What is affordable housing?
The national definition of affordable housing is set out in the National Planning Policy Framework 2018 Annex 2:
Affordable housing is defined as: housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership and/or is for essential local workers); and which complies with one or more of the following definitions:
i) Affordable housing for rent, which includes:
- Social Rent: Housing let at Government’s target level which is below market level. Social Rent is the historic method for calculating council and Registered Provider rents. The majority of affordable housing for rent is let as Social Rent;
- Affordable rented housing: Housing let at up to 80% of market value; and
- Affordable Private Rent: Housing provided by an Owner/Developer as part of the larger private rental scheme and let at 80% of market value.
ii) Starter Homes: is as specified in Sections 2 and 3 of the Housing and Planning Act 2016 and any secondary legislation made under these sections. The definition of a starter home should reflect the meaning set out in statute and any such secondary legislation at the time of plan-preparation or decision-making. Where secondary legislation has the effect of limiting a household’s eligibility to purchase a starter home to those with a particular maximum level of household income, those restrictions should be used.
iii) Discounted Market Sale: is that sold at a discount of at least 20% below local market value. Eligibility is determined with regard to local incomes and local house prices. Provisions should be in place to ensure housing remains at a discount for future eligible households.
iv) Other routes to home ownership: is housing provided for sale that provides a route to ownership for those who could not achieve home ownership through the market. It includes shared ownership, relevant equity loans, other low cost homes for sale (at a price equivalent to at least 20% below local market value) and rent to buy (which includes a period of intermediate rent). Where public grant funding is provided, there should be provisions for the homes to remain at an affordable price for future eligible households, or for any receipts to be recycled for alternative affordable housing provision, or refunded to Government or the relevant authority specified in the funding agreement.
Current Affordable Housing Stock
The majority of the Borough's housing stock is social rented housing, which is historic. The majority of affordable housing lets are created through vacancies within the existing affordable housing stock.
The affordable housing stock in the Borough is owned and managed by Registered Providers. Registered Providers are also known as Housing Associations and are not for profit and/or charitable organisations.
There are some 15 Registered Providers (RP), also known as Housing Associations, in the Borough. The largest of these is Metropolitan Thames Valley Housing (MTVH) who own close to 3,500 dwellings in the Borough. The Council’s former housing stock is now owned and managed by Metropolitan Thames Valley Housing. Waterloo own 370 dwellings with the rest of the Registered Providers owning less than 150 units each.
Affordability in the Borough
For many years, house prices and rents in the UK have grown faster than average incomes. This has led to an increasing need for affordable housing as more people struggle to afford to purchase or even privately rent a home.
The Strategic Housing Market Assessment update 2012 indicated that 56% of emerging households in the Borough would not be able to afford entry level house prices in the Borough. The Strategic Housing Market Assessment indicated at that time an annual affordable housing delivery of just over 400 would be required to meet the Borough's backlog and newly arising need.
According to Government published house price data on 1 August 2018.
Average (mean) sales prices for the Borough are considerably higher than for Nottinghamshire and the East Midlands. To a degree this is compensated by higher average salaries within the Borough and a greater proportion of higher level occupations. Nonetheless residents in service sector or manual trades will not have higher salaries than their counterparts across the region, yet will need borrow at higher salary multiples to access property in the Borough as well as needing a higher cash deposit. Clearly with restrictions on access to mortgage credit since the credit crunch, most in lower salaried occupations will not be able to access the housing market in the Borough without additional assistance.
|1 bed||2 bed||3 bed||4 bed|
|Rushcliffe: lower quartile||£425||£569||£650||£950|
|Local Housing Allowance||£394||£470||£521||£656|
The average monthly private rental charges across 2017/18 are as shown above. Average rents in Rushcliffe are higher than average rents in Nottinghamshire. Lower quartile rents in the Borough are also higher than the Nottinghamshire average. The Local Housing Allowance also falls short of the lower quartile rental prices. This means that households dependent on housing benefit will not easily be able to access private rental sector.
How do we deliver affordable housing?
We require all new housing developments above a certain size to provide some affordable housing. On developments of 15 or more homes, or which are 0.5 hectares or larger, we require 30% of homes to be affordable. We have carried out research into the costs and returns of development, and we use a well-respected “viability toolkit” model, which shows that the 30% figure should be achievable by all developers, and will not discourage housing investment.
Rushcliffe transferred all of its council homes in 2003, so all affordable housing is owned by housing associations, the largest being Metropolitan Thames Valley Housing.
All social housing in Rushcliffe is now advertised on the Homesearch website, our Choice Based Lettings scheme.
There are currently a range of products available to help people get onto the property ladder. This includes the Help to Buy ISA; Equity Loans; Right to Buy; Mortgage Guarantee and Shared Ownership.
The Government has set up the website: https://www.ownyourhome.gov.uk/ for people to be able to quickly see which schemes they may be eligible for.
If you are interested in finding more about affordable home ownership properties in Rushcliffe, then visit the website: www.helptobuymidlands.co.uk. Help to Buy Midlands process applications for these properties and act as a “one stop shop” for affordable home ownership in the East Midlands.