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Plans for housing will make affordability worse say CoSERG

A briefing paper from the CoSERG (the Cornwall Social and Economic Research Group) says that, the Government’s Green paper on housing, released on July 23rd, reiterates plans to ‘build our way out of the problem’ without addressing many of the fundamental causes. The CoSERG paper goes on to say,

"Increasing the level of social housing by 50,000 per annum equates to 600 per year across Cornwall, yet with an open market and increasing demand, house prices in Cornwall will continue to escalate, making the problem of affordability worse."

CoSERG contend that current policies on affordable housing cannot resolve the issue of providing adequate housing for those unable to afford the current high prices. There is constant emphasis by Government on the need to supply affordable housing by simply building more houses. Yet, this ignores the factors which influence house prices:

1. Demand for second homes and homes for investment;
2. Properties bought under the ‘buy to let’ format;
3. Lack of investment by government in affordable housing;
4. Migration levels (particularly important in Cornwall);
5. Interest rates;
6. Lending policies of Building societies;
7. Impact of high earners on house prices.

In Cornwall, there is
1. High demand for second homes;
2. High proportion of people moving to Cornwall from affluent areas;
3. Low local incomes.

If the number of new dwellings built increases, it
1. Is unlikely to have an impact on overall prices;
2. Can induce migration into the area;
3. Is often built for the luxury or more affluent end of the market.

Policy depends on developers supplying affordable housing, but to provide this they need to sell the other houses at unaffordable prices.

CoSERG contends that a new approach is required to address the affordable housing issue.Rather than repeating the government mantra of ‘just build more’, Cornwall needs to address the underlying issues to create a sustainable solution to affordable housing.

The full 9 page CoSERG paper "Affordable housing in Cornwall – a briefing paper" can be obtained by emailing cornishsocecong@aol.com (quoting: CoSERG Affordable Housing Brief 2007). Please say if you want it sent in other than pdf format. If you wish to have a hard/paper copy sent please forward your name and address.