Research study into the cost of building rural social ... · Procurement groups should pilot a Rural Housing Enabler; work with DSD/ NIHE and local authorities on bringing forward

Research study into the cost of building rural social housing in Northern Ireland Final Report: March 2012

Prepared for

Northern Ireland Housing Executive

NIHE

Research study into the cost of building rural social housing in Northern Ireland

Revision Schedule

Rev Date Details Prepared by Reviewed by Approved by

01 10\11\11 Final report Mark Phillips MRICS, Alan Houghton Assoc MRTPI MRTPI URS URS

02 26\01\12 Catherine Stubbings Celandine Strategic

03 23\3\12 Housing FCIH

Joe Hagen MRICS Cooke & Kettyle

URS Scott Wilson

54 Princess Street Manchester M1 6HS

Tel 0161 237 6020 E Mail: [email protected]

www.urs-scottwilson.com

NIHE


Limitations

URS Scott Wilson Ltd (“URS Scott Wilson”) has prepared this Report for the sole use of Northern Ireland

Housing Executive (“Client”) in accordance with the Agreement under which our services were performed.

No other warranty, expressed or implied, is made as to the professional advice included in this Report or

any other services provided by URS Scott Wilson. This Report is confidential and may not be disclosed by

the Client nor relied upon by any other party without the prior and express written agreement of URS Scott

Wilson.

The conclusions and recommendations contained in this Report are based upon information provided by

others and upon the assumption that all relevant information has been provided by those parties from

whom it has been requested and that such information is accurate. Information obtained by URS Scott

Wilson has not been independently verified by URS Scott Wilson, unless otherwise stated in the Report.

The methodology adopted and the sources of information used by URS Scott Wilson in providing its

services are outlined in this Report. The work described in this Report was undertaken between July 2011

and March 2012 and is based on the conditions encountered and the information available during the said

period of time. The scope of this Report and the services are accordingly factually limited by these

circumstances.

Where assessments of works or costs identified in this Report are made, such assessments are based

upon the information available at the time and where appropriate are subject to further investigations or

information which may become available.

URS Scott Wilson disclaim any undertaking or obligation to advise any person of any change in any matter

affecting the Report, which may come or be brought to URS Scott Wilson’s attention after the date of the

Report.

Certain statements made in the Report that are not historical facts may constitute estimates, projections or

other forward-looking statements and even though they are based on reasonable assumptions as of the

date of the Report, such forward-looking statements by their nature involve risks and uncertainties that

could cause actual results to differ materially from the results predicted. URS Scott Wilson specifically does

not guarantee or warrant any estimate or projections contained in this Report.

Copyright

© This Report is the copyright of URS Scott Wilson Ltd. Any unauthorised reproduction or usage by any

person other than the addressee is strictly prohibited.

NIHE


Table of Contents

1 Executive Summary ........................................................................ 1

1.1 Background .................................................................................................................... 1

1.2 Methodology ................................................................................................................... 1

1.3 Key Findings................................................................................................................... 1

1.4 Recommendations.......................................................................................................... 1

2 Introduction ..................................................................................... 3

2.1 Study aims...................................................................................................................... 3

2.2 Methodology ................................................................................................................... 3

2.3 Structure of report........................................................................................................... 4

3 Planning policy context .................................................................. 5

3.1 Introduction..................................................................................................................... 5

3.2 The ‘Regional Development Strategy (RDS) for Northern Ireland 2025 .......................... 6

3.3 ‘Shaping our Future’ – Regional Development Strategy (RDS) 2025Consultation – 10 Year Review..................................................................................... 10

3.4 The Northern Ireland Sustainable Development Strategy (NISDS) ............................... 11

3.5 Rural Development Strategy......................................................................................... 11

3.6 Rural White Paper Action Plan...................................................................................... 11

3.7 Planning Policy Statements .......................................................................................... 11

3.8 Rural Design Guides..................................................................................................... 17

3.9 Planning System Reform .............................................................................................. 17

3.10 Conclusion.................................................................................................................... 18

4 Housing Policy context................................................................. 19

4.1 Introduction................................................................................................................... 19

4.2 Current Northern Ireland housing policy context ........................................................... 19

4.3 Rural housing issues and objectives............................................................................. 24

4.4 Comparison with the systems in England, Wales and Scotland .................................... 26

4.5 Conclusion.................................................................................................................... 29

5 Stakeholder Consultations ........................................................... 30

5.1 Housing Associations ................................................................................................... 30

5.2 TCI’s............................................................................................................................. 32

5.3 October 2011 Seminars................................................................................................ 33

6 Rural social housing case studies............................................... 36

6.2 HA Response ............................................................................................................... 36

6.3 NIHE data review.......................................................................................................... 42

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6.4 Conclusions .................................................................................................................. 43

7 UK good practice update .............................................................. 44

7.1 Survey of rural partnerships.......................................................................................... 44

7.2 Innovative approaches to planning and delivery ........................................................... 46

7.3 Community-led development ........................................................................................ 47

7.4 Procurement ................................................................................................................. 47

7.5 Recyclable/ revolving funds .......................................................................................... 47

7.6 Lessons from Wales ..................................................................................................... 48

7.7 Application of findings to Northern Ireland context (with particular reference toissues raised at workshops).......................................................................................... 49

8 Conclusions and Recommendations........................................... 52

9 Appendix 1 – Call for evidence letter ........................................... 54

10 Appendix 2 – Resources and website links derived fromChapter 6 English Good Practice Update.................................... 55

11 Appendix 3: English Good Practice survey details .................. 56

11.1 England Good Practice survey respondents ................................................................. 56

11.2 England Good Practice survey questionnaire ............................................................... 56

1 Executive Summary

1.1 Background

1.1.1 The research was undertaken to better understand whether the cost of building new

social/affordable housing in rural areas is higher for locational reasons. In addition, the

researchers, URS Scott Wilson, were asked to identify instances of good practice elsewhere in

the UK which might help maximise rural provision.

1.2 Methodology

1.2.1 The researchers initially undertook a desk top review of rural planning and housing policy in

Northern Ireland , focusing on policies such as Regional Development Strategy Northern

Ireland Sustainable Development Strategy, Rural Development policy, Rural White Paper and

various Planning Policy Statements.

1.2.2 Direct consultation took place with stakeholders including NIHE, Housing Associations, rural

community groups, NI Housing Council, DSD and DARD. In addition to this qualitative

information, quantitative data was sought from housing associations on rural specific costs and

other relevant delivery issues; despite a limited response, some specific case studies were

identified.

1.2.3 Research into rural housing delivery in England, Scotland and Wales also led to a number of

Good Practice examples which may be applicable in Northern Ireland.

1.2.4 The findings of the qualitative and quantitative research undertaken are set out under Key

Findings below.

1.3 Key Findings

1.3.1 In summary, while the quantitative evidence obtained was limited, combined with the qualitative

evidence, the research found that:

• Rural schemes may have particular costs (e.g. infrastructure and services) but urban

schemes can also have particular site specific costs;

• On balance, residential schemes in rural locations do not necessarily result in higher costs

compared to building in urban areas;

• Site size appears to be more significant than rural location in adding to scheme cost; small

schemes may not come forward because housing associations feel they will ‘fail’ TCI; and

• The TCI system works reasonably well but is not as sensitive to smaller schemes

requirements.

1.4 Recommendations

1.4.1 The report makes eight recommendations, summarised below:

1. That the TCI system is reviewed particularly in relation to scheme size issues.

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2. Further research into barriers and processes which may prevent some rural sites

being developed and the feasibility of cross-subsidising small rural schemes through

wider development programmes.

3. NIHE and DSD create greater awareness of the need for a more integrated approach

across government particularly in relation to rural infrastructure.

4. Procurement groups should pilot a Rural Housing Enabler; work with DSD/ NIHE and

local authorities on bringing forward potential sites; and examine short term

opportunities to use private sites for market or sub market rental

5. NIHE raise awareness of rural social/affordable housing issues with local Councils in

advance of transfer of planning powers

6. NIHE and DSD move towards a more mixed tenure approach

7. NIHE and DSD should consider mechanisms such as developer contributions and

Community Infrastructure Levy

8. That a more comprehensive approach to assessing housing need is developed that

takes into account the combined needs of applicants in housing stress and existing

social tenants and this approach is used to inform the mix and location of schemes

included in the Social Housing Development Programme.

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2 Introduction

2.1 Study aims

2.1.1 URS Scott Wilson was appointed in July 2011 by Northern Ireland Housing Executive (NIHE) to

undertake a rural housing study in the province. The consultant team was made up as follows:

• URS Scott Wilson – principal consultant

• Celandine Strategic Housing – housing specialist

• University of Ulster – housing adviser

• Cooke & Kettyle – chartered quantity surveyor

2.1.2 Research was undertaken by the consultant team during 2009-10 in England on the cost of

building in rural areas; this took place as part of the Rural Affordable Housing Project - a joint

initiative between the HCA and DEFRA aimed at supporting local authorities and their partners

in their attempts to increase the delivery of rural affordable housing.

2.1.3 NIHE wishes to understand from evidence to be collected whether the cost of building new

social/affordable housing in rural areas is higher for locational reasons. The origins of the study

have in part been borne from assertions from some Housing Associations that rural

development attracts a cost premium. NIHE wishes to understand whether this is accurate and

if it is what response measures might be appropriate. The study seeks to explore rural

development costs but has additional objectives as follows:

• To identify if there are rural specific costs; if these costs are higher; and whether the costs

affect viability;

• To examine other challenges and issues which impact on the delivery of rural specific

affordable housing (including those which do not relate directly to development costs);

• To recommend ways to address the issue of viability and maximise affordable housing

provision, bearing in mind good practice in GB.

2.1.4 The key output from the project will focus on the following issues:

• A summary of the policy context and financial regime governing the provision of social

housing in the UK with specific reference to housing association finance in GB and Northern

Ireland;

• An analysis of findings from primary and secondary research undertaken in Northern

Ireland.

• A set of conclusions and recommendations developed in partnership with NIHE and the

Northern Ireland Federation of Housing Associations (NIfHA) and based on consultative

discussions with and presentations to rural stakeholder groups.

2.2 Methodology

2.2.1 Our approach comprises:

• Rural planning policy review – desk based

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• Rural housing policy review – desk based

• Consultations with stakeholders including – NIHE, Housing Associations, rural community

groups, NI Housing sub committee, Department for Social Development (DSD) and

Department of Agriculture and Rural Development (DARD). This has taken the form of direct

discussions, web based research and workshops

• Research of rural housing delivery in England, Scotland and Wales

• A call for and analysis of evidence on rural specific costs and other relevant delivery issues

from Housing Associations

• An update on current good practice from rural stakeholders engaged in the 2010 HCA study

2.3 Structure of report

• Chapter 3 sets out a planning policy context review;

• Chapter 4 sets out a housing policy context review;

• Chapter 5 summarises the results of consultations;

• Chapter 6 sets out the returns and feedback in respect of rural costs received as a result of

the call for evidence;

• Chapter 7 provides an update from UK best practice in rural housing; and

• Chapter 8 provides study conclusions and a series of recommendations.

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3 Planning policy context

3.1 Introduction

3.1.1 The planning policy context is materially relevant and therefore influences the consideration of

affordable housing in rural areas. This section reviews key planning policies cascading down

from the strategic national framework to more detailed planning policy statements.

3.1.2 This policy review has been extracted from the following documents:

• ‘Regional Development Strategy’ (RDS) for Northern Ireland 2025 (September 2001);

• ‘Shaping our Future’ Regional Development Strategy (RDS) 2025 Consultation – 10 Year

Review;

• The Northern Ireland Sustainable Development Strategy;

• Planning Policy Statements; and

• Rural Design Strategies i.e. ‘The Sustainable Rural Design Guide for the Northern Ireland

Countryside’ and the ‘Mourne Area Design Guide’ et al.

Definition of Rural

3.1.3 There is the problem of consistency in defining rural and countryside across the Northern

Ireland Departments. The Regional Development Strategy (RDS) tended to define rural

Northern Ireland to include all settlements outside of the city hinterlands of the Belfast and

Derry. PPS21 however applies a more concentrated reference to the countryside “land lying

outside of settlement limits as defined in development plans”.

3.1.4 In the interests of clarity, ‘Rural’ is defined in the Department of Agriculture and Rural

Developments ‘Rural Strategy’ (2007-2013) as, ‘Settlements with a population of 4,500 or less’.

On the basis of this definition, approximately 65% of Northern Ireland’s 1.7 million inhabitants

live in urban areas and 35% in rural areas. The report does however stress that policy makers

need to consider the appropriateness of settlements and urban/rural classification to individual

policies.

3.1.5 For the purposes of this policy review, we have considered smaller settlements with a

population under 4,500 and the open/rural countryside.

3.1.6 The NIHE definition of rural settlements includes the following areas (from NISRA ‘Default’

Rural Bandings).

Band F (Population. 2,250 - 4,500): Ahoghill, Ballygowan, Broughshane, Castlederg, Castlewellan, Crumlin, Cullybackey, Dungiven, Eglinton, Hillsborough, Keady, Killyleagh, Lisnaskea, Maghera, Moira, Portaferry, Richhill, Rostrevor, Saintfield, Tandragee, Waringstown, Whitehead.

Band G (Population 1000 - 2,250): Annahilt, Annalong, Ardglass, Ballinamallard, Ballykelly, Ballywalter, Bellaghy, Bushmills, Carnlough, Castledawson, Castlerock, Claudy, Cloughmills, Cogry/Kilbride, Crossgar, Crossmaglen, Cushendall, Doagh, Dollingstown, Draperstown, Dromore (Omagh), Drumaness, Dundrum, Dunloy, Fintona, Fivemiletown, Garvagh, Gilford, Glenavy, Greyabbey, Greysteel, Irvinestown, Kells/Connor, Kilrea, Kircubbin, Lisbellaw, Magheraberry, Magheralin, Markethill, Millisle, Moneymore, Moy, Newtownstewart, Portavogie, Portglenone, Rathfriland, Sion Mills, Templepatrick.

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Band H (Population less than 1,000) are all smaller settlements and open countryside.

Definition of Social Housing

3.1.7 The Regional Development Strategy (RDS) 2025 ‘10 Year Review’ defines social housing as,

‘Housing provided by registered Social Landlords for rent. Such housing is allocated by

reference to an approved (Department for Social Development) Common Waiting List and

allocation system’. See paragraph 2.7.33 for social housing definition as per PPS21.

Definition of Affordable Housing

3.1.8 The Regional Development Strategy (RDS) ’10 Year Review’ defines affordable housing as

‘The social rented sector, housing benefit funded private rented and that part of the low cost

owner occupation which can be purchased utilising 30% or less of gross household income’.

See paragraph 2.7.33 for social housing definition as per PPS21.

The Planning System in Northern Ireland

3.1.9 The town and country planning system exists to regulate the development and use of land in

the public interest. Planning Service i.e. the Department, functions as the planning authority for

Northern Ireland, legislation of which is set out in the Planning (Northern Ireland) Order

1991.Planning Service is an agency within the Department and is subject to the direction and

control of the Secretary of State and appointed First Minister.

3.1.10 The planning system has some similarities with the English system however there are distinct

differences such as there is no system of developer contributions under S.106 Town and

Country Planning Act 1990 as there is in England. Under this legislation developers in England

are required to meet various financial or policy requirements to mitigate the impact of

development. This can include off site highway costs and provision of on site affordable

housing or off site commuted sums.

3.2 The ‘Regional Development Strategy (RDS) for Northern Ireland 2025

3.2.1 In September 2001, the Department for Regional Development (DRD) published the final

version of a Strategy to guide the future development of Northern Ireland to 2025. Advice within

the Regional Development Strategy (RDS) relevant to the cost of building in rural areas and

social housing is set out below.

3.2.2 A substantial part of the document is devoted to ‘Strategic Planning Guidelines’ (SPG’s) and a

Spatial Development Strategy that recognises a need to encourage sustainable patterns of

development in the Northern Ireland region. The relevant SPG’s include:

Chapter 1 – Purpose and Status

3.2.3 The first chapter of the RDS purports to ‘Equality of Opportunity’ and highlights that equality

and equity should be at the forefront of the long term development of the region. The spatial

elements of the RDS seek to achieve balance between urban and rural communities.

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3.2.4 The RDS provides broad support for the policy of ‘New Targeting Social Need’ (new TSN)

which aims to direct efforts and available resources to those objectively assessed as being in

‘greatest’ social need. The RDS includes appropriate indicators to assess the impact on

housing in rural areas and a quality environment for those living in socially disadvantaged

communities.

