Opinion: Affordable Housing Is Vital To Maintain Our Prosperity

Published on: 26 Apr, 2015
Updated on: 30 Apr, 2015

By Gordon Bridger

Hon Alderman Gordon Bridger, a former councillor and Guildford Mayor, has studied Guildford’s economy closely. Here he makes the argument for building more affordable homes, even if it means giving up some of the green belt.

Most of us need to work and it has been a major achievement of the coalition government that they have significantly increased the number of us in employment, topping the league table for economic growth. It merits credit.

But the fact that a great deal of this growth depends on foreign borrowing has not been made sufficiently clear by any of the political parties.

As a nation we are importing more goods and services than we export and this adverse balance of trade is being funded by foreign capital inflows. We are using up some of these capital inflows on consumption. This is most unwise. In the long run it is an unsustainable position.

To think that in 1914 we provided the world with over 40% of external investment while today our Prime Minister has to try and persuade the Chinese and Gulf States to invest in HSR2, nuclear power or anything, in order to enable us to pay for pensions, welfare, health, foreign aid and holidays abroad.

Is it not a little shaming that the savings of Chinese peasants are being used to maintain our life style? When we express concern that so many of our national enterprises are sold to foreign investors we have only ourselves to blame. In many cases this has resulted in improved productivity but in many others the benefits have been consumed.

Is there anything that we should or could do about in Guildford? Yes there is.

Instead of investing in surplus consumer retail facilities, investment likely to attract more imports of goods and labour we need to encourage the development of high tech professional services.

Such services, according to a recent economic report, now account for nearly 40% of our Gross Value Added, the value of the goods and services we produce in our borough. This is much higher than the contribution from retail which is only about 15%.

Almost everyone, certainly the younger generation, agrees we need more affordable housing…

Additionally, our high tech services are normally exported by companies such as Surrey Satellite Technology, Vision Engineering and many of the enterprises in Surrey Research Park.

While, as a country, we have become extremely wealthy as a result, a comfortable complacency has set in which ignores the fact that we live in a very competitive world. We too easily forget that we only have our education and enterprise to enable us to survive.

So far we have done well but we are now losing our competitive edge as the younger skilled professionals we need to service our existing enterprises, schools and hospitals can no longer be recruited due to the high cost of housing: new companies are no longer coming to Guildford.

The high cost of housing is also a self created problem as 89% of Guildford is in the green belt, one of the highest percentages in the country, and land accounts for 2/3 of the cost of a house. This has pushed up our labour costs and is making us increasingly uncompetitive.

There is a solution…

Almost everyone, certainly the younger generation, agrees we need more affordable housing, yet the present system of funding is insufficient and flawed. By requiring new developments of 15 houses or more to finance a third of the total as affordable houses we just push up the costs of market priced housing element needed to fund them. In any case there are not likely to be sufficient affordable homes to meet our needs.

There is a solution. By releasing a very small percentage, less than one half of one per cent, of poorer quality land classed as green belt we could provide many affordable houses paid for by the handsome profits which change of use allows developers. We should be able to secure at least 40% affordable homes in any competent negotiation.

While we all value our environment and the green belt, by refusing any modifications to it we are prioritising accommodation for birds, bees, bats and views over accommodation for people. Surely this cannot be right ?

Our generation will survive comfortably enough but are we doing the right thing for our children?

Responses to Opinion: Affordable Housing Is Vital To Maintain Our Prosperity

Lisa Wright Reply

April 26, 2015 at 2:50 pm

I am glad Mr Bridger asked the final question.

In answer, yes, I am doing the best for my children by conserving the green belt. At the very minimum, I want them to be able to breathe clean air, something we would not have if our greenery is destroyed. I would also like them to be able to enjoy our fellow species of bird, mammal and flora and be able to walk through fields, enjoy trees and a blue sky.

My own preference is for Councils to build more social and keyworker housing in their own brownfield land.
Bernard Parke Reply

April 26, 2015 at 4:47 pm

Yes, we need affordable housing but at present most of our housing stock is being bought up by speculators and in doing so they price out the young families from owning their own homes.

Perhaps central government intervention would help by revisiting the Rent Act Principle?

The Rent Acts not only gave security of tenure but also kept down the cost of housing as it ceased to be a cash cow.

Homes are the foundation of all family life and should regarded as such.

A secure family life foundation helps to keep families together and in doing so also as a spin off helps to reduce crime.
David Smith Reply

April 27, 2015 at 9:38 am

I presume Lisa Wright’s children are young. Good luck when they get to my age. I am in my late twenties with two degrees, I’m a member of the RICS and have a significant deposit of over £100k but I have struggled to buy a house in Guildford.

