What is Affordable Housing and how to apply

Why are there so many different types of affordable housing?

Different households can have very different housing needs. For example, someone seeking work might need to rent a home at a very low price, or a young couple earning an average wage might need help to buy their first home. 

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Because households are in different circumstances with varying incomes, affordable housing schemes are designed to offer a range of choices.

Cornwall Council use planning conditions and legal agreements (known as Section 106 agreements) to ensure affordable homes remain at an affordable price for future eligible households. 

Affordable housing can be provided to households who are eligible because their needs are not met by the open market. Eligibility for affordable housing is linked to local incomes and local house prices.

There are different types of affordable housing available in Cornwall, detailed below:

Social rented housing

Social rented housing is owned and let by local authorities including Cornwall Council and Registered Providers of affordable housing ("RP"s). These homes are offered at the lowest rents which are set by the Government. 

Affordable rented housing

Affordable rented housing is owned and let by Registered Providers and homes are managed and maintained in the same way as social rented homes, but higher rents can be charged (up to 80% of open market rent).

Because more rent is charged, the housing providers can generate income to help build more homes. Rents like this are often charged on new build homes.

Housing benefit can still be claimed to assist with paying the rent.

Rent to Buy

Rent to Buy is a relatively new tenure that is not yet widely available in Cornwall.  This is a Government funded scheme delivered through Registered Providers which allows the property to be rented at an affordable rent level (80% of the open market rate, capped at Local Housing Allowance) with the concept that the tenant saves the other 20% towards a mortgage deposit, preferably through a Help to Buy ISA.  At the end of the prescribed term (typically 5- 7 years), the property is offered to the tenant to purchase, usually as shared ownership.   

Social and affordable rented housing is allocated by the Homechoice team at Cornwall Housing. Homechoice advertises newly built and existing homes when available for occupation. To apply, you need to be registered with Homechoice.  

Apply for rented housing through Homechoice

Or call the Homechoice team on 0300 1234 161

This link to the Government's 'Own Your Own Home' website may help you find the type of intermediate home that is right for you.

Affordable housing to buy is advertised by the Help To Buy South West agency, who also assess the eligibility of purchasers of newly built affordable homes or affordable homes that have come back onto the market, on behalf of the Council and Registered Providers.  Section 106 qualifying criteria usually covers a local connection to the parish/town where the property is situated, housing need and a financial assessment.  You can see homes which are currently available and apply online below, or call Help to Buy SW on 0300 100 0021.

Apply for an affordable home to buy through Help to Buy South West

Below are some examples of intermediate housing schemes which may be advertised by Help to Buy South West:

Shared ownership 

Shared ownership is designed for people who cannot afford to buy a house on the open market but still want to get on the property ladder. 

An initial share is bought (usually 25% to 75%) and then rent is paid to a Registered Provider on the remaining part.  There are two monthly payments, one for the mortgage and one for the rent. 

However, these are still less than the mortgage would be on an open market property.  The other share in your home is owned by a Registered Provider or a developer.  It may be possible for you to increase or decrease the share you own in the future, known as staircasing. 

When you sell a shared ownership property, the proceeds are split according to who owns what.  If you have staircased from 50% to 80%, then you would get 80% of the value of the property when you sell it.  Unless your home is within a restricted village or rural area, it is usually possible to buy 100% of your home outright so it becomes a traditional open market property.

Shared Equity

Shared equity schemes are usually offered by developers. Whilst not strictly
‘affordable housing’, the schemes help you by providing a loan that acts as part of the deposit, and you would own 100% of the property.  You will need to check whether the developer of the home you are interested in offers this scheme.

Help to Buy equity loan

The Governments’ Help To Buy equity loan is available through the Help To Buy South West agency. This scheme offers a 10%-20% equity loan funded by the Government through the Homes and Communities Agency (HCA) on new build properties. With a Help to Buy equity loan, the government loans you up to 20% of the cost of a new-build home, so you only need a 5% deposit and a 75% mortgage to make up the rest. Help to Buy equity loans are open to both first-time buyers and home movers on new-build homes worth up to £600,000. You won't be able to sub-let your home.

Discounted sale

Discounted sale properties are built and sold at below market value by private developers. The initial sales price is typically between 40% and 70% of the open market value (depending upon whether the property is in a high or low value part of Cornwall).

You buy the property at a discounted price and own the freehold of the entire property.  Unlike shared ownership, you don’t have to pay rent on the remaining share of the property, as there is no remaining share.

When you come to sell the discounted property, a Section 106 legal agreement requires you to sell the property at the same percentage of open market value as you bought for so that the property remains affordable. 

For example, if you pay £80,000 for an affordable property worth £100,000 and it rises in value to £110,000 by the time you sell it, the 20% discount would be passed on and you could sell it for £88,000.

Buying an Ex Council ‘Right to Buy’ property

If you are buying a former Council House it will not have an affordable housing restriction imposed on it through a Section 106 agreement.  However, there is likely to be a restriction under s157 of the Housing Act 1985 if the property is within a ‘designated rural area’.  Many areas of Cornwall are designated rural areas and therefore many ex-Council properties will have the restriction.  The restriction has the effect that the property can only be sold to somebody who has lived or worked in Cornwall for the 3 years immediately preceding their application to purchase the property.  You will require a certificate from Cornwall Council stating that the transaction is made in accordance with Section 157 of the Housing Act 1985. 

Applications for a certificate are dealt with by the Council’s Legal department and not the Affordable Housing Team. Please email these types of requests to Legal157Instructions@cornwall.gov.uk

The Council will require evidence that at least one of the purchasers has lived or worked in Cornwall for the last 3 years immediately preceding their application to purchase.  The Council’s charge for considering evidence, preparing the Certificate and producing the same is currently £300.00 and this will need to paid prior to the Certificate being issued.

The Certificate will be sent to your solicitor so that they can send this with their application to the Land Registry when the purchase is completed.

Council housing in the former District Council areas of Penwith, Kerrier and Restormel was transferred to Housing Associations under what are known as Housing Stock Transfers.  If you are buying a former council property in these areas and it was sold after the Housing Stock Transfer took place you will need to contact the relevant Housing Association who took transfer of the property from the council and subsequently sold the property.  In these cases the Housing Association is responsible for issuing the Certificate of Compliance rather than the Council. The relevant Housing Associations are:

  • Penwith Housing Association for the former Penwith area
  • Coastline Housing for the former Kerrier area
  • Ocean Housing for the former Restormel area