What is ‘Affordable Housing’ and how did we get here?

Working for local charity, Community Council for Berkshire (CCB), as Rural Housing Enabler for the last decade it is clear to me that most people do not understand what is meant by the term ‘affordable housing’. If you are one of them, you are not alone.

Affordable Housing is a misnomer applied back in the noughties when ‘social’ housing became socially unacceptable, pure council housing became redundant as it was no longer being built and more and more of it was sold off in Right to Buy. Public opinion on housing became increasingly favourable to home-ownership. Council Housing became social housing, developed by Registered Providers and social housing has now morphed into ‘affordable housing’ a collection of tenures that are increasingly less and less affordable. Click here for a full history of social housing.

 

So what is affordable housing?

Affordable Rents: Homes to rent at 80% of open market rents (typically the cost to rent a 2 bedroom property in Windsor and Maidenhead is in the region of £1200 pcm)

Social rent: If you are lucky, you may still be on an secure tenancy with an old social rent that is linked to Local Council Housing Allowance Rates (In Berkshire in the region of £193.92 pw or around £840pcm). There is no longer Government grant to build new properties for social rent, though some councils may use S106 monies for this purpose.

Affordable ownership tenures:
Rent to Buy – homes for working people let at intermediate rent in order to provide the occupants time to save for a deposit to purchase the home. Properties will be let on an assured tenancy of less than 2 years, after 5 years the tenants have the option to purchase the property. If the tenants chose not purchase after 5 years the landlord has the option to continue to rent the property or to sell it on the open market.

Help to Buy – Shared ownership – where a purchaser can buy as little as 25% of a property and pay rent on the outstanding equity to the Housing Association. Any uplift in the value of the property is shared in proportion to the % of equity owned. The owner can ‘staircase’ upwards and buy additional shares in the property at any time. The purchaser is responsible for mall maintenance and repair on the property.

Starter Homes – this is a new tenure introduced in the Housing and Planning Act 2015. New homes will be developed specifically to meet the need of first time buyers (at least one partner must be under the age of 40). The houses will be for sale at 80% of market value but value is capped at £250,000 outside of London or £450,000 in London. Additional regulations are still to be determined.

Tenures and Rural Exception Sites
Rural exception sites are special development sites identified to meet exceptional circumstances (the affordable housing needs of local people) This is a special planning term for a site that would not normally get planning permission (probably because it is outside the development envelope or in an area of constraint) to meet exceptional needs.

The majority of the housing must be affordable tenure on a rural exception site (shared ownership or affordable rent) with some limited open market houses allowable just to help make the development of the affordable homes viable.

Starter Homes are a very new tenure and are not yet being developed, however Local Authorities can refuse to allow Starter Homes on rural exception sites as they are not ‘affordable’ in perpetuity. Likewise Rent to Buy is not a suitable tenure on exception sites.

Contact us:

If you would like more information on how to get affordable homes for local people in your Berkshire Village, contact:
Arlene Kersley,
CCB Rural Housing Enabler for Berkshire
0118 961 2000
arlene.kersley@ccberks.org.uk

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