3.2.5 The RDS is consistent with the integrated approach of the European Spatial Development

Perspective (ESDP) which is an important policy framework for member states within the

European Union (EU).

Chapter 2 – Forces for Change

3.2.6 The RDS takes account of local, national and international forces which are collectively driving

change in Northern Ireland and presenting a range of development challenges. The RDS

recognises that there is a contrast between the more urbanised east and the mainly rural areas

in the north, south and west of the Region. The RDS also recognises that the key social factors

driving change will be:

• the regional population growth rate, which is twice the current UK rate and exceeds that of

the Republic of Ireland;

• A population that continues to grow; and

• The requirement to target social need

Chapter 4 – Strengthening Global Cohesion

3.2.7 Policy SPG-SRC3 aims to foster development within rural areas which contributes to better

community relations and reduces socio economic differentials within Northern Ireland.

Chapter 5 – The Spatial Development Strategy for Northern Ireland

3.2.8 The DSD ‘hub, corridor and gateway’ framework aims to accommodate necessary housing

growth and promote balanced community developments in rural areas.

3.2.9 The RDS aims to promote a vibrant rural Northern Ireland by revitalising rural areas and small

settlements with an appropriate scale of rural development in the open countryside.

Chapter 8 – Rural Northern Ireland

3.2.10 Chapter 8 is devoted to rural Northern Ireland in order to promote social inclusion in rural areas

and balance the need to provide suitable housing, whilst at the same time, ensure rural areas

are not threatened by inappropriate development.

3.2.11 The RDS recognises the need to facilitate the provision of land and buildings, and associated

services and amenities, in order to accommodate a projected need of 70,000 dwellings (in

total) in the open countryside.

3.2.12 The following policies are relevant:

3.2.13 SPG-RNI 2 aims to ‘create and sustain a living countryside with a high quality of life for all its

residents’. This policy aims to:

a. Accommodate new social housing development to meet local housing need;

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b. Encourage the development of ‘balanced’ rural communities by promoting housing choice

and affordable housing in rural areas;

c. Support the continued development of long established rural communities by recognising

the strong sense of belonging and sense of place in rural areas. To reinforce strong

community identities, help rural communities to develop strategies for economic and social

regeneration in the face of wider rural change (with a particular focus on the sustainable

and equitable development of disadvantaged rural areas) and to continue to develop a

partnership approach to tackling complex rural issues based on community participation.

3.2.14 SPG-RNI5 aims to ‘continue to create and sustain an attractive and unique rural environment in

the interests of the rural community and region as a whole’.

3.2.15 RNI 5.1 aims to ‘manage’ the use of rural resources to achieve a more sustainable pattern of

development in rural areas. For example, an emphasis is placed on the restoration and reuse

of vernacular buildings for residential accommodation rather than new build.

3.2.16 The RDS also aims to monitor urban and rural housing development patterns to guard against

unbalanced development either in the form of excessive urban growth at the expense of local

rural communities or high rural growth rates based on an outflow of people from towns, creating

problems for both the towns and their rural hinterlands.

Chapter 9 – Meeting Housing Need

3.2.17 The RDS aims to facilitate the supply of additional housing to meet the projected needs of the

rural region over the next 25 years. In order to the achieve this, the following measures are

proposed:

• To widen housing opportunity, affordability and choice;

• To Improve the supply and quality of housing; and

• To promote sustainable development.

3.2.18 The approach to the location of future rural housing is consistent with the Spatial Development

Strategy and places particular emphasis on balanced and integrated development.

3.2.19 Policy SPG-HOU1 aims to, ‘manage housing growth in response to changing housing needs’.

This policy aims to provide for a balanced supply of housing land throughout the Region by a

robust and flexible approach to meeting future housing need. This will be achieved by a review

of housing projections every five years and adjustment to Housing Growth Indicators (HGI’s)

and ensuring there are reserves of land through the development plan process for appropriate

rural housing.

3.2.20 Policy SPG-HOU2 aims to ‘direct and manage future housing growth to achieve more

sustainable patterns of residential development’. In order to achieve this, the RDS aims to

promote more sustainable patterns of rural development by defining housing allocations and

policies in development plans based on strategic planning guidance. This approach will avoid

significant extensions to rural towns and villages.

3.2.21 The RDS aims to accommodate the majority of housing growth over the next 25 years in

existing settlements. The RDS does give flexibility to the development of new settlements,

subject to specific criteria.

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3.2.22 Policy SPG-HOU3 is framed to ‘set housing indicators to guide the distribution of housing in the

Region over the period to 2015 through the development plan process, in accordance with the

Spatial Development Strategy’. The RDS acknowledges that the allocation of housing growth to

specific locations in a district is a matter for the development plan process. Housing growth

figures aim to achieve a complementary urban/rural balance to meet the need for housing in

rural settlements and to meet the needs of the rural community living in the smaller settlements

and in the countryside.

Achieving Balanced Communities

3.2.23 Within the objective of developing community cohesion, the Strategy encourages the creation

of more balanced local communities characterised by development patterns which contribute to

community spirit, neighbourliness and a sense of belonging to a particular place.

3.2.24 The RDS considers diversity and social inclusion as distinguishing marks of a well balanced

community which embraces a mix of social groups and are able to accommodate people of

different backgrounds who wish to live together.

3.2.25 Policy SPG-HOU6 aims to ‘encourage the development of balanced local communities’. The

Department aims to do this through:

• The assessment of ‘rural housing need’ where this may be required;

• The promotion of home ownership and affordable housing generally;

• The provision of social housing targeted to meet identified needs;

• Identification of a range of family and small household requirements; and

• Identification of specialised housing needs including those for the vulnerable.

Second Homes

3.2.26 The RDS raises the issue of second homes in rural areas but acknowledges there are

limitations on the ability of the land use planning system to regulate the growth of second

homes in rural areas.

The Regional Development Strategy for Northern Ireland – Review of Housing Figures

3.2.27 In January 2005, the Department published a Consultation Document on the Review of the

Regional Housing Figures. An independent Panel conducted a Public Examination on key

issues in February 2006 and the Department received the Panel’s report in March 2006.

3.2.28 The Department's review of housing figures endorses that the Spatial Development Strategy is

the primary driver of housing allocation across the Region. A number of recommendations

within this review are relevant to this study:

• Recommendation 7: The Department will revise PPS12 ‘Housing in Settlements’ to clarify

and strengthen policies on affordable housing;

• Recommendation 9: The review endorses the thrust of PPS21 ‘Sustainable Development in

the Countryside’.

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3.3 ‘Shaping our Future’ – Regional Development Strategy (RDS) 2025 Consultation – 10 Year Review

3.3.1 A commitment was given in the existing RDS formulated in 2001 to carry out a review after 10

years. Published in January 2011, the public consultation period closed in March 2011.

Following consideration of the public consultation, the revised document will replace the RDS

that was published in 2001 ‘Shaping our Future’ and amended in 2008.

3.3.2 The 10 year review provides a commitment to the balanced development of the region

including appropriate housing development. One critical component of the approach to

balanced regional development was the distribution of regional housing need between the

Belfast Metropolitan Area (BMA) and its hinterland and the rest of the Region.

3.3.3 The concept of sub-regional centres and clusters is introduced within this review coupled with a

new approach to housing growth indicators.

3.3.4 The review is framed to promote the development of balanced communities and recognises the

need for a variety of house types and tenures. It promotes quality, social, affordable and

specialist housing supported by local services and facilities. This is seen as a key to the

achievement of diversity and social inclusion. The preparation of a Housing Needs Assessment

is a means of developing a better understanding of local need and where this should be met.

3.3.5 The review has introduced a new approach to the location of housing and to the importance of

spatial planning in helping to deliver balanced and integrated communities.

3.3.6 The aim of the review is to support our towns, villages and rural communities in order to

maximise their potential.

Rural Areas

3.3.7 The review acknowledges that the majority of people live within 15 miles of a sub-regional

centre and within 8 miles of a cluster where they can access services. Further guidance is also

given in relation to the definition of the provinces rural area. “Those places outside the Principal

cities, the Sub-Regional Centres and the cluster towns are for the purposes of this framework

identified as constituting the rural area”.

3.3.8 The following policies are materially relevant to rural areas and social housing.

• -Policy SG13 aims to sustain local communities living in smaller settlements and the open

countryside i.e. to provide an integrated approach to social deprivation need in rural areas;

• -Policy SG20 aims to strengthen community cohesion;

• -Policy SG21 aims to support rural renaissance i.e. to develop innovative ways to bring

forward under utilised areas of land for residential development and promote regeneration in

areas of social need.

• -Policy SG22 aims to manage housing growth to achieve sustainable patterns of residential

development i.e. to manage housing demand in rural areas consistent with housing policies

set out in Planning Policy Statement 21 ‘Sustainable Development in the Countryside’.

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3.4 The Northern Ireland Sustainable Development Strategy (NISDS)

3.4.1 Published in May 2006, the Sustainable Development Strategy highlights the need for action to

address growing concerns about unsustainable trends including adverse impact upon our

environment. Its supporting implementation plan defines a long term vision of sustainable

development for rural Northern Ireland with a series of objectives and targets.

3.5 Rural Development Strategy

3.5.1 The Rural Strategy 2007 -2013 was published by the Department of Agriculture and Rural

Development (DARD) in October 2006. The Strategy provides a broad strategic context for

rural policy which takes account of the aims and objectives of the RDS. Key themes include

housing, the protection of the rural environment and the need to sustain rural communities. In

addition, DARD’s Strategic Plan 2006-2011 had amongst it stated goals the strengthening of

social and economic infrastructure in rural areas as well as the development of a more

sustainable environment.

3.6 Rural White Paper Action Plan

3.6.1 The Programme for Government 2007 – 2011 contained a commitment to obtain approval from

the NI Executive for the development of a rural white paper. It was recognised that whilst

DARD had responsibility for rural development, other government departments had functions in

respect of rural areas and therefore other departments would be required to contribute to the

development of the Rural White Paper. Following the completion of stakeholder consultations

DARD has worked with other departments and produced a draft Action Plan.

3.6.2 The draft Action Plan sets out a thematic approach including Rural Communities which sets out

a number of actions relevant to rural social housing. The document allocates responsibility to

lead and supporting departments signalling the intention to seek more cross departmental

collaboration to support rural communities.

3.6.3 Consultation opened in March 2011 and closed in June 2011. The Department is considering

responses and expects to issue a final Action Plan in early 2012.

3.7 Planning Policy Statements

3.7.1 Planning Policy Statements (PPS’s) contain policies on land-use and other planning matters,

for example residential design or the built heritage which apply to the whole of Northern Ireland.

They set out the main planning considerations that the Department takes into account in

assessing proposals for the various forms of development that are also relevant to the

preparation of development plans. Key PPS’s for consideration include:

• PPS1: ‘General Principles’ (1988);

• PPS7:’Quality Residential Environment’ (June 2001);

• PPS7 (Addendum) ‘Safeguarding the Character of Established Rural Areas’ (August 2010);

• PPS12 ‘Housing in Settlements’ (July 2005);

• PPS12 (Draft) Policy HS3 (Amended) Travellers Accommodation (July 2011)

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• PPS13: ‘Transportation and Land Use’ (February 2005);

• PPS21 ‘Sustainable Development in the Countryside’ (November 2008)

• (Draft) PPS23 ‘Enabling Development’ (January 2011);

PPS1 ‘General Principles’

3.7.2 This Statement is framed to set out the general principles that the Department observes in

formulating planning policies, making development plans and exercising control of

development. The Statement also sets out the key themes that underlie the Department’s

overall approach to planning across the whole range of topics, including housing. The

Department has the important and positive task of guiding appropriate developments in the

right places, while preventing developments that are not acceptable.

3.7.3 PPS1 is committed to sustainable development and therefore gives preference to the zoning of

land to the development of Brownfield sites within built up areas before considering the

development of Greenfield sites provided that this creates or maintains a good living

environment.

3.7.4 This policy is also framed to ensure that development is carried out in a consistent manner.

PPS1 states that ‘The Department’s guiding principle in determining planning proposals is that

development should be permitted having regard to the development plan and all other material

considerations, unless the proposed development will cause demonstrable harm to interests of

acknowledged importance’. Reference is also made to rural design considerations which are

considered to be matters of proper public interest. The Department states that good design

should be the aim of all those involved in the development process.

3.7.5 With regard to the preparation of Development Plans, PPS1 considers ‘Countryside

Assessments’ as an integral part of the development plan-making process. In particular,

reference is made to the ‘Development Pressure Analysis’ that seeks to identify areas where

significant housing development pressure has occurred and/or where local character is under

threat of significant change. Combined with a Landscape Assessment, this information informs

the designation of Green Belts and Countryside Policy Areas.

PPS7 ‘Quality Residential Environments’

3.7.6 PPS7 is framed to set out the Department’s planning policies for achieving quality in new

residential development and advises on the treatment of this issue in development plans. It

embodies the Government’s commitment to sustainable development and the Quality Initiative.

This policy applies to all development proposals for new residential development in rural

settlements with a population less than 4,500.

PPS7 (Addendum) ‘Safeguarding the Character of Established Rural Areas’ (August 2010)

3.7.7 This addendum to PPS7 ‘Quality Residential Environments’ provides additional planning policy

provisions on the protection of local character, environmental quality and residential amenity

within established residential areas, villages and smaller settlements.

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PPS12 ‘Housing in Settlements’

3.7.8 Planning Policy Statement 12 ‘Housing in Settlements’ has been prepared to assist in the

implementation of the Regional Development Strategy to guide the future pattern of housing by

managing future housing growth and distribution and achieve balanced communities.

3.7.9 PPS12 is consistent with the strategic approach to New Targeting Social Need and includes

provisions such as the promotion of accessibility for all, which will contribute to tackling poverty,

social exclusion and the regeneration of disadvantaged neighbourhoods.

3.7.10 PPS12 is also consistent with the Department of Agriculture and Rural Development’s ‘A guide

to Rural Proofing – considering the needs of rural communities’. Rural proofing ensures that the

needs and special considerations of rural communities and areas are routinely and objectively

considered as part of the policy development process.

3.7.11 PPS12 states that outside of development plans, the delivery of affordable housing to meet the

needs of different household types in Northern Ireland can at present be met by the following

housing mechanisms:

• social renting (Housing Executive);

• social renting (Housing Association);

• housing benefit funded private renting;

• open market low cost owner occupation (co-ownership);

• NIHE house sales; and

• Housing Association house sales.

3.7.12 PPS12 states that the planning system also has a part to play in addressing the issue of

affordability.

3.7.13 Planning Control Principle 4 ‘Balanced Communities’ identifies the need for social housing

stipulates that social housing should be provided by developers as an integral elemnt of larger

housing developments where a need is identified part of any new housing provision in rural

settlements.

3.7.14 Supplementary Policy HS2 ‘Social Housing’ requires that social housing need, established

through a Housing Needs Assessment, is met through the development control process where

it has not been provided for in the development plan for the area.

3.7.15 In section 54 on Page 18, PPS 12 provides that development plans can zone sites specifically

to meet social housing need identified in Housing Needs Assessments. Clearly this may apply

to rural areas.

PPS 21 ‘Sustainable Development in the Countryside’

3.7.16 Planning Policy Statement, PPS21 sets out planning policies for development in the

countryside including housing. The Department defines countryside as ‘land lying outside the

settlement limits as defined in relevant development plans’. PPS21 also stipulates that no

material weight can be attached to a Green Belt designation within an area plan. Therefore,

Green Belt designations such as those designated within recent area plan publications carry

minimal material weight within the planning process.

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3.7.17 The aim of PPS 21 is to manage development in the countryside:

• in a manner consistent with achieving the strategic objectives of the Regional Development

Strategy for Northern Ireland 2025;

• in a manner which strikes a balance between the need to protect the countryside from

unnecessary or inappropriate development while supporting rural communities.

3.7.18 The objectives of PPS 21 include:

• to manage growth of the countryside to achieve appropriate and sustainable patterns of

development the meet the essential needs of a vibrant rural community;

• to conserve the landscape and natural resources of the rural area and to protect it from

excessive, inappropriate or obtrusive development and from the actual or potential effects of

pollution;

• to facilitate development necessary to achieve a sustainable rural economy; and

• promote high standard in the design, siting and landscaping of development in the

countryside.

