England’s rural housing crisis could be solved by setting land prices and bringing land into public ownership Achi-News

Young people are reportedly being priced out of rural communities due to rising housing costs. Official statistics for England show that affordability in rural parts of the country is worse than in towns and cities, excluding London. In 2021, even the cheapest houses in rural areas cost around 9.2 times more than the earnings of the lowest paid workers. In urban areas, it was eight times more.

Since Brexit, there has been an increase in the number of landlords transferring long-term rental properties to short-term lettings on platforms such as Airbnb, in an attempt to cash in on the growing staycation market. COVID has increased the appeal of living in the countryside, with more people buying second homes. Affordability has worsened since 2020.

These recent pressures have intensified the decades-old trends of general anti-urbanization and the demand for rural homes that my colleagues and I discuss in our book 2022, Village Housing.

A combination of planning restrictions and external demand pressures, which focus on the smallest villages and hamlets, drive up land price expectations and make it difficult to build affordable housing. Land values ​​belong to the communities that create them. We need to find a way to determine the cost of land at a price that supports the provision of affordable housing in rural locations.

Increasing pressure on the price of land

Rural planning authorities largely operate on the rationale that housing and service needs can be met more effectively in towns than in the countryside. Generally, they respond to an increase in demand for housing in rural areas by allocating sites in service centers and larger towns for new developments. They also set policies in local plans that require the inclusion of affordable housing in market-led plans.

Much less is built in villages. There, the existing stock is gradually sold off as investment opportunities to wealthier immigrants or seasonal and weekend residents. This dynamic is putting increasing pressure on land prices.

In those few cases where sites for market development are allocated in smaller villages, the price of land rises dramatically. The resulting houses are high end and unaffordable for local people.

It is within this challenging market that registered providers of social housing and community land trusts, formed by groups of concerned residents, seek to secure affordable land for affordable housing through the so-called “rural exception site” method.

Since 1991, communities have been able to work with partners to secure exceptional planning permission for affordable homes on small plots of unallocated land (enough for up to a dozen homes, depending on the scale of local need experienced) that would not permission for housing on its basis. is usually allowed.

Getting the landowner to accept that this is an “exception” to normal planning – and not a regular allocation – is a key hurdle. The landowner needs to agree to sell plots at a price that supports affordability.

Affordable land supports affordable housing

Since 2012, exempt sites have been able to include open market housing, and their role is to support the viability of projects in the context of falling grant rates. Those grants are channeled to registered providers by Homes England, a government agency sponsored by the Department for Upgrading, Housing and Communities. The Government has been targeting grant-free, market-supported development, although exempt sites usually require some grants to achieve viability.

But there is a cost to including market homes on rural exempt sites. Landowners’ price expectations are raised, increasing the price paid for land, which means that an even larger element of open market housing is needed to cross-subsidize the affordable element. Larger developments that include more homes for sale, and relatively fewer affordable homes for local need, will not receive the same level of community support.

Threats to the viability of rural exempt sites, mainly due to rising land costs, mean that communities are going to lose a vital source of affordable housing in villages that would otherwise be unaffordable. The question is what can be done about this.

Raising grant rates would enable social housing providers (or taxpayers) to bear higher land costs. But our research indicates that this is unlikely to happen given public funding constraints and governments’ preference for market support. And in any case, the justice of such an approach (taxpayers are effectively subsidizing the rise of landlords’ rents) is questionable.

A fairer approach would be to determine the cost of land at a price that supports a range of affordable housing types. That fix can be achieved by setting an advisory price for rural exempt sites in national planning policy or, where an advisory price does not encourage sales, by using simplified and reformed compulsory purchase powers to bring land into public ownership . Experience elsewhere in the UK shows that the prospect of compulsory purchase is often enough to encourage landowners to sell.

Our research has shown that the land price that usually supports affordability on rural exempt sites is £10,000 per plot. Assuming a valuation density of 35 dwellings per hectare, this figure is well above the agricultural value (£600 for a plot of similar size), but well below the full residential value (say £150,000, in South Cambridgeshire).

Some landowners will accept a price that supports affordability, driven by a desire to help their communities. Others will refuse to sell at any price short of full residential value. At the moment, however, too much is being left to the market.

Local authorities need the power to bring small plots of land into public ownership, quickly and at an affordable price. This would enable registered providers and community land trusts, and local councils too, to match their building programs to the scale of the need for rural housing.