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


Memorandum by the Cheshire Housing Alliance (CHA) (AH 33)

1.  THE CHESHIRE HOUSING ALLIANCE

  1.1  This submission has been prepared on behalf of the Cheshire Housing Alliance (CHA), a partnership formed in 2003 comprising members from all local housing authorities and the largest RSLs in Cheshire, in terms of the quantity of stock owned within the county. The Alliance has carried out extensive research to map housing needs and aspirations within Cheshire, to identify and tackle relevant housing issues. The data gathered is used to inform the Regional and Sub-Regional Housing Strategy and other broad regional agendas.

  1.2  The provision of more affordable housing for local people in urban areas, market towns and rural settlements, both rented accommodation and properties for sale, has been identified as a significant priority, resulting in a strategic delivery programme, described in the Sub-Regional Housing Strategy 2004-08.

  1.3  The above Strategy sets an annual target for the county of at least 400 additional units of affordable housing to be provided through ADP funding,[65] until 2008 when the Strategy is due to be reviewed. This includes not only new development, but also bringing existing buildings back into use and working with private landlords to achieve the decent homes standard and reduce the number of empty homes in the district. Achieving this target is, of course, dependant on receiving sufficient social housing grant.

  1.4  Local authorities are also working to increase the number of new affordable homes in the county, in addition to the above target, through the use of planning conditions, such as "Section 106" agreements.

  1.5  The Alliance would be pleased to provide further details of its research, should this be beneficial to the Inquiry Committee.

2.  THE POTENTIAL BENEFITS OF AND SCOPE TO PROMOTE GREATER HOME OWNERSHIP

  2.1  One benefit of promoting affordable home ownership is greater choice for those who may not be able to purchase outright but could take advantage of part or discounted ownership schemes. A large portion of Cheshire's population, who are in housing need, would be unable to access ownership even at discounted levels. Indeed, it is something of a contradiction in terms to describe discounted market housing as affordable housing, since it is, in essence, based on current market prices. Income levels in many parts of the county are so low anyway that a substantial number of households are unable to afford even a partial mortgage, plus any rent charges, maintenance costs and other household bills and for whom affordable rented accommodation is the only realistic alternative.[66] This is particularly likely to be true of concealed households and for this reason it is essential that any extension of home ownership does not occur at the expense of a reduction in already depleted stocks of affordable housing.

  2.2  The UK has one of the highest rates of personal debt in the developed world, largely due to mortgage debt, equating to over 60% of annual GDP.[67] It is inevitable that promoting greater home ownership will result in higher levels of borrowing and there is a danger that it will encourage those on the lowest incomes to take on levels of debt that will cause hardship in the long term, particularly given the current low interest rates. The housing market crash of the early 1990s and the record number of repossessions resulting from that period illustrates the dangers of rapid rises in inflation and interest rates and is a harsh reminder of what can happen when households overstretch themselves financially. There is an inherent risk in encouraging low-income households to take on debt, particularly where a single asset is concerned and that asset is also the family home. The risk is not only personal, since housing market activity has a significant effect on the wider national economy.

  2.3  Although there is an argument linking home ownership with greater wealth and there is a long-standing tradition of aspiring to home ownership in the UK, there is little evidence that asset ownership actually leads to any substantial long-term benefit. (See point 3.1 below.) Where schemes such as Homebuy and Shared Ownership are concerned, the inherent dangers are negative equity resulting in personal debt and, at the other end of the spectrum, rising house prices pushing the value of further shares beyond the reach of the current household.

  2.4  That said, in rising markets, those who are able to afford to buy a home stand to be better off financially in the long term than those who cannot and it is undeniable that house prices have risen in real terms over the decades. According to Boelhouwer et al[68] however, house prices have only grown by 3.1% per annum in real terms since 1980.

