Strategic Housing Market Assessment - Update April 2009 Braintree District Council - Braintree District ...
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Braintree District Council Strategic Housing Market Assessment Update April 2009 www.braintree.gov.uk
Strategic Housing Market Assessment Update
Contents
1) Population and Migration Trends
1.0) Trend Based Population Projections
1.1) Policy Based Population Projections
1.2) NHS Patient Migration Patterns
1.2a) Moves into and out of Braintree by age group during the year ending
June 2007
1.2b) Net migration flow of the Braintree District by neighbouring councils
1.2c) Migration patterns from between Braintree and London
1.2d) Future Moves
2) Affordability and Updating the Housing Cost Ladder
2.1) Entry Level Housing Costs (resale properties)
2.2) Entry Level Housing Costs (new build properties)
2.3) Average Entry Level Costs
2.4) Average Entry Level New Build Purchase Prices
2.5) Average Entry Level Market Rent
2.6) Social Rented Cost in Braintree
3) Weekly Housing Cost
3.1) Owner Occupation
3.2) Findings; Halifax (online mortgage calculator)
3.3) Findings; Nationwide (online mortgage calculator)
3.4) Housing Costs by Tenure
4) Empty Homes in the District
5) Household Income and Earnings
5.1) Housing Benefit and Housing Allowance
5.1a) Implications of Housing Allowance for Braintree Residents
5.1b) Housing Benefit/Allowance Applications (2007/08 to 2008/09)
5.2) JSA Claimant Claim
5.3) Unemployed and Seeking Benefit
5.4) Housings Earnings
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2008/09Strategic Housing Market Assessment Update
6) Mortgage Information
6.1) Median Income Multiple between 2007/2008
6.1a) Median Income between 2007/08
6.2) Mortgage Availability
7) Market Activity
7.1) Average Time to Sell
7.2) Viewings per Sale
8) Repossessions
8.1) Colchester County Court Repossession Data
9) Homelessness Trend within the district
10) Conclusion
10.1 Findings
10.2 Conclusion
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2008/09Strategic Housing Market Assessment Update
Strategic Housing Market Assessment
This report is an update to the Strategic updates is the identification of the weekly
Housing Market Assessment (SHMA) housing costs by tenure. Given the
commissioned in 2007 and conducted by current turbulent economy and the
Fordham Research. The final report was specific influence of this on the housing
published in April 2008. market, more extensive information will
also be collected.
It is stated in the original SHMA that the
most crucial element of subsequent
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2008/09Strategic Housing Market Assessment Update
1) Population and Migration Trends
Summary:
• According to trend data from the CLG, the number of households in the district
is expected to increase by 26% between 2006 and 2026 and the size of
households is predicted to decrease by 7% by 2026
• Policy based predictions based on the Regional Spatial Strategy suggest that
the population would have increased by 1,700 (1.3%) between 2001 and 2021
and the number of dwellings would have increased by 7,500 (12.2%) in the
same period. The disparity between the increase in households and the
increase in population is largely due to the changes in the average household
size and the propensity to form smaller households.
• There was a net inflow of 160 individuals into the Braintree district from nearby
councils in 2007
• There was a net inflow of 930 individuals into the Braintree district from London
Boroughs.
• The age group with the highest frequency of inflow into the district during 2007
was 25-44 year olds (inflow of 1,490 individuals) yet this group also represents
the highest outflow into surrounding areas (outflow of 1,330 individuals) leaving
a net inflow of 160 individuals.
1.0) Trend based Population The table below gives the estimated
Projections number of households (thousand) by type
The total population according to the between 2006 and 2026.
Office of National Statistics (ONS) mid- The estimations have been made using
year population 2007 for the Braintree household projection data from the CLG
District was 140,900. The SHMA in particular Regional household
population figures are based on the 2006 projections by type (East of England) and
data from the ONS and it was recorded Sub-regional projection of total household
as 139,400. numbers.
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2008/09Strategic Housing Market Assessment Update
Household types 2006e 2011p 2016p 2021p 2026p
(thousand) (thousand) (thousand) (thousand) (thousand)
Couple 34.1 36.6 38.3 39.9 41.12
Lone Parent 2.7 2.9 3 3.1 4.72
Other multi-person 4.3 5 5.8 6.5 4.3
One person 17.5 20 22.6 25.3 29.6
All households 59 65 70 75 79.7
Private household 139,240 151,450 158,200 164,250
population
Average household size 2.36 2.33 2.26 2.19 Data
unavailable
(Table 1.0; Table to show estimated and projected number of household by type. Estimations and
projections based on data from the CLG data regarding household statistics for the East of England and
Sub-regional).
E = estimated
P = projected
As the table demonstrates the number of 20.7/79.7*100 = 25.9) between 2006 and
households is predicted to significantly 2026
increase by 26% (79.7-59 =
**********
The average size of households is
expected to decrease by 7% (2.36-2.19 =
0.17/2.36*100 = 7.2) between 2006 and
2021 thus reflecting the predicted
increase in one person households
between 2006 and 2026 of 41% (29.6-
17.5 = 12.1/29.6*100 = 40.8%).
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2008/09Strategic Housing Market Assessment Update
1.1) Policy Based Population Projections
The method behind policy based dwellings within a region and it is based
population projections differs to the trend on this allocation that population
approach discussed previously; (trend projections can be made. The table
based data is developed upon past below sets out the projected population
occurrences whereas policy is based on and number of households in the district
the future expectations). The Regional by 2021.
Spatial Strategy sets out the allocation of
2001 2021 Difference
Population 132,300 134,000 1,700
Households 54,400 61,900 7,500
Average household size 2.43 2.16 0.27
(Table 1.2; Table to show the policy based population projections for the Braintree District between 2001 and
2021. Source: Demographic forecasts for the East of England; a revised 2001-based population and
household projections (summary tables) December 2006).
