Affordability and Migration within the Ayrshire Housing System
AFFORDABILITY AND MIGRATION WITHIN THE AYRSHIRE HOUSING SYSTEM
Final Report June 2007
1
Affordability And Migration Within The Ayrshire Housing System
Acknowledgements
We would like to thank the staff of East, North and South Ayrshire and Communities Scotland for their assistance, support and comments at all stages of this study.
We would also like to thank to Mark Hordern of GSPC and Gwilym Pryce of the University of Glasgow for their assistance in supplying GSPC house price data.
2 Affordability And Migration Within The Ayrshire Housing System
Contents
Executive summary ...... 5
1 Introduction ...... 8
2 Economic and demographic change in Ayrshire 2000-2006 ...... 10
3 Ayrshire housing markets 2000-2006 ...... 33
4 The views of recent house purchasers ...... 76
5 Prospects to 2012 ...... 87
6 Conclusions and recommendations ...... 105
Appendix 1: Industry definitions ...... 111
Appendix 2: Ayrshire HMA demographic profiles relative to Scotland ...... 112
Appendix 3: Internal migration within Ayrshire ...... 118
Appendix 4: Detailed definition of major and local HMAs ...... 121
Appendix 5: Additional price and transactions data ...... 123
Appendix 6: Affordability estimates for Ayrshire ...... 126
Appendix 7: References ...... 138
Figures
Figure 2.1: Average annual growth in jobs by sector, 1999-2005 (%) ...... 11
Figure 2.2: Average annual growth of the 10 largest industries, 1999-2005 ..... 12
Figure 2.3: Average annual growth of total employment, 1999-2005 ...... 13
Figure 2.4: Average annual growth of total employment, 1999-2004……..…...15
Figure 2.5: Demographic groups in Ayrshire 2003 and 2005 ...... 20
Map 3.1: Ayrshire Housing Market Areas (HMAs) ...... 35
Map 3.2: Ayrshire Structure Plan Development Framework, 2006 ...... 42
Figure 3.1: Ayrshire sales 2000(Q1) -2006(Q2) ...... 43
Figure 3.2: HMA Share of transactions (all sales 2000q1 – 2006q2) ...... 46
Figure 3.3: Increase in second hand prices 2000q1-2006q2 by HMA...... 48
Figure 3.4: Increase in new build prices 2000q1 – 2006q2 by HMA ...... 48
3 Affordability And Migration Within The Ayrshire Housing System
Figure 3.5: Increase in second hand prices 2000q1 – 2006q2 by HMA sub area ...... 51
Figure 3.6: Increase in new build prices 2000q1 – 2006q2 by HMA sub area .. 52
Figure 3.7: Increase in second hand prices 2000q1 -2006q2 (%) ...... 60
Figure 3.8: Average second hand price within the M77 „initial catchment area‟ by buyer origin...... 61
Figure 3.9: Second hand trends in the Ayrshire HMAs ...... 64
Figure 3.10: New build trends in the Ayrshire HMAs 2000-2006 ...... 64
Figure 5.1: Forecasts for inflation and interest rates to 2010 ...... 87
Figure 5.2: Forecast average annual growth of output and employment in Scotland by sector, 2006-2012 ...... 88
Figure 5.3: Forecast annual percentage change in house prices Scotland and UK, 2004-2010 ...... 89
Figure 5.4: Average annual change in output (GVA) in Ayrshire and Scotland 2005-2012 ...... 89
Figure 5.5: Average annual change in output (GVA) by industry in Ayrshire & Scotland 2006-12 ...... 90
Figure 5.6: Average Household Income in Ayrshire and Scotland 2006-2012 .. 92
Figure 5.7: Ayrshire Population Projections by age group 2004-2012 ...... 94
Figure 5.8: Ayrshire Household Projections 2004-2012 ...... 95
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Executive summary
This study examines housing market trends across Ayrshire with the exception of Arran, which has been subject to separate study of local housing trends and affordability problems.
The key objectives set for the study were to:
Identify recent house price trends and assess current affordability of owner occupation within and across the Ayrshire housing market and identify any issues arising.
Explore migration patterns both within Ayrshire and between it and other areas.
Investigate households‟ housing choices, and why they take the form they do.
Specifically investigate the impact of M77 extension on the extent of integration of the Glasgow and Ayrshire housing markets.
Assess how future trends might affect the structure and operation of the Ayrshire housing market.
Housing markets have a strong spatial dimension. Looking at the pattern of migration flows of house purchasers it is evident that Ayrshire continues to have a complex geographic housing structure. It is made up of seven housing market areas. Four major housing markets - Ayr HMA, Kilmarnock HMA, Irvine HMA and the Three Towns HMA- operate across the core investment area outlined in the second Ayrshire Structure Plan. The remaining three local housing markets are North Coast, Garnock Valley, and Girvan and South Carrick
Since January 2000 house prices have risen sharply in all seven HMAs but the Ayr HMA remains the highest priced market in Ayrshire. There has also been a widening of the house price distribution across Ayrshire, although the trend is most observable in South Ayrshire.
This widening of the house price distribution is consistent with the ongoing restructuring of the Ayrshire economy and labour market, and within that a growth in better paid employment opportunities. House price inflation trends at the lower, middle and upper ends of the housing market in East, North and South Ayrshire are also broadly consistent with the recent patterns of migration.
The Kilmarnock HMA has experienced high house price increases across the lower, middle and upper segments of the second hand market relative to most other HMAs. Although it has been suggested that this trend results from completion of the extension of the M77, analysis of available evidence does not confirm the existence of such an effect. Thus whatever the effect the M77 may have had or be having it is not a clear-cut one.
The rapid rise in house prices has meant that by 2006 all seven HMAs had price to income ratios in excess of the DCLG recommended threshold of 3.5. On the other hand, the survey findings suggest that the property and locational housing choices of those able to afford to buy in the Ayrshire market remain largely unconstrained by the increase in house prices.
5 Affordability And Migration Within The Ayrshire Housing System
Overall, available evidence suggests that local economic developments have played a part in influencing the operation of the housing market and house price trends but other factors such as changing commuting patterns, and housing market developments have also been important.
Looking to the future, a combination of economic forecasts, GROS household projections and policy developments reviewed in this study suggest that:
Further dispersal of the house price distribution in most if not all housing market areas is likely, with house prices at the top of the market continuing to rise more rapidly than at the middle and more especially the lower end of the housing market.
If the rates of new supply anticipated in the Structure Plan are realised then, notwithstanding shorter-term pressure on land prices, overall supply constraints and inflationary house price pressures should both ease.
Although it is important not to overstate future possible affordability problems in Ayrshire, it is unlikely that there will be a steep decline in the affordability pressures in the period to 2012.
There is a strong possibility that adoption of wider search areas for suitable housing by middle and higher income households combined with higher rates of in-migration being encouraged through the land planning framework will:
Offset any downward pressure on house prices that might have been anticipated from Experian‟s economic forecast that the Ayrshire economy will continue to under-perform.
Lead, in the long term, to the gradual fusing together of the four housing markets in the core investment area.
Mean that the current affordability pressures experienced by existing and newly forming households from within the existing local population in less well paid employment will not decline substantially.
Finally, the expected increase of one-person (single earner) households in itself suggests a growth in affordability issues, not just in Ayrshire, but also across the UK.
Based on our analysis and the conclusions outlined above we recommend that:
The spatial structure of the housing market across Ayrshire and in particular the spatial boundaries of the housing market areas identified in this report should be periodically reviewed. In particular we would suggest that the underlying HMA structure should be reassessed within three to four years.
The possibility of an M77 effect should be kept under more frequent review, given the possible localised affordability implications arising from such an effect. As such we would suggest that this should be revisited annually.
Affordability ratios at the HMA level should be monitored on an annual basis.
6 Affordability And Migration Within The Ayrshire Housing System
The three Council Local Plan departments set up a standing working party to co-ordinate residential development activity in and between the towns of Ayr, Kilmarnock and Irvine.
North, East and South Ayrshire Councils jointly conduct an annual postal survey of movers into and around Ayrshire, to understand what motivates the patterns evident in market data, and whether these patterns continue to demonstrate the achievement of aspiration or the effect of unreasonable constraint.
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1 Introduction
This report presents the findings of a study into the Ayrshire economy and the operation and dynamics of the Ayrshire owner occupied housing market and associated migration flows.
Terms of reference
Communities Scotland and the three Ayrshire Councils jointly commissioned the study. Motivating the commission was a view that housing markets across Ayrshire have been undergoing major transformation in recent years. Significant underlying factors explaining such change were suspected to be trends in the Ayrshire economy relative to that of the Glasgow and Clyde Valley area, completion of the M77 extension in spring 2005, and ongoing efforts to regenerate specific parts of Ayrshire.
This study examines housing market trends across Ayrshire with the exception of Arran, which has its own Local Plan and where a more detailed analysis of local housing trends and affordability problems was carried out in early 2007.
The key objectives set for the study were to:
Identify recent house price trends and assess current affordability of owner occupation within and across the Ayrshire housing market and identify any issues arising.
Explore migration patterns both within Ayrshire and between it and other areas.
Investigate households‟ housing choices, and why they take the form they do.
Specifically investigate the impact of M77 extension on the extent of integration of the Glasgow and Ayrshire housing markets.
Assess how future trends might affect the structure and operation of the Ayrshire housing market.
To address these objectives, this report answers the following four questions:
What is the current spatial structure of the housing market across Ayrshire?
How has this changed over the last five years, and why?
What have the affordability implications of this change been?
In what ways may the housing market in Ayrshire change in the next five years?
The study involved a number of different strands, including:
Investigation of economic trends and prospects for Ayrshire based on Experian‟s Regional Planning Service.
8 Affordability And Migration Within The Ayrshire Housing System
Analysis of household movement patterns which is based on Sasines data for 2000-2006 and on Experian‟s Consumer Dynamics database.
Analysis of the social and economic profile of movers, based on Experian‟s Mosaic Scotland household segmentation tool.
Investigation of housing market price trends using both Sasines data and estate agent data.
Analysis of house purchase affordability using income data based on CACI Paycheck, the Annual Survey of Hours and Earnings (ASHE), Bramley et al (2006) modelled household income estimates, and Experian household income estimates.
Exploration of household motivation through three separate postal surveys, involving purchasers moving into, out of and within Ayrshire.
Consultation with housing and planning professionals within the public and private sectors.
As part of this study a number of interim reports were prepared and discussed with the advisory group established to guide the research and a wider audience. These reports are not reproduced in full within this report, but are drawn upon as necessary to inform it.
Report structure
The report is structured as follows:
Section 2 provides an overview of the economic and demographic trends evident within Ayrshire over the period 2000-6, and looks at the underlying population movement patterns that have shaped demographic change. It concludes by suggesting some of the possible housing market implications arising from these factors.
Section 3 looks at the evolution of the housing market areas within Ayrshire over the period 2000-6 and the house price and affordability effects evident in secondary data. In particular, we assess the extent to which available evidence suggests the completion of the M77 motorway extension to Fenwick has increased the number of households moving to Ayrshire from the Glasgow and Clyde Valley area.
Section 4 presents the main findings from the three postal surveys and explores the factors that have shaped household‟s decisions on where to search and bid for owner-occupier housing.
Section 5 looks at the economic and demographic prospects for Ayrshire relative to those for the Glasgow and Clyde Valley area as well as current national and local policy priorities.
Section 6 raises a number of possible housing market consequences that may follow in future years and the likely policy implications arising from this research.
9 Affordability And Migration Within The Ayrshire Housing System
2 Economic and demographic change in Ayrshire 2000-2006
Introduction
Economic and demographic trends are important drivers of the housing market. This chapter therefore examines trends in the structure and performance of the economy as well demographic trends across Ayrshire since 2000.
Economic trends
Industrial structure of the Ayrshire economy
In 2006 there were around 140,000 employees working in Ayrshire. The two largest industrial sectors in the Ayrshire economy are:
Public sector services, which includes health, public administration and defence, and education, and employs around 30 per cent of the labour force.
Distribution, hotels and catering which includes retail, wholesale and catering, and accounts for around 24 per cent of total employment.
Ayrshire remains an important manufacturing centre for the Scottish economy. Manufacturing accounts for a higher proportion of jobs in Ayrshire (12 per cent) than in Glasgow and Clyde Valley (8.9 per cent). Manufacture of metal goods, transport equipment and food and drink are important export sectors, and together accounted for 5.1 per cent of total employment in Ayrshire in 2005.
In recent years the industrial structure of the Ayrshire economy has been shifting away from traditional industrial sectors such as manufacturing and construction towards the service sector. Figure 2.1 shows that a similar process of economic restructuring has also been occurring in Glasgow and Clyde Valley1, albeit at a slower pace.
Figure 2.1 demonstrates that there has been a sharp increase in the number of jobs in the financial & business services sector and to a lesser extent in the transport and communications sectors. Between 1999 and 2005 employment growth in the financial & business services sector averaged 6 per cent a year. By contrast there has been a sharp decrease in the number of jobs in the manufacturing and construction sectors. There has also been some decrease in the distribution, hotel & catering sector.
1 This covers the following local authority areas; Glasgow, East Renfrewshire, Renfrewshire, West Dunbartonshire, East Dunbartonshire, North Lanarkshire, South Lanarkshire and Inverclyde.
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The decline in manufacturing employment mirrors the steady decline in manufacturing across the UK and most Western economies as labour intensive manufacturing continues to relocate to locations in Eastern Europe and Asia with low labour costs.
The decrease in employment in hotels, distribution and catering partly mirrors a similar fall at the Scottish wide level resulting from the fall in tourism in the aftermath of the foot and mouth outbreak and the events of September 11. However, as discussed in more detailed below, retailing in Ayrshire has also been adversely affected by the growth of large retail outlets in neighbouring local authority areas.
The factors contributing to the fall in construction employment are harder to isolate. In part it may reflect recruitment problems and the reported skills gap in this sector. In part it may reflect excess supply of labour relative to construction demand in the region. In 2005 around 6.7 per cent of employees in Ayrshire continued to work in the construction sector compared to 5 per cent of Scottish employees.
Figure 2.1: Average annual growth in jobs by sector, 1999-2005 (%)
1999 to 2005
Ayrshire Manufacturing Clyde Valley
Construction
Distribution, Hotels & Catering
Other (Mainly Public) Services
Transport & Communications
Financial & Business Services
-8 -6 -4 -2 0 2 4 6 8 Source: Experian, 2006
Performance of the top 10 industries
Each industrial sector is made up of a number of industries, which are listed in appendix 1. The largest single industry in Ayrshire region is health, which accounts for 16 per cent of all jobs and has grown by on average 1.4 per cent each year since 1999. There has been a similar expansion at the Scotland and UK levels, reflecting the increase in public expenditure on health in recent years.
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Table 2.1 compares the 10 most important industries in terms of employment in Ayrshire with that of Glasgow and Clyde Valley. It shows that the Ayrshire economy remains under-represented in high value-added business and financial services, despite encouraging recent growth. In 2005, the business services sector accounted for 7.8 per cent of total employment, compared to 13.2 per cent in Glasgow and Clyde Valley. The comparatively low proportion of jobs in the business and financial services sector in Ayrshire reflects the fact that such services tend to cluster in cities where key customer groups, such as large corporate and public sector clients, are concentrated.
Table 2.1: Top 10 industries in 2005 by employment (% and no of total employment) Ayrshire 000s % Glasgow & Clyde Valley 000s % Health 22.8 16.3 Health 119.9 13.8 Retail 16.3 11.6 Retail 86.0 9.9 Business Services 10.9 7.8 Business Services 115.0 13.2 Hotels & Catering 10.9 7.8 Hotels & Catering 57.2 6.6 Education 10.5 7.5 Education 68.4 7.9 Construction 9.3 6.7 Construction 56.0 6.4 Public Admin. & Defence 8.5 6.1 Public Admin. & Defence 59.2 6.8 Transport 6.7 4.8 Transport 47.9 5.5 Wholesale 6.5 4.6 Wholesale 46.3 5.3 Other Services 9.1 6.5 Other Services 49.2 5.7 Source: Experian, 2006 The health industry and the retail industry both account for a higher proportion of jobs in the Ayrshire economy than in the Glasgow and Clyde Valley economy.
Figure 2.2: Average annual growth of the 10 largest industries, 1999-2005
average annual growth, 1999 to 2005
Construction Ayrshire Clyde Valley Retailing
Hotels & Catering
Wholesailing
Public Admin. & Defence
Health
Education
Other Services
Transport
Business Services
-8 -6 -4 -2 0 2 4 6 8
Source: Experian, 2006 %
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Figure 2.2 shows the annual change in employment of the ten largest industries in the period from 1999 to 2005 and indicates that over the period:
Business services employment in Ayrshire has increased by an average of 6.0 per cent a year compared to 3.7 per cent in Glasgow and Clyde Valley. This reflects the fact that Ayrshire is to some extent catching up on the industrial re-structuring evident in Glasgow and Clyde Valley.
The average annual decline in construction jobs has been sharper in Ayrshire (-5.8 per cent) than in Glasgow and Clyde Valley (- 2.4 per cent). As a result, construction accounted for 7.5% of all employment in Ayrshire in 1999 but just 6.7% of employment by 20052.
Retail employment has declined by an average of 2.0 per cent a year compared to a growth of 1.0 per cent a year in Glasgow and Clyde Valley. The Ayrshire Structure Plan 2006 identifies that „fierce competition‟ from outside Ayrshire has played a role in the relative decline of retailing. Key service centres of Braehead, Hamilton, Motherwell and East Kilbride in Glasgow and Clyde Valley have all experienced considerable investment in retail and leisure offerings in the past decade. This has led to an increase in consumer spending leakage from Ayrshire to these retail and leisure centres.
Figure 2.3: Average annual growth of total employment, 1999-2005
Growth in total employment, 1999 to 2005
Clyde Valley
Ayrshire
East Ayrshire
South Ayrshire
North Ayrshire
-2.0 -1.0 0.0 1.0 2.0
Source: Experian, 2006 Average annual growth rate
2 There was no employment growth in construction in Scotland in this period whilst employment in the UK expanded by an average of 2 per cent each year.
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As figure 2.3 shows, between 1999 and 2005 total employment fell by an annual average of 0.7 per cent a year in Ayrshire compared to an annual growth of 1.0 per cent in Glasgow and Clyde Valley
However, the fall in employment growth in Ayrshire has been heavily affected by a large fall in employment in 1999. Since 2001 employment rates3 in Ayrshire have picked up and this has helped to close the gap with Scotland. By 2005 the unemployment rate had fallen to 7.9 per cent, although this remained above the Scottish and UK rates of 6.5 per cent and 5.1 per cent respectively (Labour Force Survey 2005)4.
Spatial patterns of employment growth and decline
There are clearly defined concentrations of industry in each local authority area:
Manufacturing is concentrated in North Ayrshire. Almost 40 per cent of all manufacturing employment in the region is to be found in North Ayrshire compared to just 26.5 per cent in East Ayrshire. North Ayrshire‟s largest town, Irvine, has retained a particularly strong manufacturing sector, which still accounts for almost a quarter of all jobs. Key companies in the sector in North Ayrshire include Glaxosmithkline (employing around 700) and Nacco Materials Handling, both in Irvine, and DSM in Dalry.
East Ayrshire is the main centre for financial & business services accounting for 40.5 per cent of all jobs in the sector across Ayrshire as a whole. Key employers include Halifax Bank of Scotland (HBoS), beCogent and the Scottish call centre outsourcer Telecom Service Centres (TSC), who created 530 jobs in Kilmarnock in 2006 with the location of a call centre operation in Rowallan Business Park. Food and drink manufacture is also significant, with Diageo employing around 500 people in Kilmarnock. Food Partners Ltd is also a significant employer.
The majority of Ayrshire‟s public services are in South Ayrshire, reflecting the fact that Ayr is a key centre for public administration and services in the region. South Ayrshire also dominates employment in transport and communications as well as distribution, hotels and catering. However, manufacturing is also highly significant to the local economy. Employers based at Prestwick Aerospace Park include GE Caledonian (900 jobs), Spirit Aerospace, which bought the BAE plant in 2006 (300 jobs), and Goodwich Corporation Aerostructures Division. There are other major manufacturing employers outside the Aerospace Park, including Jabil Circuits in Ayr.
3 The employment rate is defined as the number of employed as a proportion of the working age population. 4 The unemployment rate is defined as the number of unemployed as a proportion of the working age population.
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In terms of recent employment trends, figure 2.3 shows that between 1999 and 2005:
Total employment has expanded in East Ayrshire by on average 0.8 per cent a year driven by the expansion of employment in most private and public services with the exception of the retail and wholesale industries.
North Ayrshire experienced an average annual fall in employment of 0.9 per cent whilst in South Ayrshire the fall averaged 1.3 per cent.
The large majority of retail and construction jobs have been lost in South Ayrshire whilst similar levels of manufacturing jobs have been lost in all three local authority areas.
Figure 2.4: Average annual growth of total employment, 1999- 2004
average annual growth, 1999 to 2004
Kilwinning
Kilbirnie
Girvan
Ayr
Saltcoats
Irvine
Largs
Kilmarnock
Troon
Cumnock
Prestwick
-3 -2 -1 0 1 2 3 4 Source: ABI, 2006 %
Looking at the settlement level, figure 2.4 shows that on average over the period from 1999 to 20045:
5 The settlement level data derived from the ONS Annual Business Inquiry is subject to a high level of sampling error. Considerable caution should therefore be exercised in drawing conclusions from this data. Data on the number of jobs (relative to per cent) is especially unreliable and therefore not provided.
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Employment has expanded in three of the four largest towns. There was no change in Ayr. Irvine experienced employment growth of 0.2 per cent a year. Kilmarnock experienced employment growth of 0.8 per cent a year and Prestwick experienced growth of 2.8 per cent.
Troon and Cumnock both experienced employment growth in excess of 1 per cent a year. Female employment has been the main driver of the growth in total employment in both towns.
The two lowest performing towns have been Kilwinning and Kilbirnie, where the average annual rate of employment has declined by 2.7 per cent and 1.9 per cent respectively. Both tows have lost manufacturing jobs in the textiles, food and drink, and chemicals industries as well as the once-booming electrical & optical equipment sector.
Industrial change and earnings
Table 2.2 shows that at the Scottish level there is considerable variation in median weekly full-time earnings by industry. Looking at the industries in Ayrshire where employment has either expanded or contracted since 1999:
The two most significant growth industries have been health (+3,356 jobs) and business services (+3,046 jobs). As the first two rows of table 2.2 indicate, in both industries the median wage is similar to the median wage for employees as a whole.
Table 2.2: Median full time weekly earnings, Scotland (2006) industry median index 2006 (all industry average = 100) Health and social work £429 99 Real estate, renting and business activities £445 103 Manufacturing (total) £443 103 Manufacture of textiles and textile products £314 73 Manufacture of electrical and optical equipment £495 115 Manufacture of chemicals and chemical products £474 110 Financial intermediation £463 107 Public administration £486 112 Education £483 112 Community, social and personal services £350 81 Wholesale and retail trade £316 73 Hotels and restaurants £263 61 Electricity, gas and water supply £556 129 Construction £462 107 Mining and quarrying £644 149 Transport, storage and communications £427 99 Agriculture, forestry and hunting £345 80 Electricity, gas and water supply £556 129 All employee jobs £432 100 Source: Annual Survey of Hours and Earnings (ONS website, May 2007)
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Job losses have been heaviest in the manufacturing sector, particularly in textiles (-3,094) and electrical and optical equipment (-4,025). Whilst the median wage for manufacturing as a whole is close to the median wage for all employees, textiles is relatively poorly paid and electrical and optical equipment is relatively well paid.
Job losses in retail, which is relatively poorly paid, have been roughly „offset‟ by gains in community, social and personal services6 which are also relatively poorly paid.
There have been considerable jobs gains in financial services, public administration and education, which all offer above average earnings.
The location of industries experiencing employment growth (such as public and private services) and declining industries (such as manufacturing) is potentially significant. If these gains and losses are concentrated in particular local authority areas within Ayrshire then we might expect to be able to detect their influence on local housing markets. In this context we note that since 1999:
In North Ayrshire, industrial re-structuring has led to an expansion of employment in industries with above average pay prospects. Job growth has been dominated by business services, public administration, health, education, and other services. However, the manufacturing industries that have lost jobs, such as chemicals, electrical and optical equipment, pay above the all-industry median.
Most job losses in South Ayrshire since 1999 has been in the wholesale and retail industries, which are relatively poorly paid, and in construction and public administration, both of which pay above the median. On the other hand, job growth has been in well-paid industries, such as financial services and education.
In East Ayrshire there has been employment growth in the service sector, especially financial services, business services and communications. The only services that have not expanded are wholesale and retail industries (which are relatively poorly paid) and health. Almost all manufacturing sectors in East Ayrshire have declined along with construction and agriculture.
Commuting patterns
Ayrshire is a net exporter of labour. The most recent comprehensive data on Ayrshire commuting patterns comes from the 2001 Census. In 2001 around 25,700 people out-commuted from Ayrshire to work, over 8,500 more than in 1999. Thus, in 2001 around 17 per cent of employees living in Ayrshire travelled outwith Ayrshire to work.
6 „Community, social and personal services‟ includes libraries, laundering, dry cleaning, recreation, and hairdressing, which comprises the majority of employment in this sector.
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In terms of those who commuted outwith Ayrshire, some 21,600 (84 per cent) worked in Glasgow and Clyde Valley and around 11,000 (42 per cent) worked in Glasgow. Renfrewshire, Inverclyde and Lanarkshire were the other main destinations for the region‟s out-commuters. Around a fifth of all out-commuters worked in the financial and business services sector and more than half of out- commuters worked in managerial, professional or associate professional & technical jobs.
By contrast, just 7,642 people commuted into Ayrshire to work in 2001, although this is almost double the number in 1991. In-commuters were spread across all three local authority areas. Some 1,500 (20 per cent) commuted from Glasgow, of which around half worked in professional or associate professional jobs. A further 1,200 (16 per cent) commuted from Renfrewshire. South Lanarkshire and Dumfries and Galloway were also significant sources of in-commuting.
It is very likely that commuting patterns have changed since 2001 in response to changes in employment availability, transport infrastructure investment, and housing market trends such as additional rates of new house-building and the cost of housing in Ayrshire relative to the cost of housing in neighbouring areas.
Demographic trends
Experian‟s Mosaic Scotland is a geo-demographic tool that classifies households into distinct socio-economic groups according to characteristics that they possess such as household composition, lifestyle factors, current housing, and the age and educational attainment of household members.
Mosaic Scotland has been used to examine the composition of Ayrshire‟s household population and how it has changed since 2003 in order to provide a broad indication of variations in the nature of housing demand across Ayrshire.
Although the classification system consists of 10 groups that can be sub-divided into 44 types, the following paragraphs focuses on the 10 groups to keep analysis manageable whilst still allowing important demographic differences between areas to be highlighted. Table 2.3 lists these 10 groups and summarises each group‟s associated housing demand characteristics in relation to features such as age, household composition, affluence, life-stage and employment characteristics.
Ayrshire demographic profile
Table 2.4 details the number and proportion of the population that fall into the 10 Mosaic groups in Ayrshire and the size of each group relative to Scotland as a whole. It shows that in 2005:
Around 70 per cent of the population of Ayrshire fell into one of four groups - renters’ now owning, low income families, families on the move and small town propriety.
These four groups, together with the shades of grey group are all more prevalent in the population of Ayrshire compared to the Scottish population as a whole.
Upper echelons and town centre singles are slightly less prevalent in Ayrshire than in Scotland as a whole.
18 Affordability And Migration Within The Ayrshire Housing System
At only 4 percent, Ayrshire had a very small number of state beneficiaries. This reflects the fact that a disproportionately large number of this mosaic group are to be found in Glasgow.
Table 2.3: Summary descriptions of each Mosaic group mosaic group features of housing demand This group consists of professionals, senior managers and others able to Upper afford spacious housing in the choicest locations. As the most affluent Echelons Mosaic group, these households exert most influence on the upper end of the housing market. This group includes younger or early middle working age single and dual Families on earning households starting or growing their families. This group tends to the Move live in houses build after 1945 and is the key customer segment for newly built housing. This group includes retired households as well as middle aged to older working home owners whose jobs are likely to root them in the Small Town community – such as local craftspeople, shopkeepers and other Propriety professions serving people rather than business customers. They are less likely to move than younger households. This group generally comprises of middle aged/ older working and retired households rather than families with young children. These households Country have a rural lifestyle, in terms of where they live and type of work. When Lifestyles moving house, they are likely to move between rural areas rather than into urban areas. This is a highly mobile, well educated and affluent group that own or rent Urban well appointed properties and are most often found in Scotland‟s larger Sophisticates cities. This diverse group includes single person and childless couples across the age spectrum. Many of these households are mobile but they are Town Centre also less affluent than families on the move or urban sophisticates. They Singles are therefore more likely to encounter affordability issues than these other two mobile groups. Renters Now This group consists mainly of households that exercised their right to Owning buy. As such they tend to be older and more settled. This group consists mainly of families and lone parents. Most of these households contain at least one person in employment, often in lower Low Income paid occupations. Many rent from a social landlord but this group may Families also include those buying their home through some form of shared equity. These households are quite mobile and may be most affected by affordability issues. This group in the main rent from a social landlord and includes single people, childless couples and pensioners as well as households with State children, most of whom are heavily reliant on state benefit. They are Beneficiaries relatively geographically immobile compared with other groups, particularly low-income families. This group includes older person households living in sheltered Shades of accommodation as well as housing originally built for families. Most rent Grey from a social landlord and many rely on the state pension as their source of income. Note: The „descriptor‟ labels (such as shades of grey) are those used by Experian and reflect the marketing origins of the MOSAIC classification system.
Ayrshire also has a relatively small number of country lifestyles. Again this is indicative of the fact that a large share of this mosaic group live in the Highlands and Islands of Scotland.
19 Affordability And Migration Within The Ayrshire Housing System
Urban sophisticates hardly feature in Ayrshire, reflecting the fact that this mosaic group is found predominantly in Scotland‟s main cities.
