Housing and access to housing are probably the single biggest issues in the district. It is also a national issue as well we know. The Cabinet Member responsible for Housing in the Folkestone & Hythe District Council (FHDC) is Cllr Alan Ewart-James (pictured).
Now it may seem obvious but it has to be said, to get onto the housing ladder or even rent a home you’ve got to have money. Relatively low household income levels in the district means that many households struggle to access the local housing market without some form of financial assistance either from the state in the form of rental deposits and housing benefit, or family members assisting with a deposit to buy or rent a home.
The average annual gross household income in the Folkestone & Hythe District is currently approximately £34,710, which is 9.6% below the overall figure for Kent. The average household income of households within the lower quartile (lowest 25%) in the district is approximately £19,235, again below both national and regional averages. And note they are talking about households, meaning more than 1 person.
The current overall average house price for the district currently stands at approximately £309,000 (November 2017). Average house prices are currently nine times the current average household income for the district (above national and regional levels). Affordability for newly forming households looking to the housing market is even more problematic and average prices are closer to 9.5 times the average household income. Access to homeownership including low cost home ownership, such as shared ownership, is consequently beyond the financial means of many households not currently in homeownership. So how many locals will be able to purchase on a mortgage, or through shared ownership, a flat in Sir Roger’s de Haan’s seafront development?
Report C17-58 makes it very clear that due to Government Welfare Reform, Benefit caps and Local Housing Allowance caps limit the number of private rented properties locally that are affordable, therefore the number of working homeless households looks set to grow. And the high cost of home ownership has created higher competition for private rented housing and increased rental costs, meaning this option is no longer affordable for many households.
Conditions within the mortgage market continue to impact on the ability of many first time buyers to access the housing market, including the ability of buyers on lower incomes to access homes available for shared ownership in the district. Most lenders at present require buyers to provide deposits of, on average, at least 17% or £18,000 when taking up a new mortgage product. This presents particular difficulties for first time buyers looking to access entry level home ownership in the district. Average current entry level values for homes in the district are approximately £124,000 for 2 bedroom flats and £219,000 for a three bedroom home. Households looking to purchase an entry level 2 bedroom home would require an income of approximately £35,000 and deposit savings of approximately £21,000.
Whilst employment levels have increased in the district, the employment available within the district is relatively low paid and mainly service based. Do remember that Cllr Dick Pascoe (Con) and former Lib Dem) said of the old Silver Spring site; Young people here are desperate for work, and will the accept minimum wage
Now with an attitude like that, that’s why people have problems either renting or buying a house, because Tories like Dick are quite content for “Young People” to accept the minimum wage while the owner of the site can take his cash offshore presumably. Dick should be demanding more, much more for our young people within the district.
So what we’d like to know Cllr Ewart James is just exactly how will our local children and grandchildren be able to buy or rent in their communities, when all the indicators suggest it will be highly unlikely they will be able to afford to.
Now turning our attention the private rented sector, accessing it is also likely to be increasingly difficult for households on lower incomes in the district. The SHMA(Part 1) has shown that 73% of newly forming households in the district each year are already unable to afford to access entry level private sector rented accommodation. The evidence to date suggests that an increasing number of households will be required to spend in excess of 35% of their gross household income in order to meet their housing costs, putting their overall household costs under considerable strain particularly in current conditions of rising inflation and pay stagnation.
The worst housing conditions in the district are found in the private sector. 11,618 dwellings are privately rented (of which 1,403 have at least one category. 1 hazard, equating to approximately 12% of private rented sector. (Category 1 hazards are the most serious form of housing hazard under the Housing Health and Safety Rating System). What action if any have the FHDC taken against these 1,403 properties?
Moving on, the highest concentrations of properties with hazards are in the
North Downs West Ward (Cllr Susan Carey (Con) pictured left & Cllr Jennifer Hollingsbee (Con))
Walland and Dengemarsh Ward (Cllr Clive Goddard (Con) pictured left & Cllr Len Lawes (UKIP))
East Folkestone Ward (Cllr Frank McKenna (Ind) pictured left, Cllr Claire Jeffrey (Con) pictured centre & Cllr Carol Sacre (UKIP) areas of the district.
