Houses built on NHS land sold for up to 9.6 times the average nurse’s salary

The average sale prices of many houses built on NHS land is 9.6 times the average annual salary of a nurse at £306,434. At present 5% of the homes built on sold-off NHS land will be for genuinely affordable social rent with 30% of sites having no plans for affordable housing at all, according to new analysis published by New Economics Foundation today.

The analysis takes a fresh look at 23 sites the NHS declared ​‘surplus’ in England in the last year, and it shows, once again, that the sale of NHS land is fundamentally failing to produce the affordable homes we need, and is exacerbating the deep affordability crisis across the UK. Meanwhile there are currently 1.2 million English households on the waiting list for social housing, but the majority of homes built on NHS land will be out of reach to those who most need them.

The report recommends introducing an ​‘NHS Land community-lock’ where any land asset sold by the NHS through choice, necessity or obligation can only be used for community benefit. Meaning that the community served by the NHS Trust will benefit from the sale of an asset and those working for the NHS Trust will be able to purchase or rent homes on the land. This is part of a wider recommendation to create a ​‘People’s Land Bank’ which would hold surplus public sites to be used strategically in partnership with communities to meet their needs for affordable housing.

The NHS is selling off land as part of the Government’s Public Land for Housing Programme, which has the dual aim of releasing enough land for 160,000 homes by 2020, and raising £5 billion in capital receipts. The recent National Audit Office report found that the government is currently expected to fall almost 100,000 homes short of this target by 2020. There is also little planning for the types of homes being built – so much so that the Ministry of Housing Communities and Local Government (MHCLG) do not collect or publish data on the number of affordable homes built. Further, MHCLG has not published an annual report on the land for new homes programme since February 2017. When NEF requested this information using a Freedom of Information Request, the information was denied.

In 2016 a survey by the Royal College of Nursing found that 40% of nurses in London plan to leave the capital within 5 years, because of the cost of housing. The average RCN member spent 50% of their take home pay on housing and transport. Despite this, when we looked at the two large NHS sites in London with planning permission for development in 2017/​18, we found that none of the homes being built for sale would be at a price which would be affordable to nurses. The two sites are:

• Thorpe Coombe Hospital, Waltham Forest: it would take an average nurse over a century to afford the deposit for a market-rate home at the site of Thorpe Coombe Hospital, which is being redeveloped into 91 homes. The London Plan requires 50% affordable housing on public land, and the council also has a borough-wide target of 50% affordable housing on new build developments, however the scheme has been approved with no affordable housing.
  Ealing Hospital: it would take 93 years for an average nurse to save for a deposit for a market-rate home on the site of Ealing Hospital. With 45% ​‘affordable housing’, on paper this site looks closer to meeting the London Plan requirement of 50%, but in reality 30% will be for shared ownership, completely out of reach for many Londoners, and only 8% will be for genuinely affordable social rent.
  

The analysis, which looks in detail at the planning documents for the 23 NHS sites declared ​‘surplus’ in England in 2017 – 18 that have the capacity for over 80 homes, finds that on those sites:

• 83% of the homes being built on NHS land will be for market sale. The remaining 17% of proposed houses are classified as ​‘affordable’ but less than a third of these are for genuinely affordable social rent, with many of the rest at 80% of market rent, or for shared ownership.
• Only 5% of the homes built on sold-off NHS land will be for genuinely affordable social rent.
• 30% of the sites have plans for no affordable housing at all, and 61% have plans that include no socially rented housing — widely understood as the only housing that is genuinely affordable to people on low incomes.
• Of the planned homes to be built for sale on NHS land, two thirds will be unaffordable to a nurse on an average salary. And where they could afford the mortgage repayments, a nurse would have to save for an average of 35 years to afford the deposit
• The average expected sale price for these new homes, based on area estimates, is £306,434. This is 9.6 times the average annual salary of a nurse.

Hanna Wheatley, Researcher at the New Economics Foundation, said:

“The UK is facing a worsening housing crisis – finding a decent, affordable place to live is becoming harder and harder for people and families across the country. A key part of this is the overinflated price of land dictating what gets built on it. Public land, if it must be sold, represents an opportunity to produce the kinds of homes people need. But the government’s approach to the public land sale is a shambles.

“There is a clear tension between trying to raise as much money as possible from the land sale and also building the kind of homes we need – and right now the government isn’t doing either. The one-off cash injection gained by selling land to the highest bidder is small compensation for the lost opportunity of more affordable housing, and a reduction in the housing benefit bill.

“Both the moral and economic cases are clear — if the Government insists on privatising the ever decreasing commons of land that we all own, they must think clearly about what that land is used for, and a massive increase the supply of affordable housing should be top of the list.”

