The West Midlands Combined Authority has become the first region in the UK to introduce its own localised definition of affordable housing.
The new definition, which has been approved by the authority’s Housing and Land Board, is based on local people paying no more than 35 per cent of their salary on mortgages or rent.
By linking the definition to the real world incomes of people in the area rather than to local house prices, the WMCA believes the change will not only provide genuinely affordable homes for local people but also encourage new types of affordable housing to come onto the market.
The new definition is also significant because any development schemes receiving investment from the WMCA’s devolved housing and land funds must make a minimum of at least 20 per cent of the homes in their scheme affordable.
Andy Street, Mayor of the West Midlands, said: “In recent years would-be homeowners have been forced to stand by and watch as house prices outstrip wages. The current ‘affordability’ definition is 80 per cent of market value, which for many people in the West Midlands still leaves homes frustratingly out of reach.
“By linking the definition of affordability to local people’s earnings rather than property, and using this alongside our minimum 20 per cent requirement, we can help make the prospect of homeownership a very real one for many more hard-working individuals and families. It also sets out a very clear ambition to developers and partners who want to work with us to deliver homes. This is the kind of inclusive growth that is key to building the future of the West Midlands.”
Source: Government Business
Date: 4th of February 2020