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Assessment of Financial Resources


Section 167 (2A) of the Housing Act 1996, allows the Council to give less priority to an applicant who has financial resources available to them to meet their housing need. In assessing whether the applicant has sufficient income the Council will have regard to the Strategic Housing Market Assessments Practice Guidance version 2 (SHMA) regarding the test of affordability to be used in respect of SHMAs. This stated that: 

“A household can be considered to afford to buy a home if it costs 3.5 times the gross household income for a household earner or 2.9 times the gross household income for dual income households…a household can be considered to afford market house renting in cases where the rent payable was up to 25% of their gross household income”.

The aforementioned income multipliers will be used in conjunction with current data on median private sector rentals in Dover and entry level house prices to help determine whether a household can reasonably be expected to meet their need in the private market.

The following payments will not be included as income for the purposes of the financial assessment:

  • Personal Independence Payments (PIP)
  • Attendance allowance and any benefit treated as attendance allowance
  • Armed Forces Independence Payment
  • War pensioner’s mobility supplement
  • Payments in compensation for non-receipt of the above

Please note that this does not apply to transfer applications form existing Secure Tenants of a Council or Assured Tenants of Private Registered Providers or leaseholder where the Council is buying back the property as part of a decant programme.

Current research shows the following results:

Table 1: Market renting:


Median rent pcm

Median rent pa

Affordability Threshold

1 bed




2 bed




3 bed




4+ bed









Table 2: Market Purcha


Median price

              Affordability Threshold

(Single / 3.5)

(Joint / 2.9)

1 bed




2 bed




3 bed




4 bed




5 bed









The above tables suggest that where a household appears to have sufficient income to purchase a property, but is unable to obtain a mortgage, they would have sufficient income to rent privately. Such households may also benefit from low cost home ownership products.

The tables are illustrative and for guidance purposes. The Council recognises that market rentals and sales prices vary across the district and will fluctuate over time. It also recognises that there may be special reasons why a household needs to live in a particular area or why they incur exceptionally high levels of expenditure which makes market housing unaffordable.


Where an applicant has financial assets, such as a property or savings, these assets will also be considered as part of the financial assessment.

Applications from households, where the value of their assets equates to at least 12 months rental of a suitable property, will normally be placed in Band D or E.

Again, the Council accepts that there may be special circumstances where the strict application of this rule would be unreasonable or impractical. Consequently, when assessing financial resources, the Council will judge each case on its own merits. However, there is also responsibility on applicants to provide sufficient financial evidence which reasonably demonstrates that they cannot afford market housing.



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Tel: 01304 872265