Policy H2: Affordable homes
Policy H2: Affordable homes
Small affordable housing developments, including pitches for travellers will be permitted to meet identified local housing needs provided that:
We OBJECT to this policy
“Affordable” homes, under national definitions, means homes which are sold or rented at 80% of market value. Even at 70% rented this means that these homes will not be cheap, and starter homes will not be made available for local people. There is a viability clause (4.2.40) which means that in practice this could be unenforceable. We would be losing countryside for no local benefit.
“Affordable” homes, under national definitions, means homes that are sold or rented at 80% of market value. Even if 70% of these are rented as proposed, the level of market prices in the South-East means (even post-Brexit) that these homes will remain well beyond most people’s means and that starter homes will not become available for local people.
In addition, the viability clause (4.2.40) means that in practice the policy could be unenforceable. Private financial viability has no place in a public policy and should be removed. It is a get-out-of-jail-free card for developers that will sacrifice countryside for no local benefit.
We question the assumptions that seem to underlie this policy: that people have a right (rather than a legitimate aspiration) to own a home; that they should be encouraged to live locally (contradicting the Government’s policy of encouraging labour mobility and development in poorer regions, where homes are cheaper anyway); that increasing local house-building will reduce overcrowding and congestion (rather than simply suck more people into the borough); and that it will stem the rise in house prices (even though 13,860 new homes would be a drop in the ocean, given that prices are determined by an infinite demand-pull from London, whose population is increasing by 100,000 a year, and the currently low cost of capital for overseas and other buyers). The weak mechanisms proposed might influence the market in more remote parts of the UK, but not here.
This policy allows “affordability” to be a smokescreen for pushing through more development generally. Building more homes in Guildford cannot increase real affordability given the overhang of the London market.
In the draft Local Plan affordable homes is a misnomer, a designation that could have come straight from George Orwell’s Ministry of Truth. It refers to houses that are expected to go onto the market at 20% below the “market” price, or available at a rent of 80% of the prevailing “market” rate. Some of these are built to lower specifications than neighbouring houses, so that they remain profitable for builders. But when house prices and rents are high, so-called affordable homes are not affordable to those with low paid jobs or on benefits. “Affordable” homes are not the same as social housing, or old style council housing, and are not a replacement for any social housing that is sold off. Across the borough, according to the most recent data from the ONS, in Feb 2016, there were 5,696 housing benefit claimants. These “affordable” homes will be of no use to these people, or others on benefits, or on low wages. There is nothing in this policy for these people, many of whom need social housing, which has historically truly been affordable.
The Policy Statement (blue text in the Strategy and Sites document) refers to working “to increase the number of affordable homes in the borough and meeting identified needs.” But there is nothing in this plan that will meet the needs of those on benefits, or on low wages.
The Policy goes on to say that on sites “providing five or more homes, or sites of 0.17 ha regardless of the number of homes, at least 40% of the homes must be affordable homes….” A site of 0.17 ha is only 0.4 acre, and many single homes are built on plots of this size. This is a very low threshold. No exemptions are given – for example, what about self-build housing, or shared ownership, etc? This policy does nothing to encourage various paths to property ownership, other than the affordable housing route – which for many people is simply not an option. It is poorly thought out and is based on data which is not accurate, including the West Surrey SHMA, which in any case should be revised because of the poor understanding of the borough’s population statistics that underpin the study and the Brexit vote.
In the wording of the text supporting this Policy there are many errors of fact, errors through omission and exaggerations in the introductory text to this policy. As an affordable homes policy should be a cornerstone of the Local Plan, some of these are reviewed in depth below.
The final sentence of this paragraph reads: “High demand and limited supply have resulted in one of the least affordable areas of the country to live in”.
This is a profound statement, but one that was made without any supporting analysis, so it appears to be based on supposition, not on fact. Relevant analysis would consist of looking at demand for housing through, for example, population growth; then at the supply of new homes and the balance between these – and then compare this with property price increases. Then a similar analysis should examine other areas too, to assess if Guildford Borough is different from other local authorities within the south east. Obviously, this type of detailed analysis is not possible in a submission on the draft Local Plan, but the fact that this statement was made in paragraph 4.2.30 without any supporting information is a major concern, as this unsupported statement in itself could be considered to be the driver for housing policies within this draft Local Plan.
