AFFORDABLE HOUSING MODEL Presentation by Alan Richards and Melvyn Stone, with a ‘call to arms’ from Jackie Sadek

Jackie Sadek

Alan is President of ACES and Executive Director for Environment and Place at Southend-on-Sea City Council.  Melvyn is Operations Director at Norse Consulting and a Corporate Sponsor of ACES.  Jackie is an Honorary Member of ACES and co-author of “Broken Homes”.

This is a summary of the presentation given by Alan and Melvyn at the Annual Meeting held in Cardiff. It follows a presentation made by Alan at the LSH/ACES combined sub-regional CPD seminar held at Milton Keynes in October [see my write-up in Branches section of this ACES’ Terrier]. It is ‘work in progress’ towards developing a model for accelerating affordable housing provision using the government’s financial allocation of £39 billion. Jackie gives a rousing introduction. 

Jackie’s call to arms 

It is a great privilege to be asked by our Editor (She Who Must Be Obeyed) to write a rally-to-the-cause introduction to the vitally important article that follows. But WARNING! All those reading on, please take heed. What follows is not for the faint of heart. It outlines one of the greatest failures in social policy in our times..…. 

Many ACES members will be aware that our new President, Alan Richards, has been leading the charge - passionately and fearlessly - to end homelessness in the UK. He is being ably abetted in all this by Melvyn Stone of Norse, and a merry band of ACES luminaries (actually, pretty much the entire membership, if truth be known, certainly any ACES member who has been asked has shown willing). All of us are agreed on one thing: we cannot go on like this. 

Presentation Overview

On a humanitarian level, the statistics are simply shocking, as we enter 2026 as a G7 economic power! Even for those of us dealing with this day-in-day-out, to see these bald numbers renders it pretty stark, it is absolutely devastating really. And it would be nice to know that that alone would be enough for concerted action. But even if the problem is only viewed at a hard-hearted financial level, everyone can see that something has to give. The status quo is simply unsustainable. And that is what we, in the local government sector, are living with every day. Putting to the one side our sympathies for our fellow women and men (although please don’t do that for too long - we are public servants, after all), we all know that our esteemed employers - aka the UK local authorities - are being relentlessly driven into arrears, or even Section 114 notices, by the demands on our Temporary Accommodation budgets, which has now reached a mind boggling £2.8bn p.a nationally. It is simply eye watering. 

What follows is Alan boldly laying out the case for a radical new approach, which I first heard at an inspired ACES Conference in Milton Keynes. Alan comes at it as a humanitarian (hurrah), but happily it is backed by a solid business case and tough commercial thinking (thank you Norse). And thankfully, he is not alone. Many opinion formers in the property industry are rapidly coming to a similar view, notably Michael Keaveney of Grainger plc, who has published an excellent paper “Homes for the People we Need” laying out a new model for the provision for social housing, one which - crucially - provides a solid investment case for new social housing vehicles (naturally I recommend the paper, but for those like me who can’t be faffed to read stuff, Mike gave an upbeat interview for us on the “Planning After Dark” Podcast laying out this most compelling case in short and lucid order) (1) So, the argument is being made elsewhere. And - sooner or later - our financial institutions (perhaps even our own local authority pension funds) are going to start listening. 

But ACES is the crucial piece of the jigsaw, isn’t it? To build housing you need land. And, as Alan so brilliantly asks: if not now, then when? And if not us, then who? ACES members are the very people who can make this happen. We have the authority, the influence, and the responsibility. So,

all power to the great Alan Richards with his indefatigable zeal to get something radical going to force wholesale change. 

All power to the ACES army and to our wonderful sponsors and partners. Can we dare hope that our time is now? Well, all the indications are there. There are a multitude of reasons why we need to act. Most resoundingly that WE CANNOT GO ON LIKE THIS. 

But Alan needs help and support, guys. This problem is on us. We are organising a webinar to kick this campaign off in the new year (2). If not us, then who? 

Some facts and figures 

Alan and Melvyn have been working closely on Alan’s idea to improve the provision of affordable housing. 

Firstly, some facts and figures: 

• 172,420 children in England are homeless and living in temporary accommodation – the highest number since records began. That’s enough to fill Wembley Stadium twice over 

• Every 8 minutes a child becomes homeless in England (Shelter estimate) – a shocking indicator of the scale of the crisis 

• 74 children have died in the last five years due to hazards in temporary accommodation, including damp, mould, and unsafe facilities 

• One in every 200 households in the UK is experiencing homelessness – the highest rate among developed nations 

• Local authorities report record waiting times for social housing: in some London boroughs, families face waits of over 100 years for a family-sized home 

• The UK has a housing gap of 6.5 million homes. To close this gap by 2040, we need to build 565,000 homes per year – more than double the current rate 

• Government target: 300,000 new homes per year, but completions are stuck around 201,000 annually, far short of needhttps://infogram.com/figure-1-housing-supply-at-a-glance-vs-last-quarter-q2-2025-1h984wv8r7xrz2p 

• Social rent completions have fallen 83% since 1992, leaving families reliant on insecure private rentals, where many spend 59% of income on housing costs. 

