Flawed Housing Analysis Could Unleash A Wave Of Greenfield Sprawl

26.10.07

Recommendations [1] made by a Government advisory body suggesting there needs to be a massive increase in housebuilding are fundamentally flawed. Pursuing them would have devastating environmental consequences and would make little difference to affordability, countryside campaigners, the Campaign to Protect Rural England, (CPRE) [2] warn today (Friday).

Kate Gordon said:

‘The number of new homes proposed goes far beyond what is actually needed. Projections suggest that between 223,000 and 250,000 new households a year are expected to form over the next 20 years, yet this body proposes that 270,000 homes should be built.’

Increasing housebuilding to this level will not make homes affordable. [3] New homes comprise only a very small proportion of homes for sale at any one time and other factors have more influence on house prices, notably interest rates, mortgage lending policy and speculative investment. [4]

Kate Gordon concluded:

‘It would be a grave mistake to pursue this target based on spurious economic and demographic assumptions. Instead of foisting more development on the country’s most pressured regions, we need a planned approach which takes account of environmental capacity, makes better use of existing buildings and the swathes of derelict land that exist across the country. [5] We must not sacrifice the nation’s precious countryside needlessly in response to flawed economic modelling.’

NOTES FOR EDITORS

1. Developing a target range for the supply of new homes across England, published today (29 October) by the National Housing and Planning Advice Unit (NHPAU).

2 CPRE, the Campaign to Protect Rural England, is a charity which promotes the beauty, tranquillity and diversity of rural England. We advocate positive solutions for the long-term future of the countryside. Founded in 1926, we have 60,000 supporters and a branch in every county. President: Bill Bryson. Patron: Her Majesty The Queen.

3. The NHPAU’s report shows that at the higher rate of 270,000 homes a year they expected a ratio of house prices to income of 8.2 in 2026.

4. Research commissioned by CPRE this year found that:

• it is the size, type and quality of homes built that has the greatest influence on local house prices;
• house prices are heavily influenced by the quality of the environment: new homes which improve an area create value, but homes which damage an attractive location can bring down prices;
• if local house prices fall following development this may reflect damage to local amenity and a decline in the quality of the neighbourhood, rather than a response to a greater supply of new homes;
• even with much higher building rates, the impact on house prices would be very small, delayed and hard to detect. Any reduction in price resulting from increasing housing supply would be swamped by other factors,
• house prices are controlled not by land supply but primarily by ability to pay;
• rising house prices reflect, notably, an era of rising incomes, greater wealth available to many buyers as deposits, and mortgage lenders offering much higher loans than was considered prudent only a few years ago;
• affordability as measured by the ratio of house prices to incomes has worsened. However, the proportion of income which first time buyers spend on mortgage repayments remains less than it was for most of the 1980s.

CPRE commissioned independent consultants Green Balance to conduct research into the relationship between planning, housing land supply and housing affordability. As well as analysing broad trends, through case studies a variety of market conditions were explored. Areas chosen were Darlington, Poundbury, Dorchester and West Dorset, Cambridgeshire, Gravesham, Dartford and Torridge. See http://www.cpre.org.uk/news/view/416 for links to the report Planning for housing affordability and Recommendations.

5. There are around a million more homes than households, in England, for example (22.5 million and 21.5 million respectively). According to the National Land Use Database, 62,700 hectares of brownfield land is known to be available for development in England, of which 26,700 hectares is suitable for housing – enough for more than a million homes building at 40 homes per hectare.

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