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					     Coming home to roost
     How two Mayors have failed to make housing affordable
     A report by Jenny Jones Green Party member of the London Assembly              January
     2010
     (This response sets out my individual views as an Assembly member and not the agreed
     views of the full Assembly.)


     Foreword
     The statistics in this report offer a bleak picture of London’s housing supply. But they
     barely expose the human side of the story that many of us experience. The difficult
     economic climate makes life for many Londoners hard. Their endless struggle for secure,
     safe, comfortable housing makes for even harder times.

     Current policies are simply not enough to change this; we need new approaches to take
     centre stage. I am determined to hold the Mayor to account, so the search for a decent home
     is easier in the future.

     Summary
     This report demonstrates three trends in the past decade that have made housing
     increasingly difficult for Londoners to afford.

        1. There has been a massive loss of social rented homes
           Right to buy sales have far outstripped the building of new social rented homes,
           despite growing demand and a slightly improved delivery of social homes in recent
           years. This has led to the waiting list almost doubling within a decade.

        2. The cost of buying a home has risen twice as fast as incomes
           It now costs eleven times the average income to buy a home in London, putting
           home ownership far beyond the means of most households.

        3. New housing delivery hasn’t met London’s needs
           House building has completely failed to slow the rising affordability gap in housing.
           In 2009 we only managed to build a little over half of the housing we needed.

     The Mayor’s plans will not reverse this crisis. Under current Mayoral and central
     government policy, homes will become even more expensive to buy, and social housing
     waiting lists even longer. Unless Boris Johnson can more than double the number of homes
     being built it will keep getting harder to buy a home, and his social housing targets could
     only deliver half of what we need, making waiting lists even longer. Moreover, in the
     absence of a huge public investment, the market is unlikely to deliver on his immediate
     plans anyway.

1    There has been a massive loss of social rented homes in London

1.1 London has lost over a third of its low cost social housing since Right to Buy was
    introducedi. In the past ten years, around 55,000 social rented homes have been built but
    almost 85,000 have been sold. As can be seen in Error! Reference source not found.Error!
    Reference source not found. in the PDF version of this document this trend has improved
    in recent years, after a slight increase in the number of social rented homes being built and
     a collapse in Right to Buy sales leading to more homes being built than sold. ii

1.2 The effect of ten years of loss on waiting lists is clearly shown in Error! Reference source
    not found.Error! Reference source not found. in the PDF version of this document.
    Waiting lists have increased by almost 176,000 households, up 82% within a decade.
    Waiting lists are now more than half the total social housing stockiii. The worst effects of
    this loss have been soaked up by a huge increase in housing benefits uptakeiv, with a quarter
    of London households now claiming themv.

1.3 Both of London’s Mayors have tried to build more market and intermediate housing in
    areas where social renting predominates, but there is little emphasis on the reverse.

2    The cost of buying a home has risen twice as fast as average incomes

2.1 It has getting harder and harder for most households to buy a home. The capital’s house
    prices have risen twice as quickly as incomesvi, going up by almost £200,000 on average in
    the past ten yearsvii. Error! Reference source not found.Error! Reference source not
    found. in the PDF version of this document shows how the ratio of earnings to house prices
    has risen dramatically, particularly for lower income families. In 1997, the ratio for lower
    income families was 4:1, compared to 8:1 todayviii. The average has risen from 7.8:1 in 1997
    to 11:1 today. The Mayor wants to raise the income threshold for households that qualify
    for special low cost home ownership schemes (“intermediate housing”) to £74,000.
    Households earning less will find it almost impossible to buy a home.

2.2 Bringing empty homes back into use as intermediate housing would be one way to provide
    low-cost home ownership to many families, but some London Boroughs and property
    owners are still dragging their feet. In the past decade the number of empty homes in
    London has only dropped 28% from approximately 114,000 in 1999 to approximately
    82,000 in 2008. Whilst the largest absolute drop has been amongst private empty
    dwellings, public authorities (other than councils) have brought more than half of their
    empty homes into useix.

