The term affordable housing, or affordable homes, as used in Circular 6/98 is expressed as being: -

Low cost market, and subsidised housing (irrespective of tenure, ownership-whether exclusive or shared-or financial arrangements) that will be available to people who cannot afford to rent or buy houses generally available on the open market.

Affordable housing is that which can be afforded where the dwelling has the smallest number of rooms appropriate to meet the needs of a household which cannot afford to buy or rent on the open market without some form of subsidy. It can include the following:-

• Social Rented housing -Is rented property where the dwellings are owned by a Registered Social Landlord (RSL).
• Shared ownership properties- A percentage (25%, 50%, or 75%) of the property is in the ownership of an RSL, with the shared owner paying an affordable rent on the remainder. The individual is able to staircase up to buy out the RSLs share of the property.
• Do It Yourself Shared Ownership. (DIYSO) -Through this scheme the individual can buy property suitable for the families needs on a shared ownership basis with an RSL. It is similar to the above although the choice of areas may be wider and not limited to a housing associations own development.
• Discounted Low Cost Market Housing -Properties are sold at a defined level below normal market value which enables them to be purchased by people who would otherwise be unable to buy on the open market. House types should reflect the local housing need, and not just be smaller cheaper houses or flats. Covenants should be imposed to retain the discount for future purchasers. Low cost market housing without a substantial subsidy is unlikely to be affordable to those in housing need, and will not be considered to fulfil the City Councils affordable housing requirements.
• Fixed equity schemes -These require a minimum of 10% of the equity to be retained by the developer through a RSL, or a trust.
• Home buy- This is based on part ownership. The home seeker would have a mortgage or lump sum for a percentage, normally 75% of the purchase price. The remaining amount would be funded by a housing association Unlike shared ownership no rent is repayable on the loan. The loan is repayable on the sale of the property at 25% of the market value at the date of repayment. Alternatively the loan can be re paid at any time.