Thames Gateway South Essex Strategic Housing Market Assessment Final Report September 2008 www.gvagrimley.co.uk Thames Gateway South Essex Housing Group SHMA Final Report September 2008 Thames Gateway South Essex Housing Group SHMA Final Report CONTENTS 1. INTRODUCTION.....................................................................................................1 2. DEFINING SUB-REGIONAL HOUSING MARKETS ...............................................7 3. STRATEGIC AND INVESTMENT CONTEXT........................................................21 4. DEMOGRAPHIC & SOCIO-ECONOMIC PROFILE...............................................45 5. ECONOMIC REVIEW ...........................................................................................73 6. HOUSING STOCK AND SUPPLY TRENDS .........................................................95 7. PRIVATE SECTOR ACTIVE MARKET ...............................................................113 8. DRIVERS OF CHANGE......................................................................................151 9. SHORT-TERM MARKET OUTLOOK..................................................................155 10. FUTURE HOUSING MARKET ............................................................................171 11. HOUSING NEEDS ASSESSMENT .....................................................................195 12. HOUSING REQUIREMENTS OF OTHER GROUPS...........................................219 13. CONCLUSIONS AND RECOMMENDATIONS....................................................239 14. FRAMEWORK FOR MONITORING AND REVIEW.............................................253 September 2008 Thames Gateway South Essex Housing Group SHMA Final Report September 2008 Thames Gateway South Essex Housing Group SHMA Final Report 1. INTRODUCTION 1.1 Thames Gateway South Essex Housing Group, comprising housing officers from the five local authorities of Basildon, Castle Point, Rochford, Southend-on-Sea and Thurrock, has commissioned GVA Grimley to prepare a Strategic Housing Market Assessment (SHMA) for the Thames Gateway South Essex (TGSE) sub-region. Purpose of the Strategic Housing Market Assessment 1.2 PPS3: Housing1 identifies the importance of understanding sub-regional housing markets, and taking into account market information when developing planning policies for housing provision. Strategic Housing Market Assessments (SHMAs) are intended to achieve this. They are to be a key mechanism for considering the mix of housing required, and together with Strategic Housing Land Availability Assessments (SHLAAs), are intended to inform the level of future housing provision. These assessments are intended to inform Local Development Frameworks (LDFs) and future revisions to Regional Spatial Strategies (RSSs), as well as regional and local housing strategies. For the TGSE sub-region the SHMA is required as a core element of the evidence base for the districts’ LDFs and is to inform preparation of the Sub-Regional Housing Strategy. 1.3 The Government published Practice Guidance on undertaking Strategic Housing Market Assessments in March 20072. This identifies the value of SHMAs in assisting policy development, decision-making and allocation of housing investment resources by: • Enabling regional bodies to develop long-term strategic views of housing need and demand to inform regional spatial strategies and regional housing strategies; • Enabling local authorities to think spatially about the nature and influence of housing markets in respect to their local area; • Providing robust evidence to inform policies aimed at providing the right mix of housing across the whole market area – both market and affordable housing; • Supporting local authorities to develop a strategic approach to housing through consideration of housing need and demand in all housing sectors – owner occupied, 1 CLG (November 2006) Planning Policy Statement 3 (PPS3): Housing 2 CLG (March 2007) Strategic Housing Market Assessments: Practice Guidance September 2008 1 Thames Gateway South Essex Housing Group SHMA Final Report private rented and affordable – and assessment of the key drivers and relationships in the housing market; • Drawing together the bulk of evidence required for local authorities to appraise strategic housing options including social housing allocation priorities, the role of intermediate housing products, stock renewal, conversion, demolition and transfer; and • Ensuring the most appropriate and cost-effective use of public funds. 1.4 SHMAs are intended to be prepared for ‘functional’ sub-regional housing markets, which often transcend administrative boundaries. The five local authorities in the sub-region have come together as a Housing Market Partnership to prepare the SHMA. SHMA Aims and Objectives 1.5 The SHMA provides a fit for purpose basis to develop housing and planning policies by considering the characteristics of the housing market, how key factors work together and the probable scale of change in future housing need and demand. For the purposes of the independent examination into the ‘soundness’ of Local Development Plans, the Strategic Housing Market Assessment will be considered robust and credible if it provides, as a minimum, all the core outputs and meets the requirements of the process criteria set out in the Guidance. The Core Outputs are set out below and where these can be found within the report. Figure 1.1: SHMA Core Output Requirements2 1 Estimates of current dwellings in terms of size, type, condition and Chapter 4 tenure 2 Analysis of past and current housing market trends, including the Chapters 7 and 8 balance between supply and demand in different housing sectors and price/ affordability. Description of key drivers underpinning the housing market 3 Estimates of total future numbers of households, broken down by Chapter 10 age and type where possible 4 Estimates of current number of households in housing need Chapter 11 5 Estimates of future households that will require affordable housing Chapter 11 6 Estimates of future households requiring market housing Chapter 13 7 Estimates of the size of affordable housing required Chapter 13 8 Estimates of household groups who have particular housing Chapter 12 requirements September 2008 2 Thames Gateway South Essex Housing Group SHMA Final Report 1.6 This SHMA is being undertaken in accordance with the Practice Guidance. It includes an assessment of housing needs but incorporated into a wider process with the aim of understanding the operation of the housing market and future housing requirements across tenures. The assessment of housing needs is undertaken using secondary data sources, without primary survey work. The Guidance sets out that whether the assessment is based upon secondary or survey data should not be a factor in determining whether the assessment is robust and credible, as no single approach or particular dataset will result in a definitive assessment of housing need and demand. 1.7 The Government’s Practice Guidance sets out a structure and key research questions for the SHMA. These are set out below. Figure 1.2: Key Research Questions2 Stage Step Research Questions Current 1. The demographic and • What is the current demographic profile of Housing economic context the area? Market • What is the current economic profile? • How have these profiles changed over the last 10 years? 2. The housing stock • What is the current housing stock profile? • How has the stock changed over the last 10 years? 3. The active market • What do the active market indicators tell us about current demand, particularly house prices/affordability? • How has demand changed? 4. Bringing the evidence • How are market characteristics related to together each other geographically? • What do the trends in market characteristics tell us about the key drivers in the market area? • What are the implications in terms of the balance between supply and demand access to housing? • What are the key issues for future policy/strategy? Future 1. Indicators of future • How might the total number of households Housing demand change in the future? How are household Market types changing, e.g. is there an aging population? • How might economic factors influence total future demand? • Is affordability likely to worsen or improve? 2. Bringing the evidence • What are the key issues for future together policy/strategy? Housing Need 1. Current housing need • What is the total number of households in housing need currently (gross estimated)? 2. Future need • How many newly arising households are likely to be in housing need (gross annual estimate)? September 2008 3 Thames Gateway South Essex Housing Group SHMA Final Report 3. Affordable housing supply • What is the level of existing affordable housing stock? • What is the likely level of future annual supply? 4. Housing requirements of • What is the current requirement for households in need affordable housing from households in need? • What are the requirements for different sized properties? • How is the private rented sector used to accommodate need? 5. Bringing the evidence • What is the total number of households in together need (net annual estimate)? • What are the key issues for future policy/strategy? • How do the key messages fit with the findings from analysis of the current and future housing market? Housing Families, Older People, • What are the housing requirements of Requirements Minority and hard to reach specific groups of local interest/importance? of Specific households and households Household with specific