Select Committee on Transport, Local Government and the Regions Memoranda


Memorandum by Housing Services, London Borough of Hillingdon (AFH 33)

THE DEFINITION OF "AFFORDABLE"

  There is a lack of consistency across the country in terms of the affordable housing definitions, particularly those derived from circular 6/98 and PPG3. The definitions offered in circular 6/98 are particularly wide and can obstruct those boroughs who seek an emphasis on social rented housing. Furthermore, the circular does not differentiate between traditional affordable housing and key worker housing—enabling key worker housing to be provided by developers instead of social rented housing. This was the case following the appeal on the Hillingdon Hospital case where key worker housing was accepted by the Appeal Inspector in place of social rented housing.

  An income based definition of affordability is used in the Hillingdon Housing Needs and Private Sector House Condition Survey 2001, which was carried out in compliance with the DTLR publication "Local Housing Needs Assessment: A Guide to Good Practice" (July 2000). This definition is "a household is unable to afford private sector housing if it has a gross income less than one third its mortgage requirement and renting privately would take up more than 30 per cent of net household income".

  For the practical purpose of delivering affordable housing through the planning process the Council requires affordable housing to be delivered at rent levels not exceeding Housing Corporation target rents.

THE SCALE AND LOCATION OF THE DEMAND FOR AFFORDABLE HOUSING

  The experience in Hillingdon is fairly typical of boroughs in London—the demand for affordable housing far exceeds local supply. At the beginning of May 2002 there were almost 4,700 households registered with the Council waiting for affordable housing—about 2,000 of these households are statutorily homeless and in temporary accommodation—and an additional 1,200 households in affordable housing needing to move to more suitable homes. From income information provided by these households less than 2 per cent could afford to meet their housing needs by buying their home through low cost home opportunities.

  The borough of Hillingdon is roughly divided by the A40 road into the more affluent "north" and less affluent "south". A significant proportion of existing affordable housing is provided in the south. The greater demand for affordable housing is from the south of the borough, though households in the north are also increasingly finding it difficult to meet their housing needs on the open market anywhere in the borough.

  In addition an increasing number of "key workers"—nurses, teachers, police officers, paramedics, occupational therapists, social workers, public transport workers to name a few—cannot afford to meet their housing needs on the open market in Hillingdon or neighbouring boroughs and require some form of affordable housing.

THE QUALITY OF AFFORDABLE HOUSING

  The quality of affordable housing in Hillingdon is generally good. This is as a result of significant investment in maintaining the Council's housing stock and the fact that the greater proportion of housing association (registered social landlord) housing stock in the borough is comparatively new (less than 12 years old).

  There are a few Council and housing association supported and sheltered housing schemes that provide accommodation with shared facilities. In addition there are a number of Council and Primary Care Trust registered care homes that do not meet the Care Standards Act 2000 requirements. These supported, sheltered and registered properties require substantial investment, running into many millions of Pounds, to bring them up to modern, acceptable and statutory standards.

THE ADEQUACY OF THE EXISTING SUPPLY AND THE AMOUNT OF RESOURCES AVAILABLE

  In Hillingdon a combination of the loss of 12,000 council homes through the Right to Buy and the provision of approximately 5,000 new housing association homes in the same period has resulted in a net loss of 7,000 affordable homes since the introduction of the Right to Buy.

  The substantial increase in house prices in the borough over recent years, far in excess of the rate of growth in incomes over the same period, means that fewer households can afford to meet their housing need on the open market. The combination of property price growth far exceeding income growth and the reduction in the number of affordable homes has contributed to a significant homelessness problem in the borough.

  For a number of years homeless acceptances have continued to exceed affordable lettings and low cost home ownership opportunities available. Typically, in the last few years an average of 800 households are accepted per annum as homeless and affordable housing lettings opportunities average at 750 per annum. This has led to increasing numbers of households placed in temporary accommodation for extended periods of time, up to four years in many cases.