  2.5  Assets such as property can be used as collateral to purchase further finance, enabling more goods and services to be purchased by the household, arguably allowing a better quality of life and bolstering the economy in general. There is an inherent risk in using a family home in this way, but it is a benefit that many homeowners take advantage of with no adverse effects. For those who are still unable to afford to buy, and there will be many, the result will be a widening of the gap between the "haves and have nots", further excluding and stigmatising the most vulnerable and financially disadvantaged households in the county.

  2.6  Although it is recognised that affordability is generally worse in the south of the country, it is now a widespread problem with the house price to individual income ratio in parts of Cheshire averaging over 8:1. Even the most affordable district has an average ratio that is double the usual mortgage-lending ratio.[69] The situation is worse in rural areas, excluding local children from purchasing a home in the locality in which they were born and more needs to be done regionally, not just in the south, to combat the problem and increase access to housing for those in need.

  2.7  Higher density building will assist in increasing supply, but may have an adverse impact on the surrounding environment and residents' satisfaction with their home and quality of life. Although many commentators are calling for smaller, more affordable homes, this may result in overcrowding and areas of low demand in the long term. Already, studies show that there is a lack of larger family housing, impacting on those households following a tradition of large, multi-generation family living, a preference often exhibited by, but not limited to, minority ethnic households and the settled Gypsy/Traveller community. It is essential that a mix of property size and type that is appropriate for conditions in the individual locality is maintained.

  2.8  In recent studies, it has been found that 70% of UK households are already homeowners. Of the remaining 30%, only 20% express a desire to own, leaving a substantial number of households whose first choice is rented accommodation. Lifestyle choices and employment opportunities nowadays mean that newly forming households often prefer to rent, and rent for longer periods before purchasing a home, because of the flexibility, ease of mobility and lesser financial burdens associated with renting. Buying not only incurs mortgage payments, but necessitates substantial initial outlay including a deposit, legal costs, survey costs, stamp duty, furniture and insurance. Many households choose renting instead of buying, particularly if their future employment and/ or income is in any doubt. Home ownership is said to be the choice of the majority of the UK population, but it is important to remember that it is not the choice of every household and, in order to provide the widest possible choice of tenure, affordable rented accommodation must be given the priority it deserves.

3.  THE EXTENT TO WHICH HOME PURCHASE TACKLES SOCIAL AND ECONOMIC INEQUALITIES AND REDUCES POVERTY

  3.1  There is no hard evidence that buying, rather than renting, a home contributes to economic equality and/or the reduction of poverty in any given locality. Successful home purchasers do not need to rely on state provision (either the direct provision of a home or through housing benefit) and this reduces the burden on the state and the taxpayer, as well as contributing to the economy as a whole and there seems to be a perception in the UK that owning a property equates to wealth. But research conducted on behalf of the Joseph Rowntree Foundation in 2003[70] suggested that half of adults living in poverty were actually homeowners.

  3.2  Purchasers often hope to release some of the capital invested in a property in later life to supplement pension provisions and there is evidence that there is a trade-off between monies used for house purchase and those invested in pension schemes. There is a further risk here, since an increase in the supply of housing may result in house values reducing in real terms by the time today's purchasers need to realise their equity, leaving them financially vulnerable and placing increased future burdens on the welfare state.

  3.3  A study into the perceptions of older homeowners[71] showed that many had to sell their homes to finance healthcare in later life and there is evidence that the responsibility of maintaining a property in old age creates financial hardship. Homeowners cannot always access grants and benefits that may be available to those in the social sector and many are not aware of or mistrust equity release schemes. The study found that single elderly people, particularly women, are acutely worried about maintaining their home, increasing the risk of anxiety-related illnesses.

  3.4  There is an argument that those who buy their own home take greater pride in their surroundings and are enabled to become more socially mobile. This does not necessarily result in reduced levels of poverty, nor does it tackle social inequalities. Although there is an argument that ownership of even a small amount of assets encourages individuals to be more responsible for their own welfare,[72] those on the very lowest incomes simply cannot accrue any assets. There are numerous examples in any given locality, and certainly within Cheshire, of predominantly owner-occupied areas that exhibit a visibly poor local environment, particularly where disposable income levels are low, as owners may struggle to find the resources needed to be able to maintain the exterior appearance and state of repair of their homes. This may affect the value of surrounding properties and, if it is a widespread problem, particularly in a small locality, may result in that locality becoming unattractive to more economically active purchasers and suffering increasingly from low demand.

