Incentivising landowners to release sites for affordable housing A report to Lincolnshire Rural Affordable Housing Partnership August 2011
Authors: Dr Jason Beedell, Smiths Gore Andrew Teanby, Smiths Gore t e
01733 866562 jason.beedell@smithsgore.co.uk
Executive summary There are clear differences in the experience, attitude and behaviours of farmers and estates in relation to affordable housing. Setting the scene What the land means to the owners Buying and selling land Involvement in development Involvement in property management
Farmers
Estates
Source of income
Source of income Heirloom / inheritance Traders – buyers and sellers 58% involved
Accumulators – buyers 21% involved 50% With most using external agents
Attitude towards affordable housing Knowledge of who builds 50% don’t know affordable housing History of putting forward 7% have sites Willingness to put a site 79% would consider putting a site forward for affordable forward housing Predominant reasons for putting forward sites Realising capital value above agricultural value What type of deal or model would be most attractive More willing to sell sites – “to keep things simple” and not have “on-going issues” Scheme details
Smaller numbers of houses Houses should “fit in” Pass management to housing association
100% With most using in-house managers
75% think housing associations 42% have 67% would consider putting a site forward
Realising capital value above agricultural value Acting to benefit the community
More likely to want to retain ownership – so more interested in long leaseholds or delivering the housing themselves
Eight or more houses Houses should “fit in” Be involved in managing the houses
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Almost three-quarters of the landowners would consider providing a site for affordable housing. This is a very high proportion and suggests that there is a generally positive attitude towards affordable housing – if the deal is right. However, despite landowners being positive and despite many not knowing how much they could be paid for a site for affordable housing, many viewed the income they would receive as too little, especially considering the perceived time input and hassle factor. Many require a deal to generate them a significant lump sum, net of professional fees and other costs, before they would devote time to making a housing scheme happen. This sum is a minimum of £100,000 – 150,000, which equates to around 8-12 plots. Both groups, but especially estates, were clear that part of the deal would be to have a mix of affordable and market housing so that they received a higher value for their land. Given the changes to the planning system that the Government’s localism agenda is making, which makes the system more pro-development unless there is a good reason against, landowners will become even less likely to offer sites for affordable housing in the future unless the financial deal is right. The implications of this study are that bodies providing affordable housing, such as the LRAHP, should have different models to attract different types of landowner, based on the characteristics the survey has identified – for example, farmers are more interested in selling sites and not have on-going issues while estates are more likely to want to retain ownership. The position of advisers also differs; while both groups use property advisers, typically chartered surveyors or farm management consultants, the farmers buy the advice in from external advisors while estates often have in-house advisers, so there are different routes to the landowners. Although some landowners have a good understanding, there is considerable evidence of lack of knowledge, experience and understanding of affordable housing in many, which makes them more reluctant to engage. Knowledge transfer campaigns for farmers and estates should be beneficial in encouraging them to get involved.
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Contents Executive summary
2
Background to the research project
5
Requirement, research approach and sample
6
Findings
8
Recommendations
18
References
21
Appendix 1
Survey form
22
Appendix 2
Landowner information sheet
26
Report preparation and limitations
30
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Background to the research project Private landowners own the majority of land and so are a key actor in putting forward sites for affordable housing, especially in smaller settlements. Despite the high profile of the lack of affordable housing, particularly in rural areas, many landowners do not understand what affordable housing is, how it is provided and how they could get involved; there are also many misconceptions about it. Two pieces of research Smiths Gore carried out suggest that there is potential to change this: 1.
37% of landowners are willing to put forward sites as it would realise capital value above agricultural value but they have concerns about who can occupy them (nomination rights) and selling on (RICS, May 2008, for the Taylor Review)
2.
Rural estates own significant proportions of the housing (23%), including private rented housing (70%), in their localities. They also have the right profile to be able to contribute towards affordable housing delivery - they own sites within villages that could be developed and they have long-term interests in their communities. They may also accept lower returns on investments, such those offered by affordable housing1
There are clearly some barriers that prevent landowners from offering sites for affordable housing and this project aims to explore them and identify ways of overcoming them. There may also be new models for providing housing which are more attractive for landowners than the current ones, such as the landowner retaining ownership of the land or housing, through to more innovative use of capital taxation, and long leases of existing houses to meet immediate needs.
