The National Housing Federation warns that an estimated 32,000 new affordable homes and half of all new affordable homes in rural areas could be lost over the next decade if new proposed changes to planning rules are brought into effect.
Under the National Planning Policy Framework, the government has proposed removing the existing requirement for new development sites of between 10 and 49 homes to deliver affordable housing on-site.
Currently, sites of 10 homes or more, classed as medium and large, are required to deliver a proportion of affordable housing through Section 106, which is responsible for delivering almost half of all affordable housing in England.
If brought into effect, the NHF says that this change would have disproportionate consequences for rural communities, where nearly all homes are delivered on sites of fewer than 50 homes. According to government supply figures, last year S106 accounted for more than half (51.3%) of affordable housing delivery in the most rural areas of England. This means removing this requirement could lead to the loss of half of future rural affordable homes over the next decade.
In the last three years, 10,000 affordable homes have been delivered on medium development sites through S106 agreements. Based on this rate of delivery, the change could lead to the loss of 32,000 affordable homes or more over the next decade, with the greatest impact on rural communities.
The government’s current proposals would see the affordable homes replaced by cash payments from developers to councils, but the NHF says that, historically, financial contributions have rarely matched the true cost of affordable homes and seldom result in new delivery, with local authorities in many cases returning unspent funds to developers as they do not have the capacity or resource to bring forward delivery. According to a report by the Home Builders Federation, an estimated £9billion of developer contributions currently remains unspent.
The NHF reports that the shortage of affordable homes in rural areas is already much more acute than in urban areas, with just 9% classed as affordable, around half the proportion in towns and cities (17%). In small villages, the shortage is even more significant, with nearly a quarter of small villages having two or fewer affordable homes.
Demand in rural areas is also growing at a faster rate, with waiting lists increasing by 20% over the last three years, from 191,092 to 228,404 households, compared with a 13% increase in urban areas. During this period, just 10,878 homes for social rent were completed in rural areas, sufficient to house less than a third of the additional households on waiting lists in those areas. Meanwhile, rural homelessness increased by 40% between 2019 and 2023.
The National Housing Federation is calling on the government to scrap its proposals and protect this vital pipeline of affordable homes for the local communities that rely on them.
Kate Henderson, chief executive of the National Housing Federation, said: “Rural families are already in the most acute need of affordable homes, often priced out of the communities they call home and these proposals risk making the rural housing crisis even worse.”
“This requirement for affordable homes on medium sites is one of the most important ways we have of ensuring affordable homes are being delivered in the most rural areas. Removing it could put half of future rural affordable housing at risk leading to increased waiting lists, rising homelessness and staff shortages in local schools and businesses.”
“If the government is committed to building the homes needed across the country and supporting rural communities to thrive, it must not weaken one of the key tools we have to deliver affordable homes in the places that need them most. We urge ministers to rethink these proposals and protect the pipeline of homes that rural communities desperately need.”
