This article titled “Who can afford Boris Johnson’s new affordable housing?” was written by Jenny Jones, for guardian.co.uk on Tuesday 26th July 2011 08.29 Europe/London
The mayor of London’s housing advisor was right to bang the drum for investment in affordable housing on the Guardian housing network last week. But it’s a curious message to deliver on the day that the government announced its package of barely affordable homes using a grant cut by two thirds.
The mayor made his manifesto commitment to deliver 50,000 affordable homes in three years on the back of a £3.7bn affordable housing grant. To put this in context, even if the mayor had met this target (moving the goalpost by a full year) that wouldn’t have been enough to meet the pressing need for social housing.
In his article, the mayor’s housing advisor pointed out the economic returns from investing in affordable housing, not least to businesses that need workers who can get to work without facing a gruelling three-stage bus journey. With the mayor so upbeat on the issue you might expect that the government had increased its investment.
In fact, it has cut the grant by 66%, back to just £1.7bn over four years. The bulk of this money is already committed to finish off the existing pipeline of social rented and intermediate homes. Only £627m is new money for the affordable rent homes.
That means there is no more money for social housing, which is genuinely affordable for low income Londoners. Who are these “affordable” homes let at up to 80% of market rent for? Even if the average rent was set at 65% of market rent, as the mayor claims, this is substantially higher than social rent levels in most London boroughs.
The problem is illustrated by two examples provided by London and Quadrant to the London Assembly planning and housing committee back in March. If a tenant were charged 65% of the market rent on a one bed home in Haringey their rent would be around £137 per week, a full £52 higher than a social rented home.
There is obviously a demand for housing let at these intermediate rents. But London and Quadrant told us that 77% of their residents earn less than £15,000 a year. The mayor’s own research shows that some 14% of Londoners in work earn less than than this threshold, and that this group is in the most acute housing need. This new “affordable” housing isn’t affordable for them.
Families on low incomes are even worse off. The mayor wanted 42% of social rented homes to have three or more bedrooms, but only 29% of the affordable rent homes will be that size. The likely result will be more overcrowding. As for rent, a family seeking a four bed property in Haringey would need to pay £293 per week if it were let at 65% of market rent, 132% higher than a social rent of £126 per week.
Low income households, in dire need of social housing, will increasingly become dependent on housing benefits. There is no more money for homes they can afford.
The mayor wants to persuade the world he will still deliver the same number of affordable homes, but it’s a con. In truth the government has delivered a paltry investment that will hobble the Mayor’s ambitions on housing. He should stop spinning and be honest enough to say that.
Jenny Jones is a member of the London Assembly and leader of the assembly’s Green Group
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