Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence


Memorandum by the Commission for Rural Communities (CRC) (AH 95)

INTRODUCTION

  1.  The Commission for Rural Communities was established as a division of the Countryside Agency in April 2005 to provide well-informed, independent advice to government and ensure that policies reflect the real needs of people living and working in rural England, with a particular focus on disadvantage.

  2.  The lack of affordable housing in rural communities is a major issue affecting the well-being of most rural areas. The CRC has wide knowledge and experience of the nature and scale of the issue as well as possible solutions. It is currently undertaking an inquiry into rural housing to hear the views of rural people and communities which will form part of its evidence to the Government`s Affordable Rural Housing Commission which is due to report in March 2006.

THE LACK OF SUBSIDISED HOUSING IN RURAL AREAS

  3.  For many years, attention has focussed on the lack of publicly subsidised affordable housing in rural areas. This has been cause by the loss of much council housing through the Right-to-Buy, with over 330,000 sales in rural local authority areas since 1979; the limited funding available for new social housing, exacerbated by the abolition of Local Authority Social Housing Grant in 2000; the limited opportunities for applying affordable housing quotas to private developments; the difficulties and costs of building small schemes in more remote locations; and the opposition from local "nimbys". Each and all of these factors have caused particular problems for those on low incomes in rural areas. Overall in rural areas public sector housing continues to comprise a smaller proportion of overall housing stock when compared to urban areas: 13.4% compared to 22.4 % (State of the Countryside; CRC 2004).

HOME OWNERSHIP IN RURAL AREASTHE PROBLEM OF AFFORDABILITY

  4.  These problems of providing affordable housing in rural areas have been well rehearsed (1 and 2). Less attention has been paid to the problems of home ownership in rural areas and the role it might play. Access to open market housing in rural areas is often difficult for many rural people. As an illustration the State of the Countryside Report 2005 shows that the affordability index in less sparse hamlets and isolated dwellings is 6.9 compared to the equivalent urban figure of 4.6. In terms of the costs of home ownership, based on standard lending terms, 36% of rural households would have to spend over 50% of their income on mortgage payments in order to become homeowners, compared to an equivalent figures of 25.5% for urban areas. These issues of affordability have led to the emergence of a substantial intermediate housing market in rural areas. Recent analysis by the Joseph Rowntree Foundation showed that outside of London, rural districts in the South East and South West have the most significant intermediate housing markets(3)[201].

SUPPORT FOR HOME OWNERSHIP

  5.  A number of schemes seek to help households in this position achieve their aspirations to home ownership. Shared ownership, shared equity and more recently proposals for Homebuy schemes aim to assist households in social housing to access the open housing market. For rural areas these schemes can lead to a dilemma between assisting households to full home ownership and protecting the pressured stocks of public sector housing, and this is reflected in rural safeguards that exist in respect to some such schemes including Right to Acquire.

  6.  Thus the CRC supported the opportunities which ODPMs Homebuy proposals gave to rural residents, especially "key workers" and the "intermediate" market, provided that safeguards were maintained to prevent the selling of scarce subsidised housing for rent in villages, both in order to prevent the loss of this much needed supply, and to avoid deterring potential donors of cheap land for "exception" sites.

THE EFFECTS OF PLANNING POLICIES

  7.  However, the potential for increasing home ownership in rural areas is strongly constrained by planning policies which are generally very restrictive in order to protect the countryside from development, prevent sprawl and excessive car journeys, and maximise the regeneration of urban areas. Such private housing development which is allowed is normally limited to larger market towns and villages with a wide range of service, which are assumed to be more "sustainable".

  8.  However, we consider that private market housing for sale could and should play a stronger role in rural communities in order to:

    (a)  help deliver a proportion of affordable housing through Developer Agreements;

    (b)  help meet the growing "intermediate" needs for affordable housing, ie those who do not qualify for housing support but cannot afford market property prices; and

    (c)  help provide a mix of housing which meets a wide range of socio-economic groups, and reduces the growing polarity in rural communities between the very wealthy and the most disadvantaged.

