Memorandum by Yorkshire and Humberside
Housing Forum (AFH 20)
INTRODUCTION
The Yorkshire and Humberside Housing Forum welcomes
the opportunity to give evidence to the Sub-Committee's Affordable
Housing Inquiry. The Forum represents the views of housing stakeholders
in the Yorkshire and Humberside region and membership comprises:
local housing authorities, registered social landlords, representatives
from BME North East, Chartered Institute Housing, Countryside
Agency, Council Mortgage Lenders, House Builders Federation, Local
Government Association, National Housing Federation and the Northern
Housing Consortium. The Forum is therefore able to give an overall
regional view of the issue of affordable housing.
CONTEXT
Yorkshire and Humberside is a region of contrasts,
with coastal, rural, coalfield and urban areas—necessitating
housing providers to deal with complex and diverse housing markets.
Much attention has been drawn to the problem
of housing market failure in some northern regions including Yorkshire
and Humberside. However, many of the neighbourhoods in this region
which are experiencing low or changing demand are found close
to areas where prices are continuing to rise and where affordability
in the private market or access to limited social rented housing
resources are serious problems.
Lack of affordable housing is most acute in
rural areas where there are fewer houses to rent—for example
15 per cent social housing stock in North Yorkshire compared to
31 per cent in West Yorkshire. House prices in North Yorkshire
are currently running at 40 per cent above the regional average.
The need for affordable housing—particularly
new affordable housing where the tenure, size and type fits in
with the needs and aspirations of the population—can be
categorised as follows:
— providing affordable homes for households
on low incomes living in affluent high cost areas—especially
those areas close to urban areas offering good employment opportunities
accessed by higher income commuter households—such as Leeds/Harrogate,
Leeds/York;
— providing affordable homes in high
cost but low income "tourist" areas where retirement
to the countryside and purchases of holiday/second home has meant
low-waged workers are priced out of the market;
— providing alternative affordable
housing to replace obsolete elderly persons housing which no longer
fits requirements or falls well short of current mobility standards
and have limited value in meeting the increasing needs of housing
increasingly frail elderly people, plus housing to meet the demand
from people in their retirement years who wish to divest themselves
of their responsibility for ongoing repairs and maintenance of
their under-occupied homes; and
— providing different types and tenures
of affordable housing where the market is at risk of failure due
to the unsuitability of existing affordable housing stock.
THE DEFINITION
OF AFFORDABLE
HOUSING
The DTLR defines affordable housing as both
low-cost market and subsidised housing that will be available
to people who cannot afford to rent or buy houses generally available
on the open market.
For this region the most fundamental point is
to see "affordability" in the context of issues of quality,
location, accessibility, tenure and type.
The need for affordable housing should be assessed
locally from consideration of market prices and rents, incomes,
the supply and suitability of existing affordable housing, the
size and type of households and the type of housing best suited
to their needs.
The concept of affordability, of whatever commodity,
is essentially subjective. Even within low income groups there
is a wide range of views on what proportion of income it is acceptable
to spend on housing and where owner occupation is concerned there
is the added important dimension of attitudes to housing expenditure
as an investment. It is generally accepted that as a rough indicator—25
per cent of net disposable income should be considered the maximum
rent that is affordable for low-income households. In recent years
many "affordable" housing units have been far from affordable
for those in low paid employment and high rents have encouraged
the development of concentrations of tenants in receipt of housing
benefit—leading to marginalised, unbalanced, unsustainable
communities. It is of great concern that this trend will continue
through the implementation of rent restructuring, whereby rents
will be based on a formula determined by capital values and regional
earnings criteria.
SCALE AND
LOCATION OF
THE DEMAND
FOR AFFORDABLE
HOUSING
In many respects problems of affordability can
be seen as the other side of the coin from market failure—with
overheated markets increasingly sitting alongside collapsing markets
in the same urban areas and the best solutions involving a better
balance between the two. The main areas to address:
1. In areas such as South Yorkshire and
West Yorkshire we have overheated housing markets next to areas
in decline. In Sheffield for example, there is a booming housing
market in the South and West of the city—dominated by owner-occupation
with house prices well above what many people can afford—and
very large areas of market weakness in the North and East with
a ready supply of affordable housing (albeit often in poor condition).
