Select Committee on Transport, Local Government and the Regions Memoranda

Memorandum by The Countryside Agency (AFH 62)

  The Countryside Agency is the Government's statutory adviser on the countryside. We aim to conserve the countryside; to spread social and economic opportunity for the people who live there; and to help everyone, wherever they live and whatever their background, to enjoy this national asset. We encourage sustainable development which integrates environmental, social and economic objectives.


  An adequate supply of affordable housing is essential for the future well-being of rural areas and to the achievement of the Government's vision for the countryside, as set out in its Rural White Paper, published in November 2000. Villages and market towns must provide access to jobs, housing and other services for people in a range of age groups and differing circumstances. The countryside should not become an exclusive area, simply for those with sufficient funds to buy into it, and housing and other policies, eg planning, must recognise the need for rural areas to provide suitable housing opportunities for a range of socio-economic groups. Currently, the severe lack of affordable housing limits the opportunities for those on low, or modest, incomes to live in rural areas, which has a knock-on effect on the social and economic life of those areas, affecting the viability of local services and the availability of a local workforce. The lack of affordable housing in rural areas also impacts on urban areas and urban policy, since many of those who are unable to compete in the rural housing market will be forced to move away to urban areas contributing to problems there.

  Policies affecting the provision of housing must be "rural proofed" as they are developed and implemented to ensure they take rural needs and circumstances fully into account.


  Some 14 million people live in rural districts in England, over 10 million of those (more than 20 per cent of England's population) in some 16,700 rural settlements, of which over 13,000 have populations of 500 and below. Some 6 million people live in settlements of 1,000 to 10,000 population.

  Rural England's population is growing faster than that of urban areas, due mainly to outmigration by people (generally the more affluent and more mobile) from the towns and cities wishing to commute from, work in, retire to rural areas or to use them as a holiday or second home. However, despite apparent prosperity, the economy of many rural areas is fragile and undergoing major structural change, especially in the remoter areas. Local wages are low. The 10 English counties with the lowest average earnings and highest proportions of employees on low wages are predominantly rural. Even in the more affluent areas there are pockets of disadvantage or individual households in need. For example in Cotswold District, whilst over 33 per cent of households have incomes of over £25,000, 27 per cent have less than £7,000. Access to jobs, training and services is poor, with limited public transport. A higher proportion of low income households have to run a car than in urban areas.


  The Government is commited to a living, working, protected and vibrant countryside (Rural White Paper, published November 2000). The aim in the Housing White Paper of a decent home for all to promote social cohesion, well-being and self dependence applies equally in rural areas as in towns and cities. Market towns and villages need to provide a range of jobs, services and housing opportunities for all sectors of society, if the countryside is not to become an exclusive area for those only with the mobility and funds to buy into it.

  Currently, the lack of suitable and affordable housing is squeezing out low income households from many rural areas. They are forced to move away from family, friends and other support networks, and often from their existing jobs, to find housing in towns. Locally generated housing need is not being met and, in some parts of the country, villages are becoming exclusive dormitories.


  We estimate a need over the next 10 years for 10,000 new units of affordable housing per annum, split equally between settlements below 3,000 population and larger rural communities up to 10,000 population, resulting from projected household growth. In addition, there is a significiant backlog of unmet need. Surveys undertaken by CA funded Rural Housing Enablers in 160 villages between 1999-2000 revealed an immediate need for 1,973 affordable homes.

  House prices are higher than in urban areas in almost all regions. In 1999 house prices were on average £12,000 greater in rural than urban areas. Our latest report on the State of the English Countryside (2002) shows that rural households in almost all of England's regions are less likely to be able to afford to buy a property in their areas than urban households. The problems of affordability are particularly acute in the South East, the South West and parts of the North (especially in National Parks). Research by Cambridge University for the Joseph Rowntree Foundation found that, out of a sample of 40 authorities, six rural areas were above average in terms of lack of affordability, measured by the ratio between house prices and incomes.

  Homelessness is a problem in many rural areas, especially among young people. Research by Bristol University showed that between 1992-96 rural homelessness rose from 11.8 per cent to 14.4 per cent at a time when homelessness in London and urban authorities was falling. The highest increase (12.1 per cent) was in deep rural areas and 20 rural local authorities witnessed rises in excess of 50 per cent. A survey for Centrepoint found 199 homeless young people aged 16 to 25 in Worcestershire in a four week period in September 2001. In North Yorkshire, agencies identified 160 young people as homeless on a single night in March 2001.


  Social housing is limited: 14 per cent of the rural housing stock compared to 23 per cent in urban areas. 91,000 homes were lost from the social rented sector in rural areas between 1985-90 as a result of the Right To Buy. Replacement has been insufficient: since 1989 the Housing Corporation's special Rural Programme has produced some 21,000 units (only 3,169 of these in the last three years). The Rural White Paper gave a welcome commitment to double the size of the HC's rural programme to 1,600 units per annum by 2003. However, this will still be less than the number of units provided in 1997. Recent increase in the HC's grant rates and the review of cost ceilings (Total Cost Indicators) has begun to result in an upturn in supply, although there are some areas, eg the South East and Cumbria and some types of investment (Purchase and Repair), where the costs make it unviable to provide social housing.

  Most rural social housing provided is for families. At the same time, research has shown that there are particular problems for young people in securing suitable accommodation, and for the elderly and those needing supported housing, to enable them to remain in the community. Rural housing schemes are also time consuming and costly to develop. They may take several years to come to fruition. This needs to be recognised by housing providers. Rural Housing Enablers can facilitate the process and bring forward schemes.

