Memorandum by South Ribble Borough Council
Affordable housing can only be delivered
with some form of subsidy. A clear steer is required from central
government on how any subsidy should be given.
Research needs to be undertaken on
the British Housing Market and where subsidy should be made (eg
home ownership or social rented housing).
The problems that home owners already
have in maintaining their own homes especially the elderly and
those on the margins of owner occupation.
The promotion of and reliance on
Home ownership does not assist local authorities discharge their
The government needs to conduct research
on the interplay within housing markets.
Pursuing policies of homeownership
does not assist in tackling social and economic inequalities and
help reduce poverty. In fact the converse is probably the case.
The problems of asset rich income
poor older people and home maintenance.
Diminishing numbers of social rented
properties coming forward from Housing associations as affordability
becomes an issue for tenants. The Right to Buy/Right to acquire
does nothing to help local authorities discharge homelessness
South Ribble is testing out new ways
of assisting Key workers onto the housing ladder.
Need for more and different models
of assistance and the need for local authorities to play a role
in making decisions on forms and levels of assistance.
Issues of using planning gain to
deliver affordable housing and the need for other forms of subsidy
to local authorities to be available.
The problems of the North not being
just about low demand but the need for high demand areas to be
in the picture.
The possible influence of the Northern
Way on the Central Lancashire city Region Core area.
Pressure on Green belt and on rural
Care needs to be taken on relying
on supply and demand to influence house prices. Homes are not
just about bricks and mortar and the home as a product needs to
be looked at.
1. Potential Benefit and scope to promote
greater home ownership
1.1 By definition (whichever way it is defined)
affordable housing can only be delivered with an element of subsidy.
How this subsidy is applied is crucial to who can afford market
housing, that is subsidised. Housing can be subsidised through
bricks and mortar (Housing Corporation Grants, Local authority
assistance or S106 Planning Gain). In additional subsidy can be
given to individuals. This was at one time given through Mortgage
Tax relief which was phased out by the previous Tory Government.
Some countries still offer mortgage tax relief for first time
buyers but this is withdrawn as people remain in the home ownership
1.2 A steer is required from Central Government
on how any subsidy should be given.
1.3 The United Kingdom has probably one
of the highest rates of home ownership in the world. Why such
a reliance on owner occupation? This promotion of owner occupation
at the expense of social rented accommodation has significantly
influenced peoples perception as rented housing as being "of
the last resort" and has led to sink estates and lack of
social cohesion. Simply getting more people to buy their rented
accommodation will not bring about a better society or improve
social cohesion but will make it worst by further stigmatising
people who because of necessity have to rent.
1.4 Research need to be undertaken on the
British Housing Market and where subsidy should be made.
1.5 Too much public money is spent on promotion
of owner occupation at the expense of providing decent affordable
housing for people to rent and on assisting existing owner occupiers
in maintaining their homes.
1.6 Home ownership comes with repair responsibilities
and for many people all their financial resources go on paying
for the roof over their head and the state it is in becomes irrelevant.
The largest area of neglect is not in the public sector but in
the private sector due to people being unwilling or unable to
maintain their own homes.
1.7 The government and financial institutes
should look at promoting responsible home ownership not just home
1.8 In South Ribble we have a fairly balanced
housing market. No areas of housing problems either in the social
rented sector or in the owner occupied sector. It is a good place
to live with good schools and low crime rates. Owners occupation
is above the national average at 84%. The area was previously
a New Town area and the council transferred it stock 12 years
ago, the first in the North West to do so. When asking local residents
what they want the first issue raised is information on what they
can do to maintain their homes so that they can remain in them
as long as possible (not what grant assistance they can receive)
and secondly the fact that their children cannot afford to purchase
a property locally (average house prices have doubled over the
last seven year sand now stand at above £150k or seven to
eight times the average income for the area of £17k). With
a small private rented market and only 10% of the properties in
the area being available through social landlords the future is
bleak for young people.
1.9 Government needs to be aware of the
housing market per se and not class the North as an area of low
demand when in fact it contains areas with some of the highest
values in the UK and property prices vary so much. Affordability
is not just about prices but also about the relationship to income
as well as on entry level and ability to enter the housing market.
1.10 The benefits of and scope for greater
home ownership needs to be looked at with regard to where any
form of subsidy should be made. While it is of benefit to some
it must be noted that it will only be able to assist some people.
It does not help local authorities in discharging their obligations
on homelessness. The vast majority of our clients are women fleeing
domestic violence, relationship breakdowns and young single people.
With out more units of accommodation for rent the ability of council's
to assist with homelessness will diminish as fewer and fewer properties
become available from Housing Associations (tenants unable to
purchase properties in the private sector, those buying who have
the right to buy/right to acquire). The increase in home ownership
adds to the pressure on social rented accommodation.