The data shows there to be a significantly marital break-up, more people choosing
greater increase in the number of to live alone and people living longer etc.
properties in relation to the number of The increase in properties is therefore a
individuals. The explanation suggested result of the in-migration of individuals
for this is the growing tendency for people into the district (1,700) and from the
to form smaller households as a result of existing population.
**********
1.2) NHS Patient Migration Patterns
The tables below present data regarding of using patient data registers is advised
the migration of people across several and include the following;
local authorities including the London • Accuracy depends on all patients
boroughs. All data is derived from the re-registering with a doctor when
patient data register as this proves an they move. This can sometimes
ideal way to monitor the movement of be a delayed processed especially
people as they move across districts in young males; and
however consideration for the limitations
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2008/09Strategic Housing Market Assessment Update
• The National Health Service districts and therefore migration at
Central Register (NHSCR) system lower geographical levels cannot
can only record moves between be estimated using this method.
**********
The SHMA 2007 found that multi-adult total outflow). Unfortunately it is not
households and households with children possible to analyse the data obtained
were represented as having the highest from the NHSCR by household; the
frequency of inflow (31% and 30% following tables demonstrates the
respectively of the total inflow) and movement of people as opposed to
outflow (36% and 34% respectively of the households.
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2008/09Strategic Housing Market Assessment Update
1.2a) Moves into and out of Braintree by age group during the year ending June 2007
Inflow Outflow
Area 0-15 16-24 25-44 45-64 65+ All ages 0-15 16-24 25-44 45-64 65+ All ages
Southend-on-sea 20 10 40 10 10 90 10 10 20 10 0 50
Thurrock 30 10 60 10 10 130 10 0 10 20 - 40
Cambridge 0 10 10 0 - 30 0 20 20 0 - 40
E. Cambs 0 0 10 10 - 20 0 0 10 10 - 20
S. Cambs 10 0 10 10 0 40 10 10 10 0 0 30
Basildon 40 20 70 30 30 190 30 20 40 10 0 100
Brentwood 30 10 60 30 20 150 20 0 30 10 10 70
Castle Point 10 10 20 0 0 50 0 0 10 10 0 20
Chelmsford 150 150 500 180 100 1070 160 90 330 110 50 730
Colchester 70 70 200 80 30 450 160 130 360 140 50 840
Epping Forest 30 20 60 40 20 170 0 10 20 10 0 40
Harlow 40 10 80 30 10 170 0 10 20 10 0 40
Maldon 40 40 100 70 40 290 70 30 90 40 20 260
Rochford 10 0 30 10 0 60 10 10 10 10 0 40
Tendring 20 20 30 40 40 150 60 20 80 70 30 260
Uttlesford 50 50 150 100 30 380 70 30 130 50 20 300
Babergh 20 30 60 40 20 160 60 40 140 90 50 380
Ipswich 10 0 20 0 0 30 10 10 40 10 0 80
Mid Suffolk 0 0 10 10 0 20 10 10 20 20 0 70
St Edmundsbury 40 20 60 30 10 170 30 30 80 40 20 200
Suffolk Coastal 10 0 10 10 0 30 20 10 20 10 20 80
Total 630 480 1,590 780 370 3,850 720 490 1,490 680 270 3,690
(Table 1.3; Moves into and out of Braintree by age group during the year ending June 2007. Source migstatsunit@ons.gsi.gov.uk note: “Each age band is rounded
and then the All Ages total is rounded - but using the total from the unrounded figures from the ages bands. The tables are rounded in order to avoid publishing data
that is too disclosive”).
.
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2008/09Strategic Housing Market Assessment Update
Continues from previous page… group also represents the highest outflow.
The data in table 1.3 shows the age The age group with the lowest balance is
range with the highest inflow into the 0-15 with a balance of -100.
district is 25-44 year olds but this age
1.2b) Net migration flow of the Braintree District by neighbouring councils
Area Total Inflow Total outflow Net flow
Chelmsford 1070 730 +340
Epping Forest 170 40 +130
Harlow 170 40 +130
Thurrock 130 40 +90
Basildon 190 100 +90
Brentwood 150 70 +80
Uttlesford 380 300 +80
Southend-on-sea 90 50 +40
Castle Point 50 20 +30
Maldon 290 260 +30
Rochford 60 40 +20
S.Cambs 40 30 +10
E. Cambs 20 20 0
Cambridge 30 40 -10
Ispwich 30 70 -40
Mid Suffolk 20 60 -40
St Edmundsbury 160 200 -40
Suffolk Coastal 30 80 -50
Tendring 150 260 -110
Babergh 160 380 -220
Colchester 450 840 -390
Total 3,840 3,670 +170
(Table 1.4; Moves into and out of Braintree during the year ending June 2007 by local authority. Source:
www.migstatsunits@ons.gsi.gov.uk).
Chelmsford represents the area with is a comparably high outflow of
which the highest inflow of individuals into individuals from Braintree to Chelmsford
the Braintree district has occurred. There but the remaining balance represents the
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2008/09Strategic Housing Market Assessment Update
highest amongst all areas. The inflow of
individuals from Colchester is significantly
lower compared to the outflow of
individuals from the Braintree district to
Colchester resulting in a negative balance
of -390. Other areas where a relatively
high number of individuals have moved
from and into the Braintree district are
Epping Forest and Harlow.
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2008/09Strategic Housing Market Assessment Update
1.2c) Migration from London
The table below gives the respective
inflows and outflows between Braintree
and some of the London Boroughs.
