Affordable Housing - It's not what you think!
There continues to be some misunderstanding when it comes to affordable housing. It is a misused term.
When used in the planning context it refers very specifically to a type and tenure of housing.
It is not lower priced housing on the open market!
The National Planning Policy Framework (NPPF) clearly states that if development is allowed on Green Belt land, whether as grey belt or under very special circumstances, the developer has to provide 50% of the properties as affordable housing. This is a legal condition of the approval and is secured by a S106 agreement. This is one of the Golden Rules in the NPPF. Please note that this only applies to approvals since December 2024 when the current NPPF came into use.
The NPPF also states that development on all other land (brownfield) must also deliver a proportion of the properties as affordable housing but this is typically at a level set by the local council. Basildon council is setting a local policy of 35%. In some cases it’s possible for the developer to make a payment to the council for affordable housing to be provided off-site. All councils are legally required to apply the policies in the NPPF and Basildon council are doing so.
But what really is ‘affordable housing’?
One thing it definitely isn’t, contrary to most people’s thinking, is lower priced housing on the open market. That has never been what affordable housing is in the planning system definition. It’s a misused and misunderstood term.
Affordable homes, as defined by the NPPF, are properties with very specific attributes and tenures.
1. The majority of affordable homes will be acquired by a registered housing provider (housing association) who will make them available to those that qualify at what is called an affordable rent. This is typically around 80% of the market rental price for the property.
2. A number could be acquired by the council as council housing stock for social rent but this will depend on the availability of finances, or the ability of the council to borrow (like a mortgage). Basildon council aims to buy small numbers of affordable homes on developments as council houses.
3. A proportion, again through a registered provider, will be available for shared ownership, where someone can buy a proportion of the property through a mortgage and pay rent on the remainder, with service charges on top.
4. A small proportion will be made available under the Government’s First Homes scheme where the property is sold to a first time buyer at a discount from the market price of the property. The discount varies but 30% is typical. The discount is locked to the property by deed so that the first buyer cannot profit when they come to sell. Any subsequent buyer also has to be a first time buyer and they will get the discount advantage.
In each of these 4 cases the affordable houses will be offered to the council first to see if they can be used to help anyone on council waiting lists or in temporary accommodation. They will not be offered to the general market.
The developer has to build the affordable housing to the same standard as the other housing on the development that will be sold on the open market at local market prices. It therefore costs the developer the same amount to build an affordable house (land, materials & labour) but they are acquired by the housing association or council at a reduced price. As such it reduces the overall profitability of a development.
Typically, the affordable housing is distributed across and within the wider development rather than being all put in one place. However, those that are flats or apartments are usually all in one discrete block for ease of management
The image below shows the proposed affordable housing policy in the emerging Basildon Local Plan.
When used in the planning context it refers very specifically to a type and tenure of housing.
It is not lower priced housing on the open market!
The National Planning Policy Framework (NPPF) clearly states that if development is allowed on Green Belt land, whether as grey belt or under very special circumstances, the developer has to provide 50% of the properties as affordable housing. This is a legal condition of the approval and is secured by a S106 agreement. This is one of the Golden Rules in the NPPF. Please note that this only applies to approvals since December 2024 when the current NPPF came into use.
The NPPF also states that development on all other land (brownfield) must also deliver a proportion of the properties as affordable housing but this is typically at a level set by the local council. Basildon council is setting a local policy of 35%. In some cases it’s possible for the developer to make a payment to the council for affordable housing to be provided off-site. All councils are legally required to apply the policies in the NPPF and Basildon council are doing so.
But what really is ‘affordable housing’?
One thing it definitely isn’t, contrary to most people’s thinking, is lower priced housing on the open market. That has never been what affordable housing is in the planning system definition. It’s a misused and misunderstood term.
Affordable homes, as defined by the NPPF, are properties with very specific attributes and tenures.
1. The majority of affordable homes will be acquired by a registered housing provider (housing association) who will make them available to those that qualify at what is called an affordable rent. This is typically around 80% of the market rental price for the property.
2. A number could be acquired by the council as council housing stock for social rent but this will depend on the availability of finances, or the ability of the council to borrow (like a mortgage). Basildon council aims to buy small numbers of affordable homes on developments as council houses.
3. A proportion, again through a registered provider, will be available for shared ownership, where someone can buy a proportion of the property through a mortgage and pay rent on the remainder, with service charges on top.
4. A small proportion will be made available under the Government’s First Homes scheme where the property is sold to a first time buyer at a discount from the market price of the property. The discount varies but 30% is typical. The discount is locked to the property by deed so that the first buyer cannot profit when they come to sell. Any subsequent buyer also has to be a first time buyer and they will get the discount advantage.
In each of these 4 cases the affordable houses will be offered to the council first to see if they can be used to help anyone on council waiting lists or in temporary accommodation. They will not be offered to the general market.
The developer has to build the affordable housing to the same standard as the other housing on the development that will be sold on the open market at local market prices. It therefore costs the developer the same amount to build an affordable house (land, materials & labour) but they are acquired by the housing association or council at a reduced price. As such it reduces the overall profitability of a development.
Typically, the affordable housing is distributed across and within the wider development rather than being all put in one place. However, those that are flats or apartments are usually all in one discrete block for ease of management
The image below shows the proposed affordable housing policy in the emerging Basildon Local Plan.
