Government Help to Buy and Right to Buy policy interventions into the housing market have had little impact on delivering its target of 250 000 homes a year by 2020 for people who need a place to live. Help to Buy has made home ownership for some people affordable but the policy has prevented house prices stabilising at a level people can afford without the support of Help to Buy. Consequently those people who do not qualify for Help to Buy support are finding it increasingly difficult to buy their own home. The Council’s analysis of housing affordability for people living and working in Central Bedfordshire shows that it is impossible for people on the national average wage to buy their own home.
Right to Buy has reduced the amount of rented social housing available. This housing to a limited extent has been or is intended to be replaced with affordable housing. With a few exceptions this affordable housing has been market housing and not rented social housing. As market housing is becoming increasingly unaffordable for Central Bedfordshire residents rented social housing built and controlled by the Council is one means of providing residents with the houses they need. The Council appears to be ideologically opposed to providing rented social housing. Clearly this ideology has an adverse impact on hard working Central Bedfordshire families who earn less than the national average wage.
Starter Homes are another Government policy intervention. Stater Homes are for people below the age of 40. They are being promoted as solution to the problem of unaffordable housing. Outside of London the maximum price of a starter home should not exceed £250 000 but they can be priced at up to 80% of the value of the market equivalent. After a period of time these houses revert to market housing. As Central Bedfordshire residents on the average wage cannot afford houses priced above £250 000. Rented social housing that is affordable in perpetuity appears to meet these residents housing need better than the alternatives.
Analysis of the Council’s recent Strategic Housing Market Assessment (SHMA) shows the magnitude of housing need for Central Bedfordshire has been inflated. As approximately 50% of the housing it plans to build is for people who live outside Central Bedfordshire. Most of these people live to the south of Central Bedfordshire and in London where house prices and wages are far higher than in Central Bedfordshire. If these people choose to move into Central Bedfordshire it is probable the affordability of housing for Central Bedfordshire residents will be adversely affected.
The Council has identified affordability as a key issue to address with its Housing Strategy. However it has no policy of its own for dealing with this issue. The Council’s only response is to require developers to provide 30% affordable housing. This is not a credible response as the affordability of housing is dependent on the cost of borrowing or renting, both of which are affected by wages, and house prices. The Council has no control over any of these factors.
The Council’s Housing Strategy also considers the impact of the economic viability of a development on achieving its 30% affordable housing requirement. The viability of a development depends on its associated infrastructure costs and anticipated income from the sale of houses. The Council say the factors influencing viability are placing downward pressure on affordability. For example the costs of the Council’s A5 M1 and Woodside Link roads at Houghton Regis North has placed significant downward pressure on affordable housing and infrastructure delivery despite the Council choosing to increase developers housing income by approving plans to build more houses than is required to meet the needs of people living in this area. Any proposals for new roads, for example, an M1 A6 road will jeopardise the amount of affordable housing developers consider to be viable.
The Council is concerned about developers not ‘building out’ their sites. It is not in the interests of developers if housing supply approaches or exceeds housing demand. As this circumstance will adversely affect the profitability of their development sites and dividends they pay their shareholders. The amount of profit developers expect is also affected by the amount of affordable housing and infrastructure they are obliged to provide under Section 106 agreements or the Council’s Community Infrastructure Levy scheme. The Council’s Housing Strategy does not set out its policy for dealing with developers poor ‘build out rate’ performance. Without a policy incentive to increase ‘build out’ rates the Council is vulnerable to challenges to the credibility of its claim that it has a 5 year land supply.
The Housing Strategy covers the location of new housing in Central Bedfordshire. A large proportion of this new housing is proposed to be built on Green Belt. Building on the Green Belt is against Government policy. The Council has not yet conducted a review of the Green Belt however its Housing Strategy indicates it intends to propose a change to the Green Belt boundary to accommodate new housing North of Luton without having a reasonable basis for doing so. The withdrawal of the Council’s Development Strategy means the Council’s unlawful and unapproved North of Luton Framework Plan has been withdrawn as well. The Framework Plan is a Supplementary Planning Document and therefore cannot be used as the reasonable basis for changing a Green Belt boundary as this is a matter for an independent Planning Inspector’s judgement and not the Council’s judgement. Any housing North of Luton resulting from a change to the Green Belt boundary will also adversely affect the Chilterns Area of Outstanding Natural Beauty (AONB) and the Best and Most Versatile (BMVL) agricultural land.
National infrastructure developments have clearly not influenced the Housing Strategy. The new East West Rail Link connecting Cambridge to Oxford will pass through Central Bedfordshire. Funding this infrastructure, including railway station upgrades, will probably require the support of developers through s106 agreements. The relocation of housing from the Green Belt, the Chilterns AONB and areas of distinctive Landscape Character to transport hubs along this rail link’s route would contribute to the East West Rail Link’s costs and preserve Central Bedfordshire’s most valued countryside. Relocation of housing would also improve its sustainability by attracting businesses to set up at these hubs and relieve congestion on Central Bedfordshire’s highways infrastructure.