Affordable Home Ownership Conference and Exhibition

Transcription

1 Affordable Home Ownership Conference and Exhibition Closing Plenary: Dynamics and demographics of our broken housing market Speakers: Richard Donnell Research Director Hometrack Ben Page Chief Executive Ipsos Mori Chair: Yvette Ruggins Sales Director Affinity Sutton

2 Dynamics and demographics of our broken housing market NHF Affordable Home Ownership Conference Richard Donnell, Director of Research

3 Context > The drivers of market pressures > Population and household numbers (demand) keeps on growing > New housing supply falling well short of demand > Mortgage availability and funding costs remain a major impediment > Sluggish economic growth impacts employment > Balance sheet re-structuring impacts income and investment > Market forces are shaping demand, attitudes & preferences > around an inflexible, polarised market with an ageing stock > Demand will be pushed/pulled into the available tenure options > Localised variations around core national trends 3 Hometrack 2011

4 Years between moves Low turnover - home owners moving home less often Source: Hometrack 4 Hometrack 2011

5 Rolling 12 month starts Low new supply - private housing starts by type 120,000 Houses 100,000 Flats 80,000 60,000 40,000 20,000 0 Schemes of 5+ units registered with NHBC Source: Hometrack / NHBC 5 Hometrack 2011

6 Index 1995 = 100 Capital values - recovery profile differs by market 400 L shaped V Shaped London Oxford Cambridge Partial recovery V shaped L Shaped Liverpool Leeds Glasgow Sheffield Bradford Newcastle Edinburgh Partial recovery Reading Bristol Brighton Manchester Birmingham Cardiff Nottingham 50 Source: Hometrack 6 Hometrack 2011

7 2007 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q1 Average rent for a 2 bed property pcm Private rents affordability pressures limit growth 1,600 1,400 1,200 1, London E Anglia E Mids N East S West N West W Mids S East Y & Humber 0 Source: Hometrack 7 Hometrack 2011

8 London N East N West Y & Humber W Mids S East East E Mids S West % households under-occupying their homes Occupancy and capacity utilisation Standard occupancy - owned Standard occupancy - PRS Source: EHS 8 Hometrack 2011

9 0 to 4 5 to 9 10 to to to to to to to to to to to to to to to to and over No.of people in England (000s) What supply response to meet demographic pressures? 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Growth by 2032 Current population Source: ONS Sub-national population projections 9 Hometrack 2011

10 No.of households (000s) Pressure points and opportunity by tenure 9,000 8,000 Own outright to rise further How to free up embedded equity through rental, downtrade or financial products? 7,000 6,000 5,000 4,000 3,000 2,000 1,000 Social & intermediate markets under greatest pressure 0 Social rented Private rented Shared ownership Mortgage >100%LTV Mortgage %LTV Mortgage 50-75%LTV Mortgage <50%LTV Own outright Source: Hometrack 10 Hometrack 2011

11 Income to buy lower quartile home outright Income to buy outright a lower quartile 2 bed property with an 85% LTV mortgage at a 5% mortgage rate on a repayment basis 10k income brackets Red areas > 60k Source: Hometrack 11 Hometrack 2011

12 Summary and prospects > Home-ownership still the long term aspiration > but regulatory pressures are changing the mortgage market > Prolonged period for realignment of incomes and house prices > Wider intermediate market here to stay locational variations > Stronger demand pressures at older end of age spectrum > Use the demand data you hold to make the case for supply/investment > Don t get dazzled by policy focus on where market forces are taking us 12 Hometrack 2011

13 Hometrack 6th Floor, The Chambers Chelsea Harbour London SW10 0XF 13 Hometrack 2011

14 Dynamics and demographics of our broken housing market Ben Page Chief Executive, Ipsos MORI

15 What if we were writing a Housing Report based on public opinion?

16 91% satisfied with home Q. Overall, how satisfied or dissatisfied are you with your home? Fairly dissatisfied Neither/nor Very dissatisfied 2% 5% 3% Fairly satisfied 34% 57% Very satisfied Base: 1,006 British adults, November 2011 (undertaken before publication of Government s Housing Strategy) Source: Channel 4/Ipsos MORI