Area Inflow Outflow Balance
Redbridge 170 20 +150
Havering 210 40 +170
Barking and Dagenham 150 30 +120
Newham 110 20 +90
Enfield 90 20 +70
Tower Hamlets 80 30 +50
Haringey 50 0 +50
Lewisham 50 20 +30
Hackney 40 10 +30
Bromley 30 10 +20
Croyden 30 10 +20
Ealing 20 0 +20
Hillingdon 20 0 +20
Southwark 30 20 +10
Hounslow 10 0 +10
Lambeth 30 20 +10
Barnet 20 10 +10
Bexley 20 10 +10
Brent 20 10 +10
Hammersmith and Fullham 20 10 +10
Islington 30 20 +10
Kensington and Chelsea 10 0 +10
Merton 10 10 0
Richmond upon Thames 10 10 0
Camden 20 20 0
City of London 0 0 0
Wandsworth 20 20 0
Harrow 10 10 0
Kingston upon Thames 10 10 0
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2008/09Strategic Housing Market Assessment Update
Westminster 20 20 0
Greenwich 20 20 0
Total 1360 430 +930
(Table 1.5; Moves into and out of Braintree during the year ending June 2007 by London boroughs. Source:
migstatsunit@ons.gsi.gov.uk).
number of people moving from London
The outflow of residents into London
into the Braintree District, thus leaving a
areas is considerably lower than the
high net inflow of +930
Note
In order to obtain data from the NHSCR you are required to email the ONS
migration statistics unit at migstatsunit@ons.gsi.gov.uk
1.2d) Future Moves
The table below indicates the possible to from the Braintree District in the next
areas individuals who are looking to move two years.
Location of next home Like Expect
Babergh 3.0% 1.6%
Basildon 0.4% 0.6%
Braintree 45.9% 53.2%
Brentwood 1.5% 0.5%
Chelmsford 11.2% 9.0%
Colchester 4.1% 3.9%
Maldon 1.1% 0.5%
Tendring 2.3% 2.1%
Elsewhere in the South East 16.5% 16.6%
Elsewhere in the UK/Abroad 14.1% 11.9%
Total 100.0% 100.0%
(Table 1.6; Households planning to move within the next two years: where households would like and expect
to move to (%)Source: Braintree SHMA 2007 – household survey data).
next two years, 46% would like to remain
As the data shows of the number of in the district, whereas 53% expect they
households planning to move within the will do so.
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2008/09Strategic Housing Market Assessment Update
Aside from Braintree, Chelmsford is 11.9% of potentially moving households
identified as the area whereby the stated they expect to be moving
majority of potentially moving households elsewhere in the UK or abroad within the
want to move to with 11.2% (9% of which next two years.
wishing to do so).
**********
The table below compares the data households moving in the future with the
above regarding the preferred locations of migration patterns of previous years.
% of where future moving households expect % of where households
to move to. moving out of Braintree have
(Future Moves in the next to years (data from previously moved to
table 1.6)) (Net migration flows (year end
June 07) data from table 1.4)
Babergh 1.6% 10.4%
Basildon 0.6% 2.7%
Brentwood 0.5 1.9%
Chelmsford 9.0 20%
Colchester 3.9 22.8%
Maldon 0.5 7.1%
Tendring 2.1 7.1%
(Table 1.7; Comparison of preferred locations of future movers and where households have moved to from
Braintree Source: Braintree SHMA 2007 – household survey data and pre-update data request).
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2008/09Strategic Housing Market Assessment Update
2) Affordability and Updating the Housing Cost Ladder
Summary:
• Resale properties in Braintree town demonstrated the lowest decrease in value
amongst the three main towns of the district with an average of 16.5% drop in
property prices (Witham 20% in value and Halstead 25% (December 2008)).
• In all cases of resale properties one bedroom properties demonstrated the
lowest drop in value.
• An anomaly was identified amongst the data; three and four bedroom new-build
properties in Halstead demonstrated value increases of 8% and 16.5%
respectively in comparison to the values stated in the SHMA 2007.
• Average entry level private rented costs for two bedroom properties increased
by 3%.
• Average social rented cost for a one bedroom property increased by 5% (the
highest increase identified).
The SHMA reported the entry level costs disparities between the three towns to be
for one, two, three and four bed identified and therefore allow for a more
properties; accurate reflection of the current
• Purchase of resale properties situation.
• Purchase of new build properties
• Private rented The findings of this update exercise will
• Social rented be compared against those of the 2007
The SHMA reported this information on a SHMA in order to observe how the
district wide scale (an average for market has changed.
Braintree, Witham and Halstead) yet
given the current uncertainty and turmoil Fordham’s report identified entry-level
within the housing sector (particularly the prices as the “cheapest cost of housing in
fall in property prices), the entry level good repair of which there is a
figures for each of the three main reasonable supply (and broadly in-line
individual towns of the district in addition with lower quartile costs)”. This approach
to average figures were calculated. This has been maintained during the update
approach will allow for any significant exercise.
Considerations
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2008/09Strategic Housing Market Assessment Update
It is important to note some accordingly is relied upon to get
considerations with regards to comparing accurate results.
the findings obtained using the • Fordham Research used a range
‘rightmove’ property website of sources to obtain its figures yet
(www.rightmove.co.uk); for the purpose of this update
• “www.rightmove.co.uk” does not exercise only data from the
have the facility to state the date ‘rightmove’ website will be used so
on which the property adverts were again accuracy issues arise.
added to the site after the initial 14 • Nonetheless RightMove.com does
days, and therefore prices could allow for future comparison using
be inaccurate. similar data and shows trends that
• There is a significant amount of are in line with national and
duplication of adverts on the regional data.
website and therefore the
researcher’s ability to identify such
duplication and account for it
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2008/09Strategic Housing Market Assessment Update
2.1) Entry Level Housing Costs (resale properties)
The table below demonstrate the entry level purchase prices of different size properties taken in 2007 by the SHMA and in 2009 from
data available on the “rightmove” website.
