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

Memorandum by The Royal Institution of Chartered Surveyors (HOU 12)


  The Royal Institute of Chartered Surveyors (RICS), represents the views and interests of 120,000 chartered surveyors worldwide covering all aspects of land, property and construction. Under the terms of its Royal Charter, RICS is required at all times to act in the public interest.

  RICS welcomes this opportunity to submit evidence to the House of Commons Select Committee on Transport, Local Government and the Regions' re-investigation into affordable housing. Following the Chancellor's Spending Review and the proposed increase of around £1.4 billion for the housing sector, it is essential that the Government develops a sound and coherent strategy for reinvestment. For London and the South East the problem revolves around acute housing shortages, while large areas of the North and the Midlands require strategies to tackle low demand.

  The over-riding objective must be the provision of good quality, affordable housing, be it social rented or privately owned. This will only be possible by harmonising housing and planning strategies and by utilising good quality, innovative design wherever possible. RICS is encouraged that the Select Committee's new inquiry appears to focus on these crucial areas.

  We would like to comment on the following issues:


  The principle of a decent homes standard is an admirable one. RICS wholeheartedly supports the Government's commitment to ensuring that all social housing is of a decent standard by 2010. However, the release of additional funds for tackling home conditions will require sound management and realistic expectations. Too many areas, especially in parts of the North and Midlands, are in a state of irreversible decline with the housing stock in a chronic state of disrepair. In such instances it is worth questioning whether further significant investment is worthwhile.

  The Government appears committed to the principle of housing stock transfer from local councils to housing associations as a means of ensuring more homes meet the decency standard. However, in some instances, as was recently the case in Birmingham, this policy is likely to generate resistance from tenant groups keen to see a retention of council control. RICS is therefore encouraged that the Government is addressing this issue by allocating more money to councils to renovate run-down stock by relaxing the requirements for arms length management organisations (ALMOs) and is seeking to amend the 1985 Housing Act to make it easier for councils to enter into Private Finance Initiatives. Both of these policies can potentially lever in the necessary finance to improve stock condition.

  The setting of stock condition and improvement targets (including energy efficiency targets) must cover the private as well as council and housing association sectors, together with demolition and replacement targets for the stock as a whole. The rate of housing demolition must increase with national, regional and local demolition targets being negotiated and publicised by government.

  RICS supports the Government's intention to streamline the powers and procedures relating to compulsory purchase orders (CPOs). We particularly support proposals to introduce wider powers for local authorities to use CPOs to tackle planning and regeneration issues. In addition, the proposal to enhance home loss payments for owners and occupiers will provide fairer compensation and will help to reduce delays in the system.

  RICS also advocates the active development of new policy instruments to deal with the improvement of low value owner occupied properties. Where households are affected by compulsory acquisition, the principle of equivalent re-investment should apply wherever possible. Owner-occupiers living in Right-to-Buy (RTB) properties on one-time council estates and affected by compulsory acquisition should be enabled to maintain their position in the housing market.


  If the Government is committed to the creation of mixed and balanced communities, then it must ensure the provision of a range of tenure options designed to meet all housing needs. For lower income households, social housing may prove to be the most suitable, while more affluent households are more likely to aspire to home ownership. Those caught in between may turn to the rented sector or a form of shared ownership scheme.

  Unfortunately excessive house price inflation in many areas has forced many would-be-buyers into rented of temporary accommodation in order to minimise the distance between home and work. Affordable rented social housing is essential for low income groups. But this should not be to the neglect of middle income groups, unable to buy their own property but not eligible for social housing.

  RICS is also concerned at the adverse consequences of RTB activity. The acquisition of affordable housing through RTB in areas of high demand may no longer be feasible given prevailing market conditions. There are also considerable management problems where "mixed tenure" areas have been created (particularly in relation to flats and low demand areas where ex RTB properties may have become privately rented) and with the difficulties that some RTB households have in sustaining their owner occupation. Whilst RTB discount arrangements have been changed over the years (demonstrating that they are not inviolate), these continue to be haphazard and inequitable. It is over 20 years since the initial comprehensive legislation was introduced. A formal review is now badly needed.

  More generally, RICS is concerned at the current British obsession with home-ownership. Unlike many successful housing economies elsewhere in Europe, the UK housing market is driven by an almost unhealthy interest in home ownership. It is therefore important that new flexible forms of tenure be developed, such as low cost ownership and other equity sharing schemes including those that give the option to "staircase down" when a household's financial circumstances change. However, we recognise issues of complexity, consumer and legal resistance and the fact that new and flexible forms of tenure are likely to be of only limited or niche interest for the foreseeable future.


  The current system of planning obligations is often a barrier to the delivery of affordable housing and, therefore, is in need of modification. Changes are needed to introduce greater consistency between authorities in the use of their powers, to provide for greater transparency and to give developers greater certainty about the affordable housing contributions that they may be called on to make. There is currently excessive variation in the level of developers' contributions towards affordable housing sought by different local authorities as well as excessive demands, sometimes unrelated to the development in question, which act as a barrier to delivery.

