In the latest of our series of stories on the housing crisis in London, Henry Longden reports on the crippling costs of so-called “affordable housing”.
Council housing tenants face being pushed out of east London because rented homes are being replaced with housing which is classed as “affordable” but which could still require tenants to earn more than £40,000 a year, an investigation by Eastlondonlines has found.
Social rented housing, or council housing, costs about 50 per cent of the market rate. Since 2011, much of it has been replaced with affordable housing, which charges up to 80 per cent, according to figures released by the Department for Communities and Local Government.
Mayor of Tower Hamlets John Biggs has responded to these changes by establishing a cabinet commission to “promote the delivery of genuine affordable housing across the borough.”
Rachel Blake, a councillor on the commission, said: “In order to pay for an average affordable rented house without housing benefits, a household would need to earn around £30,000 per year.
“A single parent family can afford to live in social rented housing. However, because of the welfare cap, those who don’t work and don’t care for two or more children would be unlikely to afford a new affordable rent.”
The provision of cheaper social rented housing has plummeted to an all-time low in east London sparking concerns over spiralling living costs for those with a low household income.
Rent can cost up to £22,000 per year for a three-bedroom house in Hackney. Rents for affordable housing are also allowed to increase year-on-year, leaving tenants vulnerable to London’s increasingly expensive property market.
A three-bedroom affordable rented home in Tower Hamlets can cost up to £21,700 a year. This compares to £14,600 in Lewisham and £12,600 in Croydon. With the average UK wage reaching roughly £22,500 this year, there are concerns over who can afford the homes.
Martin Wheatley, strategic adviser to social housing campaigners SHOUT, said: “There is a misuse of language in the London housing market. ‘Affordable Housing’ with a capital A and H is not affordable in the normal usage of the words. It is beyond the pocket of Londoners who work very hard. We are very upset about the fallout of social rented housing.”
Across Croydon, Hackney, Lewisham and Tower Hamlets, social rented housing provision is now at an all time low as the government reduces funding for housing associations to provide more homes.
The supply of social rented housing is now lower than the amount being demolished and sold, leaving future generations with fewer low-cost options at a time when east London is growing.
The government has increased the amount of affordable housing as a way to reduce costs for middle-income households struggling in privately rented properties, and so reduce the housing benefits these households receive.
SHOUT fears that without social rented housing being provided for those on low incomes, benefits are likely to increase. Wheatley said: “If it is not affordable for normal people then housing benefits will have to pick up the tab.”
Nicola Quinn, spokesperson for Hackney Council, said: “As part of a borough-wide council housing regeneration programme, the council will deliver more than 2,760 homes for social renting, shared ownership and private sale. So far, 201 houses have been provided for social renting and 20 have been completed for shared ownership. Meanwhile, 42 houses have been built for private sale to help pay for the programme.”
While Hackney Council has supported the building of 240 social rented homes last year, 180 were sold off through the right-to-buy scheme, bringing the net increase down to just 60 from a total of 286 the previous year.
Croydon, Lewisham and Tower Hamlets have also seen severe net reductions in housing available since 2011.
Home ownership was flagged as a priority for the Conservative government. The opening line to the 2015 manifesto was: “Conservatives believe passionately in home ownership.”
They have pledged to make it easier for families to buy their own homes and are extending the right to buy programme to housing association tenants.
SHOUT called for more to be done: “We need a big programme, particularly in London, we suggest about half of the 50-60 thousand new homes that are required, to have genuinely affordable rents. The argument that this isn’t affordable is wrong.”