Memorandum by the Lake District National
Park Authority (AH 21)
1. Although we welcome the need to further
investigate the affordability and supply of housing, this must
be tied into the other inquiries into this issue occurring at
the same time- the Affordable Rural Housing Commission and the
Commission for Rural Communities research. Our comments relate
to our experiences of planning and housing delivery in rural areas,
and hopefully illustrate the need for adequate rural proofing
of policies. We also suggest the need for "real world proofing"
of policies to see if they are likely to have unintended consequences,
and the need for policy between ODPM, DEFRA and the Treasury to
be joined up. Against this background we would offer the following
observations on the specific questions that you raise:
2. THE POTENTIAL
BENEFITS OF
AND SCOPE
TO PROMOTE
GREATER HOMEOWNERSHIP
2.1 We have major concerns about the preoccupation
of current government policy in terms affordable housing solutions.
The focus on greater owner-occupation and the concentration of
resources and solutions on this sector of the market, runs the
risk of undermining the government's own policy of decent homes
for all. This would not be such a concern if this focus on owner-occupation
market-delivered affordable housing solutions meant additional
resources overall. However, the redirection of resources from
rented to shared-equity that is occurring[47],
raises questions about whether public money is being used to help
those in greatest need, or merely subsiding an already over-inflated
market.
2.2 For some people, and particularly in
low-wage economies like Cumbria, renting is the only realistic
option. The gap between incomes and house-prices puts home-ownership
out of the reach of many households. They may aspire to ownership,
but the financial realities make it an impossibility. Shared ownership
and similar types of options need to be better promoted and understood.
They can offer a way for those who aspire to, and can afford to,
move into partial home-ownership. But without a full range of
sub-market options this could serve only to move people "trapped
renting" to being "trapped in shared ownership".
2.3 A one-size-fits-all solutions simply
cannot work where the issues of affordability are so diverse and
wide ranging. Home-ownership solutions may be the way forward
in some areas, but not the best, or most important issue, for
other areas. We therefore suggest local solutions to local problems
based on local research, as the way forward. This would enable
communities to identify what is required to address the imbalances
in their housing markets. This requires national planning, housing
and funding policies to provide a framework within which local
solutions can be developed and delivered.
3. THE EXTENT
TO WHICH
HOME PURCHASE
TACKLES SOCIAL
AND ECONOMIC
INEQUALITIES AND
REDUCES POVERTY
3.1 We do not think there is a clear benefit
for those on the lowest income levels in home ownership. As mentioned
above those in real poverty are most likely to be those to whom
shared equity and owner occupancy solutions are least available.
These groups are also likely to be most at risk from external
pressures and changing market conditions.
3.2 Our experience would indicate that home-ownership,
as currently promoted in the raft of government "affordable
housing solutions", does little to tackle social and economic
inequalities and could in fact be increasing inequalities and
poverty. In making assessments of the costs of renting v. ownership[48]
people may look only at the monthly repayments versus the rent,
and not consider all the other costs associated with home ownership-
maintenance costs, the cost of borrowing, the impact of any potential
interest rate rises, the need and cost of mortgage payment protection
etc.
3.3 We are therefore concerned that by focusing
on the second and third rungs of the housing ladder- shared equity
and discounted housing for sale (market delivered "affordable
housing") you could in effect be excluding those in greatest
housing need. The latest research[49]
indicates that people are being forced to find larger deposits,
often by gifts or borrowing from family members, and stretching
themselves further to access housing.
3.4 It may be useful to remember that there
are two approaches that could be used to address the gap between
house prices and wages. One looks to control house prices and
other to increase wages. A better understanding of the linkages
between housing at the economy at a national, regional and local
level is needed. We would suggest that initiatives like the minimum
wage, and promoting training opportunities (such as a University
of Cumbria), offer a much better way to address social and economic
inequalities and reduce poverty, than home purchase.
4. THE ECONOMIC
AND SOCIAL
IMPACT OF
CURRENT HOUSE
PRICES
4.1 Clearly the imbalance in the housing
market is having a major impact on the sustainability of local
communities. We believe that sustainable rural communities should
be mixed and balanced. This requires a mix of ages and incomes
in each community. This requires the housing stock to offer a
mix in terms of type, size and tenure. So, the provision of rented
and shared equity properties in our communities is needed.
4.2 We strongly support the needs for evidence
based policies and implementation. The bottom-up housing needs
survey methodology developed by the Rural Housing Enabler programme[50]
offers a way to appreciate the balance of provision needed. We
are using this approach to inform the delivery of our planning
policies[51].
An understanding of the existing stock and the gaps in the housing
ladder[52]
is also essential in order to understand the full implications
of any interventions suggested.
4.3 Research commissioned by Cumbria Rural
Housing Trust has shown that the development of affordable housing
contributes positively to the sustainability of rural communities[53].
