Agenda Item No. 7

 

 

THE VALE OF GLAMORGAN COUNCIL

 

HOMES AND SAFE COMMUNITIES SCRUTINY COMMITTEE: 16 MAY 2018

 

REFERENCE FROM CABINET:  30 APRIL 2018

 

C299      LOCAL HOUSING MARKET ASSESSMENT 2017 (HBS) (SCRUTINY COMMITTEE – HOMES AND SAFE COMMUNITIES) -

 

Cabinet was asked to consider the 2017 Local Housing Market Assessment that was attached at Appendix A to the report.

 

Local authorities had an important strategic housing role and statutory responsibilities in relation to the functioning of the housing market. Relevant to the adoption of the Local Housing Market Assessment (LHMA); Section 8 of the Housing Act 1985 required local authorities to consider the housing conditions and needs in their local area; this included a duty for local authorities to conduct a periodic review of the housing market. The review provided the Council with a comprehensive understanding of the local housing market and a robust evidence base for effective strategic housing and planning services.

The previous LHMA for the Vale of Glamorgan was undertaken in 2015 and completed in-house following the methodology published by the Welsh Government in November 2014. It provided a review of the housing market in the Vale of Glamorgan, considering all geographical areas, at ward level or by major settlement. This was achieved by providing an overview of the housing market, socio-economic, demographic and population statistics. This analysis provided a review of the housing market of the Vale of Glamorgan as a whole, across all tenures; home ownership, private renting and affordable housing. The assessment was conducted between September 2014 and January 2015; therefore the data and statistics used were those available or collected during this period of time and adopted by Cabinet on 16th November 2015 (Cabinet Minute C2980).

 

The results of the LHMA 2015 showed net need for 559 affordable housing units per year comprises 331 units of social rented accommodation and 228 units of intermediate housing (114 for low cost home ownership purchase and 114 for intermediate rent). 

 

The LHMA 2017 was the first biannual review of the document, following the same methodology in compliance of Welsh Government requirements under Section 8 of the Housing Act 1985 and again was competed in-house. Due to the length of the document, a copy of report had been placed in both the Cabinet Room and the Members Room. A further copy was available in the Democratic Services office should Members wish to inspect the document

 

In addition to a review of the local housing market, a fundamental aspect of any LHMA is a calculation of the net need for ‘affordable housing’. Estimates of shortfalls or surpluses of affordable housing, in different areas and of different sizes, awere crucial inputs into the local housing and planning frameworks.

 

In common with the 2015 assessment, the LHMA 2017 again considered housing data and calculated the level of housing need across 12 housing market areas in the Vale of Glamorgan; outside of Barry and Penarth and Llandough these areas were coterminous with the ward boundaries.

 

The quantitative assessment of housing need, as set out by the Welsh Government's step-by-step guide, estimated the need for affordable housing over the next five years. The assessment of housing took into account of three stages:

 

(X) Newly Arising Housing Need (newly arising need for social rented housing, newly arising need for intermediate housing products and existing households falling into need for social housing)

(Y) Backlog of Housing Need (backlog of need for social rented housing and the backlog of need for intermediate housing products)

(Z) Supply of Affordable Housing (re-lets / re-sales of existing affordable housing and new build supply).Table 2 below showed the figures used in the three stages:

 

Table 2 showed the annual affordable housing need identified in the 2017 LHMA for the next five years, 2017 to 2022.

 

Affordable Housing

 

Social Housing

Intermediate Housing

LCHO

Intermediate Rented

(X) Newly Arising Housing Need

253

42

47

(Y) Backlog of Housing Need

829

64

50

(Z) Supply of Affordable Housing

603

157

0

Annual Net Need for Affordable Housing

(X + Y - Z)

479*

           46

 

* Adjusted to account for the turnover of existing social housing, as per the calculation detailed in the Welsh Government guidance.

 

It should also be noted that out of the projected annual supply of 603 social rented units above in Table 2. 416 units were derived from the turnover in existing social housing stock and not new housing development.

 

The calculation for the LHMA 2017 showed an annual net requirement of 525 affordable units in the Vale of Glamorgan during the next five year period 2017 - 2022 (2,625 over the full period).  However, this figure had been reduced by an annual projected over supply of 51 low cost home ownership units, which were unaffordable to those households in need of social rented and intermediate rented units. The true annual need was therefore 576 affordable housing units needed (made up of 479 social rented and 97 intermediate rented units) over the five year period. This was an increase of 148 social rented units per year from the 2015 LHMA (from 331 to 479) and a decrease of 114 units of low cost home ownership units (from 114 to nil) as well as a decrease of 17 intermediate rented homes (from 114 to 97). over the five year period.

 

These changes were due to a number of factors, including an increase in the Homes4U waiting from 2,237 to 3,882, an increase in the backlog of affordable housing needed from 459 in 2015 to 943 in 2017 and a projected decrease in the number of social rented properties available for re-let based on the lower turnover in the last two year period. Some of these changes had in part however also been counteracted by a reduction in the household projections published by Welsh Government for the Vale of Glamorgan since the 2015 LHMA was conducted.

 

Social Rented Accommodation

 

The net need for social rented accommodation was broken down within the report to detail the need for general needs properties, adapted/accessible properties and older person's accommodation. As well as by property size and area.

