Our Commitment to Affordable Homes- June 2015
“Increasing the supply of affordable homes should be done in a variety of ways, but they must be cost effective. It should also focus on wider housing regeneration initiatives like town centres, create sustainable communities and bring empty properties back into use....”
Quote from stakeholder event- March 2015
I have great pleasure in introducing our commitment to providing more affordable homes. This comes at a crucial moment in Wales as families are finding it harder and harder to find a home that meets their needs, at a price they can afford. Incomes have remained flat for over five years. More and more people are looking to the Council for help to find a home to rent. People wanting to buy a home for the first time are finding it hard to get a mortgage. At the same time, too many homes in our County are lying empty.
I believe, that together with our partners, we have a duty to act to tackle these issues head on. This clear commitment is our response as we believe that everyone in our County should be able to live in a home which meets their needs and expectations, and is affordable for them to rent, buy and run. A decent, secure home is the foundation for sustainable communities – both in our towns and rural areas. I want to give people choice about where they live, in what kind of home, and whether to rent or buy.
Our commitment is built on us listening to what the public told us through the wide ranging consultation process. From that, our five affordable housing principles commit us to:
ü Targeting help on where the need is highest, in both urban and rural areas, by delivering more affordable homes for rent
ü Being more flexible - whether by bringing wasted homes back into use, buying existing homes or building new ones.
ü Doing whatever it takes by developing innovative and creative ways to deliver more
ü Using our resources in the best possible way to ensure as many new homes as possible
ü Using the expertise, skills and resources of those we work with
A delivery plan, outlining what we will do and where, will be published and updated every year. By doing this we will help keep young people in our county and improve our economy. This will provide training and jobs as well as the much needed homes. Communities will become stronger with a bright future, Good housing is a major factor in improving the health of our population. I urge you to support us and be part of this most worthwhile journey.
Councillor Linda Davies Evans
Executive Board Member for Housing
Foreword by Cllr Linda Davies Evans 2
Carmarthenshire is changing 4
How do we know what people need and want? 4
What is the gap? 5
What is needed, and where? 7
How have we been meeting the gap? 9
Putting our principles to work 10
Carmarthenshire is changing
What people are telling us is supported by our research1. The population of Carmarthenshire is growing, as is the number of households (although the average household size is reducing). Single people households (4,300) and adult couples without children (1,800) account for most of this increase. That’s a lot of extra households to accommodate. We also know that there will be a continuing rise in single parent families and a likely reduction in four and five person households – over 850 households over next five years.
From this it is projected that more than 6,000 extra households will form in Carmarthenshire over the next five years. While the nature of our communities is changing fast, the 80,000 homes in Carmarthenshire aren’t.
As in the UK and Wales, Carmarthenshire people generally want to own their own homes (if given the choice). The National Survey for Wales shows that owner occupation has the highest satisfaction rating of any tenure, with 97% of current owner occupiers happy with their choice of tenure.
However this is in direct contrast to what people are finding. Since 2008, tighter controls on mortgage finance together with stagnating household incomes have combined to restrict access to owner occupation for many. Private renting continues to increase. For tenants, access to social housing is often difficult. It may not be the right size, type of property or in the right place. For landlords, there is a perception that the financial returns for investing in the buy to let market are greater than other investment options.
During our consultation, the people of Carmarthenshire have told us that affordable housing is:
n People’s ability to keep up with payments, whether the home is purchased or rented
n The ability to get a mortgage in the first place for people buying
n Affected by income and house prices
We try and understand this further by regularly undertaking a ‘housing market assessment’. This is done by:
● Looking at the type, size and location of the housing people have applied to us for
● Looking at what becomes available as people move
● Identifying house prices (to rent and buy)
● Assessing the ability to pay for housing ( household income)
● Comparing the above to population and household changes
● And the number of people telling us they have a housing need, for example through disability, illness or homelessness.
● We then compare the ‘need’ and the likely supply of new homes. This leaves us with a gap in what is needed and what will be provided.
People also told us that new homes should be provided for:
● Older people
● People with specific disabilities
Our housing market assessment estimates that there will be a shortfall of over 1,900 affordable homes a year for the next five years. This includes all households who do not have the income and savings to meet their needs through the housing market. If we consider only those in the highest housing need, however, this will reduce this figure to 400. We therefore need to aim to provide at least 2,000 homes to help those in the most need by 2020.
