The concept of affordable housing has become debased since it was introduced by the coalition government in 2014 as a means of hiking council and housing association rents. It was an attempt to kickstart a low-cost housebuilding programme on the backs of tenants. Within this context, Sadiq Khan’s definition of London Affordable Housing is a slippery one that blurs social rents with out-of-reach housing that only top earners can afford. It includes 80% of London’s super-heated market rent and shared ownership on properties worth around £¾ million for a 2-bed home. The lower threshold of the mayor’s London Affordable Rent, the cheapest of his three ‘affordable housing products’, practically falls off the summit of the current social housing rent rate.
The mayor’s target is 90,000 affordable homes on site by 2021 (50% of the total number of new homes), of which merely 17,500, another target, will be socially rented. Setting aside that the majority of these ‘affordable’ homes will be out of reach for low or median income families, the Mayor’s target, of 90,000 ‘affordable homes’ is just that – a target not a promise.
What makes his vision unattainable is that it’s to be achieved by the market.
Less than 5% of the mayor’s £3.15bn affordable homes deal will remain in the public sector as council housing; the rest of this public money will go to private housing associations and other private property developers or remain unspent. We have been promised many targets for low cost house building by successive governments – none have materialised as a market geared to 25% profits can’t deliver low cost housing in asset-bubble London.
Secure homes that Londoners on low or median incomes are able to afford will not be available in sufficient numbers until councils can borrow to invest in building homes and those homes stay as public assets. Council housing not only pays for itself but makes a surplus over time. This provides an opportunity, as long as rent revenues are ring-fenced, to maintain existing stock in good condition and keep council rents low. In contrast, private housing associations, as we know only too well, use our homes – and our inflated rents – as collateral to raise loans on the private market to build out-of-reach housing. Last year’s affordable housing becomes this year’s unaffordable housing and tenants are turfed out of neighbourhoods they once called home.