3    New housing delivery hasn’t met London’s needs

3.1 Both Mayors have tried and failed to play the same game: build more homes so that supply
    comes closer to meeting demand. The first London Plan (2004) set a target for 30,000 new
    homes per year, of which 50% should be affordable x. This was updated to 30,500 in the
    2006 planxi. The draft replacement London Plan (2009) raises the target further to 33,400
    homes per year, of which 40% should be affordablexii.

3.2 Long-term trends shown in Error! Reference source not found.Error! Reference source
    not found. and Error! Reference source not found.Error! Reference source not found.
    in the PDF version of this document highlight the massive shortfall in delivery relative to
    London Plan targets (which appear in 2004), and the low proportion of affordable housing
    being built. They also show the decline in housing starts, which began in 2006, and the
    decline in completions that followed. We never got close to meeting demandxiii. In the past
    year, the shortfall is approximately equivalent to the delivery.

3.3 During Boris Johnson’s term as Mayor (the five quarters for which data is available) there
    have been 6,500 affordable housing starts and 9,080 completions. This compares with 5,540
    housing starts and 9,260 completions during the last five quarters of Ken Livingstone’s
    termxiv. In 2008/09, London was the only UK region to see a drop in new affordable
     housing supplyxv.

4    How do the boroughs compare?

4.1 If we compare the two key topics across the London boroughs – the time it will take to give
    every household on social housing waiting lists a secure home, and the affordability of
    buying a home – we can see a clear picture of where the problems are most acute.

4.2 Social housing waiting lists will continue to grow in most London boroughs. This means
    more families living in overcrowded temporary accommodation, waiting longer to get a
    permanent home that meets their needs. If social housing building slows, these will get
    even worse. The PDF version of this document includes a map highlighting the
    discrepancy, with waiting lists in Barnet and Redbridge of over 32 years, compared to fewer
    than 5 years in many boroughsxvi.

4.3 The number of households that can afford to buy a home is dwindling across London.
    Boroughs with the highest ratios of house prices to average incomes also have some of the
    lowest targets for new homes being built, which will only make the problems there worse.
    The PDF version of this document includes a map highlighting the discrepancy, with ratios
    of more than 13 times the lower quartile income in Kensington & Chelsea compared to
    between 7-8.5 times in Lewisham, Tower Hamlets, Hackney and Barking & Dagenhamxvii.

5    The Mayor’s policies will not reverse this crisis

5.1 To clear the social housing waiting lists and provide new social housing to meet future
    need; and to meet the likely demand for buying homes and build enough to stop prices
    rising faster than incomes; we would need to build roughly 45,000 homes per year.

5.2 The best we managed in the past decade was 24,190 new homes completed in 2004, a
    meagre 54% of the 45,000 we need. Only 27% of those homes were affordable (social rented
    or intermediate).

5.3 In the past year and a half, a glut of unoccupied flats, the cancellation of major transport
    infrastructure projects and dropping sales values have wiped out the viability of most
    housing developments with planning permissionxviii.

5.4 The model for delivering affordable housing in the last decade is currently in dire straits.
    The contracting public purse, the lower (or non-existent) potential yield from section 106
    agreements, the near-zero potential of market home sales to cross-subsidise affordable
    homes, the demands of Crossrail and the current dearth of mortgage lending have all
    undermined the finance and delivery models for affordable housingxix.

5.5 The Mayor’s draft replacement plan will be adopted in 2011, and aims for 33,400 new
    homes per year, of which only 13,200 will be affordable, with only half the required social
    housingxx. Even these targets, which fail to meet need, are ambitious compared to recent
    performance.

5.6 After promising 50,000 new affordable homes by 2011, the Mayor has had to push that
    target back to 2012. This means he will only deliver 12,500 new affordable homes per year,
    rather than the 16,666 per year he had promised. This will be lower in 2011/12 than his
    London Plan target, and is a very long way short of the 18,200 new affordable homes that
    London needs.
5.7 The Mayor has confirmed in written answers that he has no programmes or policies
    that will address the shortfall in delivery, beyond helping tenants move out of London to
    free up social housingxxi. Another less clear written answer suggests that he hasn’t
    undertaken any serious consideration of the impact of possible changes to housing benefits,
    which soaked up some of the past impact of the social housing shortfallxxii.

