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

Memorandum by the City of Sunderland (AH 102)

  The City of Sunderland would like to offer a response with regards to the following issues:

    —  The potential benefits of and scope to promote greater homeownership.

    —  The extent to which home purchase tackles social and economic inequalities and reduces poverty.

    —  The economic and social impact of current house prices.

    —  The relationship between house prices and housing supply.

    —  Other factors influencing the affordability of housing for sale including construction methods and fiscal measures.

    —  The scale of the Government's plans to boost housing supply.

    —  The relative importance of increasing the supply of private housing as opposed to subsidised housing.

    —  How the planning system should respond to the demand for housing for sale.

    —  The scale of housing development required to influence house prices and the impact of promoting such a programme on the natural and historical environment and infrastructure provision.

    —  The regional disparities in the supply and demand for housing and how they might be tackled.


  The City of Sunderland is the industrial capital of the North East of England and has an overall population of 280,807 (2001 Census data returns) 0.48% of the entire population of Great Britain.

  Sunderland is based upon its shipbuilding and heavy industry past as well as coalmining and port trade. Although the focus continues to be on heavy and light engineering the principal industries now revolve around car assembly, car components and a growing call-centre industry.

  In relation to the North East region the City has the largest population concentration and this is centred around the City centre, Washington New Town and the former coalfield areas of Houghton and Hetton.

  The City is the largest, in terms of population, between Leeds and Edinburgh, and covers an area of 137 sq km and lies on the North East coast of England.

  Deprivation in Sunderland is broad based, affects the whole of the City and is not restricted to locality pockets within the City. The city is 15th out of 354 authorities in the governments index of multiple deprivation and 11 out of 25 wards are among the top 10% most deprived in the country.

  Between 1997 and 2005 over 9,000 units of previously council owned social housing has been demolished or lost through right to buy sales. In relation to the social rented as a whole, the sector as at 31 March 2005 had 35,884 properties available in the City. Sunderland Housing Group, the largest RSL in the City, which took over the management of the Council's stock has seen a decrease in stock total from 40,750 units in 1997, 36,356 as at the point of transfer in March 2001 to only 31,534 on 1 April 2005.

Population changes

  Sunderland's current population is 280,807 and is declining by 3,500 per annum and fell by 15,100 from 1991 to 2001.Although this is the case, the average household size is also decreasing due to more people choosing to live alone and a reduced birth rate. In 1981 household size was 2.80 with 105,434 households, in 1991 it was 2.50 with 113,904 households and in 2001 it was 2.36 with 116,355 households. Also it is predicted that by 2011 it will be 2.15 with 121,816 households.

Key statistics

    —  Older people aged 65+ account for 43,776 or 15.6% of the population.

    —  A significant trend for the City is the projected increase in the number of people over the age of 65, by 2006 it is estimated that this number will grow to 46,470, with predominance in the over 75 age group.

    —  The Black and Minority Ethnic Communities accounted for 1.9% of the population in 2001, and accounted for approximately 5,300 residents but Sunderland has a small but growing proportion of residents from BME communities.

    —  Unemployment stands at 3.7% where-as the national average is 2.6%.

    —  The health of the City's population is well below that of the national average as is educational attainment.

Affordable housing

  House prices in Sunderland have increased significantly over the past five years due to, the ripple effect of increased house prices emanating from the South, increased investor buying and low interest rates. These overriding factors have highlighted the issue of affordable housing supply.

  Although "Affordable Housing" is now a well known and well used phase, there is not one definitive definition of what constitutes affordable housing.

  For the purpose of this paper Affordable Housing is "housing which is affordable as the purchase costs are achievable and maintainable to the purchaser. This does not necessary mean that the costs associated with the purchase are subsidized in any way".


  There are currently 119,000 households within the City, with a tenure breakdown of 63% owner occupation, 34% social rented and around 3% private rented sector.

  Homeless applications increased significantly during the past five years which the table below illustrates. This trend highlights a lack of available properties as more households are applying as homeless.

