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.
| 
