Memorandum by Southampton City Council
In common with much of the south east there
is a shortage of affordable housing in Southampton. Families on
our Housing Register will typically have to wait up to seven years
for a 3-bedroom houseoften living in acute housing need.
Bridging this gap requires the direction of more resources and
innovative new solutions.
Currently each local authority reaches its own
definition of affordable housing (supported by evidence about
local housing need). For planning purposes current planning legislation
defines affordable housing as that being low-cost home ownership,
shared ownership and subsidised rented accommodation. It is fair
to say that these three criteria offer some form of reduced cost
housing for those on a lower than average income. However proportionally
the numbers requiring subsidised rented accommodation and the
numbers requiring shared ownership are not as great as those requiring
subsidised rented accommodation. For example in Southampton our
last Housing Needs and Housing Market Survey (1999) showed the
need for 2,339 units of subsidised rented accommodation over the
period 1999-2002 compared to 250 units of low-cost/shared ownership
units over the same period. Too frequently where affordable housing
is required as part of a planning obligation developers seek to
provide low cost home ownership based often on the perception
of "preferred client".
The Housing Market is also not just divided
between the north and south, it is locally divided between the
"Haves"existing homeowners with sufficient equity
and/(or those with the) income to self determine their future
housing requirements, and the "Have Nots", those with
insufficient savings/income to break into the homeownership sector
at a level that meets their household needs or aspirations. This
latter group are no longer just the "lower paid", they
include virtually all newly forming households, virtually all
manual workers and households with incomes up to £30,000.
The Regional Housing Statement for the South
East identifies the provision of more affordable housing as being
its most important priority. Evidence to this effect is offered
within this document. This paper explains the strategic regional
implications of the high need for affordable housing in the south
east. In summary, the relationship of London to the south-east,
limited land supply, high need and not enough supply, in-migration
and demographic changes. The affordable housing crisis in the
south cannot be viewed in isolation. The high price of accommodation
in London puts further pressure for affordable properties in the
rest of the south east and out-migration from the north (wasting
abandoned properties) exacerbates this situation.
Even households with Professional workers are
becoming excluded from homeownership. Many do not reach the threshold
of £30,000 per year, including the majority of Public worker
professionals, who may traditionally have been the backbone of
the homeowner corps.
Regional pressures become local pressures. Locally
in Southamptonthe city suffers from high house prices (house
prices have increased by 104 per cent since 1995), and lower than
average incomes. This puts continued pressure on the capacity
of the social housing sector to meet need and demand.
The design, quality, management and maintenance
of new affordable housing should be at least equal to the best
that the private sector can provide. The rationale for this is
that those with higher than average incomes can exercise choice
over their housing solutions, whereas those on average incomes
or less are increasingly unable to do so.
(a) The supply of land resources is a major constraint.
There is great competition for all housing development land and
the best sites are often snapped up by the developer sector at
ever increasing prices. Developers build the product that reaps
the best return and in urban areas like Southampton, this is frequently
a luxury two bedroom flat. These sell at prices well beyond the
means of the majority of local people, adding little to the city's
useable housing resources.
The developments will inevitable generate some
household migration within the existing stock which may result
in the release of a few affordable homes, but local perception
is that the majority of dwellings are sold to households migrating
into the city, or to households "trading down" from
larger properties, or to the "Buy to Let" market, the
rents for which are likely to be beyond the definitions of "affordability".
This is an area which would benefit from some
national or regional research which may inform the development
of planning guidance to help local authorities encourage developers
to build housing more appropriate to future demands for local
(b) In urban areas such as Southampton,
the majority of sites are "brownfield" and bring with
them a cocktail of development constraints which add to the cost
of development and may affect the viability of development. This
acts against the local authority in its negotiations with developers,
as both parties know that the site may not be developed if the
development profits cannot be maximised. Is there a case for greater
Government support to the redevelopment of brownfield sites to
encourage the development of more appropriate housing to a locality?
