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The Mayor’s Housing Strategy – Will this really lead to affordable long-term housing?

Posted on 6th November 2017

Affordable housing has been an issue in London for far too long, as evidenced by 90,000 children in London residing in temporary accommodation and the outrageous homelessness epidemic. In the aftermath of the Grenfell tragedy, the housing crisis carries a key focus in mainstream media, and London’s housing market has now been introduced to a potentially promising £250 million Strategy.

Mr Sadiq Khan, Mayor of London, revealed that in 2015-2016, a shocking 85% of proposed new builds were out of financial reach to those falling into the low-middle income bracket , thus defeating the purpose for which they were introduced in the first place.

The vision of the Mayor’s London Housing Strategy has 5 key priorities:

  1. Building homes for Londoners
  2. Delivering genuinely affordable homes;
  3. High quality homes and inclusive neighbourhoods
  4.  A fairer deal for private renters and leaseholders
  5. Tackling homelessness and helping rough sleepers.

Defining affordable housing?

In light of the proposals of the strategy, the definition of truly affordable housing in London is set to include three products:

  1. London Affordable Rent – with benchmarks at £144.26 per week for 1 bed to 186.66 per week to 6+ beds
  2. London Living Rent – a rent to buy product assisting those with a maximum household income of £60,000 save for a deposit so that they can buy their own home, with rent in the interim based on 1/3 of the average household income in each ward
  3. London Shared Ownership – providing an opportunity to those with a maximum household income of £90,000 to purchase shares between 25-75% in a property.

Sadiq Khan’s mission is to invest £3.15 billion to build 90,000 affordable homes in London by 2021 . This 35% leap from the 2015-2016 figures (above) is necessary considering the existing situation. Khan aims to make at least 35% of homes affordable, in each zone of London, to those on both low and middle incomes by working alongside a range of housing associations, local authorities, the community and private landlords. As with previous proposals, the rhetoric sounds very promising. However, how is this likely to work in practical terms?

A factor that suggests Khan’s objective could be substantiated is the fact that he has already rejected plans which may threaten his strategy. Despite the fact that his predecessor, Mr Boris Johnson, had a strong relationship with BL Developments and little regard to affordability, Khan has already rejected the Abu Dhabi Financial Group’s proposed plan which inevitably allocated space near Westminster for a disturbingly trivial 3% of affordable new builds.

As part of its 50th anniversary in assisting the homeless, Crisis conducted research with Heriot-Watt University based on 2016’s data. It was found that at any one time across Britain 9,100 people were street homeless and 8,900 people were sleeping in tents, cars or on public transport. With the UK being the world’s 5th largest economy with a considerable focus on developing the welfare state since the early 20th century, one has to question why these figures are so high.

Sadiq Khan aims to reduce the number of those without shelter by working closely with the government and charities, such as Crisis, to improve and increase the number of hostels and refuges in London. It is important to bear in mind, however, that hostels and refuges are only an interim remedy. Ideally, the end goal should be to provide permanent accommodation and long-term security for all.

Without diminishing the optimism contained within the strategy, it is important to consider the uncertain ground regarding Brexit and all of its surrounding attention. Some may question whether the affordable housing dilemma will actually obtain much focus at all in the current political climate. Ultimately, it depends on whether the focus will continue on prioritising domestic housing issues post Grenfell.

With the existing Conservative government in power, there may be doubt as to whether the funding which Sadiq Khan’s plan requires will actually be granted. To meet the targets set out in the Strategy, an enormous £2.7bn a year will be needed but the current budget set by the government is only £500m a year.

Sadiq Khan has the power to put the strategy forward but has to follow provisions as to what can be included within the proposals. In terms of budgeting, the Mayor simply has the power to submit “spending recommendations” to the government. Therefore, for Sadiq Khan’s mission to be successful, he will need the government’s support in this regard. As his strategy reveals the need for change, there is hope that this will encourage them to do so but only if housing issues remain in the media spotlight.

This blog was written by Siddiq Fazaluddin and Brady Tagg.

Our Social Housing Solicitors are backed by four decades of experience. Our legal practice and team of London Solicitors have a strong track record of achieving favourable client outcomes. For expert legal advice use our contact form or call us on 0808 250 6017 today.

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