Housing market issues part 2 isles of scilly

A review of recent evidence, with key housing issues highlighted.

Understanding Data Ltd.

A report for Cornwall and Isles of Scilly LEP

About this report

This report draws together key data about housing in Cornwall and the Isles of Scilly relevant to the refresh of the Strategic Economic Plan for Cornwall and Isles of Scilly Local Enterprise Partnership.

It provides headline analysis and draws out key messages. It does not attempt to pass comment on every aspect of the data presented. Where appropriate national trends and context are provided.

Part 1 discusses key issues facing the housing market in Cornwall, and highlights area for further discussion as part of the SEP refresh, and in terms of formulating responses to these issues.

Part 2 will precis evidence and issues for the Isles of Scilly.

Part 3 contains detailed data analysis and sets out core Census characteristics, house price and house rental value data.

Charts and Tables can be reused, and should be acknowledged as created by Understanding Data Ltd. THIS PAPER COVERS PART 2 ABOVE

Contents A. Economic and Housing background B. Housing Market evidence C. Issues arising & Discussion points for the LEP

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A. Economic and Housing background.

There are two relevant recent pieces of work available for the Isles of Scilly. The first is Island Futures by Ash Futures in 2014 part of economic development strategy for the Isles of Scilly.

The second is the Strategic Housing Market Assessment undertaken in 2016 by David Couttie Associates. This forms part of the formal evidence base of the Isles of Scilly Local Plan, and extracts here are from a pre-publication draft.

Short summaries/extracts are provided from both of these documents Introduction The Isles of Scilly have a very unique housing market. Second homes and holiday accommodation represent approximately 30% of the Island’s housing stock, limiting access to the Island’s stock for local households, while forming a key element of the areas holiday offer and stock.

The Island’s tenure also follows a different pattern to Cornwall and other UK authorities in that owner-occupation is lower in supply and the majority of the private sector lives in private rented housing1, much of which is tied to employment accommodation.

Market housing prices are very high in relation to the level of incomes for the Islands, data shows the average house price in 2015 was £325,000.

Island futures – Economic Strategy May 2014 This work sets out a Vision A thriving vibrant community rooted in nature, ready for change and excited about the future.

And an Aim To grow the economy in order to protect the future viability of Scilly and its communities, The key relevant section for an overall approach to housing and growth is: Ash Futures Island Futures Page 4 “The economy of the Isles of Scilly is unusual in many ways. It is remarkably self-contained. It is dominated by one or two business sectors. It has high levels of very small businesses. The cost of living is high. These factors make the economy particularly vulnerable to shocks and any downturn in the tourism trade. The last few years have seen a steady decline in the number of visitors, as well as a financial crisis, a lengthy recession and a rapid change in social 1

While different to other local authorities, tenure and the level of private renting in particular is similar to levels found in town centre areas of larger mainland towns of similar overall populations. That is, it is the other types of tenure that are arguably missing, not private renting being over provided.

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norms. As a result, the Scilly economy has suffered, with many businesses seeing reduced trade and some closing altogether. While incomes have remained steady or declined, costs have risen. At the same time, the expectations of visitors have become more sophisticated and more demanding and some local businesses have struggled to change fast enough. There is a real risk, as costs rise and services reduce, that more visitors will find other destinations and more residents will decide that life is easier on the mainland. And so starts a spiral of decline.”

Page 5 There are also very strong views about the need to build more houses on Scilly. It is very clear that the islands should not spoil their special and valued environment - an environment at the heart of why people want to live on and visit the islands. Nevertheless, there is a considerable demand for housing from Scilly residents and workers - both for affordable and market housing. If Scilly is to keep more young people on the islands and attract new people to live and work (replacing those who leave), it needs to make sure that it has sufficient choice of housing to fulfil local needs and future demand. Any new housing should be developed to meet the social and economic needs of Scilly, and managed so that it continues to meet them in the future. Without this, the islands risk depopulation and a further decline in services. We believe that there are existing and potential sites for housing which do not risk spoiling the most environmentally sensitive areas. A sustainable future for the Isles of Scilly must embrace the social needs of the residents, the importance of a thriving economy, and the precious natural environment. Without all three being planned for, a viable future for Scilly will be in doubt.

