Truly Affordable Housing

Recently I heard about some friends of a friend who were struggling to sell their house. It seemed like the sort of place that would be snapped up at once: good condition, tastefully decorated three bedroom cottage on a quiet country lane facing south with its back to woodland, close to the sea, with paddocks, in fact the Faux Bucolic Rural Idyll made bricks and mortar. The snag was the lease, or more precisely, the freeholder: The National Trust. Any good solicitor will tell you not to touch a NT lease with a bargepole - their powers are pretty absolute and pretty arbitrary and the National Trust Act exempts them from modern leasehold reform legislation.

That got me thinking: Local Authorities want to make affordable housing available, but its not possible to sell affordable land. Selling it at undervalue simply gives the purchaser an windfall gain when they sell. However, the LA or other organisation could remain the freeholder and sell a 999 year lease, and that lease can reduce the value of the land to an affordable level, by stipulating who the property can and cannot be sold on to. Now the value of building land is governed by what people are prepared to pay and what they are prepared to pay is governed by what they can afford, so if the house can only be sold to people that can't afford much, then it will never be priced beyond those people's reach. So the inhabitants get a house they can afford, without having to rent.

Of course, they don't get to take part on the Great British Housing Ponzi Scheme, but you can't have everything.