Memorandum by North West Regional Assembly
(AFH 03)
INTRODUCTION
This document is submitted to the Select Committee
on behalf of the North West Regional Assembly. The Assembly is
a partnership of local government, business organisations, public
sector agencies, education and training bodies, trade unions and
co-operatives, together with the voluntary sector, working to
promote the economic, environmental and social well-being of the
North West of England (Cheshire, Cumbria, Greater Manchester,
Lancashire and Merseyside).
The Assembly is the Regional Planning Body (RPB)
for the North West and has been responsible for review of Regional
Planning Guidance and Regional Transport Strategy. The Assembly
has also been responsible for taking a lead in the preparation,
promotion and implementation of the Regional Sustainable Development
Framework "Action for Sustainability". The Assembly
has been designated as the regional chamber for the North West
Development Agency. Affordable housing was recognised as an important
issue in the preparation of Draft Regional Planning Guidance for
the North West.
The contents of this response are focused on
the:
— scale of the location and demand
for affordable housing;
— difficulties in assessing the scale
of regional need;
— how Regional Planning Guidance is
trying to address the issue at a regional scale;
— defining and delivering affordable
housing; and
— the need to promote and maintain
sustainable patterns of development through balanced mixed communities.
As such this response complements the separate
response of the North West Housing Forum.
SCALE AND
LOCATION OF
DEMAND FOR
AFFORDABLE HOUSING
WITHIN THE
NORTH WEST
The North West of England is a diverse region,
stretching from Crewe to the Scottish border, and including large
rural and semi-rural areas as well as the more familiar industrial
and post-industrial urban areas. While there may be a perception
that low property values and a surplus of housing make affordability
a non-issue in the North West, this is far removed from the true
picture. The North West Regional Housing Statement[1]
points to the need to meet "the continuing need for affordable
housing", backed up by the conclusions of Draft Regional
Planning Guidance[2].
Studies of housing markets in the region have drawn attention
to the existence of failed or failing housing markets in some
areas—those same studies also point to healthy, high value
housing markets operating in much the greater part of the region.
It is clear that affordable housing is a key concern.
The needs for affordable housing in the region
were identified as part of the DETR published research[3]
on regional housing need and demand, which was used to inform
the current ongoing review of Regional Planning Guidance for the
North West. This research found:
— the low house prices in the North
West, as well as the relatively high level of home ownership across
different social groups means that there is a lack of strong evidence
to support the need to have affordable housing policies in most
areas of the Region.
— however the need, nevertheless, will
be more urgent in the more accessible and scenic rural areas in
Cumbria, and in very affluent areas such as Stockport, Trafford
and North Cheshire. These areas tend to face very strict planning
controls over housing land supply and very high land values. They
are also areas where local housing needs are in conflict with
economic in-migrants (affluent commuters, second homeowners and
the retired);
— excellent motorway access and closer
proximity to external job opportunities make certain suburban
areas and outer metropolitan areas far more attractive as residential
locations. They have higher than average house prices, far greater
proportions of homeowners, and fewer households renting from private
or social landlords. Clearly, in these areas policies aimed at
the procurement of affordable housing might open up new opportunities
to the less well-off existing residents. In these areas, the local
authority might seek the inclusion of policies in their local
plans which aimed to procure a quota of "affordable homes"
for local needs on new market housing schemes;
— the problem of providing sufficient
affordable homes has been of particular concern in the Lake District
and across Cumbria for a number of years. There was a smaller
proportion of both professional and managerial households that
were homeowners in Cumbria as a whole but especially in South
Lakeland and Eden. This concern has stemmed from the number of
non-local retirement migrants, commuters and second-homebuyers
moving into these areas, attracted by the picturesque settings
of the numerous small villages and market towns dotted across
this part of the North West. In the early 1980s, a study of local
attempts to increase the amount of housing available to local
people[4]
focused on the Lake District Special Planning Board's use of Section
52 planning agreements to control the occupancy of new housing
in favour of local people. The study concluded that by placing
restrictions on the purchase and occupancy of new dwellings, the
Board was inadvertently increasing demand pressure within the
second-hand market. Because non-local buyers were not able to
compete for new housing, but still wished to move into the area,
they refocused their attention on older properties. This caused
a further elevation of prices in this sector. The net result was
that local people were further disadvantaged in the market for
core village housing, and became increasingly dependent on council
or housing association dwellings at the edges of villages and
on new Greenfield sites. For this reason, the use of planning
agreements to control occupancy of new housing was deleted from
the Cumbria and Lake District Joint Structure Plan in 1984;
— in 1998, the Lake District National
Park Authority introduced policies into its local plan, which
again only permit new housing development where units are to be
sold to "local" people who live and work in the National
Park. This move is intended, in particular, to address the persistent
problem of second-home purchases in the Park. The second-home
phenomenon in the Lake District has escalated in recent years
and is now in numbers on a par with parts of North Wales. In fact,
it has been suggested that 15 per cent of all dwellings in the
Lake District are second homes and, in the villages of Skelwith
Bridge and Patterdale, second homes comprise as much as 40 per
cent of all housing. This reflects a degree of external housing
demand that is seen as the root cause of affordability problems
in the Lakes. Much of this demand is concentrated in the market
for second or retirement homes. Yet because of the penetration
of the M6 into this part of the region, it is also within relatively
easy commuting distance of Liverpool and Manchester. Similarly,
the north of the National Park is also within easy reach of the
North East (ie the area around Newcastle). So whilst the Lake
District and Cumbria looks set to continue to attract second and
retirement home seekers, current trends suggest further increases
in the number of people moving into the area but working elsewhere.
