How to create permanently affordable homes in Yorkshire's rural areas

Driving round Wensleydale, you can see on the fringe of many villages small developments of decent houses which were built by the local authority after the Second World War with the intention that they would be available to let in perpetuity and provide a pool of housing for people who could not afford to buy.

When house prices started to take off from about 1970, they became an increasingly valuable resource, enabling people in low paid but vital jobs to continue to live in the Dale.

This was blown out of the water by the Thatcher government in the 1980s with its “right to buy” policy which persists today. Virtually every one of these houses is now privately owned.

Right to buy brought with it benefits, but these were almost entirely for individuals awarded a large windfall in the form of a house at a heavily discounted price. The losers were, and are, the public and anyone of modest means trying to get a roof over their heads today.

The damage was reinforced by local authorities being barred from reinvesting the sale proceeds in housing. In the meantime, the shortage of housing for a growing population has escalated house prices to undreamed of levels, way beyond general inflation.

This has resulted in a huge increase in the value of land with planning permission for open market development. It follows that the only way to create reasonably low cost land for housing is to designate sites that would not receive planning permission for open market development as sites for affordable housing.

There is a vast gulf between agricultural value, say £8,000 per acre, and land for housing development which can be 100 times that.

Landowners could still be rewarded for development value at a fraction of open market development value or many times agricultural value, though some would not wish to sell and compulsory purchase would be appropriate in some cases.

The right to buy creates a ratchet effect whereby as fast as one generation builds affordable housing, it finds its way into the open market and ceases to be affordable. It follows that the right to buy must not apply to houses built on sites designated for affordable housing.

Current arrangements are clearly not working. Local families in locations as different as Wensleydale villages and London suburbs are unable to find accommodation at prices they can afford. This can affect the ability of vital people like teachers, police officers and care workers to live anywhere near where they work. The Government’s assessment of “affordable” is 80 per cent of open market value. This does address true affordability.

A further downside is that people who cannot afford to buy are often forced into the private rented sector which has seen rent rises tracking capital values creating a huge strain on the finances of individuals and public authorities, faced with the escalating cost of housing benefit.

The only way to create truly affordable housing is for local authorities or housing associations to buy land at a fraction of the value of land for open market development and to build houses and let them at a price which reflects the reduced cost base. There must be no right to buy. Owning a house is a fine aspiration but a decent roof over your head is a much more fundamental need.

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