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Derek Twigg (in the Chair)
I call Olivia Bailey to move the motion. I will then call the Minister to respond. There will not be an opportunity for the Member in charge to wind up, as is the convention in a 30-minute debate. I call Olivia Bailey.
Olivia Bailey (Reading West and Mid Berkshire) (Lab)
I beg to move,
That this House has considered the provision of affordable rural housing.
It is a pleasure to serve under your chairship, Mr Twigg. I am delighted to have secured this important debate, and I look forward to hearing from my colleagues and my hon. Friend the Minister over the next 30 minutes.
My Reading West and Mid Berkshire constituency boasts the very best of the English countryside. We have many beautiful rural villages and hamlets, many nestled in the north Wessex downs national landscape, formerly known as an area of outstanding natural beauty. They are villages full of families who have lived there for generations, but unfortunately villages now under threat due to a lack of affordable housing. There are many barriers to affordable housing in those villages: some are a consequence of the national landscape designation, but others are a consequence of a lack of political will. In west Berkshire people have been let down by Conservative and then Liberal Democrat administrations that offer warm words about the future of our villages, but are unwilling to take the action necessary and do the hard work to secure not massive developments in our villages, but small developments, with the support of the community, of houses at an affordable price.
Jim Shannon (Strangford) (DUP)
I commend the hon. Lady. This is a massive subject for my constituents, as it is for hers. For those who have lived in the countryside, who were born in the countryside and whose grannies, granddads and great grannies all live in the countryside, when it comes to affordable houses they have a real problem. Does she agree that perhaps we need legislation to ensure that those who are born in the countryside can stay in the countryside, in housing that is affordable for them?
Olivia Bailey
I thank the hon. Member; I agree that this is about keeping generations of families together and I will talk more about that later in my speech.
As I said, people have been let down by Conservative and then Liberal Democrat administrations, which have been bodging the local plan process, trying to pass the buck and avoid the hard work needed to secure the vibrant villages that we were promised.
Caroline Voaden (South Devon) (LD)
In response to what the hon. Lady has just said, I would like to congratulate the Liberal Democrat-led South Hams district council, which has just contributed £623,000 to support a community housing project that will offer 39 new energy-efficient, 100% social rented homes for people with a local connection, including a community garden and orchard and a community building that will be delivered once the homes are complete. Does she agree that that is the kind of development that we need to see?
Olivia Bailey
I am delighted that the hon. Member has had an opportunity to congratulate her council, and I thank her for her intervention.
With a lack of supply come skyrocketing house prices. In the five years to 2022, house prices in the countryside increased at close to twice the rate of those in urban areas. We need only look at the nine houses currently for sale in Upper Basildon in my constituency: four are on the market for more than £1.25 million and only one at under half a million pounds. Across the villages in my constituency, there are very few properties available for private rent, and the small number that are available are simply unaffordable for many.
Rachel Taylor (North Warwickshire and Bedworth) (Lab)
It is a pleasure to serve under your chairmanship again, Mr Twigg. In North Warwickshire, private rents grew to an average of £898 in January this year—an increase of 11% from the previous year. Young people are prevented from starting their careers in North Warwickshire because those rent increases are unaffordable, and many of my young constituents are having to move away because of the lack of affordable housing. Does my hon. Friend agree that increased rental costs and a lack of social housing in rural areas prevent local economic growth and pose insurmountable challenges for young families in our rural areas?
Olivia Bailey
I agree wholeheartedly with my hon. Friend. Simply put, these costs price people out of the community. One constituent in Bradfield shared her story with me. Her daughter would love to be able to stay in the village that she grew up in, but there are no affordable houses that are the right size for her young family. Eventually, she is likely to have to move away—a story repeated across my constituency.
Without affordable housing, schools close because there are not enough children to fill a class; pubs shut their doors because there are not enough punters to buy pints; and services for the elderly stop operating because there is nobody to volunteer. We simply cannot have a community without people, and those people need affordable homes.
I am delighted that the Government are committed to building the housing we need and to boosting home ownership, providing over £5 billion total housing investment in 2025-26 and a £500 million top-up to the affordable homes programme, and building an ambitious 1.5 million homes with the infrastructure that they need. I am also pleased that the Government are paying particular attention to housing in rural communities, giving local authorities flexible but ambitious targets for affordable housing development, recognising the value of rural exception sites and community-led development, and committing to look at how national policy can promote affordable rural housing.
