There has been a lot made of the fact that public land sale, such as from the NHS, is being used to build new houses but new research suggests they are not affordable for many.
For example, of the planned homes to be built for sale on NHS land, some 67% will be unaffordable to a nurse on an average salary, according to a new analysis published by the New Economics Foundation.
The average sale prices of many houses built on NHS land is 9.6 times the average annual salary of a nurse at £306,434. At present 5% of the homes built on sold-off NHS land will be for genuinely affordable social rent with 30% of sites having no plans for affordable housing at all.
The looks at 23 sites the NHS declared ‘surplus’ in England in the last year, and it shows that the sale of NHS land is fundamentally failing to produce the affordable homes needed and suggests it is exacerbating the deep affordability crisis across the UK.
Meanwhile there are currently 1.2 million English households on the waiting list for social housing, but the majority of homes built on NHS land will be out of reach to those who most need them.
The report recommends introducing an NHS Land community lock where any land asset sold by the NHS through choice, necessity or obligation can only be used for community benefit. Meaning that the community served by the NHS Trust will benefit from the sale of an asset and those working for the NHS Trust will be able to purchase or rent homes on the land.
This is part of a wider recommendation to create a People’s Land Bank which would hold surplus public sites to be used strategically in partnership with communities to meet their needs for affordable housing.
The NHS is selling off land as part of the Government’s Public Land for Housing Programme, which has the dual aim of releasing enough land for 160,000 homes by 2020, and raising £5 billion in capital receipts. The recent National Audit Office report found that the government is currently expected to fall almost 100,000 homes short of this target by 2020.
There is also little planning for the types of homes being built so much so that the Ministry of Housing Communities and Local Government (MHCLG) do not collect or publish data on the number of affordable homes built. Further, MHCLG has not published an annual report
on the land for new homes programme since February 2017.
Currently, on the two large NHS sites in London with planning permission for development in 2017/2018, none of the homes being built for sale would be at a price which would be affordable to nurses. It would take an average nurse over a century to afford the deposit for a market-rate home at the site of Thorpe Coombe Hospital, which is being redeveloped into 91 homes. The London Plan requires 50% affordable housing on public land, and the council also has a borough-wide target of 50% affordable housing on new build developments, however the scheme has been approved with no affordable housing.
At Ealing Hospital it would take 93 years for an average nurse to save for a deposit for a market rate home on the site. With 45% affordable housing, on paper this site looks closer to meeting the London Plan requirement of 50%, but in reality 30% will be for shared ownership, completely out of reach for many Londoners, and only 8% will be for genuinely affordable social rent.
Some 83% of the homes being built on NHS land will be for market sale. The remaining 17% of proposed houses are classified as ‘affordable’ but less than a third of these are for genuinely affordable social rent, with many of the rest at 80% of market rent, or for shared ownership.
Only 5% of the homes built on sold-off NHS land will be for genuinely affordable social rent.
30% of the sites have plans for no affordable housing at all, and 61% have plans that include no socially rented housing,?widely understood as the only housing that is genuinely affordable to people on low incomes.
Of the planned homes to be built for sale on NHS land, two thirds will be unaffordable to a nurse on an average salary. And where they could afford the mortgage repayments, a nurse would have to save for an average of 35 years to afford the deposit
The average expected sale price for these new homes, based on area estimates, is £306,434. This is 9.6 times the average annual salary of a nurse.
‘The UK is facing a worsening housing crisis, Finding a decent, affordable place to live is becoming harder and harder for people and families across the country. A key part of this is the overinflated price of land dictating what gets built on it. Public land, if it must be sold, represents an opportunity to produce the kinds of homes people need. But the Government’s approach to the public land sale is a shambles,’ said Hanna Wheatley, researcher at the New Economics Foundation.
‘There is a clear tension between trying to raise as much money as possible from the land sale and also building the kind of homes we need and right now the Government isn’t doing either. The one-off cash injection gained by selling land to the highest bidder is small compensation for the lost opportunity of more affordable housing, and a reduction in the housing benefit bill,’ she pointed out.
‘Both the moral and economic cases are clear, if the Government insists on privatising the ever decreasing commons of land that we all own, they must think clearly about what that land is used for, and a massive increase the supply of affordable housing should be top of the list,’ she added.
Jude Duggins, Royal College of Nursing London regional director, said that it is sad that NHS land is being sold to the highest bidder with almost zero attention paid to the housing needs of every day Londoners. ‘For our members who work day and night caring for people in the capital, it is hugely disappointing that developers are still being allowed to use loopholes to avoid building the genuinely affordable homes that are so desperately needed,’ she explained.
‘Our members have repeatedly told us that they will have to leave the city if their housing needs are not met soon, yet this report shows us that NHS Trusts are selling land for homes that would take a nurse 100 years to save a deposit up for. That is nothing short of disgraceful and a painfully short sighted way to manage land which could help house vital health care workers and low income Londoners,’ she pointed out.
‘The recommendations made by the New Economics Foundation, both for a community land lock to ensure NHS land is only sold for the benefit of the community and for the housing needs of NHS staff to be given true priority when land is developed, are welcome and should be taken seriously by policy makers, in Westminster and in City Hall,’ she added.
