The West Midlands Combined Authority (WMCA) has redefined ‘affordable housing’ to mortgages or rent costing less than 35% of the lowest quarter of wage earners in the local area.
This replaces the typically used ‘affordability’ definition of 80% of market value.
The West Midlands is the first UK region to introduce a local definition, which is significant because any development schemes receiving WMCA investment from its devolved housing and land funds must make a minimum of at least 20% of the homes in their scheme affordable.
Andy Street, mayor of the West Midlands, who chairs the WMCA, said: “In recent years would-be homeowners have been forced to stand by and watch as house prices outstrip wages.
“The current ‘affordability’ definition is 80% of market value, which for many people in the West Midlands still leaves homes frustratingly out of reach.
“By linking the definition of affordability to local people’s earnings rather than property, and using this alongside our minimum 20% requirement, we can help make the prospect of homeownership a very real one for many more hard-working individuals and families.
“It also sets out a very clear ambition to developers and partners who want to work with us to deliver homes. This is the kind of inclusive growth that is key to building the future of the West Midlands.”
The West Midlands needs to build 215,000 new homes by 2031 to meet future housing and economic demand.
To help reach the target the WMCA has introduced a ‘brownfield first’ policy where new homes and commercial developments are built on former industrial land wherever possible and has secured new funding from national government to help make it happen.
With such sites being notoriously difficult to build on because of the high clean-up costs for developers, and other constraints, the WMCA has committed substantial funding for land purchases and for brownfield remediation so sites can be made viable for development.
A total of 16,938 properties were built in 2018/19 – a 15% rise on the previous year and twice the UK average increase. That compares to just 7,500 homes built in 2011.
Cllr Mike Bird, WMCA portfolio holder for housing and land and leader of Walsall Council, said: “This is another example of how the WMCA and its partners are changing the housing market, using our funding to deliver the homes we need in the places where we need them.
“By building on brownfield land, regenerating local areas, supporting living in town centres and linking affordability to local incomes, we are leading the housing revolution.”
BY RYAN BEMBRIDGE
Source: Property Wire