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Summary

Background papers: Lifestyle and wider determinants :: Housing and homelessness :: Summary

Introduction

Housing makes an important contribution to social and environmental objectives such as reducing health inequalities, improving educational attainment and community cohesion.

Medway has benefited, and continues to benefit, from considerable investment arising from its strategic location within the Thames Gateway. Recent infrastructure investment includes Chatham Bus Station and the High Speed Rail Link. This is resulting in a welcome diversification of the economic base towards creative industries, financial services, business services, education, environmental and energy technologies. This has added to Medway's long-standing manufacturing strengths and important energy and port facilities located on the Hoo Peninsula. Good progress has been made in raising the skill levels, which are growing significantly faster than the regional and national averages. The unique cluster of universities and the Mid Kent College have contributed greatly to this. However, Medway remains a relatively low wage area with high numbers of people commuting out to work and skill shortages particularly at some levels.

In recent years, as part of the Thames Gateway regeneration area, Medway has undergone extensive regeneration particularly in the former derelict riverside areas of Rochester, Chatham and Gillingham, which have been transformed into thriving business, higher and further education and residential communities. Medway is now looking to continue its regeneration along the riverside, in the town centres and through the only new settlement in the Thames Gateway at Lodge Hill, Chattenden, which will accommodate approximately 5,000 homes.

The population of Medway is currently about 253,500 and is expected to grow to 280,000 by 2026. Overall, Medway is not a deprived area being ranked 150th most deprived local authority area out of 354 in England, but it has higher levels of deprivation than neighbouring local authorities in Kent and the South East. At ward level it has both some of the most affluent and some of the most deprived areas in the country. Within Medway are 25 neighbourhoods which fall into the 25% of most deprived areas in the country.

Key issues and gaps

The change of government in May 2010 has already seen a number of changes in housing policy introduced and others set for implementation over the coming months and years. Along with the Coalition's various policy announcements, the medium term housing financial landscape was completely re-drawn with the outcome of the 2010 Spending Review. The Spending Review has seen a reduction in Government funding for affordable housing investment nationally, a move towards charging affordable rents for new schemes coupled with the ending of 'tenancies for life' and the introduction of the New Homes Bonus. The Government has also proposed greater local freedom for the way social housing is allocated and how the homelessness duty can be discharged, and seeks to give local communities greater control over planning outcomes as a further way of encouraging development.

Along with the Spending Review, the Coalition Government has introduced a number of other changes affecting housing. These include the abolition of a number of quangos including the Tenant Services Authority as the social housing regulator, with its powers being transferred to the Homes and Communities Agency (HCA); and the limiting of Local Housing Allowance payments from April 2011, with further changes to the Housing Benefit system to follow. Earlier cuts made to the Area Based Grant included the removal of the administration budget for delivering housing-related support services although the (Supporting People) funding for services themselves has largely been protected, as was the Homelessness Grant. Certain aspects of the previous government's housing and related policy will, however, continue to be pursued by the current government, including the transformation of social care through personalisation of service delivery.

Range and Affordability of Housing in Medway

There is a whole range of housing options within Medway from Temporary Accommodation for those in priority housing need to traditional home ownership and everything in-between. The primary obstacle to providing these options for all residents is that the market does not provide the type of housing needed at a cost many can afford. A key element to housing markets being able to function effectively is to enable choices to be made when seeking housing, regardless of income and financial circumstances. The housing offer of a community is one element to ensure that a diversity of households have their housing needs met. These choices are best represented through a continuum, depicted below.

Figure 1: The Housing Continuum
Figure 1: The Housing Continuum

Traditionally the needs of those households unable to access the housing market have been met through social rented housing. Intermediate housing is affordable housing designed to assist those households not eligible for social rented housing but who are priced out of the private housing market by a combination of low wages and/or high house prices. The most common form of intermediate housing in Medway is shared ownership; however the amount and distribution is sensitive to changes in house prices. The credit crunch has lead to falling house prices in Medway. This was however accompanied by a credit squeeze making mortgage availability scarcer and more expensive. The credit crunch also led to the tailing off of private housing development and Registered Providers selling fewer properties for shared ownership. Property prices in Medway peaked in April 2008 and by May 2011 had fallen by an average £26,835. Over the first five months of 2011, house prices have fallen by £5,703. In June 2011, the Nationwide reported that there is uncertainty over whether house prices will rise or fall over the remainder of 2011. They have reported that economic growth looks set to gather pace but is likely to result in only modest gains in employment and wage increases, which will continue to keep many potential buyers unable to purchase property.

Delivery of affordable housing

Medway has a strong track record of delivering affordable housing, which has continued despite the downturn in the market. These affordable homes not only leveraged in large amounts of private finance toward the delivery of affordable housing but also have enabled many regeneration sites to continue delivering units during the market downturn. We have renegotiated through the planning system for key developments to bring forward affordable housing and remove some risk for developers during the early phases of development while the market recovers. However, we have taken a measured approach to guard against an oversupply of social rented housing.

