Agenda item

Mark Hand presented the report and answered the Members’ questions, with additional contributions from Ian Bakewell and Cabinet Member Bob Greenland.

Challenge:

People with disabilities are disproportionately represented among those seeking social housing. Welsh Government has said the mix between social and mass market housing should be 45%/55%, Stats Wales say 47%/53%, but in the last 5 years Monmouthshire has achieved 18%/82%. The report says we need to build 467 affordable houses each year, which would mean also building 2128 mass-market houses, following the 18-82 ratio. How is that achievable and what is the impetus for increasing the ratio of social housing?

2000+ homes per year is not deliverable, and Welsh Government’s ratio is not used anywhere in Wales as an LDP target. The NDF, now called Future Wales 2040, talks about a need for 47% of homes built to be affordable, for the first 5 years of its life. It also talks about that growth being directed largely to Newport and the valleys. Those sites are less viable than in Monmouthshire. It will be impossible for those areas without heavy public subsidy. The minister promotes inclusion of affordable housing-led sites in local development plans. The hard fact is that the level of affordable housing we’re talking about is well below what the LHMA says.

The Housing Allocation policy and its discord with the current report: the former says that if someone has savings exceeding £16k they will be put into Band 4, which effectively means they will never get social housing. But this report says that a deposit of at least £30k is needed, and an income of £48.5k, to be able to afford an entry level property. Those two facts are at odds with each other. Did the two departments work together on this?

Yes, we are working very closely together, and both policies are written by the same department. Adults Select Committee received the policy change a few months ago. There was a need to review the financial resources section. The policy is worked on the basis of targeting those with the greatest need. There’s a section in the policy that relates to having sufficient financial resources and therefore, arguably, there’s a lower need for social housing. We made a number of changes in that section. We increased the amount of savings to £16k and the income threshold to £45k, and we increased the banding around that. In the new policy, someone would be in Band 4, rather than Band 5. We also built in the caveat that we wouldn’t count benefit income or a lump sum from, for example, leaving the Armed Forces. The figures we came to were based on average Monmouthshire property prices. Another important consideration is that we aren’t always talking about purchasing property but also accessing rental properties. The new policy has only been in place relatively recently – we can review it as we move forward.

The report mentions needing 467 affordable houses per annum but it doesn’t mention the number in the LDP – the previous number was 960 affordable houses.

The Local Housing Market Assessment doesn’t specify the level of affordable housing needed in the LDP – they are two separate documents – but it does form part of the evidence base. The LHMA shows that we need 467 affordable homes p.a. over the next 5 years to tackle the need that is identified. A chunk of that comes from the planning process, some comes from things like Monmouthshire Letting service, and the annual churn of affordable homes, with people moving out. But, the 467 is part of the information that we use for the LDP.

There are some single people looking for social housing. It has been normal practice that properties are bought based on a joint income, which would cut down the ratios significantly.

Yes, we talk about the income to house price ratio assuming that it’s a single salary purchase but even if one assumes that there are two people and both are earning, the house prices are still in excess of 3 times the joint average income. So we still have that challenge. People on decent joint incomes would still struggle to get a mortgage for £300k starting, and to get the deposit without an equity. There is the added challenge of private sector rents being quite high, so living day-to-day and building up the deposit is difficult.

There is nothing in the report about bedroom numbers. There is a one-bedroom demand at the moment concerning young homeless people. There is possible a two-bedroom demand for elderly people looking to downsize, a three-bedroom demand for young couples potentially starting families. Is there any coordination between the different needs and the types of dwelling?

There is a lot of information in the LHMA (p14-18) which looks at bedroom size requirements and demands, and identifies some other challenges. In the housing market, a starter home would typically be a flat or terraced house, but the average price of our flats is higher than the average price of all property types in Blaenau Gwent, and the average price of a terraced property in Monmouthshire is higher than the average for all property types in Torfaen and Newport. So just getting on that ladder in Monmouthshire is more difficult than in neighbouring authorities. This is a concern to all of us. The bedroom size issue is important for thinking about what we build going forward. With current developments, we can pin down exactly what the affordable portion needs to be per area: number of one-bedroom flats, two-bedroom houses, etc.

