Rural Affairs

Chapter 5: An affordable home

The issues

  • There is a shortage of affordable housing in many rural towns and villages which are frequently popular and attractive places to live. Demand for housing is high, both from local people and from new residents - commuters, the retired and second home owners. This can create unbalanced communities and deny local people the chance to acquire a home.
  • The Right to Buy scheme has helped tenants to realise their aspiration to own their own homes and in many cases it has helped to create stable, mixed-income communities. But it has been a costly scheme and in the absence, under the previous government, of sufficient investme> replace housing being sold, has led to the removal of more desirable homes from the social rented sector. This has left local authorities with a smaller stock of poorer quality properties in which to house people who need affordable housing to rent, particularly in small rural communities with only a few homes for rent.
  • There is less obvious homelessness in the countryside, but homelessness cases accepted by rural authorities have increased as a proportion of the total in the last decade.
  • There is often resistance to new housing in small villages because of the fear that it will not fit in.

The future - what we want to see

  • A high proportion of affordable and decent housing, both for rent and sale, in market towns and villages to support a living, working countryside with inclusive rural communities which help young people to remain in the area where they grew up.
  • New housing development built sustainably in market towns where it is accessible to jobs and services and will reduce car dependence. By making use of previously developed sites we can reduce the amount of new development in the open countryside; an urban renaissance so that our larger towns and cities will become more attractive places to live.
  • Sensitively designed new housing in towns and villages using materials which blend with nearby buildings and that is carefully sited so that it fits into the surroundings.

Summary of measures

  • Doubling funding for the Housing Corporation between 2000 and 2003 to benefit both rural and urban areas;

  • Doubling the size of the Housing Corporation's programme in small rural settlements from 800 to 1,600 homes a year;

  • Local authorities able to charge the full council tax on second homes and retain extra revenue (subject to consultation);

  • Better use of the planning system to secure more affordable homes as part of mixed developments in market towns and rural areas. There is no reason why, in small villages if there is evidence of need and subject to financial viability, every new market house should not be matched with an affordable home;

  • Better designed homes to fit in with rural surroundings;

  • Package of VAT reforms to encourage additional conversions of properties for residential use.

Contents

5.1. Introduction

5.2. Identifying the need for affordable housing

5.3. Providing the resources for affordable homes

5.4. Planning for affordable housing

5.5. Making better use of existing housing stock

5.6. Rural homelessness

5.7. Improving housing quality and design

"So what happens to the young people when they get to the age when they want to make a household?" "They leave, or they stay at home with mum and dad, or they go off to somewhere like Chesterfield where house prices are more reasonable."

"So you really wouldn't be able to afford anything in your own village?"

"Not in my village, no"

"Does that bother you, or not?"

"It does really, yeah, 'cos I do like where I live, but there's just nothing - I would stay there if I could afford to."

5.1. Introduction

5.1.1. We are putting in place a framework to ensure the housing needs of rural areas are better met. Our strategy is to ensure that rural affordable housing needs are properly identified; that a higher proportion of housing provided in rural areas is affordable; and that new housing is designed to enhance the countryside. We will deliver this strategy through a substantial increase in resources for affordable housing and by making better use of the planning system to provide a higher proportion of affordable housing.

5.1.2. In the Spending Review 2000, we announced an additional £1.8bn investment in housing over the next three years. This is in addition to the extra £5bn announced for housing as a result of our Capital Receipts Initiative and the 1998 Comprehensive Spending Review. This means that around £13bn will be available over the next three years for more and better housing.

5.1.3. However our aim is not just to increase the amount available for housing overall, but also to ensure that an adequate share goes towards those rural areas where additional resources are most needed.

5.2. Identifying the need for affordable housing

5.2.1. We know that the housing needs of rural areas are not always properly assessed at the local level. Responsibility for assessing housing needs rests primarily with local authorities. A robust needs assessment is an essential input to the housing strategies authorities are required to produce. Making such an assessment is not easy because of the scattered nature of rural communities. But it is essential that it should be done, and done in consultation with the local communities themselves.