In our view therefore, where local evidence clearly demonstrates
a need for a particular kind of housing to be provided, the size,
type and tenure of units, as well as their location may need to
be prescribed if the planning process is to be used most effectively
to correct market failure. Current guidance[54]
suggests this should only be done in exceptional circumstances.
4.4 There does however need to be a recognition
of the potential monitoring and resource implications of implementing
the kind of policies we need. There is no point spending a great
deal of time developing a system that is not monitored or enforced,
or is viewed as being easy to get around. We again have anecdotal
evidence of breaches or loopholes in the current system that are
already being exploited. We are seeking to address some of these,
but a general publicity campaign on this issue would be welcome.
4.5 In America a poster campaign featuring
pictures of key workers—fire fighters, teachers etc—with
the strap line "we need the people who need affordable housing",
was very successful. [55]In
our case, key workers are as likely to be working in tourism industry
as the public sector. In view of the unbalanced profiles of many
of our communities, key workers in the National Park could almost
be defined as "anyone who works for a living".
5. THE RELATIONSHIP
BETWEEN HOUSE
PRICES AND
HOUSING SUPPLY
5.1 In our experience this is considerably
more complex than simple economics of supply and demand would
suggest. In areas such as National Parks it is simply not possible
to build your way out of this crisis. Demand in our area is generated
from local, regional, national and international markets. Add
to that the desire for second homes, holiday homes, retirement
homes, commuter, SIPPs etc. and the demand for housing is likely
to be insatiable. We therefore seek to separate those with a real
need to live in the Lake District National Park from those who
just have a desire. [56]
5.2 It is important to remember that there
are other factors which impact on house prices—the British
home-owner culture, the profitability of other types of investments,
mortgage interest rates and such like. There also needs to be
recognition of the limitations on what the planning system can
actually deliver. Planning authorities can only grant planning
permissions. They do not build houses. Developers build houses,
and using the simple economic logic of reduced supply increasing
prices—it may in fact not be in the development industries
best interest to build all the houses they could as quickly as
possible. A more detailed understanding of the economics of development,
particularly in rural areas is needed. Also, consideration of
the potential use and benefits of completion orders etc may be
helpful.
5.3 A house is only worth what someone is
willing to pay for it. In our area the difficulty we have is that
much of the demand comes from people with significant purchasing
power. There is also a disparity in perception of value. For example
a person used to London house prices may consider a two-bedroom
cottage in Keswick priced £300,000 a bargain, whereas for
a local family on average wages it is completely unobtainable.
5.4 For many years the Lake District National
Park Authority has sought to restrict occupancy of new dwellings
through conditions. Monitoring of this policy has established
that these conditions may in fact have little or no impact on
the price of the houses. We have some anecdotal evidence that
in some areas it actually increases the value of the houses as
the prospective purchasers know that they will not be living next
door to an empty second home. Over the last couple of year we
have therefore tightened up our occupancy conditions. Further
research on the impact of occupancy conditions on the price of
houses and the ability of purchasers to secure finance (a common
reason cited by those wishing to escape or remove occupancy conditions)
is required.
6. OTHER FACTORS
INFLUENCING THE
AFFORDABILITY OF
HOUSING FOR
SALE INCLUDING
CONSTRUCTION METHODS
AND FISCAL
MEASURES
6.1 We welcome the recognition that using
the planning system offers only part of the solution to the affordability
problem. In areas like the Lake District National Park there may
be enough houses, but not enough homes. The planning system can
only influence things which require planning permission, and the
reality is that most people live in, and will purchase, housing
that has already in existence.
6.2 We are heartened by discussions in the
rural affordable housing inquiries which appear to be reopening
discussions about separate use classes for second homes and holiday
lets, and perhaps even affordable housing. We would welcome a
healthy and well-informed debate around such issues.
6.3 Fiscal measures, such as the increased
council tax on second homes, can also be used to generate revenue
for affordable housing. We believe that fiscal measures could
also be more innovatively used to impact on second home ownership.
For example, tax incentives such as the release from inheritance
tax if a property is made available for local people to rent through
a covenant or other legal agreement could represent a more innovative
way to turn some of our houses back into homes.
6.4 Bringing the existing stock back into
use through fiscal measures, including VAT parity between redevelopment
and new build, are likely to be much more effective ways of addressing
the housing crisis areas like the Lake District National Park,
than using the planning system to build new affordable housing
on greenfield exceptions sites, or allocated sites.
6.5 We generally welcome the interest in
modern methods of construction especially where they can create
more sustainable buildings in terms of energy efficiency etc.
But we are concerned that this could in reality serve as a distraction
from the more important issues facing our area: that of providing
housing for local people at a price they can afford, while still
ensuring these "affordable houses" are homes that people
can, and want to live, and expand in.
