Housing Supply

APPENDIX 3: HOUSING SUPPLY

While an analysis of housing supply is not an essential requirement in the SHMA guidance checklist, it is an extremely important factor in understanding how the market works. Influencing supply is one of relatively few ‘levers’ which Planning policy has to influence housing markets, but is still quite limited in its impact, affecting only about 1% of stock a year, or often much less. Developers too may have much to gain through an improved strategic understanding of how supply varies, and is perceived, received and absorbed.

3) Housing supply ...... 1 3.1 Introduction...... 1 Appendix 3:1 Length of residence by tenure...... 2 3.2 Housing for sale...... 3 Appendix 3:2 Overall average HMA house prices and sales volumes 2001-2007...... 3 Appendix 3:3 Sales by local authority ...... 4 Appendix 3:4 Sales as proportion of privately owned stock by LA ...... 4 Appendix 3:5 New sales by local authority...... 5 Appendix 3:6 Leicester City only – new and resales ...... 6 Appendix 3:7 Leicester City only – sales by property type ...... 6 3.3 New development...... 7 Appendix 3:8 East Midlands housing starts and completions 2005 -7 ..7 3.4 Private renting ...... 8 Appendix 3:9 Extract from NHPAU Rapid Evidence Assessment...... 9 Appendix 3:10 Impacts of the Private Rented Sector...... 9 3.5 Private rented housing stock ...... 10 Appendix 3:11 Percentage of Private Rented stock by Output Area 2001 ...... 10 Appendix 3:12 Central Leicester - % of PRS stock by Output Area 2001 ...... 11 Appendix 3:13 BRE stock model – levels of non decent homes by Output Area...... 12 Appendix 3:14 Estimated private rented sector stock and % by settlement...... 13 Appendix 3:15 Number & proportion of PRS by housing submarket 2001 ...... 14 Appendix 3:16 Submarkets in Leicester with highest proportion of private renting ...... 16 3.6 Turnover ...... 17 3.7 Effect on supply and demand ...... 17 Appendix 3:17 Empty property- submarkets with most PRS in Leicester 2007 ...... 18

3.8 Effect on prices...... 20 3.9 Public attitudes ...... 21 Appendix 3:18 Extract from Priced Out ...... 21 3.10 Social housing supply...... 22 3.11 Local authority stock and lettings...... 23 Appendix 3:19 Patterns of local authority housing stock ...... 23 Appendix 3:20 Leicester area average submarket house prices 2007 and LA stock ...... 24 Appendix 3:21 Leicester City Council estate areas and house price patterns ...... 25 Appendix 3:22 Leicester City Council sales by estate to 01/04/2007 ..26 Appendix 3:23 LA and RSL lets and turnover as % of stock by submarket ...... 28 Appendix 3:24 Highest social stock levels by submarket and turnover...... 31 Appendix 3:25 Local Authority lettings (whole HMA)...... 32 Appendix 3:26 Number of bedrooms of local authority lets ...... 32 Appendix 3:27 Local authority stock size profile...... 33 Appendix 3:28 LA lets by housing submarket 2006/7 ...... 33 3.12 Housing associations (Registered Social Landlords – RSLs) lets ...37 Appendix 3:29 RSL stock...... 37 Appendix 3:30 Housing association lets...... 37 Appendix 3:31 RSL stock and lets by settlement ...... 38 Appendix 3:32 Higher turnover rates by submarkets with 100+ RSL stock...... 39 Appendix 3:33 Reasons for letting of RSL properties 2006-7...... 39 Appendix 3:34 Reasons for RSL vacancies ...... 40 Appendix 3:35 RSL new and relets ...... 41 Appendix 3:36 RSL voids at 31/3/07 ...... 41 3.13 Intermediate Housing sales ...... 41 Appendix 3:37 Intermediate sales 2006-7...... 42 Appendix 3:38 Intermediate sales 2004-5...... 43 Appendix 3:39 Intermediate sales 2005-6...... 43 Appendix 3:40 Previous tenure of purchasers from RSLs...... 44 Appendix 3:41 Previous tenure of purchasers from RSLs- % ...... 44 Appendix 3:42 Incomes of purchasers of IH 2004-7 ...... 45 3.14 Implications for policy ...... 45 3.15 Intermediate Housing in the market...... 46 3.16 Alternative approaches and products ...... 47

3) Housing supply

3.1 Introduction

3.1.a Clearly the supply of housing is a crucial aspect of the operation of housing markets, and indeed the Barker Report of 2004 argues that lack of supply is a major cause of price rises over recent years. But like other aspects of housing, supply is complicated, variable and widely differentiated - by type, size, location, tenure, price, design, etc - and this is often under analysed and inadequately discussed in housing market and needs studies. Economists summarise the unique position of housing as ‘fixed, durable and heterogeneous’.

3.1.b Supply of the wrong kind in the wrong place at the wrong time can not only fail to meet demand or need and result in enormous wastes of resources, but also creates problems which have implications far beyond just housing, which can last for many years and take further extensive resources to address.

3.1.c Unlike most other ‘products’, housing supply is also very strongly linked to demand in that most transactions are of existing property – resales or relets (the term ‘second hand’ is not usually applied to housing). Normally less than 1% of the annual flow of supply is newly built in the UK.

3.1.d Different aspects of supply, mainly analysed by tenure, are set out below, but the links and flows between tenures need to be born in mind. These are shown in the Survey of English Housing (see table below).

Appendix 3:1 Length of residence by tenure

3.1.e This is related to ‘lifestage’, and interpreting the data from the SEH median figures indicates typical housing trajectories, such as:-

• Young households in private renting for short periods – median 1.7 years • Buyers with mortgages trading up less frequently – median 7.1 years; • Older owners staying in their home for long periods and clearing their mortgage – median 22.4 years; • Social tenants with a more mixed length of residence; – median 8.6 years for Councils with more older tenants, and 6.9 years for housing association tenants with more younger tenants and newer stock.

3.1.f These flows in the owned sector are directly affected by the ease or difficulty of transactions, which is reflected in the volumes. There is generally an optimum range for turnover, because too much ‘churn’ is often an indication of an unpopular area or property type, as households seek to leave it and move on.

3.2 Housing for sale

3.2.a House prices and volume of sales provide the closest match to the evidence and indicators of normal market economics, but are again complicated by the unique position of housing. NHPAU modelling confirms that in addition to household growth and limited supply, rising incomes and low, relatively stable interest rates, are important factors.

3.2.b Land Registry data since 2001 shows a link between the rate of house price inflation and sales volumes, with the number of sales in the Leicester(&shire) HMA falling to its lowest level when price rises were slowing and lowest.

Appendix 3:2 Overall average HMA house prices and sales volumes 2001-2007 price change volume of on previous % of max year sales average price year turnover 2001 21,150 £ 89,165 2002 21,061 £ 108,358 22% 99.6% 2003 16,330 £ 132,163 22% 77.2% 2004 17,896 £ 149,426 13% 84.6% 2005 14,442 £ 163,096 9% 68.3% 2006 16,946 £ 164,399 1% 80.1% 2007 21,103 £ 173,779 6% 99.8% Source: Land Registry (accessed February 2008)

3.2.c Including private rented property as saleable, a turnover rate equivalent to the Survey of English Housing figures for owners would mean sales of some 25,000 a year. The highest volumes of 21,000 + suggests that owners in the Leicester area move on average about once every 13 to 14 years – although averages of course hide much variation. This makes sense given the relatively more settled nature of much of the Leicestershire housing market compared for example to city areas. But it may also indicate that more owned stock is fairly static, including that occupied by older, under-occupying empty nesters, and also may suggest that slightly higher turnover and resales supply could meet more demand for owner occupation, but in a more stable market and provided prices were affordable to those seeking it.

3.2.d Sales volumes fell by almost 40% on the maximum levels in this period when price rises slowed in 2005/6. This is probably due to a combination of potential sellers deciding not to put their house on the

market when prices are not rising so fast, and potential purchasers not buying when they too feel that prices may fall.

3.2.e While this suggests that rising prices maintains healthier flows in the market, there are of course limits to this when prices rise so fast and become so high that new buyers cannot enter the market at all. Again this argues for gentle but more predictable house price inflation to maintain confidence and prevent volatility.

3.2.f Turnover at more detailed levels is more variable, and detects different types of activity in smaller market areas, but at local authority level there is little difference.

Appendix 3:3 Sales by local authority LA 2001 2002 2003 2004 2005 2006 2007 Leicester 5549 5513 4477 4652 3925 4562 5604 Blaby 1882 1823 1440 1773 1378 1516 2053 Charnwood 3259 3398 2659 2979 2402 2879 3896 Harborough 2308 2194 1550 1687 1433 1669 2066 Hinckley and Bosworth 2657 2625 1998 2308 1799 1955 2464 Melton 1147 1095 913 929 733 900 987 North West Leicestershire 2310 2448 1644 1833 1512 1843 2137 Oadby and Wigston 1164 1194 954 1037 809 911 1075

Appendix 3:4 Sales as proportion of privately owned stock by LA LA 2001 2002 2003 2004 2005 2006 2007 Leicester 6.7% 6.7% 5.4% 5.6% 4.8% 5.5% 6.8% Blaby 5.5% 5.3% 4.2% 5.2% 4.0% 4.4% 6.0% Charnwood 5.9% 6.2% 4.8% 5.4% 4.4% 5.2% 7.1% Harborough 7.9% 7.5% 5.3% 5.8% 4.9% 5.7% 7.1% Hinckley and Bosworth 7.0% 6.9% 5.2% 6.1% 4.7% 5.1% 6.5% Melton 6.4% 6.1% 5.1% 5.2% 4.1% 5.0% 5.5% North West Leicestershire 7.5% 8.0% 5.4% 6.0% 4.9% 6.0% 7.0% Oadby and Wigston 5.6% 5.7% 4.6% 5.0% 3.9% 4.4% 5.2% Source: Land Registry (accessed February 2008)

3.2.g Sales proportions are often affected most by higher than normal new building activity, which can distort the impression given by the data because it is not turnover of existing stock, but additional new supply.