  • We are therefore asking all authorities with rural areas to make a specific assessment of the rural housing needs in their area, and to include in their strategies a plan for meeting these needs. We have recently issued guidance on how to ensure the needs of everyone in their area are taken into account, including the particular circumstances of sub-areas, including rural areas. This stresses the importance of local authorities consulting local communities including parish councils; and we have endorsed the recently published guide to local authorities Developing Housing Strategies in Rural Areas which has been developed by the Chartered Institute of Housing, along with the Housing Corporation and the Countryside Agency;

  • In making recommendations on funding allocations for housing, the Government Offices in the regions will take into account how effective local authorities have been in identifying rural need. To this end the Government Offices will monitor local authorities' rural needs assessments;

  • The Housing Corporation is now adopting an increasingly strategic approach to the allocation of resources under its Approved Development Programme. This ensures that investment decisions are based on regional and local priorities. The Corporation will continue to include allowance for the higher costs which can be incurred in developing small schemes in villages in its scheme cost criteria. It will also include issues relating to development in rural areas in its forthcoming review of total cost indicators and social housing grant rates.

See progress towards this commitment in the Rural White Paper Implementation Plan

5.3. Providing the resources for affordable homes

5.3.1. It is clear that there is a need for more affordable houses in many rural areas. We are providing an additional £50 million this year, followed by an extra £872 million between 2001-02 and 2003-04 for building new social housing in both rural and urban areas. This will mean that by 2003-04 we will have doubled annual funding for the Housing Corporation's Approved Development Programme (ADP).

Case study - rural housing development with local authority support
A council-owned in-fill development site in Chapel Lane, Weston Sub Edge, Gloucestershire was released from adjoining secure tenancies and originally granted planning consent for a single detached house.

The Parish Council and Ward Member were concerned about the lack of affordable housing for local young people. Two one-bedroom homes were built instead.

The development was possible through the benefit of the partnering contract which batched a number of small rural schemes with a significant 20 unit scheme at Willersey. The scheme was completed in February 2000. The units were joint funded with Social Housing Grant by the Housing Corporation and Cotswold District Council.

Funding for social housing

The main mechanisms for financing provision of additional social housing (rented housing at below marked rates) are:

  • Funding by the Housing Corporation through its Approved Development Programme (ADP) to Registered Social Landlords (RSLs) which provide lower than market cost housing;
  • Funding for new or replacement social housing by means of Local Authority Social Housing Grant (LASHG) through local authorities' housing capital programmes. This is financed partly from allocations from central government and partly from authorities' own resources.
Affordable homes in small rural settlements

5.3.2. There is a particular problem in small rural settlements, where often all the new housing has recently been executive homes that local people cannot afford to buy. To make sure that a fair share of the additional funding goes to small rural settlements where there is a need for affordable housing:

  • We will double the number of dwellings which the Housing Corporation's rural programme will deliver in settlements of less than 3,000 people over the next three years. By 2003-04 we expect 1,600 dwellings a year (provided by Registered Social Landlords) to be approved in those settlements compared with about 800 dwellings in the current year. This means that the proportion of the dwellings in small settlements approved by the Corporation will rise from the current target of 3.4% to a new target of 6.4%;

  • We will encourage local authorities to provide more new affordable housing in small rural settlements where there is high demand through use of local authority Social Housing Grant. This, together with the judicious use of planning powers (see para 5.4 below) should bring 1500 or so affordable social homes annually to small rural settlements - ie together with the Housing Corporation rural programme a total of over 3,000 by 2003-04.

See progress towards this commitment in the Rural White Paper Implementation Plan

Affordable homes in market towns

5.3.3. While it is important to provide new affordable homes in villages where there is a need, about half of rural people live in market towns, and that is where we expect most new affordable housing to be provided.

  • Some 3,800 affordable homes (16% of the total Housing Corporation programme) were approved in 1999-2000 in local authority districts with rural areas, including market towns. (This was in addition to the housing provided in settlements of under 3,000 people under the rural programme.) We expect this to grow, alongside urban approvals, as they benefit from the extra resources which the Government is providing for the Approved Development Programme over the next 3 years.
  • Local authorities also finance new affordable homes. On average we estimate that some 8,000 social housing dwellings are provided by this means annually in England, of which the majority are in the south east and south west. In 1999-00 around 2,500 dwellings were approved in rural districts. We expect rural local authorities to use this route to provide homes in market towns and small villages which help people to live and work in the countryside. They will be assisted by the massive boost in the overall resources provided to local authorities for housing investment. The resources allocated for 2000-01 are around twice the amount allocated for 1997-98 and will increase by a further 40% over the next 3 years.
  • The Housing Corporation will be reviewing its rural strategy following the White Paper to ensure that it responds effectively to the housing needs of rural communities. The Corporation wants to fit its rural policy within their broader investment strategies and acknowledge the key role of market towns alongside the village programme.