  3.5  It has been argued that the creation of mixed tenure estates encourage those on other tenure types into home ownership, as owner-occupiers set an example to and support neighbours in becoming more socially mobile. Research carried out in 2001[73] and more recently[74] however, shows that, on new estates specifically designed to comprise a mix of tenures, owner occupiers and those living in social housing do not mix socially and there is little evidence of owners providing a "role model" effect for those on other tenure types. Mixing owners with social residents, however, does help to prevent concentrations of poverty on a single estate and seems to avoid stigmatising those residents relying on social housing, which is beneficial in avoiding prejudice within communities.

  3.6  Many former council homes, purchased under the Right to Buy scheme, are now let to private sector tenants, either by their original purchasers (or their beneficiaries) or by buy-to-let landlords, so fail to fulfil one predicted outcome of the scheme, namely creating a mix of social tenants and owner-occupiers on existing estates. These properties can often be poorly maintained and can suffer from a high turnover of tenants, making it difficult to create a sense of community in the locality. In addition, there is a risk of adverse consequences for neighbouring residents when these properties are let privately, especially where they are not suitably managed, such as increased instances of nuisance and anti-social behaviour. Whether the purchaser of a former council dwelling lives in the property or not, it is of course removed from the sphere of social housing, reducing the number of affordable homes available for those in housing need in the area. (See Points 4.1 and 4.2 below.)

  3.7 Boelhouwer[75] theorises that a perceived increase in property values encourages higher levels of spending and consumption, particularly where homeowners have other, readily accessible, monies, such as savings or disposable income. The reverse is true of those who do not currently own a property but who aspire to do so, however, as greater house values necessitate higher deposits and mortgage payments.

4.  THE ECONOMIC AND SOCIAL IMPACT OF CURRENT HOUSE PRICES

  4.1  Local research contradicts the conclusions of the recent report on affordability levels in the UK by Professor Steve Wilcox;[76] data from the Halifax shows that house prices in Cheshire, particularly in the Crewe and Nantwich and Ellesmere Port and Neston districts, have risen by over 30% in the last year[77] and affordability is a major problem across the county. Professor Wilcox himself, in the abovementioned report, admits that there is a lack of reliable household income data for the UK and it is submitted that the report's conclusions relating to this data are therefore of questionable use. The Indices of Multiple Deprivation (IMD) 2004, confirms that there are concentrated areas of persistent economic disadvantage throughout the county with 16 Cheshire super output areas featuring in the top 10% most income deprived in England.[78]

  4.2  "There are many areas across the North West where affordability is a major problem. The consequences of such disparity within the housing market results in increased levels of community displacement and imbalance. The need to provide affordable housing is essential for achieving sustainable communities" (North West Regional Housing Strategy 2005.) The long-term goal of sustainable, balanced and mixed communities is more difficult than ever to reach in the face of soaring house prices. Those on lower incomes, especially the young and newly forming households, are unable to access local housing at reasonable cost and there is increasing concern about the social mix and cohesion of affected communities in the longer-term. The impact on local economies if local people are no longer able to afford to live in those communities, even if they are working and on average incomes, will be catastrophic. Already in many rural communities in Cheshire, the children of existing households can no longer afford to purchase nearby property, forcing them to abandon local employment opportunities and move elsewhere. This will increase the problems already faced in maintaining and encouraging the rural economy.

