Affordable homes for developers

[Charlie613]

Hi,

I am looking at purchasing a land with planning for 81 apartments. In the planning conditions it's subject to 20 units of affordable homes. 12 social rented units and 8 intermediate housing.

What does that mean? The plan is to develop and sell. So, can I sell these 20 units or will I have to keep them? Can anyone buy them? Can anyone rent it? Is the sales price capped? Is the rental income capped?
I have experience witg development of individual houses but I never dealt with afforable homes.

Please share your thoughts and experiences.

Thanks


Charlie

 

[oldbutnotdead]

Butler got the night off? Try this http://bfy.tw/AxFw or maybe this http://bfy.tw/AxFt.


































Or maybe don't bother. This bit of land purchase is presumably going to be a significant chunk of change- are you seriously doing your due diligence by canvassing random opinions on internet forii?

 

[cjard]

As I understand it, the developer builds them and then transfers them to an affordable housing association so they can be sold at a percentage of markt value in exchange for a percentage of ownership. The other percentage remainder is leased/rented by the occupants with an option to ladder up to owning more and renting less over time. I. Not sure of the commercial arrangement between the developer and the HA, but I suspect a developer can set up his own HA to continue to benefit financially from the rental income, albeit at the expense of having a share in maintaining the property

 

[Bodge it & Scarper]

The HA buy the houses from the developer at a below market price (I Don't know how much), generally the developer should still make a profit albeit a reduced one on the particular plots however as a shared cost across the build I expect its not too painful as a developer, its also a guaranteed cheque in the bank for the developer and can help is sales are slow. The main impact for the developer is that the HA will be heavily involved in the specification of the houses, in my experience they are also built to higher spec than the developer would normally build as the requirements for social housing are much higher than that of private housing in most aspects, even positioning and quantity of sockets etc. often they will need to meet 'built for life' requirements, secure by design etc. The HA deals with all the Low cost, Rented and intermediate stuff, again the impact to developer is they will most likely all have different specs for each type. There are negative connotations attached to social housing on new build developments from the point if view of private purchasers; a lot of this is generally miss informed. for example should a Tennant of a rented HA house be a genuine nuisance to their neighbours, the HA will try and manage the issue and could potentially evict the Tennant, the same could not be said for a private buyer who would continue to be a nuisance unchecked. HA's generally manage and maintain their properties well, low cost housing is normally purchased by young professional first time buyers. I wouldn't say its something to be overly concerned about, however its worth being informed on the impacts, either way its a fact of life for volume property developers. I agree with oldbutnotdead's footnote, if you're serious its worth doing the legwork.

as for developers setting up their own HA that would be far more hassle than its worth, two completely different businesses really, not to mention most HA's cant make a profit.