Object

Draft Local Plan - Supplementary Consultation

Representation ID: 8482

Received: 15/03/2019

Respondent: Simon Taylor

Representation Summary:

- Fundamental flaws in local housing need methodology, most significantly use of affordability ratios and targeting a ratio of 4
- Question the relevance of the ratio, given that earnings are derived from outside of Solihull
- LHN based on house prices and earning at set point in time, for a period 17 years into the future
- Likely that earnings will grow significantly due to HS2 etc
- Suggest that position is reviewed at set intervals to ensure the housing need remains relevant

Full text:

I do believe there are fundamental flaws in the methodology used to calculate the local housing need, the most significant of which is the use of affordability ratios and targeting a ratio of 4, as per section 43 of the Supplementary Consultation.

The affordability ratios referenced, define the house price to earnings ratio as follows: "By dividing the house price for a given area by its earnings, we produce a ratio which serves as an indicator of relative affordability. A higher ratio indicates that on average, it is less affordable for a resident to purchase a house in their local authority district. Conversely, a lower ratio indicates higher affordability in a local authority. While there are many more factors that influence affordability, the simple ratio provides an overview of geographic differences across England and Wales."
In using an affordability ratio as outlined it is essentially benchmarking affordability of housing based upon people already living within the region, based on their earnings. I would therefore question the relevance of this ratio, given that the population upon which it is based already live in the region, but also that in many cases earnings may be derived from outside of the region, for instance Birmingham City Centre.

In addition, the Supplementary Consultation is setting the local housing need based on house prices and earnings at a set point in time (2018), yet the Local Plan is based on an allocation over a period 2018 to 2035. With the prospect of HS2 and other factors, there is potential for significant earnings growth within the region during this period, therefore I would suggest the position should be reviewed at set intervals throughout the period to ensure the housing need remains relevant.