Furthermore, increases in "teleworking" may only heighten
external demand pressures and compound the current problems facing
the different planning authorities in the area and, of course,
the local population.
DIFFICULTIES IN
ASSESSING THE
SCALE OF
REGIONAL NEED
The aforementioned DETR research made a number
of policy and research recommendations relating to affordable
housing. One difficulty identified was how to assess the scale
of need at a regional level. There is a clear need for improved
methodologies used to carry out local housing needs surveys.
In reviewing the local housing needs reports,
the research found that the quality of these reports varied widely,
only a very few studies manage to provide a thorough review of
their local housing issues and provide very fine-grained analysts
to inform policy decisions. The sampling methodology used by most
surveys was found to be ineffective and unreliable. The broad-brush
approach of conducting a simple random sample of 10 per cent of
households in the district is the commonly adopted method. Such
a sampling approach is not suitable to elicit responses from households
living in areas with very different socio-economic characteristics.
The research found there was also a lack of
comment on the patterns of non-response. Non-response is not evenly
distributed across different areas within the district and ignorance
of such a problem will lead to biased and unreliable overall findings.
However, such health warnings were not given in most of these
reports and the percentages derived from the surveys (without
weighting the factor of different response rates in different
local areas) are used as the overall figures for the district.
Hence, the information produced by these reports is biased and
cannot be used to inform meaningful policy decisions. This also
makes more difficult the task of forming a regional picture from
these local housing needs surveys.
There is some concern over the very subjective,
mechanistic approach used in some surveys to establish housing
needs and affordable housing targets. This approach combines the
use of very subjective attitudinal questionnaire items, together
with a pseudo-objective scoring system to assess housing needs.
The findings often come up with the conclusion that there is a
need to have 25 to 30 per cent affordable housing. However, such
targets are derived for areas which already have low social housing
demand and plenty of cheap private sector housing.
There is a need for the Government Office/DTLR
to set up a code of practice to advise local authorities on how
to choose a reliable and effective methodology to carry out local
housing needs surveys. More importantly, after the survey is completed,
the analyses tend only to provide a straightforward frequency
distribution of the answers to each question, rather than presenting
a more fine-grained understanding of the relationship between
different types of households and their aspirations and needs
for housing:
— the low house prices in the North
West, as well as the relatively high level of home ownership across
different social groups, means that there is a lack of strong
evidence to support the need for affordable housing policies in
most parts of the Region. For areas with low average house prices,
more sensible solutions may not relate to the provision of new
low-cost housing opportunities, but to better training for the
local workforce. However, where there is a need to provide additional
affordable homes to new employment opportunities, the authority
might consider seeking the inclusion of quotas in market development
proposal. In some areas, other authorities have sought "fixed"
quotas (ranging from 10 to 50 per cent) of units on specific sites
but the tend in recent years has been towards a looser form of
negotiation with developers. However, the research did not recommend
that a fixed proportion of affordable dwellings on all new development
sites is sought;
— the need, nevertheless, is more urgent
in the more accessible, and scenic, rural areas in Cumbria, and
in very affluent areas such as Stockport, Trafford and North Cheshire.