There is no question that property prices are high within the borough, but this is largely a consequence of being close to London, with a reasonably fast train connection. A Local Plan is supposed to focus on local needs, not the needs of those who wish to move out from London. All of Surrey and the home counties have high prices and recent statistics show that the rate of price increases in the East has been higher than in the South East. High prices are not a phenomenon unique to Guildford. This is shown in Figure 1, which shows that price increases in Guildford are mirrored in Woking and Dorking, which are in neighbouring boroughs. In fact, this shows that over the last two years price increases in Dorking have been higher than in Guildford. This figure was generated on the Zoopla website1.
Figure 1. Comparison of Average House Price Increases
It is also incorrect to suggest that high prices are a consequence of an imbalance between supply and demand – there are many factors that have an impact on property prices; the supply and demand balance is only one of these. Although it is not appropriate to have a detailed critique of why housing costs are high, as one of the declared goals of the Local Plan is to increase affordability it is appropriate to comment on other factors that affect house prices, and this has been done in Annex 1. This also provides a borough wide analysis of the supply of housing between 2001 and 2011 and the demand for new housing, using census data.
This shows that the population of the borough increased by 7,482 persons, of whom 3,723 were full time students aged 18 and over. A few of these may have been Guildford residents but the vast majority would be new to the area. Some students find accommodation in student halls, and as this accommodation expanded during this time period, it has been assumed about 40% of the increase in student population would find accommodation in student halls, leaving 2,234 that would need accommodation in the town. With 4 students per house, this need would be equivalent to 559 houses.
Census data for 2011 revealed that the average household in the borough was 2.42 persons, so the increase in demand for housing caused by the increase in population (excluding students), assuming 2.42 persons/household, was 1,553 new houses.
Thus the total number of new dwellings required by Guildford’s population increase between 2001 and 2011 was 2,112 (559 plus 1,553). In fact, the census reveals that the number of new dwellings was 2,692 – so supply actually exceeded demand by a considerable margin, about 28%. Yet over this period Land Registry data shows the average house price in Guildford borough almost doubled. As supply exceeded demand, other factors beyond the supply and demand balance affected house prices. This means that the underlying premise behind the Local Plan is incorrect; house prices have not increased because of a supply/demand imbalance. At the very least this means that the 31 houses added to the housing target to promote affordability should not be included, but in fact the whole of the SHMA and Local Plan should be revised, to include a more accurate picture of the housing market, which is currently poor.
However, there has been no detailed analysis by GBC of housing needs, this was contracted out to a consultant, and the housing model used by that consultant has not been subject to any scrutiny. The SHMA did not examine fundamental reasons for house price increases, nor did it properly examine the historic supply and demand balance across the area. Consequently, the SHMA is not fit for purpose, as no understanding of the fundamental workings of the housing market was shown in this study. Had a proper analysis been carried out it would have shown that in 2015/6 across the borough there were 2,510 housing transactions, and analysed the price bands of sales. Of these, 713 housing transactions were below £300,000, which is approximately what a couple on average earnings in the borough could borrow. A more detailed breakdown is given in Annexe 1.
In paragraph 4.2.31, the text of the opening sentence reads “The West Surrey Strategic Market Assessment 2015 indicates that approximately half of the Guildford households over the plan period will not be able to afford to buy or rent a home that meets their needs on the open market without subsidy.”
This sentence is plainly nonsense. The census data of 2011 showed that 66.6% of Guildford households either already owned or were in the process of buying their home. If the sentence refers to new households being formed in Guildford during the plan period, it should say so. If that were the case, it would not be surprising – the statistics on which the housing projections were based included a large increase in the number of full time students, a fact which was ultimately overlooked by GBC consultants, despite this being noted in several places in the SHMA. As shown in Annexe 1, census data shows 50% of the increase in population from 2001 to 2011 were students – and very few of these would be seeking to buy in Guildford, but are unlikely to take up a place at the university unless they had adequate funding, including the means to pay their rent.
Paragraph 4.2.32 discusses affordability in more depth and provides the ratio used by GBC to assess affordability. There are many definitions of affordability in use by different organisations and frequently this is a ratio between pay and house prices. GBC have decided to use a ratio which is of very limited value – the ratio of the lowest 25% of earnings to the lowest 25% of house prices. The higher this ratio, the less affordable the housing. This is a remarkable ratio as at the peak of home ownership in the UK, home ownership was just over 70% of total households. This is not because the remaining 30% did not want to own a house, although some did, but because in many cases home ownership was not a suitable option. This would apply to students, to migrant workers who wish only to work in the UK for a short time; people who do not want the responsibilities that comes with home ownership; people with temporary employment contracts, armed forces personnel, etc, etc. But GBC have chosen to consider affordability using the lowest paid – a group that have never been able to afford home ownership, or who may have no desire for home ownership. It is a bizarre ratio to use and is completely inappropriate to assess affordability in the borough.
