cardiff exec summary this report describes a substantial project focused on the housing market in...

Cardiff

Cardiff Local Housing

Market Assessment

Executive Summary

September 2008

Execut ive Summary

Page 1

Executive Summary

Introduction

1 This report describes a substantial project focused on the housing market in Cardiff. This

report was undertaken at the same time as a parallel study for Vale of Glamorgan, which

will be referred to for comparative purposes. This is the first Local Housing Market

Assessment (LHMA) for Cardiff. The term LHMA comes from the Guidance on this topic

published by the Welsh Assembly Government (WAG) in March 2006.

2 This LHMA aims to enable a better understanding of the local housing market, the key

drivers of local housing demand and supply and the level of housing need within the City, in

line with the original brief supplied by the Councils. The LHMA forms a key part of a

thorough research strategy to provide robust evidence to inform the development of local

authority housing and planning documents including the Housing Strategy and Local

Development Plan. This report presents a range of recommendations on the most

appropriate approach for the Council to achieve the type of housing required in Cardiff

which will help determine future planning policy. The LHMA was carried out in accordance

with WAG guidance.

3 A range of data sources were consulted during this project to ensure that the most reliable

data was used for analysis. These included a primary survey of local households,

secondary data, a survey of local estate agents and stakeholder consultation.

4 The primary data was gathered using a hybrid approach of postal questionnaires and

personal interviews. In total 4,409 postal questionnaires were returned and 500 personal

interviews were completed. The total number of responses of 4,909 provides sufficient data

to allow complete, accurate and detailed analysis across the City.

5 The household survey dataset was grossed up to an estimated total of households and

weighted according to key characteristics so as to be representative of the City’s household

population. In total it is estimated that there were 134,800 resident households in the City at

the time of the survey.

6 Three separate additional personal interview surveys were undertaken with BME

households, students and migrant workers.

7 Analysis throughout this report is presented for six sub-areas, which are based on ward

groupings. These are shown in the map on the following page.

Card i f f Counc i l – Loca l Hous ing Market Assessment 2007

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Figure 1 Sub-areas of Cardiff

Source: Cardiff and Vale of Glamorgan LHMA 2007

The Local Housing Market

8 Cardiff has the largest population out of all local authorities in Wales at approximately

317,500 and has seen rapid population growth in the last five years of around 0.7% per

annum. Cardiff faces a number of challenges and opportunities posed by an increasingly

diverse population, full-time higher education students who account for 10% of total

population and the arrival of some 4,000 people seeking employment as recent economic

migrants1.

9 Approximately 50,000 Cardiff residents live in neighbourhoods in the lowest 10% of Wales

in multiple deprivation terms, with households living in the southern arc of Cardiff

experiencing poorer health than those living in the more affluent parts of the City.

10 According to the 2001 Census, Cardiff has the highest proportion of BME households in

Wales at 8.43% - this compares with Vale of Glamorgan (2.16%) and Wales (2.12%).

1 Cardiff Council, Proud Capital: The Cardiff Community Strategy, 2007-2017 (Draft), 2006

© Crown Copyright

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11 Households in Cardiff display higher than national average levels of qualifications, although

the proportion of households without qualifications is still relatively high. The highly qualified

characteristic of the workforce is reflected in the large proportion of people employed in

managerial positions in Cardiff, although a significant proportion is employed in more

routine occupations.

12 The tenure profile for Cardiff, Vale of Glamorgan and Wales is presented in the table below,

based on information from Welsh Housing Statistics. The table indicates that owner-

occupation levels are substantially higher in Vale of Glamorgan (80%) compared with either

Cardiff (69%) or Wales (73%). In contrast, Vale of Glamorgan contains a smaller private

rented sector. The proportion of social rented dwellings in Cardiff is similar to the Welsh

average (17%); Vale of Glamorgan has a lower proportion of social rented dwellings.

Table 1 Tenure

Cardiff (%) Vale of Glamorgan (%) Wales (%)

Owner-occupied 69 80 73

Council 10 7 12

RSL 7 4 5

Private rented 14 9 10

Source: 2007 Welsh Housing Statistics

13 According to the 2001 Census, Cardiff experienced both significant inflows and outflows of

people moving to and from the local authorities surrounding Cardiff. The figure on the

following page shows migration into and out of Cardiff from other local authorities. The map

is based on gross numbers of people moving into and out of Cardiff, therefore the

population of each area will have an impact upon the results.


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Figure 2 Migration into and out of Cardiff

INTO CARDIFF OUT OF CARDIFF

Source: Fordham Research, based on 2001 Census

14 The substantial numbers of people commuting into Cardiff underlines its status as a major

industrial, commerce and employment hub. At the time of the 2001 Census, a total of

60,805 people commuted into Cardiff compared with 22,821 people who commuted out of

the Cardiff area.