Quotas could perhaps be sought on sites of more than one hectare
as outlined in Circular 6/98. However, such a policy might prove
problematic for a number of reasons. For example, new housing
for rent in these areas might further reduce the attraction of
social housing units located elsewhere and accentuate the existing
low demand problems. The suggestion that affordable units should
be sought in commuter areas (and the occupants encouraged to travel
by car and seek work opportunities outside the district) might
not prove to be palatable. The whole strategy might be too simplistic,
as the provision of new affordable housing opportunities in these
areas will not necessarily increase the wider opportunities available
to local households who may not have the means to commute or the
skills to take up jobs in nearby employment "hot-spots".
However, reduced cost home-ownership opportunities (secured in
perpetuity through Section 106 agreements) might be beneficial
in some of the higher priced areas where communities are becoming
polarised towards higher-income commuters, and therefore are becoming
imbalanced—some first time buyers in these areas might benefit
from being in these locations;
— within the North West, the Lake District
and Cumbria occupy a unique position. They form an area of incredible
natural beauty, offering unrivalled leisure opportunities and
(arguably) a quality of life that cannot be matched anywhere else
in England. It is also a highly accessible location and one that
can be quickly reached from adjacent employment centres. This
means that external housing demand pressures are likely to remain
high. There is certainly merit in the suggestion that a unique
area requires unique solutions to its particular problems.
HOW REGIONAL
PLANNING GUIDANCE
IS TRYING
TO ADDRESS
THE ISSUE
AT A
REGIONAL SCALE
In July 2000, the North West Regional Assembly
published Draft Regional Planning Guidance (RPG) for the North
West. After public consultation this was the subject of a Public
Examination in February and March 2001. The Public Examination
Panel Report[5]
was published in July 2001. Currently the Secretary of States'
Proposed Changes to Draft RPG are awaited.
Within Draft RPG Policy UR9 set out a policy
framework dealing with Affordable Housing. This policy complements
national guidance in Circular 6.98. The policy had three elements:
— identification of greatest need in
specific geographic parts of the North West;
— establishment of a regional indicative
target of 30 per cent of new homes to provide a tool in monitoring
and review; and
— regional specific policy approach
based on explicitly providing advice and information on the factors
that local authorities should take into account in preparing their
development plans in the light of local needs assessments in order
to ensure a consistent approach across the North West.
The Public Examination Panel Report recognised
that the approach in Draft RPG is not out of line with the advice
in paragraph 12 of PPG3. It endorsed the majority of the content
of the Draft policy when it stated:
"We consider that in order to provide a
balanced overview and to assist local planning authorities to
meet the housing needs of all members of the community and redress
problems of social exclusion, RPG should contain direction about
the provision of affordable housing in the region."
With regard to the inclusion of the regional
target in the policy, the Panel Report concludes that:
"Whilst it may broadly demonstrate the scale
of the problem, because of the range of local circumstances it
is difficult to see how it can be of much benefit. Primarily,
there is little reassurance provided to suggest that the 30 per
cent figure would be remotely consistent with the sum total of
estimates of affordable housing requirements from local assessments
nor is its value as a monitoring tool convincing. Therefore, the
Panel Report considered there to be no persuasive case for the
inclusion of the figure within Policy UR9 of Draft RPG".
DEFINING AND
DELIVERING AFFORDABLE
HOUSING
Affordable housing can be rented (both social
and private sector), owner-occupied or based on the various models
of shared ownership which have evolved—tenure per se is
not the key factor. What is crucial is the relationship between
housing costs and household incomes. This is recognised in the
Government's rent restructuring framework, which is based partly
upon a measure of income, albeit an imperfect one. However, the
costs of some new developments, although subsidised from the public
purse to reduce the housing costs of the residents, are sufficiently
high that they can no longer be described as "affordable".
This points to the fundamental need for affordable
housing to be defined in relation to the income levels of the
households most likely to need it—those on lower incomes
in each locality. This will vary in line with the labour markets
in each area, but to a much lesser degree than property values/house
prices. Strategies for central and local government, registered
social landlords and other agencies, should be aimed at ensuring
a range of housing which is affordable to all parts of the community—including
increased investment in provision of social housing in parts of
the region where it is required.
There are a number of barriers to the provision
of sufficient and appropriate affordable housing. Some relate
directly to the costs of developing affordable housing schemes
where demand is the highest—high costs of land (or existing
buildings for conversion), high construction costs (especially
where traditional local materials are required to meet heritage/conservation
objectives), and the inadequacy of grant rates/Total Cost Indicators.
