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What is Affordable Housing?


Recently, the UK government pledged to increase affordable housing across the nation. This prospective rise in affordable housing developments means the demand for land will increase in the coming years.

As a landowner, understanding the concept and importance of affordable housing could present lucrative opportunities—particularly if your land is eligible for such developments.

Affordable housing is often perceived as a confusing term. But, to help you understand the concept on a deeper level, here we explore the meaning of affordable housing and what it means to you as a landowner.

Why is affordable housing important?

Before we consider why it’s important, let’s answer the question, ‘what is affordable housing?’

The term is subject to some contradiction, varying slightly depending which angle you’re tackling the issue from:

  • From the perspective of people or occupiers: looking at incomes and seeing what people can ‘afford’ to spend on housing.
  • From the perspective of the home: providing different types and tenures of affordable housing at a percentage of the market value.

But, as a working guide, here is a practical affordable housing definition from the National Planning Policy Framework (NPPF):

“Housing for sale or rent, for those whose needs are not met by the market (including housing that provides a subsidised route to home ownership or for essential local workers).”

The scope of affordable housing

According to the government, an affordable housing scheme is aimed at providing sustainable accommodation where costs comprise less than 30% of the household monthly income.

The term affordable housing covers achievable accommodation for rent; discount market sales housing; first-time buyer or starter homes, and many other routes to affordable homeownership.

The need for affordable housing


The UK needs affordable housing for a variety of reasons. But, the most important factor is the rising value of private sector housing.

The property market has been incredibly buoyant in recent years, and property values are rising faster than incomes. The overall impact of this pressing trend is that housing of an adequate living standard is becoming increasingly more unaffordable, thus leaving the poorest in society without a feasible place to call home. 

Private developers with little incentive to build affordable homes (due to a perceived lack of profit margin—developers earn most of their revenue through the construction and sale of market units) are making the supply issue all the more pressing. As such, it’s now widely accepted that the development of affordable housing must be subsidised to bolster the supply.

Affordable housing is somewhat of a complex topic, but these developments are essential because they:

  • Offer wider access to sustainable accommodation and homeownership
  • Help to attract essential workers including medical staff and public sector staff to communities
  • Encourages economic growth, progress, and stability

The role of registered providers & housing associations

The need for subsidy is where housing associations and registered providers (RPs) enter the affordable housing fold.

Housing associations or RPs are typically not-for-profit organisations that reinvest revenue made from rent into the maintenance of the existing properties as well as the acquisition of new affordable or social housing initiatives.

At this point, it’s worth noting that these organisations can vary in terms of their structure and what they provide. For example, some housing associations have private arms that develop housing so that revenue is invested back into social housing stock (profit-for-purpose).

Others focus on providing housing for specific demographic groups, including the elderly and disabled population. Such organisations are heavily regulated—with all of England’s registered providers governed by the Homes and Communities Agency—an executive non-departmental public body that oversees new affordable housing rules.

Housing associations as well as RPs are pivotal to the ongoing development and supply of affordable housing schemes throughout the UK—and as such, are worth paying attention to as a landowner.

Affordable housing & planning permission

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Local Planning Authorities (LPAs) have a duty, as secured through the NPPF, to ensure that developments within their boundaries provide adequate levels of affordable housing. The NPPF suggests that minor developments should not have to provide affordable housing but mostly leaves LPAs to set their own levels of minimum affordable housing provision.

As a landowner looking to maximise the value of their asset, you must be aware of the level of affordable housing provision expected by your LPA when submitting a planning application for your land. 

If you fail to provide an adequate level of affordable housing provision within your site plans, your planning application is likely to be refused. On the other hand, if you include an overprovision of affordable housing within your plans, you may not maximise the value of your land.  When it comes to planning applications and affordable housing, there is a fine balance to strike.

In some instances, 100% affordable housing schemes might be the only way you can get a scheme through planning. An example of this is rural exception schemes, which by definition, allows a developer to build on land that wouldn’t usually be considered for development (greenbelt or open countryside, for instance) if it meets the locally identified needs for affordable housing.

Note: The percentage of affordable housing contributions vary from council to council, with affordable housing sold by the developer to an RP at a discount.  

Final thoughts

Navigating the planning permission process and affordable housing rules as a landowner can prove challenging.

If you’re unsure about what you need to provide concerning affordable housing provision and how to ensure the success of a prospective development, we can help.

As land consultation and promotion experts, we will guide you through the residential development planning process from start to finish, working with you to achieve a positive outcome while maximising the value of your most important asset.

Contact us for more information on our services—we look forward to working with you.

Want to know what we can do for you?

Want to know what we can do for you?