Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Memoranda

Memorandum by Brighton & Hove City Council (HOU 08)


  Pressure on the housing market has seen housing costs rise, pricing low or no income households out of the market. Homelessness continues to be a major problem in the city as increasing numbers of households are unable to find a market solution to their housing needs.

  The shortage of affordable housing has key social and economic consequences for the city, the region and the country. The need for adequate "affordable housing" is a direct factor in terms of delivering economic regeneration and neighbourhood renewal.

  The need for affordable housing can no longer be seen just as a housing needs issue but is a cornerstone of regeneration and renewal objectives.

How resources should be balanced between social housing and options for owner occupation and whether any additional mechanisms are required

  The need for affordable housing in the South East, and Brighton & Hove in particular, is acute. Additional resources are required to increase availability of affordable housing for those households with low and limited incomes. However, as the gap between salaries and housing costs widen, increasing numbers of households on average incomes are priced out of the housing market. Therefore alternative measures and funding mechanisms are required to provide a range of solutions to assist both low and middle earners.

Highlighted below are key proposals that should be considered:

    (a)  An increase in affordable housing funding programmes should be targeted to the South East with particular emphasis on investment in Brighton & Hove.

    (b)  We welcome the use of "affordable housing planning obligations" through regional planning guidance and local plan policies. Current guidance should be strengthened and opportunities to enhance a tariff system that prioritises "affordable housing" via the planning green paper should be promoted.

    (c)  Traditional "affordable housing" including rented and shared ownership needs to be augmented by the promotion of "intermediate market measures". Intermediate market rented accommodation should be supported with a new grant regime for RSL partners.

    (d)  The "keyworker" housing debate has provided focus on the inter-relationship between housing and business planning. Consideration should be given to promote these links via appropriate fiscal business tax arrangements. For example tax incentives to be introduced to encourage employers to support housing options for their employees.

    (e)  The promotion of new affordable housing or intermediate housing market products is key to increasing supply. Private sector lenders and investors should be encouraged via special mortgage products ie buy to let mortgages targeted at keyworkers or co-op mortgage packages to empower shared households.

    (f)  PSBR and funding support arrangements require review. Affordable housing and decent homes objectives are key regeneration and renewal activities. The debate on altering PSBR in respect of housing investment must consider the broader strategy merits not purely housing objectives.

    (g)  The availability of affordable homes within the existing stock is inter-related to the relationship between affordable housing and the private sector. Encouraging the investment in a lower cost private rented sector and facilitating a business approach amongst private landlords will have essential impact.

    (h)  Incentives should be enhanced to encourage both public and private sector asset management in support of affordable housing objectives. For example guidance and regulation on achieving best consideration with regard to the disposal of local authority land should be reviewed. Also tax incentives to encourage land or property vendors to transfer sites to affordable housing development rather than general market provision.

Scale and location of demand for affordable housing. The adequacy of existing supply and amount of resources available

  Here we highlight how housing need outstrips supply and resources allocated to affordable housing. The booming London economy has caused a "ripple effect" throughout the South East and in Brighton & Hove in particular—with residents and businesses moving out of the capital in search of more affordable areas. This is turn exacerbates pressures on the housing market which fuels housing costs that are well ahead of local incomes.

  Due to high land values particularly within Brighton & Hove, it is difficult for Registered Social Landlords to compete with private sector developers for sites. We welcome that social housing grant rates have increased in recognition of this but without further resources allocated to the provision of affordable housing, the number of homes required will not be delivered.

Housing Needs in Brighton & Hove

  During 2000-01 Brighton & Hove was in an unprecedented position, experiencing homelessness acceptances in excess of the supply of new lets to both its stock and that of partner registered social landlords. In all, homelessness acceptances exceeded the supply of lets by over 30 per cent during the year.

  In comparison with London, during 2000-01, only 11 out of 33 boroughs[1] experienced a similar situation to Brighton & Hove with homelessness exceeded the supply of lets.

  Since 1997-98 we have seen a 76 per cent rise in homelessness acceptances which has resulted in a twofold increase in bed and breakfast usage, with almost 300 households now in bed and breakfast accommodation.

  Brighton & Hove is also in the difficult position of having a relatively small social housing stock, at 15.3 per cent of dwellings compared to an England average of 20.9 per cent, making us particularly susceptible to increases in homelessness and decreases of turnover within the social housing stock.

  Analysis of our homelessness acceptances during 2001-02 shows that 50 per cent of acceptances are households with children, or households expecting children. Just over 25 per cent of acceptances have a priority need relating to mental illness, with the other major categories being vulnerable due to physical disability 12 per cent or young person households 9 per cent. Just over 3 per cent of acceptances relate to old age.

