The term ‘affordable housing’ describes lower rent property that is available to eligible households that are unable to afford the full market value. The term includes both affordable rent housing, often provided by housing associations, and council housing.
However, homes let under the ‘affordable’ banner may be decidedly ‘unaffordable’ to those on a low income, as rent is capped at 80% of the full market rate but crucially does not take account of local wage levels. The government ceased funding of social housing in 2010 to encourage the provision of affordable rent property.
Social renters are assessed under a formula that looks at both local area wages and property values, and rent would typically be set at around half the cost of private renting. However, although funding was reinstated in 2017, funding falls a long way short of demand and the number of social homes being built was just 173 last year from an initial 682 in 2010/11.
Nationally, 81% of new affordable housing last year, either built or acquired, was classed as affordable rent rather than social rent.
In Devon, when it was introduced by the government in 2011/12, affordable rent accounted for just 4% of new affordable homes either built or acquired. Just a year after its introduction that figure had grown to 50%, and now stands at 68% of all new affordable housing in Devon.
Last year in Devon, where wages are at the bottom of the national average, all the new affordable property built or acquired in the areas of Plymouth, South Hams, Teignbridge, West Devon and Mid Devon, was classed as ‘affordable rent’. In East Devon the figure was 97%, in Torridge 67% and 58% in Torbay.
The cost of social rented property in Devon is on average £86 per week, compared to around £120 per week for ‘affordable rent’, meaning that affordable rent in Devon is 42% more expensive than social housing at an additional £1,854 per annum.
At the time of researching this article, Devon Home Choice, the body that oversees social and affordable housing in Devon, offered just twelve properties in the whole of the county and no social housing. The cost of a privately rented home in Devon is on average £150 per week, or an additional £3,328 per annum.
Shelter says that the cost of affordable housing should reflect local area wage levels and has called for an additional 3.1 million social rented homes to be made available over the next twenty years to meet demand. There is perhaps also a demand for social housing ‘need’ to be reassessed during the lifetime of the let in order to re-release property to those who really need it.
If you’re lucky enough to be buying property in Devon or anywhere else in England and Wales, ask a Chartered Surveyor for a building survey.