15 Cardiff house prices are significantly higher than the average for Wales although still below

the average for England and Wales combined.

Table 2 Land Registry average prices (4th quarter 2006)

Area Average price As % of E & W

England & Wales £207,573 100.0%

Wales £157,010 75.6%

Cardiff £182,122 87.7%

Source: Land Registry

© Crown Copyright © Crown Copyright

Execut ive Summary

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The perceptions of stakeholders

16 Information was gathered from stakeholders using a number of techniques undertaken at

different times in the Local Housing Market Assessment process including:

• Face to face meetings with a large number of estate and letting agents

• A stakeholder workshop and workshop for officials

• Community consultation

• Follow up interviews, for example, with developers, university officials, neighbouring

councils and the voluntary sector

• (LHMA) Steering group meetings

17 A range of views were expressed by stakeholders. Some of the themes arising regarding

the challenges to the study area’s continuing success were as follows:

• Capacity problems of the road network, based upon the M4 and its intersections

• What some see as an oversupply of housing in the apartment market

• House price inflation that is presenting affordability gaps in many tenures

• Competition within parts of the market between buy-to-let landlords and owner-

occupiers that is changing the character of areas

18 Stakeholders emphasised that the study area also presented opportunities for future growth

and development, notably significant regeneration in Barry and St Athan. Cardiff airport

also offers the potential for economic development. This continues the pace of regeneration

of flagship developments at Cardiff Bay and Barry Docks.

Topography of the market

19 A study of the local housing market was undertaken to establish minimum (entry-level)

prices of housing in the City (both to buy and to rent). A range of data sources were used to

obtain detailed information about the local variations in the housing market across Cardiff.

These included information from the Land Registry, interviews with estate and letting

agents, the views of stakeholders and an internet and telephone based survey of estate

and letting agents.

20 Entry level (lower quartile) prices were identified for each of the six sub-areas within Cardiff.

This analysis of the cost of housing at the local level suggested that the owner-occupied

price-markets corresponded with the sub-areas shown in Figure 1.


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21 This analysis of the cost of renting at the local level revealed that there are just two private

rental price-markets across the City: Northern Cardiff and Rural, and Southern Cardiff.

These price-markets are presented in the figure below and follow the sub-area boundaries

identified by the Council.

Figure 3 Cardiff private rental price-markets


22 Entry-level costs to rent and buy for each price market, by accommodation size are

illustrated in tables on the following page. Southern Cardiff was identified as being cheaper

than Northern Cardiff.

© Crown Copyright

Execut ive Summary

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Table 3 Entry-level housing costs (North rental price market)

Min price sale Min private rent Sub-market and

property size £price £ weekly

Rural

1 bedroom - £97

2 bedrooms £150,031 £121

3 bedrooms £200,702 £156

4 bedrooms £331,150 £206

Suburbs

1 bedroom £118,432 £97

2 bedrooms £142,261 £121

3 bedrooms £186,374 £156

4 bedrooms £244,231 £206


Table 4 Entry-level housing costs (South rental price market)

Min price sale Min private rent Sub-market and

property size £price £ weekly

East/West areas

1 bedroom £81,760 £90

2 bedrooms £114,240 £115

3 bedrooms £125,945 £143

4 bedrooms £179,194 £182

City Centre/ Bay

1 bedroom £118,775 £90

2 bedrooms £135,850 £115

3 bedrooms £172,450 £143

4 bedrooms £197,450 £182

Inner City

1 bedroom £117,839 £90

2 bedrooms £129,462 £115

3 bedrooms £158,046 £143

4 bedrooms £191,659 £182

Student

1 bedroom £115,500 £90

2 bedrooms £131,100 £115

3 bedrooms £158,063 £143

4 bedrooms £194,451 £182



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23 To complete the housing cost profile in the local market the cost of affordable housing,

including intermediate housing was also considered. Social rented housing costs were

significantly below those for private rented housing indicating a significant potential gap

between the social rented and market sectors.

Financial capacity

24 Financial capacity refers to the overall ability of a household to purchase housing (whether

on the open market or through the Assisted Home Ownership Scheme). The term includes

income, owned equity and savings.

25 To measure the combined value of ‘capital’ and ‘income’ it is necessary to put them on the

same basis. It is possible to ‘capitalise’ annual income (as for example mortgage lenders do

when applying multiples to income to work out how much a household can afford). We have

applied a multiple of 3 to household incomes and added this to household savings and

equity to arrive at a figure for household financial capacity.

26 The following table shows financial capacity by tenure. The table indicates that owner-

occupiers without mortgage (typically older households) have by far the highest financial

capacity. It is about 38% higher than the financial capacity of the generally younger

households who still have mortgages. The three renting categories clearly have much lower

financial capacity, since they have no equity.

