Hackney and Tower Hamlets will continue to fight for lower rents in new affordable housing, despite the dismissal of their challenges in a High Court this week.
The two local councils joined seven others in challenging Mayor Boris Johnson’s plan for London which prevents local councils from setting a cap on rents charged for social or ‘affordable’ house. The councils had argued that local councils are best placed to decide what an affordable rent is and that it is unreasonable for the Mayor to set a London wide cap for affordable rents in new housing at 80 per cent of the market rate. The protesting councils argued that they should be allowed to set lower rent limits in new affordable housing, since rents at anywhere close to 80 per cent of market levels would be unaffordable for many local people.
Until now, councils have been able maintain rents that are typically around 30-40 per cent of market level in inner London. In a judgment handed down yesterday, the Honourable Mrs Justice Lang DBE said: “All parties agree that more affordable rented housing is needed in London, at levels below 80 percent of market value, but they disagree about how best to realise this aim.”
She ruled that the Mayor had acted within his power, and that the Mayor’s plan leaves it open to boroughs to fight for lower rents on individual developments, particularly in developments that are not funded by Mayor Johnson.
Mayor of Hackney, Jules Pipe, said: “This is a very disappointing decision. Hackney Council joined the fight against higher rents because we believe that councils are best placed to assess local market rents and what residents on low incomes can afford. We also don’t believe in a blanket redefinition of what is affordable social housing.”
The Mayor of Tower Hamlets, Lutfur Rahman, also expressed his dissatisfaction with the decision, saying: “There is a fundamental need to ensure that ‘affordable rent’ is genuinely affordable to ordinary families. We will continue to do all we can in Tower Hamlets to ensure that our residents have suitable housing available to them.”
The Mayor of London’s proposal applies to new affordable housing built in London. Existing council tenancies and the majority of housing association tenancies remain unaffected.