Countryside in crisis

#ruralhousing#yestohomes

Rural housing

Rural housing

Contents

02

Getting rural housing back on the map 03

Who can afford a home in the country? 04

The rise of second homes 06

Fuel poverty 08

An ageing rural population 11

The role of housing associations 13

What’s needed 14

Rural housing 03

Getting rural housing back on the map

We have a rural housing crisis.High house prices, low wages,seasonal rental and jobs markets,high levels of second homeownership, and an ageingpopulation are all piling pressureon to rural communities and local services.

Some years on from Lord Taylor’sinfluential Living, WorkingCountryside report, families and

young people are still being pricedout of our villages and markettowns. Housing associations areaddressing the challenges faced byrural areas, not only through thesupply of new and affordablehomes, but also through the rangeof other specialist services theyprovide. But concerns about theageing rural population, continuedhigh levels of second homeownership, rising energy prices,

welfare reform, and the loss ofhomes through Right to Buy, areall hampering their progress inbringing about changes that areneeded to address this crisis.

This publication focuses on four keyissues which are making our ruralareas increasingly unaffordable formany: housing affordability,prevalence of second homes, fuelpoverty and an ageing population.

The question now is: how do we ensurethat our countryside does not become thepreserve of only the very wealthy?

“”

Who can afford a home in the country?

Rural1 areas face profoundaffordability issues with houseprice growth exceeding increasesin local incomes. In 90% of rurallocal authorities the averagehomes costs over eight times the average salary. DEFRAreports that the average price ofhomes in rural hamlets – wherethere is the largest difference – is almost £119,000 higher than in urban areas2.

The areas with the biggestaffordability issues are in theSouth West – the rural areasaround the urban hubs of Exeter,Bath, and Bristol. In the SouthEast it is the rural areas withexcellent transport links toLondon (and higher wages) that are among the mostunaffordable. The top 12 mostunaffordable areas all lie withinthese regions.

Thousands of people living inrural areas are in households ofbelow average income and highhousing costs have a role to playin this. In his Living, Working,Countryside report Lord Taylorhighlighted the choice to be madebetween building more affordablehomes in rural areas or seeingyounger people and familiesmoving away and schools, pubs,shops and services disappearingfrom communities3.

The question now is: how do weensure that our countryside doesnot become the preserve of onlythe very wealthy?

Case studyImpact Housing Associationhas completed an affordablehousing scheme of 12 housesand 3 flats in the centre ofGrasmere village. Demand fornew homes was so high thescheme got huge support fromthe local community and wasoversubscribed by 600%.

This scheme is a greatexample of partnershipworking. The Youth Hostelassociation worked withImpact to agree a price for thesite. South Lakeland Districtcouncil put in money and Lake District National Parksupported the project to keepcosts down. Impact funded theremainder of the cost throughborrowing and internalsubsidy. The sale of the twoproperties at market pricehelped cross-subsidise.

1 Definition of rural – local authority areas where at least 50% of the population is in rural settlementsand larger market towns (Department for Environment, Food and Rural Affairs – DEFRA) 2 Land Registry, Price Paid Data/DEFRA, 2013 – DEFRA used a range of rural typologies in their analysis.3 The Taylor Review of Rural Economy and Housing, Living, Working, Countryside, 2008

Rural housing 04

House prices vs income levels byrural local authority in England4

Ratio of mean house prices tomedian income (Rural localauthorities, 2013)

13.9 - 20.2 (16)12.3 - 13.9 (17)11.4 - 12.3 (16)9.85 - 11.4 (17)8.4 - 9.85 (17)Up to 8.4 (18)Urban (225)

4 Mean house price (Land Registry 2013), gross median earnings (ASHE, ONS, 2013). Contains Ordnance Survey data © Crown copyright and databaseright 2013, Licence No. 100031183.

Rural housing 05

The rise of second homes

The rise of second homes is aserious issue for rural areas. The 2011 census reported morethan 1.5 million people had asecond address in England andWales. Cornwall had the greatestnumber of second home-owners –almost 23,000 people5. Desirableand highly sought-after places

attract people with the availablecapital to invest in a secondproperty and these are often found in rural areas.

