Affordable Housing - What Does That Mean?

House prices are an average 8x income making home ownership a dream for many people.

The Government is putting housing high on their agenda and plans to increase the number of new houses including 8000 affordable homes in 2006-8.

But what does affordable housing offer the public. There are three main categories for home ownership - open market, social housing and intermediate housing.

Open market sets the price of a house by demand. As the population increases and the number of people wanting to live alone rises there are more people looking for houses. This pushes the prices up making them beyond reach for many.

Social housing is accommodation rented out at below market prices by housing associations and local authorities. These homes are offered to those on low incomes who cannot afford private sector rents or to participate in home ownership.

The third category is intermediate housing for those who earn too much to qualify for social housing but not enough to compete in the open market. This is the category that the Government wants to develop and encourage.

Intermediate housing offers individuals a chance to purchase a share in the value of a property. As the individuals’ income increases they can choose to ‘staircase’ i.e. increase the percentage of the property they own until, in some cases they can own the property outright. Legally, the shared equity arrangement is achieved by way of a lease between the Landlord ( Housing Association or organisation ) and the Tenant ( the prospective Buyer ).

The size and type of houses and properties available for purchase in this way vary but are usually part of the planning permission granted to a prospective development.


20% of housing associations now provide shared ownership dwellings, twice as many as in 1995. Priority may be given to local people who have resided in the area for a specified time or who have family connections in the area. Some schemes ensure that the property stays in the landlord’s ownership ( by limiting the amount of staircasing allowed ) and some may be targeted at the elderly or special needs.

In the south west £274million for the years 2006-8 is earmarked to build 8000 new affordable homes ranging from 1 bedroom flats to 4+ bedroom houses.

Intermediate housing is likely to be the biggest area of growth in affordable housing. The challenge is for developers to build homes of a minimum standard that will fulfil the dreams for home ownership for many people.

Published 05/10/2007.