See progress towards this commitment in the Rural White Paper Implementation Plan

Cheaper homes to buy

"It's a very difficult problem, it's not just young people, it's people like, for example, young teachers. When the schools advertise here for teachers they don't get many applicants, frankly, because they just can't afford to come and live here - very, very difficult for them."

5.3.4. In addition to the need for more social housing, there is a demand for cheaper housing for purchase in rural areas, for example to help young couples get their feet on the housing ladder.

  • We will therefore increase the level of support to help those on modest incomes acquire their own homes. There are several existing schemes which help people into home ownership. Options include part buying and part renting homes from Registered Social Landlords (RSLs) or using an interest free equity loan from an RSL toward the cost of a property eg Homebuy.

  • In addition our Housing Green Paper Quality and Choice - a Decent Home for All announced the new Starter Home Initiative which will assist key workers with home ownership in areas of high prices and high demand. The Spending Review has provided £250m to support this important initiative and we will make sure that these funds will be available to benefit rural high demand hotspots, among other areas.

See progress towards this commitment in the Rural White Paper Implementation Plan

5.3.5. Through these measures we can substantially increase the supply of affordable homes in rural areas. We expect to deliver around 9,000 affordable homes annually in rural districts by 2003-04 (including 3,000 in small settlements). However, the precise amount will depend on local authorities' investment decisions and additional housing provided through the planning system.

Case study - shared ownership housing
Uttlesford District Council gave planning permission in 1988 for ten houses on its first exception site (see paragraph 5.4.4) in Ashdon, near Saffron Walden. Because of the negligible land cost, English Villages Housing Association was able to provide shared ownership houses (at 50% of value) on this site without any public subsidy.

The scheme is now eleven years old and some of the houses have changed hands - always to people from the village of Ashdon. Building Societies remain willing to provide mortgages on the properties. Further non-subsidised shared ownership houses have been built by English Villages Housing Association in a further 6 villages in the District. Altogether, the association has built 397 non-subsidised shared ownership houses in 89 villages in England.

5.4. Planning for affordable housing

"To the best of my knowledge all the recent planning has been for medium-to-upper group housing."

5.4.1. The planning system has a vital role to play in the provision of both affordable housing for rent and for purchase. Our new planning guidance on housing (PPG3) emphasises the importance of an affordable housing policy based on an assessment of local need.

5.4.2. When developers apply for planning permission to build new houses, the local authority can seek a contribution to affordable housing, usually by asking for a proportion of the units to be built on site as social housing. Local authorities outside London can do this if the development covers a site of at least one hectare or involves at least 25 dwellings or more. But where acute pressures can be shown to exist and smaller schemes would be viable, authorities can adopt policies in their plans to use lower thresholds down to developments on sites of only half a hectare or with as few as 15 dwellings. This offers particular flexibility for small housing development in market towns.

5.4.3. Furthermore, in settlements of 3,000 or less, no thresholds apply. So in villages where there is a clear need for affordable housing, the local authority can seek a proportion of affordable housing even on the smallest site. This provision, which is of particular benefit to rural areas, is not always used to full effect, and we believe that its wider adoption could generate significant numbers of affordable houses in rural villages.

Exception policy

5.4.4. We also want to encourage the use of the rural exception policy. This is a special provision which applies only in rural settlements (but regardless of size) where permission would not otherwise be given for new housing development. It can provide a significant number of affordable homes for local people in rural areas - around 1,500 in 1998 - which is in addition to those delivered as a result of an authority's general affordable housing policy. The exception applies to additional affordable housing made available only for local people in perpetuity. Local authorities who include an exception policy in their local plan can grant planning permission for small sites within or adjoining villages which would not otherwise be released for housing. Again we would like local authorities to make more use of the exception policy. "Yeah, but we sold some land for eight bungalows, and if it wasn't for those bungalows our church would fold - mother and I used to be about the only ones that went to church, and now we get about 16 - and they have really brought life."

