What has caused the housing crisis in Suffolk and north Essex?

A shortage of housing is said to have caused prices to rise

A shortage of housing is said to have caused prices to rise - Credit: Archant

Yesterday, we looked at the growing gap between earnings and house prices and the difficulties faced by first time buyers, today’s housing feature looks at the cause of the housing crisis.

Graphic showing number of new homes and additional affordable homes provided by region

Graphic showing number of new homes and additional affordable homes provided by region - Credit: Archant

Questions about the cause of the housing crisis and how it can be resolved have been fuelling political debate ever since the explosion in property prices in the 1980s.

But while an under-supply of new housing is widely acknowledged as one of the main causes of the problem, those in the industry say there are many underlying factors, and few simple solutions.

The Government may have pledged more than 400,000 affordable homes by 2020 – however, housing completions remain stubbornly below targets, both nationally and locally.

House building declined during the economic downturn and, despite a slight revival across the UK, the National House Building Council (NHBC) said the number of new home registrations in the Eastern region had fallen again last year.

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The 1,610 new homes delivered in Suffolk was less than half the peak number completed in 2008/09, according to the Office for National Statistics (ONS). In Ipswich, just 80 new homes were completed throughout all of 2012/13.

The Federation of Master Builders highlighted problems with access to finance, availability of development sites and shortages in labour.

As we reported on Tuesday, the New Anglia Local Enterprise Partnership’s (LEP’s) strategic economic plan for Norfolk and Suffolk warned Suffolk is heading for a shortfall of 15,000 homes by 2026.

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Jane Basham, a Labour politician in south Suffolk who works with homeless people in Ipswich, claimed successive governments had failed to provide enough council homes, while planning authorities had been weak, pandering to the needs of landowners.

She called for “local people to be put in the driving seat” in deciding housing policy rather than “landowners and the political elite”.

Suffolk Coastal District Council's housing and planning team, (l-r), Phil Ridley Tony Fryatt and Jus

Suffolk Coastal District Council's housing and planning team, (l-r), Phil Ridley Tony Fryatt and Justin Hunt of Suffolk Coastal District Council. - Credit: Archant

“From my work on the doorstep I’d say there’s a real disconnect with local people and the developers and decision-makers,” she added.

“Local people – many of whom don’t have the money to help give their children a chance to put a deposit on a house – genuinely understand how little chance their children or grandchildren have of getting on the property ladder.

“They see council houses as the only way forward.”

A particular concern is the lack of so-called affordable housing.

NHBC chief executive Mike Quinton said that, while there had been “steady growth” in overall house building, “we are now seeing registration volumes fall in the public and affordable sector”.

Although many councils require around a third of homes in large schemes to be affordable, in some parts of Suffolk and Essex, the supply is far below that level.

Of the 350 new homes the ONS said were completed in Suffolk Coastal in 2014/15, only 20 were deemed affordable – just 5% of the total. In Tendring, just 10 affordable homes were delivered last year.

Neil Stock, leader of Tendring District Council and cabinet member for planning, said the data shows a “clear need” for local plans to be put in place to increase the supply of good-quality homes.

Tony Fryatt, Suffolk Coastal’s cabinet member for planning, said although the council had been criticised for not meeting housing targets, much of the shortfall was due to developers not starting work on sites, highlighting applications for around 3,000 homes in the district that had been approved but not begun.

Jane Basham says more council houses are needed

Jane Basham says more council houses are needed - Credit: Archant

Meanwhile, James Hopkins, of Hopkins Homes, one of the region’s most prominent developers, said the shortage of new homes was due to planning bureaucracy and ‘not in my back yard’ (NIMBY) attitudes.

Despite recent Government initiatives and changing attitudes towards housing, he said “there are still major challenges in the planning system”.

“On the one hand the Government tells us that we need to build more houses, but the planning system is restrictive and 90% of people admit they have NIMBY attitudes towards new development,” he added.

“This makes the system bureaucratic and means the approval process can take months, sometimes years, to navigate.

“Understandably, rural locations are wary of plans to extend their towns and villages, fearing that profit-hungry developers will throw up low quality, unsympathetic housing in high densities. And our planning system is basically adversarial pitting local councils, developers and communities against one another.”

Uncertainty among housing associations is said to be another issue affecting delivery of new homes.

Nationally, housing associations were responsible for 22% of new homes delivered in 2015. However, in Suffolk Coastal this proportion was 15% and in Ipswich just 9%.

Philip Ridley, SCDC’s head of planning, said some developers in Suffolk were unable to find housing associations to take on the affordable element of their schemes. He said in some parts of the county it was difficult to supply housing at a rental price that would meet the Government’s benefits cap.

Justin Hunt, Suffolk Coastal’s head of housing, added that Government demands for housing associations to cut social rents by 1% over each of the next four years had added further uncertainty to the sector.

