1. Governance
April 11, 2016updated 04 Aug 2023 8:34am

Britain has a rural housing crisis – and Right To Buy is accelerating it

By Oliver Savory

The countryside is great. Everyone enjoys getting out of the city, strolling up the rolling hills, breathing in the fresh air.

But it’s also where millions of people live and work. In economic terms, rural areas still provide nearly a third of Britain’s Gross Value Added (GVA). And farming underpins the UK’s largest manufacturing sector: food manufacturing is worth more than aerospace and automobiles combined, and 13 per cent of the country’s work force works somewhere in the food chain.

But rural areas also face problems that’ll be familiar to those living in many cities: there is a major housing crisis in rural England.

Allowing people to live close to where they work is critical in rural areas, where public transport links are often poor or non-existent. Without access to housing – especially housing suitable for younger people – rural businesses will struggle to attract quality employees. The crisis holds back economic development, as well as community well-being

Traditionally council houses and housing associations have provided affordable housing. But in villages of fewer than 3,000 people these now represent only 8 per cent of the housing stock (compared to around 20 per cent in urban areas). It is vital that this stock of houses is protected – and the government’s proposed extension of Right to Buy places them at serious risk.

We have already seen this stock dwindle: Right to Buy sales in rural districts have accelerated, from 2.4 homes per 1,000 in 2012 to 10 per 1,000 today. And for every eight homes sold, just one has been replaced. The extension of Right to Buy to housing associations is likely to further decrease the already low level of affordable housing in rural communities.

The extension of Right to Buy is meant to include compensation for housing associations and one-for-one replacement of affordable homes purchased through the scheme. The funding for this is supposed to come from the sale of high value, vacant, local authority housing stock – something government predicts will generate £4.5bn nationwide.

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But 35 per cent of rural authorities own no housing, and a further 25 per cent own fewer than 50 houses. With the higher planning and construction costs associated with providing affordable rural housing, and fewer suitable sites available than in urban areas, it is very difficult to see how the government will achieve the one-for-one ratio it promised.

The majority of rural affordable housing is covered by legal agreements that secure homes as affordable in perpetuity (i.e. forever). Often, landowners have offered land at a discount from market value because they recognise the need to provide affordable housing to meet local need. These arrangements are a pre-requisite to landowners being willing to sell sites, and schemes gaining local community support.

Research conducted as part of the rural policy review found that 70 per cent of housing associations said more than half their homes in villages of less than 3,000 people were covered by these agreements; 94 per cent of local authorities said they applied perpetuity arrangements to affordable houses in villages.

What this means is that, if affordable housing can no longer be protected in perpetuity, land owners are less likely to offer land at discount rates – and it will become harder to gain planning permission. Some 41 per cent of surveyed local authorities thought Right to Buy without exemptions will have a “significant” to “devastating” impact.

There remains an affordability gap in rural areas. House prices are on average 26 per cent higher than in urban areas (excluding London), but median earnings are £4,600 lower. The Department for Environment, Food & Rural Affairs’ statistical digest of rural England found the average lower quartile house price was 8.4 times the average lower quartile annual earning. So a significant proportion of the rural population is unlikely to be able to access market housing in the foreseeable future.

While government plans such as starter homes are welcome, they can’t be allowed to replace genuinely affordable housing. Homes need to be affordable at the wages workers can earn, not just based on the rates they can sell for in the market.

Affordable housing is essential to the vitality and diversity of the countryside, as well as the long term strength of the rural economy. The government must make sure their Right to Buy rules are rural-proofed – and, if necessary, exempt areas where replacements are unlikely to be found.

Oliver Savory is a parliamentary advisor at the National Farmers’ Union. 

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