Assessing affordability and housing tenures

We have a duty to assess an applicant's affordability to purchase an affordable property. The Homes England calculator is used to ensure the applicant is eligible, are unable to purchase on the open market and can afford the property.

Types of tenures available

Social rent

Social rent is owned by local authorities and private registered providers (as defined in section 80 of the Housing and Regeneration Act). These rents are in line with guideline target rents which are determined through the government's rent policy.

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. Affordable rent is subject to rent controls that require a rent of no more than 80 percent of the local market rent (including service charges, where applicable).

Affordable private rent housing

This is housing that is made available for rent at a level which is at least 20 percent below local market rent. Eligibility is determined with regards to local incomes and local house prices. Provision should be made to ensure that the affordable private rent housing remains available for rent at a discount for future eligible households or for alternative affordable housing provision to be made if the discount is withdrawn. Affordable private rented housing is particularly suited to the provision of affordable housing as part of the Build to Rent Schemes.

Intermediate housing

This is housing that is provided for sale and rent at a cost above social rent, but below market levels. Eligibility is determined with regards to local incomes and local house prices. It should also include provisions to remain at an affordable price for future eligible households or for any receipts to be recycled for alternative affordable housing provision. These include shared ownership, shared equity, low cost market discounted market, rent to buy and intermediate rent.

Shared ownership

Ownership is under the terms of a lease by which a lessee may acquire a share or shares of the equity from the registered provider who retains the remainder and may charge a rent.

Intermediate rent

This is housing that is provided by a registered provider or private landlord. The housing provided will have the same characteristics as social rented housing except that it is outside the national rent regime. It is subject to other rent controls that require it to be offered to eligible households at a rent of up to 100 percent of the Local Housing Allowance (housing benefit for people who rent a home from a private landlord) for Herefordshire.

Discounted market sales housing

This is housing that is at least 20 percent below local market value. Eligibility is determined with regards to local incomes and local house prices. It should include provisions to remain at a discount for future eligible households.

Low cost market housing

This is housing that is sold at a discount of at least 20 percent below local market level. In Herefordshire any discount should be sufficient to meet local housing needs. The discount set is applied using the assumptions in social rent and affordable rented housing above. Eligibility is determined with regard to local incomes and local house prices. It should include provisions to remain at a discount for future eligible households.

Shared equity

This is housing that 100 percent of the title is to be transferred to a qualifying purchaser at no more than 80 percent of open market value subject to a legal charge in favour of the council for 20 percent of the unit's equity value.

Rent to buy

This is housing provided by registered providers that is let at an intermediate rent for a maximum of five years to a household that is looking to buy but are unable to save for a deposit.

Starter homes

This is housing as specified in Sections 2 and 3 of the Housing and Planning Act 2016 and any secondary legislation made under these sections. The definition of a starter home should reflect the meaning set out in statute and any such secondary legislation at the time of plan preparation or decision making. Where secondary legislation has the effect of limiting a household's eligibility to purchase a starter home to those with a particular maximum level of household income those restrictions should be used.

Strategic housing contact details

If you are a prospective developer or a parish council and would like advice on developing affordable housing or if you are looking for advice on the feasibility of developing affordable housing on a particular site, please contact us.

Telephone: 01432 260269

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