Home > More Affordable Homes in High Priced Areas?
Will we see more affordable homes in high priced areas?
A new planning model was unveiled in Westminster on 31 May 2012 to make affordable housing viable in high-value areas.
Under the model, the landowner agrees to sell the land for below market value in return for an affordable housing credit, which can be used against payments that might have to be made in projects where affordable housing is not viable.
In a landmark case, “Land Securities” sold a site to private affordable property developer “Pocket” for £2.3milion less than market value. “Pocket” could create the homes at 20% less than the market value.
The result was a 32 home development on Fermoy Road, Westminster, providing one bedroom flats at affordable prices to households that meet the income criteria used for the major of London’s first-time buyer scheme.
For “Land Securities” it meant that, £2.3million in credit to offset planning obligations on other developments.
Buyers are tied by a covenant, ensuring that further sales are at a 20% discount on the market rate and to households that qualify for affordable housing, with the prior approval of the Council.
Phillipa Roe, leader of Westminster Council, said “This new scheme lays the foundations of a new era in affordable housing in the capital.”
We share Housing Minster, Grant Shapp’s hope that “other councils look to see how they may be able to replicate this success in their own areas.” We also hope that Registered Providers can get a bite of the cherry and hopefully we will see similar opportunities open up in the North of the country.
Catherine McFadden, Associate
If you want to discuss any of the above further, or want to find out how Croftons can help you, contact Cathy direct, complete our contact form or request a free callback and one of our property specialists will get in touch with you.
Posted on 12.07.12
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