An Affordable Rent is defined as being no more that 80% of the market value rent.
There is no direct subsidy of the actual rents from local or national government, but the Housing Association can keep the cost low because:
- They are built on land which is not available for normal market value development, and is therefore cheaper to buy
- There are various grants available to the CLT and to the Housing Association for start up expenses and a capital grant per property.
- They are built to a high but no-frills specification.
- The Housing Association’s profits all have to be used for building more housing – they are not creamed off by shareholders