  The Hillingdon Housing Needs and Private Sector House Condition Survey 2001 identified a backlog of 2,500 households in unsuitable accommodation needing to move and unable to afford market housing. In addition the survey estimates annual newly arising housing need of 3,275 households also unable to afford market housing. The Survey concluded that low cost market housing cannot meet any of this housing need. While shared ownership may be able to help a fraction of these households for the majority only affordable rented housing would meet their needs.

  Resources available for new affordable housing provision in 2002-03 are the highest they have been for some time at £12.7 million Housing Corporation Social Housing Grant, £3.3 million Local Authority Social Housing Grant and £9 million Housing Revenue Account capital funding. These resources will provide approximately 210 new affordable homes, substantially short of the Housing Needs Survey estimate of 2,870 new affordable homes required per annum to meet housing needs for the five year period 2001-06.

THE EXTENT TO WHICH PLANNING GAIN CAN FUND THE LEVEL OF AFFORDABLE HOUSING REQUIRED

  The role of the planning system in delivering affordable housing cannot be underestimated. However, the provision of affordable housing through development plan policies ought not be regarded as the only way of delivering new affordable housing. Whilst local planning authorities will be expected to play a fundamental role in the delivery of affordable housing, other demands and pressures need to be addressed through the planning system. New housing, of any tenure, cannot necessarily be provided at the expense of other environmental, social and economic considerations.

  If government targets on decent and affordable housing are to be met, it will require a greater level of investment from government and an acknowledgement that it is unrealistic to expect the private sector to deliver all of the affordable housing that is required. Section 106 agreements in Hillingdon from April 1998 to May 2002 will deliver a total of 821 new affordable homes (718 for rent and 103 for shared ownership). Though this is a significant number of homes it is far short of what is required to meet the need for affordable housing in the borough.

HOW RESOURCES SHOULD BE BALANCED BETWEEN SOCIAL HOUSING AND OPTIONS FOR OWNER OCCUPATION

  We believe the lack of an adequate supply of new homes of all tenures in London and the South East is part of the reason for the dramatic increase in house prices in the region. Whilst house building for owner occupation has declined over the last twenty years, this decline has not been as dramatic as the decline in number of new affordable homes developed over the same period. Affordable housing supply in London is at its lowest since records began over 20 years ago.

  Because of the crisis in affordable housing in the region we would suggest the first priority for any resources would be to substantially increase the number of affordable rented homes across the region. We believe a substantial increase in the supply of affordable rented homes is necessary to meet the backlog of need in the region. In addition affordable rented accommodation should be provided for the capital's key workers.

  We believe a significant increase in the supply of affordable rented homes, if not at the expense of the loss of open market housing, will give home seekers more options to meet their housing need. It is also likely to have a dampening effect on house price inflation as there will be fewer households "competing" for open market housing.

  As low cost home ownership schemes are by and large linked to market values, the provision of low cost home ownership will meet a very small minority of housing needs at current property prices. However the Council advocates mixed tenure developments including affordable rented, low cost home ownership and open market sale units in the interest of creating diverse and sustainable neighbourhoods. The provision of a small proportion—no more than 10 per cent of new affordable housing—of low cost home ownership opportunities will also provide a degree of choice to households with moderate incomes seeking to become home owners.

WHETHER TARGETS IN REGIONAL PLANNING GUIDANCE ARE APPROPRIATE

  The (minimum) targets in Regional Planning Guidance Note 9 (RPG9) from 1989 and 1996 have both been comfortably met in Hillingdon. RPG9(1989) required 8,000 new homes to built between 1987 and 2001—9,071 were completed in Hillingdon between 1987 and 2001; RPG(1996) required 3,900 to be built between 1992 and 2006—4,434 were completed in Hillingdon between 1992 and 2001. Nevertheless whilst these targets have been exceeded, the fact remains that housing demand continues to outstrip supply in Hillingdon and across London, for both market and non-market housing.