Appendix 3:5 New sales by local authority new sales 2001 2002 2003 2004 2005 2006 2007 Leicester 209 152 300 257 398 510 505 Blaby 175 90 51 81 142 59 149 Charnwood 251 193 256 212 309 281 389 Harborough 480 317 111 106 180 139 217 Hinckley & Bosworth 305 229 281 124 264 175 148 Melton 107 62 74 33 47 66 79 NW Leicestershire 421 258 165 70 168 164 172 Oadby & Wigston 10 19 60 56 91 44 31

New sales as % of total sales new sales as % of all 2001 2002 2003 2004 2005 2006 2007 Leicester 3.8% 2.8% 6.7% 5.5% 10.1% 11.2% 9.0% Blaby 9.3% 4.9% 3.5% 4.6% 10.3% 3.9% 7.3% Charnwood 7.7% 5.7% 9.6% 7.1% 12.9% 9.8% 10.0% Harborough 20.8% 14.4% 7.2% 6.3% 12.6% 8.3% 10.5% Hinckley & Bosworth 11.5% 8.7% 14.1% 5.4% 14.7% 9.0% 6.0% Melton 9.3% 5.7% 8.1% 3.6% 6.4% 7.3% 8.0% NW Leicestershire 18.2% 10.5% 10.0% 3.8% 11.1% 8.9% 8.0% Oadby & Wigston 0.9% 1.6% 6.3% 5.4% 11.2% 4.8% 2.9% Source: Land Registry (accessed February 2008)

3.2.h The effect of new schemes and estates can be clearly seen, for example in Harborough in 2001, when new developments north of Market Harborough reached the market.

3.2.i The charts below from the Hometrack Housing Information System show the composition and trends of sales in Leicester City only.

Appendix 3:6 Leicester City only – new and resales

Appendix 3:7 Leicester City only – sales by property type

3.2.j The overall implication on private sector supply from sales data is that the Leicestershire housing market remains fairly stable compared to other areas. Estate Agents comments confirm this view: - “The dramatic changes seen around the UK seem at odds with the relatively steady, fairly static prices in Leicestershire”. This could perhaps give greater scope for monitoring and adjusting supply to maintain more stability in the sale market, if effective market intelligence and the right policy levers can be developed.

3.3 New development

3.3.a Newly developed supply is analysed in more detail in the section on the active market, but is considered briefly here in relation to the changing housing market position in 2008.

3.3.b The government has set ambitious targets for new supply in an effort to try to ease long term price rises and affordability pressures. The East Midlands Regional Monitoring reports 2007 comments:-

The 2006/07 net housing completions are above the Draft Regional Plan target for the first time. This is an important achievement, as the target for the previous 5 years was much lower, based on the current RSS8.

3.3.c However the changed housing market position in 2008 has resulted in marked slowing of housing starts.

Appendix 3:8 East Midlands housing starts and completions 2005 -7

East Midlands starts & completions

20,000

19,000

18,000

17,000

16,000 starts 15,000 completions 14,000 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 2007 Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec

Source: CLG (accessed February 2008)

3.3.d The natural response of developers to the changed market has been to slow build rates and reduce starts. A continued higher rate of delivery of new housing appears now extremely unlikely.

3.3.e Not only will this reduce commercial output, but also as some 70% of sites nationally now have some form of S106 affordable housing

included, delivery of affordable housing through this route will also reduce.

3.3.f Housing associations and developers may quickly find other ways of delivery by working together, as they did in the 1990’s, as developing affordable housing can become a fallback means of maintaining some activity and delivery for developers who want to stay active. Strategic planning for this changed situation through local authorities having an overview and working with associations and developers will be needed, and skills and lessons learned in the early 1990s will need to be revived.

3.4 Private renting

3.4.a The private rented sector (PRS) has a pivotal but somewhat ambiguous position in the housing market. It meets housing demand and need, but may also cause it. It brings private investment in housing, but may also distort the market and inflate prices. Management practices by some landlords and agents can be criticized, but there is also much owner input and effort giving good value for money.

3.4.b The sector is varied and fragmented, and many alternative behaviour patterns and combinations are possible, and all probably happen sometime, somewhere, to different degrees. Nor can landlords be easily categorised, because how they behave can depend on other variables such as their own circumstances, changes in the market, the agents they use and the tenants they get.

3.4.c However there may be more prevalent patterns and behaviour in the current private rented sector, and these are considered here by looking at the available data and research, so that approaches and policies can be more evidence based and strategic.

3.4.d The size of the PRS has grown considerably over recent years, due mainly to buy to let. It is one of the hardest aspects of the housing market on which to obtain reliable data, but estimates suggest growth of 20-25% since the 2001 Census. Applied to Leicester(&shire) this would mean the PRS would have grown from about 35,000 to around 43,000.

Appendix 3:9 Extract from NHPAU Rapid Evidence Assessment

The size of the private rented sector (PRS) at large was in steady decline throughout most of the twentieth century. Its lowest point in England was in the late-1980s, when the sector dropped to just over 2 million properties, representing just 10% of all stock (Thomas, 2006b). But there has been clear growth since then. Today the sector is bigger in size and proportion of the housing market housing some 2.5 million households and representing 12% of all stock (CLG, 2007). Although the tenure is still dwarfed by owner occupation (accounting for around 70% of stock), the absolute and relative increase in properties is significant.

Rapid evidence assessment of the research literature on the buy-to-let housing market sector1. NHPAU 2008

3.4.e Clearly this growth has increased supply in this tenure, but just how this affects housing supply overall will depend on what is being bought to let, by whom, where it is, and who lives in it. A crude typology of possible behaviour patterns for private landlords set out below gives some alternatives. Potential benefits are often not clear cut, but can be offset by other unintended adverse effects.

Appendix 3:10 Impacts of the Private Rented Sector alternative behaviour and effects competing with owner occupiers OR Buy to let purchase of buying when owner occupiers would not investing to improve the property OR poor or absentee landlord allowing property decline existing resale property paying higher prices to outbid potential owners OR leaving fewer funds for improvement OR accessing funds to invest and improve new property when owner occupiers could not poor management leading to churning Impact on tenants and transient communities OR good quality properties and management improving and communities choices and options for renters buying to leave empty for Impact on supply capital appreciation stimulating the market to produce and the market when it would not have done otherwise OR Prompting the market to produce the wrong things

1 This research provides probably the best overall picture of the current PRS. See http://www.communities.gov.uk/nhpau/keypublications/buytoletliterature .

3.5 Private rented housing stock

3.5.a In the Leicester(&shire) HMA private renting is shown by 2001 Census data to be concentrated mainly in Leicester city, about 9,000 - or a quarter of the HMA total - were in the central areas of the city in 2001. There also appear to be apparently quite substantial proportions in a few more rural areas, most notably Melton, although the actual numbers there are much lower. Higher levels of private renting in rural areas are sometimes due to historical stock for workers on the estate of a large landowner or farm.

Appendix 3:11 Percentage of Private Rented stock by Output Area 2001

Appendix 3:12 Central Leicester - % of PRS stock by Output Area 2001

3.5.b This distribution can be usefully compared to estimates of housing stock condition. The BRE model used by HI4EM shows some spatial correlation between higher projected non decent housing and higher levels of private rented stock on the west side of the city centre, although of course this is a complex relationship.

Appendix 3:13 BRE stock model – levels of non decent homes by Output Area

Source: HI4EM BRE Stock Model 2007 (accessed March 2008)

3.5.c By settlement this distribution shows some perhaps surprising results, which are usually due to specific local factors.

Appendix 3:14 Estimated private rented sector stock and % by settlement. current PRS PRS all hhlds with estimated Census 22% on 22% Settlement PRS other 2001 % PRS growth increase Loughborough 2319 605 17438 13.3% 2829 16% Woodhouse Eaves 24 5 181 13.3% 29 16% Leicester 13325 2857 123956 10.7% 16257 13% Burton Overy 19 15 181 10.5% 23 12% Kegworth 90 18 902 10.0% 110 12% Ellistown 38 11 389 9.8% 46 11% Barlestone 23 3 246 9.3% 28 11% Leicester Urban Area 14851 3479 159774 9.3% 18118 11% Castle Donnington 160 53 1769 9.0% 195 11% Hathern 21 5 244 8.6% 26 10% Bottesford 41 26 495 8.3% 50 10% Dunton Bassett 8 3 103 7.8% 10 9% Beaumont Leys 121 24 1599 7.6% 148 9% Wymeswold 8 0 129 6.2% 10 7% Melton Mowbray 471 146 7701 6.1% 575 7% Earl Shilton 308 128 5400 5.7% 376 7% Husbands Bosworth 13 7 232 5.6% 16 7% Barrow upon Soar 67 27 1209 5.5% 82 7% Quorndon 52 19 952 5.5% 63 6% Market Harborough 355 136 6637 5.3% 433 6% Leire 12 3 225 5.3% 15 6% Wigston 669 239 12620 5.3% 816 6% Hinckley 827 287 15761 5.2% 1009 6% Sileby 89 37 1725 5.2% 109 6% Sapcote 13 6 254 5.1% 16 6% Kibworth Harcourt 58 31 1148 5.1% 71 6% Anstey 103 61 2055 5.0% 126 6% Asfordby 23 18 482 4.8% 28 6% Ratby 46 22 968 4.8% 56 6% Ashby-de-la-Zouch 162 78 3476 4.7% 198 5% Shepshed 179 87 3981 4.5% 218 5% Mountsorrel 140 64 3170 4.4% 171 5% Oadby 282 137 6905 4.1% 344 5% Kirby Muxloe 101 29 2526 4.0% 123 5% Coalville 354 205 9370 3.8% 432 4% Broughton Astley 78 39 2116 3.7% 95 4% Narborough/Enderby 160 61 4470 3.6% 195 4% Enderby 89 28 2498 3.6% 109 4% Great Glen 31 20 879 3.5% 38 4% Stoney Stanton 24 4 684 3.5% 29 4% Markfield 54 33 1550 3.5% 66 4% Ibstock 52 49 1503 3.5% 63 4% Birstall 135 76 4032 3.3% 165 4% Foxton (Harborough) 3 6 92 3.3% 4 4%

Cosby 33 15 1039 3.2% 40 4% Cropston 4 3 126 3.2% 5 4% East Goscote 24 14 789 3.0% 29 4% Croft (Blaby) 10 10 341 2.9% 12 3% Measham 26 8 904 2.9% 32 3% Fleckney 20 14 747 2.7% 24 3% Donisthorpe 27 25 1021 2.6% 33 3% Lutterworth 70 71 2733 2.6% 85 3% Whetstone 47 31 1852 2.5% 57 3% Heather 3 3 125 2.4% 4 3% Countesthorpe 32 29 1356 2.4% 39 3% Queniborough 11 5 474 2.3% 13 3% Blaby 37 21 1616 2.3% 45 3% Stoke Golding 5 3 223 2.2% 6 3% Groby 44 23 2187 2.0% 54 2% Desford 14 11 734 1.9% 17 2% Newbold Verdon 11 10 592 1.9% 13 2% Huncote 3 3 268 1.1% 4 1% Source: ONS Census 20012

3.5.d The numbers and proportions of PRS by the housing submarkets identified for this project should give a more recognisable illustration of the characteristics of different areas, and provide a better basis for targeting policy.

