The roots of the rural housing crisis

The roots of the rural housing crisis

Have you heard about the housing crisis hollowing out the countryside? This week, for once, the answer to that question might just be “yes”. The National Housing Federation’s Rural Housing Week has shone a light on a problem that is poorly understood and rarely discussed with anything like the urgency it deserves.

A vicious chain reaction

In many rural communities, the market for housing has become divorced from local people and their incomes. Homes are sold for as much as people are willing and able to pay for them. In theory, this means that lower average rural wages should be reflected in lower rural house prices. But in much of the countryside, the market serves primarily second and holiday homeowners and retirees, who have far more to spend on housing than local workers. The market doesn’t try to be affordable to local people, because it has plenty of demand from out of area to feed on. As a result, house price to income ratios are out of control – 13:1 in Horsham, 10:1 in Central Bedfordshire, 9:1 in Cornwall and South Lakeland. Keep in mind that it’s rare for mortgage providers to lend more than 4.5 times your income and it’s clear we have a big problem. Little wonder that new research from Shelter has uncovered a 15.8 percentage point drop homeownership in rural areas since 2001.

Those frozen out of homeownership are increasingly turning to the private rented sector, where costs are high, tenancies insecure, and housing conditions consistently the worst of any tenure. With more intense competition for these homes, young people and families on lower incomes are losing the resulting game of musical chairs. And a shrinking stock of rural social homes has been less able to catch them when they slip through the cracks in market provision. Ultimately, many are priced out of rural communities entirely – forced to move away from friends, families and jobs. Many rural employers struggle to fill vacancies and many communities struggle to sustain basic services such as schools and pubs. It’s a vicious chain reaction that threatens the social fabric of rural life and the very survival of some villages.

Breaking the silence

So why do we hear so little about rural housing in the national conversation about the housing crisis? To take a generous view, it may be because the impact of the lack of affordable, decent homes in urban areas is more visible. Anyone who has walked down a city centre street lately is well aware that too many people have nowhere to call home. By contrast, homelessness in rural areas is far more likely to be hidden from general view as people seek shelter in outhouses, barns, tents and cars. Perhaps it is also relevant that many of the people who shape the national conversation about the housing crisis – journalists, politicians, policy wonks at national housing charities – also live in cities, and may have limited contact with the less rosy side of country life.

Whatever the reason, the end result has been an escalating problem in rural areas that has been little noted outside them. Rural Housing Week has an important role in breaking this silence, lifting the lid on a hidden crisis and celebrating the councils and housing associations getting rural social homes built against the odds.

The roots of the crisis

But while it is certainly true that cities get too much attention and a disproportionate share of resources compared to rural areas, these factors are not at the root of the housing crisis in the countryside, and they hold out little prospect of fixing it. The fundamental drivers of the dearth of affordable, decent homes are strikingly similar across rural, suburban and urban areas:

  • a lack of support for and public investment in genuinely affordable housing
  • affordable housing providers lack access to affordable land because the land market is broken
  • decisions about what is built, where and for whom are pre-determined by the broken land market, because developers assume they will build the most profitable kinds of homes to win land bids
  • weak, excessively flexible planning rules have reduced affordable housing delivery through Section 106

These are not problems which can be resolved by tweaking the existing system in ways that get a slightly bigger piece of the pie for rural areas. For example, until the prime minister announced new money in her party conference speech last year, there was £0 of public grant available to build truly affordable social rent homes anywhere. A bigger slice of £0 is still £0.

Tackling the fundamental problems which drive the housing crisis everywhere is no mean feat, and the solutions will need to be tailored for local circumstances. There is no doubt that particular policies (like the removal of affordable housing from schemes of fewer than ten homes) are tone deaf to the needs and nature of rural development. But the big changes in legislation and financial and political commitment needed to build our way out of this hole are common across the country and require close collaboration across traditional groups.

That is exactly what we intend to do in Shelter’s upcoming work to map out the path to build a bigger, better social housing offer.