Carmarthenshire County Council| OP/PD restructuring

Wrexham Affordable Housing Delivery Statement 2008-2012

FOREWORD

Wrexham’s Local Housing Strategy 2007-2012sets out the long term aspirations for all housing in Wrexham. Its aims includethe developmentof more good quality affordable homes and ensuring that appropriate housing is available to all.

Access to good quality housing is vital in improving the quality of life for people in Wrexham who cannot afford to rent or buy on the open market.The County Borough recognisesthis need and has made Affordable Housing a Council Priority over the next three years. The development and implementation of this priority demonstrates the Council’s continued commitment to delivering more affordable housing in the County Borough.

This Delivery Statement sets the framework and outlines the methods by which the Council Priority on Affordable Housing 2009 – 2012 will be delivered.

Signed Leader

Table of contents

Introduction4

Wrexham housing market and demographic profile6

Affordable housing needs evidence base7

Assessment of need 8

Affordability in Wrexham13

Influencing demand16

Enabling supply18

Monitoring27

Affordable housing delivery summary28

Introduction

Wrexham County Borough Council aims to ensure that everyone in the County Borough has access to a good quality home that meets their housing needs. However, the steep rise in house prices in recent years and the inability of many households to get onto the property ladder has made affordability a key issue within the County Borough.

Despite a fall in house prices in Wales of 11.7% in 2008, the recent economic crisis and property market downturn have made mortgages far more difficult to obtain. There has been no reduction in the requirement for affordable housing as fewer people are able to access owner occupation due to mortgage rationing and job insecurity.

The County Borough’s recognition of these difficulties and it’s commitment to ensuring that more affordable housing is available to residents in Wrexham has been reaffirmed by its decision to make affordable housing a Council Priority over the next three years.

The overall aim of this Affordable Housing Delivery Statement(AHDS) is to provide a clear mechanism outlining how the County Borough,as part of our strategic housing and planning functions and building on existing strategic housing partnerships andregistered social landlord (RSL) expertise intends to improve delivery of affordable housing in response to both the Welsh Assembly Government’s (WAG)‘OneWales’ target of 6,500 new affordable homes to be delivered in the period2007/8 to 2010/11 and the local authority’s own identified affordable housingneed.

This AHDS establishes a clear local 4-year target for affordable housing for the period 2007-2011.

Our strategic housing partnership, the Wrexham Housing Alliance has been established since December 2005. Membership of the Alliance includes senior management and representatives from the Local Authority, RSLs, the House Builders Federation and WAG. It is responsible for the delivery of the Borough’s Local Housing Strategy.

Wrexham’s Local Housing Strategy 2007 – 2012has identified and prioritised the following five aims:

1 / To improve the quality and sustainability of existing homes and neighbourhoods
2 / To develop more good quality affordable homes
3 / To reduce homelessness and rough sleeping
4 / To ensure that appropriate housing is available for all, particularly the vulnerable and those with special housing requirements
5 / To provide effective housing advice and promote the full range of housing options available

This Affordable Housing Delivery Statement supports the Local Housing Strategy, outlines the evidence for affordable housing need in the County and how we propose to secure, deliver and monitor provision.

The purpose of this Delivery Plan is to:

  • Re-state our commitment to enabling the provision of additional affordable homes in Wrexham
  • Define what affordable housing means
  • Confirm our understanding of the housing market
  • Describe how we can influence the demand for affordable homes
  • Bring together all the actions to increase the supply of affordable homes.
  • Clearly state what we are committed to enabling over the next four years.
  • Clearly state our expectations of our partner agencies

This Statement will not cover:

  • Quality of homes, including building ‘sustainable, environmentally friendly’ homes
  • Long term running costs associated with owner occupation including heat, light and power costs

Wrexham housing market and demographic profile

Wrexham County Borough’s population stands at 131,000 residents accommodated in 54,500 homes. Between 1991 and 2001 the population grew at almost double the Wales average at 4.2%. The current growth in the population of 4.4% is considerably faster than the population for Wales as a whole.

However, ‘Wales Population – A Demographic Overview 2008’ – Welsh Assembly Government’ estimates that by 2031 all Walespopulation is projected to increase by 11 per cent. Whilst separate figures are not available for Wrexham it may be that the current figure of 4.4% (and as a consequence the new households and dwelling requirement) may be conservative and by inference underestimate the affordable housing requirement.

The proportion of older people in the population is predicted to grow significantly over the coming years. Projections by the North Wales Population and Housing Research Group predict a 37% increase in people over retirement age in the Borough by 2026 with significant increases in the elderly population (85+) of 78%.

