WHAT DO WE KNOW?
There were 2.4m dwellings in the South West in 2011 (DCLG 2010, Table 109).
There were 13,220 dwellings completed in 2010/11 (DCLG 2010, Table 232).
41,720 affordable dwellings were provided between 2001/2 and 2009/10 (DCLG 2010, Table 1000).
Flats comprised 29% of all dwelling completions in 2010/11, compared to 32% in 2009/10 and 42% in 2008/09 (DCLG 2010, Table 254).
2,980 households were accepted as homeless by South West local authorities in 2009/10(DCLG 2010, Table 772).
There were 63,304 empty dwellings recorded in the South West in 2010, representing 2.7% of the total number of homes (HSSA 2011).
Second homes represented 2% of the South West housing provision in 2008, double the figure for England (ONS 2010: Neighbourhood Statistics).
In the South West, the median house price was £181,500 in Q1 2011. This varies across the region; the lowest being in Gloucester (£130,000) and
the highest being in East Dorset
In 2010, the ratio of lower quartile house price to lower quartile earnings in the South West was 8.17 to 1 compared to a national average of 6.69 to 1 (DCLG 2010, table 576 and Figure 6.1 below).This ratio, which better reflects the first time buyers market, varies across the region; the highest (least affordable houses) in the South West are in Dorset, the lowest (most affordable houses) are in Plymouth.
In the South West, house prices remain high in relation to incomes and the area has the highest proportion of second homes in the country.
According to data from DCLG, the average (mean) house price in the South West in October 2010 was £212,603, up 66% from 2002. The lower quartile house price to lower quartile income ratio, used to measure affordability, remains particularly high in the South West at 8.17. This has increased from 3.98 in 1997 and 7.63 in 2009, yet remains below the peak of 8.94 in 2007.
The National Housing Federation report Home Truths 2011 states that these figures are even higher, with the average South West home estimated at nearly 12 times average income levels. It also finds the average home in rural areas now costs 13 times the average local income, compared to 11 times in urban areas. About a third of the South West’s population live in small market towns or villages - the highest proportion of any region.
Figure 6.1: Ratio of Lower Quartile House Price to Lower Quartile Earnings by District, from 1997-2010
Affordability in the South West is further strained by the high level of second homes, with 40,118 recorded in 2008. This is even more apparent in some areas, with 50% of the region’s second homes being located in Devon and Cornwall and a further 27% in Bournemouth, Dorset and Poole.
Housing supply in the South West has been in decline since 2004/05 (see Figure 6.2 below). In 2010/11, the South West had 13,220 homes completed, the lowest level since 1990/91. However the supply of affordable housing is increasing, with 7,100 completions in the South West in 2010/11 accounting for more than 50% of the overall total. This represents the highest level of affordable housing completions since 1995/96.
The Council of Mortgage Lenders has found that the number of loans advanced for house purchase fell by 8% in October 2011, to 44,500. This is 5% lower than October 2010. Lending to first time buyers was unchanged from October 2010’s figures at £2.0bn. The number of loans fell by 1% over the year, to 16,400. There were 28,000 remortgages (worth £4.5bn) in October 2011, 8% less than October 2010. Typically first time buyers and prospective shared owners require high loan to value mortgages, but these are more difficult to secure. If they are secured, they often require deposits of 20% or more, which poses a further challenge for prospective buyers.
Lower interest rates have helped make monthly mortgage payments for first-time buyers more affordable, but the uncertainty of the economic outlook continues to impact upon lending activity.
Figure 6.2: Housing supply, South West Region