Table 5 Financial capacity and tenure

Owner-occupied

(no mortgage)

Owner-occupied

(with mortgage) Council RSL

Private

rented

Mean income £25,356 £40,905 £8,927 £10,116 £22,085

Mean savings £53,139 £12,079 £456 £2,352 £9,605

Mean equity £210,957 £112,003 - - -

Financial capacity £340,164 £246,797 £27,237 £32,700 £75,860

Source: Cardiff LHMA 2007

27 It is clear even from this summary analysis that those who are renting are very much less

able to ascend the housing ladder than those who have already been able to access

owner-occupation.

Profile of Cardiff sub-areas

28 The character of each of the six sub-areas of the City was examined. Although each area is

distinct, survey information indicates that the Rural sub-area is the most affluent and the

East/West sub-area the least affluent. This is illustrated in the figure and map on the

following page, with the former showing that the Rural and Suburbs sub-areas have by far

Execut ive Summary

Page 9

the highest proportion of owner-occupiers. The highest proportion of social rented

households is found in the East/West sub-area, followed by the Inner City and City

Centre/Bay sub-areas.

Figure 4 Tenure by sub-area

41.4%

20.2%

35.9%

20.7% 19.5% 17.7%

44.2%

42.7%

55.0%

38.0% 37.7%

29.4%

6.9%

30.9%

21.6% 22.1%

8.2%

7.4% 6.2% 4.2%

19.6% 20.7%

44.7%

4.9%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Suburbs East/West Rural Inner City City

centre/Bay

Student

area

Owner-occupied (no mortgage) Owner-occupied (w/ mortgage)

Social Rented Private Rented


Figure 5 Income by sub-area


© Crown Copyright


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Key housing information by tenure

29 The nature of the dwelling stock and resident households in each of the three principle

tenures in Cardiff were examined using survey data. The findings were as follows:

• The owner-occupied sector has the lowest turnover of stock and is characterised by

the largest properties. Households in this sector display the most affluent profile with

the highest incomes and the highest level of car ownership. This sector has the

lowest proportion of single person households suggesting it is hard to access for

one person alone. Most under-occupation of dwellings occurs in this sector.

• The private rented sector records the highest turnover, much greater than that found

in the owner-occupied sector. It contains a larger proportion of single non-pensioner

households and households containing two or more adults but no children.

• The social rented sector displays the lowest level of under-occupation, and highest

level of overcrowding. The tenure houses a relatively high proportion of single

person households, including many pensioners. The financial profile of these

households is much less affluent than households in the other two tenures with

average incomes less than a third of that in the owner-occupied sector, and much

lower levels of savings.

• There is relatively little inter-tenure movement by households although there is a

notable movement from the private rented sector to owner-occupation. More than

half of newly forming households now move into the private rented sector.

Assessing affordability

30 All households in the survey were tested for their ability to afford either a mortgage or

private rented housing in the local area. These two measures were then combined to

estimate households unable to afford either form of private sector housing. The general

methodology and results are presented below.

Combined affordability:

A household containing one person in employment is not eligible for a mortgage if the gross

household income multiplied by 3.5 is less than the cost of the mortgage requirement. A

household containing more than one person in employment is not eligible for a mortgage if the

gross household income multiplied by 2.9 is less than the cost of the mortgage requirement.

AND

A household is unable to afford private sector housing if renting privately would take up more

than 25% of its gross household income.

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Affordable housing requirement

31 The WAG LHMA Guide sets out the procedure to produce an estimate of the net need for

affordable housing. The following table details the position for Cardiff.

Table 6 Detailed affordable housing requirement table for Cardiff

Stage and step in calculation Notes Output

STAGE 1: CURRENT NEED (Gross)

1. Existing households in need of accommodation 6,315

2. Homeless households and those in temporary accommodation 119

3. Minus cases where they can afford to meet their need in the market 2,180

4. equals Total current housing need (gross) 1+2-3 4,254

STAGE 2: AVAILABLE STOCK TO OFFSET NEED

5. Current occupiers of affordable housing in need 1,943

6. plus Surplus stock 0

7. plus Committed supply of new affordable units 1,473

8. minus Units to be taken out of management 0

9. equals Total stock available to meet current need 5+6+7-8 3,416

10. equals Total current unmet housing need 4-9 838

11. times annual quota for the reduction of current need 20.0%

12. equals annual requirement of units to reduce current need 10×11 168

STAGE 3: NEWLY ARISING NEED

13. New household formation (gross per year) 3,917

14. Proportion of new households unable to buy or rent in the market 41.4%

15. Existing households falling into need 2,024

16. Potential out-migrants unable to afford market housing 174

17. In-migrants unable to afford market housing (included in steps

13-15) -

18. Total newly arising housing need (gross per year) (13x14)+15-16 3,472

STAGE 4: FUTURE SUPPLY OF AFFORDABLE UNITS

19. Annual supply of social re-lets (net) 1,435

20. Annual supply of intermediate housing available for re-let or resale at

sub-market levels

32

21. Annual supply of affordable housing 19+20 1,467

NET SHORTFALL OR SURPLUS OF AFFORDABLE UNITS

Overall shortfall 12+18–21 2,173



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32 The (net) current need assessment suggests a requirement for 168 units per year. Added

to this is the figure for newly arising need (3,472), which gives a total of 3,640. The

estimated future supply to meet this need is 1,467 units per year. This therefore leaves an

annual requirement of 2,173 additional affordable units per year in Cardiff. This figure of

2,173 represents the annual need in Cardiff for the next five years.