July to
Sept 2001
July to
Sept 2002
July to
Sept 2003
July to
Sept 2004
July to
Sept 2005

353 359733607 454
All homelessness, including intentionally and non-priority need 266281517 363355
Acceptances159163 255154145

  Sunderland is going through a period of change. The previous perception of low demand coupled to low value and abandonment no longer prevails and the real issue is of property availability and whether people can access and move through the property ladder, (either via purchase or rent) allowing properties to be released for others, ie those in need.

  At present the rate of new build to demolition exasperates the supply and demand of properties in the City as demand outstrips supply mainly as a result of demolition and the time lag factor in building new developments. When this phase of regeneration is complete, more properties should become available in all tenures.

  Also the social rented sector has seen just over a 9,000 property reduction since 1997 and this will have undoubtedly affected the supply of housing in the City due to such a significant and sustained reduction over the years.

  These two issues have dramatically affected housing supply in the city, meaning that there is not the correct supply of housing across the city.

  It is the affordability of the market that has to be addressed from the private sector with a significant build programme in the social rented sector as to alleviate pressures on supply and demand.


  Areas with a higher percentage of home ownership generally prove to be more sustainable and popular than areas with a low percentage of homeownership. This can be in part attributed to increased economic equality and low incidents of anti-social behaviour and crime.

  Pushing people into ownership when their financial resources are only on the cusp of affordability may not be a wise move. Home ownership is a serious responsibility and one which can often incur unforeseen costs, for maintenance etc. If this were the case, households could be forced to live in increased poverty.

  As many applicants on Sunderland's housing waiting list cannot secure finances to purchase or can "only just" secure finances, we believe that the push for new housing has to be focused on providing high quality housing with excellent management across all tenures and not purely based upon greater home ownership.


  There has long being the argument that the housing market will essentially "look after itself" in that if properties become unaffordable people will not be able to purchase them and allow the market to function. Therefore the supply/demand argument kicks in:

  Properties are unaffordable, leading to a stagnant market with an over supply of properties, leading to sellers reducing prices in order to sell. Although the overall growth is vast, evidence now shows that this shift in values has started in the city. The table below illustrates this.

2001-02 2002-032003-04 2004-052005-06 Overall

Average Property Price % Increase across the Year
15.1%17.9%25.4% 20.8%3.2%112.2%

  As demonstrated by the breakdown of properties in the various Council Tax bands. In Sunderland there is a predominance of properties in Council tax bands A and B, 96,685 properties which is 78.1% of the total, whereas there are only 0.6% in bands G and H 637 properties. Therefore it is clear that the city has a large amount of properties at the "lower cost" end of the market. The questions still remains, are these properties affordable? If you examine the affordability of average properties set against average income, there are certain groups which may find it difficult of afford a suitable property.

  The actual house prices in Sunderland at September 2005 are on average:

£207,990 Semi Detached£122,806
Flat/Masionette£90,119 Terraced£94,479
Average Property£117,008

  In Sunderland the average annual full time wage is £17,939, which is approximately £4,500 less than the English average and £1,500 below the North East average. Compared with the average property price in Sunderland in September 2005 is approximately £117,008. This would mean a house price to property ratio of 6.5.

  The following are House Price Ratios in Sunderland.

2 person
full time
2 person
full time and
female part time
1 person
male full time
1 person
female full time
1 person
female part time

4.35.9 7.015.5

  Most mortgage lenders generally lend households 3 to 4 times their annual wage, the consequence of this being that any ratio over four could be classed as unaffordable. Highlighting the fact that the prosperity of residents has a significant impact on the ability to secure a mortgage as to get onto, or move up the homeownership ladder.

  The City has relatively high unemployment and low home ownership. On average unemployment is 4.8%, which is above the national average of 2.6% and homeownership 63%, which is below the national average of 68.7%. However in South Sunderland home ownership is as low as 35% and unemployment as high as 8%. This shows a direct correlation between the two factors, and highlights the fact that pockets of extreme deprivation exist.