  4.3  "Hotspots" of high and low demand are created, as people move away from areas of unaffordable housing and the burden on social housing in more popular areas is increased. Social housing is in far shorter supply than it was many years ago, due to lack of investment and sales of council stock and this may leave households with no alternative except renting from the private sector or worse, homelessness. Since 1979, local authorities in England have lost a third of their stock in Right to Buy Sales alone and this is mirrored in Cheshire. In fact, Ellesmere Port and Neston and Crewe and Nantwich borough councils both lost over 40% of their stock due to Right to Buy sales during that period and very little new social housing has been developed in the Cheshire region due to lack of funding. This is in spite of the fact that affordability has been identified as an issue for local people for many years and local authorities in the county have sought to provide additional social housing through the use of section 106 agreements on new private developments. The chart attached as Appendix 2 is based on data from the ODPM website and shows the number of properties sold as a result of the Right to Buy in each district between 1979 and 2004. This equates to almost 20,000 units of housing taken out of the social sector in Cheshire alone. To put this in context, 430 homes were sold under the Right to Buy scheme in Ellesmere Port and Neston in 2003-04 and only 52 were developed in conjunction with Registered Social Landlords,[79] equating to just 12% of the number sold. This is a typical finding and illustrates the continual reduction in stock levels that occurs year after year as a result of the Right to Buy scheme.

  4.4  Increasing house prices lead to a decline in labour mobility as households cannot afford to move to more affluent areas, resulting in higher unemployment. There is often an imbalance between areas where work is available and areas where unemployment is high, as individuals in the latter lack the financial ability to move to the areas where work is available.

  4.5  House prices are inextricably linked to the economy as a whole; when house prices are rising, householders perceive themselves as being more affluent and spend more, increasing consumption and enlarging the economy. Higher values mean householders can borrow more money against their home, again adding to consumption, whilst a decline in values leads to a decline in spending. Increases in house prices lead to expectations/demands for a corresponding increase in wages, as the majority of the population either owns or aspires to own a home and house prices/ mortgage repayment levels are viewed as a significant portion of the overall cost of living. Interest rates and the availability of borrowing all affect demand for housing and demand affects price. Lack of demand often leads to a perception of recession and leads to lower consumer spending on all levels.

  4.6  If people are unable to afford to buy or to rent without assistance, the burden on the state is drastically increased. Those who cannot afford to buy and must rely on state provision are stigmatised and are disadvantaged socially as well as economically.

5.  THE RELATIONSHIP BETWEEN HOUSE PRICES AND HOUSING SUPPLY

  5.1  House prices and housing supply are inextricably linked, as is the case in any market situation. If supply decreases and demand is stable, prices rise, as there are fewer properties available for those who want them. If supply is increased, prices should fall as demand is lowered by comparison, though lower prices may, in practice, increase demand, as more people will be able to purchase. Once demand pushes prices to a level where people are either unable or unwilling to buy, demand falls until such time as incomes rise or prices fall to a level where prospective purchasers are better able to afford to buy again.

  5.2  The supply of housing in the UK is essentially limited to the existing resale market, as the numbers of new properties being developed have been relatively small in relation to the number of existing properties for many years. Increasing housing supply, even substantially, will have little if any effect on house prices as the number of existing properties is so great that any new units will be comparatively small in number, at 1 or 2% of the existing market, and will therefore not significantly address demand or affordability issues across the UK as a whole. The provision of more affordable housing in those areas in highest need should be a priority, but the existing backlog of need will take many years to redress.

6.  OTHER FACTORS INFLUENCING THE AFFORDABILITY OF HOUSING FOR SALE INCLUDING CONSTRUCTION METHODS AND FISCAL MEASURES

  6.1  Interest rates and fiscal policy inevitably affect housing affordability. The increase in availability of mortgage finance following the de-regulation of the mortgage market fuelled house price increases, as an increase in the number of households who could access finance for house purchase would of course increase overall demand. There is a danger that any other financial incentives such as tax credits or VAT reductions targeted at developers or grants and loans given to prospective homeowners will only increase demand and push prices even higher.