1
Emda.2008. Working positively with rural estates. 5 / 30
Requirement, research approach and sample The Lincolnshire Affordable Housing Partnership (LRAHP) wants to understand from landowners what would incentivise them to put forward sites for affordable housing. A semi-structured questionnaire was used to gather information from two groups – farmers and estates – through telephone and face-to-face interviews (see Appendix 1); this approach was chosen as it was considered more likely to generate a higher response rate than a postal or an email survey. It enabled deep questioning and, where site visits were made, a greater understanding of the land ownership and settlement context. Twenty six farmers and estates were interviewed 2 in April and May 2011, covering a range of settlement contexts (see Table 1 and Table 2). Responses were provided on behalf of a number of estates by their chartered surveyors. Table 1 Survey sample structure: by settlement and landholding size
Size of landowners’ holding: Estates Farmers / other landowners Total
Small settlements (<3,000) Small Large 3
Service centres (3-10,000)
Tota l
Small
Large
12 14 26
6 6
4 5
2
2 1
12
9
2
2
Table 2 Survey sample structure: by settlement sustainability indicator 4 Settlement sustainability assessment: Estates Farmers / other landowners Total
Low
Medium
High
Total
3 3 6
6 6 12
3 5 8
12 14 26
There are around 87 estates 5 in Lincolnshire and it is estimated that they own just under a quarter of the area of the county 6; the project showed that estates tend to take longer-term interest in
2 3 4 5
Six face-to-face and twenty by telephone Large farm defined as over 1,000 acres; Large estate defined as over 4,000 acres. Low (no services, excluding public transport); Medium (some services e.g. pub, school, shop); High (most services available). The definition of estates used by this project is that estates tend to own a range of assets – often including agricultural land, houses, workspace and community facilities. A minimum size 6 / 30
land and communities and have greater history of community-development than farms, which tend not to have the size and range of property interests to do so. Table 3 Characteristics of estates in Lincolnshire and the East Midland region Characteristics of estates in Lincolnshire and the East Midland region Number of estates Area (acres) Small (up to 2,000 acres) Medium (2-5,000 acres) Large (5,000+ acres) Total area (acres) Estate area as a % of county Ownership Private Institutional / charitable 7 Public
6 7
Lincolnshire 87
East Midlands 290
36% 24% 40%
53% 25% 22%
352,588 23%
919,466 23%
74% 24% 2%
72% 20% 8%
of estates has not been used as some estates cover small areas but are still estates as they own a wide range of assets and this is what differentiates them from farms. Emda.2008. Working positively with rural estates This includes financial institutions, traditional landowning institutions, such as the Church Commissioners, diocese and The Crown Estate, educational trusts, such as the Ernest Cook Trust, and other charitable bodies, such as members of the Land Trusts Association and The National Trust 7 / 30
Findings
Understanding farms and estates - setting the scene Both farmers and estates are long-term landowners but with estates having longer histories of ownership. Average duration of ownership Estate Farm
Years 368 (10 8) 77 (14)
What does the land mean to the owners Farmers tend to have a wider range of reasons for owning their farms than estates but they are broadly similar, and this is reflected in what they say the land means to them, which ranges from the purely commercial (“It’s an asset to make a living from”) through to the more emotional and aspirational (“…life’s ambition [to own a farm]” and “[I have a] responsibility to look after and hand on in good heart”). The meaning of the land to estates is simpler – it is an heirloom, an inheritance and, for many, a source of income for the owning family. Do the owners buy and sell land? The estates are more likely to be traders in land than the farmers, who are typically accumulators – buyers and not sellers. Do you trade (buy or sell) land? Estate Farm
Buy
Buy and Sell
No
25% 57%
25% 7%
50% 36%
Estates also tend to have a greater involvement in property management and development and, not surprisingly, with affordable housing given their larger land holdings and involvement in the management of houses; estates tend to own more houses than farmers. This makes them more natural partners in developing affordable housing.
8
The number in brackets is the number of respondents to a question or in a cell in a table 8 / 30
Are you already involved in development? Estate Farm
Is property management part of your business? Estate Farm
No
Yes
42% (5) 79% (11)
58% (7) 21% (3)
No
Yes
0% (0) 50% (7)
100% (12) 50% (7)
Where farmers and estates are involved in property management, two-thirds of the farmers use an external agent, while a similar proportion of estates do the management in-house. Therefore, there are different groups of ‘advisers’ that need to be influenced if you want to persuade them to get involved in affordable housing – out-of-house advisers for farmers and in-house advisers for estates.
