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
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 householdsbeyond the 596 projectionwho
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
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
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 pricehence
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
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
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
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
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 declinewhich,
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.
Housing Strategy Manager
Trafford Metropolitan Borough Council