1 Response to Inspector's Document ID/9 Updated Housing Technical Paper- Submission Document B126 1. Introduction 1.1 the In

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1 Response to Inspector's Document ID/9 Updated Housing Technical Paper- Submission Document B126 1. Introduction 1.1 the In Response to Inspector’s document ID/9 Updated Housing Technical Paper- Submission Document B126 1. Introduction 1.1 The Inspector has asked for an update to the Housing Topic Paper (HTP) prepared in February 2011. This statement responds to the request for an update, clarifying the parts of the HTP that remain relevant and updating those areas where new information is available to support the Council’s position. The role of the Housing Topic Paper 1.2 The HTP was produced to support and justify the Council’s decision to revise its Core Strategy housing target to make it more realistic and deliverable. The Council’s view is that the housing target included in the Core Strategy Revised Proposed Submission (October 2010) remains relevant and appropriate, and that activity in the housing market over the last two years continues to support the Council’s position. 1.3 As such, the background to as to why the Council altered its housing target to deliver 28,000 homes over the plan period (2010-2026) remains as per the HTP of February 2011. 1.4 What has been updated is factual information regarding the rate of house building, land availability and market indicators. There has also been progress on the delivery of key sites, which further supports the position put forward by the Council in the HTP. An update has also been provided covering some of the key issues raised by the publication of the National Planning Policy Framework (NPPF). This new information is set out below. 2. Key reports and new data Five Year Land Supply Report 2.1 The Council published a new Five-Year Land Supply Report in December 20111 covering the period April 2012 to March 2017. The report shows that across the Borough as a whole, the Council can demonstrate a 5.47 year land supply against the housing target in the Core Strategy Revised Proposed Submission Version. This figure is only slightly below the figure reported in the previous Five-Year Land Supply Report in December 2010 (5.7 years). Recent completions 2.2 Since the HTP was produced the Council has reported on two full years of housing completions; the first two years of the Core Strategy plan period. In 1 Five Year Land Supply Report 2012-207 http://www.milton-keynes.gov.uk/planning- policy/documents/Published_5_year_land_supply_paper_2011.pdf 1 2010/11 there were 1,295 net completions across the Borough. In 2011/12 there were 1,580 net completions. 2.3 These figures were broadly in line with the housing trajectory included in the Core Strategy Revised Proposed Submission Version (2,875 completed compared with 2,822 originally forecast). The number of starts recorded has also risen and been maintained since the start of the plan period, helping the Council remain on track to deliver future forecasts. These factors are discussed in more detail later in this paper. Land supply position 2.4 At present there remains land already identified for 24,299 new homes across the Borough. Of these, 15,455 have planning permission of which 3,321 have detailed planning consent. This information is summarised in Table 1 below. Table 1 - Land Supply position at 1st April 2012 Dwellings Area (Ha) FULL PERMISSIONS 3,321 151.70 OUTLINE PERMISSIONS 12,134 500.46 LOCAL PLAN ALLOCATIONS 8,844 185.85 TOTAL IDENTIFIED LAND 24,299 838.01 Revised Housing Trajectory 2.5 During 2011 a revised Housing Trajectory was prepared and published in the 2010/11 Annual Monitoring Report, setting out the latest forecasts for housing completions across the Borough, based on updated intelligence and monitored completions. The trajectory, set out in Figure 1, is broadly similar to that included in the Core Strategy Revised Proposed Submission Version, with a few small adjustments. After collating the end of year monitoring information and reconciling with existing forecasts and seeking developer feedback, a revised trajectory is likely to be ready for the start of the examination. 2 Figure 1 - Revised Housing Traject 3000 2500 Past Net Completions Total Projected Net Completions *3 2000 Housing Target Annualised *4 Annual Requirement Taking Account of Past/Projected Completions 1500 Dwellings 1000 ory as published in the AMR 2010/11 500 1295 1642 0 2.6 The main alteration is a slow-down in 1494 2010/11 1893 2169 to increase across the201 Borough.1/12 It can be completions were forecast for201 22011/12,/13 1969 Ongoing monitoring work, particularly aroun 2263 forecast of 1,494 for 2012/13 is likely2 013/14 below what was originally forecast 2025 Submission version. The ongoing achiev 2014/15 in the paper. 