Rural Development Sub-Committee

Inquiry into Poverty and Deprivation in Rural Wales

Response from Community Housing Cymru

Community Housing Cymru is a membership body serving housing associations and associated support providers in Wales. We exist to enable our members to work effectively and flourish in Wales by:

Positively promoting housing associations as non-statutory, non-profit, ethical providers of affordable housing, support and community regeneration services
Seeking to develop a political, regulatory and financial framework that supports housing association activities
Developing, supporting and disseminating good practice
Encouraging and enabling members to provide accessible homes in sustainable communities throughout Wales
Working in partnership with key bodies in Wales

1. What are the poverty/deprivation problems faced by rural areas? what are the specific needs of rural areas in relation to this issue?

Housing and Employment

Rural Wales is one of the least affordable housing areas in the UK. It has higher than average property prices with the average house price totalling £180,283 - this is 17% higher than the average house price for urban areas which is £154,250. It has higher concentrations of second homes - the proportion of second homes in rural Wales is one and a half times that for rural areas across Britain as a whole which can disproportionately affect community structure and service. Rural Wales is also afflicted by limited and poorly paid jobs - the average property price in rural areas is 6.4 times average annual earnings compared with a ratio of 5.5 in urban areas. Not surprisingly rural Wales also has fewer first time buyers - FTB in rural areas, account for only 25% of all buyers compared with 35% in urban area. Despite this just 14% of housing in rural areas is classed as social housing.(1).

The huge disparity between local wages and house prices in rural areas has created a situation that has seen many people priced out of their local housing market and forced to relocate to other areas, often breaking local ties. This can having a detrimental effect on the rural community and local businesses and in some cases, the sustainability of the Welsh language.

Migration and Access to Services

The high level of outward migration from rural areas is predominantly amongst young people and is combined with a trend of high inward migration from wealthy immigrants in search of an idyllic lifestyle.

The combined effect of these trends has been the creation of a rural population with a much higher proportion of older people. This can have detrimental effects on the sustainability of these communities as service requirements will be different. Schools and other businesses which rely heavily on young people and families could struggle with long-term viability.

Low population density and the landscape also increases the cost of service provision as there are less opportunities to drive cost efficiencies.

Land Supply

Rural Wales has a large number of conservation areas and is characterised by historic buildings which are protected under the listed buildings and conservation areas Act 1990. This puts additional pressures on land supply for housing development.

The nature of housing development in rural areas is therefore small in scale which again is more expensive as there is less opportunity for costs savings..

Small scale developments also make it harder to utilise Section 106 agreements as private developers are more reluctant to allocate homes for affordable housing

The design of housing development also has to be ergonomically sensitive which raises construction costs. The perceived shortage of building contractors in rural areas will again raises the costs of development.

2. Tackling poverty and deprivation in rural areas

Community Housing Cymru believes that cooperation and partnership is the best way to deal with poverty and deprivation in rural (and urban) areas. Housing associations and community mutuals already undertake a wide range of initiatives and projects aimed at alleviating poverty and deprivation in rural Wales and are key partners in driving forward solutions aimed at tackling deprivation in rural communities.

3. Action required

Promotion of partnership working

More and better partnerships between local authorities to deliver cross boundary sites
WAG to encourage local authorities to allocate more exception sites.
Community Land Trusts (CLTS) to work in collaboration with housing associations to provide affordable housing in perpetuity. Without regulation it will be difficult to ensure that CLTs allocation systems are robust and stand up to scrutiny. There are also concerns that CLTs are duplicating the work of housing associations therefore to avoid this scenario it is important that the two institutions work together.

More resources

A Network of Rural Housing Enablers (RHE’s) operating across Wales. RHE’s are independent brokers who, in partnership with local authorities, housing associations, national parks and local communities, develop affordable rural housing solutions for village communities. They significantly contribute to the supply of affordable housing and play a crucial role in fostering community cohesion and defusing tensions and sensitivities which can render development plans inoperable. The Commission for Rural Communities see RHE’s as playing a unique and vital role in addressing rural affordability as well as supporting community regeneration and promoting social inclusion in rural areas. In a recent review conducted by the Affordable Rural Housing Commission in England a recommendation was made that DEFRA funds 100 RHEs across England. Despite being considered as having twice the rurality of England, in Wales, there are only 4 RHE projects. Recent research recommends 'considerable expansion’ of the RHE service across Wales, suggesting that 12/13 RHEs plus a central support unit, a Chair, a Champion and Board as the best way to expand. CHC is currently exploring funding for this Network in Wales.
WAG to recognise and fund additional costs of providing extra care in rural areas.
Continued funding for Homebuy. There have been suggestions that the Assembly expects Homebuy to be delivered through Section 106 agreements this will not be viable for rural Wales.

More effective planning system

Affordable housing quotas for all new housing developments, including housing for rent and shared-ownership (e.g. Homebuy)
Powers for housing associations to develop sites outside of the Local Development Strategy. The inability to use land not in the development plan is again problematic. Changes in land use are also difficult to achieve.
Incentivise Land Owners to release land for Affordable Housing Development

Better Regulation

Enabling flexibility to allow housing associations to create non-registered subsidiaries allowing the sale of property and to borrow more against existing assets.
Regulation which focuses on financial viability of housing associations
Outcome focused
Review of ACG levels that reflects higher development costs in rural Wales.

5. Conclusion

CHC believes that addressing rural housing needs is the cornerstone for alleviating poverty and deprivation in rural Wales. It will compliment WAG policies designed to reduce poverty and eliminate child poverty and will help tackle rural deprivation by preventing much of the outward migration that takes place in certain rural areas in Wales, often due to economic reasons.

Reference:

(1) All data in this paragraph is taken form the Halifax survey 2007