The government needs to conduct research on
the interplay within the housing markets.
2. The extent to which home purchase tackles
social and economic inequalities and reduces poverty
2.1 In South Ribble, or indeed within Central
South Lancashire it is not the view of the local authorities or
partner Housing associations that pursuing a policy of promoting
owner occupation tackles social and economic inequalities.
2.2 Many of the people that come to us as
homeless come from owner occupation. When (and they do) relationships
fail then it is the women (with children) who apply as homeless
and with little equity from the sale of the property and no job/opportunity
to purchase a property, then social rented accommodation is the
2.3 Owner occupation for those on the margins
of owner occupation also bring with it the inability to maintain
their home. They are then trapped in that property/or that neighbourhoods.
While possibly not a real issue in South Ribble this scenario
has been found to be a problem in areas where low demand is now
2.4 What we do have however in South Ribble
is asset rich older people but who are income poor. Many in our
area have very small occupational pensions (ex British Leyland
or British Aerospace for example). This puts then out side of
Income Support or Pension Credits but that small pension with
the Retirement Pension means that they miss out on much assistance.
2.5 It is suggested that ODPM look at the
housing market for social rented accommodation and look at issues
of low incomes on home owners and why Home Improvement Agencies
are so successful in providing assistance.
3. The Economic and Social Impact of current
3.1 Availability of RSL properties for rent
has almost halved over the last three years and it is believed
that most of this is due to rising house prices in the South Ribble
3.2 The four local authorities in South
Lancashire (South Ribble, Preston, Chorley and West Lancashire)
are currently piloting a demonstration project that is looking
at assisting Key Workers in the area and to get a step on the
home ownership ladder. What we have found so far is that there
is a need for low level assistance (around £10,000) to help
meet the affordability gap. Successful applicants are obtaining
certificates of what a finance company will let and grants are
being made available to meet the cost of that offer and the lower
end of the local housing market. Purchaser shave to demonstrate
value for money by assessing the market themselves and helping
to minimise the grant assistance. These successful applicants
at the end of the day represent those workers paid at the higher
level of income in the area and many of the applicants were found
ineligible for the scheme as home ownership at the current house
price level in the area is beyond their reach.
3.3 As part of the Affordable Housing partnership
all four local authority waiting lists for home ownership has
been merged and applicants on the list will be kept informed of
other schemes that come forward.
3.4 The government needs to look at a variety
of models to assist people become homeowners and not to rely on
just a few.
3.5 Local authorities should be freed to
look at local response to affordable housing and indeed assisted
with resources to help fund these schemes.
4. The relationship between house prices
and housing supply
4.1 The relationship between house prices
and housing supply seems to be in conflict, certainly in South
Ribble. This is a popular area to live and a popular area for
developers to develop. There is no shortage of land for development,
but the low strategic requirement in RPG13 has meant that a "moratorium"
situation now exists in South Ribble. Land allocated for housing
in the existing Local Plan has had to be included in the moratorium,
illustrating that it is not local planning policy that restricts
supply, but RPG13. It is hoped that the current review of RPG13
will rectify this situation, by a sizeable increase in the strategic
4.2 The moratorium has undoubtedly raised
prices. In addition, because only small windfall sites are permitted,
the council cannot require developers to provide affordable housing
through s106 agreements. The impact of the moratorium has arguably
been more acutely felt in the supply of affordable housing, which
has completely dried up as a result.
4.3 The council is looking at the need to
amend its policies on affordable housing, and would ideally like
to require even small developments to contribute to the provision
of affordable housing, as already occurs for the provision of
public open space. In this regard, the thresholds set in the forthcoming
PPS3 will have a great impact on the supply of affordable housing.
4.4 Another threat to land supply is posed
by PPG3, with its emphasis on brownfield land. The borough's brownfield
land is situated mainly in its industrial areas. These are predominantly
post-war employment premises, for which there continues to be
high demand. However, the value of such sites for housing exceeds
their value for employment purposes, and many businesses are seeking
to cash in on this residential land value. The unintended consequence
of PPG3 in this borough is likely to be the loss of local employment
sites, with negative consequences for sustainability. The single
most important change to PPG3, to release land for housing, would
be a more relaxed approach to the use of greenfield sites. In
this borough, this would be the most sustainable option.
5. The scale of the Governments plans to
boost housing supply
5.1 This seems to be all concentrated in
the South of England with a perception that anything in the "North"
is low demand and affordable.
5.2 House prices in South Ribble are currently
running at seven to eight times average incomes. South Ribble
currently undertake an annual Housing Affordability Statement
which seeks to match incomes to average house prices. An average
"affordable" price for a property in South Ribble is
currently around £70,000. By definition half of all those
seeking accommodation (ie below the average) cannot afford a property
at £70,000. The current average house price (as per the Land
Registry) is around £150,000 per property. House prices in
the borough start at around £100,000.
