2010

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Theme	<<Environment Social
Sub-theme	<<Education Population>> Housing
Indicator	<<Homelessness and housing need Housing growth>> House prices and affordability
Analysis	2010

Source	Communities and Local Government
National Indicators	n/a
Date range	2010

Data Time Series Comparisons Commentary Confidence Levels Notes

Commentary

House prices and housing affordability are monitored closely at regional and national level as indicators of the health of the economy and housing market. The house price to earnings/income ratio is one indicator that measures to what extent owner occupation is accessible to local residents. Other measures include whether particular housing is affordable to certain groups (eg: key workers, first time buyers); whether an individual or household has access to finance in order to purchase a house (including any required deposit); and measuring affordability by looking at a household`s residual income - the income that remains after housing costs have been met.

The CLG website maintains a series of statistical tables covering many aspects of the housing market and house prices. These can be found via the following link:
http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket/livetables/

While the tables cover mortgage lending, arrears, repossessions, income and age of borrowers and type of buyer, these are given for the UK and region only.

At local authority level, however, data is available for lower quartile (table 583), mean and median house prices (table 582), lower quartile house price to lower quartile earnings ratio (table 576), and median house price to median earnings ratio (table 577). This approach to measuring affordability gives a general indication of whether house prices are affordable in relation to incomes, and lower quartile house price is taken as an entry price for owner occupation. The analysis below considers house prices and house price ratios based on lower quartile and median data. The median is given rather than the mean as the latter is more likely to be influenced by extreme values.

House price to income ratios provide an indicator of the location of the most and least pressured areas within a region or sub-region.CLG uses earnings data (taken from the Annual Survey of Hours and Earnings (ASHE)) as a proxy for income. ASHE gives earnings information for individuals, not households and is based on a 1% sample of employees. The Cambridge Centre for Housing and Planning Research, in their recent publication "Measuring Housing Affordability: A Review of Data Sources", notes that the sources of data on household incomes (the Family Resources Survey and the Survey English Housing) are too small to be robust below national level and the larger regions. House price data is taken by CLG from the Land Registry.

A full analysis of ASHE is given within the Profile Online in the sections headed Earnings by Residence and Earnings by Workplace.

Confidence Levels

The Annual Survey of Hours and Earnings (ASHE) is based on a 1 per cent sample of employee jobs. Information on earnings and hours is obtained in confidence from employers. It does not cover the self-employed nor does it cover employees not paid during the reference period. Information is as at April each year. The statistics used are workplace based full-time individual earnings.

Data for 2010 is provisional and subject to revision.

Data

The latest house price data is 2010 (quarter 3). House price to income ratios are for the full 2010 year.

Data shows, in comparison with county and regional averages, that Basingstoke and Deane house prices are lower and therefore more affordable. Despite that, the "house price to income ratio" shows that lower quartile house prices are 7.8 times higher than lower quartile incomes; median/average house prices are 7.4 times average incomes.

House prices and affordability 2010	lower quartile		median
House prices and affordability 2010	House price (£)	House price to income ratio	House price (£)	House price to income ratio
Basingstoke and Deane	165,000	7.83	220,000	7.36
Hampshire	171,725	8.80	233,000	8.27
Surrey	228,625	10.54	311,000	10.01
South East	172,000	8.51	235,000	8.23
England	130,500	6.69	190,000	7.01
CLG live tables 576, 577, 582, 583

Time Series

House prices

Time series data shows how closely house prices in the borough have tracked both the county (Hampshire) and regional (South East) averages for over a decade.

Affordability

The graph below shows how housing affordability (owner occupation) has become increasingly difficult over recent years. Both lower quartile and median/average house price to income ratios clearly show the affordability ratio has almost doubled since 1997, even the slight dip in house prices in 2009 still leaving the cost of a lower quartile home at 7 times the amount of lower quartile income and median house prices 6.5 times.

Comparisons

Data is presented in order of "lower Quartile house price to lower quartile income" - this is the usual measure of affordability by entry level into owner occupation. Analysis is given for Hampshire, Berkshire and certain Surrey districts.

House price (Q3 2010) / affordability 2010	Lower quartile house price (£)	LQ house price to income ratio	Median house price (£)	Median house price to income ratio
Waverley	225,000	12.14	336,000	13.13
Winchester	220,000	11.70	299,995	10.20
East Hampshire	200,000	11.54	285,000	11.02
Woking	214,500	11.09	274,500	9.61
Surrey Heath	220,000	11.03	293,500	9.41
Windsor and Maidenhead	250,000	10.53	340,000	10.17
New Forest	184,750	10.33	250,000	10.05
Wokingham	221,250	10.10	275,000	7.85
Guildford	225,500	10.04	312,000	10.43
Hart	215,500	9.67	277,750	8.55
Test Valley	178,125	9.66	235,000	9.24
Fareham	170,000	9.62	211,750	8.45
West Berkshire	190,000	9.13	244,250	7.79
Eastleigh	166,000	8.55	205,000	7.82
Bracknell Forest	190,000	8.29	239,950	7.10
Havant	147,250	8.26	196,000	7.83
Basingstoke and Deane	165,000	7.83	220,000	7.36
Gosport	125,000	7.34	150,000	6.20
Reading	166,000	7.33	200,000	6.41
Rushmoor	170,000	7.24	212,000	5.74
Southampton	130,000	6.67	165,000	6.11
Portsmouth	124,000	5.88	153,000	5.31