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This section summarises some of the most recent data relating to housing across the South West, before exploring the policy context in relation to organisational changes, new affordability schemes, social housing reform, and welfare reform affecting housing benefit.

Key Data
  • 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

[ Zoom ]
Ratio of lower quartile house price to lower quartile earnings by district, from 1997 - 2010
Source: DCLG, Table 576
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

[ Zoom ]
Housing Supply, South West Region
Source: DCLG, Table 232

The removal of regional government structures, most notably the abolition of the Regional Development Agencies (RDA) and the Tenants Services Authority (TSA), the removal of Regional Assemblies and changes to the role of the Homes and Communities Agency (HCA), has had a significant impact on the housing sector.

The South West Regional Assembly was removed on March 31 2010 and replaced by a Leaders Board. The removal of the Assembly along with the Government Office for the South West has lead to the end of the South West Housing and Regeneration Board and the South West Regional Housing Strategy.

South West Regional Development Agency (RDA)
The RDAs are being abolished by Government through the Public Bodies Bill and will close in March 2012. They owned a variety of assets and liabilities, around a third of which was land and property. In July 2011, DCLG and the Department for Business Innovation and Skills (BIS) agreed to transfer the majority of remaining RDA land and property portfolio into a stewardship arrangement with the HCA. The transfer was completed on 19 September 2011, leading to the creation of the HCA’s Economic Assets Programme (EAP) which oversees the disposal of more than 300 former RDA sites, for the benefit of the local economies in which they are based. In the South West, 47 assets were transferred to the HCA. Through the EAP the HCA will establish Local Stewardship Partnerships with local authorities, Local Enterprise Partnerships, businesses and other local partners. The purpose of the partnerships will be to determine the future of the assets and to ensure they contribute to economic growth and help meet local priorities.

The Government’s housing strategy, published in November 2011, highlights its commitment to increasing and speeding up the development on public land. The HCA has a central role to play in this, through its own use of public sector land and assets. This work also sees the HCA working with four other Government departments to help them unlock their land assets.

Changes to the HCA and the TSA
The HCA is the national housing and regeneration agency for England. It invests in new housing and regeneration and provides proactive enabling support to local partners. Central to the HCA’s new role is combining investment, enabling and land to support the delivery of local priorities for housing, regeneration and economic prosperity. In order to do this, the HCA continues to work with local partners on Local Investment Plans (LIPs). The South and South West operating area, which includes the South West, Hampshire, Berkshire, Oxfordshire and the Isle of Wight, consists of 16 LIP areas.

In response to the spending review, the HCA has created a smaller leaner agency that is more focused on where it can add value. The HCA has gone from having nine regions to six operating areas, with the London operating area due to transfer to the Greater London Authority in April 2012. The HCA is delivering the new Affordable Rent model with registered housing providers, which offers the sector new flexibility by allowing providers to charge up to 80% of local market rent levels for new homes delivered under the Affordable Homes Programme.

The TSA is due to close at the end of March 2012. A Regulation Committee will be formed as part of the HCA, which will oversee the financial and economic regulation of social housing providers. The committee will focus on economic regulation, set standards and resolve serious failings that cannot be resolved locally. From 1 April 2013 a single ombudsman specialising in complaints about social housing will help ensure consistency and provide a common route of redress for all social housing tenants.

The Government’s housing policy
Under the Coalition Government there are significant changes to housing policy. The Government published Laying the Foundations: A Housing Strategy for England in November 2011. The strategy highlights the shift in emphasis towards growth and set outs the role housing plays in supporting these ambitions alongside a number of programmes and initiatives.

The Housing Strategy announced the £400m Get Britain Building Investment Fund. This programme is to be managed by the HCA and aims to unlock up to 16,000 homes on stalled sites to boost the economy. It also includes an additional £50m on top of the £100m already allocated to tackle the worst concentrations of empty homes, bringing vacant properties back into use. Support will also be available for private rent developments, taking forward funding to support self-build projects. A mortgage indemnity scheme was also announced, to provide up to 95 per cent loan to value mortgages for new build properties, this aims to give banks the confidence to lend and provide those who aspire to own their own home the opportunity to access finance without a needing a large deposit. Further information is included on the private rented sector, a consultation on reinvigorating the Right to Buy, social housing reform, quality, sustainability and design.

The 2011 Budget introduced FirstBuy, a new product for the HomeBuy range to assist first time buyers onto the property ladder. Purchasers need to raise a mortgage and deposit of at least 80% of the property price and FirstBuy offers an equity loan funding of up to 20% of the purchase price, which is split between the HCA and the developer.

Housing provisions within the Localism Act 2011 allow local authorities to discharge their duties to homeless people by using private rented accommodation. It also includes the eradication of the requirement to have a Home Information Pack.
Further changes to housing policy include the Community Right to Build and the New Homes Bonus, which are included in the planning section of this document

Social housing reform
Tenancy reform within the Localism Act 2011 is intended to provide social landlords with more flexibility. The act creates the ability to grant a secure tenancy of two or more years in place of lifetime tenancy. Succession rights to a spouse or partner are limited along with a requirement for local authorities (in consultation with social landlords) to produce a local tenancy strategy by November 2012.

The act includes provision to improve the ability of social tenants to move home. Local authorities will also have powers to handle existing tenants’ requests for transfer through separate rules and criteria from those applying to people who are not tenants. In addition there is more flexibility for local authorities to develop their own allocation policies (within parameters). It also gives local authorities the power to limit who can apply for social housing within their areas.

Housing finance
The Localism Act includes the reform of the Housing Revenue Account subsidy and provides powers for the Secretary of State to set the buy-out to enable self financing. The Government’s intention is to give local authorities the resources, incentives and flexibility to manage their own housing in the long-term. A short guide to the reform is available via the Local Gov website.

Housing Benefit
In April 2011 the rates for the local housing allowance were reduced across England. The maximum £15 weekly excess received by some was removed and limits were introduced based on the number of bedrooms. Local Housing Allowance rates will be uprated in line with the Consumer Price Index.

From January 2012, the shared accommodation rate that currently applies to single people under the age of 25, living in accommodation that they rent from a private landlord, is extended to people aged under 35. This means that single people under 35 will no longer receive Housing Benefit based on one bedroom self contained accommodation.

From April 2013, Housing Benefit will be restricted for some people who are living in a property that is larger than their household size. This will apply to working-age customers renting from a social landlord.


Much of the Government’s initiatives and programmes detailed above are still to be implemented or remain the subject of ongoing consultation, meaning that many of the impacts are still to be seen. The HCA has a challenge to take on the economic functions from the RDAs and the regulatory role of the TSA whist delivering new programmes. Much of the HCA’s work will be carried out in partnership with local authorities, registered providers and other partners.

Social challenges will remain a key factor in guiding the work of partners in future years.

The number of people aged 85 and above in the South West is expected to grow by 2033, causing significant impacts on demand for specialist housing and care.

Meanwhile, affordability remains a key issue for the South West and the economic environment remains uncertain, which will continue to affect the availability
of mortgage lending, particularly for first time buyers.

Given the Government’s priorities, the relationship between housing and the economy is becoming an increasing focus for the sector.

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