Memorandum by British Chambers of Commerce
(BCC) (AFH 15)
The BCC welcomes the opportunity to participate
in the inquiry into affordable housing by the Urban Affairs Sub-Committee.
This issue is a vital matter to address over the coming years
if the economy is not to stagnate and will be instrumental in
regeneration projects in both rural and urban areas.
Having consulted the BCC network, which represents
135,000 businesses across the UK economy, the opinions of business
are represented below. This submission follows the structure of
the Press Notice from the Sub-Committee requesting responses.
The definition of affordable
The cost of housing must bear some relationship
to average income multiples and the scale on which mortgage lenders
work. This is a challenge in areas where land values are disproportionately
high, such as city centres, but this challenge must be addressed
because the city centre is where accommodation is most needed,
especially by key workers.
One problem noted by Chambers is that each planning
authority seems to have their own views and on occasions swaps
the definition around to suit their own purposes. In certain areas
the term affordable relates only to council development and not
to the private sector, yet authorities can force private sector
developers to build a certain amount of "affordable"
homes. Clarity from Government on this whole issue would be appreciated.
This forms a part of a more general dissatisfaction
with the planning system in England, which is seen by business
as a block on the economy and on certain other Government priorities.
If Government wishes to regenerate run-down areas, especially
in the rural community or in urban centres, then the whole planning
system must be rebuilt from scratch to ensure it is efficient,
quick and fair.
The scale and location of the demand for affordable
Very little progress is envisioned on this issue.
Quality, affordable housing is needed in city centres for key
workers yet land prices prevent this from being an economical
proposition for developers. A solution may be to hold some land
in public ownership, yet leased on long-term leases (say 999 years)
with covenants preventing resale so that construction costs are
the only factor in housing prices in city centres. As the BCC
recognises the trend for moving public housing into the private
sector we appreciate that Government intervention in the housing
market is not a pragmatic approach. Nor is it something we would
necessarily want to see. Therefore, the authorities should be
encouraged to provide only the framework for affordable housing.
The regeneration of city centres could be facilitated
by the provision of affordable housing. It would decrease congestion
as employees would already be close to work and if a ready-made
workforce (and, of course customer, base) is on the doorstep it
will stimulate business start-ups and growth. The minimisation
of the use of transport should be considered when the location
of housing is being debated. Commuting and congestion is also
a block on economic growth.
Environmental protection should also be an important
consideration, given the nature of some of the UK's towns and
cities. Green space in and around these urban areas should generally
continue to be protected. We do not support any change to the
status of Green Belts unless brown field sites are fully developed
The quality of affordable housing
Accommodation should meet minimum criteria in
regard to thermal efficiencyinsulation and efficient heating
systems could reduce costs to enable key workers to afford such
The housing should be able to house an "average"
family (two adults and two children) and have adequate space for,
or provision of, facilities, such as shower/bath, toilet, laundry,
refrigeration equipment, waste storage and one car parking space.
Imagination is required in design to avoid developments becoming
ghettos and realism is needed to address modern day problems.
For example, not providing parking spaces will not prevent people
owning cars or encourage them to use public transport. It will
simply result in a large number of on street parking problems,
leading to further congestion.
The adequacy of the existing supply and the amount
of resources available
Planning authorities appear currently to insist
on affordable housing being planned and developed within executive
developments. This is not a satisfactory solution and is perceptibly
causing delays to developments. It can also create social problems
if tension develops on the new estate.
The Chamber network has expressed its concerns
that planning authorities tend to view the allocation of affordable
housing as an opportunity to regulate the local housing market
according to their own agendas. This is not helpful and Government
should act to monitor and prevent this.
Evidence of un-met need should be supplied where
proposals for obliging developers to build affordable housing
are being advanced. Such requirements should not be proposed without
reliable figures to support them. Need must be matched to location.
Currently affordable housing for key workers
(especially emergency services personnel, nurses and transport
workers) is distinctly lacking in both rural and urban areas.
A large proportion of that which is available is in an unfit state
due to public sector spending constraints. The current move away
from public housing, through local authority stock transfers,
is a positive step in achieving improvements to existing public
The extent to which planning gain can fund the
level of affordable housing required
Affordable housing could be derived from planning
gain. The costs are commensurate with other projects completed
under "section 106" agreements. Sensitive management
is needed to achieve the best solutions. However, this may well
be a more useful alternative to the current requirement for affordable
housing in the same development as more exclusive accommodation.