In Southend campaigners have been fighting to secure affordable social housing on a former NHS site, Fosset’s Farm. The NHS sold the site to Homes England for £7.8m, and the group ​‘Fossett’s for the People’ has been set up to challenge Homes England to build genuinely affordable homes on the site, as opposed to luxury homes for London commuters.

Kate Sheehan, an NHS nurse who lives in Southend, and one of the Fossett’s For the People campaigners said:

“The NHS land that was sold off in Southend was originally intended as a site for a diagnostic and treatment centre, instead this has been sold off with none of the profits going to frontline services.

“This NHS land is ours, and now that it has been earmarked for up to 400 privately developed homes, Homes England should at least ensure that our community gets something back from yet another disgraceful public land sell off. Our community desperately needs genuinely affordable social housing and homes for key workers which will assist our local housing and NHS staff crisis. Homes England should be engaging with us over the future of this site, and we call on them to do so. ”

Jude Duggins, Royal College of Nursing London Regional Director, said:

“It is sad but unsurprising to see NHS land continuing to be sold to the highest bidder with almost zero attention paid to the housing needs of every day Londoners. For our members who work day and night caring for people in the capital, it is hugely disappointing that developers are still being allowed to use loopholes to avoid building the genuinely affordable homes that are so desperately needed.

“Our members have repeatedly told us that they will have to leave the city if their housing needs are not met soon, yet this report shows us that NHS Trusts are selling land for homes that would take a nurse 100 years to save a deposit up for. That is nothing short of disgraceful and a painfully short-sighted way to manage land which could help house vital health care workers and low income Londoners.

“As the report acknowledges, it is true that Trusts have been placed in difficult financial positions as a result of sustained government underfunding, however we are clear that selling valuable land in order to balance the books for one year is counter-productive and does little to solve the cost of living pressures that are driving nurses out of London and fuelling a recruitment and retention crisis in the profession.

“The recommendations made by the New Economics Foundation, both for a ​‘community-land lock’ to ensure NHS land is only sold for the benefit of the community and for the housing needs of NHS staff to be given true priority when land is developed, are welcome and should be taken seriously by policy makers, in Westminster and in City Hall.”

Notes

The original press release sent out did not include a quote from Jude Duggins, Royal College of Nursing London Regional Director.

The report, Still No Home For Nurses, is available from https://​newe​co​nom​ics​.org/​2​0​1​9​/​0​6​/​s​t​i​l​l​-​n​o​-​h​o​m​e​s​-​f​o​r​-​n​urses

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

Case study examples:

The former Royal Infirmary hospital in Stoke-on-Trent
This site has been given planning permission for a development that has no affordable housing, with the developer instead promising to build some on-site ​‘play equipment’ and also give some money to the council for affordable housing elsewhere – an amount which adds up to less than 1% of the price they paid for the land. It would take the average nurse 64 years to save for a deposit for a home on this site.

The Derbyshire Royal Infirmary
On this site the Cedar Group, owned by a Birmingham-based property developer estimated to have a personal wealth of more than £50 million, has submitted plans to build 786 new homes, with not a single social or affordable home among them. The company set up to buy the site paid the NHS £7 million for the plot, but submitted a viability assessment stating that they couldn’t afford to build any social or affordable housing, only almost 800 expensive market homes. Derby has a waiting list for social housing of 6,686 households, and this key development won’t help any of those people and families.

The former site of St Luke’s hospital, Huddersfield,
On this site the developer initially received planning permission to build 226 homes, with just 5% affordable housing. However, they are now seeking amendments to their application, and using the viability loophole to claim that even this tiny proportion of affordable housing is not viable, instead seeking to reduce their affordable housing contribution to zero.

NEF searched council planning portals for the planning documents for all surplus NHS sites with plans for more than 80 dwellings listed as surplus by the NHS in 2017 – 18^. This resulted in 23 sites. Using the number of market dwellings, and number and breakdown of affordable housing proposed for each development, we calculated the total affordable and social rent dwellings planned as a proportion of all the dwellings proposed.

Market dwelling price estimates were based on the average price of all new builds from 2017 to present using Land Registry Price Paid data for the first half of the postcode of each development. We used all sales for two postcodes where there was insufficient data on new builds.

Our calculation of market dwelling affordability was based on a single full time nurse salary in 2018, using the most common tax code (1185L).

The mortgage costs are calculated assuming a 80% loan-to-value (LTV) mortgage over 25 years with an annual interest rate of 3.34%. We calculate the number of years it would take to save for a 20% deposit based on an average saving rate of 5% of monthly income after housing costs, assuming an average of 33% of income spent on rent. We set the level of affordability at 35% of monthly take home pay, following Shelter guidance.