with industry partners. This report is presented in four sections.

1.1.2 This section introduces the study, establishes its purpose and compliance with the relevant guidance and sets out the geographies which form the basis of the study. The second considers the current housing market, looking first at the policy, demographic and economic drivers, and then examining each of the main tenures in some detail – first in terms of stock and then market indicators. The third section looks at the future housing market and in particular, housing need and demand. The final section presents the conclusions of the study.

1.2 Purpose

1.2.1 The main purpose of the study is to strengthen the Tyne & Wear Housing Partnership’s understanding of the nature and influence of the housing market and sub-markets in the Tyne and Wear area. The study, in line with the requirements of GLG guidance delivers evidence and analysis, on a series of key matters, including: ■ Confirmation of the definition of the functional housing market area and sub-areas

■ The current housing stock and market

■ Analysis of the factors influencing change in the housing market

■ Analysis of the future housing market

■ Estimates of the unmet need for affordable housing; and an assessment of the viability of affordable housing targets

■ Analysis of the housing requirements of specific household groups.

1.2.2 Projections are required over a 20 year time period. It is appreciated that the reliability of the projections deteriorates with the length of the projection: the projection is likely to be more accurate for the earlier years than for later years. The guidance therefore recommends that the needs and demands estimates are updateable, so that they can be refreshed as new data on the housing system and the factors that influence it become available. This study is therefore accompanied by an Excel model which can be updated to take account of new data, together with a guidance manual (and staff training on its use).

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1.2.3 Evidence from the study will be used to:

■ Inform the development of the Partnership’s long-term strategic housing understanding of housing needs and demand; and the capacity of the local system to address these needs

■ Inform decisions on housing mix – both in terms of property type/size and tenure

■ Provide the basis and mechanism for regular monitoring and review of housing interventions, change within the system and neighbourhood stability; and for assessing key risks to the housing strategy

■ Support funding applications and investment prioritisation

■ Inform high-level strategy, including the development of the integrated regional housing strategy, City Region strategies and the NewcastleGateshead Economic Masterplan. It must therefore take account of other work that is already underway to develop an understanding of the conurbation and urban core and assist with local economic assessments and the Tyne and Wear City Region Economic Review

■ Provide a robust basis for spatial planning, including Local Development Frameworks1. 1.3 Approach

1.3.1 The study follows the approach set out in the CLG practice guidance.

1.3.2 The study draws on secondary data to profile and analyse the Tyne and Wear housing system, and to develop estimates of current and future needs and demands. This includes, but is not limited to, detailed review of policy and research reports undertaken for the five local authorities and their strategic partners, national statistics, local statistical returns, and operational data provided by the authorities and their partners. Consultations were held with stakeholders over the course of the study, to explore key issues in further depth.

1.3.3 The Tribal methodology further includes the development of a model that takes the year one estimate of need and builds a forward projection which considers flows of demand and supply across all tenures. This is essentially a simple dynamic housing market model, the core elements of which are the current housing need, emerging households (which include migration), estimates of between-tenure flows, current housing market supply and projections of new build.

1.3.4 The assessment is primarily concerned with describing the major characteristics of the Strategic Housing Market area that is the Tyne and Wear city region. It includes information about the major sub markets where available and robust.

1.3.5 This assessment has only used existing data on a proportionate and robust basis and no primary data were collected specifically for this piece of work. In order to be consistent at the city region level the data available have in some cases been older and less detailed than the Partnership would have wished. Reference has been made where possible to more up to date information at district level but this may not always provide the basis for consistent comparison across the city region.

1 See para 11 of PPS: Housing

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1.3.6 In particular it had been hoped that the assessment of need and demand in chapters 9 and 10 would be able to make use of the local housing assessments carried out by the five metropolitan district councils in the area. These local assessments provide a good picture of local housing markets, their characteristics, trends and issues. However this did not prove practical. The surveys were carried at different time, using similar but not common sets of questions and had varying response rates and weightings. Two of the household surveys were carried out before the latest version of guidance was issued and before the housing market crash.

1.3.7 Consequently, other local, national and regional data have been used to build up the needs and demand assessment at the Tyne and Wear level. However, this analysis does not pick up the finer grain differences and issues relevant to the sub markets within the city region. For example the sample used by the Survey of English Housing provides estimates of characteristics not valid below the level of the areas of Northumberland and Tyne and Wear combined and is always at least two years old when it becomes available. This assessment therefore presents a picture of need and demand at the Tyne and Wear level only. Care should be taken not extrapolate the Tyne and Wear data to district level as this will not necessarily capture the full story within individual districts. The local assessments provide a better basis for looking at local need and demand.

1.3.8 Timing differences in the data and the fact of the crash in the housing market and the uncertainties about recovery make future assessments of need and supply particularly difficult at the present time.

1.3.9 The Tyne and Wear SHMA should be a dynamic piece of work, monitoring the evidence for effects of policies, market changes and trends in needs and supply. The Tyne and Wear Housing Partnership acknowledges the need to keep the city region and local assessments up to date. Section 1.6 sets out how the Partnership proposes to do this.

1.3.10 Work is in progress to collect new primary data for the Gateshead and Newcastle areas using face-to-face interviews and on the same question framework used in the latest local survey carried out in North Tyneside. As part of the ongoing update of the SHMA these data will be taken into account in the first review of the document and combined with data from the other surveys for use in the needs and demand model.

1.4 Housing market areas2

Strategic Housing Market Areas in the North East 1.4.1 Tyne and Wear has traditionally been analysed as a sub-region covering the five metropolitan authorities, rather than the functional area covered by the City Region. The North East has been moving towards an approach which seeks to respond to functional geographies wherever practical.

1.4.2 Research by the North East Assembly3 (now ANEC) concluded that the majority of Tyne & Wear, southern Northumberland and north County Durham share similar price characteristics. Combined with the strong functional relationships between all Tyne & Wear and southern Northumberland and north County Durham (employment, transport, leisure, retail), the wider City Region was identified as the basis for the SHMA area.

2 For a full summary of the relevant evidence, please see Technical Paper #1: Defining housing market areas

3 NEA (2009) Defining strategic housing market areas in the North East

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Sub-market areas within South Northumberland, Tyne & Wear and Nth Co Durham 1.4.3 The sub-areas within the Tyne & Wear sub-region were shaped using an analysis by CURDS of census migration figures on the basis of a 96.5% self-containment of those moving4 within those HMAs. This suggested the existence of four primary sub-areas: 1. North Tyne - based on the two local authorities north of the river Tyne (Newcastle- upon-Tyne and North Tyneside), and the surrounding former districts in southern Northumberland

2. Gateshead - the second sub-market to the west is based on Gateshead with northern Durham, and southern Northumberland (parts of Tynedale)

3. Sunderland - the third sub-market to the south links Sunderland to parts of South Tyneside, Gateshead and to northern County Durham (esp. Easington)

4. South Tyneside - the fourth sub-market area focuses on the central part of South Tyneside.

Geographies used in this report 1.4.4 The table overleaf presents the key geographies used in this report. Data, wherever possible, are presented at the level of: ■ The City Region (5 Tyne & Wear metropolitan authorities and the 8 former Districts in Durham and Northumberland authorities) ■ The five metropolitan authorities (TW5) ■ The four sub-areas of North Tyne, Gateshead, South Tyneside and Northumberland – where data are available for the sub-areas within Northumberland and Durham, these are also added ■ The five local authorities ■ The North East region and England are presented where possible for comparison.

4 For discussion and reference, see p. 9.37 in NEA (2009) Defining Strategic Housing Market Areas in the North East

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Figure 1-1: Map of geographies used in this report

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1.5 Compliance

1.5.1 The approach and requirements for the production of a SHMA are set out in the CLG Practice Guidance5. Furthermore, the SHMA is intended to help authorities to meet the requirements of PPS3: Housing.

1.5.2 This report provides projections of need for the next five years, and demand projections for the next twenty years6.

1.5.3 A technical report accompanies the SHMA and details the study approach adopted, thus serving as a manual to the needs and demand model.

CLG Practice Guidance 1.5.4 This report is fully compliant with the CLG SHMA practice guidance. It has adopted an approach of drawing on secondary data sources, as they are more consistent and reliable sources of information between authority areas and over time; and will permit the Partnership to regularly update the estimates.

1.5.5 The guidance sets out what topics are to be covered (and how) and also specifies a number of core outputs. Table 1-1 shows the main chapter headings suggested in the guidance and where the relevant sections are located in this report.

5 CLG (August 2007) “Strategic Housing Market Assessments: Practice Guidance” Version 2

6 The analysis presents findings for years 5, 10 and 20, but has been undertaken for individual years, so different reporting points are available. The spreadsheets which accompany the report provide annual findings.

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Table 1-1: CLG Practice Guidance: Chapter locator

Section / Guidance Report Chapter 3 Current market: Section 2: Demographic context Demographic drivers Chapter 2.2 Section 2: Economic context Economic drivers Chapter 2.3 Characteristics of the housing Section 2: Housing stock/active market stock Chapter 3 Section 2: The owner occupied market Chapter 4 Section 2: The private rented sector Chapter 5 Section 2: The social rented sector Chapter 6 Section 2: Bringing it altogether Chapter 7 4 Future housing market Projecting change in household Section 3: Demographic change numbers Chapter 8.1 Section 3: Future economic performance Economic performance Chapter 8.2 Section 3: Economic performance/housing Chapter 8.2 / Future affordability need Section 3: Chapter 9 Section 3: Estimating future housing change Housing demand Chapter 10 Section 3: 5 Housing need Housing need Chapter 9 Section 3: 6 Specific household groups Housing for vulnerable groups Chapter 11 Technical 7 Updating Technical appendix Appendix

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1.5.6 The practice guidance identifies a set of core outputs and processes. For ease of reference, tables 1-2 and 1-3 below set out how these requirements have been met – in most cases they refer to a location in the report.

Table 1-2: SHMA Core Output Locator

SHMA Practice Guidance Core Outputs Report 1 Estimates of current dwellings - size, type, condition, tenure Overview of the T&W stock profile and condition Ch 3 Individual tenure analysis: Owner occupied Ch 4 PRS Ch 5 SRS Ch 6 Analysis of past and current housing market trends, including balance between supply and demand in different housing 2 sectors and price/affordability Description of key drivers underpinning the housing market,

Analysis of key drivers: overview 2.1 Detailed analysis of policy drivers 2.2 Detailed analysis of demographic drivers 2.3 Detailed analysis of economic drivers 2.4, 8.2 Housing market analysis – by tenure: Owner occupied Ch 4 PRS Ch 5 SRS Ch 6 Estimate of total future number of households, broken down 3 by age and type where possible

Demographic projections 8.1 4 Estimate of current number of households in need Ch 9, Tables 9-1, 9-2, 9-3, Households currently in need 9-4, 9-7, 9-8, 9-9, 9-10, I9- 8a, I9-8b Estimate of future households that will need affordable 5 housing

Ch9, Tables 9-6, 9-7, 9-8, 9- Households developing needs in the future 11, 9-12, I9-8a, I9-8b 6 Estimate of future households that will need market housing Households that will need market housing in the future Ch10, Tables 10-1, 10-3 7 Estimate of size of affordable housing required Size of affordable housing required 9.6 and Tables 9-10, 9-11, 9-12, 9-14 Estimate of household groups that have particular housing 8 requirements, eg families, older people, and so on

Analysis of particular needs Ch 11

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Table 1-3: SHMA Process Checklist

SHMA Process Checklist Report/Comment Approach to identifying housing market areas is consistent with other 1 approaches to housing market areas within the region Summary 1.4 Detailed analysis Technical Paper #1: Defining housing market areas Housing market conditions are assessed within the context of the 2 housing market area Approach used throughout report, following the geographies set out

in 1.7.4 Ch3-8 3 Involves stakeholders including house builders

Process of stakeholder involvement 1.6 Contains full explanation of methods employed, with any limitations 4 noted Technical explanation of approach - summary 1.3 Technical explanation of approach - detailed Technical appendix (separate volume) Assumptions, judgements and findings are fully justified and 5 presented in an open transparent manner

Clear exposition of assumptions Throughout report and Technical Appendix

6 Uses and reports on effective quality control mechanisms

QA See Technical Appendix Explains how the assessment findings have been monitored and 7 updated (where appropriate) since it was originally undertaken

This is the first set of estimates. Section 1.6 sets out proposals for updating, and the Technical Updating mechanisms Appendix provides details of the models to enable updating of the needs and demands estimates.

PPS3: Housing 1.5.7 PPS3 (housing) represents the national planning policy framework for housing. It guides planning authorities on how housing should be provided for through the planning system. The SHMA report provides an important part of the evidence base which local authorities will need to use in order to comply with the expectations laid out in PPS3. Clearly the SHMA is not the only piece of evidence will be taken into account in delivering the PPS3 requirements.

1.5.8 The table below identifies the main requirement of PPS3 and identifies where these elements are covered in this report and where they are not. In the final chapter, we outline the likely sources of evidence, which authorities would need to turn to in order to move towards the outputs expected by PPS3.

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Table 1-4: PPS3 (housing) - References to SHMAs

Based on SHMAs and other local evidence, Local Planning Authorities Covered? Location should set out in Local Development Documents: The likely overall proportions of households that require market or affordable housing, Section 3: Yes for example x% market housing and y% Chapters 9 & 10 affordable housing The likely profile of household types requiring market housing. eg multi-person, including families an children (%), single No persons (%), couples (%) The size and type of affordable housing required. Size Chapter 9

Source: PPS (housing); para. 22

A SHMA should: Covered? Location

Estimate housing need and demand in Section 3: Chapters terms of affordable and market housing Yes 9 (need) & 10 (demand) Determine how the distribution of need and Section 3: Chapters demand varies across the plan area Yes 9 (need) & 10 (demand) Consider future demographic trends and Section 3: Chapter identify the accommodation requirements of Partial coverage specific groups 11

Source: PPS3 (housing), Annex C

Planning use of the SHMA 1.5.9 Planning authorities and planning applicants may wish to cite the Tyne and Wear SHMA as a material consideration in the determination of Planning Applications where the emerging evidence may be used to support the case for or against a particular development proposal. Those who wish to do so are asked to take into consideration the following points. ■ The Tyne and Wear SHMA report has been formally signed off by Heads of Strategic Housing within each of the Tyne and Wear Local Authorities. It has not been subject to a wider approvals process such as endorsement by Cabinet / Executive Committees

■ It is a snapshot of information, evidence, research and analysis at a particular point in time. Although trends are indicated this is a very difficult time in the market and future changes are not easy to discern

■ A SHMA is a dynamic process and this report is only the starting point. The document sets out the process by which it is intended that it will be updated with at least an annual review of the needs and demand outputs by stakeholders

■ The report contains a number of recommendations about issues to be taken into account and for improving the process of analysis and assessment. These should not be construed as formal policies of the five partner local authorities. Policy formulation will take place through their respective processes for development of and consultation

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about Local Development Frameworks, Sustainable Community Strategies, Housing Strategies, Single Conversation Local Investment Plans and related documents

■ The SHMA (and subsequent revisions) is one of a number of public documents that will be used to provide evidence for policy formulation. Other documents will include local SHMA reports, affordable housing viability studies and SHLAAs

■ As noted in section 1.3 the calculation and presentation of need and demand for Tyne and Wear in this report do not allow further drilling down of data (for example to local authority or ward level). If further analysis at these levels is required users are advised to consult individual local authorities to ensure that the most up to date data and analysis with regard to detailed housing need at the local level is secured. As noted above, work is ongoing to improve the collection of primary data to assist in this work.

1.6 Process and updating

The Housing Market Partnership 1.6.1 The Tyne and Wear Housing Partnership is a co-ordinating group of the five metropolitan district strategic housing authorities in the Tyne and Wear sub region. It has a governing board of the five lead cabinet members responsible for strategic housing issues. Executive action is taken by a Group of officers at Head of Service level responsible for strategic housing. This group is assisted and advised by the Director and a number of other officer groups working around joint action on specific themes including policy co- ordination, the SHMA, choice based lettings, gypsy, traveller and travelling showpeople accommodation, homelessness and supporting people, growth point activity, private rented sector and the Regional Loans Fund and others projects as appropriate.

1.6.2 The SHMA process has been guided by a steering group of leading housing and planning officers from strategy teams within the five district councils. The TWHP Director has acted as Project Manager and the Head of Service for Housing and Regeneration at Sunderland has acted as project sponsor on behalf of the Heads of Service Group.

1.6.3 A Technical Working Group consisting of officers from the districts and from the Tyne and Wear Research and Information group and the Tyne and Wear City Region team has provided technical advice.

Stakeholder involvement 1.6.4 Other stakeholders have been involved in the process at particular points. In preparing the brief for the work representatives from the Home Builders Federation and the Chair of the regional Housing Board voluntary sector advisory group both provided comments on the draft brief. The brief was amended to take account of their comments. During the preparation of the brief additional questions focusing on issues of sub regional significance were added to the research questions to be answered.

1.6.5 Stakeholder views were obtained throughout the study process:

■ Two large-scale stakeholder sessions were held at key stages in the study: at the end of Stage 1 and at early draft stage in Stage 2. The widest representation of stakeholders was sought from agencies including providers such as housing associations, private landlords, estate agents, home builders and ALMOs, funders including the Homes and Communities Agency and other agencies such as Government Office and ONE North East ■ During the preparation of the report Storeys: SSP were engaged to collect data and information about the state of the local housing markets from estate and lettings agents

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■ A separate meeting with the Home Builders Federation was held when the draft findings available, to discuss the key issues that had emerged and obtain their further input before final drafting of the report ■ Two workshops were held with representatives of local authority Homeless and housing choice teams and Supporting People teams to gather data about the housing needs of vulnerable groups. Additional data about the housing needs of asylum seekers expected to be given the right to stay was also obtained from the UK Border Agency. Review and updating 1.6.6 The TWHP proposes to widen the steering group by inviting representatives from the following stakeholders who were all included in the two feedback sessions held during the writing of this report: ■ Home Builders Federation (cross linked to the Tyne and Wear SHLAA group)

■ Private Rented Sector Landlords

■ National Housing Federation (North) Government Office

■ Homes and Communities Agency

■ ANEC

■ Lenders

■ RICS

■ Representatives from the Northumberland and Durham SHMA groups.

■ Regional Housing Board voluntary sector advisory group.

1.6.7 The brief of the steering group will be widened to include: ■ Monitor the use of the SHMA

■ Advise on the review and updating of the SHMA as relevant data becomes available

■ Advise on the annual review of the SHMA, advise on further scenario work

■ Advise on the development and use of the SHMA Regional Implementation Guidance.

■ Agree a timetable for the work and the allocation of resources among stakeholders.

1.6.8 The TWHP envisages that the group will meet three times a year.

1.6.9 The SHMA exercise will leave the Partnership with a set of tools that will enable it to re- run the housing needs and demand models described in Chapters 9 and 10. It is envisaged that the SHMA should be reviewed at least annually. It would be appropriate to carry out such a review towards the end of the year to enable any significant changes to be reported in the regional RSS/North East Strategy and local AMR monitoring reports.

1.6.10 The first review will take account of the new primary data being collected for the Newcastle and Gateshead areas.

1.6.11 The Tyne and Wear City region is in the process of carrying out a local economic review at sub regional level and districts are carrying out local economic reviews as part of their new statutory duties and to feed into the North East Strategy. The Tyne and Wear multi area agreement will also be reviewed during 2010. It is intended that housing objectives

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will be added to the MAA. The North East Strategy will be developed during 2010. All this work will put in place population, household, economic, transport and spatial models that provide an improved context for the housing needs and demand model we have used in the SHMA. It will also use the outputs from the SHLAA reviews.

1.6.12 Where there are any outstanding issues of concern that the steering group have not been able to resolve at the publication of this report they will continue to work with stakeholders to try to seek a resolution.

1.6.13 The steering group will: ■ Seek to improve the data sources we are using in the SHMA by using more recent data when it is released and seeking access to more robust data when this becomes available. Where possible they will work in common with the other three SHMA groups across the region to do so. TWHP has already worked together with ANEC and partners on joint advice on future SHMAs work and asked CLG to comment on shortcomings in the national guidance

■ Examine the work being done by the National Housing and Planning Advice Unit to develop tools that can be used at sub regional and local authority level to assess incomes, housing costs and affordability

■ Examine the recommendations made in this report about the collection and use of data for SHMAs

■ Continue to work at the sub regional and regional level to examine cost effective ways of working together to improve our local and sub regional housing need and demand models to assist our better understanding of local sub regional markets.

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SECTION 2: CURRENT HOUSING MARKET This section provides an understanding of how the housing market in Tyne & Wear operates. It covers: the impact of drivers (policy, economic and demographic); the characteristics of the housing stock; the active market (an analysis by market sector); and conclusions on the current state of the market across sectors

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2 Understanding the drivers shaping the housing market

2.1 Overview

In this section, three primary drivers which shape strategic housing markets are explored. These are the policy context, demographic drivers, and economic drivers. This section is a short summary of Technical Paper #2: Policy, demographics and the economy.

2.2 Policy and Strategy

Policy can and does shape how housing markets operate, both in market and spatial terms. Policies influence the nature and location of future supply, the volume of that supply, the provision of affordable housing and so on. This section provides a summary of the main policies which influence the housing system across the City Region.

Key Findings

1. National policy priorities have sought to influence the supply and delivery of new homes (both market and affordable). The quality of both homes and communities has been to the fore of recent policy initiatives (2.2.1).

2. Regional priorities have meanwhile aimed to achieve a balance between growth and the needs of the economy, and regeneration priorities (2.2.4).

3. Spurred by the Government’s Sub-National Review, and led in the North East by the Leaders Panel and One North East, the regional governance is being reshaped to reflect functional activity at the regional and city regional levels. The involvement of business and third sector interests in this process is well developed and considered good practice by CLG (2.2.4).

4. Raising income levels is a key goal of the Regional Economic Strategy, which has a particular bearing on housing need (2.2.6).

5. A recent review of the Regional Economic Strategy is seeking to position the region as an early leader in the development of a “Green Economy”. Until the recession kicked in, signs of catch-up were evident in parts of the Region (2.2.7).

6. In total, the Regional Spatial Strategy envisaged the provision of 19,265 net dwelling units for the entire city region over the period 2004-2021. As part of this some 16,530 gross completions are anticipated within the five Tyne & Wear metropolitan authorities, along with 3,405 replacement units and 4,235 demolitions, leaving a net figure of 13,130 for the metropolitan authorities (2.2.10).

7. Subsequent to the RSS, the Government announced three Growth Points in the City Region resulting in a combined 4,491 new housing units by 2017 in: Newcastle and Gateshead (2,430), North Tyneside (882), and South East Northumberland (1,179) (2.2.11).

8. The city region has sought to innovate in response to the challenges of the recession. This includes a number of local housing companies, joint vehicles, and a commitment to introduce a regional loans fund to help with maintenance and home improvement in the private sector (2.2.17).

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2.2.1 The current focus of national policy over the last number of years has sought to:

■ Accelerate the supply and delivery of additional homes (Housing Green Paper, 2007) ■ Increase the supply of affordable housing (Housing Green Paper, 2007, and PPS3: Housing) ■ Create sustainable communities (including the regeneration of existing communities) (Sustainable Communities Plan) ■ To enhance the quality of new homes and critically places (PPS3: Housing) ■ To ensure the efficient use of land and the provision of adequate infrastructure to support communities through the planning system (PPS3: Housing).

2.2.2 PPS3 (Housing) is an important document which sets out the national planning policy framework for delivering the Government’s housing objectives. PPS3 was delivered in response to the Barker Review of Housing Supply and in particular to introduce a step- change in housing delivery, through a more responsive approach to land supply at the local level. The primary Government objectives supported by PPS3 are:

■ To achieve a wide choice of high quality homes, both affordable and market housing, to address the requirements of the community. ■ To widen opportunities for home ownership and ensure high quality housing for those who cannot afford market housing, in particular those who are vulnerable or in need. ■ To improve affordability across the housing market, including by increasing the supply of housing. ■ To create sustainable, inclusive, mixed communities in all areas, both urban and rural.

2.2.3 The box overleaf illustrates how PPS3 envisages how a SHMA should assist authorities to develop sound, responsive housing policies.

2.2.4 The Regional policy architecture seeks to position these national priorities in response to the region’s characteristics and also to frame the broad shape of development and housing delivery. In the North East, led by the Leaders Panel and One North East, the regional governance structure has been positioned to seek a balance between supporting economic growth and regeneration. Governance is being reshaped to respond to functional geographies at both the regional and city regional level.

2.2.5 The process in the North East has sought to engage both business and third sector interests, with CLG recognising the approach in the North East as good practice.

2.2.6 The Regional Economic Strategy sets out how the region intends to deliver greater and sustainable prosperity. It places a great emphasis on the importance of clear and strong leadership in the North East and organises its action areas around three core elements: Business (incl. enterprise, business solutions, structural change), People (incl. skills and economic inclusion) and Place (incl. strategic transformational regeneration, delivering high quality business accommodation, enhancing the regional’s transport and ICT connectivity, and promoting, enhancing and protecting natural and cultural assets. The RES seeks to raise incomes, enhance the level of skills and professional expertise, promote an entrepreneurial culture and to attract and retain individuals with key skills.

2.2.7 A focus on the opportunities presented by the Green Economy represents one plank of a review of the RES which is occurring in the context of the Local Economic Assessments and the integration of the RES into the integrated Regional Strategy.

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BOX – PPS3 and planning for housing PPS3 seeks to promote a more evidence-base approach to planning for housing, with significant importance attached to both Strategic Market Housing Assessments (SHMAs) and Strategic housing Land Availability Assessments (SHLAAs) as key components of a Local Planning Authority’s housing evidence base. In particular, paragraph 22 of PPS3 states:

‘Based upon the findings of the Strategic Housing Market Assessment and other local evidence7, Local Planning Authorities should set out in Local Development Documents:

• The likely overall proportions of households that require market or affordable housing, for example, x% market housing and y% affordable housing.

• The likely profile of household types requiring market housing eg multi- person, including families and children (x%), single persons (y%), couples (z%).

• The size and type of affordable housing required.’

The SHMA is recognised as part of a wider evidence base which will help authorities to form a judgement on these figures – the SHMA does not set these figures, but provides the evidence which helps authorities to make an informed decision.

PPS3 provides further insight into its expectations for a SHMA in Annex C.

A Strategic Housing Market Assessment should:

• Estimate housing need and demand in terms of affordable and market housing.

• Determine how the distribution of need and demand varies across the plan area, for example, as between the urban and rural areas.

• Consider future demographic trends and identify the accommodation requirements of specific groups such as, homeless households, Black and Minority Ethnic groups, first time buyers, disabled people, older people, Gypsies and Travellers and occupational groups such as key workers, students and operational defence personnel.

2.2.8 The North East Housing Strategy (Quality Places for a Dynamic Region) seeks to rejuvenate the housing stock; provide choice and quality; improve and maintain the existing stock; meet specific community and social needs.

2.2.9 In terms of spatial development, the Regional Spatial Strategy (RSS) seeks to set the spatial development principles governing the region. It has prescribed that an increasing proportion of future (new) housing supply should occur within the metropolitan cores of the Region. In the case of Tyne & Wear, this means a particular emphasis on enhanced provision in Newcastle, Gateshead and Sunderland in particular. It sets density levels at 30-50 dwelling per hectare, but averaged across each local authority, providing authorities for some flexibility of interpretation on a site-by-site basis.

7 Other local housing evidence in Tyne & Wear would include: local housing needs surveys, affordable housing viability assessments, and local housing market assessments where undertaken.

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2.2.10 In total, the RSS envisaged the provision of 19,265 net dwelling units for the entire city region over the period 2004-2021. As part of this some 16,530 gross completions are anticipated within the five Tyne & Wear metropolitan authorities, along with 3,405 replacement units and 4,235 demolitions, leaving a net figure of 13,130 for the metropolitan authorities.

2.2.11 Subsequent to the RSS, the Government announced three Growth Points in the City Region: Newcastle and Gateshead, North Tyneside, and South East Northumberland. This will see an additional allocation of new homes by 2017 as follows:

■ Newcastle and Gateshead: +2,430 ■ North Tyneside: +882 ■ South East Northumberland: +1,179.

2.2.12 It is likely that these targets (RSS and Growth Point) will require revision in light of the fall in output triggered by the current recession.

2.2.13 The Tyne & Wear City Region has entered into a Multi-Area Agreement (MAA) with Government. The City Region has made a number of “asks” of Government and been granted a number of freedoms on the basis of a comprehensive MAA covering transport, and employment and skills. Discussions are ongoing to understand whether the MAA might be extended to include a housing dimension and how the process might be used to achieve strategic housing objectives.

2.2.14 The Tyne & Wear Housing Strategy seeks to deliver the following by 2030:

■ Decent affordable housing that is available to all who want to live here ■ All neighbourhoods are sustainable ■ All vulnerable groups have access to housing and support that meet their needs ■ Occurrences of homelessness are minimised through preventative measures.

2.2.15 The Sustainable Communities Plan saw an initial focus on renewal in the City Region, and in particular resulted in the establishment of Bridging NewcastleGateshead to address housing market failure within the NewcastleGateshead conurbation core. Seen as a successful example of partnership and having built up a strong coordinating and research role, the extension of BNG’s remit to include growth was seen as a natural evolution.

2.2.16 These regional and sub-regional strategies are supported by local level strategies and policies which seek to interpret the wider policy architecture to respond to local characteristics and knowledge. Following the Lyons Review and the Sub-National Review, a great deal of emphasis has been placed on the strategic role of local authorities, especially with regard to place shaping and on taking a more strategic role in supporting economic development locally. The box overleaf outlines the current status of the four Local Development Frameworks in Tyne & Wear.

Delivery innovation 2.2.17 Local authorities in Tyne & Wear have been seeking to identify innovative ways of delivering new and refurbished housing, many of which draw on new routes to delivery (including public private partnership) and new streams of Government finance, which have incentivised organisational evolution. Examples of this include:

■ Local Housing Companies: The Cities of Newcastle and Sunderland have both received approval to proceed with Local Housing Companies (in the case of Newcastle 2 are proposed). Were all the LHCs to proceed, Newcastle estimate this could lead to

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the building of over 5,000 new homes over the next 15 years, with Sunderland anticipating at least 1,600 units ■ Joint Venture Companies: Gateshead is seeking partners to take part in what is termed the “BIG opportunity”. This seeks to deliver in the region of 3,000 family homes in Gateshead over a 15-20 year period ■ Private Finance Initiative: North Tyneside have been successful in securing PFI finance for its Home for the Future programme, which is supporting the modernisation and rationalisation of the Council’s sheltered housing stock, involving over 1,000 dwellings ■ Regional Loans Fund: There is a firm commitment among partners in the North East to introduce a Regional Loans Fund, which would be used to help with maintenance and home improvements in the private sector. A common framework has been agreed among all 12 local authorities and the long-term ambition is to recycle funding and attract commercial investment ■ Others: Sunderland also has a range of other partners working to deliver the Council’s housing strategy including Gentoo (renewal and growth – already met Decent Homes targets 3 years early), and Sunderland arc.

BOX: Local Development Frameworks in Tyne & Wear

The five metropolitan districts are preparing a series of key planning documents as part of the Local Development Framework process, which are at various stages of development. The evidence, analysis and outputs from the SHMA are key inputs.

South Tyneside South Tyneside is most advanced. A Core Strategy has gone through the scrutiny process as was adopted in June 2007. Two Area Action Plans (for South Shields Town Centre and Waterfront and for Hebburn Town Centre) were adopted in 2008. A third AAP (Central Jarrow) is set for examination in public in March 2010. A number of Supplementary Planning Documents including Planning Obligations and Agreements and Affordable Housing have been adopted.

A revised Site Specific Allocations development plan document will be consulted upon in the summer of 2010 and a document on Development Management Policies is scheduled to be published for consultation in July 2010.

Alongside these a Strategic Housing Land Availability Assessment was carried out in 2009, which formed the basis of a positive 5-year land supply statement. The SHLAA is now undergoing its first annual review.

Newcastle and Gateshead Newcastle and Gateshead agreed in 2009 to produce a joint Core Strategy document “One Core Strategy Newcastle and Gateshead 2030” to be published in July 2011 for adoption in 2012. As well as the SHMA a range of other local studies are being carried out including an Affordable Housing Viability Assessment. Joint Topic papers will be published for consultation in March 2010. A preferred Options paper will be published for consultation by November 2010.

Two Area Action Plans (Walker Riverside and Benwell and Scotswood) have been adopted in Newcastle.

Two AAPs covering the central areas of Newcastle and Gateshead will be prepared and aligned for strategic issues. Issues and options for Gateshead will consulted upon in 2010, consultation in Newcastle will be in 2012.

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Separate Allocation and Infrastructure plan for Newcastle and Gateshead will be published for consultation in March 2011 (Gateshead) and in February 2012 (Newcastle). Supplementary Planning Documents adopted in Newcastle include Shared Housing (2008) and there is also Interim Policy Guidance on Purpose Built Student Housing. Among the Supplementary Planning Documents Gateshead plan to work on are Affordable Housing and the St James’ Village Phase 3/Freight Depot site.

In Newcastle consultation on SHLAA sites has been completed and a final assessment report is in preparation.

In Gateshead a SHLAA is being carried out. A draft document is being prepared for formal consultation in March.

Sunderland The latest consultation about four alternative approaches to Core strategy Policies and ten strategic sites closed in February 2010. Following a review of the consultation responses the draft Core Strategy will be published in October 2010. The adoption target date is November 2011. Topic papers including one on housing were published alongside the consultation document.

An Allocations development plan document is being prepared and this will include housing sites. An issues and options paper will be published in May 2010.

Masterplans for housing renewal areas at Castletown, Doxford Park and Southwick have been adopted as Interim Planning Guidance. A Hetton Downs AAP will be published in July 2010.

A SHLAA was completed in 2009 and the first annual review has started. A positive five- year land supply statement has been published.

North Tyneside Cabinet agreed an update of the LDS in February 2010 and this will be sent the Secretary of State for approval. Preferred Options consultation on the Core Strategy will take place from July 2010 with publication of the Core Strategy scheduled for February 2011. The target date for adoption is January 2012.

Three Area Action Plans (Wallsend, North Shields and Coastal) are included. Preferred options consultation will take place on each of these early in 2011.

A Strategic Development Framework for the North Bank of the Tyne has been adopted as Interim Policy Guidance.

Supplementary Planning Guidance on Local Planning Obligations has been adopted.

Supporting studies include completed Housing Viability Study.

An initial SHLAA has been carried out and published along with a positive five year land supply statement. The first annual review of the SHLAA will begin in April.

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2.3 Demographic

This section seeks to understand the nature of demographic change within the city region. As data are easily available for the wider city region geography, we provide an analysis of the wider patterns of population change.

Key Findings

1. The population of Tyne & Wear moved from a historical pattern of decline, to a period of moderate growth from 2001 onwards. (2.3.2)

2. Substantial variations exist within the city region. North Tyne is the only sub-area to have experienced substantial population growth in the 2000s, while the more typical pattern has seen population migration to the city region’s hinterland. The largest proportionate decline has been experienced in Sunderland and its hinterland. (2.3.2)

3. The population of the city region is aging. This is true nationally, but the rate of change is more pronounced in Tyne & Wear. The proportion of younger people, birth rates and in-migration are all lower than the national average. The city region’s hinterland is notably older. (2.3.3)

4. There has been an increase in households over the period 1991-2006, nationally and within Tyne & Wear. The rate of increase is much lower in the city region (+5pp) and especially the five metropolitan authorities (+3pp), than is the case nationally (+15pp). (2.3.4)

5. Household formation has increased since 2001. (2.3.5)

6. Tyne & Wear has a higher proportion of pensioner (+2pp) and lone parent (+1pp) households, and has a lower proportion of single person (-1pp) and couple (-1pp) households, compared to England as a whole. (2.3.6)

7. The period after the last recessions resulted in the lowest rates of net growth in household numbers over the last two decades. (2.3.8)

8. The level of new household formation in the City Region is not expected to be significantly affected by the current recession. (2.3.9-2.3.11)

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2.3.1 The population of the City Region stood at 1,678,800 in 2008 (Mid-Year Population Estimates), while the five metropolitan authorities of Tyne & Wear have a population of 1,093,400, representing 42% of the Region’s total.

2.3.2 Compared with the national pattern of population growth, the North East and Tyne & Wear in particular has experienced ongoing population decline since (at least) 1981, which has only begun to reverse since 2001. There have been substantial variations within the City Region, with the North Tyne sub-area experiencing the most substantial uplift in the 2000s, while the remaining sub-areas have largely seen a transfer of population from the metropolitan core to the metropolitan fringe. The largest proportionate decline has been recorded in Sunderland and its hinterland.

2.3.3 The population is aging, as is the case nationally, but it is aging at a faster rate in Tyne & Wear. The proportion of younger persons is lower, and the levels of in-migration and birth rates are lower than the national average. The population is notably older in the City Region’s hinterland.

2.3.4 In terms of households, there has been a more substantial increase in the number of households over the period 1991-2006, nationally and within Tyne & Wear. The level of household formation in Tyne & Wear appears to be noticeably lower than the national average (Tyne & Wear city region: +5pp8; Tyne & Wear Metropolitan 5: +3pp; England: +12pp). Within Tyne & Wear, North Tyneside has seen the largest proportion of new households, though this remains well below the national level. The other metropolitan authorities have only seen very modest household growth. The largest proportionate increases in the City Region have occurred in City Region Commuter and Urban Northumberland.

2.3.5 Of interest, the rate of household growth has increased substantially since 2001, and the view expressed by stakeholders as part of the engagement process suggests that the overall level of new household formation is not expected to be significantly affected by the recession.

2.3.6 A quarter of households are pensioners, which is 2 percentage points (pp) higher than the national average, while the proportion of single person and couple households is 1pp lower. There are a higher proportion of lone parents (+1pp).

2.3.7 Given the current recession and the pressure in the housing market in particular, it is worth taking a step back and considering how the number of new households has changed in the city region over a longer timeframe, including the period covering the last major recession9.

2.3.8 There are clear lessons; both of the major UK recessions of the last quarter century have been associated in Tyne & Wear with the lowest rates of net growth in households (this is shown by analysing 5-year periods as in Figure 2-1). This does NOT mean the current recession will be a simple repeat of the early 1990s. Nevertheless, we recommend that TWHP develop further systematic thought on the economic drivers of household numbers.

8 percentage points 9 There were two major recessions in the UK over the time period – 1981-1982; and 1990-1992, which resulted in a contraction of 6.1% and 2.5% (Bank of England data), with the current recession likely to exceed both in severity levels.

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Figure 2-1: Percentage household change (5 yr periods): 1981-2005

12%

10%

-2% 81-85 86-90 91-95 96-00 01-05

TWCR TW5 Gateshead North Ty ne South Tyneside Sunderland North Eas t

Source: CLG (2009) 2006 based Household Estimates and Projections, Tribal calculations 2.3.9 In an advice note10 provided Ministers by the NHPAU on housing supply ranges, a commentary of the recent 2006-based ONS population and CLG household projections was provided. The note suggested that a revised range for future annual household growth in the North East region. The bottom of the range (7,200) represents expected household growth, but does not take into account unmet need and demand, second homes and vacancies in the new stock). The top of the range (8,200) does take these factors into account.

2.3.10 The ranges are driven by the 2006-based population projections, based on more up to date data, which “… suggests people are living longer and birth rates are higher than was previously assumed…” and “… are also based on a better understanding of the patterns of migration both into this country and between regions.” These factors had a disproportionate impact on the figures for the North East as well as Yorkshire and the Humber and the East Midlands.

2.3.11 In addition, the note also concluded that: ■ “The recession and fall in house prices have not solved the problems of affordability” ■ The recession has had little impact on household growth ■ The homes “lost” in the dip will need to be made good in a later period ■ Affordability is having an increasingly severe impact because of mortgage rationing, increasing loan to value ratios and the size of deposit requirements ■ A risk of greater volatility in house prices and potential for even more extreme boom and bust cycles ■ Only increasing supply will moderate long term house price growth and improve accessibility.

10 NHPAU (2009) More homes for more people: advice to Ministers on housing levels to be considered in regional plans

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2.4 The economy

The purpose of this section is to understand better those economic drivers which have an impact on the housing market.

Changes in the economy have implications for the type, tenure and potentially even the location of housing. The data surrounding the economy are not quite as fine grain11 as for the demographic drivers, but a City Region geography has been used wherever possible.

Key findings

1. The UK is in recession. A sharp reduction in economic output has occurred following a crash in property markets, global economic turmoil and the resulting uncertainty. It will take some time to return to 2007 levels of output (2.4.1)

2. Headline GVA for Tyneside in 2006 was £14,200m and for Sunderland £4,752m (combined: £18,952m). (2.4.2). GVA growth lagged behind the English average for the nineties and the early 2000s. By 2005 Sunderland’s rate of growth had surpassed the national average, with Tyneside just behind. (2.4.3). GVA per resident stood at £17,596 for Tyneside and £16,935 for Sunderland, as compared to a national level of £19,413. (2.4.4) Incomes are low. (2.4.5)

3. The City Region has 686,700 employees, with 491,900 in the TW5 (2007). TW5 has 72% of City Region employees. In the period 1998-2007 there has been an uplift of 11.5% in TW5, which is substantially higher than the national pace of change. (2.4.6)

4. There is a clear pattern of ongoing employment concentration in the Newcastle Gateshead core, in the Durham hinterland and North Tyneside. Meanwhile, South Tyneside and Urban Northumberland have experienced relative decline. (2.4.7).

5. There has been a significant structural change in employment sectors. Manufacturing has declined, while there have been large increases in finance and banking services and public services. There are disproportionate risks to the Tyne & Wear economy of a reduction in public sector employment. (2.4.8-2.4.11)

6. Tyne & Wear has a substantially lower proportion of managers and professionals than the national average, a similar level of administrative and skilled trades and a higher level of customer service, process, plant and machine operatives and elementary occupations. (2.4.12)

7. Employment deprivation is a major issue, especially in Newcastle and Sunderland. (2.4.13) Benefit dependence is a significant feature. (2.4.14)

8. Tyne & Wear suffers from a very high proportion of young persons categorised as NEETs (Not in Employment, Education or Training). (2.4.15)

9. Newcastle, South Tyneside and Sunderland contain the largest proportion (40-43%) of people who live in areas which fall within the top 10% most deprived areas in England. (2.4.16)

11 Here, we refer to key economic indicators, such as GVA, which are very unreliable at lower level geographies.

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2.4.1 The UK is in recession. A sharp reduction in economic output has occurred following a crash in property markets, global economic turmoil and the resulting uncertainty. After a period of extreme fluctuations in estimates and forecasts, some element of stability and consistency in national level forecasts is beginning to emerge. These suggest a substantial decline in 2009, near flat growth in 2010 and a return to positive growth in 201112. It will take a number of years before we return to 2007 levels and those sub- regions which have traditionally taken longer to recover and grow may take even longer.

2.4.2 Headline GVA for Tyneside in 2006 was £14,200m and for Sunderland £4,752m. Tyne & Wear, therefore, has a total GVA of £18,952m.

2.4.3 GVA growth lagged behind the English average for the nineties and the early 2000s. By 2005 Sunderland’s rate of growth had surpassed the national average, with Tyneside just behind. This catch-up is clearly evident in Figure 2-2 below, as is the relative underperformance of Durham and Northumberland when compared with the regional performance. Figure 2-2: GVA change by area (compared to North East)

Source: ONS (2006):Table 3.1: Headline1 Gross Value Added (GVA)2,3 by NUTS3 area at current basic prices by region

2.4.4 GVA per resident stood at £17,596 for Tyneside and £16,935 for Sunderland, as compared to a national level of £19,413.

2.4.5 Income levels are lower in the North East than elsewhere in the UK, with a key objective of the Regional Economic Strategy being to lift income levels so that households are better able to build up cash reserves for deposits and to afford effective owner occupation. Of the UK’s countries and regions, income levels in the North East are

12 Source: ONS (2006) GVA Estimates by NUTS 3, HM Treasury (2009) consensus forecasts for UK economy

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second lowest, after Northern Ireland. The levels in the five metropolitan authorities are slightly lower than the regional average.

2.4.6 In 2007, the five metropolitan authorities had 491,900 employees, representing 72% of the wider city region’s 686,700 employees. In the period 1998-2007 there has been an uplift of 11.5% in TW5, which is substantially higher than the national pace of change (an element of catch-up has occurred).

2.4.7 The spread of new employees has not been equally distributed across the City Region. There is a clear pattern of ongoing concentration in the NewcastleGateshead core (+17.4 and +13.6%), and in the Durham hinterland (Easington: +23.6%; and North Durham: +15.9%). Substantial increases have also been evident in North Tyneside (+12.3%) with a comparatively modest but still strong increase in Sunderland (+8.7%). Meanwhile, South Tyneside (-6.7%) and Urban Northumberland (-4.9%) have experienced decline. The Northumberland Urban Commuter area (+1.2%) has been relatively stagnant.

2.4.8 Structural changes have been evident across the city region. The largest decrease in jobs (1997-2007) has taken place in manufacturing (-34,100), while the big increases have been seen in banking and finance (+42,300) and public services (+45,500). A recent report by Centre for Cities13 highlights the risk to Tyne & Wear as an economy with a high proportion of public sector jobs. It takes the view that spending cuts of up to 5% per annum will be required and that this will have a knock-on impact on employment levels, and that cities such as Newcastle and Sunderland will face cutbacks in employment levels over the period 2009-14.

2.4.9 The North Tyne sub-area specialises in banking, insurance and finance and public services, while Gateshead specialises in manufacturing, construction and distribution. Sunderland specialises in manufacturing and energy at the expense of public services. South Tyneside has a very low level of banking, insurance and finance.

2.4.10 In the context of the SHMA, it is worth briefly remarking on the importance of the housing industry as a sector of the economy in its own right. Its sharp decline is heavily sign- posted by the decline in the construction sector indicated above, but it is worth stressing that the sector includes the management, maintenance, legal and financial sectors as well. Furthermore, a number of the large national volume home builders are either based in the city region, or have a substantial regional presence. Further work looking in more detail at this segment of the market and its role in the North East’s economic activity would help to better define the extent of the market and its potential contribution. Demonstrating the impact of the housing industry as part of the economy, and perhaps more topically the potential for significant components of the skills within the housing industry to be adapted for use in the emerging Green Economy would also be of benefit as part of ongoing efforts to integrate strategies supporting the renewal of the housing industry and capitalising on the potential of the Green Economy.

2.4.11 An additional sector of particular interest to Tyne & Wear is the performance of the public sector. As noted above, this is a disproportionately large component of the City Region’s economy and this has traditionally been interpreted as being a relatively stable component of employment in the context of the current recession. Early speculation was that this high concentration of public sector employment would help dampen the impacts of the recession on the city region’s economy. However, a recent report by Centre for

13 Centre for Cities (2009): Public sector cities

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Cities14 has cautioned about a reliance on this sector, and has argued that those cities with a heavy emphasis on public sector services will be hit hard in the period 2011-14. The report estimates that 240,000-290,000 jobs may be lost in the sector over the period 2009-2014.

2.4.12 Tyne & Wear has a substantially lower proportion of managers and professionals than the national average, a similar level of administrative and skilled trades and a higher level of customer service, process, plant and machine operatives and elementary occupations. Within Tyne & Wear North Tyne sees a concentration of managers and professionals, South Tyneside of Skilled Trades, Sunderland of customer service, process, plant and machine operatives, and elementary positions, and Gateshead of administrative positions.

2.4.13 Unemployment is higher in Tyne & Wear and Economic Activity rates substantially lower than the national average (Dec 2008). Gateshead is closest to the national profile. Unemployment and claimant counts are highest in South Tyneside, with a correspondingly low level of economic activity. Employment deprivation is generally the issue in which the five metropolitan authorities have performed least well when compared with the regional average. It remains a major issue in Newcastle and Sunderland in particular.

2.4.14 Claimant counts had largely fallen from 1993, with a steep rise evident in 2008-09, reflecting the severity of the economic transition currently underway and the very real impact it is having on the labour market.

2.4.15 Tyne & Wear (and indeed the North East more generally) suffer from a very high (10.2%) proportion of young persons (16-18) which are categorised as NEETs (Not in Employment, Education or Training).

2.4.16 Newcastle, South Tyneside and Sunderland contain the largest proportion (40-43%) of people who live in areas which fall within the top 10% most deprived LSOAs. Gateshead is lower (36%) and the lowest is North Tyneside (24%).

2.4.17 Further work is underway with the SHMA steering group to identify the implications of these drivers and to spell out what the might mean for the city region. These will then be tested as part of the scenarios which will be run as part of the modelling work.

14 Centre for Cities (2009): Public sector cities: Trouble ahead

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3 Characteristics of the housing stock

This section provides an overview of the housing stock in terms of the balance between housing types, tenures and stock conditions.