James Hopkins, executive chairman of Hopkins Homes, says planning bureaucracy is holding up the supp

James Hopkins, executive chairman of Hopkins Homes, says planning bureaucracy is holding up the supply of new homes - Credit: Archant

Nationally, the extension of the Government’s “right to buy” scheme has been criticised.

The Chartered Institute of Housing said the scheme could result in the loss of almost 7,000 council homes a year “at a time when an increasing number of people are struggling to find an affordable home”.

The region’s attractiveness for second homeowners and its above average proportion of older residents adds another dimension to the problem.

Under-occupancy – where a home has one or more unused bedrooms – tends to affect rural parts of the country and those with more elderly people.

According to 2011 census data, Tendring was listed as the local authority with the fifth highest proportion of households with one spare bedroom – 42.1%.

And in Suffolk Coastal, according to the National Housing Federation’s Home Truths report, there were 2,679 second homes in the district alone – more than in the entire county of Cambridgeshire (2,448).

Tomorrow we look at what developers, planners and politicians recommend to solve the housing crisis.

Neil Stock, leader Tendring District Council, says the shortage of affordable homes emphasises the n

Neil Stock, leader Tendring District Council, says the shortage of affordable homes emphasises the need for local plans to be put forward - Credit: Archant

Why does Babergh seem to suffer region’s housing crisis most acutely?

The south Suffolk district portrayed in some of the nation’s finest landscape paintings today sits at the forefront of the region’s housing crisis.

Once home to Constable and Gainsborough, Babergh now suffers the troubles of spiralling property costs more acutely than any other district in Suffolk or north Essex.

While official figures show its average house prices have risen most steeply – nearly quadrupling from £55,000 in 1998 to £217,000 in 2014 – average full-time earnings have risen at the slowest pace – just 41%.

Other indicators of the housing market are similarly bleak.

The 150 new homes completed last year was the second lowest total for the region and the 50 affordable was also behind most other districts, according to figures from the Office for National Statistics. Babergh District Council (BDC), however, says its own figures indicate there were 172 completions, 31 of which were affordable.

The number of council-owned homes has declined steadily from 3,940 in 2000 to 3,472 in 2014, according to figures from Shelter. No new council homes have been built in that time and housing associations have provided just 160 since 2004.

People living locally say council policy failed to address communities’ needs.

The housing shortage has seen a rise in homelessness in some regions. File photo, Press Association.

The housing shortage has seen a rise in homelessness in some regions. File photo, Press Association. - Credit: PA

Jane Basham said BDC had shown “no political will” to build new council homes, as the “rich political elite” fear it would blight the district.

“Babergh as an authority has been weak,” she added.

“It has caved in to developers who have said they cannot afford to build affordable homes.

“Shotley, for example, was a huge development given the green light with no requirement for any of those homes to be affordable.

“Babergh’s approach combined with Government policy – incentivising councils to build homes and plug holes in their coffers – has put their landowners, developers and those with money in the driving seat.”

Phil Dunnett, who lives in Brantham and stood for Labour to represent Alton on Babergh District Council in last year’s local elections, said housing concerns are regularly raised with him when out canvassing.

“The council are being held over a barrel,” he said,

“Either they allow the developer to do what they want or they fall further behind their housing targets.”

Mr Dunnett said the council’s housing strategy appeared to be “reactive” and called for more “strategic planning”.

He also said national policies, such as the so-called “bedroom tax”, had affected more people locally than he had imagined.

Tom Barker, head of planning for growth at BDC, said: “This is a key strategic priority for our councillors and we’re doing everything we can to address the supply and delivery of the right homes of the right tenures in the right places.”

What are some of the adverse effects of the housing shortage?

The shortage in new homes and the rising prices affecting the property market have had an impact on rental prices, council waiting lists, homelessness and people in temporary accommodation, figures indicate.

After years in which homelessness had been declining nationally, 2013/14 saw a rise, according to housing charity Shelter.

Quarterly figures for Suffolk show the number of homeless families in priority need increased from 35 in the third quarter of 2009 to 108 in the second quarter of 2014.

In Colchester the number rose from 17 at the beginning of 2010 to 49 at the start of last year.

The number of households in temporary accommodation in Babergh increased from four at the beginning of 2012 to 37 in the second quarter of 2015, while in St Edmundsbury over the same period the number grew from one to 28.

Suffolk Coastal’s council waiting list grew from 643 in 2009 to 2,917 in 2014; Waveney’s grew from 1,665 in 2011 to 2,875 in 2014.

Landlord possessions in Colchester increased from 90 in the third quarter of 2011 to 152 in the same period of 2015.

Census data shows that whereas home ownership had increased steadily up to 2001 when 69% of people owned their own home, since then it has declined. In 2011 it had fallen to 64%. And according to the Department for Community and Local Government’s 2013-14 Housing Survey, it was 63%.

The proportion of people in social rents also declined recently from 19% to 17%.

Analysis by Home Let found that average monthly rental prices in East Anglia had increased 5.7% between 2014-15 to £799.

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