How do we solve the North East's housing problem?

Alison Thain and Paul Fiddaman, two experts in their field, on the measures needed to address the misfiring housing system in the region

Rui Vieira/PA Wire A housing estate
A housing estate

There is little doubt that decades of under-provision of new housing in England has left a damaging legacy.

Affordability of housing is beyond the reach of many in some areas of the country, leaving a generation with little hope of being able to afford to buy a home. They are either reliant on a private rented sector with escalating rents or little security, or they can join the ranks of unmet demand for affordable housing nationally.

In the North East, this housing crisis manifests itself in ways which add complexity. Not only is there significant unmet demand for affordable housing, but the quality, type and location of some of the available housing is a barrier to a stable housing market.

The fluctuating economic performance of the region over several decades means that there are some communities whose economic raison d’etre has passed, and without physical and economic regeneration, we will continue to see areas of boarded up properties where people would simply not choose to live.

The housing sector has an important role to play in the economic regeneration of our region. Not only does construction provide vital jobs for a skilled workforce, but the creation of construction jobs has a significant multiplier effect of the local economy. For every £1 spent on construction generates £2.84 in the wider economy.

Moreover, research has established that to attract employers and entrepreneurs to invest in the North East, a high quality housing offer is a key component of the region’s offer.

© 2011 Dave Charnley Photography All Rights Reserved Alison Thain
Alison Thain

Successive governments have dabbled in addressing housing issues, but rarely has policy had the subtlety of regional nuance and understanding necessary to deliver solutions in housing markets that refuse to follow the drivers of the buoyant markets in other parts of the country.

In the wake of the general election, politicians need to better acknowledge the need for policy that has the flexibility to deal with the specific issues that face under-performing housing markets around the country.

So what measures would make a difference in the particular circumstances facing us in the North East? As leaders of two of region’s leading housing organisations, together with our roles in the CBI and National Housing Federation respectively, we have considered opportunities that will deliver additional homes and increase the overall quality of our region’s housing offer.

Firstly, while the planning system has been reformed recently, it can still be subject to protracted decision-making, and local opposition to new housing development still seems to outrank the presumption in favour of sustainable development in politicians’ minds.

We therefore need to ensure that the current framework of local plans is strengthened to ensure that every local authority has a current plan that reflects a regionally-developed housing and infrastructure strategy that has been subject to robust local engagement and consultation.

Development proposals that meet this framework should not require any further political decision-making. This could include the introduction of designated zones for housing, where the mix of affordable, family and specialist homes is clearly set out, along with any infrastructure to be funded from the additional land value arising from planning gain.

We would also encourage policy-makers to tackle speculation of development land. This will ensure that landowners must be realistic in their aspirations for the value of their land.

Paul Fiddaman
Paul Fiddaman

In fact, the price at which land becomes available for development is a key component in driving house prices that are unaffordable to average wage earners in many locations.

To counter this, land values should reflect the mix of affordable and specialist housing to be provided along with any infrastructure that would be funded from planning gain.

There also needs to be greater transparency around public sector land holdings with pressure exerted on public sector landowners to release land to support the delivery of affordable housing in their own local plans and the regional housing and infrastructure strategy.

Finally, the funding system for housing and related infrastructure is complex and fragmented, often not reflecting local priorities. A successful funding system for the region to overcome this challenge should include locally determined funding priorities, which match our proposed regional housing and infrastructure strategy.

This would be supported by consolidating the various funding streams with the flexibility to allocate funding to agreed local priorities such as regeneration.

These measures, we believe, would enable a much greater degree of flexibility in policy that is tailored to local needs. This, in turn, would enable the housing sector to play its full part in the future economic success of our great region.

Alison Thain is North East Chair of the CBI and Group CEO of Thirteen Group. Paul Fiddaman is North East Chair of the National Housing Federation and Deputy Group CEO of ISOS Housing Group.

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