The SEEDA Brownfield Land Assembly Trust proposal would be one
(c) Demolition of domestic buildings is
at an all time low and the RTPI and others have estimated that
the current stock of UK homes must last 5,000 years or more.
There is a compelling case for a new major redevelopment
programme in urban areas. Many Victorian suburbs are well beyond
their economic life and will continue to crumble without significant
Many suburban Council estates have large stocks
of low density non-traditional housing, which has a finite life
and which cannot be sold through Right to Buy as it is unmortgageable.
Greater freedoms for Councils to borrow could result in significant
redevelopment and the reconstruction of higher density, more sustainable
The impact of climate change has also yet to
be realised in the south. The higher ambient summer temperatures,
greater seasonal temperature variations, higher levels of winter
precipitation, drier and hotter summers and dramatically rising
sea levels, all forecast for the next 50 years could, within the
next 20 years start to render huge numbers of properties obsolete.
Given the preponderance of older homes in the stock, much of it
built in shrinkable clay soils this is at best worrying. New homes
of course are being built to a design life of at least 70 years
and if they are not designed to cope with climate changes then
they too will become obsolete, probably with significant financial
consequences for their owners and the insurance industry.
(d) Financial resources are insufficient
in areas of high demand. Housing provision is considered by some
to be the poor relation of other higher profile public sector
spending departments. Pragmatically therefore new thinking needs
to be applied to identify better/more efficient ways of spending
the same money:
Unlocking existing resources/spending
power tied up in local authority housing stock and rental streams;
Releasing the equity in homeowners
property to enable it to be used to improve the property and keep
it in good repair, so releasing ongoing demand on renovation grant
resources and shifting the full responsibility to homeowners/landlords;
New forms of low-cost homeownership
to realise the aspirations of the majority, but at an affordable
Increasing the supply of new affordable
homes by the enforced release of government/health authority/other
public sector held land in the south east;
Identifying positive and supportive
policies, which would encourage the migration of households from
the south to other parts of the UK where housing costs are lower
and stemming migration to the south east;
Identifying short term housing solutions
as a stop gap to quell demand (eg well designed, high density,
prefabricated dwellings with design life of 30 years maximum).
There may be some groups who need to access affordable housing
for a relatively short period of time (eg single person/couples
starter units), where building of a lower standard offering cheaper
building costs/rent/value may be acceptable;
Planning policy requiring high levels
of affordable provision across the south east;
(e) Affordable housing supply cannot be
the sole responsibility of individual local authorities. The success
of the UK economy and of the Region is dependent on the free flow
of skills and labour and this is significantly frustrated by unequal
housing costs between and within regions. In Southampton, the
local housing stock is meeting a sub-regional role as, along with
Portsmouth and Gosport, it has significantly lower house prices
than in surrounding districts. Lower income households are therefore
resorting to the cities for their housing solutions whilst perhaps
The cities are already densely developed and
land costs are high mitigating against significant future affordable
provision. Provision needs to be balanced between city areas and
Action is needed to tackle NIMBYism. The result
of this in rural areas is often migration to the city in search
of affordable stock so exacerbating city housing demand.
As said previously, developers seek the highest
return. Without compromising on quality (eg lower property standards
or higher densities for affordable housing than for mainstream
housing), then achieving much more than 25-30 per cent is not
realistic at a local level, as developers, which are generally
regionally or nationally based, will simply not develop in the
locality as better profits can be achieved elsewhere. The solution
therefore is a Government policy which properly reflects affordable
housing need, rather than the needs of the developer community.
Once a policy with appropriate threshold and
percentage targets is in place there is then the issue of the
financial contribution required to support the affordable provision.
The Tariff proposal in the Planning Green Paper may be sufficient,
but unless there is clear guidance to the contrary, what would
stop local authorities deciding to weight the tariff contributions
to economic development, leisure, education or other local priorities
rather than affordable housing?
