Affordable Housing - Shepway District Council

Affordable Housing - Supplementary Planning Document (SPD) - Adopted September 20083 Affordable Housing Provision3.1 A district-wide Housing Needs Survey was carried out in 2003. This identifieda need for affordable housing of over 900 units per annum, or over 7,000 unitsover the Plan period. (Source: Shepway Housing Needs Survey 2003 – DavidCouttie Associates Ltd). The Local Plan Review (2006) did not consider thatsuch a target was economically deliverable or sustainable and sets a lessertarget of 500 homes to be provided during the Plan period. It is not expectedthat all this housing will be delivered by the development of sites allocated withinthe Plan; other means of creating affordable homes such as the conversion oflarger houses or the bringing back into use of vacant units, are also referredto.3.2 House price increases in recent years have contributed to a situation wheremiddle earning households, as well as those with the lowest incomes, are beingincreasingly priced out of the local housing market. The figures used in the2003 Housing Needs Survey require re-evaluation due to house price rises,increased wage levels and inflation in the intervening period. Nevertheless,the figures provide a clear assessment of the situation as at the date of thesurvey, which informed the creation of Policy HO4. The Survey indicated thatany household with an annual income below £22,000 to £31,000, dependingon location within the district, would struggle financially to buy the smallest,acceptable quality units in the local housing market. For example, based on95% mortgage and a 3x gross income lending ratio, incomes of £22,000 to£24,000 would be needed to buy a one bedroom flat in Folkestone, (the cheapestlocation). For a two bedroom terraced house, annual incomes ranging from£27,000 (Folkestone), to £30,000 (New Romney) and £31,000 (Hawkinge andPaddlesworth) would be required. However, the Housing Needs Survey alsoindicated that only 16% of newly forming households had an annual income ofmore than £23,000.3.3 The Survey also indicated that affordability issues restricted access to theprivate rented sector with some 75% of those seeking housing unable to afforda rent of more than £70 a week. This equated (based on a rent at 25% of grossincome) to an annual income requirement of £13,500 to rent a one bedroomflat in Folkestone rising to £17,500 in Hythe and £19,000 in New Romney. Anincome of £20,000 would have been necessary to rent a two bedroom terracehouse in Folkestone whereas 83% of newly forming households have an annualincome of less than this figure. Current indicators show that the affordabilitygap within the local housing market has continued to grow.3.4 Affordable housing is defined in the Local Plan Review (2006) as ‘Housing forpeople who are not able to afford to purchase or rent adequate accommodationon the open market without subsidy’.Shepway District Council - Local Development Framework9