Housing Core Strategy Review Issues and Options

Housing Issues and Options

4 Emerging Evidence

The Annual Monitoring Report

4.1         The Council’s Planning and Borough Development department published the first Annual Monitoring Report (AMR) in 2011 following the adoption of the Core Strategy. The AMR reviews the outcomes of the policies in the Core Strategy and whether they have delivered what they set out to do.  It provides some initial information about the implementation and delivery of planning policy in the Borough. 

4.2         The AMR monitors net planning permissions and net completions for the period of 2006 – 2011. The figures indicate that over the entire study period the net gains permitted have exceeded the target set in the London Plan of 350 units for 2009/10 and the higher target of 600 units since August 2011. The net gain for approvals was 540 for 2009/10 and 783 for 2011. 

4.3         However, there is some concern that these permissions do not appear to have been translated into completions, with just 324 completions in 2009/10 and 175 in 2010/11. Whilst the Core Strategy can influence the number of properties permitted it has little influence on the number of units that are actually built. The Council has demonstrated the deliverability of the housing capacity, incorporating the Strategic Housing Land Availability Assessment (SHLAA) findings and using local evidence, as illustrated in the Housing Trajectory. 

4.4         In terms of affordable housing the target has not generally been met since 2006/07 with just 22 units negotiated in 2009/10 and 61 in 2010/11 as opposed to an average target of 200 affordable units per year set out in the London Plan 2011 (90 affordable units per annum were required in the previous London Plan). 

Average House Prices 

4.5         Since adoption of the Core Strategy in 2010 average house prices have continued to rise, to an average of over a million pounds (£1,044,900) (see chart below). This is nearly double the average house prices in 2005. Therefore affordability in the Borough continues to be an issue. 

 chart1

Source Based on data available on: http://www.landregistry.gov.uk/professional/house-prices-and-sales/search-the-index

Strategic Housing Market Assessment  

4.6         A Strategic Housing Market Assessment (SHMA) update for the Borough has been undertaken and published in October 2012. This provides an update of the original SHMA undertaken in Kensington & Chelsea Royal Borough in 2008 (finalised in 2009). The update has been undertaken because of the continued turbulence across the housing market and changes to the housing sector such as the introduction of ‘Affordable Rent’ by the government. The report assesses the local impact and the appropriate response within the current market conditions and new policy landscape. The full report is available on the Council’s website www.rbkc.gov.uk. All the key findings are reproduced in Appendix 2 for ease of reference and are summarised below. 

  • An analysis of the gaps between each tenure shows that there is a very large income gap between the social rented sector and market rent indicating the limited potential for intermediate housing which is closer to the market rent, especially for larger units.
  • Based on the affordability criteria set out in the SHMA Practice Guidance, some 42.5% of all households in Kensington & Chelsea are theoretically unable to afford market accommodation of an appropriate size at the present time. This compares to a figure of 39.7% in 2009.
  • It is estimated that a total of 11,587 households are living in unsuitable housing. This represents 14.4% of all (non-student) households in Kensington & Chelsea.
  • The needs assessment model shows a net need estimate of 5,786 affordable dwellings per year in Kensington & Chelsea. Larger affordable homes and properties outside the North price market[4] (explained in the footnote) are in particular demand.
  • Flexible Tenancies are being introduced as a new tenure. They will not give the tenant security of tenure for life and will allow Affordable Rent to be charged. Affordable Rent will be based on the open market value of each property.
  • The Local Housing Allowance (LHA) is capped nationally. The high property prices in Kensington and Chelsea means that setting ‘Affordable Rent’ at 80% of market rent is still too expensive, unaffordable to most households in the Borough and far above the LHA cap.
  • Very few households on the Register can afford Affordable Rent at 80% of the median market rent. The most practical level to set Affordable Rent to meet substantial need and be viable in terms of the viability of development is no more than 45% of market rent.
  • The GLA demographic projections, which were based on the 2001 Census, suggested that there will be a notable growth of the resident population over the next 19 years, with a significant increase in certain age cohorts, particularly those aged 90 or over. In addition it was projected that there may be large increases in the number of lone parent households. It is possible that the 2011 Census may amend these conclusions, but it appears likely that there will be an increase in very elderly and one parent households.
  • The introduction of the national upper LHA cap means that most of the new LHA accommodation required will have to be social rented housing. 

4.7         In addition to updating of the 2009 SHMA, the 2011 census data is available and a range of other evidence sources are also becoming available, for example:

  • Viability analysis which links to Community Infrastructure Levy (CIL) preparation
  • The Council’s Common Housing Register
  • The preparation of the Older People’s Housing Strategy 

4.8         Revised planning policy relating to affordable housing will also need to respond to the introduction of Community Infrastructure Levy (CIL).  In 2011, the Government consulted on changes to the CIL process which, if introduced, could allow authorities to provide affordable housing using money levied from developments.  This would be instead of the requirement to provide affordable housing within development schemes.


[4] SHMA identifies four price markets in RBKC. These are – North, North West of Centre, Central and South East and South West.