At the top end of the market, prices are rising—as
they continue to fall at the bottom end—thereby creating
an affordability problem if the supply of good quality housing
within all price ranges is not kept up. This is why in an area
of low demand there is still a need for affordable housing policies
which set targets for new, good quality, affordable housing—in
other words housing that people on low or average incomes can
afford.
In West Yorkshire, Leeds also presents a dual
market with a clear split between the North with high and very
high values, offset by a large zone of lower value housing in
the South of the district extending into Bradford, Calderdale,
Kirklees and Wakefield.
2. Large parts of the region are predominantly
rural in nature—most particularly North Yorkshire and the
East Riding. These rural areas are areas of high demand housing
with average house prices running at 40 per cent above the regional
average. This is due in large part to:
(a) in-migration of higher income commuter
households;
(b) retirement to the countryside;
(c) purchases of holiday/second homes; and
(d) fewer rented houses due to the impact
of Right to Buy.
Consequently affordability is a major problem,
with affordability ratios for all local areas at well over regional
mean. Imported demand has had the effect of pushing out local,
economically weaker households. Social rented housing stock has
been substantially reduced through the RTB scheme and there is
increasing evidence of RTB purchases being funded by relatives'
families as an investment for the future in high demand areas
such as Craven, Harrogate and York. Demand for and provision of
housing in rural areas is also influenced by factors such as transport,
employment and access to services.
3. There are some areas in the region where
there is a more than adequate supply of affordable housing, but
it is not meeting the needs or demands of the population. Kingston
upon Hull for example is recognised as having an over-provision
of affordable housing, leading to churning between sectors and
de-stabilising communities. This does not mean however, that all
housing in the city, whilst affordable to a large proportion of
the population, is the type of housing people actually want to
live in. The issue here is to reduce net migration from the city
(to the East Riding and North Yorkshire) by providing a greater
variety of housing that represents for those people who can afford
to and want to invest in housing, a reasonable investment opportunity.
THE QUALITY
OF AFFORDABLE
HOUSING
The number of "non-decent" homes owned
by local authorities in the region varies between 10 per cent
and 90 per cent of their stock. Many councils face a dilemma because
many tenants regard environment and security matters as more important
than the decent homes standard, nevertheless there is a lot of
effort being put in to meet targets and for many stock transfer
may be the only answer.
Large areas of unpopular non-decent housing
are largely occupied by people on low incomes and invariably have
failing local economies and have a depressing effect on sub-regional
economic growth. This is a major issue for areas like South Yorkshire
and parts of Humberside which have a particularly weak sub-regional
economy.
RESOURCES AND
PLANNING OPTIONS
Regional Planning Guidance suggests that some
4,000 affordable homes are required each year. Currently the Housing
Corporation provides around 1,500 homes per annum with some 100
provided through Local Authority grant. The balance would need
to be found through planning gain. Many providers, including the
Housing Corporation, consider this too crude a position to adopt
as a regional policy in view of the variable balance of supply
and demand mentioned above. It would be preferable for each locality
to determine its requirements for affordable housing based on
local supply and demand and related to housing market factors.
Rather than using planning gain just to provide additional affordable
housing, in areas of oversupply, commuted sums might be more effectively
used to restructure the housing market, for example by funding
clearance of obsolete housing.
Planning Guidance in North Yorkshire aims to
divert the growth pressures arising from the economic growth in
the successful Leeds/York/Harrogate "golden triangle"
into the older urban areas and the regeneration zones of West
and South Yorkshire. Planning policy therefore restricts the amount
of land provision for new housing in North Yorkshire. For the
planning policy to be successful the house price differential
between these two areas will probably have to widen further. This
will increase the problems of affordability for existing low-income
households—working in the local service industry sector—entirely
dependent upon the shrinking social rented sector to meet their
needs.
Achieving affordable housing through planning
gain is a tool of limited use. In practice, high value areas in
which there might be substantial planning gain, actually have
very few sites and this will become even more so as the emphasis
on brown field development limits the supply of available land.
There are also important green field land issues
in the region that will have to be tackled through market renewal
strategies. One key issue is that, in some sub-regions, there
may be an oversupply of housing land already occupied by housing
or with existing approval; in other words merely stopping further
green field development may not tackle the imbalance between supply
and demand. The existing system of regional planning guidance
has not been able to detect this situation or prevent it arising.
