Affordable Housing Market UK 2005

Additional Information

The Social Housing Grant is the main form of investment used by the Housing Corporation to invest in affordable homes. It is a grant used mainly for funding the difference between what a Housing Association invests in affordable homes (from borrowing or from revenue on its activities) and the amount of the actual building, acquisition and property management costs. During the period 2004-06, the £3.3 billion of public subsidy administered through the Approved Development Programme (ADP) will be invested in housing schemes built or acquired by housing associations to provide affordable homes.

The ODPM defines social housing as comprising those dwellings owned by RSLs (Housing Associations) and Local Authorities. Affordable housing, however, is subsidised or ""low"" cost housing of any tenure. Figures for social housing (usually rented accommodation) can be derived from the ODPM tables, but this grouping should not be confused with affordable housing, which cannot be derived from the tables and is less easy to define in statistical terms, particularly as it includes a mix of new build and ‘rehabilitation’.

Affordable homes are not just social houses for rent, they also include low cost ownership. Although the majority of the Housing Corporation’s grant is committed to rented homes in the social sector, low cost home ownership schemes such as Homebuy are becoming more popular as more and more householders wish to own their homes.

In order to address further the undersupply of affordable housing, the largest ever investment programme to cover the period 2006 - 08 will be administered under the renamed National Approved Development Programme. In a move designed to give the public better value for money, this will be the first time that this programme has been opened up to unregistered bodies in addition to Housing Associations.

Although targets will continue to be set at a national level, there is a continuing trend to set strategies at a regional and local level which is now the responsibility of the Regional Housing Boards.

Supply chain efficiency will be a key requirement for timely and cost-effective delivery of affordable homes and, fundamental to this efficiency, will be the use of modern methods of construction. Of the 23,398 affordable homes completed in 2004/05, it is estimated that 56% or 13,185 units were constructed using MMC. London and the South East regions have the dominant share totalling 7,362 units, or 56% of the national total.

The Affordable Homes programme is currently the main focus for the use of MMC in housing, but usage is growing rapidly. In addition to the above figures, a further 6,315 market homes used MMC giving a total use of MMC as a construction method of 19,500 housing units in England.

The share of MMC will continue to grow as Government investment is dependent on greater use of MMC. Timber frame currently represents the main segment of MMC, but steel frame buildings are also popular, particularly in high-storey buildings.

Additional housing will require a significant amount of land and previously developed land offers significant opportunities. The re-use of brownfield land helps meet key Government targets for 60% of new housing to be built on brownfield land, with English Partnerships now operating a major role in terms of using Government-owned land for major affordable house building programmes.

This is currently illustrated in their role in the £60k housing competition with the allocation of several sites to the potential winners of the competition to design innovative housing schemes which will incorporate dwellings with a build cost of £60k. The competition is in its final stages with building set to begin in early 2006.

In respect of new homes, the Housing Corporation has used the Ecohomes system of environmental rating to drive up standards. In 2005, they will require a ‘good’ rating and in 2006, a ‘very good’ rating on the new homes they fund. At the same time, they will contribute to the development of the new Code for Sustainable Building.