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Saturday, 5 November 2011

Affordability - Another Westminster Red Herring

Over the last month or two I have tried to show that the Conservative (supported by their Lib Dem whipping boys) idea of 'Localism' is anything but - especially when it comes to development policy.

There is, sadly, another term that seems to be being scattered like confetti by Westminster politicians. A cynical attempt to fool us into believeing that they are trying to solve the housing crisis in Cornwall.

'Affordable Housing' is the mantra of the politcian that wants us to think that he or she understands the situation and wants to do something about it. If some LibLabCon person mentions Affordable Housing and the dire need for homes for local people it demonstrates their empathy for the struggle that the people of Cornwall are facing. Yeah - right!

The problem is what they mean by 'Affordable Housing' and what we would like to think they mean are very different things.

'Affordable Housing' is actually a specifically defined term to be found in the Department for Communities and Local Government's Policy Statement . There is also information on Cornwall Council's website.

There are basically two parts to Affordable Housing - the rented sector and purchase sector. As the subject of Affordable Housing usually comes up in the media in the context of people being able to buy their own home I mainly looked at what the policy means for people who want to do just that.

Basically Affordable Housing is available to Eligble Households who earn less than Stephen Gilbert MP and who have a development building Affordable Housing within 10 miles or so of where they currently live. If you want to buy your home outright then you may be able to find a house with a "20% - 50% discount" compared to market value.

Given that the average house price in Cornwall is now over £220,000 even a 50% dscount would be £110,000.

I have asked for more information from Cornwall Council as to exacly how many discounted Affordable Homes have been provided in Cornwall over the last year and what the average discount has been and I will blog again when I get this information.

However, in the meantime I will make a few assumptions.

First of all the average price includes all housing and will be distorted by higher value detached houses. I will use £185,000 as the basic market value price. This is the figure for the average semi-detached house in Cornwall.

Secondly I will assume the discount is 25%. I have seen a few schemes where a 20% discount has been offered but never any where 50% was available, so I think 25% is being generous.

This means an average Affordable Home would cost £138,750.

Given the average wage in Cornwall is now £17,000, this means that the average Affordable House is more than 8 times the average wage. Of course this means that, as everyone knows, even an Affordable House isn't affordable.

So what does all this mean?

Well it means that there is no such thing as an Affordable House for the average person in Cornwall.

It means that politicians in Westminster parties are at best being disingenuous at best when they talk about their committment to Affordable Housing because they are merely talking about a committment to something that doesn't exist.

However, there is more harm being done by the Affordable Housing red herring.

The hidden problem is that supposed Affordable Housing is being used to drive development in Cornwall using the fairy tale that housing is being provided for local need as well as developers' greed.

The media allows people who have a vested interest in seing houses built to make comments such as:

"There is a pent up demand for houses."

"There is a housing shortage so we need to build more."

What nobody is ever allowed to say is:

"Building more houses - even Affordable Housing won't allow the average person in Cornwall to buy one."

So who are all the houses for?

They must be for people who can afford them - whoever these people are they are not your average Cornish person on the streets of Camborne, St Austell, Bude or Penzance!

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