Memorandum by the Commission for Rural
Communities (CRC) (SRH 27)
INTRODUCTION
1. This paper outlines the CRC's views in
respect of the supply of social and private rented housing, specifically
in the rural context.
THE COMMISSION
FOR RURAL
COMMUNITIES
2. The Commission for Rural Communities
was established in March 2005, initially as an operating division
of the Countryside Agency. From 1 October 2006 the Commission
was formally established as a statutory independent body.
3. The Commission provides independent advice
to government and others and works to ensure that policies reflect
the real needs of people living and working in rural England,
with a particular focus on tackling disadvantage.
4. We have three key functions:
Rural advocate: the voice for rural people,
businesses and communities.
Expert adviser: giving objective advice to
government and others.
Independent watchdog: monitoring and reporting
on the delivery of policies.
5. Access to suitable and affordable housing
is a critical issue facing many people living and working in rural
areas. Raising understanding of the issues involved and identifying
possible solutions is a high priority for us and social housing,
specifically social rented housing, has an important role to play,
along with other tenure options such as low cost home ownership
and private rented accommodation. We consider that a wide range
of "products" should be offered which can be tailored
to meet particular circumstances, offering more choice—
and less stigma—and made up of different combinations of
public, private and community resources. It will be the task of
local planning and housing authorities to identify needs within
rural communities and facilitate appropriate solutions.
6. We welcomed the creation of the Government's
Affordable Rural Housing Commission (ARHC), and endorsed the overwhelming
majority of the recommendations detailed in the final report that
was published in May this year. The CRC submitted detailed evidence
to the Commission and some of our evidence to this inquiry draws
directly from this evidence.
7. Rural housing stocks are dominated by
owner-occupiers and compared to urban areas social rented homes
make up a far smaller proportion of the whole housing stock available.
For example, in those settlements defined as less sparse villages
(using the rural definitions developed by the Countryside Agency,
Defra and ONS) 10.3% of households live in social rented homes,
compared to 21.1% in less sparse urban areas. Within rural areas,
the smaller settlements tend to have lower levels still of socially
rented housing, when compared with market towns; [84]for
example providing homes to 4.9% of households in less sparse hamlets
and dispersed dwellings, compared to 14.5% in less sparse town
and fringe areas.
LEVEL OF
PUBLIC FUNDING
REQUIRED TO
MEET SOCIAL
HOUSING NEEDS
8. Current levels of Social Housing Grant,
together with cross-subsidies from planning agreements with developers
of private market housing, are insufficient to meet rural needs
for affordable housing to rent and to enable low cost home ownership.
9. We believe that there needs to be a significant
increase in the funds available for rural affordable housing.
Whilst much of this will need to come from the public sector in
some way, we also consider that mechanisms to increase the potential
contribution from private financial sources need to be thoroughly
explored.
10. The ARHC identified a declining level
of local authority resources being used for new affordable homes,
together with levels of Housing Corporation funding for rural
areas below their per capita share. It recommended that funding
for rural affordable housing should be increased to reflect levels
of need. They also recommended that over the "next few years",
11,000 units of affordable housing of all kinds, should be delivered
each year in settlements with populations of under 10,000. This
figure was reached by estimating the rural proportion of the total
amount of social housing needed in the Barker Review, plus a rural
cut of the Government's planned low cost homeownership delivery
programme.
11. In comparison, following our own research[85]
the CRC is calling for between 14,000 to 19,000 affordable homes
in rural areas per year to meet newly arising need. [86]This
shows need at significantly higher levels than previously thought,
suggesting public funding will need to be increased significantly
to meet growing demand.
12. We therefore welcome the Governments
increased funding for new affordable housing in rural areas through
the Housing Corporation's National Affordable Housing Programme
to enable 2,303 new affordable homes in villages under 3,000 population.
However, from both the ARHC's calculations and our own on the
number of households currently in housing need, this is still
insufficient. The ARHC have called for levels of funding going
to rural settlements to be, at a minimum, proportionate to their
share of the country's population with 13% going to settlements
of less than 3,000 and 7% to settlements of between 3,000 to 10,000.
13. But at the same time, as reliable figures
for the numbers of households in housing need in rural areas are
published, the stock of social housing in rural areas is declining
further. New homes built through the Housing Corporation's rural
programme are not keeping pace, with losses to the social housing
stock through the Right To Buy and, to a lesser extent, the Right
to Acquire.
