The aim of this document is to support local authorities and other key players in delivering more high quality affordable housing within mixed sustainable communities by using all tools available to them. It outlines the affordable housing challenge that needs to be met, and provides information on how existing delivery mechanisms operate to help in delivery. While the details of the delivery mechanisms reflect the position in November 2006 and will be subject to change, most of this document will be robust to changes in future policy. Some parts are likely to evolve, and the Government would expect to update it periodically, especially if there are major policy developments. This document should be read in conjunction with Planning Policy Statement 3 (PPS3) Housing. he Government believes everyone should have the opportunity of a decent home, which they can afford, within a sustainable mixed community. This means providing a wide choice of housing to meet the needs of the whole community in terms of tenures and price ranges. This should include affordable housing, both socially rented and intermediate. Affordable housing policy is based around three themes, providing high-quality homes in mixed sustainable communities for those in need; widening the opportunities for home ownership and offering greater quality, flexibility and choice to those who rent.

The increase in house prices relative to incomes in recent years has been marked. At the start of this decade there were areas where house prices were very high, but this was largely confined to London, the South East and a few regional hot spots. By 2005, the position had changed significantly: there are now many areas in all regions where house prices are very high and where as a consequence first time buyers are finding it very difficult to buy a home in the market. This position is particularly marked in rural districts and smaller settlements. The Government has backed this up with increases in financial provision and has developed a number of grant funded products  that aim to meet need in the intermediate market alongside traditional social rented housing, but it cannot subsidies every household currently priced out of the market. Increasingly the market will be able to deliver housing aimed at first time buyers: the Shared Equity Task Force will report shortly on the scope for this, now and in the medium-term future. There has been much innovation from both the financial community and developers. But there is also scope for achieving development without the grant, by effective use of developer contributions through planning obligations (sometimes known as section 106 agreements).3 Many local authorities are meeting this challenge well. But research suggests that performance is very varied. Others may be missing opportunities to deliver more by not exploring the options available to them. The Government strongly encourages the best possible use of planning obligations and other tools to improve delivery and would like to see all local authorities meet the standards of the best performers.