Table 2.4: Ayrshire Mosaic profile 2003 2005 population % index population % index (Scotland (Scotland =100) =100) A Upper Echelons 20,854 6 81 20,428 6 85 B Families on the Move 50,947 14 101 53,043 15 106 C Small Town Propriety 48,826 14 120 47,872 13 118 D Country Lifestyles 25,745 7 67 23,904 7 64 E Urban Sophisticates 693 0 4 515 0 3 F Town Centre Singles 19,060 5 75 19,743 6 85 G Renters Now Owning 83,575 23 140 81,298 23 137 H Low Income Families 67,378 19 129 68,901 19 132 I State Beneficiaries 12,989 4 54 12,715 4 54 J Shades of Grey 29,212 8 125 28,948 8 125 U Unclassified 249 0 45 - 0 0 Adult population 359,528 100 100 357,367 100 100 estimate Source: Experian, 2007 Figure 2.5 shows how the mosaic group profile of Ayrshire has changed since 2003. It indicates that over this period:
Figure 2.5: Demographic groups in Ayrshire 2003 and 2005
2003 2005
G Renters Now Owning
H Low Income Families
B Families on the Move
C Small Town Propriety
J Shades of Grey
D Country Lifestyles
A Upper Echelons
F Town Centre Singles
I State Beneficiaries
E Urban Sophisticates
0% 5% 10% 15% 20% 25% % of total population
20 Affordability And Migration Within The Ayrshire Housing System
There was a slight increase in the proportion and number of people classified as families on the move, with over 2,000 people added to this group.
There was also a slight increase (+1,523) in the number of people classified as low-income families.
There was a slight decline in the number of people classified as renting now owning and small town propriety.
Demographic Profile at HMA Level
As discussed in detail in section 3, there are four major housing market areas (HMAs) in Ayrshire, which are based on the principal urban areas:
Ayr HMA, which includes important sub-areas: Ayr urban (which includes Ayr town, Prestwick and Troon), Doon Valley and Cumnock
The Kilmarnock HMA, which includes the three sub-areas of Kilmarnock urban, Northern and the Irvine Valley
Irvine HMA
Three Towns HMA.
In addition, there are three more rural-based local housing markets comprised of a combination of local towns and villages:
North Coast
Garnock Valley
Girvan and South Carrick.
We can use Mosaic Scotland to consider demographic profiles at this level of detail. However, in order to allow for data availability, in the following analysis the „Ayr urban sub area‟ includes Doon Valley whilst the „Kilmarnock urban sub area‟ includes the northern sub area, which is based in and around Stewarton.
Table 2.5 summarises the Mosaic Scotland demographic profiles for the main housing market areas whilst table 2.6 shows the change in profiles that occurred over the period 2003-5. Map 3.1 in section 3 indicates the location of each of these areas.
It can be seen from tables 2.5 and 2.6 that:
Upper echelons are concentrated in the Ayr HMA (urban sub-area) and to a much lesser extent North Coast HMA and the Kilmarnock HMA (urban and northern sub-areas).
Families on the move make up a significant share of the population in all the areas other than in Girvan and South Carrick.
21 Affordability and Migration within the Ayrshire Housing System
Table 2.5: Proportion of population in each mosaic group by HMA, 2005 (%) Ayr HMA Ayr HMA Girvan Irvine Kilmarnock Kilmarnock North Three Ayrshire Scotland 2005 (Cumnock (Urban and Garnock and HMA HMA (Irvine HMA Coast Towns sub-area) Doon Valley South Valley sub- (Urban and HMA HMA Valley sub- HMA Carrick area) North sub- areas) HMA areas ) A Upper Echelons 0 11 1 2 1 0 3 16 4 6 7 B Families on the Move 8 14 18 0 18 15 19 17 12 15 14 C Small Town Propriety 6 17 12 13 10 18 12 18 13 13 11 D Country Lifestyles 10 7 6 35 2 13 6 3 2 7 10 E Urban Sophisticates 0 0 0 0 0 0 0 0 0 0.14 5 F Town Centre Singles 0 7 4 1 2 2 5 25 5 6 7 G Renters Now Owning 30 22 17 22 32 16 23 10 17 23 17 H Low Income Families 33 12 32 17 24 24 18 4 30 19 15 I State Beneficiaries 2 3 1 3 4 1 5 1 6 4 7 J Shades of Grey 10 7 9 6 8 12 8 7 11 8 6 All Groups 100 100 100 100 100 100 100 100 100 100 100 Base (Adults) 21,918 120,112 20,716 10,870 55,620 12,482 64,000 14,867 36,782 357,367 5,040,599 Source: Experian, 2007 Note: The cells shaded in grey are based on very small number of people. As a result these findings are subject to significant error and are not discussed in this report.
22 Affordability And Migration Within The Ayrshire Housing System
Table 2.6: Changes in mosaic group profile by HMA, 2003-2005 (%) Ayr HMA Ayr HMA Garnock Girvan Kilmarnock Kilmarnock North Three Ayrshire Scotland Changes 2003 to (Cumnock (Urban Valley and Irvine HMA (Irvine HMA Coast Towns 2005 sub-area) and Doon HMA South HMA Valley sub- (Urban and HMA HMA Valley Carrick areas) North sub- sub- HMA areas) areas) A Upper Echelons - 2 1 2 4 -100 -23 0 1 -2 1 B Families on the Move 8 1 3 -100 3 9 10 6 0 4 0 C Small Town Propriety 3 -2 -1 -2 -3 -3 -3 -8 3 -2 1 D Country Lifestyles -11 -6 -27 -8 -4 -6 -3 5 -2 -7 -3 E Urban Sophisticates - -36 - - - - 5 - - -26 4 F Town Centre Singles - 11 12 -3 -8 3 -5 1 -1 4 2 G Renters Now Owning 0 -4 -2 2 -1 -11 -5 4 -2 -3 0 H Low Income Families 3 5 1 1 -1 5 6 -4 0 2 0 I State Beneficiaries -9 -4 5 9 0 1 3 -6 -8 -2 -2 J Shades of Grey 3 -4 2 2 -1 0 -3 3 3 -1 -1 Total population change 1 -1 -1 -3 -1 -1 0 0 0 -1 0 Source: Experian, 2007 Note: The changes recorded in the cells shaded in grey are based on a relatively small number of people. Consequently, small changes in these cell counts between 2003 and 2005 may lead to apparently big changes over the two periods. These changes are not considered statistically robust and must not be interpreted as indicating likely trends. The grey cells are therefore not referred to in the main report.
23 Affordability and Migration within the Ayrshire Housing System
Seven out of the eight areas with a significant share of families on the move have experienced an increase in the proportion of people classified as this mosaic group, although the increase has been greatest in the Kilmarnock HMA and to a lesser extent in the North Coast, and Ayr HMA (Cumnock sub-area).
Except for the Ayr HMA (Cumnock sub-area), Ayrshire‟s HMAs have a higher share of small town propriety than Scotland as a whole. With the exception of the Three Towns area, the proportion of the population in this mosaic group appears to be slowly declining7.
As expected, the country lifestyles group is strongly in evidence in the Girvan and South Carrick area. The number and proportion of people falling into this mosaic group has declined across Ayrshire.
In comparison to Scotland there is a high proportion of renters now owners in many areas, but especially in the Irvine HMA and Ayr HMA (Cumnock sub-area). The number and proportion of people in this mosaic group has been declining across most of Ayrshire, but the decline has been most pronounced in the Kilmarnock HMA.
Town centre singles form a large proportion of households in the North Coast HMA, possibly reflecting the number of more mature households that have opted to live in this area. Ayr HMA (Urban and Doon Valley sub-area) has witnessed a growth in „town centre singles‟ in recent years.
Relatively high proportions of low-income families feature in many of the Ayrshire housing market areas, especially the Three Towns, Ayr HMA (Cumnock sub-area) and Garnock Valley areas. Both the Kilmarnock HMA and Ayr HMA have seen a growth in low-income families‟.
Most areas have proportionately low levels of households classed as state beneficiaries, but comparatively high proportions of elderly people (shades of grey).
Further detail on mosaic profiles at HMA level is provided in Appendix 2.
Profile of Movers
Economic differences between areas are a key driver of migration trends. Towns and regions with growing industries attract in mobile, economically active people. Conversely, areas where employment is declining will (other things being equal) tend to lose population to areas with more employment
7 It is possible that this may due to the death or movement of older people and being replaced by younger adults, especially „families on the move‟. It would be sensible to monitor whether this trend continues over the next 5 years or more.
24 Affordability And Migration Within The Ayrshire Housing System
opportunities. Such migration flows impact on the size and composition of local populations and therefore on the level and type of housing demand.
The following analysis is based on Experian‟s Consumer Dynamics database, which measures population movements within, into and out of Ayrshire. This database is built from a variety of sources and uses change of address information that households themselves supply to companies that they deal with8.
Movement Flows
Looking at internal flows within Ayrshire region, table 2.7 shows that the proportion of annual population movement that occurred wholly within a local authority area ranged from 90 per cent in North Ayrshire in 2005 to 85 per cent in both East and South Ayrshire.
In terms of migration flows between local authority areas, the largest cross- boundary flows are between East and South Ayrshire.
Table 2.7: Household migration within Ayrshire 2000 to 2005 (%) From Local To Local 2000 2001 2002 2003 2004 2005 Authority Authority (%) (%) (%) (%) (%) (%) East Ayrshire East Ayrshire 86 87 86 86 85 85 East Ayrshire North Ayrshire 4 4 4 4 5 5 East Ayrshire South Ayrshire 10 9 9 10 10 10 East Ayrshire All 100 100 100 100 100 100 North Ayrshire East Ayrshire 5 5 5 5 6 5 North Ayrshire North Ayrshire 91 90 91 91 90 90 North Ayrshire South Ayrshire 4 5 4 4 4 5 North Ayrshire All 100 100 100 100 100 100 South Ayrshire East Ayrshire 9 9 9 9 10 11 South Ayrshire North Ayrshire 4 4 4 4 4 4 South Ayrshire South Ayrshire 88 88 87 87 86 85 South Ayrshire All 100 100 100 100 100 100 Source: Experian, 2007 Table 2.8 looks at the average annual percentage change in migration between and within local authority areas and shows that migration has increased in all directions, although:
The largest proportionate growth in migration has occurred in those moving from South Ayrshire to East Ayrshire. The proportion averaged 10 per cent each year between 2000 and 2005 and averaged 12 per cent each year between 2003 and 2005, which is equivalent to around 1,200 households moving from South to East Ayrshire each year.
8 Note this data differs from analysis using Sasines data in the next section to consider housing market dynamics, as it relates to the total population across all tenures and not just the move of households involved in house purchase.
25 Affordability And Migration Within The Ayrshire Housing System
The second largest proportionate increase has been from South Ayrshire to North Ayrshire (8 per cent per annum). This translates to around 500 households a year moving from South to North Ayrshire.
These findings are consistent with the earlier economic assessment, which showed the South Ayrshire economy has performed less well than the two other local authority areas in terms of change in the total volume of employment.
Table 2.8: Change in migration flows within Ayrshire (%) from local to local average annual Average annual authority authority growth 2000-05 growth 2003-05 (%) (%) East Ayrshire East Ayrshire 4 1 East Ayrshire North Ayrshire 7 6 East Ayrshire South Ayrshire 4 2 North Ayrshire East Ayrshire 6 3 North Ayrshire North Ayrshire 4 1 North Ayrshire South Ayrshire 5 3 South Ayrshire East Ayrshire 10 12 South Ayrshire North Ayrshire 8 4 South Ayrshire South Ayrshire 5 0 Source: Experian, 2007 Table 2.9 indicates that the number and proportion of migrants both from within and outwith Ayrshire increased in the period from 2000 to 2005. More specifically:
Total migration has increased on average by 5 per cent each year.
Internal migration in Ayrshire has grown by an average of 4 per cent each year.
Incoming migrants have grown by an average of 21 per cent each year.
Table 2.9: Source of migrants in Ayrshire (%) average annual 2000 2001 2002 2003 2004 2005 From Area growth (%) (%) (%) (%) (%) (%) 2000-05 (%) Ayrshire 79 78 77 76 76 76 4 Glasgow & Clyde 10 10 11 11 12 11 9 Valley Rest of Scotland 4 4 4 4 4 4 4 Rest of UK 7 8 8 9 8 8 8 All migration 100 100 100 100 100 100 5 Base 40,500 47,500 51,500 52,000 55,000 52,500 Source: Experian, 2007 The proportion of all migrant households that have moved from outwith Ayrshire has increased from 21 per cent to 24 per cent.
The Glasgow and Clyde Valley area is a significant source of migrants, accounting for 11 per cent of all migrants in 2005. This has
26 Affordability And Migration Within The Ayrshire Housing System
also been the source of the fastest growing migratory flow, increasing by an annual average of 9 per cent.
Flows from the rest of Scotland account for 4 per cent of all migration and grew by an average of 4 per cent per year
Flows from the rest of the UK account for 8 per cent and grew by 8 per cent each year.
Overall, this indicates that Ayrshire housing markets have become more open in the past five years.
Further investigation of migration flows from the Glasgow and Clyde Valley area is presented in table 2.10. It shows that:
North Ayrshire is the most popular destination within Ayrshire, accounting from between 45 per cent and 48 per cent of all moves from the Glasgow and Clyde Valley area to Ayrshire between 2000 and 2005.
East Ayrshire accounted for around 30 per cent of all moves from the Glasgow and Clyde Valley area to Ayrshire between 2000 and 2005 whilst South Ayrshire accounted for 23 per cent of such moves.
Table 2.10: Migration from Glasgow & Clyde Valley to Ayrshire local authority areas 2000-05 (%) average annual 2000 2001 2002 2003 2004 2005 Migration to: growth (%) (%) (%) (%) (%) (%) 2000- 05 (%) East Ayrshire 30 32 32 30 30 30 9 North Ayrshire 46 45 48 47 47 47 10 South Ayrshire 24 23 20 22 24 23 8 Total 100 100 100 100 100 100 9 3,800 4,700 5,500 5,800 6,200 6,000 Source: Experian, 2007
Profile of Internal migrants
The following analysis examines the mosaic group profile for the three local authority areas separately. Appendix 2 provides further detail.
East Ayrshire
The large majority (70 per cent) of the population that moved within East Ayrshire in 2005 comprised low-income families (27 per cent), renters now owning (16 per cent), families on the move (15 per cent) and town centre singles (12 per cent).
Migration from South Ayrshire to East Ayrshire is also dominated by those classified as low-income families (21 per cent), families on the move (14 per cent) and town centre singles (12 per cent). The other main feature of
27 Affordability And Migration Within The Ayrshire Housing System migration from South to East Ayrshire is the country lifestyles group, which accounts for 14 per cent of moves.
Moves from North Ayrshire to East Ayrshire are dominated by low income families (29 per cent) and families on the move (24 per cent).
Of particular significance is the fact that in the period from 2000 to 2005:
There has been a sharp growth in the number of families on the move (11 per cent) moving from North to East Ayrshire (11 per cent) and from South to East Ayrshire (12 per cent).
There has also been a modest rise in the number of town centre singles and country lifestyles relocating from South Ayrshire to East Ayrshire and to a lesser extent from North Ayrshire to East Ayrshire.
North Ayrshire
Low-income families (25 per cent), renters now owning (18 per cent) and families on the move (14 per cent) and town centre singles (13 per cent) also dominate migration within North Ayrshire. The other main source of internal migration is those classed as country lifestyles (11 per cent), which account for a larger percent of internal movers than their population share would suggest.
Those moving to North Ayrshire from South Ayrshire tend to be families on the move (17 per cent), low income families (16 per cent) and small town propriety (15 per cent). Town centre singles (11 per cent) and country lifestyles (11 per cent) are also reasonably prevalent. However, in contrast to the first three mosaic groups, there has not been a significant increase in the number of people classified as town centre singles and country lifestyles relocating from South to North Ayrshire in the past 5 years.
In terms of those moving to North Ayrshire from East Ayrshire, the largest groups are low-income families (25 per cent) and families on the move (19 per cent). In the period since 2000, the size of the former group has increased by an average of 8 per cent each year whilst the size of the latter group has increased by an average of 11 per cent. Country lifestyles (12 per cent) and town centre singles (11 per cent) are also prominent, but the size of both groups has increased at a much lower rate than either low-income families or families on the move.
South Ayrshire
The largest migratory group within South Ayrshire is low-income families (19 per cent), followed by town centre singles (14 per cent), country lifestyles (12 per cent) and families on the move (12 per cent). In comparison to the other two local authority areas, South Ayrshire also has a high number of internal movers from within the upper echelons group (11 per cent). This reflects the fact that over three fifths of Ayrshire‟s upper echelons population are to be found in South Ayrshire, primarily in the in the Ayr HMA area.
Moves from East to South Ayrshire are dominated by low income families (22 per cent) and families on the move (22 per cent) and to a much lesser extent renters now owning (13 per cent), country lifestyles (10 per cent) and town centre singles (8 per cent).
28 Affordability And Migration Within The Ayrshire Housing System
Since 2000 there has been a sharp increase in the proportion of movers from East Ayrshire to South Ayrshire classified as families on the move. In 2000 families on the move accounted for 11 per cent of movers compared to 22 per cent in 2005. By contrast the proportion of town centre single, country lifestyles and renters now owners have remained largely unchanged whilst the proportion of low income families has fallen from 30 per cent to 22 per cent.
The profile of movers from North Ayrshire to South Ayrshire is broadly similar to the profile of movers from East Ayrshire to South Ayrshire. The main difference is that families on the move comprise an even larger share of total moves (29 per cent).
Mosaic groups and incomes implications of internal migration
It is possible to consider the 10 Mosaic Scotland groups in terms of the likely position of a typical member of each group within the overall income distribution. Very roughly, the groups in income terms look as follows:
Top third of the income distribution - upper echelons, families on the move and small town propriety
Middle third of the income distribution - country lifestyles, urban sophisticates and town centre singles
Bottom third of the income distribution - renters now owning, low income families, state beneficiaries and shades of grey
This categorisation is not hard and fast. For example, urban sophisticates are over represented in both very low and very high-income bands because this group contains students as well as academics and young professionals. However, it is provides a reasonable basis to allow us to consider different segments of the housing market (upper, middle, lower) against demographic profiles and change therein.
Table 2.11: Income implications of relative migration flows (%) Income East to North to East to South to North to South to band North East South East South North Ayrshire Ayrshire Ayrshire Ayrshire Ayrshire Ayrshire Top 28 33 34 30 40 40 Middle 27 21 21 29 16 25 Bottom 45 45 46 40 44 34 Total 100 100 100 100 100 100 Source: Experian, 2007 Table 2.11 shows the income implications of the various migration flows between Ayrshire local authority areas, using this mosaic income banding. It suggests there has been:
Some net relocation of higher income households towards East and South Ayrshire.
Net movement of middle-income households towards East and North Ayrshire.
Net movement of lower income households towards South Ayrshire.
29 Affordability And Migration Within The Ayrshire Housing System
Profile of inward migrants to Ayrshire
In 2005 there were around 12,600 in-movers to Ayrshire. In terms of the Mosaic group profile of inward migrants table 2.12 shows that in 2005:
The largest group is low-income families (21 per cent), which is slightly higher than this group‟s share of total population in Ayrshire.
The most rapid annual growth amongst migrants occurred in the families on the move group (9 per cent), which accounted for 15 per cent of in-migrants.
Town centre singles (13 per cent), renters now owning (11 per cent) and country lifestyles (11 per cent) made up most of the remaining in-migrants.
Table 2.12: profile of all inward migrants to Ayrshire average % % Group as % of annual of moves of moves total Ayrshire change 2000 2005 population Upper echelons 5 7 6 6 Families on the 9 13 15 15 move Small town propriety 5 7 7 13 Country Lifestyles 6 11 11 7 Urban sophisticates 8 4 4 0 Town centre singles 4 14 13 6 Renters now owning 3 13 11 23 Low income families 5 21 21 19 State beneficiaries 6 5 5 4 Shades of grey 5 6 6 8 All 5 100 100 100 Base - 8,505 12,600 Source: Experian, 2007
Profile of migrants from Glasgow & Clyde Valley
In 2005 there were approximately 6,000 in-movers from the Glasgow and Clyde Valley area to Ayrshire. Looking at the profile of this migratory population, table 2.13 shows that in 2005, the largest group of in-movers was town centre singles (25 per cent). The next largest group was families on the move (16 per cent), which was similar to this group‟s share of total population in Ayrshire.
Looking across tables 2.12 and table 2.13, it is clear that in-movers to Ayrshire from Glasgow and Clyde Valley are less likely to fall into one of the low income groups than in-movers as a whole. For example, in 2005 low- income families accounted for 11 per cent of in-movers from Glasgow and Clyde Valley compared to 21 per cent of all in-movers.
30 Affordability And Migration Within The Ayrshire Housing System
Table 2.13: profile of inward migrants to Ayrshire from Glasgow & Clyde Valley (%) average % % group as % annual of of moves of Ayrshire change (%) moves 2005 population 2000 Upper echelons 5 12 10 6 Families on the 10 15 16 15 move Small town propriety 4 7 6 13 Country Lifestyles 8 8 8 7 Urban sophisticates 11 11 12 0 Town centre singles 9 25 25 6 Renters now owning 11 4 4 23 Low income families 12 10 11 19 State beneficiaries 11 5 5 4 Shades of grey 12 4 4 8 All 9 100 100 100 Base 3,800 6,000 Source: Experian, 2007 This suggests that, on average, in-movers from Glasgow and Clyde Valley have higher incomes than those originating from elsewhere in Scotland or the UK. This is confirmed in table 2.14.
Table 2.14 Income profile of inward migration flows (%) income band in-migrants in–migrants Ayrshire all sources (%) G&CV (%) population (%) Top 28 32 34 Middle 28 45 13 Bottom 43 24 54 100 100 100 Source: Experian, 2007
Housing implications of economic and demographic trends
The fact that the Ayrshire economy as a whole has performed less well than that of the Glasgow and Clyde Valley area (and indeed the rest of Scotland) supports a conclusion of net out-migration and lower price inflation in Ayrshire relative to the rest of Scotland. However, direct linkages between local house price movements and relative economic change are difficult to prove with any degree of confidence. This is because such relationships can be obscured by changes in commuting patterns. Unfortunately, there is no regularly updated and comprehensive data to permit analysis of changes in commuting patterns since 2001 and its impact on house prices.
However, the preceding analysis does allow us to tentatively suggest a number of effects we might look for in the operation of Ayrshire housing markets. With respect to local authority and housing market areas:
31 Affordability And Migration Within The Ayrshire Housing System
Net employment loss and within this a net loss of lower paid jobs and a gain in higher paid jobs in North Ayrshire may have stretched the house price distribution, with higher value properties experiencing higher price inflation than lower value properties.
Growth of high value employment opportunities within an overall context of net job losses in South Ayrshire may have led to a stretching of the house price distribution.
Within East Ayrshire net employment and industrial restructuring may have led to price pressure across all segments in the local housing market areas.
Other possible effects are:
Continued growth in specific industries, such as the Aerospace industry in and around Prestwick, and the financial and business sector around Kilmarnock could have created a number of local area price „hotspots‟, although this might be affected by broader area conditions. For example a lack of regeneration activity could dampen such local effects, while successful regeneration initiatives could amplify them.
Weak retail performance in the Ayrshire economy due to the attractions of Braehead and other shopping centres located in Glasgow and Clyde Valley could have generated a residential „pull‟ to relocate in and around Kilmarnock.
„High value‟ housing market areas (as proxied by the mosaic profile of HMAs) might be expected to have higher house price levels and rates of inflation at the upper end of the market. In practice, if this effect exists, we would expect to see it within the Ayr and Kilmarnock urban area markets and the North Coast HMA.
Areas such as Kilmarnock with significant numbers of „families on the move‟ should have experienced strong price performance.
Disproportionate in migration into North Ayrshire might be expected to have generated greater price pressure there, particularly in the new build market.
In addition, the migratory flows detailed in table 2.11 might be expected to have resulted in:
Greater price inflation at the top of the market in East and South Ayrshire than North Ayrshire.
Strong price inflationary pressure at the middle of the East Ayrshire housing market.
Greater price pressure at the bottom of the market in South Ayrshire relative to East and North.
32 Affordability And Migration Within The Ayrshire Housing System
3 Ayrshire housing markets 2000-2006
Introduction
Section 2 referred to the housing market areas within Ayrshire. This section begins by summarising the analytical basis used to update and map the existing housing markets within Ayrshire. It then examines the operation of these housing markets since 2000. Of particular interest are the extent to which the completion of M77 extension to Fenwick has had a discernable impact on housing demand and the extent to which affordability pressures have increased over the period.
The concept of a housing market area (HMA)
The housing market, unlike the market for many other products, has a strong spatial dimension. Consumers buying a property tend to choose to live in reasonable travelling distance of work, educational institutions, and family and friends. The main exceptions are households pursuing a major change in lifestyle such as a new job or retirement to a different part of the country.
A housing market is therefore typically conceived to operate across an area where most households seeking owner occupied housing are willing to consider searching for and purchasing alternative accommodation without changing employment or pursuing other major lifestyle changes. As guidance on local housing system analysis produced by Communities Scotland explains (O‟Sullivan et al, 2004):
“A housing market area (HMA) can therefore be defined as the geographical area where most people both live and work and where most people moving home (without changing job) will have sought a house”.
As many (but not all) households tend to take little account of local authority boundaries when searching for housing, housing market areas can and do operate across local authority boundaries.
Housing market boundaries also change over time. Where housing demand outstrips the number of properties available for purchase over a sustained period of time, households often adjust their search activity. Aside from revising the price they are willing to pay, households often broaden the locations over which they are prepared to buy a home.
In addition, housing market areas are rarely wholly self-contained and most exhibit some degree of overlap and some influence from changes in demand and supply in adjacent housing market areas.
Ayrshire Housing markets
The Ayrshire housing system has a complex geographic market structure. Although the spatial structure remains the subject of debate, at the time of commissioning this study there was a widespread perception that the Ayrshire housing market was undergoing a process of change, partly in response to increasing demand from households relocating from Glasgow
33 Affordability And Migration Within The Ayrshire Housing System and Clyde Valley, possibly facilitated by transport infrastructure developments such as the completion of the M77 to Fenwick in spring 2005.
An important early stage of this research project was therefore to review recent Sasines data in order to establish the current spatial structure of housing markets across Ayrshire. The following paragraphs summarise the outputs from this analysis. A more detailed description of the work conducted can be found in a consultation paper (Newhaven, 2006) issued in November 20069.
An important concept in the identification of HMAs is the notion of „self- containment‟. This term refers to how many house purchasers originate within a given area relative to the number of purchasers moving into or out of that area. Above an agreed threshold, an area is considered to be self- contained and therefore to constitute a housing market area.
An alternative to self-containment is to measure the strength of movement flows between two areas to determine whether they are functionally connected (DTZ Pieda Consulting, 2003a-c). If the proportion of sales in an area is greater than an agreed level, the two areas are concluded to form part of the same housing market area.
Using Registers of Scotland house sales data for 2000-2006 (excluding RTB sales) we applied these two techniques. More specifically we:
Examined whether each of the three local authority areas continues to display a high level of self-containment in terms of the origins of recent purchasers. In discussion with the steering group, the origin based self-containment threshold was set at 65%.
Assessed the degree of inter-connectivity between Ayr, Kilmarnock, Irvine and the Three Towns HMAs by examining purchaser flows between these areas.
Explored the degree of inter-connectivity between Ayrshire and the Glasgow and Clyde Valley area by examining purchaser flows.
Identified a number of HMAs across Ayrshire based on the findings from the self-containment and purchaser flows analysis.
DTZ Pieda (2003a-c) suggests the purchaser flows threshold should be at least 10 per cent. This threshold was used in most instances. However, the threshold was increased to 15 per cent for areas with fewer than 600-700 sales and where sales numbers fluctuate from one year to another.
9 The consultation paper was widely circulated for comment. Responses received were supportive of the HMA boundaries detailed in this section of the report. The main amendments made in light of comments received were to include Cumnock as a sub area of the Ayr HMA, and to include Mauchline as part of the Ayr HMA Urban sub area.
34 Affordability And Migration Within The Ayrshire Housing System
Map 3.1: Ayrshire Housing Market Areas (HMAs)
Map 3.1 shows that a number of Housing Market Areas operate within Ayrshire. In summary, there are:
Four major housing markets within Ayrshire – centred on Ayr, Kilmarnock, Irvine and the Three Towns (Ardrossan, Saltcoats and Stevenston). These HMAs are based on the principal urban areas of Ayrshire. A list of towns and settlements in each of these HMAs is provided in appendix 4.
Three rural-based local housing markets – North Coast, Garnock Valley, and Girvan and South Carrick – all of which have low levels
35 Affordability And Migration Within The Ayrshire Housing System
of self-containment and are subject to significant influence from long distance in-migration. North Coast and Garnock Valley are also subject to strong influence from the Greater Glasgow HMA, which covers most of Glasgow and Clyde Valley.
The Ayr and Kilmarnock HMAs both have identifiable sub-areas within them that are large and distinct enough to support separate analysis.
Within Ayr these comprise an urban sub-area that includes Ayr, Prestwick and Troon; a Doon Valley sub area, and a Cumnock Valley sub area.
With respect to Kilmarnock, sub areas comprise the urban area centred on the town, a northern sub area and an Irvine Valley sub area.
The analysis and rationale for this spatial structure set out in map 3.1 is detailed below.
Local authority wide level analysis
Table 3.1 shows the extent of self-containment10 at local authority level and indicates that over the period from January 2000 to June 2006:
North Ayrshire no longer remained a self-contained area. In most years the proportion of purchasers originating within the local authority area has been below the 65 per cent self-containment threshold. A major reason for this is that one in six purchasers originate from Glasgow and Clyde Valley. Parts of North Ayrshire are also popular with long-distance purchasers, such as households retiring to the area.
