Rich ghettos: the rural housing crisis no one is talking about

Want to live here? Houses in Stanton cost £500,000 or more. Dave_S., CC BY

Britain’s countryside is becoming ever more socially exclusive as spiralling house prices turn once-normal villages into rich ghettos.

Contrary to the popular imagination, few of the cast of The Archers could now afford to live in Ambridge, or anywhere else in rural Britain for that matter. It’s getting ever harder for people on medium and lower incomes to buy a first home, and there is very little so-called “affordable housing”. The proposed extension of the Right to Buy to tenants of housing associations will only make matters much worse.

As the internet explodes with articles focused on London, it’s is an ideal moment to take stock of the situation and ensure people in the countryside don’t get drowned out.

The UK is unique in having higher house prices in its rural areas than in its towns and cities. Rural homes now cost 26% more on average than those in urban England (London aside), and work out to around 11 times the average local salary. These prices are well beyond the means of most families living and working in the countryside, who are outbid by wealthy commuters, retirees and second home owners who earn their living elsewhere.

For people unable to afford to buy a home, renting should be viable alternative, but this is also a problem. Private rents are just as high as in urban areas, despite lower earnings in rural communities (local earnings in rural England average £19,700 compared to £26,900 in major urban areas).

Rented social housing provided by housing associations and councils could help out, but again rural areas are lacking: 12% of rural housing is social compared to 19% in urban areas. Even this small stock of social housing has been further depleted under the Right to Buy scheme, and in some areas affordable housing has all but disappeared.

Why housing associations are so crucial

The few opportunities which do arise for people with local connections and ordinary incomes to share in rural life, helping keep schools and services going, derive primarily from the efforts of housing associations. Where these associations have built small-scale developments, shops remain open, buses keep running, and local communities thrive.

Picturesque villages attract tourists – but also push up house prices. Martin Keene/PA

The government is now proposing to force housing associations against their will to sell their stock to tenants at heavily discounted prices. The bill, estimated at £5.8 billion or more, will partly be met by forcing local authorities to sell their most valuable council houses. The government argues that this will allow housing associations to build new affordable housing, even though since 2012 just 46% of houses sold under the Right to Buy scheme have been replaced.

Unless the government ensures replacements are built in the same settlement, affordable homes will inevitably be lost in larger numbers from attractive villages and hamlets (as happened under the original Right to Buy of council houses) and that they will be replaced, if at all, elsewhere where sites are cheaper and planning regulations more sympathetic.

Lord Kerslake, until recently head of the civil service, described this proposal as “wrong in principle and wrong in practice”. We are already seeing those on low and medium incomes, and especially young people, priced out of small towns and villages across the country. With housing association properties sold off at great cost to the taxpayer, and unlikely to be replaced in any substantial quantities, the wealth divide in rural communities will deepen even further.

Not only will the forced sale of housing association properties affect the social and demographic make-up of rural communities; it will also have an effect on local employers. With rural areas becoming increasingly socially exclusive, local businesses – from farms and shops to accountants and software developers – will find it even harder to attract the young, skilled, ambitious people they need. We urgently need more affordable homes to be built, not the disposal of the few that remain in rural areas.

The government must reconsider the proposed Right to Buy extension, at least exempting rural areas. Instead they should implement the recommendations made by the Rural Housing Policy Review, to provide more affordable rural housing. This would not only provide much-needed housing supply, but would help rural economies contribute more fully to the government’s growth agenda.