Why key organisations are worried by policy shift on affordable homes

Consultation responses to the government's proposals to update planning policy reveal deep alarm over their potential impact on affordable housing supply.

Affordable homes: concern over definition in new draft national planning policy
Affordable homes: concern over definition in new draft national planning policy

Changes to the definition of affordable housing in new draft national planning policy will make it harder for councils to secure housing that is "genuinely affordable to those who need it", consultation responses to the revised policy document are suggesting.

In its response to the draft revised National Planning Policy Framework (NPPF), the Town and Country Planning Association said the exclusion of social rent from the proposed new definition of affordable properties "risks jeopardising the ability of councils to secure this vital tenure of housing, which provides accommodation that is affordable to people on low incomes". The association said the social rented sector provides homes for "the people who work in our hospitals, drive our buses and run our nurseries".

London mayor Sadiq Khan also said he is "very concerned" with the change to the definition. "Given the Prime Minister’s renewed focus on social rented housing and government’s ongoing commitment to fund affordable rent housing, it is surprising that the proposed official government definition does not include a single reference to, let alone specific definition of, either of these types of affordable housing," Khan said in his response to the consultation. "This makes the definition difficult to use for planning authorities and fails to promote public understanding of the meaning of affordable housing. More importantly, it suggests that these are not government priorities."

Local planning authorities are able to secure affordable homes through planning obligations. The draft revised NPPF, issued in March for comment, states that planning policies should specify the need for affordable housing and the type of accommodation required. But responses to the consultation emphasise that definition of the term is key to setting out what form of low-cost housing councils can secure through such policies.

The glossary of the existing NPPF defines affordable housing as "social rented, affordable rented and intermediate housing, provided to eligible households whose needs are not met by the market". It says social rented housing comprises stock owned by local authorities and registered providers "for which guideline target rents are determined through the national rent regime". The current NPPF defines affordable rented housing as properties subject to controls that require rent levels to be set at no more than 80 per cent of local market levels.

The proposed definition in the draft revised framework removes the specific reference to social rented housing. Instead, it defines affordable housing as "housing for sale or rent for those whose needs are not met by the market, including housing that provides a subsidised route to home ownership and/or is for essential local workers". It also stipulates that affordable homes should fall into one of four categories - affordable housing for rent, starter homes; discounted market sales housing and "other affordable routes to home ownership". To qualify for the first category, it says, the rent should be "set in accordance with the government’s rent policy" or be "at least 20 per cent below local market rents".

Khan said in his response that the new definition risks "opening the door to cheap market housing being counted as affordable housing". He said the change could mean that affordable homes "could be called social rent but be charged at 80 per cent of market rents and still meet the planning definition". He also criticised the fact that the new definition refers to the discount being compared with local market rents or values.

The TCPA agreed, saying in its response that measuring affordability based on an "arbitrary percentage of market prices", rather than income, is "not a measure of affordability because it fails to factor in the ability to pay of those on low incomes". "The association warned that the impact of this changed definition will "devalue what can be required through section 106 contributions and shift focus away from the provision of genuinely affordable tenures such as social rent".

In a statement responding to these concerns, the Ministry of Housing, Communities and Local Government said: "Our proposed new planning rules make crystal clear that councils should be planning for all types of affordable homes in their area." A spokesperson for the ministry said the draft NPPF makes "clear reference" to social rented housing. Planning understands that the wider reference "affordable housing for rent" in the new definition is designed to cover social rent as well as affordable rented housing.

Housing charity Shelter, in a briefing on the draft revised framework, acknowledged that, technically, the reference to rents "set in accordance with the government’s rent policy" means that social rented housing is still supported in the document. But it warned that the government’s failure to make this reference clear and unambiguous "dilutes the definition". It added: "Social rented housing is a vital part of our housing mix and is the only housing tenure that will directly support the government’s intention to tackle homelessness. The removal of social rent from the NPPF could be read as a withdrawal of support for these kinds of homes in the planning system."

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