Housing Strategy

Priority 1 - Increase the Supply of Affordable Housing to Meet Local Needs

What the evidence says

 ‘……Pembrokeshire’s overall housing market is unaffordable for a significant proportion of the local population’

‘…..outward migration (of local people) due to housing affordability’

‘…single households….predicted to grow across Wales up to 2043 which will create associated demand for new housing’

‘…pressure on local property prices especially when households move in from more affluent areas of the UK’

‘….an ageing population trend’

‘challenges within the housing market for younger, locally resident households, seeking affordable housing options’

‘..housing costs have a greater impact on poverty in Pembrokeshire’

‘..lack of available alternatives to home ownership for local residents….’

‘….average house price was £248,315 compared to £212,752 in September 2021, representing a 16.7% increase over the 12 month period’

‘..second homes in Wales, Pembrokeshire was the second highest ranked local authority at 16%’

‘…in mid-2020, some 9.2% of the housing stock was unavailable for use, the second highest figure recorded across the whole of Wales.

‘…..impacts on Welsh speaking areas where local families struggle to retain a foothold in their community, thereby placing pressure on the sustainability of Welsh language and culture in the county’

‘….. a significant increase in the use of bed and breakfast accommodation….‘

‘…lost opportunity represented by long term empty properties’

 ‘…..significant growth in the waiting list for housing’

Summary analysis

The evidence presented in this strategy clearly demonstrates that one of the key housing challenges facing Pembrokeshire is the lack of affordable housing to meet the needs of local residents, both currently and into the future. In recognising this the Council has made the delivery of new affordable housing a key priority across its key guiding strategies including within its Well-Being Objectives, Corporate Strategy and the Programme for the Administration. It is also considered that the overall lack of housing supply in the county is inextricably linked with the opportunities presented for the economic growth of the county. With the opportunities presented by far-reaching projects such as the Freeport, it is imperative that a ready supply of good quality housing of all tenures exists in the county. 

Pembrokeshire’s undoubted attractiveness as a tourist destination has led to significant numbers of residential properties being purchased as second homes or to support the tourism trade and therefore away from residential occupation by local households. Furthermore, the county has seen significant inward migration of affluent, older households from other parts of the UK, which has placed additional pressure on house prices to a point where they are unaffordable for the vast majority of local households. The private rented sector is unable to meet the local demand as private landlords have moved away from residential lettings due to increased government-imposed regulation and the more favourable financial returns offered by moving towards AirBnB and the short term holiday lettings market. Private sector lets are therefore in short supply and private rents are no longer affordable for local households, with the result that an increasing number of households who would have normally sought to purchase or rent in the private sector are now applying for social housing.

This has caused a significant increase in the waiting list for social housing and with insufficient supply of vacant homes available for re-letting, the urgency of housing need for many households has increased to crisis point. The impact on our communities is significant, including within our Welsh-speaking communities, where second homes ownership is leading to the exclusion of local residents from some settlements, leading to the decline of Welsh language and culture. Similarly, the loss of key workers to the county represents a risk to the sustainment of local services including within the health and social care sectors.

Evidence suggests that Pembrokeshire has experienced outward migration of local households and very significant increases in the levels of homelessness in recent years. The consequences of the Covid-19 pandemic and the cost of living crisis has only served to increase the pressure on homelessness services with the demand for temporary accommodation rising significantly. In addition, meeting Welsh Government policies to address rough sleeping and prioritise re-housing has necessitated the acquisition of additional temporary accommodation including, until recently, through the use of vacant social housing units that would otherwise have been available to the waiting list. As a consequence of the reduced numbers of properties available for re-letting, the numbers of households on the waiting list have continued to rise and competing demand for available property has increased with significant increasing levels of competing demand for every property advertised through Choice Homes @ Pembrokeshire. The consequences of multiple factors now manifest themselves in the most extreme end of the housing crisis with soaring levels of homelessness and rising applications for social housing on the housing register. The council is determined to ensure there is a rebalancing of the housing market to ensure there is sufficient access to decent affordable housing for the current and future needs of its residents.

