So could there be a seismic shift in affordable housing? It is not a new concept, it’s been around for a while. However, there are increasingly more providers that are creating it due to the increased need and demand. Hopefully, this will make housing more accessible and readily available for those in need.
What is classed as affordable housing?
Affordable housing is designed for those who cannot afford a home at market value. However, they rightly so demand good quality housing. Affordable housing goes across all tenures including renting, shared ownership and full ownership. Most housing that is affordable can be seen in the ‘social housing’ sector. However, it is also present within the private rental sector. The Help to Buy scheme is heavily supported by private house builders. When we think of ‘affordable housing’ what springs to mind? Most would think of affordable rent, shared ownership and help to buy. Typically this housing is delivered by councils, housing associations and house builder. What if this is starting to change?
John Lewis are looking at ‘affordable housing’
The large retailer John Lewis recently reported they are considering plans to develop “affordable” rented housing. They have discussed this after increasing pressure they are facing to survive as a company. This is due to the closure of many of their stores due to the impacts of coronavirus. They are looking to convert some of their existing retail space into affordable housing.
Could this be a new market for those struggling in the retail industry at present? There is a need for affordable housing and the supply needs to come from somewhere and so this could be a good opportunity. It will be interesting to see the business models that emerge from the retail sector to allow it to prosper post Covid-19.
How would the John Lewis affordable housing model work?
John Lewis are not the only retailer to have considered building homes. Back in 2018, Lidl had plans to build more than 3,000 homes, notably all in London. Not quite the same way as John Lewis are looking to do it. All the same it’s interesting to here how different industries are seeing how they can be part of affordable housing initiatives.
When asked about why Lidl were wanting to build affordable homes, the CEO Christian Härtnagel said “It continues to mean a great deal to us that we are able to support many of the communities that we’re a part of by providing added value above and beyond affordable food.”
Lidl are not the only supermarket to have experimented with creating homes. Tesco, Sainsbury’s and Morrisons have also done this. Could this be a new popular way for affordable homes to be created, rather than the standard house builders and providers creating them? It has been suggested that these supermarkets actually gain custom for building them also. This is because they tend to build them in surrounding areas of their supermarkets so when new homes are built, the residents in that area are closer to their stores.
It is the approach that John Lewis are looking at that is of particular interest. What will happen to City Centres if the retail and hospitality sectors shrink? Also, how do you ensure that these homes are attractive to would be buyers and renters as they will be keen to have access to outside space especially if lockdowns become the norm.
Do you think that retailers should do more in helping the housing crisis and do you think more will follow suit?