Memorandum by Prime Focus (AH 66)
1. OVERVIEW
1.1 Prime Focus is a housing and regeneration
organisation operating in the West Midlands region, and currently
managing around 15,000 homes. In addition to our core housing
management functions as a Registered Social Landlord, we also
deliver a wide range of additional activities, including Low Cost
Home Ownership, housing with care and support for a number of
different client groups, community regeneration projects, and
training and employment schemes. In the year 2004-05, we completed
a total of 365 new homes, of which 182 were for shared ownership.
1.2 Written evidence is being submitted
by Prime Focus to this Committee Inquiry into Affordability and
the Supply of Housing, and the information below has been structured
using the bulleted points in the Inquiry press release. In brief,
attention is drawn to the following areas of written evidence,
which Prime Focus believes are of the greatest magnitude, within
the context of being a housing and regeneration organisation:
— Views presented on whether increases
in owner occupation will help to tackle social and economic inequalities
and reduce poverty (see paragraph 2.2).
— Views relating to the social and
economic impact of current house prices (see paragraph 2.3).
— Evidence presented on the role of
the planning system, particularly in light of current proposed
reforms to the system (see paragraph 2.7).
— Regional issues, in particular the
West Midlands, which are felt to be of importance (see paragraph
2.9).
1.3 The views expressed in this written
evidence have been gathered to reflect the wider Prime Focus Group.
2. DETAILED WRITTEN
EVIDENCE
2.1 Should we strive for increased owner occupation?
2.1.1 There appears to be an underlying
acceptance that policy direction will continue to encourage increased
owner occupation.
2.1.2 Whilst it is important that supply
is tailored to meet aspirations, it is also essential that the
reasons and thoughts forming these aspirations are fully understood.
Failure to fully understand the actual housing needs and aspirations
of the population may result in a mismatch in the longer-term
between tenure options available and those required.
2.1.3 Further changes by Government and
delivery agencies to the models and options of home ownership
which they provide may alter patterns of demand—the sole
aim of increasing home ownership is not a solution in itself.
2.2 Does owner occupation tackle social and
economic inequalities, and reduce poverty?
2.2.1 There is no doubt that household wealth
can be increased through home ownership and the associated acquisition
of equity. However, social and economic inequalities are not tackled
by owner occupation per se: the drive for mixed and sustainable
communities is the means to address the issues of inequality.
It is important not to lose sight of the basic human right to
be well housed, across all tenures, and not to create actions
that result in social housing being a last resort option.
2.2.2 Poverty reduction is a much wider
issue than housing tenure: it is about household income, educational
achievement, local labour markets and geographical disparity.
2.2.3 Current initiatives, with the laudable
objectives of increasing owner occupation in order to achieve
mixed and sustainable communities, may also have some adverse
effects and result in certain circumstances where only the more
"wealthy" sections of the population are able to buy
a home, thus potentially widening the gap between those who own
and those who don't.
2.3 What are the social and economic impacts
of current house prices?
2.3.1 Unrelenting high house prices reduce
the number of people who can access owner occupation. This results
in a smaller proportion of the population amassing equity, and
thus has an impact on longer term household wealth, creating a
wider gap between owner occupiers and households of other tenures.
2.3.2 There are risks associated with, and
a lack of confidence in, the current shape of house prices. This
has slowed down the buying and selling process, which has social
impacts. Economically, current high prices result in serious risk
for those overstretching to afford their own home.
2.3.3 There are a number of "asset
transfer" methods, which could be seen to be masking some
of the root issues associated with affordability and supply. These
include the passing down of equity to younger generations, and
the transferring of equity from communities to individuals through
the Right to Buy process. The review of the Right to Buy is timely
and essential.
2.4 What is the relationship between prices
and supply?
2.4.1 It is well documented that prices
increase as supply fails to meet demand; however, this is normally
only to such a point at which the price structure becomes overly
unrealistic for domestic incomes to afford.
2.4.2 Increasing supply to respond both
to demand for homeownership and the increasing number of (smaller)
households is an accepted policy direction, but the impact of
long lead-in times for development projects, along with those
arising as a result of demographic changes, continue to put financial
pressure on developers and customers.
2.5 Views on the Government's plans to continue
and further the boost in housing supply?
