INTRODUCTION

  The Royal Institution of Chartered Surveyors (RICS), represents the views and interests of 110,000 chartered surveyors worldwide covering all aspects of land, property and construction. Under the terms of its Royal Charter, RICS is required at all times to act in the public interest.

  Foundations for establishing sustainable housing communities. With acute shortages in the supply of decent affordable housing in areas of high demand, it is inevitable that the Government will come under pressure to accelerate house building rates. Just as household growth is significantly outstripping the number of available homes, so house price inflation is pushing home ownership beyond the reach of those on low and middle income. The Government's intention to build 200,000 new homes in London and the South East and to insist that local authorities deliver the number of new houses as laid out in regional planning guidance is a step in the right direction. But this will only provide meaningful benefits if sufficient quantities of affordable accommodation is made available.

  We welcome the Government's decision to provide an aditional £1.2 billion for the Housing Corporation's Approved Development Programme (ADP) which will provide 22,700 new homes in 2003-04. The £200 million "Challenge Fund", provided through the ADP and likely to generate 4,000 new homes for rent and low cost sale in the South and East of England is a good example of the sort of investment that the sector needs.

  It is also important to recognise that house price inflation in areas of high demand is not the only problem facing the sector. In other areas the problem is very different: economic decline is leading to falling house prices, dilapidated property and failing communities. The need for robust housing market renewal strategies in these areas is becoming increasingly more pressing. Not all areas will be suitable for renewal—many are in a state of irrevocable decline. The active restructuring of housing markets must involve a rebalancing of regeneration priorities designed to "invest in the best" communities rather than seeking to reverse advanced instances of decline. In the case of the latter an accelerated programme of housing demolition and restructuring would be more advisable.

ARE THE PROPOSALS LIKELY TO REDUCE HOUSE PRICES

  The current mismatch between the supply and demand of housing is undoubtedly contributing to unprecedented levels of house price inflation. Redressing this imbalance through an acceleration of housebuilding will go some way towards dampening house price increases. However, there are a complex array of other economic factors which determine house price levels and which may nullify any benefits accrued through increasing supply. House prices will continue to increase while interest rates remain low and public confidence in national economic performance remains strong. In such circumstances any rapid increase in housebuilding is unlikely to have a significant impact on prices in the short term.

  With house price inflation largely dictated by other economic factors, the objective for new housing investment should be to provide more decent affordable homes in the right areas and with a suitable social infrastructure. In many areas this may well have a knock-on deflationary effect on house prices.

THE GEOGRAPHICAL DISTRIBUTION OF HOUSING

  The four areas identified as suitable for accelerated housing development will provide relief for areas of excessively high housing demand in London and the South East. New housing development must contain sufficient quantities of affordable housing in order to accommodate those on low income. Equally, new housing development must present a range of tenure options in order to generate mixed, balanced and sustainable communities in the long term.

  The sustainability of these new communities will be partially determined by the quality of the infrastucture provided. The links between housing, health and education is now well established and should under-pin the formulation of housing policy. Without significant investment in schools, transport, hospitals and other social amenities, new communities will quickly degenerate. It is imperative that local authorities in the areas stipulated carefully assess the scale of the needs of these new communities and secure sufficient levels of investment in the social infrastructure. If previous errors are not to be repeated then these new communities must be turned into attractive areas where people will choose to live.

HIGH QUALITY SUSTAINABLE COMMUNITIES AVOIDING POORLY DESIGNED URBAN SPRAWL

  There is always the risk that the pressure to provide more housing in order to satisfy demand will lead to hastily conceived and poorly designed communities. If new housing communities are to be sustainable in the long term then they must be carefully designed to satisfy the needs of current and future generations. Many of the communities frequently cited as instances of design failure exhibit severe social imbalances resulting from mono-tenure housing development. High density development should remain a priority, but should be sensitively targeted to ensure the creation of mixed tenure wherever possible.

  RICS research into Transport Development Areas (TDAs) has illustrated the need for well designed, higher density mixed used areas situated around transport nodes. Such schemes can help ensure that housing development takes place at the most sustainable location and can in some cases generate higher development contributions for transport improvements.

THE BALANCE BETWEEN HOUSING FOR SALE AND SOCIAL HOUSING

  If communities are to be balanced and sustainable they must include the provision of housing that is suitable for a range of household incomes. A range of tenure options should be made available with an emphasis on ensuring that residents can move easily between tenures. It is imperative that we learn from previous mistakes and avoid the creation of mono-tenure housing communities.

  With house price inflation pushing house purchase beyond the reach of many lower and middle income households, including key workers in essential public services, the need for more affordable housing has never been greater. Unfortunately the delivery of affordable housing through the planning system has been slow and inconsistent. The current system whereby developers enter into Section 106 arrangements with local authorities is characterised by an adversarial bargaining culture and protracted legal wrangling.

  Increasingly developers view the provision of affordable housing through Section 106 arrangements as little more than a development tax. With some local authorities, particularly in London, setting unacceptably high percentage figures for affordable housing provision, developers frequently decide to pursue other commercial alternatives. The Government must move quickly to simplify the current system and induce greater certainty and transparency for the key stakeholders. The establishment of model clauses to ensure consistency for all local authorities, developers and housing associations would be a welcome initiative.

THE EXTENT TO WHICH DECISIONS RELATING TO HOUSING SHOULD BE TAKEN BY CENTRAL AND LOCAL GOVERNMENT

  The formulation of housing policy and strategy should remain the preserve of central government which is better placed to identify deficiencies, inequalities and imbalances in the market. The setting of individual targets for housing development should be deferred to regional government which is better able to account for local circumstances. Through communication with local authorities, regional governments can set appropriate and where possible, binding targets.

  Housing targets will be made available to individual local authorities through regional planning guidance (RPG). We welcome the announcement by the Deputy Prime Minister that steps will be taken to ensure the delivery of housing targets but would like to see more detail as to the means of intervention. We also welcome the intention to insist that housing density targets are more strictly adhered. This will ensure the provision of more dwellings without additional pressure on land supply.

OTHER COMMENTS

  We would re-iterate our belief that more needs to be done to mobilise the 760,000 homes that currently remain empty and which could be used to ease the pressure of housing shortages. As the Mayor of London recently highlighted, in London alone there are currently nearly 100,000 empty homes with 54,000 families living in temporary accommodation and another 8,600 living in bed and breakfast. Consideration should be given to providing financial incentives to discourage empty homes in the private sector. Equally the Government must now set out clear targets to reduce the number of empty homes and introduce benchmarks against which government agencies and local authorities should be required to act. At a time of acute housing shortage, the re-occupation of empty homes should remain a key priority.

  We also welcome the Government's intention to review the policy of Right-To-Buy (RTB) which is seriously jeopardising the level of supply of social housing. We are of the view that we need to protect our supply of affordable social housing in areas of high demand. The Government has recognised the problem of the supply of social housing in rural communities by restricting the right to acquire and restricting the RTB from traditional housing associations. This restriction should now be extended beyond rural areas and traditional housing association stock. It is extremely difficult in some areas to replace homes sold under RTB and we need to ensure that it is not only the families of today who are able to have affordable housing in those locations but also the families of tomorrow.

  Our immediate concern is that following the Deputy Prime Minister's announcement of a review we will see a flood of RTB applications. This could have serious consequences for the supply of social housing. Many remember the chaos caused in the housing market in 1988 after the Lawson budget announced changes to stamp duty. We could see equivalent chaos for social housing if the rules are not changed quickly and with extreme clarity. Such changes can be done under Secretary of State powers and do not require legislation.