Understanding farms and estates – attitude towards and experience of affordable housing Almost all of the respondents had an understanding of what affordable housing is but the estates had a better understanding of who provided it and how and were also more likely to have been involved in affordable schemes. “Getting people on the housing ladder” – farmer “Cheaper housing for local people” – farmer “First time buyers, to get people on the bottom rung of the ladder” – farmer “Houses for sale or rent at lower value” – estate “Housing at less than market value” – estate Who builds it? Estate Farm
Developer
Housing Association
Unknown
0% (0) 14% (2)
75% (9) 36% (5)
25% (3) 50% (7)
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Estates are more likely to know someone who has provided land for affordable housing than farmers – over half of them do compared with just over a third of farmers. Those landowners who know someone who has provided land are more likely to know how it is developed; however, over a third of them don’t know who develops it which suggests that there is still a role for an information or knowledge transfer campaign. Over 40% of estates had put forward a site for affordable housing 9 compared with less than 10% of farmers but almost three-quarters of the respondents would consider it. This is a very high proportion and suggests that there is a generally positive attitude towards affordable housing – if the deal is right. Have you put forward a site for affordable housing? Estate Farm
Would you consider putting forward a site or property for affordable housing? Estate Farm
No
Yes
58% (7) 93% (13)
42% (5) 7% (1) No
Yes
33% (4) 21% (3)
67% (8) 79% (11)
However, there are concerns under this apparent positivity. [We have put a site forward] “but [it is] not something that is high priority so we need a catalyst [such as being able to talk to estates that have done schemes, help from a Rural Housing Enabler and getting a significant lump sum from a scheme which the estate’s trustees can do something significant with]” – estate. [We have not put a site forward] and “never approached councils about market or affordable housing due to difficulties envisaged [such as social cohesion in the villages]. Don’t know whether there is a need for affordable housing in any of the villages.”- estate “[We have] had a housing need survey done – [there is a] clear need. We are interested but would like market housing with it. We want to move farms out of the village and develop sites for housing and retail. But as third tier settlements, we have had to win the argument with planners.” – estate
9
But very few of the sites had been developed, due to the finances not being adequate and difficulties agreeing any associated development with the district councils. 10 / 30
[We have put a site forward] “but withdrew as the Registered Social Landlord did not offer enough 10.” – estate (Highlighting by report authors) The concerns mentioned by the respondents have increased due to the Community Right to Buy proposals in the Localism Bill; the estates in particular do not like the feeling of the government having control over their property 11. Although the majority of the farmers were not aware of the proposals, the estates were and a number felt less likely to put forward sites due to it.
Understanding farms and estates – reasons why landowners would consider putting forward a site for affordable housing There was quite a clear difference in the reasons why farmers and estate owners would consider putting sites forward. At its simplest, the estates were more affected by community needs than the farmers, whose main reason was to sell land at above agricultural value. Reasons why landowners would consider putting forward a site for affordable housing Realises capital value for a site above agricultural value Owner has option to retain units for family member/staff Owner retains ownership of land through freehold Clear indication that a site has no ‘market’ development potential Acting to benefit the community Encouragement from the local community Encouragement from the Parish Council Encouragement from the Local Authority
Estate
Farm
50% (4) 25% (2) 25% (2) 13% (1)
100% (11) 9% (1)
75% (6) 38% (3) 38% (3) 25% (2)
45% (5)
Overall average 79% (15) 16% (3) 11% (2) 5% (1) 58% (11) 16% (3) 16% (3) 11% (2)
NB. Percentages in this table are percentage of respondents who answered the question, which was not the full sample
10 11
The estate was offered around £8,000 per plot The Localism Bill and Community Right to Buy were proposals when the landowners were interviewed and so details of how they would operate were sketchy and have changed. 11 / 30
A number of landowners (7 out of 26, 27%) would not consider putting forward sites. The main reasons for this were local opposition, concerns about the impact of the housing on the local landscape and amenity and on community balance, and being paid a low land value. Many of these reasons should not be intractable or show-stoppers; they suggest an important role for rural housing enablers, and in particular for them influencing the trusted advisers of farmers and estates.
Local opposition (NIMBYism) Concerns of impact on local landscape and amenity Low land or site values Will encourage undesirable social mix Not suitable for the land or community Takes agricultural land out of production Do not want affordable housing Concerns over resale of houses at market value
Estate
Farm
100% (4) 100% (4) 0% (0) 50% (2) 50% (2) 0% (0) 25% (1) 0% (0)
100% (3) 100% (3) 67% (2) 0% (0) 0% (0) 33% (1) 0% (0) 33% (1)
Overall average 100% (7) 100% (7) 29% (2) 29% (2) 29% (2) 14% (1) 14% (1) 14% (1)
The landowners who would not consider putting forward sites were then asked what might encourage them to put forward a site and the overwhelming response was a higher financial return.