Appendix 3:15 Number & proportion of PRS by housing submarket 2001

PRS % PRS % Submarket 2001 PRS submarket 2001 PRS Central Loughborough 800 36% Belvoir_Vale_West 95 5% St Andrews 519 35% Beaumont Leys 162 5% South Highfields 938 33% Edendale 74 5% Bagworth, Narborough Road 1732 31% Barlestone 150 5% City Centre 485 30% Market Bosworth 86 5% Clarendon Park 955 28% North Mkt Harboro 13 5% West End 912 25% Saffron Lane 147 5% High_Leicestershire 64 24% West Knighton 170 5% Melton_rural_east 202 24% Wolds 69 5% Evington Road 449 21% Asfordby Road 60 5% Thorpe Road 98 21% Barwell 163 5% Belvoir_Vale_East 189 19% Kirby Frith 92 5% Knighton Fields 155 18% Braunstone Town 197 5% South Wigston 293 18% Wreake_Valley 343 5%

2 (N.B. The GIS queries used to aggregate the data for the tables below are based on ONS urban areas, which are not coterminous with Census geography, and can therefore distort the totals. Disclosure control restrictions on small counts can also inflate totals. The figures should be considered as indicative only ).

Market Harborough Spinney Hills 954 16% fringe 65 5% Forest Road 186 16% Lutterworth 330 5% East Loughborough 625 16% Scalford Road 78 5% Aylestone 543 15% Welland Park 122 5% Mkt Harboro town centre 53 14% Ashby 217 5% Barwell Lane Leicester Rd Melton 16 13% Hinckley 34 4% Hinckley Centre north 229 13% Winstanley Drive 70 4% Belgrave 1030 12% Charnwood_Edge 468 4% Melton_rural_south 69 12% Evington Village 102 4% Stoneygate 384 12% Ridgeway 50 4% St Saviours Road 397 11% Husbands Bosworth 53 4% Old Ashby Road 160 11% West Mkt Harboro 66 4% Burton Road_Ankle Hill 80 10% Thorpe Astley 49 4% Hinckley centre south 99 10% Rosemead Drive 78 4% Harboro Rural East 198 10% Queensway 14 4% Gipsy Lane 59 10% Sketchley Lane 47 4% Humberstone Lane 131 9% Wykin 5 4% Burbage Village 37 9% Fleckney Village 62 4% South Knighton 103 9% Groby, Ratby, Kirby 201 4% Valley 231 9% Markfield 76 4% Melton Town Centre 61 9% Ibstock 90 4% Alan Moss Road, Epinal Way 223 8% South Braunstone 53 3% Twycross 60 8% Uplands Road 82 3% East Mkt Harboro 102 8% New Parks 142 3% Castle Donnington 424 8% North Hinckley 55 3% Astill Lodge 160 7% Thurnby 115 3% Shelthorpe 131 7% Asfordby centre 8 3% Aylestone Village 48 7% Broughton Astley 103 3% Bardon & Forest Wigston Central 76 7% Road 36 3% Coleman Road 192 7% Coalville West 35 3% A47, M69 rural Rusheymead 158 7% corridor 192 3% Melton_rural_west 113 7% Hinckley western ring 15 3% Melton_Mowbray fringe 235 7% Wigston Fields 35 3% Forest 139 7% Eyres Monsell 161 3% Rowley Fields 66 7% Blaby central villages 451 3% Loughborough and surround 742 7% The Woulds 108 3% Loughborough Forestside 273 7% Fairfields 43 3% Northfields 154 7% Wigston Estate 29 3% Glenfield Road 151 7% Grange Drive 21 3% St Matthews 91 7% Nottingham Road 15 3% Oadby Central 108 7% Twycross Road area 37 3% Coalville 275 6% Newton Lane 25 3% Asfordby outer 15 6% Woodthorpe 28 3% Vale_North 97 6% Southern rural NWL 39 3% Maxwell Drive South 68 6% Thurncourt 147 3%

Stocking Farm 185 6% Dominion Road 81 3% Stoke Golding 133 6% Leicester Forest East 101 2% Earl Shilton 197 6% Horsewell Lane 43 2% Roston Drive 168 6% Fairmead 3 2% Melton_mid_rur 108 6% North Braunstone 39 2% Oadby Manor Rd 42 6% Whitwick/Thringstone 133 2% Groby Road 25 6% Desford 59 2% Gilmorton 29 6% Glen Parva 19 2% Swad/Albert Village 94 6% Greenhill 23 2% Glen&Kibworth 228 6% Meadow Lane 28 2% Hinckley northern South Derbyshire Villages 73 6% ring 15 2% Coventry Road 67 5% Burbage outer 13 2% Thorpe Road North Stadium Estate 180 5% MM 3 1% Soar_Valley 652 5% Oadby Grange 12 1% Leicester Road Netherhall-Hamilton 107 5% Hinckley 3 1% Humberstone Village 91 5% Brookside 9 1% East Knighton 94 5% Park Rise 0 0% Source: ONS Census 2001 Table KS18 (accessed October 2007)

3.5.e In ten submarkets of central Leicester City the overall average PRS proportion was 25% in 2001. This is likely to have grown since through buy to let, probably especially through city centre flats.

Appendix 3:16 Submarkets in Leicester with highest proportion of private renting submarket PRS hhlds PRS % Evington Road 449 2150 21% South Highfields 938 2831 33% Spinney Hills 954 5898 16% City Centre 485 1635 30% St Andrews 519 1498 35% Narborough Road 2001 6495 31% West End 912 3650 25% Aylestone 521 3425 15% Clarendon Park 955 3415 28% Knighton Fields 155 854 18% Totals 7889 31851 25% Source: ONS Census 2001

3.5.f In Central Loughborough the proportion of PRS was similar at 36%, and in the most central part of the town it reaches almost 50%.

3.6 Turnover

3.6.a The flow of supply coming from this increased PRS housing stock then depends on the number of lettings it generates. The PRS has the highest level of turnover by far of all tenures. The Survey of English Housing 2006/7 found that:-

Thirty eight per cent of all private renters had moved during the previous year, compared to only 10 per cent of social renters and 6 per cent of owner- occupiers.

3.6.b Much of this movement is within the PRS, with some 56% of movers to private renting coming from private renting, rising to 63% for furnished lets. Again this average disguises much variation, and many PRS moves increasing this average are due to highly transient groups such as students, and so expected. However, the SEH also finds that 78% of PRS tenants have a length of residence of less than five years, and just 12% of over ten years.

3.6.c Applying turnover level of 38% to the estimated 2007 PRS stock of 43,000 in the HMA gives some 16,000 lets a year. However, 56% of these (over 9,000) may be due to households changing and moving around or ‘churning’ within the sector. To put this in perspective the balance of 7,000 lets per year to new entrants to the PRS compares to an estimate of some 6,300 new emerging households per year in the HMA. Other demands on the PRS typically include new migrants, people leaving relationships, students, homelessness, and ex owners.

3.7 Effect on supply and demand

3.7.a However, it is the nature of private rented housing and the supply it creates that is of crucial importance for how it interacts with the market and affects demand and need.

3.7.b Rapid Evidence Assessment Research by NHPAU (2008) adds a great deal to knowledge of the PRS, although it still concludes that: “The most rapidly changing part of the English housing market is the part we currently know least about.”

3.7.c Other findings provide a useful basis for interpreting the evidence in relation to the Leicester(&shire) HMA.

The private rented sector has consistently held the highest level of unfitness among all tenures, although fitness appears to have increased dramatically over the decade. Improvement to property condition appears to happen more with new stock entering the market than by the active modification by landlords….

Some BTL investors are happy to hold on to poor-quality stock and obtain high rental yield, though have little interest in long-term capital growth. These landlords have been called ‘rent maximisers’, though may face higher voids. Another group of landlords often buys good-quality stock and invest to maintain this high standard or buys poor quality stock but improves it. These investors will receive better capital growth but reduced net rental yield, because of higher management and maintenance costs.

3.7.d If Leicester follows the same patterns as nationally these BTL types will tend to operate in different parts of the spatial submarket structure. Older rented stock in areas like Narborough Road, Highfields and West End will have seen more of an increase in ‘rent maximisers’, while the city centre has had more of those who buy newer ‘good quality’ stock.

3.7.e Indications of how this is now developing can be seen from other data, including empty properties. Over 50% all empty property recorded in Leicester City Council Tax records in October 2007 was in the central submarkets with the highest proportions of PRS, compared to 30% of the stock in the city overall. (See also the section on Empty Properties in the Active Market chapter).

