Neil O’Brien MP: England’s rural housing crisis cannot be resolved by simply 'building more homes'

It's difficult to live in London and not be confronted by the sharp end of what the housing crisis means for some people. Rough sleeping is up by 169% since 2010, 15% in the past year. However, the crisis is not just an urban phenomenon with rural England facing its own unique set of challenges characterised by high house prices, lower wages, plus the seasonal nature of both the rental and job market.

Building affordable and quality homes in rural England was the topic of the CPRE and National Housing Federation fringe event on Sunday evening. Chaired by the Editor of Inside Housing Emma Maier, the panel consisted of Neil O'Brien MP for Harborough, John Lefever of Hastoe Housing Association, and CPRE's Director of Campaigns Tom Fyans.

"The media images are dominated by rough sleeping in cities, but despite the fact that the rural housing crisis does not quite fit that picture it is no less devastating for those people who are affected by it. Nearly 1 in 5 people across the UK live in rural communities, so it is an issue that we should be talking about a great deal more than we are," remarked Ms Maier.

Neil O'Brien MP says that for too long the housing debate has been dominated by false choices and endless bogus arguments.

"The quality of our housing debate is rather lopsided in this country."

The MP said the debate needs to refocus on tackling the root causes of limited supply, such as local opposition to development and lack of infrastructure and have a concerted push towards increasing ownership occupation and strategic developments with well-designed infrastructure.  

"Every year in this decade the private sector built about 165,000 houses, but owner occupation still went down because the private rental sector has expanded by 195,000 houses every year. The growth in the private rental sector, driven by buy-to-let and the like, outpaced the building. Even if we do build an additional 30,000 houses a year we won’t see a big enough upturn in owner occupation to see a reverse in that fall in the last decade unless we change the private rental sector."

Ms Maier pointed to the fact that there has been a 30% increase in second homes between 2000-2014, up to 5.2 million.

"If you think about the scale of the number of homes we are hoping to build, 5.2 million is quite a figure for us to be thinking about. It is of little surprise that in some places the market has deviated to serve the second and holiday home owners. The retirees who may be wealthier than those in work or those who are searching for work."

To combat this issue the MP for Harborough said giving people tax incentives for investing in other things outside of bricks and mortar - such as to move away from Buy-to-Let or for making investments in stock and shares - can make a difference.

The audience heard how the current crisis has been driven by the fact that in many communities, the market for housing has become divorced from local people and local incomes.

Tom Fyans said by definition, only 8% of rural housing stock is classified as "affordable". He was concerned that the current definition of affordability which is based on market value does not take into account rural salaries, which are typically lower than in urban areas. To tackle this, Fyans said there may be a need for a look at a "rural living rent rate" or getting rental values more linked to local earnings, calling for a new definition that is linked to income and not to market.

The panel agreed that affordability is also impacted by how land value is captured.

"A piece of land that goes from being a piece of agricultural fields to being given permission for residential development becomes worth about 100x more. The great majority of the value of that is captured by the developer or the land speculator," said O'Brien.

He continued saying that often times the land speculator just sits on the land, gets the planning permission, captures the uplift in value and doesn't build.

CPRE's Tom Fyans also hit on this issue saying: "The land's value increased 120 times once given planning permission. Who gives that value? The land owner doesn’t give any value to that land, it is the community - all its services and infrastructure - that makes the land valuable. At the moment the vast majority of that value is given to the land owner.

"If you are selling the land at 120 times it's real value, how are you actually going to resolve the rural housing crisis?"

Fyans emphasised that the land developers are not technically at fault as they are "building within the system", a system that he claims, does not allow for you to assemble that land at the kind of rate that you can build affordable homes on.

"Because of that, you get the market that you see around the country - developments not created for local need which is the key driver."

He called upon Government to look at home value and reform the 1961 Land Compensation Act.   

"We've done it before, we can do it again. It used to be that 100% of the value was captured, but that has changed over the past 70 years."

Beyond the affordability issue, the panel recognised that there is also a resistance in some places to development.

To overcome local opposition, O'Brien said we need to put a stop to "piecemeal unplanned development."

He called for a move away from the "classic model" of development in rural communities, which entails tacking housing developments onto villages without providing new infrastructure to support them. The MP said this model leads to the village or town resources gradually getting overwhelmed and with important expansions of roads and schools being prevented due to them being "surrounded" by new housing.

"Basically villages that are designed to be small become overloaded.

"We need to get back into the business of planned development, where you can have proper planning for infrastructure, proper transport, and you get away from this “just tacking on” that drives people crazy.

"If you wanted to maximise the opposition to new development in this country, you would have a system that looks a lot like the one we have got."

The MP said it was important to capture more of the value of the development for the community, a potential figure of £9 billion a year, that can be invested in new infrastructure, parking spaces, landscaping, quality house building and the socio-economic infrastructure.

John Lefever, Land and New Business Manager, from Hastoe Housing Association - the largest rural housing association in the UK - said it is important to have a "community connection."

"We believe in rural housing, and we believe if it is done well, we don't just tack it on..."

He said it was absolutely essential that housing is built to only address "local housing need. " The benefits of focusing on local need is that it is not market lead, which means if the market dips, they keep building.  He remarked that the government needs consistency in delivery and housing associations like his deliver that.

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