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


Memorandum by the Campaign to Protect Rural England (CPRE) (AH 57)

OVERVIEW

  1.  CPRE warmly welcomes the Select Committee's decision to hold an inquiry into housing supply and affordability. CPRE has engaged closely with housing debates over many years. We believe it is possible to meet the nation's housing needs while achieving wider benefits, including protecting the countryside and those qualities which make places special. To achieve this, however, will require a much more sophisticated approach than has been proposed by the Government or recommended by Kate Barker in her recent review of housing supply. We draw a clear distinction between affordable housing, by which we mean subsidised housing available in perpetuity for purchase or rent at sub-market prices, and affordability of market housing.

  2.  CPRE does not believe it is possible to build our way out of what is essentially an affordable housing problem by allowing more market housing to be constructed. Attempting to do so would:

    —  lead to dispersed, unsustainable patterns of development;

    —  increase car dependency;

    —  exacerbate the neglect and decline of urban areas and undermine urban regeneration;

    —  widen regional disparities;

    —  fail to address the lack of affordable housing or reduce house prices.

  3.  Housing development should never be considered in isolation, but in the context of broader objectives for conserving and enhancing the built and natural environment, delivering urban regeneration and securing more sustainable patterns of development. We believe decisions about the number and location of new homes should be based primarily on considerations of local need and environmental capacity, not market demand.

  4.  CPRE welcomed the change in direction in planning for housing brought about by Planning Policy Guidance Note 3 (PPG3, 2000), with its focus on steering development to urban brownfield sites, meeting local needs and applying a "plan, monitor and manage" rather than a "predict and provide" approach. PPG3 was drawn up in response to problems highlighted by the Urban Task Force, namely that the wrong type of housing was being built in the wrong place leading to problems of urban sprawl and urban decline. Since PPG3 was published the efficiency with which land is developed for housing has improved significantly with the highest ever proportion of new homes (70%) built on brownfield sites last year, while the average density of development now stands at 40 dwellings per hectare.

  5.  Through our nation-wide Sprawl Patrol campaign CPRE has strongly supported the thrust of national policy in PPG3. We have welcomed its emphasis on prioritising previously developed sites for housing and requiring more efficient use of land by raising the standards of design and density of development. Our network of volunteers have campaigned locally to ensure that PPG3 principles are implemented on the ground.

THE POTENTIAL BENEFITS AND SCOPE TO PROMOTE GREATER HOME OWNERSHIP AND THE EXTENT TO WHICH HOME PURCHASE TACKLES SOCIAL AND ECONOMIC INEQUALITIES AND REDUCES POVERTY

  6.  There are undoubtedly many benefits to home ownership. CPRE believes there are limits, however, to the extent to which home ownership can or should be promoted. We need to move beyond crude ideological claims concerning the merits of home ownership to consider the wider costs and benefits of all forms of housing. Far greater understanding of the role and value of different forms of tenure is needed. Availability of homes for rent has traditionally been important for labour mobility, while the evidence suggests there will always be some people who cannot afford to buy or rent on the open market who will require subsidised housing or cheaper market housing. A focus on extending home ownership to the detriment of other forms of tenure is not the way to tackle social and economic inequalities or reduce poverty. There is also a danger that such an approach can have unacceptable environmental impacts.

THE RELATIVE IMPORTANCE OF INCREASING THE SUPPLY OF PRIVATE HOUSING AS OPPOSED TO SUBSIDISED HOUSING

  7.  CPRE believes everyone should have access to a decent home, regardless of whether they own or rent in the private or public sector. It makes no sense to plan for a massive increase in market housebuilding when the overwhelming need is for more subsidised, affordable housing. More homes were built last year than at any time since 1995, the number built having risen for the third consecutive year. While the number of market homes built (136,000) is close to the average for the past 50 years (140,000 between 1955-2004); construction of affordable, ie subsidised, housing has collapsed. On average, more than 150,000 affordable homes were built each year in the 1950s and more than 100,000 in the 1960s and 1970s. This fell to 44,000 in the 1980s and 26,000 in the 1990s. Just 13,000 affordable homes were built in 2003 and 17,000 in 2004. Add to this the loss of affordable housing, without replacement, through Right to Buy and it is hardly surprising we have a chronic shortage of affordable housing.

