I’m looking to develop land for affordable housing – what do I need to take into account in the planning process to make it attractive to a registered provider of affordable housing?

Mash Halai (left) and Gareth Turner respond:

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In the first part we covered the areas that are required through legislation, housing organisations and funding bodies. However, getting your scheme snapped up by a registered provider is not a case of simply meeting these requirements.

This just means that it is viable to be used for affordable housing. To really market your development for a registered provider you need to take into account what it looks for in its housing stock.

Mix it up

First of all, take into account the need for a diverse mix of tenures, so include affordable rented; shared ownership and open market sale units. Schemes with a single tenure of affordable housing are less likely to get support from planners or attract grant funding, which is key if you want the affordable housing provision on your site to be viable.

A mix of tenures will optimize the income opportunity for a developer. In real terms, this means the price a registered provider could usually offer for units in London will be higher for shared ownership than rented. But it’s not just about financial benefits – by introducing a range of tenures you’ll be creating a more sustainable development and one that is more attractive to both registered providers and potential purchasers.

One golden rule is to provide separate access cores for affordable rented homes and shared ownership homes, as this will give the best outcome for the residents, registered provider and developer.  The reason for this is that a number of services that affordable rented tenants may not be able to afford are desirable for those purchasers of low cost home ownership.

Many affordable rented tenants rely on housing benefit and there are some services that are not eligible for housing benefit. Combining access can either make management costs prohibitive for one group or services unattractive for another, if service standards are unattractive to purchasers, then the value of those homes will be less. registered providers use the income stream from shared ownership or open market sale units to cross-subsidise providing the rented accommodation, so a mix of tenures is beneficial all round.

Design in accessibility

As we outlined in part one, best practice homes should incorporate the 16 lifetime homes requirements, however these are not legally required. At the minimum 10% of the homes should incorporate wheelchair designs with apartments available to wheelchair users on the ground floor. If this is not possible it may be necessary to include two lifts as one must be serviceable in the event of a fire. Internally these flats will need to have similar considerations taken into account, such as wiring included for automatic door sensors and wet rooms instead of baths.

Check on funding allocations

Grant funding is the biggest element of income to most affordable housing and so it’s crucial for developers to know how it’s being allocated. Currently it’s on a per unit basis but as recently as 2009 it was based on per person.

It is important to note that there are different grant funding levels per tenure. If grant funding is capped at a per unit rate, then it’s in a developer’s interest to secure the maximum number of units. If on the other hand grant funding is based on per person, then maximising the number of people is the driver. This obviously leads to the delivery of larger units such as three and four bedroom houses, which is more beneficial than per unit as most planning authorities will consider the percentage affordable housing provision on a habitable room basis.

For example, a three bedroom flat is likely to be four habitable rooms. To put this in context, developers get the same number of habitable rooms in an 80sqm three bedroom flat as they would in two 50 sq m one bedroom flats, only you’ll also get five people instead of four. Crudely speaking, if grant is based on per person, providing larger units will optimise the percentage of the site area given over to affordable housing, while at the same time attracting more grant and therefore more income for the RP, which in turn equates to a higher land value for the developer.

Mash Halai is head of affordable housing at John Rowan & Partners and Gareth Turner is an A2Dominion regional development manager

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