'Affordable' housing': This is an affordable super yacht

'Affordable' housing': This is an affordable super yacht

At the Budget in November, the government re-announced putting £11.5 billion into something called an Affordable Homes Programme (AHP), to build 180,000 ‘Affordable Homes’. 

Last week, Theresa May called on Boris Johnson to build more ‘truly affordable’ homes for rent. 

Labour has previously said it wants to ‘redefine affordable’ to make it ‘truly affordable’.  
You know when you say a word over and over again until it loses all meaning? That. 

What is ‘Affordable Housing’, and how much does it cost to live in? 

There used to be one main type of subsidised housing provided by government for people not able to find housing in the private market. It used to be known as council or housing association homes, now we call them social rent homes.  

Since 2011, however, things have become more complicated; government introduced the Affordable Homes Programme. 

There are now several kinds of ‘Affordable Homes’ built using grant(the £11.5 billion ). Here we compare some of the most common types, using Birmingham as an example area; for context the average private rent per week in Birmingham is £171: 

  1. Social Rent: The only homes which have rents linked to local incomes and are usually around 50-60% of the cost of renting privately. Example cost in Birmingham: £79.89 per week 
  2. Affordable Rent: These are set at 80% or under of the cost of renting privately locally. Example cost in Birmingham: £100.88 per week 
  3. Shared Ownership: Allows buyers to purchase a share of a home – usually between 25% and 75%. Example cost for new 1 bed in Birmingham: £183 per week with a £4713 minimum deposit

So, the AHP builds several types of homes – the cheapest of these to rent is not the one called ‘affordable’. Following along, yeah? 

Meme debating the true affordability of 'affordable' homes

How many ‘affordable’ homes were built last year? 

Alongside grant funding from government, Affordable Homes are also delivered though planning system rules (known as Section 106 (S106)). So, given the challenges many face in finding an affordable home in the private market, how many of various Affordable Homes do we actually build – surely, we prioritise more of the most ‘affordable’ with the money for Affordable Homes’? Nope. Take a look at the table below. 

Table 1: Affordable Homes Completed in 2019-20 and % provided by type of scheme.  

 Units/homes completed % funded via government grant*  % funded via Section 106^ 
Social Rent 6,644 12% 57% 
London Affordable Rent 1,797 13% 63% 
Affordable Rent 28,209 33% 49% 
Intermediate Rent 1,755 4% 58% 
Shared Ownership 18,210 39% 51% 
Affordable Home Ownership 2,101 0% 51% 
Unknown tenures 43 0% 100% 

Source; DLUHC live table 1000c, and Shelter analysis. *Full and partial grant funded homes ^fully and partially s106 funded homes  

That’s right, most Affordable Homes are produced via the planning system, not through government grant. Last year government only funded 826 social rent homes via grant, while private developers (the same developers that can’t produce enough homes at an affordable enough price in the first place) delivered 3,820 because of planning rules.  

For context, in 2010-11, the year before the AHP was introduced, government grant delivered over 37,000 Social Rent homes. Here is a graph, check out the bright red line: 

Source; DLUHC 

First homes: the next big idea/mistake 

First Homes launched in June 2021 in Bolsover, Derbyshire. Coincidentally, Bolsover is the most affordable place to live in the East Midlands. The government’s target is to make 1,500 First Homes available by the end of 2021. It’s estimated that only 59% of households in Bolsover could afford a mortgage for a First Home. So, for 41%, these are unaffordable – even in one of the most affordable places in the country. In London, it is much worse of course; First Homes will be unaffordable to 88% of Londoners. Oh, and that is not factoring in the 15% deposit you would need – around £15-20k on average.. 

First Homes will still be expensive to buy, and they are a new and untested tenure. Indeed, Labour MP Bell Ribiero-Addy asked about exactly this at Michael Gove’s first parliamentary questions recently. 
You’d have thought that would mean we weren’t prioritising this tenure? Well, it looks like the government are: 
First Homes is going to use at least 25% of all Affordable Housing delivered by developers through Section 106. Almost 50% of the Affordable Housing Programme budget is going on ‘affordable home ownership’. That is in this context: 

  • £1.2 billion was spent providing often cramped and shoddy, always insecure, temporary accommodation for homeless households in 2019-20. This is an increase of 55% in the last five years. 
  • 192,000 more children than five years ago (a 36% rise) are growing up in overcrowded social housing because so many family sized social homes were sold via Right to Buy.  
  • There has been a net loss of social housing of 135,131 in the last decade – losing around 20,000 a year currently. And well over a million people are on the social housing waiting list. 

Affordable should mean exactly that – and that means the Affordable Homes Programme should prioritise funding social housing above all other “affordable” tenures . The word is beginning to lose its meaning, or can we start calling super yachts affordable too?