Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Trafford Metropolitan Borough Council (AFH 02)

  Obviously the issue of the provision of affordable housing is important for a borough such as Trafford. As you are aware, Regional Planning Guidance, the M62 Corridor CURs research and our own Housing Needs survey, confirm a high demand for housing across most areas and tenures, with a shortage of social and affordable housing. Our own Housing Needs Study concluded that "affordability" is the major obstacle facing households in need in Trafford.


  1.  Attached is a short paper produced by Michael Bullock (NCHA), which flowed from our Housing Needs Study. Based on the HNS our UDP includes a policy that over the next five years we should make affordable housing provision for 596 households (39.6 per cent of all those in need) who could afford up to a £250 housing cost per month. However, the number in need would be higher if an affordable housing cost were deemed to be greater than this. In reality, to buy a home in Trafford at current average prices would incur a monthly housing cost of over £600.

  2.  HM Land Registry figures for 2001 shows that the average price for a house in Trafford was £129,586 and £89,141 for a terraced house. To buy a terraced house (the cheapest available) would probably require a household income in excess of £30,000 per year, and equate to a monthly housing cost of approximately £600 per month.

  3.  Therefore, in practice there would be many more households—beyond the 596 projection—who could not afford to purchase a home. In a borough where 81 per cent of the existing housing stock is owner occupied, and most people aspire to owner occupation, the high house prices are a major obstacle for lower income households purchasing a home. Consequently we are experiencing growing waiting lists and homelessness because people cannot "afford" to obtain housing in the prevailing market in Trafford. Our recent work on Choice Based Lettings has also uncovered a number of new applicants for council housing, who would previously not consider such a housing option.

  4.  To address the shortage of affordable housing we work with RSL partners to provide shared ownership homes. An RSL partner is currently building 2 and 3 bedroom houses for shared ownership in the Stretford area; which is an average housing market area in Ttrafford. A 2 bedroom, 4 person house is valued at £77k. Based on a 50 per cent shared ownership a household would pay approximately £387 per month (£220 for a £38.5k mortgage and £167 rent). Therefore, while a lot cheaper than buying the house outright, even the "affordable" shared ownership option would be beyond the financial capacity of many households identified as being in need.


  5.  I agree that there needs to be a clearer definition of "affordability". Ideally there should be a link between lower incomes and affordable house prices for owner occupation. However, any standard formula produced should be linked to local circumstances.

  Affordable housing costs should be provided across all tenures. However, if we assume (?) that the Rent Restructuring Policy will produce affordable social housing rent levels, the real policy gap is one which produces affordable housing to purchase for owner occupation. (However, such a policy also needs to bear in mind the effect interest rate levels will have on housing costs and affordability.)

  6.  Clearly there is a real link here to the Planning Green Paper. This seeks to review the planning system and introduce a tariff system, which aims to assist in increasing the provision of affordable housing. However, more thought is required around how this would work in practice, and deliver housing which is truly affordable.

  7.  New housing developments in Trafford are being produced, in the main, at very high prices. We currently secure 10 per cent on site provision for affordable housing (S 106 agreements), which in turn is generally provided by an RSL partner for shared ownership. However, in the absence of a definition of affordability, and given the example in (4) above, there is no guarantee that shared ownership units will be affordable to many low-income households. This will seriously undermine the Government's attempts to use the planning system to crease mixed communities.

  8.  As you know, households who purchase on a shared ownership basis can eventually staircase up to own a property outright. At this point a home becomes a general market one, and would no longer be available at a sub-market price—hence ceases to be affordable. Consideration could be given to limiting the staircasing up so that a household can own no more than 80 per cent of a property's equity; as is the case in rural areas. This way more homes would continue to be available at sub-(full)-market value.

  9.  There are also issues associated with B&ME communities. Whilst many B&ME communities aspire to home ownership, the success of B&ME Associations has indicated a demand for suitable rented accommodation. The relative size of such property and the rent restructuring proposals will often make the accommodation unaffordable. In Trafford the majority of the B&ME communities are concentrated in the north of the borough, and often in the more deprived areas. We are yet to fully develop our B&ME housing strategy and identification of needs, but have carried out some initial consultations. This has revealed (opinions) that many B&ME households aspire to purchase homes in more affluent areas where house prices are higher. They would find it difficult to do so because of the gaps in house prices between their existing area and the affluent areas. There are also issues around creating a culturally sensitive infrastructure of support in residential areas, which currently have low numbers of B&ME households which, would make it easier, for B&ME households to move home. The recent community cohesion reports have highlighted the need for mixed communities in our urban areas. Current problems regarding affordability are acting as a disincentive to this.

  10.  The Government has introduced the Starter Home initiative for Key workers. Schemes devised under this initiative aim to assist Key workers purchase housing in high value areas, through different types of subsidy. This initiative assumes all Key workers will wish to buy housing for owner occupation. We conducted a limited research project among 80 Newly Qualified Teachers, recruited to schools in Trafford. This revealed that most NQTs, who struggled to find accommodation, actually sought rented accommodation.


  11.  Obviously the Housing Corporation has an important role in funding the provision of affordable and social rented housing. We would agree that their investment decisions in this region should be guided by the NW Housing Statement. We would also agree that the biggest problem facing the NW are areas of market collapse, particularly in the private sector. Trafford is fortunate that it does not suffer greatly from failing housing markets.

  However, this is not the only problem in the NW. The NW Housing Statement recognises the importance of other problems, and sets aims to address these; including the provision of affordable housing in high demand areas.

  In the N/W the Housing Corporation are giving strong indications that most (if not all) of their future investments will be directed at regeneration areas. In many instances these areas will be the same as those suffering market decline—which, potentially, may also benefit from the Housing Market Renewal Fund (if established).

  Therefore, we would plead that the Housing Corporation takes a more balanced view of their investment priorities and provide a fair level of funding for the provision of affordable and social rented housing in boroughs such as Trafford, which have proven shortages.


  I hope the above evidence and comments are of some assistance. I feel that the main task ahead is to produce a policy around the definition of affordable housing to purchase. A formula around how this would be calculated at a local level, so that house prices can be affordable to far more households who aspire to owner occupation and should reasonably be assisted to do so.

  Whilst RSL schemes for shared ownership are welcome, they may not provide a solution for many low-income households who wish to buy in a market such as in Trafford.

  In areas such as Trafford where owner occupation in any form will be beyond many households there will be a continued and increasing need to provide social rented homes.

Neil Davies

Housing Strategy Manager

Trafford Metropolitan Borough Council

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 1 July 2002