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Affordable Housing in Rural Communities

Volume 765: debated on Thursday 15 October 2015

Question for Short Debate

Asked by

To ask Her Majesty’s Government how they plan to deliver a sustainable supply of affordable housing in rural communities, particularly in the light of the planned extension of the Right to Buy scheme.

My Lords, I am very grateful to all those who have agreed to contribute to this debate, many of whom have huge experience in this area, and I am looking forward to what they have to say.

The provision of affordable housing is vital to the long-term sustainability of rural communities so that they continue to be places where a broad cross-section of people can live and work. It is all the more important, given that rural house prices are currently well beyond the means of many lower-income and middle-income people. Indeed, it is estimated that in 90% of rural authorities, the average home costs eight times the average salary. However, rural communities currently face a serious lack of affordable housing. Only 8% of rural housing stock is considered affordable, compared with 20% in urban areas. The amount of new affordable rural housing is also low. In 2013, only 2,886 affordable homes were built in rural areas out of nearly 40,000 affordable homes nationally.

Creating more affordable accommodation, particularly rented accommodation, must be a central aspect of any drive to create sustainability in rural communities. I would welcome an update from the Minister on what plans Her Majesty’s Government have to boost the supply of affordable rented accommodation, especially in rural areas. Given the current shortage of rural affordable housing, I am very concerned that Her Majesty’s Government in partnership with the National Housing Federation are, in effect, forcing a right-to-buy scheme on rural housing associations that may further endanger the supply of affordable rented accommodation in the countryside. I say “in effect” forcing because, while the overall majority of housing associations have agreed and signed up to the NHF deal, rural-specific housing associations raised some very serious concerns, with many of them abstaining from the agreement.

I welcome some aspects of the proposals as they may benefit some of the housing associations—not least, for example, the greater flexibility over how they invest the proceeds of sales. It is also to be welcomed that the deal specifies some circumstances in which housing associations will be exempt from the requirement to sell their housing stock: for example, in rural communities of fewer than 3,000 people and where developments are subject to clear restrictive covenants. I want to mention three areas of the proposals which raise concerns. First, it has been widely acknowledged that the current definition of “rural” used within the agreement is very narrow in scope. To restrict the definition of “rural” to settlements of fewer than 3,000 inhabitants is to exclude some market towns and villages that face exactly the same planning and development difficulties as smaller communities.

Under the current proposals, rural housing associations would be forced to sell off vital affordable housing stock in locations where they have little chance of providing like-for-like replacement, leading to a net loss in the availability of affordable rented accommodation in these rural areas. This is a concern shared by my ecumenical partners within the Methodist church, particularly Richard Teal, chairman of the Cumbria Methodist District. I know that the Hastoe Housing Association and the Campaign to Protect Rural England have written to the Secretary of State for CLG to propose a rural definition that allows for larger rural communities at the discretion of the Secretary of State, and I hope that the Minister will look at this option very carefully.

Secondly, it is important to point out that the rural exemptions contained in the agreement are not exemptions placed on the tenant from the right to buy but exemptions placed on housing associations from the requirement to sell. That means that housing associations which operate across both rural and urban areas can choose to sell off their rural stock, which can be expensive and difficult to maintain, and use that money to build new affordable housing in cheaper urban areas where larger developments can sometimes prove more cost-effective. Such arrangements would again lead to a net loss in the availability of affordable rural housing, despite the safeguards that Ministers have rightly tried to put in place.

Two days ago, the Minister for Housing and Planning in the other place claimed that,

“for every home sold, an extra home will be built in that area”,—[Official Report, Commons, 12/10/15; col. 43.]

Under the agreement as it stands he can provide no such assurances as there is currently no restriction on where housing associations choose to reinvest the proceeds of sales. This needs to be remedied.

Does the Minister recognise the problem and will she tell the House what safeguards will be introduced to prevent this happening? If Her Majesty’s Government will not accept the recommendation made by numerous rural housing associations that affordable housing in rural areas should be actively excluded from the right to buy, will the Minister inform the House whether the Government will consider working with the NHF to introduce a presumption into the right-to-buy agreement that rural housing stock sold under the right to buy will be replaced by housing stock in the same rural communities and that the money will not be invested somewhere else in other urban areas?

