Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by British Chambers of Commerce (BCC) (AFH 15)


  The BCC welcomes the opportunity to participate in the inquiry into affordable housing by the Urban Affairs Sub-Committee. This issue is a vital matter to address over the coming years if the economy is not to stagnate and will be instrumental in regeneration projects in both rural and urban areas.


  Having consulted the BCC network, which represents 135,000 businesses across the UK economy, the opinions of business are represented below. This submission follows the structure of the Press Notice from the Sub-Committee requesting responses.

The definition of affordable

  The cost of housing must bear some relationship to average income multiples and the scale on which mortgage lenders work. This is a challenge in areas where land values are disproportionately high, such as city centres, but this challenge must be addressed because the city centre is where accommodation is most needed, especially by key workers.

  One problem noted by Chambers is that each planning authority seems to have their own views and on occasions swaps the definition around to suit their own purposes. In certain areas the term affordable relates only to council development and not to the private sector, yet authorities can force private sector developers to build a certain amount of "affordable" homes. Clarity from Government on this whole issue would be appreciated.

  This forms a part of a more general dissatisfaction with the planning system in England, which is seen by business as a block on the economy and on certain other Government priorities. If Government wishes to regenerate run-down areas, especially in the rural community or in urban centres, then the whole planning system must be rebuilt from scratch to ensure it is efficient, quick and fair.

The scale and location of the demand for affordable housing

  Very little progress is envisioned on this issue. Quality, affordable housing is needed in city centres for key workers yet land prices prevent this from being an economical proposition for developers. A solution may be to hold some land in public ownership, yet leased on long-term leases (say 999 years) with covenants preventing resale so that construction costs are the only factor in housing prices in city centres. As the BCC recognises the trend for moving public housing into the private sector we appreciate that Government intervention in the housing market is not a pragmatic approach. Nor is it something we would necessarily want to see. Therefore, the authorities should be encouraged to provide only the framework for affordable housing.

  The regeneration of city centres could be facilitated by the provision of affordable housing. It would decrease congestion as employees would already be close to work and if a ready-made workforce (and, of course customer, base) is on the doorstep it will stimulate business start-ups and growth. The minimisation of the use of transport should be considered when the location of housing is being debated. Commuting and congestion is also a block on economic growth.

  Environmental protection should also be an important consideration, given the nature of some of the UK's towns and cities. Green space in and around these urban areas should generally continue to be protected. We do not support any change to the status of Green Belts unless brown field sites are fully developed beforehand.

The quality of affordable housing

  Accommodation should meet minimum criteria in regard to thermal efficiency—insulation and efficient heating systems could reduce costs to enable key workers to afford such housing.

  The housing should be able to house an "average" family (two adults and two children) and have adequate space for, or provision of, facilities, such as shower/bath, toilet, laundry, refrigeration equipment, waste storage and one car parking space. Imagination is required in design to avoid developments becoming ghettos and realism is needed to address modern day problems. For example, not providing parking spaces will not prevent people owning cars or encourage them to use public transport. It will simply result in a large number of on street parking problems, leading to further congestion.

The adequacy of the existing supply and the amount of resources available

  Planning authorities appear currently to insist on affordable housing being planned and developed within executive developments. This is not a satisfactory solution and is perceptibly causing delays to developments. It can also create social problems if tension develops on the new estate.

  The Chamber network has expressed its concerns that planning authorities tend to view the allocation of affordable housing as an opportunity to regulate the local housing market according to their own agendas. This is not helpful and Government should act to monitor and prevent this.

  Evidence of un-met need should be supplied where proposals for obliging developers to build affordable housing are being advanced. Such requirements should not be proposed without reliable figures to support them. Need must be matched to location.

  Currently affordable housing for key workers (especially emergency services personnel, nurses and transport workers) is distinctly lacking in both rural and urban areas. A large proportion of that which is available is in an unfit state due to public sector spending constraints. The current move away from public housing, through local authority stock transfers, is a positive step in achieving improvements to existing public housing.

The extent to which planning gain can fund the level of affordable housing required

  Affordable housing could be derived from planning gain. The costs are commensurate with other projects completed under "section 106" agreements. Sensitive management is needed to achieve the best solutions. However, this may well be a more useful alternative to the current requirement for affordable housing in the same development as more exclusive accommodation.