The draft Local Housing Market Assessment (LHMA) 2023, using recently reviewed formulae and guidance issued by Welsh Government, has identified a high level of unmet need for affordable housing in the county based on statistical analysis from a variety of sources (further detail in Appendix 1). The Assessment’s principal projection has identified a gross need of 1,070 affordable units per annum which reduces to an outstanding need for 475 new affordable homes per annum over the first 5 years when deducting planned supply and turnover of stock. Within this figure there is annual newly arising need for 154 market homes per annum. These estimates are based on the figures provided for the LHMA from the Choice Homes Housing Register. It is noted that the LHMA is only one body of evidence that is used to inform the Local Development Plan (LDP) which is in the process of being reviewed. The Council’s replacement LDP (LDP 2) Preferred Strategy for has a housing delivery target of 425 homes brought forward per year for the period of the Plan (2017 to 2033) with the anticipated apportionment being 60% in the urban settlements (Haverfordwest, Milford Haven, Pembroke Dock, Pembroke, Fishguard, Goodwick and Neyland) and the remainder in the rural settlements (the largest of which is Narberth).  That approach was subsequently reflected in the 2020 Deposit LDP 2 (a full public consultation draft of the new Plan).  The 2020 Deposit LDP 2 also included a delivery target of 125 affordable dwellings per annum (as an element of the 425 per annum overall housing delivery target).  Council resolved in December 2021 to repeat the Deposit stage of the Plan process, but based on a revised Plan, and it is anticipated that the second Deposit Plan consultation will take place in 2024.  Welsh Government has advised that PCC should take account of revised population and household projections (those for 2018) in the second Deposit Plan, which may require a revised (slightly lower) annual housing delivery target to be set.  Between the 10 year period 2013/14 to 2022/23 383 dwellings per annum were completed.

Welsh Government policy and legislative changes are providing further opportunities in recognition that second homes and short-term lets are having complex impacts on our housing markets and communities. The measures introduced by WG include providing Local Authorities with the ability to charge 300% on Council tax for second homes; the introduction of a licensing scheme for short-term lets (a consultation on this is ongoing); and changes to planning legislation and policy. It is considered given the high level of affordable housing need combined with the high numbers of second homes and holiday lets in the county, that all of these policy and legislative levers require close scrutiny and consideration for the county.

Our approach

Addressing these challenges is not simply about the delivery of new housing as the evidence base has clearly described multi-faceted challenges for the county in terms of the overall housing sector which the 5 priorities set out within this Housing Strategy demonstrates. Nor can the situation be resolved quickly. It will take time to deliver aspects of change, especially in terms of delivering affordable housing which, of its nature, takes both time and significant resources in planning and delivery by the council and its delivery partners. It is clear from the conclusion of the LHMA analysis and overlaying this with current figures within the Council’s LDP 2 Preferred Strategy and subsequent 2020 Deposit plan, that there needs to be wider consideration of how affordable housing units can be increased over and above the social and affordable new build programmes. These wider considerations include using the levers available through policy and legislative changes aimed at increasing the supply of permanent homes (as opposed to holiday lets/second homes), allocation of funding for second homes premium generation for affordable housing conversion of empty buildings, individual empty properties brought back into use, maximising acquisitions back into our housing stock, package ready developments from private developers and community-led housing sites and (where evidence justifies it) on exception sites next to settlement boundaries.

It is acknowledged that this will be made more difficult by the uncertain economic circumstances nationally, including inflationary pressures, rising interest rates and the local constraints around capacity in the construction sector.  The Council is doing a great deal to effect change already and has developed a range of policy responses to tackle the failing housing market including, for instance, through the use of its powers to levy charges on second homes to fund and launching a range of housing delivery initiatives including match funding support for Welsh Government’s empty homes grant scheme, funding for 25 ‘turn-key’ new homes and financial support for Community Land Trusts. It is acknowledged however, there is much more that needs to be done to improve the supply of affordable housing including the introduction of further affordable housing options such as intermediate rent, shared ownership and Rent to Own options, and utilisation of second homes premium for this purpose provides the opportunity to expand the offer of these products.