  8.  A growing number of people cannot afford to buy but fail to qualify for social housing. Research by Steve Wilcox for Joseph Rowntree found that more than a fifth of younger households in England, Wales and Scotland could not afford a mortgage on even the cheapest two- or three-bedroom homes for sale in their area (Affordability and the intermediate housing market, October 2005). This figure is highest in London (35%) and lowest in the North East (7%). In 40 local authority areas, 40% or more of all younger working households can afford to pay more than a social sector rent, but still cannot afford to buy at the lowest decile (10%) point of local house prices.

  9.  This evidence suggests that we need a much more a discerning approach to housing supply. There is a need for a broader mix of housing (eg. affordable, intermediate and market) which gives priority to meeting local, identified needs, rather than an approach based on increasing supply in response to market-demand as has been proposed recently by Government in the consultation paper Planning for Housing Provision.

THE RELATIONSHIP BETWEEN HOUSE PRICES AND HOUSING SUPPLY

  10.  The relationship between housing supply and price is not straightforward. Simply seeking to increase housing supply will not guarantee that homes will be more affordable. Kate Barker observed that even a doubling of market housing provision would not actually reduce prices (Kate Barker's memorandum to the House of Commons Environmental Audit Committee, First report of session 2004-05). Research by the Institute of Public Policy Research has thrown doubt on the robustness of Kate Barker's methodology (Meeting housing need in the South East, working paper five, Commission on Sustainable Development in the South East 2005). The price of housing is hugely influenced by the wider housing market, including demand side factors. New homes comprise just a small part, around 10% of homes for sale at any one time and 1% of total housing stock. CPRE's views on Kate Barker's analysis and recommendations are set out in our report Building on Barker (2005, a copy is enclosed).

OTHER FACTORS INFLUENCING THE AFFORDABILITY OF HOUSING FOR SALE, INCLUDING CONSTRUCTION METHODS AND FISCAL METHODS

  11.  A wide range of factors influence house prices: the quality of the local environment and local schools, availability of jobs, perceptions of crime and safety, interest rates, cost and access to credit and the state of the national and international economy. House prices are highly susceptible to demand-side factors such as low interest rates.

  12.  While construction methods undoubtedly affect the cost of housing, consideration should be given to the quality of housing and resulting development: its durability, attractiveness and running costs and how it relates to the surrounding area and fulfils sustainable development objectives.

THE SCALE OF THE GOVERNMENT'S PLANS TO BOOST HOUSING SUPPLY

  13.  While the planning system is capable of facilitating more housing, there are significant costs associated with overallocating land and oversupply of housing, such as blight, congestion, land being unavailable for other uses. The current annual housebuilding rate in England (155,000) is below the level of new homes provided for in adopted and emerging Regional Spatial Strategies (170,000). Measures are needed to discourage housing developers from sitting on landholdings which have planning permission. The 14 leading UK housebuilders held around 240,000 housing plots with full or outline planning permission in 1998. This figure rose by more than a third to 331,000 plots in 2004 (CPRE analysis, 2005, copy enclosed).

  14.  We believe that the available evidence does not support the case for significantly increasing the scale of housebuilding overall, though we believe a greater proportion of homes built should be affordable. This will require a major increase in direct investment in subsidised housing for rent and part-ownership.

HOW THE PLANNING SYSTEM SHOULD RESPOND TO THE DEMAND FOR HOUSING FOR SALE

  15.  Housing development is just one of many matters which the planning system has to address. It should never be seen in isolation. Planning is not only concerned with managing development, but with conserving natural resources such as land and water, protecting landscapes; and achieving democratic consensus over the scale, nature and pace of development. Development of market housing needs to be seen in the context of wider needs, including for affordable (subsidised), housing, opportunities for employment and recreation; access to services and transport.

  16.  The requirement for planning to contribute to sustainable development and respect environmental limits is enshrined in PPS1, Delivering Sustainable Development (2005), section 39 of the 2004 Planning Act and the revised UK Sustainable Development Strategy (2005). To do its job properly, planning must address a wide range of needs and issues in an equitable way, basing policies, plans and decisions on clear evidence which looks to the long term public interest. It cannot do this if it is diverted to serve the interests of a particular sector in response to short-term market factors.

