Plans for so-called Entry Level Exception Sites emerged in an outline of revisions to planning regulations published last month, following a highly publicised launch by the Prime Minister.
Theresa May told housebuilders they would no longer be allowed to “hoard” land that had been earmarked for development in the expectation that its value would rise.
A 60-page report which followed contained only a few paragraphs devoted solely to rural housing, but the Country Land and Business Association said this week that its proposal to give special treatment to first-time buyers would help those who live and work in the countryside to get a foot on the housing ladder.
The CLA believes the Exception Sites in rural areas could give landowners greater opportunities to build affordable homes and that discounted homes could be built and sold without the involvement of a housing association – many of which it said were not interested in small or isolated rural locations.
Tim Breitmeyer, the CLA president, called the rural housing crisis “one of the defining challenges of our time”.
He said: “The rural economy will struggle to achieve its full potential and our villages will not survive if people cannot afford to live and work in the countryside.”
He said that the policy of exception sites, if implemented correctly by local authorities, could “strike a good balance between providing affordable homes and an economic return that motivates landowners to pursue sites, whilst ensuring sensitive design to meet the needs of the local community”.
The new proposals differ from the current policy of creating small “rural exception sites” for long-term, affordable housing on sites not normally used for the purpose.
The CLA says such sites are effective but are used inconsistently by different local authorities, and that Entry Level Exception Sites will increase the number of available homes by giving landowners a way to progress their own developments.
The Rural Services Network, an arm of the Local Government Association, which represents councils, has also said the planning review must be used to create more rural homes but denies that some councils are holding back development.
Its assistant director, Andy Dean, said: “It is really important to maintain the position of Rural Exception Sites as a delivery mechanism for affordable housing in rural areas.”
The new proposals are aimed partly at removing the “viability assessment loophole”, which the Campaign to Protect Rural England says has been used by developers to bypass minimum quotas of affordable houses.
Builders are required by councils to provide around 30 per cent of such homes on any new development, but many are said to use “viability assessments” to negotiate down the number by arguing that their profit margins would be badly hit.
Between 2011 and 2017, some 7,884 affordable homes were built on Rural Exception Sites. But the CLA argues that they are “not the panacea to the affordable housing shortage in rural areas”.
It says the policy depends on landowners donating or selling land just above their agricultural value – which is significantly less than the value of land with planning permission for market-value housing.
The organisation’s report, Strong Foundations, published this week, says: “From a landowner’s perspective, the decision to pursue a Rural Exception Site is socially motivated rather than in expectation of significant financial remuneration”.
It adds: “Selling land for housing is a once in a generation moment for many landowners, particularly those with smaller landholdings. In most circumstances the proceeds from any land sold is a crucial source of funding to reinvest in another part of a landowning business.
“By only relying on sites from those landowners who can afford to donate land or sell land at reduced value, Rural Exception Sites are restricted to a small proportion of landowners.”
The report argues that the new proposals for Entry Level Exception Sites bridge the current gap “between a desire to help and a need to ensure financial prudence by improving the economic case to build affordable homes for the community”.
It concludes: “Without the next generation, the rural economy will struggle to achieve its potential.
“Rural landowners are aware of the challenges faced by the next generation and many are keen to provide solutions.”