3.7.19 PPS21 refers to the significant role development plans play in identifying countryside assets of

the Region and balancing the needs of rural areas / communities with protection of the

environment. Specific reference is made to ‘Dispersed Rural Communities’. In the interests of

promoting rural regeneration and in recognition of the strong sense of belonging and sense of

place in certain rural areas, PPS21 identifies that the Department will identify and designate

Dispersed Rural Communities (DRC) after consultation with District Councils, local

communities and the public.

3.7.20 The criteria for designation as a DRC includes:

• A location in a remoter rural area and away from areas of development pressures close to

towns;

• association with a traditional focal point, where there is convincing evidence of local

community activity i.e. church halls, school and/ or sports clubs;

• A strong community identity;

• A locally significant number of dwellings that have been built over time.

3.7.21 The following policies set out the main planning considerations for the control of residential

development in the countryside. In the interest of clarity, these include:

Policy CTY1 – Development in the Countryside / Housing Development

3.7.22 This policy states that planning permission will be granted for an individual dwelling in the

countryside in the following cases:

• a replacement dwelling;

• a dwelling based on special personal or domestic circumstances;

• a dwelling to meet the essential needs of a non – agricultural business enterprise;

• the development of a small ‘gap site’ within an otherwise substantial and closely built up

frontage’;

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• a dwelling on a farm.

3.7.23 Planning permission will also be granted in the countryside for:

• a small group of houses in a designated Dispersed Rural Community (DRC);

• the conversion of a non – residential building to a dwelling;

• the provision of social and affordable housing in accordance with Draft PPS21 Policy CTY5;

• a residential caravan or mobile home;

• the conversion of a listed building or vernacular building to residential accommodation;

• the extension of an existing dwelling;

• a transit site for Travellers.

3.7.24 A number of specific planning policies exist for certain types of residential development

including social housing.

Policy CTY2 – Development in Dispersed Rural Communities (DRC)

3.7.25 Within a DRC designated in a development plan, PPS21 states that planning permission will be

granted to suitable proposals for a small cluster or ‘clachan’ style development of up to 6 no.

houses at an identified focal point. Appropriate economic development enterprises including

schemes for tourist development, and new social or community facilities may also be

accommodated. Policy CTY2 states that proposals for individual dwellings or affordable

housing schemes in DRC’s will be assessed against the other policy provisions of these PPS.

3.7.26 This policy acknowledges that some rural areas display symptoms of economic and social

disadvantage and that these areas may contain dispersed communities with a strong sense of

identity. In the interests of promoting rural regeneration, the Department has identified and

designated a number of these communities as Dispersed Rural Communities (DRC) in

development plans. In an effort to help sustain these particular rural communities, the

Department will approve a suitable proposal for a small group of houses that build upon and

consolidate identified focal points. Proposals for appropriate economic and social development

will also be sympathetically considered.

Policy CTY 3 – Replacement Dwelling

3.7.27 Policy CTY 3 states that planning permission will be granted for a replacement dwelling where

the dwelling to be replaced exhibits the essential characteristics of a dwelling and as a

minimum all external walls are substantially intact.

Policy CTY 4 – The Conversion and Reuse of Existing Non Residential Buildings

3.7.28 Policy CTY 4 states that planning permission will be granted to proposals for the sympathetic

conversion with adaptation if necessary, of a suitable non-residential building for a variety of

alternative uses, including use as a single dwelling, where this would secure its upkeep and

retention.

Policy CTY 5 – Social and Affordable Housing

3.7.29 This is the main thrust of PPS21 devoted to social and affordable housing. Policy CTY5 ‘Social

and Affordable Housing’ states that planning permission may be granted for a group no more

than 14 no. dwellings adjacent to or near a small settlement or within a designated Dispersed

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Rural Community to provide social and affordable housing to meet the needs of the rural

community.

3.7.30 Planning permission will only be granted where the application is made by a registered Housing

Association and where a demonstrable need has been identified by the Northern Ireland

Housing Executive (NIHE) which cannot readily be met within an existing settlement in the

locality.

3.7.31 In assessing the acceptability of sites outside a small settlement, the following sequential test

(in terms of location) will be applied:

• land adjacent to the existing settlement limit, subject to amenity and environmental

considerations;

• a site close to the settlement limits which currently contains buildings or where the site is

already in a degraded or derelict state and there is an opportunity to improve the

environment;

• an undeveloped site in close proximity to the settlement where the development could be

visually integrated into the landscape.

3.7.32 Where the need relates to a Dispersed Rural Community, the housing group should be located

adjacent or close to a traditional focal point such as a community centre.

3.7.33 Planning policy normally resists groups of dwellings in the countryside. Exceptions are however

made when there is a specific need for social and affordable housing in an area established

through a local housing need assessment undertaken by the NIHE and where the housing

need has not been identified through the development plan process.

3.7.34 The Department defines ‘affordable housing’ as social rented housing and intermediate

housing for eligible households including:

(a) Social Rented Housing – is housing provided at an affordable rent by a Registered Housing Association; that is, one which is registered and regulated by the Department of Social Development as a social housing provider. Social rented accommodation should be available to households in housing need and is offered in accordance with the Commons Selection Scheme, administered by the Northern Ireland Housing Executive, which prioritises households who are living in unsuitable or insecure accommodation;

(b) Intermediate Housing – comprises shared ownership housing provided through a Registered Housing Association and helps households who can afford a small mortgage, but are not able to afford to buy a property outright. The property is split between part ownership by the householder and part social renting form the Registered Housing Association. The proportion of property ownership and renting can vary depending on householder circumstances and preferences. The DSD have devised an eligibility criterion for shared ownership. This is currently under review. The Department has advised that the definition of intermediate housing used for the purposes of this policy may change over time to incorporate other forms of housing tenure below the market rates.

3.7.35 The Department restricts applications for social and affordable housing groups to Registered

Housing Associations. Such proposals will need to be accompanied by information

demonstrating that the potential to locate the necessary housing within settlement limits have

been explored and that no suitable sites are available.

Policy CTY8 ‘Ribbon Development’

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3.7.36 Planning permission may be permitted for a development of a small gap site sufficient to

accommodate up to a maximum of two houses in an otherwise substantial and continuously

built up frontage;

3.8 Rural Design Guides

3.8.1 A number of rural design guides have been published to

process. Whilst these guides are not specifically tailored

should be given to these within the design stage.

assist those in the rural design

to social housing, consideration

(a)

(b)

‘Design Guide for Rural Northern Ireland’ (May 1994) – This guide is framed to improve the quality of design in the countryside. ‘Draft Supplementary Design Guidance – Building on Tradition’ (A Sustainable Guide for Rural Northern Ireland) – This document provides assistance for all those involved with sustainable development in the Northern Ireland countryside in compliance with PPS21 ‘Sustainable Development in the Countryside’;

(c) ‘Dwellings in the Mournes / A Sustainable Design Guide’ specific rural design within the greater Mournes area.

– This guide is framed to provide

3.9 Planning System Reform

3.9.1 A major reform programme for the planning system in Northern Ireland, encompassing the

structural changes announced under the Review of Public Administration (RPA), is currently

being taken forward.

3.9.2 The comprehensive programme of reform for the planning system was originally announced in

November 2007 and incorporates a range of medium to long-term measures designed to

address all the key management elements of the planning system including development

plans, policy and development management.

3.9.3 The NI Executive agreed to the final policy proposals for reform of the planning system in

February 2010, including the measures necessary to transfer the majority of planning functions

to the new District Councils under the RPA.

3.9.4 The Planning Bill was introduced into the Assembly on 6 December 2010. The Bill completed

its Final Stage on 23 March 2011 and received Royal Assent on 4 May 2011.

3.9.5 The Act will provide for the transfer of the majority of planning functions from central

government to district councils within a timetable to be agreed by the Executive. It also brings

forward a number of reforms to the planning system.

3.9.6 The timetable for reform is not clear. The current Minister’s preference is for bringing the 11

councils into shadow form in 2014 with the full transfer of powers in April 2015. The Minister

has stated that he does not propose to transfer Planning ahead of local government re

organisation legislation.

3.9.7 There has been activity though in relation to grass roots rural planning initiatives. DARD has

funded a Village Renewal and Development measure as part of the Rural Development

Programme 2007-2013. This has explored current issues and practice relevant to the concept

of Village Renewal and Development. Its membership was drawn from the seven Northern

Ireland Local Action Groups (LAGs).

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3.9.8 Under the Village Renewal and Development measure the 7 Axis 3 LAGs have responsibility

for allocating approximately £12m in funding to village renewal projects across Northern

Ireland. This work has placed emphasis on and set out a process of Integrated Village Planning

setting out a series of good practice examples. This work recognises the importance of

affordable housing to maintain the vibrancy and structure of rural communities.

3.10 Conclusion

3.10.1 Northern Ireland is a predominantly rural region with approximately 35% of its population, living

in towns, villages and open countryside outside the BMA and Londonderry. Urban and rural

areas have distinct roles, but it is important that these roles are complementary and that town

and country maintain their distinctiveness and respect social and physical integrity in the

sustainable development of each. Rural Northern Ireland has experienced significant change in

the past 10 years due to wider social and economic forces.

3.10.2 Rural planning policy is set out through a range of strategic planning guidelines and planning

policies. The Department’s approach to rural planning policy is framed to ensure the balanced

development across the region and recognises the needs and potential of rural areas. Coupled

with proposed changes to local governance and the forthcoming Review of Public

Administration, the Department aims to sustain rural community’s living in smaller settlements

and the open countryside and provide accessible, affordable and sustainable housing without

detrimental impact to the quality of the local environment.

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4 Housing Policy context

4.1 Introduction

4.1.1 This review sets key housing issues and policies relating to the provision of rural affordable

housing in Northern Ireland in a wider context.

4.1.2 Issues referred to here, refined by detailed cost analysis and dialogue with housing

associations and other stakeholders (detailed in subsequent chapters) form the basis of our

final conclusions and recommendations.

4.2 Current Northern Ireland housing policy context

What is meant by affordable and social housing?

4.2.2 Affordable housing is defined as ‘The social rented sector, housing benefit funded private

rented and that part of the low cost owner occupation which can be purchased utilising 30% or

less of gross household income’1.

4.2.3 Social housing is defined in the same document as, ‘Housing provided by registered Social

Landlords for rent. Such housing is allocated by reference to an approved (Department for

Social Development) Common Waiting List and allocation system'.

4.2.4 Sir John Semple’s Review of Affordable Housing2 recommended that the cost to the occupier

of affordable housing should not exceed 35% of gross household income.

4.2.5 Affordable accommodation currently provided by the public sector in Northern Ireland are:

• Social housing - provided at an affordable rent by a social landlord (i.e. the Northern Ireland

Housing Executive (NIHE) or a housing association)

• Co-ownership - a form of home ownership whereby the householder purchases a share of a

property for sale on the open market. The remaining share is purchased by the Northern

Ireland Co-Ownership Housing Association (NICHA).

The scale of housing provision and housing need/demand

4.2.6 In 2009, there were 740,000 homes in Northern Ireland - an increase of 35,000 since 2006.

110,100 (approximately 14%) of these were social rented homes. Tenure is broken down more

fully in Table 1.

1 The Regional Development Strategy (RDS) 2025 ‘10 Year Review’, Department for Regional

Development 2

Semple Review into Affordable Housing, Department for Social Development, 2007

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Table 1 Northern Ireland Dwelling Stock by Tenure 2009

Owner occupied 461,800

Private Rented & Other 124,600

Housing Executive 85,600

Housing Association 24,600

Vacant Dwellings 43,400

Total 740,000

Source: Northern Ireland Market: Review and Perspectives 2011-2014

4.2.7 The stock of social housing has increased by at least 1,000 homes per year since 2005 with

substantially higher levels of delivery in more recent years.

Table 2 Social Housing Delivery in Northern Ireland

2005/06 2006/07 2007/08 2008/09 2009/10 target

2009/10 actual

Starts 1519 1032 1595 1136 1750 1838

Completions 1410 1365 1466 1504

Source: NIHE Corporate Plan 2010-13 Note: completion figures were not quoted for 2005-07 as this pre-dates NIHE responsibility for this function

4.2.8 Only 10% of social housing (about 11,000 homes) is situated in rural locations but delivery was

very strong during 2010-11. At 31 March 2011, 302 new build rural starts were achieved - the

highest rural outturn in at least ten years - far surpassing the previous highest return (185 units 3

in 2009/10). 96 rural affordable homes were completed in 2010-11 .

4.2.9 The current stock of homes in co-ownership is between 4,500 and 5,000 properties4. The

scheme operated by the NICHA has enabled about 500 households per year to become co

owners - more than 21,000 since the scheme began - of whom more than 16.500 have

purchased the remaining equity to own their homes outright.

4.2.10 The Housing Executive estimates that between 2,000 and 2,500 new homes need to be built

each year to meet the needs of those in 'housing stress' - a level which has not been attained

even in the most successful years of social housing delivery. The shortage of affordable

housing in both the social and private sectors has been recognised since at least 2006. The

Semple Review made recommendations to tackle the shortage which were accepted by

Government. However, the economic changes since 2007 have made those recommendations

less feasible.

4.2.11 A key indicator of housing demand is the number of applicants for social housing registered on

the waiting list maintained by the Housing Executive. Points are allocated according to the size

and current circumstances of the applicant's household. Households with 30 points or more are

regarded as being in housing stress and in greatest need of rehousing.

3 Rural Homes and People: Annual Progress Report on the Implementation of the Housing Executive Rural Action Plan 4

4,413 properties at 31 March 2010, NIHE Northern Ireland Market: Review and Perspectives 2011-2014

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4.2.12 Following two years of slight decline, the total number of applicants on the waiting list in March

2010 was 38,120 of whom 19,716 were in housing stress5. By the end of September 2010 the

overall waiting list had increased to 39,344 and the number in housing stress to 20,513.

4.2.13 Waiting lists have reduced recently in Fermanagh, Strabane, Ballymoney and Armagh.

Possible reasons for this fall include an increase in the amount of private rented

accommodation available since the building boom or their more remote rural location. While

reductions in waiting lists may appear to be a positive sign they could also be a sign of poor

local employment prospects with implications for the long term sustainability of communities in

those areas.

4.2.14 Approximately half of applicants on the waiting list at that time were owner occupiers or renting

privately. Many applicants were single people, but there were also a substantial number of

elderly applicants and small families.

4.2.15 At the end of March 2011, 5,618 households on the waiting list were seeking homes in rural

areas6. Of these, 2,571 were in ‘housing stress’ - just over 12% of all those in housing stress on

the waiting list. This figure of 12% is one of the factors incorporated in the Strategic Guidelines

used by the Housing Executive to develop the Social Housing Development Programme

(SHDP) and ensure that public investment is used fairly to deliver housing to meet a range of

social housing needs.

4.2.16 Demographic trends indicate that the rural population has been increasing and that a long term

increase is projected in the number and proportion of one and two person households in the

population. Older people will make up many of these households: by 2018 there are expected

to be an additional 34,000 people aged over 75 in Northern Ireland7. This will have implications

for the location and design (and hence the cost) of new social housing for older people who

cannot afford to purchase more suitable market housing and are unable or unwilling to remain

in their family homes with support. It also raises questions about the effective use of the social

housing stock.

Affordability and social housing

4.2.17 Although a number of measures of housing demand and affordability are well established,

these focus either on the level of demand for social housing or on the ability of households to

afford home ownership., There is no clear mechanism that brings identification of housing need

and affordability together to test whether social rented housing is the only option that applicants

want and can afford. The ability of applicants for social housing to afford other options which

could be provided at less cost to the public purse is therefore unknown.

4.2.18 Waiting list application forms do not require information about financial circumstances and

therefore cannot be used to identify the proportion of applicants likely to be able to afford some

form of home ownership or rents above social rent levels.

4.2.19 The Housing Executive uses a Net Stock Model to estimate the overall need for new social

housing. Using demographic information from the Census, population and household

projections and housing stock indicators (e.g. demolitions, second homes and vacancy rates) it

has estimated the total extra number of new social dwellings required over a 10 year period.

The Model has influenced the size of the Social Housing Development Programme (SHDP).

5 NIHE website

6 Rural Homes and People NIHE Rural Action Plan, Annual Progress Report for 2010/11

7 NIHE Housing Market Review and Perspectives 2011-14

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Again, the Model does not identify what potential social housing tenants can afford to pay for

their housing.

