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| London housing: what price affordability under Conservative plans? | London housing: what price affordability under Conservative plans? |
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| A learned London housing analyst told me recently that it was hard to predict precisely what effect the government’s Housing and Planning Bill will have on the capital after it passes into law. This came as no surprise - the clearest thing about the housing policies proffered by the Conservatives during the election campaign was their dazzling opacity. What has come more into focus during Commons debate about the Bill is a huge concern among London MPs that the measures as a whole will be bad, if not calamitous, for the city - and that’s just the Tories. | A learned London housing analyst told me recently that it was hard to predict precisely what effect the government’s Housing and Planning Bill will have on the capital after it passes into law. This came as no surprise - the clearest thing about the housing policies proffered by the Conservatives during the election campaign was their dazzling opacity. What has come more into focus during Commons debate about the Bill is a huge concern among London MPs that the measures as a whole will be bad, if not calamitous, for the city - and that’s just the Tories. |
| Struggling to make the best of a bad job, they have rallied round their mayoral candidate Zac Goldsmith’s amendment to the Bill. This asks for a “binding guarantee” that London will see a net gain in “affordable” housing - a term whose meaning is becoming slipperier by the day - with at least two “low cost homes” (ditto) being built for each one forcibly sold by boroughs to help compensate housing associations for those they will lose due to the right-to-buy being extended to their tenants. | Struggling to make the best of a bad job, they have rallied round their mayoral candidate Zac Goldsmith’s amendment to the Bill. This asks for a “binding guarantee” that London will see a net gain in “affordable” housing - a term whose meaning is becoming slipperier by the day - with at least two “low cost homes” (ditto) being built for each one forcibly sold by boroughs to help compensate housing associations for those they will lose due to the right-to-buy being extended to their tenants. |
| What useful difference this might make seems as fogged by imprecision as the Bill itself, though the impacts of other parts of the proposed legislation are taking firmer form in the miasma. Forecasting that London house prices will rise by a third - yes, one whole third - by 2019, new market research from CBRE predicts that the Bill will give the market an extra lift thanks to its “starter homes” provision (a concept dismantled by the Guardian’s Hilary Osborne here). | What useful difference this might make seems as fogged by imprecision as the Bill itself, though the impacts of other parts of the proposed legislation are taking firmer form in the miasma. Forecasting that London house prices will rise by a third - yes, one whole third - by 2019, new market research from CBRE predicts that the Bill will give the market an extra lift thanks to its “starter homes” provision (a concept dismantled by the Guardian’s Hilary Osborne here). |
| Quoted in City AM, CBRE’s head of residential research Jennet Siebrits says that, thanks to the Bill, “Developers will soon be able to deliver schemes that are 100% for private sale, supplying affordable starter homes rather than incorporating an affordable rental element.” Here, we see the term “affordable” broaden its range still more to encompass 20% discounts for young, first time buyers. In London, I’m told that looks like a bit more help for households with incomes of £50,000-£60,000 a year and quite a lot less for those in need of the aforesaid “affordable rental element.” | Quoted in City AM, CBRE’s head of residential research Jennet Siebrits says that, thanks to the Bill, “Developers will soon be able to deliver schemes that are 100% for private sale, supplying affordable starter homes rather than incorporating an affordable rental element.” Here, we see the term “affordable” broaden its range still more to encompass 20% discounts for young, first time buyers. In London, I’m told that looks like a bit more help for households with incomes of £50,000-£60,000 a year and quite a lot less for those in need of the aforesaid “affordable rental element.” |
| Siebrits sees the Bill’s reforms as a whole as “a positive move” which could up overall housing supply, but she also provides a hefty caveat: “More action needs to be taken to address other types of tenure and ensure long term availability of affordable homes for sale or to rent.” | Siebrits sees the Bill’s reforms as a whole as “a positive move” which could up overall housing supply, but she also provides a hefty caveat: “More action needs to be taken to address other types of tenure and ensure long term availability of affordable homes for sale or to rent.” |
| With this in mind, let’s look back at the borough “affordable” supply stats in the most recent London Plan monitoring report (see table on page 23). Top of the league for net “affordable completions” of various types over the three years from 2011/2012 was Southwark with 1,488, representing 41% of the borough’s total net completions. Southwark, take note, is routinely accused by campaigners of wanting to purge its low income residents and replace them with bankers and oligarchs. | |
| Hackney came a close second, followed by seven others who exceeded 1,000. Only one of these top nine, Barnet, is Conservative-run and its affordable proportion was the lowest at 30%. Top dogs in percentage terms were Barking and Dagenham on 49% (out of 994), Brent on 48% (out of 879) and Haringey on 46% (out of 818). The average for London as a whole was 34%. | Hackney came a close second, followed by seven others who exceeded 1,000. Only one of these top nine, Barnet, is Conservative-run and its affordable proportion was the lowest at 30%. Top dogs in percentage terms were Barking and Dagenham on 49% (out of 994), Brent on 48% (out of 879) and Haringey on 46% (out of 818). The average for London as a whole was 34%. |
| Let’s put all these numbers in perspective. A total of 23,138 additional affordable homes were supplied across London during the three years concerned. The London Plan target for the period was 39,600 (3 x 13,200). Exactly how the government’s plans will affect the present rate of affordable undersupply, either in numbers or degree of affordability, may indeed be hard to predict, as the London housing analyst mentioned at the top of this piece said. But it’s not looking very cheerful, is it? | Let’s put all these numbers in perspective. A total of 23,138 additional affordable homes were supplied across London during the three years concerned. The London Plan target for the period was 39,600 (3 x 13,200). Exactly how the government’s plans will affect the present rate of affordable undersupply, either in numbers or degree of affordability, may indeed be hard to predict, as the London housing analyst mentioned at the top of this piece said. But it’s not looking very cheerful, is it? |
| This article was amended on 16 November, 2015 to add more detail about the London Plan monitoring report affordable completions data. |