Over 1900 homes
400 of these are
On average 69
Social housing is in high demand. There are over 7,000 households on the housing register. There are only a very few areas where the existing council and housing association homes are hard to let. The low demand currently is in a small number of sheltered housing schemes or areas with a poor public perception.
When talking to us, 88% of people believe that housing need should be the main factor when planning new affordable homes
We have made over £200m of investment in our tenants’ homes in recent years. We know that 90% of the homes suit people’s needs.
We will do further analysis, however, on the remaining 10% of homes to understand more about why the home does not meet their needs.
The private rented sector has expanded dramatically over the past 15 years, and continues to do so.
The private rented sector is the most diverse tenure, with some of the best properties and some of the very worst. In practice, it has become the only option for people who can’t access owner occupation or social housing. It suits some people due to its flexibility and choice. However many people find it does not meet their long term needs, particularly due to the higher rent levels, the impact of housing benefit changes and reduced security
Private landlords are increasingly unwilling to let to tenants reliant on welfare benefits, and this is only likely to increase with further welfare changes.
Recent changes to the law will mean landlords and letting agents will have to be licensed. It is envisaged that this will improve standards of both management and repairs in the private rented sector.
The consultation we undertook and the housing list tells us that the biggest gap is in housing to rent. Our housing list includes 600 households who want low cost home ownership – some form of help to buy their home. This is less than 10% of the overall list. However it is unlikely that this accurately reflects people’s aspirations. We have helped some families buy their own home, through our shared equity schemes. This is usually done with private house builders as part of planning obligations.
People told us that they believed the types of homes that should be built are:
n Smaller homes
n For local people
n To allow older people to downsize and free up homes for families
They also told us that affordable homes should be prioritised:
n According to housing need
n According to housing need and where it provides training and employment opportunities
Across the county, the biggest shortfall is for smaller homes for both single people and couples without children – typically one bedroom homes. Out of the 1,900 additional new homes required, 1,200 are required for this group. The biggest shortfall is in Llanelli, followed by Carmarthen West, Aman and Gwendraeth. In terms of age, just under a third of these households are over 60.
The next biggest shortfall is for two bedroom homes (over 400 a year). Again, this is across the County, but with the highest numbers in Llanelli, Carmarthen West, Gwendraeth and Tywi.
There is less need for three bedroom homes, which is likely to reduce further over the next five years, as typical family sizes continue to reduce. There is also a need for four bedroom homes (over 150 a year), especially in Llanelli.
The supply and availability of affordable housing is also set in the context of the present decline in Welsh speakers n Carmarthenshire and the role housing has in enabling our younger people in particular, educated through our local bi-lingual education system, to remain within the county. It is currently estimated that one in three young people from the county are leaving Carmarthenshire after finishing school2.
We suspect we do not fully understand housing need in rural areas and it is really important that we provide additional focus. For example, why would people apply to us for social housing if there is none in the village? We will carry out further research in rural areas, as soon as possible, to ensure we fully understand housing needs and the impact people moving into the area is actually having on local people’s ability to access affordable housing. This will include working with local communities to ensure affordable homes are developed to meet the needs and expectations of people across the county.
We want to ensure affordable homes are fit for the future and can be adapted to meet the changing needs of people. However, there will always be a need for ‘specialist’ housing for individuals and families with significant physical, mental or learning disabilities. We know we need to set out the plans for specialist accommodation more explicitly.
For instance, we are currently working on a ten year strategy for older people. This may suggest we look further at our sheltered housing schemes which may be suitable for upgrading to provide extra-care and more specialist services.
People told us that they believe the role of the council should be:
n Working in partnership with others to maximise the supply
n To provide land to enable housing to be built
You also told us that the supply of affordable homes should be increased by:
n Bringing empty properties back into use
n Providing co-ops or self build
n Focussing on rent rather than sale
n The option to buy back council houses
This is a grant paid by Welsh Government to Housing Associations to build more social housing. The grant meets about two thirds of the costs, with the housing association providing the rest. Carmarthenshire’s housing association partners normally receive about £2m a year, but there is usually an opportunity to get more. For example, in 2014 we gained an extra £1.7m. These homes are developed throughout the County, but the last three years has seen the majority of homes being provided in Ammanford and Carmarthen in two extra care schemes.