Key Findings

1. In 2008, there were 762,070 dwelling units in the Tyne & Wear City Region. 66% of these (500,231) are within TW5. (Table 3-2)

2. The North Tyne sub-area has the largest number of units (215,189), followed by Sunderland (124,170), Gateshead (91,886) and South Tyneside (68,986). (Table 3-2)

3. 75% of the City Region’s stock was Owner Occupied and Private Rented15, while 25% was Social Rented. For TW5, this was 72% and 28% respectively. (Table 3-4)

4. The highest proportion of Social Rented stock was in South Tyneside (33%) and Newcastle (31%), while the lowest proportion was in North Tyneside (22%). (Table 3-4)

5. Social housing as a proportion of all stock has fallen from over 30% to around 25% in the City Region between 2001 and 2008. This has occurred because of: Right to Buy sales; the removal of poor quality stock; and the growth of owner occupation and the private rented sector (Table 3-4).

6. In terms of stock conditions, there is something of a variable picture, with fewer private sector homes failing decent homes standards, but a higher proportion of social rented stock failing to meet the standard. There are significant variations within City Region. Sunderland has largely achieved its Decent Homes targets, while Newcastle has a high proportion of non-decent stock (70%). (3.2 and 3.3)

7. Significant progress has been made in Tyne & Wear in improving stock conditions. The largest social stock holder Gentoo which owns the former Council stock in Sunderland completed its decent homes programme in 2008. The four other metropolitan authorities have agreed with CLG to complete their decent homes programme in 2012 and 2013. The worst performing social owner East Durham Homes at Easington has this summer been awarded access to funding to accelerate its decent homes programme. Proportionately fewer private sector homes fail the decent homes standard (mainly on grounds of poor insulation and trip hazards in older properties such as Tyneside flats). Housing associations have all indicated that they will meet the original target of 2010. (CR: Chapters 4-6)

15 CLG’s live tables do not break down further than the broad private : social split used above. Applying the Census proportions, would result in the following proportions: TWCR: Owner Occupied: 67.5%; Private Rented: 7.5%. TW5: Owner Occupied: 63.3%; Private Rented: 8.6%.

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3.1 The housing stock

3.1.1 The 2001 Census estimated the total dwelling stock in the Tyne and Wear City Region as 730,481. Around 96% of household spaces is occupied, while some 29,097 household spaces were either vacant or used as second residences or holiday accommodation. Vacancy rates slightly higher in Newcastle on Tyne and Northumberland CR Commuter where around 5% of household spaces were unoccupied at the time. In addition to this, the use of stock as second residences or holiday homes was also higher in Northumberland CR Commuter, where such properties accounted for 1.1% of all stock (against a city region average of 0.2%). Occupation rates of households spaces in the Tyne and Wear City region are identical to those of the North East and England as a whole. Table 3-1: Total dwelling stock by status, 2001

Unoccupied Unoccupied Total Occupied Occupied Unoccupied Household Spaces - Household Housing Household Household Household Second / Spaces - Stock Spaces Spaces Spaces holiday Vacant homes

No. No. % No. No. No.

1 Gateshead 87659 84267 96 3392 89 3303

2 Newcastle upon Tyne 117695 111243 95 6452 245 6207

3 North Tyneside 88375 84861 96 3514 133 3381

4 South Tyneside 67992 66097 97 1895 61 1834

5 Sunderland 120072 116356 97 3716 147 3569

Northumberland: CR 62852 60975 97 1877 53 1824 6 Coalfield

Northumberland: CR 46830 44617 95 2213 505 1708 7 Commuter

8 North Durham 98546 94180 96 4366 305 4061

9 Easington 40460 38788 96 1672 35 1637

Tyne & Wear City 730481 701384 96 29097 1573 27524 10 Region

TWCR Metropolitan 5 481793 462824 96 18969 675 18294 A (1-5)

B Gateshead (1) 87659 84267 96 3392 89 3303

C North Tyne (2+3) 206070 196104 95 9966 378 9588

D South Tyneside (4) 67992 66097 97 1895 61 1834

E Sunderland (5) 120072 116356 97 3716 147 3569

X North East 1115821 1066292 96 49529 4428 45101

Y England 21262825 20451427 96 811398 135202 676196 Source: Census (2001)

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3.1.2 Data from the CLG for 2001 and 2008 on total dwelling stock numbers is presented in the table below. This indicates that stock numbers have increased over the period by 3.2%. The largest increases appear to have been in Durham Gateshead whereas growth in Newcastle has been lowest. In the Tyne and Wear Metropolitan 5, growth averaged at a lower 2.3%, with higher rates of 4.6% in Gateshead and 2.8% in North Tyneside, and lower rates in Newcastle, as well as South Tyneside and Sunderland (both 1.7%).

Table 3-2: Total dwelling stock by local authority area, 2001 and 2008

Total Dwelling Total Dwelling % Change Stock 2001 Stock 2008

1 Gateshead 87864 91886 4.58 2 Newcastle upon Tyne 120785 122319 1.27 3 North Tyneside 90358 92870 2.78 4 South Tyneside 67822 68986 1.72 5 Sunderland 122075 124170 1.72 6 Northumberland: CR Coalfield 62484 65420 4.70 7 Northumberland: CR Commuter 46941 48846 4.06 8 North Durham 99164 104649 5.53 9 Easington 41144 42924 4.33 10 Tyne & Wear City Region 738637 762070 3.17

A TWCR Metropolitan 5 (1-5) 488904 500231 2.32 B Gateshead (1) 87864 91886 4.58 C North Tyne (2+3) 211143 215189 1.92 D South Tyneside (4) 67822 68986 1.72 E Sunderland (5) 122075 124170 1.72

X North East 1127769 1167480 3.52 Y England 21360647 22493857 5.31

Source: CLG (2008)

3.1.3 In 2001, social housing accounted for 30% (208,389 dwellings) of all occupied dwellings in the city region; however, this proportion varies across the different local authority areas. Northumberland CR Commuter has the lowest level at 15% (6,602 dwellings). The Tyne and Wear Metropolitan 5 area averages out at 33% social rented occupied dwellings, ranging from 38% in South Tyneside to 26% in North Tyneside. In absolute terms, Sunderland is the leader with 39,012 socially rented properties in 2001. The private sector accounts for more than 60% across each local authority area in the city region, with an average of 69% overall. The balance between the private rented and owner occupied sector as 62% and 7% respectively, with a greater percentage of private rented properties in Newcastle (12%) 16and the fewest in South Tyneside and Sunderland (5%).

16 Stakeholders report that this figure is likely to have been surpassed by some margin since 2001.

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Table 3-3: Dwelling Stock by Tenure 2001

Total % Owner % Social % Private % Lives Occupied Occupied Rented Rented rent free dwellings

1 Gateshead 84184 58 34 6 1 2 Newcastle upon Tyne 111160 53 33 12 1 3 North Tyneside 84815 66 26 7 1 4 South Tyneside 66090 56 38 5 1 5 Sunderland 116293 60 34 5 1 6 Northumberland: CR Coalfield 60969 66 27 6 1 7 Northumberland: CR Commuter 44602 73 15 9 3 8 North Durham 94133 69 24 6 1 9 Easington 38786 63 30 5 3 10 Tyne & Wear City Region 701032 62 30 7 1

A TWCR Metropolitan 5 (1-5) 462542 59 33 7 1 B Gateshead (1) 84184 58 34 6 1 C North Tyne (2+3) 195975 59 30 10 1 D South Tyneside (4) 66090 56 38 5 1 E Sunderland (5) 116293 60 34 5 1

X North East 1065718 64 28 7 2 Y England 20406117 69 19 10 2

Source: Census (2001)

3.1.4 The 2001 Census data also provides a further breakdown of each category, showing that in the city region overall, owner occupation achieved through a mortgage or loan is most common (37% of all occupied dwellings). Within social renting, the vast majority, (24% of all occupied dwellings) are renting from the council.

3.1.5 In order to compare how the tenure breakdown has changed from 2001 to 2008, below are the CLG figures for both years, showing a breakdown of total dwelling stock. The tenure mix overall was marked by a significant decrease in the proportion of Local Authority dwelling stock (21% to 14%), a smaller increase in the proportion of RSL dwelling stock (10% to 11%), and a significant increase in the proportion of private housing (69% to 75%). While these patterns are in line with change trends in England as a whole, the changes in proportions were less pronounced for the England average.

3.1.6 Within the different sub areas, the most marked changes took place in Northumberland CR Coalfield and Durham Gateshead, where LA Dwelling Stock decreased from 24% to 10% and from 22% to 6% respectively, and the RSL Dwelling Stock increased from 4% to 12% and from 3% to 13% respectively. The biggest change in the owner occupied sector was in Durham Sunderland, where it increased in proportion from 66% to 76%.

3.1.7 These figures clearly represent marked changes within the social rented sector. Four authorities have transferred their social rented homes to housing associations (known as Large Scale Voluntary Transfers (LSVT)). These were17: Sunderland to Gentoo (36,356)

17 Source: HCA (2009) List of completed large-scale housing transfers

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homes in 2001); Tynedale (City Region Commuter) to Milecastle Housing Ltd (3,564 homes in 1999/2000); Castle Morpeth (City Region Commuter) to Castle Morpeth Housing (2,167 homes in 2007); Chester-le-Street (North Durham) to Cestria Community Housing (4,294 homes in 2008); Derwentside (North Durham) to Derwentside Homes (6,884 in 2006); and Wansbeck (Urban Northumberland) to Wansbeck Homes (part of the Bernican Group; 5,300 homes in 2008).

3.1.8 Three of the remaining metropolitan authorities have set up Arms Length Management Organisations (ALMOs) and one, North Tyneside, still directly manages its stock. Northumberland and Durham, after reorganisation, also each have one ALMO to manage the stock inherited from the previous constituent authorities

Table 3-4: Percentage Dwelling Stock by Tenure 2001-2008

Year 2001 2008 2001 2008 2001 2008 2001 2008

Other Other OO + OO + Stock LA LA RSL RSL Public Public PRS PRS

Area % % % % % % % %

1 Gateshead 29.78 23.51 5.04 5.13 0.08 0.22 65.10 71.15 Newcastle upon 2 29.21 24.28 5.55 5.87 1.07 0.82 64.17 69.03 Tyne 3 North Tyneside 22.30 16.98 5.12 5.16 0.05 0.01 72.53 77.85 4 South Tyneside 33.52 26.61 6.00 6.35 0.00 0.02 60.48 67.02 5 Sunderland 0.00 0.00 33.53 27.65 0.06 0.00 66.41 72.35 Northumberland: 6 23.57 10.34 3.83 11.67 0.12 0.11 72.47 77.89 CR Coalfield Northumberland: 7 6.12 0.00 8.95 13.08 0.61 0.23 84.32 86.68 CR Commuter 8 North Durham 22.34 5.89 2.73 13.00 0.22 0.15 74.71 80.96 9 Easington 29.89 20.11 4.13 4.07 0.03 0.02 65.95 75.80 Tyne & Wear City 10 21.17 14.04 9.72 11.12 0.28 0.21 68.83 74.63 Region

TWCR A Metropolitan 5 (1- 21.34 17.08 12.43 11.07 0.30 0.24 65.93 71.60 5) B Gateshead (1) 29.78 23.51 5.04 5.13 0.08 0.22 65.10 71.15 C North Tyne (2+3) 26.25 21.13 5.37 5.57 0.63 0.47 67.75 72.84 D South Tyneside (4) 33.52 26.61 6.00 6.35 0.00 0.02 60.48 67.02 E Sunderland (5) 0.00 0.00 33.53 27.65 0.06 0.00 66.41 72.35

X North East 20.68 11.96 7.98 11.46 0.26 0.20 71.08 76.38 Y England 13.06 8.32 6.96 9.52 0.58 0.33 79.39 81.83

Source: CLG (2008) NOTE: LA: Local Authority; RSL: Registered Social Landlord; OO: Owner Occupied; PRS: Private Rented Sector 3.1.9 The stock mix by accommodation type differs across the different sub areas, although the city region average is roughly in line with trends for England as a whole. Contrary to some opinions the City Region does not contain an over preponderance of flats. They account for 15% of the stock. As might be expected, Newcastle has a high proportion of higher density housing than the other local authorities in the city region, around 29% of all dwellings, which is double the city region average, although proportions of flats are not as high as can be observed in other, larger metropolitan areas. Other sub areas with slightly

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higher proportions of flats are North and South Tyneside, and Gateshead (20, 19 and 18%). Much lower proportions of flats can be observed in Durham Gateshead and Durham Sunderland (5%).

3.1.10 Other notable features of the stock mix are the high proportion of terraced houses in Durham Sunderland and the high representation of detached houses in Northumberland CR Commuter.

3.1.11 Finally, there are 491 residential caravans in the city region, the majority of which (125) are located in Sunderland followed by 96 located in Durham Gateshead.

3.1.12 There are five official halting sites within the City Region. The two largest in Sunderland cater for Travelling Showpeople, with a third in South Shields. Two Council run sites for Gypsies and Travellers are located in Gateshead and Durham (just outside Birtley). Another small privately owned site in South Tyneside has only temporary planning permission. Table 3-5: Dwelling Stock by Accommodation Type 2001

House or bungalow House or bungalow - Detached House or bungalow - Semi detached House or bungalow - Terraced Flat Flat - Purpose built block Flat - Conversion / Shared House Flat - In a commercial building Caravan or other

% % % % % % % % %

1 Gateshead 82 10 44 28 18 15 2 1 0 Newcastle upon 2 71 8 36 27 29 23 5 1 0 Tyne 3 North Tyneside 80 10 44 26 20 16 3 1 0 4 South Tyneside 81 8 43 30 19 15 3 1 0 5 Sunderland 89 11 45 33 11 9 2 1 0 Northumberland: 6 88 15 40 32 12 10 1 1 0 CR Coalfield Northumberland: 7 92 36 32 24 7 5 1 1 0 CR Commuter 8 North Durham 95 17 41 36 5 4 1 1 0 9 Easington 95 13 38 44 5 4 0 1 0 Tyne & Wear 10 85 13 41 31 15 12 2 1 0 City Region

TWCR A Metropolitan 5 81 9 42 29 19 16 3 1 0 (1-5) B Gateshead (1) 82 10 44 28 18 15 2 1 0 North Tyne C 75 9 39 27 25 20 4 1 0 (2+3) South Tyneside D 81 8 43 30 19 15 3 1 0 (4) E Sunderland (5) 89 11 45 33 11 9 2 1 0

X North East 87 15 40 32 13 10 2 1 0 Y England 81 23 32 26 19 14 4 1 0 Source: Census (2001)

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3.2 Stock conditions in the private sector18

3.2.1 Private sector stock conditions are (along with other tenure types) typically assessed against decent homes standards as a means of identifying those housing units that would need investment in order to bring them up to the nationally agreed minimum standard.

3.2.2 BRE have developed a Housing Stock Model which seeks to present a more nuanced picture of an area’s housing quality levels than those traditionally presented in local House Condition Surveys. The outputs from the model are mapped in Error! Reference source not found. below.

3.2.3 This data, though somewhat dated at this juncture, presents a sense of the locations where the private sector stock faces particular challenges in meeting decent homes standards. This is especially true in central, eastern, western and north central Newcastle, central Gateshead, along the Tyne Corridor in North Tyneside (Wallsend to North Shields), South Shields and Sunderland City.

Figure 3-1: Percentage of private sector non-decent homes by ward

Source: BRE (2006) Tyne and Wear Sub-region Housing Stock Projections, p. 10 Note: Based on 2001 ECHS data

The table overleaf presents the local authority level summary for a number of sub- elements within the model, namely: Dwellings which would fail the Decent Homes Standard

18 NOTE: The BRE model covers all private sector stock, comprising of owner occupied AND private rented stock.

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■ Dwellings which would fail the Decent Homes Standard due to:

the presence of a Category 1 Rating System Hazard

inadequate thermal comfort

disrepair

non-modern facilities and services ■ Non decent homes with vulnerable occupiers

■ Vulnerable households in decent dwellings

■ Percentage of dwellings with a SAP rating less than 35

■ Households in fuel poverty.

3.2.4 Across the bulk of indicators, Tyne & Wear performs substantially better than the English average. For example, 27% of Tyne & Wear private sector dwellings are estimated to be non decent as compared with 37% nationally. However, a higher proportion of households are reported as vulnerable – 21% as opposed to 16%.

3.2.5 Within Tyne & Wear, Newcastle is estimated to have the highest proportion of non decent dwellings at 31%, with Sunderland the lowest proportion at 23%. Conversely, Sunderland has the highest proportion of vulnerable households in non decent homes (23%), while Newcastle (and North Tyneside) have the lowest (19%).

3.2.6 Since 2001, a significant amount of investment has been made to address fuel poverty and energy efficiency and this is continuing. However, the research and supporting analysis undertaken by the Metropolitan Districts suggest that the low levels of energy efficiency evident in the private sector will not be addressed by traditional programmes of cavity wall and loft insulation. Additionally, the number of priority 1 hazards arising from steps and stairs in older homes occupied by older people and families with children (influenced by the high proportion of Tyneside flats) has implications for reducing ill health and accidents, as well as social exclusion priorities.

3.2.7 A further consideration in the current policy climate must be the residential carbon footprint of the city region, and the role of the strategic housing function in supporting the Government’s ambitions as outlined in its draft Climate Change bill, which proposes to introduce a long-term legal target for reducing CO2 emissions by 60% based on 1990 levels. A thinkpiece undertaken by NLP on behalf of One NorthEast19 in support of the integrated Regional Strategy suggested that the key roles for the strategic housing function lay in five main areas of ongoing work:

■ The Decent Homes programme aimed at bringing all social rented homes up to a certain standard. An important element is to improve the energy efficiency of the dwellings. ■ Programmes to eliminate fuel poverty where households are having to spend more than 10% of income on energy bills. Programmes involve working with those on low incomes to improve home insulation levels, upgrade heating and ensure income is being maximised.

19 NLP for ONE (2008) The housing issues for an Integrated Regional Strategy.

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■ Private sector stock improvement programmes, including regeneration, enveloping, improvement grant and equity loans for owner occupiers, private sector landlord assistance and accreditation ■ Working with planners to ensure design quality of new building particularly in relation to regeneration initiatives. ■ Education and awareness activities. 3.2.8 Further work to quantify the nature of this carbon contribution which housing in the city region can make is very much linked to the wider role of the housing industry in linking into wider Green Economy initiatives would be of great benefit from a housing and economy perspective.

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Table 3-6 BRE Housing Stock Model – Private Sector Housing

Vulnerable households Vulnerable in non households Inadequate Vulnerable decent in decent Non decent thermal HHSRS Disrepair as Non modern households dwellings as dwellings as SAP less Fuel poverty as a comfort as a Cat. 1 as a a as a as a a a percentage than 35 as a as a percentage of percentage percentage percentage percentage percentage percentage of all PS percentage percentage Private sector all PS of all PS of all PS of all PS of all PS of all PS of all PS vulnerable of all PS of all PS dwellings dwellings dwellings dwellings dwellings dwellings dwellings dwellings households dwellings dwellings Gateshead 57597 16229 8578 5925 5755 915 12515 5796 6719 4029 5011 ( 28% ) ( 15% ) ( 10% ) ( 10% ) ( 2% ) ( 22% ) ( 10% ) ( 54% ) ( 7% ) ( 9% ) Newcastle upon Tyne 77634 23697 11590 8076 8837 1495 14725 6835 7889 5158 5817 ( 31% ) ( 15% ) ( 10% ) ( 11% ) ( 2% ) ( 19% ) ( 9% ) ( 54% ) ( 7% ) ( 7% ) North Tyneside 65636 18392 9992 6448 6624 979 12502 5898 6604 4446 5269 ( 28% ) ( 15% ) ( 10% ) ( 10% ) ( 1% ) ( 19% ) ( 9% ) ( 53% ) ( 7% ) ( 8% ) South Tyneside 42204 10698 5661 3667 3672 606 9411 4174 5237 2361 3429 ( 25% ) ( 13% ) ( 9% ) ( 9% ) ( 1% ) ( 22% ) ( 10% ) ( 56% ) ( 6% ) ( 8% ) Sunderland 79748 18712 9602 6876 6116 667 18210 7498 10712 4515 6419 ( 23% ) ( 12% ) ( 9% ) ( 8% ) ( 1% ) ( 23% ) ( 9% ) ( 59% ) ( 6% ) ( 8% ) Tyne and Wear 322818 87728 45423 30992 31004 4663 67361 30201 37161 20509 25945 ( 27% ) ( 14% ) ( 10% ) ( 10% ) ( 1% ) ( 21% ) ( 9% ) ( 55% ) ( 6% ) ( 8% ) England 16970378 6294235 ########### ########### ########### 315219 ########### ########### 1430792 ########### ########### ( 37% ) ( 25% ) ( 19% ) ( 9% ) ( 2% ) ( 16% ) ( 7% ) ( 53% ) ( 15% ) ( 8% )

Source: BRE (2006) Tyne and Wear Sub-region Housing Stock Projections, p. 10

Note: Based on 2001 ECHS data

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3.3 Stock conditions in the social rented sector

3.3.1 Turning now to stock conditions within the social rented sector, information from the CLG shows the percentage of local authority dwellings falling below the decent home standard, the percentage requiring investment, and the average amount of investment required for each of these local authority dwellings.

3.3.2 The data suggest that in 2008 many of the local authority dwellings in the Tyne and Wear Metropolitan 5 were failing the decent homes standard. At that point around 70% of local authority dwellings in Newcastle and 55% in South Tyneside failed the decent home standard. The corresponding figures for North Tyneside were 35% and 19% for Gateshead. The national picture is similar, with 40% of North East LA dwellings and 26% for England falling below the decent home standard. This implies significant is still required in the area, with around £500million in investment in the Metropolitan area, and £654million required in the city region.

3.3.3 All local authorities have now reached an agreement with the CLG for completion of their decent home programmes. Under these agreements, programmes will be completed by: ■ Gateshead 2013 ■ Newcastle 2012 ■ North Tyneside 2011 (except sheltered stock which is subject to PFI arrangements and scheduled for completion by 2017 ■ South Tyneside 2013. Table 3-7: Local Authority Dwellings requiring investment, 2008

LA % of LA Total cost of LA dwelling dwellings dwellings investment stock requiring requiring required investment investment (£000s)

1 Gateshead 21,600 4,162 19 33,135 2 Newcastle upon Tyne 29,702 20,780 70 305,535 3 North Tyneside 15,769 11,160 71 132,060 4 South Tyneside 18,358 10,114 55 29,429 5 Sunderland 0 0 0 0 6 Northumberland: CR Coalfield 6,763 71 1 678 Northumberland: CR 7 0 0 0 0 Commuter 8 North Durham 6,160 1,681 27 15,304 9 Easington 8,634 7,685 89 138,330 10 Tyne & Wear City Region* 106,986 55,653 52 654,471

A TWCR Metropolitan 5 (1-5)* 85,429 46,216 54 500,159 B Gateshead (1) 21,600 4,162 19 33,135 C North Tyne (2+3) 45,471 31,940 70 437,595 D South Tyneside (4) 18,358 10,114 55 29,429 E Sunderland (5) 0 0 0 0

X North East 139,643 65,872 47 797,604 Y England 1,870,365 892,369 48 8,435,249

Source: CLG (2008) / *Excluding Sunderland

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3.3.4 The RSR suggests that well over 10,000 housing dwellings also fail to meet decent homes in the city region, of which around 1,700 are in the T&W Metropolitan area. Again, a substantial proportion (32%) of these dwellings are located in the Newcastle area. Notably, Gentoo, the LSVT association in Sunderland, has completed their decent homes programme.

Table 3-8: Housing Association dwellings that fail the Decent Homes Standard, 2006

Unfit Total number of HA homes which failed to meet the stock Decent Homes Standard (No.)

1 Gateshead 148 2 Newcastle upon Tyne 543 3 North Tyneside 370 4 South Tyneside 451 5 Sunderland 201 6 Northumberland: CR Coalfield 2,776 7 Northumberland: CR Commuter 1,747 8 North Durham 3,921 9 Easington 359 10 Tyne & Wear City Region 10,516

A TWCR Metropolitan 5 (1-5) 1,713 B Gateshead (1) 148 C North Tyne (2+3) 913 D South Tyneside (4) 451 E Sunderland (5) 201

X North East … Y England 224,567

Source: RSR (2008)

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4 Owner occupied sector

This section of the report details the main trends in the owner-occupied market in recent years beginning with the structure of the sector, affordability, the current market context, followed by some commentary from the perspective of the market.

Key Findings

Characteristics

1. The proportion of owner occupied stock has increased markedly in the nineties and early 2000s, outstripping national levels, driven by a strong economy and the practice of right to buy/acquire (4.2.11).

2. Tyne and Wear has more semi-detached and terraced properties than is typical nationally. The inverse is true of detached properties (Table 4-2). This difference is more pronounced than for the social rented sector, which is closer to the national distribution (Cross-reference: Table 3-8 and Table 6-).

Affordability

4.1.1 Affordability had declined substantially across the city region in the 2000s. The levels of affordability typically remain good in comparison with national levels. Some pockets of pressure exist in areas of quality. Outright affordability has moderated, but mortgage rationing has become a substantial challenge, especially for first time buyers with limited assets. Negative equity has re-emerged for some households. (Outright affordability has begun to improve relatively rapidly. However, we must take into account that many households are currently grappling with a context where lending criteria have altered substantially and rapidly. A move from 100% mortgages to an expectation of a 20% (and above) deposit has meant that even those households which may want to take advantage of lower purchase prices, may not have the necessary assets available to make up the required deposit. This is very closely linked to the process of mortgage rationing, where banks themselves have less access to finance and/or willingness to lend in the current market. This reinforces that, in the short term, the relationship between home prices and income will need to be interpreted with great caution.

4.1.2 From the two figures below, for both Lower Quartile and Median affordability most of Tyne & Wear remained highly affordable in relative terms right up until a strong jump in prices seen in 2002-03 in the North Tyne sub-area, and 2003-04 in Gateshead, South Tyneside and Sunderland. Sunderland experienced the most modest acceleration of the sub-areas. In the year from 2007-2008 affordability level had begun to improve in all areas. The largest improvement in affordability has been seen in North Tyneside, Newcastle and South Tyneside.

4.1.3 In short, affordability as emphasised by the NHPAU remains problematic at different points in the market.

3. Figure 4-3 and Figure 4-4)

The Market

4. The volume of sales had increased substantially in the period up to 2007 peaking at 23,041 for TW5 (4.6.13). The largest market (by sales volume) is North Tyne (46%), followed by Sunderland (24%) (Table 4-10). In the space of one year, this had declined across the piste by more than half, with all the signs for 2009 suggesting that the volume of sales had continued to decline (y-o-y). (

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Table 4-12)

5. Property prices grew rapidly in the 2000s with most (but not all) areas peaking in 2007. What followed was a steep correction with prices declining throughout 2008. The level of this decline has not fully fed its way into prices as market confidence has not yet been restored and market equilibrium has not been achieved. This is being exacerbated by a number of factors, including a difficultly in accessing finance, a belief that prices will continue to fall (and thus ongoing uncertainty in the market place), and an unwillingness of home owners to release properties at the current levels. (Figure 4-10 and Figure 4-11)

6. Although average house prices in the North East are lower than anywhere else, prices in Tyne and Wear have consistently been 10% above regional averages (4.6.1 and 4.6.2).]

7. Lower quartile property prices had risen more than the mean levels in the 2001- 08 period, suggesting a significant narrowing in the property market. This also means that the most accessible stock for those at the bottom of the market has become disproportionately more costly. This may also be connected with a substantial increase in the quality (and the removal of poor quality of stock) at the lower end of the market. (Table 4-9)

8. Traditionally popular areas remain popular. Other areas have thinner markets and previously vulnerable areas need careful monitoring as prices re-adjust (4.5.10).

9. Detached properties have a slightly higher likelihood of retaining their price at the moment, but it is impossible to establish any major distinctions between flats, semis, and terraced properties with all declining across the city region. There has been no disproportionate decline in the sales values of flats, certainly not to the extent of that seen in some of the North’s other major cities. (Table 4-14)

4.2 Structure of the owner-occupied market

4.2.1 The 2001 Census indicates that the bulk (62%) of the stock in the city region is owner occupied, as compared with 64% in the North East, and 69% in England. This represents a significant difference. Within the Tyne & Wear metropolitan five, this proportion is even lower at 59%. It is however worth noting that it is expected that the Tyne & Wear Metropolitan 5 will have moved closer to the regional average since 2001 due in part to significant demolitions within the social rented sector, and right-to-buy acquisitions.

4.2.2 Significant variations exist within the city region, with the proportion ranging from 53 per cent in Newcastle to 73 per cent in the Northumberland City Region Commuter sub-area. Of the four primary sub-areas, Sunderland has the highest proportion (60%), and South Tyneside the lowest (56%).

4.2.3 Between 21-23 per cent of homes in the metropolitan core are owned outright, while the proportion is higher in the Durham and Northumberland parts of the city region. The level of shared ownership in the city region is marginal representing less than half of one per cent of the city region’s owner occupied stock.

Table 4-1: Owner occupied stock, 2001

Total % Owned - % Owner % Owned - % Owned - with Occupied Shared Occupied owns outright mortgage or loan dwellings ownership No. No. % No. % No. % No. % 1 Gateshead 84,184 48,972 58 18,752 22 29,835 35 385 0 2 Newcastle upon Tyne 111,160 59,310 53 23,035 21 35,767 32 508 0

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3 North Tyneside 84,815 56,332 66 21,457 25 34,369 41 506 1 4 South Tyneside 66,090 37,142 56 13,945 21 22,865 35 332 1 5 Sunderland 116,293 70,083 60 26,417 23 43,102 37 564 0 Northumberland: CR 6 60,969 40,282 66 14,378 24 25,669 42 235 0 Coalfield Northumberland: CR 7 44,602 32,279 73 15,108 34 17,001 38 170 0 Commuter 8 North Durham 94,133 65,164 69 25,806 27 39,070 42 288 0 9 Easington 38,786 24,281 63 9,661 25 14,543 37 77 0 Tyne & Wear City 10 701,032 433,845 62 168,559 24 262,221 37 3,065 0 Region TWCR Metropolitan 5 A 462,542 271,839 59 103,606 22 165,938 36 2,295 0 (1-5) B Gateshead (1) 84,184 48,972 58 18,752 22 29,835 35 385 0 C North Tyne (2+3) 195,975 115,642 59 44,492 23 70,136 36 1,014 1 D South Tyneside (4) 66,090 37,142 56 13,945 21 22,865 35 332 1 E Sunderland (5) 116,293 70,083 60 26,417 23 43,102 37 564 0 X North East 1,065,718 678,397 64 269,503 25 404,319 38 4,575 0 Y England 20,406,117 14,052,992 69 5,969,124 29 7,950,309 39 133,559 1

Source: Census (2001)

4.2.4 In terms of the type of units, the dominant dwelling type20 in the city region is semi- detached properties, with 191,907 in 2001. This is followed by terraced stock (134,578), detached (75,933), and flats (31,081).

Table 4-2: Owner occupied stock by type, 2001

Owner Occupied Owner Occupied (unshared) (shared)

All Occupied Dwelling Total - all tenures Total Detached Semi- Detached Terraced Flat/ Maisonette Caravan or other temporary structure 1 Gateshead 84,277 48,968 7,116 23,078 14,847 3,914 13 9 Newcastle upon 2 111,239 59,299 6,556 29,574 15,020 8,138 11 12 Tyne 3 North Tyneside 84,858 56,326 7,745 27,660 14,377 6,538 6 6 4 South Tyneside 66,097 37,138 4,114 16,847 11,609 4,541 27 6 5 Sunderland 116,354 70,079 9,865 33,283 24,130 2,714 87 0 Northumberland: 6 60,966 40,276 8,355 16,369 13,203 2,317 32 0 CR Coalfield Northumberland: 7 44,626 32,275 13,639 10,236 7,106 1,241 53 6 CR Commuter 8 North Durham 94,176 65,163 14,495 26,093 23,042 1,477 56 0 9 Easington 38,787 24,276 4,048 8,767 11,244 201 16 3 Tyne & Wear 10 701,380 433,800 75,933 191,907 134,578 31,081 301 42 City Region TWCR A Metropolitan 5 462,825 271,810 35,396 130,442 79,983 25,845 144 33 (1-5) B Gateshead (1) 84,277 48,968 7,116 23,078 14,847 3,914 13 9 C North Tyne 196,097 115,625 14,301 57,234 29,397 14,676 17 18

20 Note: the Census refers to dwelling types as “Accommodation Types”

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(2+3) South Tyneside D 66,097 37,138 4,114 16,847 11,609 4,541 27 6 (4) E Sunderland (5) 116,354 70,079 9,865 33,283 24,130 2,714 87 0 X North East 1,066,292 678,343 134,326 298,458 208,657 36,272 630 64 Y England 20,451,427 14,049,614 4,238,221 5,001,290 3,600,469 1,149,178 60,456 4,508 Source: Census (2001) 4.2.5 In terms of proportions, Figure 4-1 below helps us to understand how certain sub-areas are specialised in terms of the provision they offer. This is driven by two key factors – the first is specific functions, while the second is a historical legacy.

4.2.6 Terraced stock receives a lot of attention in the housing and planning policy discourse in the North East. And, indeed the proportion is higher than the national average – approximately 30% as compared with 25% nationally. A far more distinctive characteristic of the city region, and in particular the five metropolitan boroughs, is the high proportion of semi-detached housing where we see 48% in TW5 compared to a level of 36% for England. There are more flats in the metropolitan boroughs than nationally or regionally as might be expected. The level of detached housing is significantly lower in the city region and within the five metropolitan boroughs.

4.2.7 In terms of the sub-areas, there are some substantial differences. The most distinctive sub-area is the North Tyne sub-area, which has the highest proportion of semi-detached housing and flats, while have the lowest level of terraced stock. Sunderland has the highest proportion of terraced stock and a very low level of flats. Gateshead meanwhile has the highest proportion of detached properties reflecting its relatively large rural area. South Tyneside meanwhile has the lowest level of detached housing and semi-detached housing, compensated for by relatively high proportions of terraced and flatted stock, implying a somewhat smaller profile of units within the borough.

4.2.8 Care should be taken in drawing any assumptions from a simplistic interpretation of dwelling types. There is a tendency to interpret a different profile of accommodation types as a means of justifying a requirement for a particular type of stock. It should be stressed just how limited an analysis of accommodation types in isolation is, as it does not tell us anything about the quality or size of properties, which has a much greater bearing on its market performance. In planning for new provision, the focus should be on the quality and size of properties, rather than the type, which should be informed by more local site- specific attributes.

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Figure 4-1: Owner occupied stock by accommodation type, 2001

Source: Census (2001), Tribal calculations

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What has changed? 4.2.9 The table below shows the level of owner occupied stock in 1991, with the most striking element being the extent to which the Tyne & Wear along with the rest of the North East have been playing catch-up on the rest of the country.

Table 4-3: Owner occupied stock, 1991

Total Owned - owns Occupied Owner occupied Owned - buying (1) outright dwellings No. No. % No. % No. % 1 Gateshead 82,727 43,632 53 14,079 17 29,553 36 2 Newcastle upon Tyne 111,216 55,672 50 18,071 16 37,601 34 3 North Tyneside 80,279 48,304 60 16,035 20 32,269 40 4 South Tyneside 63,938 32,091 50 9,789 15 22,302 35 5 Sunderland 113,168 60,556 54 19,408 17 41,148 36 Northumberland: CR 56,639 34,828 61 9,690 17 25,138 44 6 Coalfield Northumberland: CR 41,475 28,282 68 10,727 26 17,555 42 7 Commuter 8 North Durham 87,685 55,770 64 19,155 22 36,615 42 9 Easington 38,819 20,900 54 6,795 18 14,105 36 10 Tyne & Wear City Region 675,946 380,035 56 123,749 18 256,286 38 A TWCR Metropolitan 5 (1-5) 451,328 240,255 53 77,382 17 162,873 36 B Gateshead (1) 82,727 43,632 53 14,079 17 29,553 36 C North Tyne (2+3) 191,495 103,976 54 34,106 18 69,870 36 D South Tyneside (4) 63,938 32,091 50 9,789 15 22,302 35 E Sunderland (5) 113,168 60,556 54 19,408 17 41,148 36 X North East 1,023,280 604,903 59 203,527 20 401,376 39 Y England 18,545,529 12,618,633 68 4,504,600 24 8,114,033 44 1 Census 1991 did not record "shared ownership" Source: Census (1991) 4.2.10 Table 4-4 shows the extent of this change and the trends. Overall in the city region, there are 53,810 more homes in the owner occupied market in 2001 than there were in 1991. The owner occupied market has grown substantially with some growth also occurring in the Private Rented Sector, at the expense of the Social Rented Sector. The more up-to- date data presented in the table above for 2001-2008 (Table 3-4) suggests that this overall pattern is likely to have continued.

4.2.11 Within the sector the biggest increases have been seen in the ‘owns outright’ category, while the proportion of “owned homes – buying” has also outstripped the national level. The proportionate increases are summarised in Figure 4-2 below.

Table 4-4: Owner occupied stock, change 1991-2001

Total Owned - Occupied Owner Owned - owns dwellings occupied buying (1) outright (all tenures) 1 Gateshead 1,457 5,340 4,673 667 2 Newcastle upon Tyne -56 3,638 4,964 -1,326 3 North Tyneside 4,536 8,028 5,422 2,606 4 South Tyneside 2,152 5,051 4,156 895 5 Sunderland 3,125 9,527 7,009 2,518 6 Northumberland: CR Coalfield 4,330 5,454 4,688 766

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7 Northumberland: CR Commuter 3,127 3,997 4,381 -384 8 North Durham 6,448 9,394 6,651 2,743 9 Easington -33 3,381 2,866 515 10 Tyne & Wear City Region 25,086 53,810 44,810 9,000 A TWCR Metropolitan 5 (1-5) 11,214 31,584 26,224 5,360 B Gateshead (1) 1,457 5,340 4,673 667 C North Tyne (2+3) 4,480 11,666 10,386 1,280 D South Tyneside (4) 2,152 5,051 4,156 895 E Sunderland (5) 3,125 9,527 7,009 2,518 X North East 42,438 73,494 65,976 7,518 Y England 1,860,588 1,434,359 1,464,524 -30,165 1991 did not record shared ownership as a separate category; 2001 figure here refers to "owned with (1) mortgage or loan" and "shared ownership" Source: Census (2001)

Figure 4-2: Owner occupied stock, proportionate change 1991-2001

Source: Census (2001), Tribal calculations

4.3 Affordability

Interpreting Affordability 4.3.1 The relationship between household incomes and home prices is key in understanding how accessible different forms of housing options are for households. This impacts on need and potentially the competitiveness of city region economies (ref: Northern Way, Residential Futures research programme). A multiple of 3.5 times (2.9 for couples) annual household income is normally used as a benchmark to indicate a sustainable level for purchases, while a level of 25% of household income is usually accepted as a sustainable level for private sector rent.

4.3.2 In housing circles, there is a particular interest in understanding the relationship between lower quartile incomes and lower quartile housing prices, and the affordability ratio. The

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logic underpinning this is that there is particular importance in understanding how easy (or otherwise) it is for lower income households to afford properties in a similar band to their income levels.

4.3.3 This area is, however, fraught with issues of interpretation. The market for lower quartile properties may not actually be those on lower quartile incomes, as their needs may actually be accommodated elsewhere (social tenure, intermediate options and so on) – we consider this issue later in this section.

4.3.4 In the same vein, though we use mean or median21 (depending on the data source) household incomes and home prices below, there is nothing which indicates that an average income household needs to buy an average priced home. They may exercise a choice, within their means, to purchase a cheaper property (thus releasing resources for other purposes), or they may choose to invest in a more expensive property (for, say, quality of life purposes). These are choices, and are not reflective of a need, which needs to be fulfilled.

4.3.5 At the other end of the spectrum, there is also little to say that a lower quartile house is necessarily of quality, and therefore would be chosen by any household other than those with no other financial choice. This may not be the case, but there is nothing in a simple price:income analysis which helps us to understand those dynamics.

Affordability in Tyne & Wear 4.3.6 In the late nineties and early 2000s, a rapid escalation in affordability ratios was evident across the country. In the 2000s, the impact of this started to be experienced in parts of Tyne & Wear. With ratios of (say) five and above, there are clearly increasing difficulties in accessing owner occupation. This has an impact on the housing choices of individual households and in extreme cases, this may impact on the competitiveness of a location as a place in which to live, work and do business.

4.3.7 The NHPAU identifies the North East as having the lowest affordability ratio of any region. As this is a key determinant in the allocated home-building supply figures, this point needs to be tested through the Regional Strategy and Local Development Frameworks for its applicability and soundness at each tier. The evidence presented below supports that NHPAU’s analysis at the regional tier and goes some way towards helping authorities to explore the implications of the affordability pressures which exist, and to think through the supply-side ramifications at the more local level.

4.3.8 Using the evidence presented here as a starting point, authorities will need to reconcile the data on need and the market (including affordability) with the targets for home-building suggested at the regional level by the NHPAU. In particular, the evidence presented below, should provide a steer on policy choices surrounding where future supply might be required (in market demand and need terms).

4.3.9 Clearly, policy is an instrument of change and so this is not a simple relationship of high pressure = build more homes here; but major axis and swathes of pressure must be considered as a significant structural features of the housing market and it is important that policy is cognisant of these forces in the market.

21 Mean = average; median = the mid-point price (i.e. 50% of home prices lie above the median; 50% above)

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Affordability – the current position 4.3.10 Outright affordability has begun to improve relatively rapidly. However, we must take into account that many households are currently grappling with a context where lending criteria have altered substantially and rapidly. A move from 100% mortgages to an expectation of a 20% (and above) deposit has meant that even those households which may want to take advantage of lower purchase prices, may not have the necessary assets available to make up the required deposit. This is very closely linked to the process of mortgage rationing, where banks themselves have less access to finance and/or willingness to lend in the current market. This reinforces that, in the short term, the relationship between home prices and income will need to be interpreted with great caution.

4.3.11 From the two figures below, for both Lower Quartile and Median affordability most of Tyne & Wear remained highly affordable in relative terms right up until a strong jump in prices seen in 2002-03 in the North Tyne sub-area, and 2003-04 in Gateshead, South Tyneside and Sunderland. Sunderland experienced the most modest acceleration of the sub-areas. In the year from 2007-2008 affordability level had begun to improve in all areas. The largest improvement in affordability has been seen in North Tyneside, Newcastle and South Tyneside.

4.3.12 In short, affordability as emphasised by the NHPAU remains problematic at different points in the market.

Figure 4-3: Lower quartile earnings versus lower quartile home prices

Source; CLG (2009) Table 576, Ratio of lower quartile house price to lower quartile earnings by district, 1997- 2008. Based on ASHE and HM Land Registry data.

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Figure 4-4: Median earnings versus median home prices

Source; CLG (2009) Table 577, Ratio of lower quartile house price to lower quartile earnings by district, 1997- 2008. Based on ASHE and HM Land Registry data.

Affordability for entrants into owner occupation 4.3.13 Data produced by Professor Steve Wilcox helps us to explore how affordability impacts upon newly forming households. This can be interpreted as a measure of affordability for those not already on the housing ladder.

4.3.14 The dataset provide data on mean household incomes of these younger groups (age 20- 39) for typical starter homes (2-3 bedrooms) resulting in a house price to income ratio. These are mapped out for the available periods below (this is not a regular publication). This indicates that for the most part affordability levels in the North East remained generally within acceptable tolerance levels22 for this group of households. Furthermore, it appears that while affordability had continued to deteriorate nationally, it had begun to ease in Tyne & Wear City Region by 2007, with the single exception of the North Tyne market. It is likely that outright affordability levels will have continued to improve in 2008 and 2009, with mortgage rationing becoming the new constraint.

22 At, or close to, a ratio of 3.5

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Figure 4-5: Household affordability, Tyne & Wear, 2002, 2004, 2005, 2007

Sources: Wilcox (JRF, 2002; JRF, 2005; JRF, 2006; Hometrack, 2008), Tribal calculations

4.3.15 The Wilcox reports also give an indication of the proportion of the overall market which falls within the “Intermediate Housing Market” (IHM). Further defined in terms of “narrow” and “broad” IHMs23, these describe the proportion of households who cannot access the private property market. This is summarised in the figure below.

Figure 4-6: Wilcox: broad and narrow intermediate housing markets

Source: Wilcox (Hometrack, 2008) 4.3.16 The table below presents the most recent Wilcox (Hometrack, 2008) report’s findings on the intermediate housing market for the five metropolitan authorities of Tyne & Wear.

23 Narrow = Households not on Housing Benefit who cannot afford to buy at the lower decile level; Broad = Households unable to buy at lower quartile level + those working but on Housing Benefit.

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4.3.17 This suggests that the proportion of households falling within the narrow definition of the IHM had remained well below the average for England as a whole. There had however been a very sizeable increase from 2005 and 2007, which vastly exceeded the pace of change nationally, indicating an amount of convergence with the national picture. Of the Tyne & Wear authorities, only Sunderland’s IHM was below the average for the region.

Table 4-5 Wilcox intermediate housing market, Tyne & Wear, 2007

Requires Working Narrow Between Wide Narrow Housing households IHM LD & LQ IHM IHM Benefit

2007 2007 2007 2007 2007 2005

Gateshead 18,563 7.3 21 11 39.3 9.9 Newcastle upon Tyne 25,961 7.4 22.2 7.7 37.3 8.6 North Tyneside 21,944 12.8 20.2 5.7 38.7 10.2

South Tyneside 12,237 10.8 20.7 6.4 37.9 7.5

Sunderland 24,750 11.8 15 6.1 32.9 11.2

North East 232,420 10.5 16.9 7.6 35 6.9

England 5,004,758 13.1 29.6 7.9 50.6 23.5

Source: Wilcox (Hometrack, 2008), and Wilcox (JRF, 2006)

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Affordability – local pressure points24 4.3.18 Looking at the most recent data available (Hometrack, May 2009), we can explore the local level picture for lower quartile affordability25 (based on land registry data and CACI’s Paycheck data). General affordability levels typically exceed a ratio of 5, suggesting the affordability remains an issue locally within the city region.

4.3.19 The greatest local level affordability concerns in the lower quartile segment are evident in the hinterland of the city region, in the Tynedale corridor, Ponteland and Morpeth to the north, and in Durham City and Chester-le-Street to the south.

4.3.20 Within the metropolitan authorities, north of the Tyne is less affordable. The pockets where this is most problematic include the Coast and North Newcastle, along with pockets of rural South Tyneside (in and around the greenbelt), parts of Sunderland south of the city centre, and pockets within Gateshead (including Whickham, Low Fell).

4.3.21 Looking at the mean26 (average) house price to income ratios, the differentials are less pronounced as in the case of the lower quartile ratio.

4.3.22 The first thing to notice is that the ratios are lower suggesting it is easier for those at the average point in income terms to purchase average priced homes.

4.3.23 North of the Tyne the most unaffordable locations are restricted to The Northumberland: City Region Commuter sub-area, and pockets of North Newcastle and the city centre.

4.3.24 South of the Tyne, and Wearside also see a more concentrated focus for the pressures in this segment, with Low Fell (Gateshead), Durham City and Cleadon, Whitburn (South Tyneside) standing out.

24 The analysis in this section is based on the maps generated by the hometrack system and reported in Appendix C. Unfortunately, due to the licenses available through the client group, it has not been possible to produce a map for the whole city region and instead North of Tyne and South of Tyne maps have been produced. As these are somewhat difficult to compare, caution should be employed in interpreting the data.

25 See Map 1 in Appendix C

26 See Map 2 in Appendix C

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4.4 Current market context27

4.4.1 In the period from the millennium until Q3 2007, the property market nationally and in Tyne & Wear had experienced significant year on year increases. Demand was fuelled by a buoyant economy, a changing demographic profile, in-migration, cheap credit and a significant volume of speculative investment. Supply meanwhile was sluggish, taking many years for supply levels to start reaching the Government’s targets on housing delivery.

4.4.2 The third quarter of 2007 has been identified by many commentators as the peak of the property boom. Since then, prices have fallen and the volume of sales is low. This can be seen in the very stark decline illustrated in the figure below.

Figure 4-7: Average (mean) home prices and volume of sales, Tyne & Wear, 1995- 2009

Source: Land Registry (2009)

4.4.3 Currently in the midst of a recession, combined with a global financial crisis, the level of lending has declined markedly. A situation where 100% (and higher) mortgages was common, turned into one where a minimum of a 20% mortgage is now required. This has priced first-time buyers out of the market, which has had a knock-on effect on: 1. the supply of new housing (first-time buyers are an especially important market for new homes); and 2. the sale of second time homes as first-time buyers typically occupy an important role in housing sale chains. The market has not yet reached a new equilibrium where the expectation of sellers and buyers are in balance.

