Memorandum by Nuneaton and Bedworth Borough
Council
1. THE NATIONAL
PICTURE
1.1 The increased number of households and
changes to household patterns has meant that in many parts of
the Country, the supply of housing has not increased in line with
demand. This has led to rapidly increasing house prices.
1.2 Kate Baker's Review of Housing Supply
analysed the problems with the supply of housing amid projections
that there will be 209,000 more households per annum to 2026.
This is due to population growth, more single person households
and the demographic trends, particularly the increase in older
persons anticipated until that date.
1.3 The Baker Review recommended that there
should be an increase in the provision of social rented housing
to deal with the growth in need for social housing. The Government
has stated that social housing will be a priority in the 2007
Comprehensive Spending Review.
1.4 House prices are at record levels. House
price inflation has far outstripped wage levels, thus the gap
for those hoping to own has become wider. As a result, there are
some 94,000 households in temporary accommodation and around 1.5m
households on waiting list.
1.5 Interest rates for borrowing on mortgages
have been at their lowest level for 40 years. This has enabled
many to buy by borrowing 100% (and more) of the house value by
way of mortgages and other loans. However, many have had to borrow
in excess of sustainable levels through a lack of alternatives
and recent minor interest rate increases have generated the highest
number of repossessions since 2000.
1.6 Latest figures produced by the Council
of Mortgage Lenders (2006) shows that the average first time mortgage
is £142,000. This equates to between 5 and 6 times the national
average salary. Anecdotal evidence suggests that it is necessary
to borrow 8 or 9 times salary in London to get a "foot on
the ladder"". Latest information from Royal Institution
of Chartered Surveyors suggests that house price inflation probably
hit a plateau in November 2006, but strong employment conditions
and a robust economy continue to shield the market from any dip.
The RICS believe that house price inflation will be at around
7% to 9% during 2007.
1.7 Guidance from the National Housing Federation
and Housing Corporation suggests that affordability is spending
approximately 28% or 30% of disposable income on housing costs.
The extent of borrowing has been brought a little closer to the
affordable definition only by mortgage terms increasing from the
traditional 25 years to 30 or even 40 years.
1.8 There is a demonstrable need for more
affordable housing. This has been targeted, in part, by the move
towards shared equity housing, as offered by Registered Social
Landlords (RSL's) and the range of Homebuy products. This form
of tenure allows households who aspire to home ownership to get
a foot on the ladder at a time when they cannot afford a mortgage
to the full value of the home. However, shared ownership targets
customers with an average salary of £26,500 (2004-05) compared
to gross annual salary of £25,008 in England in 2006 (ASHE).
1.9 One of the clear issues is that not
only has housing supply not kept up with demand, but that there
is a serious issue of affordability to address. This demonstrates
a clear need for affordable homes to rent. CORE data shows that
for 2004-05, 57% of new entrants to social rented housing were
eligible for housing benefit, with 51% wholly dependent on state
benefits for their income.
2. NUNEATON AND
BEDWORTH
2.1 Nuneaton and Bedworth is the smallest
Warwickshire District geographically, but has the second highest
population. Population growth was predicted to be 2.4% between
2003 and 2011 and is predicted at 3.4% between 2011 and 2021.
There is predicted to be a fall in the 5-14 and 30-49 age groups,
with the resultant impact on schools, facilities and working population.
The highest rate of growth is expected in the over 85 age group.
The black and minority ethnic population constitutes 4.9%, well
below the regional figure of 11.3%, but above the Warwickshire
figure of 4.4%.
2.2 There are pockets of serious deprivation
within the Borough. The Index of Multiple Deprivation 2004 showed
that two of the Boroughs Super Output Areas (SOA's) are within
the 10% most deprived SOA's in England—the only ones in
Warwickshire to be so. There are 37 Warwickshire SOA's within
the most deprived 30% SOA's in England, of which 26 are in the
Borough. The Authority is ranked 123rd of 354 local authorities
in England (one being the most deprived) by the Index of Multiple
Deprivation.
2.3 Due to the previous decline in the manufacturing
and employment base of the Borough, there are still pockets of
high unemployment associated with deprived areas. Unemployment
in May 2006, stood at 2.6%, below the national average, but the
highest level in Warwickshire. Growth in employment has been in
service industries, much of it warehousing due to the road network.
Overall the Borough is a low pay economy with average pay being
£21,652—well below the county and national averages
of £25,099 and £25,008 respectively.
2.4 Although there are some affluent areas
in the Borough, almost 83% of all dwellings in Nuneaton and Bedworth
fall within Council Tax Bands A to C, compared to 76% regionally.
There are 51,000 dwellings in the Borough of which some 81% are
owner-occupied which is well above the national average (71%).
2.5 Following extensive consultation with
tenants and leaseholders in 2002, the Council decided to retain
its housing stock, which currently stands at 6,187. The Council
is well on target to achieve the governments Decent Homes standard
for its homes by 2010.
