Page last updated at 18:30 GMT, Friday, 17 February 2006

Housing the UK's rising population

By William Brierley
BBC News website

Housing campaigners are fighting two main issues in the battle to provide the housing necessary to meet the demand of the UK's rising population.

Terraced housing
Traditional terraces could become a thing of the past

The Barker report, published in March 2004, identified the need for more affordable rental properties.

It estimated that 23,000 such properties are needed yearly, between 2008 and 2011, to meet minimum housing requirements and bring stability to the housing market.

The Empty Homes Agency, a campaigning charity, points to the 680,412 homes that were vacant for longer than 6 months in England in 2005.

They say these properties could potentially be brought back into residential use as part of the solution.

According to the charity, houses remain empty because their owners cannot afford the cost of repairs or, as house prices continue to rise, they see their property as a bricks-and-mortar investment that they would prefer to keep unoccupied before selling.

One of the major obstacles in the refurbishment and sale of empty homes is the discrepancy between the zero rate of VAT on new-build properties and the 17.5% rate of VAT for the refurbishment of an empty home.

This has led to swathes of housing in low-demand areas such as the north-west of England being earmarked for demolition and regeneration.

Community spirit and activities have been affected as the population in the Lakes has changed. There are no social activities for younger people anymore, as the age profile has become skewed towards the over 60s.
Jack Ellerby, policy officer for Friends of the Lake District

Jonathan Ellis, chief executive of the Empty Homes Agency believes that there is a more creative solution. "You can't tackle the issues of low demand without also taking on the economic situation, but there are alternatives.

Companies like Urban Splash in Manchester have managed to make desirable properties in low-demand areas through architectural innovation, so it can be done."

But Mr Ellis believes that this won't happen until VAT levels on refurbishment come down. "A VAT reduction would provide a level playing field and give a massive positive signal to the housing industry that refurbishment is the value for money answer".

Countryside demand

Unoccupied homes are also an issue in rural areas, but for a different reason.

The high number of holiday homes in areas such as the Lake District along with strict planning constraints have driven up demand and prices, pricing out locals who live and work in the area and in particular first-time buyers.

Jack Ellerby, policy officer for Friends of the Lake District, says that in some communities in the Lake District up to 60% of homes are either holiday homes or owned by retired people.

This has led to a decline in local services as locals in the area are priced out of rented accommodation and entry level property that has been absorbed by the demand from the holiday sector. Cumbria county council reports a significant decrease in demand for primary school places as the population has changed.

"Community spirit and activities have been affected as the population in the Lakes has changed. There are no social activities for younger people anymore, as the age profile has become skewed towards the over 60s", says Mr Ellerby.

The alternative for those employed by the tourism industry, which is now the major industry in the Lake District, is to live in cheaper areas of Cumbria and to commute.

Lake District view
The Lake District is a highly desirable area for second homes

"The tourism sector is usually low paid and part-time, so it is very difficult for these workers to afford housing," says Mr Ellerby. "Many people now have to commute from towns like Mayport, which is 40 miles away from where they work in Keswick."

The solution in the Lake District has been to make all new development within the area meet the local need for affordable housing, guaranteed by a permanent covenant which protects the property by ensuring that only those who can't afford existing properties can buy.

But there is a knock-on effect of building properties in rural areas due to the environmental impact of new developments on the very countryside that makes the area an attractive place to live in the first place.

Housing associations are also in place to provide affordable rented housing and either shared-ownership or shared-equity homes whereby the home owner is subsidised by the housing association.

There are also proposals supported at local level to charge 200 to 300% council tax on second homes as a disincentive to those that can afford them.

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