6.6 We are aware of developers looking to
move into providing affordable housing. There are however concerns
that "non-RSL developers" do not have to comply with
the same space and design standards as RSLs. To make it stack
up financially there is concern that the resulting non-RSL developments
provide smaller units, with no opportunity for a couple to grow
into a family. Directing single people, and couples into one bedroom
flats is surely only storing up problems for later on.
6.7 The Treasury/Housing Corporation's drive
for economies of scale, and getting more units for the same or
less rate of grants, could be removing future proofing from the
development that are currently occurring. A recent, and much praised,
development of rented and shared equity properties in the village
of Pooley Bridge has been showcased by the ODPM in their Sustainable
Communities DVD. Under the new efficiency drive it is unlikely
that this development would have been viable. We would therefore
like to see better recognition in the funding formulas for the
extra costs of developing in sensitive areas. We have numerous
example of affordable housing scheme in the Lake District National
Park Authority that have been successfully assimilated into the
surrounding villages and wider landscape. They serve to demonstrate
what is possible, but the cost per unit is inevitably higher.
7. THE SCALE
OF THE
GOVERNMENT'S
PLANS TO
BOOST HOUSING
SUPPLY
7.1 For communities in the Lake District
the national agenda of focusing development on "sustainable
locations" is problematic. At a regional and sub-regional
level this is taken to mean urban conurbations and "key service
centres" in Cumbria. When sustainability is viewed largely
in terms of access and reducing the need to travel, where does
this leave "unsustainable" (or perhaps less sustainable)
rural communities? We would welcome a greater understanding of
impact of initiatives like the Northern Way may have on areas
that are not included in such plans.
7.2 We would suggest that a needs-led approach,
based on local circumstances and evidence should help determine
the level of house building required in rural areas. National
Parks are living and working landscapes and need local people
living within in them to continue to manage and look after the
environment acknowledged by its very designation as being of national
importance. We now have policies and mechanisms to deliver more
housing for local people at prices they can afford, in perpetuity.
We now need to work in partnerships to address the barriers around
finance, land release, local objections and attitudes to ensure
that these policies deliver housing on the ground.
7.3 Many of our communities are suffering,
schools and shops are closing as families and people who live
and work locally are replaced by holiday lets, second homes, retirees
and out-commuters. The definition of sustainability should allow
local authorities the flexibility to consider the social and economic,
and well as the environmental impacts—both positive and
negative, of both allowing, but also restricting, new developments
in rural areas. A separation, in policy terms, of housing that
is needed to sustain rural communities from housing that the market
demands, would be particularly helpful.
8. THE RELATIVE
IMPORTANCE OF
INCREASING THE
SUPPLY OF
PRIVATE HOUSING
AS OPPOSED
TO SUBSIDISED
HOUSING
8.1 The Panel Report into the Joint structure
Plan acknowledged that the pressures on the Lake National Park
were such that its housing market "would always be distorted".[57]
So although we acknowledge and recognise the potential of shared
ownership and similar schemes to help address some of our housing
needs. In areas, like ours, where aspirations for ownership do
not match the economic realities of a low-wage economy largely
dependant on tourism and agriculture, rented solutions are still
required.
8.2 We firmly believe that numerous different
solutions will be needed to address the issues of affordable housing
problem. Our approach of local solutions to local problems would
require this issue to be informed by local policy and local decision-making.
Our research and housing needs evidence to date would suggest
a need for both rented and shared ownership solution are needed.
Although additional, more detailed, research is still needed.
8.3 Now we are able to allocate sites solely
for affordable housing, and restrict all new developments to only
meeting local needs, there won't be any opportunities for affordable
housing providing through quotas on open market sites. Instead
we are working closely with Parish Councils, local landowners
and partners to look to identify sites that could be allocated,
or allowed as exception sites for affordable housing, and looking
to our enabling role to make the schemes actually happen. This
is just one example of how the Lake District National Park Authority
has developed local solution to local problems that should deliver
the kind of affordable housing that our evidence indicates that
we need.
9. HOW THE
PLANNING SYSTEM
SHOULD RESPOND
TO THE
DEMAND FOR
HOUSING FOR
SALE
9.1 In our view, a distinction that can
be made between housing demand and housing need, in the Lake District
National Park. In other areas a more market led solution may be
required. Our view is that local circumstances and evidence should
enable different models to be developed in different areas.
9.2 The government's use of an ever-expanding
definition of "affordable housing", is undermining its
credibility. Simply providing smaller units as part of a quota
site[58]
is not affordable housing in most people's understanding of the
term. Likewise two and three bedroom apartments, with local occupancy
conditions, priced from £335,995-£445,000[59]
are not affordable to local people either. A clear definition
based on housing need (rather than demand or market forces) would
be very helpful to us.
