Across much of rural England there is a lack of housing choice, particularly for those on lower incomes seeking a home they can afford. This means a lack of housing for those who work in local businesses and provide local services, undermining the economic vitality of rural areas. It also weakens the social fabric of rural communities by restricting opportunities for young and older people dependent on low incomes to remain in a village. Setting up a Revolving Land Bank Fund would help to tackle this problem.
There are generally five key challenges that make it difficult to deliver a range of affordable homes, including community-led, in both urban and rural areas:
- Problems finding a site at a price which makes it viable to provide homes at a cost that local people in housing need can afford
- Wariness of landowners to engage because of a lack of knowledge and expertise in this form of development
- Lack of appetite amongst housing associations to develop in rural areas because of: the complexity and therefore increased risks associated with rural affordable housing development and management; and the high costs because of the limited opportunities for economies of scale which increases the financial burden of infrastructure costs
- Lack of appetite amongst local small and medium sized builders to develop in rural communities because of the complexity of the process, the limited opportunities to achieve economies of scale because schemes are small and the risks this poses to their cash flow and therefore financial viability
A revolving land bank would secure sites principally through four routes: rural exception sites, stalled allocated sites, windfall sites and purchase of Section 106 affordable housing plots from private developers on mixed tenure sites. Through these routes private and public land could be brought forward for development.
A Revolving Land Bank might usefully have the follow criteria:
- Sites will be brought forward through a variety of routes including private landowners, review of the local authorities’ strategic housing land availability assessments, public landowners, communities, and individuals interested in self or custom-build
- Sites would bought using the Land Bank Fund and then sold onto a developer at a marginally increased cost to cover the costs of a surveyor (a key element of the process) and de-risking. The capital then returns to the Fund and is available for further site purchases
- For a site to be purchased it will have to meet a number of tests that confirm that the site is deliverable within an appropriate timescale to ensure the funds revolve and the Land Bank can be self-financing. These will include:
- Preliminary site investigations
- Acceptability in principle for planning permission
- Evidence of the quantity and nature of local housing need that will be met by the development of the site
- Process in place for community involvement in the development of the scheme
- A financial appraisal that demonstrates that the scheme is financially viable
- Each area would have a formal process for bringing together officers from the relevant planning, housing, highways departments and CLH Enablers (through a Support Hub where one is in place) to ensure that any obstacles are identified and associated mitigation measures are agreed before the Land Bank offers the site for sale
- The Revolving Land Bank Fund would de-risk the site by:
- confirming that the site is deliverable
- checking title
- agreeing and putting in place any covenants and overage agreements required by the landowner
- agreeing heads of terms for any S106 Agreements with the landowner
- undertaking or commissioning the necessary site surveys
- undertaking a detailed financial viability assessment for the site
- developing an outline development brief for the site
- in some cases securing planning permission for the site
- The site would be sold through a transparent process on a competitive basis. Small sites of less than 10 units could be offered to a selected panel of Registered Providers, self-builders, community-led housing groups and local small and medium sized builders. Larger schemes would be sold through open competition.
- A bespoke governance structure would be needed to manage the Land Bank Fund.
For more information about Revolving Land Banks, their potential, and a proposed pilot project, contact: Rural Housing Solutions' Jo.Lavis64@gmail.com