17 % Satisfaction with accommodation and neighbourhood remain high, while fewer properties are non-decent 90% 80% 81% 82% 82% Stock condition and perceptions of accommodation/neighbourhood 80% 81% 70% 60% 50% HRP satisfied with accommodation and neighbourhood % non-decent 40% 30% 35% 35% 33% 30% 20% Source: English Housing Survey

18 But there IS a strong sense of crisis Q. Do you agree or disagree that There is a housing crisis in Britain Strongly Don t know disagree (1%) Tend to disagree Neither/nor 8% 10% 5% 35% Strongly agree Tend to agree 41% Base: 1,006 British adults, November 2011 Source: Channel 4/Ipsos MORI

19 Prevalent among all tenure groups (and age groups) Q. Overall, how satisfied or dissatisfied are you with your home? % Strongly/tend to agree 87% 75% 74% 73% Owner (351) Buying (293) Base: 1,006 British adults, November 2011 Social tenant (156) Private renter (142) Source: Channel 4/Ipsos MORI

20 Why? Affordability and buying prospects Q. To what extent do you agree or disagree? Housing will become more affordable over the next two years or so I don t believe I will ever be able to afford to buy a home 63% disagree 59% agree Base: 1,006 British adults, November 2011 Base: 354 social/private renters, November 2011 Source: Channel 4/Ipsos MORI

21 Supply seen as key solution Q. This list shows a selection of issues associated with housing in Britain. Which one or two do you think should be the highest priority for the Government to deal with? Building more affordable homes 44% Making it easier for first-time buyers to own or part-own their homes Reducing the no. of empty homes Improving run down estates and neighbourhoods 27% 33% 33% Tackling homelessness and rough sleeping Making homes more energy efficient Tackling bad landlords 5% 8% 17% Base: 1,006 British adults, November 2011 Source: Channel 4/Ipsos MORI

22 Economic uncertainty and anxiety are manifest in public opinion

23 Economy has taken over as key concern Most important/other important issue(s) facing Britain 70 Economy Unemployment Environment/ climate change

24 We re getting harsher on welfare Q. The government should spend more money on welfare benefits for the poor, even if it leads to higher taxes 70% 60% 50% 55% Disagree 43% 40% 30% 20% 10% 0% 22% Agree 57% agree: People who receive higher housing benefit because they live in expensive areas should be forced to move into cheaper housing to bring down the benefit bill %

25 Growing concern about a lost generation Q. When they reach your age, do you think your children will have a higher or lower quality of life than you, or about the same? % Higher % About the same % Lower Net higher (±) November April Base: 1,006 British adults aged 18+, 19 th -21 st November 2011 Source: Ipsos MORI

26 Tipping points not large Q. Taking your answer from this card, what is the smallest amount your monthly rent/mortgage repayments would have to increase for you to find it difficult to afford Overall it? 21% would find < 50 increase difficult. 24 or less per month.between 25 and 49 per month.between 50 and 74 per month.between 75 and 99 per month.between 100 and 124 per month.between 125 and 149 per month. 150 or more per month I would have no difficulties Base: 142 private renters & 293 buyers, November % Renters % Buyers 25 Source: Channel 4/Ipsos MORI

27 Sense that mortgages are riskier Q. To what extent do you agree or disagree that Having a mortgage is more risky than it used to be? Don t know Strongly disagree Tend to disagree Neither agree/ nor disagree 11% 11% 3% 18% 30% 28% Strongly agree By 2:1 mortgage holders agree 6:1 private renters Base: 1,006 British adults, November 2011 Tend to agree Source: Channel 4/Ipsos MORI

28 But as a nation we still aspire to buy % of each tenure group % who Strongly would disagree choose to buy rather than rent 95% 77% 61% 58% Owner occupiers Private renters Rent from HA Rent from LA Source: British Social Attitudes Survey Base: 2,795 British adults, June-November 2010

29 Among renters, the appetite is strongest among the young Q. Apart from what you would like, do you expect to buy a house or a flat in the next two years, or not? Renters only % Yes, expect to buy % No, do not expect to buy Net preference to buy over rent Total Source: British Social Attitudes Survey Base: Renters only

30 Push and pull Property-owning democracy It s not just about the economy, it s also about people s hopes and dreams You always remember that moment, if you ve done it, when you get that key and walk into your first flat It s a moment I want everyone in this country to have.