Thirdly, on the issue about those areas where affordable housing developments have been built on land that has either been donated or sold at a very favourable price to housing associations by local landowners, very often this land is transferred on the condition that it is made available for affordable rental in perpetuity. A number of rural housing associations are deeply reliant on these arrangements. Indeed, I declare an interest as land and property belonging to a number of Christian denominations, not least the Church of England, has been transferred precisely under these conditions. I believe that the current right-to-buy agreement protects such development from forced sale but that has not been made clear by either the Government or the NHF. Indeed, I have heard of one landowner who has threatened to withdraw from an arrangement to provide land for affordable housing on the basis that those houses may in future be sold on at a profit. Can the Minister confirm that landowners will still be able to donate land or sell it at a clearly favourable price on the condition that those developments will be retained as affordable rented housing in perpetuity?

I want to finish with a comment on the Government’s proposals for starter homes, which are an excellent idea to help people on to the housing ladder. At 80% of the market rate they are not affordable for many families. I am therefore particularly concerned at the suggestion that starter homes could provide an alternative means for development to fulfil Section 106 requirements. Given that Section 106 regulations are one of the principal ways that new affordable homes are created in rural areas, the impact of such a change would undoubtedly be devastating. Taken alongside the current right-to-buy proposals they pose a threat to the future availability of rural affordable housing. So finally, will the Minister assure the House that Her Majesty’s Government will review this matter carefully?

My Lords, it is excellent that this subject been brought to your Lordships’ House today. I cannot claim to know a lot about rural housing, but I do know a bit about housing as I served on my local council and, in the Greater London Council, I had quite a major responsibility for it. The points raised by the right reverend Prelate are fascinating and I should like to take up some of them.

I, too, am most concerned about the sustainability of replacements for properties that housing associations might be forced to sell. I noted that the words of the right reverend Prelate were very careful. I served a long time ago on the Sutton Hastoe Housing Association. Indeed, it was there that I first met the noble Lord, Lord Best. I am delighted that he is speaking today because no one knows more about the situation than him.

My only experience of rural housing is that I have had a shared home in a village in Oxfordshire for more than 30 years. We have quite an interesting history, in that in the first instance five or perhaps seven small homes were built and no one wanted them. It was quite difficult to fill them, whereas more recently and currently everyone wants more housing for the people who were born and brought up in the village, as they do not want to change their way of life or be forced to go far away. That is important. Another very good thing in that village is that the people are really consulting carefully about where would be the best places to have developments, and whether the place you would most like is available or not available. A great deal of thought is being given in these small villages to this situation.

On Right to Buy for housing association properties, I support the point that the right reverend Prelate made about the problem of affordable housing. I ask the Minister: what is affordable? What is affordable to one person is not at all affordable to another. Therefore, it is far too wide a phrase to say “affordable housing” and then clump a whole lot of things together that all come up as “affordable housing”. We need to think about that.

My uncle, who was the Premier of New South Wales—a Labor Premier, I regret to say—introduced the first affordable housing built on the fringes of Sydney. At the very beginning, the only way they could decide who was entitled was to draw names out of a hat, because huge numbers of people wanted these houses. They built them on a different basis: every penny you paid in rent went towards your eventual ownership of the property you lived in. It changed, and now the housing commission is a vast organisation. I have been out of touch with what has been going on there for 60 years, so I am reporting only on the very beginning of affordable housing in Australia.

On Right to Buy, in the GLC days I met with Mrs Thatcher when either the 1,000th or 10,000th GLC home was sold—I do not know which. The people who bought it were terribly pleased to be able to do so. The GLC officer said that this particular family had phoned every day for six months with a query or concern about what would happen when they bought their house. It was a very momentous thing for them.

I have only another minute to say something, so I cannot say very much. One very important point is that sinking funds are terribly important. If people have the right to buy they should also be helped to have the means to continue to live in the property.

My Lords, I declare an interest as chair of Housing & Care 21. I am delighted to speak in this debate, initiated by the right reverend Prelate. I start by paying tribute to the role of the church in encouraging social housing initiatives to help those with modest means. I have been involved in housing for 12 years, first with the Portsmouth Housing Association, which was set up by a clergyman in Portsmouth, Bill Sergeant. He bought his first house as part of that association in 1972. Forty years later, there are 5,000 houses in that housing association, worth £1.5 billion in assets. He was an amazing social entrepreneur who remains a hero of mine.

