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| London housing report asks for help for priced out middle income groups | London housing report asks for help for priced out middle income groups |
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| When pondering the depths of London’s housing difficulties it is possible to lose sight of their breadth. A telling measure of the high cost of the city’s accommodation is that the range of households stretched to the point of financial exclusion extends to categories of workers who face nothing like the same pressures elsewhere and that the capital cannot do without. | When pondering the depths of London’s housing difficulties it is possible to lose sight of their breadth. A telling measure of the high cost of the city’s accommodation is that the range of households stretched to the point of financial exclusion extends to categories of workers who face nothing like the same pressures elsewhere and that the capital cannot do without. |
| A new report from the Centre For London think tank concludes and confirms that school teachers, bus drivers, electricians, chefs, doctors, nurses and even solicitors who don’t already own homes in the capital are being progressively “priced out” of it as house prices and private sector rents soar. | A new report from the Centre For London think tank concludes and confirms that school teachers, bus drivers, electricians, chefs, doctors, nurses and even solicitors who don’t already own homes in the capital are being progressively “priced out” of it as house prices and private sector rents soar. |
| London, as the report points out, badly needs these low-to-middle income earners: they are vital to its public sector and integral to its economy; they form part of its famously inclusive social mix. Yet it calculates that on present trends even an average priced home in Haringey will be beyond the purchasing power of the professionals on this “fair to middling” income spectrum within a year, while every terraced house in the city while be unaffordable to a single senior nurse on 40 grand within two. There’s a case study of a roofing engineer called Ed who left London for his wife’s homeland of Germany in 2012. The couple had been paying £1,400 a month for a rather cold, one-bedroom former council flat in Islington. With Ed’s income in the region of £25,000 a year, the financial strain was just too much. | |
| What is to be done? The report draws on a generous spread of expertise, including that of Shelter’s chief executive, the head of housing at Savills and a senior land and housing officer at the Greater London Authority (GLA). Significantly, this group was jointly chaired by two borough politicians from different parties and different parts of town: Haringey’s Labour leader Claire Kober and Conservative Kensington and Chelsea’s deputy leader and cabinet member for housing, property and regeneration Rock Feilding-Mellen. | What is to be done? The report draws on a generous spread of expertise, including that of Shelter’s chief executive, the head of housing at Savills and a senior land and housing officer at the Greater London Authority (GLA). Significantly, this group was jointly chaired by two borough politicians from different parties and different parts of town: Haringey’s Labour leader Claire Kober and Conservative Kensington and Chelsea’s deputy leader and cabinet member for housing, property and regeneration Rock Feilding-Mellen. |
| The main drive of their conclusions is that more should be done through the planning system and with public subsidy to increase the supply of intermediate “affordable” housing for these groups and to promote its virtues. | The main drive of their conclusions is that more should be done through the planning system and with public subsidy to increase the supply of intermediate “affordable” housing for these groups and to promote its virtues. |
| The meaning of the term “affordable” is, of course, in growing peril of broadening to the point of meaninglessness. But it has always encompassed a portfolio of housing types supported by the taxpayer in different ways, from traditional social housing for rent at the lowest end of the price scale to “intermediate” options for those who will never qualify for social housing but don’t have enough money to buy a place of their own. | The meaning of the term “affordable” is, of course, in growing peril of broadening to the point of meaninglessness. But it has always encompassed a portfolio of housing types supported by the taxpayer in different ways, from traditional social housing for rent at the lowest end of the price scale to “intermediate” options for those who will never qualify for social housing but don’t have enough money to buy a place of their own. |
| The most common of the intermediate types, which have been around for 30 years, is shared ownership, whereby people purchase a portion of a property and rent the rest from its (usually) housing association provider, often hoping to enlarge their stake over time. Both Ken Livingstone and Boris Johnson have backed shared ownership as mayors, with the latter particularly keen on it: 40% of his affordable housing budget helps fund these “low cost home ownership” products. | The most common of the intermediate types, which have been around for 30 years, is shared ownership, whereby people purchase a portion of a property and rent the rest from its (usually) housing association provider, often hoping to enlarge their stake over time. Both Ken Livingstone and Boris Johnson have backed shared ownership as mayors, with the latter particularly keen on it: 40% of his affordable housing budget helps fund these “low cost home ownership” products. |
| Even so, the report says the supply of intermediate homes is “lamentably small”, amounting to less than 2% of London’s total housing stock at a time when growing numbers of the sorts of households who might want them, including families, are housed in the often uncertain realm of private renting. And there are problems with the shared ownership model, not least its complexity and complete unaffordability in the most expensive parts of London to all but the higher-earning households in the £18,000-£71,000 bracket - up to £85,000 for homes with three bedrooms or more - eligible to apply for them. | |
| In super-expensive Kensington and Chelsea, the median joint income of dual-income households benefiting from the mayor’s First Steps shared ownership programme is £58,300 a year. Across London’s 32 boroughs as a whole the median deposit required to access it is a formidable £13,200, according to the same GLA figures. With this in mind, the Centre for London report urges greater emphasis on providing housing for “intermediate rent” - homes for the intermediate market containing no home ownership element at all - with levels tailored to fall within the income range of those at the lower levels of the intermediate spectrum: those bus drivers, school teachers and chefs. | |
| Like any set of ideas for addressing the capital’s mounting housing affordability problems, this well-argued report has been compiled against the backdrop of the government’s Housing and Planning Bill, whose feared implications for the capital are causing the most tigerish London Tories to produce large litters of kittens. Insofar as they can be predicted, the Bill’s consequences seem likely to include a further - and, frankly, lunatic - tightening of the squeeze on the already inadequate supply of “affordable” options London can offer, especially those in need of them further down the pay scale. | Like any set of ideas for addressing the capital’s mounting housing affordability problems, this well-argued report has been compiled against the backdrop of the government’s Housing and Planning Bill, whose feared implications for the capital are causing the most tigerish London Tories to produce large litters of kittens. Insofar as they can be predicted, the Bill’s consequences seem likely to include a further - and, frankly, lunatic - tightening of the squeeze on the already inadequate supply of “affordable” options London can offer, especially those in need of them further down the pay scale. |
| The prospect of such an outcome illuminates a tension between different, desirable goals that “affordable” housing provision aims to achieve. One of those goals is to assist the least well off, in particular those in need of social housing. Another is to protect and strengthen mixed income neighbourhoods, which, the report argues, intermediate forms of affordable housing can help with by preventing the exodus of those excluded from social and market housing alike. To which group should most priority be given? The question raises a more fundamental one. Why should London have to choose? | The prospect of such an outcome illuminates a tension between different, desirable goals that “affordable” housing provision aims to achieve. One of those goals is to assist the least well off, in particular those in need of social housing. Another is to protect and strengthen mixed income neighbourhoods, which, the report argues, intermediate forms of affordable housing can help with by preventing the exodus of those excluded from social and market housing alike. To which group should most priority be given? The question raises a more fundamental one. Why should London have to choose? |
| Read the Centre for London’s Fair to Middling report here. | Read the Centre for London’s Fair to Middling report here. |