In our sector, there is quite rightly a clear focus on delivering new affordable homes, as the UK grapples with the ongoing housing crisis.
Housing associations across the country, including Karbon Homes, are all committed to providing ever more affordable homes, so we can help our customers – and those who are not yet our customers – find the home they need to succeed in life, whatever the tenure.
But what is affordable? The question of affordability in a region like the North East is complex. In England as a whole, median house prices are nearly eight times median earnings, but in the North East, the figure varies hugely – from three times in County Durham to way above the national average in prosperous coastal villages in Northumberland.
Overall, though, we’re facing a very different scenario than in the overheated property market of the South East.
Indeed, the difference here between social rent and affordable rent is often negligible. There are even examples where affordable rent (80% of market rent) is cheaper than social rent.
Our focus is on ensuring we provide the affordable homes that people need, with the services and transport links they require close by, all helping to build strong foundations for the communities we serve.
For us, the specific description of the rent charged is less important than an assessment of whether it is genuinely affordable.
Recently, we commissioned research to test the affordability of all our rented homes across the North East. That research demonstrated that Karbon Homes’ rents are affordable in relation to local earnings and the lowest in our peer group. But we will remain vigilant to ensure they are affordable for the customers who need them.
We plan to provide around 500 new homes each year between 2018 and 2023. This amounts to one of the most ambitious build programmes of any housing association in the region.
That programme reflects our current financial capacity, but as Karbon grows and strengthens, we hope to deliver even more.
Some of these homes will be for social rent – in Newcastle, York, Harrogate and Leeds, where we can attract the funding needed and where the condition of the housing market makes it necessary.
Elsewhere, we will develop different tenures, including shared ownership, affordable rent homes, and for rent to buy – but, importantly, only after assessing the local market to ensure we’re providing the homes each area needs.
“The finances for large-scale projects to replace homes and regenerate communities do not add up, but we are willing to look at cross-subsidy from market sale and market rent activity to make the numbers work”
Our homes will address the housing crisis as it presents itself in the areas we serve. They will be built where we can strengthen our connection with communities and help people build strong foundations for their lives.
We will also invest in maintaining and improving the homes we already provide, so our properties remain good homes well into the future.
We are also willing to consider taking on regeneration projects that are the right solutions for the communities we serve.
Too often, the finances for large-scale projects to replace homes and regenerate communities do not add up, but we are willing to look at cross-subsidy from market sale and market rent activity to make the numbers work.
It is going to be a long haul to tackle the housing crisis in our country, and we’re going to need a variety of different approaches, building partnerships with all those who can help, to address the very different conditions to be found in the UK housing market, region by region.
It is at the core of what we do that the homes we provide should be affordable, but let’s not allow ourselves to be too rigid in our thinking about what constitutes an affordable rent. Let’s just get on with providing the secure, high quality, genuinely affordable homes people need to lead successful lives.