Planning and Housing

04.02.20

‘Affordable housing’ re-defined by the West Midlands

West Midlands Combined Authority (WMCA) has drastically changed their approach to affordable housing and put home ownership within the reach of thousands more people in the area.

WMCA is the first region in the UK to introduce its own localised definition of affordable housing, linking real incomes of people in the area to what is considered ‘affordable housing’ rather than local house prices.

This new definition has been approved by the WMCA’s Housing and Land Board and is based on local people paying no more than 35% of their salary on mortgages or rent.

It is hoped by changing the definition to better reflect their area, local people will be able to access genuinely affordable homes and encourage a more widespread adoption of these housing onto the market.

The announcement comes as WMCA maintains its funding support to help developers build high-quality new homes on brownfield land across the region. Developers receiving this funding must make a minimum of 20% of their homes affordable, in the new localised sense.

Mayor of the West Midlands Andy Street, who chairs the WMCA, 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% 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% 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.”

Guidelines will be regularly reviewed to ensure house prices reflect the real incomes of local residents and the scheme delivers its original intention and purpose of making more affordable housing in the area.

The West Midlands target of 215,000 new homes built by 2031 is supported by the introduction of a ‘brownfield first’ policy, where government funding is secured to build on former industrial land wherever possible.

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