The number of second homes as apercentage of the overall housingin a local authority area is havinghuge impact on rural areas. In

desirable coastal and nationalpark areas with a high number of second homes the impact canbe far-reaching. With secondhomes inhabited for only part ofthe year the local services cansuffer with village shops, schoolsand bus services left struggling to survive.

Case studyThe uneven playing field created by people moving into rural areas with higher incomes and purchasingpower has been tackled in Hampshire by the Hyde Group.

Communities throughout rural Hampshire are benefiting from a unique scheme involving parishcouncillors and local groups to unblock planning objections and provide affordable housing where it is needed most. The Hyde Group is the development partner for HARAH (Hampshire Alliance forAffordable Rural Housing) which has created some 300 new homes across the county. In line with therecommendations of HRH Princess Anne, HARAH and its development partner, the Hyde Group have beenquietly injecting life and regeneration into more than 40 villages by building small, locally appropriateschemes, often of just five to 10 affordable homes. Many of the developments include wildlife areas,community orchards, allotments and vegetable patches. These are hugely popular and demonstratethat communities can meet their housing needs and improve the quality of life for the people living inthe area. The residents of the new housing also contribute to village life and the HARAH scheme hasalready brought several local pubs and sports facilities back from the brink.

5 ONS 2011, Census Data, Number of People with Second Addresses in Local Authorities in England and Wales, March 2011

Rural housing 06

Proportion of second homes byrural local authority in England6

6 Council tax base data (DCLG, 2013). Contains Ordnance Survey data © Crown copyright and database right 2013, Licence No. 100031183.

Percentage of homes recordedas second homes (Rural localauthorities only, 2012 data)

3.3% - 9.9% (16)1.2% - 3.3% (18)0.8% - 1.2% (16)0.6% - 0.8% (17)0.5% - 0.6% (18)0.1% - 0.5% (17)Urban (0)

Rural housing 07

Fuel poverty

Fuel poverty is an often overlookedhousing issue for many ruralareas. Over the past decade,average energy bills have risen byaround 135% in cash terms.OFGEM estimates that the averageannual dual fuel bill will reach£1,344 in 2014/157. DECC predictsthat energy prices will continue torise8. Those on lowest incomes areusually affected most9.

DEFRA reports that proportionallymore households in rural areasare in fuel poverty than in urbanareas (18% compared to 16%) andthat, as the level of ruralityincreases, so does the level of fuel poverty10.

Homes that are old, poorlyinsulated and hard to heat andmaintain will mean a largeramount of money has to be spenton fuel. Households in rural areasare more likely to be off the gasgrid (36%) and are therefore more

reliant on alternative (andpotentially more expensive)heating methods. In urban areasonly around 8% of households areoff the gas grid11.

A household is deemed to be fuel poor if:

n their income is below thepoverty line (taking into accountenergy costs); and

n their energy costs are higherthan is typical for theirhousehold type.

7 OFGEM, Market Supply Indicator, April 20148 DECC, Estimated impacts of energy and climate change policy on energy prices and bills 2012, March 20139 Spending on fuel as a necessity would stay broadly similar across income levels but lower income means a higher proportion is spent on fuel.10 DEFRA, Fuel, Energy and Fuel Poverty in Rural Areas, January 201311 DEFRA, Fuel, Energy and Fuel Poverty in Rural Areas, January 2013

Rural housing 08

Proportion of households in fuel poverty

Hamlets and isolated dwellings

Villages

30%

25%

20%

15%

10%

5%

0Small townsand fringe

Urbanareas

English housing survey, DCLG; the data is the average for the three years to 2009; England; Updated July 2011

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of h

ouse

hold

sw

ho w

ere

in fu

el p

over

ty

The ageing population in ruralareas means that older peoplemake up a large proportion of thefuel poor in rural areas. Age UK’srecent report ‘ Reducing fuelpoverty – a scourge for olderpeople’ calls for the Governmentto urgently tackle the nation’sproblem of fuel poverty by drivingforward a massive energyefficiency programme. In thereport Age Concern specificallyasks for rural areas to be tackledas they point out that the highnumber of stone-built, solid wallhomes that are off gas make theissue particularly difficult.