2.6 Average house price sales April to June
2006 show that prices in the Borough are the lowest in Warwickshire.
(see table 1 attached) with the overall average at £134,675.
However income levels are also the lowest in the County (see table
2 attached). Current shared ownership properties being built by
Registered Social Landlord (RSL) partners are marketed at around
£130,000.
2.7 Nuneaton and Bedworth is covered by
the West Midlands Regional Housing Strategy and West Midlands
Regional Spatial Strategy. Housebuilding in the Borough has already
exceeded the target set in the Regional Spatial Strategy to 2011.
However, virtually all housing built has been open market housing
built by private developers. Very little "affordable""
housing has been provided. Nuneaton and Bedworth, as with all
other District Council's, makes a key contribution in the provision
of affordable housing through its own stock and the enabling role.
2.8 The Council's Local Plan, adopted in
2006, requires that on any development of 15 dwellings or more
than 0.5 hectares, affordable housing of 25% of the total is to
be provided under Section 106 Town and Country Planning Act 1990.
This policy is currently under review.
2.9 The Council owns very little land and
is therefore heavily reliant on developers providing affordable
homes under Section 106 provisions.
2.10 The Council works in partnership with
six Registered Social Landlords, all of whom are approved development
partners with the Housing Corporation. RSL partners are buying
land and working with developers to provide social housing. However,
such is the cost of land and subsidy levels from the Housing Corporation,
that very few properties for rent can be achieved. Recent inquiries
show that land in the Borough is attracting in excess of £1
million per acre.
2.11 A number of Brownfield sites are owned
by the Council's Housing Revenue Account (HRA). The Council is
actively in discussion with RSL partners on seeking to maximise
the provision of affordable homes on these sites. The Council
will use its best endeavours given the resources available to
maximise the number of rented homes provided on these sites. It
has recently provided land to an RSL partner at nil consideration
to ensure rented, as well as shared ownership dwellings, have
been provided in the town of Nuneaton.
2.12 The Council's Housing Register continues
to be the natural location of those seeking accommodation in the
area, who are unable to purchase. Applications stood at 3,600
in December 2004, 3,860 in December 2005 and 4130 in December
2006. Stock owned by the Council has fallen due to the Right to
Buy—7242 in 2001 compared to 6187 today. Whilst the waiting
list continues to grow, the vacancy rate of Council-owned properties
has fallen; some 400 in 2006, of which 65% were for supported
housing.
2.13 The Council has recently introduced
a revised housing accommodation application form, which allows
more data to be collected to be better able to discuss housing
options with applicants, seeking income data and whether applicants
would consider private sector renting as an alternative. We suspect
that average incomes of those on the register are more in the
range of £15,000 to £16,000 per annum for those in paid
employment—considerably less than the Borough average. Very
few on the housing register are able to enter shared ownership.
With entry levels generally still at 50% because of financial
balancing, this tenure is out of reach of the majority in housing
need in the Borough.
2.14 There is a reasonable private rented
sector in the Borough:
There are some 2,500 privately rented homes
in the Borough. Council Tax records show that 50% of these are
in receipt of housing benefit. The Council is working with private
sector landlords through its Accreditation Scheme and Rent Deposit
Scheme to maximise use of properties for those in most housing
need.
2.15 There are significant numbers of empty
properties in the Borough, with an estimated 700 empty for six
months or more. The Council has provided more resources to target
these homes and bring them back into use. This will involve working
with owners on condition and offering advice and support for disposal
as well as using the Empty Dwelling Management Orders to ensure
they are let. RSL partners are keen to work with the Council to
buy up some properties and work collaboratively on managing these
properties.
2.16 The Governments regulations on the
HRA subsidy are detrimental to the Council. The allowances for
major repairs and management on the one hand, compared to the
rents necessarily charged on the other, lead to a notional surplus
on the HRA. Some £2.9 million was paid back to the Secretary
of State for 2005-06 and the Council estimates this will be £3.3
million in 2006-07. If the Council was allowed to retain its tenant
rental income, more could be done to improve existing accommodation
or provide additional affordable homes. The Council commented
on this when replying to the discussion document " From Decent
Homes to Sustainable Communities"" in September 2006.
3. CONSIDERATIONS
3.1 Those in housing need naturally look
to the Council for help with accommodation. Most register on the
Council's waiting list. However, continued sales, lower number
of voids and continued pressures to help homeless families, make
it increasingly difficult to offer real hope to most applicants.
3.2 Land prices in Nuneaton and Bedworth
are currently £1 million per acre. This is making it increasingly
difficult for RSL's to provide rented as well as shared ownership
properties on sites they purchase. The Housing Corporation may
need to reconsider its subsidy levels in order to target those
most in housing need.
3.3 Where shared ownership properties are
provided, there needs to be entry at lower levels if those on
the housing register are to be able to afford them. The standard
50% entry level is beyond the reach of the majority on the register,
before adding fees, charges and the rent levels.