Lizzi Collinge (Morecambe and Lunesdale) (Lab)
It is a pleasure to serve under your chairship today, Mr Twigg. In my constituency we have some villages, such as Dent, where 40% of the homes are second homes or Airbnb-type short-term lets. I also have concerns for Morecambe, with the Eden Project coming there. Does my hon. Friend agree that we should look at the licensing and regulation of short-term lets as part of the solution to the rural housing crisis?
Olivia Bailey
I am pleased that the Government are acting to level the playing field for first-time buyers, and I am sure that the Minister will elaborate further on that in his statement today.
David Smith (North Northumberland) (Lab)
It is a pleasure to serve under your stewardship, Mr Twigg. Similarly, in my constituency, the county council has built just 15,000 homes since 2013 and only 3,700 affordable homes, yet 2,000 people are in urgent need of housing. I am also delighted by this Government’s commitment to building 1.5 million homes, and I am sure my hon. Friend agrees that it would be fantastic to see an allocation within that for rural areas in the country.
Olivia Bailey
I agree wholeheartedly with my hon. Friend that we need more affordable housing in our rural areas; that is what I am seeking to address with this debate.
I will focus first on rural exception sites, which allow the delivery of small developments of affordable housing on the edges of rural communities, solely for local people. The role of rural housing enablers to deliver those are crucial, and I consider Connecting Communities in Berkshire to be the gold standard there. The team works in partnership with developers, landowners, local authorities, parish councils and local people to try to build truly affordable housing in rural exception sites. It is currently working to deliver affordable housing in Beenham, identifying housing need and suitable land in partnership with the parish council and the local community.
The Government are committed to funding the rural housing enabler programme until the end of March, and I know my constituents would welcome an update on its future from the Minister today. More widely, I also ask the Minister to provide an update on how he plans to promote exception sites as he prepares to consult on national development management policies in the coming months.
We also need to consider the impact of affordable and social housing stock being sold off by developers and moving out of the hands of the local community. I welcome the Government’s focus on the needs of social renters in the revised national planning policy framework and the commitment to explore how national policy can support social housing.
Sadly, constituents have shared with me that Sovereign, which owns a significant proportion of social housing in West Berkshire, has been selling off older properties in West Berkshire’s villages, which means that swathes of perfectly usable social housing stock is going into the private sector to be sold or rented at unaffordable prices. Housing that could be offered for social rent to local people who cannot afford to buy in their village is now being bought up and taken out of the community. I share the frustration of parish councils, who are working to increase the amount of affordable housing available through developing rural exception sites, when they see a social landlord putting existing affordable properties in the village up for sale. Will the Minister consider this particular problem as he consults on national policy to support the delivery of social housing?
Rural communities in Reading West and Mid Berkshire are at a turning point. They desperately need affordable housing in their local areas and they finally have a Labour Government laser-focused on delivering the housing that this country needs, focusing on policy reforms that enable local authorities to build the affordable homes that will keep communities together and supporting the work of organisations such as Connecting Communities in Berkshire and local parish councils such as Beenham. These communities need a local council to match that ambition.
I look forward to working with the Lib Dems in West Berkshire council to deliver vibrant villages, ending the era of bodged planning processes, internal politics and inaction, the era of being aware of the issue and acknowledging that something must be done, but being unwilling to take the action to tackle it. I am incredibly optimistic that we can achieve that, having seen the brilliant work that people in my constituency are doing to secure the future of their villages. I am confident that this Labour Government can and will deliver for them. From Beech Hill to Mortimer, from Beenham to Compton, from Hampstead Norreys to East and West llsley, and from Upper Bucklebury to Upper Basildon, we can build the affordable housing that is so vital for these beautiful villages to continue thriving far into the future.
Derek Twigg (in the Chair)
May I just check that the Member has sought permission to speak?
The Minister for Housing and Planning (Matthew Pennycook)
indicated assent.
Helena Dollimore (Hastings and Rye) (Lab/Co-op)
It is a pleasure to serve under your chairship, Mr Twigg. I congratulate my hon. Friend the Member for Reading West and Mid Berkshire (Olivia Bailey) on securing this debate on the important topic of the affordability of housing in our rural communities. I represent a seaside community; around 30% of my constituency is coastal villages, where we acutely feel the pressures of the rural housing crisis. As other Members have spoken about, our community has seen the rise of Airbnbs and second homes, putting on real pressure and pushing up rental prices and house prices in our community. We have not seen enough affordable homes built in our communities. The situation now facing our villages and rural areas is that many young people find that they cannot afford to live in the villages they grew up in and are forced to move away from family.