Appendix 3:17 Empty property- submarkets with most PRS in Leicester 2007 Submarket All empty 2007 Evington Road 159 South Highfields 267 Spinney Hills 357 City Centre 560 St Andrews 195 Narborough Road 585 West End 328 Aylestone 219 Clarendon Park 328 Knighton Fields 55 Stoneygate 236 total 3289 % in central submarkets 53% all empties 6149 Source: Leicester City Council Tax Records 2007

3.7.f The NHPAU research found that :-

Evidence on vacancy periods and void rates is patchy but generally consistent. Some 6%–7% of landlords’ properties appear to be vacant at any one time, and the duration of voids is about one month per year. These figures are probably currently for BTL investors, but there would be a public policy concern if demand dropped or the BTL market became saturated with supply.

3.7.g In central Leicester this figure would translate to some 600 to 700 empty PRS properties, which would be over 20% of all empty properties in these central submarkets.

3.7.h The interpreted and extrapolated evidence therefore appears to indicate that although there is available supply of private rented properties in central Leicester, it is not meeting expectations and being taken up by demand. However this does not necessarily apply to other parts of the HMA, and renting in other areas appears to be more buoyant.

3.7.i Qualitative evidence confirms that private renters are becoming increasingly selective in what they will accept. Good quality properties in popular locations are sought after, as well as the lettings agents and landlords with better practices and attitudes.

3.7.j Evidence from focus groups3 with migrant workers suggests that they are a source of demand for properties that are becoming less popular with other groups, such as students. It shows for example that many young Polish workers are living in the Narborough Rd area of Leicester.

3.7.k Landlords and agents typically use tenant selection criteria, because the cost and inconvenience of bad tenants will outweigh that of voids, but this may become more difficult for them to sustain for poor quality properties without causing long void periods, whereas good quality properties have queues of prospective tenants. Agents and landlords are also responding to this by seeking to retain good tenants through regular renewal of six monthly shorthold assured tenancies, (or longer if they can), to tie them up contractually, and are hesitating to increase rents for fear of losing them.

3 Leicester City Council: Community Cohesion: New Arrivals, Polish Focus Group, 2007

3.7.l The PRS is also a source of housing need, as shown by reasons for homelessness in which loss of Assured Shorthold Tenancy is the main cause of homeless ness in 6-7% of cases accepted, and growing. The turnover figures show that much more of this demand is met within the PRS by internal ‘churning’.

3.8 Effect on prices

3.8.a The NHPAU Rapid Evidence Review report comments:-

There is also concern that investors have priced out first-time buyers. Yet the evidence is ambiguous. A number of studies state that rather than pricing out first-time buyers, BTL is providing a demand-led alternative at a time when attitudes to homeownership have changed. Other studies point to a different interplay between BTL investment and first-time buyers.

3.8.b The NHPAU have also developed a model to estimate UK house prices to simulate the impact of BTL on house prices. The model is based on the factors identified by previous research as important determinants of house price movements. The modelling indicates that :-

BTL has made a small contribution to house price inflation in recent years but rising incomes, low and stable interest rates, household growth and limited supply are much more important factors…..

The impact of BTL is most felt in recent years, with BTL increasing average house prices by up to 7 per cent in 2007 Q2. ….

Buyers of the average priced home, on a 100 per cent mortgage, would pay around £1,190 rather than £1,100 per month as a result of a 7 per cent increase in house prices.

3.8.c The research does give a very tentative indication of cumulative increases in house prices due to BTL.

The model used in this paper attributes much of the variation in house prices to mortgage interest rates, changes in disposable income, changes in housing supply, rates of household formation, and mortgage availability. For instance, since 1996Q3 house prices increased in real terms by 150 per cent and, even without the estimated effect of BTL, they would still have been expected to increase by more than 130 per cent. It would therefore be wrong to say that

BTL has been responsible for all of the growth in house prices over the last decade but it has played a part.

3.8.d A reduction in price of 7% makes little difference to the level of need estimated by the Bramley model, making it just 1% to 2% lower. However, the difference between increases of 150% and 130%, which equates to a reduction of around 15% in current lower quartile house prices – decreases the model estimates of the shortfall of affordable housing in the Leicester(&shire) HMA from over 3400 to around 300, that is by some 400 a year from an overall requirement of 89% of RSS target supply to about 78%.

3.8.e It also considerably reduces the requirement for Intermediate Housing in the model, to just 11% in the HMA overall.

3.8.f So what this may suggest is that that the additional increase in house prices resulting in part from Buy to Let has reduced the number of households who have been able to move into owner occupation. Buy to Let has then in effect captured this demand and partly met some of the ‘need’ that it has created.

3.9 Public attitudes

3.9.a Some members of the public see this situation more starkly. The campaigning organisation for would be house buyers www.pricedout.org comments :-

Appendix 3:18 Extract from Priced Out

The sad truth is that any void left by the “youngsters” is being amply filled by the buy-to-let market, which is supplying the rented accommodation for those very people who would otherwise be first-time buyers themselves. It certainly keeps the market afloat, albeit at the expense of those who would prefer to own their own home earlier in life

3.9.b Governments have frequently tried to revive the PRS, to bring in private funds to help meet housing need. The Assured Shorthold Tenancy regime introduced in 1988, along with Buy to Let, has certainly done this, but while the intention of government policy was that this should help meet housing need, what it appears to have done in part is to extend that need up the income scale, and then meet that.

3.9.c While Buy to Let has become demonised in some quarters, others look for ways to address the problems that have accompanied its growth. The All Party Urban Development Group4 included in its eight recommendations that government should incentivise long term private sector investment in residential property and the development of a strong private rented sector. The British Property Foundation5 almost simultaneously called for large institutions to enter the PRS and provide ‘Branded Rental’, along with a ‘Build to Let’ Planning permission category.

3.9.d While the market may in time resolve some of the issues of the PRS, it seems clear that it will not do so alone in current, dysfunctional UK housing markets. The result of all this ultimately seems to be that policies towards the PRS should be more evidence based, understand the links and complexities within the market, and be tailored to specific, local circumstances. Current ideas and possible alternatives are considered further in the Policy directions and options section.

3.10 Social housing supply

3.10.a The supply of social housing comes mainly from:-

• Local authority (LA) or Large Scale Voluntary Transfer Landlord (LSVT) relets • Housing association or Registered Social Landlord ( RSL) relets and new lets • RSL Intermediate Housing Schemes, mainly Low Cost Home Ownership (LCHO) • Affordable housing schemes provided by developers and other institutions.

3.10.b Data is now very good on many of these, with records of theoretically all LA and RSL social stock being collected into a National Register of Social Housing (NROSH); and CORE (Continuous Recording of lettings) giving extensive data on every LA and RSL let and LCHO sale.

3.10.c For this SHMA project database records of all housing stock was requested from local authorities and housing associations operating in the HMA. This resulted in some 44,000 LA and 17,000 RSL stock records, some 98% of which was able to be mapped to compare with other housing market factors such as house prices, turnover, and

4 Delivering Urban Homes, 2008, http://www.allparty-urbandevelopment.org.uk/reports.html 5 http://www.bpf.org.uk/newsroom/pressreleases/document/23332/branded-rental-could- solve-housing-crisis

lifestyle categories. The information fields provided were often not consistent, however, so comparisons within the stock data are often difficult and there are gaps.

3.11 Local authority stock and lettings

3.11.a The pattern of LA stock is shown in the map below, although a fixed format shows little and the real value of the data is when used and visualised interactively in GIS.

Appendix 3:19 Patterns of local authority housing stock

3.11.b The nature and proportion of local authority housing is one of the key drivers of local markets, and is typically linked with lower house prices.

It is therefore also a key determinant in local perceptions of housing submarkets.

Appendix 3:20 Leicester area average submarket house prices 2007 and LA stock

3.11.c Where available, the LA estate boundaries also show a strong correlation with lower prices.

Appendix 3:21 Leicester City Council estate areas and house price patterns

3.11.d However the estate boundaries do not show the concentration of LA housing stock within them, and on many estates large proportions of the stock have been sold under Right to Buy.

3.11.e The extent of sales within estate areas is one indicator of how mixed tenure they have become. In Leicester City, with by far the largest number and proportion of local authority housing, this ranges from over 50% in area like Coleman Road, Kirby, Goodwood, etc; to just 2% to 5% in St Andrews, Beatty Avenue and St Matthews.

Appendix 3:22 Leicester City Council sales by estate to 01/04/2007 Original Current Number % of Estate Number Number sold Estate Coleman Road 450 145 299 66.44 Kirby 325 117 205 63.08 Goodwood 992 454 536 54.03 Evington 536 263 273 50.93 Stocking Farm 1,114 546 566 50.81 Eyres Monsell 3,797 1736 1915 50.43 Netherhall 1,720 866 851 49.48 Thurnby Lodge 2,458 1255 1189 48.37 Braunstone South 3,141 1388 1477 47.02 Rushey Mead 253 144 108 42.69 Braunstone Frith 1,273 727 543 42.66 Miscellaneous* 2,005 894 810 40.40 New Parks 4,047 2411 1632 40.33 Gilmorton 320 164 129 40.31 Small Development 414 250 163 39.37 Belgrave 387 242 145 37.47 Abbey Rise 424 269 155 36.56 North/Tailby/Morton 1,654 1058 586 35.43 St Marks 577 376 204 35.36 Mowmacre Hill 1,405 939 449 31.96 Saffron 2,567 1613 757 29.49 Rupert 368 264 103 27.99 West End 470 336 130 27.66 Rowlatts Hill 1,072 519 287 26.77 Beaumont Leys 2,421 1755 485 20.03 Braunstone North 1,977 1360 396 20.03 Charnwood 422 336 83 19.67 St Peters 972 875 97 9.98 St Matthews 1,602 1235 81 5.06 Beatty Avenue 96 92 4 4.17 St Andrews 239 55 5 2.09 Total 39,500 22,686 14663 37.12 Source: Leicester City Council (2007)

3.11.f Areas can then also gradually move into the general sales housing market, with prices rising to match others, or some estate areas may tend to remain lower priced. Conversely, the higher prices rise the less affordable an area becomes, and the more sales that take place the fewer affordable social relets come available.

3.11.g The optimum solution would seem to be an even spread of sales and mixing, so that estate areas do not remain stubbornly at the bottom of the market with unpopular reputations.

