For young professionals and low to middle income families alike – high house prices, rising rents and a lack of affordable housing are making living in Devon harder than ever. That’s the warning from the National Housing Federation in a new report published Wednesday 2 November 2011.
South West Home Truths 2011 is being launched at a special reception at the Palace of Westminster, hosted by North Cornwall MP Dan Rogerson. MPs and Councillors will hear a keynote speech by National Housing Federation Chair, Lord Matthew Taylor. Among them are Exeter MP, the Right Honourable Ben Bradshaw, Newton Abbot MP Anne Marie Morris, and Plymouth Moor View MP Alison Seabeck.
Our South West Home Truths 2011 report warns of ‘a broken housing market’, with the average home in the region costing £228,940 - nearly 12 times the average South West wage of £19,713. With house prices having increased three times faster than incomes in the region over the past decade, they now cost 15% more than in 2005 and 116% more than in 2000.
In Devon, the average home costs £241,575 - 13.5 times the average individual income of £17,940, meaning home ownership on the open market remains out of reach for many in the county, with even homes at the lowest quartile level costing £155,000. Furthermore, the gross annual income needed to secure a mortgage in Devon stands at £51,766. With private sector rents also on the increase, saving for a deposit is also becoming even harder.
A ‘league table’ of the least affordable local authority areas in Devon would be as follows:
- South Hams, Devon: £323,360 (16.7 x £19,328 average income)
- North Devon: £225,327 (14.8 x £15,215 average income)
- East Devon: £266,470 (14.3 x £18,595 average income)
- West Devon: £236,610 (13.9 x £17,061 average income)
- Torridge, Devon: £210,227 (13.8 x £15,288 average income
- Teignbridge, Devon: £226,172 (12.7 x £17,878 average income)
- Mid Devon: £222,381 (12.1 x £18,330 average income)
- Torbay, Devon: £186,100 (11.1 x £16,713 average income)
- Exeter, Devon: £206,182 (10.9 x £18,990 average income)
- Plymouth, Devon: £159,999 (8 x £19,978 average income)
NB: The affordability ratio is the house price divided by individual average income.
The report also shows that one in 15 (148,422) South West households is on a social housing waiting list for an affordable home in 2010.
Across Devon, we have actually seen a significant reduction in the number of households on waiting lists between 2009 and 2010, with 16,911 households on waiting lists in 2010 compared with 24,341 households the previous year. At a local authority level, Plymouth has seen the worst increase (up by 3,291) while Torbay has had the greatest impact in reducing waiting lists (down by 4,011):
- Plymouth: 9,153 households on waiting list in 2010– 5,862 in 2009 (+ 3,291)
- Exeter: 5,612 households on waiting list in 2010 – 5,560 in 2009 (+ 52)
- North Devon: 2,774 households on waiting list in 2010 – 2,526 in 2009 (+ 248)
- Torbay: 2,482 households on waiting list in 2010 – 6,493 in 2009 (- 4,011)
- Teignbridge: 2,430 households on waiting list in 2010 – 3,653 in 2009 (- 1,223)
- East Devon: 1,865 households on waiting list in 2010 – 4,381 in 2009 (- 2,516)
- Mid Devon: 1,264 households on waiting list in 2010 – 3,276 in 2009 (- 2,012)
- West Devon: 1,065 households on waiting list in 2010 – 2,035 in 2009 (- 970)
- South Hams: 1,001 households on waiting list in 2010 – 1,701 in 2009 (- 700)
- Torridge: 900 households on waiting list in 2010 – 1,209 in 2009 (- 309)
Devon is particularly hard hit on the affordability stakes as this is generally a much greater problem in rural parts of the South West. Around a third of the South West’s population live in small market towns or villages – the highest proportion of any region – but, according to a Federation poll, 81% of them believe local families and young people are being forced out of the countryside by high house prices. The average home in rural parts of the South West costs 13 times the average local income compared with 11 times in more urban areas.
Across the South West, the ‘affordability gap’ could well be set to worsen too, as the gulf between supply and demand is continuing to grow. In total 13,220 new homes were built in the region in 2010/11 – enough to house just 48% of new households expected to have formed in the year.
Looking ahead, Government projections suggest the number of households in the South West will increase 30% by 2033. Despite this growing need, and with one in 15 households on social housing waiting lists (over 148,000 households), South West local authorities have axed over 106,000 planned homes since the abolition of Regional Spatial Strategies in 2010. In Devon around 10,300 planned homes have been axed by local authorities.
To fix the broken housing market, the National Housing Federation is calling on the government to:
- Make a renewed commitment to building the homes we need at scale
- Identify housing as a key driver for economic activity
- Deliver a reformed planning system that supports the building of affordable homes, ensuring private developers continue to build social housing on sites of private development through the use of planning gain
- Ensure that councils undertake robust housing needs assessments on which to base future development plans
Jenny Allen, South West Lead Manager for the National Housing Federation said: ‘This year’s Home Truths report shows that - despite a deep recession - house prices in Devon and the wider South West remain out of reach for thousands of households.
‘As unemployment is on the up and benefits are set to be slashed, private sector rents also look set to rise. To cap it all, we’ve also seen the first increase in homelessness since 2003 - a 10% rise with more than 3,200 households accepted as homeless by local councils in the South West in 2010/11.
‘Lack of supply is at the root of the problem. Ministers need to act now to implement a range of measures to turn the tide on the current housing crisis,ensuring that homes continue to be built at scale where it is most needed, that affordable housing options remain, and that housing is properly regulated across all sectors.’
Paul Crawford, Group Chief Executive of Devon & Cornwall Housing said: ‘It’s very clear from the figures in this year’s report that house prices are so far ahead of wages in Devon that home ownership is just a distant dream for a significant proportion of households. With private sector rents also set to rise, associations, local authorities and other partners have a responsibility to ensure that there is an affordable option for those that need it most in Devon.
‘Housing associations have demonstrated their commitment to this by continuing to deliver new homes despite the recession – in fact, in the face of an extremely tough environment we still built 18% more homes last year than the year before in the South West.
‘The Federation’s annual Home Truths launch is a vital opportunity to remind the Government, local authorities, and the emerging regional bodies such as Local Enterprise Partnerships and Health and Wellbeing Boards that housing associations have a crucial role to play in the region and its economy.’
