How do we keep rural housing affordable?
Sajid Javid says rarely a day goes by when he doesn't hear about somebody suffering from a housing problem.
"Having a decent roof over your head is not a luxury," says the Secretary of State for Housing, Communities and Local Government.
Today, as he prepares to set out his plans for tackling England's housing crisis, two charities are urging Mr Javid to spare a thought for those in rural communities whose problems often seem to be overlooked.
Mr Javid is expected to announce reforms of the National Planning Policy Framework in today's speech.
Rebecca Pullinger of the Campaign to Protect Rural England, and Rose Grayston of housing charity Shelter, say that closing a loophole which allows house builders to avoid commitments for affordable housing would be a step in the right direction.
Under the present system, any development of 10 homes or more must normally include an element of "affordable" housing, which is available to rent through a social landlord at below market rent. However, builders can be exempted from this if it is considered the requirement would make a scheme unviable, which is defined as giving the developer a "competitive" return.
The two charities have now published a report looking at eight rural areas across England – including Shropshire – and shows that there are huge variations in the willingness of local authorities to relax their requirements on affordable housing to meet housebuilding targets.
The issue is particularly problematic in rural areas. On the one hand, the need for housing is putting the green belt under increasing pressure, as councils look for ways to meet housing targets. On the other, developers prefer to build the more lucrative 'high-end' homes for obvious reasons, doing little to alleviate the need for affordable housing.
What these exclusive developments do, though, is attract well-heeled city-dwellers looking to make their flight to the country. If these newcomers bring teenage children with them, it will also exacerbate the problem when the time comes for them to leave home.
The report, published at the weekend, looks at how viability exemptions have affected the number of affordable homes in eight rural counties: County Durham, South Lakeland, Yorkshire and the Humber, Newark and Sherwood in the East Midlands, Shropshire, central Bedfordshire, Horsham and Cornwall.
The research found that, on schemes where viability assessments were only 1,028 of the 1,966 affordable homes required by local authority policy guidelines were actually delivered.
The findings echo the comments of construction boss Wayne Holt, who last month told the Shropshire Star that government house-building targets were actually making the shortage of affordable housing worse. Mr Holt, executive director of civil engineering consultants Design2e, said that placing local authorities under pressure to meet targets for new homes meant that developers held the upper hand when negotiating with councils what types of houses they would build.
The good news is that, over the 12-month period the research was carried out, none of these lost opportunities were in Shropshire.
"Shropshire Council's robust, evidence-based approach to its affordable housing policy may account for this," says Miss Grayston.
The council is praised for its flexible approach to meeting changing needs for affordable housing based on up-to-date figures. It also operates different policies in different locations, depending on the demand and the availability of suitable sites.
"Shropshire sets out clear expectations of on when a viability appraisal might be acceptable and how it should be completed," says Miss Grayston.
"Shropshire is an example of a rural authority maximising affordable housing provision through effective local policies, in the context of unnecessary national policy hurdles to overcome."
That said, the report says affordability of housing relative to people's incomes is a growing problem in the county.
"In common with other areas in our study, Shropshire's natural environment has made it a desirable place to live – and buy holiday homes," says Miss Pullinger of the CPRE.
"The area's popularity with second homeowners and older people looking for a pleasant place to retire has driven a buoyant housing market, but wages for local working-age people remain too low to afford the new homes being built.
"Homes cost on average seven times local earnings, underlining the need for affordable sub-market homes to house local people."
They call for the new planning framework to include a clear requirement for developers and landowners to take into account the need for affordable housing when they first draw up schemes and agree land prices. This would prevent developers from paying over the odds for land, and then trying to recoup the costs by getting out of the affordable housing commitments, the report says.
Negotiations between developers and local authorities on affordable housing provision should be held in public, the report says. It also calls for a tightening of the loophole which allows building companies to define what they consider a "competitive return", saying it should be up to the council to decide what is an acceptable profit margin.
"Some housing schemes will be genuinely unviable, for example where a site turns out to have abnormally high remediation costs that could not possibly have been picked up in earlier surveys," says Miss Pullinger.
"However, site viability assessments should not be used to manage normal market risks, such as sales values being lower than a developer bet on when purchasing land."
Crispin Truman, Campaign to Protect Rural England chief executive, says: “A lack of affordable housing is often seen as an urban problem, with issues of affordability in rural areas overlooked.
"It cannot be ignored any longer. Too much of our countryside is eaten up for developments that boost profits, but don’t meet local housing needs because of the ‘viability’ loophole."
Polly Neate, chief executive of Shelter, adds "With this new research, we can see for the first time the true scale of our housing crisis – it’s not just blighting cities but our towns and villages too.
“Developers are using this legal loophole to overpower local communities and are refusing to build the affordable homes they need.
“The Government should use their current review of planning laws to close this loophole and give local communities the homes they really need."