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Financial return Retention of control Say in who occupies it Retention of ownership Certainty on process of getting consent, building house and its occupation Owner has option to retain units for family member/staff Owner retains ownership of land through freehold
Estate
Farm
50% (2) 25% (1) 25% (1) 0% (0) 0% (0) 0% (0) 0% (0)
67% (2) 0% (0) 0% (0) 0% (0) 0% (0) 0% (0) 0% (0)
Overall average 57% (4) 14% (1) 14% (1) 0% (0) 0% (0) 0% (0) 0% (0)
This suggests that provided landowners consider that they will receive a suitable financial return, they are happy to work through other concerns, such as local opposition and impacts.
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How farms and estates could provide sites How farms and estates could provide sites – what the deal is The landowners were asked what type of deal or model would be most attractive to them and there was an interesting difference between the farmers and estates. The farmers were more willing to sell sites than estates, which were more likely to want to retain ownership. This makes sense given the generally longer-term view that estates tend to take. The farmers’ views were shaped by wanting to “keep things simple” and not wanting “on-going issues”. The estates were more concerned about loss of control over the land and its occupants and, because of this, were more interested in long leaseholds of the land so that it reverted to them eventually; this meant that even if the affordable housing was a mistake, it was not permanent as it could be rectified once the house and land reverted to them. The quotes below are broadly representative of the way many estates think about land ownership: “We know that some land has long-term hope value - this century or next. There is a disincentive to sell land as we would lose control but [there are] some areas where we are happy to sell. We could do affordable housing in areas we want to retain ownership so leasehold is attractive. We have got to be careful not to do something now that we would regret. Once sold, we have beached our boats. But there are other areas where we are less concerned about long-term ownership.” “…would want to talk to heirs about doing something which affects them.”
How farms and estates could provide sites – the preferred way of doing it When the farmers and estates were asked about their preferred way of providing sites, their responses reinforced the differences between them. The estates’ desire to retain control and ownership of their land was shown in their preference for offering land on long leases or for delivering the housing themselves. These two ways were the least favoured by farmers who, consistent with their desire to “keep things simple” and not wanting “on-going issues”, most favoured selling sites to Housing Associations; this will affect schemes like Home on the Farm, which farmers are unlikely to take up if they require on-going involvement. The implications of this for the LRAHP and other bodies promoting affordable housing are important – different models are required for different types of landowner.
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Preferred ways of delivering affordable housing (Ranked preference) Site sale to Housing Association or CLT, no further involvement (usual model) Sells site to Housing Association or CLT but has some nomination rights Leases site to a Housing Association, Landowner has no rights during term. Reversion in 80 years minimum subject to a covenant on the letting of the houses Landowner develops and manages site. S106 planning agreement secures the properties as affordable in perpetuity Landowner lets existing house to Housing Association under a long lease (60 or more years)
Estates
Farms
2nd= (4) 4th (3) 1st (6)
1st (11) 2nd (8) 4th (2)
2nd= (4) 5th (2)
5th (0) 3rd (3)
Very few farmers or estates were interested in letting existing houses to a housing association under a long lease (15% of farmers and 25% of estates). In addition, a significant number of the landowners were clear that part of the deal would be to have a mix of affordable and market housing so that they receive a higher value for their land, which was higher than ‘affordable housing land value’ but lower than ‘market housing land value’. As well as the financial benefit of this, many estates stated that they wanted to include affordable housing as part of a wider master planning or community development project. “The ideal model is to keep two houses and give away ten for affordable housing.” “The ideal model is a mixed market and affordable housing approach - possibly 50:50 depending on economics. This approach would encourage sites in the right place for villages to expand, otherwise they do become unsustainable. Councils should not use the definition of sustainable communities as an excuse for stopping development in small villages. Villages should not just depend on a small bit of council owned land, which might not be in the right place.” “We would look at affordable housing as a tool to unlock other development. Our aim is to make money. There must be an advantage to the estate.” “Need village with a mix of rich and poor, young and old.” “We are not interested in releasing individual sites – we want an overall master plan.”
How farms and estates could provide sites – the lump sum needed to start talking Almost all of the farmers and half the estates did not know how much they could be paid for a site for affordable housing; this highlights the importance of getting information out to landowners
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although once they had been told what site values were, the knowledge did not change their minds12. Despite not knowing what they could get, most felt it was probably too little. The respondents, and estates in particular, viewed the income that they could get from affordable housing as relatively small, especially when compared with the time and “hassle factor 13” that could go with it; this is consistent with their reasons for putting or not putting sites forward. When questioned further, many of them said that they would require a deal to generate them a significant lump sum, net of professional fees and other costs, before they would get interested in it and devote time to making it happen. This sum is a minimum of £100,000-150,000, which equates to around 8-12 plots14. If the deal does not reach this kind of lump sum, the amount per plot is largely irrelevant. “[We would need a] significant lump sum as not interested in small sums. £100,000 minimum so the trustees feel they can do something with the capital.”
