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Rural Housing Week / affordable homes for local people

By Helen Taylor - Housing Development & Standards Manager TVBC Upper Clatford

Friday, 24 June 2022


TVBC Contributor


As we approach Rural Housing Week (4th - 8th July) I thought it would be useful to let you know that at Test Valley Borough Council we are keen to work with Parish Councils and local communities to explore the need for affordable housing in rural areas.

What does Affordable Housing mean?

Affordable Housing means many different things to different people, but one key factor is the cost of buying or renting a home. Obviously the cost of running that home also contributes to the affordability factor, but we are only covering here the cost of buying or renting a home.

There is an affordability index used by Government and others looking at house prices and people’s income and ability to buy. The median property price in Test Valley was £310,000 in 2020 and the median gross income £35,083. Dividing house price by income gives a ratio of 9.76 – this is called the affordability index. A household is considered able to afford to buy a home if it costs 3.5 times the gross household income or an index of 3.5!

What does this really mean? For an average cost house in Test Valley and a 20% deposit you need a mortgage of £248,000. Generally, a mortgage company will loan 3.5 times salary or £122,790 if you earn the average. This is simply not enough and first-time buyers, unless they have very big deposits or earn well above the average, cannot enter the market unless there is additional help.

Many households with low incomes have no realistic chance of getting onto the property ladder, and also struggle to find suitable private rented housing which is affordable. The median average private rent across the whole of Test Valley is £825 pcm. Based on a household spending no more than 30% of their household income on rent, a household would need income of at least £33,000 for a private rented home to be affordable to them.

TVBC uses the term Affordable Housing to describe the different ways it tries to provide that additional help for first time buyers, low-income families and other groups afford homes they need to achieve a good quality of life.

What is affordable housing and who provides it?

Affordable homes are provided for people who are unable to meet their housing needs through the general housing market. This includes homes for rent and purchase.

Types of Affordable Housing

Social Rented Housing - This is subsidised rented housing owned and managed by an Affordable Housing Provider (AHP) and allocated through Hampshire Home Choice to eligible households. Rents are typically no more than 60% of market rents.

Affordable rented housing - Also subsidised housing owned and managed by an AHP and allocated through Hampshire Home Choice to eligible households. Rents are typically up to 80% of open market rent.

Shared ownership - Enables a purchaser to access home ownership through buying an initial share (usually 25% to 75%)* and paying rent on the remaining share. Purchasers can then increase their share later if they choose to.

The Discount Market scheme - Enables a purchaser to buy a specific property at no more than 80% of market value. Unlike shared ownership there is no rent payable. The discount remains in perpetuity, so when the property is sold the same level of discount is passed onto the next purchaser.

First Homes - A new affordable housing product similar to Discount Market homes. First Homes will be sold at no more than 70% of open market value to qualifying buyers. First Homes are not applicable on rural exception sites, or on any site which is delivering 100% affordable housing.

The main eligibility criteria for all low cost home ownership products is:-

  • First time buyer
  • Household income of less than £80,000
  • Local connection

Contact Information

Donna Wagers

  • 01264 368706

Find Upper Clatford

Upper Clatford, Andover, Hampshire