Unfair funding formula that breaks up families

Yorkshire and the rest of northern England are being “frozen out” of vital home-building schemes because of funding criteria which favour London and the South East.

THE PAST 18 months have been turbulent for the young Dyson family in their struggle to get on the housing market in the scenic village of Hutton Cranswick.

Nestled in the East Riding of Yorkshire, it offers an idyllic vision of community life, but increasingly the cost of homes has become divorced from local people and their incomes.

An average home in the East Riding is more than seven times the average income and, according to the National Housing Federation, the average worker in the area would need a 67 per cent pay rise to buy a home outright.

Brendan Dyson, 34, and his wife Ellen, 27, rented a two-bedroomed property in the village for seven years while being frozen out of home ownership.

However, when Mrs Dyson fell pregnant with their second child in the summer of 2018, the professional working couple found themselves in a desperate situation due to a lack of space and spiralling rent.

“We needed to move - it was urgent,” said Mr Dyson, who has lived in the village since he was three years old. “Rents in the area just kept going up and up and we knew we wouldn’t have enough room when the baby was born.”

Mr Dyson stressed the importance for the family to remain in the village due to family ties and schooling for his seven-year-old son, Riley. “My whole life is here,” he said. “It would have been disastrous to have to leave the village. My family live here, I went to school here and my son goes to the local school.”

Despite Mr Dyson, a National Market Traders Federation (NMTF) support worker, and his wife both earning good wages, they were unable to find a suitable property. The couple resorted to looking further afield to the neighbouring town of Driffield.

“There are no three-bedroom houses that you can afford,” he said. “I earn a good living, but I still couldn’t get on the property ladder. We did think that we would have to leave the village. I’ve got a lot of friends that have left the area and it seems the only option.”

The family was close to giving up hope but was thrown a “lifeline” in the form of a threebedroom, semi-detached property through a shared ownership scheme with Together Homes. Shared ownership allows those who would not otherwise be able to afford to buy on the open market the chance to part-buy and part-rent.

Mr Dyson said: “It took us over a year to find a house that we could afford - that is so worrying and I think it is quite disturbing really for other people who need a house in the area.”

In common with many areas of Yorkshire and the wider UK, the East Riding is not seeing enough homes being built, with a recent council report admitting this shortage is impacting on the local economy. The housing crisis gripping the nation, where an estimated 8.4m people are living in an unaffordable, insecure or unsuitable home in England alone, impacts all ages across every part of the country.

But while the 10 politicians who have held the role of Housing Minister in the last decade all insist the issue is a priority, figures show how some areas of the country get more attention from the Government than others.

And according to Homes For The North (H4N), an alliance of 17 housing associations, a lack of funding to deliver homes across northern England means many parts of the region risk losing families like the Dysons.

This trend, if allowed to continue, could ultimately undermine Prime Minister Boris Johnson’s attempts to rebalance the economy as homes are built at a much faster rate in London and the South East, with ‘red wall’ areas of the North left behind.

Analysis from a recent report by the group into how funding for homes has been distributed shows that UK public spending on housing targeted at the North has fallen from 24 per cent of the total to 17.8 per cent over the last 20 years, with current rules meaning this could fall as low as 10 per cent.

The North has capacity to build 300,000 homes on previously developed sites, but this land supply would fulfil only 15 per cent of the homes which analysis suggests are needed to transform the region’s economy.

A report by H4N says: “A mismatch between the quantity, quality and mix of housing available with the needs and aspirations of the current and future workforce could act as a brake on future growth. Pan-Northern planning could maximise the benefits of growth connecting great places to live to jobs and prosperity.”

A potentially crucial obstacle to overcoming this is the so-called ‘80:20 rule’, which governs who can bid for the billions of pounds in funding made available by government agency Homes England.

A change in criteria in 2018 means only four out of the 72 local authority areas in the North can access 80 per cent of the nearly £9bn funding Homes England hands out to deliver new homes via five separate funding streams.

The funds are targeted at the 50 per cent of local areas suffering ‘high affordability pressure’, calculated by comparing average house prices with average wages. The vast majority of such areas are in southern England, while in the North only Hambleton, Harrogate, South Lakeland and Trafford are eligible to bid.

Other areas can only bid for the remaining 20 per cent of the money available in the Housing Infrastructure Forward Fund, Accelerated Construction Fund, Land Assembly Fund and Regeneration Fund, all of which are designed to unlock new housing.

Northern housing groups believe recent policy announcements have resulted in a funding system that will see a significant shift in resources away from the North, with funding for housing infrastructure expected to be cut by 50 per cent in the coming years.

Carol Matthews, who chairs Homes for the North, says the rules as they stand at the moment are “starving the North of investment” and “running in the opposite direction of the government manifesto and their stated commitment to level up”.

She said: “I absolutely believe the Conservative Government in five years wants to win and retain all those northern seats they secured (in the 2019 election). These rules are actually running in the opposite direction.”

Getting rid of the 80:20 rule would, she says, send out a strong signal to Government, developers and policy-makers that areas in the South with the highest land, property and rental values should not necessarily receive the lion’s share of the funding.

And she believes such a move would be welcomed in London and the South East, where the over-heated housing market now has too much high-density accommodation, not enough green space and a poor public realm. Ms Matthews concluded: “Sorting the regional imbalance is good for the South as well as being essential for the North.”