3.4 The Regional Spatial Strategy commits
the Council to looking at land use on a much wider basis. However,
to be able to help local people in local housing need, a more
flexible approach is necessary. Land ought to be released which
enables people to live where they want in relation to existing
facilities, helping to provide or maintain existing cohesive communities.
The Council is undertaking a Housing Needs Survey during 2007.
It is the view of the West Midlands Regional Assembly (and they
claim DCLG) that such work is not necessary. However, recent experiences
by Lichfield City Council and Stafford Borough Council show that
the Planning Inspectorate insist on this quality of robust data
to approve planning framework
3.5 The Council should be able to retain
the notional surplus on its HRA to provide more affordable homes
for local people in housing need. This currently amounts to £3.3
million per annum for Nuneaton and Bedworth Borough Council. This
could be used to buy land and/or enable other providers.
January 2007
Table 1
Average House Prices
The tables below detail the average house prices
for the same areas for the same periods in 2005 and 2006:
April- June 2005 figures.
|
| District | Detached
£
| Semi-
Detached
£
| Terraced
£
| Flat or
Maisonette
£
| Overall
Average
£
|
|
| North Warwickshire | 246,850
| 153,692 | 126,586
| 101,590 | 159,352
|
| Nuneaton & Bedworth | 198,479
| 129,440 | 108,874
| 107,929 | 133.009
|
| Rugby | 258,580
| 155,876 | 123,898
| 113,464 | 171,590
|
| Stratford on Avon | 352,311
| 215,465 | 180,707
| 165,523 | 252,543
|
| Warwick | 338,731
| 206,548 | 192,926
| 169,855 | 220,527
|
| Hinckley & Bosworth | 246,823
| 147,336 | 117,943
| 110,824 | 165,922
|
| Coventry | 268,693
| 143,942 | 112,890
| 101,207 | 128,899
|
| Tamworth | 227,259
| 130,980 | 116,429
| 110,450 | 145,847
|
| South Staffordshire | 283,943
| 143,980 | 139,965
| 136,389 | 188,593
|
| Birmingham | 307,250
| 150,766 | 121,699
| 133,534 | 146,822
|
|
Source: Land Registry. April—June 2006 figures.
|
| District | Detached
£
| Semi-
Detached
£
| Terraced
£
| Flat or
Maisonette
£
| Overall
Average
£
|
|
| North Warwickshire | 275,949
| 159,851 | 128,303
| 130,990 | 172,948
|
| Nuneaton & Bedworth | 209,660
| 129,987 | 107,843
| 105,735 | 134,675
|
| Rugby | 277,743
| 166,874 | 139,400
| 118,866 | 182,692
|
| Stratford on Avon | 367,842
| 221,411 | 188,460
| 145,017 | 250,954
|
| Warwick | 347,174
| 208,558 | 190,689
| 163,218 | 225,263
|
| Hinckley & Bosworth | 241,362
| 150,808 | 129,211
| 104,595 | 169,414
|
| Coventry | 292,948
| 156,563 | 118,501
| 116,761 | 140,573
|
| Tamworth | 220,609
| 139,847 | 129,082
| 125,853 | 151,929
|
| South Staffordshire | 298,503
| 153,056 | 154,221
| 126,560 | 201,417
|
| Birmingham | 312,327
| 156,875 | 126,820
| 131,000 | 153,374
|
|
Source: Land Registry.
It is clear that Nuneaton and Bedworth overall have the lowest
house prices in the County and in comparison with neighbouring
authorities.
Table 2
EARNINGS
A summary of earnings in Nuneaton and Bedworth, in comparison
to other areas in Warwickshire, and England.
Within Warwickshire, wage levels are highest for Warwick
and Stratford-on-Avon residents, £27,683 and £28,130
respectively. Wages for residents of Nuneaton and Bedworth are
the lowest in the County, at £21,652:
|
| | Residence
| Workplace |
|
| North Warwickshire | £21,998
| £23,560 |
| Nuneaton & Bedworth | £21,652
| £19,908 |
| Rugby | £24,307
| £22,510 |
| Stratford-on-Avon | £28,130
| £24,934 |
| Warwick | £27,683
| £25,180 |
| Warwickshire | £25,099
| £23,562 |
| Hinckley & Bosworth | £22,060
| £19,908 |
| Coventry | £21,487
| £25,167 |
| Tamworth | £21,274
| £23,400 |
| South Staffordshire | £22,420
| £22,099 |
| England | £25,008
| £24,948 |
|
Typical gross annual wage, full time workers, 2006
Source: Annual Survey of Hours & Earnings (ASHE), National Statistics.
|
Residence based earnings are considerably higher in the South
of the County than the workplace earnings, suggesting that a significant
proportion of South Warwickshire residents work outside the County
earning higher wages than are available within Warwickshire.
Workplace earnings are fairly consistent across the County
except for Nuneaton and Bedworth where annual earnings are £2,600
lower than in any other district. The largest employment sector
in Nuneaton and Bedworth is wholesale and retail where wages tend
to be lower.
|