I will talk about a much smaller scheme in the limited time that I have, which is in the village of Wickham, just north of Portsmouth, just south of where I live. It is a medieval village that has a small rural housing scheme, an initiative started by the then Bishop of Portsmouth, the late Kenneth Stevenson, who was a very energetic, enthusiastic and highly intelligent Member of this House. In 2004, he asked parish churches to identify the needs of their communities and challenged them to think of new ways in which the church could and should serve them better. St Nicholas Church identified the lack of affordable housing in that community and it sought to meet this need. This is at the heart of the good society, which we really should support and which I thought the Government supported in the early days. They need to support it.

The housing scheme started with a local farmer being approached by a doctors’ practice that wanted a surgery. It wanted land at the edge of the village. I know this individual well; he is in his late 70s. He thought that, for his own good, it would be good to have a better local surgery. He was very happy to contribute land at a discount. Out of the discussion came the decision that they should put some affordable housing either side of it, which they did. The housing association was involved. The church decided to set up a community land trust. It took eight of the 20 houses. Four were rented and four were for intermediate housing—so shared ownership, with the trust maintaining 20% ownership of the properties in the shared-ownership scheme. It has the right to buy the property back. It is an excellent scheme that has provided affordable housing in the village.

What will happen under the current government policies? I talked to the trust. It is very cautious. I am glad to say that it will be excluded, although we have yet to see the detail of the Bill. I have, at least: I do not think there is much mention of rural exceptions; it is certainly implied by the voluntary agreement that has been arrived at. It is very cautious about the future. Of course, it has already had the announcement that, over the next five years, its rent flow will be reduced. Again, I emphasise that that is no problem for the larger association because it has a certain amount of fat that it can cut and it can improve efficiencies, but it is absolutely terrible for smaller associations.

The landowner in this situation is very angry because he thinks that, if he wanted to give further land, Right to Buy would lead to other people getting the surplus value. The housing association will have an exception with its properties, but it will be under great pressure to allow them to be sold, otherwise it is unlikely to get other grants to build new houses. Possibly it will want to build elsewhere. Interestingly, just to the south of this village, another huge development of 3,000 new houses on the edge of the urban area is coming, but the Government are now beginning to say that, under Section 106, they will be limited in the amount of affordable housing that can be provided for rent.

This is disastrous for these communities. We have to understand that housing associations and community land trusts can contribute to balance communities, but Right to Buy and a whole range of government policies are an attack on social housing. The consequences will be substantial and deeply depressing for those who have a commitment to encouraging thriving, dynamic, settled rural communities where families can aspire to see their younger members housed locally, where they were brought up, and where family links can strengthen that local community.

My Lords, we passed an amendment to the charities Bill that charities should not be compelled to sell their assets contrary to their trust deeds. While the new proposals make some exemptions, the Charity Commission, which was not consulted in advance, remains concerned about how trustees can,

“administer … housing associations in the best interests of their beneficiaries”.

We have heard about the lack of rural social housing: just 8% of housing in small villages is owned by councils or housing associations. A third of rural local authorities own no housing. Land for housing associations to keep working-class or low-income people in the community will not willingly be made available if, within three years, they could be sold off to tenants, and, three years later, resold to richer owners or buy-to-let businesses, which can then rent them at twice the housing association level. Even community land trusts are not automatically excluded from this so-called deal. Furthermore, if a housing association builds, say, 10 units as a group, one of which is then sold, the money from that would not allow the building of one new flat or house, even if land was available nearby at a reasonable price.

The chairman of Tiddicross charity wrote to me and told me that it owns two almshouses. They are lived in by single, less well-off people, usually spinsters or widows who could not otherwise stay in the conservation village where they grew up. It would be awful, he said, if the tenants could buy their properties, which would inevitably find their way into the open market. Interestingly, his MP, Mark Pritchard, concurred, with his support for our successful amendment to the charities Bill.

How would we pay for these rural sales? It could come only from urban areas. For Westminster, this means selling three-quarters of its much-needed council houses as they become vacant. Camden will lose some 400 units. The price against which the ones to be sold will be judged is an all-London average, but obviously Camden and Westminster are well above the outer London prices, so a higher proportion of their stock will be deemed to be high value and forced to be sold. This money has to be used to pay for new builds in Camden or Westminster, which are not cheap given land prices there, and has to compensate housing associations for their forced sales. Those housing associations will not even be in their own boroughs but might have to be sent, for example, to Norfolk, to compensate for its losses. There will be a real and substantial outflow of funding from London.