5.8 After promising a break with previous failed policies, including a major shift towards
    models such as Community Land Trusts that I highlighted in my 2007 report on social
    housingxxiii, the Mayor has so far delivered little innovation to the housing market. I am
    determined to hold the Mayor to account on this.
Contact me to share your ideas and solutions

Jenny Jones AM
Green Party member of the London               Tom Chance (researcher)
Assembly                                       Tel:           020 7983 4963
                                               E-mail:
Tel:            020 7983 4358                          tom.chance@london.gov.uk
E-mail:
          Jenny.Jones@london.gov.uk            Ian Wingrove (press officer)
                                               Tel:           020 7983 4424
Address:        London Assembly                E-mail:
                City Hall                              ian.wingrove@london.gov.uk
                London
                SE1 2AA
Credits
Cover image is “Early Morning Construction Site” by Charles Budd,
http://www.flickr.com/photos/charlesbudd/4175604900/

References

i        Greater London Authority, Housing in London: the London Housing Strategy evidence base 2005,
         June 2005
ii DCLG and National Statistics, Housing Statistics 2009, Live Tables 217 and 670
iii DCLG and National Statistics, Housing Statistics 2009, Live Tables 109 and 600
iv GLA (2009), Greater London Strategic Housing Market Assessment 2008, pp. 50-51
v Evening Standard, 2nd November 2009, 40% of London families on housing benefit
vi Greater London Authority, Towards the Mayor’s Housing Strategy – Consultation Paper, November 2006
vii         Department of Communities and Local Government and the Office of National Statistics, Housing
    Statistics 2006, December 2006
viii GLA (2009), Greater London Strategic Housing Market Assessment 2008, p.37
ix Empty Homes Agency statistical compilations. Detailed breakdown by tenure for 2006 was extrapolated

from previous trends, given the absence of this data from the EHA.
x GLA (2004), The London Plan, p.54
xi GLA (2006), The London Plan, p.64
xii GLA (2009), The London Plan consultation draft replacement, pp.64, 79
xiii DCLG and National Statistics, Housing Statistics 2009, Live Table 217. Figures for 2009 extrapolated

from the first three quarters.
xiv Ibid.
xv DCLG (2009), Affordable housing supply, England, 2008-09,

http://www.communities.gov.uk/documents/statistics/pdf/1405884.pdf
xvi Shelter (2009), Council housing waiting lists data available at

http://england.shelter.org.uk/housing_issues/waiting_lists
xvii GLA (2009), Focus on London Data Store Table 11.11 Median and lower quartile house prices and ratios of prices

to earnings, by London borough, 2008 Q2, http://www.london.gov.uk/focusonlondon/datastore.jsp#11
xviii See, for example, the analysis of the Highbury Group (2009), Housing and the credit crunch: Impact of the

market downturn on London Development,
http://www.londonmet.ac.uk/londonmet/fms/MRSite/acad/dass/Highbury%20Group%20on%20Housing%
20and%20the%20Credit%20Crunch/Highbury%20Group%20London%20Paper%20July%202009.pdf
xix Ibid.
xx The GLA’s Strategic Housing Market Assessment sets a minimum requirement of 18,200 affordable homes, of

which 80% or 14,560 should be social rented. The draft replacement London Plan sets a target of 13,200
affordable homes, of which 60% or 7,920 should be social rented.
xxi Questions to the Mayor from Jenny Jones on the 18 th November 2009,

http://www.london.gov.uk/mqt/public/question.do?id=28436
http://www.london.gov.uk/mqt/public/question.do?id=28438
xxii Question to the Mayor from Jenny Jones on the 18 th November 2009,

http://www.london.gov.uk/mqt/public/question.do?id=28437
xxiii Boris Johnson (2008), Building a Better London, pp.11-14, http://image.guardian.co.uk/sys-

files/Guardian/documents/2009/04/27/borishousingmanifesto.pdf

				
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