2.5.1 Much work is already underway to improve
the gathering of continuous and in-depth market intelligence,
in order that future supply is appropriate to meet forecasted
demand, in the context of a whole range of factors, including
demography, location, tenure, and so on. It is critical that this
continues.
2.5.2 Promotion of new build owner occupation
will never be the right solution by itself; rather, what is needed
is a more mixed approach and an effort to promote alternative
solutions, which strive to balance tenure breakdown in local communities,
and provide mixed and sustainable outcomes. Policy direction currently
supports this; monitoring the implementation and outcomes of policy
must now be the priority.
2.5.3 There are particular issues associated
with the first-time buyer section of the market. There is a definite
need for the potential of the diversifying social housing association
sector to increase its customer base; an area which, to date,
has not truly been tapped into. The sector will continue to prioritise
marketing itself and being "in business for neighbourhoods"
in order that supply is appropriate to need, and associated services
and support are available where required.
2.6 Is the balance of importance right for
increasing the supply of private housing as opposed to subsidised
housing?
2.6.1 The current balance matches short
term imperatives; however, we are not convinced that it is the
most appropriate. A significant amount of housing association
resources can be spent chasing and pushing through low cost home
ownership (LCHO) schemes, and yet it is also sometimes the case
that we experience difficulty in securing social rented units
on new schemes through section 106 agreements.
2.6.2 We are signed up, as a sector, to
the fact that more effort is required to improve social housing
perception, and to increase the mix of customers in the social
rented sector. Over the last two years, the housing association
sector, through the National Housing Federation (NHF) has undertaken
a sustained campaign programme to improve its image, perception
and branding. The campaign, entitled "in business for neighbourhoods,"
also has a role in communicating the three main principles of
the sector's activities, which are:
2.7 How should the planning system respond
to the demand for housing for sale?
2.7.1 The planning system reforms must address
the planning delays issue, and must also seek to resolve the way
in which local and regional planning documents can be overly prescriptive
in the long-term. Additionally, improving the usability of affordable
housing targets would also be welcomed.
2.7.2 There is a clear need to continue
to promote the re-use of buildings and land, and ensure that all
new developments are not solely in high land/house price areas.
2.7.3 The importance of local political
structures, and the impact they may have on successful delivery
of new developments, should be understood. Partnership working
with stakeholders has, over recent years, improved across the
housing sectors, and work must continue to better understand how
the more challenging relationships can be overcome, and how different
agencies with different objectives can best work together to deliver.
2.7.4 Proposals to increase the rate and
amount of land release are a concern, as it may encourage increased
development only in higher priced areas, thus not solving some
of the root problems.
2.8 Views on the scale of development required
to influence prices, and the impact of promoting such a programme
on the natural and historical environment, and infrastructure
provision.
2.8.1 The long-term environmental impact
of delivering parts of the Sustainable Communities' Plan should
be closely monitored to ensure permanent adverse impacts are avoided.
Opportunities for enhancements to design and infrastructure should
continue to be encouraged.
2.8.2 Similarly, there is a definite need
to increase the promotion of brownfield and previously used buildings
for new housing provision, in order to minimise impact on the
natural environment. It is essential that "damage" in
rural areas is avoided, but such that the resulting situation
is not either no development whatsoever, nor the creation of wealthy
dormitory towns. Several regional strategy documents include both
urban and rural renaissance in their objectives, and it is important
that focus on rural areas is not lost.
2.8.3 Geographical issues are key; recommendations
from reports such as the Lyons Review (2004) must be taken on
board and all agencies engaged in drivind forward their implementation.
Transport systems and wider infrastructures are already under
immense strain across the country; it is important that the housing
supply boost is done in tandem with other service areas to avoid
huge impact.
2.9 What are the regional disparities in the
supply and demand for housing, and how might they be tackled?
2.9.1 There are clear regional disparities
evident across the UK. The West Midlands region in which we operate
shows signs of both excessive demand/under supply and low demand/abandonment.
2.9.2 Urban areas must continue be encouraged
to absorb as much household growth as possible, in order that
urban renaissance can be successful. Rural policies generally
restrict any significant increases in supply. This is usually
and acceptable direction, but it is important that the question
may, when necessary, be asked whether policies should remain as
static as they are.
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