Linked to this overarching economic plan, was both a housing and infrastructure plan.

The key extract from the Housing Action plan is: Housing supply on the Isles of Scilly is very limited and new construction is very restricted.

The lack of supply and the local housing policies are designed partly to prevent overdevelopment in an area of special environmental quality, and partly to ensure that people who live and work on the islands are able to find places to live.

As a consequence, there are serious issues with affordability and availability. This affects both the local community and the wider economy, as it is difficult to attract staff and potential entrepreneurs. At the same time, the population has been increasing and getting older which puts more pressure on the available housing stock.

We believe that there are a number of reasons why the existing planning and housing policies should be relaxed.

1. It is unlikely that the same level of grants for social housing will be available in the future.

Therefore, securing more social housing for local people will require an element of crosssubsidy from more open market housing.

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2. The new National Planning Policy Framework requires local planning policies to consider the need for all types of housing - of different sizes, types and tenures.

3. There remains considerable local demand for social housing and an increased choice of homes for private rent and sale.

4. The economy of Scilly needs to grow in order to sustain the viability of local services and, ultimately, of the local communities. It would be prudent to allow for a modest level of new development to attract new entrepreneurs and staff to the islands.

We are fully aware of the need to maintain the special nature of the environment. We suggest that development should be focused, in the first instance, on sites which are already identified, and then to other brownfield sites. Only then should any new locations be identified - which, we would suggest, should support existing or new settlements and be located carefully so as not to affect any environmentally sensitive sites.

As a result, we are estimating that provision should be made for between 90 and 120 new homes on Scilly over the next 10 years - this is only slightly higher than the number of homes built during the last 10 years. We suggest that these preliminary figures be kept under review to take account of any substantial increase or decrease in population size, and any changes in government housing policy and funding arrangements.

Isles of Scilly Strategic Housing Market Assessment (2016) In 2015 the Isles of Scilly Council commissioned David Couttie Associates to undertake a Strategic Housing Market Assessment (SHMA), a key component of the evidence base of the Local Plan review.

A SHMA is intended provide a comprehensive and robust assessment to obtain high quality information about current and future housing needs at a local authority level and to inform the development of polices and underpin the Local Plan and local housing strategies.

A SHMA will:   

Analyse household and population projections, taking account of migration and demographic change; Address the need for all types of housing, including market and affordable housing and the needs of different groups within the community; Identify the housing demand and inform the scale of housing supply necessary to meet the demand.

SHMA – introduction.

SHMA DCA “Much of the land is under the ownership of the Duchy of Cornwall and let on a leasehold basis making it is difficult to build new housing and the cost of development is also a 4

significant factor. Build costs estimated to be 50% higher than the UK mainland due to freight costs.

The Islands have much higher house prices than the mainland and coupled with low wages, low availability of owner-occupied housing and limited access to affordable housing, means out-migration from young people who leave for further education, employment and housing on the mainland.

Along with a loss of the younger generation, retirees migrate to the Islands to take advantage of the beauty of the local area, with an increasing older population placing significant implications for local services provided by the Council.�

The key findings from the SHMA are: There has been some consistent growth and change of the population of the Isles of Scilly, both in terms of overall size, and in the age structure and also the female male split.

The population aged 65+ has increased, in numbers and in share.

The working age population has declined very marginally in numbers, but more so in overall share.

There has been a shift toward more men on St Marys, and more women on off islands.

Modelling small areas is a sensitive area, and the national projections may not be fine-tuned enough to pick up the variations that have been happening in terms of natural change and migration for the IOS. However, the starting message is a useful one, which is that overall the population is predicted to decline without “policy on� interventions.

