Affordable Housing

The cost of housing across the South of England is high when set against average incomes. It isn’t surprising therefore that many attempts have been made over the years to deliver housing that is affordable by more people. My experience of this was gained with the former Kennet DC, although the approach they used originated elsewhere. In essence the approach the Council adopted was to identify sites that would not normally be given planning permission. The land did not therefore acquire the inflated value of sites allocated for housing, enabling it to be acquired by Housing Associations or other social landlords at a lower cost than would otherwise have been the case.

To make this work, complex legal agreements were needed in an attempt to prevent the onward sale of these houses on the open market at ‘normal’ prices. This didn’t always work of course and every attempt was met with opposition from Planning Inspectors, Central Government and politicians generally, all unhappy with the implications of this approach for the planning system and with the legality of the process.

Later, changes to Government policies made it possible to require a certain percentage of any new development to be given over to ‘affordable housing’, although this had to include the option of housing for sale. Without a clear definition of what ‘affordable’ meant this often ended up as small units with a degree of cross subsidy from the larger more expensive ones. If public money was involved then the units would probably end up being transferred to a Housing Association. Without public money, and sometimes with, there was no way to prevent the first purchaser cashing in on the windfall increase in value that became possible on the first resale.

One other, perhaps unintended, consequence of this approach is that the ‘affordable housing’ so provided is usually very small and in terraces or flats, so inflexible in responding to changes in family circumstances. Given that a key reason for young couples attempting to buy their own home is often to start a family, this is a serious flaw. Having struggled to buy a tiny one bed room flat, these couples are forced as children came along, to uproot themselves in order to move and find a larger house. Buying a house is stressful at the best of times, but being forced to do so at a time when family income is going to fall is doubly so.

Increased mortgage costs are not the whole story either. We need to add removal costs, legal and estate agency fees and survey fees of one sort or another. Typically these add another £5-£10k to the cost of moving house. The aggregate cost of these enforced moves across the country is huge and a diversion of resources from the provision of housing. This doesn’t just apply to young couples of course. At the other end of life, as children move out, older couples may find themselves with more space than they need. At the moment, downsizing often means moving to a new area away from the community they know.

Is there a way through these problems? Can we provide affordable flexible housing in ways that reinforce community rather than destroying it? I believe there is and that’s what I will start to cover in my next post.

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Posted in Housing
One comment on “Affordable Housing
  1. If a shared ownership purchaser has bought their home with a registered provider (housing association) they take the risk of the value of the property going up or down. If the value rises and they have a 50% share in the property they would receive half of any increase of value if they need to sell it. They also have to offer the home back to their co-owner before putting it on the open market for sale.

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