What will the result of this be in relation to the LDP?

We propose including in the LDP a policy around housing mix for the market sector. At the moment, we control the affordable housing element. As a rule, developers will build what they can sell: in Monmouthshire, anything will sell, so they naturally move towards the 4-bedroom detached properties because there is a higher profit margin. We’re working towards the argument that we need intervention into that, to get some smaller market homes built – otherwise there will be a gap between people who qualify for affordable housing and people who can’t get on the ladder.

There is a lack of resources for officers. Young people in care are becoming homeless – this must be addressed urgently. We simply aren’t building enough social or affordable housing. This joint committee should ask Cabinet to start the process of building our own housing – the private sector has failed miserably.

We would like to build our own houses but can only do so once we have a new LDP to increase our delivery of social housing (for the rest of this LDP, all of our houses are coming on stream and will be built.) The next LDP is therefore the time to bring on the development company. The development company is about setting up for the future when the land supply is there, and projects for it to move on. The report going to Cabinet suggests that a way of starting is with a potential scheme in Caldicot. Members will be able to see the report and proposal. The challenge we’re finding, and in our discussions with registered social landlords, is that they would build more if more land were available. So it comes down to the LDP, what we put in it, and how we balance that level of growth with sustainability and infrastructure.

In the forthcoming LDP, we must nail down the promises from developers that agree numbers of affordable houses but then change their mind later in the process. The exception sites showed that the developers can do it. If we build our own homes, it will be important to put aside rent money, after expenses, with which to provide maintenance.

We need to ensure that these developments are viable. We have to make it balanced and to ensure that the communities are balanced as a result. We have to recognise that as a result of the social housing projects of the 60s, we now have some very big solely ex-council estates in sometimes fairly remote locations, and some social issues around them. We’re looking now to have more of a balance and get the mix right. We also have to bear in mind the infrastructure needs in the county.

Regarding the development company, the recommendations going to Cabinet next week are: 1. that Cabinet agrees to the proposals to commence a project to undertake the construction of low-cost homes on the site adjacent to Caldicot Comprehensive School, and 2. that Cabinet agrees to the continuation of the planning for the development company so that it can be implemented when opportunities or land supply pipeline are secured, and the requirement for a development company is both justified and required by law.

Why are we failing on exception sites?

There are two aspects. There’s a policy that allows for rural exception sites – so we could build 100% affordable housing on the edge of villages, and potentially grant-fund aspects of those. They are rare coming forwards, largely due to viability. That’s not unique to Monmouthshire. We tried to address that to an extent with this LDP, by having 60-40 sites (60% affordable housing). That has been a mixed success, and a mix of issues around those that haven’t worked. For example, on the smaller sites it only takes a small amount of infrastructure to go wrong for them not to be viable. Several others have stalled because the landowners have their eyes on residential values that aren’t justified, and are being greedy. The point of those sites is to bring forward housing that wouldn’t happen otherwise. We will look to send out a strong message in the new LDP because any of those sites that haven’t happened will be de-allocated – they won’t go back into the plan unless there are exceptional circumstances. They will go back to agricultural land value. Councillor Harris referred to the fact that we briefly had a policy to look at sites outside the LDP based on the 5-year housing land supply. They were achieving 35% affordable housing but that policy has ended. There was a very clear message from the Raglan application that Welsh Government supported a plan-led approach and have since changed national policy so we don’t have a 5-year housing land supply measured in the same way as before. There is a logic to this but it gives us a worrying gap between delivering and finishing the current plan, and the new plan sites coming forward in 2023.

Chair’s Summary:

There is general support from the committee to move forward with this report, and for the creation of a development company at the appropriate time, tying in with the LDP. A fuller summary of the meeting will be provided for the Chair(s) to take to Cabinet next week.

Tony Crowhurst noted that the mass market doesn’t think about disabled people enough when houses and estates are designed, and observed that disabled people also can’t have private rents, as landlords won’t make the necessary adaptations to their properties. Councillor Brown proposed that a comment be included in relation to the implications of a single person purchasing, rather than a couple.