west*wales*news*review

West Wales News Review — analysis with a sustainability slant

One Wales One Planet: Helping Young Families to Live and Work in the Countryside

Yesterday I was speaking to the estate agent who has been trying to sell my late parents’ bungalow.  “The problem is,” he explained, “that people aren’t retiring any more, they are keeping their heads down and concentrating on earning money for as long as they can. Additionally, there used to be families moving in to the area who also wanted bungalows for their elderly relatives, but those families find it much harder to move now because they can’t sell their houses.”

Having just written a report on mortgages, I could identify with what he was saying. With the exceptions of hot spots drawing in money and residents from overseas, places like Kensington and Chelsea and the country house belt around London, the property market suffers multiple afflictions:

  • Fewer mortgage funds.
  • Strong competition for those funds, enabling lenders to be very fussy about whom they will accept as borrowers.
  • Increasing job insecurity, temporary work, part-time work and self-employment as a response to the lack of employee jobs, all cutting households’ capability to repay a mortgage.
  • Households in negative equity, unable repay their current mortgage, let alone take out a new one.

The property market echoes the increasingly polarised distribution of incomes. There is a globalised top tier, a professional tier of doctors, lawyers, accountants and so on below that, a retirement tier, a tier of homebuyers who used to aspire to move up the property ladder but who are now mainly stuck on whichever rung they had reached, and everyone else.

Personally, I think the typical three-bedroomed house should cost no more than three to four times the average income. The median net equivalised household income for the UK in 2010-11 was £419 a week, £21,788 a year. This means that, to be really affordable, the average house would need to be in the range £65,350 to £87,150. All very well, but if you have paid double that amount, you will be very reluctant to sell at a 50% discount, all the more so if you have a mortgage to pay off.

There are terraced houses in this price range where I live in rural Carmarthenshire, but very few jobs available, a fact which is a further drag on the market here. Over most of the UK, the gap between incomes and property prices is immensely larger. In London, the chasm between gross disposable household income per head, £20,238, and the average property price, £416,976, was 20.6 times in 2010. In Wales the equivalent figures were £13,783 and £150,066, a differential of 10.9 times.[1]

In such circumstances, we might expect a gradual fall in property prices until the typical house became affordable for the typical household, but the shortage of homes – estimated by the Institute for Public Policy Research to reach 750,000 dwellings for England by 2025[2] — of course limits the falls, and landlords see a big opportunity to cater for the hundreds of thousands of households for whom home ownership will have become a distant dream.

Here empty houses are quite common, from ruined mansions (like Edwinsford, photo below) to terraced cottages. The slowing of the retirement conveyor belt is one cause, the reductions in local employment another. The biggest employer is the county council, which is shedding jobs. A more even geographical distribution of work would help to populate dying hamlets, and Wales has a policy that could help: One Wales One Planet, a vision for low-impact developments that would not be allowed under conventional planning regulations. One Wales One Planet, and Technical Advice Note (TAN) 6, Planning for Sustainable Rural Communities in Wales, which accompanies it, open up possibilities for self-sufficiency and small-scale employment in and around rural settlements.

One Wales One Planet was published by the Welsh Assembly Government in 2009, and TAN 6 followed in 2010. Applications under the policy started to come in from July 2010, and in the just-over eight months from then until the end of March 2011, 26 applications were received, and 14 of these were given permission to go ahead. Leading the way with three permissions each were Carmarthenshire, Ceredigion and Swansea.[3] The idea is for homes built of local materials at low cost and with very small fuel and power requirements; smallholdings; food and forestry enterprises; and renewable energy.

All new policies have to start somewhere, and Wales is ahead of England, which has nothing similar. Low-impact developments are a tiny chink in the dysfunctional property market, a small step towards revitalising country areas which have lost shops, schools, post offices and public transport links, along with the employment that used to exist. They won’t by themselves solve the ruptures between dwellings, jobs, incomes and mortgages, but they offer a promise of a gradual revival of rural communities, adding environmentally aware young families and children to ageing retired populations.

The ruined Edwinsford at Talley, Carmarthenshire, photographed by Paul White, http://www.welshruins.co.uk. Thank you to Paul for permission to reproduce the photo: go to his website for several more photos of Edwinsford and other unique, abandoned buildings. Edwinsford’s listing as Grade 2* has not helped one jot to protect it, or to find a sustainable use for it. We need to loosen the impossibly restrictive rules for renovating listed buildings or more and more will just fall down — but that is another story.


[1] Income figures from table 1.1, Regional Household Income, Spring 2012, from the Office for National Statistics. Gross household disposable income is the money left after paying income tax, national insurance, property taxes and pension contributions. Property prices are from Zoopla, June 26th 2012.

[2] ‘The Good, the Bad and the Ugly: Housing Demand 2025’, published in 2011.

[3] Welsh Assembly Government answer to written question from Rhodri Glyn Thomas, Assembly Member for Carmarthen East and Dinefwr, June 15th 2012.

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