It is more normal to consider the ratio between average pay and average property prices, though this is not an especially good ratio either, as average pay gives a certain weight to the lowest paid, who have never been able to afford home ownership. Average house prices are not a good measure either, as the sales of a few high cost properties will tend to push up average prices and distort the affordability ratio. It is much better to use the median property price in an affordability ratio. Another more relevant ratio is to use the average pay of first time buyers and the median price of properties purchased.
The text in the paragraph goes on to use government figures) from 2013, quoting GBCs affordability ratio (bottom 25% of wages to bottom 25% of house prices) of 10.92 which was said to be “higher than Surrey’s ratio of 10.89”.
The difference between these two ratios was 0.03, or in percentage terms, 0.28%. In others words, given that affordability ratios are estimates, there is no significant difference between these numbers. So it was nonsense to infer that property in the borough was less affordable in 2013 than in the rest of Surrey.
The text also states that the most recent data for this affordability ratio is from 2013, but in fact up to date information is provided by way of an interactive map2 which shows that Guildford Borough has a better affordability ratio than all but one of its neighbouring boroughs. In other words, housing is more affordable in Guildford than in most neighbouring boroughs. Data provided by the ONS was from Q3 2014 to Q3 2015, as full details for 2015 were not available. This map (and a supporting spreadsheet) provides 2 ratios, for median earnings to median house prices and GBC’s preferred measure, lower quartile earnings to lower quartile house prices. These are given inTable 1, and on GBC’s preferred lower quartile measure, Guildford is the most affordable of 6 of the 7 authorities listed, with only Rushmoor more affordable. On the more appropriate ratio of median pay to median property prices Guildford and Surrey Heath were essentially the same, with only Rushmoor again more affordable.
Table 1 Affordability Ratio Comparisons
This data shows clearly that GBC were incorrect to say that up to date affordability data was not available and more importantly, that of the local authorities that share a boundary with Guildford Borough, housing in Guildford Borough is actually more affordable than in almost all neighbouring local authorities.
Another indication of Guildford’s relative affordability was provided by an article in the Daily Telegraph3 This was about a couple who had been resident in London, but had moved to Guildford so that they could save for a deposit, but who were considering a move back to London. A comparison was made of the costs of living in Guildford or London, including travel costs to work in London, which showed that annual costs in Guildford were lower by an estimated £3,052; about 16% cheaper living in Guildford than in London. This is why people are moving from London to Guildford – and is why if houses were built as per the Local Plan target, they would mostly be bought or rented by Londoners, not by residents of the borough.
This paragraph refers to sufficient housing to meet the needs of the borough’s population – but the proposed minimum of 693 dwellings a year is well in excess of the needs of the borough’s residents. The data used in the SHMA ignored the effect of full time students and so the housing number is very considerably in excess of the needs of the resident population. If this housing is delivered it will cause an increase in Guildford’s population that is considerably more than recent population growth – almost 5 times the rate of population growth during the period between the censuses of 2001 and 2011.
The final part of the paragraph is nonsense “…..ensuring people with a wide variety of occupations in the borough and potentially reducing travel to work journeys.”
Housing proposed in the Local Plan is mostly in the countryside, with about 70% of the housing proposed on land that is currently in the Green Belt. These locations are some considerable distance from employment centers, many of which are located in central Guildford – so journeys to work will increase, not reduce, and congestion will get much worse. This issue is considered in detail in Annexe 2, which shows clearly that building new homes in the countryside will result in many more traffic movements than building homes within Guildford.
Housing Supply and Demand Balance Analysis in Guildford Borough: 2001 to 2011
As census data is considered by the Office for National Statistics (ONS) to be their “gold standard” this analysis uses only census data. Although data for subsequent years is available, this is based on many estimates and so analysis is more subjective.
Across the borough, during the 10 year period between the two most recent censuses4, the number of dwellings in the borough increased by 2,692, an average of 269 dwellings per year. During the same period, the population of the borough increased by 7,482 persons, but a high percentage of these were full time students, aged 18 and over. Some of these students may have been local, but as this was probably a small number, it was ignored. This data is summarised in Table 2, below.
