Select Committee on Communities and Local Government Committee Written Evidence

Memorandum by Daventry District Council (SRH 42)


  1.1  To inform ODPM of the comments made by Daventry District Council of the concerns facing the supply of private and social rented housing with reference to the issues of funding; the role of Local Authorities and the role and effectiveness of the planning system in securing supply.


  2.1  The level of available public funding to meet both local and national social housing needs is far too low. With the present problems evolving due to rising house price inflation, affordability particularly for first time buyers is a major worry, with many reports in the media and research from bodies such as the Joseph Rowntree foundation, suggesting that for many, the aspiration of home ownership is now beyond reach.

  2.2  The present 2006-08 National Affordable Housing Programme for Daventry provided for a total of 154 affordable units with a potential further 16 units with reserve funding. The majority tenure of these is social rented (96), however the 2005-06 Daventry District Housing Needs Survey has indicated that due to local pressures the need for social rented has increased dramatically. In 2005, the DDC Common Housing Register stood at 1,012 individuals where as by Summer 2006 this had doubled to just over 2,035.

  2.3  The DDC needs study reveals a crude need of around 400 affordable units per year within Daventry District to meet current demand levels. However as only 444 housing units in total are currently developed annually, the affordable need would be some 90% of the total housing supply within the district. This need is not going to be met under current prevailing conditions.

  2.4  There is a large difference between the crude annual needs estimate for affordable housing locally and the amount of investment available for RSLs and developers to meet this need. Whereas the study suggests over the next two years approximately 800 units are needed to meet the current housing needs, only 154 units will be provided with Social Housing Grant locally, a shortfall of some 650 units. With the wider issues of Eastern European Migration and a distinct lack of current knowledge of the housing needs of these migrants locally and nationally, the actual need may be much higher.

  2.5  Housing Corporation Social Housing Grant for social rented is much higher than for shared ownership unit provision. Within Daventry this amounts to some £45,843 on average for SHG awarded for social rented units, compared to an average of £51,768 for the West Northamptonshire Sub-region. In South Northamptonshire this figure rises to £73,846, a rise in grant level of approximately £28,000 per unit. As house and land prices within the south of the County are slightly higher than within Daventry, a rise in grant awarded would be expected; the average house price according to the Land Registry being some £20,000 higher. However, the increase in the level of grant seems disproportionate considering the difference in average house prices is not as high for a very similar district.

  2.6  An issue facing DDC currently is the fact that the development of "Low-Cost Home Ownership" units is used by RSLs to offset the costs of providing social rented properties. Although there is a demand within Daventry for Shared Ownership properties, there is a much greater demand for social rented properties. Approximately only 100 applicants have in the past year contacted either Daventry District Council or the Northamptonshire Zone agents regarding shared ownership locally compared to over 1,000 applicants that have joined the Common Housing Register. So while there is a clear need for such properties, the demand for Social rented far outweighs it at this present moment in time.

  2.7  Many RSLs and developers try to maximise the provision of Shared Ownership units upon developments to the detriment of social rented. The Daventry District Council Housing Strategy Team has communicated to developing RSLs that the local housing needs require a majority of social rented units. This view is strengthened by the fact that some recently developed shared ownership units have been slow to sell, even after heavy reductions in the initial market asking price of the properties. The demand for many-shared ownership flats locally is over-estimated and often found to be unaffordable, compared to purchasing upon the open market, where using higher income multipliers and borrowing over a longer period, from some High Street mortgage lenders can prove to be cheaper in both the short and long term.

  2.8  The future role of Local Authorities in the development of affordable housing will be strictly a strategic function. Local Authorities are unable to access Social Housing Grant in order to develop affordable housing locally, whereas RSLs are able to access various forms of funding. Providing relevant and up to date need and local income information and develop local development plans to fit into sub-regional and regional strategies is where local Authorities can best influence the development of affordable housing.

  2.9  This lack of available investment funding to Local Authorities has meant that the traditional model of local authority housing is outliving its usefulness. Stock transfer of housing to ALMO organisations, RSLs or housing co-operatives is sometimes necessary to ensure that new investment from central government or private sources is available to meet decent even basic decent homes standards. Although currently meeting decent homes standards throughout its stock, local authorities such as Daventry cannot meet the aspirational expectations of their tenants/customers using the traditional Local Authority Housing model.

  2.10  With an increase in demand for rented housing locally and the inability of many to purchase property upon the open market, the private rented housing market is essential within the Daventry area. The growing intermediate housing market, the massive inward migration of Eastern European migrants to work locally together with a shrinking supply of social rented properties has meant demand for private rented accommodation has risen to meet need. For many individuals who would not be seen as a priority, the private sector is vitally important tool in providing accommodation in Daventry.

  2.11  The importance of the private rented sector has risen due to policies such as "Right to Buy". Local Authority Housing Stock has shrunk massively since the 1980s. To help increase access to private stock, Daventry DC has sought to set up a Private Sector Leasing Scheme. It is anticipated that this scheme will help bring empty properties back into use, increasing the stock of homes available for private rent.

  2.12  There have been some issues, which have arisen concerning housing benefit through the development of this scheme and also within the established "Homes-2-Stay" scheme, currently running within the District. This scheme, similar to the proposed Private Sector Leasing Scheme, but without the Council actually renting properties directly, has suffered due to the time lag between Housing Benefit Claims being put forward and payment to landlords being received. Although, locally, the lag between payment and claim is smaller than in many other areas, the time length it took, meant that many landlords became frustrated at not receiving their housing benefit receipts within what they would view an acceptable period of time, considering many would have mortgage payments to meet on a monthly basis. Consequently, officers involved with this scheme spend much of their time, chasing housing benefit on behalf of contributing landlords, when their time could be better utilised trying to increase the numbers of landlords involved with the scheme.

  2.13  The role of the Housing Corporation in the delivery process of affordable housing is paramount. Acting as the broker of Social Housing Grant and leading on the continuous improvements in affordable housing that is being driven within this industry sector. However the Housing Corporation only has finite resources and presently as house price inflation continues, then their resources are becoming over stretched. Locally the role of English Partnerships is not as high as in other locations such as Northampton or Milton Keynes where they are substantial stakeholders in the delivery of affordable housing. Their role in delivering social rented housing, like that of the Regional Housing Boards, would be hugely dependent upon the housing need information accrued at local authority level or sub-regionally through the Housing Market Assessments.

  2.14  The effectiveness of the planning system in delivering social rented housing should be improved through the development of Planning Policy Statement 3, replacing Planning Policy Guidance 3, shortly. The draft PPS3 that went out to consultation would allow Local Authorities to specify the required housing tenure and mix upon new developments, securing more social rented housing than was previously possible.

  2.15  Historically, there have been problems trying to secure social rented provision upon many "affordable" housing developments with developers including some RSLs preferring Low-Cost Home Ownership units instead. It is hoped that PPS3 will be a useful tool for LAs in order for them to meet social housing needs more accurately and thereby preventing the imbalance that is currently occurring with developers wishing to mostly provide one or two bedroom flats for LCHO, as the affordable element upon most housing sites.

  2.16  In order to further strengthen the role of the planning system, DDC is contributing to the development of the Northamptonshire s 106 agreement with agreed standard countywide clauses. This project has been designed to improve the quality of such agreements within the County, ensuring some level of transparency across the county with all stakeholders aware of the clauses.

  2.17  Housing Benefit and Council Tax benefit does help those on low incomes with the affordability issues associated with the private rented sector. Although housing benefit does help the most needy, there are problems associated with the qualifying threshold levels that could act as a disincentive for some to work.

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Prepared 21 November 2006