There has long been a common understanding, that homes are now becoming more unaffordable by the day.
For many it seems as if long-term renting has seemed the more reasonable option, with young people truly believing that owning their own home is, unfortunately, an unobtainable goal.
Well, change may be on its way! Legal and General have made a bid to build as many as 3,000 new “affordable” homes a year.
But how different will this be to that of previous housing associations? And will there be the same subsequent problems for Legal & General?
How will homes be affordable?
One of the factors that led to the downfall of previous housing associations is debt. Debt accumulated through development, to be more specific.
Legal and General believe there is a ‘chronic shortfall’ of affordable housing, and through this they have proposed to add more to the £1.5bn they have already invested in build-to-rent homes so far.
They believe that the future lies in prefab homes, built in Leeds.
Is it a sustainable approach?
Some have argued that this is the next necessary step for affordable housing.
Debts in previous housing associations arose for a number of reasons, and one significant one will be the project management costs when building new homes.
The homes that are being provided, by a subsidiary arm of L&G, are built in Leeds, and transported to the project site.
They must be small homes then?
Well, they’re not huge. However, recent years have seen a spark in things like studio apartments, smaller and smaller spaces rented out at high prices.
Because of this, there are more members of society, especially younger or first-time buyers, that will thrive in the 26 sq metre space available.
Imagine how cheap it would be to insure your home in these small homes. And with the company producing them selling them at a cost 15% below standard construction site costs, you can see how much this begins to mount in savings.
The plan is that these savings should be reflected on the customer end, and if it is successful should be a landmark event for modern housing.
Is this a permanent solution?
It doesn’t look to be that way, no. Nor are they designed to be.
The concept of these homes are:
“accommodation for young, single, urban workers earning between £20,000 and £40,000 who do not qualify for conventional social housing but who are priced out of buying.”
Therefore, the notion of the properties is to be high-spec, to incorporate for modern demand, at a price between £600 and £700 a month. They are also energy efficient, boasting that energy bills could be as low as £10 a year!
So considering the standard single tenancy (no way would there be enough room for even a couple) would be around 6 months or so, this could be the vital fill needed in the housing market gap of a generation.