  6.2  Allowing residential property to be included as part of personal pension investment plans[80] will increase demand, as investors will naturally wish to take advantage of any tax benefits accruing. It is widely expected that this change will encourage more investment in the buy-to-let market, increasing the number of private sector lettings available, but this could be a two-edged sword. Increased purchases of investment property could result in an excess of privately rented accommodation, driving rents and therefore investment profits down. Investment will only occur if the returns are sufficiently attractive and there is also a danger of investors selling if the property market dips again in the future, adding to the downward spiral of prices by flooding the market with yet more properties. Encouraging local authority regulation of the private sector lettings market may be of some assistance, but if registration is not compulsory there will still be problems of poor maintenance and poor housing conditions for some tenants.

  6.3  New construction methods may result in cheaper build costs, but if they are untested there may be reluctance from the construction industry to use them. In addition, insurers may be reluctant to insure non-traditional buildings making it difficult for householders to get adequate cover and/or mortgage finance, making the buildings unattractive and virtually unsaleable.

  6.4  There is still a shortage of skilled workers in many sectors of the construction industry; this will inevitably lead to increased labour costs as the demand for those skills increases, adding to the overall costs of construction. Labour costs have risen by approximately 70% in the last 10 years, increasing by 8% in the last year alone[81] and the Government must work with the industry to attract more people into the trade and redress the skills shortage.

7.  THE SCALE OF THE GOVERNMENT'S PLANS TO BOOST HOUSING SUPPLY

  7.1  Increasing the supply of housing will not have an immediate effect on either current house prices or the economy as a whole, because of the lead times involved. Further, the scale of building would have to be enormous to make any difference even in the longer term (see point 5.1).

  7.2  Recent Government policy has underlined the importance of sustainable markets and sustainable communities and the rapid building of new properties without relation to proper infrastructure, affordability, quality and lifetime homes considerations will not resolve current problems and will result in greater problems in the future.

8.  THE RELATIVE IMPORTANCE OF INCREASING THE SUPPLY OF PRIVATE HOUSING AS OPPOSED TO SUBSIDISED HOUSING

  8.1  Increasing the supply of private housing will not produce any substantial benefits either to individuals or to the UK economy in the long term. Focussing exclusively, or even largely, on private housing will further marginalise and stigmatise the social housing sector.

  8.2  Working households who would have expected to be able to buy their own property in the past, but cannot now do so because their incomes have been outstripped by rising house prices, will be unable to take advantage of new private housing without subsidy of some form. These households will not only be excluded from home ownership because of high house prices, but from social housing too, because they may be considered as being in less need than those with lower or no incomes or who have greater family commitments. Social housing is also likely to be beyond reach for these households because they are not likely to qualify for any state benefits, unlike those on very low incomes. Helping first time and returning buyers in this category would target assistance at some of those who currently find it difficult to obtain housing and perhaps encourage people to stay in employment where opportunities are available, rather than relying on state provision.

9.  HOW THE PLANNING SYSTEM SHOULD RESPOND TO THE DEMAND FOR HOUSING FOR SALE

  9.1  In accordance with PPG33,[82] a range of policies and plans have already been drawn up and adopted, at both district and cross-regional level, with the aim of measuring, monitoring and meeting the housing need in the county and increasing the opportunity and choice of housing available to the population, whilst making the best and most efficient use of the land available. This includes promoting good design and encouraging the creation of attractive surroundings and sustainable communities whilst protecting the existing environment. The introduction of the Local Development Framework, which replaces the existing Local Plan structure, has inspired local authorities to carry out a comprehensive review of their current planning policies and to consult widely with the local community, to inform future policy.

  9.2  Target 11 of the Second Generation Cheshire Public Service Agreement (LPSA 2)[83] aims to improve housing standards in the county by encouraging the most efficient use of the existing housing stock, including bringing empty homes back into use and improving the condition and standard of existing housing. (See point 10.4).

