So, why should landowners sell their land to affordable housing providers rather than private schemes? We need to know what is in it for them too.
A lot of landowners have stayed clear of affordable housing in the past, under the premise that they will receive less land value if they sell to affordable housing providers. However, there are many benefits in developers creating affordable housing which we will discuss in this article.
Reduced risk is an advantage to sell land for affordable housing
One of the main advantages are that there is a reduced risk when creating an affordable homes development. This is because housing associations are not as reliant on sales and consumer confidence and so any changes such as brexit do not affect them as much.
When Brexit hit, housebuilders share prices went drastically down whereas the demands for affordable homes did not. This means that the interest will always be there for affordable housing, but private housing fluctuates more. Your money may be more secure if you are investing it into affordable housing with registered providers.
Do landowners get more money from private housebuilders?
In short, the answer is no. A lot of landowners may think that because affordable housing providers do not offer homes for major profit, they do not have the same amount of money to pay. This is not the case however. As private housebuilders build for profit, they want to make sure that they are getting the most money they can. This could often mean that you may get more from affordable housing as their main aim isn’t to gain profit and they have demand to fill.
All housing developments now have to have a percentage of affordable housing within the development. The local authority will determine the exact amount. This is called a section 106. Landowners may find that private housebuilders may not be able to afford the land as they have to factor in the costs of building a section of affordable properties. If they cannot guarantee a substantial profit, they may decide not to buy the land. By choosing an affordable provider, you will take away this problem as affordable housing providers are not interested in profit.
So, how can landowners help?
Quite simply, landowners can help by being involved in the production of affordable housing. If a landowners is not qualified/experienced enough to build affordable housing themselves, they may wish to sell to a provider who can. This will usually sell for land value, not development value so the price will be lower.
If a landowner does have the ability to build affordable homes themselves, they can apply for planning permission to build these affordable homes which they can rent out. Another option is for the landowner to build these houses as some for market rent and some for affordable housing. The application is likely to be successful If the affordable homes percentage of the development matches the criteria(25%),
In conclusion, ultimately the choice is down to the landowner. There are many benefits in selling your land for affordable housing. One of them being that you know you are helping to alleviate the need for affordable housing.