  The HC's special Rural Programme is targeted at settlements of less than 3,000 population. Most market towns are outside the ceiling for this programme, yet they play an important role in relation to their rural hinterlands and are often the most appropriate location for larger scale development and for supported housing for older and younger people. The HC has shown its willingness to do more in market towns, but more funding is needed to secure this (although this should not be at the expense of the existing rural programme).


  Planning is often the main constraint to the provision of affordable housing in the countryside where restrictions on development are tight. Current planning mechanisms are failing to help meet the need for sufficient, good quality affordable housing. Some authorities still do not include locally defined thresholds in local plans. Even where these are in place, in some rural areas sites are often too expensive to achieve a proportion of affordable housing, particularly social rented housing. Research for the Joseph Rowntree Foundation found that 98 per cent of plans covering rural areas included affordable housing policies, but the output was minimal in a sample of 15 rural local planning authorities (including four National Parks) only 539 units were provided in rural areas through quota sites and 437 through exception sites (55 of which were in the National Parks where this is often the only route to affordable housing) between 1998 and 2000. If aggregated, these figures suggest that across England rural local authorities would only secure 2,169 units per annum through the planning system, including those funded through the Housing Corporation's programme.

  The problem over securing sufficient affordable sites for development is exacerbated by the lack of rural sensitivity in the application of the sequential approach in PPG3, which gives preference to brownfield sites and by adopting a narrow view of sustainable development, so that development is required to be located near a range of services and public transport. In rural communities there are few brownfield sites, limited services and public transport. However, to rule out development of affordable housing in such communities undermines the achievement of sustainable development and the objectives of PPG3 in the countryside.

  Planning policies need to adopt a more positive approach to development in the countryside. Applications should be judged against the principle "is it good enough to approve", rather than "bad enough to refuse", as currently. The Government's proposals for changes to the planning system are a step in the right direction, but the success of any new planning system depends on whether it brings forward an adequate supply of affordable housing. To address this we have developed a proposal to allow local authorities to designate Sites for Social Diversity in communities where there is an imbalance in the housing tenure and socio-economic structure and, where for environmental reasons, only one site will be identified for development. (A more detailed note is attached at Annex A.)

  Our proposal is very close to that set out in the Government's recent consultation on planning obligations, aimed at enabling local planning authorities to allocate sites for affordable housing where there was a demonstrable need and the subsequent development would contribute to the creation of mixed and inclusive communities. We prefer this approach to a system of tariffs which we believe will not result in the affordable housing needed in rural areas, since, where there is a major need, local planning authorities may seek a higher tariff resulting in developers not proceeding. Conversely, a low tariff may be insufficient to fund the affordable housing, especially if other community benefits are sought.


  Although the greatest need in most rural areas is for social rented housing, there is also an unmet aspiration for some form of home ownership from those on modest incomes who are unable to compete in the private housing market, especially in areas of high demand, such as the South East.

  Low cost sale housing may only provide a short term benefit. Some local authorities are using S106 agreements to ensure the initial discount is passed on to subsequent purchasers or limiting re-sale to those with a defined local housing need in order to reduce the value of the property sufficiently to keep it as affordable. However, both these approaches may not be effective in areas where house prices are rising. For example, last year the Peak District National Park lost an appeal for a local occupancy condition to be lifted because the price of the housing was now above that affordable to local people.

  Shared ownership housing provides an alternative route for people with modest incomes. In publicly funded schemes in settlements of less than 3,000 purchasers are only able to buy up to 80 per cent of the equity. However, this may lead to problems with lenders. To overcome this, the Rural Housing Trust use a model where English Villages Housing Association owns 50 per cent of the equity and the resident buys the remaining share. The property reverts back to the housing association, but building societies are more willing to extend mortgages. However, in recent years some of these schemes have suffered as a result of escalating property values making even a 50 per cent purchase unaffordable.


  Against this backcloth, in the areas of particular interest to the Committee, we would recommend the following action:

    —  a definition of affordable housing should be adopted which allows local authorities to distinguish between low cost sale and subsidised housing for social rent and shared ownership;

    —  local planning authorities should be able to include a formula which defines affordable low cost sale housing within the local plan;

    —  the Government should aim to increase the size of the Housing Corporation rural programme beyond that already planned;

    —  the Housing Corporation should also give priority to providing housing in the market towns.

    —  the Housing Corporation should carry out a further review of Total Cost Indicators to make them more sensitive to the very local housing markets found in rural areas;

    —  current indices used to distribute capital borrowing by local authorities are weighted towards poor stock condition and generally reflect urban housing problems. DTLR should develop an indicator to reflect problems of access to housing caused by affordability and shortage of social housing for inclusion in the Housing Needs Index;

    —  local authorities should first be able to use their capital receipts to meet the need for affordable housing in their areas before any resources are redistributed to other parts of the country;

    —  the Government should give local planning authorities powers to allocate sites for affordable housing;

    —  in the absence of such an approach, our proposals to designate Sites for Social Diversity should be included in any future planning guidance;

    —  future Government planning guidance should reinforce the need for local authorities and others to take proper account of rural needs and circumstances and to promote sustainable development and mixed and inclusive communities in rural, as well as urban areas;

    —  the sequential approach to the provision of land should be more sensitive to rural circumstances, especially where the use of greenfield sites would achieve the overall objectives of sustainable development;

    —  guidance should be provided for local authorities on how they can retain low cost sale housing in perpetuity; and

    —  lenders should be encouraged to adopt more flexible lending policies where shared ownership housing is subject to restrictions on staircasing.

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