5.3 Landowners are fully aware of the high
values of residential land. In the past the Commission for New
Towns purchased large swathes of land at agricultural prices,
for new housing development. A similar mechanism could work well
5.4 Government need to look at affordability
issues in the North of England and in the rural areas. There may
be a useful role for urban development corporations in such areas,
with the specific remit of acquiring land for housing. In this
borough, English Partnerships still hold large swathes of agricultural
land (allocated in the Local Plan as "safeguarded for future
development"). The release of this land for a nominal sum
could help supply much of the borough's affordable housing needs.
6. How the Planning system should respond
should respond to the demand for housing for sale/the relative
importance of increasing the supply of private housing as opposed
to subsidised housing
6.1 These two points can be taken together.
The Planning system is only responsible for the number of dwellings
built and need only ensure that land is brought forward for development.
Tenure is then negotiated as part of a S106 agreement or a subsidy
is sought for development from the Housing Corporation. The time
taken to obtain any funding from the Housing Corporation is too
slow to meet many of the good offers made by private developers
on their sites. What local authorities end up with is a small
number of what is loosely termed affordable properties (ie they
are cheaper than what developers are putting on the site and go
nowhere to meeting local needs). Without subsidy affordable housing
cannot be provided. Generally new build market housing in South
Ribble costs over £200,000. Even if developers are forced
to build smaller, cheaper properties by compromising on design,
layout etc, then what is built is still valued at over £150,000.
At this level Housing Associations are unable to obtain grants
from the Housing Corporation for the properties as they are above
Total Cost Indicators for the area. In order to secure some elements
of affordability in South Ribble the council has had to reach
agreements with developers to provide less properties but at a
6.2 Developments of high market value houses
(four/five bedroomed detached) yields the greatest profit to be
utilised as planning gain to secure the highest possible number
of affordable houses. However, this does not meet the need for
small starter homes, smaller retirement apartments, and mid-sized
medium value market homes. To supply these market needs requires
an unfortunate trade-off with the amount of planning gain available
for affordable housing. Cross-subsidy from developers is therefore
insufficient, if the planning authority seeks to ensure a good
mix of house types as required by PPG3.
6.3 Financial resources should be made available
to local authorities to make the decisions locally about what
it gets involved in. The system as it stands is at best cumbersome
and at worst not workable.
6.4 Having transferred its housing stock
in 1994 the council re cycled the capital receipts from the transfer
into affordable housing using Local Authority Social Housing Grant.
This was local decisions meeting local needs. In all some £9
million was re cycled producing over 400 additional units for
rent and sale over a 10 year period. While the council now does
not have the necessary capital finance to do this the principle
of local decisions to meet local needs remains and government
is urged to review how subsidy is given.
6.5 While supporting the work of our neighbours
and colleagues in East Lancashire and the work of the Pathfinders,
never the less it needs to be asked why public money is going
to bolster areas where people do not want to live but nothing
goes to areas where people do want to live thus making homes more
6.6 Government are therefore asked to look
at how resources are given out and at supporting local authorities
in high demand areas to meet the affordable housing gap.
7. The scale of housing development required
to influence house prices and the impact of promoting such a programme
on the natural and historical environment and infrastructure provision
7.1 This approach was undertaken in the
1960's and 1970's. It was called New Towns and in those days (until
1984) South Ribble was part of the Central Lancashire New Town.
This expansion and growth has continued to this day and this is
recognised in the Northern way with this area being the core of
the Central Lancashire city Region.
7.2 South Ribble has huge tracks of green
belt and is semi rural in nature. Any large growth of development
will undoubtedly put pressure on these areas. However, large development
will also fund important transport infrastructure that will ease
local congestion and contribute to resolving some of Preston's
serious congestion issues. These include the completion of the
Lostock Hall Link Road, a park and ride in Penwortham to ease
congestion into Preston, and improved public transport provision.
None of these important transport schemes is likely without associated
development to fund them.
7.3 Similarly, in the absence of alternative
funding, large scale development is required to subsidise the
provision of affordable housing in the borough.
7.4 There is no evidence to suggest that
large scale building programmes would force down prices, indeed
the opposite is the case. The former ROF site while lies in both
South Ribble and Chorley local authorities areas is a Rural Village
concept. House prices here actually have an additional premium
on the location despite there being little infrastructure in place.
The attraction being that all the properties in the area are brand
7.5 Care needs to be taken in relying on
demand and supply to influence house prices. The brand "home"
is more than just bricks and mortar. Issues in the Pathfinder
regions are demonstrating this. It is not just about areas of
low demand: it is also about the product that is provided and
while what is provided is left to the market and to private developers
they will provide properties that do not match need but will match