  9.3  Although there is a clear demand for housing for sale, which has resulted in the rapid increase of house prices and the current slowdown in the property market, increasing the supply of housing for sale is not going to redress the balance (see point 5.1). Use of section 106 agreements, while they have delivered some affordable housing gains, have not delivered as many new properties as was expected and lengthy negotiations can delay construction. Local authorities should be given greater powers to expand the use and extent of these agreements and, according to the Joseph Rowntree Foundation, clarification on what can and cannot be done is needed to speed up the planning process. It is our experience that the large commercial developers are often reluctant to provide affordable housing and they must be encouraged to work more closely with social housing providers and local authorities to produce greater numbers of affordable housing both for sale and rent in areas of greatest need.

  9.4  Negotiations regarding affordable housing are often lengthy due to the number and complexity of the issues involved and can often be compromised by the need to turn around planning applications within a very short time period. There needs to be a better and more realistic balance between the requirement for the rapid processing of applications and the requirement to ensure the suitability and quality of the finished product.

  9.5  Concentration on brownfield sites and bringing empty homes back into use allows existing greenfield areas to be preserved for the moment, but there are many brownfield sites that are not suitable for residential development and highly concentrated development on urban areas may lead to growing social problems in the future. Conversely, there is evidence that appropriate brownfield developments, which dovetail with existing services and transport links etc, can assist in the long-term sustainability of urban communities.

  9.6  One frequent problem encountered with brownfield sites is that the associated development costs are often greater than those involved in the development of greenfield sites, due to the remedial works required, such as demolition of existing buildings, alteration/ removal of existing foundations and treatment or removal of any contaminants present. Surrounding buildings may also prevent or restrict easy access to some areas of the site, requiring non-traditional methods of working and increasing costs further. A requirement to provide affordable housing on brownfield sites where development costs are already high, will simply result in the site remaining undeveloped, as there will be no financial incentive to undertake the necessary works. This is likely to result in developers retaining some sites because they are simply not cost-effective to develop and a partnership approach, possibly in conjunction with a Registered Social Landlord, which encourages these sites to be brought forward without loss of affordable units should be encouraged. Government investment of some sort, through grants or other incentives, to encourage development of these marginal brownfield sites would be extremely useful. Land banking by developers simply to maximise profits, however, must be discouraged and those holding any suitable sites that can be brought forward for residential and economic development at reasonable cost should be required to do so.

  9.7  There is anecdotal evidence that some developers are deliberately tailoring planning applications to avoid the affordable housing thresholds set by local authorities. The Government needs to ensure that the planning appeals procedure endorses and supports any refusals or conditions relating to affordable housing requirements made by local authority planners.

  9.8  It is, of course, necessary to preserve the agricultural and other rural economies in the UK and green space is an important and sensitive issue, but the need for affordable housing in rural areas is more pressing in some Cheshire districts, including Macclesfield, Chester and Crewe and Nantwich, even than that found in the county's urban conurbations and should therefore be given at least equal priority.

10.  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

  10.1  Increasing housing supply will not make housing more affordable in the short term. Like any market, the housing market in the UK follows a cyclical path, as supply and demand are never in perfect equilibrium. Peaks and troughs in house prices and sales are a natural result of changes in demand. Increasing the supply of new properties runs the risk of creating heightened demand for certain types of property, attracting premium prices in that sector and making older properties less attractive, risking the creation of areas of low demand in the future.

  10.2  Further, greatly increasing the numbers of new housing available will eventually result in oversupply, as the market becomes satiated and prices may then fall rapidly, resulting in a housing market crash similar to that of the early 1990s. What is needed in the UK housing market is stability, not a "boom and bust" methodology. Finance available for housing is an important factor affecting demand and affordability is of course a major issue. Initiatives that allow households in need better access to subsidised housing are more effective than simply producing more housing that people not already on the "property ladder" still cannot afford.

  10.3  The population of Cheshire over the long term is in decline, with a fall expected in the numbers of younger people but growth of the elderly population as the "baby boom" generation begins to reach old age.[84] Encouraging more housebuilding at this time will result in substantial oversupply in the area in the long term.