East Ayrshire has also become more open. Although the proportion of purchasers originating from the Glasgow and Clyde Valley area has fluctuated between 10-12 per cent, the proportion of purchasers moving from elsewhere in Ayrshire increased from 11 per cent to 14 per cent, driven primarily by an increase in households relocating from South Ayrshire.
In 2005 just under 68 per cent of purchasers in South Ayrshire already lived there, compared to over 71 per cent in 2000. The main reason for this has been an increase in the number of purchasers‟ moving to South Ayrshire from the rest of Scotland (other than from the Glasgow and Clyde Valley area) and beyond.
10 This is „origins based‟ – that is it measures the number of sales originating in an area as a proportion of the total number of sales that occur within that area
36 Affordability And Migration Within The Ayrshire Housing System
Table 3.1: Number of sales and origin of purchaser by local authority area, 2000-2006 (%) 2006 2000 2001 2002 2003 2004 2005 (q2) North Number of sales 2,389 2,539 2,972 2,882 2,446 3,299 1,550 Ayrshire North Ayrshire 63.9 66.1 61.4 60.7 60.5 60.1 65.8
Rest Ayrshire SP 3.8 4.6 5.6 5.8 6.2 7.3 5.5 GCVSP 17.1 15.4 18.0 18.8 17.9 18.5 13.4 Other 13.0 11.4 11.4 12.0 12.7 11.2 10.2
Unknown 2.3 2.5 3.6 2.6 2.7 2.8 5.2 Total 100 100 100 100 100 100 100 Number of sales 1,940 2,058 2,190 2,294 1,826 2,537 1,246
East Ayrshire 68.4 68.4 67.9 67.7 68.5 64.1 58.1 East Ayrshire Rest Ayrshire SP 10.9 10.3 10.5 11.0 11.9 14.0 12.7 GCVSP 12.3 11.8 12.3 12.2 9.9 11.2 10.7 Other 5.7 6.4 6.6 6.8 7.6 7.6 14.8
Unknown 2.7 3.2 2.6 2.3 2.1 3.1 3.7 Total 100 100 100 100 100 100 100 Number of sales 2,407 2,564 2,769 2,779 2,182 2,799 1,144 South Ayrshire 71.3 68.8 69.6 67.7 66.8 67.7 64.5 South Rest Ayrshire SP 10.6 10.3 9.2 10.0 9.9 10.7 10.5 Ayrshire GCVSP 7.3 7.4 7.1 7.3 9.9 8.1 9.0
Other 8.6 11.0 10.5 12.5 9.9 10.2 11.4 Unknown 2.2 2.5 3.6 2.5 3.5 3.3 4.6 Total 100 100 100 100 100 100 100 Source: Sasines
Ayrshire HMA analysis
Table 3.2 shows the extent of self-containment within the Ayr, Irvine, Kilmarnock and Three Towns HMAs, and flows between these markets over time. It confirms that:
The major Ayrshire HMAs have become more open over time. This could be for a number of reasons, including household income growth. Housing research has long established that as household incomes grow, the area over which households will search for suitable housing increases, making the boundaries of individual markets wider and more likely to overlap.
Irvine is developing closer links with the Three Towns and Kilmarnock is developing closer links with both Ayr and Irvine. The development of such links can sometimes moderate the types of price effect that can arise from changes in the economy, such as those hypothesised at the end of section 2.
Sales in the Irvine HMA to purchasers originating from the Glasgow and Clyde Valley area have gradually increased, but the actual number of households involved remains relatively small. As a proportion of sales, Kilmarnock and also the Three Towns remain more important destinations for such purchasers.
Analysis also shows a complex pattern of market interactions involving the Kilmarnock HMA has been developing over time:
37 Affordability And Migration Within The Ayrshire Housing System
Table 3.2: Origin based flows to HMA areas in Ayrshire (where purchasers come from) Year All Ayr Glasgow Irvine Kilmarnock Three Elsewhere All Sales (%) & (%) (%) Towns (%) Sales (no) Clyde (%) (%) Valley (%) Ayr 2000 2,358 71.3 6.7 2.1 3.2 0.7 16 100 2001 2,462 69.3 7.3 1.8 3.3 0.5 18 100 2002 2,670 71.0 6.2 2.0 3.1 0.3 17 100 2003 2,669 68.8 6.0 2.5 3.7 0.5 18 100 2004 2,155 67.4 8.7 2.3 3.1 0.4 18 100 2005 2,801 68.2 7.1 2.4 4.0 0.3 18 100 Irvine 2000 898 3.2 6.0 71.9 2.4 3.6 11 100 2001 969 4.1 6.8 70.1 3.3 3.6 12 100 2002 1,143 5.1 8.0 67.6 3.4 4.5 11 100 2003 1,076 4.9 8.0 65.5 4.3 4.6 13 100 2004 866 5.5 9.6 62.4 5.8 4.8 12 100 2005 1,245 5.5 7.8 63.4 5.8 5.9 12 100 Kilmarnock 2000 1,303 4.5 12.1 3.1 68.2 0.8 11 100
2001 1,392 3.5 12.9 3.4 67.3 0.7 12 100 2002 1,436 5.3 13.3 3.6 65.4 0.3 12 100 2003 1,531 6.0 12.4 3.5 66.2 0.7 11 100 2004 1,211 6.6 10.2 2.5 68.9 0.5 11 100 2005 1,628 7.2 11.3 2.8 64.3 0.6 14 100 Three 2001 644 0.6 9.6 6.7 0.8 62.7 25 100 Towns 2002 778 2.1 12.2 7.2 1.2 53.0 20 100
2003 738 1.9 13.0 6.5 1.2 56.4 24 100 2004 705 2.6 11.1 7.5 1.3 55.0 21 100 2005 799 2.3 10.1 10.6 1.5 54.2 23 100 Source: Sasines Within the Kilmarnock urban area, the proportion of local purchasers has been declining. This has been due to an increase in the number and proportion of purchasers moving from the rest of Ayrshire and in particular South Ayrshire as opposed to an increase in the number of purchasers moving from Glasgow and Clyde Valley.
In the smaller northern sub area, which includes Stewarton, households from the Glasgow and Clyde Valley form a much higher proportion of total purchasers (around 25 per cent per annum), and an even higher proportion (over 50 per cent) of new build purchasers.
In the Irvine Valley area, there is no evidence that either the number or proportion of sales to households from Glasgow and Clyde Valley is increasing.
Overall, the flow of purchasers from Glasgow and Clyde Valley into the Kilmarnock HMA has remained largely unchanged since 2000. However, the Northern sub-area of the Kilmarnock HMA is very open and forms an area where the boundaries of the Kilmarnock and Glasgow housing market areas overlap.
38 Affordability And Migration Within The Ayrshire Housing System
Table 3.3: North Coast: Number of sales and origin of purchaser (%) 2000 2001 2002 2003 2004 2005 Number of sales 502 555 606 618 465 712 North Coast 51.0 55.1 49.5 46.0 50.1 44.2 Glasgow and Clyde Valley 24.1 21.8 22.6 25.9 26.0 27.2 Rest North Ayrshire 3.0 2.7 2.8 2.6 2.2 3.8 Rest of Ayrshire SP 1.8 2.3 1.8 2.8 0.6 3.7 Elsewhere (incl unknown) 20.1 18.0 23.3 22.8 21.1 20.9 Source: Sasines
Table 3.4: Garnock Valley: Number of sales and origin of purchaser (%) 2000 2001 2002 2003 2004 2005 Number of sales 346 275 353 358 315 454 Garnock Valley 59.0 56.4 51.0 51.4 49.5 50.9 Glasgow and Clyde Valley 22.0 22.2 28.9 30.4 24.1 26.2 Rest North Ayrshire 4.9 4.7 5.1 5.9 8.9 6.4 Rest of Ayrshire SP 1.2 2.9 2.0 2.2 3.2 2.4 Elsewhere (incl unknown) 13.0 13.8 13.0 10.1 14.3 14.1 Source: Sasines
Table 3.5 Girvan & South Carrick: Number of sales and origin of purchaser (%) 2000 2001 2002 2003 2004 2005 Number of sales 202 257 263 249 205 261 Girvan &South Carrick 49.0 54.1 43.3 38.6 34.6 42.9 Glasgow and Clyde Valley 8.9 3.9 8.7 8.0 10.7 7.3 Rest of South Ayr 11.4 7.8 11.0 9.2 9.3 11.1 Rest of Ayrshire SP 5.0 5.4 5.3 3.2 3.4 4.6 Elsewhere (incl unknown) 25.7 28.8 31.6 41.0 42.0 34.1 Source: Sasines Turning to the other Ayrshire housing markets:
The North Coast HMA has become increasingly open (table 3.3). Although the North Coast has few connections with the rest of Ayrshire, the level of influence and degree of overlap with Glasgow and Clyde Valley has been increasing. Moreover, one in five purchasers are long distance movers re-locating from the rest of Scotland (other than Glasgow and Clyde Valley) or from further afield.
Garnock Valley is also an open area (table 3.4) that is subject to influence from Glasgow and Clyde Valley but lays outwith the sphere of influence of the other Ayrshire authority areas.
Girvan and South Carrick is becoming more open over time (table 3.5) and there has been a strong upturn in the proportion and number of long distance purchasers since 2003. Most of these purchasers bought property in and around rural villages rather than in Girvan town. There is no evidence of an increase in purchasers originating from within the Ayr HMA.
39 Affordability And Migration Within The Ayrshire Housing System
Table 3.6 shows an increase in the importance of links between Cumnock and the rest of Ayrshire, which essentially involves links to the Ayr HMA. Further analysis suggests that in the six years to December 2005:
21 per cent of all purchasers (411) originating from the Cumnock area bought a house in the Ayr HMA. By contrast, just 3.5 per cent of purchasers originating from the Cumnock area bought a house in the Kilmarnock HMA area.
Nine per cent of all purchasers (191) buying property in the Cumnock area originated within the Ayr HMA.
The consultation exercise conducted in December 2006-January 2007 showed local perceptions confirming the statistical evidence that the Cumnock area is gradually coming under the sphere of influence of the Ayr HMA.
Table 3.6: Cumnock Area: Number of sales and origin of purchaser (%) 2000 2001 2002 2003 2004 2005 Number of sales 293 315 394 393 289 443 Cumnock Area 70.6 69.8 67.8 63.9 62.3 60.3 Glasgow and Clyde Valley 4.4 3.8 7.4 5.6 3.8 7.4 Rest of East Ayrshire 7.8 7.6 6.1 7.9 9.7 10.1 Rest of Ayrshire SP 9.6 6.7 7.1 10.2 12.1 10.2 Elsewhere (incl unknown) 7.5 12.1 11.7 12.5 12.1 12.0 Source: Sasines In sum, we conclude that all the Ayrshire HMAs while identifiable and well defined are becoming more open. The openness of the Girvan and Carrick HMA and to a lesser extent the North Coast HMA reflects continuing demand originating from long distances away. The openness of other areas (North Coast, Garnock Valley, and Kilmarnock northern sub area) reflects the growing attractiveness of these areas to households originating from the Glasgow and Clyde Valley area.
More generally, the extent of inter penetration between certain HMAs is likely to reflect a combination of factors. Such factors include the changes in the relative economic fortunes of different areas discussed in section 2, ongoing imbalances between supply and demand at the local HMA level, and the longer term effect of rising income levels on household search patterns.
Looking to the future, the degree of inter-connectivity between HMAs may continue to increase, and indeed be actively fostered by a range of policy initiatives. In particular the new Ayrshire Structure Plan (Ayrshire Joint Structure Plan Committee, 2006a) defines the towns of Ayr, Kilmarnock and Irvine and „their associated communities‟ (which includes Ardrossan, Saltcoats, and Stevenston) as the „core investment area‟, (see map 3.2) for future transport, economic and housing development. Around 65 per cent of new housing planned for the period to 2025 is to be built in this area. This hints at a possibility that in the longer term the core investment area may gradually develop into a single housing market area. As the plan states:
„The towns of Ayr, Kilmarnock and Irvine and their associated communities form a closely inter-related urban network at the very heart of Ayrshire. This grouping contains the majority of the area‟s population, economic
40 Affordability And Migration Within The Ayrshire Housing System
activity and services, and, as the focus of the transport network…the towns act as key focal points attracting the largest proportion of new development and have the greatest potential for attracting new investment in the future. Government policy recognises this and identifies a Central Ayrshire Economic Development Zone as a priority in the National Planning Framework. The Core Investment Area is based on this Development Zone and within this area the plan promotes the inter-dependence of good transport links, modern infrastructure with residential and business opportunities, and an upgraded landscape setting. This establishes a new vision for the towns in the context of their immediate area and, in this regard, there will be clear competitive advantage to be had from their collective integration and interdependence‟.
The Ayrshire Joint Structure Plan also seeks to promote development across seven „investment corridors‟ that radiate out along main road and rail transport routes. Each investment corridor includes one or more local economic and service centres. As Map 3.2 shows, these investment corridors are:
The North Coast investment corridor, which is intended to strengthen the economic and service role of Largs.
The Garnock Valley investment corridor, which has Kilbirnie as the main service centre.
The Glasgow Link investment corridor north of Kilmarnock, which includes the service centre of Stewarton.
The Irvine Valley investment corridor, which includes the service centre of Galston.
The Doon Valley investment corridor, which has Dalmellington as the main service centre.
The M74 link investment corridor, which includes the service centres of Auchinleck and Cumnock.
The Carrick investment corridor in South Ayrshire, which includes the service centres of Maybole and Girvan.
We return to the potential housing implications of arising from this policy framework in section 5.
41 Affordability And Migration Within The Ayrshire Housing System
Map 3.2: Ayrshire Structure Plan Development Framework, 2006
Source: Ayrshire Joint Structure Plan 2006
42 Affordability And Migration Within The Ayrshire Housing System
House Price Trends 2000-2006
Sales and price trends at local authority level
The analysis of sasines covers the period from the first quarter of 2000 to the second quarter in 2006 and involves just over 62,000 residential transactions in Ayrshire region11.
Over this period a slightly higher proportion of total transactions occurred in North Ayrshire than in the other two local authority areas (see Figure 3.1) Inspection of the data reveals that:
New build sales constitute around nine per cent of total sales, although the proportion is marginally higher in East Ayrshire, and lower in the other two authority areas.
Second hand sales constitute around three quarters of the market, ranging from almost 70 per cent in East Ayrshire to over 80 per cent in South Ayrshire).
Right to buy (RTB) sales constitute around 16 per cent of sales, ranging from 12 per cent in south Ayrshire to 20 per cent in East Ayrshire.
Figure 3.1: Ayrshire sales 2000(Q1) -2006(Q2)
25,000
20,000
15,000
10,000
5,000
0 East Ayrshire North Ayrshire South Ayrshire
These compositional effects are big enough (unless controlled for) to affect „average prices‟12. The following paragraphs therefore focus primarily (but not exclusively) on second hand price trends.
11 The data display a significant dip in sales in 2004, which could reflect some miscoding of sales in 2004 into other years. 12 For example, a comparison of average prices for North and South Ayrshire would reflect amongst other things the bigger proportion of RTB sales evident in the former.
43 Affordability And Migration Within The Ayrshire Housing System
Tables 3.7a-c show second-hand house price trends for Ayrshire and the three local authority areas. These price trends are broken down by lower quartile, median and upper quartile points of the price distribution. These points present a reasonable representation of the lower, middle and upper ends of the housing market respectively13.
Table 3.7a: Lower quartile prices by year (second hand sales) Year East North South Ayrshire Rest of Ayrshire Ayrshire Ayrshire Scotland 2000 £31,995 £31,995 £38,500 £33,995 £40,000 2001 £32,950 £32,000 £40,000 £34,500 £42,000 2002 £33,000 £33,000 £41,000 £35,000 £44,000 2003 £37,000 £37,000 £50,275 £40,000 £50,000 2004 £45,000 £45,200 £60,000 £49,025 £60,000 2005 £56,000 £55,000 £70,000 £60,000 £70,554 2006 £61,850 £62,000 £79,000 £65,000 £75,239 Source: Sasines
Table 3.7b: Median prices by year (second hand sales) East North South Ayrshire Rest of Ayrshire Ayrshire Ayrshire Scotland 2000 £40,025 £42,768 £55,000 £46,100 £56,000 2001 £42,100 £43,000 £58,500 £47,995 £59,000 2002 £44,529 £45,250 £60,000 £50,000 £64,000 2003 £52,008 £52,000 £75,000 £59,950 £75,000 2004 £64,000 £65,000 £87,000 £71,000 £90,050 2005 £77,250 £75,000 £104,000 £83,750 £100,000 2006 £80,000 £79,000 £120,000 £88,000 £106,000 Source: Sasines
Table 3.7c: Upper quartile prices by year (second hand sales) East North South Ayrshire Rest of Ayrshire Ayrshire Ayrshire Scotland 2000 £60,000 £66,000 £80,000 £69,177 £83,000 2001 £64,000 £67,525 £87,000 £74,975 £87,750 2002 £69,500 £74,500 £95,075 £80,251 £98,000 2003 £83,700 £85,000 £117,725 £95,000 £120,000 2004 £105,000 £103,363 £140,000 £118,295 £142,000 2005 £125,000 £125,000 £162,059 £136,500 £153,000 2006 £119,725 £130,000 £179,600 £140,000 £158,000 Source: Sasines
13 Later in the report these quartiles are compared alongside movement patterns of households at the lower, middle and upper end of the income distribution (as proxied by the Mosaic group information discussed in the previous section).
44 Affordability And Migration Within The Ayrshire Housing System
In terms of house price levels, table 3.7a-c shows that South Ayrshire is the most expensive part of Ayrshire and the prices in East and North Ayrshire are very similar. Relative to Scotland as a whole, East and North Ayrshire are lower priced markets whilst South Ayrshire is appreciably more expensive.
In terms of price inflation, tables 3.8a-b show that:
New build house prices have increased at a much faster rate than second hand prices across Ayrshire.
Within the new build sector, lower quartile prices have increased at a faster rate than prices at the upper end of the market in North Ayrshire, although the opposite is the case in East and South Ayrshire.
A higher rate of price inflation has been experienced at the upper end of the second hand market than at the lower end, particularly in South Ayrshire.
New build prices for Ayrshire as a whole have risen by a similar amount as in the rest of Scotland, except at the upper end of the market where Ayrshire prices have risen faster. A similar picture emerges with respect to second hand prices.
Table 3.8a: Percentage price increase 2000-2006 (new build prices) East North South Ayrshire Rest of Ayrshire Ayrshire Ayrshire Scotland LQ 69 169 95 109 107 Median 65 140 85 101 104 UQ 126 125 234 111 96 Source: Sasines
Table 3.8b: Percentage price increase 2000-2006 (second hand prices) East North South Ayrshire Rest of Ayrshire Ayrshire Ayrshire Scotland LQ 93 94 105 91 88 Median 100 85 118 91 89 UQ 100 97 125 102 90 Source: Sasines
Sales and price trends at housing market area level
Figure 3.2 shows the relative size of the Ayrshire HMAs in terms of volume of sales. The large scale of the Ayr and Kilmarnock HMAs compared to the other HMAs is readily apparent.
Table 3.9 shows that second-hand sales dominate all seven housing market areas but there are some important variations in the proportion of new build and RTB sales activity occurring within each HMA.
Girvan & South Carrick and North Coast housing markets have proportionately few new build sales in comparison to the Ayr and Kilmarnock housing markets. RTB sales are shown as particularly high in proportionate terms in Garnock Valley, Irvine, and Kilmarnock housing markets.
45 Affordability And Migration Within The Ayrshire Housing System
Figure 3.2: HMA Share of transactions (all sales 2000q1 – 2006q2)
Ayr
11% Garnock Valley
7% Girvan And South Carrick 37% Irvine
Kilmarnock
23% North Coast
Three Towns 5% 14% 3%
Relative to the rest of Scotland the proportion of RTB in Ayrshire is high. Only in the North Coast HMA is the proportion lower than elsewhere in Scotland.
New build sales constitute a marginally lower proportion of sales than elsewhere in Scotland.
Table 3.9: Transaction totals by type of sale and by HMA, January 2000-June 2006 inclusive (%) New RTB Second Total Build (%) Hand (%) No (%) (%) Ayr 9 15 76 100 23,210 GV 8 20 72 100 3,229 G&SC 5 17 78 100 1,699 Irvine 10 19 71 100 8,479 Kilmarnock 11 19 70 100 13,935 NC 5 5 89 100 4,341 TT 9 18 73 100 6,463 All Ayrshire 9 17 74 100 62,083* Rest of Scotland 11 12 77 100 713,407 Source: Sasines Note: Ayrshire total includes over 700 unallocated sales Table 3.10a-c provides prices by year for second hand properties at the lower quartile, median and upper quartile points of the market for Ayrshire as a whole and for each HMA. These tables show that:
The Ayr HMA is consistently the highest price market in Ayrshire, across all price segments of the market.
At the middle and upper sections of the market, the North Coast HMA also stands out as an expensive area.
46 Affordability and Migration within the Ayrshire Housing System
Table 3.10a: Lower quartile prices by year (second hand sales) Ayr HMA GV HMA GSC HMA I HMA K HMA NC HMA TT HMA Ayrshire 2000 £37,500 £31,125 £35,000 £30,736 £31,995 £36,000 £29,950 £33,995 2001 £38,000 £29,125 £35,000 £31,125 £33,000 £37,613 £30,875 £34,500 2002 £40,000 £31,000 £35,000 £33,000 £33,300 £38,500 £32,000 £35,000 2003 £46,000 £35,000 £44,500 £37,000 £39,188 £42,000 £34,500 £40,000 2004 £55,000 £40,000 £49,500 £48,013 £48,000 £51,250 £40,625 £49,025 2005 £65,000 £47,125 £56,225 £59,650 £60,000 £55,000 £51,733 £60,000 2006 £72,128 £55,500 £63,125 £64,999 £65,000 £62,250 £60,000 £65,000 Source: Sasines
Table 3.10b: Median prices by year (second hand sales) Ayr HMA GV HMA GSC HMA I HMA K HMA NC HMA TT HMA Ayrshire 2000 £53,000 £43,500 £47,375 £38,000 £40,050 £54,000 £39,500 £46,100 2001 £55,250 £39,500 £41,250 £37,750 £43,995 £55,500 £39,500 £47,995 2002 £60,000 £40,000 £41,035 £40,500 £45,000 £60,000 £44,000 £50,000 2003 £70,000 £45,000 £59,950 £49,050 £55,000 £60,000 £48,000 £59,950 2004 £81,500 £54,675 £72,000 £60,000 £67,750 £77,000 £60,000 £71,000 2005 £95,476 £65,000 £80,000 £73,025 £79,998 £85,000 £70,000 £83,750 2006 £105,500 £72,000 £83,500 £77,000 £82,000 £91,050 £77,000 £88,000 Source: Sasines
Table 3.10c: Upper quartile prices by year (second hand sales) Ayr HMA GV HMA GSC HMA I HMA K HMA NC HMA TT HMA Ayrshire 2000 £79,000 £69,000 £64,813 £56,000 £60,000 £78,125 £60,000 £69,177 2001 £85,000 £60,000 £71,000 £59,375 £67,125 £85,000 £59,700 £74,975 2002 £91,000 £63,650 £68,000 £66,188 £72,000 £93,000 £65,000 £80,251 2003 £110,000 £79,005 £95,000 £77,563 £90,000 £96,805 £73,439 £95,000 2004 £131,150 £88,750 £110,248 £93,000 £110,138 £128,781 £100,000 £118,295 2005 £154,999 £111,523 £136,750 £112,378 £130,000 £145,200 £115,000 £136,500 2006 £162,000 £119,000 £148,875 £112,500 £120,000 £152,000 £123,000 £140,000 Source: Sasines
47 Affordability and Migration within the Ayrshire Housing System
Figures 3.3 and 3.4 show there have been:
High price increases across the price spectrum for second hand properties in Kilmarnock relative to most other HMAs.
High price increases at the lower quartile of the second hand market in the Irvine and Three Town HMAs.
Figure 3.3: Increase in second hand prices 2000q1-2006q2 by HMA
140%
120% Ayr HMA GV HMA 100% GSC HMA 80% I HMA
60% K HMA NC HMA 40% TT HMA 20% Ayrshire
0% LQ Median UQ
Figure 3.4: Increase in new build prices 2000q1 – 2006q2 by HMA14
250%
Ayr HMA 200% GV HMA GSC HMA 150% I HMA K HMA 100% NC HMA TT HMA 50% Ayrshire
0% LQ Median UQ
14 Note Girvan and South Carrick is excluded as there were insufficient new build sales to compute percentiles (there were fewer than 10 new build sales in 5 of the 7 years and only 2 sales in the period from 2005q1 to 2006q2.).
48 Affordability And Migration Within The Ayrshire Housing System
High price increases at the top of the second hand market in Girvan and South Carrick, as well as in the Ayr and Three Towns HMAs.
High price rises across the new build market in the Irvine, Garnock Valley and North Coast HMAs (but not the Kilmarnock HMA).
Comparing price trends at HMA level with those in evidence for the rest of Scotland shows that:
At the lower quartile and at the median for second hand house sales, the rate of price inflation in Ayr, Irvine, Kilmarnock and the Three Towns HMAs have exceeded those experienced on average in the rest of Scotland.
At the upper end of the market for second hand sales there has been greater pressure on prices in all of above housing markets, as well as in the North Coast and Girvan and south Carrick HMAs.
In the new build sector, the rate of price inflation in Garnock Valley, Irvine and the North Coast HMAs exceeded price increase elsewhere in Scotland by a significant amount at the lower, middle and upper ends of these markets.
In sum, the evidence shows that many parts of the Ayrshire housing markets, but particularly those comprising the core investment area (across second hand markets) and the north of Ayrshire (in new build markets) have experienced greater price pressure since 2000 than has been experienced in the rest of Scotland as a whole.
Sales and price trends at sub housing market area level
Turning to the sub-areas of the Kilmarnock HMA and Ayr HMA, table 3.11shows the make up of residential sales within their respective sub- areas. Interestingly, it shows comparatively very high proportions of new build sales in the Ayr Doon Valley and Kilmarnock Northern sub areas, and a very high level of RTB sales in the Cumnock, Doon Valley and (to a lesser extent) Irvine Valley sub areas.
Table 3.11: Transaction totals by type and by sub-area 2000Q1 to 2006Q2 NB RTB SH Total No (%) (%) (%) (%) Ayr HMA: Urban 9 11 80 100 18,557 Cumnock 7 32 61 100 2,935 Doon Valley 16 29 55 100 1,718 Kilmarnock HMA: Urban 7 20 73 100 6,405 Irvine Valley 6 24 70 100 4,071 Northern 22 12 65 100 3,459 Other Ayrshire 8 16 76 100 24,211 All Ayrshire 9 16 75 100 62,083* Source: Sasines Note: Ayrshire total includes over 700 unallocated sales
49 Affordability And Migration Within The Ayrshire Housing System
Tables‟ 3.12a-c show recent trends in second hand house prices at the lower quartile, median and upper quartile points for Ayrshire as a whole, and for the sub-areas of the Kilmarnock and Ayr housing markets.
Table 3.12a: Lower quartile prices by year (second hand sales) Ayr HMA Kilmarnock Ayrshire Urban Cumnock Doon Valley Urban Irvine Valley Northern 2000 £39,000 £31,998 £31,500 £31,000 £30,000 £38,995 £33,995 2001 £40,500 £28,500 £33,000 £32,000 £32,995 £37,500 £34,500 2002 £42,000 £31,250 £34,000 £32,050 £33,250 £40,000 £35,000 2003 £51,000 £30,000 £33,093 £37,871 £35,750 £49,375 £40,000 2004 £60,000 £37,000 £40,000 £47,000 £42,000 £65,000 £49,025 2005 £70,000 £42,250 £54,000 £60,000 £53,188 £75,063 £60,000 2006 £81,000 £44,500 £61,000 £65,000 £57,000 £75,877 £65,000 Source: Sasines
Table 3.12b: Median prices by year (second hand sales) Ayr HMA Kilmarnock Ayrshire
Urban Cumnock Doon Valley Urban Irvine Valley Northern 2000 £55,000 £39,000 £42,000 £37,759 £38,500 £59,500 £46,100 2001 £59,000 £36,500 £45,000 £40,000 £43,000 £58,000 £47,995 2002 £64,000 £39,000 £47,000 £42,000 £45,000 £70,000 £50,000 2003 £75,000 £41,788 £46,000 £50,000 £50,000 £83,543 £59,950 2004 £87,760 £48,250 £55,000 £60,155 £59,998 £120,000 £71,000 2005 £105,000 £59,995 £73,000 £75,000 £73,998 £125,000 £83,750 2006 £120,000 £60,000 £80,000 £80,000 £75,000 £110,125 £88,000 Source: Sasines
Table 3.12c: Upper quartile prices by year (second hand sales) Ayr HMA Kilmarnock Ayrshire Urban Cumnock Doon Valley Urban Irvine Valley Northern 2000 £80,000 £57,000 £59,500 £52,995 £55,000 £80,375 £69,177 2001 £87,000 £49,113 £68,000 £60,000 £60,000 £85,000 £74,975 2002 £96,386 £57,498 £60,000 £60,000 £65,000 £99,000 £80,251 2003 £118,000 £60,000 £73,000 £73,250 £72,000 £118,000 £95,000 2004 £140,766 £78,539 £92,000 £85,000 £87,396 £157,000 £118,295 2005 £164,200 £95,000 £110,000 £105,000 £115,000 £166,000 £136,500 2006 £179,250 £88,000 £125,000 £110,000 £107,500 £160,000 £140,000 Source: Sasines
It is evident that:
The Ayr Urban sub area is the highest priced market across all market sectors.
In Kilmarnock, the Northern sub area is the highest priced market.
50 Affordability And Migration Within The Ayrshire Housing System
Cumnock is the lowest priced area across all market sectors, by a considerable margin.
In terms of price inflation, figure 3.5 shows in the second hand housing market there has been:
Very low rates of price increase across the market in the Cumnock sub area.
High rates of price increase across the market in the Ayr Urban and Kilmarnock Urban sub areas.
