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


Memorandum by the South East England Regional Assembly (SEERA) (AH 69)

  The South East England Regional Assembly welcomes the opportunity to submit evidence to the ODPM Committee's inquiry into affordability and the supply of housing.

  The Regional Assembly has responsibilities in the three key areas of advocacy, accountability and regional planning. In our advocacy role we provide a strong credible voice for the region, engaging and representing our member organisations and, through them, the wider public, and working to influence Central Government. As Regional Planning Body, the Assembly is responsible for proposing strategic planning and transport policies to Government, and as such we are currently preparing the South East Plan. This is our term for the Regional Spatial Strategy (RSS) for South East England. The document sets out a twenty year vision for the region and provides the statutory regional framework that forms the context for preparation of Local Development Documents and other strategies and programmes that have a bearing on land use activities. Part One of the Plan, comprising the core regional policies, was handed to Government on 29 July 2005. The Regional Assembly is also represented on the Regional Housing Board (RHB). The Board has responsibility for preparing the Regional Housing Strategy (RHS) which sets out priorities for housing in the South East region and advises ministers on investment allocations for affordable housing. The latest RHS for the South East was published in June 2005.

  All of this means that the South East England Regional Assembly is uniquely placed to offer a regional perspective on affordability and the supply of housing in the South East. It also means that although our submission is based on original work, it is work that has already been published. Because our submission is based on published policy documents and research reports, it is quite short, concentrating on a number of key points. For ease of reference I am enclosing a copy of the relevant pages from the South East Plan, the South East Regional Housing Strategy and a copy of our recent response to the ODPM consultation paper on Planning Provision for Housing.

THE NEED FOR AFFORDABLE HOUSING

  The South East is one of the most expensive regions in which to buy or rent a home, second only to London in terms of affordability. The cost of housing is a major barrier to continued economic growth, contributing to significant problems in recruitment and retention and longer distance commuting which, in turn, adds to levels of road congestion, pollution and reducing air quality. High housing costs also have potentially serious social consequences. The failure to meet the housing needs of the most vulnerable and lower paid has been shown to affect educational achievement and health.

  Rates of new affordable housing provision in the region have been running well below the rate required to meet existing needs. This has been exacerbated by the provisions of Right to Buy and Right to Acquire legislation which have resulted in a net reduction in the size of the affordable housing stock since 1991. Levels of homelessness in the region are such that most new social rented housing is now being targeted at this group. Research undertaken on behalf of the Regional Assembly shows that the failure to deliver sufficient affordable housing in the past has resulted in a backlog of unmet housing need amounting to 29,000 households who are in unsuitable housing and who cannot improve their situation in their own homes and who are unable to afford market prices.

  To address these problems, there needs to be a significant increase in affordable housing provision across the region. It is ironic that the Regional Growth Areas are not the areas in the South East where the problems of affordability are most acute. Neither the Growth Areas, nor such major greenfield development as may be forthcoming elsewhere, will solve all the region's affordable housing shortages. Indeed the South East Plan is clear that affordable housing needs, particularly those for social rented housing, should be met where they arise.

  The South East Plan defines affordable housing in the following way:

    ". . . that provided with a subsidy to enable the asking price or rent to be substantially lower than the prevailing market prices or rents in the locality and which is subject to mechanisms that will ensure that the housing remains affordable for those who cannot afford market housing. The subsidy is provided from the public sector, usually through a local authority or registered social landlord, or from the private sector through planning obligations. This definition covers housing for social rent, shared ownership, low cost home ownership and sub-market rent".

  The South East Plan also establishes that across the region as a whole, 25% of the housing provided needs to be social rented accommodation and an additional 10% should be provided as shared-ownership, low-cost home ownership and sub-market rent. These targets are based on work carried out for the Regional Assembly by the Cambridge Centre for Housing and Planning Research.

  The RHS also focuses on the shortfall of affordable housing provision and emphasises the need to increase the supply of new affordable homes to meet a backlog of housing need and reduce homelessness.

THE RELATIONSHIP BETWEEN HOUSE PRICES AND AFFORDABILITY PROBLEMS

  The Regional Assembly's Regional Planning Committee has rejected the view that rising house prices and affordability problems are in large part a consequence of long-term under-supply of housing and a planning system that does not take adequate account of information about the market and respond accordingly. Kate Barker's argument is that by making more land available, the supply of housing will increase and affordability will improve. However, it is our view that Barker's economic model fails convincingly to demonstrate a link between housing supply and the degree of price adjustment that would result. Yet the extent to which simply increasing land supply would resolve the problem of affordability hinges on the credibility of this central tenet.