Table 2 Census Data for Guildford Borough
Some of the increase in students would have found accommodation in students halls of residence (for example, the development in Manor Park opened in 2005) it is assumed that about 40% of the increase in student numbers were in student halls of residence, leaving 2,234 to find accommodation elsewhere. The majority of these would have found rooms in privately rented houses, categorised as “Homes of Multiple Occupation”. Assuming 4 students per house, the increase in student numbers would have needed 559 extra houses. The remainder of the population increase, the “permanent” resident population of Guildford, increased by 3,759 people. As the average number of people per household was 2.42 in 2011, a further 1,553 dwellings were needed for this increase in population. So to house the overall increase in population, including students, about 2,112 additional houses were needed – but 2,692 were built. Thus the number of houses needed in Guildford to house the population increase was actually substantially lower than the supply available; so the balance between supply and demand was not responsible for the increase in house prices over this period, when average property transaction prices across the borough almost doubled.
During the financial years 2001 to 2011, average property transaction prices across the borough are shown in Table 2. This includes average and median property prices for transactions in the years shown. In any given year there may be several high priced transactions which distort an average, and so the median price is also given – the median is the mid-range price, so that 50% of transactions were below this price with 50% above. It is a better indicator of the movement of prices than averages. Also shown is the number of transactions for each year.
Table 3 Land Registry Property Prices in Guildford Borough
The data in Table 2 shows that prices increased very rapidly from 2001/2 to 2007/8, and that the number of transactions was quite constant, at about 3,050±200. This represented a turnover of about 5.6% of all of the dwellings in the borough (53,388 in the 2001 census). Then in 2008/9, prices fell, and stayed low for two years. If the balance between supply and demand were the only factor influencing house prices this would suggest a huge increase in supply – but this did not occur. It can be seen from this that the balance between supply and demand must have had a minor impact on house prices. In fact, determining factors were the availability and cost of credit, and the demand for housing outside London. Credit was freely available and credit costs (in real terms) were low, consequently house prices increased rapidly from 2001/2 to 2007/8.
Data from Table 2 is shown in graphical form in Figure 1, and the impact of the recession of 2008/9 is clear. It interrupted the increase in property prices – but the reduction in interest rates that accompanied this recession, which provided very low credit costs, resulted in property prices increasing again in 2010/11. Credit costs continue to be very low and when combined with the huge expansion in credit from quantitative easing, the price of assets increased sharply. Again, this had little, if anything to do with the supply and demand balance for housing.
This picture of supply of housing exceeding demand across the borough is similar to the national picture. According to an article in the Guardian newspaper6, across the nation between the years of 1997 and 2007, “the housing stock grew by 10%, but the population only grew by 5%. If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn’t. They rose by more than 300%.”
So the issue of high prices is a national issue, not confined to Guildford Borough, and is not solely because of the supply and demand balance. Building more houses to increase affordability within the borough will not have the desired effect. This conclusion (based on data) is at variance with the Local Plan, and shows clearly that the evidence base underpinning the Local Plan is suspect, and that the analysis in much of this data base, especially the West Surrey SHMA, is inadequate.
The cursory analysis above also indicates the severe impact of having an additional 693 dwellings coming onto the housing market. At the beginning of the recession, in 2008/9, there were only 1,481 property transactions across the borough. Adding 693 dwellings to this would create many problems for any existing householders who wished to sell. As new build housing would be attractive to anyone moving from London, and is more expensive than equivalent “used” housing, the average price for housing would probably not fall – but householders would be forced to reduce their selling price in order to sell.
Given that the number of domestic property transactions in 2015/16 was 2,510, adding 693 houses to this mix would mean that redevelopment projects would not proceed. Existing run down areas of Guildford would become more run down – there would be no incentive to revitalise them under this proposed plan. Green field sites outside Guildford would provide the bulk of new dwellings – so large areas of Guildford would simply be left to decay. This is contrary to policies within the NPPF, specifically those policies that protect the Green Belt.
Figure 2 also shows that the median price is increasing more slowly than the average price, a clear illustration that the average price is not a good indicator of the housing market, due to the impact of a limited number of high value transactions.
Figure 2 Property Transaction Prices in Guildford Borough
A true picture of the housing market has not been presented in this Local Plan. A more accurate picture (for 2015/16) is given in Table 3, which shows, for example, that there were 183 housing transactions at a price equal to or lower than £200,000 during 2015/16.