Case study - Sussex Rural Community Council helps deliver affordable housing
In Sussex, seven district councils work together along with the Sussex Rural Community Council to address affordable housing issues in a consistent and constructive way. In 1998-99 they secured over 450 houses, three quarters of which were in small villages. A Housing Enabler has recently produced Guide to Good Practice, Affordable Housing for Rural Communities. The Guide provides step by step advice to parish councils on ways they can participate in providing affordable housing in their village - assessment of local need and the use of local surveys, identifying a potential site, consulting with the community, choosing a developer (typically an RSL) and obtaining planning permission. It sets out the role parish councils can play in advising local people on the process of nomination to one of the new homes in their village.

Case study - exception sites
Hartpury and Staunton, Forest of Dean District Council, Gloucestershire
These two recent newbuild developments are mixed tenure schemes to meet local housing needs on a rural exception sites using Housing Corporation Social Housing Grant. It is the outcome of a local housing needs surveys in both villages. Both settlements are in higher house price areas causing a significant ‘affordability gap' for local people to access housing. Each seheme is on a site bordering the village Planning envelope consisting of 8 two- and three-bedroom houses for rent and shared ownership. Rents are between £50 and £62 per week with shared ownership starting from £22,500 for a 50% share. Both schemes were oversubscribed and households housed all had strong local connections:
5 locally resident households
8 previous lengthy residence
10 with close relatives in the village
4 with employment in the village.
Putting affordable housing policies into practice

5.4.5. Local authorities' success in using these planning policy tools is variable and some have not exploited them fully. We think authorities could and should make greater use of these policies.

  • Local authorities should negotiate an appropriate element of affordable housing and there is no reason why, in small villages if there is evidence of need and subject to financial viability, they should not seek to match every new market house with an affordable home.

5.4.6. Closer working between housing and planning authorities, the Housing Corporation and Registered Social Landlords (eg Housing Association) is critical and this is something we are trying to encourage. We have already commissioned wide-ranging research on the use of current planning policy to provide for affordable housing and will advise on good practice guidance for local authorities and others on delivering affordable housing through planning policy.

We will issue best practice guidance which will:

  • Provide practical examples of where rural authorities are planning successfully for affordable housing;

  • Encourage local authorities to consider whether Local Authority Social Housing Grant, could be used to ensure that the potential of exceptions sites is used to the full;

  • The Countryside Agency will continue to fund its successful Rural Housing Enabler programme and explore extending it to more rural areas.

Further help from the Countryside Agency The Countryside Agency is already helping local authorities and rural communities to secure affordable homes in villages - eg through its Rural Housing Enablers programme. It is exploring further ways to help including using a community trust to purchase the land and through a combination of private funding and mortgaging the land, raising finance for social housing. This could be combined with mechanisms to retain the low cost sale element in the affordable housing sector in perpetuity.

Case study - Northumberland Rural Housing Forum
The Rural Housing Enabler (RHE) in Northumberland, based with the Rural Community Council, operates over the four district councils covering the rural parts of the county. Through joint working, now formalised in the Northumberland Rural Housing Forum the RHE has helped 45 communities identify needs and supported the development of 59 new affordable homes in 10 villages. With her support the community on Holy Island established a Community Trust. This has funded five rented homes for local people which are owned by the Trust. It has bought a vacant hotel and converted it to a community centre and hopes to do a further conversion to create two additional flats.

See progress towards this commitment in the Rural White Paper Implementation Plan

5.5. Making better use of existing housing stock

Housing tenure in rural areas compared with England as a whole
Pie chart showing housing tenure in rural areas compared with England as a whole

5.5.1. One of our main priorities is to ensure that all social housing is brought up to a decent standard within ten years. Our strategy for improving the quality of housing and service delivery was set out in the Housing Green Paper Quality and Choice: A decent home for all.

5.5.2. We also want to make sure that more of the existing housing in rural areas is available to local people. In some rural areas, a high proportion of houses are used as second homes, empty for much of the year, thus increasing the pressure on the existing housing stock. Another concern is that dwellings originally provided as social housing can be bought by the tenant and then sold on, reducing the low cost housing stock available for local people and those who need to work in the area. That is why we need the possibility of imposing some restrictions on resale.

