What is affordable housing?
Affordable housing is for people who can't afford to rent or buy on the open market. There are 3 types of affordable housing.
Social rented housing
This is rented housing, owned and managed by councils (council housing) and housing associations. It's generally offered to those in housing need from a register (waiting list), at rents well below market level.
Affordable rented housing
This is similar to social rented housing, but the rents charged by the housing association or council could be anything up to 80% of market rents. The increased income from higher rents is used to build more affordable homes.
Intermediate affordable housing
This is generally a step to home ownership for those who can't afford to buy a home on the open market.
It includes products such as:
- shared ownership (part rent, part buy)
- shared equity (where two parties share a stake in the home)
- discounted below market value (where the home is bought at a discounted price to similar market housing)
The key thing about all affordable housing is that it must:
- meet the needs of eligible households at a cost low enough for them to afford, determined with regard to local incomes and local house prices
- include provision for the home to remain at an affordable price for future eligible households or, if these restrictions are lifted, for the subsidy to be recycled for alternative affordable housing provision