There are three main routes for provision of
new affordable housing:
— local authority funding—increasingly
limited. One practical step may be to buy in—or to retain—and
improve the existing supply of social renting—but that requires
resources beyond those currently available to local authorities;
— planning gain—in rural areas
there are indications that planners and housing officers are working
together to take advantage of these powers—which would be
even more advantageous if the requirement for affordable housing
provision is brought down to 15 unit sites. However, as noted
above it is a tool of limited use. A new approach within the plan
led system enabling Local Planning Authorities to allocate sites
to meet proven housing needs—such as the concept of "Sites
for Social Diversity" promoted by the Countryside Agency—may
be one way forward; and
— another source is Housing Corporation
funding via the Approved Development Programme—which is
also in very limited supply, even more so this year with Regional
Cash limits reduced by £2.5 million in favour of the South
East.
The effect of these limited funding options
is that it is difficult to promote mixed communities in areas
dominated by up-market owner-occupation.
THE CREATION
OF MIXED
COMMUNITIES
Sustainable communities can be defined as popular
places where people want to live. These areas are characterised
by having citizens with mixed incomes, a mix of house types, sizes
and designs and tenures.
Strategic use of low cost home ownership initiatives
can achieve wider benefits. In addition to increasing housing
supply they can help achieve more inclusive, mixed-income communities
contributing to economic and social stability in both high and
low value areas. This may not however, be appropriate as a blanket
policy, particularly if it conflicts with residents' choice of
where to live or the cultural needs of BME communities.
Low cost home ownership schemes such as VPG
and Homebuy are useful both in helping people into owner occupation
and providing social stability and increased stakeholding. The
popularity and versatility of Homebuy could be improved by allowing
more than 25 per cent equity loans and extended to the purchase
of new homes as well as existing homes. The Homebuy concept could
also be developed as an equity release product, enabling existing
home owners to stay in their own homes and achieve a decent homes
standard.
Even in urban areas with a substantial amount
of failing housing there is scope for low cost home ownership.
Whilst there is evidence of successful schemes there are at present
some substantial obstacles that will have to be tackled through
a market renewal approach.
The most immediate and well known issue is the
lack of a current housing gap funding scheme. This is about to
cause the suspension, part way through, of a textbook mixed tenure
regeneration scheme in the Manor area of Sheffield with a consequent
threat to the substantial regeneration gains already achieved.
THE REGIONAL
EFFECTS OF
A SHORTAGE
OF AFFORDABLE
HOUSING
If a district-wide balance were all that mattered
it could be argued that there was no shortage of affordable housing
and therefore no need for additional provision. However, we take
the view that it is important to meet the needs of low-income
households within their current neighbourhood. Low-income households
in particular need to keep their network of friends, family and
institutional support and if forced by the housing market to break
these links they will be more vulnerable and more dependent on
institutional support. The case can also be made in terms of sustainable
neighbourhoods. If the housing market has the effect of forcing
low-income households out of an area, it also has the effect of
pushing them into low-income ghettos which are inherently vulnerable
and unstable.
Dynamic local economies within certain parts
of the region are causing increasing problems in providing sufficient
affordable housing. In some cases pressures in the housing market
are spilling over into the labour market, creating difficulties
for employers in recruiting and retaining staff. Regeneration
projects aim to boost the local economy, yet growing economies
are heavily dependent on lower-paid service-level staff. The services
provided by these employees in lower-status occupations are essential
to the dynamics of the local economy and the housing system therefore
has to accommodate them. Yet they are the households who are having
difficulty accessing housing that is affordable. This means important
groups of people are excluded from living near to their main source
of employment.
Incentives may be needed to encourage business
growth in areas with surplus housing, whilst at the same time
improving the environment and replacing obsolete housing. This
would simultaneously reduce overheating whilst improving demand
in weaker housing markets.
SUMMARY
In popular areas, whether the South of England
or the North of England, low paid households struggle to find
accommodation and businesses struggle to recruit labour. At the
same time, obsolete housing stands empty in unpopular areas. Developing
a national strategy for both improving the environment and encouraging
business growth within all regions is the key to solving these
interconnected problems.
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