Restrictions on resale of right to buy homes

5.5.3. Secure tenants - most council tenants and some tenants of Registered Social Landlords - have the right to buy their home at discounts of up to 70%. Tenants in rural areas have the same right to buy as tenants in other areas. But right-to- buy landlords in certain rural areas can impose conditions on the resale of such homes, in order to maintain a supply of affordable homes for local people. In a National Park, an Area of Outstanding Natural Beauty, or any area designated by the Secretary of State as rural they can impose one of two restrictions:

  • They can require the tenant, if reselling within 10 years, to offer them the first chance to buy the home. This enables them to bring the property back into their stock of affordable homes for rent; or

  • They can require him to resell only to someone who has lived or worked locally for at least 3 years. This requirement binds all subsequent buyers of the property. Such a restriction tends to reduce the value of the property, and so makes it more affordable as well as available to local people. As this limitation will have applied when the tenant first bought the property it will have been reflected in the purchase price, so the tenant will not lose out. This policy gives rural tenants the same rights as others while at the same time helping to promote the supply of affordable homes in rural areas and assist smaller communities to thrive.

5.5.4. Twenty four areas of England - mainly districts or parts of districts - have been designated as rural for resale restrictions since 1980. Applications for other areas to be designated can be made to DETR. These should be made or supported by the local housing authority. In reaching decisions the Secretary of State uses a number of criteria including size of settlement, population density and the incidence of second homes in the areas.

  • We will remind authorities in rural areas where there is a significant demand for affordable housing to consider the possibility of applying for designation.

See progress towards this commitment in the Rural White Paper Implementation Plan

5.5.5. Our housing Green Paper Quality and Choice - a Decent Home for All made clear that we have no plans for further significant changes to the right to buy scheme.

Making housing available for local people

5.5.6. We are taking other measures to make sure that more existing dwellings in the countryside are available to local people on lower incomes:

  • We propose (subject to consultation) to give local authorities discretion to charge the full council tax on second homes, rather than the 50% discount that they are required to apply at the moment. We propose that this should be discretionary, as pressure on housing varies from one area to another and some authorities may wish to encourage second home owners who can bring a useful input to the local economy. We propose that the extra revenue raised should be retained by the local authorities concerned and we will consult on whether the funds should be earmarked to provide affordable homes in the areas affected;

  • Last year we introduced fairer right to buy discounts, replacing the cash limit of £50,000 by new regional cash limits ranging from £22,000 to £38,000. These better reflect house prices in each region and offer the taxpayer better value for money. The new limits mean that the most expensive properties in attractive high demand rural areas will be sold only at a fair price;

  • We will promote more flexible lettings policies by local authorities, so as to take more account of specific rural needs in their area. We propose changes to social housing lettings to promote a more customer-focused approach giving applicants more say and greater choice in where they live. There would be increased opportunities for people to move more easily between different landlords and different areas; although landlords could choose to give local people priority over incomers so as to reduce the pressure of demand on limited stock. Over the next three years, we will be providing £11m to support pilot schemes involving local authorities and registered social landlords which test choice-based lettings policies. We intend to invite pilots from rural areas;

  • We are funding the Empty Homes Agency to work with local authorities to bring more empty rural property back into use. As a follow up to its challenge document Wasted Rural Homes - a Blueprint for Action, published last year, the Agency will shortly publish a good practice guide entitled Wasted Rural Homes, Putting the Blueprint into Action. The guide highlights good practice from the best rural local authorities and includes imaginative strategies that tackle empty properties. The Agency, with the full backing of Government, will continue to press authorities which have done little to tackle their wasted homes;

  • We will ask the Regional Development Agencies and the Countryside Agency to address the issue of empty properties and promote the actions required to bring more of them back into productive use as part of the economic regeneration of rural areas. This measure was recommended by the Empty Property Advisory Group which was established at the end of last year. Following other recommendations of the Group, the Government is working with the Empty Homes Agency, the professional bodies and others in the property field to raise awareness and spread best practice among property owners, professionals, local authorities and others;

  • As announced in the November 2000 Pre-Budget Report, we plan to encourage additional conversion of properties for residential use by cutting the VAT rate to 5% for residential conversions and removing the VAT burden on the sale of renovated houses that have been empty for ten years or more. These measures will help encourage the redevelopment and better use of buildings and improve the environment for local residents.

