1) What is an affordable rent level?
- 10% of renters in Lambeth have household incomes of £10-15,000.
£12,500 household income: max rent should be £42.31/week
- 10% of renters in Lambeth have household incomes of £15–20,000.
At £17,500 household income, max rent should be £70.77/week
- 10% of renters in Lambeth have household incomes of £20-25,000.
At £22,500 household income, max rent should be £99.23/week
- 9% of renters in Lambeth have household incomes of £25-30,000.
At £27,500 household income, max rent should be £127.69/week
(Based on assumption that rent should not take up more than 40% of total housing costs.)
Most housing associations borrow today against future income from rents and sales. Future income is affected by tenure mix, size of homes and time to pay back the original loan. The level of anticipated rental income determines how much money can be borrowed.
|What does it cost to build a new home?||What income can it generate?|
|£70,000 for a home for 2 people (50m2)
£140,000 for home for 6 people (100m2)
Different options change costs
300m2 could create:
|3 large 4 bed homes would generate:
4 smaller 2 bed homes would generate:
3) The money
Government subsidy rules tie housing subsidy to “affordable rent”, so less money is available from government than in past to support housing
Potential other sources of “extra” funding
- S106 – planning obligations from developers
- CIL – community infrastructure levy
- Service charge on residents and facilities/commercial users
Affordable housing: This is a catch-all term for all forms of housing provided for people at less than market cost.
This includes social rented, affordable rented and intermediate housing (see below for details).
Social rented housing: this includes the majority of council owned and housing association owned homes.
All social rented housing is let at ‘guideline target rents’ determined through the government’s national rent regime. It may also be owned by other persons and provided under equivalent rental arrangements to the above, as agreed with the local authority or with the Homes and Communities Agency.
Affordable rented housing: this is let by local authorities or private registered providers of social housing to households who are eligible for social rented housing at higher rents under the new “affordable rent” regime.
Affordable Rent is subject to rent controls that require a rent of no more than 80% of the local market rent (including service charges, where applicable).
Intermediate housing: homes for sale and rent provided at a cost above social rent, but below market levels. These can include shared equity (shared ownership and equity loans), other low cost homes for sale and intermediate rent, but not affordable rented housing.
Homes that do not meet the above definition of affordable housing, such as “low cost market” housing (eg “starter homes” that are lower cost because of their size or location) may not be considered as affordable housing for planning purposes.
What is “self build”?
This is where a group of men and women join forces and become involved in the planning, design and building of their own homes. The approach gives residents a greater say over the type and style of their home and community. It can also reduce the cost of purchasing a new home by removing the need for developers.
What is a “community land trust”?
They are non-profit, community-based organisations that develop housing, workspaces, community facilities or other assets that meet the needs of the community, are owned and controlled by the community and are made available at permanently affordable levels
What is a community-led long-term management organisation?
Long-term management can be conventional (eg managed by a local authority or housing association) or involve creating a wholly new community organisation with specific responsibilities like a development trust or a co-op.
These responsibilities might include maintenance of public space, management of community assets, and/or the delivery of local services.
5) Benefits and trade offs
Option 1: Housing for rent that local people can afford
Option 2: Secure, long-term tenancies for people who want them
Option 3: Co-ownership of housing
Option 4: A mix of housing types and tenures
Option 5: A mix of housing for families and people without children