How resources should be balanced between social housing and options for owner occupation for those who cannot afford to buy (including shared ownership) and whether any additional mechanisms are required to bring forward shared ownership-type schemes

  The BCC is not convinced of the need for increased public funding of housing. Such a course of action can prove to be self-defeating. A property-owning nation will be more likely to ensure the good upkeep and maintenance of housing. Over-regulation is also a concern for business. However, imaginative use of minimum standard requirements and long-term, low-cost, leasing of public land to construction companies could prove to be the most effective answer. This would permit housing for key workers to be built in high-demand areas at an affordable cost to all.

  Furthermore, housing associations have been equipped with funding options and ownership when dealing with people who are new to the employment market. This is a satisfactory situation and should be maintained and copied in other areas.

Whether targets in Regional Planning Guidance are appropriate

  Regional targets that are set at a national level frequently cause problems. In this case they are inappropriate. However, mention should be made of the requirement for affordable housing to be identified in local structure plans and specific targets made in this type of document if a shortfall is identified as a problem or a similar difficulty persists over a prolonged length of time.

  A lighter touch on planning would stimulate the economy and growth. Currently planning is one of the main concerns across the Chamber network. If developers were given more room to move then they could meet housing need more easily, especially if they were given assistance in providing low-cost housing through the measures outlined above.

Whether targets on decent and affordable housing will be met by central and local government

  The BCC is not in favour of national targets. National government has too broad a view to be able to set local or regional targets. Local government should set local targets. If the new Regional Assemblies are to come in, something that the BCC is against, then it is envisaged that they would take this responsibility over. Again concern must be expressed as to whether targets can be set effectively at any other Government level than locally.

Whether current policies and practices are leading to the creation of mixed communities

  Clarity is needed on what is meant by "mixed communities". The main fear of obliging developers to site affordable housing in with "ordinary" housing is that the investment made by home buyers will be somehow devalued by having affordable housing in their development. It is not certain that such "mixed communities" are even desirable let alone achievable.

Whether more greenfield development is needed to meet housing need

  The BCC is very interested to hear more details of exactly what this would entail. Opposition from certain organisations is to be expected. If housing need has to be addressed in areas where there are insufficient alternatives, then green field development may have to be considered. However, strict guidelines will have to be in place before this can be contemplated. Infrastructure problems may well prevent this from happening, if transport or water delivery for example is inadequate for extra housing. This is especially a concern in the South East. More thought by Government may be needed here on how key workers can be located in other parts of the country by developing sites for work outside London and the South East. Regeneration of the rest of the UK could work hand in hand with easing the development crisis in the South East if this problem can be solved.

The cost to individuals, businesses and the economy resulting from any shortfall in the provision of decent, affordable housing

  The cost of the lack of affordable housing may not be measurable in any way that would inspire confidence. However, it is obvious that a lack of flexibility for those moving in search of employment, especially in key sectors of the economy, is detrimental to achieving personal, corporate, and national objectives. The UK economy can only be stifled if freedom of movement, access to a skilled workforce and improved housing and transport facilities are not commonplace.


  The BCC recognises that a growing economy will stimulate demand for housing and thus increase prices. However, a lack of affordable housing will stifle this growth. Therefore, we support the desire to provide sufficient affordable housing for key workers. We would recommend that this is achieved through the use of brown field sites in towns and cities and allowing public land to be leased on a long-term basis for construction companies to build housing at a lower cost to permit key workers to purchase homes at affordable prices in areas of high demand. We are wary of opening up the Green Belt to development. Brown field sites must be fully developed before any change to the status of Green Belts is considered. We do not support over-regulation or the compulsion on construction to provide a high proportion of affordable housing in commercial developments. This can act as a powerful factor in dissuading companies to build new homes at all. Reform of planning is needed urgently, starting from scratch to ensure clarity and fairness across the country. Clarification of the rules on planning gain and especially the requirements on builders to provide affordable housing in developments is a key part of that reform. The BCC looks forward to continuing to contribute to this debate in the future and would be happy to elaborate on any of the points made in this submission.

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