Affordable Housing Programme Framework 2011-2015

March 2012

Communities and LocalGovernment and the Homes and Communities Agency published their framework forthe ‘Affordable Homes Programme’ which will run for the next four years in 2011.The programme sets out how the development of new affordable housing will befunded based on ‘affordable intermediate’ rents rather than social rents. Thispaper summarises the framework.

Traditionally, intermediaterent housing has been developed for key workers who are unable to afford to buyor rent a home in high value areas; rather than for the groups that havetraditionally rented social housing. It is likely that this will continue to bethe case with the new intermediate housing predominantly being built in highvalue areas and rented to working households with relatively modest means.

Two distinct tenures willtherefore develop for two different groups. Increased numbers of intermediatehomes will be provided for working households with modest means while the stockof social housing will continue to decline because of right to buy sales andthe re-letting of homes at intermediate rents. The fact that intermediate rentsand social rents are already similar in low value areas means that the newpolicy will not bring forward any additional homes in these low value areas.

In high value areas –especially London – there is a significant difference between social andintermediate rent and significant demand for intermediate rent homes. It is likelythat the policy will have its most significant effects in London and other highvalue areas in bringing forward more intermediate homes but at the same time reducingthe stock of social housing. There are fears that this could lead to people whoneed social housing having to move out of high value areas into low value areas.This would include a gradual exodus of social tenants from inner London.

The programme is open to LocalAuthorities as well as Housing Associations. However, the government’sself-financing proposals for local authorities include the introduction of aborrowing cap that prevents some local authorities from undertaking any newborrowing and therefore prevents them from doing any new build.

There are those inthe sector who consider that the provision of additional social homes should bea higher priority than the provision of additional intermediate homes. This iscertainly the view of elected members in a number of authorities and the viewof board members in a number of housing associations. They may wish to look atways of developing social housing without grant.

Finally, will thepolicy deliver the 150,000 new homes that the government would like to see.Many in the sector have suggested that with the banks still unwilling to lendat favourable terms this will not be the case.

For full briefing paper please click here.

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