Revealed: over 1700 affordable homes lost to loophole in planning rules

More than 1700 affordable homes that should have been built in Hackney, Tower Hamlets, Croydon and Lewisham were lost to a loophole in planning laws last year, East London Lines can reveal.

High-rise housing block in Hackney. Pic: Tarquin Binary.

High-rise housing block in Hackney. Pic: Tarquin Binary.

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More than 1700 affordable homes that should have been built in Hackney, Tower Hamlets, Croydon and Lewisham were lost to a loophole in planning laws last year, EastLondonLines can reveal.

Just 24 per cent of housing completed in the boroughs between 2016 and 2017 was affordable. All four boroughs are Labour-controlled and committed to a target that 50 per cent of all new builds be affordable.

“Affordable housing” is defined by the government as either social rented or privately rented accommodation capped at up to 80% of average market rates. It also includes housing for which mortgage payments are more than rent on council housing, but below market levels.

With just 183 affordable homes out of 3670 new builds being affordable, Croydon built the fewest proportionally. Its ratio of 5 per cent put it among the lowest in the country.

Hackney built 109 (15 per cent) and Lewisham 256 (38 per cent). Of the four boroughs, only Tower Hamlets exceeded its affordable housing target of 50 per cent, building 1050 affordable homes out of a total 1540 (68 per cent).

The average across London over the same period was 38 per cent.

The data was obtained from government figures released earlier this year.

Paul Scott, chair of Croydon Council’s Planning Committee, said: “We have a huge number of committed development schemes in existing office blocks, and we have had no opportunity to introduce any affordable housing in those schemes whatsoever. A lot of housing delivery in Croydon in recent years has been in those.”

Campaigners claim the key reason for the deficit is the widespread use by developers of viability assessments to argue down affordability commitments during the planning process.

Viability assessments are controversial tools which exempt housing projects from council affordability rules if it can be shown they would make the project too unprofitable. They were introduced in 2012 as a measure to encourage housing developers to build in cases where council-mandated affordability obligations would otherwise make doing so financially unviable.

However, they have attracted criticism for their lack of transparency – viability assessments are protected from public scrutiny by confidentiality clauses. A report released by housing charity Shelter in November revealed that developers were exploiting ambiguities in the legislation to minimise their exposure to risk at the expense of affordable housing.

Pat Turnbull, organiser for the Hackney-based Save Britannia Leisure Centre campaign, said: “It is clear that in general developers are using viability assessments to claim to councils that they can only build the minimum number of affordable homes.”

The revelation comes at a time of intense scrutiny over housebuilding and affordability. Earlier this month, Theresa May outlined Conservative plans to overhaul planning rules, cracking down on developers who “game the system” by forcing them to improve transparency.

The move followed comments from housing minister Sajid Javid in January, when he criticised developers for using viability assessments to ‘wriggle out’ of affordable housing commitments.

Despite the controversy surrounding them, so far only six councils – Southwark, Greenwich, Bristol, Croydon, Tower Hamlets and Islington – have committed to publishing viability assessments.

In October, the mayor of London Sadiq Khan criticised property developers for focusing on small, luxury homes for wealthy investors and called for 65 per cent of new builds in the capital to be affordable.

Many housing campaigners also point out that much of the affordable housing that fits the government’s criteria for “affordable” is in fact beyond the reach of people on a low or average income.

Simon Elmer, co-founder of Architects for Social Housing, said: “The actual battle for affordable housing is a complete red herring. The vast majority of affordable housing is not actually “affordable”. The average low income family could not hope to afford to rent a home at 80 per cent of market value.”

Council housing building rates have declined precipitously since their peak in the 1970s, and despite measures such as affordability targets, the private market has never delivered comparable numbers, particularly at the lower end of the market.

In 2017 there were 186161 families on the Tower Hamlets social housing waiting list, making it the local authority with the third highest social housing waiting list in London. Hackney had 12,372 households on its waiting list, Lewisham had 9,596 and Croydon had 5,052.

This week, our Home Truths series will investigate the state of housing and affordability in Croydon, Hackney, Tower Hamlets and Lewisham. Click here for the full series.

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