'Tricky market sparks affordable homes shift'

A new development will consist of only affordable homes as a developer said a "tricky market" is resulting in builders taking "less financial risks".

Somerset Council has approved plans for 100 properties to be built north of Somerton Road at Huish Episcopi near Langport, which will all be affordable homes.

Sam Stone, the director of Land and Planning at housing association Abri, said sites where all the homes are affordable are "becoming more common" as the current housing market is tricky, partly because of rising mortgage rates.

Construction of the two or three-bedroom houses, which will be a mix of social rent or shared ownership, could begin this autumn.

The government definition of affordable housing states it should be below market rate and affordable to those whose needs are not met by the market.

Stone said the housing association is able to build so many affordable homes because of its funding model.

Abri uses a combination of grant funding from Homes England, money built up from the properties they rent out, and investing money from their reserves.

Stone said: "It's getting harder and harder out there for [private] house builders to actually make things work because of viability."

He added: "The market's quite tricky with mortgage rates rising, I think you're going to see more 100% affordable schemes coming, because it's tougher for people to buy on the open market."

Chris Winter, a private developer and the managing director of West of England Developments, said big house builders are struggling with viability because "build and labour costs have gone up faster than house prices".

Winter also described the cost of planning and legal agreements as "eye-watering".

He said he could understand why a number of builders have seized the opportunity to create homes for housing associations, as there is less financial risk involved.

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