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Affordable Housing – it’s not what you think

December 2017

We hear a lot about house prices being unattainable for first-time buyers and about ‘affordable’ housing. However, the lines are being heavily blurred by politicians and the media. What you may at first think are two close relatives, are actually families on different continents!

The term ‘affordable housing’ conjures up ideas of properties, which can be purchased at a price attainable by most. Our politicians push this angle, claiming to be looking in everyone’s best interests and helping first-time buyers. Not quite the case.

Planning guidance defines affordable housing as ‘social rented, affordable rented and intermediate housing provided to eligible households whose needs are not met by the market’. In other words, affordable housing means budget cost homes for those at lowest end of financial earnings who cannot afford to buy themselves. Affordable homes are not meant for the general public, but for those on the fringes of society. A big difference.

A term often mentioned is ‘affordability’. With house prices rising on an annual basis and Rightmove confirming that Yorkshire prices have increased by 4% this year alone (one of the strongest in the country), getting finances together to jump on to the property ladder can be an upward battle.

There seems almost to be an open door policy about building on our open spaces to solve the perceived housing shortage and our once heavily protected green spaces are under attack from mass-volume low-quality developments, often with little thought for the associated infrastructure required, such as new schools, GP surgeries, roads, shops etc. It makes me so cross that our precious green areas are being gradually eroded and filled with poorly-built homes that are not of a quality to stand the test of time. Houses can be replaced and rebuilt, but our green spaces cannot.

So, is there another way?

Currently the system incentivises new-builds in terms of policy and VAT, plus they are easier and cheaper for a developer to construct. But they are just shooting themselves in the foot. By increasing the stamp duty (SDLT) threshold for first time buyers to £300K, it just creates more competition in the sub-£500K market, which counteracts the the SDLT saving and causes a bottleneck of second and third-time movers who find it hard to get mortgages to move up the ladder.

The big house builders seem to have carte blanche, but who stands to gain? Their shareholders. Even the recent Government ‘Help to Buy’ scheme was restricted to just new-build homes. I wrote an article in August about the leasehold scandal, where freeholds were being sold on by the developers for extra financial gains. There seems to be a similar theme emerging don’t you think?

Rather than building on our precious open spaces, which we will never get back, what if the system incentivised developers to renovate existing properties and brownfield sites? One only needs to walk around some of our towns and villages to see the number of empty and dilapidated properties that have seen better days.

When tackling the question of ‘affordability’ for first time buyers, it requires a new set of parameters and way of thinking. If you have tried to secure a mortgage recently, you will know how difficult the process is. I am not saying we go back to the footloose days prior to the financial crisis, but there needs to be a more sensible line drawn with the banks and the Government needs to listen to those of us at the industry coalface before implementing ill thought-through schemes.

Yes we need affordable housing for those less fortunate and of course we need to help people to afford their own homes. But building cheap, poorly constructed houses that will need replacing in 75 years, on our open spaces is not the right answer. After all, if you start building on these spaces, where will it stop?