14. Since 1979, in significantly rural or
predominantly rural authorities, 484,000 local authority homes
have been sold through Right to Buy. Even in recent years, when
the annual numbers of homes sold have reduced, the numbers of
affordable homes being sold in rural areas are greater than those
being built. Although there are safeguards in the legislation
for designated rural areas, to allow for buy-back, once a house
is lost to the social rented sector in this way it is often impossible
in practice for it to be brought back into it. This is because
of the typically high house prices in most rural areas and insufficient
levels of social housing grant available to enable buy-back by
a registered social landlord. We welcome the Housing Corporation
prioritising grant funding for buy-back under their rural programme
for all grant funded properties provided in small settlements
of under 3,000 population and we will be interested to see how
many of these properties have been successfully brought back into
affordable housing use.
15. A pressing issue is that this decline
in social housing stock has been accompanied by continued high
levels of rural homelessness. In 2004-05, 3.8% per 1,000 households
in rural areas were accepted as homeless and in priority need.
In England the national figure was 5.6% per 1,000 households and
for urban areas this figure stood at 6.8%. Considering the lack
of availability of housing stock and tenure types in rural areas,
it is clear this could be contributing to the relatively high
homelessness figures in rural communities, when compared to urban
and national figures.
16. Most rural communities, particularly
in the more attractive and accessible areas, are characterised
by inaccessible housing markets, with low household incomes and
expensive housing markets. Our own research85[87]
suggests that, overall, 45% of newly forming households in rural
England are unable to access their local housing market. This
can also be illustrated by ratios of house prices to incomes.
Our State of the Countryside Report 200686[88]
used lower quartile house prices and lower quartile household
incomes to show the challenges faced by new households attempting
to break into the housing market. The report concluded that "with
the notable exception of London and high-demand urban markets,
such as Cambridge and Oxford, it is clear it is the rural areas
of England where houses are least affordable" and that "the
greatest affordability gaps are generally found further from the
cities and larger towns, where house prices hold up but incomes
fall away".
17. While therefore it is right for policy
to support the legitimate aspirations of home ownership, through
for example, the recently introduced HomeBuy scheme, we would
like to see more resources directed towards social rented housing
to address homelessness and meet the needs of low income families
who might never have the necessary funds to get a foot on the
housing ladder. Even the resale value of shared ownership schemes,
in areas of high market value, are becoming increasingly out of
reach for low to medium income households.
18. Although there is some evidence that
young people are gaining more access to capital in order to enter
the housing market (for example with support from parents), the
continued rise in property prices in rural areas is leaving very
substantial numbers of potential local house buyers without any
hope of so doing—even with support from the Government's
homebuy schemes.
PRIVATE RENTING
AND HOUSING
BENEFIT
19. Due to high levels of owner occupation,
private rented accommodation plays a significant role in rural
communities and in particular, the smallest rural settlements.
For instance. in sparse hamlets and isolated dwellings 18.7% of
households live in private rented accommodation, compared to 13%
in sparse villages and 11.8% in sparse urban areas. As in urban
areas private rented accommodation provides accommodation for
those unable to enter into property ownership and who do not qualify
for social housing; particularly for young people private renting
often provides the only housing option.
20. Although the private rented stock is
proportionally larger in rural areas, issues of condition of the
stock, security of tenure and affordability prevent many households
from entering the sector. In particular, young people tend to
be effectively excluded from the private rented sector in rural
areas. A significant factor is the effect of the Single Room Rent
housing benefit restriction. In many rural areas shared houses
and bed-sitter accommodation are extremely rare. Where they do
exist rent levels tend to be higher than the Single Room Rent
entitlement in any given area. A survey by Centrepoint of its
rural youth homelessness network in 2002 found that the changes
to Single Room Rent in 2001 had made little difference to young
people in rural areas.
21. Also, particularly in areas where there
is a buoyant tourism sector, the demand for private rental accommodation
has an inflationary effect on rent levels. Landlords in these
areas are in a position to be selective about whom they choose
for tenants and many are simply not interested in renting to young
people on benefits.
