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Where has our affordable housing gone?

Where has our affordable housing gone?

In my previous blog in June on the subject of affordable housing, I highlighted that developers are routinely failing to provide the affordable housing they originally promised in large new private housebuilding schemes across rural England. Even worse, there is an ongoing debate about whether the official definition of ‘affordable housing’ is as stringent as it should be.

Three months on and a team of us at CPRE – with some kind assistance from the consultancy Rural Housing Solutions – have carried out some further investigation of the rural housing picture. And the picture emerging is not a pretty one.

In June we saw how local communities’ targets, as developed by councils, to address the affordable rural housing shortage, are regularly being flouted, and developers’ profit margins given more priority. Generally, if developers can opt out of building affordable homes on grounds of 'viability', they will make more money from a given scheme. These renegotiations are happening time and again, but are very hard to keep track of, as the details are often buried within local authority planning application databases and committee reports. But a hint of how widespread the problem has become can be gleaned from the use of a special, time limited mechanism (referred to as ‘Section 106BC’) for appealing affordable housing agreements that had effect from November 2013 to May 2016.

CPRE analysis found that, of the 23 appeals submitted in predominantly rural districts under this mechanism, the developer’s desired reductions were allowed either wholly or in part in 17 cases. This meant that of the 1,153 affordable homes intended when planning permission was originally given in these cases, 478 were lost, usually replaced instead by more profitable general market housing.

The communities most affected by the use of the Section 106BC mechanism were Faringdon in Oxfordshire, where 80 affordable homes were lost, and Lydney in Gloucestershire, which lost 138. It is also important to remember that the end of this mechanism has not prevented ostensible commitments to affordable homes being watered down. Developers and local authorities can still use the more established ‘Section 106B’ power to modify any planning agreement, including for affordable housing, five years after the original agreement was signed.

And it looks like worse is to come. We now seem to be set for a vicious downward spiral of failing to meet rural housing need, as the policy targets themselves are first watered down, and then often not met in practice. We analysed 62 rural local authorities* that have adopted plans since 2012 (see tables below), when the National Planning Policy Framework (NPPF) came into force.

In general, local plans produced since the NPPF came into force are seeking to meet the overall or full objective assessment of need. The Government estimates that the average overall assessed need for a single local authority is 781 dwellings per annum and the average housing requirement per local authority is 671 (targets are currently meeting 86% of assessed need). But, just to add to the confusion, overall assessments of need lump in market demand with social need. 

When it comes to meeting the part of the need assessment that relates specifically to affordable housing, the plans come up short by a very long way. There was a need for 46,100 affordable homes in total across the 62 local authorities. But the actual plans only have an overall ambition for 29% of the new homes planned to be affordable, to be achieved through negotiations with developers on individual sites in the plan. This means that the local authorities will only seek to provide 25,500 homes – little more than half of the assessed need – in practice.

If current trends continue, actual delivery is likely to be much lower, because developers can also negotiate down the policy requirement on an individual site through the use of a viability assessment. This can take place even before a planning agreement is signed, and once an agreement is signed then the affordable housing can be negotiated down still further. Indeed, in the past three years only 26% of all new homes built, or 18,700 homes, have been affordable in the 62 authorities we surveyed.

 

Survey of 62 rural local authorities with post-NPPF adopted local plans

 Proportions  Notes
 Affordable housing need  68% Need as a proportion of the local plan housing requirement
 Affordable housing target  29%  Target as a proportion of new development
 Affordable housing delivery  26%

Affordable homes as a proportion of all new homes (annual average over the past three years: 2013/14 to 2015/16)

 

Survey of 62 rural local authorities with post-NPPF adopted local plans

 Proportions  Notes
 Affordable housing need  46,100 Based on figures from Stategic Housing Market Assessments quoted within the local plan document. A total 37 local authorities have quoted such figures.
 Affordable housing target  25,500 Extrapolated from affordable housing policies within the local plan
 Affordable housing delivery  18,700

Based on an annual average over past three years delivery from DCLG

 

The overall picture is clear: since the NPPF came into force, performance on delivering rural affordable housing has been poor, and the Government’s planning reforms have served to encourage this reduction in delivery. We now have a chance to tell the Government about this problem. A new consultation on revising the method for calculating housing need has just been published. Our immediate response to it is here and we’ll be going into it more detail in the next few days.

 

* The local authorities surveyed were:
Allerdale, Babergh, Basingstoke and Deane, Bath and North East Somerset, Broadland, Cannock Chase, Carlisle, Cherwell, Cheshire West and Chester, Chichester, Copeland, Cornwall, Dacorum, Daventry, East Cambridgeshire, East Devon, East Dorset, East Hampshire, East Northamptonshire, East Riding of Yorkshire, East Staffordshire, Fenland, Great Yarmouth, Hereford, High Peak, Horsham, Lewes, Lichfield, Malvern Hills, Mendip, North Dorset, North Kesteven, North Somerset, North Warwickshire, Ribble Valley, Richmondshire, Rother, Rushcliffe Borough City, Ryedale District Council, Selby, Shepway, South Derbyshire, South Norfolk, South Northamptonshire, South Somerset, Stafford, Staffordshire Moorlands, Stratford-on-Avon, Stroud, Suffolk Coastal, Teignbridge, Test Valley, Vale of White Horse, Wealden, Wellingborough, West Dorset, West Lancashire, West Lindsey, West Somerset, Wiltshire, Winchester, Wychavon

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19 September 2017

We now seem to be set for a vicious downward spiral of failing to meet rural housing need, as the targets themselves are first watered down, and then not met in practice




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