Agenda item

To consider the report of the interim head of development, regeneration and housing (attached).

The committee considered the report of the interim head of development, regeneration and housing which set out actions that were being taken and which could be taken, within the Vale of White Horse, to increase the number of houses for rent or sale that were truly affordable to the average working family or person.

Councillor Elaine Ware, Cabinet member for housing, introduced the report. Also present to answer questions was Gerry Brough, interim head of development, regeneration and housing.

The Cabinet member reported that the provision of affordable housing that was truly affordable to everyone was an issue that national and local governments have been wrestling with for many years. At the heart of the problem was the fact that, to make housing affordable, houses for sale and/or rent needed to be available at below market value prices or rental levels. Reducing market value or rental levels meant houses needed to be built more cheaply or potential owners and tenants needed to be provided with some form of subsidy (most likely in the form of tax relief and/or housing benefit). Building houses more cheaply could only be done if the cost of land, materials, labour and capital could be reduced and no development profit, or less development profit, was allowed for.

In response to members’ questions, it was reported that:

·         The 2014 Strategic Housing Market Assessment for Oxfordshire(SHMA) uses a benchmark of costs not exceeding 35% of a household’s gross income to assess the affordability of rented accommodation. Based on this criterion, even the least expensive 2 bedroom homes for rent in the district were likely to be beyond the means of households whose earnings were within the lower quartile. Those on median level earnings were also likely to struggle with the cost of renting a modest 3-bedroom home.

·         Although the SHMA benchmark was used by planning policy, a more accurate assessment of affordability would be the Institute of Public Policy Research criteria which were based on net, rather than gross, income.

·         The lower quartile property purchase price in the Vale, in 2016, was £255,000. Assuming a deposit of 10% was available to a purchaser, the minimum annual income needed to obtain a mortgage for the balance would be £57,375, which was well in excess of both lower quartile and median earnings in the Vale.

·         Despite the lack of truly affordable housing, the Vale had the lowest homelessness rate in Oxfordshire.  However, it was recognised that there was an increasing number of people who did not have a home of their own but did not meet the statutory definition of homelessness.

·         1,122 new build affordable homes had been completed in the Vale between April 2012 and March 2017 of which 834 were for rent and 288 for shared ownership.

·         The provision of newbuild homes for shared ownership had been through Registered Providers (RPs). Whilst Section 106 agreements stipulated that the initial share purchase could be as low as 25%, some RPs advertised their preferred model of a minimum 40% share purchase.

The report set out the ways in which the council could intervene in the market to improve the affordability of houses across the district and concluded that, without the risks being underwritten by Government, the council did not have sufficient resources to make anything more than a marginal impact.

The committee thanked the Cabinet member and officer for their informative report and agreed that, in order to make housing more affordable to the average working family or person, action was required at national level.

The committee considered how the council might influence national planning policies and

RESOLVED: to RECOMMEND the Cabinet to:

1.     Take all necessary steps to seek a better relationship with Central Government in order to influence national planning policies; and

2.     Respond to the review panel led by Sir Oliver Letwin looking at the gap between the number of planning permissions granted and homes built in areas of high demand.