Many rural housing associations, as we have heard, including the largest, Hastoe, have not signed up to this so-called voluntary deal, yet they will be forced to go along with it. Money for much-needed affordable rural housing should not come from those in need in urban areas and from the loss of council homes here. Almost 7,000 council houses a year will have to be sold under the proposals if no extra funding is provided, according to the Chartered Institute of Housing today.

This is an unaccountable policy. It is being forced through without parliamentary debate or approval. It is misguided, it is unaccountable, it is a waste of money, which will be spent in a way that means it will get into the private sector and push up rents, and it should be scrapped.

My Lords, I welcome the opportunity to speak in this debate. I draw attention to my interests around housing and planning, although I have recently stepped down from chairing the National Housing Federation, as its term expired.

I was involved in some of the work which achieved the agreement with the Government. They were elected on a manifesto that clearly committed them to extending right to buy to housing association tenants and I welcome the flexibility they and housing associations have shown, in an overwhelming majority, in finding a settlement that allows recognition of the independence of housing associations and makes it very clear that there are many assumptions about exceptions, including in rural communities where affordable housing is in very short supply.

My interest in extending the opportunities for housing for people on low incomes in rural communities has been long-standing. I did a review for the last Labour Government on rural housing and economies and I very much welcome the fact that, through the neighbourhood planning process, communities have been empowered, in ways very similar to those I recommended at that time, to take the initiative in bringing forward affordable housing and other housing measures to improve and maintain the sustainability of rural communities. There is no question that, on average, wages are substantially below the national average—about 20% below—and yet house prices are substantially above it. Because we want to protect rural villages, in general, from unsuitable development, opportunities for delivering new housing are limited.

In many ways I support the Government’s work, particularly through the National Planning Policy Framework, to deliver more housing, but I want to raise two specific things that I hope the Minister, and indeed housing associations, through the NHF’s work on this, will respond to. I think the Minister is aware of my concerns. The first is that rural exception sites have been brought forward with landowners very often offering up land either for free—and we heard about the church doing so—or, certainly, much below the market value in order to deliver what communities have understood to be in-perpetuity affordable housing, to meet local needs. In some cases that has been guaranteed by covenant, either by the landowner or through long-term lease rather than freehold, or through Section 106, with the local authority covenanting it. In that case, right to buy would not in any place be applicable because housing associations would not be able to sell them, but not in all cases. Very often “in perpetuity” has been assumed because housing associations have not been under any obligation to sell.

Landowners who have offered up land in this way and communities that agreed permission where it would otherwise not have been agreed would be in great distress if those houses were sold. While I believe that most rural housing associations would not wish to sell those—giving the tenant, if they wished to buy, the portable discount to buy elsewhere—none the less some might. I think that would be a breach of faith and I look to both the Government and the NHF to make it absolutely clear to housing associations that they should not do so in those circumstances and if it is possible, through regulations, to prevent it.

Secondly, the provision of fewer than 10 homes, under which the Government do not want any affordable housing to be required is applicable in many urban cases, but in rural communities the great majority of sites brought forward are for fewer than 10 homes. If houses are being sold through right to buy, it is not the case that a council, or indeed a neighbourhood plan, can say that some of those homes should be affordable, and it is very difficult to see what, if any, opportunities there will be to bring forward new homes. Given the legal challenges we do not quite know where this will end but I hope the Government will take the opportunity of the time provided by those legal challenges to consider whether in very small rural communities it is appropriate to lift any obligation for affordable homes at all. Otherwise, it is difficult to see, in those villages, how they will be delivered, unless they are fortunate enough to have a landowner willing to provide a site as an exception site for affordable housing.

My Lords, I thank the right reverend Prelate the Bishop of St Albans for initiating this debate and for his very helpful opening speech. In essence, the national problem for the next generation in obtaining a decent home people can afford is appreciably worse in most rural areas. Average house prices are significantly higher; average wages are markedly lower. There is only half as much council and housing association accommodation, not least because of the high levels of sales of council housing in villages over past years.

I declare my interest as chair of the Rural Housing Policy Review, sponsored by Hastoe housing association, a leading rural housing provider. Our review involved some of the nation's greatest experts on rural housing matters, including the noble Lords, Lord Cameron of Dillington and Lord Taylor of Goss Moor, along with Jo Lavis as our incredibly helpful secretary. Our report is available on the Hastoe website and I strongly commend it to all those interested in these matters.

