Affordable Housing is housing for those whose needs are not met by the open market. In most cases this is because they cannot afford normal market rents or prices. It comes in two basic varieties - Social Rented and Intermediate Housing.
Social Rented is housing for rent from Local Authorities and Registered Providers (Housing Associations that have registered with the Tenant Services Authority, formerly the Housing Corporation) Social Rent levels are set below market rates in accordance with government guidelines.
Intermediate Housing is housing that is part sale, part rent under the shared-ownership schemes now known as New Build Homebuy. Shares ranging from 25% to 50% are sold at full market value with the remaining share being rented from a Registered Provider, typically at the equivalent of around 2.75% per annum of the market value of the unsold share. On many affordable housing developments within the existing physical limits boundary (or development boundary) it is possible to buy up to 100% of the property in stages (referred to as "staircasing") however, in some circumstances the maximum share that can be bought is 80%, ensuring that the property will never be completely sold off and remain available for future need.
Other types of affordable housing include Discount Market Sale or Rent by which a property is available for sale or rent at less than the current market value, usually a discount of 20%.
Affordable housing should meet the needs of eligible households including availability at a cost low enough for them to afford, with regard to local incomes and local house prices. It should also remain at an affordable price for future eligible households (remain affordable in perpetuity) In rural areas, this had led to planning conditions being applied that ensure new affordable housing developments do indeed remain affordable and available to local people through Section 106 Agreements of The Town and Country Planning Act 1990.