How farms and estates could provide sites – scheme details The estates were most interested in schemes involving eight or more houses; this supports their statements of wanting a significant lump sum to get interested and involved in a scheme. Farmers were more willing to consider smaller schemes but a significant proportion said they would only be interested in larger schemes, of two acres or more (so the equivalent of 20 houses or more.) The design of the houses is very important – almost all of the respondents said that the house should “fit in”. How the houses are then maintained is also important for some, to ensure that they are properly maintained and do not become eyesores. The estates wanted to be involved in the management of the houses, much more so than the farmers, who were generally happy that the management passed to a housing association. This can be linked back to estates’ long-term property management interests and in maintaining control; the interest in maintaining control was also manifested in the estates being more interested in having a right of first refusal if the houses are sold.
How farms and estates could provide sites – the process they would like
12 13
14
Two respondents did say the information changed their minds – but negatively so that they were no longer interested in providing a site at these values Such as dealing with the range of organisations involved in an affordable housing scheme, losing control of property within the estate, dealing with legal and property issues and the potential risk of upsetting the local community. At current values being paid for affordable housing plots (£8,000-10,000 per plot) 16 / 30
The farmers had had much less exposure to housing associations and rural housing enablers and were more familiar with councils â&#x20AC;&#x201C; so they were the farmers preferred body to deal with. Estates, which generally have more experience of the affordable housing process, had mixed views on who to deal with - housing associations or council staff â&#x20AC;&#x201C; but generally wanted clear lines of communication and responsibility. Both groups said that they would expect help in dealing with local concerns, and that it would come from a range of bodies, including local councils, housing associations and their professional advisers. Given their lesser experience of development and affordable housing, farmers thought that the process could take a year and sometimes be quicker, which is unrealistic. The estates accepted that it would take longer.
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Recommendations Affordable housing is viewed as ‘not core business’ by farmers and an unprofitable distraction by many estates. Landowners should be approached as commercial businessmen; they will expect a commercial deal on affordable housing and should not be viewed as a type of social entrepreneur willing to provide land for the greater good; some will but most won’t. A key belief held by land owners is that they will forgo the opportunity of getting market housing if they provide a site for affordable; this is likely to be increased by the Localism Bill proposals and estates are already willing to wait a long time, centuries if needed, for market development. Any approach to a landowner should have detailed and rational answers prepared to this question. Models like reverse quota 15 will appeal to landowners as they generate higher land values and the owners will feel that they have achieved a more commercial deal. If they are to be encouraged to provide more land, then these beliefs need to be countered 16. This will require knowledge transfer and models of providing sites that appeal to the landowners. Farmers and estates have different things that they want out of a deal on affordable housing – and so those promoting it should understand the difference and tailor their ‘marketing pitch’ accordingly. Farmers are more interested in selling sites and less interested in retaining any control over them afterwards – ‘keeping it simple’. They tend to have less experience and understanding of affordable housing and so will need more encouragement to get involved. They tend to rely on external advisers, such as rural practice chartered surveyors and to a lesser extent farm management consultants, for advice on property management so these are a key group to inform and arm with information on affordable housing, which they can then pass to the farmers. Estates are much more interested in retaining control over their land and the affordable housing and so are more interested in long leaseholds of land; this gives them the assurance that they will recover the land in the future so any mistakes are not permanent. The importance of this should not be underestimated. Estates tend to be bigger businesses than farms and so have their own in-house property advisers and management
15 16
Reverse quota models generate higher land values by subsidising the affordable housing land value with higher values for a proportion of market housing This type of social-psychology approach – of assessing the relationship between behaviours and attitudes, referents and behavioural controls –has a long academic history, and has been successful in changing behaviours (see Ajzen, I. (2005). Attitudes, personality, and behaviour (2nd. Edition). Milton-Keynes, England: Open University Press / McGraw- Hill.) 18 / 30
teams; they will only dedicate that teamâ&#x20AC;&#x2122;s time if a project will generate a significant return or lump sum, which we have put at around ÂŁ100,000-150,000 net of costs. The landowners are also concerned about local opposition to proposals and will need support, probably from a rural housing enabler; they should be experienced, professional and constant (i.e., should not change over the period of a scheme) and the landowners would like them to work to a procedure or timetable, so that they can see what is going to happen, when and who is responsible for it. Although some landowners have had positive experiences, there is a generally negative view of working with local authorities; it is based on negative experiences with planning departments, and housing proposals taking a long time to be agreed, with lots of parties involved, the perception that there is little chance of success and great uncertainly about what they will get out of it in the end. Making the affordable housing process straightforward for landowners would encourage more to release sites for housing.