The impact of a cold house onpeople’s health is becomingincreasingly documented and theimpact on older people is muchmore serious and can be a causeof death. Furthermore the reportestimates that the cost to the NHSof treating illnesses caused byfuel poverty is around £1.36bn12

per year and illnesses vary fromcardiovascular and respiratorydiseases to depression.

Case studyHastoe Housing has tackled the issue of rural fuel povertythrough a significant retrofit programme of ground source heatpumps with the keys aims of raising the environmentalperformance of their homes and to provide affordable warmth tothose living away from the gas network.

In September 2012 Hastoe embarked on the £1.5m retrofitprogramme to install 77 ground source heat pumps in ruralareas in the South West and East Anglia. The retrofit focused onhomes with electric storage heaters, with many having an opencoal fire as a secondary source of heat.

The results have been fantastic with:

n 1.8 tonnes of CO2 being saved per property

n £80 on average per property per annum saved

n £250 per year (additionally) being saved on average by nolonger purchasing coal

12 National Energy Action, The Many Faces of Fuel Poverty, Newcastle NEA, 2013

Rural housing 09

Fuel poverty by rural localauthorities in England13

Percentage of households in fuel poverty (Rural local authorities only, 2011)

12.7% - 15% (17)11.3% - 12.7% (17)10.0% - 11.3% (18)9.1% - 10% (17)8.2% - 9.1% (16)Up to 8.2% (17)Urban (224)

13 Sub-regional Fuel Poverty Levels, England, 2011 (Department for Energy and Climate Change, DECC). Contains Ordnance Survey data © Crowncopyright and database right 2013, Licence No. 100031183.

Rural housing 10

An ageing rural population

The demographic pattern inEngland is shifting and ourpopulation is getting older. Anageing population puts strains onservices not only in terms of deliverybut also in terms of paying for it.Life expectancy is higher in ruralareas than in urban areas14.

And while there are many wealthyretirees moving into the countrysidethere are still over 600,000pensioners in low incomehouseholds living in rural districts15.

Crucially, some areas that have high levels of fuel poverty will alsosee a large increase in older peopleas older people often have lowerincomes, but being less mobile theyspend a larger proportion of theirincome on fuel.

Older people in rural areas facesignificant challenges. Age UK hashighlighted many challenges faced by older people in ruralcommunities, including: lack ofpublic transport, reduced access to

health, care and support services,fuel poverty, lack of access tobroadband, poverty and financialexclusion, as well as lonelinessand social isolation16. By 2029,there will be around 930,000people with social care needsliving in rural areas17. As ourpopulation ages, rural areas are atthe forefront of these demographicchanges, and therefore need totackle these challenges.

14 DEFRA, Health of individuals in rural and urban areas, March 201415 CRC/New Policy Institute, ‘Indicators of poverty and social exclusion in rural England’, 200916 Age UK, Later Life in Rural England, 17 Cabinet Office, ‘Working together for older people in rural areas’, 2009

Case studyMargaret and Roger Derry ran the local shop in Snitterfield, near Stratford-upon-Avon, Warwickshire, formany years. Their strong connection to the village meant when Waterloo Housing Group, on behalf ofWarwickshire Rural Housing Association, developed 10 new houses, they were given priority and allocateda bungalow. Their grandchildren live around the corner and they were reunited with many old friends.Margaret said: “When we saw the houses being built, we knew the bungalow was perfect for us and wereally hoped we would be lucky. I plan to be here for the rest of my days.”

Not all the homes are bungalows but they are built to the Lifetime Homes Standard, meaning there is spaceto accommodate the changing needs of residents should they need level wheelchair access or a groundfloor shower room in the future.