There are two limiting issues when considering economic data for the Isles of Scilly, the first is that many official statistics are rounded, sometime to the nearest 1,000 and the second, and more significant is the limited amount of data available. The Annual Population Survey (APS) and Annual Survey of Hours and Earnings (ASHE) are normally key sources of economic characteristic and earnings data, but because they are survey based (e.g. a sample of the population), then normally available data for larger local authorities are not available for the Isles of Scilly. This puts more reliance on the 2011 Census data.

IOS HOUSING NEED SURVEY Key Findings 13.7% of all households planned a move in the next 3 years.

56.0% planned to move within the islands and around 44.0% were planning to leave the Islands.

60.1% of households leaving the islands were leaving within a year and 53.0% were planning a move to Cornwall.

The main reason for leaving the Islands was family reasons followed by unable to afford to buy a home locally.

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34 existing households require market housing and 8 need affordable housing.

20 concealed households forming need market housing and 13 need affordable housing.

The main tenure requirement for existing households was owner occupation whilst for concealed households the main requirement was private rent.

Concluding thoughts Islands Future Makes the case for growth in housing and the population in order to support economic growth, and future viability. This is seen as growth in businesses, employees, and residents, at or above prevailing recent trends. Suggests a Plan period housing target of 90-120 dwellings SHMA Sets out the case for 120 dwellings, expressed as the fully objectively assessed need (OAN), with detailed survey data, national and bespoke population projections and detailed analysis of the housing market, justifying this figure. The Council need to respond to this in terms of viability mechanisms to deliver housing need and a Plan housing target.

LEP role The LEP role is key. There is a need to assess the Islands Future aspirations and action plans, to express this and known LEP investments, as a workforce/job target (notwithstanding productivity aims) and consider this against both the housing targets suggested by the SHMA. And the relevant population and workforce changes. Once this assessment is made, the LEP is in a position to recommend whether the economic needs of the islands is likely to be supported by the level of population growth and change.

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B Isles of Scilly Housing Evidence This section provides some fresh analysis of the key housing related indicators. Both the Island Futures report (short summary) and the SHMA (detailed analysis) contain relevant analysis.

House Price Paid Data Chart 1

Box and whisker plots are uniform in their use of the box: the bottom and top of the box are always the first and third quartiles, and the band inside the box is always the second quartile (the median). the ends of the whiskers can represent several possible alternative values, among them: Any data not included between the whiskers is an outlier and shown with a dot Chart 2 Sales by Year 2011 -2016

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Chart 3 Value of Sales 2011-2016

Data labels show £ value in 000’ s e.g. 3,076 = £3,076,000

Chart 4 Island Population

Population has increased clearly for the islands as a whole, and St Marys. This growth is slowing. The off island picture is less clear. Growth has neem more mixed, with some population decline occurring from 2001-2011 for St Martins and Tresco.

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Chart 5 Age Structure 2011

Chart 6 Age structure 2011 %

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Chart 7 1991 2014 Age Changes

The age structure of the Isles of Scilly has already changed. In the chart (7) above, the orange line represents the 2014 distribution of population by single year of age (0-84, and then 85+).

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Where the orange line is higher than the brown line (the 1991 distribution) there are more people of that particular age in 2014.

There has been clear growth in most age bands from the late 40’s.

The following charts shows the island breakdown of tenure types, starting with overall tenure, and then drilling down to sub categories.

Chart 8 Tenure (2011)

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Chart 9 Owned breakdown

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Chart 10 Private rented breakdown

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Analysis rightly points out that levels of private renting are high on the IoS compared to other local authorities, and highlight the role of the Duchy and Tresco estates.

Comparing the levels of private renting with town centre areas2 in Cornwall, shows similar levels of private renting. It could be argued that the islands lack the other tenure types that larger mainland communities have.

The following charts shows the island breakdown of type of accommodation, and then drilling down to sub categories.

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Central Liskeard, Newquay and Falmouth have levels of private renting between 40-50% of all stock.