4.2.20 An affordability index developed by the University of Ulster in partnership with the Housing

Executive is designed to measure change in the affordability of homes in Northern Ireland over

time and highlight geographical differences in affordability at district council level.

4.2.21 The index is focused more on home ownership than the rental market, using a typical

bank/building society annuity formula to work out the maximum price that a household with a

median household income could afford to pay.

Impact of the market downturn on demand and affordability

4.2.22 The pressure to deliver affordable or social housing as cost effectively as possible has never

been greater: demand for social housing has remained high while funding to deliver it has

reduced substantially.

4.2.23 Due to the economic recession and housing market downturn, the average house price in

Northern Ireland fell by 41% from £250,586 to £148,243 between 2007 and 20108. By the

second quarter of 2011 the price had fallen yet further to £137,8149. Home ownership became

more affordable but factors including more stringent deposit and lending requirements by

mortgage lenders created stagnation in the housing market with very few transactions and few

first time buyers joining the housing ladder. Co-ownership became more accessible to people

on lower incomes and, with the scheme oversubscribed at a ratio of 3:1 in summer 2011,

pressure on limited funds led to the temporary introduction of a monthly quota system to

manage demand.

4.2.24 The accessibility of the private rented sector (PRS) has been less easy to assess. While

published data is not available for Northern Ireland as a whole, research into the performance

of the private rental market in the Belfast Metropolitan Area shows a decrease in the number of

lettings in the first half of 2010 compared with the previous six months and 'relatively erratic'

rental levels with an annual decline of 2.3% between 2009 and 201010: Preliminary findings

emerging from the 2011 House Condition Survey confirm that the private rented sector has

continued to grow since the last survey was undertaken in 200911. Thus while the PRS has

remained an option for some people unable to access lending for home ownership, it has not

been subject to the same drop in value as the home ownership market.

4.2.25 With few other options available, social housing has continued to be in demand:

4.2.26 'People seeking housing in Northern Ireland face significant challenges with considerable

numbers unable to have their needs answered either in the social or private sector'12.

4.2.27 The availability of public funding for social and Co-ownership housing has also been affected.

The Housing Executive's income from house and land sales has reduced and Government

funding has fallen to £461m over four years. This is the equivalent of £117m per year,

compared with an average of £148.6m per year between 2007/08 and 2009/1013. This is


9 University of Ulster Quarterly House Price Index

10 NIHE Performance of the private rental market Belfast metropolitan area, January-June 2010

11 Quarterly House Price Index Q4 2011

12 Foreword to NIHE Corporate Plan 2010-13


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expected to deliver 6,000 new social homes at current values - the equivalent of 1,500 per year

and substantially fewer than the estimated minimum requirement of 2,000 per year. If the 6,000

home target is achieved, this will represent average public investment of £76,800 per home.

4.2.28 £60m has been allocated for Co-ownership over the next four years, expected to continue

delivery of 500 purchases per year. This represents an average cost to the public purse of

£30,000 per loan.

How new affordable housing is developed and by whom

4.2.29 Housing associations (HAs) are the sole developers of social housing in the province.

Development is funded through a combination of Government grant and private borrowing by

the HAs.

4.2.30 HAs contact the Housing Executive throughout the year to register sites they wish to develop.

Provided there is housing need in the area of the site that can be met by the proposed mix of

property types and sizes, registration will be supported. Registration secures the site for

development with affordable housing grant by a specific HA, giving the HA greater confidence

in preparing to develop the site. No other HA can obtain grant to develop on that site. This

process was introduced to avoid prices becoming inflated through HA competition for site

acquisition.

4.2.31 The SHDP is a programme of schemes normally over a three-year rolling period. It is approved

for grant aid by the Housing Executive following an annual round of bids by HAs. To secure

approval, schemes must satisfy Strategic Guidelines designed to ensure that specific needs

such as those of older and disabled people and people living in rural areas receive a fair share

of funding.

4.2.32 The bids are, in effect, a consolidation of registration activity. Approved projects are published

in the SHDP following ministerial approval.

Affordable housing funding mechanism

4.2.33 Funding to devolved administrations in Northern Ireland, Scotland and Wales is allocated by

the UK Government through the Comprehensive Spending Review. Allocation to housing,

including social housing development, takes place through the Northern Ireland Executive

budget round, based on advice from the Department of Social Development (DSD) and the

Housing Minister.

4.2.34 The level of social housing grant available to HAs is controlled by Total Cost Indicators (TCIs)

and associated allowances compiled by DSD. TCIs are designed as indicators of the

reasonable cost of development and the proportion of cost that can be publicly funded. TCIs

draw on a range of government statistical data including actual land sale prices and trends in

construction costs.

4.2.35 HAs bid for grant funding and inclusion of their schemes in the SHDP, setting out the proposed

development timescale, cost estimates and the amount of grant (as determined by TCIs) for

which the scheme will qualify. The maximum grant is automatically included in cost estimates.

The SHDP and the payment of grant are managed by the Housing Executive. Grant is paid in

tranches of 40% upon acquisition, 40% at start on site, 20% on completion. Initial project

approval is based on cost estimates but, as development progresses, adjustments are made so

that grant is ultimately paid on actual costs not estimates.

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4.2.36 Figure 1 below sets out a typical example of how viability and grant is assessed.

Figure 1: Typical NI social housing funding arrangement (Source: NIHE website)

4.2.37 More schemes are included in the SHDP than can be funded with the grant available. This

allows for schemes that do not progress as planned, ensuring that funding is fully used and the

maximum number of social homes provided.

4.3 Rural housing issues and objectives

Rural Housing Policy

4.3.2 Rural settlements are defined by the Department of Agriculture and Rural Development

(DARD) as those with a population of 4,500 or less. These account for 35% of the overall

population although, as indicated above, only 10% of social housing is in rural areas.

4.3.3 Policy makers are very conscious of the needs of people in rural communities: the draft Rural

White Paper Action Plan was published for consultation by DARD in March 2011 to provide a

strategic framework for rural policy across all government departments for the next ten years.

The action plan recognises that rural areas and people are important, have rights, provide

enormous value and have untapped potential. It makes a commitment that government will

help recognise those rights, support that potential and address the challenges that exist in rural

communities.

4.3.4 As detailed in Chapter 2, Planning Policy Statements 12 and 21 provide a framework to enable

sustainable affordable housing to be developed where it is needed in rural areas.

4.3.5 Rural housing is a clear priority for the Housing Executive which sets out achievements and

planned actions in the Rural Homes and People Rural Action Plan for 2009/10 to 2012/13.

Enabling new homes and contributing to rural development and regeneration are two of five

themes in the Action Plan. It is also recognised that the poor condition of homes is more

significant in rural areas: 6,000 dwellings in isolated rural areas were unfit in 2009 - 34% of all

unfit dwellings - suggesting that greater urgency is required in providing good quality new

homes for rural households.

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4.3.6 The Action Plan Progress Report for 2010/11 celebrates meeting the target for rural new build

delivery, achieving 302 rural social new build starts - the highest number recorded in the last 10

years.

4.3.7 The Report and the housing waiting list both indicate that housing stress in rural areas remains

comparatively high but, due to funding reductions, the number of homes delivered is unlikely be

maintained at the 2010/11 level. Actions being taken by the Housing Executive to address the

imbalance between supply and demand include:

• Improved awareness of latent or hidden rural need particularly where development

opportunities may exist on land owned by the Housing Executive (the housing waiting list

application form also seeks to identify latent demand by asking about rural areas with little

or no social housing which would be of interest to applicants if to accept if accommodation

were available)

• Inclusion of sufficient opportunities in the SHDP to allow the rural target to be met

• Helping HAs to identify areas where rural development would be supported in the SHDP by

directing them to a Prospectus of Unmet Need which identifies rural locations of greatest

need where development sites have not yet been identified

• Supporting HA applications under PPS21 for social housing in 4 rural locations where

development would not normally be approved

• Investigating the feasibility of Community Land Trusts.

4.3.8 The report identifies the importance of the role played by Rural Housing Enablers (RHEs) in

England, commenting that certain aspects of that role are performed by the Housing Executive.

4.3.9 Other priorities identified in the Progress Report (some of which have been curtailed for

budgetary reasons) were discussed during our consultation workshops to evaluate their

potential to support the relief of rural housing stress. These include:

• A pilot ‘Living Over the Shops’ scheme in 4 rural pilot areas

• The Village Voice initiative which allows smaller estates with no formal tenants/community

groups to liaise with the Housing Executive through community volunteers.

Perceived barriers to delivery

4.3.10 The Independent Commission on the Future for Housing in Northern Ireland, chaired by Lord

Best, reported in May 2010, setting out a vision for an effective housing system in Northern

Ireland in 2020. The Commission saw a compartmentalised approach to tenure and housing

provision as a barrier to achieving the vision and advocated the use of financial and planning

tools to build well-designed new homes for a mix of incomes and with choices for ownership as

well as renting.

4.3.11 It was recommended that Co-Ownership should continue to operate in its current form, and

should also be the funding and administration partner for housing associations moving into

mixed income tenure development. The Commission saw particular value in mixed tenure rural

development to enable younger people to remain within the villages of Northern Ireland.

4.3.12 Mixed tenure development offers one means of addressing the (currently anecdotal) higher

cost of rural social housing provision in that cross-subsidy with homes for shared ownership

and/or outright sale can reduce the amount of public investment required and help HAs

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manage financial risk. However, this approach is dependent on other factors - some outlined

here- which will be examined further in the course of this research.

4.3.13 The Commission pointed out that there can be insufficient incentives for social housing

providers to provide small numbers of new homes due to the complexities and effort required

(such as responding to local opposition or special planning requirements). To overcome this

barrier it recommended that a programme of Rural Housing Enablers be established. There

may be a link with the Rural Community Network, a regional voluntary organisation established

by rural community groups articulate the voice of rural communities on issues relating to

poverty, disadvantage and equality. The Network has a rural enablers programme which seeks

to reconcile and develop communities rather than focusing exclusively on housing.

What is already happening?

4.3.14 The majority of housing associations in Northern Ireland are relatively small bodies (with a

stock of fewer than 4,000 homes) whose ability to develop is constrained by organisational and

borrowing capacity.

4.3.15 They have recently formed procurement groups to assist delivery of the housing targets by

tackling inefficiencies arising from small construction projects being procured on a one-off basis

by individual HAs. Membership of a procurement group is a condition for inclusion in the SHDP.

In line with the DSD Procurement Strategy, the establishment of HA procurement groups is

designed to achieve efficiency savings that can be retained within the housing programme to

provide additional housing. Framework agreements between the procurement group and the

supply chain will allow HAs to call-off selected contractors and consultants for specific projects

without the need to re-tender.

4.3.16 HAs are also beginning to merge, creating larger organisations with greater financial strength

and leverage.

4.4 Comparison with the systems in England, Wales and Scotland

Affordable housing tenure and delivery options

4.4.2 Affordable housing is defined with greater focus on tenure than in Northern Ireland. Planning

Policy Statement 3 defines affordable housing as social rented, affordable rented and

intermediate housing, provided to eligible households whose needs are not met by the market.

PPS3 was amended in 2011 to include the concept of an 'affordable rent' tenure of up to 80%

of market rent, to be delivered by Registered Providers (RPs) (predominantly housing

associations but also including private developers subject to specific criteria). The Localism Act

2011 also makes a closer link between income and housing need by introducing new

tenancies into the affordable sector which will be time-limited rather than 'tenancies for life'.

4.4.3 Rents for social rented homes are regulated with rent increases tied to the Retail Price Index.

4.4.4 RPs develop affordable housing which can include social rented and shared ownership on the

same site. The mix will be determined in partnership with the local authority and based on

evidence from housing need or market assessments and financial viability of the site.

Households wishing to become shared owners will buy a share of the equity according to what

they can afford (upwards of 25%), usually paying rent to the RP on the unsold share. They can

'staircase' to full ownership by purchasing additional shares of the equity at the prevailing

market value.

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4.4.5 RPs will obtain development funding by borrowing against the asset value of their stock,

bidding successfully for affordable housing grant (managed by the Homes and Communities

Agency (HCA) for the Department for Communities and Local Government) and receipt of

recycled capital grant from sales of shared ownership homes. Cross-subsidy from the sale of

shared ownership has played an important part in enabling RPs to reduce the amount of grant

required to deliver affordable (social rented) housing.

4.4.6 The HCA will pay no more grant than is required to make the development financially viable.

Grant is often paid to secure additional benefits in line with HCA priorities.

4.4.7 Affordable housing is also delivered by private developers in the form of homes which will be

transferred to an RP or a commuted sum paid to the local authority to fund affordable housing

on an alternative site. As explained in paragraph 2.1.9, this ‘s106 contribution’ is a tool

designed to secure funding from new development that will mitigate the impact of development

on the local area. Local authorities will often look for contributions to fund education, leisure,

infrastructure as well as affordable housing. The value of the developer contribution will be

influenced by local planning policy which will usually require that, for sites above a certain size,

a specified proportion of the homes will be affordable. Some local planning authorities stipulate

that the affordable housing should be delivered without affordable housing grant, thereby

keeping the need for public investment as low as possible - although this can lead to protracted

negotiations about site viability.

4.4.8 Do It Yourself Shared Ownership - the equivalent of Co-ownership in Northern Ireland - is no

longer generally available.

The Role of the HCA

4.4.9 The HCA manages the allocation of affordable housing grant through a competitive bid round in

which RPs submit proposals for schemes and applications for grant in line with strategic

priorities. These include housing for priority groups which are under-provided for such as

families, older and disabled people and rural communities. Rural areas are defined as

settlements with a population below 3,000. The rural share of the 2011/15 affordable housing

programme is approximately 9% of funding.

4.4.10 In 2011, following a change of UK Government policy and reduced grant allocation for 2011-15,

priority is being given to delivery of homes for 'affordable rent' which can assist working

households and generate more revenue than traditional social rents. Government policy is also

to encourage housing options that have the support of local communities such as Community

Land Trusts (now also called Local Land Trusts).

Planning and delivery in rural areas

4.4.11 Rural affordable housing is recognised as making an important contribution to community

sustainability. The purchase of equity in shared ownership homes in rural areas (settlements

with fewer than 3,000 residents) is capped at 80% to ensure that they remain affordable in

perpetuity.

4.4.12 Planning legislation provides for 'rural exception sites' where an exception can be made to local

planning policy enabling sites in rural areas (where development would not normally be

permitted) to be developed exclusively for affordable housing.

4.4.13 The draft National Planning Policy Framework (currently in draft) is designed to replace

individual planning policy statements and states that a presumption should be made in favour

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of sustainable development. It seeks to give local authorities and communities more influence

over decision-making and could permit mixed tenure development on exception sites if that is

identified as what is needed locally.

The Role of local authorities

4.4.14 Local authorities' priorities for investment in housing and regeneration are set out in Local

Investment Plans developed with the HCA. It will have regard to these in evaluating bids for

grant for development.

4.4.15 Local housing authorities may also contribute financially to affordable housing development,

possibly by providing land. In their strategic role they may also encourage or support a

programme of village housing needs assessments.

The Rural housing enabler role

4.4.16 Rural housing enablers (RHEs) play an influencing, coordinating and motivating role in

affordable housing development. They undertake village housing need surveys to establish

clear links between local need and development. They can bring together landowners, local

communities and planners to minimise input of time and effort by an RP. They often operate on

a county-wide basis and are employed by rural community councils, developing strong local

knowledge and community links and an element of continuity that enables a pipeline of

schemes to be built up. Because, historically, they were not usually employed by local

authorities or RPs they are seen as independent and acting for the benefit of the community.

This picture is changing but the credibility established by the RHEs continues to be an

important factor enabling rural affordable housing to be delivered.

4.4.17 Living Working Countryside14 stressed the importance of affordable housing in supporting the

sustainability of rural communities. The Review made comprehensive recommendations on

community involvement and changes to the planning process to increase the supply of rural

affordable housing, highlighted the important delivery role of RHEs.

The Role of local communities

4.4.18 For several years parish councils have been responsible for developing a parish, village or

community plan. Local consultation on these plans has often identified affordable housing as

an important issue for villages and acted as a catalyst for development. The evidence

contained in a community plan can act as a counterbalance to local 'nimbyism'. Inclusive

approaches to community-led planning have proved effective in defusing opposition to

development.

4.4.19 The proposed creation of 11 new district councils in Northern Ireland with a duty to draw up a

Community Plan may have relevance here.