  10.4  The quality of existing housing needs to be improved to meet the Decent Homes Standard, not only in the public sector but in the private sector too. Concentrating investment in new housebuilding will reduce the funding available to spend on upgrading and improving existing dwellings. Bringing empty and abandoned homes back into use, which is an integral part of the LPSA 2 (see point 9.2) and successfully tackling the root causes of areas of low demand would be more beneficial in the long term.

  10.5  The environmental impact of a huge increase in building is a substantial consideration. Construction and demolition waste accounts for roughly 20% of the total annual waste produced in the UK[85] and energy consumption over the life of an average domestic building accounts for half of all energy used, contributing to greenhouse gas emissions and the associated environmental problems.

  10.6  Further, although building is encouraged on brownfield and alternative use sites, once these are depleted, land will have to be taken from existing greenbelt. Building on long-deserted sites or near sensitive environmental areas can have a hugely adverse effect over great distances on wildlife and flora that inhabit the locality. Local extraction of water for domestic use can affect existing rivers and wetlands, causing detriment to the existing ecology and the pollution created, not only by the construction process, but by transporting materials and labour to and from new sites is a material consideration.

  10.7  New dwellings located outside existing urban areas often suffer from a lack of infrastructure, such as schools, healthcare and transport links, particularly public transport. Private car journeys add to pollution levels and further deplete existing fossil fuel stocks. It is also important to ensure that new developments are within reach of new or existing long term employment opportunities, as residents will need an income to meet the financial obligations involved, whether renting or buying and a vibrant local economy usually creates and sustains a demand for nearby housing.

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

  11.1  Even within Cheshire, three distinct types of housing market have been identified:

    —  Predominantly high price areas based upon economic success, which has subsequently fuelled increases in house prices, thus reducing the potential opportunities for local people servicing the intermediate labour market. Affordable housing targeted at urban and edge of town brownfield and rural sites is a priority for these areas. (Examples of these areas include Macclesfield and Chester.)

    —  Popular commuter areas combined with good local economic performance leading to sustainable forecasts for future growth. These areas have seen a substantial increase in house prices, which are now at a level unaffordable for many first time buyers. The priorities for these areas are the investment in continued economic success, facilitated through spatial policies and housing investment, which encourage mixed use development of Brownfield sites together with affordable housing provision located in market town and rural areas. (These areas include Vale Royal, Congleton, some areas of Ellesmere Port and Neston and Crewe and Nantwich.)

    —  Areas of potential economic growth to be encouraged through appropriate training of local employees to provide the required skills for employers. Housing solutions to facilitate this provision should be aimed at new, good quality, affordable housing to address the high cost of housing even in the lower priced areas of Cheshire. Priorities for these areas are regeneration of the pockets of deprivation coupled with affordable housing to accompany the forecasted economic growth. (These areas include those identified in the Indices of Multiple Deprivation (IMD) 2004 as the high deprivation areas of Ellesmere Port and Neston, Crewe and Nantwich, Vale Royal and Chester).

  11.2  It is clear from the above summaries that there is an urgent need for more affordable housing in Cheshire and not just affordable housing for sale; attached to this submission is an appendix summarising the main points from the housing needs surveys for each of the individual districts within the county, which identify a specific requirement for affordable rented housing.

  11.3  There is a need for a collaborative county-wide approach to tackling the housing problems in Cheshire and the same is undoubtedly true of other regions. It is important to understand not only the issues affecting demand and supply for housing within an individual locality, but also how the markets within that locality and those in surrounding areas interrelate and affect each other.

  11.4  Regional issues must be tackled at regional level. This is because there are distinct markets and different factors at work in those areas at a local level and a "one size fits all" approach is simply not a practical solution across the entire UK. Kate Barker in her Review of Housing Supply[86] recommends establishing a Regional Planning Executive, responsible for helping to develop and advising on regional affordability targets and how to meet them. She goes on to say that, in many cases, there are considerable differentials in affordability within regions and underlines the need to balance markets within regions in order that more popular areas are not allowed to "overheat" but are managed so that they contribute to the regeneration and renewal of less popular nearby localities. Importantly, this should be managed at local level and the example set by Germany's housing market[87] indicates that giving local planners and local authorities responsibility for ensuring that the local housing market is responsive to local needs creates a stable and sustainable property market. Of course, it is still important that the disparities between local strategies and national policy do not diverge too widely, but if local problems go against national trends then clearly different solutions are needed.