Table 4 Housing Transactions in Guildford Borough, 2015/162
According to other ONS statistics, average earnings for Guildford residents in 2015 was £33,557 per year. A couple, with both on average earnings, using a multiple of 4.5 times earnings, could take out a mortgage for just over £300,000. According to the 2015/16 Land Registry data they would have had a choice during 2015/16 of at least 713 properties. This suggests that the affordability issue in Guildford has been exaggerated in order to promote a pro-development agenda.
Factors that Affect House Prices and Affordability
Across the UK, much of the planned increase in house building is related to the issues of high house prices and affordability – building more houses to increase the supply has been the approach adopted by the government, even though this policy is high risk, for example, consider the collapse of the housing markets in Spain, Ireland, etc in 2008/9 as a consequence of their massive house building programmes. There has been no risk analysis associated with the policy, either nationally or locally in the borough. House building appears to have been put in place as a strategy to drive economic growth, so that a great deal of effort (and government subsidy) has been devoted to this policy, to the detriment of other important policies, such as regional and industrial.
Affordability is not just a question of increasing housing supply, it is much more complex and a proper analysis should examine associated questions such as: why have real wages in the UK increased so slowly? Slow growth in wages means that house prices have outstripped the growth in real wages, and so affordability ratios have fallen. A sound, sustainable economy will not be built by housebuilding alone and to pursue this path is to embark on a policy that could well end in ignominious failure, with a housing bust similar in scale to that experienced in Spain and Ireland. But what other factors are important in determining house prices and affordability?
When considering this issue of affordability, and the approach of building more dwellings, there is an implicit assumption that the only determinant of house prices is the balance between supply and demand. But this is a nonsensical assumption. In 2008, when house prices in many regions of the UK (and across the world) started to crash, this was not because of a sudden massive increase in supply. Many other factors were clearly at work. Other factors that are important in determining house prices include:
The cost of credit – the interest rate: effectively this is set by government policy via the Treasury and then by the Bank of England. This has been extremely low for 5 years, and is set to remain low for the foreseeable future. Even before the reduction in the Bank of England rate to 0.5%, the real cost of credit had been low for many years – largely because the governments preferred measure of inflation, the CPI, does not include a measure of housing costs. The current very low cost of credit means that mortgage payments as a percentage of take home pay are lower for first time buyers than during previous property booms of 2005-7 and 1989-90. House prices are set by what people can afford to pay, and so property prices have climbed.
The availability of credit. At the very least this is regulated by government, but in practice it is effectively set by government policy, for example, quantitative easing has resulted in huge credit expansion leading to asset price inflation, including house price inflation. Current high house prices are a direct consequence of the economic policies of successive governments, spanning a period of at least 20 years.
Various schemes to assist buyers such as “Help to Buy” have enabled house builders to increase or maintain prices, so that much of the subsidies government pays ends up as builders profits. This is because, for example, equity loans are available only on new build properties.
Housing subsidies paid by the government. In 2015, about £24 billion was paid out as housing benefit, of which about £8.8 billion was paid to private landlords. Consequently, housing benefit has largely driven the buy to let boom. With a secure rental income, buy to let landlords can bid up the price of houses, beyond the reach of other buyers.
The growth of “buy to leave”, which is driven largely by money from overseas, some of which comes from the black economy and illegal activities in overseas countries. Overseas buyers effectively use a house in the UK (predominantly London and its environs) as a safe deposit box in the sky. This has led to a significant number of properties in London being sold to overseas buyers, who have no intention of living there – but their investment is safe and likely to appreciate in value. In the years 2015 and 2015, Asian buyers alone paid $24 billion for UK property, of which $20 billion was in London. This forces London residents to move out to the suburbs and beyond, pushing up prices across the whole of the south east. Brexit and associated financial instability is likely to have an impact on this, and it may create a downturn in the London housing market.
Taxes – not just stamp duty but other taxes contribute to the high final cost of a house. Taxes and levies on the excavation of raw materials from quarrying coupled with high landfill taxes increase the final cost of every house built, so that stamp duty is just another layer of tax – the icing on the taxation cake for government. What extraction taxes and energy policies have done is force the closure of British brick plants, cement makers, etc, etc. Now that there is a construction boom, building materials are being imported from all over Europe – bricks from Germany and further afield, roof tiles from Belgium, cement from France, etc. This leads to large increases in prices when there is an increase in construction – over the 5 years to 2016 brick prices increased by 25%, cement by 17%. The living wage will increase the pay of unskilled workers, such as labourers. Even in the recent past, a construction boom was a major stimulus for the British economy, but this is no longer the case because so much building material (and workers) are now imported. In 2015, the value of total imports of building materials from EU countries was £4.9 billion.