How resources should be balanced between social
housing and options for owner occupation for those who cannot
afford to buy (including shared ownership) and whether any additional
mechanisms are required to bring forward shared ownership-type
The BCC is not convinced of the need for increased
public funding of housing. Such a course of action can prove to
be self-defeating. A property-owning nation will be more likely
to ensure the good upkeep and maintenance of housing. Over-regulation
is also a concern for business. However, imaginative use of minimum
standard requirements and long-term, low-cost, leasing of public
land to construction companies could prove to be the most effective
answer. This would permit housing for key workers to be built
in high-demand areas at an affordable cost to all.
Furthermore, housing associations have been
equipped with funding options and ownership when dealing with
people who are new to the employment market. This is a satisfactory
situation and should be maintained and copied in other areas.
Whether targets in Regional Planning Guidance
Regional targets that are set at a national
level frequently cause problems. In this case they are inappropriate.
However, mention should be made of the requirement for affordable
housing to be identified in local structure plans and specific
targets made in this type of document if a shortfall is identified
as a problem or a similar difficulty persists over a prolonged
length of time.
A lighter touch on planning would stimulate
the economy and growth. Currently planning is one of the main
concerns across the Chamber network. If developers were given
more room to move then they could meet housing need more easily,
especially if they were given assistance in providing low-cost
housing through the measures outlined above.
Whether targets on decent and affordable housing
will be met by central and local government
The BCC is not in favour of national targets.
National government has too broad a view to be able to set local
or regional targets. Local government should set local targets.
If the new Regional Assemblies are to come in, something that
the BCC is against, then it is envisaged that they would take
this responsibility over. Again concern must be expressed as to
whether targets can be set effectively at any other Government
level than locally.
Whether current policies and practices are leading
to the creation of mixed communities
Clarity is needed on what is meant by "mixed
communities". The main fear of obliging developers to site
affordable housing in with "ordinary" housing is that
the investment made by home buyers will be somehow devalued by
having affordable housing in their development. It is not certain
that such "mixed communities" are even desirable let
Whether more greenfield development is needed
to meet housing need
The BCC is very interested to hear more details
of exactly what this would entail. Opposition from certain organisations
is to be expected. If housing need has to be addressed in areas
where there are insufficient alternatives, then green field development
may have to be considered. However, strict guidelines will have
to be in place before this can be contemplated. Infrastructure
problems may well prevent this from happening, if transport or
water delivery for example is inadequate for extra housing. This
is especially a concern in the South East. More thought by Government
may be needed here on how key workers can be located in other
parts of the country by developing sites for work outside London
and the South East. Regeneration of the rest of the UK could work
hand in hand with easing the development crisis in the South East
if this problem can be solved.
The cost to individuals, businesses and the economy
resulting from any shortfall in the provision of decent, affordable
The cost of the lack of affordable housing may
not be measurable in any way that would inspire confidence. However,
it is obvious that a lack of flexibility for those moving in search
of employment, especially in key sectors of the economy, is detrimental
to achieving personal, corporate, and national objectives. The
UK economy can only be stifled if freedom of movement, access
to a skilled workforce and improved housing and transport facilities
are not commonplace.
The BCC recognises that a growing economy will
stimulate demand for housing and thus increase prices. However,
a lack of affordable housing will stifle this growth. Therefore,
we support the desire to provide sufficient affordable housing
for key workers. We would recommend that this is achieved through
the use of brown field sites in towns and cities and allowing
public land to be leased on a long-term basis for construction
companies to build housing at a lower cost to permit key workers
to purchase homes at affordable prices in areas of high demand.
We are wary of opening up the Green Belt to development. Brown
field sites must be fully developed before any change to the status
of Green Belts is considered. We do not support over-regulation
or the compulsion on construction to provide a high proportion
of affordable housing in commercial developments. This can act
as a powerful factor in dissuading companies to build new homes
at all. Reform of planning is needed urgently, starting from scratch
to ensure clarity and fairness across the country. Clarification
of the rules on planning gain and especially the requirements
on builders to provide affordable housing in developments is a
key part of that reform. The BCC looks forward to continuing to
contribute to this debate in the future and would be happy to
elaborate on any of the points made in this submission.