A significant increase in the student population, largely within Wrexham, with the continued growth of GlyndwrUniversity is further increasing the pressure on local housing markets.

Despite recent falls, house prices in Wrexham increased by nearly 60% between July 2004 and 2008. Household incomes have not grown at the same rate (Average UK earnings rose 18% over same period)

County Borough average house price to income ratio stands at 5.9 (October 2008) with 68% of first time buyers still priced out of the market for a terraced property (mortgage based on 3 times salary)

Affordable housing local needs evidence base

Both the current and future demand has been identified in:

  • Our Unitary Development Plan (UDP), which was successfully adopted in 2005
  • Our developing Local Development Plan (LDP) Preferred Strategy Document (Executive Board approved preparation of LDP in accordance with Preferred Strategy in September 2008)
  • Housing Potential Study published in March 2007
  • Annual housing land availability study
  • Local Housing Market assessment – published in March 2006
  • North East Wales Housing Market assessment published in March 2008
  • Our Council House waiting list and Affordable Housing Registers – a snapshot of demand for rent and to buy
  • The Accommodation and Housing Support Strategy for Older People Action Plan (2007) research document 2008 – “future older person provision in Wrexham County Borough.”

The Local Housing NeedsAssessment and sub regional Housing Market Assessment have informed and enabled:

  • A full analysis of the County Borough’s housing market and an evidence base for affordable housing requirements
  • A robust analysis of cross-authority housing markets.

The policy statement on older persons housing requirements has enabled:

  • A robustanalysis of the housing needs and aspirations of older people
  • Forward planning of the re-alignment of housing provision required to meet these needs. In particular the more specialist requirements such as Extra-Care provision.

Assessment of need

Wrexham Housing Needs Assessment 2006

Fordham Research Ltd. was commissioned to undertake a housing needs assessment in 2005 to inform the emerging Local Housing Strategy and Local Development Plan, studying housing requirements across all tenures, areas and client groups within the authority.

The report divided Wrexham into sub regional areas:

Key findings included:

  • A shortfall of affordable housing across the Borough and a continued shortage in the future.
  • Greatest shortage in WrexhamTown, West and North East, (as identified above)
  • A need for 2205 more affordable homes by 2021 – an annual shortfall of 147 a year, based on conditions and reasonable assumptions at that time, representing 40% of theplanned yearly supply of all types of housing in the county.
  • The overwhelming need for 2 and 4 bedroom properties.
  • A high target for affordable housing of up to 40% on development sites would be justified.
  • A mix of intermediate and social rented will be required to meet outstanding need.
  • 42.1% of households contain “over 50’s only”. Almost half of “over 50’s” only households are single person households,which will have implications for the provision of future care.

North East Wales Housing Market Assessment 2008

GVA Grimley Ltd. was jointly commissioned by Wrexham, Denbighshire and Flintshire to undertake a joint Local Housing Market Assessment across the North East Wales sub regional housing market area in 2007. Key findings of the report included:

  • Within the Core Study Area average house pricesincreased from £74,753 to £155,032 between 2001 and 2006
  • There is a significant undersupply of affordable housing given the recent increases in house prices, the reduction in the amount of available social rented housing and the current lack of development activity to bring forward new affordable housing.
  • Affordability for indigenous households and first time buyers remains one of the biggest delivery challenges.
  • A need to build a more balanced stock of new houses to include smaller stock that comprises of units suitable for single and family occupation, including the elderly.
  • Waiting list data indicates that there is a notably high level of demand for smaller social rented property. Within Wrexham demand is greatest for 2-bedroom units.
  • The need to secure greater levels of affordable housing as part of market housing developments.
  • The need for smaller affordable units (one and two bedroom) for greater numbers of young households likely to be excluded from entering the private housing market.
  • Maximise the delivery of affordable housing units on remaining potential housing sites and any surplus public land that arises during the plan period.
  • Opportunities should also be identified in urban centres to deliver quality apartments aimed at new households to contribute towards meeting the projected increasein demand for smaller single person or couple households.
  • A range of provision for elderly households should be explored.
  • Maximising the delivery of affordable housing on remaining land.This is particularly important in Wrexham where a considerable amount of future capacity consists of sites which already have planning permission.