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I keep six honest serving-men Their names are What and Why and When
What Why When How Where Who Recommendation
(They taught me all I knew); And How and Where and Who.
Rudyard Kipling
Farms Estates Many farmers do not have a clear understanding of how they Estates understand affordable housing but many need a can provide sites or the potential financial returns significant financial deal to get involved The reasons for them putting forward sites need to be made Some estates will put forward sites for community reasons clearer but many want a financial return Farms and estates are open to providing sites now – if the deal is right but the Localism Bill may result in their advisers recommending they wait for market development Farmers do not engage with housing associations or local What they would like are deals that generate a significant authorities, apart from on planning. Therefore a different lump sum (£100-150k net) based on long leaseholds of sites route is needed to reach them so they can recover them / retain ownership Farmers rarely gather together so use their existing advisory The CLA represents 50% or so of estates and is their most network trusted body. It holds regional AGMs and other events Their key property advisers are chartered surveyors and farm Their key property advisers are chartered surveyors, both inmanagement consultants, who can reach a high proportion house and externally, so their professional body, the RICS, is of farmers an important channel to get to them Start a pro-active knowledge transfer campaign to their There are around 90 estates in Lincolnshire, so roughly 15 per existing advisers and trusted bodies (NFU, TFA), using existing district. Each council should: networks, to make a positive case for putting forward sites • identify whether any ‘estate’ settlements are suitable for 8 or more affordable houses The campaign should be concise and simple to understand, • prepare an outline proposal and budget showing the including: financial return to the estate • stating the facts about rural housing affordability • engage their property adviser in a well prepared, pro• how affordable housing can help communities in active discussion, clearly setting out the details of a Lincolnshire potential deal • showing financial benefits • including simple local case studies
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References Taylor, M. 2008. Living Working Countryside: The Taylor review of rural economy and affordable housing. [On-line]. Department for Communities and Local Government. Available from: http://www.communities.gov.uk/documents/planningandbuilding/pdf/livingworkingcountryside.p df [Accessed 26 June 2011]. Emda. 2008. Working positively with rural estates.
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Appendix 1
Survey form
Approaches that incentivise private landowners to release sites Lincolnshire Rural Affordable Housing Partnership
January 2011
Introduce project The LRAHP, which is the organisations that have a role in providing rural affordable housing in Lincolnshire, wants to understand from landowners and farmers what might incentivise them to put forward sites for affordable housing. These interviews are completely confidential, your responses will not be attributed to you, and you and your land will not be identified, unless you want to be. Your responses do not commit you in any way. Name
1.
Address
Postcode
District
Date of interview
Length of interview
Interviewer
Is property management part of your business?
If yes, do you do it yourself or use an agent?
Other
Understanding your position – ‘setting the scene’ a. Attitude to landowning
How long have you owned land?
What does land mean to you?
Do you trade (buy or sell) land?
Are you already involved in development?
b. Attitude to affordable housing What do you think affordable housing is?
Did you think it was something else before we sent you the information sheet?
Who builds it? Who manages it?
Other
Does the Community Right to Buy affect your attitude? Prompt: Why? Will it make you more or less likely to put sites forward?
Other
c. Experience of affordable housing Do you know anyone who has provided land for affordable housing?
Have you put forward a site for affordable housing?
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2.
Interest in putting forward a site a. Would you consider putting forward a site or property for affordable housing? i. If yes, why? (identify reasons for answer by ticking boxes and recording text)
Acting to benefit the community
Realises capital value for a site above agricultural value
Encouragement from the local community
Encouragement from the Parish Council
Encouragement from the Local Authority
Clear indication that a site has no â&#x20AC;&#x2DC;marketâ&#x20AC;&#x2122; development potential
Owner has option to retain units for family member/staff
Owner retains ownership of land through freehold
Other
ii. If no, why? (identify reasons for answer) Takes agricultural land out of production
Do not want affordable housing
Local opposition (NIMBYism)
Low land or site values
Concerns over resale of houses at market value
Concerns of impact on local landscape and amenity
Will encourage undesirable social mix
Not suitable for the land or community
Other
iii. If no, what might encourage you to put forward a site? Financial return
3.
