The RSN is calling on government to produce a fully funded, comprehensive rural strategy. In this strategy there are a number of areas which we believe are linked, and need to be addressed to produce a vibrant rural community. One of these is a place to learn and grow.

Rural communities are only likely to thrive economically and socially if they are home to residents from a mix of age groups and backgrounds. This includes providing those brought up locally or working there with a chance to buy or rent a home they can afford.

• Average house prices are £44,000 higher in rural areas than urban areas (2017). Housing is less affordable in predominantly rural areas, where lower quartile (the cheapest 25%) house prices are 8.3 times greater than lower quartile annual earnings (2016).
• Options for those on low incomes seeking social rented housing are typically limited in small rural settlements. Only 8% of households in villages live in social housing. By contrast, 19% of households in urban settlements live in social housing (2011 Census).
• The rural stock of social rented housing has shrunk under the Right to Buy policy, with sales quadrupling between 2012 and 2015 to reach 1% of the stock each year. Although the sale income is intended for reinvestment, only 1 replacement home was built in rural areas for every 8 sold during this period, and these replacements are rarely in the same settlement.
• Second homes and holiday lets often add to rural housing market pressures, especially in popular tourist areas. They form a particularly large share of the housing stock in some local authority areas – Isles of Scilly (15%), North Norfolk (10%) and South Hams (9%).
• It has previously been estimated there is a need to build 7,500 new affordable homes each year at England’s small rural settlements, a figure now considered an under-estimate.
• Around 3,700 such homes were completed in 2015/16 and just over 4,000 during 2016/17.
• Two thirds of rural local authorities say that affordable housing delivery decreased in their rural areas in 2017. This follows a change in planning policy, with developers no longer required to include any affordable homes on small market development sites.

Data sources are Halifax Building Society, ONS, Rural Housing Policy Review, MHCLG and Rural Services Network.

Rural communities are generally attractive places to live, but they need to be able to grow in ways which meet the needs of local people. There are significant challenges which should be addressed by a Rural Strategy. They are:

• Bringing forward development sites at a price suited to affordable housing;
• Making sure such homes are and remain genuinely affordable;
• Planning new housing in ways which attract community support; and
• Ensuring the funding model for affordable house building adds up.

The Rural Services Network believes that the following initiatives should be included within a Rural Strategy for an affordable place to live:

→ A planning policy to fit rural circumstances: most development sites in rural areas are small. Recent changes to planning policy exclude small sites (of less than 10 dwellings) from the requirement that private developers include a proportion of affordable homes. Despite certain qualifications in designated rural areas, the impact on affordable housing delivery is proving significant and negative. Indeed, this had been the main way that such housing was built and it required no public subsidy. A simple solution would be to exempt all small rural settlements from the policy change, allowing affordable housing quotas again where they are most needed.

→ A realistic definition of affordable: in most rural areas the greatest need for affordable housing is that for social rented housing. Many households cannot afford to pay anywhere near open market prices or rents. However, national policy has broadened the definition of ‘affordable housing’ to include Starter Homes, which are for sale at a 20% discount, and Affordable Rent, which is for rent at up to 80% of market prices. These tenures have their place, but the overriding need is to increase the supply of truly affordable homes. This could be assisted by improved funding for housing associations and allowing local planning authorities more discretion to set tenures in Local Plan policies.

→ A dedicated rural affordable housing programme: a specific grant programme is needed, designed to boost delivery by housing associations in small rural settlements. This could be managed by Homes England and run at a scale which meets the shortfall in delivery identified by the 2014 Rural Housing Policy Review. It should offer grant rates which account for the fact that small-scale development in rural areas is comparatively costly. Grants should also be sufficient to encourage good design and energy efficiency measures. Similarly, a share of the Community Housing Fund, which usefully supports community land trusts, co-housing and selfbuild projects, should be allocated to rural projects, thus meeting the original objective for this fund.

→ A bolstering of landowner and community support: landowners’ willingness to release land for rural exception sites, at prices which forego hope value, depends on them being assured it will only ever be used for affordable housing. At present there is uncertainty, which undermines policy delivery. One way to boost delivery of exception sites would be putting into law the ability to attach an affordability purpose to the sale deeds. Rural community support for affordable housing development would be enhanced if the occupancy of new homes was widened from those on local housing registers, to include those in nearby parishes or settlements who currently live in insecure rented or tied accommodation. Government could also explore exempting the sale of land for rural exception sites from Capital Gains Tax.

→ A replenishing of social housing: the Right to Buy policy for local authority housing tenants has severely depleted the stock of affordable homes in rural areas. Figures show that for every 8 rural homes sold to their tenants, only 1 replacement home was built. At present only half of the sale proceeds go back to local housing authorities. Those authorities should be able to retain 100% of the proceeds from Right to Buy sales, enabling them to re-invest it and replenish the stock of affordable homes. This would complement the recent Government announcement, that it is lifting the cap on local authority borrowing to build social housing.