Memorandum by Daventry District Council
(AH 63)
PURPOSE OF
REPORT
1.1 To inform ODPM of the comments made
by Daventry District Council of the issues facing the provision
and affordability of housing within our District.
INFORMATION
2.1 The issue of House Prices and affordability
has grown in importance over the past few years. Rising home price
inflation has far outstripped average wage increases and mean
that house prices are now between six and seven times average
household incomes. The traditional mortgage income multiplier
of three to three and a half times income would not be enough
for a low-income family to purchase an averagely priced house
in the Daventry area.
2.2 Additionally, this rising house price
inflation has meant that even the smallest and least desirable
of properties have become unaffordable for many first-time buyers
locally. The price for a small one-bed roomed flat has increased
to approximately four-times average individual income in the district.
Consequently, the pressure upon the social and private rent sector
has increased measurably, as many people are unable to meet their
housing needs through purchasing upon the open market locally.
2.3 The necessary 5% deposit required for
many mortgage purchases is also creating a problem for many prospective
homeowners within the Daventry area. As house price inflation
has increased, so consequently has the 5% deposit necessary for
most transactions. The length of time, first-time buyers need
to save the deposit has increased as a result due to the higher
amount required for deposit.
2.4 The rising houses prices within both
the district and nationally have had a large social and economic
impact upon the wider economy. Due to wide differentiations of
house prices within the UK, a lack of social mobility and its
potential knock-on effects upon industry has been highlighted.
Individuals living in areas where house prices are lower upon
average may be unable to afford to move to areas for employment,
where housing costs are very high but jobs available. Additionally,
some individuals due to the perceived and actual volatility existing
within the housing market may not wish to sell their property
for fear of losing equity. This may mean that economic development
in certain areas may be affected as a consequence. Indeed it has
been highlighted in the media that some firms are looking to relocate
solely because labour costs due to the local housing market is
too high.
2.5 As Daventry is a mainly rural district,
the problem of affordable housing supply in rural areas is particularly
acute. The work of the Northamptonshire Rural Housing Enabler
(RHE) has highlighted the need for such housing in rural areas,
explaining the importance and necessity for such provision to
local landowners and Parish Councils. The stigma attached to LCHO
and social housing has meant that many areas for different reasons
do not wish to support such developments, believing that it would
not enhance the overall sustainability of their villages.
2.6 This important issue within rural areas
highlights the importance of the role played by RHEs in similar
districts. Acting as a first point of contact between PCs and
interested RSLs and other Developers, the RHE helps locate possible
sites for development, pinpoints areas where affordable housing
is sorely needed and helps to develop lines of communication between
landowners and other interested stakeholders. The importance of
this role in similar districts to DDC cannot be underplayed.
2.7 The supply of LCHO housing and the
consequential planning process, has led to the proposed development
of a countywide Section 106 protocol in addition to the proposed
Daventry DC definition for Affordable Housing. DDC believes that
planners should be able to stipulate the housing mix and tenure
upon proposed housing development sites and that a national affordable
housing definition, would provide a robust basis for planners
and developers to clearly begin negotiations over all developments.
2.8 The proposed DDC definition is:
Affordable housing is defined as housing that
meets the housing needs of individuals and families who cannot
afford to rent or buy* on the open housing market and includes
social rented, shared ownership and low cost home ownership tenures.
To be defined as affordable, Daventry District
Council recommends that rents and or mortgage costs on all affordable
developments should not exceed one third of the average net household
income of the district, inclusive of all service charges and management
costs.
* Assuming mortgage lending criteria of three
and a half times household income over 25 years.
2.9 The present problems of differing definitions
of affordable housing has led to some developments of "affordable
housing" actually being more expensive, when mortgage, rent
and service charge costs are accrued than a 100% mortgage for
a similar sized property in the same area. DDC believes that all
developments should take more into account actual housing need,
the local pressures of affordability and possess a housing mix
which will contribute to the overall sustainable communities agenda
as laid down by ODPM guidelines.
2.10 Daventry DC also believes that all
affordable housing developments should be built of the same materials
and to the same quality as surrounding developments. Affordable
Housing should be pepper-potted around new developments as per
the sustainable communities agenda helping to create mixed and
balanced communities. Although the initial costs of construction
would be higher due to this insistence, the long-term benefits
of such a policy should not be understated.
2.11 The DDC Planning Team, working closely
with the DDC Affordable Housing Working Group, believes that any
Corporate Response to demands for housing for sale should be informed
but not led by the market. This should be done upon a regional
and sub-regional basis and if necessary involving cross-boundary
work, encouraging partnership Housing Market Assessments to be
completed frequently and greater strategic thinking to tackle
this problem. HMA and other Housing Need reports should be updated
frequently, ensuring that any possible issues that are arising
can be planned for quickly, rather than allowing problems to amalgamate
until the end of a set period.
2.12 Daventry is identified for significant
growth as part of the Milton Keynes and South midlands sub-regional
strategy. A key aspect of this growth agenda is providing affordable
and key worker housing of the right type and at the right time
to ensure that the rapid growth is not hampered by a lack of appropriate
housing. The local authorities are faced with some difficulty
on this issue, as there is no information at the sub-regional
level on the type of housing that will be required
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