Innovation in Scotland

4.4.20 A Land Bank Fund was established by the Highland Council in 2005 with £5m Scottish

Government initial funding as the basis for a revolving fund. In conjunction with the Highland

Housing Alliance (a private limited company comprising housing associations and trusts) the

Fund has contributed to an increased rate of affordable housing provision in the Highlands. The

Fund has been used in line with Housing Strategy priorities to prepare sites for development

The Taylor Review of the Rural Economy and Affordable Housing, DCLG 2008

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and in some cases to meet some of the development costs. Sites are then sold on for

development. The Fund was able to become self-financing by benefitting from the provision of

land by the Highland Council and rising land values prior to the credit crunch to. A 2008 review

indicated that the Fund's financial viability was not threatened by the recession although it may

not be able to generate surpluses on the same scale as in the past. In terms of acquiring

privately owned sites, the Fund can play a role when the private market is depressed.

Current practice in Wales

4.4.21 The Welsh Government first funded a pilot RHE post in 2003, drawing on the experience of

RHEs in England. A network of ten RHEs is currently working in Wales most of whom were

appointed in 2008 or later.

4.4.22 They appear to be employed mostly by partnerships, hosted by a single local authority or

housing association.

4.4.23 They face similar barriers to RHEs in England: community opposition, reduced public funding,

landowners seeking ‘hope’ value on exception sites and infrastructure investment issues

(particularly in relation to water and sewerage) which are a significant impediment to feasibility.

4.4.24 A recent mapping exercise indicated that the role of the RHE is seen by many as more than

just about development and bricks and mortar. Some organisations really value the community

development role which RHEs are clearly performing – 'going beyond finding one solution to

one set of housing needs but beginning to get involved in finding solutions to the growing list of

issues which could be termed the ‘rural regeneration agenda’.

4.4.25 In Wales delivery to date suggests that the longer an RHE is in post the more is achieved.

Between 2003 (when the first RHE was appointed) and March 2011 a total of 132 homes had

been completed (all with social housing grant) as a result of the RHE projects and 155 rural

housing need surveys were completed or in progress. The rate of delivery of both housing need

surveys and physical schemes has increased over time as more RHEs have been appointed

and their work had begun to bear fruit.

4.5 Conclusion

4.5.1 Affordable housing policy in Northern Ireland has evolved to reflect local needs. The

requirement for affordable housing remains high in rural and urban areas and reductions in

public subsidy mean that more cost effective approaches are necessary to maximise delivery

and sustain communities. Current policy and practice offer a strong base from which to build in

developing housing options capable of delivering greater value for money.

.

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5 Stakeholder Consultations

5.1 Housing Associations

Introduction

5.1.2 Consultation with Housing Associations has occurred through telephone, interviews, face to th

face meetings and a presentation/discussion held on 26 October, 2011 in Ballymena at the

HA annual seminar.

Budgets

5.1.3 It is clear that the body representing the Housing Associations, NIfHA, have concerns about the

financial climate and the “severe budget cuts, slashed rates of capital subsidy and tighter 15

private borrowing conditions ” expected. The NI Executive published spending plans bear

witness to these concerns. The net capital budget for housing is:

• 2011/12: £130M;

• 2013/4: £74M;

• 2014/5: £90M

5.1.4 The DSD Budget Briefing to the Social Development Committee, June 2011 stated that

“maintaining adequate levels of capital investment in the main scheme of social housing is

likely to be problematic”.

5.1.5 It was confirmed that some schemes are now approved at below TCI rates and that further cuts

would be an issue.

5.1.6 It was recognised that there will need to be more radical and innovative approaches to deliver

with less grant in the coming years.

Site availability

5.1.7 We were told that delivery of rural social housing is not being stymied by an absence of sites.

The fall in land values, house purchase and reduced developer activity over the past three

years has meant that development sites are generally not in short supply but that vendor

expectations remain.

5.1.8 The use of marker schemes (now identified through the Unmet Need Prospectus) were

reported as helpful – but the size of rural schemes needs to be 8 units + to be viable according

to one HA. Another HA stated that rural schemes were only economically viable if developed

around 5-15 properties.

Approvals

5.1.9 Procurement rules and procedures are time consuming and staff intensive. Many Code 4

schemes have been achieved. Lifetime homes and secured by design standards are all

required and again can be time consuming.

15 From NiFHA website

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5.1.10 For economic appraisal NIHE use a global template however it was felt by one hosing

association that a standardised template for schemes under 10 units should be promoted. It

was felt overall that there is good communication with the NIHE Rural Unit.

5.1.11 Rural HA confirmed that of all rural sites it considered for development approximately 50%

progressed, however after feasibility the conversion rate increased to around 80% due to more

robust investigations at the initial stages.

5.1.12 Many HAs use software model to assess viability (although not all) – using capital and revenue

estimates over a 30 year period. HAs have limited resources and rely on external contacts

(agents for land) and consultants to achieve programme.

5.1.13 HAs consider that for rural schemes the planning system is slow and complicated and in some

areas there is more opposition in tight knit communities who may not have experienced social

housing before. It was felt that there was demonstrable value in promoting through PR the

merits of rural social housing to local communities to speed the approval process up.

5.1.14 One HA suggested that there was a lack of joined up approach between the Planning Service

and DSD in terms of a coherent approach to rural social housing.

5.1.15 Generally it was felt that rural schemes are more difficult in terms of time and cost to identify,

bring forward, secure planning and deliver than urban schemes.

5.1.16 Historically the issue of need identification has been seen as a difficulty – where little or nil

provision has resulted in nil demand and low or nil waiting list which perpetuates the lack of

established need.

5.1.17 Needs support from NIHE is seen as dependent on location which is accepted and the use of

marker schemes, the unmet need prospectus and more recently Strategic Guidelines were

broadly supported.

Total Cost Indicators (TCI)

5.1.18 HA’s told us that the biggest driver in deciding where to build rural social housing was the

applicable TCI rates. There are 5 bands of TCI in Northern Ireland with Belfast in Band 1 and

Band 5 in the west. Costs reduce from Bands 1-5. All 26 Councils are within one of these

bands but the bands are not sensitive enough for rural areas. Therefore each district council

has a different grant rate, and the higher rates are in urban areas and predominantly east of the

Bann.

5.1.19 TCI’s are considered to be not sensitive enough to rural locations and the size of schemes in

rural areas. Presently, we were told, the bulk of rural NI has its TCI rates at the bottom end of

the TCI rates scale – e.g. based on current TCI rates a 90/95 sq m unit in Derry achieves

£13,600 grant more than in Limavady Council.

5.1.20 Rural schemes were considered to attract a cost premium due to a wide range of issues and

the following views were expressed:

• Infrastructure costs for services – various agencies are adopting a ‘full cost recovery mode’,

coupled with vastly reduced rates in grant subsidy by up to 50%, and the cost of bringing

infrastructure to rural schemes has escalated. Examples were provided of water and

drainage provision attracting high unbudgeted costs.

• Poor economies of scale and high set up or overhead costs,

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• Unquantifiable staff costs (limited staff resource and travel times) to secure planning, deliver

and manage completed schemes

• Design requirements

• Ecology issues

• Size - due to the small number of units in rural schemes - small schemes simply cost more

than larger schemes

• Need to expend fees on contaminated land surveys

5.1.21 Due to higher costs encountered on rural schemes a case exists in the view of the HAs for a

TCI multiplier to increase grant for rural small schemes. In addition it was felt that in monetary

terms this would not amount to significant sums overall and would signal good intent to meeting

rural challenges and recognition of the premium costs involved.

5.1.22 One HA suggested a rural specific programme sensitive to rural costs (reference to TCI) and

one which facilitates speedier delivery (time for approvals) in rural areas as urban schemes are

easier to deliver.

Access to private finance

5.1.23 This was considered by one HA as a global problem, with three of the four local banks very

cautious in lending to HA due to the building element. Other HAs stated that there were no

issues in accessing private finance.

Management issues

5.1.24 The management costs were considered to be higher but these are cross subsidised through

urban stock. There was considered to be scope for joint working with other housing

associations to share services and management costs in geographical areas when there is a

low presence in the area.

5.1.25 It was felt by Rural HA that there were logistical challenges due to the wide dispersal of its

stock, however in a UK context the footprint of NI was at an acceptable level to provide

property management services.

5.2 TCI’s

5.2.1 The following information has been obtained from DSD and NIHE.

5.2.2 DSD is the custodian of TCI’s and NIHE uses this to govern the grant amounts paid to HAs.

The TCI system is an extensive database of social housing development cost information

across the province which is periodically updated when schemes are completed. Scheme costs

are broken down into considerable detail and include land acquisition costs. The costs of

completed schemes are used to calculate the average cost of development across a range of

house type, to differing quality standards and across six bands and geographical areas (see

table below).

5.2.3 Based on the information received and other industry benchmarked costs a grant rate is

applied and this is heavily influenced by location. The bands broadly become less rural from A

to F (and grant rates reduce - see table 1 below) however there are rural areas within each of

the bands as well as urban locations.

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5.2.4 DSD accept that the system is not rural sensitive and there is no specific "Rural" category

within the database.

5.2.5 DSD maintains that TCIs reflect actual costs and have yet to receive evidence that

development in rural areas is more costs. One observation on this point which could be made

is that HAs may only put forward rural schemes which are viable using TCI grant rates i.e.

those rural schemes which are particularly constrained due to perhaps a number of

circumstances – e.g. high infrastructure costs, design costs, planning costs are not pursued.

Potentially the system therefore discriminates against more costly rural schemes.

5.2.6 DSD maintains that the system allows for HAs to claim over TCI rates subject to making out an

acceptable case and that TCIs use supplementary multipliers where special service

requirements are needed or developments are single storey or septic tanks are required.

Infrastructure provision such as water supply does not command additional grant.

5.2.7 It has been suggested by staff in both DSD and NIHE that that the periodic assertions from

HAs that rural schemes cost more are not proven (as the TCIs are made up from returns from

HAs).

Table 1: TCI Bands, location adjustment and 2009/10 grant rate for 3 bed house general needs Source: NIHE

2009\10 Area A Area B Area C Area D Area E Area F

District Council Belfast Ards Banbridge Ballymena Ballymoney Armagh

Castlereagh Derry Dungannon Cookstown Craigavon Larne

North Down Lisburn Down Omagh Moyle

Fermanagh Antrim Strabane

Newry&Mourne Carrickfergus Coleraine

Newtownabbey Limavady

Magherafelt Location Factor applied 1.00 0.95 0.92 0.88 0.85 0.83

5b 3p house New Build

Area A Area B Area C Area D Area E Area F

CfSH level 4

Cost/Unit Cost/Unit Cost/Unit Cost/Unit Cost/Unit Cost/Unit

Grant Rate 2009/10 65.2% 64.2% 62.5% 60.2% 58.3% 56.8%

Norm Grant £93,617 £89,086 £83,549 £76,937 £72,072 £68,741

5.3 October 2011 Seminars

Rural stakeholder group and NI Housing Council sub committee

th 5.3.2 The first group was held on 25 October, 2011 in Cookstown with attendees from various rural

community groups including Rural Community Network. The Northern Ireland Housing Council th

sub committee was given a presentation about the study also on 25 October at Omagh. The

purpose of the Housing Council was to ensure that locally elected representatives retained a

voice in housing policy and strategy formulation.

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5.3.3 A common comment made at both sessions was the delivery of social housing could be

increased potentially by considering part built schemes of which there are many across the

province as a result of the fall in house prices over the last three years.

5.3.4 It was felt that this source may be worth considering however developments are likely to be

more in urban areas and may have procurement and design issues e.g. development planned

to non CfSH standards.

5.3.5 At the Housing Council sub committee it was noted that there was departmental split in terms

of rural responsibility in relation to rural and urban infrastructure between DSD and DARD

which was not helpful in delivering rural regeneration initiatives in terms of a joined up policy

approach, budgets and on the ground delivery e.g. DSD may have social housing budget

available in rural areas but rural infrastructure and highways can often fall under other

Departments’ areas of responsibility.

5.3.6 In terms of approach to mixed tenure housing it was noted that this was not supported in policy

or government strategy and therefore this is reflected in how DSD and NIHE deliver social

housing. Housing developments are delivered as single tenure: either private for sale or co

ownership (shared ownership) or social housing for rent.

5.3.7 The way in which rural housing is delivered in England was discussed – a combination of

shared ownership/social housing on exception sites (akin to the approach taken in PPS21) and

mixed tenure providing shared ownership/discounted sale/social housing/private forms using

S.106 as a way to secure affordable housing. There seemed to be recognition that this offered

flexibility and more freedom for HAs to act more freely and helped to cross subsidise delivery

and help the value for money of providing affordable housing.

5.3.8 It was recognized though that the introduction of mechanisms such as S.106 is likely to meet

private develop opposition although the Reform of the Planning System offered opportunity to

seriously consider this and that the budgetary situation meant that radical approaches such as

this may need to be adopted to continue the recent successful levels of delivery (2010/11 – 302

rural housing starts representing 12% of total programme).

5.3.9 The use of Rural Housing Enablers was discussed and the role they play in England and this

was considered to be a valuable concept and tool to ‘oil the wheels’ of delivery although it was

recognized that funding of posts would be a challenge to achieve.

5.3.10 The advice from workshop delegates was that Living Over the Shop schemes and development

of Village Voice as a wider consultative body were not practical options.

Housing Association annual seminar at Ballymena – 26th October 2011

5.3.11 A key point made by several HAs was the lack of economy of scale in dealing with smaller

schemes particularly in rural areas. It was strongly felt that schemes involving a handful of units

lead more often than not to costs in excess of TCI allowances. Certainly schemes involving a

single dwelling for supported needs were seen as unviable.

5.3.12 Provision of infrastructure was also seen as a common issue increasing the cost of rural

schemes. Design issues including reduced density guidance also affected viability.

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5.3.13 The audience felt that the nature of TCI calculation was obscure and in many instances small

rural schemes were not considered past initial feasibility given high estimated costs above TCI

and consequent lack of viability.

5.3.14 Some form of small scheme rural multiplier was considered highly relevant and necessary to

overcome TCI insensitivity to increase the number of rural schemes.

5.3.15 Overall there was consistency in the limited comments made compared to the more in depth

one to one consultations summarised at 5.1 above.

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6 Rural social housing case studies

6.1.1 A call for evidence letter was sent to all HAs on 4th

August, 2011 and resent shortly after the

October workshops. A copy of the request is included at Appendix 1.

6.1.2 This request was for cost data in relation to completed rural schemes to understand

developing in rural locations brings additional costs which affect viability and restrict delivery.

if

6.1.3 For rural sites the request specifically asked for information about Extra Over or Abnormal

Costs (defined as a rural specific cost which can be directly attributed to developing a rural

site).

6.1.4 For urban sites the request specifically asked for information about Extra Over or Abnormal

costs (defined as an urban specific cost which can be directly attributed to developing an urban

site).

6.1.5 We also requested evidence of urban developments to specifically compare rural schemes with

urban schemes. We also sought commentary on experiences to pinpoint wider barriers and

constraints which may be restricting delivery.

6.2 HA Response

6.2.1 The HA response was limited and does not provide a statistically robust body of evidence to

categorically find that rural social housing is more costly than that provided in urban areas.

6.2.2 The following responses were received.

Apex Housing Ltd

6.2.3 Rurals Phase 8 comprised 4 separate 5 bed 3 person bungalows each of 89.75 sq m,

presumably infill plots at addresses in Killaloo, Strabane, Newtownstewart and Omagh. The

response stated that the settlement sizes were less than 1,000.

6.2.4 The scheme was completed in December 2011 and received housing association grant of

£336,808 equating to £84,202 subsidy per bungalow.

6.2.5 The total development cost (exc. land cost) was £344,500 and land purchase was £87,500 or

an average of £21,875 per plot. The total floor area was 359 sq m giving a total development

cost rate excluding land of £960 per sq m.

6.2.6 Apex maintain that the scheme incurred rural specific abnormal costs of £32,796 comprising

£26,000 for preliminaries/supervision, £3,196 for flood risk assessment and £3,600 for an on

site septic tank. These costs appear bona fide as rural specific abnormal costs and equate to

9.5% of total development cost excluding land purchase.

6.2.7 Strabane Rural Cottages Phase 7 comprised 7 separate bungalows (6Nr x 5P3B bungalows

89.75m2 each, 1Nr x 6P3B wheelchair bungalow 102.60 m2) The response stated that the

settlement sizes were less than 1,000.