Grant rates in particular must relate back to the achievement
of an affordable rent/price as the starting point for funding
a scheme, rather than the rents reflecting the "residual"
amount required to fill the funding gap. These issues are, in
the final analysis, down to the amount of funding available.
We also need to look at improving the partnerships
working toward the delivery of affordable housing—working
for example with private landlords, with other local government
functions such as economic development, or health services, linking
with broader regeneration strategies. The role of other public
agencies with significant landholdings (eg Ministry of Defence)
can be extremely significant in particular localities, and they
should be obliged to respond positively wherever possible.
The impact of Right to Buy sales on the availability
of affordable housing is significant in some parts of the North
West. In rural areas such as Cumbria, parts of Lancashire and
Cheshire this impact can be multiplied by the small numbers involved—if
in a village there are only half a dozen council houses to begin
with, the loss of two or three (or more) has a huge impact on
the chances of local people being able to remain within their
local community. This points to the need to re-evaluate the impact
of Right to Buy—one suggestion is that a suspension of the
scheme in settlements below a certain size is needed.
By contrast, in the lower value areas, such
as parts of Merseyside, Greater Manchester and East Lancashire,
there may be a need to develop new models to allow the development
of affordable new homes for owner occupation, for example as part
of a managed programme of neighbourhood renewal. Here the issue
is one of dealing with the costs of site assembly and construction
being higher than the final market value of the new property—while
the new homes are needed, the local housing market is too weak
to make a scheme "stack up" using existing models—a
way is needed of filling that gap.
The North West Regional Assembly welcomes the
recent publication of the Government's White Paper on regional
governance[6]
and the opportunities for elected Regional Assemblies to take
a strategic lead on housing issues including the strategic and
resource allocation roles of the Government Office and regional
offices of the Housing Corporation. When put in place, this will
enable an elected Regional Assembly to work in partnership with
the North West's Unitary Authorities and other housing providers,
to effectively deliver affordable housing to meet the regions
needs.
THE NEED
TO PROMOTE
AND MAINTAIN
SUSTAINABLE PATTERNS
OF DEVELOPMENT
THROUGH BALANCED
MIXED COMMUNITIES
The plight of "key workers", much
reported recently, is one aspect of this, and applies in parts
of the North West. "Key workers", of course, are in
the eye of the beholder—there is strong anecdotal evidence
of workers in the health, social care, tourism and other sectors
in the heart of the Lake District being "bussed" or
commuting long distances from the Wet Coast of Cumbria, because
they are unable to afford to live closer to their work places.
This is promoting unsustainable patterns of living and has important
knock effects to the long term sustainability of the local economy
and services in areas such as the Lake District. No funding from
the Starter Home Initiative has found its way north of Beford
thus far, but the problem does exist in the North West.
More broadly, lack of affordable housing makes
the achievement or maintenance of balanced, mixed communities
ever more difficult. If there are no local services and poor transport
facilities then people, particularly young adults, are likely
to move away. This has had the effect in some rural areas of creating
new "suburbia". Some rural villages have become places
to live, rather than to work, and house mainly better off households.
Where jobs do exist they are mainly low paid service industries
where employers struggle to fill vacancies. This major social
change may now be irreversible in some areas. In urban areas,
there is a form of ghetto-isation, where only the better off can
afford to live in particular areas—social exclusion has
increasingly clear geographical boundaries, based largely upon
income, with some ethnic dimensions too. This runs contrary to
the Government's stated objectives around the creation of mixed
communities and urban renaissance. So, while the greatest needs
of the North West relate to the socially excluded, economically
disadvantaged urban communities which require comprehensive housing
market renewal, there does need to be a balanced approach. Social
inclusion is not aided by the inevitable economic exclusion of
lower income households from large parts of the North West which
follows from the inadequate provision of truly affordable housing.
1 North West Regional Housing Statement 2001 Update,
Government Office for the North West, Housing Corporation, North
West Housing Forum and North West Regional Assembly, 2001. Back
2
People, Places and Prosperity. Draft Regional Planning Guidance
for the North West, North West Regional Assembly, 2000. Back
3
North West Regional housing Need and Demand Research, DETR,
2000. Back
4
Non Homes for Locals? M Schucksmith, Avebury, 1981. Back
5
Draft Regional Planning Guidance for the North West-Public
Examination-Report of the Panel, 2001. Back
6
Your Region, Your Choice-Revitalising the English Regions,
(Cabinet Office/DTLR, 2002). Back
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