We mustn't ditch affordable homes to boost housing output

Like any housing story there is some good news and some bad news. The good news is that politicians “get it”. They buy the idea that we need to build more homes, with politicians of every stripe vying with one another to commit to building more homes in the next parliament. That’s great.

They also get that this needs to be through a diverse pool of players, ranging from small builders to housing associations to the more traditional volume housebuilders. Also fantastic. Furthermore they understand that regulations and other kinds of red tape have stymied development and created perverse incentives in the market place. Yes! But… the bad news.

Attempts to free up the market to deliver more homes, and hopefully better homes, come at the risk of failing to deliver affordable housing. As always this is a complicated numbers game. One that doesn’t necessarily follow a linear logic model, and that has complex interactions between each of these initiatives. There have been a trio of recent announcements and consultations on housing standards, allowable solutions and planning so let’s take them in turn:

Housing standards review

I’ve written before about the Government’s Standards Review. The outcomes of this process were announced a couple of months ago with little fanfare and even less discussion. But the decisions taken by ministers were very brave. The options presented in the consultation paper were to A) stay the same (which was never going to happen) B) have a period of National Standards with a view to moving these standards into Building Regulations (government’s preferred option) and C) to move straight to Building Regs (which requires legislation).

They have, much to my surprise, gone for the brave option C. This is good news. The consequence of this is that the Code for Sustainable homes will be wound down, and the access, energy, water elements will be incorporated into building regulations and a new regulation on security will be introduced. The incredibly brave decision though was to introduce a national standard for space. This will be non-mandatory but can be introduced through local plans, subject of course, to viability testing.

This is genuinely big news (almost literally). We all know that we build the smallest homes in Europe, and that as house prices have gone up sizes have gone down. Government continues to work through the detail of all of the above, and indeed the transitional arrangements. There will at last be both the consistency across geography and tenure that the National Housing Federation has long called for.

So far so good.

Allowable Solutions

While civil servants continue to polish their response to last autumn’s consultation on allowable solutions, the Queen’s speech and subsequent ministerial statement announced that they would be introducing new legislation to enable allowable solutions as part of the new and improve Part L (see above). This is definitely good news.

This trend for small developer exemptions really starts to become problematic when we reach the final stage of interventions which is planning.

Onsite renewables targets such as the Merton Rule, and the code for that matter, sometimes led to expensive and inappropriate technology bolted on to new homes. This didn’t do anyone any favours, least of all housing associations who are left with the added costs of maintaining this technology, and in some extreme cases, needing to take it out and replace it. There are also some encouraging signs in the ministerial statement that some of the money from allowable solutions could go to improving existing stock, for example by paying for solid wall insulation. This may, hopefully, go some way to counteracting the recent cuts in ECO funding.

However, in order to ensure that this doesn’t adversely affect small builders, they are looking at introducing exemptions which are still to be defined. While I don’t want to speculate on what this exemption will look like, it’s important that the homes that are built by small builders are built to the same standards as the volume offer. But this trend for small developer exemptions really starts to become problematic when we reach the final stage of this trio of interventions which is naturally… planning.

Planning

The planning system exists to balance out competing interests in order to deliver sustainable development. Therefore it is right that this is used as a tool by local authorities to ensure that we are delivering good quality development which will contribute to, rather than detract from, the local environment. Section 106 agreements have been incredibly important in delivering affordable housing, particularly in the context of capital funding cuts from government (I speak here of the 2010 cuts, rather than the current settlement which is broadly in line with the last one). 

But, the Growth and Infrastructure Act 2013, has made it possible for the affordable housing contributions to be renegotiated on the basis of viability. Though time limited, and technically only applying to certain permissions, this has been used by developers as a precedent to make a case for less affordable housing as part of new applications.

Then there is the recently closed consultation on whether to introduce a 10 unit threshold for affordable housing contributions. This is in order to support small housebuilders, many of whom continue to struggle even as the market begins to pick up. Based on the announcements in the Queen’s speech we anticipate that this threshold will be introduced.

This seems like a regressive step. Previous thresholds resulted in developers only building up to said threshold in order to avoid making affordable housing contributions. This has implications both for small urban sites, but also for rural housing, most of which is below the 10 unit threshold. This is disappointing. We need planning policies to match the scale of the challenge we face, and for local authorities to be able to set policies that can be factored into the price of land.

We need more homes to be built that are of good quality, are in the right places and are at the right price, both for the developer and the end user. Not every home that is built will be bought. Some will be rented out by housing associations or local authorities to people who are at the sharp end of the housing crisis. In order for these homes to be delivered, we need a real strategy and a commitment to deliver that is set out in both local and national policy.

Rachel Fisher is head of policy at the National Housing Federation