65   Approved Development Programme funding, administered by the Housing Corporation. Back

66   See Appendix 1 for house price to income ratio data for Cheshire. Back

67   Smith, S J, 2005, Banking on Housing? Speculating on the Role and Relevance of Housing Wealth in Britain, paper prepared for the Joseph Rowntree Foundation Inquiry into Home Ownership 2010 (Online), Joseph Rowntree Foundation and University of Durham. Back

68   Boelhouwer, P, Doling, J, Elsinga, M and Ford, J, 2004, Playing Snakes and Ladders: Gains and Losses for Home Owners, ENHR Conference, Cambridge. Back

69   See Appendix 1. Back

70   Burrows, R, 2003, Poverty and Home Ownership in Contemporary Britain, Bristol: The Policy Press. Back

71   Askham, J, Nelson, H, Tinker, A and Hancock, R, 1999, To Have and to Hold; The Bond Between Older People and the Homes They Own, York: YPS and the Joseph Rowntree Federation. Back

72   Paxton, W, 2002, Assets and the Definition of Poverty, in Kober, C and Paxton, W, 2002, Asset-based Welfare and Poverty: Exploring the Case for and Against Asset-Based Welfare Policies, London: Institute for Public Policy Research and End Child Poverty. Back

73   Atkinson, R and Kintrea, K, 2001, Disentangling Area Effects; Evidence from Deprived and Non-Deprived Neighbourhoods, Urban Studies (Online), Taylor & Francis. Back

74   Allen, C, Camina, M, Casey, R, Coward, S and Wood M, 2005, Mixed Tenure 20 Years On: Nothing Out of the Ordinary, Coventry: CIH. Back

75   Boelhouwer, P, Doling, J, Elsinga, M and Ford, J, 2004, Playing Snakes and Ladders: Gains and Losses for Home Owners, ENHR Conference, Cambridge. Back

76   Wilcox, S, 2005, Affordability and the Intermediate Housing Market: Local Measures for all Local Authority Areas in Great Britain, York, Joseph Rowntree Foundation. Back

77   <bj666>http://www.hbosplc.com/economy/includes/North<mv0p2>-<mv-0p2>West<mv0p2>-<mv-0p2>2005<mv0p2>-<mv-0p2>Q1.doc and <bj666>http://www.hbosplc.com/economy/includes/North<mv0p2>-<mv-0p2>West<mv0p2>-<mv-0p2>2005<mv0p2>-<mv-0p2>Q2.doc Back

78   From Cheshire County Council's IMD 2004 Report, prepared by the CCC Research & Intelligence Policy & Performance Department. The full report is available at: <bj666>http://www.cheshire.gov.uk/NR/rdonlyres/2869C86A-E267-4641-B11D-F781F4192B03/0/IMD2004Report.pdf Back

79   Data from Ellesmere Port and Neston Borough Council's statistical (HIP) returns. Back

80   Changes to the regulations governing personal pension plans are due to come into effect in April 2006. Back

81   DTI. Back

82   Planning Policy Guidance Note 3. Back

83   Available online at <au,1.5,0>http://www.cheshire.gov.uk/NR/rdonlyres/53C8D9DD-CA40-4304-9A6F-14CAA5341B3D/0/CheshireLPSA2.pdf<xu Back

84   Based on Census data and district Housing Needs Surveys. Back

85   Environment Agency website, Position Statements: Sustainable Construction, accessed 26/10/05. Back

86   Barker, K, 2004, Review of Housing Supply: Final Report Recommendations, London, HMSO. Back

87   Evans, A W and Hartwich, O M, 2005, Bigger Better Faster More: Why Some Countries Plan Better Than Others, London: Policy Exchange. Back


 
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