As part of our commitment to increase the role of the Private Rented Sector we have  identified match funding for the Welsh Government’s Leasing Scheme Wales (LSW) scheme with the aim of having up to 80 properties under lease by the end of 2026/27. We have, in conjunction with our Housing Association partners, also developed an ambitious, funded programme for the delivery of new affordable housing over the period of this housing strategy and beyond including the ‘buy-back’ of homes including former council housing. We have also commenced a review of Pembrokeshire’s Local Development Plan (LDP) which will provide an opportunity to review the number of homes that need to be delivered and put in place the planning policy tools to ensure delivery. We also recognise the distinct challenge that exists in terms of affordability with the National Park area of Pembrokeshire in light of the evidence set out within the LHMA that affordability for households in need is notably worse in the National Park part of Pembrokeshire than in the remainder of the county.

This planned programme will work collaboratively alongside our RSLs to ensure that housing developments are brought forward in a timely and effective manner and in the areas of most need and ensuring that SHG is maximised within Pembrokeshire.

We are committed to addressing the negative impact of second home ownership on Welsh speaking communities and our culture through support for local lettings policies and through our support for Community Land Trusts where feasible. We will also seek to attract and retain key workers that are critical to our key services through our housing policies.  Furthermore, we will continue to take proactive steps to address the number of empty properties in the county with funding and staff resources identified to bring such properties back into use. This includes introducing an empty property grant scheme for private landlords with grant conditions that secure affordable rents and nomination rights from the Choice Homes register. 

Accordingly, the Council recognises that a one-size-fits-all approach on new affordable housing will not address the varied needs of Pembrokeshire’s population. There needs to be a choice of affordable housing tenure options available to meet differing households needs and expectations, as well as supported housing solutions and housing which meets the needs of its growing older population. Successful delivery will mean overcoming barriers to delivery including inflationary costs in the construction market as well as a shortage of contractors with the capacity to deliver at value for money, however, we have reviewed our procurement methodology and frameworks and invested in capacity in order to support delivery. 

The emerging Local Development Plan provided an opportunity to update our assessment of the accommodation needs of Gypsies and Travellers (GTAA) although the assessment, carried out in 2019, is awaiting sign-off by Welsh Government prior to publication. Subject to sign-off the assessment identifies an unmet need for 11 pitches across the 5-year period within which the accommodation assessment is considered to be robust, and provides an estimate of future need for the Local Development Plan 2 (up to 2033). Since that unmet need was identified, 6 further pitches have been consented, leaving a residual need for 5 pitches, to be met by the end of 2024.  The need can be met through site allocation and through the potential to grant planning permissions for private sites or community led schemes. Should the Council seek to develop additional pitches or sites it can apply for the Welsh Government’s Gypsy and Traveller Sites Capital Grant which currently provides £3.5 million per annum for site refurbishment and development purposes across Wales. The requirement to provide additional pitches would then form the basis of a forward development programme.

Working in partnership will be critical to addressing the challenges set out in this Housing Strategy and the Council recognises the crucial importance its partnerships with the Registered Social Landlords in addressing the affordable housing challenge and in delivering other important housing-related services. We also recognise the need to engage with Private Sector Landlords in seeking to halt the decline of the sector and increasing its role in meeting the housing needs of our local communities. This strategy includes a commitment to further developing the close working relationships with these housing partners including in meeting the growing challenge for the council and its partners in meeting the health and social care needs of an ageing population.

Key achievements

• We have developed a forward programme of sites for 458 homes up to 2028/29 at an estimated total cost of circa £122m including £71m of external funding (when available).
• During 2022/23 we completed 21 buy-backs of existing homes to add to the council’s housing stock.
• During 21/22 we purchased 57 properties 46 of which were the bulk purchase in the Cashfields estate. We’ve agreed currently on the purchase of 43 properties in 23/24 with negotiations for a further bulk buy of 6 x 1 bed new build flats . There are also another 15 with our property department for offer.
• We are on site delivering 44 new properties in 2023/24
• Our RSL partners in Pembrokeshire have delivered 250 homes since 2020/21.
• We have employed a new post of empty properties officer to target bringing empty properties back into use utilising funding received through the Council Tax surcharge arrangements.
• During 2022/23 Pembrokeshire County Council agreed to join the National Empty Property Grant Scheme as a result of which the county will have access to £2,985,546 to bring empty properties back into use in the county during the next 2 years from 2023 - 2025.
• We have developed an Empty Properties Action Plan 2021-2025 to help bring empty properties back into use and improve the physical condition of the existing built environment.
• Increased the Council Tax surcharge on second homes to 100% from April 2022 to support the funding of empty property grant activity, develop new affordable housing/shared ownership models, support the development of Community Land Trusts and acquire properties as temporary accommodation to relieve homelessness pressures.