Greater increases at the high end of the Ayr Urban sub area market than at the middle or low end of the market (true also for the Doon Valley sub area).
Figure 3.5: Increase in Second Hand Sales Prices 2000q1 – 2006q2 by HMA Sub Area
140%
120%
100% Ayr HMA: Urban Ayr HMA: Cumnock 80% Ayr HMA: Doon Valley Kilmarnock: Urban 60% Kilmarnock: Irvine Valley Kilmarnock: Northern 40% All Ayrshire
20%
0% LQ Median UQ
In terms of the new build housing market, figure 3.6 shows that there has been:
High rates of price increase at the top end of the Ayr Urban and Kilmarnock Northern housing market sub areas.
High rates of price increase across the market in the Doon Valley sub area.
51 Affordability And Migration Within The Ayrshire Housing System
Significant increases in price in the Cumnock sub area – particularly at the lower price end of the market.
Figure 3.6: Increase in New Build Sales Prices 2000q1 – 2006q2 by HMA Sub Area15
250%
200% Ayr HMA Urban Ayr HMA Cumnock 150% Ayr HMA Doon Valley Kilmarnock Urban
100% Kilmarnock Irvine Valley Kilmarnock Northern All Ayrshire 50%
0% LQ Median UQ
The overall picture that emerges from the analysis is therefore one of very different housing market areas within Ayrshire both in terms of their composition and their price performance through time.
Settlement Price Trends
Tables 3.13a-c show second hand price trends at the level of individual Ayrshire towns. Further details about the number of transactions can be found in appendix 5. As expected, the price patterns evident at town level exhibit more variation than is found at higher level geographies, as less averaging away of highs and lows occurs.
Settlement level analysis is helpful in informing general understanding of market trends, and interpreting people‟s perceptions on what is happening at local level. However, price trends at this level contain a lot more "noise" in that the smaller number of sales means that price trends are much more likely to be influenced by the mix of properties sold. Therefore the data in table 3.13a-c should be treated with considerable caution.
15 Note Irvine Valley is not included in this figure, as it was not possible to compute price percentiles for new sales for 2006.
52 Affordability and Migration within the Ayrshire Housing System
Table 3.13a: Lower quartile prices by year (second hand sales) Ardrossan Ayr Cumnock Girvan Irvine Kilmarnock Kilwinning Largs Maybole Prestwick Saltcoats Stevenston Stewarton Troon Ayrshire 2000 £31,875 £39,500 £33,125 £32,750 £30,500 £31,500 £30,000 £36,050 £28,500 £44,313 £27,500 £26,995 £33,238 £40,000 £33,995 2001 £33,748 £41,500 £30,750 £34,000 £31,984 £32,984 £31,000 £38,000 £30,250 £48,000 £28,000 £27,750 £34,000 £38,500 £34,500 2002 £35,000 £43,450 £32,000 £34,000 £33,000 £33,744 £32,125 £41,125 £32,000 £52,110 £32,000 £28,000 £32,050 £40,500 £35,000 2003 £36,000 £50,000 £31,746 £37,188 £37,000 £39,995 £36,000 £45,000 £27,500 £66,000 £31,500 £30,000 £41,563 £54,000 £40,000 2004 £50,250 £58,000 £40,000 £43,813 £47,188 £50,000 £48,250 £51,250 £30,000 £75,500 £39,388 £34,000 £51,000 £66,995 £49,025 2005 £52,000 £70,000 £47,000 £49,000 £58,000 £63,625 £60,000 £55,000 £39,000 £87,613 £50,250 £38,350 £59,000 £74,113 £60,000 2006 £60,000 £78,095 £51,000 £53,500 £65,000 £68,000 £62,613 £65,250 £48,000 £101,250 £60,000 £53,000 £65,000 £95,000 £65,000
Table 3.13b: Median prices by year (second hand sales) Ardrossan Ayr Cumnock Girvan Irvine Kilmarnock Kilwinning Largs Maybole Prestwick Saltcoats Stevenston Stewarton Troon Ayrshire 2000 £48,750 £56,750 £38,300 £39,000 £36,500 £38,150 £38,100 £54,000 £40,000 £57,250 £36,750 £31,250 £60,000 £53,800 £46,100 2001 £45,000 £60,000 £37,000 £38,000 £36,650 £42,300 £41,000 £57,875 £40,000 £65,500 £35,000 £35,000 £45,500 £55,125 £47,995 2002 £45,500 £67,750 £38,500 £40,000 £39,050 £45,000 £47,500 £59,975 £41,000 £73,255 £42,000 £32,500 £45,000 £60,000 £50,000 2003 £51,000 £75,000 £42,000 £51,000 £46,610 £54,000 £52,500 £60,000 £37,825 £87,775 £41,500 £38,500 £59,748 £72,222 £59,950 2004 £74,883 £83,000 £54,755 £60,000 £59,000 £68,950 £61,500 £75,750 £45,000 £105,000 £55,500 £43,750 £80,500 £92,000 £71,000 2005 £73,750 £100,000 £62,000 £67,000 £69,000 £80,000 £76,000 £86,125 £60,000 £126,000 £70,600 £57,500 £95,000 £111,775 £83,750 2006 £77,500 £114,000 £66,500 £71,200 £75,000 £83,500 £77,625 £92,000 £83,500 £135,000 £72,000 £65,000 £83,579 £129,500 £88,000
Table 3.13c: Upper quartile prices by year (second hand sales) Ardrossan Ayr Cumnock Girvan Irvine Kilmarnock Kilwinning Largs Maybole Prestwick Saltcoats Stevenston Stewarton Troon Ayrshire 2000 £65,000 £86,500 £49,750 £58,250 £58,500 £57,000 £55,000 £78,375 £72,100 £75,000 £57,750 £40,000 £85,133 £79,000 £69,177 2001 £67,500 £95,414 £55,500 £55,000 £59,996 £67,996 £62,000 £84,757 £63,750 £82,000 £50,750 £46,550 £78,750 £90,125 £74,975 2002 £60,000 £112,025 £54,000 £54,050 £66,000 £72,256 £70,000 £91,000 £70,500 £90,975 £71,600 £45,528 £87,500 £92,375 £80,251 2003 £69,464 £126,750 £60,625 £83,000 £78,000 £90,000 £83,010 £96,000 £60,000 £120,000 £64,055 £55,500 £103,319 £112,000 £95,000 2004 £104,500 £140,000 £91,500 £86,000 £89,500 £114,250 £105,000 £120,000 £72,000 £145,000 £84,075 £58,881 £150,000 £156,250 £118,295 2005 £118,000 £165,000 £98,000 £110,000 £107,350 £130,000 £120,000 £139,996 £96,875 £167,063 £115,000 £70,000 £147,000 £168,500 £136,500 2006 £127,065 £180,000 £100,000 £95,661 £95,000 £122,125 £126,250 £155,000 £117,000 £186,374 £110,875 £78,000 £125,000 £205,000 £140,000 Source for tables 3.13a-c: Sasines
53 Affordability and Migration within the Ayrshire Housing System
Table 3.13a-c suggests that: in terms of prices:
Prestwick stands out as the most expensive town at lower quartile level. Troon is also expensive. Ayr itself is also priced above the Ayrshire average.
At the other end of the spectrum, Cumnock, Girvan, Maybole and Stevenston have comparatively inexpensive property at the lower quartile level of the second hand market.
A similar pattern to those found for lower quartile prices hold at the median and upper quartiles.
In terms of price inflation (see appendix 5 for further details):
The towns with the greatest second hand price pressure at the lower quartile have been Troon, Prestwick, and Kilmarnock, Saltcoats and Irvine. The price pressure at this part of the market in Ayr has been only marginally greater than for Ayrshire as a whole.
At the median of the second hand market Troon, Prestwick and Kilmarnock stand out as having greater than average price increases, as do Stevenston and Maybole.
In most „price pressured‟ markets (such as Troon, Prestwick, and Ayr) it is clear the price increases experienced at the upper end of the market have exceeded those at the middle and lower end.
The small absolute numbers of such sales in most instances limits the amount of analysis possible with respect to new build markets at town level. However, strong price inflation, especially at the higher end of the market is evident in Ayr itself.
Price behaviour of different purchaser groups
Table 3.14 shows the average (mean) price paid by local and incomer16 households for second hand properties in 2006 across Ayrshire. It highlights that the price households pay for second hand housing in Ayrshire differs according to where they originate. More specifically it shows that:
In the three sub-areas that make up the Ayr HMA, incomers paid more than local movers, but the difference was greatest in the Ayr urban area.
Looking across the Kilmarnock HMA, incomers paid substantially more than local purchasers in the Northern area but in the
16 'Local Movers' were defined as people moving within an HMA sub-market area. 'Incomers' were defined as people buying in an HMA sub-market area but originating outside of it
54 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock urban sub area the relationship was reversed. The difference in the price paid by incomers and local movers in the Kilmarnock Irvine Valley area was slight.
In three of the four HMAs located within North Ayrshire incomers paid more than local movers. However, local movers in the Irvine area paid on average £4,684 more than incomers.
Incomers paid the biggest price differences in the Girvan and South Carrick area, followed by the Kilmarnock Northern, Ayr Urban and Garnock Valley areas.
Table 3.14: Average (mean) price paid (second hand sales), 2006 Local Incomer Difference Ayr Urban £137,182 £158,486 £21,304 Ayr Cumnock £67,900 £76,677 £8,778 Ayr Doon Valley £93,722 £104,571 £10,849 Kilmarnock Urban £96,568 £88,736 -£7,831 Kilmarnock Irvine Valley £89,618 £90,892 £1,274 Kilmarnock Northern £96,016 £127,236 £31,220 North Coast £113,008 £118,358 £5,351 Garnock Valley £83,006 £102,006 £19,000 Irvine £93,390 £88,706 -£4,684 Girvan & South Carrick £98,297 £130,168 £31,870 Three Towns £97,142 £102,164 £5,022 Source: Sasines Further analysis shows that since 2000 (see appendix 5):
The „incomer premium‟ has been increasing in the Ayr Urban, Kilmarnock Northern, Garnock Valley and Girvan & South Carrick areas.
The „incomer premium‟ has been falling in the Ayr Cumnock sub area whereas the „local premium‟ has been increasing in the Kilmarnock Urban sub area.
Alternative price data
In order to confirm that Sasines data is a reasonable basis for affordability analysis and to allow for sensitivity testing we examined price data generously provided by the Glasgow Solicitors Property Centre (GSPC). A major advantage of GSPC data over that provided through the Registers of Scotland is that the former includes attribute information for each sale – such as property type, number of bedrooms and so on. This allows a more standardised analysis of price movements.
The following analysis examines price trends in relation to two bedroom properties. The lower quartile price of a two-bedroom house in Ayrshire is taken as an alternative measure of the price likely to face a first time buyer to the Sasines based lower quartile. As the GSPC dataset contains 868 two bedroom property transactions for the whole of Ayrshire for the period 2000-
55 Affordability And Migration Within The Ayrshire Housing System
2006 it is not feasible to conduct the analysis at HMA level. Therefore we have compared prices at local authority level only.
Comparing the prices set out in table 3.15 with those set out in table 3.7a it is evident that GSPC derived prices are approximately 30 per cent higher than Sasines data in 2006. The relationship over time between the two datasets has not been constant however.
Table 3.15: Lower quartile price for a two bedroom property East Ayrshire North Ayrshire South Ayrshire 2000 £34,625 £34,005 £53,000 2001 £32,500 £32,000 £44,000 2002 £33,388 £35,875 £60,025 2003 £49,500 £43,000 £74,500 2004 £65,000 £65,000 £96,000 2005 £77,625 £70,000 £125,000 2006 £80,000 £82,550 £104,000 Source: Sasines
As table 3.16 shows, the relationship has fluctuated from year to year. In South Ayrshire GSPC prices have been considerably higher than sasines prices for every year except 2001. In East and North Ayrshire GSPC lower quartile prices were very similar to sasines lower quartile prices in the period from 2000 to 2002 but began to diverge from 2003 onwards.
One possible reason for this difference may be that relative to sasines data, GSPC data captures a lower proportion of the types of properties that tend to form the lower end of the market (such as flats).
Table 3.16: Ratio of GSPC to Sasines lower quartile prices 2000-2006 (%) East Ayrshire North Ayrshire South Ayrshire (%) (%) (%) 2000 108 106 138 2001 99 100 110 2002 101 109 146 2003 134 116 148 2004 144 144 160 2005 139 127 179 2006 129 133 132 Source: Sasines
Overall we believe that the sasines price data provides the more robust data source because of its more comprehensive coverage. Nonetheless the GSPC data suggests that sasines data may provide a conservative estimate of the price faced by first time buyers. As such the GSPC data offers a valuable alternative for conducting sensitivity tests.
56 Affordability And Migration Within The Ayrshire Housing System
Is there an M77 effect?
The M77 motorway originally began in southern Glasgow at Kinning Park and existed for about 20 years as a 1.5 mile spur route taking traffic from the M8 motorway to a roundabout located close to Bellahouston Park. An extension was begun in 1994 to bypass the urban sections of the A77 (Giffnock and Newton Mearns) and was opened in 1997. A second upgrade was instigated in 2004, and involved extending the motorway a further 9 miles south to Fenwick (near Kilmarnock). The upgrade also included the Glasgow Southern Orbital, which bypasses the B764 Eaglesham Moor road to East Kilbride. It was completed in April 2005.
Why would there be an M77 Effect?
The M77 now provides a quick and safe route between the centre of Glasgow and Ayrshire. Consequently it has made towns and villages in the vicinity of the motorway more accessible to potential commuters from Glasgow.
This suggests that, other things being equal, the number and proportion of purchasers in these towns and villages that originate from elsewhere should be increasing, possibly leading to a more rapid rise in local house prices (and creating local affordability problems). It is also suggests that the boundary between the Glasgow and Clyde Valley and local Ayrshire housing market areas should be changing.
Where might an M77 effect be found?
In order to explore the possibility of a localised M77 effect, we examined house prices and transaction patterns in the following towns and villages within close proximity to the motorway:
Darvel
Fenwick
Galston
Greenholm
Kilmaurs
Kilmarnock
Newmilns
Stewarton.
Following discussion with the steering group, this „initial catchment area‟ was extended to include Symington, Dundonald, and Dreghorn.
In addition, we examined the possibility that an M77 effect has occurred within North Ayrshire rather than within East Ayrshire.
57 Affordability And Migration Within The Ayrshire Housing System
Housing market evidence
Considering first our initial M77 „catchment area‟ Table 3.17a-b shows a somewhat higher proportionate rate of new build sales within the relevant settlements, although this is clearly weighted towards the earlier years of the period for which we have data.
Table 3.17a: Sales by type within 'M77 area' (%) Year New Build RTB Second Total (%) (%) Hand (%) (%) 2000 19 23 58 100 2001 19 17 64 100 2002 11 20 69 100 2003 10 20 70 100 2004 5 13 82 100 2005 6 15 79 100 2006 6 13 81 100 Total 11 18 71 100 Source: Sasines
Table3.17b: Sales by type outwith 'M77 area' (%) Year New Build RTB Second Hand Total (%) (%) (%) (%) 2000 n.a. n.a. n.a. n.a. 2001 10 14 76 100 2002 8 16 76 100 2003 7 20 73 100 2004 10 15 74 100 2005 8 14 78 100 2006 8 13 79 100 Total 8 16 76 100 Source: Sasines
Table 3.18 presents details of where households purchasing in the „initial M77 catchment area‟ have moved from. It focuses in particular on movement from within Ayrshire, and from the Glasgow and Clyde Valley area. Consistent with earlier evidence on the structure of the housing market, table 3.18 suggests that:
The relative importance of purchasers originating from within East Ayrshire has been falling somewhat over time,
The proportion of purchasers in the M77 initial catchment area that originated from South Ayrshire has increased.
The proportion of purchasers originating from within the Glasgow and Clyde Valley area have remained fairly constant at around 11- 12 per cent, although there has been a marginal increase in movement from East Renfrewshire and South Lanarkshire.
58 Affordability And Migration Within The Ayrshire Housing System
Table 3.18: Sales (%) within the 'M77 area', by LA origin of purchaser (second hand sales) Moved From: 2000 2001 2002 2003 2004 2005 2006 Total East Ayrshire 73.0 76.1 70.5 69.6 68.4 68.7 61.4 70.0 North Ayrshire 5.2 5.2 5.0 4.1 4.0 3.7 4.1 4.5 South Ayrshire 4.6 3.1 5.5 6.6 8.2 7.8 5.5 6.0 Glasgow 5.8 4.0 5.0 4.8 5.0 5.3 3.7 4.9 East Dunbartonshire 0.6 0.5 0.3 0.3 0.3 0.5 0.3 0.4 Inverclyde 0.1 0.2 0.2 0.1 0.3 0.2 0.0 0.2 North Lanarkshire 0.6 0.5 0.6 0.6 0.3 0.3 1.1 0.5 South Lanarkshire 0.4 0.6 0.9 0.9 1.6 1.2 1.4 1.0 East Renfrewshire 2.5 2.7 2.6 3.4 2.5 2.6 3.4 2.8 Renfrewshire 0.8 1.1 1.1 1.4 1.4 1.2 1.2 1.2 West Dunbartonshire 0.3 0.0 0.3 0.2 0.1 0.3 0.9 0.3 Rest of Scotland 3.3 2.6 3.9 3.4 3.0 3.5 8.9 3.8 Rest of World 2.5 2.9 3.1 4.4 5.1 4.5 8.1 4.2 DK 0.2 0.5 1.1 0.2 0.0 0.1 0.0 0.3 Total 100 100 100 100 100 100 100 100 Source: Sasines
Table 3.19a-c shows second hand prices within the M77 area as lower than elsewhere in Ayrshire at the middle and higher end of the market, and pretty much equal at the lower end.
Table 3.19a: Lower quartile prices by year (second hand sales) Within M77 Outwith M77 All Ayrshire 2000 £31,995 £34,000 £33,995 2001 £33,000 £35,000 £34,500 2002 £33,000 £36,000 £35,000 2003 £39,557 £40,000 £40,000 2004 £48,000 £49,984 £49,025 2005 £60,000 £59,995 £60,000 2006 £65,000 £65,000 £65,000 Source: Sasines
Table 3.19b: Median prices by year (second hand sales) Within M77 Outwith M77 All Ayrshire 2000 £40,500 £48,000 £46,100 2001 £44,050 £48,500 £47,995 2002 £45,000 £52,000 £50,000 2003 £55,000 £60,000 £59,950 2004 £68,000 £72,500 £71,000 2005 £80,000 £85,000 £83,750 2006 £82,500 £90,000 £88,000 Source: Sasines
59 Affordability And Migration Within The Ayrshire Housing System
Table 3.19c: Upper quartile prices by year (second hand sales) Within M77 Outwith M77 All Ayrshire 2000 £60,000 £71,500 £69,177 2001 £68,225 £75,000 £74,975 2002 £72,231 £82,000 £80,251 2003 £90,000 £95,500 £95,000 2004 £112,000 £120,000 £118,295 2005 £131,000 £138,000 £136,500 2006 £122,125 £144,000 £140,000 Source: Sasines
Figure 3.7 shows price increases within the „M77 area‟ compared with the rest of Ayrshire. It suggests that second hand prices have been increasing somewhat faster at the middle and lower end of the market within the M77 catchment area compared with the rest of Ayrshire. On the other hand, the rate of price increase for new properties has been lower – particularly at the middle and lower ends of the new housing market.
Figure 3.7: Increase in second hand sales prices 2000q1 -2006q2 (%)
140% 120% 100% 80% 60% 40% 20% 0% Within Outwith All Within Outwith All M77 M77 Ayrshire M77 M77 Ayrshire
Second Hand: New Build:
LQ Median UQ
Figure 3.8 shows the average (mean) purchase price paid for second hand properties within the M77 area based on where the buyer originated from. It is evident from this figure that incomers from outside Ayrshire pay more than people moving into the M77 from other parts of Ayrshire, who in turn pay roughly the same as local movers within the M77 area. Table 3.14 would lead us to expect this effect to be greatest in the Kilmarnock northern sub area, but also demonstrates the phenomenon is not limited to the hypothesised M77 area.
Figure 3.8 also indicates that the rate of increase in second hand prices paid by locals (100 per cent) is slightly less than that paid by households moving in from elsewhere in Ayrshire (110 per cent). However, for both groups it is
60 Affordability And Migration Within The Ayrshire Housing System significantly higher than that experienced by in-movers (73 per cent) over the period 2000-2006.
Figure 3.8: Average second hand price within the M77 ‘initial catchment area’ by buyer origin
£120,000
£100,000
£80,000
£60,000
£40,000
£20,000
£0 2000 2001 2002 2003 2004 2005 2006
"Local" Ayrshire Incomer
Overall, the sales and price evidence for an M77 effect within the initial catchment area appears weak. Extending the catchment area to include Dreghorn, Dundonald and Symington does not change the overall picture very much.
Table 3.20 shows the pattern of movement associated with second hand property purchase in these settlements17. The evidence for an M77 effect is again patchy at best:
While sales to households from Glasgow increased in the period 2002-4, they have subsequently fallen back.
A similar pattern is evident in relation to purchasers originating from Renfrewshire in the period from 2003 to 2005.
The clearer trend in the data relates to purchasers from the rest of Scotland increasing within these settlements.
17 The absolute number of new build sales in these areas is too small to support analysis of trends.
61 Affordability And Migration Within The Ayrshire Housing System
Table 3.20: Second hand sales within Dreghorn, Dundonald and Symington by LA origin of purchaser (%) 2000 2001 2002 2003 2004 2005 2006 Total (%) (%) (%) (%) (%) (%) (%) (%) East Ayrshire 10.7 7.7 16.3 12.0 9.1 15.9 22.4 13.1 North Ayrshire 43.8 44.2 35.6 35.9 38.6 32.6 34.3 37.9 South Ayrshire 28.1 34.6 26.0 30.8 28.4 37.0 23.9 30.4 East Dunbartonshire 0.8 1.0 0.0 0.0 0.0 0.0 0.0 0.3 East Renfrewshire 0.0 1.9 1.0 0.9 3.4 0.7 1.5 1.2 Glasgow City 3.3 2.9 5.8 4.3 5.7 2.2 3.0 3.8 Inverclyde 0.0 0.0 1.0 0.0 1.1 0.7 1.5 0.5 North Lanarkshire 0.0 0.0 1.0 0.0 0.0 0.7 0.0 0.3 Renfrewshire 1.7 0.0 1.0 2.6 2.3 1.4 1.5 1.5 South Lanarkshire 0.8 0.0 0.0 0.9 4.5 0.7 1.5 1.1 West Dunbartonshire 0.0 1.0 0.0 0.0 0.0 0.0 0.0 0.1 Rest of Scotland 1.7 2.9 3.8 5.1 2.3 4.3 7.5 3.8 Rest of World 9.1 3.8 7.7 6.0 4.5 3.6 3.0 5.5 Unknown 0.0 0.0 1.0 1.7 0.0 0.0 0.0 0.4 Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 Source: Sasines
The final possibility is that any M77 effect may be contained wholly within North Ayrshire – in particular affecting the Garnock Valley and Irvine HMAs. This possibility in consistent with the view expressed by representatives from the Glasgow Solicitors Property Centre (GSPC) that North Ayrshire is the major destination of interest to purchasers from the Glasgow and Clyde Valley area.
Table 3.21 summarises the information provided on HMA level trends earlier in this report. It is evident from table 3.21 that:
There has been significant decline in the extent of self-containment within the Garnock Valley and Irvine HMAs, but only in the Garnock Valley context is this clearly associated with a significant increase in in-migration specifically from the Glasgow and Clyde Valley area
Garnock Valley HMA has low second hand house prices compared to other housing market areas in Ayrshire, and has experienced comparatively low price inflation in the second hand market.
62 Affordability And Migration Within The Ayrshire Housing System
Table 3.21: Ayrshire housing markets summary 2000-2006 Criteria Ayr Garnock G&SC Irvine Kilmarnock North Three Valley Coast Towns Change in level of -3 -9 -7 -8 -4 -7 -8 self-containment Evidence of a No Yes No Modest No Modest No G&CV in-migration (+4 ) trend? Evidence of a N.A. No No Yes Yes (+3 ) No No South Ayrshire in- (+3 ) migration? High LQ Second 1 7 4 3 2 5 6 Hand Price? (1 = highest) Rapid LQ Second 4 6 5 1 2 7 3 Hand Price Inflation? (1 = fastest) High Median New 5 3 - 2 6 1 4 Build Price? (1 = highest) Rapid Median New 5 2 - 3 6 1 4 Build Price? (1 = fastest) Source: Sasines Notes: Criteria numbers 4 to 7 are based on a scale of 1 to 10.
Figures 3.9 and 3.10 throw further light on relative HMA performance in both the second hand and new build markets in terms of price and Glasgow and Clyde Valley in-migration trends. They show the rate of inflation for median house prices for the Ayrshire HMAs relative to the rest of Scotland (ROS) mapped against the percentage change in in-migration from Glasgow and the Clyde Valley to the relevant HMA in the period from 2000 to 2006:
If the value on the y-axis equals 1 then house price inflation in the HMA was the same as in rest of Scotland during 2000-2006. If the value of the y-axis is greater than one (> 1), then inflation in the HMA was higher than in the rest of Scotland. If the value on the y- axis is less than one (< 1), then inflation in the HMA was comparatively low.
If the value on the x-axis equals 1 then in-migration from Clyde Valley to the HMA between 2003 and 2005 remained constant relative to the period 2000 to 2002. If the value of the x-axis is greater than one (> 1), then migration increased in the 2003-5 period relative to previous 3 years. However, if the value on the x- axis is less than one (< 1) then migration decreased in the latter period.
Figure 3.9 confirms:
Irvine HMA has experienced high second hand house price inflation relative to the rest of Scotland and an increase in in-migration from Glasgow and the Clyde Valley.
63 Affordability And Migration Within The Ayrshire Housing System
Figure 3.9: Second hand trends in the Ayrshire HMAs 2000-2006
Kilmarnock Irvine
Ayr 1.05 Three Towns
1.00
0.95
G&SC Price Inflation relative to ROS to relative Inflation Price 0.90 North Coast GV
0.90 1.00 1.10 1.20 % Growth in inmigration
Figure 3.10: New build trends in the Ayrshire HMAs 2000-2006
North Coast 1.60
GV
1.40
1.20 Irvine
1.00 Three Towns
Ayr Price Inflation relative to ROS to relative Inflation Price
0.80 Kilmarnock
0.75 1.00 1.25 1.50 1.75 % Growth in inmigration
64 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock HMA also experienced significant price inflation, but a decrease in in-migration.
The North Coast and Garnock Valley HMAs experienced an increase in in-migration, but low inflation relative to the rest of Scotland.
In terms of the new build market, figure 3.10 shows that:
Garnock Valley HMA experienced comparatively high inflation with respect to the rest of Scotland, and an increase in in-migration from Glasgow and Clyde Valley.
The North Coast HMA experienced comparatively high inflation but only a slight increase in in-migration from Glasgow and Clyde Valley.
Irvine HMA experienced somewhat higher house price inflation relative to the rest of Scotland as well as a modest increase in in- migration from the Glasgow and Clyde Valley.
Kilmarnock experienced low price inflation relative to the rest of Scotland, and a decrease in in-migration.
This evidence is consistent with some effect in the Irvine (second hand and new build) and Garnock Valley (new build) markets, but more generally indicates that whatever effect the M77 may have had or be having, it is not a simple or obvious one.
Household Views on the M77
Section four sets out the main findings from the three postal surveys undertaken as part of this study. Without pre-empting section four, it is useful to note at this point that all three survey groups were asked whether completion of the M77 had influenced their choice of area in which to live.
As table 3.21 indicates:
At 28 per cent, incoming house purchasers to Ayrshire (in-movers) are more likely than both outgoing purchasers that left Ayrshire (out- movers) and internal house purchasers (local movers) to say it had some influence on their choice of area.
Nonetheless, the large majority of movers in all three groups said that the completion of the M77 had not affected their choice of area.
Table 3.21: Survey respondents’ views on whether the M77 had an affect on their choice of area (%) yes no base (%) (%) In-movers 28 72 145 Out -movers 8 91 98 Local movers 8 91 149 Source: postal survey of recent purchasers
65 Affordability And Migration Within The Ayrshire Housing System
Table 3.22 is based on only 60 observations and must be treated with considerable caution. Nonetheless, it is noticeable that amongst those respondents that state the M77 influenced their choice of area, most feel the M77 had a positive influence – either making areas previously not considered accessible, or allowing households to move further from place of work. Very few felt the M77 had a negative effect such as making areas around the M77 too expensive.
Table 3.22: The effect M77 completion had on respondents (%) Areas now Move further Areas now Other base accessible from work too expensive (%) (%) (%) (%) All 40 42 10 26 60 Source: postal survey of recent purchasers
M77 Mosaic Groups
We used information provided by survey respondents on the postcode of their previous address to attribute a mosaic group to each survey record. In all, 101 of the 145 incoming purchasers provided the information needed to enable a mosaic group to be identified. Likewise, 105 of the 149 local purchasers provided the necessary information.
These two samples were then further sub-divided into two groups in order to compare the mosaic profile of those purchasing in the M77 corridor with that of households purchasing elsewhere in Ayrshire. For this analysis, the most narrow definition of the M77 corridor was used, namely the settlements of Kilmarnock, Stewarton, Galston, Newmilns, Darvel, Kilmaurs and Fenwick.
Table 3.23: Mosaic Group of incoming purchasers (%) Mosaic Group: Not in In M77 All in- Ayrshire M77 (%) movers population (%) (%) (%) Top income group 52 69 56 34 Upper echelons 13 * 17 6 Families on the move 22 * 22 15 Small town propriety 17 * 17 13 Middle income group 22 * 21 13 Country Lifestyles * * * 7 Urban sophisticates * * * 0 Town centre singles * * 10 6 Bottom income group 26 * 23 54 Renters now owning 15 * 12 23 Low income families * * * 19 State beneficiaries * * * 4 Shades of grey * * * 8 Total 100 100 100 100 Base 82 19 101 357,367 Note: percentages are not reported if based on less than 10 cases Source Experian 2007
66 Affordability And Migration Within The Ayrshire Housing System
In terms of house purchasers that recently moved to Ayrshire from outside the area table 3.23 shows that:
In-movers (56 per cent) are much more likely to be in the top income group than the existing Ayrshire population (34 per cent). In particular, in-movers are nearly three times more likely to be classified as upper echelons than existing residents. They are also more likely to be classified as Families on the move.
