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What is an 'affordable' home?

By Exeter Express and Echo  |  Posted: January 10, 2013

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CONFUSION among house buyers and local planning authorities may mean the full potential of "affordable housing" schemes in the region aren't being realised, say homebuilders Devonshire Homes.

Land and planning director for the Tiverton-based developers, Steve Russell, raised the concerns following the Government's announcement of the first National Affordable Housing programme.

Mr Russell said: "The terms 'affordability' and 'affordable housing' have different meanings. 'Affordability' is a measure of whether housing may be afforded by certain individuals. Any property is affordable if someone is in the financial position to purchase it. But 'affordable housing' refers to particular products outside of the open housing market. It is this test of terminology combined with the array of 'affordable housing products' that is causing confusion in the marketplace."

Recent figures from the National Housing Federation also indicate the South West has the largest shortfall of homes in the UK with one in 12 households now on the waiting lists for social housing.

Plus, objections to new housing schemes by existing tenants are holding up possible developments, preventing those desperately in need of a home from getting on the ladder.

Changing government administrations may be partly to blame according to Mr Russell, with Labour first announcing the 'National Affordable Housing Programme' during its tenure before David Cameron's coalition Government displaced the scheme with the 'Affordable Homes Programme' in 2011.

But a lack of distinction between terms like 'affordability' and 'affordable housing' may be the biggest cause of confusion for house buyers when they come to explore schemes available to them.

In fact, affordable housing options include many schemes including social rented, affordable rented, intermediate housing and shared ownership.

Unlike the private sector in which tenancies and house purchases are offered according to the free choice of the landlord or potential house buyer, social housing is allocated according to eligible households in housing need. It is generally provided by councils and not-for-profit organisations typically now referred to as 'Registered Providers' – what were previously known as housing associations.

Mr Russell continued: "The majority of our development sites feature some form of 'affordable housing' and we work very closely with the region's Registered Providers in supplying this type of high demand housing.

"More often than not priority is given to the construction of these affordable homes to ensure local families are the first to benefit from the new developments."

In addition to these products the Government introduced further assistance to encourage home ownership in the form of FirstBuy, which is designed to help people to get their foot onto the property ladder and purchase a suitable home. FirstBuy comes under the HomeBuy brand and assists homeowners by providing up to a 20 per cent shared equity loan whereby Devonshire Homes and the Homes and Communities Agency (HCA) each contribute up to 10 per cent. Purchasers then need to secure a smaller deposit of five per cent and a mortgage for 75 per cent of the full asking price.

The HCA is committed to building 80,000 new affordable homes by 2015 but time and again new housing schemes and the affordable housing that they will provide come up against opposition. According to Mr Russell, this can often be from people who are in prominent positions within the community and secure in their homes. He said: "(They) drown out the voices of those people who are actually in need of housing – those who would like to stay and live in their home town and support local businesses, send their children to the village primary school and contribute to the future of the town. A more emphatic approach to our neighbours would help all parties including councillors and developers to work together to deliver the homes that are so clearly needed to turn this housing crisis around."

However, praising affordable housing and its potential to help plug the housing gap, Mr Russell concluded: "The spectrum and options within the term affordable housing is vast. Its aim to assist many people in varying circumstances is to be congratulated and not knocked."

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