Retention of control
Retention of ownership
Say in who occupies it
Certainty on process of getting consent, building house and its occupation
Owner has option to retain units for family member/staff
Owner retains ownership of land through freehold
Other
If you were to put forward a site for affordable housing, what is the deal? a. Would you want to sell sites or retain ownership? Prompt: why? Sell site
Retain ownership
Other
b. What would be your preferred way of doing it? 17 Landowner sells site to Housing Association or
17
Landowner sells site to Housing Association or CLT but has some
Landowner keeps site and leases to a Housing Association,
Landowner keeps site and develops, finances and manages
Landowner lets existing house to Housing Association
Other
Try to rank preferences
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CLT and has no further involvement (usual model)
rights (e.g., one or more of the properties would be available for them to nominate the occupant, eg family member or employee
Landowner has no rights over the property whilst it is under lease. Site and house revert to landowner after a long period (80 years minimum), subject to any covenant on the letting of the houses 18
their own affordable housing. S106 planning agreement secures the properties as affordable and to meet local housing need in perpetuity
under a long-lease (60 or more years?)
c. What profit level would you expect to release land (before costs like s106 agreements, Community Infrastructure Levy 19)? £/ac
% above agricultural value
Multiple of agricultural value
Other (ROCE, target rate)
What profit level would you expect to lease an existing property? % of OMR
ROCE, target rate (likely to be standard method of valuation)
d. Do you know how much you would be paid for a site for affordable housing? No
Yes - £/ac
Yes - % above agricultural value
Yes - Multiple of agricultural value
Yes - Other
(Drop into conversation how much sites are worth (£8-10,000 per plot at 10-12 plots per acre, so £80-120,000 per acre), and number of landowners in Lincolnshire who have done it (23 in the last year – 54 during the preceding three years)) e. Do these figures change your mind? No
Yes – why?
f. What else would you expect – in terms of: Size of scheme (no of houses involved)
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Design of the houses
Maintenance
Management
Right of first refusal if they are sold
Other
As106 agreement will last in perpetuity and runs with the land unless a case can be made that it is no longer necessary Some of which may go to the local community
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g. Would you let and manage any of your existing properties as affordable housing at up to 80% of Open Market Rent? No
Yes – I could put forward existing houses at up to 80% of OMV
Don’t know
i. Could you do this without some form of subsidy? No
Yes
Don’t know
h. For you, what would be the best way for the process of providing affordable housing to happen? Who do you want to deal with? Housing Association? Local Authority? Other?
How long do you expect the process to take? What time is acceptable? What are the drivers for this timescale?
Would you expect help in dealing with local concerns? If yes, from whom?
What do you think are the risks? Prompts: finance, reputation, certainty, professional costs. How can they be reduced?
Is there any other information / support you would need?
4.
Any other comments?
5.
Would you like to consider affordable housing further? If yes, offer to put them in touch with relevant RHE or Council
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Appendix 2
Landowner information sheet
THE SEVEN STEPS TO PROVIDING RURAL AFFORDABLE HOUSING Information sheet for landowners This sheet sets out the process for developing a rural affordable housing scheme, who is involved and an indicative timetable. A definition of key terms is also provided. Indicative timescale
Who is involved Step 1 – Establishing the need Local Authority Rural Housing Enabler Parish Council
Data is collected on the cost and supply of market and affordable housing in the community and the number of people who are looking for an affordable home. This is often supplemented by a Local Housing Needs Survey at community level.
3 months
In some cases a site is proposed first; the local authority will not pursue this further until they have established the need. Step 2 – Identifying potential sites
Local Authority Landowners Housing Association Parish Councils Rural Housing Enabler
The local authority will make a ‘call for sites’. There are four means by which Parish Councils and landowners can put forward sites to the local authority: • Parish councils and landowners can submit sites to the local authority in response to its advertised ‘call for land’ • The local authority may identify possible sites by looking at plans of the area • The sites may have been submitted to the Local Authority as part of the Strategic Housing Land Availability Assessment. This does not allocate sites for development, but identifies possible sites • Sites may already have been allocated for housing development in the local plan
3 months
The Rural Housing Enabler can help by walking around the village with the parish council to identify possible sites or by talking to individual landowners.
Local Authority Housing Association Landowner Rural Housing Enabler Parish Council Community
Step 3 – Selection of the most suitable site The sites that come forward through the ‘call for land’ will be assessed against a number of criteria to identify the most suitable site for development. This will consider access, location, topography, viability. It is likely that at this stage the Housing Association will have initial discussions with the landowner on price.