SHMA 07 Right-move 09 % difference
1 bed Braintree £100,000 £89,995 -10%
Witham £100,000 £85,000 -15%
Halstead £100,000 £82,000 -18%
2 bed Braintree £136,000 £119,995 -11.8%
Witham £136,000 £119,995 -11.8%
Halstead £136,000 £100,000 -26%
3 bed Braintree £182,000 £135,000 -25.8%
Witham £182,000 £135,000 -25.8%
Halstead £182,000 £133,000 -27%
4 bed Braintree £263,000 £215,000 -18.2%
Witham £263,000 £190,000 -27.7%
Halstead £263,000 £187,750 -28.6%
(Table 2.1; Update of entry level resale purchase prices by size of dwelling for the Braintree District. Source; www.Rightmove.co.uk)
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2008/09Strategic Housing Market Assessment Update
As expected the entry level of all size seen with 3 bedroom properties and the
properties demonstrates a decrease in least with 1 and 2 bedroom properties
comparison to the values recorded in respectively.
2007. The most significant decrease is
**********
The decrease in the value of properties is sizes have dropped in value between 20
greater within the Halstead area across and 29%. It is the one bedroom
all property sizes. properties which have retained the
highest level of their value since 2007, as
Interestingly however there is comparably seen in both Braintree and Witham.
little variation in the percentage decrease
amongst two, three and four bed
properties in the area; these property
***********
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2008/09Strategic Housing Market Assessment Update
2.2) Entry Level Housing Costs (new build properties)
The below tables state the entry level prices of newly built properties for the three main towns; both those stated in the SHMA 2007 and
those taken from www.rightmove.co.uk (Dec 2008)
SHMA 07 Right-move 09 % difference
1 bed Braintree £133,000 £129,950 -2.2%
Witham £133,000 No data available NA
Halstead £133,000 £82,500 -38%
2 bed Braintree £160,000 £145,000 -9.3%
Witham £160,000 £134,950 -15.6%
Halstead £160,000 £129,500 -19%
3 bed Braintree £220,000 £199,995 -9%
Witham £220,000 £159,950 -27%
Halstead £220,000 £240,000 +8%
4 bed Braintree £275,000 £250,000 -9%
Witham £275,000 No data available NA
Halstead £275,000 £330,000 +16.5%
(Table 2.2; Update of entry level new build purchase prices by size of dwelling for the Braintree District. Source; www.Rightmove.co.uk)
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2008/09Strategic Housing Market Assessment Update
Although the disparities between the
The 2007 SHMA identified that new build
figures from the 2007 SHMA and the
properties within the District were typically
2009 “rightmove” data are not as extreme
15-25% more expensive than resale
as those seen in table 2.1 the differences
counterparts.
between the property sizes are
consistent; the smallest decrease in value
seen is for one bedroom properties.
**********
Unfortunately the data requirements for a greater extent than new build properties
all property sizes of new build properties in Braintree. Again the findings could
were not available, however the data that prove disproportionate as specific data for
is provided demonstrates that new build Witham is being compared against the
properties in Witham have depreciated to district average data of the 2007 SHMA.
*********
The findings obtained regarding the price taken with using ‘www.rightmove.co.uk’
of new build properties in the Halstead as a data source as stated earlier. In
area have defied the patterns seen in the addition to this there were only a few
data for Braintree and Witham (although properties advertised; proving a limiting
the dataset for Witham was incomplete). factor in identifying the most accurate
The findings are to be viewed with figure.
caution due to the considerations to be
**********
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2008/09Strategic Housing Market Assessment Update
2.3) Average Entry Level Costs
Below is a table demonstrating the the three towns which have been
average price of resale properties across compared with the SHMA data.
Average Entry-level purchase prices by size of dwelling
Accommodation size SHMA 07 Right-move 2009 Percentage difference
1 bedroom £100,000 £85,665 -14%
2 bedrooms £136,000 £113,330 -16%
3 bedrooms £182,000 £134,333 -26%
4 bedrooms £263,000 £197,583 -25%
(table 2.7; Updated entry level purchase prices by size of property; an average of the three main towns in the
Braintree District; Braintree, Witham and Halstead).
The average figures reinforce the findings and two bedroom properties and the most
identified on an individual town level; the (fractionally) on three bedroom
least amount of value lost is seen on one properties.
**********
The relationship between property prices
dependant on size between 2007 and 2009 in the
Braintree District
300,000
average value of
250,000
Approximate
SHMA, 2007
property
200,000
150,000
www.rightmove.co.uk
100,000
2009
50,000
0
1 bed 2 bed 3 bed 4 bed
Size of property
(Figure 1; Graph to show the relationship between property prices dependant on size between 2007 and
2009 in the Braintree District).
2.4) Average Entry Level New Build Purchase Prices
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2008/09Strategic Housing Market Assessment Update
Average Entry-level new build purchase prices by size of
dwelling
Accommodation size SHMA 07 Right-move 2009 Percentage difference
1 bedroom £133,000 £106,225 -20%
2 bedrooms £160,000 £136,483 -15%
3 bedrooms £220,000 £199,981 -9%
4 bedrooms £275,000 £290,000 +5%
(2.8 Updated entry level new build purchase prices by size of property; an average of the three main towns
in the Braintree District; Braintree, Witham and Halstead)
In principle the findings suggest that there needs to be given to the changes in
is a greater opportunity for individuals in household incomes and availability of
the Braintree District to access the mortgages since the 2007 SHMA survey.
property ladder however consideration
**********
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2008/09Strategic Housing Market Assessment Update
2.5) Average Entry Level Market Rent
Below is a table demonstrating the ‘www.rightmove.co.uk’ 2009 regarding
comparison between the data from the entry level for private rental by size of
SHMA 2007 and that of property.
