The grass isn’t always greener in East Lancashire

This is about former cotton towns in East (Pennine) Lancashire where the housing market is slack and house prices in the towns are low – decent terraced houses typically from £50,000 to £85,000, modern semis and bungalows from £100,000 to £150,000.

Most of the available housing land, brown or green, is not “viable”. The cost of land and building plus the developers’ profits is more than the local market return from sales or letting. The only exceptions are attractive countryside sites on the edge of town where there is strong resistance to development (and not just from nimby neighbours), the subject of bitterly fought planning battles.

Much of the small amount of new housing built recently is by a  successful joint venture company known as PEARL, a partnership between a local developer and the local Council (Pendle); or for the main social housing provider, Housing Pendle. Even when Council-owned brownfield land can be put in for free or funding obtained from the Homes and Communities agency, and no profit is to be made, the developments are marginal. (Prices for new 3-4 bed houses on the edge of the countryside and wonderful views of Pendle Hill across the valley range from £135,000 to £185,000).

We all really want to see new housing on brownfield land such as demolished mills. But private sector schemes are just not viable. Pendle is part of East Lancashire which has been shortlisted for consideration as one of the government’s new brownfield Housing Zones. This is a scheme which will provide £200 million of “recoverable investment funding”, a fancy name for cheap loans.

An excellent idea where it will work. But in places like Pendle, with a real gap between development costs and returns, it won’t work. We need to bridge this gap and we need grants not loans.

See the Federation of Master Builder'sresponse here.