Recommendation 4

We welcome Homes England’s commitment to provide us with regular updates on its progress delivering affordable housing, but we are concerned that it and the Department has yet to clarify what ‘affordable’ actually means, and how much it costs to deliver affordable housing. The Department claims that ‘affordable’ means different things in different settings: different regions have differing requirements for housing that is affordable, and it varies in meaning across different housing programmes. Homes England uses the formal definition as set out in the 2018 version of the National Planning Policy Framework: broadly, ‘affordable’ means homes for rent, sale or shared ownership at less than market rates. The number and proportion of affordable homes planned for the sites intended for Starter Homes has increased from 1,700 (29%) to 2,370 (36%), reflecting an increased focus on affordable housing. However, we are concerned that the cost per affordable home of those funded by money intended for Starter Homes appears much greater than the cost per affordable home delivered by local authorities. The assessment of value derived from the funding intended for Starter Homes should encompass those homes delivered for market, and it should recognise that homes are being built on land that would otherwise be underused and not viable without government help, therefore will be more expensive than other types of affordable home. Recommendation: The Department should write to us within one month setting out a clear definition of ‘affordable housing’, whether this definition means they are for sale, shared ownership or rent, and whether, and how, the definition may vary for different circumstances and geographies. As agreed, Homes England should write to us every 6 months to update us on the numbers of affordable homes created, and of what type and tenure. Starter Homes 7