These are properties that are sold at a discounted price. The discounted sale prices are carefully assessed and reviewed each year by us and are applied to new property developments.
When an affordable property is built, it is valued at a market price. The difference between the market valuation and the discounted sale price is then worked out as a percentage. This becomes the discount percentage that will be applied to the property, every time it is sold. This percentage will be set out in the Section 106 Agreement.
For example, if we have set the discount price for a new affordable three bed house in South Lakeland at £110,000, this is what the buyer pays. The Chartered Surveyor will assess a market value. In this example this new build property has a market value of £220,000. To sell it at £110,000 means that it is being sold at a 50% discount (ie 50% less than the market value). Every time this property is sold in the future, it must be valued by a RICS registered Chartered Surveyor to establish a market value. The 50% discount is then applied which is the maximum price the property can be sold for.
These discounted properties must be sold at no more than the discount percentage as stated in their individual Section 106 Agreements for the life of the property.
Resales of discounted properties
Discounted properties, whether a new build or an existing affordable home will be advertised much the same as any other property; in local newspapers, estate agents and online property search engines such as, Rightmove and Zoopla. Adverts for affordable properties have to specify that they are affordable.
These properties are not allowed to be marketed or sold over the discounted price. Look out for phrases like, "subject to section 106", "affordable property" or "offered at a percentage of the market value". This usually means they are part of the affordable housing scheme.
Home ownership one stop shop aims to help people identify what type of affordable housing scheme could be suitable for them.