  9.  Moreover, in our view the planning justification for preventing such development is at best flawed, and at worst perverse. Recent research3 has demonstrated that journeys to work, services and recreation are very complex and diverse for both town and country dwellers, and that the concept of a hierarchy of urban centres, market towns and villages in which major activities can be "contained" is far too simplistic. Rural settlements exhibit complex and interacting roles which demand more sophisticated local analysis, including the operation of regional and local housing markets.

  10.  Similarly, rural planning policies rely far too often on a very narrow interpretation of "sustainability" through criteria which are often limited to a standard checklist of available services and facilities (a tick-box approach) rather than a more measured analysis of the social and economic wellbeing of the local rural community. For example, it may be that the close social and family ties typical of many rural communities serve to offset the lack of services in place. Similarly, the perceived safety and neighbourliness of rural communities may score more highly than the availability of particular amenities on local residents` priorities. The CRC is currently undertaking some research into the meaning of "sustainable rural communities" which we would like to share with the Committee.

  11.  At a wider regional or sub-regional scale, we also consider that planning policies which aim to protect the countryside "for its own sake" and focus the vast majority of new development in urban areas to support urban regeneration are quite disproportionate. Nobody wants to "concrete over the countryside", and in any case such an outcome would take several centuries to achieve at even the highest rates of rural expansion4. On the contrary, what we are seeking is a level of gradual organic growth in rural communities which can help sustain them in social and economic terms within legitimate environmental constraints.

HOUSING SUPPLY AND HOUSE PRICES

  12.  Whether and to what extent housing development in rural areas on the scale envisaged above would have the effect of reducing house prices, thereby improving affordability, is a much more complex question. We know that there is no simple equation between the supply of new market homes and house prices, not least because new houses only comprise a small proportion of the total housing market. Moreover, the modest scale of new development envisaged for rural towns and villages to meet environmental and design criteria is unlikely to have a strong impact on local house prices by itself. However, much will depend on the workings of that local housing market and the cumulative impact at the sub-region or region. And overall rural house prices are more likely to be lower than if current very restrictive planning policies continue to be applied.

  13.  Current research being undertaken by ODPM, Defra and CRC should throw more light on the workings of rural housing markets and the extent to which new homes for sale can meet affordability criteria as well as longer term "liveability" aims. Again we would welcome an opportunity to explain and discuss these arguments in more detail.

CONCLUSIONS

  14.  In conclusion, the Commission for Rural Communities favours an increase in the opportunities for home ownership in rural communities in order to support their social and economic sustainability and help provide more affordable housing for a wider range of potential residents. This will require not only the provision of more help for potential home owners through schemes such as Homebuy, but also planning permission for more homes in rural areas. Decisions on the precise location of the latter will need to respond to market signals and the social and economic needs of rural areas, informed by better understanding of what is required to foster "sustainable rural communities" in the widest sense.

  15.  Finally, we should also stress that our support for more home ownership comes with two essential caveats. Firstly, that "homebuy" type schemes do not apply to the scarce stock of much needed subsidised rented/shared equity stock in villages; and secondly, that new developments of open market housing in rural areas contain both a wide range of house types and prices and a substantial proportion of subsidised rented/shared equity homes. This mix will be essential in order to meet not only the required variety of needs and demands of thriving rural communities, but also to avoid the disadvantage conferred on those unable to afford a home on the open market, and the social polarisation which all too often results.

NOTES

(1)  A Housing Policy for Tomorrow's Countryside: Countyside Agency, 2003.

(2)  Meeting Affordable Housing Needs in Rural Communities: A Good Practice Guide; Centre for Rural Development; the Housing Corporation, 2004.

(3)  Working households that can't buy; Professor Steve Wilcox; Joseph Rowntree Foundation; 2005-11-10.

(4)  Its not just about transport, is it ? James Shorten, Land Use Consultants, Paper for CRC research study on sustainable rural communities, 10 November 2005.

(5)  Unaffordable Housing: Fables & Myths; Alan Evans & Oliver Hartwich; Policy Exchange 2005.







201   The JRF use two definitions of an intermediate housing market in their analysis which can be summarised as households who work, but cannot afford to access the lower end of the housing market. Back


 
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