Knock down barriers to build more affordable rural homes

27 October 2016

Barriers that stop landowners keen to build and manage affordable homes in the countryside were highlighted to MPs this week.

The CLA which represents landowners, farmers and rural businesses told a cross-party group of MPs that landowners have the potential to inject life into rural areas by making land available to house young families, local workers and older people seeking to downsize or retire. But the organisation warned that government policies such extending the Right to Buy to housing association tenants discouraged landowners from making sites available because the homes would become unaffordable in the future.

CLA Housing Adviser Matthew O’Connell said: “The most common method for landowners to help solve the acute shortage of housing in rural areas is to sell land at a discount to housing associations to build affordable homes. However, since the introduction of the Voluntary Right to Buy (VRTB) many landowners are reluctant to pursue projects over concern homes will not stay affordable in perpetuity.

“Some housing associations are committed to keeping properties in the affordable sector but the policy has already meant fewer sites coming forward. The Government must exempt Rural Exception Sites from the VRTB to restore confidence that this vital source of supply for rural affordable housing can continue.”

According to the CLA, whose members provide nearly 40% of all private rented housing in rural areas, local authorities should be more open to landowners owning and managing their own affordable housing projects.

Mr O’Connell added: “Very few of these arrangements take place despite significant appetite among landowners. They have the capacity to play a greater role in providing affordable housing if the right incentives are in place. A range of solutions which increase supply must be explored so that communities themselves can decide what is best for their local area.”

The CLA is calling for the Government to encourage landowners to release land at a discount for affordable housing by exempting the value of land sold for affordable homes from Capital Gains Tax and to support landowners in building and managing their own affordable housing by adding affordable rented housing to the asset classes eligible for conditional exemption from Inheritance Tax.