You can borrow a maximum of five times your salary which based on a 50k income (and a deposit of say 100k) one could afford somewhere for £350k. With one bed flats in Guildford now hitting 300k, since the stamp duty reform, I feel I may be one of the last generations that are able to buy.

I guess some comfort can be taken, though, in that species of bird and mammal will have ample homes in the remaining 90% of our borough which is green belt.

It’s also not all bad for “generation rent” either. They can take a break from the extortionate rents by taking a walk through fields, enjoying the trees and blue skies.

I am sure that will more than make up for them never being able to own a home outright.
- Lisa Wright Reply
  
  April 28, 2015 at 11:56 am
  
  In response to David Smith’s comment.
  
  My kids are 19 and 20. One at Uni the other in Full time employment. They would prefer to live in town, near to the station, shops, pubs and restaurants.
  
  If GBC really wanted to help our young people, they would redevelop all brownfield in town, North Street, Walnut Tree etc.
  
  For Mr Smith’s information there are 39 properties under £250,000 posted on Rightmove today.
Dominique Kelly Reply

April 27, 2015 at 6:53 pm

One can build on as many green fields as one wants around Guildford but affordability of the houses built will be still too high to meet the needs described by Mr Smith.

The problem needs to be solved in a more strategic way than handing over our countryside to developers. Affordable according to GBC is 80% of current market Guildford prices by each region – is this what Mr Smith means as affordable?

The developers are trying to get out of even this obligation all over the country.

Be careful what you wish for.

We need appropriate housing in the right place rather than a hope that if we release the green belt the developers will deliver what is needed. They won’t. They will deliver what makes them the most profit.
Jim Allen Reply

April 28, 2015 at 12:03 am

In the 1980’s houses in Sandhurst were changing hands once every three months with mortgages being supported with spurious letters on Headed paper claiming higher Salaries than were being paid.

Now we are suffering the results of this ‘show a P60 /P45 when going for a mortgage was the answer’ – now just how many people are earning the average price of a house divided by 3.5 – that’s what people can truly afford.

In other countries renting and leasing homes is the way forward and will have to be in the future because the cost of housing has simply gone beyond rational purchase levels. Just think how mobile the working population would become if everyone rented – they could move within weeks to a new location as the new job appeared, while now they have to find a buyer and ‘go through the process’.

Renting also means no real maintenance cost – the land lord sees to that. In time housing associations and private landlords came up to the mark and provided the new homes, with mortgages secured against properties already owned – and empty ‘investment properties’ brought back into use.

Owning your home is like owning a large engined car – bragging rights down the pub, nothing more – it still gets stuck in the same traffic jams as small cars. Renting gives the opportunity to move when the feeling takes you or the better job appears.

I’m still not convinced on housing numbers or their claimed need. No one ever mentions the housing becoming empty the same way as those gone before. It seems to be a fashion which has little foundation in real facts. I will wait for three years to be convinced of the actual need – rather than want, that is.
Janette Panton Reply

April 28, 2015 at 8:42 am

I would like to re-iterate what Dominique Kelly has said. Developers are only required to provide affordable homes if it is viable to do so.

Many developers are being granted planning permission on the promise of providing, say, 30% of affordable homes within their proposed development, only to then say it is not viable and they cannot afford it, providing half of what was agreed and in some cases no affordable homes at all.

Planning departments are then just rolling over and letting developers have their way. It would be scandalous for Guildford’s green belt to be handed over to developers to provide yet more executive homes which is not in any way, shape or form fulfilling a housing “need”.

Homes in Guildford are sadly out of the reach of many of our young people. Excessive house building will not change this. Let’s keep Guildford the special place it is and do our best to prevent us becoming just another suburb of London.
David Smith Reply

April 28, 2015 at 9:17 am

In response to Dominique Kelly:

Affordable is either affordable rent – or shared ownership where qualifying people can buy from a 25% share upwards.

Currently developers do not have to provide “affordable” for schemes of under 14 units. Because there is no real brownfield land left most new schemes are often well below this number which means no new affordable homes are built.

There are opportunities coming forward like Guildford Fire Station but with 4,000 people on Guildford’s housing list this is not enough.
- John Robson Reply
  
  April 28, 2015 at 3:20 pm
  
  Where do these 4,000 people live currently?
  
  When I attended the Eagle debate a year or so ago, it was stated that there are only 17 homeless people in Guildford?
Dominique Kelly Reply

April 28, 2015 at 1:13 pm

The problem here is the use of “affordable”, which according to Guildford Borough council (GBC), and most boroughs, is 80% of market rate.

Guildford’s Housing viability study had their definition of Affordable Housing: “Housing provided for sale, rent or shared equity at prices in perpetuity below the current market rate, which people in housing need are able to afford”.