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Chart 11 Accommodation Type (2011)

Chart 12 Whole house breakdown

Chart 13 Flats breakdown

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C The issues Population change Population decline represents a very real threat. There has already been a significant ageing of the population of the Isles of Scilly, that is likely to exacerbate this.

This has seen the proportion of people aged over 65 go from 18% in 2001 to 26% in 2014.

The proportion of the working age population has fallen as a proportion over this period, but held constant numerically.

Depopulation isn’t an abstract concept; it has already happened on a small scale.

The off islands have seen low population growth for several decades.    

Bryher and St Agnes grew by 3 people since 1991 and by 4 people from 2001-2011, St Martins has grown by 23 people since 1991, but declined by 5 from 2001-2011, Tresco has grown by 9 people since 1991, but declined by 8 from 2001-2011, St Marys has grown, but the level is slowing, growth from 1981-91 was 106, from 1991-2001 was 60 and from 2001-2011 was 51 people.

The available national trend (i.e. policy off) population projections show an expected drop of the population by 2039 of 162 people, or 7% of the current population for the islands as a whole.

The 16-64 population (a proxy for workforce) is projected to decline by 267 (2014-2030) and by 303 (2014-2039), falling as a percentage of the total population from 59 to 50%.

These could all have significant impacts on economic resilience and the self-sufficiency of the islands, and the ability of the islands to diversify and compete.

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The Data Chart 14 Estimated and projected population

Chart 15 Estimated and projected Age changes

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Like the previous line chart showing age changes form 1991-2014, this chart adds a final age structure projected at 2039, which is shown in orange, and highlights a trend based loss of working age population and increases in the much older population (70+).

Chart 16 Estimated and projected Households

Under trend based national projections (SNPP 12 and SNHP 12) the Isles of Scilly is shown to expect both a reduction in population and households.

For population this is a projected fall of 162 people and 191 households over the respective projection periods.

It is important to realise that trend based projections can be influenced by   

Policy on decisions Investments Changes to trends, driven by other factors.

However, taken alongside the already experienced slowdown in population growth on St Marys, the low rates of growth and small decline on the off islands, and the age structure of the islands, some degree of depopulation should be considered highly likely. This provides a major challenge to economic led expectations of growth.

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The impacts The Island Futures Strategic Economic Plan and SHMA both highlight a very real threat of population decline.

Clearly housebuilding in response to this is one very practical reaction, and is needed to retain the existing population and give those who want to stay, housing options, and to fulfil aspiration expressed through the Island Futures work “to attract new entrepreneurs and staff to the islands3”.

The SHMA sets out the scale of required need at 120 units from 2015-2030. This is from assessed levels of likely household formation, and in response to clear survey based evidence from residents. Around 60 households said they were looking to leave the Islands because they could not afford housing or because of the lack of rented accommodation. The Plan will need to assess a housing target which considers ways of delivering this level of need, and could include further open market housing as a means of cross subsidy for the affordable provision.

There are clear economic reasons for the LEP to engage with this issue, to express views on the future population and housing targets for the IoS, to clearly link the need for the future population and labour force to match likely economic, job and business needs. This needs to be a key input into the Local Plan process from the LEP within the Local Plan timeframe, which is working towards a draft plan in March 2017. The LEP should consider the importance of sustaining a level of population to sustain a current and future workforce, both in terms of skills and numbers, to supplement the Council’s decisions on affordable need, open market delivery to help support the affordable element and workforce sustainability.

Statistical analysis carried out by Eurostat - the European Commission's statistical agency has found that there is a critical population mass which determines the viability of population growth on islands. If this critical mass is reached, an island tends to experience an increasing population, a relatively large proportion of young people and good provision of public services. This critical population size is between 4,000 and 5,000 inhabitants. Any islands with populations below this level tend to experience net emigration, an ageing population and inadequate provision of facilities.

The Isles of Scilly sit somewhat outside this analysis in terms of its population. The Isles of Scilly also have wider facilities supported by tourism, and the presence (budget and responsibilities) of a higher tier of local government than equivalent islands of the same size population. However, it is one of the few relevant benchmarks available and helpful for lobbying of central government support for subsidy of service provision, in terms of lack of economics of scale and critical population mass to generate local revenue to provide these key services.