33 The net shortfall of 2,173 can be related to the Fordham Research Affordable Housing

Index, which is the result of standardising the finding by dividing it by the number of

thousands of households (excluding students): (2,173/131,303) x 1,000 = 17. As the figure

below shows, this Index figure is higher than the average for Wales and Scotland (of nine).

Figure 6 Typical levels of need for new affordable housing

8

9

9

13

14

16

16

17

17

27

35

8

0 5 10 15 20 25 30 35 40

East Midlands

North

West Midlands

Scotland & Wales

Vale of Glamorgan

East

South East

England

South West

Cardiff

Outer London

Inner London

Affordable housing requiremement/000 households


34 The table on the following page shows the distribution of housing need in different parts of

the Council area. The supply distribution is derived from survey information from those who

have recently moved into affordable accommodation. The last column presents the supply

as a percentage of need. This is calculated by dividing the estimated supply in a location by

the derived need in the location. The lower the figure produced, the more acute the need

for affordable accommodation in the area, as the current supply is unlikely to meet the

identified need.

Execut ive Summary

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Table 7 Geographical distribution of affordable housing requirements in

Cardiff

Sub-area Need Supply Total % of net

shortfall

Supply as

% of need

Suburbs 724 276 447 20.6% 38.2%

East/West 1,298 1,027 270 12.4% 79.2%

Rural 24 10 14 0.7% 42.0%

Inner City 990 377 613 28.2% 38.1%

City centre/Bay 477 284 193 8.9% 59.5%

Student area 812 175 637 29.3% 21.5%

Total 4,323 2,150 2,173 100.0% 49.7%


35 The table shows that the largest proportional shortfall of affordable housing is in the

Student and Inner City sub-areas, followed by the Suburbs sub-area. The Rural sub-area

has the lowest level of need.

Balancing housing markets model outputs

36 The Balancing Housing Markets (BHM) assessment uses a modelling exercise to identify

imbalances that will exist across the housing market in Cardiff in the short to medium term.

It compares the likely future demand of housing against the likely future supply of housing

using information derived from the main household survey. A BHM assessment looks at the

whole local housing market.

37 Whilst one of the outputs of the BHM model is an estimate of the shortfall of affordable

housing, this should not be taken as an estimate of the absolute need for such housing.

This is provided in the previous section (see Table 6), which follows the prescribed

government guidance on how to calculate such a figure.

38 A key element of the ‘balance’ in the housing market is an understanding of the flow of

households within the housing system. We therefore begin by looking at expected

household change through both migratory changes and natural change. The figure on the

following page summarises the situation, and suggests that there is a net inflow of

households into Cardiff.


Page 14

Figure 7 Annual flows in Cardiff


39 The following table shows the overall results of the annual net imbalance between demand

and supply.

Execut ive Summary

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Table 8 Balancing Housing Markets results for Cardiff – part trend based2

(per annum)

Size requirement Tenure

1 bedroom 2 bedrooms 3 bedrooms 4+ bedrooms Total

Owner-occupation 168 120 234 172 695

Private rented -48 424 102 183 660

Intermediate 118 112 60 0 291

Social rented 110 -304 373 73 251

Total 348 352 769 428 1,897

Source: Cardiff LHMA 2007 (combination of data sources)

40 The shortage of social rented housing makes up around 17% of the total shortfall of

housing in the City. Most of the net requirement for social rented housing is for three

bedroom units although the results also suggest a shortage of one and four bedroom

homes and a surplus of two bedroom accommodation.

41 The surplus recorded of two bedroom homes within the social rented sector will not present

itself in reality but is a product of the model accounting for the demand for larger dwellings

from family households currently resident in two bedroom social rented accommodation

that would like to transfer within the sector. In reality the lack of availability within the social

rented stock will prevent these transfers from being possible. The impact of these

constraints can be seen by contrasting the aspirations of two bedroom social rented tenants

with actual movement in the sector. Households indicated that there would be a supply of

1,141 two bedroom social rented properties, however the reality for 2007/08 was a supply

of only 637 two bedroom homes. A similar trend can be seen in three and four bedroom

social rented properties. The model however reflects the requirement for larger social

rented dwellings from households currently resident in the tenure.

