Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by Yorkshire and Humberside Housing Forum (AFH 20)


  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.


  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 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.


  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 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.


  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.


  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.


  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.


  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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