Rural housing 11

Proportional increase in 85+ year-old led households by localauthority in England18

Increase in 85+ year-old ledhouseholds (Rural localauthorities only, 2011)

53% - 71% (16)48% - 53% (17)45% - 48% (18)41% - 45% (16)34% - 41% (18)Up to 34% (17)All others (224)

18 Household projections for England and local authority districts, interim 2011-based (DCLG, 2013). Contains Ordnance Survey data © Crowncopyright and database right 2013, Licence No. 100031183.

Rural housing 12

The role of housing associations

Housing associations are building good quality small scaledevelopments up and down the country in partnership withlocal communities. Where thesehomes have been built, the impacton the community is powerful –it thrives. Shops and schoolsremain open, the bus servicecontinues and village life isenhanced. Among the mostimportant routes of providingaffordable housing is the use ofs106 agreements. It is imperativethat this mechanism is retainedfor sites under ten properties.

As our rural population continuesto age, housing is needed not onlyfor the older population but for

those who will be providing theircare. At the moment we haveolder people forced to live inunsuitable housing that wouldprovide appropriate homes forthose young people who wish tostay in the area.

Older households are alsoparticularly affected by fuelpoverty. The property types areoften difficult and costly to retrofitbut housing associations arerising to the challenge both withthe existing older properties andthe new build. This is helping toreduce the fuel poverty.

With support from government,local authorities and local

communities, housing associationscan and will do more to ensure the healthy future of our ruralcommunities.

Working with local authorities to identify sites, maximisingdeveloper contributions andencouraging the release ofsuitable development sites at asensible price, we can make thestep change in delivery that is so desperately needed in our rural communities.

Housing associations are up forthis challenge but needcommitment from government tohelp our rural communities.

Rural housing 13

We need a long-term plan from government to end thehousing crisis in rural areas within a generation. Thereare four areas in particular that would help redress thekey challenges facing our rural communities.

“”

What’s needed

Clear local policies for rural housing

The National Planning Policy Framework (NPPF)delivered a step-change towards a simpler and morepositive planning system that supported housing and the creation of prosperous rural communities. In order to realise the ambition of the NPPF it isimportant that rural councils plan fully to meet localhousing need through their local plans.

These should set out clear policies and allocations foraffordable housing, prioritising housing to areas thathelp existing communities thrive and prosper andmaking the most of the development potential ofsites. This should include using rural exceptions sitesto deliver affordable housing where appropriate.

Ensuring the best contributions fromdevelopers

Developer contributions are an important means ofsecuring affordable housing delivery in rural areas.As most development takes place on small sites, it isimportant that small schemes are not automaticallyexempted from providing contributions.

Many rural authorities are already effectivelyoperating affordable housing policies for small sites,often securing financial contributions rather thanonsite provision on the smallest of sites.

Rural housing 14

Maximising the use of public and private land

The way land is released for development is alsoimportant. Public bodies who own land in rural areas should explore disposal models that supportaffordable housing delivery, such as Build Now Pay Later.

Private land owners should also be incentivised tobring land forward at an affordable price, rather thanholding back in the hope of a higher return. Thiscould include rural authorities buying undevelopedland at its existing use cost and then allocating foraffordable housing provision.

Rural councils and councillors must say Yes to Homes

The Yes to Homes campaign is calling for more of the right homes, in the right place, at the rightprice in local communities. Councillors and councilsare perfectly placed to help people who do supportnew homes to have their voice heard and to balancethe local debate about housing in rural communities.

To join the 500 councillors and three councils who have already said Yes to Homes go towww.yestohomes.co.uk/councillors and sign up toregister your support.

Rural housing 15

National Housing FederationLion Court25 Procter StreetLondon WC1V 6NY

Tel: 020 7067 1010Email: info@housing.org.ukWebsite: www.housing.org.uk

The National Housing Federation is the voice of affordablehousing in England. We believe that everyone should havethe home they need at a price they can afford. That’s why we represent the work of housing associations and campaignfor better housing.

Our members provide two and a half million homes for morethan five million people. And each year they invest in adiverse range of neighbourhood projects that help createstrong, vibrant communities.

#ruralhousing#yestohomes