Households with support needs

42 Information from the survey on special needs groups can be of assistance to authorities,

contributing to their Supporting People Operational Plans. Some 20.1% of all the City’s

households (27,090) contain special needs members. ‘Medical condition’ is the most

commonly found special needs category, followed by ‘physical disability’.

2 Estimates for newly forming households and household dissolution have been based on trend data, rather

than on the estimates shown in Figure 7


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Table 9 Special needs categories

Category Number of

households

% of all

households

% of special

needs

households

Frail elderly 6,283 4.7% 23.2%

Medical condition 15,344 11.4% 56.6%

Physical disability 13,387 9.9% 49.4%

Learning difficulty 2,590 1.9% 9.6%

Mental health problem 4,966 3.7% 1.8%

Severe sensory disability 2,027 1.5% 7.5%

Other 1,392 1.0% 5.1%

Source: Cardiff & Vale of Glamorgan LHMA 2007

43 Special needs households in Cardiff are more likely to be small, comprised of one or two

persons, and are more likely to contain older persons only. Such households are much

more likely than average to be living in unsuitable housing.

44 Special needs households overall expressed a need for a wide range of adaptations and

improvements to their homes. More help with home maintenance, installation of level

access shower units, and more support services were the most commonly mentioned

issues.

45 The survey suggested there was significant scope for ‘care and repair’ and ‘staying put’

schemes, given the proportion living in owner-occupied properties.

Black and Minority Ethnic households

46 A supplementary survey of 101 BME respondents was completed in addition to the main

household survey to provide additional information on this group of the population in

Cardiff.

47 The data from the main household survey showed BME households and Asian households

in particular are likely to be larger than average. The additional respondents had an even

larger average household size. BME households are more likely than average to contain

children and less likely to contain pensioners.

48 The figure below suggests that Asian households were the most likely to be owner-

occupiers (although the majority of these have a mortgage). Other households are the most

likely to be in private rented accommodation, with Black households most likely to be in the

social rented sector.

Execut ive Summary

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Figure 9 BME households and tenure

28.2%

22.9%

15.3%

6.0%

14.0%

23.8%

41.3%

50.6%

24.2%

33.3%

17.5%

35.2%

32.7%

17.4%

4.9%

44.2%

36.0%

18.9%

22.6%

22.8%

13.1%

21.6%

16.3%

29.3%

57.7%

28.3%

20.8%

1.4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

White

Asian

Black

Mixed

Other

BME total

BME (supplementary survey)

Owner-occupied (no mortgage) Owner-occupied (with mortgage) Social rented Private rented


49 The data suggests that BME groups have lower levels of income and savings than White

households. Asian households had the highest income and savings levels of the BME

groups.

Table 10 Income and savings levels of ethnic minority households

Ethnic group

Annual gross household

income -

Mean (including non-

housing benefits)

Annual gross household

income -

Median (including non-

housing benefits)

Average household

savings -

Mean

Average household

savings -

Median

White £28,845 £21,229 £21,950 £1,983

Asian £27,768 £19,632 £16,243 £728

Black £17,836 £10,686 £3,010 £314

Mixed £20,236 £15,076 £5,262 -£117

Other £21,375 £11,689 £1,885 £262

Total BME £22,855 £15,095 £8,469 £385

BME (supplementary survey) £9,045 £7,250 £306 £0


50 Respondents to the supplementary survey indicated that information on Council services

would be best received via community centres and that the demand for translation services

is not substantial as there is a preference for family members to translate. Some ten out of

the 101 respondents stated that they had been the victim of crime or bullying because of

their ethnic background or faith.


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Gypsy and Traveller Accommodation Assessment

51 In 2008 Fordham Research carried out a Gypsy and Traveller Accommodation Assessment

for Cardiff and Vale of Glamorgan. The research estimated that for Cardiff there is a need

for 194 residential pitches and ten transit pitches in the study area over the next ten years.

52 In relation to bricks and mortar housing, the study estimated that there were 130 Gypsy and

Traveller households living in bricks and mortar accommodation in Cardiff. Taking into

account the different rate of family formation levels in the Gypsy and Traveller community, it

was estimated that a further 30 households would emerge over the next ten years who

would need bricks and mortar accommodation.

53 The table below illustrates the findings of the assessment:

Table 11 Estimated requirements for pitches and housing, Cardiff, 2008-2018

Base figures

(2008)

At end of five

year model

(2013)

At end of ten

year model

(2018)

Total additional

dwellings req’d

(2008-2018)

Annualised

dwelling

requirement

Authorised

pitches 76 (143) 213 270 194 19.4

Unauthorised 9 0 0 0 0

Transit pitches - 10 - 10 1

Housing 130 144 160 30 3.0


54 The average household size for Gypsies and Travellers in the area was 3.7, although this

increased to 4.1 for Irish Traveller households.