27 This section has been partially informed by research undertaken by storeys:ssp

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4.4.4 Some of the primary impacts of the recession and the global financial crisis can be summarised as follows: ■ The UK banking and finance sector has been reducing the scope and accessibility of mortgage finance. This primarily been driven by the need to re- capitalise the banks following a rapid deterioration in the quality of the banks’ assets (especially property) at home and abroad. The difficulty in getting a mortgage has restricted the number of buyers in the market. The Council of Mortgage Lenders reported a 57% fall in loans for house purchase between September 2007 to September 2008 and a 52% drop in loans to first time buyers over the same period. In addition the provision of foreign lending to the residential wholesale market has declined markedly, which is important as at its peak, this source accounted for 30% of mortgage finance in the UK28

■ This contraction of mortgage products has spread throughout the market leading to less choice and higher costs for many new house-buyers. Those coming to end of fixed term periods are also faced with considerable increases in their costs for a number of reasons: difficulties accessing new products on favourable terms; increased mortgage fees, though interest rates have fallen substantially. A marked difference between those with substantial assets or existing variable rate mortgages (incl tracker mortgages), and first time buyers, or other asset-light households. That being said, historically low interest rates are one reason why the cost of housing has remained low for those who have already bought, which is one reason why the levels of repossessions have not been as high as some may have initially feared

■ There has been a significant reduction in completions in the new build sector as the house-building industry responds to these unfavourable conditions. The industry has contracted rapidly with significant lay-offs occurring in the North East. There are some tentative signs that the volume home builders have written off most, if not all, of the depreciation in asset values and are re-positioning themselves to take advantage of opportunities to acquire land and properties on a speculative / opportunistic basis29

■ Households that are particularly at risk of losing their homes in the current climate are households that, because of their credit history, have not been able to obtain mortgage finance from mainstream lenders and have, instead, been funded through the sub- prime market. Sub-prime mortgage products are used by households with impaired or low credit ratings. Because of the higher risk to the lender from these mortgages, the interest rate charged tends to be higher than those charged by mainstream lenders. That is, people who have had difficulties repaying debts (or who have a poor lending profile) are being charged the highest interest rates30.

4.4.5 Given the general downturn in the housing market, specific business sectors have been hit hard, including home-building and those sectors involved in the residential sales market (estate agents etc). In the short-term the industry has responded by restructuring. The longer-term prognosis for the housing market remains optimistic given the demographic drivers – however, the decline in new house-building is simply likely to add to future shortfalls to meet the pent-up demand. This view has been confirmed by the analysis done this summer by the NHPAU and included in its latest advice on the level of

28 Ref: Sir James Crosby: Mortgage Finance; http://www.hm-treasury.gov.uk/fin_mort_crosby.htm

29 http://news.bbc.co.uk/1/hi/business/8270187.stm

30 Figures provided by the FSA in response to a Parliamentary question answered on 1 October 2008. Note: the FSA cannot estimate the number of mortgages that have been made to households with a low credit rating.

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long term housing supply required. It is clear that in the short term, despite government initiatives such as Kick Start, the volume of new home building will not meet the figures in the RSS. Whether, and at what rate, the gap can be made up in the medium term is less clear due to many uncertainties and the range of variables involved. SHLAAs suggest that generally there are sufficient developable sites and planning permissions in the City Region to make up the shortfall. But when owners will be willing to bring sites to market is not clear. The financial and skills capacity of the home building industry has also been set back and rebuilding this capacity, linked to the general economic recovery, will take time. Government and local authority investment has been positive but it is likely to be scaled back considerably starting in 2010. The overall controller of recovery is still likely to be access to mortgage credit and capital for deposits for home buyers.

4.4.6 Difficulties with housing costs may lead to a rise in the number of repossessions and pressure on services such as homelessness. However the overall impact is difficult to predict and will be related to the severity of the current downturn in the housing market along with the performance of the wider economy (e.g. rising unemployment would potentially add to difficulties in the housing system). Pressure is expected to grow as the effect of unemployment, which lags economic recovery, grows during 2010.

4.4.7 Throughout 2009 housing market indicators have continued to give mixed messages on recovery. Recently there have been more positive signs in the housing market. The RICS Housing Market Survey monitors confidence levels amongst agents and thus provides an early indicator of future market movements. In its June 2009 survey it reported that activity was picking up with an increase in buyer enquiries, a net increase in new instructions to sell and an increase in the net balance of newly agreed sales, albeit from historic lows. Also recent data from the Council of Mortgage Lenders shows that lending increased in June 2009 from May 2009 levels, however these figures were still down on June 2008 levels. Savills Research also notes the slow improvement in the housing market and anticipates that this will continue throughout 2009 with recovery to peak levels of 2007/2008 only being achieved in late 2011/2012 when mortgage dependant markets have recovered.

4.4.8 While the most positive signs have been noted in London and the South East and for more expensive properties, a recent report by Knight Frank31 predicts further modest falls in 2010, a limited rise in 2011 and a concerted recovery in 2012. For the North East, they predict the sixth strongest recovery out of the thirteen national and regional areas in the UK. With a return to 2007 values by 2013 and price growth of 20.9% between 2008 and 2014, giving an average price in 2014 of £143,300.

4.4.9 The latest RICS market survey32 reports slightly more surveyors reporting price rises than price falls for September in the North region (which includes Cumbria). Overall, this places the region fifth best out of 12 regions and nations for price.

4.4.10 Against a backdrop of falling house prices, values of residential development land have also fallen sharply. Greenfield values across the UK are now at 54% below their peak of September 2007 and corresponding figures for the northern region are at 64% below peak across that same period (The future of UK residential building land – June 2009. Savills Research).

31 http://resources.knightfrank.com/GetResearchResource.ashx?id=11653

32 http://www.rics.org/site/scripts/download_info.aspx?downloadID=3857&fileID=4489

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4.4.11 There are a number of factors which have contributed to this. Savills research identifies a direct correlation between the value of residential development land and house builders’ expectations of future sales rates. Currently developer confidence in the housing market is weak with expectations that future sales rates will continue to be low. Developers are offering generous incentives and have reduced asking prices to try and stimulate demand for new homes. The banking crisis has restricted the availability of finance to house builders some of whom have substantial debt funding issues as the fall in values has meant that prices paid for sites at the top of the market can no longer be justified.

4.4.12 There is, however, little direct evidence of falling land values as very few transactions are taking place, but this is starting to change as some are cautiously returning to the market. House builders are now unwilling to buy major sites in a single tranche and are instead offering phased payments to coincide with build out rates. Some landowners will not be prepared to sell on this basis and will wait until market conditions improve. Stakeholders reported some movement from developers, who are reported to be focussing on acquiring medium-sized sites for family housing, especially north of the Tyne. The Home Builders Federation has suggested that the fall in land values may be even more severe in the North East, somewhere in the region of a 64% fall from a 2007 peak. As most builders tend not to own significant land, they need to be in a position to incentivise land owners (private or public) to release land for purchase. This remains challenging at current price levels.

4.4.13 It is anticipated that recovery in the residential land market will lag behind that of the housing market with predictions that prices for bulk land will not reach 2007 levels again until 2026. House builders will initially focus on low risk development sites where they can make a quick return and this is likely to mean developing out small sites and serviced plots and concentrating on providing houses rather than flats and apartments. This may see an emerging preference for greenfield rather than previously developed land, although given the level of brownfield land in Tyne & Wear it is uncertain how the relationship between the two will unfold.

4.4.14 There is some optimism that we are nearing the bottom and that the level of enquiries was escalating, albeit from a much reduced base. Developers were concerned about the question of finance from the perspective of putting together packages to deliver schemes, and on the demand side in terms of households accessing mortgage finance (especially first time buyers). As of May 2009, there was still some overhang of stock reported, but developers were actively working with Local Authorities and other partners (especially the HCA) to innovate in terms of product offerings. Stemming from this, there has been a lot of industry interest in exploring the various Intermediate Housing Market options, including shared equity, shared purchase and shared ownership. It must be stressed that this was seen as a very small niche within the market and it was unclear whether or not there was a substantial role for this product type in Tyne & Wear.

4.4.15 First time buyers were reported to be switching to the private rented sector and this was resulting in some areas with a large proportion of private rented experiencing relatively robust interest. As a direct parallel, owners are also reported to be placing properties into the private rental market pending an upturn in the market, reflecting an acceptance that prices may not increase substantially in the short to medium term.

4.4.16 There was a strong sense from stakeholders that existing growth plans needed to be revisited, in terms of phasing as opposed to overall ambition, and furthermore that this should be done collectively, irrespective of which local authority area the growth points were in. It was also reported that developers were re-planning sites to alter the mix to reflect perceived changes in preferences. In particular, it was suggested that lower density schemes were being proposed and that there was a change in the balance away from smaller units (including flats) towards larger family homes.

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4.4.17 Land supply was not seen as a major constraint, nor planning permissions. Most agreed that the factors impacting on the housing market were twofold. First, the difficulties within the sector itself (especially access to finance) and second the wider economy was seen as being critical to any uplift in the fortunes of the housing industry.

4.4.18 There is a general view that the recent halt in the decline in house price changes is largely due to a reduction in unsold stock rather than new sales being brought to the market. There is a fear that when stocks are exhausted, further falls in the market could follow.

4.5 The view from the market place – the estate agents’ perspective33

4.5.1 More detailed qualitative research into the market for owner-occupied housing within Tyne & Wear was done by interviewing estate agents active in various sub-areas. There were no significant differences between different sub-areas, despite the fact that there can be substantial differences in values and the socio-economic status of home owners. This demonstrates how the market downturn has been across the board and has not distinguished between different sectors.

What types and size of houses are selling? 4.5.2 Generally throughout Tyne & Wear there is no particular pattern to what types of houses are selling. All of the agents questioned reported that whilst the number of sales has significantly decreased, they continue to sell the full range of properties from flats to large detached houses, only in a lesser number. The properties that sell are those which have been priced realistically and where sellers have been prepared to accept current market prices. Some sellers are still intent on marketing their property at prices that reflect the peak of the market in 2006/2007 and will not drop their price despite their inability to secure a sale. These sellers are reluctant to take their property off the market until prices have recovered because to do so would require them to commission a new Home Information Pack.

4.5.3 The number of properties on the market has fallen. This is primarily attributable to market conditions but the expense of commissioning a Home Information Pack also makes sellers hesitant.

4.5.4 There is interest in all sizes of property, and the need for realistic pricing applies across all size bands. The most common size of house sold across Tyne & Wear is a three bedroom house. However agents in the more affluent areas report sales of four bed detached properties between £300,000 and £500,000.

4.5.5 The most difficult types of property to sell are new build apartments, second hand new build apartments and second hand new build properties in general. Apartments have flooded the market in recent times, especially in city centres. In Sunderland, there is substantial oversupply with little demand. Most purchases have been by investors at the height of the market as buy to lets rather than owner occupiers. Asking prices need to be heavily reduced in order to attract a sale and most sellers are reluctant to do this as they purchased off plan at the height of the market. This is also true of Newcastle city centre and to a lesser extent Gateshead.

4.5.6 Second hand new build properties are difficult to sell also because they do not seem to be realistically priced. Again, a high proportion of occupiers purchased at the height of the

33 This section was based on research undertaken by storeys:ssp

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market and are reluctant, or cannot afford, to reduce their asking price. Whereas housebuilders are ensuring that incentives are available to purchasers of new housing, these are not available on re-sales. Many second hand new homes are thus priced at levels which are just not competitive.

4.5.7 Amongst the incentives being offered for a purchase of a new home is the offer of a 5% “deposit” to buyers in order to facilitate a sale. This particular incentive is being targeted at the lower end of the market in order to attract first time buyers.

In which locations are properties selling and which locations have been vulnerable? 4.5.8 Property sales within Tyne and Wear do not seem to be particularly location specific. Sales will occur in most areas if the price is realistic. That said, the areas which have been traditionally popular continue to be popular, whereas in those areas where owner occupation is not the dominant form of tenure the market is thinner.

4.5.9 Some agents report that locations comprising ex local authority housing have become less popular. When the market was strong, these locations were the only one’s accessible to first time buyers or those on lower incomes. However as prices have fallen a greater range of housing and areas has become affordable allowing low income buyers to consider a wider number of locations. For example, in Newcastle some buyers can now afford to purchase in Fenham or Westerhope whereas previously they might only have been able afford areas such as Cowgate. We are sceptical that these reported choices are being exercised, given the previously noted limited access to finance generally and in particular those who would be likely to be purchasing lower quartile properties.

4.5.10 All areas have been affected by the recession and all properties have seen reduction in values. However, the traditionally more desirable areas have continued to remain more popular. During the boom when house prices were rising, the less popular areas saw large price increases. These areas have been particularly vulnerable as values have decreased more quickly than the more popular areas.

Of those properties that are sold, what is the typical price range? 4.5.11 Typical price ranges vary across Tyne & Wear. Overall the most common price range is between £100,000 and £150,000, which matches what the average buyer can afford. However, in areas such as South Shields, Jarrow, parts of Sunderland, North Shields and the West End of Newcastle, the majority of sales are in the £80,000 to £100,000 price bracket. In other areas such as Gosforth, Whitley Bay, Whickham and Boldon the majority of sales are within the £175,000 to £250,000 category.

Who is buying? 4.5.12 In those areas where properties are achieving prices of between £100,000 and £150,000, purchasers are generally a mix of first time buyers, second time buyers or families. Although this encompasses a wide section of all buyers, the second time buyers are looking to upgrade to a 2/3 bed house at the lower to middle of the market, and families are generally looking for larger 3 bed homes at the lower end of the market.

4.5.13 In those locations between £175,000 and £250,000 the purchasers are second time buyers and families. People are keen to move into these areas to be near good schools and amenities, and there is relocation from peripheral locations, e.g. from North Shields to Whitley Bay, from Jarrow to Boldon, or from Kenton to Gosforth in order to be within the catchment area of a particular school. There is very limited activity by first time buyers in the more affluent areas due to the higher property prices, and most purchasers are in the 30-50 age category. Stakeholders have commented that this may represent an opportunity to other parts of the city region to target first time buyers with a quality product / offer which matches these expectations.

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4.5.14 In those areas where the sale prices are less, most of the sales are to first time buyers. Agents active in these areas report that investors are now showing interest in purchasing property although they are making offers at figures substantially lower than the asking prices. Whereas during the latter parts of 2008 and early 2009 investors were absent the market.

4.5.15 Estate agents see little evidence of migration to Tyne and Wear from other areas, nor does there seem to be much movement between the five different districts within Tyne & Wear. So, for instance most purchasers from within North Tyneside relocate to areas within North Tyneside, and most purchasers from Sunderland move within Sunderland etc.

4.5.16 Throughout Tyne & Wear there is no clear preponderance of up-sizing or down-sizing amongst purchasers. Signs of a recovery? 4.5.17 Most agents have reported that there has been a general upturn in the market over the last three months, but in August there have been fewer sales and fewer new listings. Fewer listings could help to push prices up as demand will outweigh supply.

4.5.18 Each area is reporting the same scenario suggesting that there is general pattern in recovery, there is no evidence of one particular locality outperforming its neighbour. It seems that recovery has been instigated by sellers realising that values have dropped and reducing their price accordingly, starting at the bottom end of the market and negotiating their reduction onto their ongoing purchase etc. There is an alignment of sellers and buyers expectations.

4.5.19 First time buyers face difficulties in getting mortgages and in providing the higher levels of deposits which are now required. The first time buyer market could previously rely upon 100% mortgage and in some cases more to enable them to buy. These properties at the bottom end of the market were also in demand from investors as buy to lets, but restricted access to finance has also brought this sector of the market to a halt. Sellers are increasingly realising that they are reliant on first time buyers to enable their chain of sales to occur.

4.5.20 Many agents report an increase in the number of sellers who are willing to rent their property to enable them to move.

Prospects and expectations for the future 4.5.21 Traditionally, September sees a slight upturn in the market with people wanting to be moved before the Christmas period, but later in the year there are fewer sales and fewer properties coming on to the market. Looking further ahead most agents report that they need more properties to be brought to the market for sale as there is currently a relatively small amount of stock available. Agents would also like sellers to recognise the price adjustment that has taken place, and to acknowledge that the sale of their property requires them to substantially reduce asking prices.

4.5.22 There is early evidence that mortgages becoming more readily available but lenders will need to continue to make funds available to keep the market afloat. None of the agents are expecting a return to the extravagant mortgage terms seen at the height of the market, but if houses are realistically priced then mortgage finance is expected to start flowing again.

4.5.23 Currently, there is no stamp duty payable on residential properties bought at prices up to £175,000. This will come to an end on 31st December 2009 when there will be stamp duty payable at 1% of the purchase price for properties purchased over £125,000. This is expected to have an adverse affect upon property sales. The majority of recent sales

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have been within the £100,000 to £150,000 price bracket, meaning no stamp duty has been payable. In 2010, the resumption of stamp duty liability can be expected to delay purchases and temporarily reduce the total number of sales. 4.6 Housing market activity

Home prices 4.6.1 It is a characteristic of the North East housing market that prices have long been lower than any other part of England and Wales. The recent picture is shown in Figure 4-12 but the pattern goes back much longer. First, an amount of catch-up occurred in the mid- nineties, where the price performance in the North East out-stripped national growth levels. Second, in the period up to September 2007 the rate of growth in the North East was noticeably more restrained than nationally, and the correction following September 2007 has been less severe. Finally, in the months up to July 2009, the market appeared to be bottoming out in England and Wales, whereas fluctuations were still evident in the North East.

Figure 4-8: House Price Index, England & Wales, North East, 2004-2009

Source: Land Registry (2009), House Price Index

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4.6.2 Prices in Tyne & Wear, meanwhile, have on balance been smoother over the time staying consistently about 10% higher than the regional average for the period, as illustrated in Figure 4-9.

Figure 4-9: House Price Index, North East, Tyne & Wear, 2004-2009

Source: Land Registry (2009), House Price Index

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4.6.3 Within the city region, it is possible to get a picture of just how rapid the increase in prices was over the period 2001 – 2009.

4.6.4 As seen in Table 4-6, the mean price of a home in 2001 was £67,255 for the city region, and £66,367 for the Metropolitan County. Taking 2007 as the peak, prices had jumped to £144,272 and £143,748 respectively, and by June 2009 these levels had fallen to £135,119 and £133,336.

Table 4-6: Mean sales prices £ 2001 – 200934

2001 2002 2003 2004 2005 2006 2007 2008 2009 1 Gateshead 62937 72269 85620 109113 114996 126989 132338 132193 129210 Newcastle 2 78676 94048 118713 146748 150559 158335 169495 177474 150136 upon Tyne 3 North Tyneside 64529 74441 95261 121692 133283 143869 147196 147368 145299

4 South Tyneside 64242 68380 81041 109221 119094 128193 139195 132592 122512

5 Sunderland 57936 67057 84895 104406 111420 119484 127956 131703 111431 Northumberlan 6 55231 66214 84471 97145 109251 116346 127384 128002 122140 d: CR Coalfield Northumberlan 7 d: CR 112598 132564 157199 195101 214764 220807 244225 267074 244765 Commuter 8 North Durham 72575 83279 95213 123422 138006 144770 148255 162652 138370

9 Easington 45629 45789 54995 77551 98987 105393 111267 101578 90814 Tyne & Wear 10 67225 77025 94133 117890 128912 138029 144272 149091 135119 City Region TWCR A Metropolitan 5 66367 76697 95011 119402 127061 137087 143748 146820 133336 (1-5) B Gateshead (1) 62937 72269 85620 109113 114996 126989 132338 132193 129210 North Tyne C 72059 85257 107785 135028 142540 151704 158405 163931 148105 (2+3) South Tyneside D 64242 68380 81041 109221 119094 128193 139195 132592 122512 (4) E Sunderland (5) 57936 67057 84895 104406 111420 119484 127956 131703 111431 Source: Hometrack (2009), based on June of each year.

4.6.5 The Northumberland: City Region Commuter sub-area is by far the most expensive of the sub-areas. Outside of this, the North Tyne and North Durham (Chester-le-Street, Derwentside, and Durham City) are the two sub-areas, which lie above the city region average in price terms.

4.6.6 Gateshead, South Tyneside, Sunderland and Urban Northumberland all share similar price characteristics. Easington is substantially lower than the other sub-areas.

34 June 2001-2009. Figures in italics are weighted by the volume of sales for each of the constituent authorities. The sales figures are taken from Land Registry (NeSS, 2001-2004), and Hometrack (2005-2009, based on Land Registry data).

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Figure 4-10: Mean sales prices June 2001-2009

Source: Hometrack (2009) 4.6.7 Table 4-7 provides a sense of how prices evolved in the 2000s for average (mean) properties. The early 2000s saw the most significant increase in property prices in the city region, with 2003-04 seeing a huge 25% y-o-y increase. In that year, the metropolitan county saw an increase of 26%, with some sub-areas (South Tyneside: 35% and Easington (Easington): 41%) seeing increases in excess of a third. Interestingly, it was these two sub-areas which were first to record a downwards trajectory in 2007-08. By 2008-09, all sub-areas had experienced a decline, with a city region and metropolitan county average of -9%. The most severe declines were seen in Newcastle, Sunderland, and North Durham (-15%).

Table 4-7: Mean home prices, percentage year on year change, June 2001-2009

2001/ 2002/ 2003/ 2004/ 2005/ 2006/ 2007/ 2008/ 02 03 04 05 06 07 08 09 1 Gateshead 15% 18% 27% 5% 10% 4% 0% -2% Newcastle upon 2 20% 26% 24% 3% 5% 7% 5% -15% Tyne 3 North Tyneside 15% 28% 28% 10% 8% 2% 0% -1% 4 South Tyneside 6% 19% 35% 9% 8% 9% -5% -8% 5 Sunderland 16% 27% 23% 7% 7% 7% 3% -15% Northumberland: 6 20% 28% 15% 12% 6% 9% 0% -5% CR Coalfield Northumberland: 7 18% 19% 24% 10% 3% 11% 9% -8% CR Commuter 8 North Durham 15% 14% 30% 12% 5% 2% 10% -15% 9 Easington 0% 20% 41% 28% 6% 6% -9% -11% Tyne & Wear City 10 15% 22% 25% 9% 7% 5% 3% -9% Region TWCR Metropolitan A 16% 24% 26% 6% 8% 5% 2% -9% 5 (1-5) B Gateshead (1) 15% 18% 27% 5% 10% 4% 0% -2% C North Tyne (2+3) 18% 26% 25% 6% 6% 4% 3% -10% D South Tyneside (4) 6% 19% 35% 9% 8% 9% -5% -8% E Sunderland (5) 16% 27% 23% 7% 7% 7% 3% -15%

Source: Hometrack (2009), and Land Registry (2006), Tribal calculations

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4.6.8 Turning to Lower quartile properties (see Table 4-8), it is clear that while there has been robust growth throughout much of the 2000s, and there has been a decline in the last two years, the rate of growth and the existence of substantial outliers seems less prevalent.

4.6.9 The average Lower Quartile home in 2001 cost £37,008 in the city region, and £37,286 in the metropolitan county. By 2007, this had reached £92,855 and £95,419, falling back to £82,762 and £84,053 respectively.

Table 4-8: Lower quartile sales prices £ 2001 – 200935

2001 2002 2003 2004 2005 2006 2007 2008 2009 1 Gateshead 36000 41000 46000 67278 72000 85000 90000 90000 80000 Newcastle upon 2 43000 50000 64500 80500 86000 100000 109000 107000 90000 Tyne 3 North Tyneside 38000 43000 56250 78500 87000 92500 100000 97000 95000 4 South Tyneside 35500 38000 45100 65000 73000 82950 90500 91000 78900 5 Sunderland 32000 35500 45000 60000 72000 80000 85000 87950 73000 Northumberland: 6 31011 32607 42400 55125 66248 73917 84463 80553 70170 CR Coalfield Northumberland: 7 54977 62276 74539 107236 104107 122916 124974 126909 106085 CR Commuter 8 North Durham 38630 42244 49083 73318 81546 90325 91232 94517 80350 9 Easington 25000 25500 28000 40000 55000 65000 69600 66000 60000 Tyne & Wear 10 37008 41066 50428 68966 77464 87772 92855 93221 82762 City Region TWCR A Metropolitan 5 37286 42116 52334 70603 78662 89078 95351 95419 84053 (1-5) B Gateshead (1) 36000 41000 46000 67278 72000 85000 90000 90000 80000 C North Tyne (2+3) 40661 46861 60656 79564 86464 96562 104524 102501 92099 South Tyneside D 35500 38000 45100 65000 73000 82950 90500 91000 78900 (4) E Sunderland (5) 32000 35500 45000 60000 72000 80000 85000 87950 73000 Source: Hometrack (2009); based on June of each year

35 June 2001-2009. Figures in italics are weighted by the volume of sales for each of the constituent authorities. The sales figures are taken from Land Registry (NeSS, 2001-2004), and Hometrack (2005-2009, based on Land Registry data).

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4.6.10 The Northumberland: City Region Commuter sub-area remains the most expensive in the city region, and the North Tyne sub-area within the metropolitan county. Easington is again the lowest. The other sub-areas are concentrated within a much more concentrated spectrum.

Figure 4-11: Lower quartile prices, June 2001-2009

Source: Hometrack (2009)

4.6.11 On balance, lower quartile prices experienced a lower y-o-y change in property prices. As with mean prices, the rate of change peaked in 2003-04, although interestingly it was in this year that confidence peaked and this seems to have resulted in lower quartile home prices taking a remarkably large leap. At an average level for the city region of +37% and +35% for the metropolitan county these levels were unlikely to prove sustainable for long. The lowest increase in this year was Newcastle (+25%), while the highest was North Durham (Chester-le-Street, Derwentside, and Durham City) (+49%), very close to Gateshead’s own increase of +46% y-o-y growth.

4.6.12 This rapidly moderated and by 2007-08 a number of sub-areas had experienced a decline, while by 2008-09 all had experienced a fall, which is currently falling more rapidly than mean home prices.

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Table 4-9: Lower quartile home prices, percentage year-on-year change, June 2001- 09

2001/ 2002/ 2003/ 2004/ 2005/ 2006/ 2007/ 2008/ 02 03 04 05 06 07 08 09 1 Gateshead 14% 12% 46% 7% 18% 6% 0% -11% 2 Newcastle upon Tyne 16% 29% 25% 7% 16% 9% -2% -16% 3 North Tyneside 13% 31% 40% 11% 6% 8% -3% -2% 4 South Tyneside 7% 19% 44% 12% 14% 9% 1% -13% 5 Sunderland 11% 27% 33% 20% 11% 6% 3% -17% Northumberland: CR 6 5% 30% 30% 20% 12% 14% -5% -13% Coalfield Northumberland: CR 7 13% 20% 44% -3% 18% 2% 2% -16% Commuter 8 North Durham 9% 16% 49% 11% 11% 1% 4% -15% 9 Easington 2% 10% 43% 38% 18% 7% -5% -9% 10 Tyne & Wear City Region 11% 23% 37% 12% 13% 6% 0% -11% TWCR Metropolitan 5 (1- A 13% 24% 35% 11% 13% 7% 0% -12% 5) B Gateshead (1) 14% 12% 46% 7% 18% 6% 0% -11% C North Tyne (2+3) 15% 29% 31% 9% 12% 8% -2% -10% D South Tyneside (4) 7% 19% 44% 12% 14% 9% 1% -13% E Sunderland (5) 11% 27% 33% 20% 11% 6% 3% -17%

Source: Hometrack (2009), and Land Registry (2006), Tribal calculations

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Volume of sales 4.6.13 The volume of sales in the five metropolitan authorities stood at 19,787 in 2005, rising to a peak of 23,041 in 2007, before falling to 10,823 in 2008. In the first seven months of the year, there were 4,562, implying something in the region of 8,000 for the year. North Tyne typically represents about half of all sales and this proportion has been increasing as the overall volume of sales has been falling. Sunderland typically represents just under a quarter of sales and this has remained relatively consistent over the period. South Tyneside represents a little over 10% of sales and though this has fallen in the most recent year, it is probably too early to draw any conclusions from this. Gateshead represents about a fifth of sales, but this has seen a consistent decline in the last two periods reported, with sales in Gateshead representing 16% of sales in the first seven moths of 2009.

Table 4-10: Volume of Sales and % of Tyne & Wear Metropolitan 5, 2005-2009

Jan – July 2005 2006 2007 2008 Year 2009 No. % No. % No. % No. % No. % A Gateshead 3,945 20% 4,114 18% 4,566 20% 1,895 18% 710 16% B North Tyne 8,984 45% 10,788 47% 10,298 45% 5,017 46% 2,334 51% C Sth Tyneside 2,133 11% 2,620 12% 2,740 12% 1,335 12% 459 10% D Sunderland 4,725 24% 5,219 23% 5,437 24% 2,576 24% 1,059 23% E Tyne & Wear 19,787 - 22,741 - 23,041 - 10,823 - 4,562 -

Source: Hometrack (2009)

4.6.14 The level for the last full year (2008) represents a decline of 53% over the preceding year (2007), the peak in sales volumes. Broken down into each of the four sub-areas the percentage decline for each is: ■ Gateshead: -59%

■ North Tyne: -51%

■ South Tyneside: -51%

■ Sunderland: -53%.

The biggest point to be drawn from this is the differential performance of the main sub- areas. All have seen sales volumes fall by more than half, while it would seem that the North Tyne and South Tyneside sub-areas have performed slightly better, with Gateshead seeing the largest decline in sales volumes.

4.6.15 Table 4-11 overleaf shows just how dramatic this decline has been on a monthly basis over the period September 2007 to August 2009. For the metropolitan core, a peak can be identified in sales volumes of November 2007 with 2,020 sales in one month. Compare this with a low of 422 units in January 2009. A very gradual but consistent recovery in sales volumes can be pointed to since January 2009, with levels by July reaching 831 before falling back again in August.

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Table 4-11: Home sales volumes, Sept 2007 – Aug 2009 (No.) Jul-08 Jul-09 Oct-07 Oct-08 Jan-08 Apr-08 Jan-09 Apr-09 Feb-08 Mar-08 Jun-08 Feb-09 Mar-09 Jun-09 Sep-07 Dec-07 Sep-08 Dec-08 Nov-07 Nov-08 May-08 Aug-08 May-09 Aug-09 1 Gateshead 380 360 410 229 202 212 182 176 207 164 143 149 110 134 114 104 76 68 102 101 125 110 139 102 2 Newcastle upon Tyne 420 415 386 330 277 241 284 314 293 240 238 191 184 189 158 153 107 156 163 164 205 245 254 213 3 North Tyneside 371 377 488 344 241 249 231 225 247 205 219 181 138 116 113 94 94 82 119 159 175 191 166 158 4 South Tyneside 195 229 233 219 134 119 130 130 145 123 121 93 95 88 78 82 35 42 59 60 67 88 101 72 5 Sunderland 430 484 503 369 258 263 213 283 280 239 189 169 194 163 151 176 110 122 138 154 186 159 171 152 TWCR Metropolitan 5 (1- A 1796 1865 2020 1491 1112 1084 1040 1128 1172 971 910 783 721 690 614 609 422 470 581 638 758 793 831 697 5) B Gateshead (1) 380 360 410 229 202 212 182 176 207 164 143 149 110 134 114 104 76 68 102 101 125 110 139 102 C North Tyne (2+3) 791 792 874 674 518 490 515 539 540 445 457 372 322 305 271 247 201 238 282 323 380 436 420 371 D South Tyneside (4) 195 229 233 219 134 119 130 130 145 123 121 93 95 88 78 82 35 42 59 60 67 88 101 72 E Sunderland (5) 430 484 503 369 258 263 213 283 280 239 189 169 194 163 151 176 110 122 138 154 186 159 171 152

Source: Hometrack (2009), based on Land Registry data

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4.6.16 These results are presented in Figure 4-12 below, illustrating graphically the extent of the decline and also the beginnings of a recovery.

Figure 4-12: Home sales volumes, TW5, Sept 2007 – Aug 2009 (No.)

Source: Hometrack (2009), based on Land Registry data

4.6.17 Translating the above figures into percentages, in Table 4-14, we can see both the scale of the annual decline, and also the relative performance of the sub-areas. Huge (>50%) annual declines are evident in September 2008 to February 2009 for the Tyne & Wear metropolitan core. From March onwards, these declines had begun to reduce (largely as by March 2008 falls had already been recorded). However, by summer 2009 these annual reductions had fallen to single digit figures.

4.6.18 Among the sub-areas, the declines seem to be steeper and more persistent in Gateshead and South Tyneside. The scale of the decline appears to have been more muted (though still very severe) in Sunderland. The North Tyne sub-area is the first to show signs of entering positive year-on-year increase in sales, driven largely by a strong level of sales in Newcastle over the summer months.

4.6.19 These early signs of a reversal in fortunes were echoed by stakeholders, who reported that inquiries and market activity was picking up at our stakeholder session in May 2009, while estate agents also echoed an increase in enquiries, and signs that transactions were occurring where realistic asking prices were being sought. There were concerns that that low price levels meant that relatively few properties were coming to market, and the consensus view was that prices would have further to fall before the expectations of buyers and sellers were back in equilibrium.

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Table 4-12: Home sales volumes, year on year comparison, May 2008 – April 2009 (%)

Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09

% % % % % % % % % % % % 1 Gateshead -71 -63 -72 -55 -62 -68 -44 -43 -40 -33 -3 -32 Newcastle upon 2 -56 -54 -59 -54 -61 -35 -43 -48 -30 2 7 12 Tyne 3 North Tyneside -63 -69 -77 -73 -61 -67 -48 -29 -29 -7 -24 -13 4 South Tyneside -51 -62 -67 -63 -74 -65 -55 -54 -54 -28 -17 -23 5 Sunderland -55 -66 -70 -52 -57 -54 -35 -46 -34 -33 -10 -10 TWCR A Metropolitan 5 -60 -63 -70 -59 -62 -57 -44 -43 -35 -18 -9 -11 (1-5) B Gateshead (1) -71 -63 -72 -55 -62 -68 -44 -43 -40 -33 -3 -32 C North Tyne -59 -61 -69 -63 -61 -51 -45 -40 -30 -2 -8 0 South Tyneside D -51 -62 -67 -63 -74 -65 -55 -54 -54 -28 -17 -23 (4) E Sunderland (5) -55 -66 -70 -52 -57 -54 -35 -46 -34 -33 -10 -10

Source: Hometrack (2009), based on Land Registry data, Tribal calculations

Details of prices by size, type and location 4.6.20 The table below indicates the price differentials relative to the size of the properties. This can be interpreted as something of an equalising measure as some sub-areas may have a higher proportion of larger properties which may skew average price levels, and thus in a sense, we are not comparing a like for like offer.

4.6.21 At the level of the city region, there appears to be a significant premium for four bedroom houses, with average prices running at £225,489 in 2009. At the level of the 5 metropolitan authorities, this is marginally lower at £223,244. In terms of the wider market for houses (all sizes), there is a relative amount of consistency within four of the metropolitan authorities, with Sunderland being notably lower on a like-for-like comparison.

4.6.22 Flats are moderately more expensive in metropolitan areas than in the wider hinterland, with the exception of the Northumberland: City Region Commuter sub-area. They are highest in the metropolitan core in Newcastle, and relatively expensive in Sunderland.

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Table 4-13: Average (mean) home prices by size, June 2009

Flats Flats Houses Houses Houses (1 bed) (2 bed) (2 bed) (3 bed) (4 bed) 1 Gateshead 69,086 89,196 105,081 136,895 223,663 2 Newcastle upon Tyne 84,117 117,775 111,967 140,479 251,720 3 North Tyneside 77,330 93,573 109,340 142,577 216,390 4 South Tyneside 65,059 87,072 109,407 133,396 242,034 5 Sunderland 79,553 96,676 94,476 120,000 189,694 6 Urban Northumberland 45,365 70,283 91,088 113,108 195,210 Northumberland: CR 7 99,638 106,516 135,267 188,760 334,285 Commuter 8 North Durham 88,550 97,962 98,912 122,569 221,044 9 Easington 55,000 84,667 78,842 101,826 183,259 10 Tyne & Wear City Region 76,888 97,514 104,314 133,194 225,489 A TWCR Metropolitan 5 (1-5) 77,340 99,298 105,629 134,468 223,244 B Gateshead (1) 69,086 89,196 105,081 136,895 223,663 C North Tyne (2+3) 81,268 107,615 110,864 141,360 236,888 D South Tyneside (4) 65,059 87,072 109,407 133,396 242,034 E Sunderland (5) 79,553 96,676 94,476 120,000 189,694 Source: Hometrack (2009) 4.6.23 The figure below shows the premium available in the metropolitan authorities for four bedroom properties in particular, along with the relatively high price of flats in the two cities.

Figure 4-16: Average (mean) home price by size, June 2009

Source: Hometrack (2009) 4.6.24 Table 4-14 tracks the price of properties by size at three key points in the 2000s – 2004: the year after the largest proportionate y-o-y increase; 2007: the year the property boom peaked; and 2009: this current year.

4.6.25 Some substantial and important differences are evident:

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4.6.26 Flats (1 bed): prices for one bedroom flats have fallen by 4% between June-07 and June- 09 for the city region and by 11.7% for the metropolitan county. Substantial differences are evident. Price levels in Newcastle continued to increase up to 2007, but have fallen by almost a fifth since to a level well below 2004. Sunderland meanwhile experienced a rise in flat prices between 2004-2007 (+40%) and 2007-09 (+2%), most likely reflecting the provision of a new offer in the Sunderland sub-market, and the relatively low provision of private flats in the market up until now. Gateshead saw a fall of 17% between June-07 and June-09.

4.6.27 Flats (2 bed): a slightly different profile is evident. Prices for two bedroom flats have fallen by 7.3% between June-07 and June-09 for the city region and by 7.8% for the metropolitan county. Almost all increased in the 2004-07 period, and most decreased in 2007-09.

4.6.28 Houses (2 bed): Prices for two bedroom houses have fallen by 7.4% between June-07 and June-09 for the city region and by 10.7% for the metropolitan county. Prices have fallen more for this property type than for the equivalent flats in Newcastle, North Tyneside and Gateshead, while the reverse is true for South Tyneside and Sunderland.

4.6.29 Houses (3 bed): Prices for three bedroom houses have fallen by 6.7% between June-07 and June-09 for the city region and by 8.9% for the metropolitan county. This property type has performed less well in North Tyneside and Gateshead when compared with South Tyneside and Sunderland.

4.6.30 Houses (4 bed): this has proven to be the most resilient property type in the city region. Prices for four bedroom houses have fallen by 4.5% between June-07 and June-09 for the city region and by 5.5% for the metropolitan county. The largest fall has been recorded in North Tyneside (-10.4%)

Table 4-14: Average (Mean) Home price by type, 2004, 2007, 2009

Flats (1 bed) Jun-04 Jun-07 Jun-09 1 Gateshead 64,078 83,707 69,086 2 Newcastle upon Tyne 100,900 104,410 84,117 3 North Tyneside 72,109 92,946 77,330 4 South Tyneside 56,259 71,703 65,059 5 Sunderland 55,691 77,768 79,553 6 Urban Northumberland 36,489 54,602 45,365 7 Northumberland: CR Commuter 82,313 94,185 99,638 8 North Durham 62,329 66,617 88,550 9 Easington 50,333 66,050 55,000 66,178 80,073 76,888 10 Tyne & Wear City Region 71,374 87,557 77,340 A TWCR Metropolitan 5 (1-5) B Gateshead (1) 64,078 83,707 69,086 C North Tyne (2+3) 87,432 99,206 81,268 D South Tyneside (4) 56,259 71,703 65,059 55,691 77,768 79,553 E Sunderland (5)

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Flats (2 bed) Jun-04 Jun-07 Jun-09 1 Gateshead 78,380 96,805 89,196 2 Newcastle upon Tyne 119,337 130,881 117,775 3 North Tyneside 87,216 103,012 93,573 4 South Tyneside 74,655 92,475 87,072 5 Sunderland 80,148 109,686 96,676 6 Urban Northumberland 57,723 83,995 70,283 7 Northumberland: CR Commuter 110,357 123,020 106,516 8 North Durham 108,555 115,353 97,962 9 Easington 41,560 67,233 84,667 87,511 105,196 97,514 10 Tyne & Wear City Region 89,873 108,385 99,928 A TWCR Metropolitan 5 (1-5) B Gateshead (1) 78,380 96,805 89,196 C North Tyne (2+3) 104,312 117,573 107,615 D South Tyneside (4) 74,655 92,475 87,072 80,148 109,686 96,676 E Sunderland (5) Houses (2 bed) Jun-04 Jun-07 Jun-09 1 Gateshead 93,285 116,983 105,081 2 Newcastle upon Tyne 110,828 129,383 111,967 3 North Tyneside 102,434 125,842 109,340 4 South Tyneside 95,479 118,008 109,407 5 Sunderland 79,024 102,278 94,476 6 Urban Northumberland 76,465 101,670 91,088 7 Northumberland: CR Commuter 118,752 146,002 135,267 8 North Durham 78,359 98,552 98,912 9 Easington 55,578 80,906 78,842 90,393 112,677 104,314 10 Tyne & Wear City Region 95,949 118,348 105,629 A TWCR Metropolitan 5 (1-5) B Gateshead (1) 93,285 116,983 105,081 C North Tyne (2+3) 106,902 128,296 110,864 D South Tyneside (4) 95,479 118,008 109,407 79,024 102,278 94,476 E Sunderland (5) Houses (3 bed) Jun-04 Jun-07 Jun-09 1 Gateshead 125,496 152,316 136,895 2 Newcastle upon Tyne 137,518 156,066 140,479 3 North Tyneside 133,741 158,423 142,577 4 South Tyneside 111,464 140,929 133,396 5 Sunderland 101,307 128,812 120,000 6 Urban Northumberland 101,385 126,001 113,108 7 Northumberland: CR Commuter 154,036 197,403 188,760 8 North Durham 107,070 129,536 122,569 9 Easington 78,580 106,184 101,826 117,218 142,706 133,194 10 Tyne & Wear City Region 122,256 147,551 134,468 A TWCR Metropolitan 5 (1-5) B Gateshead (1) 125,496 152,316 136,895 C North Tyne (2+3) 135,751 158,086 141,360 D South Tyneside (4) 111,464 140,929 133,396 101,307 128,812 120,000 E Sunderland (5)

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Houses (4 bed) Jun-04 Jun-07 Jun-09 1 Gateshead 199,944 227,890 223,663 2 Newcastle upon Tyne 240,700 266,756 251,720 3 North Tyneside 209,937 241,514 216,390 4 South Tyneside 201,274 250,865 242,034 5 Sunderland 174,592 202,099 189,694 6 Urban Northumberland 174,926 202,496 195,210 7 Northumberland: CR Commuter 271,021 356,387 334,285 8 North Durham 194,298 230,122 221,044 9 Easington 143,263 194,586 183,259 200,786 236,129 225,489 10 Tyne & Wear City Region 205,336 236,226 223,244 A TWCR Metropolitan 5 (1-5) B Gateshead (1) 199,944 227,890 223,663 C North Tyne (2+3) 226,310 255,495 236,888 D South Tyneside (4) 201,274 250,865 242,034 174,592 202,099 189,694 E Sunderland (5)

Source: Hometrack (2009), Land Registry (2006), Tribal calculations

Differences within36 Differences within: mean prices within the city region (ward level) 4.6.31 Taking it down to the neighbourhood (ward) level, it is possible to see how mean home prices are distributed spatially37.

4.6.32 North of the Tyne, the bulk of wards (110 out of 184) fall within a spread of £87,717 - £181,163. The lowest prices can be seen in East Newcastle (Walker) and around Newbiggin by the Sea. The hottest market condition can be seen in Tynedale and the more rural areas surrounding Morpeth, along with small pockets of North Newcastle (Jesmond, Gosforth, High Heaton).

4.6.33 South of the Tyne, and Wearside, general prices levels are lower than north of the Tyne, with most wards (144 out of 198) falling within a spread of £89,730 - £156,001. The highest price areas are Low Fell and Whickham (Gateshead), Cleadon (South Tyneside) and Durham City.

Differences within: lower quartile prices within the city region (ward level) 4.6.34 There is a substantial difference in lower quartile38 prices between the north of Tyne, and south of Tyne and Wearside.

36 The analysis in this section is based on the maps generated by the hometrack system and reported in Appendix C. Unfortunately, due to the licenses available through the client group, it has not been possible to produce a map for the whole city region and instead North of Tyne and South of Tyne maps have been produced. As different scales are employed, they are somewhat difficult to compare, caution should be employed in interpreting the data.

37 See Map 3 In Appendix C

38 See Map 4 in Appendix C

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4.6.35 It is noticeable that more parts of the city region are effected by relatively high lower quartile property prices (as compared with the mean level).

4.6.36 This again includes the high pressure Northumberland: City Region commuter sub-area, but we can also see pockets of pressure in the North Tyneside Coast, North Newcastle, Whitburn and Cleadon (South Tyneside), Low Fell and Whickham (Gateshead), and Durham City and Chester-le-Street (North Durham).

Differences within: price changes within the city region (ward level, 2005-09) 4.6.37 The highest levels of price changes experienced over the last four years39 are not automatically correlated with the areas of high prices discussed above. We can see pockets of the City Region Commuter area (Tynedale Corridor and Morpeth), which have experienced 28% growth and upwards over the period. However, we can also see very significant price growth in parts of Blyth, Cramlington, North Shields, Newcastle City Centre, Bensham, Saltwell and Chopwell in Gateshead, West Boldon in South Tyneside, East Herrington in Sunderland, Stanley and Consett, and a range of coalfield settlements in Durham.

4.6.38 This may well reflect the substantial public sector investment which has gone into many of these localities (including demolition of unpopular stock, group refurbishment, neighbourhood management, area improvements etc), combined with price pressures existing elsewhere in the city region. The combined effect may well have gone some way to tackling the issue of low demand in the city region, an issue which was so prevalent at one juncture. The effect of the recession on these property markets will need to be very carefully examined to understand if the underlying issues have been successfully tackled. In addition to property prices, this will include monitoring of turnover rates, vacancies and site viability levels.

Differences within: price changes within the city region (ward level, 2008-09) 4.6.39 The spatial distribution of price changes in the last year40 is most illuminating. A very small number of localities have experienced positive growth. These include Cramlington, North Shields, Tynemouth, Kenton, parts of central Newcastle, Walker, Bensham, Saltwell, Low Fell, Chopwell, East Herrington, and Birtley.

4.6.40 On balance, however, the vast bulk of places have seen substantial decreases in property prices as the sub-area level data above suggested. Some of the largest decreases have occurred in some of the conurbation fringe which had previously seen very large increases in property prices, such as Ponteland (Northumberland) and Kibblesworth (Gateshead). Other places to see substantial decreases include Heddon on the Wall, Wideopen, Hetton le Hole, Bournmoor, and Shield Row.

39 See Map 5 in Appendix C

40 See Map 6 in Appendix C

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5 Private rented sector

This section of the report considers the private rented sector – a relatively small part of the Tyne and Wear housing market, but a sector that is playing an increasingly important role in providing accommodation for young households and households on low incomes, as well as playing a key role in providing housing for households at transitional stages in their lives.

Key Findings41

1. 7.4% of households in the TW Metropolitan 5 live in the PRS, in line with the North East average of 7.2%, but well below the England average of 10%. The size of the PRS varies greatly between different local authorities, from 12.1% of households in Newcastle, to 4.9% in South Tyneside. We typically expect to find higher rates of PRS in cities, especially those with large university/student populations; and we tend to find below-average levels of PRS in areas bordering cities.

2. After a sustained period of decline, the PRS has been increasing over recent years. Notably, the sector accounted for just 5.4% of TW Metropolitan 5 households at the 1991 census, and growth is noted in all five local authority areas, albeit it at very different rates: ranging from just 0.3 percentage point growth in Gateshead, to 3.1 percentage points in Newcastle. The sector has grown by 38% at the city region level over the period 1991 to 2001; and anecdotal evidence would suggest that growth has continued across much of the region.

3. Growth is associated with a number of factors. On the supply side – the development of flatted accommodation which has attracted PRS investors, the increasing availability of suitable ex-RTB stock, and the development of buy-to-let mortgage products. On the demand side, there has been a series of drivers, including an expanding student population, increased in-migration and reduced affordability of home-ownership.

4. The housing stock within the sector is fairly evenly divided between flatted properties and houses (51% flats, 49% houses). As might be expected, there are differences across the area – with flats comprising well over half of the stock in Newcastle, North Tyneside and South Tyneside; but just 38% of the stock in Sunderland.

5. The most common property size is four rooms (accounting for 37% of households within the sector). Around 18% of PRS tenants in the TW Metropolitan 5 PRS live in homes with 3 or fewer rooms (less than 5% in two or fewer rooms). The English PRS stock is generally skewed towards smaller properties, with 28% of properties having three or fewer rooms.

6. The general age profile of households in the TW Metropolitan 5 PRS is young, with the most common age group being aged 25 to 34 years, followed by those aged 24 and under. This profile is driven by Newcastle; elsewhere, the 35-44 year old age group is the second largest. Notably, around 15% of tenants are aged 55 and over (this is in line with the English average of 15.5%). Levels of older tenants range from just 12% in Newcastle to considerably above this average in North Tyneside (at 21%).

