Housing Needs Assessment 2006 - Westminster City Council

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Westminster – Housing Needs Assessment 2006A1.3 Background to housing market analysisAs a preliminary to the present phase of the work it is desirable to draw attention to some keyfeatures of housing markets:(i) Housing markets are quite complex. Housing markets can be defined, at the larger scale,by such features as journey to work areas. In the case of free-standing market towns thesemay appear as fairly neat circular areas. In most of Britain, however, the high density ofpopulation means that housing market areas overlap.In the extreme case of London, its market area extends for some purposes as far away asYork, Milton Keynes, Bristol and the South Coast. At the same time there are well definedmarket areas within London (east v west; north v south of the river).(ii) Property prices vary within market areas. Depending on the attractiveness of the area,property prices may vary considerably within a few miles or even, in large cities, within afew hundred yards. This is due to the history of the area and the nature of the housing stock.These variations are important from the point of view of housing cost analysis, whichunderpins the study of subsidised forms of housing. It is important to know what the entrylevel costs of housing are. These can only be established by close study of detailed localprice variations.(iii) New build is only a small fraction of the market. In almost all parts of Britain, new buildis a small fraction of the total housing market. The majority of all sales and lettings aresecond-hand. The important point to note in this is that second-hand housing is normallymuch cheaper than new build. Only at the luxury end of the market is this not true. Thusentry level housing will normally be second-hand.Although Government guidance refers to some forms of new build as ‘affordable’ verylittle new build is anything like as affordable as existing second-hand housing.These features of the housing market are worth bearing in mind when considering the detailedevidence produced in the following subsections of this chapter.A1.4 Government guidance on the study of housing marketsThe Guide makes several references to market studies:PAGE 166
Appendix A1 Further property price information‘The relevance of data on private sector housing costs stems primarily from therole of such data in facilitating analyses of affordability, which are central to mostlocal housing needs assessment models. The essential feature of such models isthat they measure the extent to which a given group of households can afford tomeet their housing needs through the private market. Generally, most attention isfocused on the price of properties for sale. However, some models also takeaccount of private sector rent levels’. [Section 7.3 (page 94)]ODPMGuide‘Typically, local authorities can draw on two or three sources of house priceinformation. These include; direct contacts with local estate agents; county-widemonitoring by county councils; local or regional data available in published orunpublished form from the major national mortgage lenders (particularly Halifaxand Nationwide); and data from the Land Registry’. [Section 7.3 (page 95)]‘An alternative approach to defining current threshold prices is to deriveappropriate figures in consultation with local estate agents. Although it appearsmore subjective, this latter approach has a number of advantages. Firstly, itenables properties in poor condition to be screened out. Secondly, it is better ableto reflect the whole market rather than being limited to the market share of themortgage lender concerned. Lastly and most importantly, the properties can bespecified in terms of size and type, matched to particular household types’.[Section 4.3 (page 58)]These extracts say, in summary:(i) Housing market information is essential to the assessment of affordability.(ii) There are various secondary and primary sources for such information.(iii) There are some advantages to the primary data route: obtaining information directly fromestate agents, since that reflects the true entry cost of housing, and is not particular to onemortgage source.The best route to meeting these requirements is a combination of secondary data (the Land Registry,which covers all transactions) and estate agents survey.In keeping with comments above, we concentrate upon price variations rather than the study of thewhole market. This is because in terms of affordability of local housing, the important factor is itsprice, not its location relative to wider housing markets.A1.5 The need for primary dataThere are four main reasons why Land Registry data cannot be used to calculate prices for use inthe affordability model. These are:PAGE 167
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First Surveys MarketResearch13 Darw
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A12. Where do you and your partner
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D SPECIAL NEEDSD1. Do you or any of
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edroom(s)F5. How many bedrooms woul
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a) b)Like ExpectDetached house.....
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