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Why is affordability important

Cambridge sub-region Strategic Housing Market Assessment: www.cambridgeshirehorizons.co.uk/shma. Why is affordability important?. Increases housing needs registerReliance on private rented sectorLarger householdsOvercrowdingInter-generational issuesLonger commutes. Methodology. Rents

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Why is affordability important

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    3. Why is affordability important? Increases housing needs register Reliance on private rented sector Larger households Overcrowding Inter-generational issues Longer commutes

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

    5. Cambridge City

    6. East Cambridgeshire

    7. Fenland

    8. Huntingdonshire

    9. South Cambridgeshire

    10. Forest Heath

    11. St Edmundsbury

    12. 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.

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

    14. 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.

    15. The coming year

    16. 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

    17. 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.

    18. Questions?

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