3.11.h Research suggests that this is very difficult to achieve, and that areas form reputations early and carry them for a very long time6. The Joseph Rowntree study Neighbourhood identity: effects of time, location and social class (2008) found that:-

3.11.i Neighbourhood identity was established at a very early stage of each neighbourhood's history, and proved resilient to change. Such identities were underpinned by social class and status – which was sometimes based on historic male employment patterns – as well as physical characteristics, including housing style, type and tenure.

3.11.j The actual flow of supply of local authority lettings can in theory now be reasonably estimated using HSSA and CORE data. The HSSA (Housing Strategy Statistical Appendix) is an annual monitoring return to CLG which gives total numbers of lets, including transfers and mutual exchanges.

3.11.k Core is a recording system which records details of every letting. All RSLs are required to participate, but not all Leicestershire councils have participated for long enough in LA CORE to give complete records. The starting dates for participation in core for the Leicester(&shire) local authorities were:-

Blaby - Apr 05 Charnwood - Jan 07 Harborough - Oct 04 Hinckley & Bosworth - Dec 05 Leicester City - Oct 06 Melton - Aug 06 NW Leicestershire - Apr 06 Oadby & Wigston - Apr 06

3.11.l All therefore have some lets recorded in the CORE data for 2006/7, but Leicester City and Charnwood have only part years. So for these the part year data was grossed up to the total figures given in HSSA returns to give estimates of annual lets that could be used at a more localised level. Clearly this could lead to distortions, and better data would improve the evidence.

3.11.m The data can then be used to give rough estimates of turnover for smaller areas. Submarkets are likely to be the most useful and

6 http://www.jrf.org.uk/knowledge/findings/housing/2188.asp

informative, as they are intended to represent real aspects of the housing market; and many do also closely reflect local authority estate areas where this is what drives the submarket identity.

3.11.n Lettings totals and turnover as a percentage of LA and RSL stock by submarket are shown in the table below.

Appendix 3:23 LA and RSL lets and turnover as % of stock by submarket

All LA LA % RSL RSL RSL turnover submarket stock LA lets turnover stock lets turnover % A47, M69 rural corridor 473 35 7% 128 15 12% 8% Alan Moss Road, Epinal Way 620 36 6% 39 35 90% 11% Asfordby centre 154 4 3% 20 1 5% 3% Asfordby outer 17 0 0% 14 0 0% 0% Asfordby Road 396 7 2% 86 19 22% 5% Ashby 379 46 12% 163 0 0% 8% Astill Lodge 329 24 7% 172 6 3% 6% Aylestone 173 10 6% 236 10 4% 5% Aylestone Village 2 0 0% 68 8 12% 11% Bagworth, Barlestone 171 13 8% 103 3 3% 6% Bardon & Forest Road 3 3 100% 113 0 0% 3% Barwell 383 13 3% 124 9 7% 4% Barwell Lane Hinckley 1 0 0% 2 0 0% 0% Beaumont Leys 1537 220 14% 675 56 8% 12% Belgrave 783 48 6% 857 91 11% 8% Belvoir_Vale_East 29 3 10% 0 0 0% 10% Belvoir_Vale_West 183 1 1% 39 0 0% 0% Blaby central villages 1279 67 5% 358 24 7% 6% Braunstone Town 189 28 15% 95 3 3% 11% Brookside 433 16 4% 22 2 9% 4% Broughton Astley 131 11 8% 76 5 7% 8% Burbage outer 90 3 3% 16 0 0% 3% Burbage Village 45 3 7% 10 0 0% 5% Burton Road_Ankle Hill 31 4 13% 2 0 0% 12% Castle Donnington 334 30 9% 34 0 0% 8% Central Loughborough 126 30 24% 164 12 7% 14% Charnwood_Edge 814 60 7% 144 11 8% 7% City Centre 34 14 41% 820 197 24% 25% Clarendon Park 49 4 8% 148 8 5% 6% Coalville 317 33 10% 321 1 0% 5% Coalville West 133 10 8% 25 0 0% 6% Coleman Road 975 64 7% 246 24 10% 7% Coventry Road 261 16 6% 20 2 10% 6% Desford 290 11 4% 67 3 4% 4% Dominion Road 231 12 5% 20 4 20% 6% Earl Shilton 483 35 7% 151 31 21% 10% East Knighton 18 0 0% 39 2 5% 4% East Loughborough 838 150 18% 807 64 8% 13%

East Mkt Harboro 2 0 0% 51 9 18% 17% Edendale 33 0 0% 35 1 3% 1% Evington Road 100 6 6% 284 13 5% 5% Evington Village 349 18 5% 3 0 0% 5% Eyres Monsell 1990 123 6% 98 6 6% 6% Fairfields 0 0 0% 1 0 0% 0% Fairmead 147 5 3% 42 6 14% 6% Fleckney Village 101 14 14% 36 1 3% 11% Forest 76 12 16% 3 1 33% 16% Forest Road 132 16 12% 155 14 9% 10% Gilmorton 164 10 6% 0 0 0% 6% Gipsy Lane 3 0 0% 21 2 10% 8% Glen Parva 40 6 15% 36 1 3% 9% Glen&Kibworth 255 18 7% 100 13 13% 9% Glenfield Road 93 18 19% 108 29 27% 23% Grange Drive 0 0 0% 9 1 11% 11% Greenhill 389 46 12% 378 0 0% 6% Groby Road 18 0 0% 16 2 13% 6% Groby, Ratby, Kirby 536 15 3% 88 9 10% 4% Harboro Rural East 141 8 6% 18 1 6% 6% High_Leicestershire 12 0 0% 0 0 0% 0% Hinckley Centre north 38 1 3% 15 0 0% 2% Hinckley centre south 62 12 19% 43 0 0% 11% Hinckley northern ring 14 0 0% 7 0 0% 0% Hinckley western ring 0 0 0% 33 32 97% 97% Horsewell Lane 117 6 5% 6 0 0% 5% Humberstone Lane 1 0 0% 40 1 3% 2% Humberstone Village 126 4 3% 51 10 20% 8% Husbands Bosworth 82 2 2% 13 3 23% 5% Ibstock 270 20 7% 49 0 0% 6% Kirby Frith 705 74 10% 417 20 5% 8% Knighton Fields 178 0 0% 69 3 4% 1% Leicester Forest East 209 22 11% 35 0 0% 9% Leicester Rd Melton 90 24 27% 102 5 5% 15% Leicester Road Hinckley 0 0 0% 1 0 0% 0% Loughborough and surround 730 83 11% 134 19 14% 12% Loughborough Forestside 33 0 0% 203 5 2% 2% Lutterworth 592 39 7% 237 3 1% 5% Market Bosworth 130 9 7% 49 4 8% 7% Market Harborough fringe 47 0 0% 26 16 62% 22% Markfield 126 6 5% 27 3 11% 6% Maxwell Drive South 6 0 0% 110 8 7% 7% Meadow Lane 2 0 0% 32 0 0% 0% Melton Town Centre 343 15 4% 15 2 13% 5% Melton_mid_rur 88 19 22% 2 0 0% 21% Melton_Mowbray fringe 41 2 5% 12 1 8% 6% Melton_rural_east 47 5 11% 18 0 0% 8% Melton_rural_south 28 0 0% 7 0 0% 0% Melton_rural_west 32 0 0% 5 0 0% 0% Mkt Harboro town centre 8 0 0% 79 1 1% 1% Narborough Road 417 34 8% 153 25 16% 10%

Netherhall-Hamilton 0 0 0% 197 37 19% 19% New Parks 2310 158 7% 79 7 9% 7% Newton Lane 6 0 0% 6 0 0% 0% North Braunstone 1238 80 6% 216 18 8% 7% North Hinckley 236 7 3% 82 5 6% 4% North Mkt Harboro 31 2 6% 10 0 0% 5% Northfields 994 76 8% 47 21 45% 9% Nottingham Road 10 0 0% 24 0 0% 0% Oadby Central 217 28 13% 45 2 4% 11% Oadby Grange 0 0 0% 32 2 6% 6% Oadby Manor Rd 1 1 100% 0 0 0% 100% Old Ashby Road 268 42 16% 24 4 17% 16% Park Rise 13 0 0% 48 0 0% 0% Queensway 189 4 2% 2 0 0% 2% Queensway 189 4 2% 2 0 0% 2% Ridgeway 225 17 8% 94 8 9% 8% Rosemead Drive 61 1 2% 46 3 7% 4% Roston Drive 59 3 5% 99 20 20% 15% Rowley Fields 0 0 0% 0 0 0% 0% Rusheymead 147 26 18% 26 0 0% 15% Saffron Lane 1544 74 5% 233 9 4% 5% Scalford Road 0 0 0% 81 7 9% 9% Shelthorpe 463 18 4% 42 1 2% 4% Sketchley Lane 0 0 0% 1 0 0% 0% Soar_Valley 1119 120 11% 195 11 6% 10% South Braunstone 565 20 4% 430 14 3% 3% South Derbyshire Villages 9 2 22% 9 0 0% 11% South Highfields 305 20 7% 581 52 9% 8% South Knighton 62 0 0% 20 0 0% 0% South Wigston 150 20 13% 202 7 3% 8% Southern rural NWL 102 8 8% 6 0 0% 7% Spinney Hills 1185 68 6% 866 71 8% 7% St Andrews 79 2 3% 67 71 106% 50% St Matthews 1239 70 6% 72 1 1% 5% St Saviours Road 197 4 2% 42 12 29% 7% Stadium Estate 11 0 0% 130 5 4% 4% Stocking Farm 1753 118 7% 74 9 12% 7% Stoke Golding 98 5 5% 26 2 8% 6% Stoneygate 2 0 0% 31 0 0% 0% Swad/Albert Village 89 9 10% 22 0 0% 8% The Woulds 776 48 6% 88 0 0% 6% Thorpe Astley 53 4 8% 2 0 0% 7% Thorpe Road 0 0 0% 11 0 0% 0% Thorpe Road North MM 9 0 0% 0 0 0% 0% Thurnby 254 19 7% 87 15 17% 10% Thurncourt 1880 108 6% 108 5 5% 6% Twycross 41 1 2% 24 1 4% 3% Twycross Road area 38 0 0% 27 0 0% 0% Uplands Road 39 1 3% 31 0 0% 1% Vale_North 98 4 4% 48 2 4% 4% Valley 204 13 6% 14 0 0% 6% Welland Park 458 41 9% 92 8 9% 9%

West End 237 16 7% 586 28 5% 5% West Knighton 100 4 4% 137 11 8% 6% West Mkt Harboro 11 2 18% 28 3 11% 13% Whitwick/Thringstone 753 43 6% 96 0 0% 5% Wigston Central 267 32 12% 29 3 10% 12% Wigston Estate 297 8 3% 16 0 0% 3% Wigston Fields 0 0 0% 67 4 6% 6% Winstanley Drive 673 46 7% 136 7 5% 7% Wolds 29 6 21% 7 0 0% 17% Woodthorpe 0 0 0% 49 2 4% 4% Wreake_Valley 500 66 13% 245 23 9% 12% Wykin 137 5 4% 20 0 0% 3% Sources: LA property databases, CORE.

