Fixing our broken (rural) housing market
Although we in the housing world have recognised it for many years, the Government is now acknowledging we have a housing crisis in the UK, felt perhaps more acutely in the dysfunctional housing markets of London and the South East. But of course the housing crisis is not the same in all areas, with many urban ‘postindustrial’ towns suffering acute challenges in desperate need of regeneration and market renewal. Cath Purdy, chief executive at South Lakes Housing looks at the rural housing challenge.
Against the two big housing dilemma and struggling to find housing policies to address specific local issues, sits rural communities. In the corner of the north of England where I am now familiar with, the housing challenges are similar if not as stark as the South East. The place; South Lakeland, is a mainly rural area situated in North West England which encompasses large proportions of the Lake District National Park and the top part of the Yorkshire Dales National Park.
In both national parks, new development is heavily restricted and so the potential to build large scale developments in South Lakeland is largely confined to the parts of the district outside of the national parks, such as the urban settlements of Kendal, Ulverston, and Grange-over-Sands.
The Government’s Right to Buy (RTB) scheme has been very successful for people who can afford to buy their own home in this area, where development over the last ten years has been limited and house prices have continued to rise at above rates of inflation and national house price rises. This has been fuelled by the increasing number of second homes and holiday lest As a result of this, South Lakeland area has seen an annual decrease in available affordable housing to rent for local people and the measures in the recent white paper offer limited scope to redress this.
Recent analysis by the National Housing Federation (Home Truths 2016/17: The housing market in the North West) shows the ratio of house prices to income in South Lakeland at levels of 9.9 which ranks the highest in the region. But wage growth has not kept pace and even low-cost homeownership is out of reach for many local workers (average earnings are £25,724) with the average first time buyer being 37 years old. Local SME’s continue to be the backbone of the local economy with the unemployment rate much lower than the national average (2.4% compared with 5.1% in England). In some parts of the District average house prices are up to 12 times higher than average incomes with the average house price over £250k which was way above the average for the region (£174k). Hence many people, particularly young people, are unable to afford to buy their own home or rent a home privately close to where they may work so they often move away. With a rapidly ageing demography this is of great concern.
Do current policy proposals offer ray of light? The Government’s Housing White Paper “Fixing our broken housing market” promises action on reforming the planning system including more land available for homes in the right places, including allowing rural communities to grow. Although with greater weight attached to the value of using brownfield land it was rather disappointing that we will not be having a proper debate in public policy about the use of the green spaces. This has the capacity to transform rural communities and the wider economy without ‘concreting over Britain’.
There was a number of references within the white paper to rural areas and wider policy initiatives such as a better rented sector, greater weight to using small undeveloped sites, support for rural landowners and greater flexibility for rural exception sites. There was also plenty of criticism of local planning departments and a few carrots to incentivise developers and housing associations to invest specifically in these areas.
One such ‘carrot’ is the Community Housing Fund where South Lakeland stands to benefit from £2M to help tackle the problems caused by high levels of second homes. Second homes make up more than 20% of the area’s housing stock (over 50% in some villages). The new money will come from a tax levied on second homes and will be targeted to community land trusts and others to deliver new affordable homes. Interestingly, these homes will be exempt from Right to Buy.
Tackling second homes is welcomed but the sustainability of rural housing markets is also dependent on new build and the ability to release existing stock through downsizing and better older people’s services. 20% of South Lakeland’s population is retired compared to the national average of 14% and rural communities like ours have problems associated with an ageing population and ageing rural nature of the housing stock, particularly poor energy efficiency standards leading to high energy costs, fuel poverty and ill health. Cumbria County Council has identified a need for 508 new extra care housing units in South Lakeland by 2025 but at the same time we recognise a growing crisis in health and social care we face even more uncertainty regarding the future viability of supported housing schemes.
The White Paper details further arrangements for implementing the new funding model for supported housing (and sheltered housing) which will be set out in a subsequent Green Paper (expected to be published in the Spring). This has potentially catastrophic consequences for sheltered housing should current proposals (relying on LA ‘top-up’ grants) go ahead. Over the next decade changing demographics will alter the demand profile for housing across the country and Housing Associations such as those in South Lakeland will be factoring this into future development schemes for older people to ensure that we develop homes with a longer term demand and secure financial viability.
Developing in rural areas is difficult – it takes longer, it requires additional consultation time, it’s harder to get through planning, standards are higher, available land is expensive (and with green field restrictions, finite) and construction costs are higher too. At a time where construction inflation is rising, where migrant labour supply is uncertain and where everyone is asking the same developers to build. We must find ways to make our combined resources work better by working collaboratively – only then can we start to tackle our broken rural housing markets.
Organisations like my own are grasping the efficiency agenda and making our assets and funding go further through increased development. As a result, we anticipate doubling our output to 250+ homes over the next four years. This will go further as we plan to partner with local organisations to widen our ability to purchase land and to assist with the viability of rural development schemes. But access to land remains a critical barrier which is ironic when you consider that just over 2% of England’s landscape is built on. We need a proper debate in this country about how our green space land is used to serve our people and communities.
South Lakes Housing