  17.  Planning authorities have, by and large, always taken the market into account when allocating land for housing. It makes no sense to allocate land for which there will never be any prospect of a market. CPRE believes that priority should be given to meeting housing needs, rather than demand, and to reviving weak housing markets in urban areas in need of regeneration. Understanding the nature of markets and demand is important and should inform, but not drive, decisions about housing provision.

  18.  Areas where demand for housing for sale is greatest are usually those with the most constraints—either because little land is available (eg Kensington and Chelsea in London) or the environment is of exceptional quality (eg the Lake District). Similarly, areas where the housing market is weakest tend to be those where the environment is of poor quality. While planning cannot not deliver development directly, it has a vital role to play in turning around the fortunes of run-down areas, prioritising and steering development and investment towards them. Planning can act as a catalyst for the development of new markets, whereas an approach based on responding to market demand is likely to fail to grasp these opportunities.

  19.  It is vital to distinguish housing need from market demand. Most of those in greatest housing need are excluded from the market, while demand is theoretically unlimited (eg in terms of aspirations for large or second homes). Attempting to meet demand in many areas would be impossible without incurring unacceptable costs—to the environment and quality of life. In some areas increasing supply might simply unleash further demand. While we should strive to meet local housing need in the most environmentally sustainable way, demand for housing needs to be carefully managed.

  20.  Too much housing built fails to meet local needs. Increasingly, in many areas, local people are being priced out of the market because housing is being bought by people moving in from more prosperous areas. In such areas employers may find it hard to recruit. It is not just a question of the cost, but of the type of housing provided. For example, London has a shortage of affordable larger accommodation for families.

  21.  CPRE believes that matching housing supply to identified local needs should be given far greater priority in the planning system. Ensuring the supply of housing better matches local need will require far greater public investment in affordable housing. Local planning authorities should be given more control over the type of market, as well as social, housing provided, in terms of size, type and affordability. CPRE regrets the Government's decision to retreat from its earlier proposals to allow this.

THE SCALE OF HOUSING DEVELOPMENT REQUIRED TO INFLUENCE HOUSE PRICES AND THE IMPACT OF PROMOTING SUCH A PROGRAMME ON THE NATURAL AND HISTORIC ENVIRONMENT AND INFRASTRUCTURE PROVISION

  22.  Kate Barker estimated a near doubling of supply (ie an additional 141,000 a year on top of current housebuilding levels) might reduce house price inflation in the long term. CPRE does not believe this scale of development is either achievable or desirable.

  23.  Were housebuilding to increase by the amount recommended by Kate Barker, assuming 60% of homes were built on brownfield sites in line with the Government's target, around 15 square miles of greenfield land would be lost each year to housing development (40% of 296,000, assuming 32 dwellings per hectare—average greenfield density achieved in 2004, Land Use Change Statistics, 20, ODPM). As noted above, supply is just one of many factors influencing house prices.

  24.  The impact of housing development extends far beyond the immediate area it occupies, through increased traffic, congestion and associated development. DEFRA's Study into the Environmental Impacts of Increasing the Supply of Housing in the UK Final Report (April 2004) highlighted significant and wide-ranging environmental impacts that could be expected from increased housebuilding, in terms of demands on resources, energy, water and minerals, and landscape and biodiversity issues. As well as harming the environment, a massive increase in housebuilding would have a questionable impact on house prices.

  25.  Research commissioned by CPRE into the implications of the proposed market-based approach to housing supply as outlined in Planning for housing provision identified major concerns within local authorities. These included increased likelihood of greenfield development; reduced incentives to recycle brownfield land and regenerate urban areas; and little affect on local authorities' ability to deliver affordable housing, a major problem in the areas studied. A summary of this research is enclosed.