In addition, the Landfill Tax ensures that land is not used efficiently – it is cheaper to build large surface area car parks than to excavate and build car parks underground so that even when multi-storey car parks are built, they generally have no basement – because of the high cost of excavation due to high landfill taxes.
Guildford town is a classic example of inefficient land use, with large surface car parks at the university; park and ride car parks, at the railway station, and at employers throughout the town. This is a grossly inefficient use of land, but this inefficient land use is a consequence of government policy.
Profit margins of developers, which are currently somewhere between 20 to 30% on the cost of a house, even after high, exorbitant salaries are extracted from the companies for company executives.
As an example, Berkeley Homes has in place the most generous bonus system ever put in place by a British company, with £1 billion due to be distributed to company executives if certain targets are met – and the company is en route to meet these targets, mainly because of its ability to set and maintain high house prices. The chairman of Berkeley Homes was one of the highest paid persons in the UK in 2015, with his benefits amounting to more than £22 million for the year.
Profit margins enjoyed by housebuilders would not be tolerated in government regulated industries such as utility companies, or in food retailers, etc. It applies to the most expensive purchase the vast majority of purchasers will ever make, and it shows clearly that the housing market model used by the government (supply by the private sector only) is working only to benefit developers. It is functioning as a free market – but it is not a true free market because of the other factors that determine house prices such as government subsidies, including housing benefit. These create a win:win housing market for developers. The ability of developers to control housing supply is a major problem with the housing market – it is not the planning system that limits the supply of new dwellings, it is developers ensuring that they can maximise their profit margins bydrip feeding new builds onto the market. The Local Government Association stated that there are potentially 400,000 dwellings with planning permission but construction had not been started. So the problem is in the operation of the market, not in the planning process. Reforms to the way that the housing market operates are long overdue, for example, through a large social housing programme, managed by a national housing executive.
Government regional policies also have an impact on house prices. This is evident in the way that property prices have or have not recovered after the property price crash in 2008. Not all regions currently have higher house prices than their 2007 peak values: This is clear evidence of an ineffective regional policy, and shows the publicity around creating a “northern powerhouse” is hyperbole. One strand of an effective regional policy would ensure that a genuine free market was allowed to run its course, so that as building in London and the south east became more difficult and expensive (due to strong planning policies protecting the Green Belt and countryside) development would be pushed to other regions, ensuring these regions grew. Instead, the government seek to make it easier for developers to build in areas with the highest growth, by weakening planning policies, so that development is concentrated in London and the south east, especially in the countryside. The effect of this policy (in reality the lack of an effective regional policy) means that demand for development of all types continues to grow in and around London, so that house prices can be increased and controlled by developers. This increases the wealth gap between the London plus the south east and other regions, and limits employment growth in these areas.
Immigration has a major role in the supply and demand equation – if the rate of immigration were not so high, the demand for housing would be substantially lower. Migration Watch have estimated that at least 40% of the housing demand is due to immigration, but their estimate was based on a lower number of migrants than the current level of immigration, and does not include the impact of the children of migrants, nor does it include the demand from illegal immigration. Thus the government’s immigration policies have had a major impact on the demand for housing. Immigration also has an impact on pay – it helps keep pay levels low, so that employers are not forced to pay more to help with recruitment. This has an impact on affordability ratios. Although there is a construction boom, with a supposed shortage of skilled workers, pay within the construction industry has not increased as rapidly as it has done in the past. This is because employers can recruit immigrants, who will work for lower rates of pay, for example, 50% of sub-contractors working for Berkeley Homes are from eastern Europe. So not only does this policy have an impact on the supply part of the housing equation, but it also has an impact on the ability to afford housing by keeping pay rates lower than they would otherwise have been. A recent estimate by employers was that pay rates for skilled workers in construction have increased by 6%. Historically, this is a very low increase for pay rates in the middle of a construction boom. If immigration policies change as a consequence of the Brexit vote, the pressure placed on housing supply by immigrants will fall, and this should be reflected in revised housing policies.