John Whitby (Derbyshire Dales) (Lab)
My constituency faces a chronic lack of housing as well, which disproportionately impacts young people; they face a future where they cannot afford to live in the place where they grew up. Some 8.4% of all residential properties in the dales are not the primary homes of residents. Does my hon. Friend recognise the significant impact that second homes and holiday lets have on housing supply and prices in rural areas?
Helena Dollimore
That is a pressure that many of our rural communities face. There is definitely a contribution that holiday lets can make to the local tourism economy, but many of us agree that we need to get the right balance between supporting tourism and providing homes for local families.
It is so often the case that many local people in the rural areas of my constituency cannot afford to rent or buy in the areas they grew up in and are forced to move further away. We also see that, when developments do happen in those villages, too often new-build developments are given the green light with zero affordable homes on those sites. Just last year, in Peasmarsh in my constituency, 41 homes were given the green light on a greenfield site, with zero affordable homes. We see developers using loopholes around viability to wriggle out of their responsibility to deliver affordable housing, and too often councillors feel that their hands are tied by the current legislation. I urge the Government, as part of the reforms to the planning system, to ensure we stop developers getting away with wriggling out of their responsibility to deliver affordable homes.
It is also clear that, with the right focus and the right local leadership, we can get this right. I draw attention to a brilliant local community-led housing scheme in Icklesham, a small village in my constituency just outside Hastings. The village came together to form the Icklesham Parish Community Land Trust and built 15 housing units for local people, all for social rent. If a village the size of Icklesham can do it—let me tell hon. Members, it is a very small area; I would be delighted to welcome the Minister there—anywhere can deliver affordable social housing, whether rural or urban. That is what we need to build on.
As we move forward with the vital mission of building 1.5 million homes under this Labour Government, we must ensure that our rural communities see the benefit and that developers cannot wriggle out of their commitments to deliver affordable housing.
The Minister for Housing and Planning (Matthew Pennycook)
It is a pleasure to serve under you in the Chair, Mr Twigg.
I congratulate my hon. Friend the Member for Reading West and Mid Berkshire (Olivia Bailey) on securing this important debate. She has only been in the House a relatively short time, but she has already established a reputation as a doughty champion of her constituency. Those she has the privilege of representing should be reassured by the fact that she has already assiduously conveyed their views and concerns to Ministers on a range of matters, including the one we are considering today. I also thank my hon. Friend the Member for Hastings and Rye (Helena Dollimore) and others who have made contributions to the debate.
My hon. Friend the Member for Reading West and Mid Berkshire raised a number of distinct issues on the provision of affordable rural housing and I will seek to respond to as many of them as I can in the time available to me. Before I do, I would like to make some brief remarks about planning reform and the role of the planning system in delivering homes of all kinds and meeting identified need for affordable housing, as a means of providing some important context.
It is not in dispute in this Chamber, I do not think, that the Government have inherited an acute and entrenched housing crisis, or that significantly boosting the supply of homes of all tenures is essential to tackling it. That is why we acted decisively to overhaul the national planning policy framework last year, to revise the anti-supply changes made by the previous Government in December 2023, and to introduce a range of pro-growth measures that will enable us to build the homes and infrastructure our country needs.
Joe Robertson (Isle of Wight East) (Con)
I congratulate the hon. Member for Reading West and Mid Berkshire (Olivia Bailey) on securing this important debate. I think it is true that all of us would like to see more affordable housing delivered for our constituents, but does the Minister agree that top-down housing targets for all areas of the United Kingdom are not always suitable? I am thinking of my own constituency on the Isle of Wight, where on average we deliver 300 homes a year and are committed, through our local plan, to deliver 450. The Government are asking us to deliver 1,000. Does the Minister agree that there have to be some areas of the United Kingdom where the standard method does not apply?
Matthew Pennycook
I disagree with the hon. Gentleman. We think the changes we have introduced and the revised standard method are appropriate. Every part of the country will need to play its part in achieving our ambitious plan for change milestone of building 1.5 million new homes across the country. That is the scale of ambition we need commensurate with the crisis we face, and that crisis affects every part of England.