We usually ask private house builders to include affordable homes on their new developments (as long as this is financially possible). The number of affordable homes will usually vary between 10% and 30% of the overall number of new homes. Sometimes the developer will provide a cash payment instead of providing affordable housing. This money can be used elsewhere. These homes tend to be built in the larger urban settlements in Llanelli, Ammanford and Carmarthen as these are where the developers choose to build.
When talking to us, 87% of people believe that bringing empty properties back into use was the best way to maximise the number of affordable homes
We receive money from the Welsh Government to bring empty homes back into use. This is a recyclable fund and is proving very successful throughout the County. A review carried out by the Council’s Community Scrutiny Committee highlighted the benefits of bringing empty homes back into use to meet housing need. This was also top of the list of people’s views on how we should enable more affordable housing. We brought over 130 homes back into use during 2014/15.
This agency is run by the Council and manages 138 private sector homes for landlords, for an 8% commission. These homes meet housing need from the Housing Register. The number of managed homes has remained at a constant level over the last two years as new properties taken on replace those which have been handed back to landlords.
Our Landlord Assist Scheme provides financial help to encourage landlords and owners of empty homes to let their properties via our Social Letting Agency. Improvement works can be undertaken up to the value of £10,000 with the costs repaid from the rental income. This initiative has enabled twenty additional affordable homes to be let via the Social Letting Agency.
During 2014/15 the Council delivered homes in Llanelli and Kidwelly. This was paid for from our own funds.
During 2014 we made land available in Carmarthen for the delivery of housing co-operative homes, in partnership with a housing association.
By making land available we will be able to deliver 26 homes at an overall direct cost to the Council of £500,000. But we could and need to do more to meet the needs and aspirations of the people of Carmarthenshire.
People told us that the timescales for our plan should be five years; they also said it should be regularly reviewed and flexible. We were told we need to:
n Be more flexible and react to changing circumstances
n Work in partnership to come up with more innovative solutions
n Create a Carmarthenshire home specification for affordable housing
n Ensure the list of people for affordable housing is not aspirational, with some people never going to be able to get a mortgage
With this in mind, we will work to the following principles:
n Direct our resources to meeting the highest housing need, in the areas where people want to live
n Concentrate our efforts on providing homes to rent
n Keep our information up to date, by updating and sharing the housing market assessment every year
n Carry out more research in rural areas, identifying any gaps in what we currently know, as soon as possible
n Understand what people can afford, and ensure that homes delivered really are affordable to rent buy and to run (and remain so in future)
n Re-model our homes, and in limited cases dispose of homes that cost too much to bring up to our Standard or are in the wrong place
n Turn empty private sector homes into affordable homes for rent or sale
n Increase our resources to bring additional empty homes back into use
n Look at new ways of bringing empty homes back into use
n Consider buying back ex-council houses.
n Consider buying homes where cost effective and in areas of need
n Identify the best ways to deliver as many new affordable homes to rent as possible
n Use the new funding available for the council to provide more homes or enable others to do so
n Search for other new ways of paying for new affordable homes to rent
n Research ways to make this funding go further, to enable more new affordable homes, while controlling costs. This will include looking at setting up a local housing company.
n Consider the most effective way of using our existing land or purchasing new land
n Deliver high-quality, affordable homes by the most cost-effective means. This may mean different options and solutions and working with different people
n Agree a five-year delivery plan, which will be updated each year. It will set out the size, type and tenure of homes that will delivered in each area
n Work with the private sector and housing associations to unlock ‘stuck’ sites in areas of high housing need. This will increase the delivery of open market homes as well as affordable homes. This work will include service providers for water, gas and electricity
n Continue to negotiate affordable home contributions on private sector sites through the planning system (S106). Usually this will mean on-site provision, but we will consider off-site provision or a financial contribution when there are good reasons to do so
n For people who aim to become owner occupiers, but are not able to get a mortgage on favourable terms, we will bring in a ‘try before you buy’ scheme. Rents will be affordable, and people can convert to low cost home ownership when they are in a position to do so. This will particularly be the case in the more rural areas where it is even more difficult to buy because of affordability issues
n Look into ways to help people who wish to build their own homes.
n Bring in the contributions – expertise, capacity and finance – of housing associations, Welsh Government and the private sector
n Work with residents and local communities to ensure that what we do is right for each area
n Work within the Swansea Bay City Region to ensure that we provide jobs and training for local people
n Work with financial advisors to help people access financial services and improve their credit score, so that they will be able to get a mortgage.