In- movers are also over-represented in the middle-income group, albeit not nearly to the same extent. Around 21 per cent of in-movers fall into the middle-income group compared 13 per cent of the total Ayrshire population. Survey findings suggest that a large share of in- movers in this income group may be Town centre singles.
In- movers are under represented in the bottom income group. Just 23 per cent of in-movers compared to 54 per cent of existing residents fall into this income group.
Almost seven out of 10 in-movers that purchased in the M77 corridor fall into the top income group. However, this finding is based on just 19 observations and should be treated as illustrative.
Table 3.24: Mosaic Group of local purchasers (number and %) Mosaic Group: Not in In M77 All in- Ayrshire M77 (%) movers population (%) (%) (%) Top income group 35 * 33 34 Upper echelons * * * 6 Families on the move 16 * 15 15 Small town propriety * * 12 13 Middle income group 18 * 19 13 Country Lifestyles * * * 7 Urban sophisticates * * * 0 Town centre singles * * 10 6 Bottom income group 47 48 48 54 Renters now owning 34 * 29 23 Low income families * * * 19 State beneficiaries * * * 4 Shades of grey * * * 8 Total 100 100 100 100 Base 80 25 105 357,367 Note: percentages are not reported if based on less than 10 cases Source Experian 2007
In terms of local purchasers, table 3.24 shows that:
The proportion of local movers (33 per cent) that fall into the top income group is almost identical to the proportion of the total Ayrshire population but considerably lower than in-movers.
In comparison to all existing residents, local movers are slightly more likely to fall into the middle income group (19 per cent
67 Affordability And Migration Within The Ayrshire Housing System
compared to 13 per cent) and slightly less likely to fall into the lower income group (48 per cent compared to 54 per cent).
Only 25 local movers had bought a property in the M77 area and these respondents were spread across a variety of mosaic groups. The sample is therefore too small to discern any patterns.
The above analysis suggests that:
There is considerable diversity in the groups who are active in the housing market
In-movers appear to be more affluent than the total existing Ayrshire population and the population of local movers
The M77 corridor appears to be attracting a high proportion of top income incoming purchasers, but the achieved sample is too small to draw firm conclusions.
Assuming the above findings are accurate, it would be reasonable to expect that over time the mosaic profile of the population in those housing market areas that are experiencing comparatively high levels of incoming purchasers from outside Ayrshire will change more rapidly and markedly than more self contained housing market areas.
In order to confirm this provisional conclusion, which is based on a small number of observations, it would be sensible to repeat this analysis over time.
Conclusions on an M77 effect
Overall, the evidence presented is not compelling for a powerful and unambiguous M77 effect (particularly within East Ayrshire itself) – at least not yet.
Given that the motorway extension was completed in 2005, and our data covers the period from the start of 2000 to the middle of 2006, it may be that there are timing effects we cannot capture.
On the one hand, house buyers may have bought properties in advance of physical improvement works rather than acting when the work was complete. If this has been the case, buyers may have been attracted in to the area from as early on as the first official decision granting permission for the development. This would make identifying impacts more difficult as any growth or change in demand would be spread over a longer duration.
On the other hand, it is also conceivable that house buyers respond to such developments with a lag, in which case the effect is yet to fully play through - and further monitoring is certainly warranted.
68 Affordability And Migration Within The Ayrshire Housing System
The evidence at present is most persuasive with respect to an effect within the Irvine and Garnock Valley HMAs, but this may have as much (if not more) to do with improvements in the rail service than the M77 extension18.
The lack of unambiguous evidence for a significant M77 effect is somewhat surprising given the strength of perception amongst market commentators that such an effect not only exists, but also is very pronounced (Duffy, 2007). It is difficult to evaluate the claims made in the press of such an effect however, as they are based on reported prices the geography and market sector of which are very unclear. The results presented in this section are based on standardised geographies, market sectors and time periods.
Affordability trends 2000-2006
Definition and measurement of affordability
The Department of Communities and Local Government (2007) recently confirmed that for the purposes of assessing housing need a household should be judged able to afford to buy a home that costs up to 3.5 times the gross household income for a single earner household, or 2.9 times the household income for a dual income household19. Use of this definition is gradually becoming more widespread (see for example Glass et al, 2006).
To apply this definition, we require a suitable estimate of household income. There are a number of possibilities.
CACI Paycheck provides estimates of gross household income (based on the incomes of all adult members of a household) down to the level of individual postcode units. For the purpose of this study, Communities Scotland provided summary CACI Paycheck 2006 data to the study team. The strength of this dataset are that it provides estimates of gross household income at detailed geographical level, which permits direct estimation of the household income distribution at HMA level and sub-area level. However, the precise method used by CACI to calculate income remains commercially confidential, and therefore not available for direct scrutiny. In addition, as a result of a significant change in the underlying datasets used to produce the latest published income estimates, CACI advise it is not possible to compare the findings with data for earlier years (CACI, 2007). This is unfortunate, as single year estimates of affordability tell us nothing regarding market dynamics, such as whether the conditions uncovered are likely to change in the near future20.
18 Many of the participants at the seminar held as part of this study attributed growth in migration from the Clyde Valley into North Ayr as due to rail connections rather than the impact of M77 investment. 19 The new guidance also provides a definition private renting affordability, but this study is concerned with the affordability of owning. 20 Late in the study it also became possible to cross check the CACI estimates with Experian‟s own independently derived estimates of gross household income. The
69 Affordability And Migration Within The Ayrshire Housing System
The Annual Survey of Hours and Earnings (ASHE) provides information about the levels, distribution and make-up of earnings and hours worked for employees in all industries and occupations. In terms of the present study, it has two major drawbacks. The first is that ASHE data is survey based and therefore cannot be used by us to produce reliable estimates at below local authority level. The second is that ASHE provides data on individual earnings rather than household incomes. A key strength of ASHE however is that it does provide reliable time series estimates of both workplace based and residence based earnings. The latter (more appropriate) data is available from 2002 onwards.
Bramely Modelled Income: A final possibility is to use modelled household income data. The most sophisticated version available is that produced by Bramley (Bramley 2003, 2004; Bramley et al 2006) to inform national needs estimates. The method and underlying data used are described in detail in the various reports that have been produced. The estimates relate specifically to household income (defined as a household representative under the age of 35 and any partner), which makes them conceptually directly relevant for the purposes of the current study. The Bramley estimates are only available at the local authority level however, making them less directly useful for current purposes.
To make best use of the available income estimates, and to allow for sensitivity testing, the following approach was adopted:
Our central estimate of affordability is based on the CACI Paycheck estimates of household income at HMA level and the sub-areas of the Ayr and Kilmarnock HMAs. This information on income levels has then been combined with ASHE estimates of annual residence based earnings growth, to provide an estimate of household incomes at HMA level for the period 2002-6. We believe this provides a reasonable approximation for assessing the affordability of house purchase over time.
Our first sensitivity test is based on using ASHE earnings data as a direct estimate of household income. In doing so, we have restricted attention to full time earnings and estimated affordability on the basis of single earner households. To apply the ASHE estimates more locally, we have used average income relativities at HMA level from CACI Paycheck 2006 to adjust ASHE estimates available at local authority level down to HMA level. Comparison of ASHE to CACI estimates for 2006 shows that while these sources give reasonably close estimates of median income, the ASHE based estimates are somewhat higher at the lower quartile, and vice versa.
Our second sensitivity takes the income data used for our central estimates of affordability, but re-scales these based on the ratio of Bramley‟s estimate of mean income at the Ayrshire level to that
Experian data provides point estimates that are slightly lower than the CACI numbers for all HMAs with the exception of the North Coast, but the differences are not statistically significant.
70 Affordability And Migration Within The Ayrshire Housing System
derived from CACI Paycheck. As the Bramley estimate of average income is significantly lower than the CACI estimate, this has the effect of increasing the overall degree of affordable housing difficulty.
Our final sensitivity test involves using the GSPC house price data in place of the Sasines data with our central (ASHE enhanced CACI 2006) income estimates.
Appendix 6 contains comprehensive information on price to income ratios using low quartile, median and upper quartile house prices using each of the approaches just described. However, the following paragraphs focus on price to income ratios at the lower end of the housing market (i.e. lower quartile second-hand price).
Affordability estimates
Table 3.25 summarises our central estimates of how affordability has been changing for lower income households over time across the various Ayrshire housing markets and sub-areas.
At national and local authority level table 3.25 shows that:
Lower quartile price to lower quartile gross income ratios were for the most part below the affordability threshold for single and dual earner households in 2002 and 2003. Since 2004, the affordability of house prices for lower income households has deteriorated across all three local authority areas and the rest of Scotland, reflecting the extent of house price inflation witnessed in recent years.
Ayrshire and the rest of Scotland have experienced a similar rate of deterioration in affordability but house prices have remained more affordable for Ayrshire as a whole relative to the rest of Scotland. This is largely because of conditions within East and North Ayrshire.
South Ayrshire has experienced a more rapid deterioration in affordability than the rest of Scotland.
At HMA level, table 3.25 confirms that:
Affordability pressures are greatest in the Ayr HMA, but by 2006 affordability ratios were also relatively high in Girvan and South Carrick, Irvine and Kilmarnock HMAs.
While all HMAs show price to income ratios above the threshold value by 2006, some crossed this threshold later than others. For example, the Three Towns HMA looked affordable until 2005, and Garnock Valley HMA until 2006.
At sub HMA level, it is clear that:
The greatest pressure on affordability has been experienced within the Ayr Urban and Doon Valley and Kilmarnock Urban areas.
House prices in Cumnock Valley were just on the margins of becoming unaffordable in 2006.
71 Affordability And Migration Within The Ayrshire Housing System
Table 3.25: Central estimate of affordability (lower quartile price to lower quartile gross income ratios ) 2002-2006 2002 2003 2004 2005 2006 East Ayrshire 2.8 3 3.5 4.2 4.5 North Ayrshire 2.7 2.9 3.5 4.1 4.4 South Ayrshire 3.2 3.7 4.3 4.8 5.3 Ayrshire 2.9 3.1 3.7 4.4 4.6 Rest of Scotland 3.4 3.7 4.4 4.9 5 HMA Ayr HMA 3.2 3.6 4.1 4.7 5 Garnock Valley 2.6 2.8 3.1 3.5 4 Girvan & South Carrick HMA 3.1 3.8 4 4.4 4.8 Irvine HMA 2.7 2.9 3.7 4.4 4.6 Kilmarnock HMA 2.7 3 3.6 4.3 4.5 North Coast HMA 3 3.2 3.8 3.9 4.2 Three Towns HMA 2.7 2.8 3.2 3.9 4.3 Ayr and Kilmarnock HMA sub-areas Ayr (Urban) 3.2 3.7 4.3 4.8 5.3 Ayr (Cumnock) 2.9 2.7 3.2 3.5 3.5 Ayr (Doon Valley) 3.2 3 3.5 4.5 4.9 K (Urban) 2.8 3.1 3.7 4.6 4.8 K (Northern) 2.8 3.4 4.3 4.7 4.6 K (Irvine Valley) 2.7 2.8 3.2 3.9 4 Source: Sasines and CACI Paycheck Note: affordability is defined as up to and including 3.5 times the gross income for single earner households and up to and including 2.9 times the gross income for dual income households.
Findings from our first sensitivity test, which is based on the gross income of single earner households only, are shown in table 3.26. As expected, this shows a similar build up of affordability pressures (as it is based on the same income growth rates as our central estimates). However, it suggests that the overall position in 2006 was less concerning than our central estimates have indicated.
In terms of trends at the different spatial levels:
By 2006, the affordability threshold had been breached within all the Ayrshire local authority areas, but to a much lesser extent.
At HMA level, Garnock Valley HMA remained just about affordable to single earner households and the North Coast was only just above the threshold.
72 Affordability And Migration Within The Ayrshire Housing System
At sub area level, both Ayr (Cumnock) and Kilmarnock (Irvine Valley) remained accessible to single earner households21.
Table 3.26: ASHE based affordability estimates (lower quartile price to lower quartile single earner gross earning ratios ) 2002-2006 2002 2003 2004 2005 2006 East Ayrshire 2.3 2.6 3.1 3.8 3.8 North Ayrshire 2.4 2.6 2.9 3.4 3.9 South Ayrshire 2.7 3.1 3.6 4 4.4 Ayrshire 2.4 2.7 3.2 3.7 3.9 Rest of Scotland 3.2 3.5 4.1 4.5 4.7 HMA Ayr HMA 2.8 3 3.5 4 4.3 Garnock Valley 2.2 2.4 2.6 3 3.4 Girvan & South Carrick HMA 2.6 3.2 3.4 3.8 4.1 Irvine HMA 2.3 2.5 3.1 3.8 4 Kilmarnock HMA 2.3 2.6 3.1 3.7 3.9 North Coast HMA 2.6 2.7 3.2 3.3 3.6 Three Towns HMA 2.3 2.4 2.7 3.3 3.7 Ayr and Kilmarnock HMA sub-areas Ayr (Urban) 2.7 3.2 3.6 4.1 4.6 Ayr (Cumnock) 2.5 2.3 2.7 3 3 Ayr (Doon Valley) 2.7 2.5 2.9 3.8 4.2 K (Urban) 2.3 2.7 3.2 3.9 4.1 K (Northern) 2.4 2.9 3.6 4 3.9 K (Irvine Valley) 2.3 2.4 2.7 3.3 3.4 Source: Sasines and ASHE data Note: affordability is defined as up to and including 3.5 times gross earnings for single earner households and up to and including 2.9 times gross earnings for dual earning households.
The Bramley based estimates are summarised in table 3.27 and show a more disturbing picture emerging over the period to 2006. In terms of the different spatial levels:
At local authority level affordability is identifiable as a problem across the whole of the period for which we have data, and to have escalated rapidly since 2002.
21 Further analysis suggests that in 2006 lower quartile house prices in all housing market areas in Ayrshire remained affordable for dual earning households where both were assumed to earn the lower quartile full time wage.
73 Affordability And Migration Within The Ayrshire Housing System
At HMA level the Bramley based estimates show that five of the seven HMAs have been unaffordable since 2003 and all HMAs have been unaffordable since 2004.
There is no sub area of the Ayr or Kilmarnock housing markets where affordability thresholds have not been breached.
Table 3.27: Bramley based affordability estimates (lower quartile price to lower quartile gross income ratios ) 2002-2006 2002 2003 2004 2005 2006 East Ayrshire 3.5 3.8 4.5 5.4 5.7 North Ayrshire 3.5 3.7 4.4 5.2 5.6 South Ayrshire 4.1 4.8 5.5 6.2 6.7 Ayrshire 3.6 4 4.7 5.6 5.8 Rest of Scotland 4.3 4.8 5.5 6.2 6.4 HMA Ayr HMA 4.1 4.5 5.2 6 6.4 Garnock Valley 3.3 3.5 3.9 4.4 5.1 Girvan & South Carrick HMA 3.9 4.8 5.1 5.6 6.1 Irvine HMA 3.5 3.7 4.7 5.6 5.9 Kilmarnock HMA 3.4 3.9 4.6 5.5 5.8 North Coast HMA 3.9 4.1 4.8 4.9 5.4 Three Towns HMA 3.4 3.5 4 4.9 5.5 Ayr and Kilmarnock HMA sub-areas Ayr (Urban) 4.1 4.8 5.4 6.1 6.8 Ayr (Cumnock) 3.7 3.4 4 4.4 4.5 Ayr (Doon Valley) 4 3.8 4.4 5.7 6.2 K (Urban) 3.5 4 4.8 5.8 6.1 K (Northern) 3.6 4.3 5.4 6 5.9 K (Irvine Valley) 3.4 3.5 4 4.9 5.1 Source: Sasines and CACI Paycheck rescaled to Bramely modelled income estimates Note: affordability is defined as up to and including 3.5 times the gross income for single earner households and up to and including 2.9 times the gross income for dual income households.
Turning to the impact of using GSPC price data to assess affordability, table 3.28 indicates that:
There is little change to the picture in 2002 for East and North Ayrshire but the GSPC data suggests that South Ayrshire had a significantly higher affordability pressure.
By 2006, the affordability situation using GSPC data looks significantly worse than under our central estimates, but once again the situation is at its worst in the South Ayrshire context.
74 Affordability And Migration Within The Ayrshire Housing System
Table 3.28:GSPC and Sasines house price affordability compared (lower quartile price to lower quartile gross income ratios ) 2002-2006 Sasines East Ayrshire North Ayrshire South Ayrshire 2002 2.8 2.7 3.2 2003 3.0 2.9 3.7 2004 3.5 3.5 4.3 2005 4.2 4.1 4.8 2006 4.5 4.4 5.3 Source: Sasines GSPC East Ayrshire North Ayrshire South Ayrshire 2002 2.8 3.0 4.7 2003 4.0 3.4 5.6 2004 5.1 5.0 6.9 2005 5.8 5.2 8.7 2006 5.8 5.9 7.0 Source: GSPC Note: affordability is defined as up to and including 3.5 times the gross income for single earner households and up to and including 2.9 times the gross income for dual income households
Finally, as stated earlier, appendix 6 looks at price to income ratios at the median and upper quartile as well as at the bottom end of the market.
The data suggests that using the DCLG threshold approach there are affordability issues for middle and even higher income households in some housing market areas.
However, the further up the income and price distribution one goes, the less useful the ratio approach becomes, as the absolute level of residual income is likely to be more sufficient to meet households‟ non-housing requirements. Moreover, higher income households tend not to be first time buyers and therefore have equity to put towards the purchase of a property.
The more interesting implication of high price to income ratios at higher income levels is that, to the extent they encourage higher income households to search down market, they may indicate the possibility of further pressure on house prices at the median level or below, which could further exacerbate affordability difficulties for low income households in future.
75 Affordability And Migration Within The Ayrshire Housing System
4 The views of recent house purchasers
The structure of the house purchaser surveys
A specific element of this study involved three separate postal surveys. These were:
A local purchasers survey of households where the buyer origin was recorded within Sasines as having been somewhere else within Ayrshire; households in this survey were therefore moving around the Ayrshire housing system, although this could involve moves across housing market area boundaries.
An incoming purchasers survey of households buying somewhere in Ayrshire that had previously lived outside of Ayrshire.
An outgoing purchasers survey of households that had recently moved out of Ayrshire to one of the other 29 local authority areas of Scotland22.
Each survey involved drawing a random sample of 1,000 addresses using Sasines information for 2004-6 as the sampling frame. The surveys were conducted in February and March 2007.
As table 4.1 shows the achieved samples were 145 incoming purchasers, 149 local purchasers, and 98 out-movers. Postal surveys tend to have low response rates, however the response rates were lower than we had hoped to achieve. This, inevitably, limits the analysis that can be undertaken. Moreover, the absolute number of responses means results should be treated with caution. In particular it is possible that the views and perceptions of non-respondents are different to those responding.
Table 4.1 also indicates for all three surveys when the respondent moved into their home. Over four out of ten respondents had purchased their home in 2004 or earlier.
Table 4.1: When household moved to current property (%) 2006 2005 2004 or all achieved response (%) (%) earlier (%) sample rate (%) (no) (%) Incoming purchasers 29 28 43 100 145 14.5 Out going purchasers 27 31 43 100 98 14.9 Local purchasers 21 32 47 100 149 9.8 Source: postal survey
22 As the Sasines is a Scottish dataset, it was not possible to identify people that had moved from Ayrshire to somewhere outside Scotland, although it was possible to identify purchasers moving into Ayrshire from outside Scotland in the in movers sample.
76 Affordability And Migration Within The Ayrshire Housing System
Household profile
Table 4.2 shows the household type of movers within the three survey groups. It is evident that:
The majority of out-movers (55 per cent) are young single person or couple households. Relative to the other two groups, out movers are less likely to be families without dependent children (i.e. no child under 18 years).
A third (32 per cent) of in-movers are couples and 19 per cent are families with dependent children. Compared to the other two groups in-movers are less likely to be single person households.
A third (33 per cent) of local movers are families with or without dependent children, 24 per cent are couples and 17 per cent are single person households. Relative to the other two groups, local movement tends to involve more families with dependent children.
Table 4.2: Household type of respondents (%) in out local Single person under 65 years 11 28 17 Single pensioner 65 years or older 6 6 3 Lone Parent, with at least one child under 18 years 1 1 5 Lone Parent, with no child(ren) under 18 years 1 3 5 Family with at least one child under 18 years 19 18 27 Family, with no child(ren) under 18 years 6 3 6 Couple both under 65 years 32 27 24 Couple, one or both 65 years or older 19 9 10 Friends buying jointly 1 0 0 Other 3 4 4 Sample Base 144 97 148 Source: postal survey
Table 4.3 confirms that in movers are generally older than out movers or local movers whilst out movers tend to be younger than the other two groups of purchasers. Local households buying within Ayrshire are more likely to be aged between 36-50 (38 per cent) than out-movers (26 per cent) or in- movers (20 per cent).
Table 4.3: Age of household representative (%) in out local under 35 19 38 29 36-50 20 26 38 51-64 24 15 15 61 or over 35 19 15 Not stated 1 0 1 Sample Base 143 98 148 Source: postal survey
77 Affordability And Migration Within The Ayrshire Housing System
Table 4.4 compares the size of households in the three groups, and confirms that comparatively large numbers of single person households leave Ayrshire. Approximately half the households moving into Ayr are composed of two persons (the biggest single sub group across all three surveys).
Table 4.4: Number of people in household (%) in out local 1 18 36 22 2 50 39 43 3 14 11 17 4 14 9 14 5+ 4 5 4 Sample Base 145 97 148 Source: postal survey
Overall 92 per cent of respondents provided income information. Table 4.5 shows that:
Out movers are less likely than the other two groups to fall within the lowest income band, and more likely to fall within the highest band. Some 38 per cent of in movers and 42 per cent of local movers have a gross household income of less than £25,000, compared to 27 per cent of local movers.
It is also noticeable that 29 per cent of in movers have an income of at least £40,000, a similar percentage to that of out movers, but significantly more than local movers (18 per cent).
The income profile of in-movers is consistent with local perceptions that Ayrshire is attracting a combination of retired households and more affluent working age households.
Both in and out movers are more likely to be more affluent than those moving within the Ayrshire housing system.
Table 4.5: Household income of survey respondents (%) in local out <£15,000 21 17 11 £15-25,000 17 25 16 £25-30,000 10 12 15 £30-35,000 8 9 12 £35-40,000 5 11 8 £40-50,000 13 9 10 >£50,000 16 9 17 DK/refused 10 8 11 Sample Base 131 89 139 Source: postal survey
Table 4.6 records the work location of the various purchasing groups and shows that:
Some 27 per cent of household representative in-movers work in Ayrshire, compared to 56 per cent of local movers and 6 per cent for
78 Affordability And Migration Within The Ayrshire Housing System
out movers. For second wage earners, the figures are 16 per cent, 31 per cent and 4 per cent respectively
Around 28 per cent of in-movers work in the Glasgow and Clyde Valley area compared to 20 per cent of local movers and 45 per cent for out movers. For second wage earners, the figures are 17 per cent, 8 per cent and 15 per cent respectively
Only 9 per cent of in-movers and 3 per cent of local movers work in the rest of Scotland or somewhere in England compared to 28 per cent of out movers.
A comparatively large number of in-movers household representatives (29 per cent) are retired, compared to 11 per cent of local movers and 14 per cent of out movers.
These results confirm the importance of proximity to work for many local and out moving households, and the attractiveness of Ayrshire to retiring households.
Table 4.6: Work location of respondent and partner (%) household partner representative in local out in local out Ayrshire 27 56 6 16 31 4 Kilmarnock 6 15 2 1 7 0 Ayr/Prestwick 7 19 1 5 12 3 Rest of Ayrshire 14 22 3 10 12 1 Glasgow 19 11 29 12 5 9 Rest of Glasgow & Clyde Valley 9 9 16 5 3 6 Elsewhere in UK 9 5 28 5 3 8 Retired (main) 29 11 14 19 7 7 DK 7 8 7 43 51 66 Sample Base 130 92 133 83 35 73 Source: postal survey
Housing history and reasons for buying current home
Table 4.7 reports the previous tenure of purchasing households. It can be seen from the table that:
Over half of all three survey groups were buying their previous home with a mortgage
A third of in-movers owned their previous home outright compared to just 14 per cent of local movers.
15 per cent of local movers had previously rented from a social landlord compared to only 1-2 per cent of in-movers and out-movers.
16 per cent of out-movers and 13 per cent of local-movers had previously lived with parents compared to 6 per cent of in-movers.
79 Affordability And Migration Within The Ayrshire Housing System
Table 4.7: Previous tenure of purchasing household (%) Owners * Owners PRS social With Other sample (Mortgage) (Outright) rented parents base In 52 34 4 2 6 3 145 Out 52 24 7 1 16 0 98 Local 52 14 5 15 13 1 149 Source: postal survey Note* includes less than 5 shared ownership purchasers
When asked the main reason why they had moved to the current property, table 4.8 shows that:
Nearly a fifth of local buyers said they were first time buyers (FTB) compared to around a tenth of the other two groups. Local movers were also more likely to have moved in order to secure a larger property than respondents in the two other groups.
Employment related reasons were important factors for out-movers but not for in-movers or local movers. Some 17 per cent of out- movers said it was because of a new job and 18 percent said it was to move closer to an existing job.
A quarter of in-movers said it was because they liked the area, and 15 per cent said it was due to retirement.
Being closer to family was an important factor for out-movers (24 per cent) and in-movers (14 per cent).
Table 4.8: Reason for move to current home (%) In Out Local FTB 8 12 18 Poor Condition of Last Home 0 1 5 New Job 6 17 1 To be Closer to Existing Job 3 18 3 Liked Area 24 7 14 More Affordable 5 2 5 Closer To family 14 24 7 Wanted Larger Home 8 3 17 Retirement 15 1 3 Wanted Smaller Home 6 2 6 Health 3 0 3 Relationship Breakdown 3 6 7 School Catchment 1 1 0 Other 3 5 11 Sample Base 144 98 148 Source: postal survey Few respondents in all three groups said it was because of the poor condition or affordability of their previous home, or because of local
80 Affordability And Migration Within The Ayrshire Housing System
services or amenities such as health service provision, or school catchment area.
Local movers and in-movers were asked why they had purchased in the area they had chosen. Over three quarters said they had been able to find a property in their most preferred area.
Table 4.9 shows that for both in-movers and local movers the single most important factor was cost. Being close to family was the next most important factor for local movers whilst for in-movers it was the quality of environment.
Table 4.9: Local and In movers reasons for purchase in current area (%) in local Cost 32 45 Close to work 2 2 Close to family 17 21 Environment 26 13 School Quality 2 1 Rural Lifestyle 6 4 Glasgow Commuting 8 1 Commuting Elsewhere 1 1 Amenities 2 2 Other 1 9 Sample Base 145 149 Source: postal survey
The vast majority of out-movers had not considered buying in Ayrshire before relocating. Those who said they had not considered buying in Ayrshire were asked why23 . As table 4.10 shows, only 1 per cent said it was because they knew it would be unaffordable. However, around one in seven of all out-movers also said they would have stayed if a suitable property at an affordable price had been available.
Table 4.10: Out movers reasons why didn’t consider buying in Ayrshire (%) not suitable knew wanted to go other sample for work unaffordable elsewhere base Out 43 1 42 12 96 Source: postal survey
In-movers and local movers were also asked about which other settlements they had seriously considered as somewhere to purchase a property. Their responses are detailed in table 4.11:
23 Households that had considered buying in Ayrshire but had moved out were also asked why, but the achieved sample size was too small to report the responses to this question.
81 Affordability And Migration Within The Ayrshire Housing System
Almost half of local movers (47 per cent) and a third of in-movers (33 per cent) had not considered purchasing anywhere else,
Amongst in movers, the most considered alternative settlements were Ayr, Prestwick, Troon and Largs
Table 4.11 Other areas considered by in-movers and local movers (%) in local Stewarton/Kilmaurs/Fenwick 12 9 Kilmarnock 10 8 Newmilns/Greenholm 0 3 Galston 1 3 Darvel 1 3 Cumnock 1 1 Hurlford/Crookedholm 1 3 Troon 15 9 Prestwick 18 16 Ayr 21 13 Maybole 1 0 Girvan 3 1 Mauchline 3 1 Largs 13 3 Kilbirnie 1 2 Dalry 3 2 Beith 3 3 West Kilbride 10 4 Ardrossan 6 3 Saltcoats 6 3 Stevenston 3 2 Kilwinning 6 7 Irvine 6 5 Other Ayrshire 9 13 Other not Ayrshire 6 5 None 33 47 Sample Base 145 149 Source: postal survey
Table 4.12 shows that when asked why they had chosen not to live in the other areas that they had seriously considered:
Some 23 per cent of in-movers and 30 per cent of local movers said these areas were too expensive.
Around 31 per cent of in-movers and 23 per cent of local movers said it was because the property size/type available was not suitable.
Over 10 per cent of both purchasers groups were also influenced by proximity to family, proximity to work, and available properties being in undesirable locations.
82 Affordability And Migration Within The Ayrshire Housing System
Table 4.12: Incoming and local purchasers reasons for choosing not to live in other areas seriously considered (%) in local Too Expensive 23 30 Not enough properties of suitable size/type 31 23 Poor transport 6 7 Poor Quality 1 1 Undesirable location 14 11 School too far 4 7 Family too far 15 26 Work too far 12 13 Other 9 11 Sample Base 142 147 Source: postal survey
Finally, all three purchaser groups were asked whether specific pull factors had affected their decision to buy their present home. Table 4.13 shows that:
Ease of commuting to work was of most significance to out-movers.