Since our report was published in February, three issues have risen to the top of this agenda. With the noble Lords, Lords Cameron and Lord Taylor, I was very glad, yesterday, to discuss these issues with the Secretary of State, Greg Clark, the Housing Minister, Brandon Lewis, and the noble Baroness, the Minister.

First, there is serious concern over the Government’s plan to remove the opportunity for local authorities to require affordable homes on sites of fewer than 10 properties. This measure has been subject to action in the courts and is not yet resolved, as the noble Lord, Lord Taylor, said. Because around 80% of sites in rural areas are small and because the affordable housing obligations on housebuilders have produced two-thirds of all the new affordable homes in rural areas, this measure—however helpful in urban areas—would be disastrous for local people requiring a home in their village. Without any homes for local people, the opposition to new development in rural areas is likely to be much intensified, meaning fewer homes overall.

Secondly, the Government’s intention to allow housebuilders to substitute starter homes—properties for sale with a 20% discount—in place of shared ownership or rented accommodation would, again, be problematic in rural areas. In most of these localities the 20% discount would not be enough to help those on average incomes and below. The opportunity for purchasers to sell on the open market after five years would mean that, in time, all the properties would be beyond the reach of those for whom previously affordable housing had been provided and kept available.

Thirdly, there has been much anxiety about the extension of the right to buy to housing association tenants. Thanks to the good judgment of the Secretary of State, plans for a statutory right for these tenants will not be pursued and a much more flexible voluntary scheme will be introduced. This will mean that housing associations operating in rural areas will be able—and will be strongly advised—to reject requests to buy and instead to offer the opportunity for the same discount to be applied to the purchase of another property elsewhere. Although some rural housing associations remain very anxious, this is a much improved outcome from the negotiations between the Government and the National Housing Federation.

Nevertheless, some aspects of the right-to-buy deal continue to be particularly problematic for rural communities. In particular, local authorities that have retained their council housing will be required to raise the money to pay for the right-to-buy discounts, and will have to do so by selling on the open market the most valuable council homes when they fall vacant. Although the details are yet to be hammered out, in some rural areas—including in North Yorkshire, where I am based—it seems likely that a high proportion of the remaining rural council homes will need to be sold when they become vacant to pay for the housing association discounts.

There are now three potentially serious new obstacles to creating and retaining affordable homes for those not able to buy, even with a 20% discount under the starter homes initiative. There is a real danger that people in rural communities on average and below-average incomes will face an even worse housing future in the months and years ahead. I get the feeling that Ministers are willing to consider ways of addressing these difficulties and I hope that the Minister will work with all of us in standing up for the needs of local people in all our rural communities.

My Lords, I declare an interest as a director of Anchorwood Developments and of Wessex Investors, and as a landlord of a single rural property in Devon.

I am less sanguine about this voluntary agreement. In the Housing and Planning Bill that was published in the House of Commons yesterday, there are just two pages on the right to buy and there are lots of blanks even on those. This gives an impression of plea bargaining, like in the United States, in that the Government have a proposition—they were elected on it, it was a manifesto commitment; no one is disagreeing with that—but they have looked at how to implement this and have thought, “Good grief, how are we ever going to get this through Parliament? How are we going to do this legally without the”—as my honourable friend Tim Farron called it—“Mugabisation of action in this area?”. The housing federations have said, “My goodness, how do we mitigate this problem?”. So there has been a sort of alliance that somehow bypasses Parliament and the democratic process to get to a solution that both sides see as a compromise because neither side wants to lose the whole thing completely. That really concerns me.

In the voluntary agreement there are a number of exceptions. What concerns me is the reference to:

“Examples of circumstances where housing associations may exercise discretion over sales”.

There is very little certainty there, particularly when we come back to the issue mentioned by many noble Lords, particularly my good and noble friend Lord Taylor of Goss Moor, around certainty for people who have offered in the past and wish to offer in the future parts of their estate for affordable housing to be provided. We have very little legal certainty into the future, which will not allow people to be beneficial in that way.

The other side of this is the selling-off of valuable properties. This really concerns me in rural and coastal areas in particular, such as Cornwall, where I live. If you go and knock on the doors of the main street of the port of Fowey, as I have done when electioneering, you will find that the properties are empty or certainly do not have residents there during the winter. Yet these are the most valuable properties—the ones most likely to be sold off. Who are the purchasers likely to be? They are not residents; they are second-home owners. One question I would ask—which was raised, very rightly, in the report of the noble Lord, Lord Best—is: will the Government guarantee that when these high-value properties have to be sold off there will be a covenant around them being the principal residences of those who buy thereafter? Otherwise, what are currently deserts in parts of those coastal villages will become much broader.