Entry-level private rental costs by size of dwelling (per week)
Accommodation size SHMA 07 Right-move 2009 Percentage difference
1 bedroom £112 £112 0%
2 bedrooms £127 £131 +3%
3 bedrooms £165 £162 -1.8%
4 bedrooms NA £225 NA
(table 2.9; Updated entry level private rental costs by size of property; an average of the three main towns in
the Braintree District; Braintree, Witham and Halstead).
Unlike the significant percentage marginal differences between the data
decreases seen between the datasets in from the SHMA 2007 and that of 2009.
the previous analyses, there are only
**********
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2008/09Strategic Housing Market Assessment Update
2.6) Social Rented Cost in the Braintree District
The table below compares the typical Greenfields Community Housing which
social rents for properties of varying size owns approximately 80% of the social
as recorded during the SHMA 2007 and rented stock in the district.
the current typical rents (December 08).
The data has been provided by
Social rented (General needs only) cost in the
Braintree District (per week)
Accommodation size SHMA 07 2009 Percentage difference
1 bedroom £60 £63.23 +5%
2 bedrooms £73 £74.23 +1.7%
3 bedrooms £83 £84.10 +1.3%
4 bedrooms £94 £95.19 +1.3%
(Table 2.10 Updated entry level social rental costs by size of property; an average of the three main towns in
the Braintree District; Braintree, Witham and Halstead).
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2008/09Strategic Housing Market Assessment Update
3) Weekly Housing Cost
________________________________________________________________________
Summary;
• Interest rates have significantly changed since the SHMA 2007.
• Weekly housing costs for a two bedroom property across all tenure types have
been identified as:
Social rented Intermediate Private rent Owner- New build
occupation
£73 £108.38 £143.75 £173.32 £208.87
3.1) Owner Occupation
The initial intention was to replicate the scarcely available and therefore not a
methodologies used by Fordham valid method for identifying mortgage
Research to calculate the weekly cost for costs. Consequently online mortgage
owner occupation for the purpose of this calculators from two of the largest
update. However the unforeseeable mortgage providers, Halifax and
changes in both the economic and Nationwide have been used.
housing markets prevent the method
used by Fordham (which is based on For the purpose of this exercise the
interest only mortgages) from being average entry-level price for a two
applicable in the current climate. bedroom property in the district
(£113,330) has been used in addition to
For the sake of consistency, Fordham the updated average household income
Research used interest only mortgages of first-time buyers being £40,222 (ASHE
and at the time of the SHMA this method median weekly pay for full time
gave a reasonable basis for employees in the UK increased by 4.6%
demonstrating the financial capacity of in 2008. Household incomes are
households. discussed further in the report). Other
However in the current economic criteria included two people being on the
downturn, interest only mortgages are mortgage with no children. Credit
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2008/09Strategic Housing Market Assessment Update
commitments have not been investigated as this could compromise consistency.
**********
3.2) Findings; Halifax (online mortgage
calculator) from £693.27 and £721.94 with interests
Based on the circumstances outlined rates ranging between 6.64% and 7.09%
above, the Halifax stated the maximum respectively.
amount that could be borrowed was
£180,900 payable over 25 years. Based Based on the information used with the
on the proposed property having a value online mortgage calculator the lender was
of £113,330 the lender stated the unable to offer any mortgage products on
maximum mortgage offered would be a variable rate or interest only basis.
£101,900 demonstrating that a deposit of
10% of the properties value was required.
The mortgage products offered, based on
a repayment type mortgage on a fixed
rate had initial monthly payments ranging
**********
3.3) Findings; Nationwide (online mortgage calculator)
The same information was used to
simulate a mortgage request from On a fixed rate repayment mortgage over
Nationwide via their online calculator. 25 years for a sum of £90,664 the initial
With a household income of £40,222 and monthly payment ranged between
with no other stated credit responsibilities £570.46 and £621.57 (inclusive of
(student loan or hire purchase etc) reservation fees to loan) with interest
applicants could borrow a maximum of rates ranging from 5.73% to 6.63%
£164,910.20. respectively.
Nationwide requested a deposit of 20% of
the property’s value; twice the amount
required by the Halifax.
3.4) Housing Costs by Tenure
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2008/09Strategic Housing Market Assessment Update
The table below sets out the weekly generated is the requirement of a 10%
housing costs by tenure for one, two, deposit of the properties sale value, a
three and four bedroom properties. The repayment type mortgage over 25 years.
figures for owner-occupation in the table The prices shown are inclusive of product
below have been generated by the fees.
Halifax online mortgage calculator. The
basis in which these figures have been
Tenure
Dwelling Social rent Intermediate Private rent Owner- Owner-
Size rent occupation occupation
(No of resale New build
bedrooms)
1 £63.23 £84.73 £106.25 £130.97 £162.60
2 £73 £106.38 £143.75 £173.32 £208.87
3 £83 £129 £175 £205.46 £305.98
4 £94 £171.38 £248.75 £302.41 £443.92
(Table 3.0; table to show the weekly housing costs by tenure. Source: Various (www.rightmove.com,
www.halifax.co.uk, Greenfields Community Housing).
• Average weekly costs for owner • Average weekly costs for private
occupation of new build properties rented accommodation is 54%
is 72% higher than social rented. higher than that of social rented.