55 The survey, which was carried out with Gypsies and Traveller living in Cardiff and Vale of

Glamorgan found that satisfaction levels ranged from 70% for owner-occupiers to 62% for

private renters. Many reported having moved into housing due to lack of alternative site

accommodation. Nearly half of the participants (44%) believed that they would move onto a

site if one became available, with only 20% ruling this out as an option. Participants

reported that the advantage of living in a house included access to services and lack of

harassment, whilst the negatives included loss of identity and isolation.

56 Stakeholders reported that many attempts to move into housing were unsuccessful due to

the lack of relevant support offered to Gypsies and Travellers. The report illustrated that

nearly half of those in housing had previously lived on unauthorised sites (46%), making it

likely that they would have little or no understanding of the formalities and paperwork

involved in a tenancy. Literacy is also a wide-spread problem within the Gypsy and

Traveller community and is likely to exacerbate this situation.

Execut ive Summary

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Key worker households

57 The term intermediate housing is often used with reference to specific groups of

households such as key workers. The survey analysed such households using definitions

based on categories of employment. Analysis of survey data indicates that there are an

estimated 24,864 people in key worker occupations living in Cardiff.

Table 12 Key worker categories

Category Number of persons % of key workers

Nurses and other NHS staff 14,205 57.1%

Teachers in schools, FE and sixth form colleges 8,792 35.4%

Police, Probation Service and Fire-fighters 1,867 7.5%

Total 24,864 100.0%


58 It is estimated that 14,410 households (10.7%) are headed by a key worker (head of

household taken as survey respondent). These households are more likely to be owner-

occupiers than non-key workers; they are also particularly unlikely to live in the social

rented sector. Key worker households are more likely than non-key worker households to

want to move into owner-occupied housing, and overall are more likely to require a larger

property (four plus bedrooms).

59 Although key worker households have higher financial capacities than those in other

occupations overall, there remain a number of key worker households within this broad

range that are excluded from the housing market. The survey indicates that nearly a fifth of

key worker households that intend to move in the next two years cannot afford entry-level

market costs in Cardiff.

Older person households

60 Older people are defined as those over the state pension eligibility age (currently 65 for

men, 60 for women). Some 24.1% of households in Cardiff contain older persons only, and

a further 6.4% contain a mix of both older and non-older persons. Older person only

households are largely comprised of one or two persons, a finding which may have

implications for future caring patterns. This small household size did not carry through into

smaller dwelling sizes, however, resulting in a significant level of under-occupation for this

group.

61 Though the majority of older person only households live in the owner-occupied sector,

more than a third of Council rented properties contain older person households. Older

person households are particularly likely to live in bungalows or flats. Relatively few older

person only households live in unsuitable housing; just 6.3% compared to 9.1% of other

types of household.


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Rural households

62 Use of the National Statistics Rural and Urban Classification of Output Areas (July 2004)

indicated that 97.4% of households in Cardiff live in an area classified as urban, with the

remaining 2.6% living in an area classified as rural.

63 The survey records that one person households are relatively rare in rural areas. Rural

households are more likely to live in owner-occupied or detached accommodation, and

have on average higher financial capacities. Rural households generally tend to have

greater difficulty accessing services than urban households, although analysis by income

group reveals that this may be a more important factor in access to some services.

Families with children

64 There are 35,348 households in Cardiff containing families with children, accounting for

26.2% of all households.

Table 13 Number of families with children

Households with children

Number of

households

Percentage of

households

Lone parent families 6,780 5.0%

Families with young children 14,407 10.7%

Families with older children 14,161 10.5%

Other households 99,452 73.8%

Total 134,800 100.0%


65 Lone parent households display characteristics that are quite different from families with

two parents; they are more likely to be living in smaller dwellings and in unsuitable housing.

A higher proportion of lone parent families would like to move to a different property now or

within a year.

66 Families with young children and those with older children display many similar

characteristics, requiring larger properties and often preferring owner-occupation.

Overcrowding and under-occupation

67 The occurrence of overcrowding and under-occupation was also considered using survey

data. The results suggest that 2.3% of all households are overcrowded and 36.6% under-

Execut ive Summary

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occupy their dwelling. The owner-occupied (no mortgage) sector shows the highest levels

of under-occupation, whilst the social rented sector has the highest level of overcrowding.

68 Overcrowded households tend to have low incomes (particularly per person) and are far

more likely to state that they need or expect to move than other households.

Students

69 A separate survey of students was undertaken to allow more detailed information on this

subset of the population to be collected. This survey was completed through personal

interviews with students that were accessed via on-street recruitment. In total, 52 interviews

were completed with students in Cardiff. Although the results from the supplementary

survey can not be considered to be representative of student households in Cardiff, they do

offer an insight into households’ situations and preferences, and complement the data

presented from the 2001 Census.

70 According to the 2001 census there are 24,027 students living in Cardiff, representing 7.8%

of the total population. Geographically the students are based in the more central wards of

Cardiff, as shown in the map below.

