Examination of Witnesses (Questions 280-299)|
TUESDAY 2 JULY 2002
280. Should it not be directed at larger sites?
(Mr Wakeford) In a place of 3,000 or less population,
say, you do not really want a housing development of too large
a scale. You need a more organic approach. So it is not very easy
to then say, "Let's have a large site and let's have a slice
of affordable housing within it". That approach works in
market towns, but it does not work so well in villages.
281. So what can be done to replicate the process
in more places more quickly?
(Mr Wakeford) Getting the Rural Exceptions? Getting
more rural affordable housing in place?
(Mr Wakeford) We believe that being much more honest
about it and getting the planning system to work well in small
communities using the social diversity policy would be a good
start. The Government has actually put a lot more money into the
Housing Corporation in order to fund rural affordable housing.
The challenge is on the planners and the Rural Housing Enablers
is to get the sites together to do it. In market towns there is
a slightly different challenge which is actually getting the numbers
of units in place. There it is not so much the planningbecause
there you can do a sort of quota approach with a big developer
therebut it is actually getting the finances in place to
pay for the number of affordable houses that are needed.
283. Do you believe that Rural enablers are
(Mr Wakeford) We certainly do.
284. Do you believe that costs could be reduced
without reducing standards?
(Mr Wakeford) I am not sure that we have a view on
that. Jo, do you have a view on that?
(Ms Lavis) No, but I can offer some examples of where
housing built to a high standard of design actually does not cost
significantly more than housing which is provided to a lower standard.
It is all to do with the way that materials are used within the
locality and it goes back to the point that we feel very strongly
about, that new development should respect the local character
of the area. That is true whether it is affordable housing, market
housing or any other form of development.
285. There are some examples, are there not,
in the National Parks where there has been insistence on traditional
materials and they put up the cost. And yet perhaps five or six
years later when the weathering has taken place it is very difficult
to see the difference between traditional materials and some rather
(Mr Wakeford) Yes, there are a lot of good examples
but I am not sure we can actually give you formal evidence on
what the balance of costs were. We were involved in a less scenic
area in a village design statement in Cambridgeshire which was
stimulated from a development proposal that local people did not
like the design of. The net result of the village design process
was that the developer changed his design quite radically to meet
the style of that community and made that development acceptable
to the community. I do not think the developer would have done
that if it had been a very much more costly thing for him to do.
286. Let us go on to the Right to Buy. You made
comments about the Right to Buy and the loss of affordable houses
in rural areas. You do not suggest any policy changes to address
that problem. Why?
(Mr Wakeford) Just listening to the earlier evidence
that was being given this morning, it struck me that the Right
to Buy can be a very valuable way of enabling a household to actually
get into the housing market, to owner occupancy, which seems to
be a goal in this country. The problem is not so much the Right
to Buy itself but the fact that we are not actually then replacing
that house in order to make sure there is a continuing pool of
affordable housing for those who are coming on to the market further
back, the new households that are being formed. If you see it
as a kind of moving staircase, as people use their Right to Buy
to move up that staircase, then that works well as long as, through
public intervention, new social housing is being built and is
being made available. The difficulty comes in small villages where
perhaps there are environmental constraints and even if they are
designed as well as some of the housing which your Chairman is
obviously aware of, nevertheless the capacity of that community
to take new housing is quite limited. In those circumstances Right
to Buy should be restricted. It is certainly restricted at the
moment in communities of less than 3,000.
(Ms Lavis) For a Right to Acquire on new housing association
property, not on local authority owned property.
(Mr Wakeford) If we go back, in a sense, to the stock,
there were something like 91,000 homes from the countryside lost
from the social rented sector between 1985 and 1990. In the countryside
that was a really dramatic impact because of the balance of communities
in the first place and the pressures of people moving into the
287. Where there is not an endless supply of
land in a community should there be some restriction on the Right
to Buy because they cannot be replaced?
(Mr Wakeford) That is the sort of approach that we
have been putting forward and applies in smaller communities.
288. Or should there be restrictions about the
conditions for selling on?
