Viability tests hinder new rural affordable homes

New research from the Campaign to Protect Rural England (CPRE) shows a growing crisis of affordable housing provision in many rural areas.

Using Government data, the research indicates that the proportion of affordable homes being provided by non-metropolitan local authorities has halved in five years. In 2011-12, 35% of new dwellings in shire districts and unitary authorities were affordable; in 2015-16, this had decreased to just 16%. Other than a small recovery in 2014-15, those years showed continued decline.

CPRE’s research also shows that just five of the 15 most unaffordable districts outside London have met their most recent lowest affordable housing target. In Epping Forest, the tenth most expensive borough outside of London, just 14% of new housing over the past five years has been affordable. The borough’s target is 40%.

The government data also shows which councils have provided the lowest proportions of affordable housing. Over the past five years, an average of just 6% of the new housing in Oadby & Wigston, Leicestershire, has been affordable. In Poole, which aims for 40% affordable housing, just 7.7% of completed homes have fulfilled the criteria.

As councils no longer receive direct funding for affordable housing, and, until recently, very few councils have been building homes (just 1,890 across the entire country in 2015-16), the main way affordable homes are currently provided is through conditions on developers being granted planning permission.

A pattern has emerged, however, where developers claim through a viability assessment that it is not or no longer possible to build the requisite proportion of affordable homes as part of a development.

In Horsham, Sussex, an American real estate investment trust recently told the council that a viability study demonstrated its development could not provide more than half the council’s 35% affordable housing target. Faced with the prospect of an appeal, or seeing the development cancelled, the council waved through the 2,750-home and business park development, accepting the developer’s assessment.

Recent research from the Town and Country Planning Association (TCPA) shows that councils are increasingly concerned about affordable housing and the effect that viability assessments have on providing it. In the TCPA’s study, over 60% of councils surveyed agreed that the viability test set out in the National Planning Policy Framework has hindered their ability to secure sufficient social and affordable housing to meet local needs.

Paul Miner, planning campaign manager at the Campaign to Protect Rural England (CPRE), said, “Many councils are falling woefully short of their targets to provide affordable homes. Yet you also have to look at those developers who continually use shady tactics to renege on promises to build affordable homes and new community infrastructure. These are often the promises that win them permission in the first place.

“Developers have councils in a bind. It’s either fewer affordable homes or missed housing targets. And either way it’s young people and local people in need who lose out.

“As just 8% of rural housing is affordable, much of the countryside is already out of reach to those on average incomes. If we don’t change things this will just get worse. The next government must reduce the power of these viability studies, stop highly profitable developers gaming the system and give councils the hard cash to start building houses again.”