41 The main source of information here is, unfortunately the Census. Systematic data are not collected on a regular basis on the size and structure of the PRS stock and the sector’s tenants.

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7. Around 38% of PRS tenants in the TW Metropolitan 5 area are either in work or are self-employed – considerably less than the English average of 58%. However, the difference is largely explained by the student population within the sector (27% compared with 15% nationally). As might be expected, students are a particular feature of the Newcastle PRS, accounting for 43% of PRS households in the city, compared with just 7% in both Gateshead and North Tyneside.

8. The average (mean) PRS rent in the TW Metropolitan 5 area (according to Hometrack) in 2008 was £111 a week. PRS rents appear highest in Newcastle (at £124), followed by Sunderland (£113), North Tyneside (£111) and Gateshead (£109). The lowest average was for South Tyneside at £98. We would clearly expect rent levels to vary according to the size and type of property, as well as the quality of the property. The Local Housing Allowance (LHA) levels provide a measure of market rents, as they have been estimated for benefit purposes, for properties of different sizes42. The weekly rents in the Tyneside Broad Market Rental Areas (BMRA) range from £60 for a one bedroom shared property to £223 for a five bedroom property. Sunderland BMRA LHA values are slightly lower than those for Tyneside, ranging from £42 for a shared one bedroom property to £213 for a 5 bedroom property a week.

9. As in the rest of the country, there has been a change in the private rental market in the Tyne and Wear city region, due to the housing market crash and the general economic downturn. Countrywide, the credit crunch and recession has resulted in house prices falling, an increase in empty homes, a slow down in the construction industry, an increase in unemployment and high demand for affordable housing. However, there is currently limited information available to measure the exact effect this has had specifically on the private rented market of the city region.

10. The PRS can respond in a number of ways to the current housing situation. There were views expressed in the stakeholder workshop of this SHMA that indicated that the Tyne and Wear PRS was holding its own, that significant vacancies had not started appearing, and that landlords may be using the economic climate as an opportunity to expand or restructure portfolios. It was accepted that changes were taking place; in particular some rent restructuring was taking place, with some non- benefit rents being negotiated down below LHA levels, rent levels in marginal areas (or possibly over-priced) areas have fallen and some landlords, who might prefer not to, were currently letting to tenants on housing benefit.

5.1 Structure of the PRS

5.1.1 Just under 50,000 households in the Tyne & Wear city region lived in the PRS at the time of the last Census (around 7% of the household population). This is in line with the regional average (7.2%), but well below the level for England as a whole (10%). The size of the sector varies greatly between different districts. As the table below illustrates, the private rented sector accounts for around 12% of all households in Newcastle, which is above the English average, but just 5% of households in South Tyneside and Durham Sunderland. The general level across the remaining local authorities in the TW

42 Their disadvantage is that the broad market areas on which they are based are fairly large – just two cover the whole of the TW Metropolitan 5 area. While it is the rent service’s view that rent levels within each of the BMRAs are broadly similar, it may well be possible to identify outliers/anomalies or even fairly significant pockets where rents deviate from the typical BMRA levels.

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Metropolitan 5 is also relatively low: 6.4% in Gateshead, 8% in North Tyneside and 5.4% in Sunderland. We typically expect to find higher rates of PRS in cities, and particularly in cities with large student populations. Further, we tend to find below-average levels of PRS in areas bordering cities.

Table 5-1: Households in the private rented sector 2001, 199143

Total Households 2001 PRS households 2001 (no.) PRS households 2001 (%) PRS households 1991 (%) Change in the sector

1 Gateshead 84,267 5,366 6.4 6.1 7% 2 Newcastle upon Tyne 111,243 13,466 12.1 9 34% 3 North Tyneside 84,861 5,832 6.9 6.1 19% 4 South Tyneside 66,097 3,259 4.9 4 28% 5 Sunderland 116,356 6,310 5.4 3.4 65% Northumberland: CR 6 60,975 3,487 5.7 4.2 48% Coalfield Northumberland: CR 7 44,617 4,346 9.7 7.5 39% Commuter 8 North Durham 94,180 5,439 5.8 3.4 83% 9 Easington 38,788 1,833 4.7 2.7 78% 10 Tyne & Wear City Region 701,384 49,338 7.0 5.3 38%

A TWCR Metropolitan 5 (1-5) 462,824 34,233 7.4 5.8 30% B Gateshead (1) 84,267 5,366 6.4 6.1 7% C North Tyne (2+3) 196,104 19,298 9.8 7.8 29% D South Tyneside (4) 66,097 3,259 4.9 4 28% E Sunderland (5) 116,356 6,310 5.4 3.4 65%

X North East 1,066,292 76,987 7.2 5.2 44% Y England 20,451,427 2,037,470 10 7.4 47% *Excludes “living rent free”

Source: Census (1991 and 2001)

5.1.2 A comparison of the 1991 Census and the 2001 Census shows how the level of private rented accommodation has changed in the past. This shows a local and national trend of steady increases in the private rented sector.

5.1.3 The proportion of Tyne and Wear City Region percentage of households in the private sector has increased from 5.3% in 1991 to 7.0% in 2001, a rise of 1.7 percentage points. This reflects the generalised growth in the England figures, which have also increased, but by a greater degree (2.5 percentage points): from 7.4% in 1991 to 10.0% in 2001.

43 More recent systematic information on household or stock levels in the PRS is not available. The other main source of information on stock by tenure – the HSSA – does not break down private sector housing into owner occupied and PRS. The local housing market assessments, with the exception of North Tyneside, have produced estimates of the PRS from the needs surveys. These are all broadly in line with the Census levels.

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Growth in the sector is most pronounced in Newcastle, at 3.1 percentage points over the ten year period, and slowest in Gateshead, at just 0.3 percentage points.

5.1.4 We would stress that, although these increases are just a few percentage points, in many cases they represent a significant growth, and hence potential change in the nature and structure of the sector – both because there has been an increase in the household population over the intervening period, and because the growth has been from a fairly small base. For example, at a national level, the sector has increased by 47%, while at the City Region the sector has increased by 38%.

5.1.5 Systematic data on the size and structure of the sector since the 2001 Census are, unfortunately, not available. Data from elsewhere in the country would suggest that the sector has continued to expand in those areas where the sector had been developing at least up to the start of the recession, and may have possibly continued (albeit at a slower rate).

5.2 Characteristics of the PRS

5.2.1 Within the Tyne and Wear City Region, PRS households tend to live in houses or bungalows (57%), closely followed by flats, maisonettes or apartments (43%). This profile is similar to that for England. However, the balance between flats and houses varies across the TW Metropolitan 5 area. Houses and bungalows are the more common property type in Gateshead and Sunderland; while flats are more common than houses in Newcastle, North Tyneside and South Tyneside. The most common type of house within the PRS in the city region is a terraced house, while the most common kind of flat is a purpose-built block of flats or tenement44.

44 See Table D-01: Further Breakdown of Dwelling Type in Appendix D

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Table 5-2: Private rented households by dwelling type

Private rented households in unshared Private rented households* dwellings

Flat, Caravan, other In In a shared House or maisonette or mobile or Total unshared dwelling bungalow (%) apartment temporary dwellings (%) structure (%)

1 Gateshead 5,370 19 5,351 52 48 0.3 2 Newcastle upon Tyne 13,464 44 13,420 42 58 0.1 3 North Tyneside 5,832 25 5,807 44 56 0.0 4 South Tyneside 3,259 6 3,253 45 55 0.2 5 Sunderland 6,310 70 6,240 66 34 0.4 Northumberland: CR 6 3,485 3 3,482 Coalfield 62 38 0.1 Northumberland: CR 7 4,349 3 4,346 Commuter 85 15 0.1 8 North Durham 5,436 34 5,402 78 22 0.4 9 Easington 1,835 0 1,835 85 15 0.0 Tyne & Wear City 10 49,340 204 49,136 Region 57 43 0.2

TWCR Metropolitan 5 A 34,235 164 34,071 (1-5) 49 51 0.2 B Gateshead (1) 5,370 19 5,351 52 48 0.3 C North Tyne (2+3) 19,296 69 19,227 43 57 0.1 D South Tyneside (4) 3,259 6 3,253 45 55 0.2 E Sunderland (5) 6,310 70 6,240 66 34 0.4

X North East 76,987 383 76,604 65 35 0.2 Y England 2,037,470 34,893 2,002,577 55 44 0.6 *Excludes “living rent free”

Source: Census 2001

5.2.2 The most common size of PRS dwelling in the Tyne and Wear City Region, as well as in each local authority within the TW Metropolitan 5 is four rooms. This is in line with England and the North East. Notably Newcastle has a higher proportion of larger properties (6 or more rooms) than the rest of the TW Metropolitan 5 area – at around 15% of its total PRS stock (proportions elsewhere in the area range from 6% in Gateshead to 11% in Sunderland), and is also higher than the North East (11%) and England (10%). These larger properties are likely to be HMOs, serving the student market and the benefit market, but may also include some larger properties in the executive/family market.

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Table 5-3: Private rented households by dwelling size

Private rented or living rent free

8 or Total PRS 1 2 3 4 5 6 7 more households* rooms rooms rooms rooms rooms rooms rooms rooms

No. % % % % % % % %

1 Gateshead 6,378 0.7 3.8 13.3 41.8 25.6 8.5 3.3 3.1

2 Newcastle upon Tyne 14,725 1.3 3.8 10.8 36.2 22.8 10.4 6.8 7.9

3 North Tyneside 6,835 1.0 3.5 14.8 39.3 22.9 10.7 4.4 3.5

4 South Tyneside 3,955 1.1 3.2 15.6 38.1 26.3 9.0 3.6 3.2

5 Sunderland 7,267 2.8 4.7 14.9 30.0 22.8 14.1 5.7 4.9

Northumberland: CR 6 4,369 0.8 4.1 13.9 36.4 26.3 11.5 3.6 3.3 Coalfield Northumberland: CR 7 5,728 0.3 2.2 8.3 28.0 24.2 16.6 7.3 13.1 Commuter

8 North Durham 6,616 1.3 3.3 9.8 29.7 25.3 17.7 6.1 6.8

9 Easington 3,093 0.6 2.4 12.7 33.4 30.8 14.5 3.4 2.3

10 Tyne & Wear City Region 58,966 1.2 3.6 12.3 34.9 24.5 12.3 5.4 5.9

A TWCR Metropolitan 5 (1-5) 39,160 1.4 3.9 13.1 36.7 23.6 10.7 5.3 5.3

B Gateshead (1) 6,378 0.7 3.8 13.3 41.8 25.6 8.5 3.3 3.1

C North Tyne (2+3) 21,560 1.2 3.7 12.0 37.2 22.9 10.5 6.1 6.5

D South Tyneside (4) 3,955 1.1 3.2 15.6 38.1 26.3 9.0 3.6 3.2

E Sunderland (5) 7,267 2.8 4.7 14.9 30.0 22.8 14.1 5.7 4.9

X North East 93,160 1.3 3.4 11.7 32.5 26.3 13.8 5.4 5.7

Y England 2,456,577 3.6 6.8 17.2 26.2 22.0 14.1 5.1 5.1

*Include “living rent free”

Source: Census (2001)

5.3 Demand – Household Profiles

5.3.1 Turning to the households renting privately. Typically households in the PRS are young: the most common age group is 25 to 34, followed by 35 to 44. In Newcastle and Durham Gateshead, the age profile is even younger, with those aged 24 and under making up the second most common age group. Conversely, in Northumberland CR Commuter, the most common age group is aged 35 to 44 and the other older age groups make up a larger proportion of the total PRS. This reflects the relative low level of social rented stock in this area, and the traditional role that the PRS has played in many rural areas of providing “affordable housing for life”.

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Table 5-4: PRS Age Profile (based on “Household Reference Person”)

% of private renting or living rent free HRP Total No. PRS 55 to Households * 24 or 25 to 35 to 45 to Pensionable Pensionable under 34 44 54 age to 74 Age

1 Gateshead 6,378 12.5 28.6 19.0 12.7 6.5 10.4 Newcastle upon 2 14,725 Tyne 28.0 30.0 14.7 8.6 4.5 7.0 3 North Tyneside 6,835 10.0 22.8 20.2 13.8 8.4 12.8 4 South Tyneside 3,955 11.9 25.4 19.9 13.0 7.2 9.4 5 Sunderland 7,267 19.0 28.0 19.7 12.7 6.1 7.7 Northumberland: 6 4,369 CR Coalfield 12.2 25.3 19.3 14.5 7.4 9.2 Northumberland: 7 5,728 CR Commuter 5.8 16.8 23.0 19.0 11.5 13.0 8 North Durham 6,616 21.1 25.5 19.1 12.0 6.4 7.8 9 Easington 3,093 12.1 24.1 20.0 11.8 6.7 11.3 Tyne & Wear City 10 58,966 Region 17.1 26.0 18.7 12.4 6.8 9.3

TWCR A 39,160 Metropolitan 5 (1-5) 19.0 27.7 17.8 11.4 6.1 8.9 B Gateshead (1) 6,378 12.5 28.6 19.0 12.7 6.5 10.4 C North Tyne (2+3) 21,560 22.3 27.7 16.4 10.2 5.7 8.8 D South Tyneside (4) 3,955 11.9 25.4 19.9 13.0 7.2 9.4 E Sunderland (5) 7,267 19.0 28.0 19.7 12.7 6.1 7.7

X North East 93,160 15.7 26.0 19.3 12.9 7.1 9.5 Y England 2,456,577 13.1 30.8 19.1 12.1 7.1 8.4 *Include “living rent free”

Source: Census 2001

5.3.2 The single most common household type in the PRS is the single person household – 28% of PRS households in the City Region are single people below pensionable age, and a further 13% are older single people. Households with children account for around 29% of PRS households (15% in lone parent households and 14% in two parent households).

5.3.3 The household profile in the TW Metropolitan area differs from that for England as a whole in two respects. First, the proportion of couple (no children) households is smaller than the English average (12% compared with 16%), and second the proportion of student households is much larger (7% compared with 3%).

5.3.4 As might be expected, there are a number of key variations within the TW Metropolitan area: ■ Gateshead houses a relatively large proportion of single people

■ Newcastle’s sector has a relatively low proportion of pensioners and households with children, and a very large proportion of students. Newcastle also records a high proportion of “other, other” households, which are likely to include non-related adults, including mixed student/non-student households

■ Both North Tyneside and South Tyneside have relatively large proportions of pensioner households

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■ Sunderland has a relatively small proportion of pensioner households.

5.3.5 Only around two-fifths of the tenants in the city region are in work (36% are employed, 5% are self employed); this compares with 58% for England as a whole. Part of the difference is explained by the substantial proportion of students within the sector – around 23% of tenants are students in the City Region, compared with just 14% for the country as a whole. Nonetheless, it appears that the sector generally in the city region, and in some local authority areas in particular, has not developed significant professional PRS sectors over recent years, in response to the changing market, and that the sector, may well continuing to cater predominantly for the lower end of the market and for students.

5.3.6 There are some pronounced differences in the economic profiles of tenants across the Metropolitan area: ■ Gateshead has a relatively high level of retired tenants and of tenants who are permanently sick or disabled

■ Newcastle has a very high level of students (44% of the total sector)

■ North Tyneside has a relatively high level of employed tenants, but still considerably below the national level

■ South Tyneside has a relatively high level of unemployed tenants

■ Sunderland’s profile was similar to the City Region’s profile.

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Table 5-5: Household Composition of Households Private Rented or Living Rent Free

Couple - Other One person Family - Couple - no Other PRS Hhlds One person with Lone household pensioner pensioner children household (No.) other (%) children parent (%) - all (%) (%) (%) - other (%) (%) student (%)

1 Gateshead 6,383 14.7 34.8 3.5 10.5 12.4 17.8 0.2 6.1 2 Newcastle upon Tyne 14,725 9.9 25.4 2.5 12.7 9.6 9.7 14.8 15.4 3 North Tyneside 6,837 16.9 30.8 5.1 12.4 13.1 15.8 0.1 5.7 4 South Tyneside 3,949 16.2 30.3 4.1 10.1 11.1 18.6 1.6 7.9 5 Sunderland 7,269 9.9 30.4 2.5 10.5 13.1 20.8 5.5 7.2 Northumberland: CR 6 15.6 30.7 3.5 11.3 14.7 19.0 0.0 5.1 Coalfield 4,373 Northumberland: CR 7 13.7 22.2 6.6 18.1 24.7 9.9 0.1 4.7 Commuter 5,732 8 North Durham 6,603 10.9 28.7 3.1 12.4 13.8 14.3 10.7 6.2 9 Easington 3,085 18.9 23.8 3.4 8.4 16.0 24.4 0.0 5.1 10 Tyne & Wear City Region 58,956 13.0 28.4 3.6 12.1 13.5 15.3 5.7 8.4

A TWCR Metropolitan 5 (1-5) 39,163 12.5 29.3 3.3 11.6 11.5 15.1 6.8 9.9 B Gateshead (1) 6,383 14.7 34.8 3.5 10.5 12.4 17.8 0.2 6.1 C North Tyne (2+3) 21,562 12.1 27.1 3.3 12.6 10.7 11.7 10.1 12.3 D South Tyneside (4) 3,949 16.2 30.3 4.1 10.1 11.1 18.6 1.6 7.9 E Sunderland (5) 7,269 9.9 30.4 2.5 10.5 13.1 20.8 5.5 7.2

X North East 93,166 12.7 28.3 3.8 12.0 14.6 16.7 4.2 7.6 Y England 2,456,577 12.4 27.4 3.2 16.1 14.2 12.0 2.8 11.9

Source: Census 2001

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Table 5-6: Economic Activity of Persons living in private rental or rent free households

Economically active Economically inactive

PRS Hhlds Looking Self Permanently (No.) Employee Unemployed Full-time after employed Retired (%) Student (%) sick or Other (%) (%) (%) student (%) home/family (%) disabled (%) (%)

1 Gateshead 8,397 38.4 4.3 9.3 2.3 8.7 4.7 11.7 12.6 8.0 Newcastle upon 2 29,376 Tyne 31.5 2.6 5.0 10.6 3.8 32.9 5.1 4.8 3.8 3 North Tyneside 9,248 44.7 5.3 8.2 2.4 10.4 4.1 9.2 10.0 5.7 4 South Tyneside 5,296 34.4 4.5 12.4 3.0 8.1 8.7 10.5 11.2 7.2 5 Sunderland 11,343 32.0 3.2 9.8 6.9 5.4 15.2 10.7 10.7 6.1 Northumberland: 6 5,885 CR Coalfield 40.3 5.7 10.3 2.0 7.5 3.9 11.1 12.9 6.4 Northumberland: 7 9,095 CR Commuter 49.1 17.6 4.5 2.0 8.9 3.3 6.5 5.4 2.8 8 North Durham 11,246 32.7 5.1 5.7 4.5 4.9 28.8 7.2 7.2 3.9 9 Easington 3,998 26.7 3.4 9.5 1.2 8.1 3.7 17.0 21.2 9.4 Tyne & Wear 10 93,884 City Region 35.8 5.2 7.3 5.7 6.4 17.6 8.3 8.6 5.1

TWCR A Metropolitan 5 63,660 (1-5) 34.7 3.5 7.5 7.0 6.1 19.8 8.0 8.2 5.3 B Gateshead (1) 8,397 38.4 4.3 9.3 2.3 8.7 4.7 11.7 12.6 8.0 North Tyne C 38,624 (2+3) 34.7 3.2 5.8 8.6 5.4 26.0 6.0 6.1 4.3 South Tyneside D 5,296 (4) 34.4 4.5 12.4 3.0 8.1 8.7 10.5 11.2 7.2 E Sunderland (5) 11,343 32.0 3.2 9.8 6.9 5.4 15.2 10.7 10.7 6.1

X North East 144,031 36.9 5.8 8.1 4.7 6.8 14.0 9.4 8.8 5.5 Y England 3,941,901 50.4 7.5 5.2 4.3 5.6 10.1 7.5 4.9 4.4 Source: Census 2001

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5.3.7 Further information on PRS tenants can be found in two of the local housing surveys. First, Sunderland’s private sector house condition survey (2007) found that ■ Tenants in the private rented sector were more likely to be economically vulnerable, than were owner occupiers45 (63% were economically vulnerable compared with compared to 37% of owner occupiers)

■ These economic vulnerability findings were further substantiated when the socio- economic conditions of tenants were compared with those of tenants nationally: 33% were single person households (compared with 30% nationally), 14% single parent families (21% nationally), and 20% heads of household were unemployed (4% of household reference persons in England were registered as unemployed)

■ Private rented sector tenants were much more mobile than residents in other tenures: 38% private-rented households had lived in their current home less than 1 year and 11% of private-rented households said they definitely intended to move home within the next year. This is in line with national figures: 40 per cent of all private renters in England had moved during the previous year, which is the highest percentage of all tenures.

5.3.8 Newcastle City Council Housing Requirements Study (2003) found that ■ Private rented sector incomes were generally somewhat higher than Council rented sector but 78% were below the overall national average income of £23,000

■ While owner occupation is clearly the tenure of choice for the majority of the population, a substantial minority of residents have a preference for other tenures: 58% of resident indicated a preference for owner occupation, while 31% indicated they wanted to live in council rent and 6% wanted to live in private rented accommodation. For concealed households wishing to move within Newcastle, 59% would prefer owner occupation, while 25% indicated a preference for council rented, 12% a preference for private rented accommodation and 2% preferred HA rent.

45 The report does not define “economic vulnerability”, but we might assume the study is using the CLG definition.

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5.4 Private sector rents

5.4.1 Reflecting the differentiated PRS market across the City Region, there are variations in rent levels across the area. The figures below show mean private rents per week. Newcastle has the highest weekly rent, at £124, which is probably the result of a more segmented market that includes a well-developed executive/professional sub-market. The lowest average rents within the T&W Metropolitan area are found in South Tyneside and Gateshead, areas that house relatively large numbers of unemployed/low income tenants.

Table 5-7: Mean weekly private rent rates 2008

Mean Weekly Private Rent Rates (£) 1 Gateshead 109 2 Newcastle upon Tyne 124 3 North Tyneside 111 4 South Tyneside 98 5 Sunderland 113 6 Northumberland: CR Coalfield 91 7 Northumberland: CR Commuter 116 8 North Durham 114 9 Easington 103 10 Tyne & Wear City Region 109

A TWCR Metropolitan 5 (1-5) 111 B Gateshead (1) 109 C North Tyne (2+3) 118 D South Tyneside (4) 98 E Sunderland (5) 113

Source: Hometrack (2009)

5.4.2 Another useful indicator of rent levels in the area is the local housing allowance (LHA). Across the UK in April 2008, the LHA replaced Housing Benefit for all new claimants in the private rented sector. The LHA calculation is based on market rent information applied to Broad Market Rental Areas (BMRA). We would note that some BMRAs are fairly large (the geographies are noted on the table below), and may serve to combine areas with slightly different market profiles – either within local authorities and/or by combining authorities. In the case of Tyne and Wear, there is a view that the inclusion of Gateshead, which has had relatively low rents, in the Tyneside BMRA may impact on rent levels in that area, or at least on benefit rent levels. The current LHA values (as at July 2009) by property size for the local authorities in Tyne and Wear are presented in the table below.

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Table 5-8: LHA allowance by property size and BMRA – Jul 2009

Tyneside BRMA* Sunderland BRMA**

4 weekly 4 weekly Property size Weekly Weekly equivalent equivalent 1 bed shared £60 £240 £42 £168 1 bed self-contained £92 £369 £91 £365 2 beds £104 £415 £104 £415 3 beds £121 £485 £115 £460 4 beds £162 £648 £156 £623 5 beds £223 £891 £213 £852 Source: LHA Direct, 2008 - https://lha-direct.voa.gov.uk Note: Allowances are rounded to the nearest pound. * This includes parts of the following: North Tyneside, Newcastle, South Tyneside, Gateshead, Tynedale ** This includes parts of the following: Sunderland, South Tyneside, Durham

5.4.3 The 4-weekly rents in the Tyneside BMRA range from £240 for a one bedroom shared property to £891 for a five bedroom property. Sunderland BMRA LHA values are lower than those for Tyneside across all property sizes except at 2 beds, ranging from £168 for a shared one bedroom property to £852 for a 5 bedroom property for four weeks. The biggest variation exists at the price of a one bed shared property, for which Sunderland LHA is 30% lower than for Tyneside.

5.5 Market changes

5.5.1 Following several decades of sustained decline, the PRS has been undergoing a period of renewed growth in recent years. The number of households renting privately in England increased from two million to three million between 1998 and 2008.

5.5.2 The PRS is a diverse sector. It plays a key role in providing accommodation for a wide range of groups including lower income people, young people, vulnerable people, students, mobile workers and newly formed households.

5.5.3 There has been a general growth in the population groups likely to rent over recent years. Student numbers have increased through the expansion of Higher Education, and the numbers of in-migrants has increased through the expansion of the European Union in 2004, although clearly the recession has had a pronounced dampening effect on the number of in-migrants recently. Young people, including young professionals, have remained in private renting – for both affordability and lifestyle reasons – for much longer than had been the case in the past.

5.5.4 There is also an increasing use of the sector to house households in housing need: typically homeless households (particularly as temporary accommodation), but also initiatives with vulnerable households. For example, North Tyneside council has found that the use of the private rented sector through the provision of housing benefit increases demand at the lower end of the private rented sector especially.

5.5.5 Typically, however, private tenants are renting until they are in a position to buy their own home. Nationally, in 2007-08, 56% per cent of private renters said that they expected to become homeowners eventually and 28% of these were expecting to do so within the next two years. For those who would have liked to buy their own home but did not expect

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to ever be able to, the most common reason given was that they did not expect to be able to afford it (62%), while a small number specifically mentioning lack of job security as their main reason for not buying (4%). Notably in the current climate some 9% gave concerns about debt as their reasons for not buying. (Source: CLG Survey of English Housing Preliminary Report: 2007-08).

5.5.6 The recession will have delayed many more renters from purchasing their own home, either due to unemployment or due to the increasing difficulty in gaining approval for a first mortgage. Equally, those looking to move and sell their property are often forced to rent first, to shorten the length and uncertainty of their chain. Both these groups might be expected to keep the demand for private rental high.

5.5.7 The supply of private rental accommodation traditionally tends to originate from: ■ Large and small scale property investors (These are very different types of investors; small-scale investors can be further differentiated into professional and “amateur”)

■ Those unwilling or unable to sell a property in an area or of a type/size unsuitable for them at the time.

5.5.8 The factors which are therefore most likely to affect the supply of the private rental housing market, are factors affecting property investors (and increasingly, particularly factors that affect investors in ‘buy-to-let’ properties), the ease with which it is possible to sell an unwanted property, and the supply of properties typically used for private rental purposes. In recent years, the financial environment was favourable for buying to let, with high availability of ‘buy-to-let’ mortgages and increasing concerns over the performance of alternative investment funds etc, leading to an increase in property-based investment.

5.5.9 Other factors which have positively affected the supply of private rental in recent years have been the increased development of new flatted private housing, flats being the dominant housing type for private rental, and strong demand for properties (from the growing student market and the growth in in-migrants).

5.5.10 Research undertaken in 2007, found that a number of factors were contributing to the buoyancy of the rental market in the Newcastle, Gateshead and North Tyneside areas. These included: the regeneration of Newcastle city centre and the cultural revival of the Quayside areas of Newcastle and Gateshead; the movement of new ‘international’ population groups into the sector, particularly from Eastern Europe; rising house prices and the relative un-affordability of home-ownership for many households; the desire of many households, particularly younger ones, to live in (or close to) the city centre; and the improvement in the condition of the private rented housing stock. However, many respondents, both ‘stakeholders’ and landlords, reported that the PRS was becoming more competitive as new landlords entered the sector46.

5.5.11 Key policy changes that have affected the supply of properties for private rental in recent years include the introduction of landlord registration, the licensing of Houses in Multiple Occupation, and the reform of Housing Benefit – both in terms of the introduction of the Local Housing Allowance and the general removal of direct payment of benefit to landlords47. However, it remains to be seen how, and by how much, these policy changes

46 Bridging NewcastleGateshead Private Landlord Survey, Centre for Regional Economic and Social Research Sheffield Hallam University, for BNG, 2007 47 Although arrangements can be made in some cases for LHA to paid direct to landlords where this is deemed advisable, this will no longer be the norm

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have affected supply. Indeed, some of the participants in the Tyne and Wear city region SHMA stakeholder workshop believed that the recession was temporarily mitigating any LHA effects. Landlords who were reluctant to rent to tenants on benefits currently preferred to risk rent arrears than to risk voids. However, there was a view that once the market “picked up” (i.e., once the supply of properties declined, and competition for tenants declined again) landlords could start being more selective about their tenants, and select-out LHA tenants in favour of those not on benefits.

5.5.12 The SHMA has reviewed the current PRS market with agents storeys:SSP. It is their view that the oversupply of apartments in city centre locations became apparent before the recession took hold. Development activity had been spurred on by investors buying in bulk, off-plan before the limited extent of the market for city centre living was truly understood. This flooded the letting market and landlords had to substantially reduce their expectations of rental income to attract tenants, who were now in a strong bargaining position. Landlords would rather offset their loan repayments with a low rent than leave the property empty and have no rent at all. In Gateshead for example, rents of apartments in Baltic Quays, on the Quayside dropped from £800 per calendar month to £650 per calendar month. The recession has led to more caution amongst purchasers; one manifestation of this is the favouring of more traditional house types, which further weakens demand for apartments. This, and the oversupply, will ensure that rates of new development are restricted for the foreseeable future, and that rents will take a long time to recover.

5.5.13 At the same time the supply of 3 bedroom houses available to rent has increased compared with two years ago. Here landlords are often owner–occupiers who want to purchase another property but cannot sell their house, so resort to renting it out in order to facilitate their move. With supply increasing in line with demand there has not been upward pressure on rents despite high levels of market activity. Agents report that once a rented property is brought to the market it usually takes no more than four weeks to agree a letting and that they have lists of tenants wanting property to rent. This recent tightening of supply may reflect the emerging recovery in the market for owner-occupied homes, and renewed attempts to sell.

5.5.14 At the bottom end of the market, demand from those who cannot afford to buy has been more consistent but supply has tightened. The number of affordable properties, such as 2 bed flats, coming to the market has decreased. Generally landlords here are investors and lack of finance has reduced market activity and supply. As price adjustment occurs in the owner-occupied market, some of those for whom buying was not an option, may find that they can now afford to get on the housing ladder. As a result demand for rented homes may start to fall and this will limit the scope for rental inflation at the bottom end of the market. Currently agents advise that overall tenants are in the stronger negotiating position and putting downward pressure on rents.

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6 Social rented sector

This section of the report examines the social rented sector – a declining, but still substantial sector in the Tyne and Wear City Region. The sector plays a key role in providing accommodation for households in housing need, vulnerable households and older households.

Key Findings

1. 28% of dwellings in the TW Metropolitan 5 area are provided by social housing landlords: 17% by local authorities and 11% by housing associations. 25% of dwellings in the City Region are social housing.

2. The split between LA and HAs varies between local authority area, in response to the extent of stock transfer that has occurred in the area, housing association development in the different areas, and the historical profile of local authority development and redevelopment in each area.

3. The local authority stock has been in decline, principally as a result of sales to sitting tenants and transfers to housing associations (by 18% over the period 2001 – 08). RTB sales have slowed across the country in recent years (even prior to the recession), and this pattern is evidence in the TW Metropolitan 5 area. Since the end of 2007, RTB sales have collapsed, undoubtedly as tenants are unwilling to risk taking on new financial commitments and/or find it difficult to access mortgage finance.

4. Stock losses in the housing association sector tend to be much lower than those in the local authority sector – just 127 housing association properties were sold under the RTB/A in the TW Metropolitan 5 area in the year to March 2008 (equivalent to just 0.23% of the total HA stock) – virtually all of these were in Sunderland.

5. An average of 206 new housing association dwellings was developed per annum in the nine year period since 1999/2000 (although just 31 were built in 2002/03). Completions have been declining steadily since 2004/05 (from a peak of 283).

6. Local authority stock conditions are relatively poor in the TW Metropolitan 5 area. With the exception of Gateshead, the performance of all areas is worse than the English average. All five authorities are, however, on schedule to deliver decent homes by 2013. It is not clear whether all housing associations will meet this revised target.

7. In 2008 there were around 42,070 households on local authority housing registers in the TW Metropolitan 5 area. The majority of these households required a property up to and including 2 bedrooms

8. Turnover of local authority stock is around 10% per annum across the TW Metropolitan 5 area. This is higher than the English average. Turnover remains highest in Newcastle at 12%. Elsewhere, turnover stands at between 8.5% and 10%. Rates are typically lower in the housing association sector, ranging from 10% in South Tyneside, to 8% in both Newcastle and North Tyneside, and 6% in both Sunderland and Gateshead.

9. Comparing the number of households waiting for housing with the number of lets available gives some indication of pressure for housing in each of the areas. Overall in the area there are around 5 households waiting on the housing list for every let that becomes available. This varies from just over 2 applicants per let in Newcastle to nearly 9 applicants per let in South Tyneside.

10. Stock size in the sector is skewed to smaller size property (para 6.7.3).

11. Wide variations by areas in the level of housing association supported housing and housing for older people is recorded (Table 6-2).

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12. The incomes of social housing tenants tend to be very low (para 6.5.1 and Table 6-19).

13. There is continuing demand for affordable housing across the City Region, albeit with pockets of lower demand, most notably in Newcastle (para 6.5.1).

14. The level of supply of new affordable social housing is well below the level required to replace stock lost through sales and demolitions; should one to one replacement be necessary.

6.1 Profile of the stock

6.1.1 In 200948, 25% of all dwellings in the Tyne & Wear City Region were in the social rented sector, around 86,000 housing association49 dwellings and 106,000 local authority dwellings. This is considerably higher than in England overall (around 18%). Some 17% of dwellings in the TW Metropolitan 5 area were rented from a local authority, ranging from none in Sunderland (as a result of stock transfer), 17% in North Tyneside, to 26% in South Tyneside. The proportion of housing association stock ranges from 28% in Sunderland to 5% - 6% in the other local authority areas, again reflecting the impact of stock transfer in Sunderland.

48 The most recent data for RSL stock are from TSA data which were gathered in the first few months of 2009. LA and total stock figures come from HSSA data for April 2009, and RSL figures from the HSSA will be available in early 2010.

49 We are using the term “housing associations” here (alternatives include registered social landlords (RSLs) and the new term, private registered providers). Housing associations are not-for-profit organisations that manage, own and (often) develop social rented housing. Some are also involved in intermediate housing initiatives, such as shared ownership and intermediate rent

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Table 6-1 Social rented sector (number of dwellings and % of all dwellings)

All 50 Area Local authority Housing association dwellings No. No. % No. %

1 Gateshead 91,985 21,471 23% 4,733 5% 2 Newcastle upon Tyne 122,560 29,508 24% 7,367 6% 3 North Tyneside 93,363 15,686 17% 5,142 6% 4 South Tyneside 69,159 18,294 26% 4,495 6% 5 Sunderland 124,469 0 0% 34,351 28% 6 Northumberland: CR Coalfield 65,694 6,741 10% 7,644 12% 7 Northumberland: CR Commuter 49,332 3 0% 6,516 13% 8 North Durham 239,495 6,159 6% 14,247 14% 9 Easington 43,234 8,563 20% 1,856 4% 10 Tyne & Wear City Region 765,301 106,425 14% 86,351 11%

A TWCR Metropolitan 5 (1-5) 501,536 84,959 17% 56,088 11% B Gateshead (1) 91,985 21,471 23% 4,733 5% C North Tyne (2+3) 215,923 45,194 21% 12,509 6% D South Tyneside (4) 69,159 18,294 26% 4,495 6% E Sunderland (5) 124,469 0 0% 34,351 28%

X North East 1,164,127 128,443 11% 145,550 13% Y England 22,696,246 1,804,732 8% 2,195,195 10%

Sources: HSSA 2009 (LA and total stock); TSA Regulatory and Statistical Return 2009 (RSL stock)

6.1.2 Table 6-2 shows the different types of housing association provision in each local authority and market area. The bulk of the stock is general needs: 83% in the Tyne and Wear City Region overall, and even higher proportion in some areas, such as Sunderland and the Commuter region of Northumberland (both 94%). Nonetheless, the sector clearly provides a substantial amount of specialist accommodation across the City Region: for example, high levels of supported housing are provided in Newcastle (12%) and the Coalfield region of Northumberland (10%) compared with the other areas and the regional and national averages (3% and 5% respectively); high levels of specialist provision for older people is made in North Tyneside and Gateshead (23%) and in Northumberland: C R Coalfield again (24%).

50 This refers to LA properties within the area owned by the LA (not those owned by other LAs)

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Table 6-2 Housing association stock by type of provision, 2008

Area No of units Housing for General Supported older needs housing* people** Total stock51

1 Gateshead 73% 4% 23% 100% 2 Newcastle upon Tyne 65% 12% 22% 100% 3 North Tyneside 69% 7% 24% 100% 4 South Tyneside 77% 7% 16% 100% 5 Sunderland 94% 2% 5% 100% 6 Northumberland: CR Coalfield 68% 10% 23% 100% 7 Northumberland: CR Commuter 94% 1% 5% 100% 8 North Durham 81% 2% 17% 100% 9 Easington 85% 3% 12% 100% 10 Tyne & Wear City Region 83% 4% 13% 100%

A TWCR Metropolitan 5 (1-5) 85% 4% 11% 100% B Gateshead (1) 73% 4% 23% 100% C North Tyne (2+3) 67% 10% 23% 100% D South Tyneside (4) 77% 7% 16% 100% E Sunderland (5) 94% 2% 5% 100%

X North East 81% 3% 15% 100% Y England 81% 5% 15% 100%

*Includes both purpose designed supported housing and designated supported housing, does not include supported housing for older people **Includes supported housing for older people Source: TSA Regulatory and Statistical Return 2009

Property size 6.1.3 The table below shows the stock distribution in the local authority housing sector by dwelling size. The housing stock is now skewed towards smaller properties, with just 38% of all local authority stock in the city region three bedrooms or more, while 38% has two bedrooms and around 23% has one bedroom. The pattern is broadly consistent across all sub areas, although in most local authority areas, three bedrooms or more are slightly more common than two, except in Gateshead, Northumberland CR Commuter, Durham Gateshead and Durham Sunderland, which all have a higher percentage of two bedroom local authority dwellings (45%) than three bedrooms (33%).

51 Stock eligible for DHS

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Table 6-3: local authority stock by size of dwelling, 2007

One Bed 2 Bed 3+ Bed Total Stock (%) (%) (%)

1 Gateshead 21,805 21.6 44.9 33.4 2 Newcastle upon Tyne 30,530 21.1 38.4 40.4 3 North Tyneside 15,921 25.3 33.8 40.9 4 South Tyneside 18,596 23.5 34.3 42.2 5 Sunderland* 0 0.0 0.0 0.0 6 Northumberland: CR Coalfield 12,244 23.8 35.5 40.6 7 Northumberland: CR Commuter 2,306 26.6 46.1 27.2 8 North Durham 10,539 25.6 39.5 35.0 9 Easington 8,790 28.0 40.1 31.9 10 Tyne & Wear City Region* 120,731 23.4 38.4 38.1

A TWCR Metropolitan 5 (1-5)* 86,852 22.5 38.3 39.1 B Gateshead (1) 21,805 21.6 44.9 33.4 C North Tyne (2+3) 46,451 22.5 36.8 40.5 D South Tyneside (4) 18,596 23.5 34.3 42.2 E Sunderland (5) 0 0.0 0.0 0.0

X North East 153,941 24.0 38.6 37.4 Y England 2,001,978 30.7 33.3 36.0

*Excluding Sunderland

Source: CLG (2008) Property type 6.1.4 The 2007 local authority stock distribution by property type and sub-area is shown in the table below. While houses account for over half of the stock in all areas, the split between houses and flats varies between areas. In general the urban areas have a higher proportion of flats and the rural areas have a higher proportion of houses, as would be expected. Newcastle is notable for the high proportion of flats there – 45%. By contrast North Durham and Easington have only 12-13% flats.

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Table 6-4: Local authority stock by property type, 2007

Total House*** Flat** (%) Stock (%)

1 Gateshead 21,805 30 70 2 Newcastle upon Tyne 30,530 45 55 3 North Tyneside 15,921 31 69 4 South Tyneside 18,596 26 74 5 Sunderland 0 0 0 6 Northumberland: CR Coalfield 12,244 19 81 7 Northumberland: CR Commuter 2,306 16 84 8 North Durham 10,539 12 88 9 Easington 8,790 13 87 10 Tyne & Wear City Region* 120,731 29 71

A TWCR Metropolitan 5 (1-5)* 86,852 34 66 B Gateshead (1) 21,805 30 70 C North Tyne (2+3) 46,451 40 60 D South Tyneside (4) 18,596 26 74 E Sunderland (5) 0 0 0

X North East 153,941 28 72 Y England 2,001,978 47 53

Source: CLG (2008) *Excluding Sunderland **Flats include high, medium and low rise ***Houses include bungalows 6.1.5 Table 6-5 shows the profile of housing association dwellings by property type in each local authority area. Again, it is clear that the bulk of properties in the city region are houses (around 59%). More detailed analysis (shown in Appendix F) indicates that these are mainly terraced houses and semi-detached houses. However, housing associations generally have a higher proportion of flats than local authorities do. Indeed in some areas there are more RSL flats than there are houses, when this is never the case for local authority stock (eg. Newcastle and North Tyneside). This may partly reflect the age of the available data in relation to RSL stock, as some of the high rise flats may have been demolished since 2001.

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Table 6-5 Housing association stock by property type

Area *Flat (%) **House (%)

1 Gateshead 50% 49% 2 Newcastle upon Tyne 65% 35% 3 North Tyneside 57% 42% 4 South Tyneside 39% 61% 5 Sunderland 29% 71% 6 Northumberland: CR Coalfield 42% 58% 7 Northumberland: CR Commuter 25% 76% 8 North Durham 26% 73% 9 Easington 9% 91% 10 Tyne & Wear City Region 40% 59%

A TWCR Metropolitan (1-5) 44% 56% B Gateshead (1) 50% 49% C North Tyne (2+3) 62% 38% D South Tyneside (4) 39% 61% E Sunderland (5) 29% 71%

X North East 42% 58% Y England 48% 51% Source: Census 2001 *Flats include purpose built blocks, converted/ shared houses (incl bed-sits) and commercial buildings **Houses include detached, semi-detached and terraced. Age of stock 6.1.6 The table below shows the local authority stock distribution by period of construction. The bulk of the stock was, as might be expected, built after the war – with around 41% built between 1945 and 1964, and a further 31% built after 1964. This general profile is consistent throughout the city region. The chart below the table illustrates the different construction profiles in Tyne and Wear and England as a whole – the Tyne and Wear profile is skewed towards the earlier time periods, whereas the English profile is more recent (for example, 36% of stock was constructed 45-64 and 41% post 64).

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Table 6-6: Local authority stock by year of construction, 2005

Total Pre 1919 1919-1944 1945-1964 Post 1964

Stock (%) (%) (%) (%)

1 Gateshead 24,609 1.49 25.69 45.17 27.65 2 Newcastle upon Tyne 33,275 4.24 27.61 36.77 31.39 3 North Tyneside 18,477 0.88 24.18 39.73 35.21 4 South Tyneside 21,417 1.16 21.77 46.17 30.89 5 Sunderland 0 0 0 0 0 6 Northumberland: CR Coalfield 13,730 1.30 26.29 39.58 32.83 7 Northumberland: CR Commuter 2,702 2.44 20.80 43.45 33.31 8 North Durham 20,908 1.52 27.43 40.15 30.90 9 Easington 11,044 0.52 33.14 41.27 25.07 10 Tyne & Wear City Region* 146,162 1.92 26.14 41.15 30.79

A TWCR Metropolitan 5 (1-5)* 97,778 2.24 25.20 41.50 31.06 B Gateshead (1) 24,609 1.49 25.69 45.17 27.65 C North Tyne (2+3) 51,752 3.04 26.38 37.82 32.75 D South Tyneside (4) 21,417 1.16 21.77 46.17 30.89 E Sunderland (5) 0 0 0 0 0

X North East 206,355 1.85 22.55 41.90 33.70 Y England 2,445,039 3.39 19.74 36.06 40.81

Source: CLG, 2008 *Excluding Sunderland Figure 6-1: Local authority stock by year of construction

Local authority stock by age of construction

30 Pre 1919 (%) 25 1919-1944 (%) 1945-1964 (%) 20 Post 1964 (%) 15

0 TWCR Metropolitan England

Source: CLG

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6.2 Stock change

6.2.1 According to CLG data, in 2009 there were 106,425 local authority dwellings in the Tyne and Wear city region. Historical data show that the local authority stock has been in steady decline: by almost 50,000 units over the period 2001 to 2009, largely as a result of stock transfer as noted above. (See tables in Appendix F for further historical data on stock change.)

6.2.2 Table 6-7 provides an overview of how the overall stock in the sector has changed in 2008. It provides figures for house completions in the social rented sector. The figures for RTB sales of LA and housing association stock are taken away, as well as demolitions. This leaves a total figure for the change in the stock for 2007-8. The data show that there has been significant variation in the level of change in stock in different areas. The Northumberland City Region Commuter and North Durham sub-areas showed much the highest increases in their stock levels (at over 3% of overall stock), whereas the North Tyne sub-area showed the greatest reduction in stock, at nearly 1%. This was due to the demolition programmes in these areas, and it should be noted that demolition of high rise developments tends to cause significant ‘blips’ in stock figures, and that looking at an individual year cannot provide evidence of a trend.

6.2.3 The demolitions in North Tyne accounted for around half of the demolitions in the North East, and therefore contribute significantly to the overall reduction in stock in the region (nearly 3%) compared to 2% increase in stock nationally.

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Table 6-7 Stock change in the social rented sector by local authority area, 2008

House RSL building LA RTB RTB Total Total SRS completions sales sales Demolitions change stock % change

1 Gateshead 335 27 1 82 225 26,311 0.9% Newcastle upon 2 189 50 1 375 -237 36,884 -0.6% Tyne 3 North Tyneside 117 24 1 126 -34 20,563 -0.2% 4 South Tyneside 289 34 2 122 131 22,738 0.6% 5 Sunderland 332 0 122 LSVT 210 34,328 0.6% Northumberland: 6 242 9 - … 233 14,396 1.6% CR Coalfield Northumberland: 7 209 0 3 LSVT 206 6,391 3.2% CR Commuter 8 North Durham 619 11 1 … 607 19,766 3.1% 9 Easington 258 27 1 173 57 10,380 0.5% Tyne & Wear 10 2,590 182 132 … 2,276 191,757 1.2% City Region

TWCR A Metropolitan 5 1,262 135 127 705 295 140,824 0.2% (1-5) B Gateshead (1) 335 27 1 82 225 26,311 0.9% North Tyne C 306 74 2 501 -271 57,447 -0.5% (2+3) South Tyneside D 289 34 2 122 131 22,738 0.6% (4) E Sunderland (5) 332 0 122 LSVT 210 34,328 0.6%

X North East 4,540 10,720 370 1,064 7,614 273,416 -2.8% Y England 133,830 49,120 3,737 5,104 75,869 3,997,981 1.9% Sources: HSSA 2008; Business Planning Statistical Appendix 2007/08; Regulatory & Statistical Returns Includes private enterprise, RSL and LA completions 6.2.4 During the period 1994 to 2008 the city region lost more than half (53%) of its local authority housing stock (see Appendix F). The bulk of this stock loss has been as a result of stock transfer to housing associations. As noted in section 3.1 four Tyne and Wear authorities have now transferred their stock to housing associations52: ■ Tynedale (City Region Commuter) to Milecastle Housing Ltd, 3,564 homes in 1999/2000

■ Sunderland to Gentoo, 36,356 homes in 2001

■ Castle Morpeth (City Region Commuter) to Castle Morpeth Housing, 2,167 homes in 2007

■ Derwentside (North Durham) to Derwentside Homes, 6,884 homes in 2006

52 Source: HCA (2009) List of completed large-scale housing transfers

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■ Chester-le-Street (North Durham) to Cestria Community Housing, 4,294 homes in 2008

■ Wansbeck to Wansbeck Homes, 5,300 homes in 2008.

6.2.5 Elsewhere in the T&W Metropolitan 5, there were also significant stock losses, mainly as a result of the right to buy, although there will also be some small transfers/sales of stock to housing associations. North Tyneside lost 33% of its stock, Gateshead and South Tyneside both lost 27% of their stock, and Newcastle lost 26% over the period 1994 to 2008. Notably RTB sales have been decreasing over recent years. Sales reached their peak in 2003 and 2004, and have declined steadily since then. However, sales in 2007-08 showing as little as 99 properties in Northumberland, CR Coalfield and the highest sales in Newcastle numbering 240. The remaining sub areas showed sales of 109 and 173 for the same time period. We might expect sales in 2008/09 (and 09/10) to be continue to be as low, if not even lower, as tenants find it difficult to access mortgage finance, and are nervous to take on debt in uncertain employment market. Tenants are generally content to “wait out” uncertain economic times, the home they want to buy will still be there once their circumstances improve and the valuation will not have changed much, if at all.