6.2.8 The scheme was completed in March 2008 and

£650,815 equating to £92,974 subsidy per bungalow.

received housing association grant of

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6.2.9 The total development cost (exc. Land cost) was £616,106 and land purchase was £129,000 or



6.2.10 Apex maintain that the scheme incurred rural specific abnormal costs of £41,400 comprising

£20,000 for preliminaries/supervision and £21,400 for on site septic tanks. These costs appear

bona fide as rural specific abnormal costs and equate to 6.7% of total development cost

excluding land purchase.

6.2.11 Apex submitted details for an urban scheme at 1 – 6 Fergleen Mews, Fergleen Park,

Galliagh, Derry comprising 4 no. x 5P3B two storey houses and 2 no. 4P3B two storey

houses (2 Nr x 90.96 m2, 2 Nr x 95.00m2, 1 Nr x 106.26 m2, 1 Nr x 98.70 m2)

6.2.12 The response stated that the settlement size was B, that the completion date was October

2011 and the scheme received housing association grant of £499,093 equating to £83,182

subsidy per dwelling.

6.2.13 The total development cost (exc. Land cost) was £411,213 and land purchase was £140, 000

or an average of £23,333 per plot. The total floor area was 577 sq m giving a total development


6.2.14 Apex maintains that the scheme incurred urban specific abnormal costs of £21,693 comprising

£8,338 cable diversion and £13,355 for on site septic tanks. These costs appear bona fide as

urban specific abnormal costs and equate to 5.3% of total development cost excluding land

purchase.

6.2.15 Apex submitted details for an urban scheme at Prospect Way, Lurgan comprising 5 nr x

5P3B two storey houses (2 Nr x 92.00 m2, 3 Nr x 100.00m2)

6.2.16 The response stated that the settlement size was C, that the completion date was May 2011

and the scheme received housing association grant of £423,676 equating to £84,735 subsidy

per dwelling.

6.2.17 The total development cost (exc. Land cost) was £475,000 and land purchase was £100, 000

or an average of £20,000 per plot. The total floor area was 484 sq m giving a total development


6.2.18 Apex maintain that the scheme incurred urban specific abnormal costs of £40,500 comprising

£14,000 for retaining walls due to a sloping site and £13,355 for poor ground conditions. These

costs appear bona fide as urban specific abnormal costs and equate to 8.5% of total

development cost excluding land purchase.

Hearth Housing Association

6.2.19 Although factual evidence was provided, Hearth’s experience of small rural schemes has been

that there are a number of costs that don't arise in urban areas. In particular septic tanks and

service provision can be high costs. If there is no electricity in the area or mains water has to

travel some distance these are obvious additional costs.

6.2.20 Hearth’s schemes are always rehabs, usually listed buildings in poor condition, and there can

be additional costs because of the deterioration of the fabric or unusual design features, but

usually the main costs are the services element (which will be exactly the same for new builds

as for rehabs) and of course the fact that they are small schemes, which are always going to

involve a higher percentage of cost for overheads and preliminary costs. Hearth argues that

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despite the slightly higher costs it is worth doing both rural schemes and small schemes. It is

even better when existing buildings are used, and the planners are very sympathetic to reuse

of redundant buildings, which can greatly reduce the lead-in time for planning permission.

Ulidia Housing Association

6.2.21 Ulidia returned the following information but did not identify any specific abnormal rural or urban

costs in these developments.

Middletown,

County

Armagh

Hilltown,

County

Down

Loughbrickland,

County Down

Devonshire,

Phase 2,

Belfast

Linfield Road,

Belfast (Charter

Youth Club

Settlement

Band

H (less than

1,000)

H (less

than 1,000)

H (less than

1,000)

A (Belfast) A (Belfast)

Completion

date

January 2012 January

2012

October 2011 June 2009 Nov. 2010

No. of units 12 (10no 5p3b,

2no 3p2b)

8 (6no

5p3b, 2no

3p2b)

24 (12no 5p3b,

11no 3p2b, 1no

6p4b)

23 (21no

5p3b, 1no

3p2b, 1no

6p4b)

3 (2no 5p3b, 1no

7p4b)

Total floor area

sq m (GIA)

900 710 2,020 2,265 310

Total

development

cost

£1,052,531 £808,000 £1,867,000 £2,325,000 £368,276

Cost per sq m

exc. land cost

£1,169 £1,138 £924 £1,026 £1,188

Land cost £200,000 £100,000 £435,000 £2,000,000 £70,000

Land cost per

plot

£16,666 £12,500 £18,125 £86,957 £23,333

Public subsidy

from NIHE

£805,638 £594,003 £2,053,089 £3,391,997 £339,228

Public subsidy

per unit

£67,137 £74,250 £85,545 £147,478 £113,076

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6.2.22 There are no major conclusions to be drawn from this data other than TCI and public subsidy

reflects the higher land purchase costs experienced in Belfast compared to rural Band H

locations and that actual development costs are more or less comparable between the rural

and urban schemes put forward.

6.2.23 Ulidia provided the following comments in relation to rural schemes:

• ‘ When building within rural communities, the design team must take greater care to ensure

that the fabric of the buildings is in keeping with the rural setting. The design team will also

be aware of the existing infrastructure ensuring that the scheme design does not lead to

extensive costs for connections to water, storm, NIE etc. ‘

• ‘ With regard to possible issues with Planning Permission, the Association ensures that a

Pre Application Discussion (PAD) is held with the relevant Planning Office as a means of

presenting the initial proposals to the Planning Service and addressing any concerns that

they may have in relation to the development of the site. This allows the Association to

ensure that all issues are resolved and that the scheme submitted is acceptable to the

Planning Service. The Association also ensures that extensive community consultation is

undertaken prior to the submission of a planning application. In this way, any local concerns,

can be discussed and action taken to try and alleviate these.’

• ‘ As the availability of social housing is sometimes very limited or nonexistent in some rural

areas this can very often be reflected in the waiting list for the area i.e. local people may not

select that particular rural area as an area of choice if no social housing exists.

Consequently, this can have a direct impact on support being granted by the NIHE for future

developments within rural areas. ‘

Fold Housing Association

6.2.24 Crossmaglen Phase 4, Rathkeelan Park, Crossmaglen comprised 18 units (6x5P/3B

houses, 8x3P/2B houses and 4x3P/2B apartments). The response stated that the settlement

size was more than 1,250 but less than 2,250.

6.2.25 The scheme was completed in November 2010 and received housing association grant of

£944,644 equating to £52,480 subsidy per unit.

6.2.26 The total development cost (exc. Land cost) was £1,104,000 and land purchase was £240,000

or an average of £13,333 per plot. The total floor area was 1,385 sq m giving a total

development cost rate excluding land of £797 per sq m.

6.2.27 Fold did not identify any specific abnormal rural costs in the scheme.

6.2.28 Alliance Avenue, Belfast comprised 4 x 3person/2bedroom houses. The scheme is forecast

to complete in January 2012 and received housing association grant of £305,910 equating to

£76,478 subsidy per unit.



cost rate excluding land of £1,314 per sq m.

6.2.30 Fold did not identify any specific abnormal urban costs in the scheme although flagged possible

cost issues with an extension of storm sewer which was still to be assessed.

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Ark Housing

6.2.31 Crewhill, Ardglass, Downpatrick comprised 26 units (12no. 5P3B houses; 8no. 3P2B

houses; 2no. 6P4B houses; 4no. 3P2B apartments). The scheme completed in October 2011

and received housing association grant of £2,274,831 equating to £87,494 subsidy per unit.

6.2.32 The total development cost (exc. Land cost) was £1,843,000 and land purchase was

£1,316,176 or an average of £50,622 per plot. The total floor area was 2,125 sq m giving a total

development cost rate excluding land of £867 per sq m.

6.2.33 The high land cost was caused through payment of £585,000 to a ransom strip owner.

6.2.34 The existing infrastructure and existing sewer lines were poor causing problems on site.

Unforeseen poor ground conditions and exceptional heavy rainfall led to flooding on site. There

was continuous back up of effluent in the existing lines and manholes and the existing nearby

pumping station had insufficient capacity to keep the line clears. A total of £90,000 in additional

work was encountered in relation to these problems.

6.2.35 Additional rural planting and ecology mitigation costs of £6,000 were incurred.

6.2.36 This scheme was approximately 2 ½ years in the planning system before start on site. One of

the conditions of planning was to provide a right hand turning lane from the main road into the

village. The associated construction cost in relation to this was estimated at £200,000.

Following requests to Planning Service this condition was eventually removed saving the

association the estimated construction cost and addition land acquisition cost however the

scheme was delayed by about 7 months from receipt of planning approval.

Triangle Housing Association

6.2.37 The following comments were put forward by Triangle.

6.2.38 Triangle recently developed a scheme in Broughshane. The cost of the scheme was well within

TCI although Triangle felt that an initial NIHE proposal to develop the scheme in three phases

delayed implementation and would have been economically unviable’

6.2.39 In 2011/12 the HA is working on a number of schemes in rural areas. The costs of these

schemes are ranging from 112% to 131% of TCI. The main issue is site suitability. There is a

preference to support schemes on NIHE land, but often the sites within certain rural areas are

very challenging and have significant abnormal costs. There is a preference to support

schemes on publicly owned land but some sites within certain rural areas can be challenging

and have significant abnormal costs. In some cases, Triangle feel that alternative sites or off

the shelf purchases may be more cost effective than the available NIHE site.

6.2.40 There is a perception that where costs are in excess of TCI, this is due to over specification on

the part of the housing association, rather than real cost pressures. The main restriction

encountered is the lack of sewage infrastructure in some rural areas. Triangle have found it

very difficult to make smaller schemes work within TCI whilst meeting the requirements of the

Code for Sustainable Homes

6.2.41 It is becoming increasingly difficult to make schemes work within current TCI levels. Recent

tender returns suggest that it may be still possible to obtain a competitive price for larger

schemes (above 20 units), but returns for smaller unit schemes have been, in some cases,

significantly above TCI rates.

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6.2.42 From experience, about 60% of the rural opportunities Triangle has investigated in the last 3

years have resulted in deliverable schemes.

6.2.43 It is proportionately more costly to procure a smaller scale scheme, as the requirements are still

the same. Triangle has tried to mitigate against this by procuring the entire programme

collectively through our procurement group. Triangle has considered options to cluster smaller

schemes to seek economies of scale, however, this has not been possible due to the location

of schemes.

6.2.44 Triangle highlighted that financial viability can be affected where the need is for small schemes

or where phased schemes are suggested. It would help if larger schemes could be supported.

It could also help if DSD would review its policy on provision of bungalows in rural areas.

Oaklee Housing Association

6.2.45 Meigh Phase 3, Gullion View, Meigh

houses and 3x3P/2B houses).

was a rural scheme comprising 10 units (7x5P/3B

6.2.46 The scheme was completed in November 2011 and received housing association grant of





6.2.48 Oaklee did not identify any specific abnormal rural costs in the scheme.

6.2.49 Stanhope Street Phase 1, Belfast


was an urban scheme comprising 11 units (9x5P/3B

6.2.50 The scheme was completed in August 2009


and received housing association grant of




6.2.52 Oaklee did not identify any specific abnormal urban costs in the scheme.

6.2.53 Upper Library Street/Carrickhill, Belfast was an urban scheme comprising 11 units (9x5P/3B


6.2.54 The scheme was completed in July 2010 and received housing association grant of £811,995

equating to £73,812 subsidy per unit.




6.2.56 Oaklee did not identify any specific abnormal urban costs in the scheme.

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6.3 NIHE data review

Data from 2010/2011

6.3.2 The following information was provided by NIHE in relation to new build schemes in 2010-11:

TCI BANDING Non-Rural Rural Total

70% - 80% 4 1 5

80% - 90% 12 1 13

90% - 100% 31 9 40

100% - 105% 9 2 11

105% - 110% 3 5 8

110% - 120% 6 0 6

120% - 130% 3 2 5

130% - 140% 1 2 3

140% - 150% 0 0 0

150% - 160% 1 0 1

Total 70 22 92

Average TCI 99.75% 104.17% 100.80%

No of units 1570 253 1823

6.3.3 From this data - 50% (11 of the 22) of the new build rural schemes last year exceeded TCI

allowances compared to 33% of urban schemes (23 of 70) indicating a tendency for rural

schemes to exceed TCI allowances than urban schemes.

6.3.4 NIHE maintains however that of the four schemes that sit between 120 – 140% the main

reason that these schemes exceeded TCI were due to high land values. Only in one of these

cases could NIHE attribute high costs to construction issues.

Data from 2008/2010

6.3.5 Between April 2009 and March 2010 there were 17 rural schemes started totaling 185 units. Of

these only two schemes exceeded TCI allowances – at Crumlin and Carnlough representing

just 9% of total programme.

6.3.6 Between April 2008 and March 2009 there were 18 rural schemes started totaling 93 units. Of

these only five schemes exceeded TCI allowances representing 20% of total programme.

6.3.7 In the evidence provided by NIHE there was no obvious tendency for rural schemes to exceed

TCI allowances. This is contrary to the opinions voiced at the HA annual seminar.

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6.4 Conclusions

6.4.1 The limited information received from Housing Associations does not provide a statistically

robust body of evidence to demonstrate that rural costs are inflated due to location compared

to similar sized urban schemes and require more financial support than that delivered under the

existing TCI system.

6.4.2 Land value can often skew costs in both urban and rural locations. Establishing modest

benchmark rates particularly for PPS 21 locations could help to reduce rural costs and improve

viability.

6.4.3 Rural schemes often involve hidden, non-quantified costs in staff time in progressing schemes

to gain local support and approvals. Provision of infrastructure and services appears to be a

consistent issue in raising rural development costs.

6.4.4 The research confirms that residential development in rural locations in settlements typically of

less than 3,000 populations does not necessarily result in higher costs compared to building in

a more urban environment. In addition we have found no evidence to suggest that costs in

smaller rural settlements (less than 1,000 population) are any different than slightly larger rural

settlements (up to 4,500 population).

6.4.5 No site, whether it be in a rural or urban location is the same and each will therefore have

different development issues and constraints to deal with, resulting in differing development

costs.

6.4.6 Urban schemes like small rural schemes will often have abnormal costs associated with their

implementation which will add to total scheme cost.

6.4.7 The TCI system appears to work reasonably well given the data analysed at section 5.3 above.

Based on the HA annual seminar and interview with Triangle it may be the case that many rural

schemes do not come forward because HA’s fear that current TCI allowances will not lead to

funding approvals.

6.4.8 The TCI system is perhaps not as sensitive as it could be to rural costs and issues and it

seems appropriate that the TCI system is reviewed and monitored to ensure that Housing

Associations are supported to maintain a pipeline of rural schemes subject to availability of

funding.

6.4.9 The rural programme just like the urban programme will need to consider ways to improve

viability and value for money given the reduced future social housing budgets. Chapter 7

Conclusions and Recommendations provides a series of suggestions to achieve this.

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7

NIHE


UK good practice update

7.1 Survey of rural partnerships

7.1.1 Clear themes emerged from our 2010 research for the HCA, notably that it takes time to build

local awareness and support for rural affordable housing and that economies of scale can start

to be achieved once the first few developments have been completed. Our report highlighted

innovative approaches to partnership working and procurement which delivered those

achievements.

7.1.2 Rural partnerships consulted for the HCA have provided an update on how they have

responded to changes in the economy, housing markets, public investment in affordable

housing and housing and planning policy during the past two years.

7.1.3 References to resources and website links can be found in Appendix 2. The list of

organisations and questionnaire they completed are at Appendix 3.

7.1.4 Rural affordable housing remains a priority for them all and they have used their experience of

working together to secure political support and to proactively investigate alternative

approaches to funding development and their own strategic activities to enable development.

7.1.5 Planning policies giving priority to rural affordable housing are or will be retained and in some

cases are being enhanced or adapted to take advantage of new opportunities.

7.1.6 One authority proposes to move away from a 2 tier threshold (number of homes & site size) for

the s106 affordable housing contribution to a sliding scale requirement for a percentage of

affordable homes on the site. Another local authority is, for the first time, allocating exception

sites for affordable housing through its LDF process. In response to the draft NPPF a number

of authorities are assessing or piloting approaches to deliver affordable housing without grant

by permitting housing for sale to local people at below market value on exception sites (which

would previously have been available only for affordable housing). This is seen as incentivising

landowners to bring sites forward. This type of discounted sale is seen by some as preferable

to a mix of open market and affordable housing which could 'open the floodgates' to developers

and result in inflation of land values.

