Patrick Mooney, housing consultant and news editor of Housing, Management & Maintenance magazine explains how the problem of how and where to build more affordable housing might have a ready-made solution.
How on earth are housing associations and councils going to find the money required to build the tens of thousands of affordable new homes desperately needed in local communities up and down the country at the moment. After all it’s not the sort of bill that can be sorted by making a lucky discovery of some long lost loose change down the back of the sofa, nor what might be found on the mythical money tree!
Indeed the demand for houses and flats which can be let at social rents is growing exponentially at the moment, with more than 1.3 million households on council waiting lists across the country and 270,000 households spending the festive period in temporary accommodation, including bed & breakfast hotels.
At the same time the list of priorities for spending money on the existing stock of rental housing is getting longer and longer. Decarbonisation works, the retrofitting of energy efficiency features, tackling the huge problem of mould and damp, improving the safety of buildings, as well as bringing all properties up to the decent homes standard all adds up to a multi-billion pounds shopping list. The annual bill will dwarf the record £6.5bn spent by housing associations on planned maintenance and capitalised repairs in 2021/22 alone.
The capping of the annual rent increase in April at a maximum of 7% creates a huge additional problem for would-be developers across the social housing sector. The rent rise will stretch the finances of many tenants (probably resulting in a sizeable increase in rent arrears), but it is well below the current rate of inflation and will in all likelihood result in the increased use of reserves (where these exist) and extra borrowing (where this can be arranged).
The credit rating agency S&P is already issuing warnings that the rent cap will be harmful for the sector’s financial standing and make new loans both more difficult to obtain and more expensive, in terms of the interest being charged.
And as if that was not bad enough the Housing Secretary has increased the pressure on social landlords by warning them that financial support (such as development loans and grants) will be withdrawn where they have breached the Regulator of Housing’s consumer standards until they can prove they are a responsible landlord. Rochdale Boroughwide Housing was the first social housing landlord to be sanctioned, losing £1m of funding for new homes.
NATIONAL TARGET AXED
The next big issue to be factored in (and it is a genuinely big problem) is the Government’s decision to drop its mandatory target of building 300,000 new homes a year, which is seeing scores of local authorities revisit and revise their local housebuilding targets, invariably downwards. Finding suitable and affordable sites for new housing development will get more difficult.
At the same Michael Gove also announced that councils would no longer have to plan for 20% more houses than their locality needs (to compensate for delays with designated sites) and those authorities with up-to-date plans would no longer have to maintain enough land supply for the next five years of housing need.
Planning experts are forecasting that these changes are likely to result in at least 100,000 new homes not being built over the next three to five years. The economic and social cost of this scale of reduction could be immense, with all sorts of knock-on effects. But those in the most desperate need of housing are likely to suffer the most, with even longer delays for them to be housed. At current building rates, some experts estimate the backlog of low-income families needing accommodation would take over 120 years to clear.
The Government gave in to a well-orchestrated campaign among its backbenchers, mainly in the south of England, who claimed they were protecting the unique feel of their constituencies, as well as the Green Belt.
But one potential and ready-made solution may have been highlighted by the countryside charity, the CPRE. They have discovered that a record number of brownfield sites in England have been identified for redevelopment, are currently lying dormant and could provide 1.2 million homes. They analysed 344 brownfield land registers, which identify urban sites that have previously been built on and which are available for housing.
The amount of land available covered 27,342 hectares (67,563 acres) across 23,000 sites in 2022, 6% more than in 2021. Planning permission has already been granted for 45% of the land, while 550,000 homes with planning permission are awaiting development. Housing developments on brownfield sites are often completed more than six months more quickly than those on greenfield land.
Tom Fyans, the interim chief executive of CPRE, said: “You know the system is broken when hundreds of thousands of vulnerable people and families are on social housing waiting lists, many in rural areas. Meanwhile, across the country, tens of thousands of hectares of prime brownfield sites are sitting there waiting to be redeveloped.”
A TRANSFORMATIVE SOLUTION
Fyans said investing in brownfield regeneration would have a transformative effect. “There’s no way to fix an overheated, undersupplied housing market without a new generation of social or truly affordable housing. The only solution is a commitment to building hundreds of thousands of new homes available at social rents or sold at affordable prices linked to local wages.”
“Done with consideration, such developments breathe new life into communities while also building the homes local people actually need alongside existing infrastructure such as public transport, schools and shops.”
Many of the brownfield sites are also in areas with the highest identified need for new housing. London boroughs have two of the top three totals of highest brownfield land with housing capacity, Birmingham is in second place and Manchester in fourth. Using this land would take the pressure off the Green Belt around those cities, as well as rural areas and farmland where the opposition to new housing is often at its strongest and most vocal.
The National Planning Policy Framework is due for review in 2023 and on the back of its research the CPRE is calling for it to include a clear prioritisation of brownfield development over greenfield sites. Among its recommendations are:
• Only allowing greenfield developments when they are primarily affordable housing for local needs, or when as much use as possible is already being made of brownfield land;
• The New Homes Bonus should be reformed so it is only paid out to support either development of brownfield land and/or additional affordable homes;
• The Infrastructure Levy should be set at a much higher rate on greenfield land to reflect the high costs of greenfield development to local communities; and
• Provide local communities with stronger mechanisms to bring brownfield land forward as a source of land supply, such as increased compulsory purchase powers.
If social landlords can be funded and helped to partner with private sector developers and planning authorities to build on these brownfield sites, then there is a good chance the list of
obstacles outlined earlier, could be overcome. But it will require a strong resolve and commitment from the Government to ensure that such a massive programme can be put together and implemented.
We will probably get an indication of Ministers’ willingness to adopt this sort of solution when the Levelling Up and Regeneration Bill is pushed through its final stages of Parliamentary scrutiny, but increased use of brownfield sites for new affordable housing seems like an easy win. The concept has been around for decades but is still under-utilised and capable of delivering so much more. As planning permission already exists for over half a million homes on such sites, let’s hope that common sense prevails.