Has there ever been a major housing delivery programme as shrouded in secrecy as the “Affordable Homes” scheme?
When I wrote about this on previous occasions I had to make Freedom of Information requests in an effort to obtain meaningful figures. Even the figures that are now being produced are lacking in detail and hard to decipher.
It’s as if those in charge of the scheme are doing it from a dark doorway, like Private Joe Walker, the spiv from Dad’s Army: “Ere Guv, fancy making a few million quid off the back of yer tenants and the taxpayer, just stick the rents up, sign ’ere, don’ tell no one, a’right?”
This has been neatly illustrated by the attempts to decipher the latest figures from the GLA. Like The Guardian I estimated that 25,217 social rented homes had been “converted" to “affordable rent” in London since the scheme began. The Guardian reckoned that this had brought in an extra £70 million for London landlords, much of it funded by the taxpayer through higher housing benefit costs. Not so, said the GLA. The figures in their tables are cumulative and the true figure for conversions is 11,011 with an increase of £50 million in rents. The Guardian has since amended their article, and I have amended this one.
I defy anyone to look at the GLA tables and conclude that the figures are cumulative. There is not a single note or reference to this effect. It’s only when you have been told this and work through the spreadsheets that you realise the numbers are rising quarter by quarter. As I said at the outset, this programme is not transparent.
Despite this, I still find the figures on conversions quite shocking. Admittedly, 11,011 social rent homes is not as shocking as 25,,217 but it is still a significant figure, more than the number of social rented homes lost to the right to buy over the same period. This has been allowed to happen with almost no public debate, even though social rented homes, in the context of London’s dysfunctional housing market, should be treated like precious gems and preserved at all costs.
56% of the conversions that have taken place since the “Affordable Rent” regime began are in the stock of six major housing providers, as follows:
- London & Quadrant - 1,673
- Circle - 1,381
- Affinity Sutton - 1,182
- Notting Hill - 867
- Guinness - 638
- Peabody - 394
Over the last year the average rents for converted stock in London has been set at 65 percent of market rent (some are at 80 percent and some are much lower). Housing providers argue that they are mitigating the worst impacts of “Affordable Rent” by keeping well below the 80 percent cap, but the impact on tenants is still considerable.
Take an example from two inner London boroughs. Southwark is a mid-table inner London Borough (i.e. not the richest and not the poorest). Average housing association social rents are around £116 per week, whereas the mean market rent, based on VOA figures, is £345 per week.
So a conversion from a social rent to 65% of the market rent means an increase from £116 a week to £207 a week, a 78% increase.
In Camden the average social rent is £127 per week and the mean PRS rent is £472 per week (the median is £399 because there are many more high end properties in Camden). Just taking the median rent, this means an increase from £127 per week to £259 per week, more than double the social rent.
Is it surprising that the average affordable rent in London for a two-bed newbuild has just breached the £1,000 a month mark? However you look at the figures, these new rents are simply unaffordable to anyone on a low wage without recourse to benefits. There is a real risk that this is creating a growing stock of so-called “affordable homes’ where people will be trapped on benefits until they move or die.
There is no doubt that many housing providers are caught in a cleft stick. Commendably, they want to carry on building homes to tackle the housing crisis. Yet the current funding framework means they have to charge rents on existing, as well as new, homes, which are well beyond the means of the “hard-working families” politicians are so fond of talking about.
The regulatory framework requires the Boards of housing associations to act as the “custodians of social housing assets” and you wonder how long they can continue to wander down this path of unaffordability.
Perhaps Boards should be asking themselves searching questions about whether it is right to carry on this way. Perhaps they should instead call policy-makers’ bluff and say: “Current policy is not sustainable, for people who need housing, for us as businesses, or for the taxpayer. We will only build more homes if they are at rents which hard-working families can pay without recourse to benefits.”
This article first appeared on the 24 Dash website