  26.  A major increase in housebuilding would have implications for the quality of the environment and housing provided. Much new development in recent years has been of a poor standard, failing to contribute any sense of place and local distinctiveness, or undermining these where they exist. The use of materials and quality of construction leaves much to be desired, as the Egan review identified. While programmes such as CABE's Building for Life seek to address some of these problems, much more needs to be done. Raising standards of construction and design poses a major challenge to the development industry which pressures to deliver more and cheaper housing would only exacerbate.

  27.  Rather than simply building more homes, we need to find ways to make better use of existing buildings, by reducing the number of empty homes (689,000 in England), making better use of the existing housing stock and converting suitable empty buildings for housing. Imbalances between housing supply and demand (as distinct from need) are not as stark as is sometimes claimed. For example, while the North West has the most empty homes (127,500) followed by London (99,000), the South East, London and Eastern regions contain between them more than a third of England's empty homes. We also need to bring into use the thousands of hectares of brownfield land—enough for more than a million homes, building at current densities (40 dwellings per hectare). Anecdotal evidence from more fine grained surveys suggests to us that there is more brownfield land available than has been identified in the National Land Use Database.

  28.  Where new homes are needed, applying a sequential "brownfield first" approach to housing development, locating new housing in areas with the greatest environmental capacity and where infrastructure is already in place or can be easily provided, is perhaps the single most important way of reducing harm to the environment.

REGIONAL DISPARITIES IN THE SUPPLY AND DEMAND FOR HOUSING AND HOW THEY MIGHT BE TACKLED

  29.  We need a coherent approach to regional policy to reduce development pressure on the countryside in the most prosperous regions and encourage urban regeneration in areas with the greatest capacity to accommodate development. Addressing regional disparities will require a stronger focus on market renewal and recognition of the potential and resources of all areas in the country, not just those with the strongest economies, than we have currently.

  30.  An approach based on responding to market demand would worsen regional disparities by encouraging more growth, development and investment in the wider south east. Areas where the market is weakest, principally run down areas, would continue to be neglected. A market led approach to housing provision would worsen disparities within, as well as between, regions and foster dispersed, unsustainable patterns of development.

  31.  CPRE commends to the Select Committee the current approach to housing provision in the West Midlands Regional Spatial Strategy, published by the Secretary of State in 2004. This seeks to secure sustainable patterns of development across the region and stem the outmigration of the population to rural areas. At the heart of West Midlands RSS is a focus on regeneration. This strategy could be fatally undermined by a more market-responsive approach as proposed in ODPM's consultation paper Planning for Housing Provision, as the following extract from the West Midlands Regional Assembly's response to the consultation paper illustrates:

    "Housing land supply is being increased in the Major Urban Areas and private developers have shown increased interest in working within the Metropolitan areas, for example, more executive homes being built in the conurbation. However, in consultation over both the RSS and Regional Housing Strategy 2005, private developers have made it clear that they would prefer to see a greater release of greenfield sites outside the conurbation. WMRA fears that the proposals within the consultation paper will both undermine developer confidence within the Major Urban Areas, thus undermining regeneration in these areas, and lead to demands for an ever increasing land release and further decentralisation within the Shire Counties, as greater land release is encouraged where prices are high. This proposed approach appears to be highly unsustainable and wholly against the principles of the West Midlands RSS."

  32.  CPRE believes the current PSA target on reducing regional disparities, while welcome in principle, needs to be amended to address these concerns. The distribution, scale and nature of housing provision have profound implications for regional disparities. Locating the majority of new housing in the south is likely to widen, not reduce the difference between regions' growth rates. Moreover, many factors contribute to prosperity and well being, which cannot be measured by economic indicators alone. Quality of life and the environment, access to services, jobs and leisure are equally important and should be taken into account.

THE WAY FORWARD

  33.  Government aspirations to achieve "sustainable and inclusive patterns of urban and rural development" (Planning for housing provision, paragraph 6, page 10) are more likely to be realised where new housing is based on identified local needs, environmental capacity and takes account of wider objectives than with an approach predicated on market demand.

  34.  Our wider aspirations and suggestions for policy reform are set out in our Housing Manifesto (a copy is enclosed). PPG3 and the Urban White Paper set a good basis for planning for housing. To achieve continuing success, and to tackle the problems of lack of affordability, other measures are needed which complement, rather than undermine, this approach.





 
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