  One of the reasons why the overall supply of new housing decreased during the 1990s was a fall in output by the social sector. The supply of market housing, on the other hand, remained relatively constant in the South East. The reason for the decrease in the supply of new affordable homes was not planning policies restricting the supply of land: our own monitoring data shows that during a period of successive shortfalls in completions against planned housing provision, the supply of land was increasing. Rather, it is the availability of public funding, and in particular under-investment in social rented housing, which has been responsible for high levels of housing need and homelessness.

  The most appropriate way to help those in genuine housing need is to increase investment in affordable housing. This is acknowledged in the South East Plan, and by the RHB which has identified a significant increase in affordable housing as its top priority in the RHS. In fact, the RHS expresses doubt about the financial sustainability of further increases in outright home ownership and sees a need to shift the tenure balance in favour of social renting and shared ownership.

PLANNED LEVELS OF HOUSING PROVISION IN THE SOUTH EAST

  The South East Plan sets out the level of housing to be provided in the region over the next twenty years. The level considered by the Regional Assembly to be appropriate is an average of 28,900 homes per annum. This figure is based on a range of economic, environmental and social factors. These include likely housing need and demand over the Plan period and a wish to eliminate the backlog of unmet housing need at 2001. The level of provision also takes into account the results of our public consultation on the South East Plan. The consultation, comprising face to face surveys, a postal questionnaire and written responses, revealed sharply divided views on future levels of growth. A statistically representative survey undertaken by MORI showed that 38% of those questioned supported housing growth at 25,500 homes per annum, 35% at 28,000 per annum and 22% at 32,000 per annum. By contrast the self-completion questionnaire sent to households across the region showed that 68% favoured 25,500 per annum, 20% 28,000 per annum and 9% 32,000 per annum.

DELIVERY WITHIN THE PLAN-LED SYSTEM

  In the past there has been rather more attention paid to making land available for housing than to delivery of housing itself.

  The need for a greater emphasis on delivery is reflected in the RHS which seeks to increase the supply of housing by promoting measures such as the use of Modern Methods of Construction, investment in a brownfield land portfolio to supplement the work of English Partnerships and additional investment in affordable housing such as Real Estate Investment Trusts, as well as by prioritising the RHB's investment priorities. Regional spatial strategies also place a much greater emphasis on implementation and delivery, and the South East Plan looks to local authorities to be much more pro-active in managing the delivery of housing through the planning system. However, the Plan recognises that although local authorities have an important role to play, they rarely control all the factors influencing housing delivery. These other factors are wide ranging and include landownership and infrastructure provision.

  There are opportunities to facilitate delivery of housing through sympathetic land ownership and potential funding. This is particularly important in the South East region which has a substantial portfolio of publicly owned land, particularly land held by the defence and, to a lesser extent, health sectors. Reviews of health sector land and property holdings have already been undertaken and strategic land releases are underway, with transfers to English Partnerships. The Ministry of Defence has also embarked on a fundamental, long-term review of its operational requirements and landholdings. This review is likely to lead to the release of significant land and property across the South East. Some of these sites offer considerable potential and their public land ownership could assist implementation.

  The role of infrastructure provision in delivering the region's plans for housing should not be under-estimated. Work on the draft RSS for the South East has highlighted wide ranging concern about the inadequacy of existing physical and social infrastructure and its inability to respond to scales of growth proposed over the next 20 years. A particular concern is that there has been a serious time lag, with infrastructure provided several years after development has taken place. The timely and assured provision of infrastructure will determine the deliverability and sustainability of the Government's proposals for improving the supply of housing.

  It is the plan-led system, and the certainty and predictability it provides, that ensures efficient use of resources by releasing land for development in phase with infrastructure provision, and plays an important role in integrating sustainable development objectives. The challenge is not just to build more homes. There is a real danger that with pressure for much faster delivery it will be much harder for local authorities to plan for high quality housing within sustainable communities that successfully meets the needs of the present as well as respecting the needs of future generations. Spatial planning must balance the full range of economic, social and environmental objectives that underpin sustainable development.

Paul Bevan

Chief Executive

  The following background papers were submitted by the South East England Regional Assembly:

  AH 69(i)  Draft South East Plan Part 1: July 2005, Section D3—Housing.

  AH 69(ii)  "South East Regional Housing Strategy", 2006 onwards.

  AH 69(iii)  ODPM Consultation Paper "Planning for Housing Provision" South East England RA Response, 9 September.

  Due to their length, copies are available from the Committee Office on request.





 
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