6.2.6 A number of authorities are also restructuring their housing stock, to address issues of low demand, inappropriate stock design and mix (both in general needs stock and especially in housing for older people). Often demolition programmes are undertaken in association with stock transfer to housing associations, regeneration initiatives, and measures to develop tenure diversity within local areas.

6.2.7 While the local authority stock has been in decline, the housing association has been increasing across the Tyne & Wear city region. Overall, this growth has been an impressive 179% since 1998, in line with the change at regional level (175%) and considerably higher than the national average (98%). Clearly, much of this increase results from the stock transfers outlined above. Housing associations are also the principal vehicle for new stock development. Typically around 300 to 400 new dwellings have been developed each year in the City Region. However, numbers have been declining over recent years, and just over 200 dwellings were completed in 2007/08.

6.2.8 Indeed, stock is being lost to the housing association sector through the RTB/RTA, with the exception of Sunderland53, at a much lower rate than the local authority sector. A total of 132 housing association dwellings were sold under the RTB/RTA during 2007/08 in the Tyne & Wear City Region as a whole, representing 0.15% of the total stock. This loss of the total stock was considerably lower than that recorded in 2001/02 of 1.58%, a general trend seen across all areas over the same period.

6.2.9 Clearly the levels of housing association new development are well below the level required to replace the stock being lost through the RTA/RTB in the social rented sector (through both housing association and local authority sales). For example, in 2007/08, the proportion of new build completions compared to RTA/RTB sales across the social rented 54 sector was just 20% .

53 Where tenants that transferred from the local authority, and remain in their original home, retain the right to buy

54 Calculation is based on 219 new build in the Tyne & Wear city region and the sum of RTB sales in HA (132) and LA (971) sectors.

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6.3 Market analysis

6.3.1 The next section of this section considers “market” indicators for the social rented sector: rents and affordability, demand and supply, and vacancy rates. These clearly suggest a continuing demand for affordable housing across the city region, albeit with pockets of lower demand most notably in Newcastle. Critically, the incomes of tenants tend to be very low, and this is reflected in the high proportion of tenants in receipt of housing benefit.

Housing costs 6.3.2 The table below shows the net weekly rent charged in each local authority area in 2008/09. There is very little variation across the T&W Metropolitan area as rents of local authorities and housing association properties are controlled by strict government formulae that link them to the RPI and are designed over the long term to bring rents in the two sectors to similar levels for the same size and type of property (convergence). Local authority and housing association landlords have little opportunity to apply variations within the formulae. Gateshead records the highest average rent in Tyne & Wear at around £55, followed by Newcastle at £54. The lowest weekly rents are recorded by South Tyneside at £51. The average rent for the T&W Metropolitan area at £53 is in line with the North East average (also £53), but is considerably lower than the England average of £64. As might be expected, rents do vary by property size – from around £43 a week for a bedsit, to £53 for a 2 bedroom property, right up to around £77 a week for a 6 bedroom+ property. As noted earlier in this chapter, the majority of homes in the area have two bedrooms or fewer, so we would expect most tenants to be paying rents at the lower end of the range.

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Table 6-8: Local authority rents, by property size, 2008/09

5 or 6 or 1 2 3 5 more more Ave LA Stock n bedsits bedrm bedrms bedrms 4 bedrms bedrms bedrms Bedrms rent

1 Gateshead 501 44.32 49.92 54.53 58.93 62.15 65.78 70.61 80.27 54.94 2 Newcastle upon Tyne 504 42.76 45.54 52.3 60.28 66.47 69.86 72.09 78.11 54.27 3 North Tyneside 169 40.52 46.09 51.58 57.72 61.39 64.46 67.66 70.86 52.74 4 South Tyneside 130 40.98 44.89 50.67 54.57 56.9 58.25 58.25 0 50.92 5 Sunderland LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT Northumberland: CR 6 Coalfield … … … … … … … … … … Northumberland: CR 7 Commuter LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT 8 North Durham … … … … … … … … … … 9 Easington 83 42.95 45.92 52.35 56.21 60.02 61.65 61.65 0 51.87 Tyne & Wear City No. Region … … … … … … … … … …

TWCR Metropolitan 5 A (1-5) 1,304 42.89 46.52 52.53 58.17 62.6 68.72 71.08 77.38 53.44 B Gateshead (1) 501 44.32 49.92 54.53 58.93 62.15 65.78 70.61 80.27 54.94 C North Tyne (2+3) 673 42.2 45.76 52.07 59.39 64.58 69.61 71.8 77.27 53.74 D South Tyneside (4) 130 40.98 44.89 50.67 54.57 56.9 58.25 58.25 0 50.92 E Sunderland (5) LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT LSVT

North East X average/total 1,668 43.56 47.74 53.27 57.96 61.87 67.83 70.1 77.42 53.78 England Y average/total 50,235 53.4 56.84 64.05 70.32 83.35 94.86 96.9 105.47 64.38

Source: Dataspring

6.3.3 The average weekly housing association rent in the Tyne & Wear City Region is just under £60 in line with the regional average of just under £62 with no significant difference between the areas within the Tyne & Wear region. The more significant differences are found in 2-bed properties between Northumberland Coalfield (around £56) and Easington - £10 more at around £66; and 4-bed properties which can cost £80 per week in Newcastle upon Tyne but around £67 in North Durham.

6.3.4 Housing association rents in the area are still slightly higher than local authority rents – the T&W Metropolitan area average is £61. This difference does not appear to result from a different stock profile – the average housing association rent is around £9 more expensive than the average local authority rents for all stock sizes.

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Table 6-9: Housing association weekly rent by number of bedrooms

Average 1-bed 2-bed 3-bed 4-bed 5-bed 6-bed 7-bed 8-bed Weekly rent (£) (£) (£) (£) (£) (£) (£) (£) (£)

1 Gateshead 59.23 53.24 60.13 67.50 69.45 - - - - 2 Newcastle upon Tyne 60.69 55.76 61.89 70.32 80.00 70.03 115.98 - - 3 North Tyneside 61.89 56.06 63.00 72.89 75.09 - - - - 4 South Tyneside 60.16 53.67 63.75 69.41 77.59 - - - - 5 Sunderland 60.64 55.69 62.01 66.14 69.56 57.78 - - - Northumberland: CR 6 56.30 49.15 56.27 66.89 72.48 - - - - Coalfield Northumberland: CR 7 58.81 53.34 59.54 67.54 - - - - Commuter 8 North Durham 58.61 52.50 58.15 63.16 67.36 - - - - 9 Easington 62.81 48.47 66.58 67.98 68.18 - - - - 10 Tyne & Wear City Region 59.95 54.34 61.01 66.32 - - - -

TWCR Metropolitan 5 (1- A 60.63 55.35 62.09 67.27 71.71 - - - - 5) B Gateshead (1) 59.23 53.24 60.13 67.50 69.45 - - - - C North Tyne (2+3) 61.25 55.89 62.47 71.56 79.51 - - - - D South Tyneside (4) 60.16 53.67 63.75 69.41 77.59 - - - - E Sunderland (5) 60.64 55.69 62.01 66.14 69.56 57.78 - - -

X North East 61.69 55.74 62.57 67.31 70.24 71.19 115.98 - - Y England 69.33 61.04 70.24 77.00 90.57 95.39 114.64 93.81 138.90

Source: CORE, 2008/09

Note: Zero values are shown as a dash (-)

Incomes and affordability 6.3.5 The net annual incomes of new housing association tenants by household type and economic status are shown below in Tables 3-9 and 3-10. In 2008/09, the median income levels for the categories shown for the Tyne and Wear City Region were broadly in line with those at the national level. Typically, incomes of new tenants within the sector are low, and particularly so for single person and lone parent households. There are a few observations within the table, where median incomes are high relative to regional average. In some cases (especially those towards the right hand side of the table) this may be a result of a small number of cases distorting the average. We do note that incomes for family households in Gateshead and older single households in Sunderland are considerably lower than elsewhere.

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Table 6-10 Net annual income for new HA tenants by household type (median), 2008/09

3 or Mixed Single 3 or 2 adults Other Net Annual Older Single 1 adult & more adult & older 2 adults more & house- Income (£) couple adult children adults & older person adults children holds children person/s

1 Gateshead 7,488 12,454 6,734 18,200 19,188 9,126 12,480 11,310 9,360 8,320 Newcastle upon 2 7,748 12,896 5,980 14,430 12,246 8,970 17,342 11,180 9,438 16,016 Tyne 3 North Tyneside 7,800 12,324 5,278 9,620 11,700 9,464 17,212 11,388 14,456 8,424 4 South Tyneside 7,930 15,600 7,384 11,336 12,922 9,568 16,640 13,078 26,572 17,862 5 Sunderland 6,448 11,700 5,304 13,000 14,768 9,516 17,160 16,588 9,828 11,388

Northumberland: 55 56 57 6 7,069 14,378 5,010 8,397 22,880 10,760 17,240 17,680 14,003 17,776 CR Coalfield Northumberland: 58 59 60 7 7,431 9,212 9,531 14,143 16,033 11,663 19,439 12,636 11,726 11,336 CR Commuter 8 North Durham 7,894 13,714 4,671 15,081 12,034 9,221 16,733 11,811 13,213 11,366 9 Easington 7,332 13,572 3,848 8,112 10,738 8,060 24,700 10,686

Tyne & Wear City 61 62 10 7,138 12,338 5,639 12,959 14,405 9,583 17,235 14,839 11,345 13,059 Region TWCR A Metropolitan 5(1- 6,815 12,454 6,734 18,200 19,188 9,126 12,480 11,310 9,360 8,320 5) B Gateshead (1) 7,488 12,454 6,734 18,200 19,188 9,126 12,480 11,310 9,360 8,320 C North Tyne (2+3) 7,772 12,582 5,674 12,002 12,003 9,243 17,283 11,232 11,668 11,461 South Tyneside D 7,930 15,600 7,384 11,336 12,922 9,568 16,640 13,078 26,572 17,862 (4) E Sunderland (5) 6,448 11,700 5,304 13,000 14,768 9,516 17,160 16,588 9,828 11,388 X North East 6,760 12,428 4,680 12,012 13,000 9,464 16,120 16,068 11,180 11,362 Y England 7,176 11,960 4,680 11,856 13,234 9,152 16,016 16,874 11,544 13,676

Source: CORE, 2008/09

6.3.6 Information on local authority tenant incomes is not recorded systematically. However, the various local housing market assessment assessments have collected some information: ■ Gateshead’s study reported on social rented sector tenants as a whole. It noted that only 27% of tenants were working, either full or part time, and as a consequence incomes were generally low, with 88% of tenants gross household incomes below £300 per week63

55 Excludes Blyth Valley 56 Excludes Blyth Valley 57 Excludes Blyth Valley 58 Excludes Castle Morpeth 59 Excludes Castle Morpeth 60 Excludes Tynedale 61 Excludes Blyth Valley 62 Excludes Blyth Valley and Castle Morpeth 63 Gateshead 2006 housing needs and support survey, final report, September 2006, pp37-8 (David Cumberland Housing Regeneration Ltd)

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■ Newcastle found that the median gross household income of council tenants was just £7,065 a year (£136 a week, compared with £144 for housing association tenants). The survey also found that council tenants had just £199 In savings (median)64

■ North Tyneside did not report specific local authority income information from their survey, but they do have LA CORE, which provides information on the income of new local authority tenants. This shows that the median income of new tenants was £130 in 2008/09, while the mean income was £143 a week65.

6.3.7 Around 56,300 local authority tenants in the T&W Metropolitan area are currently in receipt of housing benefit – around two-thirds of all tenants in the area. Data available from DWP do not distinguish housing association and private rented sector benefit recipients, so it is not possible from this to determine the proportion of HA tenants on housing benefit, although typically we would expect a lower proportion of HA tenants to be on benefit.

Table 6-11: Housing Benefit recipients, May 2009

All Housing Benefit recipients LA Tenants Non LA Tenants* Unknown

1 Gateshead 20,210 13,680 6,510 10 2 Newcastle upon Tyne 29,990 19,800 10,040 150 3 North Tyneside 17,350 10,070 7,180 100 4 South Tyneside 18,130 12,630 5,470 30 5 Sunderland 29,170 110 29,050 0 6 Northumberland: CR Coalfield** … … … … 7 Northumberland: CR Commuter** … … … … 8 North Durham** … … … … 9 Easington** … … … … 10 Tyne & Wear City Region … … … …

A TWCR Metropolitan 5 (1-5) 114,850 56,290 58,250 290 B Gateshead (1) 20,210 13,680 6,510 10 C North Tyne (2+3) 47,340 29,870 17,220 250 D South Tyneside (4) 18,130 12,630 5,470 30 E Sunderland (5) 29,170 110 29,050 0

X North East 241,280 86,270 154,160 850 Great Britain (Figure for England not Y published) 4,403,980 1,496,040 2,879,400 28,540

* Non-LA tenants comprises HA tenants and PRS tenants ** Data are only available for the new unitary authorities Demand for Housing 6.3.8 Demand for housing can be assessed in various ways. The simplest is by reference to the number of households applying to the housing list.

64 Newcastle survey of need and demand, April 2008, p 47 (Fordham Research)

65 North Tyneside Strategic housing market assessment 2009 (July draft), p 93 (DCA)

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6.3.9 In 2008 there were around 62,791 households local authority housing registers in the Tyne & Wear city region, 15,856 in South Tyneside, 10,048 in Gateshead, 8,473 in Newcastle, 5,513 in North Tyneside, and 2,180 in Sunderland. The majority of these households (61%) required a property up to and including 2 bedrooms66.

Table 6-12: Households on local authority housing registers, 2008

Households No. of bedrooms required (%) on the housing register 0-2 3 4+ Unspecified (No.)

1 Gateshead 10,048 79 10 2 8 2 Newcastle upon Tyne 8,473 86 11 3 0 3 North Tyneside 5,513 82 13 5 0 4 South Tyneside 15,856 0 0 0 100 5 Sunderland* 2,180 75 16 3 6 Northumberland: CR 6 6,306 Coalfield 84 13 3 0 Northumberland: CR 7 2,495 Commuter 59 8 5 28 8 North Durham 8,784 82 17 1 0 9 Easington 3,136 82 16 2 0 Tyne & Wear City 10 62,791 Region 60 10 2 28

TWCR Metropolitan 5 (1- A 42,070 5) 51 7 2 40 B Gateshead (1) 10,048 79 10 2 8 C North Tyne (2+3) 13,986 84 12 4 0 D South Tyneside (4) 15,856 0 0 0 100 E Sunderland (5) 2,180 75 16 3 6

X North East 95,400 63 12 2 23 Y England 1,770,116 79 13 4 4

Source: CLG (2008) *Sunderland Council has transferred its housing stock to Gentoo. The Council maintains a housing list, but the main housing register is maintained by Gentoo 6.3.10 A more useful measure of demand is the number new households waiting to access the sector (that is, households that are not already tenants67). The table below shows the households on the housing register for each area68, between 1997 and 2008 (that is, excluding transfer applicants). The lists suggest considerable fluctuation in the demand

66 Bedroom requirement is as indicated on the HSSA return

67 The housing register above comprises existing tenants wanting to transfer to a different property and households wanting to become tenants.

68 These lists only cover applications received by local authorities. Some housing associations also maintain housing registers. There will be some duplication between the local authority and HAs registers (and between HA registers).

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for local authority housing. However, to some extent, this variation will result from the way the lists themselves are maintained – the processes that are used to update the lists and ensure that only households that are actively interested in social rented housing remain on the housing list. Bearing these underlying problems with the data in mind, the data suggest sustained demand for social housing: in 2008 there were 62,791 households on the housing lists for housing in the city region. The largest housing list was in South Tyneside, totalling 15,856 households.

Table 6-13: Households on local authority registers 1997-2008

1997 2001 2002 2003 2004 2005 2006 2007 2008

1 Gateshead 3,953 4,841 5,394 6,015 9,894 4,174 10,308 6,999 10,048 Newcastle 2 upon Tyne 4,508 5,353 6,289 6,625 10,230 13,099 18,888 12,065 8,473 North 3 Tyneside 4,069 2,477 2,860 3,350 4,028 4,325 5,644 5,996 5,513 South 4 Tyneside 9,676 8,681 10,203 10,798 12,325 8,649 8,377 13,386 15,856 5 Sunderland 5,117 5,156 5,764 22,323 25,827 16,222 1,511 1,799 2,180 Northumberlan 6 d: CR Coalfield 5,222 2,614 2,666 3,209 4,181 4,881 6,383 5,236 6,306 Northumberlan 7 d: CR Commuter 3,362 2,675 1,730 3,152 2,764 2,995 3,323 2,916 2,495 8 North Durham 8,340 5,051 5,187 6,093 7,396 8,047 9,330 8,673 8,784 9 Easington 2,464 2,546 3,205 2,842 3,622 2,015 3,117 4,305 3,136 1 Tyne & Wear 0 City Region 46,711 39,394 43,298 64,407 80,267 64,407 66,881 61,375 62,791

TWCR A Metropolitan 5 (1-5) 27,323 26,508 30,510 49,111 62,304 46,469 44,728 40,245 42,070 B Gateshead (1) 3,953 4,841 5,394 6,015 9,894 4,174 10,308 6,999 10,048 North Tyne C (2+3) 8,577 7,830 9,149 9,975 14,258 17,424 24,532 18,061 13,986 South D Tyneside (4) 9,676 8,681 10,203 10,798 12,325 8,649 8,377 13,386 15,856 E Sunderland (5) 5,117 5,156 5,764 22,323 25,827 16,222 1,511 1,799 2,180

X North East 73,809 57,016 62,261 85,421 105,953 89,747 95,359 90,569 95,400 Y England 1,021,664 1,039,265 1,093,342 1,270,675 1,437,735 1,547,279 1,634,301 1,674,421 1,770,116

Source: CLG (2008)

Note: Sunderland Council continued to main a housing register when it transferred it housing stock to Gentoo in 2001; however, the principal housing register from that time is held by the housing association

Excludes transfer requests from existing tenants

Lets 6.3.11 There were just 12,000 lets in 2007/08 to respond to this demand across the city region. Indeed, while the number of households on the housing registers appears to have been broadly sustained over the last few years, the number of lets available to meet this demand has declined – from around 26,000 in 2000/01 to the current level (see table A- 04 in the appendix).

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6.3.12 Lets have been declining for a number of reasons – including the overall decline in the available stock. However, it should be noted that some areas across the country lets have been sustained despite significant stock losses – mainly because the bulk of stock losses (excluding LSVT) have been the result of RTB sales, and stock lost through the RTB tends to turnover very rarely. More recent initiatives – including stock restructuring (demolition and rebuild) and partial transfers to housing associations, stock improvement, and management initiatives including choice-based letting – have in many cases served to reduce turnover even in previously low demand/high turnover stock.

6.3.13 The next table shows total lets as a proportion of stock. The average turnover rate for the city region was just over 11% in 2008, in line with the NE level but considerably higher than the English level. Rates across the T&W Metropolitan area are broadly similar, at around 9%-10%, with Newcastle somewhat higher at 12%. However, we would expect there to be pockets of higher demand and lower demand within each of the local authorities. We might also expect rates to vary for different property sizes and property types.

6.3.14 Turnover rates have been declining across the country over the decade, and the city region has broadly conformed to this trend. However, we would note that rates in three of the authorities did increase again in 2008 – Gateshead by one percentage point, and Newcastle by almost two percentage points (South Tyneside’s increase was less than one percentage point).

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Table 6-14: Local authority lets as a proportion of stock 2001-2008

2001 (%) 2002 (%) 2003 (%) 2004 (%) 2005 (%) 2006 (%) 2007 (%) 2008 (%)

1 Gateshead 12.3 11.8 11.6 9.2 10.6 10.0 8.5 9.5 2 Newcastle upon Tyne 19.1 16.7 17.0 14.8 14.0 14.9 10.3 12.1 3 North Tyneside 12.6 12.8 12.1 9.7 8.5 8.5 9.4 8.7 4 South Tyneside 10.8 10.7 10.3 9.8 11.6 9.7 9.1 9.9 5 Sunderland N/A ~ ~ ~ ~ ~ ~ ~ Northumberland: CR 6 Coalfield 13.5 13.5 12.6 10.2 10.7 10.3 9.1 19.8 Northumberland: CR 7 Commuter 12.0 7.9 10.7 7.7 4.5 9.7 8.7 N/A 8 North Durham 12.3 12.8 12.8 10.6 9.1 9.8 10.8 14.6 9 Easington 11.0 9.3 9.2 9.0 8.7 8.1 9.2 9.9 Tyne & Wear City 10 Region* 16.7 12.9 12.8 10.9 10.8 10.8 9.5 11.3

TWCR Metropolitan 5 A (1-5)* 18.9 13.4 13.3 11.4 11.6 11.4 9.4 10.3 B Gateshead (1) 12.3 11.8 11.6 9.2 10.6 10.0 8.5 9.5 C North Tyne (2+3) 16.8 15.3 15.3 13.1 12.1 12.7 10.0 10.9 D South Tyneside (4) 10.8 10.7 10.3 9.8 11.6 9.7 9.1 9.9 E Sunderland (5) N/A ~ ~ ~ ~ ~ ~ ~

X North East 15.6 13.1 13.0 11.3 11.2 10.7 9.7 11.1 Y England 11.7 10.8 11.2 9.9 9.6 9.1 8.8 8.4

Source: CLG (2008) *Excluding Sunderland Match of demand 6.3.15 A useful measure of the pressure on the housing stock is to compare the housing list with the number of lets that are made each year. Overall, for the city region, there are 5.2 households on local authority housing lists for every let that becomes available. This is slightly less than the position for the NE as a whole (6.2 applicants for every let) and considerably less pressured than the position for England (which is extremely pressured with 11.2 applicants for every let that becomes available).

6.3.16 There is some variation across the T&W Metropolitan area. The South Tyneside area appears to be facing a fairly high level of pressure, with around 8.7 applicants for each let. Both Gateshead and North Tyneside are moderately pressured at 4.7 and 4.0 respectively. Newcastle’s ratio suggests less pressure on the sector overall. In practice, each area is likely to have pockets of very high demand stock and some areas that take longer to let.

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Table 6-15: LA Ratio of applicants per let by local authority area 2008

Applicants Applicants per Lets (housing list) let

1 Gateshead 2,056 10,048 4.9 2 Newcastle upon Tyne 3,598 8,473 2.4 3 North Tyneside 1,365 5,513 4.0 4 South Tyneside 1,817 15,856 8.7 5 Sunderland 0 2,180 0.0 6 Northumberland: CR Coalfield 1,341 6,306 4.7 7 Northumberland: CR Commuter 112 2,495 22.3 8 North Durham 901 8,784 9.8 9 Easington 853 3,136 3.7 10 Tyne & Wear City Region* 12,043 62,791 5.2

A TWCR Metropolitan 5 (1-5)* 8,836 42,070 4.8 B Gateshead (1) 2,056 10,048 4.9 C North Tyne (2+3) 4,963 13,986 2.8 D South Tyneside (4) 1,817 15,856 8.7 E Sunderland (5) 0 2,180 0.0

X North East 15,498 95,400 6.2 Y England 157,771 1,770,116 11.2

Source: CLG (2008) *Excluding Sunderland Supply of Housing Association lets 6.3.17 There were around 5,160 housing lets in 2007/08 in the T&W city region. As might be expected, the largest number of lets is made in Sunderland. General trends in lettings are fairly opaque within the data set, given the short time period available, and the impacts of stock transfers and new developments coming on line. However, there has been a pronounced decline in lettings in the 2007.08, compared with the previous year in most areas.

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Table 6-16: HA lets (including new lets but excluding transfers between HAs)

Area 2004/05 2005/06 2006/07 2007/08

1 Gateshead 436 633 672 259 2 Newcastle upon Tyne 1,705 1,128 1,179 525 3 North Tyneside 391 441 486 376 4 South Tyneside 306 626 433 452 5 Sunderland 1,308 1,761 2,882 1,888 6 Northumberland: CR Coalfield 458 367 206 279 7 Northumberland: CR Commuter 390 431 289 432 8 North Durham 337 394 876 756 9 Easington 231 201 186 195 10 Tyne & Wear City Region 5,562 5,982 7,209 5,162 A TWCR Metropolitan 5 (1-5) 4,146 4,589 5,652 3,500 B Gateshead (1) 436 633 672 259 C North Tyne (2+3) 2,096 1,569 1,665 901 D South Tyneside (4) 306 626 433 452 E Sunderland (5) 1,308 1,761 2,882 1,888

Source: HSSA

Empty properties 6.3.18 Finally, turning to the vacant stock. Some vacancies within the stock are unavoidable, to accommodate turnover, repairs, and so on. A vacancy rate of around 3% is generally considered sufficient to accommodate turnover, but not excessive. As the table below indicates, vacancies within the T&W City Region are generally around 3%, with Easington and Newcastle marginally higher.

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Table 6-17: Empty local authority properties as a percentage of stock, April 2006

Total Vacancies Vacant > 6 months Total Stock Number % of stock Number % of stock 1 Gateshead 22,194 526 2.4 146 0.7 2 Newcastle upon Tyne 30,852 1,140 3.7 425 1.4 3 North Tyneside 16,151 503 3.1 143 0.9 4 South Tyneside 18,910 373 2.0 206 1.1 5 Sunderland 0 ~ ~ ~ ~ 6 Northumberland: CR Coalfield 12,398 224 1.8 75 0.6 7 Northumberland: CR Commuter 2,359 47 2.0 8 0.3 8 North Durham 17,826 396 2.2 202 1.1 9 Easington 9,278 422 4.6 0 0 10 Tyne & Wear City Region* 129,968 3,631 2.8 1,205 0.9 A TWCR Metropolitan 5 (1-5)* 88,107 2,542 2.9 920 1 B Gateshead (1) 22,194 526 2.4 146 0.7 C North Tyne (2+3) 47,003 1,643 3.5 568 1.2 D South Tyneside (4) 18,910 373 2.0 206 1.1 E Sunderland (5) 0 ~ ~ ~ ~ X North East 165,112 4,358 2.6 2,221 1.4 Y England 2,071,333 42,891 2.1 17,070 0.8

Source: CLG (2008) *Excluding Sunderland 6.3.19 Dwellings which have been vacant for more than 6 months make up a high percentage of the stock in Newcastle, at 1.4%, followed by Durham Gateshead at 1.13% and South Tyneside at 1.1%, indicative of investment activity. For the rest of the city region, percentages of long term voids are lower, between 0.4 and 0.9%.

6.3.20 Table 6-18 shows the number of void housing association properties in 2003 and 2008. Just over 3% housing association properties in the Tyne & Wear City Region were void in 2008, a slight increase on the 2003 rate. Notably, the void rate for the T&W Metropolitan area is somewhat higher, at 3.8%, influenced by the rates in Sunderland, Newcastle (both 4.3% and Gateshead (3.9%). Void rates in South Tyneside and North Tyneside are low, at 1.3%, suggestive of a low turnover rate.

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Table 6-18 Housing association void stock in 2003 and 2008, number and percentage of total stock

2003 2008 Number % of stock Number % of stock 1 Gateshead 60 1.3% 183 3.9% 2 Newcastle upon Tyne 174 2.7% 312 4.3% 3 North Tyneside 76 1.6% 61 1.3% 4 South Tyneside 82 2.2% 55 1.3% 5 Sunderland 1,196 3.1% 1483 4.3% 6 Northumberland: CR Coalfield 137 5.9% 301 3.9% 7 Northumberland: CR Commuter 41 0.9% 58 0.9% 8 North Durham 130 4.7% 232 1.7% 9 Easington 35 2.1% 33 1.9% 10 Tyne & Wear City Region 1,931 2.8% 2,718 3.2% A TWCR Metropolitan 5 (1-5) 1,588 2.7% 2,094 3.8% B Gateshead (1) 60 1.3% 183 3.9% C North Tyne (2+3) 250 2.2% 373 3.1% D South Tyneside (4) 82 2.2% 55 1.3% E Sunderland (5) 1,196 3.1% 1,483 4.3% X North East 2,799 2.8% 4,113 3.1% Y England 43,731 2.5% 42,039 2.0%

Source: HSSA 2008

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7 Section 2: Bringing the evidence together

1. The drivers shaping Tyne & Wear’s housing market are in a state of flux. The demographic story points to more and older households, which suggests not only more housing but also suggests over time more demand for housing to meet the needs of older persons (see Chapter 12). Migration, meanwhile, remains something of an unknown quantity, with past lessons pointing to an increase in domestic out- migration, and more recent past pointing to substantial international in-migration. (7.1.5 and 7.1.6)

2. The economy, meanwhile has been in recession and the housing market has experienced a rapid and dramatic correction. The supply of new housing has substantially decreased and it will take some time to recover to previous levels. The capacity of the public and private sectors to fund new housing and associated investments has been greatly reduced. Mortgage repossessions will increase and there are already substantially more individuals out of work. Combined, these factors may lead to greater pressures on the social and private rented sector to absorb additional demand. (7.1.3 and 7.1.4)

3. Policy, meanwhile, finds itself trapped between those evident pressures which suggest a need for greater housing delivery in order to tackle affordability pressures and to meet the needs of future generations, while finding its ability to deliver greatly constrained. The current policy framework represents a marriage between renewal and growth objectives. In the recent past, the Government has sought to maintain the momentum of delivery and investment. With major challenges emerging for future funding, there is likely to be pressure to re-focus investment on those schemes which provide the best value for the finite resources available. Part of this may involve a focus on making the most of existing assets. (7.1.2 and 7.1.7)

4. A comparison of the cost of different intermediate products suggests that there is little room in the market for intermediate rental products. Intermediate products aimed at the owner occupied market may well inject some choice into the market, but in a low pressure housing market like Tyne & Wear it is likely that such products will need to be very carefully targeted at hotspots and at specific market segments (7.2)

7.1 Impact of drivers on the Tyne & Wear housing market

7.1.1 Section 2 has looked at three main drivers which will influence the shape of Tyne & Wear’s housing market in the years to come, namely policy, demographic and economic drivers. Each has their own specific impact on the housing market and here we pull the various factors together to say something about the collective impact.

7.1.2 The thrust of policy is very much about trying to maintain the momentum with regard to housing delivery. The Government has been at pains to maintain the supply of new affordable and market housing, even in the context of the recession. However, it is increasingly clear that the public sector will not be in a position to continue injecting historically large levels of finance into the system, with the next Comprehensive Spending Review (CSR) anticipated to result in a decline in available resources for housing investment. In summary, policy is recognising the requirement for a level of housing supply, which is going to prove extremely challenging in a context where both the public and private purse are likely to significantly restrained in the short to medium term.

7.1.3 In terms of the economy, the evidence presented in this report points to the severity of the current recession, and the extent to which the housing sector has been affected. Prices have fallen and the volume of transactions is very low. The recovery will take some time to feed through, and in the meantime it is likely that employment levels will continue to fall and unemployment has already started to rise substantially. Access to finance is

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poor and is unlikely to return to boom-time levels of lending in the short to medium term. Taken together, this suggests that the market is likely to remain weak, even if (as the NHPAU suggests) the basic fundamentals driving demand have not altered.

7.1.4 In the short to medium term the weak economy may suggest greater pressures on the existing social stock, and there has been movement into the private rented stock from households who would otherwise have purchased. It remains very unclear how the balance of these flows will pan out, but there are some very clear implications of the current situation which can be identified:

■ The market will struggle to support substantial new supply in the short term – the demand might be there, but the finance is not

■ The capacity of developers to respond to previous build levels has historically been restrained to 8-12% per annum – as capacity has been radically reduced and it will prove very challenging to return to RSS69 supply figures within the next five to seven years

■ A weaker economy may see relatively substantial increases in unemployment and downward pressure on incomes, which may result in weaker demand for market housing and increased demand for affordable housing

■ Many households will cater for their need in temporary (sub-optimal) circumstances, for example by staying with parents, staying longer in the private rented sector, or by deferring trading up

■ Counter-intuitively, affordability levels may not improve, as access to finance may reduce the ability of households to enter owner occupation.

7.1.5 Many of these elements are intimately interconnected with what is happening in terms of the demographic drivers. While natural change (births over deaths) is anticipated to positively contribute to population levels, migration is acknowledged to be a substantially different factor in this recession in Tyne & Wear. In terms of lessons from the past, it is clear that Tyne & Wear of 2009/10 is not the same as in the last two major recessions as the economy is much more diverse, however both of those recessions resulted in far lower levels of new household formation and population growth.

7.1.6 Historically, part of this was related to domestic out-migration, a trend which may return, but it is international in-migration which is perhaps the most volatile and uncertain element. While there are uncertainties about the components of change, it does not appear likely that the overall level of population change will be substantial. Migration assumptions will be tested as part of the scenario work later in the SHMA.

7.1.7 In summary, demographic factors are likely to result in a modest increase in population and household numbers (although the structure will change); the economy and financial markets are likely to make the delivery of new housing particularly challenging, and it may have an impact on the intensity of demand for different tenure types – a shift from away from owner occupied to other tenure types is likely in the short-term, but the long- term trend in favour of increased owner occupation is unlikely to be reversed. Policy faces a very uncertain context, where the acknowledged requirements will prove

69 Even if we assume that trajectory figures are not adjusted to take previous undersupply into account

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especially difficult to deliver with constraints likely on both the public and private sector purse.

7.2 The rented sectors: tenure change

7.2.1 The T&W tenure structure differs from the national profile in that there remains a relatively large social rented sector, while the private sector is relatively small. There is little evidence that the private rented sector has been developing beyond the traditional roles of student and low income housing in any of the area except Newcastle. Here, the sector is large, and has been growing both in its traditional markets and to exploit the new sectors such as in-migrants and young professionals.

7.2.2 The social rented sector, although substantial, has been in decline, largely as a result of the right to buy/acquire. The recession has all but halted the leakage of properties (and households) from the social rented sector into the owner occupied sector. However, as economy picks up, and confidence returns, households may once again feel willing to consider buying their home – they are likely to have accrued more discount, and their homes may have been improved.

7.2.3 The profile of the sector has been changing, but not as much as elsewhere in the country. Stock transfer has been effected in only one local authority area; while elsewhere, local authority stock is being managed by ALMOs or in-house. Housing associations play a key role across the Metropolitan area, delivering and managing a range of mainstream and specialist housing. They have recently been joined by the local authorities, who now are taking up the opportunities being offered by the government to develop new housing.

7.3 The cost between tenure options – a role for intermediate housing?

7.3.1 Section 2 explored the characteristics, cost and market environment for each of the three main tenure categories (owner occupied, private rented and social rented). Here, the relative cost of each is considered, in particular to help establish whether or not there is a clear demonstrable case for intermediate housing products in the market.

7.3.2 The comparison is based on charts retrieved from the Hometrack system, which are presented in full in Appendix D. Figure 7-1, below, is an example for 2 bedroom properties in Newcastle. The charts compare the cost of different tenure options and present the weekly price for 1, 2 and 3 bed properties, for the following tenure types: ■ Housing association rent

■ Intermediate rent

■ Private rent

■ Lower quartile re-sale

■ Median re-sale

■ 40% Homebuy (shared ownership)

■ Lower quartile new build

■ Median new build.

7.3.3 In terms of renting, the weekly cost of all renting products is, on average, low. The margin between intermediate rent and private rent is particularly small, which seems to leave little role for intermediate rental products.

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7.3.4 In terms of entering owner occupation, new-build Homebuy 40% is typically more expensive than a lower quartile re-sale property. However, it does typically come in substantially below the weekly cost of a new build lower quartile property, thus introducing greater choice within the market. The cost of different options is discussed further in paragraph 9.3.21.

7.3.5 Notwithstanding this point, there is currently a very low level of intermediate products operating in the Tyne & Wear market place, and overall prices are relatively low within the city region. It may be that in a low pressure market more traditional options (social rented, private rented and outright owner occupation) are sufficiently attractive propositions, thus there is little room (or pressure) for large scale provision of intermediate housing. In the current context, it is important to consider the outright cost may not be the issues, but rather than access to finance – innovation therefore might focus on different financing options rather than alternative ownership models.

7.3.6 Where there is likely to be a greater role for intermediate products is in targeted locations (e.g. “hot” market areas), or where the product is targeted at a specific market segment with an identified constraint (e.g. graduates or family builders).

Figure 7-1: Comparison of the cost between tenure options, Newcastle upon Tyne, 2009

Source: Hometrack (2009)

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SECTION 3: FUTURE HOUSING MARKET This section explores how the housing market in Tyne & Wear is expected to change in the future. It covers: demographic change; economic change; and future housing supply.

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8 The future housing market

This section explores changes anticipated for the future and what these may mean for Tyne and Wear’s housing market. This chapter therefore relies on key published projections and forecasts, in addition to available future oriented research.

The scenarios for future change in the housing market are also presented here.

Key Findings

1. In the North East migration will be a much larger driver of population growth than natural change. By contrast in the Tyne & Wear metropolitan core of the city region natural change will keep conurbation growth positive. (8.1.13). Assumptions about migration both internally within the UK and internationally are key issues (8.1.5)

2. TWCR will account for almost two-thirds of regional population growth (8.1.1) and more than half this growth will take place in the North Tyne sub-area (8.1.11/4.2.11). In the North East, unlike other regions, age structure (an aging population) and higher levels of household formation are anticipated to represent a higher proportion of future household growth than changes in population level (8.1.12).

3. Up to 2031 there are expected to be slightly more single households and lone parent households regionally than nationally. By 2031 one person households will comprise 40% of the regional population (8.1.16).

4. The population of the City Region is ageing, but not evenly. The hinterland will see its older population grow markedly. Most areas will see the proportion of younger persons and working age adults decline. Newcastle, alone, will continue to see absolute growth in this demographic. (8.1.6 and 8.1.7)

5. Formally adopted economic scenarios for the post-recession period are yet to be agreed so as to provide a full context for understanding the future housing market. (8.2.4). In their absence, it is not unreasonable to assume the pace of recovery will be intimately connected with the drivers within the economy that allowed higher growth to occur in the 1990s and 2000s. Correspondingly Northumberland and Durham would see lower levels of growth than the metropolitan core of the city region.

6. Employment projections for the five metropolitan Tyne & Wear authorities suggest that the pace of employment growth was anticipated to decline markedly in the period up to 2016, and that Tyne & Wear would underperform relative to the UK average over the period (8.2.6).

7. Assumptions about future housing supply are very difficult to make in the current market conditions. Mortgage rationing is expected to be the major factor in the short term. Discussion about the extent to which targets and trajectories need to be adjusted in the medium and long term should feed into the annual review of the assessment and the Annual Monitoring Reports at local and regional level (8.3.12)

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8.1 Demographic change

Future population change 8.1.1 Figure 8-1 shows the indexed change in population up to 2031 with 2006 as a base. It shows the most significant increase in population in the North Tyne market, equating to an absolute increase in population of 53,200, representing the bulk (45%) of the city region’s overall growth of 118,900. The five metropolitan authorities are set to grow by a total of 64,400 with relatively modest increases forecast (Gateshead: +10,100; South Tyneside: +3,500), while Sunderland alone is set to see a modest decline in population (- 2,400)70.

8.1.2 Some of the largest population growth is anticipated to occur in the city region’s hinterland. The Northumberland City Region Commuter and the North Durham sub-areas are expected to grow strongly, adding 11,700 and 28,500 respectively. Easington and Urban Northumberland are set to grow more modestly, by 5,700 and 8,600 respectively. The North Tyne sub-area is the only sub-area in the wider city region which is set to out- pace the regional level of population growth. Figure 8-1: Population Projections to 2031 (2006=100)71

ONS (2008) 2006-based Sub-National Population Projections

70 It should be stressed that the Sunderland LHMA (2008, pp. 31-32) expresses the strong view that these trend-based projections are unduly pessimistic and that the Council’s policies and supporting strategies seek to reverse this trend. This more optimistic view is reflected in RSS housing allocations.

71 The ONS 2008-based National Population Projections suggest that the national level of growth will be slightly more subdued than those suggested in the previous iteration. It is unclear how this plays out for the North East. Historically, internal migration out of Tyne & Wear to London and the South East has been a feature of recession time. It is unclear that this would be the case this time around as so many of the fundamentals of the city region economy have changed since the last two major recessions.

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8.1.3 Figure 8-1 shows the breakdown of the overall sub-national population projections by natural change and migration. Some interesting patterns are relevant which will need to be taken into account when considering future scenarios and the likely impact on housing need driven by demographic factors in the future.

8.1.4 At the level of the North East, we can see that migration will be a much larger driver of population growth than natural change. This is true of every period except for 2016 when the net population contribution from natural change peaks – migration meanwhile sees a relatively constant uplift. Stakeholders report that in-migration into Newcastle is having a positive effect on the birth rate.

8.1.5 Contrast this with Tyne & Wear (the former metropolitan county comprising the five metropolitan boroughs). In a number of years over the projection period, it is natural change that keep the conurbation in positive population territory. The level of international migration remains a positive contributing factor. Conversely, internal migration from Tyne & Wear to other parts of the Country remain a drain on population levels. There must be some concern that international in-migration into Tyne & Wear will be dampened by the weakness of the local economy.

8.1.6 Table 8-2, meanwhile, explores what will happen to the structure of the population as a result of this change in population. The most notable characteristic within the conurbation is the growth within the older segments of the population. All of the sub-areas are anticipated to see the proportion of older persons (65+) increase from a range of about 16-19% in 2006 to a range of 20-30% in 2031.

8.1.7 Particularly strong growth in this segment is anticipated in Urban Northumberland and City Region Commuter (increases of 10 and 11 percentage points respectively), while Sunderland will experience the largest among within the metropolitan County with an increase of 8 percentage points. The smallest increase in the proportion of older persons is seen Newcastle upon Tyne, which will continue to experience population growth in the 15-64 working age demographic. This is presumably linked both to the student population which is concentrated in the City and also the nature of the jobs and housing provided in the City.

8.1.8 Work has been undertaken by Glen Bramley (Heriot Watt University) on behalf of BNG looking at modelling future housing markets in the BNG and wider ROTW (Rest of Tyne & Wear) and RONE (Rest of North East) areas.

8.1.9 This model has been revised in light of credit rationing and the wider impacts of the recession (e.g. reduced international migration). The model suggests that most of the price falls have already occurred and recovery in housing markets will follow an economic recovery, helped in part by weak supply through the recession.

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Table 8-1: Sub-national population projections: Natural change and migration summaries, 2006-2031 (‘000s)

AREA COMPONENT 2006 2007 2008 2009 2010 2011 2016 2021 2026 2031 ENGLAND Population 50762.9 51094.2 51487.5 51888.4 52296.5 52706.4 54724.2 56757.0 58682.4 60431.5 Natural 177.8 183.3 198.2 211.0 220.4 233.6 231.2 200.2 164.1 Change Births 652.3 653.9 664.2 672.9 678.9 685.0 690.3 682.7 682.7 Deaths 474.6 470.6 466.0 461.9 458.5 451.4 459.1 482.4 518.6 All Migration 153.2 208.6 202.2 195.7 187.7 171.2 171.2 171.2 171.2 Net International and Cross Border 637.7 692.4 693.4 694.4 694.4 694.4 694.4 694.4 694.4 Migration In International and Cross Border 484.4 483.7 491.2 498.7 506.7 523.2 523.2 523.2 523.2 Migration Out North Population 2555.7 2561.4 2568.5 2576.3 2584.7 2593.5 2638.4 2685.5 2729.9 2769.1 East Natural 2.6 2.8 3.4 3.9 4.4 5.0 4.1 2.2 0.5 Change Births 29.7 29.6 29.9 30.2 30.4 30.4 29.7 28.8 28.5 Deaths 27.1 26.8 26.5 26.3 26.0 25.4 25.6 26.6 28.0 All Migration 3.1 4.4 4.5 4.5 4.4 4.4 5.2 6.4 6.9 Net Internal Migration In 35.6 36.1 36.5 36.9 37.2 37.8 37.9 39.0 40.3 Internal Migration Out 35.0 35.2 35.5 35.7 35.9 36.0 35.3 35.2 36.0 International and Cross Border 18.8 19.9 20.0 20.0 20.0 20.0 20.0 20.0 20.0 Migration In International and Cross Border 16.3 16.4 16.6 16.8 17.0 17.4 17.4 17.4 17.4 Migration Out Tyne and Population 1087.6 1088.8 1090.8 1093.0 1095.4 1098.0 1111.1 1124.9 1138.7 1152.0 Wear Natural 1.1 1.2 1.6 1.9 2.1 2.6 2.4 1.8 1.2 Change Births 12.7 12.7 12.9 13.0 13.1 13.1 12.8 12.4 12.2 Deaths 11.6 11.5 11.3 11.1 11.0 10.6 10.4 10.6 11.0 All Migration 0.1 0.7 0.6 0.6 0.5 0.1 0.3 1.0 1.3 Net Internal Migration In 21.7 22.0 22.2 22.4 22.5 22.7 22.5 22.9 23.6 Internal Migration Out 23.9 24.1 24.3 24.4 24.6 24.8 24.4 24.2 24.5 International and Cross Border 10.7 11.4 11.4 11.4 11.4 11.4 11.4 11.4 11.4 Migration In International and Cross Border 8.5 8.6 8.7 8.8 8.9 9.2 9.2 9.2 9.2 Migration Out

Source: ONS (2008) 2006-based Sub-National Population Projections, 2006-31

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Table 8-2: Sub-national population projections: projected population by age categories, 2006- 2031 thousands / percentages AREA NAME 2006 2011 2016 2021 2026 2031

AGE 000s % 000s % 000s % 000s % 000s % 000s % GROUP Gateshead 0-14 32 17% 32 17% 32 17% 33 17% 33 17% 32 16% Gateshead 15-64 125 66% 126 66% 124 64% 124 63% 123 62% 122 61% Gateshead 65-79 25 13% 25 13% 27 14% 28 14% 30 15% 31 16% Gateshead 80+ 8 4% 9 5% 10 5% 12 6% 13 6% 15 7% Gateshead ALL 191 100% 192 100% 194 100% 196 100% 199 100% 201 100% Newcastle upon 0-14 43 16% 43 16% 46 16% 48 17% 49 17% 49 17% Tyne Newcastle upon 15-64 186 69% 192 69% 190 68% 188 66% 188 65% 190 65% Tyne Newcastle upon 65-79 30 11% 29 10% 30 11% 32 11% 35 12% 36 12% Tyne Newcastle upon 80+ 12 4% 13 5% 14 5% 15 5% 16 5% 18 6% Tyne Newcastle upon ALL 271 100% 276 100% 280 100% 283 100% 288 100% 293 100% Tyne North Tyneside 0-14 33 17% 33 17% 35 17% 37 17% 37 17% 37 16% North Tyneside 15-64 128 66% 132 66% 133 64% 135 63% 136 62% 137 61% North Tyneside 65-79 25 13% 25 12% 28 14% 31 14% 33 15% 35 16% North Tyneside 80+ 10 5% 10 5% 11 5% 12 6% 14 6% 17 7% North Tyneside ALL 195 100% 201 100% 208 100% 214 100% 220 100% 226 100% North Tyne 0-14 75 16% 76 16% 81 17% 85 17% 86 17% 86 16% North Tyne 15-64 314 67% 324 68% 323 66% 323 65% 324 64% 327 63% North Tyne 65-79 55 12% 54 11% 59 12% 62 13% 68 13% 71 14% North Tyne 80+ 21 5% 23 5% 25 5% 27 5% 30 6% 35 7% North Tyne ALL 466 100% 477 100% 487 100% 497 100% 508 100% 519 100% South Tyneside 0-14 26 17% 24 16% 24 16% 25 16% 25 16% 24 15% South Tyneside 15-64 99 65% 100 66% 98 65% 96 63% 95 62% 93 60% South Tyneside 65-79 20 13% 19 13% 21 14% 22 14% 24 16% 26 17% South Tyneside 80+ 7 5% 8 5% 9 6% 10 6% 10 7% 12 8% South Tyneside ALL 151 100% 151 100% 152 100% 153 100% 154 100% 155 100% Sunderland 0-14 48 17% 45 16% 46 16% 46 16% 44 16% 43 15% Sunderland 15-64 187 67% 186 67% 180 65% 175 63% 171 61% 167 60% Sunderland 65-79 35 12% 35 13% 39 14% 42 15% 45 16% 47 17% Sunderland 80+ 11 4% 12 4% 14 5% 16 6% 18 6% 22 8% Sunderland ALL 281 100% 279 100% 278 100% 278 100% 278 100% 278 100% Tyne and Wear 0-14 180 17% 178 16% 183 17% 190 17% 188 17% 184 16% Met5 Tyne and Wear 15-64 725 67% 735 67% 725 65% 718 64% 713 63% 709 62% Met5 Tyne and Wear 65-79 134 12% 133 12% 145 13% 154 14% 167 15% 175 15% Met5 Tyne and Wear 80+ 48 4% 53 5% 58 5% 64 6% 70 6% 84 7% Met5 Tyne and Wear ALL 1088 100% 1098 100% 1111 100% 1125 100% 1139 100% 1152 100% Met5 North Durham 0-14 36 16% 36 15% 37 15% 39 15% 39 15% 38 15%

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thousands / percentages AREA NAME 2006 2011 2016 2021 2026 2031

AGE 000s % 000s % 000s % 000s % 000s % 000s % GROUP North Durham 15-64 158 68% 161 68% 160 65% 160 64% 161 63% 161 62% North Durham 65-79 29 12% 31 13% 35 14% 37 15% 39 15% 40 15% North Durham 80+ 10 4% 10 4% 12 5% 14 6% 17 7% 21 8% North Durham ALL 232 100% 239 100% 244 100% 250 100% 256 100% 260 100% Easington 0-14 17 18% 16 17% 17 18% 17 18% 17 17% 17 17% Easington 15-64 61 65% 61 65% 61 63% 60 61% 59 60% 58 58% Easington 65-79 12 13% 13 14% 14 14% 15 15% 16 16% 17 17% Easington 80+ 4 4% 5 5% 5 5% 6 6% 7 7% 8 8% Easington ALL 94 100% 95 100% 96 100% 98 100% 99 100% 100 100% Urban 0-14 25 17% 24 17% 25 17% 25 17% 25 17% 25 16% Northumberland Urban 15-64 95 66% 94 65% 91 62% 89 60% 88 59% 87 57% Northumberland Urban 65-79 17 12% 19 13% 23 15% 25 17% 26 17% 26 17% Northumberland Urban 80+ 6 4% 7 5% 8 5% 9 6% 11 7% 14 9% Northumberland Urban ALL 143 100% 144 100% 146 100% 148 100% 150 100% 152 100% Northumberland City Region 0-14 18 16% 18 16% 18 16% 19 16% 19 16% 19 15% Commuter City Region 15-64 70 64% 70 63% 68 60% 68 58% 67 56% 66 55% Commuter City Region 65-79 16 14% 17 16% 20 18% 22 19% 23 19% 24 20% Commuter City Region 80+ 6 5% 6 6% 7 6% 9 7% 10 9% 13 11% Commuter City Region ALL 109 100% 111 100% 113 100% 116 100% 119 100% 121 100% Commuter Tyne & Wear City 0-14 276 17% 271 16% 280 16% 290 17% 288 16% 282 16% Region Tyne & Wear City 15-64 1109 67% 1122 67% 1104 65% 1095 63% 1088 62% 1082 61% Region Tyne & Wear City 65-79 208 12% 214 13% 237 14% 251 14% 270 15% 282 16% Region Tyne & Wear City 80+ 73 4% 81 5% 90 5% 101 6% 115 7% 139 8% Region Tyne & Wear City ALL 1665 100% 1687 100% 1711 100% 1737 100% 1762 100% 1784 100% Region North East 0-14 435 17% 430 17% 444 17% 459 17% 456 17% 448 16% North East 15-64 1690 66% 1709 66% 1684 64% 1672 62% 1666 61% 1655 60% North East 65-79 319 12% 331 13% 372 14% 396 15% 426 16% 446 16% North East 80+ 112 4% 124 5% 138 5% 158 6% 182 7% 221 8% North East ALL 2556 100% 2594 100% 2638 100% 2686 100% 2730 100% 2769 100% England 0-14 9007 18% 9208 17% 9702 18% 10187 18% 10292 18% 10289 17% England 15-64 33671 66% 34744 66% 35136 64% 35830 63% 36562 62% 37002 61% England 65-79 5809 11% 6268 12% 7125 13% 7581 13% 8068 14% 8596 14% England 80+ 2277 4% 2487 5% 2762 5% 3160 6% 3760 6% 4545 8% England ALL 50763 100% 52706 100% 54724 100% 56757 100% 58682 100% 60432 100% Source: ONS (2008) 2006-based Sub National Population Projections

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Future household change 8.1.10 The table below suggests that overall population growth in the city region will account for a little under two-thirds of the regional growth in household numbers. For the whole city region, this corresponds to an additional 125,000 households, of which 79,000 will form in the five metropolitan authorities.