I just want to say one thing that is slightly off the agenda, concerning the private rented sector. One of the things I praised the Labour manifesto for in the last election was the fact that Labour wished to extend shorthold leases from six months to two years. This gives much more certainty and is particularly important in rural areas, where it is difficult to change schools and any move from one private rental to another is much more difficult. Will the Government look at that area? I am sure that my own tenant, who is on a shorthold lease, would appreciate that.

Lastly, the question I would really like to ask the Government is: what happens if and when those housing associations do not wish to be a part of this voluntary agreement? How do the Government deal with that situation?

My Lords, I thank the right reverend Prelate the Bishop of St Albans for securing this debate on a topic very dear to my heart.

We are blessed in the UK with vibrant cities, industrial heartlands, beautiful coastlines and idyllic countryside, all of which contribute to the character and economy of our country. At varying times through history, all have suffered to some extent from cyclical patterns of prosperity and decline. But it seems to me that rural communities are continually being penalised. Many living in villages and hamlets struggle to survive: their wages are low, their buses are infrequent, and housing is expensive and in very short supply. Families with children bus them to schools in the next, larger village and watch them develop. The young people who go to university rarely, if ever, return. While there may be jobs nearby, there are certainly no homes for them to rent and they cannot afford to buy. The families of children not leaving for university find their children staying at home far longer than they themselves consider healthy.

Rural communities are a vital part of life. Vibrancy comes from a mixture of people from different backgrounds, all contributing to community life. Nearly every village has a clutch of what were council houses. These homes ensure an equitable mix of residents. Sadly, the right to buy has seen many of these homes move into private ownership and they have rarely been replaced by more rented homes. This has drastically reduced the stock of rented properties in villages. Under the rural exceptions policy, some homes have been built. As we have heard, many landowners are happy to support such schemes but this is not likely to continue if the homes are sold off into private ownership, with the new owner enjoying a massive discount—plus the prospect of making a healthy profit when they sell on to another.

The Housing and Planning Bill published earlier this week and its accompanying notes make no mention of what the Secretary of State’s criteria for home ownership will be. There appear to be no protections for rural exception sites or community land trusts. This House has had verbal reassurances from the Minister that there would be safeguards in the Bill. Now we have seen the Bill and those safeguards are absent. There are 1.6 million people on housing waiting lists in the UK. We must build more homes for a mixture of tenures, including rented. There are nearly 100,000 homeless children in our country. This is a total disgrace—these could be our grandchildren.

Some 40% of properties sold under the right to buy end up in the private rented sector. There is a desperate need for rented properties. The Government should allow local authorities and housing associations to build more homes, instead of selling off those already in the rented sector.

As the right reverend Prelate said, only 8% of homes in rural areas are affordable as opposed to 20% in cities. Are we really happy to create middle-class enclaves in our villages? The elderly naturally become frailer. Village shops and services close down as those with cars travel further afield rather than buying locally. There are insufficient fit adults living locally to provide the care needed for the frail and the disabled. Carers have to travel out from the towns. Very few young families can afford to move to villages. Who wants to live anywhere without the sound of children’s laughter? I, for one, do not. We must protect a sustained mixed economy of housing in perpetuity in our village communities or face creating elderly ghettos. The Minister must rise to the challenge.

My Lords, I open my remarks by thanking the right reverend Prelate the Bishop of St Albans for putting this Question down for debate today. It comes at a most opportune moment, so I and all the House are grateful to him. I should also declare an interest as a local councillor.

I have no objection to the right to buy per se but I do have concerns about how this proposed scheme is to be funded and operated through the sale of the most expensive properties that local authorities have, and about the process for replacing the homes sold, given the time it will take to replace them. When I was previously a councillor in the 1980s and 1990s, we used to have hard-to-let properties. In 2015, there is no such thing as a hard-to-let property as the pressures to provide social housing have grown enormously. We are in the midst of a housing crisis in both our rural areas and our towns and cities. Rural areas face particular challenges. I have great concerns that the Government’s proposals run the risk of making it more difficult to provide a proper supply of social housing at rents that people can afford in rural areas. The noble Baroness, Lady Gardner of Parkes, made an excellent point about affordable housing in her contribution.

