Joseph Rowntree Foundation today published a new report with Future of London called “Changes to affordable housing in London and implications for delivery”. This post is printed with kind permission from JRF (the original post can be found here on their website).
Rising homelessness, waiting lists and house prices continue to afflict the London housing market, Future of London director Jo Wilson reveals.
The new report published by JRF today considers the affordability pressures in London’s housing market. With these pressures set to increase, it calls for a new, sustainable delivery model for affordable housing provision in London.
London is an increasingly unaffordable city in which to live. In 2012, it was ranked the 13th most expensive city in the world by The Economist, moving up three places. Its population is already higher than the figures projected for 2016 – leading to estimates that London could be a 10m megacity by 2030.
This all puts extra pressure on the cost of housing in London with statistics showing that London is currently failing to meet this fundamental need of its citizens.
As our paper shows, 2011-12 saw a 27 per cent increase in homelessness on the previous year, and 366,613 households in London were on housing waiting lists in the same year; an increase of 73 per cent increase over the previous 10 years. In some boroughs, such as Newham, the housing waiting list comprised 35 per cent of households. Meanwhile, first time buyers in London face paying 20 per cent more of their salary on mortgage payments than the rest of the UK.
Increasing supply must be a major part of the solution. However, as the economy continues to dwindle, it would be unwise to expect public subsidy for housing to return to past levels in 2015, or indeed the foreseeable future. The Affordable Rent Model was brought in by HCA to plug the funding gap for affordable housing provision, but it is not without its challenges, even in London where the market is more buoyant than most.
As our paper shows London councils are taking advantage of recent reforms to the Housing Revenue Account, increasing the borrowing capacity of stock-owning councils through which they can build new homes. They are generally being proactive with their assets and willing to take some risk in order to face these challenges. Whilst the Greater London Authority works to find a pan-London solution to the challenges of housing provision, boroughs need to continue to deliver in innovative ways.
The debate continues on whether we would be better off building more housing at the potential cost of failing to reach those in the most acute circumstances. This is an ethical dilemma, with the potential for major consequences on London’s demographic make-up. If lack of public subsidy is the insurmountable challenge, the findings of the London Finance Commission, due to report to the Mayor in May, could provide some answers.
Clearly an urgent policy response is required. As the next affordable housing programme is developed, London practitioners must work together to achieve consensus on the key elements of a sustainable delivery model for affordable housing in the capital.
Download a copy of the report here: Changes to Affordable Housing in London and Implications for Delivery