There may be argument for some tariff to the
allocated for affordable housing possibly on a regional basis.
Southampton's housing needs and housing market
survey showed unexpectedly high demand for private rented housing
and the Government needs to recognise that home-ownership is not
the only solution other than social rent. However, pragmatically,
both the market economy and household long term aspirations are
both drivers for more homeownership and the issue is how to bridge
the gap between aspirations and affordability. With sustained
house price inflation, traditional shared ownership is becoming
less attractive as it is more likely to "lock-in" its
customers in perpetuity as the costs of laddering out escalate.
The rental element is also disliked by customers as they see nothing
There is certainly a gap in the provision of
low cost homeownership schemes with the majority of the schemes
in Southampton being pitched at above average local incomes. There
is indicative evidence to show that there is a body of people
on average local incomes (£14-18,000) who can't access LCHO
schemes currently. The Housing Corporation is carrying out a review
of LCHO schemes and there seems to be an opportunity to consider
alternative schemes/mechanisms to bring forward LCHO schemes which
are more affordable to local people. In terms of good practicewe
have developed a shared equity model at Oakley Road which has
worked well for keyworkers trying to access homeownership and
is an alternative to traditional shared ownership with no SHG
There needs to be more recognition of shared
ownership/equity as a legitimate and mature market in its own
right. It is currently seen as a staging post to full ownership
and consequently a facilitative "tenure hybrid". Realistically
many of those in the sector will never ladder into full ownership
given the growing mismatch between house prices and average incomes
and consequently to meet household needs and aspirations, improved
facilities for trading between properties within the sector are
required. This is currently undeveloped and the opportunities
that do exist are not well known or well marketed.
The resourcing of shared ownership needs to
be based on a sensible assessment of affordability at a local
level. This should be undertaken by local authorities through
their housing needs surveys. The funding of low cost homeownership
by the Housing Corporation or other Government Departments or
agencies (eg via key worker housing policy) should be driven by
local needs appraisal rather than political dogma.
The numbers in current guidance are more a result
of posturing by the participating councils than identifiable local
needs. Targets are not area specific. The problem with setting
such targets is that once established they are "set in stone"
and worked to by planning departments and developers whether or
not they are reliable indicators of need.
Arguably, in dense urban areas such as Southampton,
all sites are relatively small and brownfield and the majority
are infilling within established communities. As such community
mixing is assured. On larger greenfield developments, it is unlikely
that affordable housing will be intermingled throughout the development
and the Nimbyist attitudes of both developers and home purchasers
will mitigate against the perceived stigma of affordable housing.
The cities and urban areas cannot do it all
by themselves without major redevelopment. Rural communities should
also be facilitated with local people being able to stay in their
home-community should they wish and not displaced by relatively
well off new-comers whose purchasing power and mobility "gentrify"
This is not currently measured but perceived
to be important.
Southampton's workforce is predominantly service
based and relatively low waged. The ongoing relationship between
employer's workforce needs and employees housing needs are therefore
inextricably linked in a housing market where house prices are
inflating at three to four times wage inflation.
Private sector rents have a relationship with
house prices (if only because landlords will leave the sector
if the capital return exceeds the rental return) and other things
being equal continued housing costs, fuelled substantially by
those on higher incomes will result in a housing crisis amongst
the lower paid. This may in time precipitate local labour shortages
in some sectors as households migrate to cheaper housing areas
or to higher paid jobs, resulting in either local decline in certain
business sectors, or an increase in local wage rates at the expense
of business profitability.
High prices, nominal income remains an issue
amongst Key Workers. In Southampton we have developed a Key Worker
Strategy which defines key workers as:
those people employed in occupations
that provide services which are essential to the well-being of
the nation or the local economy and community and whose income
does not allow them to compete effectively in the local housing
Current examples of local key workers included
in this definition are nurses, police officers, fire and rescue
personnel and teachers. As house prices increase retaining and
recruiting these groups remains more and more difficult.