2015/16 1789 2.7 The CouncilUpdated is SHLAA in the process report of pr 2016/17 1577 2017/18 1941 on the Site Allocations process, which 2070 been to examination. This work may al 2018/19 Year Examination. the rate that house building is forecast 2019/20 1727 3. Support for the Council’s position 2020/21 62 moreseen than from was the actuallytrajec achieved. in theto Core be a Strategy realistic Revisedrate of completion, proposed 2021/22 1100 3.1 The caseEconomic for the climate Council’s revised housing target was partly based on the d starts, suggests that the revised20 22/23 1070 ement of forecasts is discussed later 2023/24 need to ensure that the tar 906 factors that contributed to the revi 2024/25 downturn and the impact that this wa oducing a revised SHLAA, to support work tory that 1,642 particularly in the short term. This is 2025/26 which sets out that relevant market will start after the Core Strategy has so be helpful for the Core Strategy get was realistic and deliverable. One of the key sed housing figure was the economic s having on the house building industry, in line with the recently published NPPF and economic signals should be taken into 3 account in setting strategies for housing (page 5, para 17 and page 38, para 158). 3.2 Over the last year, there have been no significant changes that alter the Council’s position. The mortgage market is still very constrained, with large deposits needed, particularly for first time buyers. The economic climate in general continues to make it a challenging environment for the house building industry to operate effectively. The investor market has tailed off due to the lack of capital return for investors. These points are all acknowledged in the Government’s Housing Strategy for England, Laying the Foundations (November 2011), which sets out a number of measures to try and stimulate both house building and house buying. 3.3 All of the factors above continue to mean that significantly increasing house building rates to meet estimated demand for new homes is a challenge. The Council’s housing target remains an increase on past average rates of completion and, from the evidence set out above, and the discussion below, the Council continues to believe that the house building target set out in the Revised Proposed Submission Core Strategy is the most appropriate basis for planning the future development of the city. 3.4 In terms of the soundness of the plan, the Council is conscious of the need for the plan to be effective. The NPPF sets out that to be effective a plan should be ‘deliverable over its period’. The Council view is that the current housing target is deliverable over the plan period. At the current time, the evidence suggests a higher housing target could not be delivered, which would make the plan ineffective and therefore unsound. Market indicators/economic signals 3.5 As set out in para 3.1, the NPPF sets out that relevant market and economic signals are part of a proportionate evidence base in assessing housing targets. The level of activity in the housing market and house prices are considered to be two such market/economic signals, along with land prices and housing affordability, mentioned in paragraph 17 of the NPPF. 3.6 The Housing Topic Paper highlighted the significant fall in average monthly housing transactions per month from the peak of around 700 sales per month in 2007 (Land Registry). During 2009 the rate had dropped to an average of 301. During 2010, this decreased further to 286 and in 2011 dropped again to 265. 3.7 It could potentially be argued that this reflects the slower rate of house building locally since 2007. However, the Council’s view is that if there had been a significant shortfall in local housing supply during this period, an increase in local house prices would have been seen as buyers competed for an insufficient number of homes. 3.8 This has not been the case in Milton Keynes with house prices generally continuing to fall (see Figure 2 below). 4 3.9 The trend in Milton Keynes is broadly comparable to those seen across England and in the South East since 2009. It is interesting to note that the fall in house prices in MK was more significant than that seen across the South East as a whole. There could be a number of reasons for this, but what it could indicate that there is less pressure on housing demand in MK than across the wider South East. Figure 2 - House Price Changes- April 2008- Jan 2012 320 310 300 290 MK 280 South East England 270 260 250 240 09 09 10 10 t-08 - - t-10 t-11 an-09 pr- ul-09 an-12 Apr-08 Jul-08 Oc J A J Oct Jan- Apr Jul-10 Oc Jan-11 Apr-11 Jul-11 Oc J 3.10 DCLG published the latest information on house price affordability in June 2011 based on data from Land Registry.
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