North East
HOME TRUTHS 2012
The housing market in north east England
North East
More homes would boost our local economy We are simply not building enough homes in the North East. This lack of homes is affecting the lives of young people and families and holding back the regional economy. The shortage of new homes keeps house prices high and pushes up mortgage deposit costs, even as the economy suffers and wages stay the same. With people unable to buy their own home more people are being pushed into the private rented sector, which in turn is driving up rents to increasingly unaffordable levels. And as costs soar in the private rented market, more pressure is heaped on the limited supply of social rented housing. The Government’s latest measures to speed up new development and reduce the unacceptable volume of empty homes are helpful but more needs to be done. Building more homes would tackle the growing housing crisis in the North East and kick-start the regional economy, the weakest in England. It would help combat the high levels of unemployment, poverty and deprivation in north east towns and cities. Housing creates jobs and kick-starts the economy in a way no other industry can.
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HOME TRUTHS 2012
What the Government should do The Government should do more to support economic growth in the North East, recognising the widespread benefits that investment in new affordable housing and regeneration schemes deliver. The Government and the whole housing industry need to take a long-term view, tackling the market difficulties with a joined-up approach. Addressing the lack of houses – the supply shortage – is crucial to ensure we have a healthy, sustainable, affordable housing market across all tenures (home ownership, private rent and social housing) that strengthens the economy in the North East and meets people’s aspirations rather than defeats them. Housing associations are ready and able to play their part and deliver more homes. The Government has recently put in place some welcome important short-term measures, including a debt guarantee. But now broader, long-term solutions are needed. Housing associations could do much more if there was a ready supply of public land available to build on, if they had more certainty over rent levels after 2015 so they could raise the additional finance needed to build, and if red tape preventing them from using their homes and other assets flexibly and productively was cut.
To stem the urgent housing shortage, the National Housing Federation calls for: ■ The rapid release of publicly owned land to housing associations so they can build homes. For the quickest economic impact the Government must Home Truths 2012 | 3
North East
immediately release small parcels of brownfield sites, which can be delivered more quickly than larger sites. Each of these could be capable of delivering up to 100 new homes. Based on the Government’s own data,1 we have already identified land equivalent to a town the size of Gateshead that could be built on. ■ The Government should provide certainty on its long-term plans for investing in social housing. Currently housing associations are struggling to plan beyond 2015, when the current programme ends. Without certainty that there will be Government support for new homes, it is too high risk for housing associations to commit to new development. One way that the Government could create some certainty is by retaining the present rental formula for housing associations until 2020, allowing them to commit to delivering new homes in the future. ■ The Government must also cut red tape to allow housing associations to unleash their entrepreneurial skills. For example, housing associations need more freedom to be innovative in the use of their assets and their ability to raise finance. The flexibility to take an imaginative approach would allow housing associations to build more homes. ■ We know people want more homes built, and we need to encourage their voices to be heard above those of the NIMBYs. Public support for more homes is vital. That’s why we’ve launched our new campaign Yes to Homes. Visit www.yestohomes.co.uk to join the campaign.