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Page 2 Housing growth plan May 2014

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LEP Discussion point There is a major opportunity for the LEP to support a meaningful debate about the future of the islands, though supporting the Local Plan process, and through work for the SEP refresh to set out alternatives and a route map towards a thriving growing population, and a diversified economy.

Many of the actions have been already identified, but the debate needs to be starkly framed in terms of the depopulation or population growth and their respective impacts.

Future (re) population growth should not be purely housing led.

There is a strong debate to be had in the context of the Local Plan and the LEP’s SEP review, around a level of housing growth (growth), which would lead to an overall stand still population position, to address some of the current need, and growth over and above this (growth plus4), to address all the affordable current need, and economic needs, as well as to support and subsidise infrastructure and services.

Key to this is the balance of new houses in terms of size and tenure, and that the (new) occupants support the workforce requirements. The quality of the new development will also be important.

This would need to be carefully framed, and assessed against capacity issues, as well as key environmental issues.

Clearly both growth and growth plus would impact on assumptions around infrastructure needs, and the type and nature of economic investments and growth.

There are some further related issues: Workforce and economy It is important to have the quantity as well as quality of workforce to support the future economic needs of the Islands.

The various investments and projects for the islands should be ideally translated into simple employment projections, modelling various basic scenarios, to allow the LEP to take a view on future job growth, alongside the Council and partners, to be able to assess the level of population and housing growth that would be needed to support this change.

Proportionally it may not be necessary to commission economic projections, but an attempt should be made to assess likely job growth. The overall Cornwall and Isles of Scilly SEP may wish to refresh its view overall on job creation, especially given its productivity led objectives.

Disaggregating work to the Isles of Scilly would be important, if this is the case.

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The Ash Futures Island Futures report reports a suggested population target of 2,400 -2,500. (p.30) This would involve significant, reductions in out migration, additional in migration, and high levels of house building.

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Issues of high transport costs are clearly expressed in Council work, the local media and in the Island Futures work, and has been the subject of significant lobbying in recent years. It remains a vital issue for the LEP to come to a clear view on, in support of the long term sustainability of the islands. Clearly subsidised transport costs, ideally for residents and essential goods, would go some way to making the islands both better places to live and work.

Costs of Living are referenced as being high. This is inevitably likely to be the case. However, evidence is not presented to confirm the scale of this. The LEP could undertake a short piece of work5 to highlight key examples of this, for the SEP refresh.

End note: Facilities and Houses – a question of ownership Finally – across all these threads there is an opportunity for the LEP to take a view internally on whether there is any merit in applying lessons learned from island and rural (estate) communities in Scotland that have investigated and undertaken community buy out schemes.

The Isles of Scilly are dominated by land and freehold ownership, being vested in the Duchy of Cornwall, and to an extent Tresco estate. At the very least, off island community buy out options should be explored.

This is clearly not a panacea in isolation, however for the off islands in particular investigating community buy out options, and understanding the pros and cons and indeed appetite, both from residents, the Council and the Duchy would seem sensible.

Key reading to inform a preliminary view can be found at: http://www.gov.scot/Publications/2015/10/8581 http://www.communitylandscotland.org.uk/about-us/documents/policy-documents/ Carnegie and Highlands and Islands Enterprise (HIE) funded a study for Community Land Scotland in 2014 http://www.communitylandscotland.org.uk/wpcontent/uploads/2014/06/FINAL-Community-Land-Scotland-Economic-Data-Report-140414For-Release.pdf A community example that has some real people based relevance, is a case study on the Scottish Gov. site http://www.gov.scot/Topics/People/engage/empowerment/casestudies/buyout Robin Miller Understanding Data Ltd. June 2016 rmiller@understandingdata.co.uk

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This could be based on https://www.cornwall.gov.uk/media/3627139/CostofLiving2012.pdf however some primary data collection may be necessary.

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