The Government believe in a plan-led system. It is through local development plans that communities shape decisions about how to deliver the housing and wider development their areas need. Local plans must remain the cornerstone of our planning system and we are determined to progress towards universal coverage. My hon. Friend the Member for Reading West and Mid Berkshire will appreciate that I am unable to comment on her local plan or how her local planning authority may interpret national planning policy due to the quasi-judicial nature of the planning process, but there is merit in me making some general comments on plan making in local authority areas that overlap with national landscapes, as is the case in her own area.
As my hon. Friend is aware, the Government are committed to maintaining strong protections for our protected landscapes. We are clear that the scale and extent of development within such designated areas should be limited so that we are able to pass on their attractions and important biodiversity to future generations. National planning policy is clear that significant development within a national landscape should be refused, other than in exceptional circumstances where it can be demonstrated that the development is in the public interest, taking into account a range of considerations. That includes fully exploring the role of planning conditions and developer contributions to mitigate the impacts of development or support infrastructure provision as appropriate.
When it comes to plan making, local authorities are expected to use the revised standard method to assess housing needs. However, they are able to justify a lower housing requirement than the figure set by the method on the basis of local constraints on land availability, development and other relevant matters such as national landscapes, but also protected habitats and flood risk areas. Local authorities will need to consider these matters as they prepare their plans, but we expect them to explore all options to deliver the homes their communities need. That means maximising brownfield land, densifying available brownfield sites, working with neighbouring authorities on cross-boundary housing growth and, where necessary, reviewing the green belt. They are then expected to evidence and justify that approach to planning for housing in their local planning consultation. An examination of their approach will be scrutinised by a planning inspector to determine whether the constraints are justified and the plan is sound.
I turn to the focus of my hon. Friend’s remarks—namely, the case for supporting rural communities to build new homes for local people, and in particular for boosting the supply of rural affordable housing. The Government are committed to doing so, and it was a pleasure to have the chance to discuss this matter with my hon. Friend last month. It cannot be right that, as a number of hon. Members said, young people in particular are often unable to remain in the villages in which they grew up. That harms not only them and their families but the vibrancy and long-term viability of rural communities.
Chris Hinchliff (North East Hertfordshire) (Lab)
Does the Minister agree that the most important policies that we can look at in planning reform to deliver genuinely affordable homes in rural communities are a bold approach to land reform, the abolition of hope value and the reform of compulsory purchase orders to allow our local planning authorities to assemble the land that we need in our rural communities?
Matthew Pennycook
As my hon. Friend is no doubt aware, we have already brought into force a discretionary power to disapply hope value in certain instances where a public interest test could be met. We are committed, through the forthcoming planning and infrastructure Bill, to bring forward further reform of the compulsory purchase process and compensation, so he can look forward to seeing more action in that area.
National policy makes it clear that local authorities should ensure that their planning policies and decisions respond to local circumstances and support housing that reflects local needs. That includes promoting sustainable development in local areas and ensuring that housing is located where it will maintain and enhance the vitality of rural communities. Planning policies should identify opportunities for villages to grow and flourish, especially where that will support local services. We also want more affordable housing in rural areas, as part of our manifesto commitment to deliver the biggest increase in social and affordable house building in a generation. We have already taken steps to support the delivery of affordable rural housing. For example, our golden rules for green-belt development—which ensure an affordable housing contribution 15 percentage points above the highest existing affordable housing requirement that would otherwise apply to the development, subject to a cap of 50%—will unlock new affordable housing provision in a range of rural locations.
Mr Angus MacDonald (Inverness, Skye and West Ross-shire) (LD)
Will the Minister say a few words about the massive change in our lifetimes? Doctors, policemen and teachers had houses owned by their local authority body, and they have now been sold. That pressure is continuing. Does he think we should go back to that to ensure that people can work in those sectors?
Matthew Pennycook
I think the hon. Gentleman is making a wider point. I am not sure what specific legislative provision he is referring to in the past. There is a very clear place for ensuring we are building the right types of homes in all parts of the country, including homes that support key workers and other frontline public sector staff, and I am more than happy to discuss that matter with him outside the Chamber.
The Government have been clear that we want to look further at measures to support affordable housing in rural areas. That is why we asked a question on that issue as part of the consultation on reforms to the national planning policy framework last year. The responses we received are informing our ongoing work in relation to producing a set of national policies for decision making—national development management policies, as they were referred to under the Levelling-up and Regeneration Act 2023. Although I cannot give my hon. Friend the Member for Reading West and Mid Berkshire a firm date today, I can assure her and other hon. Members that we will consult on those policies in the spring, as promised, and I will update the House in due course.