3.11.o Many differences are simply due to random variation, and there are few clear patterns. Areas with small amounts of social stock in particular can show high percentage turnover due to just a few random relets, or conversely none at all. The grossing up may also cause some distortion.

3.11.p However some patterns appear more meaningful. High rates of turnover appear with more social stock in areas like the City Centre, St Andrews and Glenfield Road. But also many areas with higher levels of council and RSL housing show moderate levels of turnover, and some very low. The submarket areas with the most social housing stock (over 500) are shown in the extracted table below.

Appendix 3:24 Highest social stock levels by submarket and turnover.

All LA LA % RSL RSL RSL turnover submarket stock LA lets turnover stock lets turnover % New Parks 2310 158 7% 79 7 9% 7% Eyres Monsell 1990 123 6% 98 6 6% 6% Thurncourt 1880 108 6% 108 5 5% 6% Stocking Farm 1753 118 7% 74 9 12% 7% Saffron Lane 1544 74 5% 233 9 4% 5% Beaumont Leys 1537 220 14% 675 56 8% 12% Blaby central villages 1279 67 5% 358 24 7% 6% St Matthews 1239 70 6% 72 1 1% 5% North Braunstone 1238 80 6% 216 18 8% 7% Spinney Hills 1185 68 6% 866 71 8% 7% Soar_Valley 1119 120 11% 195 11 6% 10% Northfields 994 76 8% 47 21 45% 9% Coleman Road 975 64 7% 246 24 10% 7% East Loughborough 838 150 18% 807 64 8% 13% Charnwood_Edge 814 60 7% 144 11 8% 7% Belgrave 783 48 6% 857 91 11% 8% The Woulds 776 48 6% 88 0 0% 6% Whitwick/Thringstone 753 43 6% 96 0 0% 5%

Loughborough and surround 730 83 11% 134 19 14% 12% Kirby Frith 705 74 10% 417 20 5% 8% Winstanley Drive 673 46 7% 136 7 5% 7% Alan Moss Road, Epinal Way 620 36 6% 39 35 90% 11% Lutterworth 592 39 7% 237 3 1% 5% South Braunstone 565 20 4% 430 14 3% 3% Groby, Ratby, Kirby 536 15 3% 88 9 10% 4% Wreake_Valley 500 66 13% 245 23 9% 12% Sources: Housing provider databases, CORE

3.11.q The type of turnover in each area can give an indication of its nature and position in the submarket structure.

In the HMA overall the mix of local authority lettings is:-

Appendix 3:25 Local Authority lettings (whole HMA) 1 bed 2 bed 3 bed 4 bed 5 bed 36% 40% 22% 1% 0.1% Source: CORE (N.B. CORE does not record bedsits and larger than 5 beds separately)

3.11.r By local authority the pattern is fairly similar, but with noticeably more one bed lets in the local authorities of Leicester and Charnwood with larger urban areas. However, it should also be remembered that one beds can be both flats often mainly occupied by transient young people, and older persons housing which may have much less turnover, giving rise to wide variation within this category.

Appendix 3:26 Number of bedrooms of local authority lets LA 1 bed 2 bed 3 bed 4 bed 5 bed Blaby 22% 66% 11% 0.0% 0.0% Charnwood 51% 39% 9% 1.0% 0.0% Harborough 18% 66% 16% 0.0% 0.0% Hinckley & Bosworth 20% 57% 23% 0.5% 0.0% Leicester 46% 30% 23% 1.3% 0.3% Melton 18% 52% 29% 1.3% 0.0% North West Leics 14% 55% 29% 1.6% 0.0% Oadby & Wigston 27% 44% 28% 0.0% 0.0% overall 36% 40% 22% 1.0% 0.1% Source: CORE

3.11.s The compiled stock data, although it has gaps and problems, suggests that the distribution by number of bedrooms is:-

Appendix 3:27 Local authority stock size profile 1 2 3 4 5 6 7 LA bedsits bed bed bed bed bed bed bed Blaby 0% 37% 38% 25% 1% 0.0% 0.0% 0.0% Charnwood 0% 45% 15% 38% 2% 0.0% 0.0% 0.0% Harborough 0% 33% 35% 32% 1% 0.0% 0.0% 0.0% Hinckley & Bosworth 0% 26% 32% 42% 0% 0.0% 0.0% 0.0% Leicester 2% 32% 24% 39% 2% 0.5% 0.1% 0.0% Melton number of bedrooms data not available NW Leicestershire 2% 20% 28% 47% 3% 0.1% 0.0% 0.0% Oadby & Wigston 0% 28% 30% 40% 1% 0.0% 0.0% 0.0% Overall 6% 31% 24% 37% 2% 0.3% 0.1% 0.0% Source: LA stock database systems

3.11.t The generally higher level of lets of smaller one and two bed properties is noticeable, and shows how little larger housing stock there is and how infrequently it become available.

3.11.u By submarket there is much more variation, as would be expected, but the particular causes will be due to local circumstances and stock mixes

Appendix 3:28 LA lets by housing submarket 2006/7

Submarket 1 bed 2 beds 3 beds 4 beds 5+ beds A47, M69 rural corridor 0% 91% 9% 0% 0% Alan Moss Road, Epinal Way 67% 17% 17% 0% 0% Asfordby centre 0% 100% 0% 0% 0% Asfordby Road 14% 0% 71% 14% 0% Ashby 9% 54% 37% 0% 0% Astill Lodge 75% 17% 8% 0% 0% Aylestone 20% 60% 20% 0% 0% Bagworth, Barlestone 0% 54% 38% 8% 0% Bardon & Forest Road 33% 33% 33% 0% 0% Barwell 8% 54% 38% 0% 0% Beaumont Leys 28% 46% 25% 1% 0% Belgrave 54% 46% 0% 0% 0% Belvoir_Vale_East 0% 0% 100% 0% 0% Belvoir_Vale_West 0% 100% 0% 0% 0% Blaby central villages 30% 55% 15% 0% 0% Braunstone Town 79% 18% 4% 0% 0% Brookside 31% 50% 19% 0% 0% Broughton Astley 18% 82% 0% 0% 0%

Burbage outer 33% 67% 0% 0% 0% Burbage Village 100% 0% 0% 0% 0% Burton Road_Ankle Hill 25% 75% 0% 0% 0% Castle Donnington 20% 50% 27% 3% 0% Central Loughborough 60% 40% 0% 0% 0% Charnwood_Edge 50% 50% 0% 0% 0% City Centre 57% 43% 0% 0% 0% Clarendon Park 100% 0% 0% 0% 0% Coalville 21% 73% 6% 0% 0% Coalville West 0% 80% 20% 0% 0% Coleman Road 66% 25% 9% 0% 0% Coventry Road 44% 50% 6% 0% 0% Desford 0% 64% 36% 0% 0% Dominion Road 0% 100% 0% 0% 0% Earl Shilton 34% 26% 40% 0% 0% East Loughborough 76% 24% 0% 0% 0% Evington Road 67% 33% 0% 0% 0% Evington Village 100% 0% 0% 0% 0% Eyres Monsell 53% 29% 18% 0% 0% Fairmead 20% 0% 80% 0% 0% Fleckney Village 29% 64% 7% 0% 0% Forest 0% 50% 0% 50% 0% Forest Road 88% 13% 0% 0% 0% Gilmorton 80% 0% 0% 0% 20% Glen Parva 83% 17% 0% 0% 0% Glen&Kibworth 17% 61% 22% 0% 0% Glenfield Road 33% 44% 11% 11% 0% Greenhill 7% 59% 33% 2% 0% Groby, Ratby, Kirby 13% 73% 13% 0% 0% Harboro Rural East 38% 38% 25% 0% 0% Hinckley Centre north 0% 0% 100% 0% 0% Hinckley centre south 0% 100% 0% 0% 0% Horsewell Lane 67% 33% 0% 0% 0% Humberstone Village 100% 0% 0% 0% 0% Husbands Bosworth 0% 100% 0% 0% 0% Ibstock 30% 55% 15% 0% 0% Kirby Frith 68% 19% 14% 0% 0% Leicester Forest East 18% 68% 14% 0% 0% Leicester Rd Melton 0% 100% 0% 0% 0% Loughborough and surround 24% 47% 29% 0% 0% Lutterworth 26% 54% 21% 0% 0% Market Bosworth 11% 78% 11% 0% 0% Markfield 0% 100% 0% 0% 0% Melton Town Centre 60% 40% 0% 0% 0% Melton_mid_rur 100% 0% 0% 0% 0% Melton_Mowbray fringe 0% 100% 0% 0% 0% Melton_rural_east 20% 20% 60% 0% 0% Narborough Road 94% 6% 0% 0% 0% New Parks 30% 27% 35% 8% 0% North Braunstone 35% 5% 55% 5% 0% North Hinckley 0% 100% 0% 0% 0%