  RICS is encouraged by the Government's decision to abandon its proposals for a tariff-based system. Genuine improvements are more likely to be realised through a modification of the existing system. To this end, RICS would like to see the introduction of model clauses to provide clearer indicators for developers and alternative dispute resolution procedures to minimise the time given over to negotiation.

  Local Authorities must also be discouraged from setting prohibitively high affordable housing targets. In its recent commercial impact assessment of the 3 Dragons/Nottingham Trent University report, ATIS Real Weatheralls concluded that a rigid 50 per cent affordable housing figure was unrealistic in two thirds of the London Boroughs. Excessive demands on developers will stifle development and limit the opportunity for new affordable housing. Local Authorities must therefore adopt a flexible approach that reflects local and market realities and that enables the development of economically marginal schemes.

  RICS welcomes the ODPM's pledge to intervene where Local Authority targets for affordable housing are not being met, although far more detail is needed on the criteria for and the means of intervention. It is also imperative that greater fiscal incentives be given for the development of brownfield sites and for higher density affordable housing. Developers should be accorded the choice of off-site provision or commuted sums wherever this is feasible.


  If the Government is to remain committed to the housing market renewal in areas of low demand and extend its programme beyond the current nine Pathfinder projects, then it will require a clear focus and vision. In particular, it must be clear what the risks, costs and benefits of renewal attempts are when compared with those of managed decline or even abandonment.

  Regeneration priorities need to rebalanced and oriented towards approaches which "invest in the best" (ie best chance of success) rather than those which address "worst first." There is a clear need for more robust approaches to asset management by government, landlords, and individual households together with a clearer focus on preventing urban and rural decline from the outset rather than seeking to reverse that which is already underway. RICS is concerned that a key test of the efficacy of housing market renewal (namely a robust assessment of the likely costs and benefits of intervention) is not more rigorously applied.

  A renewal strategy for particular housing markets must therefore be carefully targeted and sensitively managed. In some areas this may involve "downsizing" some housing settlements—thereby increasing the chances for long term sustainability. This downsizing must seek to capitalise on those areas that are proving to be successful. Other areas may be in a state of irrevocable decline and therefore unlikely to benefit from housing market renewal. In such instances policies designed to increase social mobility and manage decline will be more appropriate.

  If housing markets and communities are to be renewed then a number of policy and practical changes need to be introduced in relation to urban management, housing mix and investment priorities to further support the development of sustainable neighbourhoods. In its recently published Housing Manifesto, RICS offered a number of suggestions to this end, including:

    —  housing and land-use policies that minimise travel demand and the promotion of home-based work;

    —  the piloting on new forms of neighbourhood management, including practical and vocational support to those that wish to take up this new career;

    —  the integration of policies relating to open space, concierge, highways, police, and caretaking services, including the participation of local groups;

    —  Local Strategic Partnerships to be able to spend a proportion of public funds currently available for core programmes, on locally-determined schemes; and

    —  greater preventative, curative and legal measures to stamp out anti-social behaviour.

  Healthy, viable, sustainable neighbourhoods will form a sound basis on which to build any housing market renewal strategy. This is based on the increasingly accepted assumption that under-achievement in education, poor health, high levels of crime and difficulties in gaining employment are all related to deficiencies in the supply of adequate housing.


  Strategies designed to increase the supply of affordable housing must be based on good design, sound planning and with "quality" as priority. In announcing the introduction of new regional bodies, the Government appears to be making the intrinsic link between housing, land-use, planning, transport, economic development and regeneration policy. The Government will need to spell out, however, how these new bodies will relate to a range of existing regional structures, particularly Regional Development Agencies.

  Much new housing design is modest in quality and frequently uninspiring. For their part, many developers perceive consumers as conservative in terms of design, environmental, running costs, home technology, security specifications and in their attitude to off-site prefabrication. In part this is true. However, the more innovative characteristics of much self-build housing (and that of non-residential buildings) would tend to confirm at least some consumer appetite for better design. Eitherway, all parties must be encouraged to make a greater commitment to new approaches and technologies.

  RICS supports greater local and regional variation in house design in a manner that is sensitive to local heritage but does not stifle innovation. In many cases there is scope for higher density housing development. RICS therefore welcomes the Secretary of State's intention to intervene where proposed housing developments fall below a threshold of 30 dwellings per hectare. However, even higher densities will be required, where appropriate, if urban sprawl is to be contained and the use of brownfield sites maximised. It is crucial that high density is combined with good quality design and integrated with local transport infrastructure.

  The means of achieving such development has been demonstrated in the recently published RICS guide to good practice for "Transport Development Areas" (TDAs). TDAs are designed to secure and develop a sustainable and high density mix of land uses including housing centred around key transport nodes. The RICS Guide also demonstrates the wider benefits of engendering early dialogue between all the parties involved, including the local community and between the public and the private sectors. The principles underlying TDAs are already being taken on board in many of the emerging new regional strategies including those for London and the South East. The guidance is freely available at

previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2002
Prepared 22 October 2002