8.1.11 Within the four sub-areas, the North Tyne sub-area is set to add 42,000, more than half the total. The other three sub-areas will add in the region of 10-14,000 new households.

Table 8-3: Household Projections: 2006-2031

2006- 2006 2011 2016 2021 2026 2031 2031

‘000s ‘000s ‘000s ‘000s ‘000s ‘000s ‘000s

1 Gateshead 86 89 92 95 97 99 +13 2 Newcastle 117 122 126 130 133 136 +19 3 North Tyneside 88 93 98 103 107 111 +23 4 South Tyneside 67 70 72 74 75 77 +10 5 Sunderland 121 124 128 130 133 135 +14 Northumberland: City Region 47 48 50 51 53 55 +8 6 Commuter 7 Urban Northumberland 63 65 67 69 71 72 +9 8 North Durham 98 104 108 113 117 121 +23 9 Easington 40 41 43 44 45 46 +6 10 TWCR 727 756 784 809 831 852 +125

A TWCR Metropolitan 5 (1-5) 480 498 516 532 545 559 +79 B Gateshead (1) 86 89 92 95 97 99 +13 C North Tyne (2+3) 205 215 224 233 240 247 +42 D South Tyneside (4) 67 70 72 74 75 77 +10 E Sunderland (5) 121 124 128 130 133 135 +14

X North East 1,110 1,154 1,201 1,244 1,281 1,316 +206 Y England 21,515 22,748 24,107 25,439 26,674 27,818 +6,303

Source: CLG (2006) Household Estimates and Projections, 2006-2031

8.1.12 Table 8-3 gives us a sense of the relative level of change for each of the main sub-areas the key comparators. The city region will add households at a pace far below the national average, though this is true of the whole North East region. Within the North East, all the sub-areas fall below the regional level, with the exception of the North Tyne sub-area.

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Figure 8-2: Household Projections to 2031 (2006=100)

Source: CLG (2006) Household Estimates and Projections, 2006-2031

8.1.13 Given the level of change anticipated, it is worth considering what the key components of this change are likely to be and what impact this will have on the nature of these extra households in the future.

8.1.14 First, we consider the components of household change. The CLG (2009) Household Estimates for 2006-31 provide a breakdown of the key components of change for each of the Regions. For the North East, this suggests that the nature of future household change will be markedly different to elsewhere in the Country.

Table 8-4: Components of Household Growth: 2006-2031 Population Household Percentage 2006-2031 Age Structure Level Formation North East 57% 18% 28% North West 67% 15% 25% Yorkshire & The Humber 78% 11% 17% East Midlands 79% 11% 14% West Midlands 67% 13% 23% East 78% 9% 15% London 72% 15% 14% South East 75% 10% 16% South West 79% 9% 17% England 74% 12% 18%

Source: CLG (2006) Household Estimates and Projections, 2006-2031

8.1.15 Table 8-4 suggests that change in population will be a far smaller proportion of future household growth than in the rest of the country. Instead, the age structure (an aging

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population) and higher levels of household formation are anticipated to represent a higher proportion of future household growth.

8.1.16 In terms of the type of households, the North East is expected to continue in line with national (England) averages in terms of the population of married couples, have slightly lower levels of cohabiting couples and have a slightly higher level of lone parent and single person households. This segment is anticipated to represent 40% of households in the North East by 2031. The average household size is expected to remain substantially lower in the North East than nationally.

8.1.17 A word of caution must be sounded about the household projections. These are ‘policy- off’ trend based projections based on anticipated population levels if existing trends were to be repeated. Clearly, recent success in retaining and attracting migrants id very closely linked to a successful economy. Future levels are presumably linked to meeting future economic policy objectives. With a deep recession in place, it is not at all convincing that these will be realised, which raises the question of what a post-recession economy might mean for household levels. It is important that partners in the city region explore a range of possible scenarios to help inform future policy choices and investment decisions.

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Table 8-5: Household estimates and projections by household type and region, England and North East, 1997-2031 (‘000s)

Other household estimates

Average Other All Married Cohabiting Lone One Private household Concealed multi- households Concealed couple couple parent person household size lone person (as defined in couples households households households households population (persons/ parents households the census) household)

Year

England 2011 40% 12% 8% 7% 33% 22,748 51,778 2.28 101 66 2016 38% 13% 8% 7% 35% 24,107 53,769 2.23 108 73 2021 36% 13% 8% 7% 37% 25,439 55,759 2.19 111 82 2026 34% 13% 7% 7% 38% 26,674 57,617 2.16 114 91 2031 33% 14% 7% 7% 39% 27,818 59,287 2.13 119 102 North East 2011 40% 11% 9% 6% 34% 1,154 2,548 2.21 3 4 2016 38% 11% 8% 6% 36% 1,201 2,591 2.16 3 4 2021 36% 12% 8% 6% 37% 1,244 2,636 2.12 3 5 2026 35% 12% 8% 6% 39% 1,281 2,676 2.09 3 5 2031 33% 12% 8% 6% 40% 1,316 2,711 2.06 3 5

Source: CLG (2006) Household Estimates and Projections, 2006-2031

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8.2 Economic change

8.2.1 The economy has entered a recession after recording almost two decades of continuous strong economic growth. What can we imply from the forecasts about how the UK economy might change and what in turn can be said about the impact of that change on our focus areas. In the table below, the actual performance up to 2006 are presented, followed by the most current consensus estimates of how the UK economy is anticipated to change. In turn, these have then been related to the previous performance of the various sub-areas compared to the national picture.

8.2.2 The forecasts72 for the period up to 2012 are beginning to stabilise after a period of relatively large variations, due to the uncertainty surrounding the current economic climate. What it less certain is how the various regions and their sub-components may be differentially impacted by the recession. Growth rates will not return to the levels seen in the late 90s, early 2000s in the forecast period. It is unclear at which precise juncture the economy will return to its long term trend rate.

Figure 8-3: GVA: percentage change per annum; 1996-2012

Source: ONS (2006) GVA Estimates by NUTS 3, HM Treasury (2009) consensus forecasts for UK economy, Tribal calculations

8.2.3 If we consider what impact this change has had on the absolute levels of GVA, it is clear that the magnitude of the decline means that the UK economy will not return to 2008 levels until at least 2012. However, the North East if it were to stick to previous trends would not return to these levels within the forecast period. Our assumption is that while the recession and decline will hit everywhere hard, the pace of recovery is intimately connected with the drivers within the economy which allowed higher growth to occur in the 90s and 2000s. Correspondingly, as shown in Figure 8-4, Durham and Northumberland would continue with lower levels of growth than the metropolitan core of the city region (Tyneside and Sunderland).

72 As reported in HM Treasury (2009) consensus forecasts for UK economy

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8.2.4 It should be noted that in the absence of formally adopted scenarios in the city region, this represents only one possible interpretation and what is presented here is based on national forecasts with no effort made to adapt these for regional characteristics or information. What seems clear, however, is that the next number of years will see a hugely different economic climate than the original evidence underpinning many of the region’s planning and housing strategy documents had suggested. This will make meeting original targets very challenging, and also suggests that the nature of both need and demand will alter in the short to medium term.

8.2.5 The Tyne & Wear City Region is currently undertaking modelling work which will look specifically at economic projections for the city region. The results of this work are expected to be published in early 2010.

Figure 8-4: GVA change 2006-2012; (Index: 2006=100)

Source: HM Treasury (2009 Consensus Estimates for UK Economy, Tribal calculations73

Year Rationale and Source

2007 Average of previous five years, based on ONS Estimates

2008 Discounted average (75%) of 2001-2006 average - peak of boom widely regarded to be Q3, 2008

2009 Weighted interpretation of HM Treasury forecasts for UK economy (GDP); Source: PAGE 3: http://www.hm-treasury.gov.uk/d/200907forcomp.pdf

2010 Weighted interpretation of HM Treasury forecasts for UK economy (GDP); Source: PAGE 3: http://www.hm-treasury.gov.uk/d/200907forcomp.pdf

2011 Weighted interpretation of HM Treasury forecasts for UK economy (GDP); Source: PAGE 19: Table M1; http://www.hm-treasury.gov.uk/d/200905forecomp.pdf

2012 Weighted interpretation of HM Treasury forecasts for UK economy (GDP) ; Source: PAGE 19: Table M1; http://www.hm-treasury.gov.uk/d/200905forecomp.pdf

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Employment Forecasts

8.2.6 Available employment forecasts were undertaken prior to the emergence of the current recession, are based on a relatively short forecasting period and only cover the five core authorities as a whole. Over the period 2004-2016, employment levels were projected to rise by a total of 4.2%74. Though the projections are somewhat dated, there some interesting elements worth noting. First, they did project a slowdown in the growth of employee numbers and second that Tyne & Wear would perform less well than the UK average.

74 TWRI (August 2006), Employment Projections for Tyne & Wear to 2016

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Residential Futures 8.2.7 In May 2009, the Tyne & Wear City Region report of the Northern Way’s Residential Futures research programme was published. The purpose of this research, undertaken by Tribal and CURS, was to: ■ Explore the link between forecast economic change and where people would demand housing

■ Consider the role and function of different types of places in meeting that demand

■ Understand the relationships between how these different place types are distributed spatially.

8.2.8 The wide-ranging report included a number of methodological innovations, the findings from which are summarised below.

8.2.9 Differentiating demand: This component, led by CURS, sought to look at how forecast employment change would impact differentially on the demand for housing in different parts of the city region. In a nutshell, it does this by looking at the nature of anticipated employment change, its location, and how people within those industrial and occupational characteristics currently consume housing across the city region. The figure below is a summary of the localities (ward-based), which are anticipated to experience the highest levels of new household formation based on the anticipated economic change. This should be interpreted as a policy-off outcome.

Figure 8-5: New household formation (by ward) driven by economic change

Source: http://www.tribalgroup.co.uk/Documents/Education/northernway_research%20report%20VOL%20II%20screen.pdf

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8.2.10 The report suggested that this distribution of higher and lower pressure could be condensed into a number of strategic attributes which help to shape how the housing market currently functions and which shapes how housing is “consumed” by economically active households. The extract overleaf summarises the main attributes of these higher and lower pressure areas.

Figure 8-6: Strategic concentrations of higher and lower pressure

A. Areas of higher pressure B. Areas of lower pressure

Source: http://www.tribalgroup.co.uk/Documents/Education/northernway_research%20report%20VOL%20II%20screen.pdf

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8.2.11 The second main focus of the report was on the nature of the city region’s places and their role and potential in the future. This was done by focussing on area “types”. In the case of Tyne & Wear, the five types explored were (case study in brackets): ■ Type 1: Strategic regeneration areas (East Gateshead)

■ Type 2: Near-market municipally-built areas (Hylton Castle)

■ Type 3: Mixed/transitional areas (Arthur’s Hill)

■ Type 4: “hot” market areas (Monkseaton, Whitley Bay)

■ Type 5: Post industrial rural settlements (Stanley Moor & Quaking Houses).

8.2.12 Type 1 reflected a policy priority, and type 5 a research focus. Types 2, 3 and 4 were selected for their role in the housing market. Type 2 and 3 represented untapped potential, while type 4 represents both a strength (in terms of quality) and a constraint (in terms of affordability). These three area types were mapped out across the city region (see figure below).

Figure 8-7: distribution of residential futures locality typologies across the Tyne & Wear city region

Source: http://www.tribalgroup.co.uk/Documents/Education/northernway_research%20report%20VOL%20II%20screen.pdf 8.2.13 The report reflected on the potential of these places to respond to the potential strategic pressures identified in the CURS differentiating demand model (see Error! Reference

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source not found. above). These findings are summarised below (directly quoted from pages 45-46). ■ The Urban Core: This segment has evolved in recent years as a relatively new component of the housing market. The recent downturn in the market has highlighted the extent to which the levels of supply being provided reflected a somewhat unsustainable reliance on the investor-led market (e.g. ‘buy-to-let’). Notwithstanding this, a review will need to be taken of the city centre market to ensure the offer available matches the needs of those who would aspire to an urban living market. This is particularly true of the space and quality standards available. There is substantial scope to absorb future demand, with a range of type 1 areas in or around the city centre, such as East Pilgrim Street, Discovery Quarter and Science Central. Another key segment of this market is the student sector, with expanded supply already identified

■ North Newcastle: This is probably the largest single concentration of new household formation in the city-region. Certain localities, such as Dene, Grange, South Gosforth and Jesmond are already considered “hot” and capacity for intensification is assumed to be limited. However, this wedge of the city benefits from a number of type 3 localities immediately adjacent to these high pressure areas (e.g. Benton, Heaton, Kenton and Fawdon), which in themselves are forecast to experience future increases in the level of new household formation growth. They are also in a position to help to absorb overspill from the likes of Dene, Grange etc. The immediate inner suburban market also has the potential to deflect demand to the west, with a cluster of type 3 areas available to the immediate west of the city centred on Fenham and Arthur’s Hill. Battle Hill and Northumberland ward to the north east are two of the few examples of type three localities which are anticipated to see low levels of household growth, and thus represent some capacity in the city-region’s offer

■ North Tyneside Coast: The majority of localities in this cluster are already considered ‘hot’. However, there is some capacity within a number of the localities to play an enhanced role – the two type 3 localities in this cluster are Whitley Bay and Seatonville. Is it possible to imagine Whitley Bay becoming the next Tynemouth over the course of the next 20 years? However, it has to be said that the long-term capacity of this segment to absorb substantially increased demand is probably modest

■ Inner suburbs (outside Newcastle): This category includes an area around Low Fell in Gateshead, along with Fulwell and St. Michael’s in Sunderland. These are all localities of relatively high pressure, which have a strong, mature offer. There are also small pockets which will experience higher levels of household formation. In all three there are opportunities to deflect excess demand to surrounding localities, but this is likely to be more straightforward in the case of Low Fell and St. Michael’s (Hillview), where there is scope for areas such as Chowdene and Hendon to respond to future pressures. The case of Fulwell is more complex, although it is possible that there is scope for future pressure to be accommodated further up the coast in Whitburn

■ Stand alone settlements: such as Cleadon in South Tyneside - these settlements are likely to be restricted in terms of their future growth potential, but given their size could be viewed as a niche offer and thus perhaps not segments in their own right. As with the Fulwell commentary above, Whitburn might serve as a location to absorb future pressure for this market

■ Urban fringe: this is a segment (for example to the west of Newcastle and Gateshead), which sees relatively substantial increases. In the case of Whickham, one of the localities is a type 4 and the other type 3, suggesting that there is some room to accommodate future pressure. In the case of Westerhope, it is best viewed as an isolated wedge, most likely serving a similar market to the North Newcastle component discussed above. In general, extensions to urban fringe locations will typically involve encroaching onto green belt, a case for which would need to be established.

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Next steps for Residential Futures 8.2.14 The key challenge in employing the Residential Futures approach in the City Region is to look at all of the city region’s places so that the ‘story’ of the city region’s places can be told.

8.2.15 Once done, it should be possible to link place types into discussions about future supply (fed by SHLAAs) and demand (partially from the SHMA, but also from a re-run of the CURS demand model driven by the new economic modelling being undertaken currently for the Tyne & Wear City Region as part of the Independent Economic Review process).

8.2.16 This would allow partners to look at what sorts of place types might be able to respond to future need and market demand, linked to changes in the key economic drivers in the city region. This could then help to inform discussions surrounding the Single Conversation and investment into the City Region’s places in terms of the sorts of products which might be best placed to respond to future economic change.

8.3 Housing Supply

Housing Supply and the SHMA 8.3.1 Identifying the balance between the supply and demand of housing is one of the core objectives of a SHMA. An important part of this story is the supply of new housing, though it must be remembered that new supply will only ever form a small part of overall provision at any given moment. The topic of new housing supply and allocations through the regional planning process has typically been politically very sensitive and methodologically complex.

8.3.2 It must be stressed that a SHMA is not a plan, but rather a piece of evidence and in that sense must incorporate the plan assumptions until such point that the region or city region arrive at a different set of agreed housing supply figures.

The pressure for additional supply 8.3.3 Nationally, there has been a significant undersupply of housing to meet the needs of a growing population and the changing profile of that population which has seen a higher level of household formation driven by structural changes to way we live our lives and how long we’re living. Supply had become increasingly unaffordable throughout the late nineties and early 2000s as the demand for housing outstripped the available supply. Additionally demand was also driven by a highly active investor market and speculative behaviour. Though initially more prominent in London and the South, by the mid-2000s, this overview was true of the whole Country.

8.3.4 Though some of these pressures have dissipated (or altered), Local authorities remain under significant pressure to achieve greater levels of housing delivery. Reconciling a stated need for additional delivery with the challenges presented by the recession and the capacity of the private sector to contribute to new home supply is a substantial focus for the local authorities and their partners (including the HBF). Notwithstanding the challenges faced on housing delivery, the NHPAU has in its most recent advice to Government reiterated the need for additional supply nationally (including in the North East) in order to tackle affordability pressures.

8.3.5 The Government has responded with a number of specific programmes, the majority of which are channelled through the Homes and Communities Agency. These include the New Growth Points (three of which fall within the City Region – Newcastle and Gateshead, North Tyneside and South East Northumberland). Additional funding has also recently been made available through the Kick Start programme and the National Affordable Housing Programme has been expanded (HCA). The Government, as part of the Housing Pledge (in Building Britain’s Future), has been keen to expand the role of

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local authorities in building new stock. Local authorities and Registered Providers have also been pro-active in seeking to accelerate housing delivery through a range of initiatives (discussed previously) including the Local Housing Companies in Newcastle and Sunderland, the Joint Venture Company in Gateshead, the PFI Round VI in North Tyneside and the programmes of Sunderland Arc and Gentoo in Sunderland.

Current challenges 8.3.6 There is much focus on the delivery front, all seeking to unblock the delivery of new homes, but it would be remiss of the Consultant team not to highlight the extreme uncertainties which surround the current set of housing trajectory figures.

8.3.7 First, the bulk of authority areas in Tyne & Wear have experienced an historical pattern of significant under-supply below RPG/RSS targets (with notable exception of North Tyneside). Second, the current climate poses substantial uncertainties and no commentator could credibly claim to be able to predict accurately when and how the economic recovery will translate into greater levels of housing delivery on the ground, especially from the private sector. Also, it is not unrealistic to assume that the capacity of the public sector will shrink in medium term as finances fall under increasing pressure.

8.3.8 All of these factors have an impact on the housing trajectory figures submitted by the Local Authorities as part of the RSS and LDF Annual Monitoring Return process. These trajectories are updated annually to take account of supply to date over the period of the plan. This results in authorities having to plan for an uplift in future years to accommodate for the current levels of under-delivery (or the inverse if there has been over-delivery).

8.3.9 At the first stakeholder session, concerns were expressed by officers and industry representatives that it was very difficult to see how these levels of future delivery could be achieved and thus the current shortfall reversed. This is a view that the Consultant team would share. The current levels of future housing supply based on the Regional Spatial Strategy would appear to be very difficult to achieve over the period of the plan, and in the short run (1-5 years) do not represent a realistic guide as the likely level of delivery. Local Authorities have not been in a position to estimate how many units are likely to be delivered in this period. This is not unsurprising given the level of uncertainty surrounding the market. The SHLAA process should help to update these figures in the future and the housing partnership are looking at how both the SHLAA process and the monitoring framework associated with the SHMA process can be integrated to provide the city region with a consistent housing and planning evidence base.

8.3.10 The NHPAU suggests that the overall levels of affordability are actually deteriorating despite falling prices due to the effect of mortgage rationing75. The precise length of this period of mortgage rationing is impossible to ascertain or estimate. The view of the NHPAU is, however, that once the period of mortgage rationing has ceased, that the fundamental relationship between the supply of housing and its demand will not have altered substantially and it anticipates that the relationship (affordability) will return to previous levels.

8.3.11 The other implication of a return to the removal of mortgage rationing is that this will release the first time buyer segment back onto the market. Feedback from estate agents has suggested that this segment is notably absent. As these represent a key market for newly built homes, and are also a key component in releasing chains of sales, their presence is essential to a smoothly functioning market.

75 National Housing and Planning Advice Unit (2009) More homes for more people: advice to Ministers on housing levels to be considered in regional plans.

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8.3.12 The purpose of this overview is to demonstrate just how shaky the assumptions underpinning future supply are. However, the SHMA needs to accept the best estimate available. The housing trajectories have in some cases sought to take account of the short-term deficit and project very low levels of completions in the coming years. In addition these figures now take account of the uplift in housing delivery numbers generated by the New Growth Point allocations, and seek in a plan-led fashion to achieve the overall level of housing supply over the period of the plan (RSS). The scenario exercise which will be undertaken as part of the SHMA process will test the impact of more realistic estimates of future supply.

8.3.13 Overleaf, the consolidated housing trajectory for the five metropolitan authorities is presented, along with detailed notes indicating the various sources from which the figures have been collated.

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Table 8-6: Consolidated Housing Trajectory, Tyne and Wear, 2004-2031

2004-2011 2011-2016

2008/09 2004/05 2005/06 2006/07 2007/08 2009/10 2010/11 2004-2011 Total RSS TARGET Under- / Over- Supply 2011/12 2012/13 2013/14 2014/15 2015/16 2011-2016 Total RSS TARGET Under- / Over- Supply Notes Actual Actual Target Targets Gateshead (1) (2) (3) 765 164 453 563 215 286 154 154 2468 3045 -577 812 938 1139 1180 1043 5112 2925 2187 Newcastle (1) (4) (5) 384 508 432 385 34 400 0 925 2668 4900 -2232 1234 1316 1386 1442 1449 6826 4700 2126 North Tyneside (1) (6) (7) (8) (9) 755 732 585 584 310 343 545 572 4083 2800 1283 600 600 650 650 700 3200 2500 700 South Tyneside (1) (10) 144 170 404 293 183 340 340 340 1874 2380 -506 415 415 415 415 415 2075 2075 0 Sunderland (1) (11) (12) (13) 370 245 123 186 576 926 686 670 2856 4900 -2044 1397 1325 820 1281 889 5712 4700 1012 Tyne & Wear (TW5) 2065 1992 2016 2027 1265 2295 1725 2661 13751 18025 -4274 4458 4594 4410 4968 4496 22925 16900 6025

2016-21 2021-26 2026-2031

2025/26 2021-2026 Total Implied RSS TARGET Under- / Over- Supply 2026/27 2027/28 2028/29 2029/30 2030/31 2026-2031 Total Implied RSS TARGET Under- / Over- Supply 2016/17 2017/18 2018/19 2019/20 2020/21 2016-2021 Total RSS TARGET Under- / Over- Supply 2021/22 2022/23 2023/24 2024/25 Notes Gateshead (1) (2) (3) 980 916 795 810 660 4161 3875 286 580 580 580 580 580 2900 2900 0 580 580 580 580 580 2900 2900 0 Newcastle (1) (4) (5) 1538 1460 14331400 1300 7132 5350 1782 880 880 880 880 880 4400 4400 0 880 880 880 880 880 4400 4400 0 North Tyneside (1) (6) (7) (8) (9) 707 545 448 422 397 2519 2500 19 362 322 243 205 460 1592 2300 -708 460 460 460 460 460 2300 2300 0 Sth Tyneside (1) (10) 540 540 540 540 540 2700 2700 0 420 420 420 420 420 2100 2100 0 420 420 420 420 420 2100 2100 0 Sunderland (1) (11) (12) (13) 914 541 621 295 664 3035 5350 -2315 880 880 880 880 880 4400 4400 0 880 880 880 880 880 4400 4400 0 Tyne & Wear (TW5) 4679 4002 38373467 3561 19547 19775 -228 3122 3082 3003 2965 3220 15392 16100 -708 3220 3220 3220 3220 3220 16100 16100 0

2004-2031 Notes 2004-2031 Total Implied RSS TARGET Under- / Over- Supply Gateshead (1) (2) (3) 17541 15645 1896 Newcastle (1) (4) (5) 25426 23750 1676 North Tyneside (1) (6) (7) (8) (9) 13694 12400 1294 South Tyneside (1) (10) 10849 11355 -506 Sunderland (1) (11) (12) (13) 20403 23750 -3347 Tyne & Wear (TW5) 87715 86900 815

Source: See notes overleaf

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NOTES on Table 8-6

(1) Post 2021, areas in green are based on the 2004-2021 average as dictated by the para 28.4 of the RSS (2) 2008/09-2010/11 targets are based on NI 154 figures; 2004/05-2008/09 are based on submitted Gateshead Council evidence (3) 2011/12-2020/21 is based on Gateshead Council submission to NEA (ANEC) for RSS Annual Monitoring Report (4) 2008/09 Target: Gross figure for 2008/09 was 546, latest targets following RSS update are 2009/10 - Gross: 400; Net: 0 (5) 2011/12-2020/21 is based on Newcastle City Council Housing Trajectory (incl. Growth Point) - submitted evidence (6) Trajectory figures are subject to Growth Point confirmation (7) 2008/09 Target: LDF AMF revised target Dec 08; Original LAA target was 586 (8) RSS update data which replaces the original LAA targets 2009/10-2024/25: Based on Housing trajectory submitted to ANEC as part of Annual Monitoring Report process; using Table 10: Core (9) Strategy Housing Requirement (incorporating New Growth Point) South Tyneside figures (2009/10-2020/21) based on targets contained within housing trajectory figures (H2) in Annual Monitoring Report (10) 2007/08 submitted to NEA (ANEC) 2008/09 Actual based on current figure reported in the Annual Monitoring Report 2007/08 submitted by Sunderland City Council to NEA (11) (ANEC) 2011/12-2020/21 based on the Annual Monitoring Report 2007/08 submitted by Sunderland City Council to NEA (ANEC); Note the (12) SHLAA Report (March 2009) suggests an annualised level of 775 units per annum; Table 3, p.9 Note: Submitted Annual Monitoring Report indicates a trajectory level of 72 for 2021/22 and 49 for 2022/23. This seems unusually low. (13) The figures reported above follow the RSS instruction to use the 2004-2021 average as indicated in the RSS General Note: These are net figures

NOTE: SEE APPENDIX G FOR A MORE DETAILED EXPLANATION OF THE SUPPLY FIGURES FOR EACH AUTHORITY

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The supply of affordable housing76 8.3.14 It is important for the SHMA to be able to present an estimate of the likely level of future affordable housing provision. Unfortunately the housing trajectory data presented above tends not to include a breakdown which includes affordable housing. Some authorities such as Newcastle do provide a guide range of what they anticipate being delivered in the medium and long term. It is precisely this form of range estimate which the SHMA needs.

8.3.15 All authorities do make strong estimates of short term delivery based on known current and future projects and these are submitted by most authorities as part of national indicator 155 (NI 155). These are presented in Table 8-7 below.

8.3.16 It is also possible to consider recent levels of completion in trying to understand how future affordable housing completions might pan out. In the case of Tyne & Wear (TW5), completions of affordable housing in the period 2004/05 to 2008/09 ranged from 218 to 464, though this number has steadily increased over most of the period. Further growth is anticipated in the short term with 560 dwellings anticipated in 2010/11 and 719 in 2011/12. Data from 2012/13 onwards have only been identified for Newcastle upon Tyne to date.

8.3.17 If we were to take an average of recently delivered and short-term planned affordable housing delivery (2004/05 – 2010/11), this would equate to approximately 429 units per annum. This does not factor in the likely reduction on the capacity of the public sector purse to fund affordable housing in the short-medium term.

76 PPS3 (Housing) definition of “affordable housing”: Affordable housing is: ‘Affordable housing includes social rented and intermediate housing, provided to specified eligible households whose needs are not met by the market. Affordable housing should: 1. 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; 2. 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’.

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Table 8-7: Recent affordable housing completions and future supply, Tyne and Wear, 2004-2016

2008/09 2005/06 2006/07 2007/08 2009/10 2010/11 2011/12 2012/13 2013/14 2004/05

Notes Actual Actual Actual Actual Actual Estimated Estimated Estimated Estimated Estimated

Gateshead (1) 120 86 111 55 73 104 109 168 Newcastle (2) 42 53 103 92 70 150 170 140 100 0 North Tyneside (3) 13 65 21 23 80 189 85 26 0 0 South Tyneside (4) 43 33 51 89 81 71 114 77 0 0

Sunderland (5) - 65 98 98 230 133 147

Tyne & Wear (TW5) 218 302 384 357 464 647 625 411 100 0

Source: See notes Notes (1) Source: Gateshead AMR 2007/08, Table 3.4, and Gateshead Council submitted evidence, and TWHP based on NI 155 returns Source: Newcastle upon Tyne AMR 2007/08, and Newcastle City Council submitted evidence and TWHP based on NI 155 returns, 2010/11 (2) onwards, information provided directly by the council from own estimates Source: North Tyneside AMR 2007/08, AMR Returns (unpublished) 08/09; 2009/10 onwards, information provided directly by the council from own (3) estimates Source: South Tyneside AMR 2007/08, C4 Affordable Housing, and SHLAA Report and TWHP based on NI 155 returns: 2009/10 onwards, (4) information provided directly by the council from own estimates (5) Source: Sunderland City Council, Annual Monitoring Reports 2006, 2007, 2008, and TWHP based on NI 155 returns

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Outstanding planning permissions77 8.3.18 As of March 2008, there are 22,053 dwellings with outstanding planning permissions in Tyne & Wear of which about two thirds have not been implemented.

Figure 8-8: Status of outstanding planning permissions in Tyne & Wear (March 08)

Source: quoted in NEA (2009) Compendium of North East England Housing and Population Data, p. 141

8.3.19 There are some notable differences within the city region as the figure below indicates. The highest volume of outstanding planning permissions is in Newcastle, followed by Sunderland, Gateshead and North Tyneside. South Tyneside lies substantially behind the other metropolitan authorities.

8.3.20 In terms of the proportion of implemented planning permissions, most authorities in the region have very low proportions which have been implemented. Within Tyne & Wear, Gateshead stands out as having both the highest absolute number of implemented permissions, and the highest proportion. Sunderland has a higher proportion of implemented permissions as compared with the remaining three authorities.

8.3.21 To put this in perspective, for Tyne & Wear the revised housing trajectories suggest delivery in the region of 3,000-3,200 per annum, which would imply something like 7 years worth of supply (assuming all sites were implemented, which is never the case). This could therefore be considered relatively tight. As Figure 8-10 indicates, there is relatively little room in most of the existing local plans as they have reached the end of their intended life span.

8.3.22 As the Assembly’s compendium suggests, this implies that a very limited amount of present capacity can be influenced by the planning system, making it more difficult to pursue policy objectives. Stakeholders have cautioned about using outstanding planning permissions as an indication of future supply, as some sites are very large and take a long time to build out, and other sites may have stalled.

8.3.23 This problem should be alleviated when the current round of LDF’s come on stream. In the short term the housing trajectories presented above suggest that actual completions will be very low. Stakeholders indicated that the planning system was not currently acting as a constraint, instead pointing to the current economic climate.

8.3.24 The Home Builders Federation in their submission have argued that land supply and the level of planning permission remain a significant constraint to future delivery levels as too much of the supply is in the wrong location and targeted at the wrong products for

77 The primary source for this sub-section is the NEA (2009) Compendium of North East England Housing and Population Data

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the demand that is out there. They have argued that future supply must be in the right locations, which support the right products and for which there is demand, and that this in turn will help to stimulate future supply levels.

8.3.25 The current round of Strategic Housing Land Availability Assessments (to a common Tyne & Wear methodology) should in the main identify a sufficient five-year land supply, which should support ongoing housing supply in the short and medium term. As of the publication of this draft, North Tyneside, South Tyneside and Sunderland have all published their SHLAAs (with review underway as of October 2009), while Gateshead and Newcastle are outstanding.

Figure 8-9: Status of outstanding planning permissions by local authority (March 08)

Source: quoted in NEA (2009) Compendium of North East England Housing and Population Data, p. 143

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Figure 8-10: North East local authority housing potential by planning status

Source: quoted in NEA (2009) Compendium of North East England Housing and Population Data, p. 143

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9 Housing need

Key findings

The housing needs estimates were developed in three stages:

■ Current housing need – the number of households in need at the start of the projection period

■ Newly arising need – the number of households that will fall into need in each year of the projections

■ Supply – the stock available to address the identified housing needs.

Current need There are currently c. 89,722 households with some form of housing need in Tyne and Wear.

Around 50,256 of these households are currently social renters. Their housing needs are important, and require to be addressed.

Of the c. 39,466 non social renters currently in housing need around 20,754 households could either afford to address their needs in the market, by buying or renting alternative accommodation, or could resolve their housing needs in situ (for example, by making adaptations or repairs to their property). This leaves some 18,712 households with unmet housing needs; c. 3,742 to be met in each of the next five years

Newly arising need There are around 1,432 new households in the area who would not be able to afford to meet their housing needs in the first year of the planning period, and an estimated 2,754 households who would fall into housing need over the year. Such needs account for an estimated 0.9% of all households in Tyne and Wear that year.

Housing supply An estimated 6,533 existing properties will available to meet housing needs during each year, from natural turnover in the stock. An estimated 428 new affordable properties will be available each year.

Unmet housing need The level of unmet housing need over the next five years is therefore estimated at around 1,509 households (assuming need is addressed solely from existing stock) per annum, or around 1,081 households per annum when the estimated new supply is also taken into account.

Intermediate housing options Our analysis would suggest that none of the households currently in housing need could afford the intermediate housing options that are available in Tyne and Wear.

Profile of housing need Our analysis of the profile of housing need (which is based on partial information) indicates that there are some key blockages in the system, particularly affecting properties for small households (one and two person households) and large home (especially those of four or more bedrooms).

9.1 Introduction

9.1.1 This chapter considers the level of housing need across the Tyne and Wear Metropolitan area, both in terms of pent-up (current need) and needs that are likely to emerge over the next few years. We assess the extent to which households will be able to afford to meet their needs in the market (either by buying or renting privately), and consider whether the social and other affordable housing available will be sufficient for those households who require it.

9.1.2 This section follows the method set out in CLG Guidance for assessing housing need. The section in Chapter 10 further develops this approach to look at the demand for affordable housing and market housing, taking account of the need for affordable

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housing identified below. The Partnership has been supplied with Excel-based models to enable assessments of need and future need to be reviewed and to allow additional scenarios to be considered.

9.1.3 We would note from the outset that the figures presented in the section should be regarded as indicative. The accuracy of the results presented relies heavily on the robustness of the underlying survey data used to generate them. We have been extremely careful throughout the analysis to avoid basing calculations on survey data drawn from excessively low samples. Nonetheless, it is important to recognise that any biases or inaccuracies in the underlying surveys used will be translated into the results presented here. It should also be recognised, that for ease of tracing results through the chapter (and relating these back to the source spreadsheets) we have used have not rounded any of the estimates. However, this is simply for convenience in using the figures, we do not suggest this level of precision applies to any of the estimates.

9.1.4 We reiterate the point made in section one of this document: the secondary data available were sufficient only to produce robust housing needs estimates at the housing market level. Users who wish to obtain the finer grain picture are advised to examine the local HMA reports produced by each local authority.

9.2 Estimating housing need

9.2.1 The study follows the approach set out in the Practice Guidance and draws on secondary data to develop the needs estimates78. The housing needs estimates are developed in three stages: ■ Current housing need – the number of households in need at the start of the projection period

■ Newly arising need – the number of households that will fall into need in each year of the projections

■ Supply – the stock available to address the identified housing needs.

9.2.2 Each of these stages is set out in detail below. Further information on the assumptions underpinning the analysis is provided in the technical appendix which accompanies this report.

9.3 Current housing need

9.3.1 The first stage in calculating housing needs is to estimate the number of households that currently have unmet housing needs. The guidance specifies the circumstances in which households would be considered to be in housing need: ■ Homeless households and those in temporary accommodation

■ Concealed households

■ Over-crowded households

■ Households with a need for adapted housing

■ Arrears and unaffordable housing

78 The main data sources used to develop the estimates in this section are national surveys (the Survey of English Housing, the English House Condition Survey).

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■ Households in poor quality housing

■ Households experiencing harassment

■ Refugees.

9.3.2 We have approached this analysis in three steps: ■ We estimate the total number of households that fall into each of these categories (avoiding, as far as is possible, including any households in two/more categories)

■ We estimate the number of these households that are social renters. The dwellings released when these households move become available for other households in need, so they have to be identifiable on “both sides” of the needs calculation.79

■ We estimate the number of the remaining households that would not be able to resolve their housing needs from their own resources – by either buying or renting alternative accommodation.

9.3.3 We start by estimating the total number of households in need, in each market area, within each category of need. We then move on to discuss the assumptions for, and calculation of, need within each category, before moving on to identify those households currently living in social rented housing, and those households that could address their housing needs themselves.

Table 9-1: Total households currently in housing need in each category of need (start of year 1)80

Tyne & Wear

Homelessness 367 Concealed HH 2,400 Overcrowded HH 10,562 Need for adapted housing 66,254

Arrears and unaffordable 1,440 Poor quality housing 8,162 Harassment 0 Asylum seekers 537 Total HH in need 89,722 Total HH 480,099 Total (gross) housing needs as % of all HH 19%

Note 1: See the support needs definition used below for the purposes of this calculation

79 For simplicity, we have used stage 2 to net off social renters – that is to identify them, and then remove them from both the need and housing supply sides of the calculation. Thus, we have excluded social rented from the affordability calculation. By this means we avoid the situation arising whereby the assessment concludes that social renters can afford to “buy” themselves out of need (that is, resolving their need by moving into the private sector), and releasing affordable dwellings for other households in need.

80 Appendix H contains a full set of Chapter 9 tables by local authority

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9.3.4 Homelessness An estimate of current cases has been used to quantify homeless households. This has been taken from the P1E returns, which provides a record of current cases.

9.3.5 Concealed households The estimate of concealed households has been taken from the ONS estimates of concealed households.

9.3.6 Over-crowded households The estimate of over-crowded households has been derived from the English House Condition Survey 2006 (EHCS) alongside CLG data on the total number of resident households in each area. A household was considered over-crowded if it exceeded the bedroom standard.

9.3.7 The approach adopted involves three key steps to provide an estimate of the total number of households for each element of need: ■ Step 1: use the EHCS 2006 to estimate the proportion of households exceeding the bedroom standard81

■ Step 2: use CLG data to estimate the total number of households resident in each area

■ Step 3: multiply Step 1 by Step 2 to achieve an estimate of the total number of concealed households.

9.3.8 The same three-stage approach was adopted, with slight variations, for calculating those with support needs, households living in poor quality housing and harassment.

9.3.9 This analysis suggests 50% of these households need a minimum of a three-bedroom property and the remainder need a larger property.

9.3.10 Adapted housing The support needs estimate was derived using the same methodology as described for overcrowded households, with one key variation. The SEH was used to derive the estimate. Support needs were defined as the total number of households with a disability or limiting long-term illness (LLTI) and their accommodation is unsuitable, such as a person in the household with difficulty manoeuvring their wheelchair around their home.

9.3.11 Arrears and unaffordable housing Using the same 3-stage method described above, the level of households with arrears of rent or mortgage arrears was estimates. The Survey of English Housing was used for this estimate.

9.3.12 Poor quality housing The methodology for calculating the number of households in poor quality housing followed the same 3-stage methodology as that described for overcrowded households. A property was considered to be poor quality if one or more of the following were identified as being unfit: the toilet, running water in the kitchen or the drainage system. The EHCS is the source for this estimate.

9.3.13 Asylum Seekers Data from the Home Office were used to determine the number of asylum seeker households that will be given leave to remain, and will therefore be in

81 Because of the EHCS sample size and structure, the smallest reliable geography that we were able to use was T&W/Northumberland combined. It was not, therefore possible to generate specific needs rates for each housing market area or for each local authority area.

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need of housing. An adjustment has been made to take account of the review of cases that is currently underway.

9.3.14 Harassment The methodology for calculating the number of experiencing harassment followed the same 3-stage methodology as that described for overcrowded households. A household was considered to be experiencing harassment if declared that severe harassment was an issue in their neighbourhood in the ECHS.

9.3.15 As set out in table 9-1 above, there are around 89,722 households across the T&W Metropolitan area with housing needs, around 19% of the household population.

Social rented households in housing need 9.3.16 The next stage of the analysis is to identify how many of the households in housing need are currently social renters. These households have very real housing needs, which the guidance assumes can be met by transfers within the social sector stock, adaptations to their current home or possibly improvements/repairs to their home. Our analysis would suggest that overall, c.50,256 of the households in need are currently social renters. Table 9-2 provides a breakdown of these households. There are no households in housing need in the following categories: homeless, concealed, arrears, or asylum seekers. The issues that social landlords will have to address with respect to their own tenants are need for adapted housing, overcrowding and poor quality housing.

Table 9-2: Affordable dwellings occupied by households in need (start of year 1)

Category of need Tyne & Wear

Homeless 0 Concealed HH 0 Overcrowded HH 5,028 Need for adapted housing 42,535 Arrears and unaffordable 0 Poor Quality 2,693 Harassment 0 Asylum seekers 0 Total HH in need 50,256

9.3.17 Table 9-3 shows total need excluding social renters (or net of social renters), and indicates that c. 39,466 of the households in need in the T&W Metropolitan area are currently not social renters (that is, they are currently living in the private sector or are not householders).

Table 9-3: Total households currently in housing need net of households in the social housing sector (start of year 1)

Category of need Tyne & Wear

Homelessness 367 Concealed HH 2,400 Overcrowded HH 5,535 Need for adapted housing 23,719 Arrears and unaffordable 1,440

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Poor quality housing 5,468 Harassment 0 Asylum seekers 537 Total HH in need (net of SR) 39,466 Total HH 480,099

Total (gross) housing needs as % of all HH 8% Households unable to meet their needs in the market 9.3.18 The next stage of the analysis involves assessing the proportion of the remaining households in housing need (that is, households in housing need who do not currently live in the social rented sector) that are unable to resolve their situation themselves, either by buying alternative housing or renting suitable housing from a private landlord.

9.3.19 There are three elements to quantifying the number of households that cannot afford to resolve their housing needs in the market: ■ Develop an estimate of household incomes for households in each element of need

■ Profile the cost of buying/renting in each housing market area

■ Given these estimates, assess the number of households in need that are not able to afford alternative accommodation.

9.3.20 Incomes Incomes are estimated from CACI data, at the local authority level. The measure used is lower quartile incomes.

9.3.21 Housing costs The guidance says that it is reasonable to expect households to meet their housing needs in owner occupied housing or private rented housing. Measures of housing costs and private rents are therefore required. ■ Costs of owner occupation were based on the cost of lower quartile, two bedroom properties within the local authority area. It was assumed that existing owner occupiers would have some equity in their current home

■ Home ownership was considered affordable if the balance (after any deposit) of the property cost was less than 2.9 times the household income. The income required was compared to the lower quartile incomes derived from CACI data. If the income required is above the lower quartile price, then, owner occupation is deemed unaffordable

■ Costs of private renting are based on the local housing allowance rate for a two- bedroom property. Households are assumed to be able to afford private renting if the rent level is no more than 25% of income82. To determine whether renting in the private sector is a viable option, the lower quartile incomes are compared to the required income levels. If the required income is above the lower quartile income, then, this option is deemed unaffordable.

Estimating current need 9.3.22 Using the assumptions described above, the incomes of all households in need were assessed against owner occupied and private rented housing costs, to determine the

82 In line with guidance, it is assumed that households are not on housing benefit

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proportion of households in each category of housing need that would be unable to afford alternative housing.

9.3.23 For each need category the analysis compares household income against the costs of each market housing option. The lowest cost option is taken as the threshold to access market housing in each case. The proportion of households unable to afford any of the options is taken as the proportion of households unable to meet their own needs in the market. This proportion varies considerably between needs categories, current tenure of household and between sub areas depending upon incomes and housing costs. Overall, the analysis suggests that: ■ No concealed households are able to meet their needs in the market

■ No overcrowded households are able to meet their needs in the market

■ 87% of households with a need for adapted housing are able to meet their own needs

■ No households in poor quality dwellings are able to meet their own needs in the market

■ No households facing harassment are able to meet their needs in the market.

9.3.24 While housing costs for both home ownership and market renting are used in the calculation, in practice the analysis shows that the threshold or most affordable option in each area depends largely upon the current tenure of the household. For owner occupying households in need the threshold cost is usually home ownership of a lower quartile property. Existing private renters can generally not afford owner occupation.

9.3.25 As table 9-4 illustrates, following this methodology suggests that across the T&W Metropolitan area, of the 39,466 non social-rented sector households who were identified as being in housing need (in table 9-3) there are around 18,712 households with needs that they cannot afford to resolve in the market sector. These households represent around 3.9% of the total T&W Metropolitan area household population.

9.3.26 In line with the guidance, we have assumed that this unmet need will be addressed over a period of five years, giving around 3,742 households to be housed each year. Individual local authorities may wish to use a longer time-period, which would decrease the annual housing requirement, but would clearly mean that the backlog of housing need would take longer to clear.

