Affordable housing types – explained
There are various types of affordable housing available throughout Shropshire. Here, you can find out about all the options available to you.
These are outlined below, but you can also find lots more information and advice about affordable homes and other housing queries here on our website.
What is affordable housing?
Affordable Housing is defined as social rented, affordable rented or intermediate housing that is provided to eligible households whose needs are not currently met by the open property market.
Eligibility for Affordable Housing is determined according to local incomes and house prices.
For an in-depth description, please refer to the 2019 National Policy Planning Framework (NPPF) prepared by the Department for Communities and Local Government.
What is a Registered Provider (RP)?
Registered Providers (RPs) are key to the delivery of affordable housing.
They’re independent housing organisations registered with the Homes & Communities Agency under the Housing Act 1996.
Most are housing associations, but there are also trusts, co-operatives, charities and companies, and they’re usually run by a board of management.
RPs provide access to a range of home types to suit the needs of the individual, including houses, flats and bungalows.
As well as Social Rent, many RPs may also provide properties to part-purchase under Shared Ownership schemes.
Affordable Housing to Buy
Buying a home is a big commitment and one that many people feel is out of reach for them.
But there are many ways to buy a home or part-own a home, and Shropshire Council can advise you on how you might be able to do this.
Before buying a home, it’s important to ensure you take appropriate financial and legal advice.
An additional option is Discounted Ownership, which allows you to buy 100% of a property, but at a substantial discount off the open market value.
Discounted Ownership properties are usually sold by a Registered Provider.
Under this model, the buyer obtains a mortgage for the discounted price, but doesn’t pay rent on the remainder.
However, if you buy a Discount Ownership home, you can’t purchase any shares in the property as it’s a ‘fixed equity’ home – so when you sell it, it will have to be at the same discount percentage at which you bought it.
Additionally, if you choose to sell, you’ll need to notify the Registered Provider, and your home must be sold to someone who is unable to afford a home on the open market.
Shared Ownership is a great way into home ownership – if you’re unable to afford to purchase a property outright, you can part-buy and part-rent your home.
With Shared Ownership schemes, you can choose to buy a 25%, 50% or 75% share in your home.
You pay rent on the share you don’t buy, and the rent is usually set at an affordable level of 2.75%.
The bigger share you own, the less rent you pay. Some schemes even allow you to increase your ownership – this is called ‘staircasing’.
Self Builds are projects where the person directly organises the design and construction of their new home.
This can cover a range of projects, from a traditional ‘DIY Self Build’ home – where the self-builder selects their chosen design and does much of the construction work themselves – to projects where the self-builder arranges for an architect/contractor to build their home for them.
It also refers to projects delivered by kit home companies, where the self-builder must find the plot, arrange the slab installation and arrange for the kit home company to build the property for them.
Entry Level and Key Worker Housing
Beyond the affordable housing to buy options listed above, there are additional options for new homeowners in Shropshire.
- Entry level housing to buy – this refers to first-time or starter homes.
- Key worker to buy – this refers to a public sector employee who is considered to provide an essential service. The term is often used in the UK in the context of essential workers who may find it difficult to buy a property in the area where they work.
Affordable Housing to Rent
Below are the renting options for prospective tenants in Shropshire. These include:
Affordable Rented Housing
Affordable Rented Housing is owned and managed by Registered Providers (eg: the Council and Housing Associations as defined in section 80 of the Housing and Regeneration Act 2008).
These properties are let to people in need from the Council’s Housing Register on a flexible type of tenancy.
Standards for management, maintenance, annual rent increases and the provision of other services are set nationally.
The tenure is regulated by the Homes and Communities Agency.
Rent levels for Affordable Rent Housing are set at 80% of the open market rental value that a property could otherwise yield (with a cap being imposed at the maximum amount of Local Housing Allowance payable for that property in Shropshire if this is lower than the calculated 80% figure).
Applicable Service Charges are included within this 80% formula price calculation.
Discounted Rented Housing
Discounted Rented Housing allows people from the Council’s Housing Register to rent a property on an Assured Shorthold tenancy granted by the Landlord, in accordance with the provisions of the Housing Act 1988 as amended by the Housing Act 1996 (and subsequent legislation).
A minimum initial fixed tenancy period of 12 months is granted by the Landlord, extending for a further 2 years (and beyond by mutual agreement) providing that there is no breach of tenancy causing the Landlord to seek Possession.
When the property is vacated it will be reallocated to another person from the Council’s Housing Register on the same terms.
Rent levels for this tenure are set at a maximum of 80% of the open market rental value that a property could potentially yield (with a cap being imposed at the maximum amount of Local Housing Allowance payable for that property in Shropshire if this is lower than the calculated 80% figure).
All Service Charges are included within this 80% formula price calculation.
Social Rented Housing
Social Rented Housing is owned by local authorities and private registered providers (see section 80 of the Housing & Regeneration Act 2018) and guideline target rents are determined through the national rent regime.
Social Rented Housing may also be owned by other personas and provided under equivalent rental arrangements, as agreed with the either the local authority or the Homes & Communities Agency.
Affordable homes for rent are available to rent by local people who are eligible for Social Rented Housing.
This type of housing is let at a low rent on a secure basis to those in severe housing need.
Affordable Rent is subject to rent controls that require a rent of no more than 80% of the local market rent, and this includes service charges, where applicable.
To rent a home from Shropshire Council or one of its Registered Providers, you must be on the Shropshire Homepoint Register.
This allows you to be considered for any new, existing homes or future homes in Shropshire.
Many people wait too long to register and miss out a home they’d like to live in, so do register as soon as you can.
- Entry level housing to rent – this refers to rental properties for first-time renters.
- Key worker to rent – as above, this refers to public sector employee who is considered to provide an essential service. The term is often used in the UK in the context of essential workers who may find it difficult to rent a property in the area where they work.
Intermediate Housing means homes for sale and rent provided at a cost above Social Rent, but below market levels – which is subject to the criteria in the Affordable Housing definition above.
These can include shared equity (shared ownership and equity loans), other low-cost homes for sale and intermediate rent, but not affordable rented housing.
If a home does not meet any of this criteria, such as ‘low cost market’ housing, it may not be considered as Affordable Housing for planning purposes.
Additional Housing Options
Assisted Independent Living
Assisted Independent Living is primarily for those over 55 who may some assistance, but still want to live for the most part independently.
It normally takes the form of sheltered and supported housing or Extra Care.
If you have any questions, please contact our team for more information.