Regeneration of areas within Ayrshire was not a particularly significant factor affecting the locational decisions of in-movers or local movers.
Price was a more important factor for local movers than in-movers and out-movers.
Table 4.13: Specific factors that affected decision as to where to live (%) in out local Price increase in area 30 36 43 Price increase elsewhere 29 20 34 Availability of New Build in area 13 17 15 Regeneration work in area 8 14 5 Ease of work commuting 22 45 11 Sample Base 145 96 149 Source: postal survey
Current Housing Circumstances
Around a quarter of all in movers live in a detached property, compared to a fifth of local movers and out-movers. Table 4.14 suggests that a higher proportion of incoming purchasers achieved their preferred house type than local or out movers. It also shows that:
Nearly a fifth of local movers purchased a terraced property, compared with only 10 per cent of the other two groups. Most people living in terraced housing prefer alternative house types.
Out movers are more likely to be living in tenements and other flat types relative to in movers and local movers, although this is probably a reflection of the housing stock in Glasgow.
Flats are less popular than other dwelling types amongst all purchaser groups.
83 Affordability And Migration Within The Ayrshire Housing System
Table 4.14: Current and preferred dwelling (%) current dwelling type preferred dwelling type in local out in local out Detached 25 20 19 45 56 62 Semi 23 25 17 8 8 7 Terrace 10 20 11 1 1 2 Bungalow 15 12 9 30 27 17 4 in a Block 10 11 5 1 1 1 Maisonette 0 2 0 1 0 0 Other Flat 15 9 26 5 3 4 Tenement 2 1 11 0 0 2 Other 1 0 0 1 2 1 Sample Base 145 149 98 131 146 95 Source: postal survey
As table 4.15 shows, comparatively few local purchasers (6 per cent) buy new properties, which confirms the overwhelming importance of the resale market as a source of affordable homes for local purchasers. Twice as many incomers as local purchasers buy new properties, but perhaps surprisingly, over three times as many out movers do so.
Table 4.15: Whether current property was purchased new or resale (%) new build second hand sample base In 12 86 143 Out 21 79 98 Local 7 93 148 Source: postal survey
Households were also asked about their satisfaction with their current homes. Table 4.16 shows:
At least 90 per cent of respondents in all three groups were satisfied with their home as a place to live, although in-movers and out movers were more likely to be very satisfied than local movers.
Over three quarters of respondents in all three groups were satisfied with their home as a place to work from, although out-movers were more likely to be very satisfied, and 10 per cent of in movers were dissatisfied or very dissatisfied.
The large majority of respondents were also satisfied with their home as a place to shop from and as a place to get to services from. However, out-movers were more likely to be very satisfied with their homes as a place to access shops and services than in-movers or local movers.
84 Affordability And Migration Within The Ayrshire Housing System
Table 4.16 satisfaction with current homes (%) As a place to live (%) very satisfied no view dissatisfied very satisfied dissatisfied In 57 35 4 3 1 Out 57 33 6 2 2 Local 49 46 5 1 0 As a place to work from (%) In 36 42 13 7 3 Out 56 29 12 2 1 Local 36 45 15 3 2 As a place to get to shop from (%) In 40 45 11 4 1 Out 48 37 9 5 1 Local 40 42 10 7 2 As a place to get to services from (%) In 36 39 19 6 0 Out 44 42 11 3 1 Local 30 44 15 9 2 Sample Base: In: 145 Local: 149 Out: 98 Source: postal survey
Future Intentions
Tables 4.17 to 4.19 reveal that the three purchaser groups have different future movement intentions. Almost half of out-movers (consistent with the age and household type profile of this group) planned to move in the next five years compared to a quarter of in-movers and a third of local movers.
Table 4.17: Whether household plans to move in next 5 years (%) yes no sample base In 24 76 145 Out 48 49 149 Local 35 65 98 Source: postal survey
Although the sample numbers are small, and should be treated with particular caution, it does appear that:
A significant amount of planned movement across all three groups is related to achieving dwelling type and area preferences, possibly as household circumstances are anticipated to change,
Job related factors are also of particular significance for out-movers.
Local movers remain more committed to remaining in Ayrshire than in movers.
85 Affordability And Migration Within The Ayrshire Housing System
Table 4.18: If a household plans to move, why? (%) in out local Job related 9 21 4 To preferred house type 35 57 48 To preferred area 32 28 23 Household reducing 3 9 10 Household increasing 21 23 25 Moving on retirement 6 9 0 Other 27 9 21 Sample Base 145 47 57 Source: postal survey
Table 4.19: If a household plans to move, where to (%) in local out Stay in local area 35 50 NA Stay in this LA 12 19 23 Stay elsewhere in Ayrshire 3 8 NA Move to Ayrshire NA NA 6 Move to Glasgow 18 0 NA Move somewhere else in Scotland 6 2 21 Leave Scotland 3 4 11 DK 24 15 38 Sample Base 34 47 51 Source: postal survey
Conclusions
The survey findings confirm that there are significant differences between the three mover groups in terms of income, age and household type.
In-movers and out-movers are more affluent than local movers, while out- movers are typically younger and in-movers typically older than those moving locally.
There are also important differences in terms of:
Current housing circumstances and degree of satisfaction with current home across a range of perspectives.
Future movement intentions.
In light of the house price trends observed over the period 2003 - 6 and the affordability ratios reported in section 3 it is perhaps surprising how little affordability issues figure in household responses. In short, the survey results support the conclusion that housing choices continue to be driven in the main by household preferences rather than constraint.
86 Affordability And Migration Within The Ayrshire Housing System
5 Prospects to 2012
Experian economic model
Experian‟s area economic forecasting methodology takes account of various factors, which include historical performance, industrial structures and economic linkages and relationships. The econometric model on which Experian forecasts are based is largely demand driven, and captures the short-to-medium term outlook particularly well. Over the longer-term, supply- side factors become increasingly important to economic performance. Our forecasts incorporate some important supply-side factors, including labour supply, work force quality and population density. However, they do not take account of the possible impact of various strands of public policy in Ayrshire. Therefore, the forecasts in this section should be interpreted as a baseline.
Economic prospects
UK economic outlook
The performance of the overall UK economy in the future is clearly important for the performance of the Ayrshire economy. Firstly, much of the demand for goods and services in Ayrshire depends on healthy UK demand. Secondly, the Bank of England sets interest rates to manage inflation at the UK level; this has an impact on the Ayrshire economy and housing market by influencing the affordability of mortgage repayments.
Experian forecast the UK economy to grow at an average annual rate of 2.7 per cent between 2006 and 2012. It is the services sector rather than manufacturing that will drive growth. The manufacturing sector at a UK level is only expected to grow at an average annual rate of 1.6 per cent compared to 2.9 per cent for non-manufacturing sectors. However this is stronger than growth in UK manufacturing between 2000 and 2006. Overall, strong economic growth at a UK level should benefit the Ayrshire economy.
Figure 5.1: Forecasts for inflation and interest rates to 2010 16 annual % change Consumer Price Inflation and Interest Rates
14
12
10 Bond rate Short-term 8 interest rates
6
4
Inflation target 2
CPI 0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Source: National Statistics, Experian
87 Affordability And Migration Within The Ayrshire Housing System
As shown in Figure 5.1, we expect inflation and interest rates to remain stable over the next four years. Inflation is expected to fall to around the 2 per cent target in late 2007 and as a result interest rates will fall to around 4 - 5 per cent in 2008. A stable macroeconomic environment will mean that business investment and confidence levels remain high. This monetary environment is also broadly supportive for the housing market.
Scottish economic outlook
In the period from 2006 to 2007, Experian forecast that the Scottish economy will lag slightly behind growth at a UK level and grow by an average annual rate of 2.4 per cent. As with the UK, the service sector is expected to drive growth. The financial and business sector is expected to grow at an average annual rate of 4.4 per cent and the transport and communication sector is expected to grow by an average annual rate of 4.3 per cent. The engineering sector is also expected to be a high growth sector, with 4.4 per cent average annual growth. Only three sectors are expected to create jobs over this period: financial and business services, engineering and other (mainly public) services (see figure 5.2).
Figure 5.2: Forecast average annual growth of output and employment in Scotland by sector, 2006-2012
Employment Output
Other (Mainly Public) Services
Financial & Business Services
Transport & Communications
Distribution, Hotels & Catering
Construction
Other Manufacturing
Engineering
Metals, Minerals & Chemicals
Mining & Utilities
Agriculture, Forestry & Fishing
-3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
As figure 5.3 shows, house price inflation at the UK and Scotland level is expected to slow from the levels experienced in recent years. As the Scottish consumer is still less indebted than the UK consumer, house price inflation is expected to remain slightly stronger than the UK in 2007 and 2008 before growing at broadly the same rate between 2009 and 2012.
88 Affordability And Migration Within The Ayrshire Housing System
Figure 5.3: Forecast annual percentage change in house prices Scotland and UK, 2004-2010
Scotland UK
25.00
20.00
15.00
10.00
5.00
0.00 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Ayrshire economic outlook Experian forecast that Ayrshire economy will continue to lag behind both the Scottish economy and the Glasgow and Clyde Valley economy in the period from 2006 to 2012. The Ayrshire economy is expected to grow at an average annual rate of 0.9 per cent compared to 2.4 per cent for the Scottish economy and 2.6 per cent for the Glasgow and Clyde Valley economy (see figure 5.4).
Figure 5.4: Average annual change in output (GVA) in Ayrshire and Scotland 2005-2012
Growth in Output 3.0% Ayrshire Scotland
2.5%
2.0%
1.5% Annual % Annual Change
1.0%
0.5%
0.0% 2005 2006 2007 2008 2009 2010 2011 2012
Source: Experian 2007
89 Affordability And Migration Within The Ayrshire Housing System
The predicted underperformance of the Ayrshire economy reflects its current industrial mix. The financial and business services and transport and communications sectors, which are likely to drive growth at the Scottish level, are expected to remain under-represented in the Ayrshire economy.
Moreover, increasing globalisation and competition from low cost producers across the world is expected to lead to contraction of the manufacturing sector, which is over-represented in the Ayrshire economy. By contrast the Glasgow and Clyde Valley economy is expected to outperform the Scottish because it forms part of the Glasgow „city region‟ which brings advantages in terms of agglomeration or clustering effects in many industries (particularly business and financial services) and good international linkages.
Figure 5.5 indicates that engineering, financial and business services and transport and communications are expected to perform most strongly, growing at an average annual rate of 4.4 per cent, 4.8 per cent and 4.9 per cent in the period to 2012. A similar pattern of growth in these industries is forecast for Glasgow and Clyde Valley. However, as these industries are expected to continue to form a smaller share of the Ayrshire economy relative to the Glasgow and Clyde Valley economy, Ayrshire will benefit less from the high growth of these industries.
Figure 5.5 also indicates that agriculture, forestry and fishing, construction and other manufacturing are expected to perform poorly over the next six years, with output forecast to contract by an annual average of 9.1 per cent, 4.2 per cent and 3.0 per cent respectively. The muted performance of the construction sector in Ayrshire is due to forecast lower investment spending in the region by both service and production industries.
Figure 5.5: Average annual change in output (GVA) by industry in Ayrshire & Scotland 2006-12
Ayrshire Clyde Valley
Other (Mainly Public) Services
Financial & Business Services
Transport & Communications
Distribution, Hotels & Catering
Construction
Other Manufacturing
Engineering
Metals, Minerals & Chemicals
Mining & Utilities
Agriculture, Forestry & Fishing
-10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0%
90 Affordability And Migration Within The Ayrshire Housing System
Within Ayrshire growth is expected to be highest in North and East Ayrshire, which are both expected to grow by an average annual rate of 1.1 per cent. South Ayrshire‟s economy is forecast to grow more sluggishly at 0.5 per cent a year on average to 2012. The engineering sector in North Ayrshire is expected to experience strong growth, with an average annual rate of 7.6 per cent. Financial and business services in East Ayrshire also stand out as significantly outperforming the overall local economy, growing at an average rate of 4.2 per cent a year.
Employment trends Latest data suggests that total employment in Ayrshire will continue to fall between 2006 and 2012. Table 5.1 indicates that total employment within Ayrshire is forecast to decline at an average rate of 1.5 per cent between 2006 and 2012. This compares with marginal growth of 0.1 per cent a year in Glasgow and Clyde Valley and zero growth at the Scottish level. Table 5.1 also shows that employment is expected to decline in all three local authority areas, but the sharpest contraction is expected to occur in South Ayrshire (-1.7 per cent) and North Ayrshire (-1.6 per cent).
Table 5.1: Predicted average annual growth of total employment to 2012 (%) 2005 – 2012 North Ayrshire -1.6 South Ayrshire -1.7 East Ayrshire -1.1 Ayrshire -1.5 Glasgow and Clyde Valley 0.1 Scotland 0.0 Source: Experian, 2006 It is not possible to provide meaningful economic forecasts at geographic levels below local authority area level. However, as noted in section 2, although employment in Ayrshire has contracted since 1999, several towns, including Kilmarnock, Troon, Irvine and Prestwick experienced net growth in employment between 1999 and 2004.
If this trend continued, we might expect the forecast employment contraction to be moderated or even reversed at the level of some towns compared with the level of Ayrshire as a whole. Clearly, policy factors will influence the extent to which this happens. Within this, a key issue is how the balance of development between the core investment area and the investment corridors set out in the Ayrshire Structure Plan 2006, evolves over the next five years.
Table 5.2: Forecast average annual growth of residence based employment to 2012 (%) 2006 – 2012 North Ayrshire 0.0 South Ayrshire 0.0 East Ayrshire 0.3 Ayrshire 0.1 Glasgow and Clyde Valley 0.3 Scotland 0.3 Source: Experian, 2006 Although employment within Ayrshire is expected to fall, employment amongst working age residents is expected to expand. This suggests that commuting by Ayrshire residents to Glasgow and Clyde Valley and the wider
91 Affordability And Migration Within The Ayrshire Housing System central belt is on an upward trend. We forecast that residence-based24 employment in Ayrshire will expand by 0.1 per cent each year between 2006 and 2012, (equivalent to an additional 1,300 jobs). This growth is expected to be concentrated in East Ayrshire where residence based employment is expected to expand by an annual average of 0.3 per cent each year (see table 5.2).
In keeping with recent trends, claimant count unemployment in Ayrshire is expected to fall from 8,400 to 6,050 between 2006 and 2012, a fall of 28 per cent. The expected reduction in unemployment is likely to be most pronounced in East Ayrshire (34 per cent). Over the same period claimant count unemployment is forecast to fall in Glasgow and Clyde Valley, Scotland and the UK by 22 per cent, 25 per cent and 5 per cent respectively.
Figure 5.6: Mean household income in Ayrshire & Scotland 2006-2012
Scotland South Ayrshire East Ayrshire North Ayrshire
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0 2006 2007 2008 2009 2010 2011 2012
Source: Experian, GROS, 2006 In 2006 the average household in Ayrshire had a lower gross income (£25,150) than the average Scottish household (£27,900), although there were significant differences in the average income of households in South Ayrshire (£27,700), East Ayrshire (£24,650) and North Ayrshire (£23,970). Figure 5.6 shows that by 2012 the average Ayrshire household income will converge towards the average Scottish household income as a consequence of household incomes in Ayrshire rising more quickly than the Scottish average. In keeping with employment trends, household income
24 This measures total employment amongst working age people resident in Ayrshire (but not necessarily employed in a workplace located in Ayrshire).
92 Affordability And Migration Within The Ayrshire Housing System growth is expected to be highest in East Ayrshire, with an expansion of 1.5 per cent each year to £26,880 by 2012.
Demographic Projections
Population Projections
The General Register Office for Scotland (GROS) project that if underlying economic and social conditions remain unchanged, the population of Ayrshire could fall from 367,590 in 2004 to 364,508 by 2012, which is equivalent to a fall of 0.8 per cent or 3,082 individuals. Table 5.3 shows that the population is expected to decline more sharply in North Ayrshire (-1.2 per cent) than in East Ayrshire (-0.7 per cent) and South Ayrshire (-0.6 per cent).
Glasgow and Clyde Valley‟s population is also projected to fall by 0.9 per cent whereas Scotland‟s is expected to expand by 0.8 per cent over the same period. Scotland‟s rising population is not as a result of natural change but of rising levels of in-migration to certain areas in Scotland. Levels of in- migration into Scotland and the UK have risen significantly since the enlargement of the European Union in 2004 when the UK opened its labour market to eight eastern and central European countries.25
Experian forecast that if underlying net-migration rates change, Ayrshire‟s population could decline by 1.1 per cent to 362,630 by 2012 whilst Glasgow and Clyde Valley‟s population could decline by 1.0 per cent and Scotland‟s population could expand by 0.7 per cent.
Table 5.3: Ayrshire population projections, absolute and % change 2004-2012 2004 2012 2004-2012 2004-2012 change change (%) East Ayrshire 119,720 118,895 -825 -0.7 North Ayrshire 136,020 134,388 -1,632 -1.2 South Ayrshire 111,850 111,225 -625 -0.6 Ayrshire 367,590 364,508 -3,082 -0.8 Source: GROS 2004 Relative to Scotland as a whole, Ayrshire has a slightly higher proportion of older people. In 2004, 17.6 per cent of Ayrshire‟s population was aged 65 or over compared to 16.3 per cent of Scotland‟s population. At 19.8 per cent, South Ayrshire had the highest proportion of older people.
Both GROS and Experian expect Ayrshire‟s population to continue to age, leading to an increase in the proportion aged 50-64 years or 65 years and over. As figure 5.7 shows, this will be accompanied by a fall in the proportion of the population aged 0-15 years or 30-49 years, although there will be a
25 Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia
93 Affordability And Migration Within The Ayrshire Housing System slight increase in the proportion aged 16- 29 years26. The working age population is therefore expected to decline more sharply than the total Ayrshire population. Experian forecast that between 2004 and 2012 there will be a 4 per cent decline in the working age population in South Ayrshire, a 3.8 per cent decline in North Ayrshire and a 2.6 per cent decline in East Ayrshire.
Figure 5.7: Ayrshire Population Projections by age group 2004-2012
35%
30% 2004 2014
25%
20%
15%
10%
5%
0% 0-15 16-29 30-49 50-64 65-74 75+
Source: GROS 2004
Household Projections
GROS household projections27 are shown in figure 5.8. The number of households living in Ayrshire is projected to increase by 4.3 per cent from 160,580 in 2004 to 167,400 by 2012. This is slightly lower that the Scottish household growth rate of 6.2 per cent.
One reason why the number of households is expected to continue to increase in the period to 2012 is that the average household size is expected to continue to decline as a result of various socio-economic changes. These include rising divorce rates, lower child birth rates and improved health in old age (with females out living men on average).
26 The same general pattern is projected for Scotland as a whole 27 GROs household projections involve applying headship rates to their population projections. Thus GRO assumptions in relation to future migration, fertility and mortality also influence household projections
94 Affordability And Migration Within The Ayrshire Housing System
GROS project that the number of single person households living in Ayrshire will increase by 16 per cent to 59,380 by 2012. Thus, 35 per cent of the 167,400 households projected to be living in Ayrshire in 2012 are expected to be single person households.
Although Ayrshire will have proportionately fewer single person households than Scotland as a whole (38 per cent), the increase in single person households will have tangible implications for the overall amount of housing and mix of dwellings required. In addition, there is evidence that adults of working age and living alone are at greater risk of falling into poverty than those who are cohabiting with a partner, which could have some bearing on future consumer tenure choices28.
Figure 5.8: Ayrshire Household Projections 2004-2012
170,000
168,000
166,000
164,000
162,000
160,000
158,000 Number of Houeholds of Number 156,000
154,000
152,000
150,000 2004 2005 2006 2007 2008 2009 2010 2011 2012
Source: GROS 2004 Nonetheless the majority (58 per cent) of households projected to be living in Ayrshire in 2012 will continue to be couple households with or without children. GROS project that in 2012 just under 41 per cent of Ayrshire‟s households will be couples and a further 17 per cent will be couples with at least one child.
More generally, there remains some uncertainty regarding the migration flows built into current household projections for UK, Scotland and Ayrshire.
As already noted, significant in-migration has occurred at the Scottish level in recent years as a result of international in-migration from the eight countries that joined the European Union in May 2004. Significant in- migration into Ayrshire could offset population decline and ageing. However, the lack of employment growth in Ayrshire (highlighted in the economic
28 Palmer (2006) Single Person Households : Issues that JRF should be thinking about
95 Affordability And Migration Within The Ayrshire Housing System forecasts section) makes it unlikely that there will be significant flows of migrant workers from overseas or indeed from the rest of the UK seeking employment.
Evidence of increased levels of commuting to Glasgow and Clyde Valley and the central belt suggest closer integration of Ayrshire with the Glasgow city region. These linkages form part of the policy aspiration that underpins the Ayrshire Structural Plan 2006. As Ayrshire is increasingly viewed as an attractive and affordable location to live, rising in-migration by households whose members work in Glasgow and elsewhere in Glasgow and Clyde Valley may occur. In turn, this could bring benefits to the area in terms of increased service provision and therefore employment opportunities.
Additionally, patterns of migration within Ayrshire will continue to reflect variations in the availability of suitable, affordable housing as well as relative economic performance. The policy factors affecting inward and internal migration are discussed below.
Public Policy and Ayrshire’s Housing Markets
To a large degree our views in this section are based upon published strategy documents such as development plans, transport and regeneration strategies. However they have also been informed by discussions at a seminar held in Irvine in March 2007 at which participants from the public and private sectors were invited to consider the future of Ayr housing markets over the period to 2012.
Development Plans
In section 3 we briefly considered the development framework introduced within the new Ayrshire Structure Plan (which is currently awaiting Ministerial approval). The previous plan (Ayrshire Joint Structure Plan Committee, 1999) confirmed the endemic nature of change within Ayrshire:
“The only inevitability about the twenty-first century is that there will be change. In order to understand the processes which could influence that change it is simply necessary to look back at what has happened to Ayrshire in the last twenty years. Major industries have closed and new industrial opportunities created; towns and villages and in some instances the countryside itself have been modified, and those people who were able have sought new values, aspirations and opportunity”.
The 1999 plan demonstrated a much less accommodating attitude to the development of links between the Ayrshire and Glasgow and Clyde Valley areas than the 2006 plan does, commenting:
“Glasgow, or perhaps more accurately the Clydeside Conurbation already exerts a limited influence in employment, education and leisure for the residents of Ayrshire and will continue to do so. The issue of providing new housing land specifically for commuters to the Conurbation has also been debated as part of the structure plan process as a way of increasing economic activity, but this is not well received by most respondents. Whilst
96 Affordability And Migration Within The Ayrshire Housing System
superficially attractive as a means of increasing rate support grant, the provision of additional housing land targeted at commuters would result in higher public sector costs for services and infrastructure, increase congestion, put further pressure on the environment, would be strongly resisted by local communities and would be contrary to the spirit of sustainable development underlying the plan”.
A sustained policy theme across these plans however has been promotion of development within the core development area specified in the 2006 Written Statement, with the 1999 plan containing as a formal policy that “The three Ayrshire Councils shall promote Ayr/Prestwick/Troon, Irvine/Kilwinning and Kilmarnock as the primary locations in Ayrshire for all major residential, economic, commercial, cultural, educational and community development.”
It is also notable that the 1999 Written Statement advised:
“For the purpose of the structure plan, each of the three Ayrshire Council areas are treated as individual and separate Housing Market Areas. All three areas have a high degree of self-containment, being areas within which the majority of those moving house without changing job would stay and are also areas in which the majority of the employed population both reside and work. There are also nine sub Housing Market Areas, the characteristics of which require to be addressed within the context of local plan housing provision”.
The 2006 plan is more spatially directive than its predecessor, although it says little with respect to housing market area structures. It proposes to “achieve closer integration with the Glasgow City Region” and within this, as noted earlier, the development framework involves:
Developing and strengthening the core investment area and focussing future transport, population, economic activity, infrastructure and service proposals in the major towns of Ayr, Irvine and Kilmarnock.
Promoting future development within a series of investment corridors along main transport routes and strengthening the role of key towns in these corridors as service centres.
The plan notes future development of the core area “does not imply a physical coalescence of individual communities within the area but allows each town a distinct identity and complementary role”, this does not however preclude the development of a unified functional housing market based on the towns of Ayr, Kilmarnock and Irvine, and extending to include the smaller towns of Ardrossan, Stevenston and Saltcoats.
The migration flows analysis presented in section 3 indicates that since 2000 many of the links between the towns within the core development area have grown. For example, between 2000 and 2006 the proportion buying annually in:
The Irvine housing market area originating from within the Ayr housing market increased from 3 per cent to 6 per cent.
97 Affordability And Migration Within The Ayrshire Housing System
The Irvine housing market area originating from within the Kilmarnock housing market increased from 3 per cent to 6 per cent.
The Irvine housing market area originating from within the Three Towns housing market increased from 4 per cent to 6 per cent.
The Ayr housing market area originating from within the Kilmarnock housing market increased from 5 per cent to 7 per cent.
An important factor behind these trends will have been household income growth, which as already noted tends to expand household housing search areas over time, and the Experian economic forecasts confirm income growth should be expected to continue. However, these trends are likely to have been facilitated by the above noted policy position within the Structure Plan, and this is likely to continue to be the case in future.
Local public and private stakeholders are in broad agreement that over time a „joint housing market area‟ is likely to emerge within the core development area. While this is likely to be a continuous process, and to extend well beyond 2012, it is important to be aware of it, and to think through its positive and negative implications.
Table 5.4: Ayrshire Housing Requirements 2005-2012 Ayrshire 11,100 East Ayrshire 3,600 North Ayrshire 4,800 South Ayrshire 2,700
Strategic Expansion Sites NW/W/S Kilmarnock 700 SE Ayr 700 Irvine Bay 600 Kilbirnie/Lochshore 300 Largs 100 Stewarton 100 Mauchline 100 Cumnock/Auchinleck 100 Maybole 100 Source: Ayrshire Joint Structure Plan Committee (2006a)
One important advantage will be expanded household choice available in an enlarged housing market. However, a possible disadvantage may be the pressure the more mobile and higher income population places on specific localities, creating particular affordability hotspot problems for more locally bound lower income households. An enlarged HMA straddling the boundaries of all three local authorities would also intensify the need for
98 Affordability And Migration Within The Ayrshire Housing System cohesion across local plans and local housing strategies – and the significance of any failures in this regard.
In terms of new housing requirements, the 2006 Structure Plan indicates that 37,200 houses will be required over the 20 years to 2025, equivalent to the construction of 1,850 new houses each year, which is a significant step up on historical performance29. Table 5.4 shows the geographic distribution of these requirements to 2012, including those expected from a number of „strategic expansion sites‟.
Tables 5.4 and 5.5 confirm the intention to direct new development within the core area, and after that within the various development corridors specified in the Structure Plan. These tables also demonstrate that the preponderance of development is anticipated in the north and east of Ayrshire, confirming the extent to which further integration between the Ayrshire and Glasgow and Clyde Valley economies is anticipated and welcomed. Over time, but increasingly beyond 2012, the scale and distribution of the anticipated development may affect the geographic structure of existing housing markets in the north and east of Ayrshire.
Table 5.5: Future Housing Requirements 2005 – 2025 Area Indicative Target Total Core Areas 24,100 Corridors: Glasgow link 1,500 M74 link 3,150 Irvine Valley 650 Doon Valley 750 Garnock Valley 2,050 North Coast 2,000 Carrick 1,500 Total Corridors 11,600 East Ayrshire non corridor 400 North Ayrshire non corridor 750 South Ayrshire non corridor 400 Total non corridor 1,550 Ayrshire 37,200 Source: Ayrshire Joint Structure Plan Committee (2006a)
29 “Can Ayrshire realistically expect to stabilise or grow its population if its relatively low historic build rates and forecast potential households are used to control the scale of future housing allocations? The evidence from new build and sales transactions suggests that opportunities for house purchase in Ayrshire have been relatively poor compared with other areas in Central Scotland. Part of the explanation for this relates to relatively low levels of new build. Ayrshire needs to construct significantly more new housing of high quality to enhance its attractiveness and meet the aspirations of existing residents and migrants. If Ayrshire is to stabilise or improve its situation relative to other areas, past rates of new build will have to be transformed. The Structure Plan is proposing a significant increase in housing land supply to improve this situation”. Ayrshire Joint Structure Plan Committee (2006c)
99 Affordability And Migration Within The Ayrshire Housing System
Residential development within the seven investment corridors as promoted by the Structure Plan is essentially aimed at galvanising the second tier of settlements in the region (with populations of between 5 and 10 thousand on average). The strategy is to stimulate the „housing economy‟ of these corridors, which it is anticipated will in turn create increased demand for local service provision (Ayrshire Joint Structure Plan Committee 2006c). In short, the corridors are about housing-led regeneration of local service economies rather than the attraction of major employers to (generally) small to medium sized towns. How this might affect the operation and structure of the underlying housing market areas depends on where gets developed first. This in turn depends on local plan policies and implementation.
The East Ayrshire local plan was adopted in 2003, with an alteration currently under consideration. In North Ayrshire the current local plan was adopted in 2005, with a (more limited) alteration adopted in 2006. Of the three authorities, South Ayrshire has had the most difficult experience in generating an agreed local plan, with a 2002 finalised plan subject to a local planning inquiry in 2004/5. The Council has now approved an amended version of the 2002 local plan for adoption30, but has also indicated that provisions of the 2006 Structure Plan in terms of new development requirements and revised policy will need to be addressed through an alteration or wider review of the adopted plan.
A number of possible issues arise from a review of the local plan documents, and from discussions held at the Irvine seminar:
Collectively, the plans reflect the policy direction set by the Structure Plan to target a significant quantity of new development into the core area, and specifically into the three towns of Ayr, Irvine and Kilmarnock, but there is no apparent recognition that in the short to medium term much of this development could be in direct competition.
There is no obvious mechanism in place to ensure that collectively the developments forthcoming provide a suitable range of property types and sizes.
The East Ayrshire Local Plan alteration is causing some evident concern in other areas that the housing numbers contained therein may be excessive, which could result in East Ayrshire capturing more than „its share‟ of household growth in the region.