• Average weekly costs for owner
occupation of resale properties is
61% higher than social rented.
**********
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2008/09Strategic Housing Market Assessment Update
4) Empty Homes in the District
Summary:
• It is estimated that there were an extra 438 empty properties across the district
in 2008 compared to 2007 representing an 18.5% increase.
• As a result of direct council involvement 125 properties will be successfully
returned back into use during 2008/09; an increase of 69 properties compared
to the number returned to use by the council during 2007/08.
The number of empty properties across year when Fordham Research conducted
the district is recorded on an annual basis the field work for the SHMA) and 2008
by the HSSA and the values for 2007 (the are stated below;
Type of empty property 2007 2008 Difference
LA 81 12 -69
RSL 25 85 +60
‘Other’ public sector 3 0 -3
Private sector 1,831 2,281 +450
Total 1,940 2,378 +438
(Table 4.1; table to show the number of empty properties across the district since 2007 (source; HSSA 2007,
2008)).
The table above shows the numbers and As the table demonstrates there were a
types of vacant dwellings across the further 438 vacant properties in the
district between 2007 and 2008. district in comparison to the figures for
The distinct change between 2007 and 2007 thus demonstrating an 18.5%
2008 regarding the number of empty increase.
homes for both LA and RSL is due to the
LVST which took place in November
2007.
**********
The total number of empty homes in the of privately owned empty properties being
district has increased as has the number returned to use by the council since 2007.
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2008/09Strategic Housing Market Assessment Update
The year 2007 saw 56 properties being 125 properties being brought back into
returned to use, yet 2008/09 has seen use.
28
2008/09Strategic Housing Market Assessment Update
5) Household Earnings
Summary
• Private sector rents have increased since the change of Housing Benefit to
Housing Allowance although the exact relationship between these two factors is
yet to become clear.
• Those who privately rent and do not receive Housing Allowance may be
required to spend more than the recommended 25% of gross household
income on their housing costs.
• The number of individuals making applications for housing benefit has
increased by 20% since 2007/08.
• JSA Claimant count has increased by 227% between February 2008 and
February 2009.
• It is estimated that in 2008 the weekly pay for full time employees in the UK
grew by 4.6%.
5.1) Housing Benefit and Housing Allowance
During 2008 the method of calculating based on the ‘middle of the range’ rental
future Housing Benefit changed and is figure and will take in account the size of
now based on the area the customer the property. Basing the LHA on the
lives, number of occupiers in the property middle of the range for a certain property
and household size. It is known as Local size means that exactly half of the rental
Housing Allowance (LHA). The LHA properties of that size in the area will be
rates are calculated for individual areas affordable within the LHA amount
known as Broad Market Rental Areas applicants receive.
each month. The amount payable will be (Source: www.directgov.co.uk)
5.1a) Implications of Housing Allowance for Braintree Residents
A number of Broad Market Rental Areas that Chelmsford and Cambridge in
exist within the Braintree district and particular are typically more expensive in
include; Chelmsford, Colchester, terms of housing than Braintree, the LHA
Cambridge and Bury St Edmunds. Given for some parts of the district is
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2008/09Strategic Housing Market Assessment Update
comparably high which could encourage
private rents to be increased.
**********
5.1b) Housing Benefit/Allowance Applications (2007/08 to 2008/09)
The table below shows the number of live table shows there has been a distinct
claims in payment of housing benefit to increase the number of live claims in
households in the private rented sector payment between 2007/08 and 2008/09.
between 2006/07 and 2008/09. As the
Number of live claims Year on year difference
2006/07 1,164 No data available
2007/08 1,253 +89 (108%)
2008/09 1,555 +302 (124%)
Table 5.1; the number of live claims for housing benefits to households in the private rented sector. Source;
Braintree District Council, Benefits Section).
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2008/09Strategic Housing Market Assessment Update
5.2) JSA Claimant Count
The table below has been obtained from claimant count records the number of
www.nomis.com and shows the number people claiming JSA and National
of JSA claimants in the Braintree district Insurance credits at Jobcentre Plus local
between 1999 and 2009. The JSA offices.
Year (February) Total number of claimants
1999 1,900
2000 1,415
2001 1,210
2002 1,268
2003 1,300
2004 1,298
2005 1,222
2006 1,499
2007 1,462
2008 1,254
2009 2,845
(Table 5.1; the number of JSA claims made in the Braintree District between 1999 and 2009, source:
www.nomis.co.uk).
The table demonstrates that 2009 has the number of JSA claims made in February
highest number of JSA claims in ten 2009 is a 227% higher than the number
years by 150% (the second highest year of claims made during February 2008.
was 1999 with 1,900 claims made). The
**********
5.3) Unemployed and Seeking Benefit
As the previous data suggests, an unemployment. The table below shows
increase in benefit claims within the data regarding the number of claims from
district and surrounding areas is the five occupations with the highest
occurring, which is likely to be due to the percentage increase between January
economic downturn being experienced 2008 and January 2009. Not only can
and subsequent increase in such data identify whether an increase or
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2008/09Strategic Housing Market Assessment Update
decrease in the number of claims has sectors have had the greatest amount of
occurred but can also indicate which unemployment.
Occupation Jan 08 Jan 09 % change
Occupation unknown 5 20 +400%
Science and Technology Associate +350%
10 35
Professionals
Skilled Construction and Building Trades 55 185 +336%
Skilled Metal and Electronic Trades 35 110 +314%
Health and Social Welfare Associate +300%
5 15
Professionals
(Table 5.3; Number of claims made by occupation in January 2008 and 2009, source:
www.nomisweb.co.uk).
