Why the rural housing crisis must be a national priority

This week marks Rural Housing Week, which aims to shine a spotlight on the challenges and opportunities of building and maintaining homes in rural areas.

The CLA continues to campaign on behalf of our members to ensure rural communities are not forgotten in the national housing conversation. We have long argued that the planning system must do more to support sustainable rural development. Yet, despite recent legislative efforts, the gap between rural housing need and delivery remains stark.

Rural areas across England are facing a housing crisis with not enough homes being built, and too many levers causing the supply of homes to dwindle, including changes to the minimum energy efficiency standards and significant policy changes in the Renters’ Rights Bill. While the government has not yet recognised the cause of dwindling supply, it does acknowledge the challenge and is ambitious to deliver 1.5m houses during this Parliament. To reach this goal, it has updated how housing need in a local area is calculated. However, according to the House of Commons Library, under the government's new standard method for calculating housing need (introduced in December 2024), many rural local authorities are still falling short of their targets. But the need for new rural housing remains great; the affordability ratio in rural areas is often worse than in urban areas (excluding London), with average house prices in some villages exceeding 10 times the average local income.

Demand for rural housing continues to grow, yet supply has not kept pace. Between 2018 and 2023, only 8% of new homes built in England were in rural local authorities, despite these areas accounting for over 17% of the population. This mismatch is not just a housing issue, it’s a threat to the sustainability of rural communities, local services, and a prosperous rural economy.

The CLA has been vocal in its call for a more flexible planning system that recognises the unique challenges of rural development. In its response to the National Planning Policy Framework (NPPF) consultation, the CLA highlighted how current planning rules often treat rural areas as static landscapes rather than living, working communities. We are also very keen to see greater development of rural affordable housing on rural exception sites, on which delivery since 2016 has halved.

One of the CLA’s key proposals is to allow small-scale developments in and around villages using a new rural exception site planning passport. This would split the planning route into two distinct phases, tailoring the existing permission in principle process to guarantee community buy-in and assuring the tenure at an early stage. This would reduce risk to applicants, resource for local authorities, and would deliver more rural affordable homes. We also support landowners being able to deliver affordable housing themselves, recognising that finding a provider in rural areas can be challenging and meaning small rural sites are not brought forward.

The Planning and Infrastructure Bill, introduced in early 2025, was billed as a transformative piece of legislation aimed at speeding up housebuilding and modernising the planning system. While it includes welcome measures, such as streamlining planning committees and mandating planning training, and enhancing local authority capacity, we believe it does not go far enough to stimulate rural housing growth. In particular, the bill misses the opportunity to prioritise small rural sites, which could, with the right policy levers, deliver some of the 1.5 million homes more quickly than urban extensions and new towns. Without targeted reforms, the risk is that rural areas will continue to be sidelined in favour of large-scale urban expansion in order to meet ever-growing housing targets.

The case for rural housing is not just about numbers to meet the government’s ambition; the capacity of small rural sites would never meet the overall housing target. However, a small number of homes in a large number of villages would make a huge difference to local communities and the rural economy.

As we mark Rural Housing Week, our message is clear: rural housing must be a national priority, not an afterthought. The government’s planning reforms must go further to empower local communities, incentivise landowners, unlock planning barriers, and deliver the homes rural areas desperately need.