Changes have been approved to the council’s affordable housing policy to cap rent at 70 per cent of market value.
The update to Reading Borough Council’s (RBC) Affordable Housing Supplementary Planning Document (AHSPD) means developers will be asked to set affordable housing rates at a minimum of 70 per cent of market value.
Developers of sites with ten or more homes in Reading must make 30 per cent of them available for affordable housing.
However, this can be reduced, or the contribution can be made off-site, if it is not deemed viable.
Currently, affordable housing must be 80 per cent of or lower than the market rate, but councillors in Reading have now voted through plans to set the minimum at 70 per cent.
The AHSPD is used in determining planning applications for new development in Reading.
The updated document was approved at Monday’s Strategic Environment, Planning and Transport (SEPT) committee, which is not available for public and press viewing due to technical issues.
However, Councillor Tony Page, lead member for SEPT, confirmed all items on the agenda were approved.
At a previous meeting, Councillor John Ennis, lead member for Housing, explained why the council could not go even further than the 70 per cent cap.
He said: “We can put what we like, but if we can’t convince developers then it’s not worth the paper it is written on.
“Many developers don’t like affordable housing because it cuts into their profits.
“We have to look at what’s realistic and I think the 70 per cent cap – the Reading Affordable Rent – is really positive.”
The AHSPD aims to strike the right balance between maximising the amount of genuinely affordable homes built for local people and ensuring rents are set at a genuinely affordable level.
Affordable housing will become more affordable under the new scheme
Exceptions to the ‘Reading affordable rent’ requirement include:
- If the home is being rented as key worker housing or supported accommodation
- Affordable private rental properties provided as part of a build-to-rent development
There is currently a need for around 406 affordable homes to be built every year in Reading, with three-bed plus properties most needed.
The council is calling the new minimum affordable housing rent ‘Reading affordable rent’ and says it has been set at 70 per cent based on calculations of local affordability.
According to the council, the median weekly household income in Reading is around £610.
Good practice indicates households should not spend more than 35 per cent of their income on housing, which for a median weekly income is around £210.
This would equate to 70 per cent of the weekly market rent for a median three-bed property (costing £300) in Reading.
This means the median household can afford the rent without requiring support from Housing Benefit or the housing element of Universal Credit.
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