The Smith Institute: Affordable Housing Commission

Funding at a glance

Programme: Nurturing Ideas to Change the Housing System
Amount: £306,080 grant
Approved: 2018
Timescale: 20 months

The Affordable Housing Commission will seek to achieve a clearer, agreed and applied definition of affordability that will help make housing in England genuinely affordable.


Why we are funding this project

The current model of affordable housing in England is unfit for purpose. It increasingly ties prices to market values, rather than focusing on what people can really afford. We know that the housing people want, in the places they need to live, is becoming more and more unaffordable. Ordinary, in-work households are struggling with housing costs and these are pushing people into poverty or deeper into poverty, by leaving no money left behind after housing costs are paid. Affordability, or the lack of it, is of huge concern to us. It most harshly affects people on low-incomes and those who are already experiencing disadvantage or challenging circumstances.

There is a need to refocus the debate around the supply of affordable housing away from a debate purely focused on numbers to one that also addresses whether those homes are genuinely affordable for the people that live in them. We know there is confusion over the definition and regulation of affordability; even homes labelled as affordable under the National Planning Policy Framework’s definition, are not within the financial reach of people on low incomes in certain parts of the country.

In June 2019, the Affordable Housing Commission launched a report, Defining and measuring housing affordability – an alternative approach, which launched a new measure of affordability, looking at it in the context of household incomes and what people can afford, be it to rent or to buy, rather than the market place which focuses on market rents and house prices. This alternative approach would replace the current Affordable Rent model, which the report claims fails to support the provision of new affordable homes.

The Commission looked at what level of income spent on housing is likely to cause hardship and stress, showing that when rents or purchase costs exceed a third (33%) of household income for those in work, it can lead to financial difficulties, arrears, debts and consequent personal problems. These problems become critical where housing costs are 40% or more of household income.

The commission wants a clearer, agreed and applied definition of affordability that will help make housing in England genuinely affordable, which in turn will help people to escape the misery of poverty.

Strategic purpose

To improve understanding of the ideas that have potential to create change in the housing system.

Project description

The Affordable Housing Commission is an independent, non-partisan commission, chaired by Lord Best with 15 leading players from across the housing world.

Its core objectives are to:

  • examine the causes and effects of the affordability crisis and how it relates to tenure, place, demographics, incomes, wealth distribution, life chances, as well as the social and economic impacts;
  • explore and propose workable solutions (big and small);
  • raise awareness of the concerns and solutions (among practitioners, decision-makers and the public);
  • engage stakeholders and build a consensus for change.

Over the lifetime of the Commission, it will be undertaking research and financial modelling, conducting polling and focus groups and publishing discussion documents. Alongside its research activities the Commission will be engaging key stakeholders and hosting events across the country.

A final report of the Commission’s findings and recommendations will be published in early 2020.

Affordable Housing Commission
The Smith Institute

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