Rural Housing Economic Viability Toolkit

During the Rural Affordable Housing Project engagement process, a number of local authorities expressed a need for support with economic viability and raised concerns in this area.

Scott Wilson, supported by Celandine Strategic Housing and English Rural Housing Association, was commissioned to analyse costs associated with rural affordable housing, and to develop a rural specific ‘viability toolkit’.  The study reviewed these concerns and analysed the evidence gathered by the Rural Affordable Housing Project alongside further research findings. 

The purpose of this study is to enable a consistent approach to measuring and understanding the economic viability of affordable housing schemes in settlements with a population fewer than 3,000, when identifying potential programmes of delivery and windfall sites.  The analysis, as detailed in the ‘stage 1’ report, points to a number of factors that regularly occur in relation to rural housing schemes which can often  result in increased development costs. These factors, including design, infrastructure and code for sustainable homes, are discussed, with recommendations to counter these costs put forward.  The report also discusses wider issues related to strategic housing and enabling that impact on the economic viability of rural development in some detail, making recommendations to counter any negative impact.  Among the key recommendation is the reference to local authorities and registered providers, that they should review the potential to improve delivery through partnership and procurement processes throughout the supply chain to enable risks associated with innovation to be shared and economies of scale and continuity of supply to be achieved. 

The rural viability toolkit has been developed, based on the analysis, reported upon in the ‘stage 1’ report, as well as a consultation process with local authority officers and other stakeholders closely involved in the delivery of affordable housing.  It is comprised of four elements:

1. ‘Viability of rural affordable housing delivery – an overview’ - explanatory guidance regarding different delivery routes for rural affordable housing and the roles and processes involved.  This section includes a rural housing development flowchart; 

2.  ‘Affordable housing costs specific to rural areas’ - a summary of the rural specific costs to development;

3. ‘Assessing viability – the mechanics’ - a step by step guide to economic viability and elements of an appraisal for both s106 and exception sites – including an illustrative case study;

4. ‘Improving viability through partnership working’ - provides a detailed overview of different types of partnerships and how partnership working is an important mechanism for improving value for money and quality in the delivery of affordable housing.