Turning to the development corridors, some of these may be easier to promote than others. An obvious consideration in this context is the role of the neighbouring Glasgow City Region. There is a general view that the corridors to the north of Ayrshire may be the more successful, in terms of
30 Some participants at the Irvine seminar suggested that lack of a local plan, and restrictions on the amount of development land within South Ayrshire may have been responsible for the observed growth in migration between Ayr and Kilmarnock.
100 Affordability And Migration Within The Ayrshire Housing System attracting investment, as a result of proximity to the Glasgow and Clyde Valley area, and the migration and (work and leisure) commuting flows associated with it. At the same time, some see the current Glasgow City initiative to develop „new neighbourhoods‟ with significant numbers of family houses for owner occupation as a threat to the continued attraction of in migrants31.
More generally there is local concern regarding the viability of some of the corridor based service centres. Many see the investment corridors as competing for growth and feel it is unlikely that all of them can grow or even stabilise population numbers simultaneously.
Essentially what all this suggests more generally however is that there is a strong likelihood that the boundaries of housing market areas either wholly within Ayrshire or linking it with the Glasgow and Clyde Valley housing system are likely to become increasingly subject to change. There is therefore a strong case for keeping a close eye on housing market boundary issues over the coming decade.
Regeneration
The preceding discussion has touched upon issues of regeneration in a general sense. Within Ayrshire there are also specific areas where explicit regeneration initiatives are being developed and implemented. Within North Ayrshire for example, a significant number of Smaller Urban Renewal Initiatives (SURI) designated in the mid 1990s evolved into Social Inclusion Partnership (SIP) areas, covering a significant portion of Ardrossan, Saltcoats and Stevenston, parts of Kilbirnie, Beith and Longbar as well as parts of Kilwinning, Irvine (Vineburgh), Springside and a small area of Largs, and these continue to attract regeneration effort, with the latest initiative involving establishment of the Irvine Bay Urban Regeneration Company (IBURC)32.
In East Ayrshire the Community Regeneration Fund (CRF) is supporting activity within 18 communities, 12 of which33 are priority areas, and in South Ayr, CRF funding is targeted towards North Ayr, Wallacetown and Newton and Girvan.
As significant (if not more so) for the future development of Ayrshire housing markets is priority work to redevelop the centres of the major Ayrshire towns. The 2006 Structure Plan notes “Town centre regeneration initiatives have also been identified for Kilmarnock, reflecting its historic core; for Ayr,
31 Although as the Sasines data shows, it is more likely that the Garnock Valley and North Coast markets attract households from outwith the city itself 32 It should be noted plans for IBURC are currently at an early stage and the levels of public sector investment are not clear at this stage so it is difficult to predict any overall impact, but reasonable to conclude these will arise for the most part beyond 2012. 33 Bellsbank, Auchinleck, Catrine, Patna, Galston, Netherthird, Lugar and Logan, Drongan, Kilmarnock (North), Kilmarnock (South), Muirkirk, New Cumnock
101 Affordability And Migration Within The Ayrshire Housing System including the Fort and harbour areas and for Irvine and Kilwinning also including the harbour area and the opportunities presented by surplus industrial land”.
In 2005 East Ayrshire approved the Kilmarnock Town Centre Strategy, and this has been incorporated into the local plan alteration. The overarching strategy, which is to promote the core of Kilmarnock town centre as the prime location for the development of major retailing activity and as the preferred location for further high quality office, high density residential and commercial leisure activities, is certainly very comprehensive, and taken with other proposed residential development around Kilmarnock, could significantly affect the structure and operation of the Kilmarnock HMA. However, it is not clear such effects should be anticipated before 201234.
Similarly, South Ayrshire Council has recently identified a strategy for the renaissance of Ayr town centre, but as the strategy is seen as having a 20- year horizon, and the necessary resources are yet to be secured, the transformational potential of this strategy is some way off from being realised.
Transport
More immediate effects on Ayrshire housing markets might be expected to arise from further investment in transport infrastructure.
The 2006 Structure Plan is quite explicit as to requirements in this regard. With respect to road improvement this involves:
An enhanced east-west link to the M74 motorway including A78 improvements to Hunterston.
Upgrading the A737 between Kilwinning and Howwood.
Improvements to A77 between Kilmarnock and Stranraer.
Improvements to the A76 between Kilmarnock and Dumfries.
And traffic relief for communities within investment corridors. However, there is no immediate expectation of these developments eventuating.
The position is though different with respect to rail. The rail network in the west of Scotland is the most heavily used commuter network in the UK outside London (Scottish Executive 2006b). Overall, there were at least 928,000 rail journeys within Ayrshire, 1.7m from Ayrshire to Glasgow and 1.8m from Glasgow to Ayrshire in 2004/5, involving a network of 28
34 In 2005 the preparation of an action plan that seeks to deliver the vision and aims of the strategy was recommended – but it is not clear if one has actually been prepared as yet.
102 Affordability And Migration Within The Ayrshire Housing System stations35. The 2006 Structure Plan notes “Persistent constraint problems are experienced in relation to the Glasgow to Ayr electrified rail service, to the Glasgow to Dumfries line via Kilmarnock and to the efficient running of freight services”, and that “The rail network in Ayrshire is operating at capacity. The need to develop the rail network for enhanced rail passenger services is most acute for the Kilmarnock to Glasgow line where service frequency is limited by capacity constraints”.
The Scottish Executive strategy for railways (Scottish Executive 2006b) states as priority actions for 2006-9:
Platform and train lengthening on the Kilmarnock-Glasgow route
More frequent services on Kilmarnock-Glasgow route
Additional capacity on the Glasgow and South Western route36
In the medium term (2009-14) the strategy also includes:
Delivering the Glasgow Airport Rail Link, including an enhanced Glasgow-Paisley service
Longer trains to Ayrshire, including to Prestwick Airport
An additional hourly service on the Ayr route
Electrification of services to Kilmarnock
Much of this agenda is now embodied within the Network Rail Route Utilisation Strategy (RUS)37, including38:
35 The Scottish Executive (2006a) reports there are 6 in East Ayrshire, 12 in North Ayrshire and 10 in South Ayrshire. The passenger journey numbers are minimums as they exclude journeys for which full information is not held centrally, such as those made using Strathclyde Passenger Transport Zonecards. 36 The South West route serves Ayrshire (including Prestwick Airport) and Inverclyde. 37 Following the UK Government‟s Rail Review in 2004 and the Railways Act 2005, the Office of Rail Regulation modified Network Rail‟s Network Licence to require the establishment of Route Utilisation Strategies (RUS) across the rail network. The RUS considers the impact of continued passenger growth on the network and identifies gaps between the demand and capacity that will arise if no action is taken. It proposes a number of solutions for closing these gaps. Network Rail has recently published its RUS for the network in Scotland (Network Rail 2007). 38 It is also embodied in the consultative draft Regional Transport Strategy for Strathclyde (SPT 2006), which also has a very helpful map (appendix 3) incorporating both regeneration areas in Ayrshire and key elements of the transport strategy. Unfortunately reproduction of this map is not permitted, but it can be accessed here: http://www.spt.co.uk/
103 Affordability And Migration Within The Ayrshire Housing System
Provision of additional capacity between Glasgow and Kilmarnock by 2009, by extending Lugton Loop and also extending the platforms at stations between Barrhead and Kilmarnock, which will permit the operation of a half-hourly even interval service
Construction of the Glasgow Airport Rail Link by 2014, thereby relieving crowding on Ayrshire services (which may also be lengthened in the peak periods)
These service enhancements should serve to further open the housing market areas in the north and west of Ayrshire to incomers from the Glasgow and Clyde Valley. As the rail services involved are radial routes from Glasgow they are likely to do little in a direct sense to promote further integration of the Ayr, Kilmarnock and Irvine housing markets. One improvement that could do this however is North Ayrshire Council‟s stated intention (in its local plan) to “promote the route between Ardrossan, Saltcoats, Kilwinning, and Irvine, continuing to Kilmarnock, as a Quality Public Transport Corridor”.
104 Affordability And Migration Within The Ayrshire Housing System
6 Conclusions and recommendations
Current operation of Ayrshire housing markets
In line with the rest of Scotland, the Ayrshire housing market is dominated by second hand sales. In the period from January 2000 to June 2006 there was a steep rise in house prices throughout Ayrshire. In the first 6 months of 2006 the median second-hand price stood at £88,000 whilst the median new build price stood at £153,000. This represents an increase of over 90 per cent and 100 per cent respectively over the period.
The housing market, unlike that for many other products, has a strong spatial dimension. In order to understand the operation of the housing market it is therefore important to have a clear picture of its spatial structure. Looking at the pattern of migration flows of house purchasers we have confirmed that the Ayrshire housing system has a complex geographic structure involving seven housing market areas.
Four major housing markets - Ayr HMA, Kilmarnock HMA, Irvine HMA and the Three Towns HMA- operate across the core investment area outlined in the second Ayrshire Structure Plan. Whilst these four HMAs remain distinctive, there are signs that they are becoming more open and that the degree of inter-connectivity between them is increasing.
The three remaining housing market areas - the North Coast, Garnock Valley, and Girvan and South Carrick - are more open and rural in nature. In addition the Ayr HMA and Kilmarnock HMA each contain three distinctive sub-areas.
Looking across the seven housing market areas, the Ayr HMA has remained consistently the highest priced market in Ayrshire, although the North Coast HMA also stands out as an expensive area.
The four major HMAs have all experienced greater price pressure than the rest of Scotland. In the period 2000 to 2006 median second hand prices in these four housing markets increased by between 95 per cent and 105 percent compared to 89 per cent in the rest of Scotland.
Relative to the rest of Scotland these four areas together with the Girvan and South Carrick HMA and North Coast HMAs have also experienced relatively high rates of inflation at the upper end of the housing market. This has led to a widening of the house price distribution across Ayrshire, although the trend is most observable in South Ayrshire.
This widening of the house price distribution is consistent with recent restructuring of the Ayrshire economy, and a growth in better paid employment opportunities in Ayrshire.
House price data also suggests there are town-based price hotspots in Ayrshire, particularly Troon, Prestwick, Ayr and Kilmarnock. The existence of these hotspots can also be plausibly linked to local economic developments. For example the high prices in Prestwick may reflect the existence of relatively well-paid jobs in the Aerospace Park and strong local economic growth.
105 Affordability And Migration Within The Ayrshire Housing System
There is a view that the recently completed M77 extension has led to a rise in the numbers of house purchasers re-locating from Glasgow and Clyde Valley to parts of Ayrshire, putting upward pressure on local house prices. Detailed analysis of the available evidence does not confirm the existence of an M77 effect within East Ayrshire, although there may be some effect within North Ayrshire, particularly in the Irvine HMA and to a lesser extent the Garnock Valley HMA. However, there may be other factors that account for the growth in house price pressure in these two housing markets. For example improved rail services may be important in explaining the increase in migration from Glasgow and Clyde Valley into the Irvine HMA. Overall we conclude that whatever effect the M77 may have had or be having on Ayrshire housing markets, it is not a clear-cut one.
The rapid rise in house prices relative to incomes in the period from 2000 to 2006 resulted in a build up of affordability pressures across Ayrshire. By 2006 all seven HMAs had price to income ratios in excess of the DCLG recommended threshold of 3.5, but affordability pressures are most acute in the Ayr, Girvan and South Coast, Irvine and Kilmarnock HMAs.
The postal survey of in-movers, out-movers and local movers generated a fairly limited response, and the results must be treated with caution. The survey findings indicate that proximity to work and to a lesser extent proximity to family and friends are important considerations in the locational choices made by both local movers and out-movers. The findings also support other evidence that parts of Ayrshire are attractive to older and retired households. Surprisingly, in spite of price rises since 2000 and the growth of affordability pressures, the results suggest that the housing choices of recent purchasers continue to reflect preference as much as constraint.
Overall, the available evidence suggests that local economic developments have played a part in influencing the operation of the Ayrshire housing markets and house price trends. However, the data also confirms there is no simple read across from economic trends to housing market outcomes. Clearly factors such as changing commuting patterns, and housing market developments unrelated to local economic conditions (for example migration patterns arising from demand for housing for retirement) are also playing an important role in the operation of the Ayrshire housing markets.
Future prospects
The Experian view of economic prospects for Ayrshire to 2012 can be summarised as:
Continuing low interest rates
Moderating house price inflation
Modest but continued income and output growth in Ayrshire, with stronger growth in the neighbouring Glasgow and Clyde Valley economy
Net job losses within Ayrshire as a whole, but not necessarily within the core investment area
106 Affordability And Migration Within The Ayrshire Housing System
A modest growth in residence-based employment as a consequence of Ayrshire residents commuting to Glasgow and Clyde Valley and the wider central belt
Population loss, but an increase in the overall number of households seeking accommodation.
These conditions form the underlying context for the Ayrshire housing markets over the next five years.
As discussed earlier however, Experian‟s economic forecasts and GROS population and household projections do not take account of policy factors which could have a significant effect on the regeneration and growth of the Ayrshire economy and the operation of its housing markets.
As detailed in section five of this report, a significant amount of public policy is likely to influence the operation and shape of housing markets across Ayrshire in the coming decade and beyond. Of particular significance is the intention to concentrate new housing in the core investment area that covers the four major housing market areas. This combined with planned road improvements and rail investment is likely to have significant effects on the housing markets operating in Ayrshire over time.
The spatial configuration of Ayrshire is perhaps unusual in that it involves three local authority areas where, within each, the main settlement is close to the boundaries between the three, creating a more demanding context and a greater need for close co-ordination than is found in most other parts of Scotland.
The need for and importance of co-ordination between local plans and local housing strategies in Ayrshire is likely to increase over time both as a result of income growth and of the implications arising from the Ayrshire development framework. In a similar vein, the potential costs of not getting this co-ordination right are also likely to grow over time.
From a policy perspective therefore, an important issue for attention should be monitoring of the continued co-evolution of the housing market areas of Irvine, Kilmarnock, Ayr and the Three Towns over the period to 2012. In addition, it will also be important to monitor household flows to track:
The extent to which Cumnock becomes much more fully integrated into the Ayr HMA – or whether the housing and town centre proposals detailed in local and structure plans begin to increase flow from Cumnock to Kilmarnock HMA (albeit that the two towns may form part of a single large HMA in the medium to long term).
Whether new development in some local housing markets - especially North Coast and Garnock HMA – result in these areas becoming more fully absorbed into the Greater Glasgow HMA.
Beyond this, the underlying economic context will also influence the affordability of owner occupation across the Ayrshire housing system.
One possible outcome of the economic trends discussed above is a further dispersal of the house price distribution in some market areas as house prices at the top of the market continue to rise more rapidly than at the middle and more especially the lower end of the housing market.
107 Affordability And Migration Within The Ayrshire Housing System
Moreover, there remains a risk that land prices could continue to rise and thereby perpetuate the current trend of new house prices rising faster than second hand prices. This in turn could reduce the number of affordable units that could be provided if current levels of public funding for new housing development remain static in real terms.
Ultimately however, affordability pressures in the housing system and the difficulties households in employment face in being able to purchase suitable housing at a price they can afford depends on conditions in the resale market. In other words, the extent to which affordability will remain a problem into the future will depend on what happens with respect to second hand house prices. It is also important to re-emphasise that the key sector of the market in terms of affordability is the lower end of the second hand market, and it is price trends here that matter most.
The second hand house price trends evident since 2000 and particularly in the period 2002-6 are out of kilter with the experience of the preceding decade, and most economists believe they involve (at least in part) something of a short term asset price bubble rather than reflecting a long term structural shift in rates of house price inflation. For example in his most recent housing needs and affordability assessment for Scotland, Professor Bramley (Bramley et al 2006) notes that:
“There are a number of reasons why a correction should be expected. These include the experience of previous cycles; the relatively slow growth in incomes and modest rise in unemployment now being experienced; short term economic outlook indicating a lack of obvious sources of demand to stimulate the economy (e.g. over-indebted consumers, public spending growth flattening out, etc.); the obviously exceptional levels of unaffordability and low numbers of first time buyers; the likelihood of speculative investment demand weakening once price expectations turn down; the reasonably generous supply situation in most parts of Scotland”.
The Experian house price projections detailed in section five are consistent with this view and are based on the assumption that we are at or nearing the end of a house price cycle. Experian therefore predict that house price inflation to 2012 will be much more modest than that recently witnessed. However, forecasting is an imprecise art.
Assuming house prices and incomes increase over the next five years as Experian expect them to, affordability pressures are likely at the very least to get no worse. Moreover into the medium and longer term, if the rates of new supply anticipated in the Structure Plan are realised then, notwithstanding shorter-term pressure on land prices, overall supply constraints and inflationary house price pressures should both ease.
It is also important to bear in mind that as household incomes rise households are better able to support higher price to income ratios. Indeed, Bramley et al (2006) and other commentators have posed the question of whether the currently generally accepted price to income ratio threshold for affordability (particularly in light of historically low interest rates) is now too low.
108 Affordability And Migration Within The Ayrshire Housing System
For these and other reasons39 it is important not to overstate future possible affordability problems in Ayrshire. Nevertheless, we believe there is little prospect that there will be a steep decline in the affordability ratios reported in section three between now and 2012.
Anticipated growth in commuter led demand for housing is likely to offset any possible downward pressure on house prices that might otherwise have been expect to occur as a result of the modest performance anticipated of the Ayrshire economy.
Moreover, as already noted, modest economic performance across Ayrshire as a whole is consistent with employment growth at town level, and the gradually widening (and in the core development area fusing) of housing markets, where middle and higher income households search increasingly wider areas for suitable housing, are both consistent with localised affordability problems that are both severe and enduring
It is also possible that future in-migration by commuting households will create enduring affordability problems for local households already established or newly forming within specific local areas.
Finally, it is perhaps worth pointing that out a further implication of the expected increase of one-person (single earner) households is this in itself suggests a growth in affordability issues, not just in Ayrshire, but also across the UK.
Recommendations
Based on our analysis and the conclusions outlined above we recommend that:
The spatial structure of the housing markets across Ayrshire and in particular the spatial boundaries of the housing market areas identified in this report should be periodically reviewed. In particular we would suggest that the underlying HMA structure should be reassessed within three to four years.
The possibility of an M77 effect should be kept under more frequent review, given the possible localised affordability implications that would arise from such an effect. As such we would suggest that this should be revisited annually.
Affordability ratios at the HMA level should be monitored on an annual basis.
39 We have not been able to take account of household wealth in the affordability analysis of section 3
109 Affordability And Migration Within The Ayrshire Housing System
The three Council Local Plan departments set up a standing working part to co-ordinate residential development activity particularly in and between the towns of Ayr, Kilmarnock and Irvine.
North, East and South Ayrshire Councils jointly conduct an annual postal survey of movers into and around Ayrshire, to understand what motivates the patterns evident in market data, and whether these patterns continue to demonstrate the achievement of aspiration or the effect of unreasonable constraint.
110 Affordability And Migration Within The Ayrshire Housing System
Appendix 1: Industry definitions
Manufacturing SIC codes Broad sector Detailed sector categories (30) sub-divisions (2-digit)
Agriculture, Forestry & Fishing Agriculture, Forestry & Fishing 1,2&5 Mining & Oil & Gas Extraction 11 utilities Other Mining 10&12_14
Gas, Electricity & Water 40_41 Manufacturing Metals, Fuel Refining 23 minerals & chemicals Chemicals 24
Minerals 26
Metals 27_28 Engineering Machinery & Equipment 29
Electrical & Optical Equipment 30_33
Transport Equipment 34_35 Other Food, Drink & Tobacco 15_16 manufacturing Textiles & Clothing 17_19
Wood & Wood Products 20
Paper, Printing & Publishing 21_22
Rubber & Plastics 25
Other manufacturing 36_37 Construction Construction 45 Distribution, Retailing 52 hotels & catering Wholesaling 50_51
Hotels & Catering 55 Transport & Transport 60_63 communications Communications 64 Financial & Banking & Insurance 65_67 business services Other Financial & Business Services 70etc Business Services 72&74 Other (mainly Public Admin. & Defence 75 public) services Education 80
Health 85
Other Services 90_95
111 Affordability And Migration Within The Ayrshire Housing System
Appendix 2: Ayrshire HMA demographic profiles relative to Scotland
In the following analysis we use indexes to summarise differences. For example, if upper echelons account for 10 per cent of population in a particular HMA but only 5 per cent of Scottish population the index value is 200 (Scotland = 100). The figures show that:
Ayr HMA (Cumnock sub-area)
Around 73 per cent of the population fall into one of the following three groups:
Has double the Scottish average for low income families and there has been an increase in this group since 2003.
Renters now owning are also relatively more prevalent in the population.
At 10 per cent and increasing, has a high proportion of shades of grey relative to the Scottish average.
Ayr HMA (Urban sub-area)
With a population in excess of 120,000 it has a reasonable number of people in all mosaic groups except urban sophisticates.
Renters now owning are 33 per cent more prevalent in this sub-area than Scotland, accounting for 22 per cent of population in this area.
Upper echelons, the most affluent group, are over 50 per cent more prevalent in the population compared to Scotland and their numbers expanded by around 200 between 2003 and 2005. They accounted for 11 per cent of population in 2005.
The Small town propriety group are 50 per cent more prevalent in this area than Scotland, but have decreased by 200 since 2003.
Girvan and South Carrick
Almost nine out of 10 people fall into one of 4 mosaic groups:
The rural nature of this sub-area explains why country lifestyles account for 35 per cent of population and are over three times more prevalent relative to Scottish average
Renters now owning are 33 per cent more prevalent than in Scotland, although this has increased. They also account for a similar proportion of population in Girvan and South Carrick as they do in Ayr HMA (urban sub-area) – 22 per cent.
The fourth group are small town propriety are also somewhat more commonly found in this area compared to Scotland as a whole.
112 Affordability And Migration Within The Ayrshire Housing System
Garnock Valley HMA
Around eight out of 10 people fall into one of the following four groups:
At 32 per cent, low income families are over two times more prevalent in Garnock Valley than at the Scottish level. The share of local residents in this group has increased very slightly since 2003.
Families on the move are 25 per cent more prevalent than in Scotland as a whole and account for 18 per cent of all people.
Renters now owning are the third largest population group (17 per cent) whilst small town propriety are the fourth largest (12 per cent).
North Coast HMA
Town centre singles are over 3.5 times more prevalent than in Scotland as a whole and over 4 times more prevalent than in Ayrshire as a whole. This group accounted for 25 per cent of population in 2005, compared with 6 per cent for Ayrshire.
At 16%, upper echelons are twice as prevalent as found at the Scottish level (7%).
Families on the move and small town propriety are also more prevalent. Other than shades of grey, the remaining groups are under-represented compared to the Scottish average.
Three Towns HMA
Low-income families (30 per cent) are twice as prevalent in this area compared with Scotland, although they have not grown since 2003.
Shades of grey are around 50 per cent more prevalent compared to Scotland as a whole. This group has grown since 2003, but actual numbers are small (4,000 out of an HMA population of 36,782).
Most other demographic groups are under-represented in the HMA.
Kilmarnock HMA (Urban and North sub-area)
The Kilmarnock urban sub-area displays considerable variety in its demographic mix and also seems to changing most rapidly.
Renters now owning are most over-represented, with an index score of 140 (Scotland=100) in 2005. They are the largest group, accounting for 23 per cent of total population, similar to Ayrshire average.
Families on the move is the second most over-represented group (compared to Scotland). In 2005 families on the move accounted for 19 per cent of population compared to 17 per cent in 2003, driven by growth of over 1,000 people in this population group.
113 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock HMA (Irvine Valley sub-area)
Low-income families (24 per cent) are more prevalent than for either Ayrshire or Scotland as a whole. The proportion of low income families has also increased since 2003.
Shades of grey accounted for 12 per cent of total population in 2005, compared with 8 per cent for Ayrshire but the proportion of the population in this group has not changed since 2003.
Families on the move are a growing population growth, similarly to the neighbouring urban Kilmarnock sub-area. They account for 15 per cent of total population, similar to Ayrshire.
Small town propriety accounted for 18 per cent of total population in 2005, compared with 13 per cent for Ayrshire as a whole.
At 13 per cent, this area has a relatively high proportion of people classed as country lifestyles.
The proportion of „renters now owners‟ is similar to the Scottish average but considerably below the Ayrshire average.
The remaining mosaic groups account for a relatively small share of total population compared to Scotland.
Irvine HMA
The largest population group in the Irvine HMA is „renters now owning‟ (32 per cent). This group is nearly twice as significant in the Irvine HMA population compared with Scotland.
The second largest group is low-income families (24 per cent), accounting for a larger share of local population than is the case in Scotland and Ayrshire.
Families on the move (18 per cent) are a growing group in the population and formed the third largest population group in 2005.
Aside form small town propriety, all other mosaic groups are under- represented in the local population relative to Ayrshire and Scotland. .