Council Housing waiting list – by wards

Greatest demand - applicants waiting per letting

Ward / Total Number of homes / Total Number of applicants / Total number of lettings / Applicants
per letting
Bryn Cefn / 49 / 238 / 0 / 238
Gwersyllt East & South / 39 / 358 / 3 / 119
Gresford East & West / 86 / 186 / 2 / 93
(WrexhamTown) / 14 / 87 / 0 / 87
Little Acton / 83 / 412 / 5 / 82
Erddig / 57 / 152 / 2 / 76
Holt / 86 / 117 / 2 / 59
Marchwiel / 60 / 114 / 2 / 57
Rhosnesni / 63 / 307 / 6 / 51
Brynyffynon / 179 / 560 / 11 / 51

Applicants for affordable non council housing

Top ten areas by demand – intermediate housing waiting list

Future older person housing need in WrexhamCountyBorough

Research undertaken by the County Borough’s Strategic Housing Section during Summer 2008 adopted a methodology advocated by the Departments of Health and Communities and Local Governments published toolkit “More Choice, Greater Voice” (February 2008)

Key findings included:

  • Population estimates - 29,100 people currently aged 60+ within the County Borough. This represents 22% of the population. Broken down by age cohort as follows:

Age Group / Population 2026 / % increase from 2001
Retired – 74 / 20,550 / 20%
75-84 / 11,950 / 62%
85+ / 4,450 / 78%
Over retirement age / 36,950 / 37%

2005 based population projections and 5 year migration trends

  • Most concerning is the significant increase in the very elderly population, the group likely to be in need of the most cares and support.
  • The “More Choice, Greater Voice” toolkit provided a framework to enable local analysis of both the current and future need for specialist older person’s accommodation in the County Borough. The tables below refer to all older persons' requirements of which an affordable element is likely to reflect the current tenure of 34%.

Indicative levels of provision of various forms of accommodation for older people – based on current supply levels and population levels.

Tenure / 1,000 75+ 2001 / Suggested ratio per 1,000 of population 75+ / Suggested number of units / Current provision 2008 / Current ratio 2008 / Surplus / deficit
Conventional sheltered for rent / 9.87 / 50 / 494 / 750 / 76 / 257
Conventional sheltered leasehold / 9.87 / 75 / 740 / 19 / 2 / -721
Enhanced sheltered for rent / 9.87 / 10 / 99 / 154 / 16 / 55
Enhanced sheltered for sale / 9.87 / 10 / 99 / Nil / 0 / -99
Extra care sheltered for rent / 9.87 / 12.5 / 123 / Nil / 0 / -123
Extra care sheltered fore sale / 9.87 / 12.5 / 123 / Nil / 0 / -123
Housing based provision for dementia / 9.87 / 10 / 99 / Nil / 0 / -99
Registered care home - personal care / 9.87 / 65 / 642 / 564 / 57 / -78
Registered care home - nursing care / 9.87 / 40 / 395 / 492 / 50 / 97

Indicative levels of future provision of various forms of accommodation for older people – based on current supply levels and future population levels.

Tenure / 1,000 75+ 2026 / Suggested ratio per 1,000 of population 75+ / Suggested number of units 2026 / Current provision 2008 / Current ratio 2008 / Surplus / deficit
Conventional sheltered for rent / 16.39 / 50 / 820 / 750 / 76 / -70
Conventional sheltered leasehold / 16.39 / 75 / 1229 / 19 / 2 / -1210
Enhanced sheltered for rent / 16.39 / 10 / 164 / 154 / 16 / -10
Enhanced sheltered for sale / 16.39 / 10 / 164 / Nil / 0 / -164
Extra care sheltered for rent / 16.39 / 12.5 / 205 / Nil / 0 / -205
Extra care sheltered for sale / 16.39 / 12.5 / 205 / Nil / 0 / -205
Housing based provision for dementia / 16.39 / 10 / 164 / Nil / 0 / -164
Registered care home - personal care / 16.39 / 65 / 1065 / 564 / 57 / -501
Registered care home - nursing care / 16.39 / 40 / 656 / 492 / 50 / -164

Affordability in Wrexham

For the purposes of this statement affordable housing is defined as:

‘housing where there are secure mechanisms to ensure that it is accessible to those who cannot afford market housing on first and subsequent occupation’’

Assessing Affordability

“A household is considered likely to be able to afford to buy a home that costs 3.5 times the gross household income for a single earner household, or 2.9 times the household income for dual income households”

“A household should be taken as being able to afford market housing in cases where the rent payable is no more than 25% of their household income (Local Housing Market Assessment Guide, WAG)”

This definition has been taken from our Supplementary Planning Guidance (SPG) on Affordable Housing.

Increasingly within the County Borough there are difficulties securing an adequate supply of affordable housing. This is due to:

  • Decline in the supply of council housing due to right to buy and significant reduction in turnover in the last 5 years
  • Demographic change
  • Rising property values

The need to develop more good quality affordable housing is a key target in Wrexham’s Local Housing Strategy (2007-2012) and a key objective within the LDP Preferred Strategy Consultation Document 2007 to promote social progress – ‘there will be a plentiful supply of affordable, accessible and well designed housing’

The Wrexham Housing Needs Assessment 2006made recommendations based on conditions and reasonable assumptions at that time.In the intervening period the North East Wales Housing Market Assessment (March 2008) supported the conclusions of the earlier studies.