The total number of claims made in in the number of claims made by
January 2009 represents a 47% increase unemployed individuals in January 2009.
**********
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2008/09Strategic Housing Market Assessment Update
5.4) Household Earnings
The SHMA 2007 identified that the The Annual Survey of Hours and
average annual income of households in Earnings results for 2008 showed that the
the Braintree District was £32,605 and for median weekly pay for full time
first-time buyer households £38,454. The employees in the UK grew by 4.6%. If we
SHMA states that assume this to be roughly representative
“the financial situation of those of wage inflation, the estimated average
households that have become first-time annual income of households in the
buyers suggests that households have to Braintree District could currently be
be on a high income before they can £34,104 and £40,222 for first-time buyer
access owner-occupation and implies that households.
the number of first-time buyers in
Braintree may be restricted by the cost of
housing” (SHMA, 2007).
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2008/09Strategic Housing Market Assessment Update
6) Mortgage Information
Summary:
• This section looks at the borrowing patterns of households
• An income multiplier is the term given to the multiples of the annual household
income a mortgage represents.
• In 2008 the median income multiplier for first-time buyers (FTB’s) was identified
as 3.10 based on an income of £33,926 (i.e. mortgages typically resembled
3.10 times the annual household income). For non first-time buyers the median
income was slightly lower at 3.01 based on an income of £41,200 which is to be
expected as non FTB’s typically have access to a greater amount of savings
and equity.
There have been significant changes on a median income of £35,029 for first-
regarding mortgage provision as a result time buyers (FTB’s) and 3.16 based on
of the events within the housing market an income of £41,525 for those who were
between 2007 and 2008. In 2007 the not first-time buyers.
median income multiplier was 3.36 based
**********
In 2008 however these figures changed those who are not first-time buyers.
with the median income multiplier being These findings have been presented by a
3.10 based on an income of £33,926 and series of graphs below;
3.01 based on an income of £41,200 for (www.cml.org.uk/cml/statistics).
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2008/09Strategic Housing Market Assessment Update
6.1) Median income multiple between 2007 and 2008
Relationship betw een the m edian incom e m ultiple for
first tim e buyers and non first tim e buyers, 2007-2008
3.4
median income
multiple
3.2 2007
3 2008
2.8
First-time buyer Non- first-time buyer
Type of m ortgage holder
(Figure 6.1; Graph to show the relationship between the median income multiple for FTB’s and non FTB’s
between 2007 and 2008).
6.1a) Median Income between 2007 and 2008
Relationship betw een the m edian incom e for first
tim e buyers and non first tim e buyers, 2007-2008
50000
median income
40000
30000 2007
20000 2008
10000
0
First-time buyer Non- first-time buyer
Type of m ortgage holder
(Figure 6.2; Graph to show the relationship between the income multiple for FTB’s and non FTB’s between
2007 and 2008).
6.2) Mortgage Availability
Despite the decrease in property values lending behaviours of banks, building
and the suggested increase in earnings, societies and other lending organisations
accessibility to mortgages and therefore during November 2007 and November
owner-occupation as a tenure is limited. 2008.
The table below shows data regarding the
**********
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2008/09Strategic Housing Market Assessment Update
The table below summarise the sharp fall in lending across all categories during 2008 from
the Bank of England.
000’s House Purchase Re-mortgages
Bank BS Other Bank BS Other
Nov 07 49 17 14 68 16 13
Nov 08 17 6 1 30 10 1
% change -65% -65% -93% -55% -38% -92%
(Table 6; Table to show the lending behaviours during November 2007 and 2008. Source: Bank of England/
Hometrack/ seasonally adjusted
(http://www.hometrack.co.uk/documents/Gary_Styles/GS_Lending_Strategy_Feb09.pdf)).
Up until the second quarter of 2008 the consistent across banks and building
re-mortgage market appeared societies.
comparably healthy, however more The data shows how the availability of
recent data shows lending has fallen in mortgages has significantly decreased
both the house purchase and re- since 2007 and has created a barrier to
mortgage market. These trends are owner-occupation especially to first-time
buyers with limited equity.
**********
36
2008/09Strategic Housing Market Assessment Update
7) Market Activity
Summary:
• The average time for a property to be on the market before it sells is 11 weeks;
an increase of five weeks since the early part of 2007 (Source, Hometrack January
2009).
• It currently takes an average of 14.9 viewings to sell.
7.1) Average Time to Sell
Identifying the average time it takes for a which demonstrates a steady increase
property to be sold on the market gives since 2007 when the average was as low
an indication of how buoyant the market as 6 weeks.
is. The current average is 11 weeks
**********
7.2) Viewings per Sale
In addition to identifying the average time seen with the average time to sell, the
for a property to sell, the number of number of viewings has steadily
viewings per sale is also a useful increased since early 2007 where it was
indicator when assessing how active the recorded that an average of 10 viewings
housing market is. The current average per sale were being made.
number of viewings per sale is 14.9. As (Source: Hometrack.co.uk (03/02/09).
**********
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2008/09Strategic Housing Market Assessment Update
8) Repossessions
Summary:
• The number of claims made through the Colchester County Court for mortgage
possession and private landlord possession have both increased between 2007
and 2008.
• Claims for possession made by RSL’s has decreased.