(Ms Lavis) I think there are three strands possibly
to answering your question. The first is that in some rural districts
they can actually put a condition that when the house is sold
into the open market the local authority have the opportunity
to buy back that property under the Rural DesignationI
think it is the 1980 or 1985Act. The difficulty has been
that because of the cost of housing increasing to the extent that
it has the local authorities and housing associations are now
finding it almost impossible to be able to buy those properties
and take them back into the rented sector. I think putting conditions
on it may be one way forward, but there has to be some acknowledgement
in the funding as well to enable that housing to be brought back
into the affordable housing sector. The other issuewhich
is one that actually also applies to low cost sale housing as
well as local authority housingis whether in fact it is
possible, using the planning system, to restrict the price at
which that housing is then passed on to the subsequent buyers.
There are examples such as north Wiltshire where they are using
section 106 agreement to make sure the discount is continued in
(Mr Wakeford) In New JerseyI hate to keep going
back to New Jersey - part of the process actually limits who can
buy housing in a particular market, people with particular incomes.
The way in which the mortgage multiplier works means that there
is a kind of market in housing which is only available for people
whose income is in a band of between 60 per cent to 80 per cent
of state median income. That market, actually, works quite well.
That enables a market to function so that people can actually
get some value, but it means that the price of housing does not
go miles out of their reach. To bring it back to home, the Countryside
Agency made a visit to Shropshire last week and in Ludlow we heard
about a house which had been sold under the current condition
that Jo just pointed out for £13,000 four years ago under
the Right to Buy. It has just been offered back to them at £113,000
which is outside the cost indicators so the Housing Association
now cannot get backeven though the condition was put in
placethe unit which was liberated in that way.
289. Can I ask about second homes which you
also mention is a problem in these communities. It pushes up the
price of houses which local people could otherwise have afforded.
Is there anything that can be done about that?
(Mr Wakeford) There are some interesting ways of looking
at it. There are about 100,000 second homes so if full council
tax was actually chargedinstead of the 50 per cent discount
at the momentthat would generate about as much money as
the Housing Corporation is spending in rural areas.
(Ms Lavis) It would be equivalent to the target that
it is aiming for next year of 1,600 units.
(Mr Wakeford) That would do quite a lot. But, on the
other hand, 100,000 houses used as second homes is actually not
terribly large when you compare it with the year on year demand,
as it were, for rural people alone (30,000 units a year). It is
part of the issue but it is not as big as actually dealing with
the responsibility to provide decent housing for all the households
we are bringing into society.
290. What you are suggesting is that if the
discount was removed and local authorities used the income to
go into the housing, that would make a significant impact.
(Mr Wakeford) That is very strongly our position from
291. Is there not an issue of the sites that
are around in rural areas. Quite a lot of the larger sites are
actually owned by public bodies. What do you think could be done
to encourage them to look at releasing them for affordable housing?
(Mr Wakeford) I am not sure that I have got a particular
recipe there. There is also another section of sites which are
effectively stymied by the options agreements that big house builders
have put in place. Certainly there is some unlocking that can
be done, but I do not think we are experts in that.
(Ms Lavis) No, we are not. I think there would always
be questions about the sustainability of some of those sites from
a wider perspective in terms of environment, economy, social provision.
292. So we are back to the planning system again?
(Mr Wakeford) Well, we are.
293. Are there any changes there you want to
(Mr Wakeford) The same would apply to some of the
redundant farm buildings. People have said "Wouldn't it be
nice to replace those with housing which we need" but those
sites are quite often remote and not accessible to communities.
294. Are there changes to the planning system
(Mr Wakeford) In terms of encouraging the disposal
of some sites, I am not sure that the planning system is as good
as it should be about incentivising people to bring land forward
and enabling development to take place. This is broadening out
the enquiry a bit I guess, but one of the things we believe the
planning system does not do is to make sufficient links between
the vision that the planning authority has for its area and the
spending and investment plans of all the other bodies who will
deliver, in particular the quasi public sector investment in that
plan. Is the Housing Corporation taking a sufficient interest
in the structure of the local plan? Are the regional development
agencies taking a sufficient interest? Are all of those who are
going to invest taking a sufficient interest? There is a real
job to be done in reforming the planning system to make sure that
it is actually about setting out a vision for society in ten years'
time and engaging properly all of those who will then contribute
to that vision. It may be, at the end of the day, we need some
other kind of approach, perhaps looking on the tax side instead
of always looking to the planning policy to resolve everything
in life; to incentivise the bringing forward of sites or perhaps
to penalise those who are sitting on sites with planning consent
and not bringing them forward for development.
