Memorandum by Daventry District Council
(SRH 42)
1. PURPOSE OF
REPORT
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. INFORMATION
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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