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DCLG to unveil latest affordable Housing product

The “Affordable rent to Buy” Scheme newly announced by the government is backed by a £400 million  fund which should be made available to organisations to pilot the scheme from 2015.

The scheme features a part “affordable rent”, part “right to buy” framework. Although the scheme precludes local authorities and other public bodies from the bidding process, the government believes it will draw in a wide range of developers. 

A working paper published today from DCLG said ” Affordable Rent to Buy will provide repayable investments to providers to fund additional new build homes which must be let at affordable rent- that is, up to 80% of market rent – for at least seven years.. After this initial seven year period, the requirement to hold the property at affordable rent will continue to apply until government’s investment is repaid.”

The paper goes on to stipulate that the aims of the scheme are to drive new build homes and stimulate supply so all properties must be new build rather than acquired. In addition, to drive value for money, the bidding process will favour schemes which can offer more homes per pounds spent.

Detractors of the new scheme have dubbed it the “worst of both worlds” including high rent affordable housing with the likeliness of it being sold on after seven years. 

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