295. If we are talking about ones belonging
to public agencies, is it not better to actually give clear indications
that all telephone exchanges, electric sub-stationswhich
in some cases in rural villages were pretty large in the pastthose
small pockets of land are ones that ought to be released.
(Mr Wakeford) Yes, exactly right, and in fact somebody
is proposing to do that in the place where I live at the moment
so I know exactly what you mean.
296. Can I refer you back to the comments you
made in your evidence about the need for changes to the mechanism
whereby the resources are allocated for affordable housing. You
put forward a number of thoughts. Can I ask you to elaborate on
(Ms Lavis) You are referring to the housing needs
indices, the general needs indices and our comments on Total Cost
Indicators, just to start. We have had concerns for a number of
years that the way that the indices are used to allocate capital
funding to local authorities do not pick up the problem of access
to affordable housing. From a rural perspective they do not pick
up the absolute shortage of supply, the fact that people are actually
leaving the area because they can no longer afford to live there.
What we have been doing is working witha strange bedfellowthe
Association of London Government on an access to affordable housing
indicator which we would like to see incorporated into the HNI.
We have discussed it with the ODPM and they too are interested
in what we can do. What we have said is that alongside the access
to affordable housing indicators there also needs to be something
which picks up what the supply of affordable housing is both in
the open market and the supply of social housing within the area
as well. That is the HNI GNI bit. The other issue about the allocation
which we raise, but partly because it was flagging up a concern
at the moment we are still awaiting further details from the Department,
is the issue about the use of capital receipts. What we are aware
of is that a lot of local authorities who are now debt free because
they have transferred their stock are using that money to be able
to invest in new affordable housing provision in their rural communities.
We would be concerned if they had that ability taken from them.
As I say, at the moment we are waiting for more information from
the Department before we really want to give a firm comment on
that. In terms of the Total Cost Indicators we have done some
work with the Housing Corporation and a number of housing associations
which illustrates that in some areas of particularly high demand
it is very difficult to make particularly social rented housing
stack up and although the review last year of TCI's is very helpful,
there are still some places where it is very difficultsuch
as Wealden, such as the Lake Districtand that affects both
new build and also the possibility for purchase and repair and
existing satisfactory properties. What we would like is some way
in which the regional offices for the Housing Corporation are
able respond to those particular hot spots, but recognising that
they still have to get value for money from any scheme which comes
297. How well structured is the supply of resourcing
in the sense that the Government tends, where it can, to move
financial resources to the more deprived parts of the north and
the midlands, for example? In housing terms that is actually where
the supply is, and the pressures are in the less politically fashionably
shire countries and so forth. Do you think housing suffers as
a result of that?
(Ms Lavis) I think there is obviously a need to provide
a decent home and a decent home might be a home of sufficient
standard and quality. It may also beas in the shire areasto
provide a home which is affordable. I think there is a concern
if too many of the resources are switched over to areas of poor
housing condition at the expense completely of those areas where
there is a severe shortage of affordable housing.
298. You referred in the memorandum to, and
I quote, "guidance should be provided for local authorities
on how they can retain low cost sale housing in perpetuity"
which caused us to scratch our heads a bit. Can you elaborate
(Ms Lavis) That goes back really to the point that
we were making before that often a local authority will negotiate
for a proportion of affordable housing. Often the housing which
comes forward is low cost sale which means that the local authority
do not have the control through a registered social landlord of
retaining it in perpetuity. But what they are concerned abouta
bit like local authority housingis that once that housing
has been sold on by the initial purchaser it is then outside the
affordability of those people on low or modest incomes within
the area. So for a lot of local authorities they need to do something
to make sure that houses still remain affordable. There are two
ways which seem to be being followed up. I think what local authorities
would really like is more guidance and more backing from the Department
for these sort of approaches. First, an example of which is North
Dorset, they actually set within the local plan an affordability
formula so when a developer comes forward and proposes low cost
market housing what the local authority is looking for is "Is
that at a price which is affordable in accordance with the formula
which is set in the local plan?" That sort of secures it
in the first stage. The second is, "What do we do on resale"?
That is the north Wiltshire example where they say "In future
sales we would need the same proportionate discount on resale
and subsequent sales as we did when we first let the housing go
as low cost market housing."
299. Does the Housing Corporation really do
a good job in rural areas in actually facilitating low cost housing?
(Ms Lavis) We are delighted that the Housing Corporation
has certainly taken on board its rural proofing role and has made
this commitment in its rural strategy and rural policy