Figure 10 Students by ward

Source: 2001 Census

71 Census information suggests that the majority of student households lived in private rented

accommodation; 44.2% lived in a student only household. Some 12.9% of student

households were overcrowded according to the Census. More than three-quarters of

students interviewed during the student survey lived in a terraced dwelling.

© Crown Copyright


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72 As part of the survey of students, interviewees were also asked a number of more

qualitative questions about their future housing intentions. The survey found that 38

students were looking to move in the next two years. Nearly three quarters expected to stay

in Cardiff or surrounding area. The majority expected to rent privately in a terraced house or

flat.

Migrant workers

73 A separate survey was conducted with 50 migrant workers in the area. This survey was

completed through personal interviews with migrant workers that were accessed via on

street recruitment.

74 During May 2004 - March 2007 there were 1,855 Worker Registration Scheme initial

approvals in Cardiff. This compares with 2,635 in Carmarthenshire, 2,565 in Wrexham and

2,405 in Newport. These four Local Authorities account for more than 50% of all WRS

approvals in Wales.

75 More than half of the migrant workers surveyed were Polish. The majority of migrant

workers moved to the UK for employment reasons, with a large proportion only expecting to

stay temporarily. The vast majority of migrant workers resided in the private rented sector.

76 The majority of migrant workers surveyed were working either full time or part time. Just 5%

were unemployed. The figure on the following page shows the employment groups of the

migrant workers interviewed and the other members of their household. The largest

proportions were in an ‘other’ employment group. Of those placed into categories relatively

few were in the higher end jobs, with the largest proportions in the service and construction

sectors, despite the fact that in the migrant workers interviewed were generally well

educated.

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Figure 11 Employment group of migrant workers

1%3%

2%

18%

16%6%

2%7%

45%

Nurses and otherNHS staff

Teacher

Local Governmentand Civil ServiceemployeesRetail trade

Hotels and catering

Transport

Childcare/au pair

Building Industry

Other

Source: Fordham Research Cardiff Migrant Workers Survey 2007

77 A third of migrant workers surveyed were planning to move within the next six months and

a further third within the next two years. The majority of households planning on moving

would like to stay in Cardiff. Almost three-quarters expected to move to a one or two

bedroom dwelling in the private rented sector.

Housing market gaps and the housing ladder

78 Housing market gaps analysis has been developed by Fordham Research to allow easy

comparisons of the costs of the tenure range, in order to facilitate the testing of different

newbuild proposals, and to show generally the nature of the housing ladder in a particular

locality.

79 The following figure illustrates figures for two-bed dwellings (the most common entry point)

for the range of tenures.


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Figure 12 Housing Market Gaps

N.B. This is for Northern Cardiff 2-bed dwellings

80 The figure shows the ‘housing ladder’ with social rents at the bottom and moving up

through market rents, second hand purchase and newbuild purchase. To this figure we

have added a line called ‘usefully affordable level’, this is a line drawn at the mid-point

between social rents and the market and is designed to provide a broad figure for the level

of outgoings which might be required to provide ‘intermediate housing’ at a level which will

be affordable to a reasonable proportion of households who are unable to access the

private sector housing market (without subsidy).

81 The gaps shown in the table above are clearly very large, and it is hard to see how

households could easily climb the ladder implied by them. This puts extra pressure on the

need to find newbuild housing variants which fill the gaps.

82 The following table provides figures for the full range of sizes and tenures. This table is

important for the following reasons:

i) It provides a test for any newbuild housing that might seek to provide housing in the

intermediate or rent/buy gaps, as to whether it actually does.

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ii) It provides the basis for updating and monitoring, techniques which are discussed

later in this section.

Table 14 Comparative outgoings by tenure

Social rent Intermediate Min private rent Min price sale New build price Sub-market and

property size £ weekly £ weekly £ weekly £ weekly £ weekly

Rural

1 bedroom £50 £74 £97 - £219

2 bedrooms £56 £89 £121 £228 £255

3 bedrooms £63 £110 £156 £305 £339

4 bedrooms £73 £140 £206 £503 £445

Suburbs

1 bedroom £50 £74 £97 £180 £219

2 bedrooms £56 £89 £121 £216 £255

3 bedrooms £63 £110 £156 £283 £339

4 bedrooms £73 £140 £206 £371 £445

East/West areas

1 bedroom £50 £70 £90 £124 £163

2 bedrooms £56 £86 £115 £174 £203

3 bedrooms £63 £103 £143 £191 £242

4 bedrooms £73 £128 £182 £272 £351

City Centre/ Bay

1 bedroom £50 £70 £90 £181 £163

2 bedrooms £56 £86 £115 £206 £203

3 bedrooms £63 £103 £143 £262 £242

4 bedrooms £73 £128 £182 £300 £351

Inner City

1 bedroom £50 £70 £90 £179 £163

2 bedrooms £56 £86 £115 £197 £203

3 bedrooms £63 £103 £143 £240 £242

4 bedrooms £73 £128 £182 £291 £351

Student

1 bedroom £50 £70 £90 £176 £163

2 bedrooms £56 £86 £115 £199 £203

3 bedrooms £63 £103 £143 £240 £242

4 bedrooms £73 £128 £182 £296 £351

Source: Survey of estate and letting agents, and Rightmove and other websites.