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HOME TRUTHS 2012
The evidence ■ House prices in the North East have risen three times faster than earnings over the past 10 years.2,3 ■ Private rents are expected to increase by 35% over the next 10 years, as demand in the sector continues to rise.4 ■ There were nearly 92,000 families on north east social housing waiting lists in 2011, a rise of 19% on the previous year and the first increase since 2008. One in 12 families in the region is now on a waiting list.5 ■ 1,800 households were accepted as homeless by local authorities in the North East in 2011/12.5 ■ The North East economy is the weakest in England, with economic output per head just 77% of the UK average.6
Sources 1. National Land Use Database 2. Land Registry data, 2001 and 2011 3. Annual Survey of Hours and Earnings (ASHE), Office for National Statistics (ONS) 2001 and 2011 4. Housing market analysis for National Housing Federation, Oxford Economics, August 2012 5. Communities and Local Government housing statistics, 2011 and 2012 6. Economic and Labour Market statistics, ONS 2011
Home Truths 2012 | 5
North East
Average (mean) house prices 2011¹
Average (median) incomes 2011²
Gross annual income needed for a mortgage (75% at 3.5x)1,2
Ratio of house prices to incomes1,2
Total local authority homes 2011³
Total housing association homes 20114
ENGLAND
£236,518
£21,346
£50,682
11.1
1,725,905
2,319,386
NORTH EAST
£136,605
£19,120
£29,272
7.1
116,196
155,724
Darlington UA
£136,838
£18,465
£29,322
7.4
5,476
2,162
Durham UA
£121,513
£20,030
£26,039
6.1
18,785
29,119
Hartlepool UA
£122,177
£19,640
£26,181
6.2
0
9,767
Middlesbrough UA
£112,919
£16,250
£24,197
6.9
0
14,865
Northumberland UA
£168,628
£19,479
£36,135
8.7
8,502
17,308
Redcar and Cleveland UA
£122,936
£18,283
£26,343
6.7
0
12,152
Stockton-on-Tees UA
£137,729
£20,160
£29,513
6.8
0
13,964
Tyne and Wear
£139,649
£18,866
£29,925
7.4
83,433
56,387
Gateshead
£131,013
£19,469
£28,074
6.7
20,984
4,674
Newcastle upon Tyne
£163,582
£17,498
£35,053
9.3
28,764
7,534 5,384
North Tyneside
£147,792
£19,547
£31,670
7.6
15,522
South Tyneside
£124,952
£18,933
£26,775
6.6
18,163
4,613
Sunderland
£119,865
£19,037
£25,685
6.3
0
34,182
Footnotes to tables 1. Land Registry, 2011 2. Annual Survey of Hours and Earnings (ASHE), 2011 3. Communities and Local Government Housing Statistics Live Tables, 2011 and 2012 4. Homes and Communities Agency, Regulatory and Statistical Return, 2011 5. Homes and Communities Agency completions data, 2010/11
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HOME TRUTHS 2012 All new housing association homes completed with HCA funding 2010/115
Change in affordable housing stock (housing association and local authority) 2006-113,4
Households on waiting list 20113
New affordable lettings made by local authorities 2010/113
New affordable lettings made by housing associations 2010/114
Change in affordable lettings (housing association and local authority) 2006-113,4
49,196
19,220
0%
1,837,042
146,388
176,660
-22,283
-6.5%
1,932
-10,255
-4%
91,914
11,556
12,981
-3,357
-12.0%
56
-53
-1%
1,893
862
157
140
15.9%
289
-1,997
-4%
20,344
1,764
2,393
-624
-13.1%
128
-129
-1%
2,824
0
770
-10
-1.3%
193
-1,168
-7%
4,511
0
1,206
-196
-14.0% -13.9%
141
-126
0%
11,651
697
1,451
-347
108
-640
-5%
2,260
0
1,195
-10
-0.8%
118
-800
-5%
3,836
875
1,367
529
30.9%
899
-5,342
-4%
44,595
7,358
4,442
-2,839
-19.4%
80
-1,217
-5%
12,313
1,627
351
-619
-23.8%
176
-1,906
-5%
9,588
2,835
655
-2,315
-39.9%
88
-388
-2%
4,184
1,481
431
164
9.4%
73
-436
-2%
15,691
1,415
321
-323
-15.7%
482
-1,395
-4%
2,819
0
2,684
254
10.5%
Note The facts in this booklet use the latest available official government statistical sources at the time of going to print. In some areas, the National Housing Federation has carried out additional analysis to draw out the social and economic implications of the figures. The commentary is our own. Some of this data is Š Crown copyright.
Home Truths 2012 | 7
National Housing Federation City Point 701 Chester Road Manchester M32 0RW Tel: 0161 848 8132 Email: north@housing.org.uk Website: www.housing.org.uk
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The National Housing Federation is the voice of affordable housing in England. We believe that everyone should have the home they need at a price they can afford. That’s why we represent the work of housing associations and campaign for better housing. Our members provide two and a half million homes for more than five million people. And each year they invest in a diverse range of neighbourhood projects that help create strong, vibrant communities.
The National Housing Federation runs iN business for neighbourhoods in partnership with members to promote the neighbourhood work of housing associations.