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New ‘affordable’ housing definition could slash rural rent prices by up to half

18 July 2019

New ‘affordable’ housing definition could slash rural rent prices by up to half Shutterstock

CPRE analysis shows huge savings for rural communities if affordable rents are based on income.

The Campaign to Protect Rural England (CPRE) is calling for changes to how ‘affordable’ housing is defined, as it publishes an analysis demonstrating how low income families living in communities across the countryside could save more than £31 million a year, if affordable rent levels were set according to the net income of tenants, rather than market rates.

Currently, rents set at 80% of the standard market rate are classified as ‘affordable’, which is still out of reach for many families and those on low incomes. CPRE is urging the government to change this definition and set affordable rents at 35% of net income for the lowest income groups unless 80% of market rate is cheaper.*

By using the lower of these two indicators, it will help to even out the huge discrepancy in ‘affordable’ rent prices in different parts of the country while providing a boost to families in need of homes that they can genuinely afford to live in.

The proposed changes to the definition of affordable could see families living in affordable rented homes across the countryside save more than £600,000 a week in total. In some of the more expensive rural areas, such as Waverley in Surrey, individual households could see their rents slashed by more than half, saving them almost £7000 per year.

The countryside charity highlights the positive impact that such a change would have on families’ ability to live in market towns and villages across the countryside, where the affordability crisis is felt just as acutely as in our big cities.

The falling number of working-age people in the countryside, which has increasingly resulted in the closure of schools, shops and other vital services, is partly a knock-on effect of a lack of genuinely affordable housing, says CPRE.

Many recent policy initiatives in the area of affordable housing provision have focused on cities and major new developments, such as garden communities, but this change would immediately benefit those struggling to find a home in cities, villages or market towns.

Lois Lane, campaigns and policy officer at CPRE, said:

‘The term “affordable housing” has become completely meaningless. Inflated land prices, a rise in private house prices and a failure to build enough social rented homes – in addition to the tens of thousands sold through Right to Buy – have driven rental prices to a point where 80% of market rate is out of reach for so many people.

‘The government’s failure to meet the housing needs of low income families has escalated the housing crisis and is fueling inequalities. Basing rent prices on income, rather than the inflated costs of the market, is a fair and logical solution that will help people across the country find homes they can actually afford to live in.’

An analysis by the countryside charity earlier this year showed that, at the current rate of building, it would take 130 years to house everyone on rural social housing waiting lists. The disparity in focus and funding for those in need of genuinely affordable homes has left rural communities suffering silently, says CPRE.

*CPRE is calling for affordability for ‘affordable rent’ properties to be defined in the National Planning Policy Framework as ‘no more than 35% of net household income for lowest quartile income groups in each local authority area’, as set out in a Ten Minute Rule Bill by Helen Hayes MP in February 2019. This definition should be introduced with accompanying guidance to specify that in places where an income-linked figure is greater than 80% of market price, the lower market-linked value should be used.

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