9.3 The Lake District National Park Authority
consider that to be in housing need, a household must be:
(a) Inadequately housed AND
(b) Unable to afford to rent and/or buy on the
open market AND
(c) Have a need to live in the locality
9.4 "Affordable housing" for discounted
sale provided by a developer in Lancaster is failing to sell,
[60]but
its prices from £80,000 to £148,000 put it out of the
reach of those it is trying to help. However, instead of the economies
of the affordable housing market bringing down the prices, the
applicant sought to remove the local occupancy condition from
over half of the "affordable units". It could therefore
be argued that by assisting "key-workers" to access
housing through public subsidy, is in fact only adding to inflated
house prices and not enabling the market to re-adjust. We hope
that by restricting all our new housing units to meeting only
local affordable needs, in time we will create a new sub-market.
However, it may take time for developers to realise there is no
hope value for unfettered housing on their sites and adjust the
price paid for land accordingly.
10. THE SCALE
OF HOUSING
DEVELOPMENT REQUIRED
TO INFLUENCE
HOUSE PRICES
AND THE
IMPACT OF
PROMOTING SUCH
A PROGRAMME
ON THE
NATURAL AND
HISTORICAL ENVIRONMENT
AND INFRASTRUCTURE
PROVISION
10.1 The Granting of significant planning
permissions does not necessarily guarantee the same increase in
the level of house building. The development system in UK is such
that the gap between planning permission and build rate is often
in the hands of the development industry. We do not believe that
significant house building alone would reduce the cost of housing
to affordable levels. A whole package of housing and planning
policy, funding and fiscal measures is required.
11. THE REGIONAL
DISPARITIES IN
THE SUPPLY
AND DEMAND
FOR HOUSING
AND HOW
THEY MIGHT
BE TACKLED
11.1 We welcome the recent recognition that
there are areas in the north where affordability is a big issue.
We would affirm our view that solutions to local problems based
on local research represent the best way of addressing affordable
housing issues wherever they occur. This will not, however, address
those issues relating to the inefficient use of existing stock,
where the requirement for second homes and holiday homes to apply
for change of use may be a more helpful and sustainable solution.
ViewArticle2.aspx?SectionID=31&ArticleID=1226763
47 "Value for Money" Research by the University
of Cambridge for the ODPM. Back
48
Housing Markets- Preparing for Change by Jacqui Blenkship and
Judith Gibbons (in particular page 53). This report can be downloaded
from www.impacthousing.org.uk Back
49
More and Better Homes Conference excerpts from Yvette Cooper's
speech downloaded from http://www.odpm.gov.uk/index.asp?id=1161227 Back
50
See Lake District National Park Authority's Supplementary Planning
Document on Demonstarting housing Need (currently out for consultation)
http://www.lakedistrict.gov.uk/lake<au0,0> <xudistrict<au0,0>
<xudocs/050927<au0,0> <xufinal<au0,0> <xuspd<au0,0>
<xufor<au0,0> <xupublic<au0,0> <xuconsultation.doc Back
51
51 See SPD Supporitng Statement and Briefing Note http://www.lake-district.gov.uk/lake<au0,0>
<xudistrict<au0,0> <xudocs/consultation<au0,0>
<xustatement<au0,0> <xubriefing<au0,0> <xunote.doc Back
52
Housing Markets-Preparing for Change by Jacqui Blenkship and
Judith Gibbons. This report can be downloaded from www.impacthousing.org.uk Back
53
Housing: An Effective Way to Sustain our Rural Communities? Copes
available from Cumbria Rural Housing Trust, Redhills House, Redhills
Business Park, Penrith, Cumbria CA11 0DT. Tel (01768) 210264 email
cumbria@ruralhousing.fslife.co.uk Back
54
Planning Policy Guidance Note 3 from the ODPM. Back
55
Getting to Yes-Persuading the Public about the need for Affordable
Housing. Pages 12-19 Planning (the magazine of the American Planning
Association) October 2005 see www.planning.org for contact information. Back
56
See SPD Supporting Statement Briefing Note for more info on how
we try to do this http://www.lake-district.gov.uk/lake<au0,0>
<xudistrict<au0,0> <xudocs/consultation<au0,0>
<xustatement<au0,0> <xubriefing<au0,0> <xunote.doc. Back
57
Paragraph 4.2.18, page 128 Examination in Public Report of the
Panel into the Cumbria and Lake District Joint Structure Plan
2001-16. This can be downloaded from www.planningcumbria.org.uk Back
58
Joseph Rowntree Foundation Research "Planning Gain and Affordable
Housing" http://www.jrf.org.uk/knowledge/findings/housing/042.asp Back
59
Mountain Ash Development, Windermere http://www.charles-church.co.uk Back
60
Lune Quays Affordable Houisng Development Lancaster http://www.lancastertoday.co.uk/ Back
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