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Housing Need and Afforadability (Housing, State of the South West 2011)

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6.5.1 Affordable housing provides homes to rent or part buy for those who cannot compete in the open marketplace. The provision of new affordable housing has become a significant issue as market housing has become
increasingly unaffordable, and following the loss of council housing stock through the Right to Buy.

6.5.2 The figures produced by the DCLG include affordable completions by the Homes and Communities Agency and Registered Social Landlords. DCLG figures show 6,540 affordable completions in the South West in 2009/10. This
represents 2.9 additions per 1,000 total households in the region (the England figure for 2009/10 is 2.7 additions per 1,00 households).

6.5.3 The number of homeless households in priority need in the South West has been decreasing steadily since 2002/3. However, this trend may slow or could even be reversed depending upon the ultimate length and severity of the current economic downturn. It is an indicator which will need close consideration over the coming years.

Figure 6.5.1 Homeless Households in Priority Need

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Homeless Households in Priority Need (Fig 6.5.1)
Homeless Households in Priority Need (Fig 6.5.1). Source: DCLG.
6.5.4 The housing market requires a small vacancy rate in order to function. In 2008, there were 54,249 vacant dwellings in the South West (excluding second homes), an increase of 12% from 48,477 in 2007. This represents 3.2% of the total stock, comparing well to the English average of 3.6% (ONS 2008, Vacant dwellings). There are considerable variations at the local level with, for example, empty properties comprising 4.6% of Torbay's and 3.8% of Bournemouth's total housing stock in 2008. In 2007/08, 1.3% of the South West's total housing stock was empty for over six months.

Figure 6.5.2 Vacant Dwellings in the South West (excluding Second Homes)

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Vacant Dwellings in the South West (excluding Second Homes) (Fig 6.5.2)
Vacant Dwellings in the South West (excluding Second Homes) (Fig 6.5.2). Source: ONS Dwellings Series.
6.5.5 The South West has a high proportion of second homes and this remains a significant issue for the region. In 2008, there were 40,118 second homes in the South West; 30% of all the second homes in England. Figures from 2006 show the percentage of second homes in the South West was 2.2% compared with a national figure of just 1.1%. This has declined slightly to 2% in 2008 but is still double the national figure.

6.5.6 There is considerable variation in the rate of second home ownership at the local level. For example, in 2004/5 (Rapid Evidence Assessment of the Research Literature on the Purchase and Use of Second Homes), some Cornish areas and Devon local authorities were reporting between 9% and 11% of all dwellings being owned as second homes. The Isles of Scilly had the highest rate at 22%.

Figure 6.5.3 Percentage of all homes that are second homes

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Percentage of all homes that are second homes (Fig 6.5.3)
Percentage of all homes that are second homes (Fig 6.5.3). Source: 'Rapid Evidence Assessment of the Research Literature on the Purchase and Use of Second Homes', NHPAU, 2008 / Vacant Dwellings 2007 & 2008, ONS.
6.5.7 Lower quartile ratios are a measure (for more see of how unaffordable housing is for the least well off and for first time buyers, particularly those who have no other sources of wealth (such as parental help). In 2010 the ratio of lower quartile house prices to lower quartile earnings in the South West was 8.17, compared to a national average of 6.69. This represents a slight increase on 2009 following two years of decreases after the peak of 8.96 in 2007. The current credit crisis has not improved the affordability of housing. Prices may be falling but the large deposit required by lenders and their reluctance to lend high income multiples as in recent years has prevented many first-time buyers from taking advantage of reductions in price.

Figure 6.5.4 Lower quartile house price to Lower quartile incomes ratio

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Lower quartile house price to Lower quartile incomes ratio (Fig 6.5.4)
Lower quartile house price to Lower quartile incomes ratio (Fig 6.5.4). Source: DCLG.
6.5.8 The worst affordability problems, in terms of the lower quartile house price to earnings ratio, are in the far west and south east of the region. The least affordable local authority area in the South West in 2010 was East Dorset, with a ratio of 11.8 to 1, and the most affordable was Plymouth (6.3 to 1).

Figure 6.5.5 Lower quartile house price to earnings ration, South West Unitary and District authorities

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Lower quartile house price to earnings ration, South West Unitary and District authorities (Fig 6.5.5)
Lower quartile house price to earnings ration, South West Unitary and District authorities (Fig 6.5.5). Contains OS Data; SourceL DCLG Table 576.
6.5.9 The average house price in the South West and England peaked in Q3 2007, at £237,314 for the South West and £232,345 for England. The recession caused prices to drop and in Q1 2009 the average house price in the
South West was £200,468 (£200,539 in England). Since then house prices have been generally rising with the latest (Q3 2010, provisional) average of £236,101 in the South West, £249,868 for England.

Figure 6.5.6 Average House Prices

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Average House Prices (Fig 6.5.6)
Average House Prices (Fig 6.5.6). Source: DCLG.