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Table 9-4: Total households currently in housing need unable to meet their housing needs in the market or in situ

Tyne & Wear

Homelessness 367 Concealed HH 2,400 Overcrowded HH 5,535 Need for adapted housing 2,965 Arrears and unaffordable 1,440 Poor quality housing 5,468 Harassment - Asylum seekers 537 Total unmet needs 18,712 % of households with unmet needs 3.9% Current need to be addressed annually1 3,742 Total HH in need 39,466 Total HH 480,099

Note 1: Assumes that 20% of current needs will be addressed each year over a 5 year period.

Summary of current housing need 9.3.27 In summary, there are currently c. 89,722 households in need in the T&W Metropolitan area. Of these, c. 50,466 households are social renters. There are c. 39,466 non social renters currently in housing need. Of these people, some 20,754 households could either afford to address their needs in the market, by buying or renting alternative accommodation, or could resolve their housing needs in situ. This leaves some 18,712 households with unmet housing needs; c. 3,742 to be met in each of the next five years.

9.4 Future housing need

9.4.1 The second stage of the calculation is to estimate the number of households that may become unable to meet their housing needs over the planning period. This future need comprises: new households that will be unable to afford suitable market housing and existing households that will develop housing needs.

New households falling into housing need 9.4.2 New households falling into need are estimated by: ■ Determining the number of new households each year

■ Estimating the proportion of these households that will/will not be able to afford market housing

■ Assuming this proportion of the household population continues to fall into need throughout the projection period.

9.4.3 The overall number of households has been estimated from the net annual change in the number of households using the CLG household projection estimates.

9.4.4 New households are made up of newly emerging households and in-migrants. It is important to be able to distinguish between these groups, as they are likely to have

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affordability profiles. Again, the SEH was used to provide the profile of emerging and in- migrant households83.

9.4.5 Our preference would be assess the income/resources profiles of the different types of new households. However, the information to do so is not available within the SEH. Instead, we have considered the differential rates at which emerging and in-migrant households have accessed market and “subsidised” housing. This would suggest that some 62% of new and in-migrant renters, and 74% in-migrant owners are accessing market housing (without housing benefit). This suggests that around 38% of new households (and non-owner occupier in-migrant households) are unable to afford market housing; while around 26% owner in-migrant households are unable to afford market housing on moving into the area.

Existing households falling into need 9.4.6 A number of existing households will also develop housing needs over the projection period. The estimate of existing households falling into need has been derived from the waiting list data84. As noted above, several thousand households have applied for social rented housing. Housing lists are unfortunately typically unreliable as indicators of housing need – the lists become outdated (households on the lists move out of the area/find alternative suitable accommodation/and so on); many join the list as “insurance” in case they need rehousing and/or a house they prefer to their current home becomes available; while some join the list in order to build time points for when they do require rehousing. At the same time, there are many households in housing need who do not join the list because they do not think they qualify for housing; because the housing available is not suitable (in terms of type or location); because they know they will have a long wait until they would be rehoused; and so on. While the housing lists are not perfect indicators, we can, nonetheless, use them intelligently, to provide an indication of newly arising need in each area.

9.4.7 The approach we have adopted here is to select only those applicants designated under “reasonable preference” categories, as these should have a very close fit to the current needs categories set out in the practice guidance. As set out in s.167 of the Housing Act 1996, those included in reasonable preference categories comprise: ■ People who are homeless (but not owed a homelessness duty)

■ People owed a homelessness duty because they have been accepted as unintentionally homeless (or threatened with homelessness) and in priority need or intentionally homeless and in priority need, and people accepted as unintentionally homeless and not in priority need and provided with accommodation at the authority’s discretion

■ People occupying unsanitary or overcrowded housing, or otherwise living in unsatisfactory housing conditions

■ People who need to move on medical or welfare grounds, including grounds relating to a disability

■ People who need to move to a particular locality in the district of the housing authority, where failure to meet that need would cause hardship from the flow of new households onto social sector waiting lists.

83 In-migrant households were defined as those moving more than 10 miles to their new home.

84 Sourced from the HSSA

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9.4.8 We would note that typically only a small proportion of all housing applicants are designated within the reasonable preference category (usually around 10% of all applicants85). However, North Tyneside designated 100% of applications (5,513) reasonable preference. Following discussion with the local authorities, it has been agreed that we should adjust the number of applicants used in the analysis so that they conform to the T&W average (excl NTC).

Future housing needs not met in the market 9.4.9 The table below sets out the number of households falling into need that cannot afford to meet their own needs in the market during the first year of the assessment.

Table 9-5: Future housing unmet need (year 1)

Tyne & Wear

New households in need 1,432 Existing households falling into need 2,754 Total future housing need 4,186 Future unmet need as % of households (pa) 0.9% Total HH 480,099

Values are rounded, but the true values have been used in calculations. Summed figures may appear inaccurate. Summary 9.4.10 There were a total of c. 1,432 new households in the area who would not be able to afford to meet their housing needs in the first year of the planning period, and an estimated 2,754 households who would fall into housing need over the year. Such needs account for an estimated 0.9% of all households in the T&W Metropolitan area that year.

9.5 Total housing need

9.5.1 The final section of the needs assessment develops the total estimate of housing need. It starts by drawing together the total housing need (gross) estimate, then quantifies the housing supply available to address need, and calculates total housing need (net).

Total housing need (gross) 9.5.2 Total housing need is calculated by summing: ■ Current housing need – annual quota (assumed to be 20%, which would address total current need over a period five years)

■ Housing need from emerging households

■ Housing need from existing households.

85 In other local areas, where we have had access to detailed housing list information, we have been able to exclude applications from emerging households, from households that are not currently looking for accommodation, and from households that do not have housing need. Typically, the number of “effective” applicants reduces to around 10% as a result of these adjustments

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9.5.3 The total, year one (2009) unmet housing need in the T&W Metropolitan area is 7,928 households, some 1.7% of all households resident in the area.

Table 9-6: Total households need (gross) – year 1

Tyne & Wear

Current housing needs 3,742

Future housing needs New households in need 1,432 Existing households falling into need 2,754 Total housing need (yr1) 7,928 Total (gross) housing needs as % of all HH 1.7% Total HH 480,099 Note 1: Assumes that 20% of current needs will be addressed each year, over a 5 year period.

Affordable housing supply projections 9.5.4 All local authorities will have some social and affordable housing available to (at least partly) address housing needs. This supply comprises: ■ New social rented stock available to let for the first time. This is mainly new build stock developed by/for the SRS, but may include acquisitions of new build and second hand properties or conversions that increase stock levels

■ Social rented stock that becomes available when the tenant either moves out of social renting or moves out of the area (transfers are excluded here, as the household is vacating one property and moving into another, so no properties become available for households new to the sector)

■ Development and funding of low cost home ownership options – including properties developed by/for the SRS, and shared equity in the second-hand market.

9.5.5 The year one, baseline stock number therefore adjusts the current stock to take account of the void rate, new build and any stock loss through demolitions or conversions over the year86. Supply projections take account of: ■ New build/acquisition projections and delivery of affordable/intermediate housing – assumptions are based on build rates extracted from the housing trajectories provided by the local authorities and from estimates of affordable housing delivery levels achievable (see table 8-7 above)

■ Available relets, taking account of other stock changes, such as right to buy sales, and demolitions – assumptions are based on analysis of social rented stock turnover data (sourced from HSSA and CORE).

86 An alternative approach to dealing with demolitions is also taken – see 9.5.9 below.

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Total housing need (net) 9.5.6 The level of net unmet housing need – that is, need that cannot be met from existing housing supply (turnover) and expected supply (newbuild housing, etc) – is calculated by comparing the total number of households in need against available supply coming forward each year. The table below summarises gross housing need and the supply of social and affordable housing. We would stress that the figures in this table are slightly different from those shown in previous tables – previous tables gave the year 1 figures, table 9-7 uses the annual average calculated over the first five years of the projections. There is obviously some variation year on year, most especially with respect to the new build supply estimates (where in table 8-7 a number of the authorities estimate no new build of affordable housing for years 4 and 5), but for the analysis here, a smoothed (annual average) estimate has been adopted.

9.5.7 The table shows baseline supply comprising: ■ An estimated 6,533 existing properties that will available for let during each year, from natural net turnover in the stock

■ Some 428 new social rented properties will be built each year, based on affordable housing estimates provided by local authorities.

9.5.8 The level of net housing need (or unmet need) is therefore estimated at around 1,509 households (net of turnover), and around 1,081 households when estimated new build is taken into account.

Table 9-7: Total households need (net) – Average applying to next 5 years

Baseline Alternative

Housing needs1 Current need 3,742 3,742 Future need 4,299 4,299 Total housing need 8,042 8,042 Housing supply Supply from turnover 6,533 6,184 Supply from new build 428 428 Total housing supply 6,961 6,612 Net housing need Housing need – net of turnover 1,509 1,858 Housing need – net of turnover and new build 1,081 1,430 Housing need (net of t/o and n/b) as % of all HH 0.2% 0.3%

Total HH (2008/09) 480,099 480,099

9.5.9 It is generally assumed that properties to be demolished are untenanted when demolished; and there is, therefore, no need to rehouse any tenants. (That is, it is assumed that properties are emptied through management approaches that cease lettings at a set point before the demolition, allow natural turnover to reduce tenancies, and finally rehouse remaining tenants via transfers). However, it was noted that this approach may not be sufficient in some cases; where high demand properties are being

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demolished for strategic/financial reasons, where lettings strategies are being effectively managed, and so on. Consequently, an alternative scenario has been included which assumes that properties in all authorities except Newcastle are 100% tenanted prior to demolition. Consequently, there is no “natural wastage” and instead, it is assumed, that ■ All properties to be demolished are tenanted (with the exception of those in Newcastle, which are assumed to be vacant prior to demolition)

■ That all these tenants are transferred to another social rented property

■ That these transfers are made at the expense of new households to the social rented system (that is, they do not reflect churn in the system, as they are not vacating a property that can be used by another household in need).

9.5.10 The key point of difference in the needs estimate, therefore, is that the amount of housing supply from turnover available to meet housing need is lower under this scenario (by c. 349), as lets are required to rehouse households in the demolition programme. The impact of the programme is to substantially reduce the number of lets available, and consequently increase the level of unmet need by that amount each year.

9.5.11 The alternative needs estimate are included in table 9-7 above. The figures that differ are those relating supply from turnover. Adjusting the assumptions of demolitions as set out in 9.5.9 reduces the number of lets available to meet housing need by around almost 350. As a consequence, need net of turnover increases to c.1,858, while need net of turnover and new build increases to c.1,430.

9.5.12 In reality, it is unlikely that every single property will be tenanted, and that all re- allocations will impact on new lets; the true impact on net need, in practice lie somewhere between these two figures. The point between will depend on local circumstances, local policies and pressure on lettings policies.

Summary 9.5.13 The level of unmet housing need is estimated at around 1,509 households (net of turnover) per annum, and around 1,081 per annum households when target new build is also taken into account, when a five year average is considered.

Affordable housing options 9.5.14 The above analysis considers total housing need arising across the T&W Metropolitan area and assessed the number of households unable to meet their needs in the market. Such households have been expected to require some form of non-market housing in order to meet their housing needs. This section takes the analysis further to consider the extent to which housing needs could be satisfied through alternative affordable housing options, and the extent to which households would require social housing.

9.5.15 The approach to addressing this question can be broken down as follows: ■ As a starting point, take the estimate of households in housing need and the income profiles of these households as outlined above

■ Identify the cost of different affordable housing products available in the region. For this study, we have taken account of the cost of Homebuy. Assumptions for the cost and availability of these products have been developed based on evidence drawn from CORE shared equity sales 2008/09

■ Using these costs and the affordability tests discussed above, estimate the levels of income required to afford each product

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■ Compare the income requirements arrived at for these products against the lower quartile income for households. Those unable to afford even the cheapest of the affordable housing options are assumed to require social rented housing

■ Apply the proportions estimated in step iv to the total number of households in need adopted in step i.

9.5.16 Table 9-8 presents the results of this analysis. This analysis suggests that none of the households in current housing need are estimated to have sufficient income to afford at least one of the affordable housing options available in the city region. Such households are therefore expected to require social rented housing to meet their housing needs.

Table 9-8: Current households unable to meet their needs through the market or through LCHO

Tyne & Wear

Current housing need 39,466 Able to access LCHO 0 Able to access LCHO as a percentage of current need 0

Current households unable to meet needs in market or through LCHO 18,712

9.6 Profile of households in housing need

9.6.1 The final stage of the housing needs analysis was to develop a profile of the households with housing needs, to develop an understanding of the type of housing that will be required to address their needs. We have only partial information on these households; however, we have constructed a profile using the information that is available.

Current housing need 9.6.2 We have started by considering households that are in current housing need. Information on overcrowded, support needs, arrears and unaffordable, poor quality and harassment categories came from national surveys, so a household profile can be compiled (although we would stress that the sample sizes on which some of the estimates are constructed are relatively small). Information on concealed households came from CLG estimates, which permits a less detailed household breakdown. We would stress that we have undertaken this analysis on the basis of “bedroom eligibility”. We have matched property size with the minimum dwelling that a household would be eligible for; thus single person and couple households have been assumed to be eligible for one-bedroom properties. This approach takes no account of current policy and practice in either housing management or grant allocations, which tend to favour two- bed properties as the minimum dwelling size, as these afford a much greater degree of flexibility in terms of stock management and have a greater fit with housing demands/aspirations. This must be borne in mind when reviewing the information on the tables below.

Table 9-9: Annual current need, by bedroom requirement in Tyne and Wear

Up to 1 2 bedrooms 3 bedrooms 4 or more Total bedroom bedrooms

Tyne and Wear # 1,319 998 668 757 3,742 Tyne and Wear % 35% 27% 18% 20% 100%

Source: English House Condition Survey, 2006 and the Survey of English Housing, 2004-05, Tribal

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housing need calculations

9.6.3 Well over half of all those currently in need require small properties: just over a third of households are small households – either one person or couples, which technically would require a one bedroom property, while just over a quarter are slightly larger (single person/couples with one/two children for example) and require a two bedroom property. Nonetheless, there is significant demand for larger properties, with one fifth of households requiring a property of four or more bedrooms.

9.6.4 Our analysis would suggest that almost all new households unable to meet their needs in the market will require small properties – around three-quarters will be eligible for one bedroom homes, and around a fifth will be eligible for two-bedroom homes.

Table 9-10: New households falling into need (year 1)

Up to 1 2 bedrooms 3 bedrooms 4 or more Total bedroom bedrooms

Tyne and Wear # 1,059 295 72 0 1,432 Tyne and Wear % 74% 21% 5% 0% 100%

Source: Survey of English Housing, 2004-05, Tribal housing need calculations 9.6.5 Finally, we estimate that the bulk of the existing households that fall into need will also require smaller properties, but clearly the balance is slightly different – around half of households are likely to eligible for one bedroom homes, a third eligible for two-bedroom homes, and a fifth eligible for larger homes.

Table 9-11: Existing households falling into need (year 1)

Up to 1 2 bedrooms 3 bedrooms 4 or more Total bedroom bedrooms

Tyne and Wear # 1305 959 402 92 2,759 Tyne and Wear % 47% 35% 15% 3% 100%

Source: Tribal estimates based on HSSA 2008/09 return. 9.6.6 Table 9-12 provides a breakdown of the housing supply set out in table 9-7 above. As was clear from the analysis above, the supply from turnover is insufficient to address need over the first five years of the projection. The table below also suggests that the profile of supply may not be appropriate: only around a third of the supply is one bedroom, and just 2% is four bedroom or larger.

Table 9-12: Social housing stock turnover

Up to 1 2 bedrooms 3 bedrooms 4 or more Total bedroom bedrooms

Tyne and Wear # 2,212 2,746 1,454 120 6,532

Tyne and Wear % 34% 42% 22% 2% 100%

Sources: CORE Annual Report, 2008-09. Annual Lettings Review 2008-09, Newcastle City Council.

9.6.7 Table 9-13 summarises the degree of mismatch across the Tyne and Wear area. It shows an overall deficit of around 1,400 dwellings. There are particular blockages within the housing system. First it suggests that the there is an under-supply of around 1,377 one-bedroom homes. It must be borne in mind that one-bedroom properties are generally neither high demand properties (households prefer slightly larger homes that will accommodate family growth, home working, non-resident children to stay over, etc);

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nor are they preferred by landlords because they lack the flexibility of slightly larger properties. No doubt as a consequence, the HCA does not generally grant fund one- bedroom properties. However, as is clear from the table, even if it is assumed that the housing needs of one and two person households (those assumed here to “require” a one-bedroom property) can be adequately addressed in two-bedroom properties, there are insufficient one and two bedroom properties combined to cope with the level of need from smaller households in the city region.

9.6.8 The second key blockage is around larger properties: there is a marked under-supply of large homes (an under-supply of c. 729 four bedroom homes).

Table 9-13: Housing need/housing turnover mismatch

Up to 1 2 bedrooms 3 bedrooms 4 or more Total bedroom bedrooms

Tyne and Wear -1472 494 312 -729 -1,395 Note: Table 9-13 = Table 9-12 - Table 9-11;9-10; 9-9

9.7 Private rented sector scenario

9.7.1 We have considered one further alternative housing needs scenario. The CLG Practice Guidance is clear that when we consider whether or not households in housing need can afford to address their needs by buying or renting market housing we do not assume access to housing benefit. That is, the affordability calculations are run against the full rent of the PRS properties, which in Tyne and Wear are only affordable to households with incomes in excess of £21,000 pa. In practice, of course, many households with incomes well below this are able to access the PRS with support from housing benefit. The PRS scenario provides an opportunity to explore the impact on the needs assessment of assuming that eligible households have access to housing benefit.

9.7.2 We would note that, even with the recent changes, housing benefit administration is still complex. We have used a simplified approach within the analysis, and applied a series of “case study” assumptions to determine the benefit entitlements across the needs categories. That is, we have profiled “typical” households for each dwelling size, and determined the benefit thresholds and entitlements for these groups.

9.7.3 Before setting out the findings from the analysis, we would set out a number of “health warnings”.

■ Some of these modifications may not fit with policy – for example, the analysis suggests that most of the homeless households could move into the PRS on housing benefit; however, depending on how these households have been assessed and the housing options available to them, this may not be considered an appropriate solution

■ The supply of good quality PRS accommodation within each of the local authority areas within Tyne and Wear may not be sufficient to respond to the level of need/demand suggested by these estimates. In practice, if the PRS was to be used as an option in meeting housing need, each authority would need to consider developing PRS initiatives appropriate to their local circumstances. Further, detailed analysis of the areas would need to be undertaken to explore the issues pertaining to the different sub-areas – for example information; supply; property conditions; management and tenancy relations; barriers to entry, such as deposits; and so on.

9.7.4 As table 9-14 below indicates, assuming households in current need have access to housing benefit makes a significant difference to the level of need that has to be addressed in Tyne and Wear – with households unable to meet their own needs declining from around 1,509 to around 66 (excluding new build).

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Table 9-14: PRS scenario: households currently in housing need and unable to meet their needs in the market or in situ

Baseline PRS scenario

Housing needs1 Current need 3,742 2,299 Future need 4,299 4,349 Total housing need 8,042 6,648 Housing supply Supply from turnover 6,533 6,533 Supply from new build 428 428 Total housing supply 6,961 6,961 Net housing need Housing need – net of turnover 1,509 66 Housing need – net of turnover and new build 1,081 -362 Housing need (net of t/o and n/b) as % of all HH 0.2% -0.1%

Total HH (2008/09) 480,099 480,099

Note1: The housing needs figures differ slightly from those in previous tables. This is because these figures are averages over the first 5 years of the projection, whereas previous figures reflected the position over year one. 9.7.5 Table 9-14 summarises the net need estimates for the next five years, assuming households in current need have access to housing benefit. It suggests that the overall level of unmet need (net of turnover) would be around be just 66 households each year; taking estimated levels of new build into account there would be a net surplus of affordable housing of around 362 units each year. However, as noted in the previous section, there are blockages in parts of the housing system, which new build is clearly required to address, so in the unlikely event the PRS was able to suitably house all those in need who had access to LHA (under current rules), there would still be a rationale for continuing with new build programmes to address housing need.

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10 Future housing market – demand assessment

Key findings

The model allows us to compare the overall demand and supply for affordable and market housing in T&W

■ The overall housing system within the T&W Metropolitan area is currently very close to being “in balance”; vacancies are around 4%. We would normally expect a level of around 3% vacancies in a housing system, to permit normal movement (the frictional rate). Vacancy rates are currently very similar across all sectors

■ The analysis suggests that demand is growing relative to supply. The initial impact of this is to reduce the level of vacancies in the system; by year 5 there are no vacancies in the system, and by year 10, demand will exceed supply by around 2%

■ Notably, vacancies decline in both the affordable and the market sector in the first few years of the forecast

■ Currently around 4% of the affordable sector is vacant at any point in time. The analysis suggests that over the next five years demand will increase relative to supply, and vacancies will decline to around 0. This will limit landlords’ ability to respond to the housing requirements of households in need – in terms of the size, type and location of housing needed. After year 5 (that is, once the main impact of current housing needs has been fed though the system) the level of flexibility within the affordable housing sector again increases

■ Currently vacancies in market housing are around 4%. The analysis would suggest that demand is such that vacancies would fall to almost 0%, and in subsequent years, that demand would exceed supply

■ In practice, housing systems rarely reach full capacity, and more likely responses will include price changes (which have an impact on demand), longer waiting lists for the social rented sector and increased development.

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10.1 Introduction

10.1.1 The final stage of the analysis is to develop estimates of demand for affordable and market housing over the next 20 years. These have been produced using the Tribal model, a spreadsheet model, which is illustrated in Figure 10-1. The model seeks to capture the main flows of households and properties within the housing system.

Figure 10-1: Dynamic model of the housing market

10.1.2 The building blocks within the model are:

■ Households in need Current housing need - from the needs estimate calculated in section 9 above

Demand from existing households falling into need

■ Demand from new households

■ Demand from existing households not in housing need

■ Supply.

10.1.3 The model estimates the number of households/dwellings in each category, and estimates which tenure they will move into.

10.1.4 We start by modelling what happens in each single year, then move on to consider what happens within the system as a whole; and in particular, to work through the implications of unmet housing needs and demand from one year to the next87. Additional

87 The technical appendix provides a more detailed explanation of how the model has been constructed, the assumptions that underpin it, and the data that have been used to populate it.

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scenarios are being developed which consider the impact of alternate assumptions relating to household projections and new supply assumptions (these will follow).

10.1.5 A number of clear issues emerge from the analysis:

■ There are some localised shortfalls in the supply of social and affordable housing

■ The analysis would suggest that the RSS new build supply assumptions would result in substantial under-supply of market housing across the region.

10.1.6 Before turning to the detailed results of the modelling some caution must be expressed.

■ Forecasts are prone to error, and this error will increase the further forward the projections are taken. Confidence with outputs is therefore much higher for the first five years than for the final few years

■ The model assumes that current tenure preferences continue across the full projection period. However, over the last few years, there has been a substantial shift in the tenure preferences of new households – with significantly more such households now entering the PRS than had been the case a few years ago. Whether this will be sustained, or a temporary shift in response to market changes is yet to be seen. The assumptions will clearly benefit from periodic review, and adjustment as necessary

■ The model applies proportions and levels of change derived from national surveys (SEH, EHCS) to household populations. This presents two issues: A very small change in the survey data can translate into a significant change when applied to all households in Tyne and Wear88 The national surveys are carried out using random samples, allowing calculation of the standard error for the outputs.89 These confidence limits must be born in mind when findings are being used. However, we cannot apply them directly to our work. 10.2 Housing need and demand

10.2.1 Table 10-1 starts by comparing the net newly arising need/demand for housing in each of the main sectors with supply from new build, on a year by year basis. As with the needs analysis above, this part of the model is static – unmet need and demand do not yet feed through into subsequent years.

10.2.2 The analysis suggests that the need/demand for affordable housing cannot be satisfied from within the existing stock within the first five years and, further, that planned levels of new build are insufficient to meet needs. Thereafter, needs can be met from within

88 For example, if the analysis suggested between 3% and 4% of all households in T&W Metropolitan area were in housing need, this would be between 14,400 and 19,200 households – a difference of around 4,800 households.

89 For example, a survey may suggest that 20.5% of households have a certain characteristic. Applying this to the Tyne and Wear population would suggest that 98,420 households have this characteristic. If the error on this percentage was ±1.5%, the actual number of T&W Metropolitan area households would vary between 91,219 and 105,622 households – a range of around 14,403 households.

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the existing stock, and that any new build would be undertaken to address issues of need/demand supply mismatches, stock reinvestment, and so on.

10.2.3 The analysis also suggests that there is a clear need for continued development in the private sector assuming household growth at projected rates, and would indicate that planned levels of development are insufficient to meet these requirements.

Table 10-1: T&W area model1 – summary of new demand/supply, annualised figures for years 1-5, 6-10, 11- 15 and 16-20, by sector

Need & demand (net Supply from 4 2 3 Balance of turnover) newbuild

Affordable housing Year 1-5 1,025 429 -596 Year 6-10 -1,570 207 1,778 Year 11-15 -1,041 207 1,249 Year 16-20 -522 207 730

Market housing Year 1-5 3,628 1,401 -2,227 Yea r 6-10 5,493 1,182 -4,311 Year 11-15 4,452 1,152 -3,300 Year 16-20 3,678 1,148 -2,529

All housing Year 1-5 4,653 1,830 -2,823 Year 6-10 3,923 1,389 -2,533 Year 11-15 3,411 1,360 -2,051 Year 16-20 3,155 1,356 -1,800

Notes: 1 The figures in this table use CLG household projections and a constant rate of new supply derived from RSS. The table presents the average figure for each of the time periods 2 This figure is the level of housing demand (incorporating current needs and demand from new households) minus supply from turnover. It is therefore represents the total amount of new supply required to address housing needs and demands. 3 Supply from new builds are presented as net of flows from open market shared equity. Such flows add to supply available each year for LCHO, but subtract from new supply available in the private sector. 4 This column estimates the level of excess supply (a positive number) or excess need/demand (negative number) when supply from turnover and planned new build are taken into account 10.2.4 Table 10-2 moves on to summarise the need and demand profile. This is the “end point” picture, where we have assumed that unmet housing needs from any one year have been fed back through the system to be addressed in future years – that is, they form a cumulative need to be met in future years. Thus the table provides an indication of the implications of running an excess of demand over a sustained period. Because these are cumulative estimates, the table picks out figures for the end of each period, and not averages for groups of years (the approach used in previous tables). We have presented findings at five points in time: a base position (year 0) and at five-year intervals. The profile is produced using ratios, which compare the total supply of homes with the total demand. A ratio of 190 would suggest that there is one dwelling for every household in need/demand. However, as noted above, housing systems require some

90 Or more accurately 1:1. We have dropped the first part of this throughout this section for brevity.

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vacancies to function effectively. In practice, a ratio value of around 0.97 (that is, a vacancy rate of around 3%) would reflect a more balanced housing system.

Table 10-2: Ratio of total supply to total demand1, T&W (ratio values2), Baseline position

Year 0 Year 5 Year 10 Year 15 Year 20 Social/intermediate housing3 0.96 1.00 0.94 0.89 0.87 Private sector housing 0.96 0.99 1.05 1.09 1.12 Overall supply to demand 0.96 1.00 1.02 1.04 1.06

Notes: 1 These estimates are taken from the last year of each 5 year period, and assume the cumulative demand/supply position at that point in time (dynamic housing model approach) 2 Ratio values – these should be expressed 1:X, (one dwelling for every X household) but the 1: has been omitted on the table for simplicity 3 These estimates apply to all affordable housing, not just the social rented sector 10.2.5 It is clear from the table that the overall housing system within the T&W area is currently very close to being “in balance”; vacancies are around 4%; with vacancy rates very similar across all sectors.

10.2.6 The model suggests over the next five years the Tyne and Wear housing market will become pressured: that is, the level of total demand will approach the level of total supply, resulting in very few vacancies within the housing system. From year five onwards the profile varies across the market sectors.

■ Need/demand for affordable housing will initially increase relative to supply, largely in response to the requirement to address backlog (current) housing need. Thereafter, the existing housing stock appears sufficient to address the level of need/demand identified. The analysis would suggest that continuing affordable housing development at target levels would result in increasing vacancies. We would stress that the model does not take account of sub-market/market segmentation, so cannot resolve issues around market (in)balance in terms of stock type and size, that were identified in section 9 above

■ The analysis suggests that the market for private sector housing tightens throughout the projection period, even assuming that supply is a delivered at target levels. Indeed, the analysis suggest that demand will have exceeded supply before year 10, and will continue to do so thereafter.

10.2.7 We stress that these conclusions are based on a series of broad assumptions about the housing system. In particular, that the conditions underpinning the needs estimates in chapter nine hold (for example, around social rented sector supply and affordable housing new build) and assuming that the RSS targets for market housing are achieved91.

91 And assuming that the /CLG population/household projections hold

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Alternative scenario 10.2.8 In section 9.5.9 we presented an alternative needs scenario, which considered the impact of assuming that all social rented sector demolitions were tenanted immediately prior to demolition. Table 10-3 runs this assumption through in the demand analysis.

10.2.9 The scenario affects only the affordable housing sector. The assumption does have an impact on the housing system – it reduces the number of social lets available during the demolitions programmes by around 350 each year. As a consequence, pressure within the affordable housing is greater than it otherwise would be. The model would suggest that by year five there is more than one household per dwelling; and while this eases over the next five years, it does so at a much slower pace than under the baseline assumptions.

10.2.10 This clearly has some implications for the housing system as a whole over the long- term: the model indicates slightly raised ratios throughout the projection period.

Table 10-2: Ratio of total supply to total demand1, T&W (ratio values2), Alternative scenario3

Year 0 Year 5 Year 10 Year 15 Year 20 Social/intermediate housing4 Baseline 0.96 1.00 0.94 0.89 0.87 Alternative scenario3 0.96 1.01 0.96 0.92 0.89 Private sector housing Baseline 0.96 0.99 1.05 1.09 1.12 Alternative scenario3 0.96 0.99 1.05 1.09 1.12 Overall supply to demand Baseline 0.96 1.00 1.02 1.04 1.06 Alternative scenario3 0.96 1.00 1.03 1.05 1.07

Notes: 1 These estimates are taken from the last year of each 5 year period, and assume the cumulative demand/supply position at that point in time (dynamic housing model approach) 2 Ratio values – these should be expressed 1:X, (one dwelling for every X household) but the 1: has been omitted on the table for simplicity 4 Assumes that 100% of properties to demolished are tenanted prior to demolition in all local authority areas except Newcastle (where the 0% assumption is retained) 3 These estimates apply to all affordable housing, not just the social rented sector

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11 Housing for vulnerable groups

Key Findings

Older people

1. There is clear evidence of a growing population of older people within the City Region. Survey research into the housing aspirations of older people would suggest that older people increasingly wish to remain in their own homes/in appropriate mainstream housing, rather than in specialist accommodation, for as long as possible. Appropriate housing is generally viewed as two-bedroom, ground floor accommodation

2. There will be a need for additional resources and specialist housing for older people who are no longer able to meet their housing needs independently. Housing support and adaptations will be required to enable households to remain in their own homes/mainstream accommodation for as long as possible; and specialist/adapted accommodation will be required for those who are no longer able to do so.

Families and overcrowding

3. The proportion of families is highest in Sunderland, and the more rural areas of North Durham, Easington and the City Region Commuter sub-area. However, overcrowding is most evident in Sunderland alone, although as with the rest of the North East, this is not identified as a particular problem for this area.

4. The lack of resources available to these households mean they are over-represented in the analysis of those in need and unable to meet their own needs, when compared to the gross housing need figures.

Households with support needs

5. Households with support needs may require purpose-built or specially adapted accommodation. The TW Metropolitan 5 area as a whole has a higher proportion of people with a limiting long-term illness (LLTI); 22% compared to the national average of 17%.

6. The proportion of those over 65 years old with a LLTI (57%) is the same as the regional average, but higher than the national figure of 49%. Sunderland (at 61%) has the highest rate of older people with a LLTI in the area. The area as a whole has 18% of all over 65s who are considered not to be in good health, with the highest proportion in Newcastle upon Tyne (22%).

Gypsy and Traveller households

7. The recent Accommodation Assessment for the Gypsy, Traveller and Travelling Show People communities in Tyne and Wear provides robust evidence of housing needs for these groups.

8. The study concluded that there is a need for an additional 74 additional pitches by 2013, around half of which are required in Sunderland. It also suggested that provision is made for authorised stopping places, where small groups of gypsies and travellers can stay for a short period (a few weeks) before moving on.

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Asylum seekers

9. Information from the Home Office indicates that there were around 1,300 asylum seekers accommodated by local authorities in September 2009 in T&W, around half of these in Newcastle. The figures are not published, but evidence suggests that the vast majority of applicants are single (around 80% nationally).

10. Home Office figures indicate that around 30% of initial asylum applications are successful and a further 21% of the 70% originally refused are upheld on appeal.

11. There is an ongoing review of older cases of failed asylum seekers by the UKBA, which is due to complete in 2011. It is anticipated that most of these, particularly those with families, will be given permission to remain. They will then be eligible to apply for local authority housing.

Homelessness

12. There were some 3,210 homeless applications to the TW Metropolitan 5 area authorities in 2008/09, equivalent to 0.7% of the household population. Homeless applications are highest in Gateshead (1.2% of the household population), and lowest in Sunderland (0.3% of households).

13. The number of applications has declined over the last few years, by 24% since 2006/07. Notably, the number of applications has declined most substantially in Sunderland (by 54% over this period)

14. In 2008/09, across T&W Metropolitan area 72% of all homeless applicants were assessed as priority need and unintentionally homeless. There is a significant variation between local authorities: 92% were assessed in this category in Newcastle, compared with 85% in Sunderland, 74% in North Tyneside, and 72% in South Tyneside, and 58% in Gateshead

15. At end of March 2009 there were 367 outstanding homelessness cases (equivalent to 11% of all applications received during 2008/09 across the TW Metropolitan 5 area). The number of homeless households waiting to have their case resolved is the lowest in South Tyneside (7%), and is relatively highest in Sunderland (18%).

16. There are currently (end March 2009) 134 households in temporary accommodation, typically in social rented housing.

Alternative forms of Provision

17. Current evidence indicates that around 0.5-0.7% of the housing stock in the five Metropolitan districts is from an intermediate source of provision, mostly shared ownership. Information on affordability indicates this form of provision may not prove to be significantly more affordable than market housing, so the scope for future provision may be limited.

11.1 Overview

11.1.1 This section looks at housing for particular needs and vulnerable groups in the Tyne & Wear City Region and considers the impact this has on housing supply. There are a number of household groups that require supported housing but this section focuses on the two largest groups in the region: older people and households with support needs (e.g. people with learning disabilities or mental health problems) - i.e. those groups which

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require specially adapted housing. Other specific groups which are prominent in the region are homeless people with support needs and families.

11.1.2 The TWHP is preparing a Housing Inclusion Strategy which is specifically looking at the need for specialised supported housing and move on accommodation from specialist support that needs to be provided as part of the affordable supply. The data here will support that strategy but is incomplete. When completed, the full set of supporting data will be used to update the SHMA model outputs as further evidence for LDF and related policies.

11.2 Housing needs of older people

11.2.1 As shown in Sections 2 and 8, a large and growing proportion of the household population is aged over 65, In 2007, 17% of the wider Tyne & Wear City Region was aged 65 or over (see Table 2-3 in Section 2, using ONS 2008 mid-year estimates). Section 2 provides more details on the recent trends in demographic change, and indicates that the population in Tyne and Wear is ageing more rapidly than the national average. This is also reflected in the number of pensioner households. Section 8.1 considers the future trends in demographics, and finds that the proportion of older people is set to increase in all sub-areas, though it is most marked in the Urban Northumberland, City Region Commuter and Sunderland sub-areas. By contrast, Newcastle upon Tyne is anticipated to show the smallest increase in the proportion of older people. The change in age structure is anticipated to be a dominant feature in trends in future household growth, more so than for elsewhere in the UK.

11.2.2 Policy is to enable people to remain in their own homes for as long as is practical, for example through the move towards individual budgets which enable people to choice in care and the support packages. Nonetheless, some people will require higher levels of support and care, which would be effectively provided in adapted accommodation or in purpose-built accommodation.

Gateshead 11.2.3 ONS population projections indicate that the people over 60 in Gateshead will represent 25% of the population in 2011 and 28% by 2021. The 2006 Housing Needs Survey (HNS) states that almost two-thirds of residents aged 60 or over are owner occupiers (64%) which suggests that there will be an increase in the needs for support at home, such as through the Home Improvement Agency (HIA). It also suggests that there is a tendency for older people to want to remain in their own homes, along with a continued need for independence and when needed, supported housing; but that there is also a lack of choice in the general market for older people.

11.2.4 The Supporting People Strategy re-emphasises the need for additional accommodation for older people and related services, and predicts an increase in demand by 200 people for Older People Services. In addition, the Joint Strategic Needs Assessment (JSNA) 2009 highlights the need to focus on providing Decent Homes to prevent excess winter deaths, particularly for the elderly on low incomes.

11.2.5 The Gateshead Housing Study for Older People showed that in terms of aspirations, there is greatest demand in both the social and private rented sector for two bedroom bungalows, which are seen as an appropriate size and easy to access. Less than 10% of respondents wanted to move into specialist housing such as sheltered housing, extra care housing or residential care.

Newcastle upon Tyne 11.2.6 The 2008 Survey of Housing Need and Demand found that almost all households containing older persons only comprised just one or two persons – mostly owner- occupiers - with nearly half of all single households comprising older persons. The survey

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also found that there was a relatively high proportion of social rented accommodation containing older people only. This suggests that there will be greater demand for specialised, social rented accommodation in the future, particularly as population projections indicate that the number of older people in Newcastle will increase significantly over the next 20 years. The preferred type of accommodation of around two-thirds of older person-only households was “ordinary” housing, not supported; although almost 20% would like sheltered housing with a warden.

North Tyneside 11.2.7 The 2007 update to the 2005 Housing Needs and Market Study estimated that there would be significant growth of the population in the over 65 age group with an increase of 35% (around 12,000 people) between 2006 to 2026, with most of the growth expected between 2011 and 2016.In particular, the study highlights a large increase in the age group aged 80 and above, with an increase of 11% between 2021 and 2026, which will inevitably be accompanied by significant demands on housing resources.

11.2.8 The 2005 Study suggested that there was a combined requirement of around 1,700 sheltered units, taking into account older people already living in the area and those who may move in to be closer to their family, with the majority in the affordable sector (64%) as opposed to the private sector.

South Tyneside 11.2.9 The 2008 Housing Market Assessment showed that the number of people aged 65 years and over is projected to increase from 18% of the population in 2008 to 25% in 2031 (around 37,900 people).As with Newcastle, there is an identified need for specialist accommodation for older people, particularly supported housing for older people with dementia and mental health problems. Demand for two bedroom bungalows and flats is high in South Tyneside, balanced against an oversupply of bedsits and one bedroom Council properties.

Sunderland 11.2.10 Sunderland’s 2008 SHMA paints a similar picture to the other four authorities, with a growing, ageing population of over 65s (expected to rise from 45,800 in 2005 to 61,900 by 2025), and with the majority of older people keen to continue living in their current home with support as necessary. Around 69% of those aged 60 or over are owner occupiers, and as such, this will increase the pressure on support services and adaptations to accommodation (e.g. better heating or bathroom adaptations). Pressure will also increase with growing demand for bungalows, smaller houses and ground floor flats (mostly with two bedrooms).

11.3 Families and overcrowding

11.3.1 The proportion of families in an area influences the mix of housing that is needed. This is particularly so in relation to populations with larger families, where overcrowding can become an issue. An analysis of household structures indicates that there is a far greater degree of differentiation in terms of the distribution of families with children (both lone parents and couples). Of the five metropolitan authorities, Sunderland has the highest proportion of families with children at 25% (just over the regional and national averages of 24%). Newcastle is at the opposite end of the spectrum with 20%. There are higher proportions evident in North Durham (25%), Easington (26%) and Northumberland: City Region Commuter sub-area (26%).

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Table 11-1: Household composition: 2001

All Households All Households Pensioner Single Adult Single Couple Pensioner no with Couple dependents dependents with Couple with no Lone parents dependents with parents Lone dependents Students Other 1 Gateshead 84,264 17% 17% 9% 23% 19% 8% 4% 0% 4% Newcastle upon 2 111,241 16% 19% 7% 20% 17% 7% 3% 2% 7% Tyne 3 North Tyneside 84,864 17% 16% 9% 24% 20% 7% 3% 0% 4% 4 South Tyneside 66,094 17% 15% 9% 22% 19% 9% 4% 0% 5% 5 Sunderland 116,356 15% 14% 8% 24% 21% 8% 4% 0% 5% Urban 6 60,980 15% 15% 8% 27% 21% 7% 3% 0% 4% Northumberland Northumberland: CR 7 44,627 15% 11% 12% 28% 23% 5% 3% 0% 4% Commuter 8 North Durham 94,171 15% 14% 9% 26% 22% 6% 3% 1% 4% 9 Easington 38,795 15% 12% 9% 25% 22% 7% 4% 0% 5% 10 TWCR 762,372 16% 15% 9% 24% 20% 7% 3% 0% 5% A TW5 (1-5) 462,819 16% 16% 8% 23% 19% 8% 4% 1% 5% B Gateshead (1) 84,264 17% 17% 9% 23% 19% 8% 4% 0% 4% C North Tyne (2+3) 196,105 16% 18% 8% 22% 18% 7% 3% 1% 6% D South Tyneside (4) 66,094 17% 15% 9% 22% 19% 9% 4% 0% 5% E Sunderland (5) 116,356 15% 14% 8% 24% 21% 8% 4% 0% 5% X North East 1,066,292 16% 15% 9% 24% 21% 7% 3% 0% 5% Y England 20,451,427 14% 16% 9% 24% 21% 6% 3% 0% 6%

Source: Census, 2001

11.3.2 The housing needs of families relate particularly to the size of the property, and evidence on household sizes suggests that the average in the metropolitan area and the city region are in line with the national average (2.3). The smallest household sizes are found within Gateshead and North Tyneside (2.2), while the largest are within Sunderland (2.4). This would suggest that overcrowding is not identified as a particular priority in the North East; figures for the region indicate that levels of overcrowding are below the national average. Given the disproportionate level of overcrowding experienced by BME households, the relatively low level of crowding in the area is likely related to the relatively low proportion of ethnic minority households in the area.

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Table 11-2: Household size: 2001

Persons per Persons Household Spaces household space 1 Gateshead 188703 84267 2.2 2 Newcastle upon Tyne 253748 111243 2.3 3 North Tyneside 189692 84861 2.2 4 South Tyneside 151122 66097 2.3 5 Sunderland 275590 116356 2.4 6 Urban Northumberland 141129 60975 2.3 Northumberland: CR 7 104767 44617 2.3 Commuter 8 North Durham 217859 94180 2.3 9 Easington 93025 38788 2.4 10 TWCR 1615635 701384 2.3 A TW5 (1-5) 1058855 462824 2.3 B Gateshead (1) 188703 84267 2.2 C North Tyne (2+3) 443440 196104 2.3 D South Tyneside (4) 151122 66097 2.3 E Sunderland (5) 275590 116356 2.4 X North East 2472884 1066292 2.3 Y England 48248150 20451427 2.4

Source: Census, 2001

11.3.3 Looking at the level of need from overcrowding identified in Section 9 above it is evident that there are over 10,500 households in housing need as a result of overcrowding across Tyne and Wear. In each of the council areas this figure represents around 12% of overall housing need (see Table 9-1).

11.3.4 Taking into account the number of households who can meet their housing needs in the market or in situ, there remain over 5,500 households in housing need due to overcrowding in the metropolitan area (see Table 9-4). In each council area 29-30% of housing need is a result of overcrowding. It is therefore evident that such households are less able to afford to meet their own housing needs than some other groups.

11.3.5 However, these figures are based on the Survey of English Housing, and will therefore include a large sampling error, due to the small sample sizes for this particular needs group. It should be noted that this has been identified as an issue with the survey results at a national level, and specific work is being undertaken to address the problem. It is therefore recommended that the need figures are updated when the nationally produced local estimates are available.

11.4 Households with support needs

11.4.1 Support may take the form of physical changes to the home ranging from a handrail or grab rail, removing a hazard, to the installation of lifts and bedroom and bathroom extensions. Other households need support in the form of social care, and intensive management, establishing or maintaining a safe and settled way of life with advice and help with finances, budgeting, access to health, services, training and employment. This may be at home, in intermediate accommodation with on site support prior to moving to a settled home. A small group of people, often homeless or rough sleepers, have a set of very complex needs that require intensive support and access to a range of supported accommodation as they move back into the community.

11.4.2 As with older people, households with support needs also require either purpose-built or specially adapted accommodation. Table 1-1 shows that the Tyne & Wear City region as

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a whole has a higher proportion of people with a long-term limiting illness (LLI); 22% compared with the national average of 17%. North Tyneside has the highest proportion of those with LLIs and not in good health (16%), whilst the Commuter region of Northumberland has the lowest at 7%.

Table 11-3: People with a long-term limiting illness (LLI) and not in good health

All people People with Percentage of Total people LLI and not in all people not Area with LLI good health in good health No % % % 1 Gateshead 188,701 23% 11% 13% 2 Newcastle upon Tyne 253,751 21% 10% 12% 3 North Tyneside 189,691 21% 16% 11% 4 South Tyneside 151,118 23% 11% 12% 5 Sunderland 275,591 24% 11% 13% 6 Northumberland: CR Coalfield 141,113 22% 10% 12% 7 Northumberland: CR Commuter 104,772 18% 7% 8% 8 North Durham 217,859 22% 10% 12% 9 Easington 93,025 30% 16% 17% 10 Tyne & Wear City Region 1,615,621 22% 11% 12% A TWCR Metropolitan 5 (1-5) 1,058,852 22% 11% 12% B Gateshead (1) 188,701 23% 11% 13% C North Tyne (2+3) 443,442 21% 10% 11% D South Tyneside (4) 151,118 23% 11% 12% E Sunderland (5) 275,591 24% 11% 13% X North East 2,472,884 22% 10% 12% Y England 48,248,150 17% 7% 9%

Source: Census 2001

11.4.3 Table 7-2 shows that of those over 65 years old in the Tyne & Wear City Region, a high proportion have LLIs (57%) which is identical to the regional average, but higher than the national figure of 49%. Within the Tyne & Wear City Region, the highest proportion of those over 65 with a LLI is Sunderland with 61% compared to just 47% in the Commuter region of Northumberland. In the region as a whole, 18% of all people over 65s consider themselves not in good health, with the highest proportion in Newcastle upon Tyne (22%).

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Table 11-4: People over 65 with a long-term limiting illness (LLI) and not in good health

People with Percentage of All people People with LLI and not in all people not 65+ LLI Area good health in good health No. % % 1 Gateshead 31,773 57% 28% 18% 2 Newcastle upon Tyne 39,493 56% 27% 22% 3 North Tyneside 32,589 55% 25% 18% 4 South Tyneside 26,001 57% 27% 17% 5 Sunderland 41,607 61% 30% 16% 6 Northumberland: CR Coalfield 21,115 58% 28% 17% 7 Northumberland: CR Commuter 18,946 47% 18% 19% 8 North Durham 33,838 57% 27% 18% 9 Easington 15,168 67% 35% 16% 10 Tyne & Wear City Region 260,530 57% 27% 18% A TWCR Metropolitan 5 (1-5) 171,463 57% 27% 18% B Gateshead (1) 31,773 57% 28% 18% C North Tyne (2+3) 72,082 55% 26% 20% D South Tyneside (4) 26,001 57% 27% 17% E Sunderland (5) 41,607 61% 30% 16% X North East 396,114 57% 26% 18% Y England 7,456,706 49% 21% 21%

Source: Census 2001

Gateshead 11.4.4 Of those residents listed as having particular illnesses or disabilities from the 2006 HNS, there is a clear relationship between age and incidence of illnesses/disability. With an increasing, ageing population, this will continue to place pressure on demand for specially adapted housing stock. The HNS sets out the number of property adaptations that are likely to be required either now or in the next five years by this household group, and the type of assistance that is required, including those arising from cultural needs. The main adaptations required were for bathrooms (16%), kitchen (16%) and internal handrails/grabrails (9%).

11.4.5 The HNS also identified that 16% (330) of the 2,077 surveyed households were homeless families, teenage parents, single homeless people with support needs and rough sleepers requiring some form of housing need. The survey showed that around 4,500 people had stayed temporarily with a friend/family in 2004/05 as they did not have a home.

Newcastle upon Tyne 11.4.6 The 2008 Housing Needs and Demand Study showed that around 24% of households had one or more members in an identified needs group (c. 27,452 households), with the largest groups being households with a medical condition (c.16,638 households) and then those with a physical disability (c.13,662 households). In addition, 40% of households living in social rented accommodation include a member with support needs.

11.4.7 The 2008 survey concluded: ■ Nearly 12,000 households need adaptations to their homes

■ A further 7,773 homes have an additional requirement for support within the home

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■ Around 1,680 households with support needs will have to move to alternative housing with specialist care or adaptations.

