98% of councils in England say that new development in their area does not meet policy requirements for affordable housing, according to a report by the Town and Country Planning Association (TCPA).
The research, which was taken from a survey of almost 90 councils, highlights the lack of resources available to local authorities trying to meet demand for affordable homes, with 70% of respondents saying that they are forced to rely ‘substantially’ on developer contributions to secure even this amount.
Councils and charities have long called for government to lift the HRA borrowing cap, which would give local authorities greater freedom to meet housing demand in their areas. The chancellor, Phillip Hammond, last year announced an additional £2bn of funding to help councils fund their own affordable housing projects and a lifting of the HRA borrowing cap, but this has been criticised for being available only in ‘high-value’ areas and for being inaccessible for at least another year.
Councils have also raised concerns that the government wants to remove the term ‘social rented housing’ from its official definition of affordable housing. Put forward as part of a series of changes to the National Planning Policy Framework (NPPF), the proposals seemingly backtrack on an earlier commitment in the housing white paper which said that social rented housing – which is the most in-demand housing tenure2 and often the only option available to low earners – would indeed be listed within the official definition.
When asked whether the government’s revised definition of affordable housing would help councils meet local requirements for affordable housing 18% said it would.
The draft Planning Practice Guidance (PPG) – which was consulted on alongside the draft revised NPPF – also contains potentially radical changes to the viability test, which currently has a significant impact on reducing the ability of councils to secure affordable housing. The PPG includes a statement that the ‘price paid for land is not a relevant justification for failing to accord with relevant policies in the plan’. The draft PPG also makes clear that ‘existing use value is not the price paid and should disregard hope value’.
The response to the survey from councils on this provide a mixed set of views about the potential impact of these changes. There is support for a greater move towards transparency and accountability, but many of the concerns expressed relate to the continued emphasis in favour of developers over meeting key public interest outcomes such as affordable housing.
Henry Smith, Projects and Policy Manager at the TCPA, said “The current model of delivering affordable housing isn’t ever going to work. Low-paid workers are being pushed further and further out of their towns and cities, enduring longer and costlier commutes and enjoying less time at home. Where will they go? There will be a time when people just stop travelling such long distances to get to work and whole sectors become critically understaffed.
“The government must lift the HRA borrowing cap not only in high-value areas but everywhere. The only way we can ease the demand for all housing types is if councils are given the responsibility to manage their own stock and finally provide some competition for the private sector.”