New definition of ‘affordable’ homes could slash rural rent prices by up to a half

18th July 2019

Huge savings are possible for rural communities if the government changes what counts as ‘affordable’ rent.

A family at home posing for a photograph

The definition of ‘affordable’ housing has always been tricky – how do you determine what people can afford? Now, our new research has shown that the government should rethink the way it defines ‘affordable’: a new definition could help low income families across the countryside save more than £31 million a year.

Currently, rents set at 80% of the standard market rate are classed as affordable, which is still out of reach for many families and those on low incomes.

CPRE campaigns and policy officer Lois Lane 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 have driven rental prices to a point where 80% of market rate is out of reach for so many people.’

Instead, we’re calling on the government to change this definition and set affordable rent levels according to people’s net income, rather than market rates. Using the lower of these two indicators 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 they can genuinely afford.

Our proposed changes could make big differences for families living in affordable rented homes: they could 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 £7,000 per year.

‘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,’ said Lois Lane.