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

Memorandum by Prime Focus (AH 66)


  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.


2.1  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:

    —  Customers.

    —  Neighbourhoods.

    —  Excellence.

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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