Types of Affordable Housing

Affordable housing is a term used to describe different tenures that are more affordable to people who cannot buy or rent a home on the open market.  Different types of affordable housing are:

Social Rent

This is subsidised housing that is owned and managed by an Affordable Housing Provider (Housing Association) and allocated through Hampshire Home Choice to eligible households.  To find more details on Hampshire Home Choice and to look at homes that are available please see the website:  https://www.hampshirehomechoice.org.uk/

Affordable Rent

Affordable rent is housing that is owned and managed by Affordable Housing Providers (Housing Associations) and allocated through Hampshire Home Choice to eligible households.  Rents are no more than 80% of open market rent and in line with the Local Housing Allowance.  For more information on Hampshire Home Choice and to look at homes that are available please see the website:  https://www.hampshirehomechoice.org.uk/

Shared Ownership

Shared ownership is designed for people who cannot afford to buy a house on the open market but still want to get on the property ladder.  An initial share can be purchased from  as little as 10% of the full open market value and dependent on your financial situation, in shares up to 75%. Rent is paid on the remaining share.   In all instances you will be encouraged to purchase the maximum share that is affordable to you.  There are two monthly payments, one for the mortgage and one for the rent (which is likely to include a service charge). The share that you pay rent on is owned by a housing association or on rare occasions by a developer. You are able to purchase additional shares in your home when you can afford to, and this is known as ‘staircasing’. In some instances staircasing will be limited so that you cannot purchase more than an 80% share in the property.  This will only apply to some shared ownership properties in rural areas where a specific restriction has been added.

Under the new shared ownership model introduced in June 2021 it may be possible for you to increase your share by as little as 1% each year and you should discuss this with the housing association who part owns your property. 

When you sell a shared ownership property you will sell the portion that you own and retain the equity for that share; the remainder will be paid to the housing association. When marketing the sale of your property it will need to be advertised as a shared ownership property and sold on as such. 

Shared ownership homes available for purchase in Test Valley will be advertised on the Help to Buy South website, where detailed information will be made available.


Intermediate Rent / Rent to Buy

This is usually for new build properties with the rents being approximately 20% cheaper than those on the open market.    Affordability checks will be carried out to make sure the monthly rent is affordable for your household.  For most intermediate rented tenancies you will be expected to utilise the reduced rent to save towards a deposit to buy the home you are renting, or another home  through Help to Buy schemes.  This is known as Rent to Buy.  Providers such as RentPlus offer this option, although other housing associations also operate the scheme from time to time. There are no Intermediate Rent / Rent to Buy schemes in Test Valley at present. 

Discount Market Sales

These properties are sold at below market value, usually with a discount of between 20% and 30% off the full market value. You buy the property at the discounted price and own the entire property. Unlike shared ownership, you do not have to pay rent on a remaining share of the property.

When you come to sell the discounted property, the saving is passed on to the next buyer so that the property remains affordable. For example, if you pay £80,000 for an affordable property worth £100,000 and it rises in value to £110,000 by the time you sell it, the 20% discount would be passed on and you could sell it for £88,000. This will be detailed in the Deeds and a covenant relating to the purchase.

All of the detail as to how a developer must dispose of discount market homes is detailed in a legal agreement called a S106. Your solicitor can explain how this works and how this relates to your purchase and future re-sale.

The homes that are to be sold at a discount are advertised by the developer for that site and enquiries should be made with the sales office. From time to time there will also be resales of existing discount market homes which will be advertised by the seller through an estate agent.  There is no register to join if you are interested in discount market sale homes although you will be required to obtain a form from Test Valley Borough Council’s Housing Development Team for an eligibility check if you wish to proceed with a purchase.  Discount market homes are usually sold on a first-come-first-served basis to purchasers who meet the eligibility criteria, but in the event that there is more than one interested party it may be necessary for the Council to determine which applicant has the highest priority. 

The general criteria is as follows:

  • First time buyers (there are some caveats to this so please check)

  • Household income of no more than £80,000

  • Local connection to Test Valley (as per local connection set out in the Allocations Policy relating to Test Valley Hampshire Home Choice)

  • Property to be used as main or principal home

The sales office you apply to will provide you with details on how to access an eligibility form for an eligibility check that will be carried out by Test Valley Borough Council. Once this is completed the sales office will begin the process of purchase with you. The form can be found here.

If you require any further information on the above, please contact:

Housing Development Team
Telephone: 01264 368000 or email housingdevelopmentteam@testvalley.gov.uk