Have we got the right information?
Following the launch of the Welsh Government Housing Supply Task Force, ABA Viewpoint invited John Harper, FRICS to share his thoughts on the Welsh Housing Market and whether we currently have the right information to make informed decisions?
“Over the last few years I have developed a strong (some would say unhealthy) interest in Welsh housing policy and all its many components which include house prices, the availability of land, design and efficiency, affordability, the sale of council houses, mortgages etc. The list goes on. News about the housing market features in the media every day. And yet even speaking as a property professional I wonder how much we know and understand about the housing market?
Data on housing abounds. House prices are the favourite with a new index published every other day. The rate of new house building probably comes second as there is a realisation that we are not building enough new homes to meet demand. Government now appears to have recognised the economic benefits of building more houses. There is a consensus that the rate of new building is far below the level required but new housing is only part of the overall market.
The Welsh Government publishes a set of housing statistics and it includes house prices and new house building starts and completions with sixteen other housing related indicators. These statistical based reports contain a wealth of information and are updated either yearly or half yearly. However despite a variety of statistics there are some big gaps in the information base.
The statistics do not include for example essential information concerning land, the availability of which is the basic requisite to build more houses. That is not to say that the information is not available somewhere within government control. All local authorities are required to produce land availability plans with at least a five-year housing supply. Assuming this information is readily available and up to date there is a need to differentiate between land that has a deemed planning consent for housing and land which is fully serviced and ready for development to commence. We need to know the availability of land along with some indication of its readiness to develop.
Likewise we are not clear about the quality of the housing stock – particularly the owner occupied stock. Wales has some of the oldest housing stock in Europe; particularly the terraced houses in our valleys, towns and cities. Other than census information Wales has not carried out a housing stock survey since 1998 and the need for an updated survey is overdue. Government needs to understand the policy implications of an aging housing stock of owner occupied houses many occupied by the elderly and disabled. In addition there is an alarming statistic that over 400,000 homes in Wales are considered to be in fuel poverty.
In contrast information on the social rented sector is much more plentiful with a lot of work underway monitoring the Wales Housing Quality Standard which is likely to show that the general standard in social housing is much improved. But whilst overall the proportion of the social housing sector has reduced the private rented sector (PRS) has expanded.
There has been a rapid rise in the private rented sector and I am not convinced we know enough about this type of tenure which includes a variety of standard and type. The student housing market caters for a distinct group of individuals at a particular stage in life. This is probably the best organised section and consequently one of the few categories to attract large scale private investors. The Buy to Let market (so beloved by TV programmes which typically exhibit a rundown house, improved and let to a new tenant as an investment) has made a significant addition.
The Buy to Let landlord might be a hobby landlord, a serious professional or a speculator looking for a quick return. There will also be landlords who operate almost entirely in the welfare market. Many landlords have been forced into letting their properties because they have been unable to sell their house. This sector comprises an important element of affordable housing but with the exception of student housing there is little or no development in Wales of new houses built to rent. The private rented sector is often quoted as the saviour of housing need but we should know a lot more about this type of tenure group than we do at present.
In fairness to the Welsh Government it has recognised the loose nature of the private rented sector and is seeking to licence landlords and regulate letting agents. These moves are welcome in helping to improve the image of the market. The Welsh Government has also consulted on new contracts to simplify the letting process. There is potential to improve the effectiveness of the PRS but future legislation will need a greater commitment to gathering sound and robust data which can inform future housing policy in Wales.
The housing market is wide and complex comprising many interlinking parts. To get a grip on housing policy the parts need to be assembled in one place. If the Welsh Government aspires to gain stewardship of the whole housing system as they indicated in their statement (meeting the Housing Challenge: December2012) all the required information needs to be available to gain a clear picture of the whole market.”
About John Harper
John is a Chartered Surveyor with over 40 years post qualification experience including senior posts in the Valuation Office, the Welsh Development Agency and latterly as Head of Estates for the Welsh Funding Councils. John has worked free lance since 2004 including a role as policy advisor to the RICS in Wales and takes a close interest in planning, housing and regeneration. John Currently serves as a member of the National Regeneration Panel and the Welsh Housing Information Group.