Written evidence submitted by the Country Landowners Association [NPP 28]
The CLA
The CLA represents landowners, farmers and other rural businesses. We represent over 33,000 members who own and manage more than half the rural land in England and Wales. Our members play a vital role in delivering rural housing and own almost 40% of rural rented accommodation.
Introduction
The CLA is committed to ensuring the long term success of the rural economy. An acute shortage of housing constitutes a threat to the continuing economic vibrancy of rural communities and businesses. The shortage of affordable housing is particularly pronounced with only 12% of all housing being affordable compared to 19% in urban areas. The answer to the housing crisis in rural areas however is not to devote all efforts to one tenure, but to offer a range of tenures that are appropriate to the community.
The Matthew Taylor report ‘A living working countryside’ published in 2008 identified land supply as a barrier to increased development. While large sectors of England’s property market experienced reduced returns and scaled back development programmes in the wake of the economic downturn, CLA members have seen the price of some farmland rise, meaning CLA members have seen an increase in borrowing capacity. This ability to borrow puts landowners in a unique position to increase housing provision in rural areas. There are a number of disincentives that prevent or dissuade landowners from developing housing themselves or making land available for housing of different tenures. These are discussed in this document, with recommendations suggesting how landowners can play a greater role in solving the rural housing crisis.
Starter Homes
The CLA is largely supportive of Starter Homes. We see them as having the potential to make a positive contribution to the menu of housing options the Government has made available for first time buyers, particularly those currently renting in the Private Rented Sector (PRS).
From a rural perspective, we have concerns that Starter Homes will be unaffordable for local first time buyers. In 2015 rural areas had 42% first time buyers compared to urban areas where the figure was 52%. This suggests that individuals living in rural areas are facing greater difficulties accessing home ownership. Part of this is the price premium attached to rural property and countryside living, the Halifax Rural Housing Review found that the average house price in British rural areas in 2015 was £236,971 compared to £193,481 (excluding London). This additional cost, the lack of development and the purchase of holiday homes puts potential rural first time buyers at a significant disadvantage.
We are therefore heartened that the Minister for Housing and Planning intimated during committee stage of the Housing and Planning Bill stated there would be some kind of local connection test for Starter Homes in rural areas. We think this would ensure local support for development as if no restrictions were in place there is a danger that local people would be outbid by commuters.
Rural Exception Sites
The Government’s announcement that Starter Homes are to be included on Rural Exception Sites is particularly detrimental to the future release of land for affordable housing on Rural Exception Sites. We would be interested to know why the Government decided to include Starter Homes on Rural Exception Sites despite its previous decision in March 2015 to exclude them.
Rural Exception sites have enabled the construction of 7,497 new build homes from 2010-2015[1]. While this is about a relatively small amount considering we should be delivering about this total annually in rural communities[2] they are nevertheless effective relative to other delivery mechanisms.
As Starter Homes can be sold on the open market after five years, they have the potential to be extremely lucrative to the first occupier upon sale. We are concerned that landowners would be less likely to offer sites when it is clear that land intended for affordable housing for the community is likely to be lost after only five years and generate a healthy profit for an individual rather than the community.
Allowing Starter Homes on Rural Exception Sites is also likely to weaken community support for any future Rural Exception Sites as without policies such as our recommendation; properties sold could be occupied by those without a local connection and potentially used as second homes.
Nomination Rights on Rural Exception Sites
We believe that the provision of rural exception sites for affordable housing could be greatly increased if landowners were able to nominate tenants for a proportion of the housing, this would be particularly appealing to landowners looking for housing for retired farm-workers or to help younger people remain in or move back to their community.
The process for nomination rights is currently determined on a case by case basis between the landowner, the Local Authority and a housing association, and there are some excellent examples of the process working well. However there are also Local Authorities who are not engaged in this process and are thus ignoring a possibility to incentivise more landowners to bring additional sites forward. We would suggest that having clearly set out national guidance would make the process clearer and would help to bring additional sites forward for development. To encourage more landowners to provide more sites for Rural Exception Sites we would propose the following:
• Landowners should have the right to nominate tenants through a referrals system for up to 33% of the affordable homes where the properties are either funded through grant by the Homes and Communities Agency, or funded by a housing association, or a combination of the two
• Landowners should have full referral rights where they also fund the delivery of housing themselves provided that the houses remain affordable in perpetuity through a Section 106 agreement
The nomination process would have to ensure that anyone nominated by the landowner satisfies the local connection test outlined in the Housing Act 1996. By ensuring this, we envisage that there will be greater support from the local community as they will directly benefit.
Green Belt development
We would tend to believe that Government should allow neighbourhood plans to allocate all types of housing on small greenbelt sites, not just Starter Homes. It seems counter-intuitive to allow communities to determine future development themselves, only to constrain what they can build. In effect this policy change gives neighbourhood plans the power to build what the Government wants - rather than what they may necessarily want, which in some cases will be fine, but inappropriate in others.
January 2016