Affordable homes by landowners can help solve housing crisis in the countryside

22 September 2016

Landowners should be encouraged to build and manage their own affordable housing in the countryside to help solve the housing crisis.

That is the message of CLA President Ross Murray who will share a stage with HRH Princess Anne today (22 September) after she delivers her keynote speech on putting affordable rural homes in the spotlight at the National Housing Federation conference.

Ahead of the debate with other professionals in the housing industry about the barriers to building affordable homes in the countryside, Mr Murray said landowners were keen to build and manage their own affordable housing and were best placed to deliver this because of their economic role within the community. However, he said there are not enough incentives to encourage more landowners to bring sites forward and manage them.

He said: “The capacity of landowners to help alleviate the acute shortage in homes in rural areas is an untapped resource. Many landowners already manage large residential portfolios and affordable housing is a part of that. Landowners have strong multi-generational ties to their communities and are often local employers, they wish to sustain that community for future generations, and long-term investment in affordable housing is an excellent way of doing this.

“However, it is important to recognise that developing market houses for sale is a more profitable enterprise than providing affordable housing to rent so there needs to be a range of incentives to encourage landowners to invest for the longer term.”

Mr Murray added that high house prices in rural areas have a significant impact on the rural economy.

He said: “Job creation is stifled, perpetuating low wages because young people cannot afford to live and work in the countryside. We do not want to build all over our beautiful countryside but we want to see incremental growth in existing villages. This can help sustain local services and stop these areas from becoming dormitory zones for commuters and holiday homes. We want life in our villages – to support young families, local workers and those in the community who are ready to downsize.”

Other motivators the CLA advocates for encouraging more landowners to bring sites forward for affordable homes are:

  • allowing landowners nomination rights for who lives in an affordable property they have built, for example, a retired agricultural worker,
  • adding affordable rental housing to the asset classes eligible for conditional exemption from inheritance tax upon death and, 
  • extending capital gains rollover relief on sale proceeds when a landowner sells land as a rural exception site development. This should also apply for 100% affordable housing or for Section106 mixed market and affordable housing sites where the affordable housing contribution is 20% above the requirement set in the local plan.