  The anticipated new targets from the Mayor's draft London Plan may help to bridge the gap a little more but if it is the intention of any target to fully match housing demand and supply, it would require (a) an unprecedented raising of the targets (b) substantial increases in residential density and (c) reconsideration of other land uses planning policies. It has to be decided whether that it is the intention of RPG to bridge the shortfall between housing demand and supply or whether it is to be accepted that not all new housing demand can be accommodated within a particular region.

WHETHER TARGETS ON DECENT AND AFFORDABLE HOUSING WILL BE MET BY CENTRAL AND LOCAL GOVERNMENT

  The targets require a substantial amount of capital investment in housing to have any chance of being met. At the moment there is no indication that the level of investment required can be met from existing local and central government resources and the private sector. There has to be a fundamental rethink of the process of delivering decent affordable homes in the region in order to be able to meet the targets.

WHETHER CURRENT POLICIES AND PRACTICES ARE LEADING TO THE CREATION OF MIXED COMMUNITIES

  The lowering of planning policy thresholds for the provision of affordable housing will ensure that more schemes, regardless of location, will contain a proportion of affordable housing—and a therefore a greater mix within that community. Most schemes continue to be 100 per cent affordable housing or 100 per cent market housing; only three schemes out of 38 in 2000 and one out of 39 schemes in 1999 contained a mix of housing of different tenures. Whilst it is hoped that a lowering of the thresholds will ensure that more schemes contain a mix of house types and tenures, it is too early to say that genuinely mixed communities have been created on a significant scale.

WHETHER MORE GREENFIELD DEVELOPMENT IS NEEDED TO MEET HOUSING NEED

  The pressure for housing has to be broken down into housing need and housing demand. Were there to be a substantial increase in funding, housing need alone could probably be accommodated within existing urban areas on previously developed land. However, it is unhelpful to think of housing need without thinking of housing demand; housing need (ie those unable to afford to buy or rent housing on the open market) is inherently linked to housing demand and the upward pressure on property prices which follows the mismatch between housing supply and demand simply takes housing costs further away from those in housing need.

  Whether more greenfield development is required to accommodate this overall housing demand will depend on whether local planning authorities are able to accept substantially increased residential densities (and a relaxation of other standards), whether the market will build at these densities—primarily by building more flats rather than houses—and whether the brownfield sites will remain on which to accommodate the new housing.

THE COST TO INDIVIDUALS, BUSINESSES AND THE ECONOMY RESULTING FROM ANY SHORTFALL IN THE PROVISION OF DECENT AFFORDABLE HOUSING

  We believe the housing crisis in the region, evidenced by high property prices and high levels of homelessness, can be linked to number of factors including the economic prosperity of the region and the reduced supply of affordable housing. There are many costs associated with the lack of decent affordable housing and a few are summarised below.

Health

  The physical and mental health of the individual in inadequate housing suffers and as a result an increasing burden is placed on the health, social and associated services and agencies.

Education

  It has been know for some time that children in unsuitable housing perform less well at school. The global economy is increasingly reliant on a skilled workforce and we cannot afford to have a less skilled workforce than other regions and countries. In addition educational attainment is also hampered by the inability of schools to recruit and retain skilled teachers (see below).

Recruitment and Retention

  The high cost of open market housing and lack of affordable housing is creating a recruitment and retention crisis for many employers, particularly for organisations that provide a public service including health and social care, education, public transport, the police and the fire service. Many of these services are spending significant amounts of money in recruitment but cannot retain staff as housing costs in the region are prohibitive.

Economy

  The continuing prosperity of the region requires a skilled workforce in both the private and public sectors. The lack of decent affordable homes has already had an impact on many organisations' ability to deliver a service. If this situation continues London may lose its global economic position to cities in other countries.

  This is only a brief submission on the issues but I hope it is of some use to you. I will be happy to answer any questions you may have.


 
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