My hon. Friend also knows that, since taking office, the Government have provided additional grant funding to support the delivery of affordable homes in all parts of England. At the Budget on 30 October 2024, the Chancellor set out details of an immediate one-year cash injection of £500 million to top up the existing affordable homes programme, which will deliver up to 5,000 new social and affordable homes. On 12 February 2025, the Government announced a further cash injection of £300 million to the existing affordable homes programme, which will deliver a further 2,800 new homes, more than half of which will be for social rent.
At the multi-year spending review this year, the Government will set out details of new investment to succeed the 2021 to 2026 affordable homes programme. That new investment will deliver a mix of homes for sub-market rent and home ownership, with a particular focus on delivering homes for social rent. We know that delivering affordable housing in rural places can be especially challenging. There are particular challenges that come with the delivery of sites in rural areas, so that is one of the factors that will be taken into consideration in the design of the future capital investment programme, which will succeed the existing one.
My hon. Friend the Member for Reading West and Mid Berkshire might also like to know that, to provide additional support for rural housing delivery in settlements with populations of fewer than 3,000 people, Homes England has developed a rural housing strategy and has dedicated rural housing champions in each of its operating areas.
My hon. Friend rightly drew attention to the significant contribution that can be made by rural exception sites. As she is aware, these allow local authorities to address the housing needs of rural communities by creating sites where local residents, and others with a strong family or employment connection, can live in affordable homes and in perpetuity. Rural exception sites tend to be just outside village boundaries, where housing is not normally granted permission, so it is possible to create them even in the green belt or designated rural areas. We recognise the strong support for rural exception sites and the potential for strengthening this policy. That is why we made clear in our response to the consultation on the revised national planning policy framework that we are giving further consideration to how we can better support rural affordable housing, including through use of exception sites. That will include consideration of how we can drive greater uptake of rural exception sites and introduce a more streamlined approach. Again, I will set out details about our thinking in due course.
I will take forward this work with my colleagues in the Department for Environment, Food and Rural Affairs, including by considering the role that rural housing enablers play in supporting rural affordable housing. My hon. Friend mentioned a case in her own constituency. Again, I am afraid that I cannot give her any firm assurances in this debate in respect of ongoing funding because that is subject to the Government’s ongoing business planning, but I can assure her that we will provide an update at the earliest possible opportunity.
I want to briefly reference a couple of issues that hon. Members raised, as I have the time. The first is the problem highlighted by my hon. Friend the Member for Reading West and Mid Berkshire of developers and housing associations—in her case, Sovereign—selling off much-needed social and affordable homes in rural areas. She might like to know that when and if grant-funded homes are sold or part-sold, there is a system in place to recover Government grants through the recycled capital grant fund. That means that the cash value of the grant is placed in a fund to be used for further investment in new affordable housing supply. I am more than happy to discuss with her the specific issues with Sovereign in her own constituency.
Briefly, on short-term lets and the existing developer contribution system, Members across the House will know that we have debated this issue at length on various occasions. We are committed to taking forward the previous Government’s measures—a registration scheme for short-term lets and the abolition of the furnished holiday lettings scheme, which comes into force on 1 April—but we have been clear that that is not enough and we are giving very considered thought to what further powers local authorities need, in particular, though there is a balance to be struck, to deal with excessive concentrations of short-term lets that often deny local people not only homes to buy but, increasingly, homes to rent.
On section 106 contributions, we are reviewing viability and we are committed to strengthening the existing section 106 system, in lieu of taking forward the previous Government’s approach, which was an infrastructure levy. When taking those reforms forward, we need to ensure that local authorities are better able to negotiate at the point that those agreements are reached and are then able to ensure that developers honour the commitments that they make in those agreements, when struck.
In conclusion, I again congratulate my hon. Friend the Member for Reading West and Mid Berkshire for securing this important debate, giving the House an opportunity to consider a range of important issues relating to affordable rural housing supply.
Matthew Pennycook
I will not—I am just winding up, I am afraid.
I hope that I have not only conveyed the Government’s firm support for delivering much-needed affordable housing in rural areas, but reassured my hon. Friend the Member for Reading West and Mid Berkshire and others that I am actively considering what further measures are necessary to ensure that we do so while balancing the need to ensure that development is sustainable and appropriate. I hope I can continue to draw on the insights provided by my hon. Friend and other colleagues, as the Government continue to develop their thinking in this area.
Question put and agreed to.