London’s social housing shortage snowballs

New stats show need for shared ownership slashed by 90%.

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London boroughs built 50% more intermediate housing than homes for social and affordable rent in 2017-18, newly released City Hall stats show.

“This is a worrying trend if councils and housing associations are neglecting their duty to build new homes for social rent,” said Jacob Secker, London Tenants Federation (LTF) representative from Haringey.

LTF research revealed London’s social-housing shortage almost trebled between 2013 and 2017, from 60,000 new homes needed to 160,000.

In the same time, unmet need for shared ownership homes shrank to less than a tenth of what it was, from 45,000 to 4,000 homes needed.

“Government funding must now be targeted at building the type of housing that can help people who are homeless or in the worst quality private accommodation, as there are far more households who need this,” said Secker.

Shared ownership is available to households earning up to £90,000 per year in London.

The new London Living Rent homes, also a form of intermediate housing, are not open to those on social-housing waiting lists and are intended for households saving up to buy a home.

“Shared ownership is an easier way for councils and housing associations to hit their affordable housing targets. But does it actually meet people’s needs? We think not,” said Secker.

“The Mayor must force councils to work harder for low-income residents by setting housing targets that reflect actual evidenced need.”

Just 1,864 homes suitable for those on housing waiting lists were built in the capital last year, 5.8% of the total number of additional homes built.

Though the Mayoral London Plan promises 50% ‘affordable’ housing, only 30% of affordable homes built must be for social or ‘affordable’ rent – the remaining 70% may be for shared ownership or London Living Rent.

10 London boroughs built more intermediate housing than homes for those on council waiting lists between 2005 and 2017: Hackney, Hammersmith and Fulham, Haringey, Harrow, Newham, Wandsworth, Barking and Dagenham, Redbridge, Southwark, and Waltham Forest.

The Mayor’s office assessed in 2013 that London’s overall housing shortage, including market and sub-market need, was at 121,399 in 2013, with half of this being unmet need for social housing for lower income households.

By 2017, this shortage had increased to 208,600, with social housing need making up 78% of the total.

Targets set for intermediate housing in London have often topped higher levels than the actual need identified by the London Mayor’s office.

In a briefing paper released last month, LTF says the opposite has consistently been the case for social-rented homes.

To calculate the need for ‘intermediate housing’, planning authorities are expected to assess the number of households that are unable to afford market homes to rent or buy, but who can afford more than social-rented homes.

The Mayoral 2017 Strategic Housing Market Assessment (SHMA) assessed need in that way, but also added for the first time and outside of guidance: ‘or they can afford market rents but are not satisfied with their current tenure and they expect to eventually buy their own home.’

While not knowing by how much this change has inflated reported need for intermediate housing, LTF suggests this change “may have something to do” with 2016 election promises made to the so-called squeezed middle class.

The London Plan housing targets are based on the number of newly forming households and a proportion each year of the ‘backlog’, or existing, unmet need – that is mostly households living with overcrowding or homeless households living in temporary accommodation.

This backlog of need for intermediate housing was identified as 45,705 in the 2013 SHMA.

In the 2017 SHMA, this had reduced to just 4,056.

At the same time, the backlog of need for social-rented homes had increased from 60,893 in 2013 to 162,627 in 2017.

Successive Mayors have increased the period of time that the backlog will apparently be addressed from 10 years while Ken Livingstone was Mayor to 20 years while Boris Johnson was Mayor, and is now proposed to be 25 years in Sadiq Khan’s Draft New London Plan.

The brief paper shows that only 13% of the homes delivered in London from 2005 to 2017 were social rented, while 12% were intermediate, and 2% were for affordable rent.

While the London Plan targets for intermediate homes have not been 100% met, delivery was more than 80% of the target for intermediate homes, while delivery of social-rented homes was just 55% of the target for new social housing.

The briefing paper highlights the boroughs where more intermediate housing than social and affordable-rent homes were built between 2005 and 2017 as Hackney, Hammersmith and Fulham, Haringey, Harrow, Newham, and Wandsworth.

In an additional four boroughs – Barking and Dagenham, Redbridge, Southwark, and Waltham Forest – the briefing paper identifies more intermediate than social-rented homes were delivered.

Currently, households with incomes of up to £90,000 – those in the top 10-15% of incomes – can access intermediate shared-ownership housing.

Households with incomes of up to £60,000 can access intermediate-rented homes such as London Living Rent homes.

In the briefing paper, LTF references its research into the affordability of Sadiq Khan’s London Living Rent – pitched as ‘genuinely affordable’ to middle income households.

LTF compared the Mayor’s 2018/19 benchmark London Living Rents for each London ward at different bedroom sizes to a third of the equivalised median-income levels

Equivalisation being a standard methodology that adjusts household income to account for the different financial-resource requirements of different household sizes – it is used by bodies such as the Office of National Statistics.

To the LTF, the equivalised median income in London is just £536 a week, or £2,322.66 pcm – a third of this monthly income is £774.14

LTF says its analysis showed that in only 23% of London’s 632 wards were one-bedroom London Living Rent homes affordable.

In 10% of wards, two-bedroom homes were affordable, three-bedroom homes were affordable in only 2% of wards, and just four wards (0.6%) were affordable for four-bedroom homes.

Overall, says LTF, London Living rent is unaffordable in all wards in 10 London boroughs.

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