22. Therefore, while the private rented
sector has a part to play there are inherent difficulties attached
to it. Not least is the question of affordability and security
of tenure. Private rent levels are subject to the same inflationary
market forces as house prices. As with home ownership many households
are increasingly likely to be priced out of the market. This can
only serve to underline the need for increased investment in social
housing to rent, particularly those rural areas of high value.
GEOGRAPHICAL DISTRIBUTION
OF SUBSIDIES
FOR AFFORDABLE
HOUSING
23. Regional Housing and Regional Spatial
Strategies should not only reflect the specific needs of rural
areas, but also deliver the necessary resources to meet those
needs. But their main focus tends to be on urban renaissance,
with the result that rural areas generally come low down in the
hierarchy for development. Allocations for rural housing therefore
fall short. Regional strategies need to be adequately rural proofed
and need to translate into equitable outcomes for rural areas.
24. One of the ARHC's recommendations called
for a more positive approach to planning, as encompassed in the
draft Planning Policy Statement 3: Housing. We hope the new PPS3,
to be published this autumn, will confirm the Government's view
for Regional Spatial Strategies and for planning authorities (including
National Park Authorities) to be more positive about allocating
housing (affordable and market) in rural areas. We also welcome
the attempts by Government to increase the effectiveness of investment
by ensuring regional housing and planning policies are properly
aligned by inviting the Regional Assemblies to take responsibility
for the work of the Regional Housing Boards. It is important that
the supply of social rented housing in rural areas is taken up
at a regional level within the Regional Housing and Planning strategies.
THE ROLE
AND THE
EFFECTIVENESS OF
THE PLANNING
SYSTEM; PLANNING
POLICIES AND
STRATEGIES
25. In our recommendations to the ARHC we
argued that rural planning policies needed to be developed which
are more positive, flexible and sensitive to social, economic
and environmental considerations.
26. The Government's response to the Barker
Report, together with the draft PPS3, point to a more positive
approach to allocating housing in rural areas to meet both the
growth needs of these areas and the need for affordable housing.
27. As stated above, we welcome the attempt
by Government to increase the effectiveness of planning and housing
at regional level by aligning housing and planning policies under
the umbrella of the Regional Assemblies. This approach must be
"rural proofed" to meet the needs of rural communities
and adopted and expressed through Regional Spatial Strategies
and Local Development Frameworks. For example, we would encourage
regional strategies to re-introduce the rural target in their
strategies to incorporate social rented housing provision and
low cost home ownership.
28. In order to deliver more social rented
housing in rural areas we also recommended to the ARHC that stronger
agreements with developers are required, with mixed packages of
market and social housing, in order to meet a wider range of housing
needs and demands. There is a need to set lower site thresholds
(than the indicative minimum threshold of 15) above which affordable
housing can be sought, where viable. In addition, higher proportions
of affordable housing (than the rest of the plan area) should
be insisted upon, where deliverable.
CONCLUSION
29. There is clear evidence of a need to
increase the supply of social rented housing within rural communities
and, by doing so, to provide tenure options that are affordable
and secure for households on low and even medium incomes.
30. As the gap between house prices and
income levels continues to rise, the need for rented social housing,
as an alternative form of tenure to open market housing and low
cost home ownership, will increase. Within rural areas the stock
of rented social housing has decreased dramatically through the
Right to Buy, with housing associations unable to replenish stock
at the rate of loss.
31. Although this submission is primarily
around the provision of social rented housing in rural areas,
there is also a role that private rented accommodation can play.
However, the very elements of private renting that attract individuals
to purchase properties as a buy to let investment, (ie market
rents and short hold tenancies), do not make this a suitable option
for many residents within rural communities who are looking for
secure accommodation at affordable rents related to their earning
power.
32. We are currently undertaking further
research on rural housing needs, including levels of affordability
(and the scale of the "intermediate market"), the motivation
and effects of migration by young people from rural areas, and
also on access to capital.
84 Commission for Rural Communities (2005) State
of the Countryside Report 2005, Countryside Agency Publications. Back
85
Commission for Rural Communities (2006) "Calculating housing
needs in rural England" Back
86
Commission for Rural Communities (2005) State of the Countryside
Report 2005, Countryside Agency Publications. Back
87
Commission for Rural Communities (2005) State of the Countryside
Report 2005, Countryside Agency Publications. Back
88
Commission for Rural Communities (2006) "Calculating housing
needs in rural England" Back
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