Contribution to Traffic Movements and Air Pollution
The Local Plan proposes building a minimum of 693 houses per year, of which 2,400 (17%) will be built within Guildford. The remainder (83%) will be built in the countryside. This is very much against advice from the Institute for Air Quality Management. Intuitively, it seems likely that this spatial distribution of housing would increase car and van journeys with a consequential increase in air pollution that is related primarily to vehicle emissions. This paper examines statistical evidence to assess the impact on vehicle journeys within the borough.
The spatial “vision” proposed in the Local Plan is the reverse of that recommended by the Institute for Air Quality Management, who said8
“The pattern of land use determines the need for travel, which is in turn a major influence on transport related emissions. Decisions made on the allocation of land use will dictate future emissions, as many people and businesses will make significant use of road transport for journeys between places that form part of their daily lives.”
This has not been recognised in the spatial planning within this plan, which proposes that a large majority of new dwellings should be in rural areas, some considerable distance from the urban centre and employment centres. It is a plan that could have been written specifically to increase road traffic.
This report also suggested that
“Ideally, air quality should be a prime consideration for long term planning, so that land is used and allocated in ways that minimise emissions and that reduce the exposure of people to air pollution.”
This has not been part of spatial planning, but it should have been, even though there is no statutory requirement to do so. However, there is a statutory requirement to declare an air quality management area (AQMA) in areas that are known to have high pollution levels, but this has not been done within the borough. This is despite requests to the council to set up an AQMA following air quality tests that show high pollution levels in at least one village which has high traffic levels.
To examine the claim that the draft Local Plan contributes to sustainability several areas could be analysed. One of these is the impact on traffic, to assess the impact of adding additional housing in the countryside rather than in Guildford centre. This can be gauged by comparing the likely impact on car ownership of building housing in a rural location as opposed to an urban area of Guildford. Effingham has been chosen for this, but it could be any of the rural villages in the borough, and the impact of additional housing in this village is compared with additional housing in an urban area, Walnut Tree Close/Station area. This can be done using census details, taken from the Office for National Statistics (ONS) publications, so that availability of cars and vans can be compared as well as methods of travelling to work.
What have traffic levels to do with sustainability?
Traffic is a major contributor to air pollution, and air pollution has a significant effect on health. In April 2014, Public Health England produced a report9 that reconfirmed the estimate by the Committee on the Medical Effects of Air Pollutants that approximately 29,000 deaths per year in the UK could be caused by pollution from man-made particulate matter. This report estimated that there were 55 deaths per year in the borough attributable to air pollution. Particulates are very small air borne particles and transport is the single largest contributor to particulate pollution.
But air pollution is not limited to air borne particles - it includes many other pollutants, and one group that affects human health, especially that of children, is the gaseous oxides of nitrogen, nitrogen dioxide (NO2) and nitrogen monoxide (NO). When taken together these are usually called NOx. Nationally, almost half of these gases are produced by transport. In a submission to the House of Commons Report “Action on Air Quality” published in November 2014, Dr Ian Mudway of King’s College, London said:
“We have also found effects on infant mortality rates, on pre-term birth and on cognitive performance in children. There is some interesting data emerging on traffic proximity, diesel emissions and traffic potentially autism spectrum disorders… The evidence over the last three or four years that children growing up near traffic in areas with high NO2 and primary particle emissions have stunted and impaired lung development is incredibly strong.”
As well as health aspects, road safety is also important – increased traffic levels means more congestion, more delays, more stress, and inevitably, more accidents.
Areas in London exceed the EU limits for various air- borne pollutants, in particular, NOx. This has been on a scale that will result in the imposition of substantial fines on the UK government – and the UK government has expressed a desire for this to be passed to local government in areas that are out of compliance. Although Guildford Borough has a very limited air pollution monitoring regime they have one station that regularly exceeds limits – that at Wisley. Even though this is very poorly sited (meaning that the actual NOx concentration in this area is considerably higher than that being recorded) it has consistently been above EU limits. Thus the borough’s taxpayers may have to share in the costs of the EU fine.
Since traffic has a major impact on air pollution, and as air pollution has a significant on health, especially that of children, it is an important element in sustainability – so the impact on traffic levels of housing policies should be assessed, in detail, before making claims that housing policies are “sustainable”.
Detailed Traffic Comparisons
Levels of car ownership vary substantially, as can be seen from the figure, taken from the data in Table 1. This data is taken from 2011 ONS Census data, as published in the series “Neighbourhood Statistics”.