The measure is 80% of the market rate for that region. So when you hear GBC talk about delivering 40% on brownfield or 45% on green belt affordable housing it isn’t what you think. On top of this the developers with do everything they can to get out of even doing that. Legislation is in place to help them in the shape of: http://www.legislation.gov.uk/ukpga/2013/27/section/7/enacted

Moreover, Policy 4 of the draft local plan has enough wriggle room for even the most muscle-bound developer to weasel out of – please note the words “work with” and “subject to viability” I doubt the wording will change in the new draft as it is in line with the legislation above. This is an extract:

“POLICY 4 – Affordable homes

“As well as providing and managing affordable housing ourselves, we will work with Registered Providers, developers and landowners to ensure that at least 40 per cent of all new homes built in the borough are affordable housing. This equates to 5,126 new affordable homes.

“Subject to viability, these affordable homes will be provided:

“On development sites of at least five homes (gross).

“On previously developed sites that meet these thresholds at least 40 per cent of the homes will be provided as affordable homes. On greenfield sites and on public land, at least 45 per cent will be provided as affordable homes,

“On allocated sites, in accordance with the Policy 20 and
on developments providing solely affordable housing either on public sector-owned land or developments by Registered Providers, and

“On developments of off-campus student accommodation and elderly people’s housing (Use Class C3) of at least 20 bedrooms on sites that would otherwise be suitable for general housing in accordance with the formula.

“Affordable Rent must be no more than the maximum percentage of market rent set out in our most recent housing guidance or strategy eg 80%.”

As I said, what is needed needs to be strategically delivered rather than left to developers who want to maximise their profits and will renege on their obligations.

This is similar to the university getting a chunk of greenbelt allocated to building some years ago yet have reneged on their commitment to deliver the student accommodation it promised for the site.

As the university has expanded the extra students have had to take more and more small flats/shared units in the town which should be available for the local need. Most of this expansion has been from students from overseas.
Karen Stevens Reply

April 29, 2015 at 11:40 am

I fully agree with Gordon Bridger that Guildford needs to encourage the development of high-tech businesses, and it is interesting to see that he quotes Surrey Satellites Technology Limited (SSTL) as an example.

What Mr Bridger fails to grasp is that this type of business is attracted to Guildford because of its beautiful landscape. If we destroy that landscape, we will have little more to offer businesses than Bracknell or Swindon.

But if Mr Bridger won’t take my word for this, perhaps he will listen to Sir Martin Sweeting, Group Executive Chairman of Surrey Satellites Ltd.

Sir Martin writes: “I feel that the proposed erosion of the Surrey green belt and the urbanisation of the surrounding villages will make Guildford a significantly less attractive location for businesses (like SSTL) that are reliant on highly-skilled staff, who value and seek a quality environment.

“The council’s assessment of the demand numbers and scale of development proposed in their plan appears to me to be greatly over-estimated. With the increasing mobility of such businesses, such a major development around Guildford might prove to be self-defeating.

“In my opinion the Hog’s Back, the lands either side of it and the villages therein, comprise a national treasure that absolutely must not be lost forever.”

Karen Stevens is a GGG candidate for Onslow ward
Mary Bedforth Reply

April 29, 2015 at 6:47 pm

The subject of shortage of affordable housing in Guildford was featured just now on BBC South news. A representative of GGG was interviewed briefly and land at Blackwell Farm was shown.

I can’t be sure but I do not think that there was any mention of the university’s involvement.
David Bilbe Reply

May 5, 2015 at 11:06 am

Not all people want to live on alleged brownfield sites to be developed as housing as proposed by the Guildford Greenbelt Group (GGG).

For GGG people to say that they think young people want to live on Walnut Tree Close they are arguing – yet again – their own keep it out of my backyard point of view. It suits this to say this so that there will be no development on land adjoining where most of the founders live – not on Walnut Tree Close incidentally.

Affordable is a subjective term. It does not mean that prices are low so that people can buy – it means a mixture of social and rental properties.

What is needed is a clear demand led rather than a developer led strategy, sensible spread across the borough and protection of the green belt. I object to GGG constantly saying that the development should go on brownfield because it is there. This is as bad as saying that the green belt is OK to develop. It lacks that fundamental ingredient – strategy and balance. There needs to be proper assessment and plans not opportunism.

David Bilbe is a Conservative candidate in Normandy ward.
Harry Eve Reply

May 5, 2015 at 3:59 pm

I would like to thank David Bilbe, for confirming that affordable is actually unaffordable – and just a subjective term that his party is rather fond of.

I think he will find that many people who live in the borough’s more built-up areas also enjoy taking the occasional walk in Guildford’s countryside, or visiting its villages, and will be rather upset if they find their favourite spots have been built on.

Their dismay will be shared by the many people who visit from outside our area and will no longer consider that worthwhile. That is if they can still get there through the extra traffic. At least they will know which party to blame – his.