Land Owners

Land Required

The Facts and Returns - Some Frequently Asked Questions

Affordable housing is housing for people who cannot afford to buy or rent in the open market. Its price is determined by the relationship between local incomes and local house prices and rents.

It includes social rented, affordable rented and some forms of purchase where the price is below market levels, known as affordable home ownership. One form of affordable home ownership is shared ownership that provides homes on a part rent part sale basis .

Social rented, affordable rented and shared ownership homes provided in settlements of less than 3,000 population cannot be sold into the open market.

What return will I gain from releasing a site for affordable housing?

Of course landowners want some financial return.

In most smaller rural communities affordable housing is provided on rural exception sites. Typically these schemes are 10-12 units giving a return to the landowner of around £100,000 - £120,000. This is approximately 14 -17 times basic agricultural value.

These are small sites within or adjoining villages, which have no prospect of being allocated for development. However, they may be given planning permission where they provide affordable housing to meet local housing needs in perpetuity.

In larger rural communities the Local Plan may allocate sites for development. They will be required to provide a mix of market and affordable housing. The price paid for land is determined by deducting costs from income to provide a residual land value.

Could I gain a higher price for a rural exception site?

Like any providers of affordable housing needs to cover building and land costs. If land price is high costs increase and the income may be insufficient to cover costs.

The impact of raising the land price is shown in the following tables. The figures come from an actual scheme which was built at £9.3K a plot.

Could there be market housing on a rural exception site?

Under current policy the answer in most instances is ‘No'.

But cuts in in public grants mean that alternative ways of funding are being explored. This may include limited market housing to fill the funding gap for affordable homes on rural exception sites. It will not therefore increase the return to the landowner. Living Lincolnshire is producing a guidance note on how this approach could work.

Do I have to sell the land or could I keep long term control?

No – you could release the site on a leasehold basis.

To secure the private loan that helps finance an affordable housing scheme, housing associations need a 125 year lease.

Do I have any say about who lives in the properties?

Yes, in some cases. You could be given the nomination rights for an agreed number of properties for occupation by members of your family or employees who need affordable housing. Crucially, these like other properties on the site will have to be retained as affordable housing in perpetuity.

Who develops the homes?

The homes will be developed by a housing association, also known as Registered Social Landlords (RSLs) and Registered Partners (RPs).

What is a housing association?

These are not for profit organizations that are registered with the Homes and Communities Agency (HCA) and so are eligible for grant and subject to HCA regulation.

They are responsible for:

• advising on the suitability of site for development;
• negotiating the sale price.
• securing the funding for the scheme,
• its design,
• submitting the planning application
• management of the build contract

Who will manage the affordable homes?

The housing association will manage the lettings and long term management of the homes. They are also responsible for the maintenance and repair of the properties.

Who will live in the homes?

On a rural exception site the affordable homes will only be available to people who have a connection with the village and need an affordable home through family, residency or employment in the locality. If there is no one in the Parish eligible for the property, the tenancy will be offered to people in surrounding parishes and then to a wider geographical area. This process is known as the ‘cascade'. A Section 106 Agreement planning obligation ensures that first and all future residents meet the local connection and affordable housing need criteria in perpetuity.

The decision about which individuals are offered one of the affordable homes will be made by the housing association using their allocations policy, which will include the local connection criteria.

Will the homes ever be sold onto the open market?

Not in settlements of less than 3,000 population if the homes are owned by a housing association and have been built with public grant. Statute prevents these being sold onto the private open market.

On other properties covenants attached to the deeds and Section 106 planning obligations can also be used to restrict initial and future sale prices. These can also be used to ensure the property is occupied by someone with a local connection.

Do I have to work with a housing association?

No, you could do the development yourself, but you will need to demonstrate that the homes will meet a local housing need in perpetuity. This will include signing legal agreements that runs with the land to secure this outcome.

What are Community Land Trusts?

A Community Land Trust (CLT) is a non-profit, community based organization run by volunteers that develops and owns housing or other assets at permanently affordable levels for long term community benefit.

Living Lincolnshire is testing the feasibility of setting up an umbrella CLT. More information on this will appear on our website as work proceeds.

What support and advice will I be given?

The Rural Housing Enabler (RHE work with communities, landowners, local authorities and housing assocations to identify and meet rural housing needs.

They provide an advisory and support service for communities and landowners. When necessary they can act as an ‘honest broker' to find solutions if schemes run into difficulties.

How will the community be involved?

They will be encouraged and supported to:

• help identify the level and nature of housing need, often in collaboration with the Parish Council;
• run events to alert the community to the need for affordable housing in the community and how this can be met;
• arrange a ‘walkabout' involving the local authority housing and planning officers, the parish council and sometimes the housing association to identify possible sites; and
• with the housing association put on exhibitions to give the wider community a chance to see what is being proposed and comment, including on the design of the scheme

Want to know more?

Contact rhe@communitylincs.com