North Mkt Harboro 0% 100% 0% 0% 0% Northfields 32% 8% 61% 0% 0% Oadby Central 7% 64% 29% 0% 0% Oadby Manor Rd 100% 0% 0% 0% 0% Old Ashby Road 71% 14% 14% 0% 0% Queensway 0% 0% 100% 0% 0% Ridgeway 12% 76% 12% 0% 0% Rosemead Drive 0% 0% 100% 0% 0% Roston Drive 33% 67% 0% 0% 0% Rusheymead 92% 0% 8% 0% 0% Saffron Lane 19% 30% 49% 0% 3% Shelthorpe 33% 33% 33% 0% 0% Soar_Valley 25% 60% 15% 0% 0% South Braunstone 40% 30% 30% 0% 0% South Derbyshire Villages 0% 0% 100% 0% 0% South Highfields 50% 50% 0% 0% 0% South Wigston 50% 10% 40% 0% 0% Southern rural NWL 25% 63% 13% 0% 0% Spinney Hills 74% 24% 3% 0% 0% St Andrews 0% 100% 0% 0% 0% St Matthews 14% 83% 3% 0% 0% St Saviours Road 50% 0% 50% 0% 0% Stocking Farm 39% 34% 27% 0% 0% Stoke Golding 40% 20% 40% 0% 0% Swad/Albert Village 0% 89% 11% 0% 0% The Woulds 21% 42% 33% 4% 0% Thorpe Astley 25% 75% 0% 0% 0% Thurnby 32% 47% 21% 0% 0% Thurncourt 39% 43% 19% 0% 0% Twycross 0% 0% 100% 0% 0% Uplands Road 0% 100% 0% 0% 0% Vale_North 0% 0% 100% 0% 0% Valley 23% 38% 38% 0% 0% Welland Park 12% 71% 17% 0% 0% West End 63% 38% 0% 0% 0% West Knighton 0% 100% 0% 0% 0% West Mkt Harboro 50% 50% 0% 0% 0% Whitwick/Thringstone 5% 65% 28% 2% 0% Wigston Central 28% 47% 25% 0% 0% Wigston Estate 25% 25% 50% 0% 0% Winstanley Drive 65% 0% 35% 0% 0% Wolds 0% 100% 0% 0% 0% Wreake_Valley 64% 36% 0% 0% 0% Wykin 20% 20% 60% 0% 0%

3.11.v The volatility of data at this level needs to be borne in mind, and the figures can only ever be indicative and subject to local confirmation and interpretation. Nevertheless the data can give indications of what is happening in these local areas. If these submarkets, identified by local knowledge, do represent areas which form a background pattern to households’ choices and preferences about where they do and do not

want to live, then this can give supporting evidence for more sophisticated and targeted policy and interventions.

3.11.w The local knowledge of residents, front line workers and local Councillors is always invaluable in this. The detailed evidence from data, although often variable and changeable, will usually support their perceptions and insights. Their knowledge is often better market intelligence than the data, but can be prompted and supplemented by it, and bulk data can assist by allowing consistency, visualisation and rapid handling where consultation can be very time intensive.

3.12 Housing associations (Registered Social Landlords – RSLs) lets

3.12.a Housing association stock is another major source of supply of housing defined as affordable, also important because they are now the main source of new supply of affordable housing and Intermediate Housing, as well as relets of existing stock. The total extent of supply from RSLs is still less than half of that from council relets, but the numbers increase steadily.

3.12.b Housing Corporation RSR returns give stock totals. For Leicester City, the total is greatly are increased by hostel bedspaces, which also have more rapid turnover and so increase the flow of supply.

Appendix 3:29 RSL stock LA self- contained total units/bed Total number spaces of general needs lettings

Leicester 6,893 8,572 2,536 Blaby 497 506 70 Charnwood 1,659 1,659 232 Harborough 439 445 91 HBBC 1,111 1,111 147 Melton 293 305 40 NWLeics 1,110 1,115 156 OWBC 285 320 31 Totals 12,287 14,033 3,303 Source: RSR returns 2006/7

3.12.c HSSA and CORE give more useful figures of self contained general needs lets. Supply at local authority level is also shown in the section on housing needs.

Appendix 3:30 Housing association lets Local authority 2003/04 2004/05 2005/06 2006/07 trend average Blaby 50 74 60 69 59 63 Charnwood 236 227 286 161 262 228 Harborough 45 51 43 76 43 54 Hinckley and Bosworth 140 136 234 133 246 161 Leicester 948 870 700 677 655 799 Melton 99 39 74 42 64 64 North West Leicestershire 163 172 181 149 164 166 Oadby and Wigston 20 25 30 25 30 25 Overall 1701 1594 1608 1332 1521 1559 Source: HSSA (accessed February 2008)

3.12.d While some local authorities have random variations, others have reducing numbers of RSL lets, especially the larger authorities. The overall trend is downwards by about 8% per year, and since 2003/4 the total is down by some 370 lets or 22%.

3.12.e At more detailed levels different patterns can be identified.

By settlement there is much random variation, especially in smaller settlements, but the larger settlements show some similarity in the level of turnover at around 10%, which is close to the national average turnover for all tenures. No settlements with significant RSL stock levels show high rates of ‘churning’. Some lets are new, first time lettings and additions to affordable stock.

Appendix 3:31 RSL stock and lets by settlement RSL RSL lets ( lets ( include include RSL s new % turn RSL es new % turn settlement stock lets) over settlement stock lets) over Anstey 48 9 19% Kegworth 18 2 11% Asfordby 34 1 3% Kibworth Harcourt 76 Ashby-de-la-Zouch 154 27 18% Kirby Muxloe 4 Barlestone 63 2 3% Leicester 8978 887 10% Barrow upon Soar 16 Leicester Urbana 9847 928 9% Beaumont Leys 148 6 4% Long Clawson 30 Billesdon 6 Long Whatton 5 Birstall 29 Loughborough 1430 127 9% Blaby 113 8 7% Lubenham 4 Bottesford 48 2 4% Lutterworth 179 3 2% Broughton Astley 76 5 7% Market Bosworth 35 1 3% Burton Overy 2 Market Harboro 387 40 10% Castle Donington 34 1 3% Markfield 18 3 17% Claybrooke Magna 1 Measham 36 6 17% Coalville 831 85 10% Melton Mowbray 408 41 10% Cosby 1 3 300% Mountsorrel 124 5 4% Countesthorpe 50 2 4% Narborough 61 1 2% Croft (Blaby) 45 2 4% Newbold Verdon 40 1 3% Desford 27 2 7% Oadby 122 5 4% Donisthorpe 42 3 7% Old Dalby 9 Earl Shilton 258 17 7% Ratby 48 7 15% East Goscote 1 Ravenstone 3 Ellistown 12 1 8% Rearsby 5 Enderby 87 9 10% Sapcote 7 Fleckney 30 Sharnford 1 Foxton (Harboro) 3 2 67% Sheepy Magna 15 Great Glen 3 Shepshed 78 16 21%

Groby 39 1 3% Sileby 42 5 12% Hathern 3 Stoke Golding 3 Heather 2 Stoney Stanton 73 7 10% Higham on he Hill 8 Thornton (HBBC) 16 Hinckley 398 45 11% Ullesthorpe 13 Houghton on Hill 1 Whetstone 42 Huncote 1 Wigston 323 11 3% Husbands Boswrth 7 1 14% Woodhouse Eaves 1 Ibstock 44 4 9% Source: RSL property databases, CORE

3.12.f Submarkets also show considerable variation, with noticeable higher rates of turnover where there is an appreciable amount of RSL stock in just a few locations. Some of these may be due to new lets.

Appendix 3:32 Higher turnover rates by submarkets with 100+ RSL stock submarket RSL stock RSL lets % A47, M69 rural corridor 128 15 12% Ashby 163 27 17% City Centre 820 167 20% Glen&Kibworth 100 13 13% Glenfield Road 108 30 28% Greenhill 378 46 12% Loughborough Central 104 12 12% Narborough Road 153 28 18% Source: CORE

3.12.g Analysis of relets in CORE shows a range of reasons, with some much more common than others.

Appendix 3:33 Reasons for letting of RSL properties 2006-7 Hinc kley & North Oadby Reason Leic Charn Harbo Bos Me West & Wigs for vacancy ester Blaby wood rough worth lton Leics ton Total New let 106 1 36 49 62 3 7 4 268 Relet - internal transfer 137 5 19 5 10 6 20 2 204 Relet – previous tenant moved to (other) LA 35 4 26 11 11 9 10 1 107 Relet - previous tenant moved to (other) HA 19 2 8 2 1 5 5 1 43

Relet - previous tenant died 44 7 9 3 11 3 3 2 82 Relet - property abandoned 66 3 16 1 7 1 17 0 111 Relet - previous tenant evicted 67 5 22 1 10 3 22 3 133 Relet - prev tenant moved to private sector or other accom 427 23 70 27 33 18 58 8 664 Relet - to tenant occupied property as temp accom 8 0 1 1 0 0 2 0 12 Total 909 50 207 100 145 48 144 21 1624 Source: CORE

3.12.h Across the whole HMA the most common reason for a relet is that the previous tenant moved to the private sector or other accommodation. This was highest in Leicester at 47%, and lowest in Hinckley & Bosworth at 23% and Harborough at 27%.

Appendix 3:34 Reasons for RSL vacancies Reason for vacancy Total Reason % New let 268 17% Relet - internal transfer 204 13% Relet - previous tenant moved to (other) LA 107 7% Relet - previous tenant moved to (other) HA 43 3% Relet - previous tenant died 82 5% Relet - property abandoned by previous tenant 111 7% Relet - previous tenant evicted 133 8% Relet - prev tenant moved to private sector or other accom 664 41% Relet - to tenant occupied property as temp accom 12 1% Total 1624 100% Source: CORE 2006/7

3.12.i Over half of all new lets in the HMA were in Leicester, but new lets were a higher proportion of lets in Harborough and Hinckley, which had large schemes of new developments coming available.

Appendix 3:35 RSL new and relets % of RSL % of all lets in HMA LA that Local authority New lets All lets new lets were new Leicester 106 909 56% 12% Blaby 1 50 3% 2% Charnwood 36 207 13% 17% Harborough 49 100 6% 49% Hinckley & Bosworth 62 145 9% 43% Melton 3 48 3% 6% North West Leics 7 144 9% 5% Oadby & Wigston 4 21 1% 19% Total 268 1624 100% 17% Source: CORE 2006/7

3.12.j The RSR data shows just 128 RSL properties empty at 41/3/2007, which is just 1% of the total.