Our priority actions:

• P1.1 Maximising the delivery of new affordable homes in Pembrokeshire through our partnerships, including the development of sustainable and balanced communities reflective of the needs of our population. 
• P1.2 Ensure our affordable housing delivery takes account of the need for supported and specialised housing including older persons housing to meet the needs of our ageing population as well as supported living provision. 
• P1.3 Ensuring an appropriate mix of housing tenures and housing types across our housing schemes to support the diverse housing needs of our population and to deliver sustainable communities. Mixing 1 beds with other types/sizes. 
• P1.4 Supporting the regeneration of local areas where housing development can support economic regeneration through area-based interventions and investment. (also see empty properties action plan)
• P1.5 Bringing empty properties back into use and working with private landlords to encourage the growth of the private rented sector in Pembrokeshire (empty properties action plan)
• P1.6 Delivering homes that are well designed and meet the highest standards in terms of Welsh Development Quality Requirements (WDQR).

Against the backdrop of these key priorities we will seek to maximise the allocation of Social Housing Grant (SHG) to Pembrokeshire from Welsh Government to support the delivery of new affordable homes and we will work closely in partnership with our RSL partners to ensure SHG is allocated to best effect in delivering new homes. However, this will not be sufficient on its own to meet the need for new homes in the county. In order to address the scale of challenge facing Pembrokeshire we will need to work in partnership to develop new and innovative policy and funding approaches to delivering more affordable housing as well as increasing the role of the private rented sector. This inevitably includes the opportunity presented through the second homes premium gathered and intended to support generation of affordable homes in the county, together with the additional policy and legislative changes being introduced by WG.

Our efforts to deliver a mix of housing to support the diverse needs of our residents will require close working with health and social care commissioners to ensure new housing best supports people with specialised needs to live independently at home for longer. This will include, for instance, taking account of the recommendations of the West Wales Care Partnership in developing housing suitable for the needs of older people or people with learning disabilities. Importantly, our approach will need to include engaging with commissioners to support the development of housing plans for specialised needs groups where there are currently gaps in our shared knowledge.

We will also continue to engage with our colleagues in planning policy on the development of Pembrokeshire’s Local Development Plan 2 to ensure that emerging planning policies support the delivery of new affordable homes to meet the needs of Pembrokeshire’s population into the future, including innovative models for increasing affordable housing such as Low Cost Home Ownership models including shared-ownership and Homebuy.

The Council is committed to ensure it makes the best use of its own assets in delivering new affordable housing and will continue to review and identify opportunities for housing to be delivered on surplus council-owned land or buildings through the Corporate Asset Management Board.

There are a significant number of challenges in delivering our ambitious programmes of development and enabling activity:

Challenges to delivery

• A lack of larger sites in the county means there is a reliance on complex, smaller sites which do not have the economy of scale of larger sites.
• High costs associated with unlocking sites for development especially where significant demolition, remediation or infrastructure costs are required to enable delivery.
• Significant inflationary costs for construction materials and labour, resulting in delays to the programme whilst scheme costs or tendered works are value-engineered or re-tendered.
• Lack of contractor/workforce capacity in the county leading to tendering delays and difficulty securing competitive tenders.
• The increased costs associated with delivering housing to higher standards of sustainability.
• Lack of larger housebuilders operating in the county reducing overall housing delivery capacity and reducing the availability of affordable housing through s.106 agreements.
• Developers seeking to reduce requirement for affordable homes on sites on account of viability
• Private landlords leaving the housing market due to increased regulations and costs and converting homes to holiday accommodation.
• Limited availability of Social Housing Grant to support high levels of need for new affordable housing.
• Capacity within the Strategic Housing delivery staffing to manage the significant shift in delivery

Detailing the actions