The recent Comprehensive Spending Review (CSR) announced a 60% reduction in the levels of government grant available for affordable housing. The gap left by the substantial cut in capital grant is expected to be met, in part, through revenue from the introduction of a new proposed 'affordable rent', to be charged for most newly built homes and many re-let properties. Despite these uncertainties, we are working in partnership with our Registered Provider partners, developers, planners and the HCA to ensure that where funding is needed and available this is secured. To date we have supported firm bids that if successful would deliver an additional 562 affordable units over the next 4 years. In addition to this, previously allocated funding (2008–11 NAHP) is due to deliver 443 affordable units over the current 2011–15 NAHP. Almost all of the units are currently under construction and will be delivered in the next couple of years. We have identified a further 325 affordable homes that have the potential to be delivered over the 2011–15 period without funding from the 2008–11 programme or have not been included in bids in the 2011–15 programme.

Figure 2: Actual and Estimated Affordable Housing Delivery 2001--26
Figure 2: Actual and Estimated Affordable Housing Delivery 2001–26

Figure 2 shows current estimates of what could be delivered in terms of affordable homes over the next four years. We estimate that a total of 1,325 new affordable homes could be delivered. This will be reliant on a range of factors, not least a significant pick up in house building from what are currently very low rates in Medway. Only 650 completions are expected to be reported for 2010–11. This would need to almost double for all of the anticipated affordable units to be delivered.

Making the best use of existing homes

Key Achievements 2008–11
• 454 empty properties brought back into use
• 50 empty properties brought back into use as affordable housing through the Purchase and Repair Scheme
• In 2010–11 we assisted 13 people to move to more suitable properties via our Mutual Exchange programme
• Joined Kent HomeChoice in May 2010 to achieve better economies of scale and provide a more equitable and efficient service to our clients

Empty homes represent economic, environmental and social costs to the community. As homes deteriorate they can become visually unattractive, therefore affecting the amenity of the local surrounding area as they create an impression of neglect and decline. This can encourage local property price devaluation, as an empty property can devalue neighbouring properties by as much as 20%. Empty homes can also be an attraction for vandalism and anti-social behaviour, which poses a risk for neighbouring properties and local residents, while increasing work for local fire and police services. At the end of March 2011, there were 1,281 empty homes in the private sector. This represents 1.37% of the total private sector housing stock. Whereas this is good progress against the Government target of 3%, one less empty property is a home for a household and less likely to be a potential source of anti-social behaviour.

Ineffective use of the housing stock can result in overcrowding and underoccupation. Through our “Creating Space” initiative, we have identified households within the affordable housing stock whose current property does not meet their housing need.

Sustainable and Cohesive Communities

Key Achievements 2008–11
• All new affordable homes achieved Code for Sustainable Homes Level 3 and some homes achieved Level 4
• Nomination Rights were achieved for all new affordable homes
• Contributed to the Development Brief for Rochester Riverside and other regeneration sites to secure the delivery of affordable housing
• Developed and delivered the In Focus project to target resources in a specific area

Sustainable communities are places where people want to live and work, now and in the future. They meet the diverse needs of existing and future residents, are sensitive to their environment and contribute to a high quality of life. This approach includes future proofing new properties to make sure they are adaptable to a household's future needs, developing mixed tenure communities, ensuring high quality design and build and considering affordability.

Affordability in Rural areas can have an impact on the sustainability of a community. Young people may have to move away from the village they grew up in and older people may have to leave due to a lack of suitable housing which meets their needs.

Quality of the housing stock

Key Achievements 2008–11
• 8,391 people were given energy efficiency advice by the Energy Savings Advice Centre

The Housing Stock in Medway mainly comprises properties, which were built since 1945 (64%). 23% of the stock was built before 1919 and 13% between the wars. Aging properties generally require more work and investment to maintain them in good repair. In addition to this they present a challenge in terms of keeping them hazard free under the new Health and Housing Safety Rating System and meeting the Decent Homes Standard for vulnerable households.

The Housing Stock Condition survey highlighted a number of issues within the private housing stock in the Medway area and in particular that nearly 20% of homes fail the Decent Homes Standard, the majority doing so due to excess cold.

Recommendations for consideration by commissioners

Medway's priorities for Housing for 2011–14 are:

Theme One: Bridging the Gap

Working to create a pathway into suitable housing and home ownership by increasing choice

Outcome One — Deliver a range of tenures, properties and locations to meet need Outcome Two — Make the best use of existing housing Outcome Three — Contribute to sustainable and cohesive communities

Theme Two: Early Prevention

Providing suitable, appropriate and timely housing advice to help people make the right housing choice

Outcome Four — Provide advice across agencies to prevent crisis and increase choice and access Outcome Five — Improve housing offer to better meet a range of housing needs

Theme Three: Health and Housing

Improving health through quality housing and places

Outcome Six — Ensure good quality homes, which are energy efficient Outcome Seven — Improve and maintain independence and inclusion by providing effective support