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Affordable Housing

Affordable housing is not available on the open market - it is available as social-rented, affordable-rented or shared-ownership housing and is managed by registered Social Landlords, who may be Local Authorities.

The UK has a long tradition of promoting social-rented and affordable-rented housing. This may be owned by local councils or housing associations. There is also a range of affordable home ownership options, including shared-ownership schemes (where a tenant rents part share in the property from a social landlord, and owns the remainder).

Housing associations are not-for-profit organisations with a history that goes back well over a hundred years. The number of homes under their ownership grew significantly from the 1980's as successive governments sought to make them the principal form of social housing, in preference to local authorities. Many of the homes previously under the ownership of local authorities have been transferred to newly established housing associations, including some of the largest in the country. Despite being not-for-profit organisations, housing association rents are typically higher than for council housing. Renting a home through a housing association can in some circumstances prove costlier than purchasing a similar property through a conventional mortgage.

The government has also attempted to promote the supply of owner-occupied affordable stock for purchase, principally by using the land-use planning system to require that housing developers provide a proportion of lower-cost housing within new developments. The current mechanism for securing the provision of affordable housing as part of a planning application for new housing development is through the use of a Section 106 agreement, which requires developers to make a financial contribution to the community or provide affordable housing or infrastructure as part of their planning permission. However, there will be changes in this area shortly, principally because many housing projects have stalled as a result of developers claiming they cannot afford to fulfill their Section 106 obligations in the context of the current financial climate.

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