North Tyneside 11.4.8 The 2005 Housing Markets and Needs Study found that 27% of households in the area included one or more members with a disability (c. 21,561 households). Over half of these households included someone with a walking difficulty, of whom around 1,730 were wheelchair users living in unsuitable accommodation.

11.4.9 41.4% of households surveyed (9,447 implied) indicated that they needed care or support with the most required type of support being ‘looking after the home’. Of households which were moving, 47% wanted Council/HA sheltered housing and 27.1% wanted independent accommodation with external support.

11.4.10 Figures in the Supported People Strategy show that in January 2005, there were 2,760 clients in North Tyneside of which 2,420 were older people with support needs living mostly in sheltered housing, but also in very sheltered housing.

South Tyneside 11.4.11 The 2008 HMA indicated that over 17% of household members require care and support, translating to 11,022 households across South Tyneside. Of those requiring care and support, 78% receive it (largely through family followed by social services) although 1,630 households said they were not receiving the care and support required. Of those that do not currently receive support, they require help with gardening (44%) and general repairs (41%) to their homes.

11.4.12 The Supported People Strategy 2005-2010 identified that the local authority provided most (83%) of the accommodation for the supported groups with 71% provided by the housing department and 12% by the social care and health departments. It also identified the fact that compared with other authorities, South Tyneside is under provided for in terms of units of support per 1,000 people in the authority, particularly for single homeless people, people with mental health problems and young people at risk.

11.4.13 The South Tyneside BME Housing and Supports Needs report suggests that across all ethnic groups, there is desire to move to larger accommodation for children and older members of the family and that there are issues with overcrowding and harassment.

Sunderland 11.4.14 The 2008 SHMA household survey showed that around 65,313 residents, or 28.9% of the population, had an illness or disability, with physical disability being one of the main reported illnesses/disabilities. Of these households, the main types of special adaptations to accommodation were: better heating/insulation; and adaptations to the bathroom and kitchen.

11.5 Asylum Seekers

11.5.1 The UK Border Agency provides accommodation support for a large proportion of the asylum seekers who are re-located to the North East through the disbursal process. Some of these are placed in local authority housing, while others are placed in private rented accommodation. Around half of the asylum seekers disbursed to the North East are allocated by the North East Consortium Asylum Support Service (NECASS, a consortium of local authorities), while the other half are allocated to two private companies who provide private rented accommodation within the Tyne and Wear area.

11.5.2 The information on the arrival, dispersal and decisions on asylum seekers is provided by the home office. However, much of this information is provided at the national level, and it

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is therefore difficult to make accurate predictions about how the numbers apply to the North East. The most accurate information available at the local authority level relates to the total number of asylum seekers supported in accommodation (ie. including dependents), as given in Table 1-1 below.92

11.5.3 This table shows that there are significantly more asylum seekers in Newcastle than in any of the other local authorities, accounting for around half those in Tyne and Wear. Gateshead and Sunderland each take around 10% of the regional total, and North and South Tyneside each take 5%.It is also evident that the number of asylum seekers in accommodation has fallen since 2008, and this is a trend replicated across the country. As the table shows, any sharp changes in the numbers arriving will be masked by the higher proportion of those already present and in accommodation.

Table 11-5 Asylum seekers supported in accommodation by local authority, as at the end of September 2008 and September 2009.

Number of applicants (including dependents) 2008 2009 % of all Local Authority No North East Gateshead 275 200 10% Newcastle upon Tyne 745 630 30% North Tyneside 130 95 5% South Tyneside 120 110 5% Sunderland 210 225 11% Tyne and Wear total 1,480 1,260 60% North East total 2,365 2,095 100%

Source: Control of Immigration: Quarterly Statistical Summaries, Q3 2008 and Q3 2009, Home Office

11.5.4 This table shows the total number of asylum seekers, including dependents. When considering the implications of housing asylum seekers it is important to consider the number and size of the households, rather than overall numbers. These figures are not published, but evidence suggests that the vast majority of applicants are single (around 80% nationally).At the local level, there is a big variation in the proportion of families placed with different local authorities, and those accommodating the largest numbers of applicants have a higher proportion of single applicants than those accommodating fewer asylum seekers. This is particularly significant when larger households require accommodation, which is inevitably more difficult to provide.

11.5.5 At the regional level, around half of all applicants are accommodated by local authorities with half being housing in the private rented sector. However, this pattern varies significantly at the local authority level. Some local authorities have been able to accommodate a much higher proportion of asylum seekers than others – Gateshead provides the highest proportion of local authority accommodation, and North Tyneside the lowest proportion (based on provision information provided by NECASS).

11.5.6 Looking at future accommodation requirements, there are two main elements to consider:

■ The number of asylum seekers arriving and requiring accommodation

92 It should be noted that we have been given figures from a number of sources, and as many do not tally with the official Home Office publications, they should be treated with caution. We have relied heavily on the official statistics and only use the others as indications of trends.

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■ The number of asylum seekers being granted permission to remain, and either moving into the social rented or private rented sectors.

11.5.7 An analysis of the numbers of asylum seekers arriving in the UK shows that there has been a general downward trend since 2002 (see Figure 1-1 below), though 2008 saw a small increase on the previous year.

Figure 11-1 Applications for asylum excluding dependents from 1999-2008.

90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Applicants excluding dependents excluding Applicants 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 (P)

Source: Control of Immigration: Statistics UK 2008 Home Office Statistical Bulletin, August 2009.

(P): 2008 figures are provisional

11.5.8 There is an ongoing review of older cases of failed asylum seekers by the UKBA, which is due to complete in 2011.This review covers around half of those in accommodation in the North East, and it is anticipated that most of these, particularly those with families, will be given permission to remain. This could create significant challenges for local authorities, particularly those which are currently heavily reliant on the private rented sector. When the applicants are granted permission to remain they become eligible to apply for local authority housing, and such housing for families is often in short supply. Another issue may be the timing of these reviews, with many applicants granted leave to remain at the same time, thus causing a ‘glut’ of applicants onto housing registers and in need of housing.

11.5.9 This may be a particularly problematic issue for Newcastle, Gateshead and Sunderland, as they currently accommodate the highest number of applicants. However, North Tyneside may also find this issue causes problems, as they are accommodating a relatively large proportion of families and are completely reliant on the private rented sector at present.

11.5.10 As well as these older cases, new cases are also being decided on an ongoing basis, and these usually feed slowly into housing need figures. Home Office figures indicate that around 30% of initial asylum applications are successful and a further 21% of the 70% originally refused are upheld on appeal. Thus we can make the rough assumption that around 45% of households provided with temporary accommodation will be given the right to stay and require re-housing. Combined with the evidence relating to the review of older

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cases, a substantial proportion (around 63%93) of the existing asylum seekers in the Tyne and Wear Region could flow into the housing need figures over the next two years.

11.6 Gypsy, Traveller and Travelling Showpeople households

11.6.1 A recent Accommodation Assessment for the Gypsy and Traveller and Travelling Showpeople communities in Tyne and Wear provides the most robust evidence of housing needs for these groups. This will feed into the Regional Spatial Strategy so that appropriate account can be taken of their needs through land use planning.

11.6.2 The assessment identified three distinct groups of people within these communities:

■ Travelling Show People –the largest group, (around 152 families) who have existing bases in the area in Sunderland and South Tyneside

■ People with homes but who may still travel “the bricks and mortar community” – it is difficult to measure this group but it is estimated that there are at least 100 families

■ People who travel for part of the year but who see Tyne and Wear as their home base – currently there are only two authorised sites in Tyne and Wear one of which has only temporary permission (a total of 21 pitches).

11.6.3 In addition to the needs of these three groups, the assessment identified a need to make provision for authorised stopping places where small groups of gypsies and travellers can stay for a short period (a few weeks) before moving on. This was considered important for households in each of these groups, as a way of enabling family visits and to help maintain the tradition of travelling. It was evident from the survey that such accommodation would predominantly be used by families from outside the region, as most of those who travelled, mostly travelled further afield, to other parts of the UK.

11.6.4 In terms of provision for residential accommodation, the assessment identified needs based on existing populations, as shown in the table below. This shows that there will be an overall need for 74 additional new pitches in Tyne and Wear between 2009 and 2013.Sunderland shows the greatest requirement for more pitches over the coming years, though demand for provision is often skewed towards where there is existing provision, as this is where people are available for survey. It is therefore important to look at the overall needs of the region before specifying a location.

93 This is based on the following assumptions:

- 50% of existing cases will fall under the review programme of older cases;

- 80% of these older cases being granted leave to remain in some form; and

- of the remaining 50%, 45% will be granted asylum.

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Table 11-6: Residential accommodation need arising from existing district level Gypsy and Traveller and Travelling Show People populations (pitches)

North South T&W Total Gateshead Newcastle Sunderland Tyneside Tyneside

Current authorised 94 173 14 0 0 32 127 residential provision Additional residential 74 9 7 8 11 39 need 2008-2013 Additional residential 29 4 1 1 5 18 need 2013-2018

Additional residential 103 13 8 9 16 57 need 2008-2018

* Note: Figures have been rounded up to the nearest whole pitch

Source: Tyne and Wear Gypsy and traveller and Travelling Showpeople Accommodation Needs Assessment, 2009

11.6.5 The survey for the needs assessment revealed that there was a preference for new residential sites to have a capacity of around 20 pitches.

11.6.6 The assessment also identified a number of other significant factors that impact on wider housing provision:

■ A significant minority of gypsy and traveller households were over 60 years of age (20%).This is combined with the finding that getting older was one of the main reasons for not travelling and remaining on their residential site

■ Household size is significantly larger than in the settled/ non-Traveller population, at 3.9 persons, and young families are the predominant household type

■ There is a sense of belonging to the area for a majority of Gypsies and Travellers, and many gave ‘family connections’ as the main reason for living where they do.

11.6.7 The study identified significant difficulties in determining the size of the Gypsy and Traveller community in bricks and mortar housing. This is significant as these people have specific housing needs which may be difficult to meet. For example, one common form of unauthorised encampment was identified as staying on land owned by friends or family, including driveways and gardens.

11.6.8 Some of those surveyed during the research identified housing support needs. These included issues such as filling in forms, accessing a GP, accessing legal services, support with planning, harassment issues and finding accommodation.

11.7 Homelessness

11.7.1 This section considers the number of households who experience homelessness in each authority and consider the impact this has on housing supply.

94 These are approximations of the provision (public and private) based on information obtained from the authorities during the course of the assessment. This includes Gypsy and Traveller and Travelling Showpeople sites.

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11.7.2 Table 7-3 shows the number of homeless applications received by each local authority during the past three financial years. Applications have declined in the T&W Metropolitan area by around 24% over this period, although the actual rates of change have varied markedly between the different authorities. Only one authority – North Tyneside – has seen applications increase (by 2%). Elsewhere applications have decreased, between 17% in South Tyneside and 54% in Sunderland.

11.7.3 Overall, homeless applicants are equivalent to some 0.7% of the total T&W Metropolitan area household population. This proportion was highest in Gateshead (1.2%) and lowest in Sunderland, where only 0.3% of households presented as homeless. This reflects a recent decline in numbers in Sunderland which may reflect a focus on preventative work.

Table 11-7: Homeless applications received, 2007 – 2009

% change Applications as % from 06/07 No. of of all households, 2006/07 2007/08 2008/09 to 08/092 households1 2008/092 Gateshead 1,279 1,149 1,043 -18% 85,180 1.2% Newcastle 795 539 499 -37% 115,284 0.4% North Tyneside 885 812 905 2% 86,520 1.0% South Tyneside 491 424 409 -17% 66,768 0.6% Sunderland 773 420 354 -54% 119,525 0.3% TWCR Metropolitan 5 4,223 3,344 3,210 -24% 473,277 0.7% North East 7,100 5,620 - -21% 1,095,000 0.5% England 137,690 117,460 - -15% 21,062,000 0.6% Notes: 1. 2006 mid-year household estimate. Source: CLG (2009). 2. Since the 2008/09 data are not available for the North East and England, the 2007/08 counts have been used instead. 3. The dash denotes that these data are not publicly available as of August 2009. Source: P1E, Homelessness Statistics, Local authorities’ action under the homelessness provisions of the 1985 and 1996 Housing Acts, CLG. 2009.

11.7.4 In 2008/09, across T&W Metropolitan area 72% of all homeless applicants are assessed as priority need and unintentionally homeless. Interestingly, there is a significant amount of variance across the local authorities: 92% are assessed within this category in Newcastle, compared with 85% in Sunderland, 74% in North Tyneside, and 72% in South Tyneside, but only 58% in Gateshead.

11.7.5 Households assessed as homeless but not in priority need account for less than 5% of homeless households in Sunderland and Newcastle. In comparison, this group accounted for 35% of homeless households in Gateshead, 19% of homeless households in North Tyneside, and 10% in South Tyneside.

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Table 11-8: Number assessed as homeless/potentially homeless, 2006/07-2008/09

2006/07 2007/08 2008/09 Gateshead Priority need 661 520 457 Priority need, but intentionally 54 55 55 Non Priority Need 286 292 274 Total 1,001 867 786 Newcastle Priority need 523 341 312 Priority need, but intentionally 43 30 17 Non Priority Need 13 9 10 Total 579 380 339 North Tyneside Priority need 582 578 648 Priority need, but intentionally 90 67 64 Non Priority Need 185 148 168 Total 857 793 880 South Tyneside Priority need 253 214 217 Priority need, but intentionally 79 59 52 Non Priority Need 32 37 31 Total 364 310 300 Sunderland Priority need 531 255 217 Priority need, but intentionally 49 29 28 Non Priority Need 26 10 11 Total 606 294 256 TWCR Priority need 2,550 1,908 1,851 Metropolitan 5 Priority need, but intentionally 315 240 216 Non Priority Need 542 496 494 Total 3,407 2,644 2,561 Source: P1E, Homelessness Statistics, Local authorities’ action under the homelessness provisions of the 1985 and 1996 Housing Acts, CLG. 2009. 11.7.6 The total number of homeless households across the region declined slightly – down 3% - in 2008/09 from the previous year. At the local authority level, Sunderland records the largest reduction in homeless households; down by 13% from the previous year. North Tyneside, however, experiences 11% growth in households experiencing homelessness.

11.7.7 Table 7-5 shows the number of outstanding homeless cases in each local authority as at 31 March 2009. Such cases are equivalent to just over a tenth (11%) of all applications received during 2008/09, in the T&W Metropolitan area. The number of homeless households waiting to have their case resolved is the lowest in South Tyneside with only have 7%, or 30 households, and is proportionally highest in Sunderland.

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Table 11-9: Outstanding homelessness cases as at March 31st 2009

No. of applications received % of applications received during 2008/09 during 2008/09 Gateshead 94 9% Newcastle 74 15% North Tyneside 105 12% South Tyneside 30 7% Sunderland 64 18% TWCR Metropolitan 5 367 11% Source: P1E, Homelessness Statistics, Local authorities’ action under the homelessness provisions of the 1985 and 1996 Housing Acts, CLG. 2009.

Homeless households in temporary accommodation 11.7.8 The main homelessness duty of the local authority for households assessed as unintentionally homeless, in priority need and eligible for assistance is to ensure suitable sustainable accommodation is provided. However, until suitable accommodation is secured, households fitting these criteria have the right to stay in temporary accommodation until an offer is made. In line with government policy, the use of hostel and bed and breakfast accommodation is kept to a minimum. Most cases are helped as homeless at home or in self-contained temporary social housing.

11.7.9 The number of households in temporary accommodation in each local authority is shown in Table 7-6 In the Tyne and Wear region, a total of 134 households were in temporary accommodation as at 31st March 2009, some 0.03% of the total household population. This ratio was highest in North Tyneside (0.06%) and lowest in Sunderland (0.01%).

Table 11-10: Total number of households in Temporary Accommodation, 31st March 2009

Area Social Hostel B&B Other Total % of all sector Hhlds

Gateshead 19 1 1 0 21 0.02% Newcastle 30 8 0 0 38 0.03% North Tyneside 53 0 0 0 53 0.06% South Tyneside 7 0 6 0 13 0.02% Sunderland 4 0 5 0 9 0.01% TWCR Metropolitan 5 113 9 12 0 134 0.03% Source: P1E, Homelessness Statistics, Local authorities’ action under the homelessness provisions of the 1985 and 1996 Housing Acts, CLG. 2009. 11.7.10 To conclude, the volume of the households who are deemed to be homeless is decreasing across the Tyne and Wear region. The number of outstanding homeless households is relatively small, but significant, as is the number of households in temporary accommodation. This may not be impacting greatly on the demand for housing now, but continuing to meet the needs of these households will lead to more demand for affordable long term housing in the longer term, and consequently, to meet this increase, the supply of sustainable accommodation may need to expand. The number of people made homeless as a result of re-possession by lenders may be expected to increase next year as the effects of unemployment bites (a known economic cycle lag).Strong efforts are being made to minimise this outcome.

11.8 Alternative forms of provision

11.8.1 In addition to the provision of affordable housing, there is a small amount of existing alternative provision in marginal tenures. This includes low cost market housing and

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intermediate affordable housing. Section 7.2 explores the potential role of these alternative forms of provision in addressing existing and future needs, while chapter 9.5 sets out contains information of the level of potential take-up of intermediate housing by households currently in housing need.

11.8.2 Current provision of this form is low, as is evident from the local Housing Needs Assessments, which identify the following provision. The Census also has information on shared ownership, and analysis of this data indicates that in each area the level of shared ownership represents 0.5-0.6% of the housing stock.

Table 111-3: Intermediate housing provision, as detailed in local studies and Census data.

Area Existing Proportion of all Demand Shared provision* stock * indicated in Ownership** survey* Gateshead (2006) 119 0.14% - 385 Newcastle (2008) - - 0.5% 508 North Tyneside (2009) 376 0.4% - 506 South Tyneside (2008/9) - 0.33 - 332 Sunderland (2007) 189 0.15% - 564 Sources: *District level housing needs assessments ** Census, 2001 11.8.3 Intermediate housing is still in its infancy. The HCA is encouraging registered providers to invest in the sector, as this will stretch grant, and widen the range of options open to households in housing need/unable to afford market housing. Consequently, we might expect the number of intermediate housing units to increase. However, given the limited difference between costs between intermediate housing products and market products in some areas, it is unclear whether this form of provision will improve access/appear an attractive option, either to those in need or to those trying to get started on the housing ladder.

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12 Conclusions and recommendations

12.1.1 In this final chapter we pull together the findings from the various sections and point to the implications of these findings for policy and strategy formation.

Tenure change 12.1.2 The social rented sector in Tyne & Wear is substantial: the sector accounts for 25% of homes in the City Region, and 28% of homes in the metropolitan area. This compares to just 18% across England as a whole. Nonetheless, there have been marked changes in the sector; both in terms of the size of the stock, and in the ownership and management of the stock. The right to buy (and increasingly, the right to acquire) has substantially reduced the housing stock within the sector. It has also shifted the profile of the stock available, as the stock most likely to be sold is the better quality, larger family housing, while the stock that is less likely to be sold is smaller, poorer quality, flatted housing. Thus landlords find it especially difficult to meet housing needs and respond to housing aspirations among some key household types and, in some cases, in some particular areas (where all/most of the stock has been sold). RTB/RTA rates have been declining over recent years, and have fallen away to almost nothing since the recession. However, it seems possible that there will be, at least a partial, recovery in these rates over the next few years (barring a marked change in central government policy…), both in response to economic recovery and as a result of continued investment in the housing stock in order to meet the Decent Homes standard. New development has not kept pace with sales, and overall, the affordable stock is in decline. Authorities are therefore faced with the dual challenge of delivering sufficient homes to meet needs and demand for affordable housing; and ensuring the overall profile of their housing stock is fit for purpose in that the that the size, type and location of the properties meets the requirements/aspirations of these households.

12.1.3 Compared with the national average (Eng: 69%), the owner occupied sector represents a substantially lower proportion of the City Region’s stock (62%), and even lower in TW5 (59%). Quality conditions in the sector are good by national averages. This segment has seen substantial growth in the nineties and 2000s, driven by right-to-buy and an increase in the supply of new market housing fuelled by the property boom. Prices had been rising at a level far higher than household incomes and as a result affordability had radically deteriorated. Since the peak in 2007 both the volume and value of sales has declined markedly, but access to owner occupation has continued to deteriorate, with access to finance and a lack of buyer confidence being two of the major reasons underpinning this ongoing difficultly in households entering the sector. The view of estate agents is that though the tentative signs of a recovery are evident, the market is not yet in equilibrium and further price falls may occur. The impact of the recession on the overall size of the sector remains unclear. In the short term, there may be additional pressure on other tenure types, but in the medium-long term, this sector is expected to continue getting closer to regional and national averages.

12.1.4 Following several decades of decline, over the recent years the private rented sector (PRS) has become revitalised. Key demand drivers were an increased in the number of students in higher education, young professionals and young workers deciding (and in some cases, needing) to stay in the sector for longer, and an increase in workers from the EU accession states. Nationally, the sector grew by almost 50% over the ten years to the 2001 census. It has almost certainly continued to grow thereafter; it has at worst remained static, and at best continued to grow, through the recession. The PRS in T&W is small relative to England as a whole (housing around 7% of households, compared with 10% nationally), and growth has been slower (at around 38% for the city region, 30% for the Metropolitan area). Nonetheless, the sector locally is significant, and is growing. In Newcastle in particular the sector is large – accounting for around 12% of all households at the last census. The structure of the Newcastle sector would suggest that it was well-

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placed to continue growing post-2001 and to have withstood the recession. Much of the sector’s growth was grounded in the growth in the student, young professional and migrant workers market segments; all of which were a feature of the Newcastle sector. Elsewhere, the sector is smaller, and growth appears to have built on more “traditional” PRS market segments – low income households and households on benefits. Growth in Gateshead has been particularly sluggish (just around 7% over the 10 years to 2001) because some PRS stock has been demolished as part of the housing renewal programme. The sector is similar to the non-Newcastle sector; we might expect growth rates more in line with those elsewhere in the Metropolitan area from now on.

Reconciling demand and supply 12.1.5 As noted above, the baseline assumptions contained within this report rely heavily on those adopted in the RSS. These are not likely to be realised, and it is important that the Partnership gets a more realistic sense of future supply, so that a balance can be achieved in the future. This will most likely draw from the SHLAA process and the close joint working achieved around that process.

12.1.6 Those supply levels in turn need to be responsive to the evidence presented in this report about the overall level of need and demand, and their spatial distribution. By looking at need and demand alongside supply, authorities can get a better sense of what the capacity is within the system to accommodate need and demand through new provision (this is a second step after looking at what the existing supply can do). Once gaps have been identified, particular focus should be paid to the role of the Growth Points in filling these gaps.

12.1.7 Implications: The Partnership should seek to review the information in this SHMA, alongside the SHLAAs, with a view to getting a shared evidence base of the housing system in terms of need, demand and capacity. A standardised reporting framework similar to the Annual Monitoring Reports for the Regional Spatial Strategy might be explored – this could draw from the work already begun in the preparation of a Regional Implementation Guidance for SHMAs in the North East. This would have the added benefit of simplifying SHMA updates, or a future SHMA.

What’s selling versus policy priorities – opposing perspectives? 12.1.8 Market intelligence suggests that current development and movement in the market places is concentrated on ‘easy’ sites in ‘good’ neighbourhoods, with traditional products aimed at the family market. Policy priorities in most parts of Tyne & Wear favour a format which prioritises regeneration of the urban core, especially within designated regeneration areas. The two at first glance appear challenging to reconcile.

12.1.9 Developers are either unwilling or unable to develop on more challenging sites at the moment, while the public purse is highly constrained and thus will struggle to supply the required finance to ensure ongoing development within regeneration areas. Certain key elements of future housing supply are likely to fall into the category of ‘easy’ sites, for example, much of North Tyneside’s Growth Point, and parts of SE Northumberland’s and Newcastle and Gateshead’s Growth Points. For the latter two growth points (and more generally for complex regeneration/brownfield sites) developer preference will likely avoid these sites in the short term until the economics of the sites improve.

12.1.10 Despite these pressures, planners and housing professionals must not fall into a trap of seeing delivery at all cost as an option. Poorly planned sites in the wrong locations build in long term costs to society in terms of the provision of additional community and social infrastructure, the environmental and economic costs of urban sprawl. A balance must be reached in the short term to support delivery but in a manner which does not compromise on either sustainable development principles, or on housing and place quality levels.

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12.1.11 Implications: The delivery of private sector investment into regeneration areas is likely to be especially difficult in the short term. For the public sector, this will involve taking on more of the burden of delivery in some cases, removing obstacles to private sector delivery in others, and a re-ordering of priorities and delivery timeframes. The sooner realistic clarity can be achieved on priorities, the better.

12.1.12 Both the public and private sector must work together to remove obstacles to delivery, whilst maintaining a commitment to the sustainable evolution of the city region and a continuing improvement of the quality of both the housing stock and the city region’s places.

12.1.13 Attention should be given to exploring new housing typologies which are based on family friendly environments in more inner suburban/urban locations. This new ‘product’ might go some way in addressing the gap between the desire of developers for edge of centre ‘easy’ locations and policy priorities which support the urban core.

12.1.14 Unless it is believed that areas can change and evolve, it is likely that current patterns of pressure will continue – the market will sometimes need additional support and encouragement to realise the potential in areas of opportunity, which suggests a role for the public sector in supporting demonstration projects in such areas.

Understanding the role of places – the city region story 12.1.15 Authorities will need to think about the role of places at the level of localities and to understand their role and function in relation to the city region housing market. In so doing, we can begin to stitch together a policy framework which allows us to look at where market demand might be accommodated in different ways (i.e. not necessarily new build) and thinking more dynamically about the role of place types. This is especially useful in terms of thinking about how different sorts of places interact with each other and where they may be gaps in provision. This helps us to think through what sorts of places might be required in strategic areas of change (e.g. Growth Points). Thinking about the demand for place types is less about a housing system, and more about the local level activities that support strong, diverse communities. The Residential Futures work in Tyne & Wear argued that having a sufficient supply of quality localities remains one of the greatest challenges facing Northern city regions.

12.1.16 At a more strategic level, this greater local level of understanding, could then be used to help tell the ‘story’ of the city region’s places for the first time. Getting a narrative right, which explains the role of places, their interrelationships and direction of travel, has proven to be a very successful part of BNG’s strategy formation and one which has helped to provide structure for their investment activities. Such an approach might well prove a useful building block for the city region’s engagement with the HCA through the Single Conversation.

12.1.17 Implications: the city region should look at gaining a greater understanding of place types across the city region to help inform strategy formulation and to help tell the city region’s story of place narrative. This might be explored in the context of the Single Conversation process.

Low demand – a closed chapter? 12.1.18 Significant investment has occurred in re-structuring the housing provision in areas of low demand in the city region, as epitomised by the Bridging NewcastleGateshead housing market renewal pathfinder. These activities have see a large volume of unwanted / low quality stock being demolished, and substantial renovations and area improvements taking place in the remainder of their area. As widely reported, prices, turnover levels and the level of voids (traditional indicators of low demand) have all improved in the bulk of targeted areas. It is not possible to demonstrate conclusively that the recession is as yet having a disproportionate impact on these localities (or indeed whether there has been a

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disproportionate impact on some neighbourhoods over others). It is too early for concrete data to have come through. The price data currently tells a mixed and unclear story, from which we are unwilling to draw any conclusions due to the very low level of transactions occurring.

12.1.19 However, anecdotal evidence from estate agents suggests that lower value properties are struggling to find sales as their market (first-time buyers and lower income households) have been particularly exposed to the so-called ‘credit crunch’. There has also been some suggestion that buyers are being more selective in terms of the neighbourhoods they are willing to buy in, possibly connected with expectations about long-term value.

12.1.20 Implications: This is an area of particular interest to a variety of stakeholders in the city region and this will need detailed and frequent monitoring of price levels, turnover levels, voids and we would also suggest some qualitative research looking at the obstacles to purchasing for key market segments, with a view to developing some innovative financial products targeted at first time buyers and lower income households (a sort-of BNG mortgage facility?), which could be used to stimulate demand in targeted areas.

Housing need 12.1.21 In summary, there are currently around 18,712 households with unmet housing needs. The guidance assumes that it will take housing authorities some time to address all these needs, and allows a period of five years. We have therefore assumed c. 3,742 will be met in each of the next five years. We would also expect a number of households to fall into housing need each year: there are around 1,432 new households in the area who would not be able to afford to meet their housing needs in the first year of the planning period, and an estimated 2,754 existing households who would fall into housing need over the year. In total we would expect the Tyne and Wear authorities to have to find housing for around 8,042 households in need for the next 5 years95.

12.1.22 The authorities will have some housing available to respond to this demand: an estimated 6,533 homes will become available to let from natural turnover in the stock, and around 428 new affordable properties are planned for development each year. This is not enough to meet the estimated level of demand. If we ignore the new development, the level of unmet need is around 1,509 households for the next five years. If we assume the planned level of new build is achieved, the level of unmet need is around 1,081 households. These are the households for whom additional housing solutions are required – and we stress solutions; these can be around work with the private rented sector, new housing management solutions, bringing empty properties back into use, and so on. The net need figures do not translate directly into a requirement for new affordable housing.

12.1.23 However, we would stress that these net figures provide only a partial picture of housing needs in Tyne and Wear. It is absolutely critical that the gross flows that underlie the net figures are properly understood if landlords are to fully address the needs that arise in their area. Thus, while net needs are around 1,500, it should be borne in mind that ■ There are currently 18,712 households in housing need within Tyne and Wear, who are unable to meet their needs in the market or in situ. Certainly the guidance recommends that these households are dealt with over a period of five years, but these households are in need just now and many will require immediate action (for example, some are in temporary accommodation, some are asylum seekers who will granted leave to remain, and so on), many will visit council offices, elected members

95 This is the average for the next 5 years. The previous figures in the paragraph relate to the year 1 figures. The figures do not sum.

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surgeries, Shelter/CAB offices over the course of the year. We may “programme in” their needs to be met over a five year period, but these households will not realise this – they still have housing needs, and will expect (need) them to be met

■ Even assuming that only part of the current need has to be met each year, as the analysis in chapter 9 demonstrated, this supply is not only insufficient to fully address the level of need identified; the profile of the housing supply is not quite right to meet the requirements of the households in need. The overall shortfall in supply is around 1,080 homes. However as Table 9-13 clearly shows; each year there would be a shortfall of around 980 1/2 bedroom homes, and around 730 4/4+ bedroom homes. And to some extent that analysis may under-estimate the overall level of need, as it assumes no other constraints – for example, in terms of property type or location (beyond specific local authority).

12.1.24 There are two other issues that authorities should also be aware of within the analysis. First, there is a substantial amount of housing need among social renters (around 9,000 tenants in T&W). The guidance assumes that this need can be addressed through a series of transfers or modifications to existing homes (either to improve the quality of homes or to install aids/adaptations as required). Need from social renters is not, therefore, considered to add to the net need for affordable housing.

12.1.25 Nevertheless, the need from social renters will impact on housing authorities and landlords: managing transfers is not resource neutral, in both staff and investment terms. Authorities/landlords will clearly need to develop approaches to resolving need among social tenants. Further, it is our view that authorities will need to carefully consider the extent to which managing need in the social rented sector might impact on the overall level of net need. For example: ■ The level of lets allocated to transfers may impact on the volume of lets available to new tenants, adjusting priorities between existing tenants and new tenants may affect the outcomes of the needs assessment ■ The analysis notes a significant level of overcrowding among existing tenants. Table 9- 13 clearly demonstrated a shortage of larger properties; which suggests that opportunities to resolve this group’s housing needs through transfers will be limited. There are around 5,000 overcrowded households currently in the social rented sector – last year around 180 4/4+ bedroom properties, and about 2,150 3-bedroom properties came up for let96 - a huge gap between need and supply. Strategies for addressing overcrowding may include new investment.

12.1.26 Second, we have calculated that many of the households initially identified as being in housing need (in table 9-1) would be able to address their housing needs themselves – either by affording market housing (bought or rented) or by adapting/repairing their current home. It could be argued that some of these households are not able to do so; for example, they are not able to purchase alternative housing because of debts/CCJs/insecure employment. Estimates of housing need, while following the approach set out in the practice guidance, may therefore under-estimate true levels of need within the local area.

96 Note, these lets figures have been adjusted downwards slightly, to fits with the net approach used in the calculation. Adjustments have been made with respect to deaths and out-migration

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Housing demand 12.1.27 The Tribal model permits analysis of the need/demand for housing within T&W Metropolitan area.

12.1.28 The affordable housing sector currently appears close to balance, with about 4% of the stock vacant at any point in time. An allowance of around 3% vacancies is typically considered acceptable, to permit effective housing management (for example, to match housing needs to vacancies, in terms of property type, size and location); and to manage stock conditions (effect repairs and housing investment). We would hope that most of these are not long term vacancies (“dead” properties), but properties that turnover fairly quickly (assessed against housing need, possibly subject to voids maintenance or investment to improve their quality/make them suitable for an applicant with a disability), and then relet – either to a household in need, or to a transfer.

12.1.29 Initially the excess supply of AH declines, in response to addressing current needs. This puts pressure on landlords to find housing for 18,000 households – over a five year period, in addition to around 4,300 households estimated to fall into housing need each year. The consequence is that the “excess” supply of affordable housing is eliminated by year 5. This is very tight; as it means landlords are likely to have insufficient circulating stock to match needs/demands against supply, let alone undertake major repairs/investment works. The needs analysis provides information on mismatch of property sizes. However, it suggests that once the current need has been resolved, there is sufficient stock to meet need. It doesn’t take account of the longer term impact of not being able to address current need, nor the competing pressures on the housing stock. The demand model sets out the clear implications of seeking to address the pressures of current need within the five year period.

12.1.30 Turning to the analysis of market housing; the model would suggest that currently the T&W housing system is broadly in balance, with around 4% of the stock vacant (this is in line with figures in table 3-1).However, demand is forecast to grow relative to supply, and, as a result, vacancies are expected to decrease (to 1% by year 5), even assuming that supply is delivered at a level of around 1,200-1,400 units per annum. In practice, housing systems rarely reach full capacity, and more likely responses will include price changes (which have an impact on demand) and increased development.

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Appendix A: Additional SRS tables

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Table A-01: New tenants by ethnic origin

Chinese/Other Refuse White Mixed Asian/Asian British Black/Black British d to Total ethnic group answer

White White & White & Bangl Caribb Chin- British Irish( Other( Black & Other( Pakist Other( Africa Other( Other Black Indian a- - ese(% (%) %) %) Caribb Asian( %) ani(%) %) n(%) %) (%) (%) (%) Africa (%) deshi( ean(% ) ean(% %) n (%) %) ) ) 1 Gateshead 91 - 2 - 1 - 1 0.3 0.3 - 1 0.3 2 - - 1 0.3 100 Newcastle upon 2 81 0.2 3 - 0.4 0.4 1 0.4 1 2 1 0.4 3 0.4 1 3 1 100 Tyne 3 North Tyneside 95 0.3 1 - 1 0.3 1 - - 0.3 0.3 - 1 - - - 1 100 4 South Tyneside 97 - - - 1 0.3 0.3 - - 0.3 0.3 - 1 - - - - 100 5 Sunderland 98 0.2 1 0.04 0.1 0.04 0.1 - 0.04 0.1 0.2 - 0.4 0.04 0.04 0.1 100 Northumberland: 6 96 1 2 - - - - - 0.3 ------99 CR Coalfield Northumberland: 7 99 0.3 1 - - 0.3 ------100 CR Commuter 8 North Durham 98 - 0.5 0.1 - - 0.1 0.1 - 0.1 0.2 - 0.2 - - 0.1 0.2 100 9 Easington 99 1 ------100 1 Tyne & Wear City 96 0.2 1 0.03 0.2 0.1 0.2 0.1 0.1 0.2 0.2 0.05 1 0.03 0.1 0.3 0.2 100 0 Region TWCR Metropolitan A 95 0.2 1 0.03 0.3 0.1 0.3 0.1 0.2 0.3 0.3 0.1 1 0.1 0.2 0.4 0.3 100 5 (1-5) B Gateshead (1) 91 - 2 - 1 - 1 0.3 0.3 - 1 0.3 2 - - 1 0.3 100 C North Tyne (2+3) 88 0.2 2 - 0.5 0.4 1 0.2 1 1 1 0.2 2 0.2 1 1 1 100 D South Tyneside (4) 97 - - - 1 0.3 0.3 - - 0.3 0.3 - 1 - - - - 100 E Sunderland (5) 98 0.2 1 0.04 0.1 0.04 0.1 - 0.04 0.1 0.2 - 0.4 - 0.04 0.04 0.1 100 X North East 96 0.2 1 0.1 0.3 0.1 0.2 0.1 0.2 0.1 0.3 0.03 1 0.1 0.1 0.2 0.2 100 Y England 82 1 3 1 0.5 0.3 1 1 1 1 1 3 3 1 0.2 1 1 100

Source: CORE, 2008/09

Note: Zero values are shown as a dash (-)

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Table A-02: Previous living circumstances of the tenant, 2008/09

LA General Needs tenancy (%) HA General needs tenancy (%) Private sector tenancy (%) Tied housing/ renting with job (%) Supported housing (%) Direct access (%) hostel Housing for older people (%) Residential care home (%) Hospital (%) Prison (%) Approved probation (%) hostel Childrens home / foster care (%) Bed and breakfast (%)

1 Gateshead 14.2 15.8 19.1 0.3 0.3 1.0 0.7 - - - - - 0.7 2 Newcastle upon Tyne 20.2 21.8 11.5 0.7 3.1 0.2 0.4 ------3 North Tyneside 15.1 13.6 15.9 0.3 3.3 1.3 1.5 - 0.3 - - 0.3 1.0 4 South Tyneside 9.8 10.2 12.5 0.3 3.1 0.3 - 0.3 - - - 4.7 5 Sunderland 2.0 36.8 17.3 0.6 1.9 0.4 0.0 0.1 0.1 - - - 0.6 Northumberland: CR 6 10.8 22.1 14.6 - 1.4 0.3 - 0.3 0.3 - - 0.3 - Coalfield Northumberland: CR 7 1.5 28.9 22.9 2.0 1.8 0.8 1.5 ------Commuter 8 North Durham 4.8 27.7 13.0 0.6 0.6 0.7 0.5 - 0.2 - - 0.5 9 Easington 11.5 16.7 10.9 0.5 ------0.5 1 Tyne & Wear City Region 6.5 28.1 15.9 0.6 1.7 0.5 0.4 0.0 0.1 - - 0.0 0.7 0 TWCR Metropolitan 5 (1- A 6.8 29.3 16.3 0.6 2.1 0.5 0.3 0.1 0.1 - - 0.0 0.9 5) B Gateshead (1) 14.2 15.8 19.1 0.3 0.3 1.0 0.7 - - - - 0.7 C North Tyne (2+3) 17.8 17.9 13.5 0.5 3.2 0.7 1.0 - 0.1 - - 0.1 0.5 D South Tyneside (4) 9.8 10.2 12.5 0.3 3.1 - 0.3 - 0.3 - - - 4.7 E Sunderland (5) 2.0 36.8 17.3 0.6 1.9 0.4 0.0 0.1 0.1 - - - 0.6

X North East 5.9 27.6 16.8 0.7 2.1 0.6 0.3 0.1 0.1 - 0.1 0.0 0.6

Y England 8.8 23.9 17.3 0.7 2.9 1.6 0.2 0.1 0.2 0.1 0.1 0.1 0.8

Continued overleaf

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Short life housing (%) Living with family (%) Living with friends (%) Any other temporary accomm-odation (%) Rough sleeping (%) refuge Womens (%) Foyer (%) or Mobile home caravan (%) Home Office Asylum Support (%) Other (%) Owner occupation (private) (%) Owner occupation (low cost home owner-ship) (%) Total (%)

1 Gateshead 1.3 25.7 5.3 1.0 - 1.0 - - 3.0 1.7 8.9 - 100 2 Newcastle upon Tyne 1.3 24.5 6.5 2.0 - 0.2 - - 0.9 1.8 4.7 - 100 3 North Tyneside 0.5 23.5 7.9 1.3 0.3 0.3 - 0.5 - 8.4 4.9 - 100 4 South Tyneside 0.7 38.3 4.1 3.7 - 0.0 - - 0.3 0.7 10.8 - 100 5 Sunderland - 26.6 3.6 0.5 0.2 0.7 - 0.0 0.2 0.5 7.8 - 100 Northumberland: CR 6 0.6 30.7 5.2 1.4 - 2.2 - - - 1.7 8.3 - 100 Coalfield Northumberland: CR 7 0.3 24.9 3.5 0.8 - 0.3 - 0.8 - 2.5 7.8 - 100 Commuter 8 North Durham 0.3 28.4 6.1 0.9 0.7 1.1 0.1 0.7 - 1.3 11.7 - 100 9 Easington - 28.1 4.2 1.6 - 1.0 - 1.0 - 0.5 20.8 2.6 100 1 Tyne & Wear City Region 0.3 27.3 4.8 1.0 0.2 0.7 - 0.3 0.3 1.5 8.8 0.1 100 0 A TWCR Metropolitan 5 (1-5) 0.4 26.9 4.5 1.1 0.2 0.6 - 0.1 0.5 1.5 7.5 - 100 B Gateshead (1) 1.3 25.7 5.3 1.0 - 1.0 - - 3.0 1.7 8.9 - 100 C North Tyne (2+3) 1.0 24.0 7.2 1.7 0.1 0.2 - 0.2 0.5 4.9 4.8 - 100 D South Tyneside (4) 0.7 38.3 4.1 3.7 - - - - 0.3 0.7 10.8 - 100 E Sunderland (5) - 26.6 3.6 0.5 0.2 0.7 - 0.0 0.2 0.5 7.8 - 100 X North East 0.3 27.5 4.4 1.2 0.2 0.9 - 0.3 0.2 1.9 7.9 0.1 100 Y England 0.9 22.5 5.0 6.6 0.6 0.9 0.2 0.5 0.1 2.8 3.1 0.1 100

Source: CORE, 2008/09

Note: Zero values are shown as a dash (-).

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Table A-03: Main reason for re-housing

Perm decanted from another property thisowned by landlord (%) Left home country as refugee (%) Discharged from prison/longstay hospital/other institution (%) Loss of tied accommodation (%) End of Assured Shorthold tenancy (%) Eviction or repossession (%) Domestic violence (%) (Non-violent) relationship breakdown with partner (%) family by to leave Asked or friends (%) (%) harassment Racial Other with problems neighbours (%) 1 Gateshead 2.6 2.6 - 0.7 3.0 2.6 3.0 9.2 11.9 0.3 5.9 2 Newcastle upon Tyne 0.4 1.1 - 0.7 0.7 0.9 1.6 4.9 11.2 0.4 6.7 3 North Tyneside 0.8 0.3 0.3 - 2.6 0.5 2.3 4.6 12.8 0.3 7.9 4 South Tyneside 0.3 1.0 - 2.0 2.0 4.4 4.7 14.6 15.3 - 3.1 5 Sunderland 9.0 0.2 0.2 0.4 2.0 0.4 1.5 3.4 6.1 0.2 2.6 Northumberland: CR 6 - - - 0.6 2.5 1.9 5.8 6.6 13.8 - 3.9 Coalfield Northumberland: CR 7 0.5 - - 1.8 4.3 3.3 2.3 5.5 1.5 - 5.5 Commuter 8 North Durham 1.7 0.1 0.3 0.6 1.8 1.9 3.6 6.4 11.5 0.1 6.3 9 Easington 1.0 - - 1.0 0.5 2.1 2.6 8.9 11.5 - 3.6 Tyne & Wear City 10 4.4 0.4 0.1 0.6 2.1 1.4 2.5 5.5 9.0 0.1 4.4 Region TWCR Metropolitan 5 A 6.1 0.6 0.1 0.5 2.0 1.0 2.0 5.0 8.4 0.2 3.9 (1-5) B Gateshead (1) 2.6 2.6 - 0.7 3.0 2.6 3.0 9.2 11.9 0.3 5.9 C North Tyne (2+3) 0.6 0.7 0.1 0.4 1.6 0.7 1.9 4.8 12.0 0.4 7.3 D South Tyneside (4) 0.3 1.0 - 2.0 2.0 4.4 4.7 14.6 15.3 - 3.1 E Sunderland (5) 9.0 0.2 0.2 0.4 2.0 0.4 1.5 3.4 6.1 0.2 2.6

X North East 5.0 0.3 0.2 0.7 2.5 1.5 3.1 5.9 9.1 0.2 4.1 Y England 2.2 0.5 0.4 0.9 4.2 2.1 3.3 5.2 9.0 0.2 3.1

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Property unsuitable because of overcrowd-ing (%) Property unsuitable because of ill health/ disability (%) Property unsuitable because of poor condition (%) Could not afford rent or mortgage (%) To move nearer to family, friends, school (%) To move nearer work (%) To move to accommodation with support (%) To move to independent accommodation (%) Other (%) Under- occupation (%) Total (%) Gateshead 12.9 12.2 3.0 4.6 6.9 2.6 0.7 4.6 10.2 - 100 Newcastle upon Tyne 12.1 6.1 4.0 4.5 5.6 2.2 1.3 14.4 20.0 0.9 100 North Tyneside 9.0 8.4 4.3 4.1 5.9 0.8 1.3 18.4 14.3 1.0 100 South Tyneside 10.2 8.8 2.0 4.7 5.1 - 2.4 10.8 7.8 0.3 100 Sunderland 6.5 11.4 3.6 6.1 6.4 0.7 0.6 21.5 15.7 1.6 100 Northumberland: CR 18.5 16.0 1.7 1.7 4.1 0.8 0.6 9.4 11.0 1.1 100 Coalfield Northumberland: CR 12.1 13.1 4.3 7.3 10.3 0.5 1.0 15.3 9.0 2.5 100 Commuter North Durham 9.6 19.0 2.8 3.8 5.1 1.2 0.5 11.4 11.0 0.8 100 Easington 4.7 30.7 5.2 5.7 4.7 0.0 3.1 10.4 4.2 - 100 Tyne & Wear City Region 9.2 13.1 3.4 5.1 6.1 0.9 0.9 16.1 13.3 1.2 100

TWCR Metropolitan 5 (1-5) 8.1 10.4 3.6 5.5 6.2 1.0 0.9 18.4 15.0 1.2 100 Gateshead (1) 12.9 12.2 3.0 4.6 6.9 2.6 0.7 4.6 10.2 - 100 North Tyne (2+3) 10.6 7.2 4.2 4.3 5.7 1.6 1.3 16.3 17.3 1.0 100 South Tyneside (4) 10.2 8.8 2.0 4.7 5.1 - 2.4 10.8 7.8 0.3 100 Sunderland (5) 6.5 11.4 3.6 6.1 6.4 0.7 0.6 21.5 15.7 1.6 100

North East 10.1 12.1 3.6 4.8 5.6 0.8 0.7 14.7 13.7 1.2 100 England 17.7 8.1 3.6 3.6 4.0 0.7 0.9 15.5 13.5 1.3 100

Source: CORE, 2008/09

Note: Zero values are shown as a dash (-

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Table A-04: Local Authority Lets 2001-2008

Apr00- Apr01- Apr02- Apr03- Apr04- Apr05- Apr06- Apr07- LA Dwellings Let Mar01 Mar02 Mar03 Mar04 Mar05 Mar06 Mar07 Mar08

1 Gateshead 3217 3020 2861 2150 2416 2226 1861 2056 2 Newcastle upon Tyne 6753 5742 5667 4803 4387 4596 3131 3598 3 North Tyneside 2541 2461 2239 1695 1402 1374 1505 1365 4 South Tyneside 2456 2370 2214 1985 2247 1831 1694 1817 5 Sunderland 4730 0 0 0 0 0 0 0 Northumberland: CR 6 1990 1909 1727 1341 1356 1274 1108 1341 Coalfield Northumberland: CR 7 344 223 290 200 113 228 200 112 Commuter 8 North Durham 2733 2759 2670 2105 1693 1746 1133 901 9 Easington 1352 1093 1026 942 844 752 823 853 Tyne & Wear City 10 26116 19577 18694 15221 14458 14027 11455 12043 Region*

TWCR Metropolitan 5 (1- A 19697 13593 12981 10633 10452 10027 8191 8836 5)* B Gateshead (1) 3217 3020 2861 2150 2416 2226 1861 2056 C North Tyne (2+3) 9294 8203 7906 6498 5789 5970 4636 4963 D South Tyneside (4) 2456 2370 2214 1985 2247 1831 1694 1817 E Sunderland (5) 4730 0 0 0 0 0 0 0

X North East 36472 29661 26904 21346 19035 17730 14908 15498 Y England 326613 291059 272838 228553 207507 188789 174877 157771 Source: CLG (2008) *Excluding Sunderland 2001 onwards

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Appendix B: Migration tables

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Appendix C: Hometrack affordability maps, May 2009

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MAP 1: Home price to income ratio (lower quartile)