31 Looking ahead: opportunities & challenges

32 As well as doing the usual social landlords will be: dealing with impacts of welfare reform policy pushes: Right to Buy determining affordable rent levels generating revenue: building more homes regenerating communities

33 Building more: winning public hearts and minds... Key concerns: over-population and change Key drivers: convinced on premise impact on schools, health services, roads/transport loss of community being swamped houses and jobs for new people: not locals/ not my kids loss of greenfield Source: Ipsos MORI (various projects) convinced on benefits confident in legacy concerns addressed sensitivity to geographic differences language and messengers: avoid words like mixed use, density etc people either associate negative connotations/do not understand

34 Social return is key (public aren t NIMBYs by instinct) Q. Do you agree or disagree that I would support new development if it helped to create jobs by attracting people and businesses to the area Tend to disagree Don t know 3% (3%) Strongly disagree 14% 7% 26% Strongly agree Neither agree/ nor disagree 15% 35% Base: 1,699 adults aged 16+, April Tend to agree

35 Younger generations life chances has strong traction... Q. How strongly do you agree or disagree % disagree % agree More needs to be done to preserve the historic nature of our town centres I would support more houses being built if it meant better shops/facilities This area needs more housing & jobs (half sample) This area needs more housing & jobs so young people stay (half sample) Source: Ipsos MORI/ High Peak Borough Council Base: 816 High Peak residents, 18+, Feb-Apr 1999

36 Ugly reduces support and impacts on lives 69% say the quality of what is built near them is more important than the quantity, and only 9% disagree. Eight in ten people feel that the built environment has a strong effect on their quality of life and bought their home because they liked the area To reduce NIMBYism, development must improve. Source: Cities for growth, Policy Exchange, 2011 (survey figures unsourced)

37 Intermediate: untapped potential Q. Which of the following, if any, best describes your attitude towards intermediate market housing? I am interested in buying or renting an intermediate market home and have already applied I don t know enough about intermediate housing to know if I am interested or not 1% 21% I am interested in buying or renting an intermediate market home but have NOT applied 53% 24% I am not interested in buying or renting an intermediate market home Base: All potential consumers (3,365) Source: HCA Consumer demand and attitudes in the intermediate market (Ipsos MORI 2010)

38 2 years on: still scope for building awareness Q. There are a number of schemes available to help make homes more affordable when buying or renting. To what extent, if at all, are you aware of these housing schemes...? % not heard of it Shared equity 47% Shared ownership 41% Intermediate rent 86% Base: 591 private renters 16+, November 2011 Source: Ipsos MORI for Catalyst Housing

39 And tackling no/mis-information Q. Which, if any, of these do you think are barriers to buying a home through a shared ownership scheme?..? Don't think I am eligible because of income Want to buy without funding from anyone Want more choice in type of property Too difficult to sell on Too difficult to arrange mortgage for these schemes Couldn't buy in location I wanted to Don't think I am eligible because of my job Don't want to go through application process Rules/conditions make it difficult to increase share/sublet etc. Don't have enough information to know None/there are no barriers Other Base: 591 private renters 16+, November % 4% 6% 9% 12% 12% 14% 13% 16% 18% Source: Ipsos MORI for Catalyst Housing 23% 24%

40 Income thresholds over-estimated When asked to estimate maximum income to be eligible for Intermediate Housing. Actual income thresholds: 74,800 60,000 40,500 Mean estimates: 25,000 Single person Base: All potential customers (554) 27 February 9 March Couples Source: Ipsos MORI for GLA

41 In conclusion... Difficult, anxious times Sense of housing crisis Generation Rent and supply key factors Affordability key too Worries about lost generation And what impact welfare reform? We ll muddle through Good luck!

42 It is vital that the sense of urgency that sparked the Housing Strategy is maintained for the rest of Parliament Most important/other important issue(s) facing Britain House prices rising at fastest rate in 10 years Houses to cost ten times salary HIPS fiasco Housing Strategy for England published 76% think housing crisis

43 Thank you!

44 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 and outlook gloomy Q. Do you think that the general economic condition of the country will improve, stay the same or get worse over the next 12 months? to find it difficult to afford it? % Improve 21% % Get worse 32% Stay the same EOI = Base: 1,006 British adults 18+, 12th - 14th 2012 Source: Ipsos MORI Political Monitor