Owning your own home is almost every person’s dream – but the reality is that it is now out of reach for a lot of people.
Unless you rely on the bank of mum and dad or save for several years, just scraping a deposit together is a big enough mountain to climb.
When new housing developments are built, much is made of a number of the properties being classed as ‘affordable’ – but what does that really mean?
This week, Westmorland and Lonsdale MP Tim Farron stood up in Parliament and made the case for planning authorities in the Lakes to be given power to only approve new developments which have 100 per cent affordable homes.
He said: “The biggest bar to young people finding employment in the Lakes and the Dales is the fact that there is nowhere affordable for them to live with average house prices 12 times average incomes and the collapse of the long term rented sector into the Airbnb sector.”
It’s a nice idea – but it’s not quite as simple as that. Just because homes are classed as ‘affordable’ – it doesn’t really mean that they are always in reach of people in minimum wage jobs.
Affordable house prices are not based solely on wages of an area – but also the housing market.
This means that lines cross when places like the South Lakes – which has one of the lowest on average salaries in the county at £33,767 per annum – has an average house price of £307,094, according to the ONS.
Comparatively, average house prices and average yearly salaries in Cumbria are as follows:
- Allerdale has an average house price of £188,892 and average salary of £29,560
- Copeland has an average house price of £153,717 and average salary of £44,425
- Barrow has an average house price of £155,588 and average salary of £38,028
- Eden has an average house price of £258,414 and an average salary of £35,133
So while the most expensive properties are found in the South Lakes – the cost of housing doesn’t reflect how much people are making working in the area and what they can afford.
When major housing developments are built anywhere in the UK, by law, at least 10 per cent of the housing provided should be affordable.
The concept was introduced after World War Two as a way to address private rented slums, the destruction of war, and the need to house returning soldiers and has remained in law since, with an aim of helping people in need.
Cumbria has over 20,000 of these properties that vary in type and tenancy – and there is a huge demand and waiting lists across the county for them.
A total of 13,961 people are registered on Cumbria Choice Based Lettings – the one platform in Cumbria where people can apply for affordable housing.
Around 10,023 of those people require rented accommodation, with the rest requiring other forms of affordable housing such as help to buy or shared ownership.
We asked one of Cumbria’s leading social landlords Castles & Coasts to explain the concept of affordable homes.
The organisation is currently working with developer Russell Armer, part of Genesis Homes, on phase three of an ongoing development in Staveley, in the South Lakes.
Affordable homes built during phase two of the development included homes for rent and shared ownership and three open market sale dormer bungalows.
The local needs open market homes were sold for in the region of £330,000 each, with sale proceeds used to cross subsidise development of the affordable units.
Shared ownership sales covered a range of equity shares up to £175,000.
Defined at a national level
Put simply, guidelines for what makes housing affordable are set by the Government under the National Planning Policy Network.
In theory, it aims to help people stay in their local area who could otherwise not afford to buy or rent on the open market.
It is aimed at people who meet a specific criteria and house and rent costs are based on local incomes and local house prices in the area.
Renters on lower incomes should be able to secure homes at rates below market value and for buyers, houses should be sold at a discount of at least 20 per cent below local market value.
Castles and Coasts said: “It combines an analysis of local incomes and house prices. Because it is all set nationally, we are bound by it and the harsh reality is that sometimes it doesn’t fit everyone.
“But some developers like ourselves do things to help fund the development and subside the affordable stuff on the scheme.”
For phase two of the Crookfield development in Staveley, the housing association received 60 applications for two rented bungalows. For rent to buy shared ownership homes on the scheme, it received over nine applications for each home available.
The criteria for what makes someone a suitable candidate for an affordable Lake District home is defined solely by the planning authority in charge of the area.
Castles and Coasts added: “We operate across four national parks across the North of England as well as areas of outstanding natural beauty. Some of our developments have local occupancy restrictions on them, which is defined by the local planning authority.
“The local planning authority defines the local need in the area, whether that be prioritising people who work in the area or who are moving there for work, were born there or live there – that’s decided by them.
“That’s why we offer so many different options of housing. We understand not one size fits all and that different people will need different options and we are keen to support people by doing that.
“The amount of applications we’ve had for the phase two development shows there is still a demand for affordable housing in the area.”
How are the property prices decided?
Prices of houses and rents are not set until the houses are built and if the new home owners decide to sell the property, it is secured under a Section 16 agreement, which puts sale restrictions onto it to keep the home affordable.
Castles and Coasts added: “We all know what is going on with property and mortgage prices and with inflation, even the best economist would struggle to predict where prices are going.
“But once our homes are built, for example for our phase three of the Staveley development, then we get a market price assessment and a decision is made at that point.
“As a not-for-profit we have a social purpose, and we want to provide houses where people want them. If any money is made from a development, it is reinvested back into social housing.
“We’re clear and transparent about what we do and we try to do it all with a bit of heart.”