However, as in other parts of the UK, Wrexham has been affected by the property market downturn. The new economic conditions are already being reflected in a fall in the rate of affordable housing secured through Section 106 agreements. Despite the reduction in house prices, entry level values across the Borough,more restrictive mortgage lending criteria and job insecurity arising from the economic downturn have not enabled first time buyers to enter the market.

This dramatic shift in housing market conditions suggests that the shortfall in affordable housing is likely to be more significant than the 2,205 figure highlighted in the report. This is further supported by factors such as:

  • House prices increased by nearly 60% in the Borough over the 4 year period July 2004 to 2008.
  • Whilst average house prices fell by £10,000between July and October 2008 house price to income ratio still currently stands at 5.9for the Borough. (October 2008)
  • First time buyers needing higher deposits are struggling to get a mortgage in the current financial markets.
  • 68% of first time buyerspriced out of the market for terraced houses as at October 2008.
  • New housing developments, the main vehicle for affordable housing provision through s106 agreements are not progressing due to the property market downturn.
  • In recent years the significant inflow of migrant workers from the new EU accession states in Eastern Europe and the continued growth of Glyndwr Universityresulting in a significant increase in the student population in Wrexham have further increased the pressure on local housing markets.

We have established an affordability ‘matrix’ within the County Borough in the context of a sub regional analysis model established within the Housing Needs Assessment 2006

Affordability levels are revised quarterly using household income data from CACI Paycheck, and are based onmedian local incomes.During October 2008 extensive consultation was undertaken with Estate Agents operating throughout the County Borough to validate the process and methodology.

Median household income by sub region

andmaximum property price achievable

based on X3 income and 10% deposit

Average property and terraced price by sub region

Sub Region / Median Income / Maximum Property Price achievable
North East / £32,728 / £109,000
Rural East / £29,519 / £98,500
WrexhamTown / £26,987 / £90,000
North West / £25,727 / £86,000
Rural West / £28,037 / £93,500
South West / £23,966 / £80,000
West / £24,943 / £83,000
Caia / £22,023 / £73,500
Sub Region / Average Property Price / Terraced Property Price
North East / £288,125 / £164,250
Rural East / £272,100 / £131,666
WrexhamTown / £166,358 / £129,392
North West / £162,655 / £121,266
Rural West / £196,800 / £123,600
South West / £158,800 / £134,171
West / £139,740 / £103,260
Caia / £166,358 / £112,560

Source - CACI Paycheck 2007 Source – Hometrack

Using terraced property prices as the entry point on the housing market, the table below shows the difference in price between maximum property price achievable and terrace property prices.

Sub Region / Difference between 3x income and terraced house / % Difference
North East / £55,250 / 34%
Rural East / £33,166 / 25%
WrexhamTown / £39,391 / 30%
North West / £35,266 / 29%
Rural West / £30,100 / 24%
South West / £54,171 / 40%
West / £20,260 / 20%
Caia / £39,060 / 35%

Source - Affordable housing for sale prices – 3rd quarter 2008

The table below shows the suggested affordable housing prices by sub region based on 30% discount on current house prices.

Sub Region / 1 Bed Flat / 2 bed flat / 2 bed terraced / 2 bed semi / 3 bed terraced / 3 bed semi / 4 bed detached
North East / £82,950 / £93,100 / £99,050 / £106,400 / £108,500 / £116,900 / £165,900
Rural East / £74,900 / £84,000 / £89,250 / £95,900 / £97,650 / £105,000 / £149,800
Rural West / £71,400 / £79,800 / £85,400 / £91,700 / £93,100 / £100,450 / £142,800
WrexhamTown / £68,600 / £77,000 / £81,900 / £88,200 / £89,600 / £96,600 / £142,800
North West / £65,170 / £73,150 / £77,700 / £84,000 / £85,400 / £91,700 / £130,200
West / £63,700 / £71,400 / £76,300 / £81,900 / £83,300 / £89,600 / £127,400
South West / £60,900 / £68,600 / £72,800 / £78,400 / £79,800 / £86,100 / £121,800
Caia / £56,000 / £63,000 / £67,200 / £72,100 / £73,500 / £79,100 / £112,700

Influencing demand

As well as looking at what we can do to enable supply, we will consider what we can reasonably do to influence the demand for additional affordable housing.