Four things the government can do to make homes affordable in the countryside

2 July 2024

Phillip Vincent, ACRE’s Public Affairs and Communications Manager discusses the need for the next government to take urgent action to address the housing crisis in a blog for #RuralHousingWeek

The cost of living has been at the forefront of people’s minds during the 2024 general election. Polling by YouGov last month indicated that almost half of people said this was the most important issue influencing how they would vote on 4 July.

It reflects the fact many people are seeing a profound disparity between their earnings and the amount of money they need to spend to maintain a basic standard of living. The problem is widespread, and as we have detailed previously, the crisis is being keenly felt in the countryside.

Perhaps the biggest pressure acting upon rural communities is the cost of accommodation. People are spending more and more simply to keep a roof over their head in the countryside, whether that be to buy or rent.

Earlier this year, the County Councils Network estimated the average house price in the countryside to be £309,000; equivalent to 11.1 times the average annual wage. Prohibitive sale prices were cited to have fuelled a 31% increase in the number of households renting privately between 2011 and 2021. But of course, renting has a reputation for leaving people even more at the mercy of the market both in terms of supply and cost. Rural areas in particular have been impacted by the growth in short terms lets and second homes.  According to official data there are many rural parts of the South East and Cotswolds where households are paying more than 40% of their household income on rent, not to mention the risk of eviction and disrepair that comes with this tenure.

As part of #RuralHousingWeek, ACRE is joining other organisations led by the National Housing Federation (NHF) in highlighting the need for a long-term plan to deliver genuinely affordable housing in the countryside. It is our firm belief that increasing the supply of these homes not only stands to bring down the cost of living for households, but it can also act as a multiplier stimulating investment in the rural economy, creating jobs, and sustaining services. We also believe these homes should be well designed, quality homes of which local communities can be proud.

So how can this be done? Not long before the election was called we published our recommendations for the next government called ‘No rural community left behind’. Broadly speaking, it makes the case for the following interventions.

1. Build more affordable homes to meet local needs

Because demand has outstripped the supply of housing, this has resulted in a situation where the average lower quartile house price was 8.8 times the average lower quartile earnings in predominantly rural areas – compared to 7.6 times in predominantly urban ones in 2022. A lack of affordable housing, coupled with a lack of services and infrastructure in rural areas, creates a downward spiral as young people are forced to move away which in turn makes it harder for local businesses and services find employees.

We believe that planning policy and housing targets should be reviewed to ensure that every rural community, including those in protected landscapes, can add sufficient new, good quality affordable housing to meet the needs of local people and local employers.

2. Fund community-led housing

Of course, people living and working in the countryside can be resistant to new housing, especially where these are large amorphous developments perceived to be foisted upon them. There may also exist concerns about local services and infrastructure being able to cope with large increases to the local population.

But in our experience, when rural communities are provided with opportunities to consider the housing and development needs of their local area, and have a say over what gets built, they are much more supportive. Indeed, a decade of neighbourhood planning demonstrates there is significant interest amongst rural communities for getting involved in such considerations.

We are calling on the next government to widen opportunities for communities to have their say over the homes that get built locally. In particular, we would like to see continued funding for rural housing enablers – specialists who help rural communities consider the need for housing locally, connecting them with landowners, housebuilders and planners to bring about suitable schemes. Their ongoing deployment is likely to result in rural exception sites being used much more – an under-utilised existing planning mechanism useful for securing affordable homes on underdeveloped land that would otherwise be restricted for residential development.

3. Prioritise those who live and work locally

A particular concern that has come to the fore in recent years has been the pressure that second homes and holiday lets have put on some rural and coastal communities. Areas popular with tourists such as Devon, Cornwall, Cumbria and North Norfolk have witnessed property prices soar whilst the availability of properties to rent on a long-term basis has diminished. This has led to a situation where people are unable to live locally near to their jobs, their family and social networks. This in turn has made it harder for local businesses and public services to recruit employees.

We are calling on the next government to provide local authorities with legal powers to ensure a specified proportion of domestic properties are available in perpetuity for people who live and work locally. It would apply where market pressures and restrictions on new development have inflated house prices such that they threaten community life and local businesses.

4. Create the means to restrict and tax second homes

And finally, linked to this, we think local authorities should also be able to regulate second homes and properties rented out as short term lets in areas where there is a shortage of housing.   Where taxes are introduced, the revenues could be recycled back into rural communities to build new social homes and support local services.

The manifestos released by the main political parties highlight housing as a key concern. ACRE will be scrutinising how the next government acts upon the promises made and proactively work with policy makers to share our experience and make sure no rural community is left behind.

Increasing the supply of affordable homes not only stands to bring down the cost of living for households, but it can also act as a multiplier stimulating investment in the rural economy, creating jobs, and sustaining services.

Phillip Vincent, ACRE’s Public Affairs & Communications Manager