Braintree is served by the county courts and so has not been used to demonstrate
of Chelmsford and Colchester (dependant the repossession trends for Braintree.
upon the area within the district). Unfortunately given the nature of the data
Consequently the repossession data for source it is not possible to identify what
Braintree is provided by both Colchester’s exact numbers are applicable to Braintree
and Chelmsford’s County Courts, but overall trends are likely to be relevant
however Chelmsford County Court do not to the district.
release their data a detailed breakdown
**********
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2008/09Strategic Housing Market Assessment Update
8.1) Colchester County Court Repossession Data
Below is the table containing the repossession data from Colchester County Court;
Mortgage possession actions Landlord possession actions
4,5 4 4,5 4
Claims issued Suspended orders Outright orders Claims issued Suspended orders Outright orders
2007 1 279 87 116 234 55 139
2 297 67 124 204 31 111
3 308 66 131 231 37 132
4 293 84 103 191 38 108
1 351 83 124 233 35 102
2008 2 300 142 197 230 80 141
3 271 115 134 226 53 135
4 190 96 124 214 53 136
(Table 8.0; “Possession Actions for Colchester Court for Quarter 3 & 4 2007 and Quarter 1 2008”. Source; Colchester Borough Council).
The data above demonstrates that the number of claims issued and suspended orders for mortgage possession has significantly
increased, as have the number of claims issued by private landlords. Despite this however, the overall outright orders for mortgage
possession has seen a five percent decrease.
The number of possessions from social landlords has decreased.
**********
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2008/09Strategic Housing Market Assessment Update
9) Homelessness Trend within the District
________________________________________________________________________
Summary:
• The number of homeless presentations being made has decreased by 30%
between 2007/08 and 2008/09 (421 cases and 296 cases respectively.
Homelessness trends since 2007/08 have
been identified and are stated below;
2007/08 2008/09 Difference
Presentations 421 296 -125
Acceptances 283 195 -88
(Table 9.0; Table to show the number of homelessness presentations and subsequent decisions made
between 2007/08 and 2008/09. Source: BDC performance monitoring data).
The table demonstrates that expectations given the increased
homelessness presentations have unemployment and increase in the
significantly decreased between 2007/08 number of applications for Jobs Seekers
and 2008/09 which contradicts the Allowance and Income Support.
**********
It is currently unclear as to the reasoning monitoring of this particular area will
behind this situation and therefore continue.
**********
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2008/09Strategic Housing Market Assessment Update
10) Conclusion
Summary:
• Much of the findings made as a result of this paper are subject to the volatility of
the economy.
• Population across the district is relatively stable
• Number of single person households is expected to increase
• The proportion of older people within the district is expected to increase
Many of the findings identified in this consequently how services and policies
paper have been anticipated. However need to be developed in order to
the update offers a clearer view to the effectively deal with it.
current situation in Braintree, and
10.1) Findings
• Data from the NHS migration • The value of one and two bedroom
register has suggested that the properties has decreased along
outflow of people a year on from with larger properties but to a
the SHMA is marginal, therefore significantly lesser extent.
the population within the district
could be considered relatively • Based on the methodologies used
stable. during the original SHMA 2007 to
identify the weekly housing costs,
• The number of single person it could be interpreted from this
households is expected to report that Owner Occupation
increase yet how this will affect the could be considered a cheaper
housing market is unclear. form of tenure than when the
original SHMA was written.
• The general findings have Despite this however, there is
identified that the property prices substantial evidence to undermine
across all dwelling sizes have seen this suggestion such as mortgage
a significant decrease; particularly availability and risk of
larger family properties. unemployment.
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2008/09Strategic Housing Market Assessment Update
• The number of empty homes • The number of claims for mortgage
across the district has increased possession has increased (based
by 18.5% between 2007 and 2008. on information from both
Chelmsford and Colchester County
• Research suggests that there has Courts) but a more significant
been a significant increase in the increase in the number of claims
number of applications for benefit being issued from private landlords
including Housing Allowance, is evident. The number of claims
Income Support and Jobs Seekers issued from social landlords has
Allowance. decreased.
• The Annual Survey of Hours and • The number of homeless
Earnings identified that the median presentations being made to the
weekly pay for full time employees council has dropped by 30%
in the UK grew by 4.6%. However between 2007/08 and 2008/09.
due to increased unemployment,
the average household income will
not have grown by this much.
**********
10.2) Conclusion
Based on the findings identified housing market have clearly occurred yet
throughout the report and summarised there is some scope for discussion
above, significant changes within the regarding the findings.
**********
1) The trend based population largely influenced by the
projections from ONS’s suggest significantly high number of homes
that the number of households will built across district between the
increase by an average of 1,000 year 2000 and 2005 and therefore
per year between 2006 and 2011. not reflective of the current and
This projection would have been forthcoming development targets.
42
2008/09Strategic Housing Market Assessment Update
**********
2) With regards to the financial aspects of SHMA 2007 were not representative to
this report, the significant changes the change in parameters; an example
identified are in part a result of the being the equation and assumptions used
economic downturn and the subsequent to identify the weekly housing costs for
unstable economy. Some of the methods owner occupations.
used by Fordham Research during the
**********
3) At the time of the SHMA, mortgage interest rates significantly above the bank
availability was not an issue. In of England base rate have been a feature
calculating the affordability of owner of recent mortgage lending. This is very
occupation, it was reasonable to use the different to when the SHMA was
monthly cost of an interest only mortgage conducted.
as a base. Higher deposits and mortgage
**********
4) Aside from data reliability issues when increased unemployment, JSA
collectively assessing the information and applications and an increase in the
findings offered by this update report, number of possession claims support
there is a strong suggestion that despite this. This could create a distinct shift in
the decrease in property prices, there the housing needs across the district.
remains significant barriers for existing Ironically the economic decline has in
residents and those migrating in to the some respect made owner-occupation
district to the open market. There is more affordable but no more obtainable
evidence to suggest that an increasing to the average earning household.
number of households may struggle to
maintain a mortgage;
**********
43
2008/09Strategic Housing Market Assessment Update
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