Posted on 13th March 2018 by Jordan Holmes
Spring has arrived (even with the snow) and along with it a huge amount of property planning and investment for some of the UK largest cities as they allow developers to plan new residential developments. However, with exciting new opportunities ahead, there is one leading problem. Little to no affordable housing.
Discovered by The Guardian Cities Investigation, a housing crisis is on the brink of unfolding as some of the UK’s biggest cities plan to build residential plots with less than 24% of proposed properties being affordable.
The government defines affordable rent as “no more than 80% of the average market rate and housing to buy must be provided at a level at which mortgage payments should be no more than what would be paid in rent on council housing, but below market levels”.
An additional 41,540 affordable homes were constructed in England in 2016-17, according to the department for communities and local government. Of those, 5,380 were for social rent, 24,350 for affordable rent and 11,810 for intermediate affordable housing (which includes shared ownership schemes).
Sheffield was one of the leading cities of house growth last year according to Zoopla, however as it accelerates past many cities, only 97 homes out of 6,943 (1.4%) approved by planners in 2016 and 2017 met the government’s affordable definition. This equates to just 1.4% of homes approved are defined as affordable.
In Sheffield, developers are not required to provide any affordable housing in certain areas, notably the city centre, where a lot of multi-storey student accommodation has been given the green light. In the south and south-west of the city, they are supposed to transfer 30% of units to a registered provider and be offered as “affordable”. However, developers can bypass these quotas with viability appraisals – restricting affordable housing further.
Contrastingly Sheffield’s neighbouring city, Leeds, routinely forces developers to include at least 5% affordable units in any large development, including the city centre. Some 2,011 affordable homes have been built in Leeds since 2012 – 510 of which were in the private sector, agreed as part of agreements with big developers.
Following the pattern of Sheffield with few initiatives by its council to build affordable housing, Nottingham has notably low figures regarding housing expansion and the reality of the percentage that is affordable. The Guardian Cities Investigation has shown that only 1,381 houses are planned to be constructed, a very small figure in comparison to other cities. In reflection to the low growth figures, where the council aims for 20% of affordable housing, only 3.8% of affordable units were given the green light by council planners. Highlighting the ease in which planners can break away from nationwide plans.
The worst offender of all the UK cities, according to the Guardian’s investigation is Manchester, where none of the 14,667 homes (the biggest granted development plans the last two years), are set to be “affordable”. This is in direct contravention of its own rules, leading to worries that London’s affordable housing crisis is spreading north – driving scepticism further by the recent 15% dip in London housing prices.
Named by Deloitte earlier this month as one of Europe’s fastest-growing cities and where property now sells three times as quickly as in London, planners have routinely waved through huge new developments – some containing swimming pools, tennis courts and more than 1,000 flats. Not one of the new apartments meets the national definition of “affordable” – leading many critics to believe the council are filtering certain demographics within the city.
Other individuals worry the city could become like London, where people on average salaries can no longer afford to live anywhere central. In central Manchester monthly rents have increased on average by more than £100 year on year, according to campaigners.
Ironically as the north becomes more expensive, cities further down south are actually increasing the availability of affordable housing. In Cardiff, 24% of the homes granted planning approval in 2016 and 2017 met the affordable definition. Even more shocking is that some councils in the capital, such as Westminster, one of the world’s most expensive neighbourhoods, have agreed to price 12% of all large residential developments at an “affordable” rate between 2016 and 2017 – Those who refused had to pay a huge penalty sum.
Contrastingly, the level of affordable housing is not the same throughout the south of England, with cities such as Bristol showing only 6.77% of new developments over the last two years are being recognised as affordable. Nevertheless, Bristol has remained firm with it’s approach to ensuring houses are affordable, forcing developers to publish their viability appraisal.
Auction offers a quick, flexible and transparent solution to buying and selling a property. Whether your local area is planning on new affordable housing solutions, or like the majority, not, then auction may be the answer to finding an affordable home – pricing properties on the agreed price between the buyer and seller, not the planners.
In 2017 alone, IAM Sold has sold over 3000 properties, with starting bids ranging from as little as £1 all the way up to £1 million plus. So, whether you’re looking for an affordable solution, a luxurious solution or even a project of your own, IAM Sold will always have a price to suit your budget.
Speak to our specialists today and see how auction can suit anyone’s price range.
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