Earnings, on average, are lower in rural areas than urban areas. There is much less housing association and council housing generally in rural areas, so what there is is a precious resource making up just 8% of rural properties, as other noble Lords said. The right reverend Prelate made the point very well about the deal and its effect on smaller rural associations. I am in complete agreement with him there.

Rural areas face particular problems to get the right mix and balance of housing types to ensure that their communities thrive and prosper. The noble Lord, Lord Taylor of Goss Moor, referred to exceptions in this agreement and I look forward to seeing them in more detail. I hope they will offer the protection he referred to. However, if it could take up to three years initially to replace a home sold under this scheme, that seems a very long time to me. The fact that housing associations will have great flexibility about where the replacement home will be placed means that rural areas could be changed very quickly—and not for the better, as communities lose all or most of their social housing. The right reverend Prelate the Bishop of St Albans again made that point in his contribution this afternoon.

My noble friend Lady Hayter of Kentish Town focused on the charitable status of housing associations and the problems this policy will cause them, and I am completely in agreement with the point she made.

It is difficult in a short contribution to cover all the points one would want to make, but I would be grateful if the Minister answered a few questions for me now or perhaps wrote to me and other Members after the debate. What assessment have the Government made of the effects of the loss of large parts of social housing, in particular in hamlets or villages, and the replacement for that lost housing asset being put elsewhere? Does she expect, or will she require, housing associations to put the replacement property in the same rural local authority area it came from, funded by the sale of authority assets? Or is that not to be considered, so that the associations can put the replacement house anywhere?

Have the Government had any discussions on how a replacement property could be provided more quickly than those initial three years? What assessment have the Government made of how many properties will be bought under this scheme? How will they incentivise landowners to release land for affordable housing, rather than keep it for other opportunities? What consultations has the Minister had with organisations such as the pub is the hub, the Association of Convenience Stores or the National Federation of SubPostmasters on the possible long-term effects of this policy on rural communities? Their members need communities to remain vibrant so that their businesses can remain operational and thrive in future. I again thank the right reverend Prelate for his contribution today.

My Lords, I thank the right reverend Prelate for initiating this timely debate. I also pay tribute to the church and the work it has done in providing rural housing, and to all the other landlords who have done the same thing philanthropically to preserve and sustain their local communities. Perhaps I could start with the context; then, I am very keen to answer noble Lords’ specific questions.

In 2010 we inherited the lowest peacetime rate of housebuilding since the 1920s, a dysfunctional planning system and levels of housebuilding that were tumbling. Today, we are growing faster than any other major advanced economy and our job creation is the envy of the developed world. Now, we are meeting the aspirations of people to own their own homes.

On affordable rural housing, this Government believe that meeting the housing needs of rural communities is very important: since 2010, more than 85,000 affordable homes have been delivered in rural local authorities in England. Some communities have gone over and above their commitments. I pay tribute at this point to Willersey in Gloucestershire, which has done just this. But we know that more are needed and we are committed to delivering 275,000 affordable homes over this Parliament in rural and urban areas. The 2015 to 2018 affordable homes prospectus makes it clear that where a particular scheme, for example in a rural location, involves higher than average costs, the HCA will wherever possible seek to take account of such genuine comparators. Our intention is that bidders will not be systematically disadvantaged where there are some higher costs or higher grant bids within their proposed programme.

Local authorities should plan to reflect local needs, particularly for affordable housing, including through rural exception sites. They should also consider whether allowing some market housing would facilitate provision of significant additional affordable housing. Through the Rural Productivity Plan, we will review the planning and regulatory constraints facing rural businesses, including how permitted development rights can better support the provision of new homes, jobs and innovation.

The Government are committed to reforming the housing market and boosting the supply of much-needed housing. Housebuilding starts have more than doubled since 2009 and planning permission was granted for 242,000 houses in the year to June 2015. Almost 800,000 new homes have been delivered in England since 2009. Completions are up and housing starts are at their highest annual level since 2007. More than 260,000 affordable homes have been delivered since 2010 and, with nearly 186,000 affordable builds, we have exceeded our 2011-15 target by 16,000. Over this Parliament, we will ensure the fastest rate of affordable housebuilding in the last 20 years, with 275,000 new affordable homes by 2020.

