Rochester Riverside – affordable housing?

Rochester Riverside

Rochester Riverside regeneration. The picture was taken from the viewing platform off Gas House Road in Rochester. A very helpful lady called Emily who is a Senior Project Officer with Medway Renaissance arranged for access. I’m planning on taking more pictures as the work progresses over time. Hopefully they will turn out a bit better than this effort.

The plan is that 25% of the residential properties built here will be so called affordable housing. Wondering what that is? Affordable housing is a con. You end up paying about the same each month if you were to buy the whole property yet a proportion of your monthly payments goes on rent instead of reducing your mortgage. Consequently over time it ends up being a fair bit more expensive than buying the property in the first place. For example –

Affordable Housing Option

    Property Value = £180,000
    Percentage purchased = 50%
    Deposit = £2700
    Monthly Rent = £206.25
    Monthly Service Charge = £115
    Monthly Mortgage Repayment = £569.09
    Interest Rate = 6%
    Term = 25 years
    Monthly repayment = £890.34

Repayment Mortgage

    Property Value = £180,000
    Percentage purchased = 100%
    Deposit = £2700
    Interest Rate = 6%
    Term = 25 years
    Monthly repayment = £1119.54

So you rent half your house from a “social” landlord for the benefit of “saving” £229.20 or in other words paying about 20% less each month than a repayment mortgage would cost. As it goes that is just £22.95 more than the amount paid in rent each month in the first example.

If you take into account that the mortgage will reduce over time but that the monthly rent (with service charge factored in) is more likely to rise you can see that the affordable option is a sham that hammers people who by default can afford it the least.

No wishing though to put a dampner on the regeneration what they are planning to do is pretty good. As you can see from the picture a once contaminated brownfield site next to the river will in time become a pleasant place to live, work and play – if you can afford to after paying the rent that is.

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