  As all housing markets across the sub-region and beyond have increased it is not the case that people are leaving the city to secure cheaper accommodation. It is in fact the opposite, people have moved to the city, as properties in the city are more affordable than the neighbouring Local Authorities. In a survey people highlighted that it was the lack of jobs, higher value property and properties in "nice environments" that made them migrate from the City to other areas, and housing choice has to reflect that high earners are leaving the City in order to fulfill their housing desires.

  Examination of the Councils housing register shows that the vast amount of applicants, who require re-housing are reliant on welfare benefit as their sole income. This factor alone excludes these people from home ownership and increases demand for high quality social and privately rented properties.

  The key is an increase in the availability of houses in all tenures and locations whilst ensuring that affordability is not yet another barrier to securing suitable accommodation to those that have the means to secure a mortgage and wish to buy.


  If you examine the previous average earnings table it is very clear that keyworkers will be able to secure a property within the city. Also there is no evidence to suggest otherwise. Therefore providing specific properties for this group is deemed as unnecessary at present.


  The recent sudden growth in property prices has had both a social and economic impact upon the city and its residents. The main effect being the reduction in the number of households who cannot afford to comfortably purchase a property. It has also created a higher demand for rented properties, especially from registered social landlords, (which could however provide an avenue into homeownership via right to buy legislation).

  The table shows that the number of people requesting a property between 1998 and 2001 more than doubled.
Year1997-98 1998-991999-2000 2000-012001-02 2002-032003-04 2004-05
Properties Allocated5,892 5,1915,1065,277 4,5573,8961,882 1,308
People on the Waiting List2,003 3,7434,4765,156 Comparable figures are unavailable due to the introduction of CBL

  This trend is evident throughout the sub-region. The chart below shows that since 1999 the housing registers within Tyne and Wear have almost trebled, from 26,508 households in 2001 to over 62,304 in April 2004.

  Another concern for the city, which stems from market movement is the increased amount of investor buyer from people who live outside the city and northeast region. This is especially common in the new-build apartment market. The trend has contributed to pushing up purchase prices and prevented more local people from buying such properties.


  It is the view of northern-based authorities that Central Government thinking is focused on the south and its housing problems. It is true that the south does has exaggerated housing stress, generally linked to the lack of supply and high prices. However as described the north suffers some serious housing issues and these should continue to be targeted by central government, via programmes such as Pathfinders, New Deal for Communities, Urban Regeneration Companies and new options for Council owned housing stock. The Northern Way highlights these methods as part of an overall package to deliver decent homes in all housing tenures. This move to tackle decline within the private sector and poor quality housing owned by Councils is the first step to delivering sustainable communities in all housing sectors and areas of the north.

  Housing issues are only part of the issue. There is reason that the southern housing market is so buoyant, and this is, in part based on a powerful economy and the link to Europe. Central government should be looking towards boosting the economy of the city and the northeast region to support plans for delivering sustainable housing developments.


  In Sunderland it is not the scale of private housing development, but the overall net increase in the housing stock in all tenures which is critical to ensuring a well balanced, flexible housing market. The latest Sunderland Housing Strategy, (2006-09) will clearly state one of its key aims is that of improved choice of type, location and price to meet 21st Century aspirations and demands, which will reverse the trend of outward migration.

  Sunderland is steadfast in its belief that both private housing and subsidised housing is of paramount importance in delivering the Government's vision of sustainable communities in the 21st Century. This is demonstrated as the Council supported, where appropriate, bids for National Affordable Housing Programme funding from the Housing Corporation and was very much in support of RSL schemes which delivered cross-tenure developments and affordability tools, such as shared ownership properties.

  It has also been agreed that the Council will make land available for more "higher" value housing, although this does not link directly with affordable housing supply it does tackle the shortage in supply of that particular type of property, and should free up more affordable properties down the property ladder.


  An option for Sunderland in the future is the use of Section 106 contributions by private developers, especially in areas where there is an identified need for developers to aid suitable housing provision, ie a percentage of the development being socially rented housing.

  Planning officers have recently completed and published the Interim Strategy for Housing Land. This details where developments such be by identifying land for use and the numbers of units required. This provides the council, house builders, RSL's and other organisations with a framework for delivering new housing throughout the city.

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