The right reverend Prelate the Bishop of St Albans asked whether there should be a wider definition of rural. The Government would be willing to revisit the definition if evidence can be provided that this would convincingly increase new housing supply. He also made the point that many new starter homes will not be affordable to people in rural areas. A number of noble Lords also made the point that starter homes may be a threat to rural affordable housing supply. Starter homes are a new form of low-cost house ownership to help young first-time buyers on to the property ladder, including in rural areas. The definition of affordable housing will be expanded to include starter homes, and a consultation on that will take place shortly.

The August 2015 rural productivity plan announced that starter homes will be encouraged through the use of rural exception sites to help villages thrive. Young first-time buyers face significant affordability pressures in many rural areas, so we want the development of starter homes to make a significant contribution to housebuilding in those areas.

The right reverend Prelate also asked what safeguards are in place to ensure one-for-one replacements locally. Under the agreement with the National Housing Federation, there is a clear commitment to all properties sold being replaced with an additional home. Rural areas will benefit from that and there is a clear exemption for rural housing under the agreement, whereby housing associations can decide not to sell those homes.

Both the right reverend Prelate and the noble Lord, Lord Taylor, asked about situations where landlords donate land and want it kept for the specific purposes for which they originally intended it. The agreement we have in place includes examples of types of property that associations may decide they do not want to sell to the tenant, including supported housing, historic legacy stock and homes in rural areas. It also includes rural properties that are protected by clear restrictive covenants in existing residence contracts. That should give a good basis for housing associations to engage with local landowners and their wishes on the issue.

The right reverend Prelate also asked what the Government will do to deliver affordable rented accommodation in rural areas. That is a very good point. Affordable rent was introduced in 2011, and rents can be set at 80% of local market rents. More than 260,000 affordable homes have been delivered since 2010, as I said, of which 85,000 have been provided in England in 2014-15. I cannot provide more specific figures because of the spending review.

The noble Baroness, Lady Hayter, asked about community land trusts being excluded. They are included in the agreement and are one category where properties can be exempted. She does not look convinced, but perhaps I can meet her afterwards.

My noble friend Lady Gardner of Parkes asked for the definition of affordable housing. It is set out in the National Planning Policy Framework and the Housing and Regeneration Act 2008. The NPPF defines it as:

“Social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market. Eligibility is determined with regard to local incomes and local house prices. Affordable housing should include provisions to remain at an affordable price for future eligible households or for the subsidy to be recycled for alternative affordable housing provision”.

The Housing and Regeneration Act 2008 defines social housing as “low cost rental accommodation” and “low cost home ownership accommodation”. In the Act, a low-cost rent is simply defined as below market rate. Low-cost home ownership is defined by availability for occupation on a shared ownership or equity percentage basis.

My noble friend also asked about sinking funds. Registered providers are generally required to make provision for a sinking fund, for example to meet future costs in shared ownership developments.

The noble Lord, Lord Taylor, asked about landowners selling land above market price. It has to be at discount of market price, otherwise they will not qualify. He also asked about the 10 units limit on Section 106 orders—we discussed this last night—the small sites threshold. A judgment was issued on 31 July this year quashing the Section 106 small sites threshold. Increasing the number of homes is a top priority, and our policy was aimed at securing it by helping small builders and developers to contribute. Section 106 requirements can be very burdensome and prevent developments actually being built. We now have permission to appeal against the judge’s decision.

The noble Baroness, Lady Hayter, said that this was being forced through and was a waste of money. The Government had a clear manifesto commitment to extend right to buy, and we are very pleased that the sector has come forward with a voluntary offer, rather than needing to legislate. The policy will boost not only new home ownership but supply through replacement.

The noble Lord, Lord Best, asked about the impact of high-value council sales in rural areas. We are legislating to require local authorities to pay the Secretary of State a sum in line with the anticipated receipt from the sale of high-value council housing. Councils will be able to retain some of that fund to support new housebuilding in their area.

The noble Lords, Lord Taylor and Lord Kennedy, talked about house prices versus wages in rural areas. It is a particular problem in rural areas; we recognise that there can be that gap. That is why we allocated £1.4 billion through the 2015-18 affordable homes programme in both rural and non-rural areas.

In conclusion, we want to support people who aspire to buy their own homes, and to support young families who sign up for a starter home. As much as possible, we want to support their aspirations by building homes in every part of this country.

Obviously, I asked a number of questions that the noble Baroness has not responded to. I assume she will write to me and perhaps place a copy in the House.

I was about to conclude by saying that I recognise I have not covered everybody’s points, and I will write to them in due course.