See progress towards this commitment in the Rural White Paper Implementation Plan

5.6. Rural homelessness

Summary of Homeless Acceptances in England by population
Graph showing Summary of Homeless Acceptances in England by population

5.6.1. Rural homelessness is not as obvious a problem as urban homelessness. It is less visible than the street homelessness seen in many cities and towns. But the misery felt by individual households who find themselves without a home of their own is just as acute whether they live in the countryside or in a major city.

5.6.2. Our Homeless Action Programme provides resources to develop practical measures to help those who are particularly vulnerable to homelessness. Services provided under this fund include housing advice and resettlement services for those in rural areas.

5.6.3. Tackling homelessness in rural areas helps to prevent rough sleeping in larger towns and cities. Our Special Innovation Fund to prevent rough sleeping supports local initiatives such as the Benjamin Foundation in North Norfolk, which helps young homeless people through specialist advice and counselling and a direct access hostel, to expand the services that it provides. This will help prevent rough sleeping by tackling the root causes of social exclusion of young people in rural areas. The Foundation will now be able to set up a rent deposit and housing support service for young people who are vulnerable to homelessness. This will provide practical help to enable young homeless people to find and secure accommodation locally, close to their natural support networks. We will also be producing good practice guidance for councils which will address the particular difficulty in ensuring access to housing advice and homelessness services in rural areas.

Case study - Newark and Sherwood Foyer tackling homelessness and unemployment among young people
Research identified that the greatest unmet housing need was among young unemployed people whose lack of job or skills often meant they were homeless. In response a ‘dispersed foyer' has been established to offer both houses and training. It provides 18 places for young people aged 16-25 years old for up to two years.

Temporary furnished housing is provided through housing association and local authority vacant stock in villages throughout the district. This cuts costs and means the young people can stay in or near their family and friends. At the end of their placement some move on to permanent accommodation provided as part of the scheme. Others become permanent tenants of the homes they occupied when with the foyer.

The training, tailored to individual need, is provided through the local colleges and training agencies. An outreach service provides life skills support for the young people in their foyer accommodation. This support remains available for the young people for six months after they leave the foyer. Between January and March 2000 the foyer had received requests for help from 133 young people.

The project has been developed through a partnership of the local district council, three housing associations, Social Services, a local hostel, NACRO, other key agencies and the RCC.

5.7. Improving housing quality and design

5.7.1. New housing is not always well designed and attractive. Poor housing can change the character of a settlement, particularly in a village setting. New housing needs to be sympathetically sited and built in a style and use materials which blend with the rest of the village - for example using local materials. This does not mean that housing should always be based on traditional architectural patterns - sometimes modern architecture can make a real contribution to a locality.

"I would say in our village the development's quite tasteful, blends in well"
"They look as if they've been there all the time, don't they?"
"Beautifully done"

5.7.2. Creating better-designed places is a central message of our new planning guidance for housing (PPG3). We have made it clear that planning authorities should promote developments that bring together environmental, transport, planning and architectural best practice to create places with their own distinct identity and in harmony with the local environment. Authorities can include planning policies in local development plans covering new buildings in the countryside which refer to local character, building styles and materials. They can also develop design guides, which may be approved as supplementary planning guidance.

5.7.3. We are strongly committed to promoting earlier, greater and better-informed attention to design wherever new development takes place. This was underlined when we published a ‘good practice' guide earlier this year. We believe that better attention to design considerations from the outset will help to achieve high quality places in which people live, work or relax, not just in towns and cities but in villages and other rural areas as well. To promote better design we will encourage the preparation of village design statements as part of the Town and Village Plans described in chapter 12. These can be a particularly helpful design tool when considering new development in villages, or other rural settlements.

Case study - The Piggeries housing scheme, Frome
The Piggeries is the product of dedicated efforts by Mendip District Council to turn round a derelict part of Frome blighted by road proposals. Through land assembly and a clear design philosophy the Council has fostered a re-development that provides an attractive living environment sensitive to its surroundings. The establishment of a multi-disciplinary project group early on in the process was crucial to the scheme's success, as was the involvement of the local community.

See progress towards this commitment in the Rural White Paper Implementation Plan

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Page last modified: 19 May, 2005
Page published: 28 November, 2000

Department for Environment, Food and Rural Affairs