7.1.7 Investment is also being made in training councillors in rural housing issues and in new

systems to help planning officers to better tackle affordable housing contribution negotiations

with developers. Consideration is also being given to encouraging development of house types

that enable downsizing.

7.1.8 Most, but not all partnerships have succeeded in maintaining or increasing the number of

homes delivered since 2009, due to long term investment and commitment by the partners and

the work done by rural housing enablers in building up a pipeline of schemes. Fewer s106 sites

have come forward due to market conditions but a pipeline of schemes on exception sites is

building up again after a lull while the outcome of the HCA, recent bidding round was awaited.

7.1.9 Land values and the cost of construction appear to have generally been suppressed by the

recession although it was reported that in North Yorkshire, the increased requirements of

Building Regulations and the Code for Sustainable Homes in locations without mains gas have

meant building costs continued to rise.

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7.1.10 Partnerships reported that where expectations of land value are unrealistic, less land is brought

forward for development. The HARAH approach appears to have been successful in controlling

the cost of land on exception sites. HARAH established a partnership-wide policy of paying

£8,000 to £10,000 per plot on exception sites. By applying this policy consistently over a period

of time, local landowners have come to expect this and are prepared to accept that this is the

'going rate', although values now tend to be at the upper end of the range, especially for shared

ownership homes. As indicated above, the NPPF may put this policy at risk by enabling the

development of market housing on exception sites. It is hoped that local planning policies

limiting market housing to what is required to subsidise the provision of affordable will mitigate

that risk and enable the price per plot policy to be maintained.

7.1.11 The HARAH experience demonstrates the value of taking a long-term strategic approach to

rural delivery, finding that sharing resources has increased capacity not only to deliver homes

but to improve their ability to respond to change and maintain delivery for the future.

7.1.12 During 2008-11, 19 HARAH projects were completed (144 homes) with a further 9 schemes on

site (95 homes) in October 2011. HCA funding has been allocated for 91 homes to be built

between 2011 and 2015. By working with a single housing association partner, Hyde Housing,

HARAH secures a range of benefits including expertise in planning requirements and

economies and efficiencies gained by engaging a single local building contractor and a range

of local architects. The long term nature of the relationship enables Hyde to contribute to the

cost of employing an RHE and to work on small sites which in their experience tend to be more

costly. Despite this purported higher cost, the commitment of the partners has enabled

schemes of 4 homes to be successfully delivered and two schemes in the New Forest of five

and six homes are in the current programme.

7.1.13 Expectations for delivery to 2015 vary across the partnerships according to the stage reached

by local authorities in developing their planning policies. Where policies are well developed,

delivery is expected to increase, for example, as long term work with parishes starts to come to

fruition and the Core Strategy allocates a specific number of homes to be delivered in rural

areas. Exception sites have carried some partnerships through the downturn in the market.

There is concern about reduced funding and fewer partners beyond 2013.

7.1.14 In terms of alternative funding models, a mix of affordable and local needs market housing (to

cross-subsidise the affordable element) appears to be the most popular model.

7.1.15 Actions proposed to maintain or increase delivery include:

• continued commitment to partnership while seeking alternative ways of funding their work

and RHE roles

• support for rural policy content of Core Strategy, policies that capture affordable housing

contributions to be used to deliver local needs housing and allocation of exception sites

• use of local authority land and/or funding

• recognition of rural affordable housing as a priority in Local Investment Plans developed

with the HCA as a means of attracting grant

• strengthening evidence of housing needs

• reviewing and improving internal processes

• maximising enabler resources to continue to increase awareness of rural affordable housing

issues with local landowners via dialogue with organisations (e.g. Country Landowners

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Association, National Farmers Union and the Tenant Farmers Association), meeting with

parish councils, member training and lobbying campaigns.

7.1.16 Actions to control costs (in addition to the planning measures referred to above) include:

• Re-tendering for preferred development partner, securing specialist and professional

resources at lower cost due to economies of scale across a number of sites

• Topping up HCA funding to deliver social rather than affordable rent

• Maintaining maximum price per plot policies

• Using a tender first (rather than a negotiated approach) to building contracts.

7.2 Innovative approaches to planning and delivery

7.2.1 Activity to encourage rural affordable housing has not been limited to the partnerships

surveyed. Organisations and partnerships elsewhere in England have taken action during the

past two years to encourage provision while controlling costs.

7.2.2 As part of a strategy to increase the supply of affordable rural housing within Leicestershire and

Rutland and to equip local councillors for their new powers and responsibilities under the

Localism Act, Councillor awareness training for affordable rural housing was arranged in 2011

for county, district and parish councillors. Over 170 councillors took part, hearing about the

importance of affordable homes in rural communities and how new schemes are initiated and

carried through, as well as having the opportunity to discuss the process in more detail with

experts on hand.

7.2.3 The HCA launched an e-learning course and toolkit in July 2011 aimed at those interested in or

specialising in rural housing provision (including affordable housing). The interactive toolkit

the Village Affordable Housing Handbook - is designed to help planners and communities

better understand the impacts of the provision of new affordable housing in small rural

settlements. It is provided to help people make a case for, and demonstrate the positive

impacts of, affordable housing. The Handbook incorporates a sustainability tool which can be

used to assess the sustainability of rural communities and the contribution that new affordable

housing can make to enhance their future sustainability.

7.2.4 As a response to the reduced availability of sites during the economic downturn, South Hams

District Council in Devon has introduced a Village Housing Initiative which puts into practice the

notion of incentivising landowners to bring land forward by permitting mixed tenure

development (including up to two open market homes) on what would have been rural

exception sites, providing a form of cross subsidy to enable the homes to be built.

7.2.5 Kent Housing Group worked with public and private stakeholders to produce a Rural Housing

Protocol designed to help to increase the delivery of affordable housing in rural areas and

enable rural communities and businesses in Kent to thrive and prosper. The Protocol:

• aims to make the development process easier by encouraging a consistent, pragmatic

approach to affordable, rural, local needs housing development across the County

• is intended for use by housing, planning and highways officers, Registered Providers, Parish

Councils, landowners and local communities

• sets out the process of delivering affordable local needs housing, potential obstacles and

ways in which these can be overcome

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• contains a helpful list of practical “things to consider” for all the major partners involved in

the delivery process and a sample housing needs survey.

7.3 Community-led development

7.3.1 The HCA has allocated approximately 9% of its grant funding to schemes in settlements with

populations of below 3,000, giving priority to those with community and local authority support

and potential for community sustainability.

7.3.2 The Lyvennet Community Trust (LCT) is one of a number of schemes supporting pilot initiatives

of community-led planning or Community Land Trusts. The Lyvennet scheme attracted

£600,000 investment from the HCA and £1m of funding from Charity Bank, enabling a

community-driven affordable housing project to go ahead on a disused quarry in Cumbria.

7.3.3 The scheme will include 10 homes for social rent, two for shared ownership and eight

properties for self builders, in response to interest from local people to have a hand in the

design and construction of their own homes.

7.3.4 Similarly, the HCA provided grant funding for the housing element of High Bickington

Community Property Trust Ltd's community-led development in High Bickington in Devon which

will also provide a range of community facilities for the community.

7.4 Procurement

Sovereign Development Consortium (SDC)

7.4.2 The SDC, which was featured in our work for the HCA, continues to demonstrate its ability,

through collaboration, to cut procurement costs, achieve efficiencies and bid more effectively

for funding. An alliance of eight housing providers based around the South and South West of

England with a broad range of skills and strengths, SDC secured HCA funding in November

2011 to deliver nearly 1,900 new affordable homes across the South and South-West of

England over the next four years. While many SDC schemes are in urban locations, the

Consortium includes providers delivering rural schemes which benefit from SDC's buying

power.

Aster Homes

7.4.3 More recently, in October 2011, the Aster Group of housing associations has taken a similar

approach, creating a development company, Aster Homes, responsible for building new

affordable housing and homes for open market sale across central South and South West

England. Aster Homes is looking to achieve economies of scale by providing design and build

services including large-scale regeneration, land purchase and acting as a development

agency to businesses within Aster Group and other housing associations.

7.5 Recyclable/ revolving funds

7.5.1 Evidence is mixed on the viability and value of recyclable funds.

7.5.2 The Brownfield Land Assembly Company (BLAC) which was working in South East England

has not proved to be a sustainable model due to lack of borrowing capacity. The Company, set

up by the South East England Regional Development Agency, acquired and remediated

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NIHE


pockets of land which were not attractive to private developers due to factors such as land

contamination. Operating on a similar principle to the Highland Council's Land Bank Fund,

remediated sites were sold for affordable housing with the intention that the uplift in value

would enable profits to be returned to BLAC for reinvestment in further sites. Unfortunately

returns were not sufficient for the model to remain viable in the housing market downturn.

7.5.3 Other models devised to forward-fund development (such as the Milton Keynes Tariff/'Roof

Tax', South West England Regional Infrastructure Fund, Community Infrastructure Levy (CIL))

suggest that there may be a role for a recyclable funding model that functions on a not-for profit

basis, acquiring, remediating and selling public sector land, recovering forward-funding from

developers and using that funding to fund the next project.

7.5.4 For the expansion areas of Milton Keynes, a tariff regime operates where developers have

agreed to a standard contribution of £18,500 per residential dwelling and £260,000 per hectare

of commercial land.

7.6 Lessons from Wales

7.6.1 Affordable housing in Wales is funded in a similar way to Northern Ireland. The UK

Government has allocated monies for housing which Welsh Assembly Ministers allocate

according to their own policies. Social housing grant is paid at 58% of costs based on Actual

Cost Guidance which is comparable to TCI. Allocation of grant to individual schemes is decided

strategically by the local authorities according to need. Rural affordable housing is not regarded

as a separate priority due to the generally more rural nature of settlements in Wales.

7.6.2 In Gwynedd recent reductions in grant level and infrastructure contributions required by local

authorities through s106 have led to rural development being severely curtailed. Previously the

majority of development was for social rent but it is now considered that mixed tenure will be

necessary in order to cross-subsidise social rented homes. The RHE is working to address

planning restrictions which deter lenders and to encourage local authorities to review their s106

requirements for housing association developments.

7.6.3 Gwynedd has seen a marked increase in rural affordable housing delivery due to the

establishment of partnership working by local agencies and the RHE, leading to a common

goal for local authorities, housing associations and communities. Community opposition has

reduced where the community has been involved in the process. The eleven RHEs in Wales

have formed a network which has helped to sustain delivery by helping new RHE’s to gain

better insight into working with communities, through being invited into dialogue with housing

and rural housing forums, and making the case for rural housing to the Minister, local

authorities and other stakeholders. The network acts as a means of developing good practice:

it is currently contemplating how to support Cooperatives /Mutuals and how local development

partners requiring housing need information for new developments can be supported in areas

where RHEs may no longer be employed.

7.6.4 In terms of procurement, Government policy requiring RSL’s to form consortia to procure

services, has not proved positive for rural affordable housing development. Schemes in

Gwynedd are currently likely to come forward if a developer is offering a scheme to a HA – in

order to minimise risk. This approach tends to involve a package deal with local developers and

builders where the communities benefit from local employment as well as new homes.

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7.6.5 As alternatives to the high costs of connecting to mains services, schemes in Gwynedd have

applied solutions including air source heat pumps, photo-voltaics, rain water collection and LPG

gas.

7.7 Application of findings to Northern Ireland context (with particular reference to issues raised at workshops)

Viability of small sites

th 7.7.2 It was suggested at the Housing Association workshop on 26 October at Ballymena that the

competitive bidding environment works only at the 30-40 unit scheme level and that delivery of

social housing requires a minimum of £50k social housing grant. Further discussion suggested

that site size could be a more significant factor than the rural location in influencing

development decisions. The HARAH experience shows that it is possible for smaller schemes

to be developed as part of a larger package of schemes, enabling development partners to

absorb the higher costs. This experience may be transferable to the procurement group

structure. For example, applying TCI flexibly across a number of schemes would enable a

procurement group to bid for grant as a package with cross-subsidy across individual schemes

within the package.

Community awareness and capacity

7.7.3 The HCA e-learning course and toolkit have partial relevance relevant for Northern Ireland and

share many common principles and characteristics. The tools could be adopted/ adapted by

NIHE as a means of raising awareness and as a foundation for more tailored local training or

the introduction of Rural Housing Enablers.

7.7.4 As responsibility for planning and other centralised functions become devolved to local councils

and communities the imperative becomes greater for local councillors, stakeholders and

residents to be aware of the benefits of rural affordable housing and how they can influence its

provision. Tools for achieving this include arranging interactive training sessions such as those

held in Leicestershire and study visits touring completed schemes.

Creating a pipeline of schemes and managing land values

7.7.5 The value of RHEs in enabling rural affordable housing to come forward in England and Wales,

and the financial benefits of having a continuous rural development programme have been well

documented.

7.7.6 While employing an RHE may not be cost effective for relatively small housing associations in

Northern Ireland, often operating across a broad geographical area, this may be an option for a

procurement group. For a core development team serving a number of partner associations

along the lines of Sovereign Development Consortium and Aster Homes - it may be cost

effective to employ an RHE to build up a rural programme.

7.7.7 The survey responses from partnerships in England indicate that there is an issue in some

areas of land being withheld from the market in anticipation of higher future prices. Strong

policies regarding the maximum price housing associations are prepared to pay, especially on

sites where PPS21 Policy CTY5 would apply, could be effective in managing landowner

expectations when applied across a procurement group. Reinforcement of the message on the

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ground by RHEs could increase the impact of the policy and speed up its acceptance by

landowners.

Mixed tenure and cross-subsidy

7.7.8 It was clear from the workshops that shared ownership offers benefits in terms of cross-subsidy

and community sustainability and is perceived as positive in offering more choice for younger

rural households. Concerns expressed that mixed tenure could lower private values in the

locality were outweighed by the potential benefits of levying a s106-style contribution to

regenerate adjoining estates.

7.7.9 However, it is clear that the time is not right for its introduction into a depressed market with

restricted mortgage lending. It would be disproportionate to expect housing associations (as

relatively small organisations) to develop new systems and recruit additional specialist staff in

order to add shared ownership to their role.

7.7.10 A viable alternative may be to continue the development of co-ownership as a means of cross-

subsidy and stimulus to the construction industry. Co-ownership could be promoted when

undertaking rural need surveys, with questions included in the survey about respondents'

financial situation and their interest in the scheme. This would provide an indication of the

demand for co-ownership in specific locations. Some co-ownership funding could be ring-

fenced for rural applicants, enabling them to access funds at the right time. HAs would be able

to recover the cost of providing homes purchased by co-owners more rapidly, reducing their

overheads and borrowing costs. There would be a risk to HAs in that the co-ownership

purchases could not be guaranteed in advance. A 'cascade' system written into the

development process could permit homes to be sold on the open market (possibly with some

sort of discount) or let at market rents if not sold to co-owners within an agreed period of time.

7.7.11 On sites where PPS21 Policy CTY5 would apply, consideration would need to be given as to

whether this approach would meet the criteria of providing social and affordable housing to

meet the needs of the rural community.

Cost of infrastructure

7.7.12 The disproportionate cost and availability of funding to connect a rural development to local

services was a clear concern to providers and stakeholders.

7.7.13 It can be argued that the provision of rural affordable housing is a form of infrastructure and as

such should not be required to meet the full cost required by infrastructure providers. A

possible approach would be for planning permissions to make provision for affordable housing

providers to recover some of their investment in new infrastructure from subsequent developers

connecting into and benefitting from the same systems if this transpires..

7.7.14 Planning gain alone will not address the question of forward-funding of mixed tenure

development as a partial or full replacement for affordable housing grant. A recyclable land

purchase or infrastructure fund similar to those outlined above may provide forward-funding

that would improve the viability of some developments.

A more holistic approach to meeting housing need

7.7.15 There is scope to take a more holistic approach to housing need by making more effective use

of the existing housing stock and encouraging downsizing. Providing suitable, smaller homes

which are less costly to build would help affordable housing grant to go further. The size of new

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social homes is determined by the profile of households in housing stress as measured by the

Housing Register without taking into consideration under-occcupation and transfer needs of

current social tenants. This would open up important opportunities for increasing numbers of

older, under-occupying tenants who may have difficulty managing their current homes and

could have additional cost-saving benefits in terms of wellbeing and prevention of poor health.

7.7.16 Such an approach could lead to an increase in void turnover in the existing social stock, with

implications for repair budgets and rent income. A strategic view would have to be taken of the

overall cost benefits of reducing the numbers of households in housing stress.

