Comment

03.06.19

Building for the future amidst a growing affordability crisis

Source: PSE Apr/May 2019

Cllr Philip Atkins, housing, infrastructure, and planning spokesman for the County Councils Network (CCN), reveals that county house prices are the most unaffordable in England outside of London.

House prices are never far away from the headlines, and much media attention in recent months has focused on sluggish growth for the country’s property market.

Whilst some parts of the country have seen house prices drop – particularly London – this has not been the case for county areas. Whilst a buoyant property market is good for sellers and homeowners, the other side of the coin is a growing affordability crisis that has locked millions out of home ownership.

Recent research from the CCN illustrates this affordability issue and how it is spreading from the capital to the shires. The average county house price is now 10 times annual average wages – a ratio that has widened over the last two years. The average home in Cambridgeshire is 14.6 times annual wages in the county; and in total just six out of 27 county council areas have a wage to house price ratio that is lower than the national average of 8.3.

This poses social and economic issues for county leaders. As the County All-Party Parliamentary Group’s social mobility report touched on last year, counties face a ‘brain drain’ whereby skilled graduates and workers leave their county home and never return. The increasing unaffordability of homes – and average county wages which are some £2,000 lower than the national average – only exacerbates this situation when our young people feel like they have more opportunity in the cities.

The government’s attempts to address the country’s housing crisis is laudable; despite Brexit considerations, this has arguably been the government’s flagship domestic agenda. Yet reforms designed to boost housebuilding do not go far enough. Bolder change is needed if this agenda is to be a success.

The planning system in two-tier areas is fragmented; a closer alignment of the system is needed. CCN has long called for a re-introduction of planning on a strategic scale, with counties working in close collaboration with their district councils, bringing in a closer alignment of the disparate planning and infrastructure functions currently carried out by the different tiers.

This closer relationship between districts and counties would also allow for planning over larger geographies with an improved and clear role for the county council in helping to plan for new development and infrastructure over a larger area rather than by district area. This will help ensure that we get the right mix of homes, in the right places, with the necessary and properly-financed infrastructure.

This is not a power grab from the counties; instead, it is an acknowledgment that the present system is not working as well as intended, and closer collaboration is needed.

At the same time, the government has acknowledged that developer contributions to help finance infrastructure requires reform. This is particularly pertinent for county authorities, who face billions in infrastructure funding gaps. Hertfordshire, for example, calculates that it requires £6bn to support the planned growth in new homes for the county, but only £1.6bn of this has been identified so far.

Development funding via Section 106 arrangements and the Community Infrastructure Levy is inadequate to truly address each county’s need, and government reforms, like its planning policy revamp, do not go far enough. Whilst the restrictions to lift s106 pooling restrictions are very welcome, we would like to see a more effective way of capturing land value, and the ability to set strategic infrastructure tariffs – something only urban-metro mayors can do currently.

The aim of the game must not be to simply increase the numbers – it should be to ensure that we build not just homes, but long lasting, attractive, and sustainable communities. County councils are the ones that can provide the strategic leadership and delivery to ensure that this happens.

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