Planning Advice Note - (May 2005)

Policy HS8 - Affordable Housing

Affordable Housing is one or a combination of low cost market housing, social rented, and shared ownership schemes. PPG3 and circular 6/98 states that a community's need for affordable housing is a material planning consideration. In accordance with circular 6/98 we negotiate an element of affordable housing provision (typically 35%) on sites in excess of 0.5 Hectare or 15 dwellings. Provision of affordable housing is linked to planning conditions to ensure that it remains affordable over time.  Below are the purchase price and rental figures for affordable housing at July 2008

Mortgages

Set out below is the calculation of a mortgage available to the average full time employee in Shropshire. The calculation is based on the Median Gross Weekly Earnings figure in Shropshire for males and females across all occupations of £407.50 (Source: ASHE Survey 2007), this figure is current for 2008.

Earnings of £407.50 per week equate to an annual salary of £21,190.00

Single earner seeking a 2 bedroom property

Mortgage is calculated at a multiple of 3 x the annual salary, which amounts to a borrowing figure of £63,570 available to fund the property purchase.  Typical repayments on a mortgage of this figure would be around £94 per week.  By obtaining a 95% mortgage the average Shropshire employee could afford a 2 bedroom property at a market price of around £67,000.  This more accurate income information using the established borrowing criteria gives a reduced affordable figure for 2008.  Shrewsbury and Atcham Borough Council will therefore continue to use the previously published figure of £69k for a 2 bed home.

Two earners seeking a 3 bedroom property

This model assumes a nominal 2nd income of £7,820.00 pa.  Mortgage is calculated at a multiple of 2.75 x the annual joint income.  This equates to a borrowing figure of £80,000 available to fund the property purchase.  Typical repayments on this mortgage would be around £115 per week.  By obtaining a 95% mortgage the couple could afford a 3 bedroom property at a market price of around £84,000.

Rents

The figure for affordable rent is taken from information provided by letting agents in the Shrewsbury and Atcham Borough Council area and is for accommodation providing 2 bedrooms plus 1 living room.  The figure is calculated as a straight average from the high and low rent figures for Shrewsbury & Atcham. 

Current High Rent for 3 room property = £126.00 per week

Current Low Rent for 3 room property  = £  96.40 per week

The affordable 2-bedroom rent figure at July 2008 is therefore: £111 per week.