Currently there are approximately 47,000 dwellings in our district. The Core Strategy Local Plan (adopted 2013) committed the Council to the development of a target 8,000 additional homes in the district over the period 2006 to 2031. The Council is now in the process of reviewing the Core Strategy. The evidence based document, the Strategic Housing Market Assessment (SHMA Pt2), indicates that there is an Objectively Assessed Need (OAN) of 14,560 dwellings over the period from 2014 to 2037. This is an additional 6,560 homes over the 2013 Plan. Now add that to the potential 12,000 homes at Otterpool Park and we have 26,560 homes. That means the the number of dwellings will grow by 56.5% between 2014 – 2037. Compare that with the population projections provided by KCC below; which state in the next 5 years our district will grow by 1.8%. Also latest Government population projections suggest that Ashford, Thanet and Canterbury have the greatest scope for population growth over the next 23 years to 2039, not FHDC. So why the need for 26,560 extra homes? Who will buy these homes, DFL’s, and what if there is another economic slow down/recession, how will that affect Otterpool and housing building in the district? Any answers to these few questions Cllr Ewart – James?
Do remember that not all the houses at Otterpool will be built all at once. It will be a phased construction – a possible building site for up to 28 years – and the rates with HIF and without HIF are quite different as the chart shows below.
Now of course with development comes more people, more people means more vehicle movements across the district. Now according to Bureau Veritas who undertake air quality monitoring for and on behalf of FHDC, monitoring data from 2016 compared to 2015 showed that concentrations of Nitrogen Dixode -NO 2 at all but one monitoring location had increased. The levels of NO 2 have not exceeded the national thresholds, but with more vehicle movements due to an increased population the air quality levels in the district will no doubt suffer. And don’t get us started on water issues.
That said, it is real easy to complain about the Council wanting to hoist all the extra development on the district. However, solutions are what we need to fix this local and national problem. So far we have not heard any solutions put forward by our local political parties – UKIP, Lib Dems, Green’s or Labour. Yes they offer us a national solution, but what about a local one? So, ladies and gentleman we are putting forward a potential solution for consideration.
The UK Municipal Bonds Agency Plc is a public limited company, owned by local councils and the Local Government Association. There are no legal constraints on local authorities raising bonds, but it has not been encouraged by governments since the 1980’s. However this changed when an important precedent was set whereby the Treasury authorised Transport for London (itself a local authority in legal terms) to issue £600m of bonds as part of its borrowings to improve transport infrastructure. These were snapped up by big investors.
How would returns be paid to local people who would chosoe to invest in the Folkestone & Hythe District bond?
First, by way of interest payment: that’s hardly surprising. The government is used to paying interest on its borrowing.
Second, there would be a real current return on the investment: It would be entirely appropriate to designate local funds or sector funds so people could see that the money they were investing was linked to a real economic output. Nothing could make investment more comprehensible and transparent than that.
The mechanisms would need refinement, but given that government bonds have for decades underpinned the annuities used by private pension funds such an arrangement is completely normal.
Issuing Bonds would be a good way to overcome the rising B&B costs. With the money from the Folkestone & Hythe District bond the Council could buy land in areas where the local “community” want and need the housing (remember the Council have CPO powers). This way, we would all get what we need, as would the council, via a return on their investment in building houses in our communities where we want and need them. Also they could be built at a price those on the lowest incomes could afford to rent or perhaps even buy.
Yes the Council might have to set up a company to enable this, but this hurdle can be overcome. We are sure Corporate Director John Bunnett (former Ashford BC Chief Exec) (pictured) could facilitate such a move to enable the bond.
At the moment to few local people will be able to afford a flat in Sir Roger de Haan’s Seafront Development or the Fisherman’s Beach development in Hythe, where houses have sold for £1.3 million, or the £600,000 homes at Mulbery Place, New Romney.
With the lowest 25% of households earning less than £20,000 in the district, the middle 25% on £28,278 and the upper 25% on £39,218 on average, how can local people afford the above properties. Using bonds means the Council could build modular homes such as the ones below in Stoke Newington, London, for example.