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

Memorandum by Countryside Agency (HOU 15)

  The Countryside Agency submitted written and oral evidence to the earlier Urban Affairs Inquiry into Affordable Housing. Since then, the Government has published its Planning Policy Statement and announced additional funding for affordable housing as part of the Spending Review. We would like to take this opportunity to make a further submission to the re-opened Inquiry into Affordable Housing in response to the additional questions raised.

Will the funds in the Comprehensive Spending Review achieve the Government's target of a decent home for everyone by 2010 Funding?

  The additional funding made available to support the provision of affordable housing and market renewal is welcome but we have concerns about the proposed targeting of these resources, which would in our view affect the achievement of the Government's objectives for rural areas.

  A simplistic division of resources between affordable housing in the south and market renewal in the north ignores the diversity of housing markets across the country, particularly in rural areas, which face considerable external pressures. For example, rural affordable housing needs are not restricted to a few districts in the south east but are a general phenomenon across rural England. This year the Housing Corporation's Rural Programme was overbid by 100 per cent, indicating an unmet need for affordable housing in smaller rural communities. Even within regions there are distinct differences; there are high demand areas for housing in the rural parts of most regions, although the region overall may appear to be a low demand area. For example, the pressurised housing market in much of rural Cumbria has little in common with the problems of low demand experienced in many of the urban conurbations of the north west. Acknowledging and responding to this diversity is a core component of the Government's modernisation agenda and is central to the promotion of sustainable development in urban and rural areas. But to meet these objectives there needs to be the capacity for regional allocation of funding with sufficient resources to meet affordable housing needs where ever they occur.

  We would recommend that:

    —  a reasonable proportion of the resources made available for affordable housing through the Spending Review are channelled into the Housing Corporation's Rural Programme and targeted at rural areas of intense housing pressure;

    —  a separate funding stream is identified to support the provision of affordable housing in market towns to relieve the pressure on the smaller and remoter settlements; and

    —  the new role of the Regional Development Agencies in regional housing allocations should clearly address needs for affordable housing within overall numbers.

How should the spending of the new resources be balanced between social housing and options for owner occupation for those who cannot afford to buy (including shared ownership) and what should be the mechanisms to be used for their distribution?

  Providing a range of housing types and tenure is essential for the creation of mixed and inclusive communities in urban and rural areas. Pressure of demand from wishing to move into the countryside, combined with the constraints on land and the predominance of larger houses in new developments, means that in rural areas people on low and modest incomes are unable to find a home they can afford either to rent or buy. There is an under supply of social housing and few low cost "starter" homes affordable to those on local incomes to allow them to get on the first rung of home ownership. There is, therefore, a need to provide social rented housing and low cost home ownership options in rural areas. However, the potential to meet both these needs is limited because in some areas the lack of land, the high costs of development and the price of houses available on the market means they are outside the Housing Corporation's cost limits.

  A further complication are the difficulties in securing low cost sale housing in the affordable housing sector in perpetuity. Rising values mean that housing which was initially sold at a discount can on resale be too expensive for people employed locally. Unlike urban areas there are few opportunities to replace this lost stock.

  In response to some of these needs and particularly the impact on key public services, the Government has introduced the key worker scheme. This has provided 360 houses in rural areas this year. However, we are concerned that the narrow definition of key worker does not reflect the nature of rural employment, which is dominated by small business and self employment. The cost of housing in rural areas means that increasingly even these groups are unable to access housing and yet they are crucial to the vitality and diversification of the rural economy.

  We would recommend that:

    —  the allocation of resources between social and low cost home ownership should be determined at a regional level, taking account of local needs and circumstances and with the capacity to respond to the diversity of needs within a region;

    —  in line with our recommendations for funding to meet the diversity of needs at a regional level, Housing Corporation Regional Offices are given the discretion to vary TCIs where appropriate and to accept some rural schemes at more than 110 per cent TCI;

    —  new models for providing low cost home ownership in rural areas, such as the Cumbrian equity shares model, which retains the housing in the affordable housing sector in perpetuity without limiting opportunities for the occupier to progress to 100 per cent owner occupation, should be developed and tested; and

    —  the definition of key worker should allow greater flexibility to respond to the needs of middle range households who provide services and economic opportunities within an area.

What is the role of planning obligations in providing affordable housing?

  Planning obligations play a major part in achieving affordable housing in rural areas. They are used to secure a proportion of affordable housing on open market sites, define local need categories and ensure that affordable housing is retained to meet local housing needs in perpetuity. In some areas they are also used to restrict the discount on resale of low cost sale housing. We consider that they are essential if local communities, landowners and local authorities are to support and ultimately provide affordable housing in rural communities. However, planning obligations are only one planning instrument necessary for affordable housing and are in themselves only applicable if other policies are in place. Some local planning authorities are not confident enough to use the mechanism to the full. Circular 6/98 Planning for affordable housing needs amending to ensure the best use is made of planning obligations.

  These were noted in our earlier submission but in summary include:

    —  a two strand definition of affordable housing to assist local planning authorities distinguish in their negotiations with developers between subsidised and low cost sale housing. This would also help frame clear Section 106 agreements;

    —  local authorities are given the discretion to set their own sites size thresholds which will trigger negotiations for affordable housing on market sites;

    —  government guidance which supports the use of Sites for Social Diversity to provide land in smaller rural communities for housing which will meet local housing needs; and

    —  guidance is provided on how local planning authorities can use planning obligations to secure local occupancy conditions and low cost sale housing which is affordable at initial purchase and subsequent sale.

  Planning obligations should also be used to address other social and environmental impacts of development. They can, therefore, make it easier to deliver housing of all kinds in rural areas where communities are sometimes reluctant.

How can the quality of new affordable housing be ensured and the poor design of previous house building programmes avoided?

  The design of new housing includes its scale and layout as well as it visual appearance. We consider that these elements are crucial to the provision of all housing, market and affordable, in urban and rural areas. The Government's proposals for a new planning framework and broader scope of planning obligations provides opportunities to secure development which meets social, economic and environmental needs.

  There was discussion during the previous Select Committee hearing about the design of new affordable housing. In our experience affordable housing can be designed to very high standards. For example an affordable housing scheme in the Lake District National Park is of such high quality it has now been included in the village conservation area. This is not an isolated example. Initiatives, such as village design statements, parish plans and the involvement of the Rural Housing Enablers, can help to bring forward housing development which respects the local character. However, this can add to the costs of development and needs to be taken into account in funding.

  New construction techniques and pursuit of the Egan agenda may speed up delivery of housing and provide more eco-efficient homes but this should not be at the expense of other aspects of design, including the need for full community involvement in its development, design which provides a range of needs and is in keeping with the local environment.

  We would recommend that:

    —  the Government clarifies the full scope of Planning Obligations in securing social, economic and environmental benefits and encourages local planning authorities to use them to the full to respond to local circumstances;

    —  appropriate levels of public finance are made available to provide affordable housing which respects the local environment, whilst still providing homes which are affordable to people living in the locality;

    —  the Housing Corporation examine how their proposals for partnership working will support quality design in rural areas; and

    —  adequate resources, including provision of services and infrastructure, are made available to complement any funding secured from development via planning obligations.

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