Appendix 3:36 RSL voids at 31/3/07 LA No of self-contained units vacant at 31/03/07

Leicester 60 Blaby 9 Charnwood 34 Harborough 3 Hinckley & Bosworth 8 Melton 1 North West Leicestershire 11 Oadby & Wigston 2 Total 128 Source: RSR 2006/7

3.12.k However the records of empty properties from Leicester City Council Tax records indicate rather more than this, with over 300 RSL properties empty in the city alone, although this also included properties for sale.

3.13 Intermediate Housing sales

3.13.a Housing associations are currently the main source of Intermediate Housing (IH) supply, mainly through shared ownership but also other products such as the various Homebuy schemes. Much of it is aimed at households who cannot afford full ownership, but IH also includes sub market rental.

3.13.b Developers and others are beginning to develop IH products themselves, and this may become increasingly common.

3.13.c CORE gives comprehensive data on IH sales through housing associations. Shared ownership sales and resales can sometimes be marketed and sold through Estate Agents, in which case the data is not recorded in CORE, but this is not believed to be common in Leicestershire.

3.13.d Over recent years sales in the Leicester(&shire) HMA have been:-

Appendix 3:37 Intermediate sales 2006-7 Hom e Own Outri ershi ght p for Sale peopl Any - e other Right New with Open shar to Right build long New mark Shared ed Acqu To or Othe term build et Ownershi owne ire - Buy - conv r disab Hom Hom Tota p rship RTA RTB erted Sale ilities eBuy eBuy l Leicester 17 1 2 3 31 1 0 0 3 58 Blaby 6 2 0 0 0 0 0 0 1 9 Charnwood 22 9 0 0 0 0 1 0 5 37 Harborough 22 5 0 0 0 0 0 0 0 27 HBBC 2 0 0 0 0 0 0 0 1 3 Melton 2 0 0 0 0 0 0 0 0 2 NW Leics 9 0 0 0 0 0 0 2 1 12 OWBC 5 0 0 0 0 0 0 0 1 6 total 85 17 2 3 31 1 1 2 12 154 Source: CORE

Appendix 3:38 Intermediate sales 2004-5 Share d Owner Out ship right for Right Sale - people Any to New with Share other Acquir build long d shared e - Right or term Owner owner RTA or To Buy rehab Other Home disa ship ship SPG - RTB ilitaion Sale Buy bilities Total Leicester 28 0 1 2 14 3 17 4 69 Blaby 0 0 0 0 0 0 6 1 7 Charnwood 7 5 0 1 0 0 18 1 32 Harborough 8 0 0 0 0 0 13 0 21 HBBC 2 0 0 0 0 0 3 2 7 Melton 6 0 0 0 0 0 1 0 7 NW Leics 14 0 0 0 0 0 4 2 20 OWBC 2 0 0 0 0 0 2 0 4 Total 67 5 1 3 14 3 64 10 167 Source: CORE

Appendix 3:39 Intermediate sales 2005-6 Outrig ht Voluntar Right Rig Sale - Leaseh y to ht New old Any Purchas Acqui To build Scheme other e re - Buy or Shared s for the shared Agreem RTA - reha Hom Owners Elderly - owners ent or RT bilitaio e Tot hip LSE hip (VPA) SPG B n Buy al Leicester 11 0 4 8 1 3 0 8 35 Blaby 5 0 0 0 0 0 0 3 8 Charnwo od 26 0 0 0 1 0 24 6 57 Harborou gh 28 2 0 0 0 0 0 4 34 HBBC 10 0 1 0 0 0 0 0 11 Melton 14 0 0 0 0 0 0 0 14 NW Leics 6 0 0 2 0 0 0 4 12 OWBC 2 0 0 0 0 0 0 1 3 Total 102 2 5 10 2 3 24 26 174 Source: CORE

3.13.e Average annual RSL sales of all types over the three years was 165, including an average of 85 shared ownership and 35 Homebuy. While

annual averages are low, in total RSL sales have provided homes for almost 500 households over the period.

3.13.f A noticeable factor in these sales is that a majority are to households who were previously living with family or friends, buying, or renting privately.

Appendix 3:40 Previous tenure of purchasers from RSLs Previous tenure 2004-5 2005-6 2006-7 Renting LA 1 7 3 Renting HA 20 30 12 Private tenant 33 35 25 Renting with job 1 Owning or buying 26 8 7 Family or friends 55 55 46 Temporary accommodation 1 1 1 Other 1 10 2 Total 137 147 96 Missing 37 20 58 Total 174 167 154 Source: CORE

3.13.g These three previous tenure categories average just under 60% of all sales for these three years, and also Right to Buy, Right to Acquire and Voluntary Purchase Agreement sales are by definition to LA or RSL tenants.

Appendix 3:41 Previous tenure of purchasers from RSLs- % Previous tenure 2004-5 2005-6 2006-7 Renting LA 1% 4% 2% Renting HA 11% 18% 8% Private tenant 19% 21% 16% Renting with job 0% 1% 0% Owning or buying 15% 5% 5% Family or friends 32% 33% 30% Temporary accommodation 1% 1% 1% Other 1% 6% 1% Total 79% 88% 62% Missing 21% 12% 38% Total 100% 100% 100% Source: CORE

3.13.h Incomes are very variable, but most in the range £15 to £25k, and 90% are below £30K.

Appendix 3:42 Incomes of purchasers of IH 2004-7 Income range Frequency Percent Cumulative Percent £3 to 5K 5 1% 1% £5 to10K 18 5% 7% £10-15K 63 18% 25% ££15-20K 110 32% 57% £20-25K 63 18% 75% £25-30K 51 15% 90% £30-35K 26 8% 98% £35-40K 6 2% 99% £40-45K 1 0.3% 99.7% £45-50K 1 0.3% 100.0% 344 100% Total sales 495 Without incomes data 151 31% Source: CORE (not including Right to Buy, Acquire and Voluntary Purchase)

3.13.i Although Intermediate Housing and Homebuy is ostensibly targeted at council and housing association tenants, and the approval criteria includes a check for being on the local authority housing register, this is widely recognised as an unhelpful confusion of client groups and their capabilities, which the data confirms.

3.13.j Intermediate housing sales are in practice mainly only affordable for households who do not want or are unlikely to have much priority for social rented housing, and the main alternative for these households is private renting7. The schemes are currently trying to hit both targets, and so may fail to hit either convincingly.

3.14 Implications for policy

3.14.a This has several implications for the policy approach to IH. It can and does meet need, but this need is generally of a different order to that applied for social rented housing. Research carried out in 2007 for the region and for the Homebuy Agent, East Midlands HA, set these out in more detail. Getting the products and their target customer groups right will improve the contribution this form of tenure can make to

7 Research by Wilcox ( 2007) confirms this. http://www.hometrack.co.uk/documents/Steve_Wilcox/cantbuycanrent.pdf

supply, but they also need to be understood and positioned within a wider strategic housing market approach.

3.14.b This will involve:- understanding the changing nature and scale of housing need locally, and assessing whom the various products, schemes and initiatives have helped and could help; monitoring the take-up, operation and impact of any initiatives developed; being able to revise and refocus initiatives in response to changing situations and priorities and evidence of limitations in the operation and effectiveness of the intervention.

3.14.c This will again require more sophisticated monitoring and feedback systems, and improved understanding of local housing markets, and reducing remote centralized control and micro-management of the operation of the schemes. It is not possible for an area as big as a local authority, let alone a ‘housing market area’ the size of Leicestershire or a region.

3.14.d However, for Intermediate Housing in particular relatively good data is already collected through Planning completions data, RSL property and sales records, applications to Homebuy agents, and CORE lettings logs. Accessing and pulling these together into a monitoring system would be a quite feasible, if not easy, task.

3.15 Intermediate Housing in the market

3.15.a The changing situation in the housing market could have direct effects on IH products. The Housing Corporation’s Global accounts for RSLs for 2007 lists as one of the current potential risks for RSLs:- demand for equity share homes and potential impact of a restriction in mortgage availability for potential purchasers.

3.15.b In addition to this demand for IH products may be directly affected, as buying an equity share when house prices are static or falling is seen as particularly complicated and risky, and not a preferred option when open market entry level prices could become more affordable.

3.15.c In the last period of house price falls in the early 1990’s shared ownership encountered particular problems, as owners could not sell almost at any price due to suspicion of and difficulties with the split ownership arrangements, and some became trapped in unsuitable housing. Several housing associations eventually repurchased some Shared Ownership properties and brought them into rental.

3.15.d In the changing housing market it would be useful for housing associations with IH schemes to develop alternative strategies and approaches, in conjunction with local authorities.

3.16 Alternative approaches and products

3.16.a An option which may become more attractive to potential intermediate market customers is sub market rental. From a strategic market perspective this appeals to a very similar income target market group to Homebuy and Shared ownership products for sale.

3.16.b Although it does not help them to get a ‘foot on the ladder ‘ immediately and follow government initiatives, and the financing will be different, it is an intermediate tenure which is likely to help them to buy in the longer term by allowing tenants to save and prepare to buy.

3.16.c It is also likely to be more lettable as households become wary of buying in a market with falling prices, while sales of equity share products for sale may well slow. RSLs may see this as a better product in current circumstances.

3.16.d Sub market rental could also be linked with other policy levers in schemes to develop a more strategic response to the changing housing market.

• Linking sub market rental with savings schemes to create ‘save to buy rental’.

Households renting under the scheme would also be able and expected to save through partner financial institutions, such as Building Societies, Credit Unions, etc, and eventually to use this to buy and move out, releasing the save to buy property for relet.

• Using this to promote purchase and renovation of houses in changing submarkets, such as in areas where students are moving out into purpose built accommodation, and Buy to Let landlords are looking to sell.

3.16.e So rather than let the free market take its course such approaches would try to combine different areas of policy to guide housing markets in strategically beneficial directions on a targeted, local basis.