  The profile of homelessness acceptances during 2001-02 shows an overwhelming need for affordable family sized accommodation within the city. Supported accommodation is also significantly in demand, especially in relation to those with a mental illness and young people. There is also a shortage of affordable accommodation suitable for those with a physical disability.

  Local research into Single Homeless People in 2000[2] found around 470 single person households being accepted as homeless. Overwhelmingly, the largest proportion of these, just under 50 per cent, had some form of mental illness. 15 per cent of all single households were accepted as vulnerable because of their age. The housing register maintained by the council also shows a high demand for single person's accommodation, with over 50 per cent registered for such accommodation.

  Analysis of homelessness acceptances throughout 2000-01 highlights that over 46 per cent is due to loss of private rented accommodation. The high incidence of homelessness from the private rented sector partly reflects the size of the sector, at 20 per cent of all stock (twice the national average), but is more directly attributable to high rents and limited affordability.

  The last few years has seen a significant rise in the cost of private renting, although not as extreme as the increase in the cost of home ownership within the city.

  The average rent of a 1 bedroom flat, at £613 per month[3] is equivalent to the repayment of a mortgage in the region of £110,000 (requiring an income of over £30,000 to finance). The average annual household income in Brighton & Hove is less than £20,000, pricing monthly rent payments significantly in excess of that considered financially prudent for a mortgage.


Rent Increase
Indicative Rent
Indicative Rent
1 bed flat
28 per cent
2 bed flat
21 per cent
2 bed house
23 per cent
3 bed house
£ 849
£ 590.42
23 per cent
Source: Housing Strategy Monitoring (* Sept 2001 to Dec 2001)

  The increase in private rents has particularly hit those on benefits since the gap between the Housing Benefit indicative rent and the market rent has widened as rental costs rose. An increasing number of private landlords are now refusing to let to tenants on benefits.

  In Brighton & Hove, 64 per cent of rents referred to the Rent Officer service are restricted. The average restriction has been calculated at £14.09 per week, £61.06 per month which private rented tenants have to top up from other benefits. Housing Benefit tenants within Brighton & Hove have to contribute a total of £3.4 million per annum to top up their rents, with a discretionary fund of only £260,000 for cases of hardship.

  Eviction by parents, friends, and relatives accounted for 31 per cent of homelessness acceptances during 2001-02. This is perhaps a reflection of the comparatively young population within the city, with 16-29 year olds at 23.1 per cent of the population, significantly higher than the national average. Again, the affordability of private rented accommodation is cited as the barrier against the younger population entering the private rented and owner-occupied sector. The single room rent restrictions exclude most under 25 year olds, with nearly 85 per cent of the local market having rents higher than housing benefit level and subsequently, local research has shown that only 2 of the 257 landlords on the Brighton Housing Register would rent to under 25s.[4]

  Between 1998-99 and 2001-02 property prices in the city have risen significantly with a large proportion of properties doubling in value. Terraced houses in Brighton & Hove are now the third most expensive in England and Wales, with only Greater London and Windsor having more expensive terraced properties.

Brighton & Hove—Property Prices

2002 (Q1) Average Price
Annual Income Required
1998 (Q1) Average Price
Annual Income Required
74 per cent
80 per cent
102 per cent
Flat / Maison.
117 per cent
Average Price
104 per cent
Income required based on 95 per cent mortgage with income multiplier of 3.25.
Source: HM Land Registry.

  Income levels have not risen in line with the increases in the cost of accommodation within the city. With average household incomes at less than £20,000 per annum, and a household income of £44,536 required to purchase the average home, home ownership in Brighton & Hove has moved out of the reach of those aspiring to move into the sector.

  The council's comprehensive Housing Needs Survey 2000 has demonstrated very high levels of need in the city. 13,687 households, 11.8 per cent of the total, have a significant housing need and are unable to afford suitable housing at market costs. Housing need locally is nearly twice the average for similar surveys carried out in 130 other districts, and similar to that in most London boroughs.

  Further analysis of housing flows and socio-economic trends has made it possible to project housing needs over the next five and 10 years, demonstrating a need to develop 15,727 additional affordable dwellings by 2005 and 19,612 dwellings by 2010. This equates to 3,000 additional affordable homes per year, whereas currently less than 300 units of affordable housing per year are being developed in the city.

  The lack of affordable housing within Brighton & Hove and the South East generally will have severe social and economic consequences for the area.

1   London Houseing Unit, "No Let Up-supply and demand for council housing in London 2000-01". Back

2   Brighton & Hove City Council, analysis of homelessness acceptances, 2000. Back

3   Brighton & Hove City Council, Housing Strategy Monitoring (Sept 2001 to Dec 2001). Back

4   Brighton University, Research amongst hard to reach groups: 2000. Back

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Prepared 22 October 2002