Story from Inside Housing: Scared Away

Affordable housing starts in rural England have dropped 44 per cent in three years, slowly killing off village life. So what is holding developers back? Pete Apps from Inside Housing investigates

‘When I draw my curtains in the evening and look across at the houses all around me, there used to be lights on, through the gaps in the curtains, or lights on porches. They’re gone now. The houses are all dark.’

Things have changed dramatically since 82-year-old Mary Kempe’s parents bought a cottage in 238-home Osmington, in Devon, in the mid-1950s. Second homes and holiday lettings have led to spiralling house prices in the seaside village, pricing the younger generation out of the area.

‘Our shop has gone, our post office has gone, our school has gone. This place will end up as a sort of dead place - an empty place,’ she says.

Osmington, like many other villages, is the victim of the UK’s rural housing crisis - one that, until now, has been largely overshadowed by the crisis facing urban communities. With the majority of rural areas primarily populated by ageing communities, schools are closing down, local economies are grinding to a halt, and there are no carers living locally to help the older people left behind.

The impact of this crisis is starting to rear its head. Last week a report by the environment, food and rural affairs committee warned that there is an ‘imperative need’ for affordable homes to prevent the ‘slow death’ of villages. This followed figures compiled by the National Housing Federation this month showing a drop of nearly 9 per cent in the number of 30 to 44-year-olds living in rural areas from 2.6 million to 2.3 million over the past decade. Over the same period average rural house prices rose 82 per cent from £126,016 to £228,742, and are now 18 per cent higher than in urban areas.

In the face of fast-growing affordable housing need, figures obtained from the Homes and Communities Agency show there were just 820 rural affordable housing starts in England in 2011/12 and 2,188 in 2012/13. This is down 44 per cent from 3,887 in 2009/10.

Cause and effect
So, what is scaring developers away from building badly needed homes in the countryside - and what can be done to turn the lights back on in villages across Britain?

Rural housing expert, Professor Mark Shucksmith of Newcastle University identifies three main challenges to providing rural affordable housing: cost, land availability and local resistance.

The first two problems are linked. Rural affordable housing is usually provided on rural exception sites - small plots of land, granted an exception from normal planning regulations to provide affordable homes to people with a link to surrounding villages. These sites are usually small, often containing a mere four or five homes, meaning it is difficult to achieve cost savings that can be achieved on bigger schemes in cities.

Furthermore, under planning rules which came into effect in April last year, a percentage of homes built on rural exception sites can now be sold on the open market to cross-subsidise schemes - potentially reducing the number of affordable homes built. This percentage is subject to viability assessments, with no set limit.

The HCA directed that around 9 per cent of the £1.8 billion affordable homes programme outside London should be awarded to rural communities, which it hopes will deliver 9,400 homes by 2015. Housing providers say this equates to an average grant rate of around £20,000 per unit (compared with £65,000 five years ago), which is often not enough to make rural schemes viable.

‘Because it’s very rare to build a big scheme in rural areas, per home, the costs are higher,’ says Sue Chalkley, chief executive of 5,000-home Hastoe Group, which operates mainly in rural areas across the south, east and west of England and built 181 homes last year.

‘You usually build between six and 15 homes to fit in with the village and all the infrastructure has to be built for just these units,’ she adds. ‘Also, there often isn’t the same interest from building contractors.’ This can mean less competition for work and higher prices as a result, she adds.

Arlene Kersley is a rural housing enabler at Community Council Berkshire, part of a network which advises the government on the needs of rural communities. Her job is to get landowners, rural communities and housing providers working together to bring forward rural schemes. She says lack of finance is the biggest problem.

‘When you’ve done the hard work to break down the barriers of resistance [from residents] to a housing scheme - and in some areas that is a lot of hard work - if the funding isn’t there, that is all for nothing.

‘There has been a huge drop in funding in the last five years, and to my mind that is the reason for the drop in the figures.’

‘Housing associations and developers prefer to look at urban areas where they can get more bang for their buck,’ adds Martin Hawkins, housing, transport and services officer at rural charity Action with Communities in Rural England.

And even where the schemes do make financial sense, they require development land.

‘If we’re looking for suitable sites in a village, there might only be one landowner, or two we can negotiate with,’ Ms Chalkley says. ‘If you can’t do a deal, then there are no other options.’

Resident resistance
Local campaigns against affordable housing can also hold back development.

‘People have a fear of what affordable housing is,’ Mr Hawkins explains. ‘They worry that a housing association is just going to take people from the nearby town, and stick them in the village.’

English Rural Housing Association has tackled this problem, to a degree, by recruiting local campaigners to go toe-to-toe with the nimby opponents.

‘It’s a big challenge, because even if a scheme gets planning approval, if the parish council is against it, the scheme very often will not get built,’ says Adrian Maunders, chief executive of the 1,000-home landlord and chair of the NHF’s lobbying voice for rural housing associations, Rural Alliance.

‘But local leadership of the scheme makes a huge difference, and very often they will be just as loud as the opposition.’

That said, Ms Kersley offers some hope for the future. ‘Local resistance is still out there and you have to have broad shoulders, but more and more I’m finding it’s less of a problem.

‘We’ve been screaming about the need for affordable homes for decades and people do finally realise there’s a problem.’

The question now, is whether landowners and developers are listening and willing to help turn the lights back on.