 

The need for social rented accommodation was greatest for general needs properties. There was an overall shortfall of 476 units per year. The need was highest in the Barry and Penarth and Llandough housing market areas. In terms of the properties needed, the most significant demand was for smaller one and two bedroom homes.

 

The net need for adapted and accessible accommodation was an oversupply of 24 units per annum.  This included the need for level access properties with minor adaptations and those with acute needs which were most likely to require a purpose built adapted property. This was due to a number of factors, the application of the turnover rate of existing adapted housing available as part of the calculation and the information not being available for the number of people in the newly arising housing need or those falling into housing need who require an adapted home. This was a limitation of the calculation which was discussed further in the assessment of housing need.

 

Overall across the Vale of Glamorgan there was a need for an additional 32 units of older person’s social rented accommodation, which showed a change from 2015 where there was an oversupply. The number was however still low and was in part due to the areas where the current accommodation was located and the high turnover. However, the need for specialist tailored older person accommodation in specific areas remains high and would continue to increase in line with the increase in the older persons' population projections in the Vale of Glamorgan. .

Intermediate Housing

 

The net need for intermediate housing was 46 units per year in the Vale of Glamorgan, of which there was a projected annual surplus of 51 for Low Cost Home Ownership (LCHO) and a need for 97 intermediate rented homes. This reflected the trend of applicants only applying for low cost home ownership unit once a development commences and the growing difficulties of affordability, in the current economic climate.

 

LCHO provided by Registered Social Landlords in the Vale of Glamorgan had to date been provided on a 70:30 equity share basis (whereby the property was purchased for 70% of the market value). Due to the high property prices in the Vale of Glamorgan it was suggested that consideration be given to offering LCHO on a 60:40 equity share basis in some areas.

 

The demand for intermediate rented accommodation was highest in the Barry and Penarth and Llandough housing market areas. 

 

Implementation of an intermediate rent model in the Vale of Glamorgan may be hindered by the gap between Local Housing Allowance and private rent levels in many areas. Consideration would need to be given to how a model of intermediate rent could be developed in the Vale of Glamorgan to meet the identified need.

 

The net need for affordable housing provided in the LHMA 2017 was calculated in accordance with the Welsh Government LHMA Guidance 2006 as well as meeting the requirements of Technical Advice Note 2 (TAN2) Planning and Affordable Housing (June 2006).

 

The Welsh Government earlier LHMA guidance (2006) states that in addition to providing an annual net need figure for affordable housing, it was also important to use the data to: 

  • Highlight where the data points to a large future shortfall or surplus of a particular dwelling size or tenure.
  • Illustrate particular locational requirements.
  • Identify future areas of concern where intervention may be advisable. 

This was important to note in terms of the LHMA 2017, as whilst it was necessary to provide a net affordable housing figure across all property types, affordable tenures and areas, the figure calculated for the Vale of Glamorgan was misleading as it distorted differences in sub market areas, tenures and property types required.

 

One of the reasons that the net housing need figure was misleading was due to the way in which the requirement for social housing was calculated. Existing social housing stock which was considered to be 'surplus' or where there was a higher turnover rate (the frequency with which a property became available for re-let) was essentially deducted from the social housing required. However this did not take into account that the properties which were available do not 'match' those which were required.

 

Across the range of property sizes there was also surpluses of larger properties, for example three bedroom general needs properties, which again were essentially deducted from the need for smaller properties. These larger properties however cannot in the short term be used to meet the need for smaller properties. Although it was acknowledged that in the long term this information could be used by social landlords to consider the reconfiguration of their housing stock.

 

The issue was further compounded by differences between need and demand in different housing market areas and between types of property; for example the areas with surpluses of larger properties mask the need for smaller social housing units and the need for general needs accommodation compared to sheltered accommodation.

 

Consequently, the headline net social housing need of 479 units per year was an under estimation of the number of social rented properties actually needed in the county.

 

The Welsh Government LHMA Guide (2014) highlighted that the development of a LHMA was often described as “more of an art than a science” and therefore the ‘headline’ net housing need figure calculated by this approach should not be used as a definitive measure of need or as a target figure. Rather it should be used as an indication of the scale of the affordable housing problem and a benchmark to which the Council would work towards as far as practically deliverable through a range of various methods. These methods included but were not limited to Social Housing Grant, Housing Finance Grant, the Smaller Properties Programme,  private finance secured by Housing Associations, Section 106 contributions (on-site provision and/or commuted sums) and other external funding.

 

This was a matter for Executive decision

 

Cabinet, having considered the report and all the issues and implications contained therein

 

RESOLVED –

 

(1)       T H A T subject to consideration by the Homes and Safe Communities Scrutiny Committee the Local Housing Market Assessment 2017 attached at Appendix A to the report be accepted and the policy implications for the Vale of Glamorgan be noted.

 

(2)       T H A T the Local Housing Market Assessment 2017 be referred to the Homes and Safe Communities Scrutiny Committee, for consideration.

  

Reasons for decisions

 

(1)       To ensure the Council was able to meet the demand for affordable housing units required in the Vale of Glamorgan.

 

(2)       To enable this Committee to consider implication of the assessment.

 

 

Attached as Appendix – Report to Cabinet –  30 APRIL 2018