3-6 months
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Step 4 – The price and design of the scheme are agreed
Housing Association Landowner Local authority Community Rural Housing Enabler
The housing association will agree a price with the landowner. What they can pay for the land will be determined by: the costs of development; the type of housing that planning policy will allow; the tenure mix, which determines the income they will receive from the scheme: availability of public grant and costs of their borrowing. The housing association will design the scheme in consultation with the local planning authority, taking on board local views.
3-6 months
Agreement will be reached on any planning conditions and obligations that govern the design of the scheme and who can occupy the houses. This usually includes a requirement that the affordable homes will be let to people with a local connection and retained as affordable housing in perpetuity.
Local Authority Housing Association Parish Council
Step 5 – Planning permission is granted Once the pre-application discussions have been completed the housing association or developer will apply for planning permission. The Parish Council and immediate neighbours to the site will be formally consulted.
2 months
Step 6 – Construction begins Housing Association
Local Authority Housing Associations Landowner Residents Parish Council
Once planning permission is granted and the Housing Association has the finance in place the building begins. This may not be immediate, but is usually within 6 months of planning permission being granted.
12 months
Step 7 – Completion: Finally the homes are built and the residents move in. Time to celebrate! Total time 26 - 32 months
Throughout each of these stages the Rural Housing Enabler will support the constructive engagement of the local community in the scheme. If you would like further information, please contact Jason Beedell (01733 866562 / jason.beedell@smithsgore.co.uk) or Andrew Teanby (01733 866565 / Andrew.teanby@smithsgore.co.uk ) 27 / 30
Definition of Key Terms Affordable housing …is housing for people on modest incomes who can’t afford to buy or rent on the open market. It includes: Rented housing These have been provided at a rent well below private market rents. Housing associations are now being asked to charge up to 80% of market rent. When these homes are built in settlements of less than 3,000 population they are exempt from the Right to Acquire. Low cost home ownership This can include shared ownership, so that the resident owns part and rents part. Residents can buy further portions of the equity, known as stair casing. In settlements of up to 3,000 people, the housing can never pass totally into the market; outside these areas, it is less assured. Rural exception sites …are located within or adjoining rural communities where market housing is not allowed. They are granted permission as they solely provide affordable housing in perpetuity that meets the needs of the community by accommodating people with a local connection, whilst ensuring that rural areas offer sustainable, mixed and inclusive communities. Section 106 sites/quota sites …provide a mix of market and affordable housing. They are usually sites that have been allocated for development in the Local Plan. Local connection Most rural affordable housing schemes are reserved for people who are currently or previously resident in a parish or permanently employed in the parish or who are connected by close family still living in the parish or surrounding parishes Housing association …is a not-for-profit organisation that develops and manages affordable housing. They are also known as registered providers as they must be registered with the Homes and Communities Agency (HCA) to draw down public funding to build the homes. Rural Housing Enabler (RHE) …is employed by Community Lincs to work with communities and landowners, providing information, supporting their involvement in providing affordable housing and providing bridges to the local authority and housing associations. Community Land Trust
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â&#x20AC;Śis a not-for profit organisation set up to manage affordable housing. The value of the land is held in trust so the houses remain affordable. They can own and manage other community and employment facilities for the benefit of the community. Community Right to Build â&#x20AC;Śis a new initiative being introduced by the Government. It gives community organisations the right to develop housing, employment premises or provide other amenities that will support the sustainability of the community. To activate this right they have to demonstrate 50% support for the proposed development from the residents through a local referendum. This triggers the granting of a Neighbourhood Development Order by the local authority. However, the development still has to be in conformity with the local development plan.
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Report preparation and limitations Authors Dr Jason Beedell writing Andrew Teanby writing
Project Manager, telephone interviews, data analysis and report Sample identification, telephone interviews, data analysis and report
This report was written in June 2011. Duty of care, liability and responsibility This report has been prepared for Lincolnshire Rural Affordable Housing Partnership. No duty of care, liability or responsibility will be accepted to any third party acting or refraining from actions as a result of any material in this report. Views expressed The views expressed in this report are those of the reportâ&#x20AC;&#x2122;s authors and do not necessarily reflect those of Lincolnshire Rural Affordable Housing Partnership except where expressly stated. Information relied upon The authors have acted upon information and data extracted from various sources, which have been stated and assumed to be reliable. The information and data collected has been assumed to be true, correct and complete. It has been tested and checked so far as reasonably possible. Acknowledgements The authors would like to thank those who contributed to this project, in particular the farmers and estate owners and managers who responded to the survey, and other stakeholders who kindly gave their time. We would also like to thank the Steering Group who were always helpful, constructive and worked with us to complete the project. End
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