The Intermediate costs are imputed (being halfway between social rent and market entry)

83 Newbuild housing is mainly available as for sale and as social rent, in other words at the

extreme ends of the range. There is little newbuild housing in between. Shared ownership

(New Build HomeBuy in Housing Corporation terminology) is the main option. The problem

is that this is normally more expensive than market rental due to the newbuild purchase

element. Hence it is normally to be seen as ‘low cost market’ housing in the rent/buy gap,

not intermediate housing.


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84 Although HomeBuy and partial equity ownership do offer a useful step up for those in the

rent/buy gap ( i.e. those who can afford the market but not to buy outright), there is a clear

need for a housing product priced at the ‘usefully’ affordable point within the intermediate

band. Whilst there is not one available at this cost currently this objective provides a

challenge for the future.

85 The Housing Market Gaps analysis provides a template which, suitably updated, provides a

lasting basis for testing newbuild housing options in terms of their affordability to fill the

various gaps.

Policy on new build affordable housing

86 The level of affordable housing need (2,173 per annum, as shown in Table 6) is much

higher than the Welsh/Scottish average. On the basis of the level of need, and its absolute

number it would be expected (thinking of the overall British percentage target regime) that

the affordable target should be around 45%.

87 Such targets are maxima: no developer would ever go higher. Indeed the Council itself will

be involved in a policy debate over the issue, since this report provides suggestions only. In

effect the evidence would justify a target up to 45%, and the Council can choose whatever

level it sees fit beneath that maximum. The eventual target set by the Council will be

dependent on viability analysis including a consideration of the financial implications of a

number of directives that will have to be met by house builders in the future.

88 It is encouraged in Guidance to set sub-district targets. Although the level of need varies

between sub-areas, it does not follow that the targets should. We would generally advise on

a uniform target across Cardiff, unless policy considerations suggest otherwise.

89 The only area where it clearly might be good to have a lower or no target is Rural, since it

may well be best not to encourage much building at all there. Otherwise the only result of

varying the target (since 45% is effectively a maximum) is that it will produce less affordable

housing. From that point of view we would not encourage it in the case of Cardiff, as the

overall level of housing need is high, and is clearly not going to be met even if the target

were fully achieved.

90 Although the Balancing Housing Markets (BHM) analysis (Table 8) suggests that around

half of all new affordable housing could be intermediate, this analysis is based on the

assumption that intermediate housing will be provided at the costs shown in Table 14.

Current intermediate products available in Cardiff are priced notably above this point and

there is no evidence that intermediate housing will be produced at this cost in Cardiff in the

future. With this in mind, the current Council policy of 20% of all affordable housing as

intermediate appears appropriate.

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Policy on market housing

91 The BHM analysis provides an assessment of the size of market housing required in Cardiff

(across both the private rented and owner-occupied sectors). The figure below shows the

size requirement when the two market sectors are combined.

Figure 13 Size of market accommodation required in Cardiff

120

544

336

355

1 bedroom

2 bedrooms

3 bedrooms

4+ bedrooms

Source: Cardiff LHMA 2007 (combination of data sources)

92 The figure shows that across the market sector there is a very large shortfall of two

bedroom homes, a large shortfall of three and four bedroom properties and a small shortfall

of one bedroom accommodation.

93 The profile presented in the figure above is the requirement across the authority area,

however the size of new market housing pursued in each part of Cardiff should also reflect

the size of the existing stock in the area, to ensure that the new housing helps encourage

mixed and balanced communities.

Monitoring and Updating

94 It is a key feature of the LHMA that it be a continuing process, not a ‘one shot’ report.

Updating and monitoring is therefore a key feature of that process.

95 The key statistic is the weekly cost of different tenures/sizes of dwelling. A combination of

updating this weekly costs matrix (Table 14), and testing proposed new housing

developments against it, plus updating the background information in the report should

enable the LHMA process to proceed constructively.


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96 Updating the primary data is not easily carried out by LHMA Partnerships, as it is a

technical exercise. This is not a serious drawback as the structure of a housing market

does not usually change fundamentally in less than about 5 years.

97 The final ingredient is the commitment of the Steering Group. This cannot be made a

written requirement, but clearly the will and drive of the Steering Group is in many ways the

main route to successful evolution of the LHMA process.

cardiff exec summary this report describes a substantial project focused on the housing market in...

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