Developing affordable housing

Lancaster City Council has recently implemented Registered Provider Framework to review and assess the suitability of all Registered Providers interesting in developing social and affordable housing in Lancaster district.

The new Framework is limited to Registered Providers who currently own, manage or are seeking to provide affordable housing in the form of general needs accommodation, older people’s housing and/or supported housing for homeless households for which Lancaster City Council is the lead commissioner.   There are other arrangements in place for specialist housing where the lead commissioner is Lancashire County Council.

Below is the current list of Registered Providers who have made successful applications for inclusion on the Framework:

• Calico Housing Group
• Great Places Housing Group
• Guinness Partnership
• Heylo Housing
• Home Group
• Jigsaw Homes
• Legal and General Affordable Homes
• Lune Valley Rural Housing Association
• Places for People
• Progress Housing Group
• South Lakes Housing

The council normally requires housebuilders and developers of new housing to select Registered Provider partners from this list as part of planning obligations to deliver on-site affordable housing. 

The council may, at its discretion, accept new applications for the Registered Provider Framework outside of the normal review period (anticipated to be every two years). 

For specific contact information on the organisations listed above, or to enquire about being included on the Registered Provider Framework please email planningpolicy@lancaster.gov.uk.

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Lancaster City Council recognises the need for affordable housing in the district and it is therefore a key council priority. The provision of more affordable homes can help to increase the range of housing options, help to meet increasing demand as a result of recent welfare scheme changes and help the council to meet its required housing responsibilities.

Policies DM3 and DM6 of the Lancaster District Local Plan and Policy AS03 of the Arnside and Silverdale AONB DPD set out the requirements for the delivery of affordable homes within housing schemes. Policy DM3 refers to two categories of affordable homes, intermediate housing and social/affordable rented housing. The policy requires up to 50% of affordable homes to be delivered as intermediate housing and a minimum of 50% as either affordable or social rented housing. The Government has introduced a new form of intermediate housing – ‘First Homes’ and expects at least 25% of affordable homes delivered on developer led site to be delivered as this tenure. The tenure split required will therefore be:

• 25% intermediate tenure, preferably shared ownership;
• 25% first homes;
• 50% affordable rent or social rent.

Further information about the provision of affordable housing can be found in the Meeting Housing Need Supplementary Planning Document (2022). Please note that the tenure mix within the SPD requires updating. 

Affordable housing falls into two categories: intermediate housing and social rented.

This includes shared ownership, shared equity, rent to buy, discounted market homes and first homes.  Intermediate housing is normally targeted at households who are not likely to have a high enough income to buy a property outright but who are unlikely to qualify for social housing.

• Shared ownership housing

Shared ownership is the council’s preferred intermediate housing (managed by registered providers), because it allows people who are not normally able to buy a property outright, to buy a percentage share depending on what they can afford, and pay rent to a registered provider for the remainder. There is some eligibility criteria that applies and a financial assessment is undertaken in all circumstances.

• First homes

First homes are a form of discounted sale which:

• must be discounted by 30% against the market value;
• sold to a person or person who meet the eligibility criteria;
• have a restriction registered on the title at HM land register;
• the first sale price must not exceed £250,000 after the discount has been applied.

To be eligible for a first home:

• All purchases must be first time buyers;
• Purchases (whether individuals, couples or groups) must have a combined annual household income not exceeding £80,000;
• Purchases must have a minimum 50% mortgage or home purchase plan (if required by Islamic law) of the discounted price.

Marketing of a first home:

• First homes must be marketed for at least 6 months, this must start no sooner that 6 months prior to completion to a point where the home is ready for handover;
• Where the home has not been sold during the period, a developer may apply to the local authority to disapply the discount. An application will need to be supported with evidence that all reasonable efforts have been made to market the home and the appropriate discount. In cases, where the application is approved, the developer shall contribute 30% of the final open market sales price to the local authority.

First Homes will be secured by a S106 Agreement which will also require payment of a fee for eligibility applications. The fee is currently £150.  More on First Homes.

• Rent to Buy

Rent to buy is initially an affordable rent product at a maximum of 80% of the market rate. The reduced rent is intended to help tenants save for a deposit. After the initial tenancy agreement is granted the property is offered to the tenant to buy. At this point a tenant may continue to buy or rent. Acceptability of this product will depend upon the model and the relative affordability. Provision of a discount at the point of sale and inclusion of a recycling clause for proceeds will be expected.

• Discounted market housing

There are a number of existing discounted market housing schemes across Lancaster district that periodically become available for sale.  There is a separate webpage that describes the policy and processes on how units are sold on.  The discounted market housing model offers a fixed level of discount only, and the experience locally is that a set amount of discount at around 20% is often not enough to make homes affordable locally.  As a result of this, the council no longer negotiates discounted market housing units on new sites although the council’s policy could be subject to change if the government fully implements “starter homes” nationally.     

• Shared equity housing

Shared equity schemes provide a loan that acts as part of a deposit, and are often provided through private developers rather than registered providers. Legally, the purchaser owns 100% of the property but there are requirements to pay back the loan after a certain period of time or when sold, and a legal charge is normally placed on the property. The government has recently introduced a new scheme called 'Help to Buy' which is a type of equity loan scheme.

Social and affordable rented units are charged at social or affordable rents (social rents are typically set at around 50% of market rents calculated through government rent setting policy guidance and affordable rent is set at up to 80% of the market rent).

How are we working towards this?

We are working in partnership with a number of affordable housing providers (‘registered providers’, previously known as housing associations). The main developing registered providers locally are Jigsaw, Guinness, Great Places, Impact, Places for People, Progress and Lune Valley Rural Housing Association. For details please contact the Planning and Housing Strategy Team.

We support the identification of sites through the local plan process and have previously supported affordable housing development by providing free land or grant funding, and support bids to gain grant funding to support affordable homes in our district.

Registered providers also work in partnership with house builders. Ideally house builders need to provide up to 40% of affordable housing when planning a housing development (negotiable depending on site). The affordable housing is then transferred to a registered provider who owns/manages the properties.

We have an agreement with local registered providers, which means that at least 50% of rented affordable housing is provided as social/council housing.

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Affordable housing schemes in the Lancaster district

For details of available affordable housing developments, please contact us.

Who do I contact about the different types affordable housing?

For intermediate housing (shared ownership and shared equity schemes):

• Help to Buy North West can provide information and assistance on shared ownership and shared equity schemes.  
• An alterative is to contact the relevant registered provider or local estate agent who are marketing the properties.

For social/affordable rented housing:

• See Ideal Choice Homes, our choice-based lettings scheme. Please note that certain eligibility criteria apply.
• You may also need to contact the relevant registered provider. You will need to eligible to be able to apply for one of these properties.

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Last updated: 15 May 2024