Affordable Housing


01 August, 2014

Recent reports from the National Housing Federation ("NHF") have revealed that the housing shortage in the North West is pushing house prices and private rents out of reach for local workers, and things are only going to get worse by 2020.

The NHF warns that while workers in the region have seen the average wage rise by just 23% between 2002 and 2012, house prices have rocketed more than three times as fast by an astounding 76%.

The report blames the North West's affordability crisis on the housing shortage in the region, with less than two thirds of the homes needed in the region being built. It is understood that 17,500 new households are expected each year to form in the North West but in 2012/2013 just 11,160 homes were built, nearly 3,000 of which by housing associations.

In the North West there has been a 112% increase in working people claiming housing benefit between 2009 and 2013, one of the highest regional increase for the UK. With the Government currently spending more than £23bn a year on housing benefit, much of this goes into the pockets of private landlords, when that money could be put towards building new affordable homes.

It is clearly becoming very difficult for people living and working in the region to get that 'foot' on the housing ladder that they need. However with more support and funding, housing associations can be the real driving force behind the change needed for local communities and can actively contribute towards the recovery of a stable economic by providing the affordable housing that is needed.

The development of new affordable homes is key to balanced economic recovery however there are numerous factors that a housing association must consider when entering into such plans to ensure that the any development is viable and deliverable.

Getting the Head of Terms right at the outset is crucial to ensure that any development is cost effective. It is well known that the requirement to provide affordable housing has the most effect on viability and deliverability of a housing development. The viability of a development is generally controlled by the type of affordable housing to be provided at the development, whether this be Social Rented, Affordable Rented and Intermediate Housing to Shared Ownership and Shared Equity Housing. Ultimately this will be governed by the housing need in that particular area.

The National Planning Policy Framework states that, 'to be considered deliverable, sites for development should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that the housing will be delivered on site within five years.'

The viability and the deliverability of a development run hand in hand and this can be a difficult matter to achieve. The Homes & Communities Agency do provide useful toolkits to assist housing association in ensuring the viability and deliverability of an affordable housing development.

(Sources: National Housing Federation & National Planning Policy Framework)


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