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Ayrshire HMA mosaic group profile relative to the Scotland wide distribution Ayr HMA (Cumnock sub-area)
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250
Ayr HMA (Urban sub-area)
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200
Girvan and South Carrick HMA
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250 300 350 400
115 Affordability And Migration Within The Ayrshire Housing System
Garnock Valley HMA
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250
North Coast HMA
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250 300 350 400
Three Towns HMA
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250
116 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock HMA (Urban sub-area)
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 20 40 60 80 100 120 140 160
Kilmarnock HMA (Irvine Valley sub- area)
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200
Irvine HMA
2003 2005
J Shades of Grey I State Beneficiaries H Low Income Families G Renters Now Owning F Town Centre Singles E Urban Sophisticates D Country Lifestyles C Small Town Propriety B Families on the Move A Upper Echelons
0 50 100 150 200 250
117 Affordability And Migration Within The Ayrshire Housing System
Appendix 3: Internal migration within Ayrshire
East Ayrshire - internal migration % Average % of moves % of Group as % annual 2000 moves of total Ayrshire change 2005 population Upper echelons 2 3 3 6 Families on the move 11 11 15 15 Small town propriety 3 5 5 13 Country Lifestyles 6 9 10 7 Urban sophisticates 5 2 3 0 Town centre singles 2 13 12 6 Renters now owning 0 19 16 23 Low income families 2 29 27 19 State beneficiaries 7 5 7 4 Shades of grey 4 3 3 8 All 4 100 100 100 From South Ayrshire % % % Group as % Average of moves of of total Ayrshire annual 2000 moves population change 2005 Upper echelons 7 9 8 6 Families on the move 12 13 14 15 Small town propriety 12 7 8 13 Country Lifestyles 11 13 14 7 Urban sophisticates 20 2 3 0 Town centre singles 10 12 12 6 Renters now owning 6 7 6 23 Low income families 9 22 21 19 State beneficiaries 10 5 5 4 Shades of grey 8 9 8 8 All 10 100 100 100 From North Ayrshire % % % Group as % Average of moves of of total Ayrshire annual 2000 moves population change 2005 Upper echelons 28 2 4 6 Families on the move 11 19 24 15 Small town propriety 15 3 5 13 Country Lifestyles 6 10 10 7 Urban sophisticates 0 0 0 0 Town centre singles 7 11 11 6 Renters now owning -2 17 11 23 Low income families 7 30 29 19 State beneficiaries -1 3 2 4 Shades of grey 6 4 3 8 All 7 100 100 100
118 Affordability And Migration Within The Ayrshire Housing System
Source: Experian, 2007 North Ayrshire - internal migration % Average % % Group as % annual of moves of moves of total Ayrshire change 2000 2005 population Upper echelons 1 4 3 6 Families on the move 7 12 14 15 Small town propriety 1 6 5 13 Country Lifestyles 4 11 11 7 Urban sophisticates 10 1 1 0 Town centre singles 2 14 13 6 Renters now owning 3 19 18 23 Low income families 5 24 25 19 State beneficiaries 5 5 5 4 Shades of grey 4 5 5 8 All 4 100 100 100 From South Ayrshire % % % Group as % Average of moves of moves of total Ayrshire annual 2000 2005 population change Upper echelons 17 6 8 6 Families on the move 14 14 17 15 Small town propriety 12 12 15 13 Country Lifestyles 2 15 11 7 Urban sophisticates 15 2 3 0 Town centre singles -2 19 11 6 Renters now owning 8 5 5 23 Low income families 10 15 16 19 State beneficiaries -9 5 2 4 Shades of grey 16 8 11 8 All 8 100 100 100 From East Ayrshire % % % Group as % Average of moves of moves of total Ayrshire annual 2000 2005 population change Upper echelons 4 6 5 6 Families on the move 11 16 19 15 Small town propriety 5 4 4 13 Country Lifestyles 3 14 12 7 Urban sophisticates -4 6 4 0 Town centre singles 5 12 11 6 Renters now owning 4 12 10 23 Low income families 8 23 25 19 State beneficiaries 25 3 6 4 Shades of grey 10 3 4 8 All 7 100 100 100 Source: Experian, 2007
119 Affordability And Migration Within The Ayrshire Housing System
South Ayrshire - internal migration % % % Group as % Average of moves of moves of total Ayrshire annual 2000 2005 population change Upper echelons 5 11 11 6 Families on the move 7 11 12 15 Small town propriety 5 8 8 13 Country Lifestyles 5 11 12 7 Urban sophisticates 14 1 2 0 Town centre singles 4 15 14 6 Renters now owning 3 8 7 23 Low income families 4 20 19 19 State beneficiaries 5 5 5 4 Shades of grey 6 10 11 8 All 5 100 100 100 From East Ayrshire % % % Group as % Average of moves of moves of total Ayrshire annual 2000 2005 population change Upper echelons 2 4 4 6 Families on the move 19 11 22 15 Small town propriety 0 10 8 13 Country Lifestyles 5 10 10 7 Urban sophisticates 7 2 3 0 Town centre singles 1 9 8 6 Renters now owning 8 11 13 23 Low income families -2 30 22 19 State beneficiaries 1 7 6 4 Shades of grey -4 7 5 8 All 4 100 100 100 From North Ayrshire % % % Group as % Average of moves of moves of total Ayrshire annual 2000 2005 population change Upper echelons 1 6 5 6 Families on the move 6 27 29 15 Small town propriety 7 6 6 13 Country Lifestyles 0 11 9 7 Urban sophisticates -8 1 0 0 Town centre singles -3 10 7 6 Renters now owning 11 9 12 23 Low income families 5 23 24 19 State beneficiaries 8 2 3 4 Shades of grey 5 5 5 8 All 5 100 100 100 Source: Experian, 2007
120 Affordability And Migration Within The Ayrshire Housing System
Appendix 4: Detailed definition of major and local HMAs
Major HMA Settlements Settlements Ayr Ayr Urban sub area Cumnock sub area Ayr Alloway Auchmillan
Annbank Auchinleck Auchincruive Catrine
Ayr Cronberry
Barassie Cumnock Coalhall Muirkirk
Coylton Mossgiel Craigie Sorn
Crosshill
CroyBrae Doonfoot Doon Valley Sub area
Drumshang Bellsbank Dundonald Burnton Dunure Dalmellington Fisherton Dalrymple Kirkmichael Drongan Loans Hayhill Mauchline Hollybush Maybole Ochiltree Minishant Patna Monkton Polnessan Mossblown Rankinston Old Toll Waterside Prestwick St. Quivox Sundrum Symington Trabboch Tarbolton Troon
121 Affordability And Migration Within The Ayrshire Housing System
Local HMA Settlements Local HMA Settlements Three Ardrossan Garnock Barrmill Towns Valley Saltcoats Beith Stevenston Dalry West Kilbride Gateside Ardeer Glengarnock Seamill Kilbirnie Irvine Irvine North Fairlie Kilwinning Coast Auchengate Largs Bourtreehill North Millport Bourtreehill South Portencross Broomlands Skelmorlie Castlepark Fairlie Cunninghamhead Dreghorn Drybridge Girvan And Ballantrae Girdle Toll South Barr Carrick Lawthorn Barrhill Town Old Perceton Colmonell Town Perceton Culzean Springside Dailly Stanecastle Girvan Hersonford Kilmarnock Kilmarnock Urban sub area Kirkoswald
Crosshouse Knockdolian Earlston Laggan Gatehead Lendalfoot Knockentiber Maidens Shortlees Pinmore Pinwherry Northern sub area Dunlop Fenwick Kilmaurs Lugton Stewarton
Irvine Valley sub area Crookedholm Darvel Galston Hurlford Moscow Newmilns
122 Affordability And Migration Within The Ayrshire Housing System
Appendix 5: Additional price and transactions data
Transactions Totals by Type By Town All Sales Irvine Ardrossan Ayr Cumnock Girvan New Build 314 129 608 77 23 RTB 816 298 855 328 149 Second 2,726 1,094 6,040 828 643 Hand Other 584 247 1,115 207 219 Total 4,440 1,768 8,618 1,440 1,034
Prestwick Kilmarnock Kilwinning Largs Maybole New Build 68 978 350 118 86 RTB 179 1,351 360 135 107 Second 2,044 5,102 1,805 2,314 460 Hand Other 326 1,013 329 486 129 Total 2,617 8,444 2,844 3,053 782
Saltcoats Stevenston Stewarton Troon New Build 223 56 133 130 RTB 342 287 120 220 Second 1,361 785 814 2,107 Hand Other 287 195 177 396 Total 2,213 1,323 1,244 2,853
Percentage price increase 2000q1-2006q2 (second hand prices)
Ardrossan Ayr Cumnock Girvan Irvine LQ 88% 98% 54% 63% 113% Median 59% 101% 74% 83% 105% UQ 95% 108% 101% 64% 62%
Kilmarnock Kilwinning Largs Maybole Prestwick LQ 116% 109% 81% 68% 128% Median 119% 104% 70% 109% 136% UQ 114% 130% 98% 62% 148%
Saltcoats Stevenston Stewarton Troon Ayrshire LQ 118% 96% 96% 138% 91% Median 96% 108% 39% 141% 91% UQ 92% 95% 47% 159% 102%
123 Affordability And Migration Within The Ayrshire Housing System
Average (Mean) Price paid (second hand sales) 2000 q1-2006q2
LOCAL Ayr Ayr Ayr Doon Kilmarnock Kilmarnock Kilmarnock Urban Cumnock Valley Irvine Valley Urban Northern YEAR Mean Mean Mean Mean Mean Mean 2000 £65,858 £42,279 £46,772 £46,782 £46,257 £65,978 2001 £68,530 £40,116 £43,745 £49,718 £52,474 £64,213 2002 £76,347 £45,230 £45,087 £49,512 £51,611 £67,933 2003 £89,808 £48,018 £46,157 £55,379 £65,520 £79,381 2004 £104,830 £58,192 £63,472 £60,821 £73,995 £116,859 2005 £125,082 £72,127 £80,842 £86,717 £96,746 £109,362 2006 £137,182 £67,900 £93,722 £89,618 £96,568 £96,016 Total
INCOMERS Ayr Ayr Ayr Doon Kilmarnock Kilmarnock Kilmarnock Urban Cumnock Valley Irvine Valley Urban Northern YEAR Mean Mean Mean Mean Mean Mean 2000 £73,795 £59,375 £60,349 £46,863 £43,111 £68,326 2001 £80,899 £54,920 £63,093 £55,201 £48,176 £70,483 2002 £88,569 £55,870 £66,894 £53,610 £52,920 £78,416 2003 £104,413 £61,899 £69,854 £67,559 £59,623 £93,904 2004 £123,891 £67,398 £89,314 £78,991 £71,168 £125,323 2005 £137,191 £78,038 £99,403 £94,989 £83,327 £134,804 2006 £158,486 £76,677 £104,571 £90,892 £88,736 £127,236 Total
Difference Ayr Ayr Ayr Doon Kilmarnock Kilmarnock Kilmarnock Urban Cumnock Valley Irvine Valley Urban Northern YEAR 2000 £7,937 £17,096 £13,577 £82 -£3,146 £2,348 2001 £12,370 £14,804 £19,348 £5,483 -£4,299 £6,270 2002 £12,223 £10,640 £21,807 £4,098 £1,309 £10,483 2003 £14,606 £13,881 £23,697 £12,180 -£5,898 £14,523 2004 £19,061 £9,206 £25,842 £18,169 -£2,826 £8,464 2005 £12,108 £5,911 £18,562 £8,272 -£13,419 £25,442 2006 £21,304 £8,778 £10,849 £1,274 -£7,831 £31,220
124 Affordability And Migration Within The Ayrshire Housing System
Average (Mean) Price paid (second hand sales) 2000 q1-2006q2
North Garnock Girvan & South Three LOCAL Coast Valley Irvine Carrick Towns YEAR Mean Mean Mean Mean Mean 2000 £59,923 £48,022 £46,092 £55,114 £46,718 2001 £65,564 £47,265 £46,437 £47,140 £46,815 2002 £70,748 £51,438 £51,294 £47,301 £49,475 2003 £77,775 £57,759 £61,882 £65,219 £55,872 2004 £100,127 £64,505 £74,156 £71,675 £72,200 2005 £104,923 £79,125 £90,187 £86,526 £87,256 2006 £113,008 £83,006 £93,390 £98,297 £97,142 Total
INCOMERS North Garnock Girvan & South Three Coast Valley Irvine Carrick Towns YEAR Mean Mean Mean Mean Mean 2000 £66,758 £61,256 £48,137 £62,028 £54,654 2001 £68,634 £52,329 £50,162 £75,617 £51,772 2002 £74,052 £56,182 £55,160 £64,926 £56,717 2003 £85,573 £70,096 £60,885 £87,164 £70,712 2004 £98,934 £75,534 £77,141 £110,564 £89,579 2005 £108,105 £103,699 £89,947 £127,787 £90,735 2006 £118,358 £102,006 £88,706 £130,168 £102,164 Total
Difference North Garnock Girvan & South Three Coast Valley Irvine Carrick Towns YEAR 2000 £6,835 £13,234 £2,044 £6,915 £7,936 2001 £3,070 £5,064 £3,725 £28,477 £4,957 2002 £3,304 £4,745 £3,866 £17,624 £7,242 2003 £7,798 £12,337 -£996 £21,945 £14,841 2004 -£1,194 £11,028 £2,985 £38,889 £17,379 2005 £3,182 £24,574 -£240 £41,261 £3,479 2006 £5,351 £19,000 -£4,684 £31,870 £5,022
125 Affordability And Migration Within The Ayrshire Housing System
Appendix 6: Affordability estimates for Ayrshire
As explained in section three, the definition of affordability used for this study is that recommended by the Department of Communities and Local Government. Under this definition, a household is judged able to afford to buy a home that costs up to 3.5 times the gross household income for a single earner household, or 2.9 times the household income for dual income households.
CACI Paycheck (Central) Estimates
Rest Of Scotland Affordability Ratios LQ Median UQ Mean 2002 3.4 3.1 3.0 3.3 2003 3.7 3.5 3.5 3.7 2004 4.4 4.0 4.0 4.3 2005 4.9 4.3 4.1 4.4 2006 5.0 4.3 4.1 4.4
Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.9 2.5 2.6 2.7 2003 3.1 2.9 3.0 3.1 2004 3.7 3.3 3.5 3.6 2005 4.4 3.8 3.9 3.9 2006 4.6 3.8 3.8 4.0
East Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.8 2.3 2.4 2.4 2003 3.0 2.6 2.7 2.8 2004 3.5 3.1 3.3 3.3 2005 4.2 3.6 3.7 3.6 2006 4.5 3.6 3.4 3.5
North Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.7 2.3 2.5 2.5 2003 2.9 2.6 2.7 2.8 2004 3.5 3.0 3.1 3.3 2005 4.1 3.4 3.6 3.6 2006 4.4 3.4 3.6 3.7
126 Affordability And Migration Within The Ayrshire Housing System
South Ayrshire Affordability Ratios LQ Median UQ Mean 2002 3.2 2.8 2.9 3.1 2003 3.7 3.5 3.5 3.6 2004 4.3 3.8 3.9 4.0 2005 4.8 4.4 4.3 4.4 2006 5.3 4.9 4.6 4.8
Ayr HMA Affordability Ratios LQ Median UQ Mean 2002 3.2 2.9 2.9 3.1 2003 3.6 3.4 3.4 3.5 2004 4.1 3.7 3.8 3.9 2005 4.7 4.2 4.3 4.3 2006 5.0 4.5 4.3 4.6
Ayr (Urban) Affordability Ratios LQ Median UQ Mean 2002 3.2 3.0 2.9 3.1 2003 3.7 3.4 3.4 3.5 2004 4.3 3.8 3.9 4.0 2005 4.8 4.4 4.3 4.3 2006 5.3 4.8 4.6 4.8
Ayr (Cumnock) Affordability Ratios LQ Median UQ Mean 2002 2.9 2.2 2.2 2.3 2003 2.7 2.3 2.2 2.5 2004 3.2 2.6 2.7 2.8 2005 3.5 3.1 3.1 3.1 2006 3.5 3.0 2.8 3.0
Ayr (Doon Valley) Affordability Ratios LQ Median UQ Mean 2002 3.2 2.7 2.3 2.8 2003 3.0 2.6 2.7 2.8 2004 3.5 3.0 3.2 3.7 2005 4.5 3.8 3.7 4.0 2006 4.9 4.0 4.0 4.2
127 Affordability And Migration Within The Ayrshire Housing System
Garnock Valley HMA Affordability Ratios LQ Median UQ Mean 2002 2.6 2.0 2.1 2.3 2003 2.8 2.2 2.5 2.6 2004 3.1 2.6 2.7 2.8 2005 3.5 3.0 3.2 3.3 2006 4.0 3.1 3.3 3.4
Girvan and South Carrick Affordability Ratios LQ Median UQ Mean 2002 3.1 2.2 2.5 2.7 2003 3.8 3.2 3.4 3.5 2004 4.0 3.7 3.7 4.2 2005 4.4 3.9 4.4 4.4 2006 4.8 3.9 4.6 4.7
Irvine HMA Affordability Ratios LQ Median UQ Mean 2002 2.7 2.0 2.2 2.2 2003 2.9 2.4 2.5 2.5 2004 3.7 2.8 2.9 3.0 2005 4.4 3.3 3.3 3.3 2006 4.6 3.4 3.2 3.4
Kilmarnock HMA Affordability Ratios LQ Median UQ Mean 2002 2.7 2.2 2.3 2.4 2003 3.0 2.7 2.7 2.8 2004 3.6 3.1 3.2 3.3 2005 4.3 3.6 3.6 3.6 2006 4.5 3.5 3.2 3.5
Kilmarnock (Irvine Valley) Affordability Ratios LQ Median UQ Mean 2002 2.7 2.2 2.2 2.2 2003 2.8 2.4 2.3 2.6 2004 3.2 2.8 2.7 2.9 2005 3.9 3.3 3.3 3.4 2006 4.0 3.2 3.0 3.3
128 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock (Northern) Affordability Ratios LQ Median UQ Mean 2002 2.8 3.0 2.7 2.7 2003 3.4 3.5 3.1 3.1 2004 4.3 4.8 3.9 4.1 2005 4.7 4.9 3.9 4.1 2006 4.6 4.1 3.7 3.7
Kilmarnock (Urban) Affordability Ratios LQ Median UQ Mean 2002 2.8 2.2 2.1 2.3 2003 3.1 2.6 2.4 2.7 2004 3.7 2.9 2.7 3.0 2005 4.6 3.6 3.2 3.5 2006 4.8 3.6 3.2 3.5
North Coast HMA Affordability Ratios LQ Median UQ Mean 2002 3.0 2.9 2.9 2.9 2003 3.2 2.8 2.9 3.1 2004 3.8 3.4 3.7 3.7 2005 3.9 3.7 3.9 3.7 2006 4.2 3.8 4.0 3.9
Three Towns HMA Affordability Ratios LQ Median UQ Mean 2002 2.7 2.2 2.2 2.2 2003 2.8 2.4 2.4 2.6 2004 3.2 2.9 3.1 3.2 2005 3.9 3.2 3.4 3.3 2006 4.3 3.4 3.5 3.6
129 Affordability And Migration Within The Ayrshire Housing System
ASHE Based (Sensitivity Test 1) Estimates
Rest of Scotland Affordability Ratios LQ Median UQ Mean 2002 3.2 3.3 3.7 3.8 2003 3.5 3.8 4.4 4.2 2004 4.1 4.4 5.0 4.8 2005 4.5 4.7 5.1 5.0 2006 4.7 4.7 5.1 5.0
Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.4 2.5 3.0 2.9 2003 2.7 2.9 3.4 3.3 2004 3.2 3.3 4.0 3.8 2005 3.7 3.8 4.4 4.2 2006 3.9 3.8 4.4 4.3
East Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.3 2.3 2.6 2.7 2003 2.6 2.6 3.1 3.1 2004 3.1 3.1 3.8 3.7 2005 3.8 3.7 4.3 4.1 2006 3.8 3.5 3.9 3.8
North Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.4 2.4 2.9 2.6 2003 2.6 2.8 3.2 3.0 2004 2.9 3.2 3.5 3.5 2005 3.4 3.5 4.0 3.6 2006 3.9 3.8 4.1 4.0
South Ayrshire Affordability Ratios LQ Median UQ Mean 2002 2.7 2.7 3.4 3.3 2003 3.1 3.3 4.0 3.7 2004 3.6 3.7 4.6 4.3 2005 4.0 4.3 5.1 4.8 2006 4.4 4.6 5.5 5.2
130 Affordability And Migration Within The Ayrshire Housing System
Ayr HMA Affordability Ratios LQ Median UQ Mean 2002 2.8 2.9 3.3 3.3 2003 3.0 3.4 3.9 3.7 2004 3.5 3.7 4.4 4.2 2005 4.0 4.2 4.9 4.6 2006 4.3 4.5 5.0 4.9
Ayr (Urban) Affordability Ratios LQ Median UQ Mean 2002 2.7 3.0 3.3 3.3 2003 3.2 3.4 3.9 3.8 2004 3.6 3.8 4.5 4.3 2005 4.1 4.4 4.9 4.7 2006 4.6 4.8 5.2 5.1
Ayr (Cumnock ) Affordability Ratios LQ Median UQ Mean 2002 2.5 2.2 2.5 2.5 2003 2.3 2.3 2.5 2.6 2004 2.7 2.6 3.1 3.0 2005 3.0 3.1 3.6 3.4 2006 3.0 3.0 3.2 3.2
Ayr (Doon Valley) Affordability Ratios LQ Median UQ Mean 2002 2.7 2.7 2.6 3.1 2003 2.5 2.6 3.1 3.1 2004 2.9 3.0 3.7 3.9 2005 3.8 3.8 4.2 4.3 2006 4.2 4.0 4.6 4.5
Garnock Valley HMA Affordability Ratios LQ Median UQ Mean 2002 2.2 2.0 2.4 2.4 2003 2.4 2.2 2.9 2.8 2004 2.6 2.6 3.1 3.0 2005 3.0 3.0 3.7 3.6 2006 3.4 3.1 3.8 3.6
131 Affordability And Migration Within The Ayrshire Housing System
Girvan and South Carrick Affordability Ratios LQ Median UQ Mean 2002 2.6 2.2 2.9 2.9 2003 3.2 3.2 3.9 3.8 2004 3.4 3.7 4.3 4.5 2005 3.8 3.9 5.0 4.8 2006 4.1 3.9 5.3 5.1
Irvine HMA Affordability Ratios LQ Median UQ Mean 2002 2.3 2.0 2.5 2.4 2003 2.5 2.4 2.9 2.7 2004 3.1 2.8 3.3 3.2 2005 3.8 3.3 3.7 3.6 2006 4.0 3.4 3.6 3.6
Kilmarnock HMA Affordability Ratios LQ Median UQ Mean 2002 2.3 2.2 2.6 2.6 2003 2.6 2.7 3.1 3.0 2004 3.1 3.1 3.7 3.6 2005 3.7 3.6 4.1 3.9 2006 3.9 3.5 3.7 3.8
Kilmarnock (Irvine Valley) Affordability Ratios LQ Median UQ Mean 2002 2.3 2.2 2.5 2.4 2003 2.4 2.4 2.6 2.8 2004 2.7 2.8 3.0 3.1 2005 3.3 3.3 3.8 3.7 2006 3.4 3.2 3.4 3.5
Kilmarnock (Northern) Affordability Ratios LQ Median UQ Mean 2002 2.4 3.0 3.1 2.9 2003 2.9 3.5 3.6 3.4 2004 3.6 4.8 4.5 4.4 2005 4.0 4.9 4.5 4.4 2006 3.9 4.1 4.2 4.0
132 Affordability And Migration Within The Ayrshire Housing System
Kilmarnock (Urban) Affordability Ratios LQ Median UQ Mean 2002 2.3 2.2 2.4 2.5 2003 2.7 2.6 2.8 2.9 2004 3.2 2.9 3.1 3.2 2005 3.9 3.6 3.6 3.8 2006 4.1 3.6 3.7 3.8
North Coast HMA Affordability Ratios LQ Median UQ Mean 2002 2.6 2.9 3.3 3.1 2003 2.7 2.8 3.3 3.4 2004 3.2 3.4 4.2 4.0 2005 3.3 3.7 4.5 4.0 2006 3.6 3.8 4.6 4.2
Three Towns HMA Affordability Ratios LQ Median UQ Mean 2002 2.3 2.2 2.5 2.4 2003 2.4 2.4 2.7 2.7 2004 2.7 2.9 3.5 3.4 2005 3.3 3.2 3.9 3.6 2006 3.7 3.4 4.0 3.9
133 Affordability And Migration Within The Ayrshire Housing System
Bramley Based (Sensitivity Test 2) Estimates
Rest of Scotland Affordability Ratios LQ Median UQ Mean 2002 4.3 3.9 3.8 4.2 2003 4.8 4.4 4.4 4.7 2004 5.5 5.1 5.1 5.4 2005 6.2 5.4 5.2 5.6 2006 6.4 5.5 5.2 5.6
Ayrshire Affordability Ratios LQ Median UQ Mean 2002 3.6 3.1 3.3 3.4 2003 4.0 3.7 3.8 3.9 2004 4.7 4.2 4.5 4.5 2005 5.6 4.8 4.9 4.9 2006 5.8 4.8 4.9 5.1
East Ayrshire Affordability Ratios LQ Median UQ Mean 2002 3.5 2.9 3.0 3.1 2003 3.8 3.3 3.5 3.6 2004 4.5 3.9 4.2 4.2 2005 5.4 4.6 4.7 4.6 2006 5.7 4.5 4.4 4.5
North Ayrshire Affordability Ratios LQ Median UQ Mean 2002 3.5 2.9 3.1 3.1 2003 3.7 3.3 3.5 3.6 2004 4.4 3.9 4.0 4.2 2005 5.2 4.3 4.6 4.5 2006 5.6 4.4 4.6 4.7
South Ayrshire Affordability Ratios LQ Median UQ Mean 2002 4.1 3.6 3.7 3.9 2003 4.8 4.4 4.4 4.5 2004 5.5 4.9 5.0 5.2 2005 6.2 5.7 5.5 5.6 2006 6.7 6.2 5.9 6.1
134 Affordability And Migration Within The Ayrshire Housing System
Ayr HMA Affordability Ratios LQ Median UQ Mean 2002 4.1 3.7 3.7 3.9 2003 4.5 4.3 4.3 4.4 2004 5.2 4.7 4.9 5.0 2005 6.0 5.4 5.4 5.4 2006 6.4 5.7 5.5 5.8
Ayr (Urban) Affordability Ratios LQ Median UQ Mean 2002 4.1 3.8 3.7 3.9 2003 4.8 4.4 4.4 4.5 2004 5.4 4.8 5.0 5.1 2005 6.1 5.6 5.5 5.5 2006 6.8 6.1 5.8 6.1
Ayr (Cumnock) Affordability Ratios LQ Median UQ Mean 2002 3.7 2.8 2.8 3.0 2003 3.4 3.0 2.8 3.1 2004 4.0 3.3 3.5 3.5 2005 4.4 3.9 4.0 4.0 2006 4.5 3.8 3.6 3.8
Ayr (Doon Valley) Affordability Ratios LQ Median UQ Mean 2002 4.0 3.4 2.9 3.6 2003 3.8 3.3 3.4 3.6 2004 4.4 3.8 4.1 4.7 2005 5.7 4.8 4.7 5.0 2006 6.2 5.1 5.1 5.3
Garnock Valley HMA Affordability Ratios LQ Median UQ Mean 2002 3.3 2.5 2.7 2.9 2003 3.5 2.8 3.2 3.3 2004 3.9 3.3 3.4 3.5 2005 4.4 3.8 4.1 4.2 2006 5.1 4.0 4.2 4.3
135 Affordability And Migration Within The Ayrshire Housing System
Girvan & South Carrick Affordability Ratios LQ Median UQ Mean 2002 3.9 2.8 3.2 3.4 2003 4.8 4.1 4.3 4.5 2004 5.1 4.6 4.7 5.3 2005 5.6 5.0 5.6 5.7 2006 6.1 5.0 5.9 6.0
Irvine HMA Affordability Ratios LQ Median UQ Mean 2002 3.5 2.6 2.8 2.8 2003 3.7 3.1 3.2 3.2 2004 4.7 3.6 3.6 3.8 2005 5.6 4.3 4.2 4.3 2006 5.9 4.3 4.0 4.3
Kilmarnock HMA Affordability Ratios LQ Median UQ Mean 2002 3.4 2.8 2.9 3.0 2003 3.9 3.4 3.5 3.6 2004 4.6 4.0 4.1 4.2 2005 5.5 4.5 4.5 4.6 2006 5.8 4.4 4.1 4.5
Kilmarnock (Irvine Valley) Affordability Ratios LQ Median UQ Mean 2002 3.4 2.8 2.7 2.8 2003 3.5 3.1 2.9 3.3 2004 4.0 3.5 3.4 3.6 2005 4.9 4.2 4.2 4.3 2006 5.1 4.1 3.8 4.2
Kilmarnock (Northern ) Affordability Ratios LQ Median UQ Mean 2002 3.6 3.8 3.4 3.5 2003 4.3 4.5 4.0 4.0 2004 5.4 6.1 5.0 5.2 2005 6.0 6.2 5.0 5.2 2006 5.9 5.2 4.7 4.8
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Kilmarnock (Urban) Affordability Ratios LQ Median UQ Mean 2002 3.5 2.8 2.6 2.9 2003 4.0 3.3 3.1 3.4 2004 4.8 3.7 3.4 3.8 2005 5.8 4.5 4.0 4.5 2006 6.1 4.6 4.1 4.5
North Coast HMA Affordability Ratios LQ Median UQ Mean 2002 3.9 3.6 3.7 3.6 2003 4.1 3.6 3.7 4.0 2004 4.8 4.4 4.7 4.7 2005 4.9 4.7 5.0 4.7 2006 5.4 4.8 5.1 5.0
Three Towns HMA Affordability Ratios LQ Median UQ Mean 2002 3.4 2.8 2.8 2.8 2003 3.5 3.1 3.0 3.2 2004 4.0 3.6 3.9 4.0 2005 4.9 4.1 4.3 4.2 2006 5.5 4.3 4.5 4.6
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Appendix 7: References
Ayrshire Joint Structure Plan Committee (1999) Ayrshire Joint Structure Plan 1999: A Framework for the 21st Century
Ayrshire Joint Structure Plan Committee (2006a) Ayrshire Joint Structure Plan 2025: Growing a Sustainable Ayrshire
Ayrshire Joint Structure Plan Committee (2006b) Report of Survey Technical Report 01/2006 Strategic Assessment of Housing Land Requirements
Ayrshire Joint Structure Plan Committee (2006c) Report of Survey Technical Report 06/2006 New Housing –The Key to Developing A Sustainable Ayrshire
Bramley, G (2003) Local Housing Need and Affordability Model for Scotland, Research Report 21, Communities Scotland, Edinburgh
Bramley, G (2004) Local Housing Need and Affordability Model – Update, Research Report 34, Communities Scotland, Edinburgh
Bramley, G., Karley, N., and Watkins, D (2006) Local Housing Need and Affordability Model for Scotland – Update (2005 based), Research Report 72, Communities Scotland, Edinburgh
CACI (2007) Wealth of the Nation 2006, CACI, London
Cambridge Centre for Housing and Planning Research (2005) Local Housing Assessment A Practice Guide, Discussion Draft
Department of Communities and Local Government (2006), Planning Policy Statement 3: Housing, Department of Communities and Local Government, London
Department of Communities and Local Government (2007), Strategic Housing Market Assessments Practice Guidance Department of Communities and Local Government, London
DTZ Pieda Consulting, (2003a) Housing Market Areas in Scotland: definition and review, Volume 1: Main Report, Communities Scotland, Edinburgh
DTZ Pieda Consulting, (2003b) Housing Market Areas in Scotland: definition and review, Volume 2: Case Studies, Communities Scotland, Edinburgh
DTZ Pieda Consulting, (2003c) Housing Market Areas in Scotland: definition and review, Volume 3: Guidance on Market Area Definition, Communities Scotland, Edinburgh
Duffy M (2007) The Road To Riches, The Herald, 24 February, House Price Guide, p4
East Ayrshire Council (2003a) Local Plan Volume 1: Written Statement
East Ayrshire Council (2003b) Local Plan Volume 2: Settlement and Rural Area Development Opportunities
138 Affordability And Migration Within The Ayrshire Housing System
East Ayrshire Council (2004a) The East Ayrshire Local Housing Strategy 2004-2009
East Ayrshire Council (2004b) East Ayrshire Local Plan Spatial Development Options Paper
East Ayrshire Council (2005b) Kilmarnock Town Centre Strategy
East Ayrshire Council (2006a) Alteration to the East Ayrshire Local Plan Consultative Draft: Part 1 – Introduction and Strategic Approach
East Ayrshire Council (2006b) Alteration to the East Ayrshire Local Plan Consultative Draft: Part 2 – Strategic and General Development Promotion Policies
Glass, A., McGregor, A., McTier, A., O‟Sullivan, A., and Young, G (2006) Affordable Housing and the Labour Market in Scotland, Research Report 70, Communities Scotland, Edinburgh
Newhaven Research Limited (2006) Housing Market Area Structure in Ayrshire: A Consultation Paper
Network Rail (2007) Route Utilisation Strategy
North Ayrshire Council (2005a) North Ayrshire Local Housing Strategy 2005- 2010
North Ayrshire Council (2005b) LHS Technical Appendix
North Ayrshire Council (2005c) A Regeneration Outcome Agreement (ROA) for North Ayrshire
North Ayrshire Council (2005d) North Ayrshire Local Plan (Excluding Isle of Arran)
North Ayrshire Council (2006) North Ayrshire Local Plan (Excluding Isle of Arran) and Isle of Arran Local Plan Alteration No 1: Proposed Rural Development Policies & Environmental Assessment: Environmental Report
O‟Sullivan, A, Young, G et al (2004) Local Housing Systems Analysis: Good Practice Guide, Communities Scotland
Palmer, G. (2006) Single Person Households – Issues that JRF Should Be Thinking About
Scottish Executive, (2004), National Planning Framework for Scotland
Scottish Executive (2006a) Scottish Transport Statistics
Scottish Executive (2006b) Scotland’s Railways
Scottish Executive (2006c) Scotland’s National Transport Strategy
South Ayrshire Council (2002) Local Plan
South Ayrshire Council (2004) South Ayrshire’s Local Housing Strategy
139 Affordability And Migration Within The Ayrshire Housing System
South Ayrshire Council (2006) Report by Depute Chief Executive and Director of Development, Safety and Regulation to a meeting of the Full Council on 28th September 2006: Subject: South Ayrshire Local Plan
South Ayrshire Council (2007) Report by Depute Chief Executive and Director of Development, Safety and Regulation to a special Council meeting of 20th February 2007: Subject: South Ayrshire Local Plan: Representations Received on the Council‟s Published Proposed Modifications
Strathclyde Partnership for Transport (2006) The Regional Transport Strategy for the West of Scotland 2007 – 2021: A Catalyst for Change (Consultative Draft)
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