When discussing housing options in the UK, social housing and affordable housing are often mentioned interchangeably. However, they are fundamentally different in terms of purpose, rent structure, and target demographics. While social housing is designed to support the most vulnerable individuals by offering the lowest rents, affordable housing aims to assist those with middle to low incomes by providing homes at reduced, but higher, rents compared to social housing.
What is social housing?
Social housing refers to homes provided by local councils or housing associations at rents significantly lower than market rates. It is designed to ensure that individuals and families on low incomes or those in challenging circumstances have access to safe, secure, and affordable living spaces.
Types and examples include council homes, housing association properties, and shared tenancies. For instance, a single-parent family with limited financial resources may qualify for a council home with rent set at a fraction of the local market value.
Pros and cons
- Pros: Lowest possible rents, long-term security, and an essential safety net for those in need.
- Cons: Limited availability, long waiting lists, and strict eligibility criteria.
Eligibility criteria focus on individuals or families with urgent housing needs, such as low-income households, those experiencing homelessness, or people with disabilities. Applications are usually assessed through a points-based system by local councils.
What is affordable housing?
Affordable housing is intended to help individuals and families who cannot comfortably pay market rents but may not qualify for social housing. It is offered at around 80% of local market rents and is typically funded through public-private partnerships or planning obligations (such as section 106 agreements).
Types and examples include affordable rent properties, shared ownership schemes, and intermediate rent options. For example, a young professional couple earning a moderate income may apply for a shared ownership home where they purchase a portion and rent the rest.
Pros and cons
- Pros: Broad accessibility, moderate financial relief compared to market rents, and options for eventual property ownership.
- Cons: Higher costs than social housing and less focus on the most vulnerable groups.
Eligibility criteria generally cater to households earning below a specific income threshold (usually capped at £90,000 per annum for shared ownership in some areas) but above the range required for social housing eligibility.
Differences between social housing and affordable housing
Ownership
Social housing is typically owned and managed by local councils or housing associations, reflecting its strong public sector foundation. These organisations ensure that the properties are maintained and provided to those in greatest need.
Affordable housing, however, often involves partnerships between private developers and housing associations. This collaboration allows for the inclusion of affordable housing units in larger housing developments, sometimes paired with schemes like shared ownership. Shared ownership gives tenants the opportunity to buy a share of the property while renting the remainder, offering a pathway to homeownership that’s absent in most social housing setups.
Eligibility
Eligibility criteria for social housing are more restrictive, focusing on individuals and families in urgent need. Keeping in mind unconscious bias, priority is often given to those facing homelessness, living in unsafe conditions, or earning extremely low incomes.
Affordable housing, on the other hand, casts a wider net. It is designed to assist not only vulnerable households but also middle-income individuals and families who may find private market rents unaffordable. This broader approach makes affordable housing more accessible to a wider demographic, addressing housing challenges for people who might not qualify for social housing.
Rental rates
Council housing rents are not directly tied to a fixed percentage of household income. Instead, they are calculated using a government-set formula known as “formula rent.” This formula considers factors such as the size, location, and relative value of the property, as well as local income levels. Typically, social housing rents are set at 50% to 60% of local market rents
Similarly housing association calculate rent using government-set guidelines which considers factors like property value, size, and local income levels. Affordable rents can be up to 80% of market rents.
Tenure
Social housing often provides long-term or lifetime tenancies that grant a sense of stability and security to its tenants. These tenancies allow families to plan for the future without the fear of frequent relocations. Affordable housing tenures, in contrast, tend to be more flexible and shorter-term, designed to meet varying affordability needs over time.
However, schemes like shared ownership bridge this gap somewhat by offering tenants both stability and a clear process to move toward full property ownership, catering to aspirations for long-term housing security.
Purpose and funding
The government’s housebuilding target of 1.5m homes within 5 years includes provisions for affordable housing, initially requiring 50% of these homes on grey belt sites to be affordable. However, this has now been revised to mandate that 15% above the local planning policy (up to a cap of 50%) must consist of affordable housing. This shift demonstrates a focus on balancing affordability with the practicalities of wider housing development goals, leveraging a mix of public and private funding sources to address varied housing needs beyond the most vulnerable.
How to choose between social and affordable housing
Choosing between social housing and affordable housing depends largely on your financial situation, housing needs, and eligibility. If you are facing significant financial hardship or other urgent housing issues, social housing may be the more suitable option due to its lower rents and added security.
If your income is higher but still insufficient to cover market-rate rents, affordable housing might be the right choice. It offers reasonable flexibility, more availability compared to social housing, and opportunities for ownership through schemes like shared ownership.
Consider speaking with your local housing association or a registered housing provider to assess your eligibility and explore the options available to you. Understanding the differences can help you make an informed decision that aligns with your circumstances and long-term goals.
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