Capitalising on opportunities

7.7.17 One workshop discussed the possibility of stalled, partially completed, private sites being

acquired by HAs to provide rural affordable housing. It was concluded that this was unlikely to

be an option as such sites are more likely to be located in urban areas and that the private

homes would likely fall short of affordable housing standards, particularly relating to the Code

for Sustainable Homes. However, where sites are in areas of housing demand, HAs could

consider acquiring them for market or sub-market rental, using the revenue to subsidise

affordable housing development.

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Conclusions and Recommendations

Conclusions

8.1.1 No clear-cut quantitative evidence was presented to indicate that the cost of affordable housing

development is necessarily higher in rural areas compared to building in a more urban

environment.

8.1.2 It is clear that rural schemes often involve hidden, non-quantified costs in staff time in

identifying and progressing schemes to gain local support and approvals. Provision of

infrastructure and services appear to be consistent issues in raising rural development costs.

8.1.3 It is clear that schemes in urban areas can also have abnormal site specific costs. Taking

account of this, on balance, the research shows that residential schemes in rural locations do

not necessarily result in higher costs compared to building in urban areas.

8.1.4 The research indicates that size of scheme has a more significant impact on cost than the rural

location.

8.1.5 The TCI system appears to work reasonably well but is perhaps not as sensitive as it could be

to rural costs and more particularly, scheme size issues. It may be the case that many rural

schemes do not come forward because of HA concerns that current TCI allowances will not

lead to funding approvals.

8.1.6 The introduction of procurement groups offers housing associations opportunities for innovation

that they could not consider as individual organisations.

8.1.7 A range of issues and good practice were identified during the research which could benefit the

delivery of rural affordable housing and more generally relieve housing stress in Northern

Ireland.

Recommendations

Number 1

8.1.8 That the TCI system is reviewed and monitored to ensure that Housing Associations are

supported to maintain a pipeline of rural schemes, subject to availability of funding. Particular

consideration should be given to scheme size within TCI. It is also recommended that ongoing

monitoring should include a ’rural’ category in databases in order to facilitate rural-urban

analysis of information gathered.

Number 2

8.1.9 Further research is recommended into barriers and the process that Housing Associations go

through in developing emerging small rural schemes which prevent some rural sites being

taken forward for development and the feasibility of cross-subsidising small rural schemes

through wider development programmes also including larger schemes particularly in urban

areas.

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Number 3

8.1.10 That NIHE makes the Northern Ireland Executive (perhaps through input to the development or

review of the Rural White Paper Action Plan and DARD Rural Development Strategy) aware of

the issues raised during the research regarding the scope for greater integration and

consistency of existing policies and new policy development across different Government

departments relating to rural infrastructure funding and provision.

Number 4

8.1.11 That Housing Associations working together in procurement groups consider using the greater

critical mass and potential economies of scale to increase their impact, skills, capacity and cost

effectiveness by:

• piloting a Rural Housing Enabler role across a procurement group to raise community awareness and acceptance

• working with NIHE, DSD and local authorities to introduce shared policies that can encourage land to be brought forward for development while managing land values

• taking short-term opportunities such as acquiring stalled, partially completed, private rural sites for market or sub-market rental, using the revenue to subsidise affordable housing development.

Number 5

8.1.12 At an appropriate time NIHE are recommended to take a lead in raising awareness among

local councilors and initiating training sessions on rural social and affordable housing issues in

preparation for the transfer of planning powers and related public administration responsibilities

to local councils.

Number 6

8.1.13 NIHE and DSD are recommended to consider actions to move towards a more mixed tenure

approach to housing provision such as increased promotion of co-ownership and piloting a

combined social rented/co-ownership development.

Number 7

8.1.14 NIHE and DSD are recommended to consider the pros and cons of developing and using in the

medium to longer terms mechanisms which will provide private sector funding such as S.106

planning obligations or Community Infrastructure Levy to provide a source of funding to support

the provision of social and co-ownership housing.

Number 8

8.1.15 To make effective use of the existing housing stock and of development funding for affordable

housing it is recommended that a more comprehensive approach to assessing housing need is

developed that takes into account the combined needs of applicants in housing stress and

existing social tenants and this approach is used to inform the mix and location of schemes

included in the SHDP.

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Appendix 1 – Call for evidence letter

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Mr Gerry Kelly Our Ref: NIHE Rural call for evidence Chief Executive Apex Housing Association 10, Butchers Street

Your Ref: Derry Northern Ireland th

Date: 4 August, 2011 BT48 6HL

Dear Mr Kelly

Research into the cost of building and delivering new social housing in rural areas

Introduction

I am writing to you on behalf of our client NIHE and with the support of the NIfHA as part of the above study. The aim of the work is to compile a body of evidence of completed housing schemes to understand if developing in rural locations brings additional costs which affect viability and restrict delivery. We also wish to obtain some evidence of urban developments to specifically compare rural schemes with urban schemes. We also want to capture the experiences of those involved in delivery and specifically those of Housing Associations in delivering rural schemes. The purpose is to pinpoint wider barriers and constraints which may be restricting delivery.

In 2009 we undertook a research study on behalf of the Homes and Communities Agency in England which had three broad strands:

• To elicit if there are rural specific costs; if these costs are higher; and whether the costs affect viability.

• To examine other challenges and issues which impact on the delivery of rural specific social housing (including those which do not relate directly to development costs).

• To identify ways and best practice to address viability and maximise social housing provision

The overall conclusion was that residential development in settlements of under 3,000 did not necessarily result in higher costs compared to construction in more urban areas. The research did however identify a number of possible cost implications for rural schemes vis-à-vis urban developments; it highlighted that where several of these occur they can incur additional costs due to rural location.

Resulting from our previous work, Housing Associations, Local Authority Planners and housing departments responded positively and told us and HCA that the study had been of benefit by identifying typical barriers to delivery (relating to viability and the development process) and highlighting options for intervention to overcome them. The study report can be found at the following web address http://www.ruralaffordablehousing.org.uk/further-information/rural-viability-tool-kit.html.

The focus of the study in Northern Ireland is to secure and analyse cost evidence, explore and debate other challenges and issues to identify best practice in order to increase the delivery of social housing. We hope that you will be willing to participate as doing so may help to increase supply through improved viability and better meet needs in rural locations.

URS Scott Wilson Ltd Brunel House 54 Princess Street, Manchester M1 6HS, United Kingdom Tel: +44 (0) 161 907 3500 Fax: +44 (0) 161 907 3501 www.urs-scottwilson.com

URS Scott Wilson Ltd Registered in England: No 880328 Registered Office: Scott House, Alençon Link, Basingstoke, Hampshire, RG21 7PP, United Kingdom

http://www.ruralaffordablehousing.org.uk/further-information/rural-viability-tool-kit.html

Page: 2 of 8

What information are we requesting?

1. Cost data

We want to be able to assess overall development costs for typical rural schemes and also urban schemes and to ascertain what rural specific additional costs are encountered.

The definition of a rural English research considered settlements of less than 3,000. The rural definition in Northern Ireland includes settlements of under 4,500, banded into settlements of <1,000, 1,000-2,250 and 2,250-4,500. We wish to hear about rural schemes which you have delivered in settlements less than 4,500 and also schemes located in the more populated urban parts of the province. Attached is a one page summary of rural settlements to classify developments accordingly.

We would like to receive from you information on between 3 to 5 rural schemes (more if you are able) and 2 typical small (less than 20 units) urban schemes as a benchmark. We have developed the attached pro formas to assist in the process. We would ask that representative case studies are chosen to reflect your typical experiences. Schemes should have been started within the last 3 years.

If you have not found any noticeable difference between the costs associated with rural vs urban schemes, we would like to know this too.

Please do not include ‘off the shelf’ or ‘extra- statutory’ purchases and also indicate where NIHE land transfers took place.

If you have not delivered rural schemes then please complete the commentary sections of the pro forma as best you can.

If you are also able to provide a photograph of the completed development this would be appreciated.

2. Other issues relevant to delivery of rural social housing.

We would like you to also comment on any other issues which in your view make it more difficult to deliver rural schemes. This could range from availability of land, the planning process, management issues of completed units, funding, viability etc. There may be other indirect costs which are relevant such as higher staff and overheads.

3. Good practice in delivering rural housing

Where you have come up against cost and/or other issues inhibiting delivery and developed a response to overcome issues faced we would be grateful to hear how you have achieved this. This may have been through partnership working or modern methods of construction for example.

Please also indicate measures or areas which you feel need to be employed or developed to facilitate more efficient and increased delivery of rural affordable housing.

October Workshops

As part of our research we intend to hold 2 workshops in October 2011 in Belfast and Cookstown to which we will be inviting stakeholders in the delivery of rural social housing. Here we will present on our findings and engage in debate about the study with an emphasis on developing ways to overcome challenges which may be present. We would really appreciate your participation at either location as it is essential to hear the views of key organisations such as yours. If you are willing to participate at either location then please confirm and we will send further details in due course.

Please feel free to expand the tables and pro forma as necessary and return your templates for rural and th

urban schemes either electronically or in the post to me in Manchester by 9 September. If you have any queries please contact the undersigned.


Page: 3 of 8

Yours faithfully Yours faithfully for URS Scott Wilson Ltd for NIHE

Mark Phillips Michael Conway Principal Regeneration Surveyor Rural Housing Coordinator URS Scott Wilson NIHE Direct Line: +44 (0)161 237 6020 D.D.I 028 90318559 [email protected] [email protected]

Yours faithfully for Northern Ireland Federation Of Housing Associations

Chief Executive

NIFHA – Working Together for Better Housing


Page: 4 of 8

NIHE - Research into the cost of building new social housing in rural areas.

Call for Evidence - August 2011

Rural location template

1. General Details

Housing Association Name:

Scheme Name:

Scheme Location:

How much housing association grant was received?:

Settlement size (population): less than 1,000 OR 1,000 – 2,250 OR 2250 -4,500 (delete asnecessary)

Start date of construction:

Completion date:

No. of units (including size mix):

Site area (ha. net developable):

Total floor area (sq. m. gross internal):

2a. Extra Over or Abnormal Costs (defined as a rural specific cost which can be directly attributed to developing a rural site):

Pre-Development Costs e.g. feasibility, planning delays, security Item: £

Design Costs: e.g. specific design/materials related planning requirementsItem £

Fees and other costs: e.g. to achieve planning consent, staff time, holding costsItem £

Infrastructure and utility costs: e.g. access, drainage, electricity, drainage provisionItem £

Contractor Costs: e.g. increased preliminaries, overheads, travel, economies of scaleItem £


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Sustainability and Code for Sustainable Homes Costs: e.g. surface water attenuation, ecology issues, achieving renewable energy credits Item £

TOTAL ADDITIONAL COSTS £ £ £ m2 GIA /Unit

2b. Overall cost data (to be used to derive extra over rural cost)

TOTAL CONTRACT SUM exc. £ £ /Unit £ m2 GIA land

Land cost £

2c. Please confirm the total no. of units held by your Association

2d. Please confirm the estimated management cost per unit for the scheme put forward and the association's average management cost per unit?

2e. General comments concerning cost of building in rural areas

3. Other issues relevant to delivery of rural social housing. Please record any other issues which in your view make it more difficult to deliver rural schemes.


Page: 6 of 8

4. Good practice in delivering rural housing Please share specific examples which you have developed to respond and overcome the issues faced.

4b. Areas to be addressed Indicate measures or areas which you feel need to be employed or developed to facilitate more efficient and increased delivery of rural affordable housing

5. Are there any other comments that you would like to make that are not covered above?


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NIHE - Research into the cost of building new social housing in rural areas.

August 2011 – Call for Evidence

Urban location template

1. General Details

Housing Association Name:

Scheme Name:

Scheme Location:

How much housing association grant was received?:

Settlement size (population):

Start date of construction:

Completion date:

No. of units (including size mix):

Site area (ha. net developable):

Total floor area (sq. m. gross internal):

2. Extra Over or Abnormal costs (defined as an urban specific cost which can be directly attributed to developing an urban site). Please provide a brief description and value of abnormal costs which in your view made the development more expensive than you would usually expect based on experience. It is expected that it will be more difficult to pinpoint where abnormal development costs occur in an urban location, however for sake of comparison with rural sites the same headings are set out below.

Pre-Development Costs e.g. feasibility, planning delays, security Item: £

Design Costs: e.g. specific design/materials related planning requirementsItem £

Fees and other costs: e.g. to achieve planning consent, staff time, holding costsItem £

Infrastructure and utility costs: e.g. access, drainage, electricity, drainage provision


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Item £

Contractor Costs: e.g. increased preliminaries, overheads, travel, economies of scaleItem £

Sustainability and Code for Sustainable Homes Costs: e.g. surface water attenuation, ecology issues, achieving renewable energy credits Item £

TOTAL ADDITIONAL COSTS £ £ £ m2 GIA /Unit

3. Overall cost data

TOTAL CONTRACT SUM exc. £ £ /Unit £ m2 GIA land

Land cost £

4. Please list any other issues which contributed to delay or cost escalation/overrun


NIHE


10 Appendix 2 – Resources and website links derived from Chapter 6 English Good Practice Update

New Forest National Park Supplementary Planning Guidance - Residential design guide for rural areas: http://www.newforest.gov.uk/index.cfm?articleid=2221

HARAH Design Guide: http://www.harah.org.uk/pdf/harah-rural-building.pdf

HARAH Masterplanning project

High Bickington Community Property Trust: http://www.highbickington.org/

HCA e-learning course http://www.learnathca.co.uk/course/view.php?id=120

HCA Village Affordable Housing Handbook: http://vahh.c4g.me.uk/.

Kent Rural Housing Protocol:http://www.kenthousinggroup.org.uk/uploads/RuralProtocolFINAL2.pdf

Lyvennet Community Trust: http://www.lyvennetcommunitytrust.org

Milton Keynes Tariff/'Roof Tax': http://www.miltonkeynes.gov.uk/planningpolicy/DisplayArticle.asp?ID=61630

National Community Land Trust Network:

http://www.communitylandtrusts.org.uk/resources/publications

South Hams Village Housing Initiative: http://www.southhams.gov.uk/20101026_village_housing_initiative_guide.pdf

South West England Regional Infrastructure Fund: http://www.southwestrda.org.uk/working_for_the_region/our_regional_role/regional_infra structure_fund.aspx

Sovereign Development Consortium: http://www.sovereigndevelopmentconsortium.org.uk/about-us/

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http://www.newforest.gov.uk/index.cfm?articleid=2221

http://www.highbickington.org/

http://www.learnathca.co.uk/course/view.php?id=120

http://vahh.c4g.me.uk/

http://www.kenthousinggroup.org.uk/uploads/RuralProtocolFINAL2.pdf

http://www.lyvennetcommunitytrust.org

http://www.communitylandtrusts.org.uk/resources/publications

http://www.sovereigndevelopmentconsortium.org.uk/about-us/

NIHE


11 Appendix 3: English Good Practice survey details

11.1 England Good Practice survey respondents

Marita Ford Greensquare Group, Oxfordshire Nick Wood Shropshire Council Sue Walters-Thompson North Yorkshire Strategic Housing

Partnership Colin Savage Exmoor National Park Ashley Grist Hart Borough Council (HARAH member) Alice Lean Waverley Council

11.2 England Good Practice survey questionnaire

1. How have rural affordable housing priorities and relationships changed at strategic level since 2009?

2. How have your organisation's strategic housing and planning policies relating to rural affordable housing changed since 2009?

3. How much has rural affordable housing delivery in your area or partnership increased or decreased since 2009? What do you see as the main reason for this?

4. Have typical land, pre-development or construction costs for rural affordable schemes increased or decreased since 2009? Please give details.

5. Is the level of rural delivery expected to increase or decrease from 2011 - 2015? What do you see as the main reason for this?

6. Is your organisation or partnership pursuing or considering alternative funding or tenure models (e.g. Local Land Trusts)? Please give details if possible.

7. What action is your organisation/ partnership taking to maintain/ increase rural delivery for the future?

8. What action is your organisation/ partnership taking to control the cost of delivery?

9. Do you regard the changes to the planning process proposed in the Localism Bill and National Planning Policy Framework as an opportunity or threat to the supply of rural affordable housing?

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Documents

Research study into the cost of building rural social ... · Procurement groups should pilot a Rural Housing Enabler; work with DSD/ NIHE and local authorities on bringing forward