More frightening statistics are shown in the image, used at the LSH event. As well as the impact on people’s lives is the impact on council finances. 

Statistics on the UK Housing Crisis

Introduction 

What is the right strategy for dealing with what is a significant housing crisis? While the government is clear about its ambition for 1.5 million houses, it is also becoming clearer around the 10-year plan to release £39 billion for the social and affordable housing programme. While the right noises are being made for 60% social rent, but has the government got the keys to unlock the funds and make it happen? 

We are all aware that because of viability challenges to meet ever-increasing planning requirements such as BNG, and increasing build costs, without statutory provisions for affordable housing it will not be delivered. Viability challenges lead to delays, funding gaps, and fragmented delivery. 

We are talking about something bigger than any single authority or organisation – a national mission. Building the future, one home, one community at a time. We want to share and empower a vision that demands bold action and collaboration. There is an opportunity to use more effectively the £39bn and we want to make a strong case to government that to deliver affordable housing, it is mandated and has to be delivered by developers, who are compensated through grants. 

To make it work, rules must be set including basic principles – and probably mandated: value of property plus the land equals cost of delivery plus a fair contractor’s margin. It relies on a tariff-based system with money allocated for social rent, shared equity and shared ownership, and with that, shared risk and reward. 

We did it before. We can do it again. History shows us that when this country faces a housing crisis, we rise to the challenge. After the war, we built homes at scale. We transformed lives. And we can do it again. This is our generation’s housing mission; it’s not just another policy initiative. If we don’t act now, the consequences will echo for decades. We have massive amounts of land; the tools, the expertise, and the partnerships. What we need is urgency and commitment. 

The Vision 

Alan and Melvyn have been developing this idea for a couple of months, outlined at the LSH CPD day. We want to know if it’s a stupid idea, but if it has legs, we need to flesh the model out through a cohort of ACES members and sponsors, registered providers (RPs) and local authority housing professionals, so we can take a fully worked proposition to government. It is a call to arms! 

We are planning on a couple of routes into government, and we are hoping that Jackie Sadek, ACES Fellow, can help us to make inroads. 

Some concepts: 

• Mandatory affordable housing – remove viability tests; make policy-compliant affordable housing a non-negotiable requirement for all developments over 10 units 

• Direct tariff-based payments – developers, RPs, and LAs receive guaranteed payments on practical completion of affordable units, replacing reliance on additionality grants 

• Fair and standardised valuation – tariff set to cover the gap between build cost and EUV-SH (based on Local Housing Allowance (LHA)), with modest contractor margin; assume nil land value for affordable housing to prevent inflated land prices 

• Incentives for social rent and modernisation – adjust tariffs to favour social rent over shared ownership/affordable rent and encourage modernisation of LHA to reduce grant dependency 

• Protect existing stock – end leakage of social housing through Right to Buy or remove RTB discounts to slow supply loss. 

One of the factors that would help viability in a fair and standardised valuation is a more modest contractor margin - 20% is no longer viable; as part of the model, a fixed 10% means social value can be improved and built into the model as gains. An example is the Norse Passivhaus development at Norwich [Ed – see 2017 Spring Terrier], where with 10% cash profit we achieved 30% affordable as mixed tenure, together with £1.3m of social value by the capitalisation of savings from temporary accommodation. The book value of the land verses the land value return at the end of the project was 70%. The ‘gap’ was justified through social value return. 

An issue among private developers is sometimes a scarcity of registered providers taking up affordable stock. This vision has to be holistic, involving RPs. 

There are challenges with local authorities stepping in to build council housing. Back in the 1970s and 80s, councils had all the in-house expertise to build houses – architects, engineers, designers. None of that exists any longer. To commission new housing developments, you need client-side intelligence. This will add to costs, so a better solution is along the joint venture model, where your partner already has all those skills, which reduces project risk. 

A call to arms 

If not now, when? If not us, who? 

• Ask yourself: if not now, when? If not us, who? 

• We are the people who can make this happen. 

We have the authority, the influence, and the responsibility. 

References 

1. The Planning after Dark podcast can be found here: Planning After Dark #PADpod Michael Keaveney “Homes For People We Need - Making Social Rent Homes Viable” and https://m.youtube.com/watch?v=YezPypOB8UA  

2. ACES Members who wish to be involved in this crucial campaign please notify Neil Webster on neil.webster@aces.org.uk