The average number of cars or vans per household is highest in Effingham, with an average of 1.9 cars or vans per household in Effingham in 2011, compared to an average of 0.93 cars or vans per household in Woodbridge Meadows/Walnut the Station. This suggests that plans for high levels of development in the countryside go against all the ideals of achieving sustainable developments as car and van availability is an indicator of how often those vehicles will be used.
Table 1 Comparison of availability of cars or vans
In Effingham, there are very few households that do not have a car or van available, at 4.7% of total households, compared to 34.2% in Woodbridge Meadows, Walnut Tree Close and the Station. Given the limited range of shops and services available in rural villages this should not be surprising. Most residents have to drive to be able to access basic health services, and for all but the most basic of shopping needs, employment opportunities, etc. This shows very clearly that it is very likely that there would be increased traffic on the roads throughout the borough as a consequence of additional housing in the countryside, and that this increase in traffic would be lower if additional housing were built in the centre of Guildford.
Experienced city planners such as Lord Rogers have called for increased density in towns and cities as a way to provide extra housing, provided increased density is accompanied by improved amenities and sensible traffic management plans. This is because of the benefits of increased density – towns and cities work better, with better public transport, better access to services, and a reduction in car journeys. Woodbridge Meadows, Walnut Tree Close and the Station are ideal locations for increased population density – the railway station is within walking distance, as is much of the town centre. This is recognised to a limited extent by the Masterplan prepared for Guildford Borough Council, but does not seem to have been recognised in the 2016 draft Local Plan.
As the 2011 census had details of the methods used to travel to work, it is possible to test if traffic implications are in line with these expectations.
Methods of travel to work illustrate differing patterns of car and van use, with the details given in Table 2. In Effingham, only 14% of employed people who travel to work use public transport and almost 75% travel to work by car or van. Only 8% of those who travel to work walk or use a bicycle in Effingham, whereas in the Woodbridge Meadows/Station area the comparable figure is almost 33%.
Differences are illustrated in the figure showing the proportion of people who travel to work using public transport, walk or by bike. Building more houses in the countryside will result in many more car journeys – just to get to work. Many more would also be necessary, for residents to shop, to access financial and health services, etc. This shows clearly that car journeys would be minimised if new housing was concentrated in urban areas of Guildford.
Sensible planning should seek to improve the ability to use these modes of transport and the impact on the number of car or van journeys is very clear from the comparisons made here.
This type of analysis should be a feature when choosing to claim an option is “sustainable”, but it has not been a feature of the draft Local Plan. Claims made that building housing in rural areas is a sustainable option do not stand up to simple scrutiny, even without the consideration that it is proposed to build housing on the limited resource that is farmland.
Table 2 Comparison of Methods Used to Travel to Work in 2011
The spatial planning in this draft plan will increase traffic movements and consequently, air pollution. Air quality should be a constraint used to limit the housing target. Even with a lower housing target, instead of what is proposed a higher proportion of housing developments should be within Guildford town. This could be achieved by recognizing that an expansion in retail and warehousing and distribution within the urban area is not sustainable, and the land set aside in the town centre for these used instead to provide housing. GBC should also have used the local plan to set targets for air quality, with proposals to reduce noxious emissions, for example, through the use of LPG fueled public service vehicles, as is happening in other areas, such as Birmingham. This has not been done; there is no proposal to tackle existing air pollution or to alleviate the pollution caused by adding approximately 24,000 cars and vans to those already in use within the borough, based on car ownership levels in a rural village and an urban area in Guildford. This is the approximate number of vehicles that the proposed housing additions would bring, thought his number would vary, dependent on where the additional houses are located. If all the proposed housing were within Guildford, then instead of 24,000 about 13,000 cars and vans would be added to the existing total. In the census of 2011, the total across the borough was just under 54,000 cars and vans.
The comparisons made above show that traffic and air quality has not been considered in the spatial allocation of housing. Sustainability claims have not been analysed in drawing up the housing proposals featured in the draft Local Plan. A simple comparison of only one aspect of sustainability, car use (with its associated air pollution), shows very clearly that building extra housing in Effingham (a typical rural area village) is the least sustainable option. As a method of travel to work, car use in Effingham was shown to be much higher than in an urban area of Guildford, so to limit increases in traffic and emissions from traffic, housing should be provided in areas closer to employment opportunities and with access to good public transport. This does not mean that no additional housing should be provided in the countryside, but this housing should be limited in quantity, in keeping with its Green Belt status.