Cross tenure housing affordability in the Cambridge sub-region

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Cross tenure housing affordability in the
Cambridge sub-region
Polly Jackson Housing Research Officer,
Cambridgeshire County Council
October 2008
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Cambridge sub-region Strategic Housing Market
Assessment www.cambridgeshirehorizons.co.uk/shma
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Why is affordability important?

• Increases housing needs register
• Reliance on private rented sector
• Larger households
• Overcrowding
• Inter-generational issues
• Longer commutes

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Methodology

• Rents Dont include service charges
• Mortgages Repayment mortgage, 25-year term
• 10 deposit for outright purchase
• 5,000 deposit for shared ownership

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Cambridge City
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East Cambridgeshire
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Fenland
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Huntingdonshire
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South Cambridgeshire
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Forest Heath
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St Edmundsbury
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Results

• The difference between renting a (reasonable) 1
  bed property and buying a (poor quality) property
  of the same size is quite small
• Renting is on the whole cheaper than 50 shared
  ownership
• Purchasing a share of a 3-bed property may be
  cheaper than renting a 2-bed property
• There is a large difference between social rent
  and other affordable tenures.

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Percentage of population unable to afford lower
quartile 2-bed property based on housing costs
third of income by tenure
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Affordability

• Whether people are able to access a tenure based
  solely on whether they are able to afford it in
  terms of gross household income.
• Based on spending one third of current household
  income on housing costs.

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The coming year
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The coming year (2)

• Estimated 07/09 lower quartile price Jan 07
  price in City and Fenland, Jul 06 price in Hunts
  and S Cambs and Jan 05 price in E Cambs
• The credit crunch
• No 100() mortgages
• 2007 CML members lent 108bn in home loans and
  mortgages. June 2008 they announced that they
  couldnt justify 55bn
• Parental assistance
• Cost of living
• Buyers market psychology

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Conclusions

• Housing affordability is a problem in the
  sub-region and is likely to remain so.
• The implications of this are increasing HNRs,
  greater reliance on private rented sector, adults
  living at home longer (concealed households),
  overcrowding, greater commutes.

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Questions?