Will Labour's housebuilding plans ease Lewisham's housing crisis? Part 2: Social rent
Chancellor Rachel Reeves announced £39bn of grants for building affordable housing in her spending review. Will it deliver the social rent homes that Lewisham needs?
The rise of "affordable" and collapse of social rent housebuilding
Shelter analysis from May 25 found that "affordable" rent homes are unaffordable to those on low pay in Lewisham and across most of London.
"Affordable" rents were introduced in 2011, capped at up to 80% of market rents. But as private rents soar, affordable rents rise with them.
Shelter notes that since affordable rent was introduced in 2011, "it has replaced social rent as the main form of affordable housing being built in England.
"It makes homelessness worse by draining investment away from delivering genuinely affordable housing."
We asked Lewisham councillor James-J Walsh, cabinet member for Inclusive Regeneration and Planning, whether the new government investment would deliver social rent homes for Lewisham.
Walsh pointed to Endwell Road development as an example of council and government partnership and innovation.
Endwell Road is a small infill scheme built on council-owned land which had been used for garages. It is part of the the UK-wide Small Sites Aggregator pilot which aims to "unlock small site housing developments" and allow smaller housebuilders into the process.
Lewisham borough council with Sheffield and Bristol city councils are leading the pilot, which aims to prioritise "genuinely affordable" and social housing.
The Endwell Road development has delivered nine homes on assured short term tenancies at London Affordable Rents (LAR).
LAR is capped by the GLA; it is higher than social rents, but significantly lower than affordable housing.
Walsh said that that the council is using every tool it has available. "We're building council homes, buying back those lost to right to buy and securing the maximum number of social rent and affordable homes from developers."
Mairi MacRae, Campaigns and Policy director at Shelter said, "The increased investment is a watershed moment .. (But) to truly tackle rising homelessness, it most come alongside a clear target for delivering social rent homes."
That target has not yet appeared.
Do housing associations want to develop new social rent homes?
Since affordable rents were launched, there has been a shift by councils and housing associations towards building affordable housing, which brings in higher rents than social housing.
Housing associations have come under their own financial pressures and some have given up building social rent homes completely.
Jonathan Lawn, Assistant director of Phoenix Housing said: "We welcome the additional investment .. but it's too soon to say how it might translate into new developments for us."
He pointed to schemes Phoenix has in progress in Lewisham, including a recently completed intergenerational development at Melfield Gardens. This includes housing for people over 55 at London Affordable Rent (LAR) alongside two four-bed flats for postgraduate students at Goldsmiths.
Phoenix Chief Executive Denise Fowler also welcomed the government's announcement including the rent settlement, which allows social landlords can raise rents by 1% above inflation for 10 years, noting this "provides much greater financial certainty for the housing sector".
L&Q Chief Executive, Fiona Fletcher-Smith agreed, saying: "the confirmation of a 10-year rent settlement, gives housing associations like L&Q the certainty to plan, build and invest at scale".
The 1% rise will bring social rents up by around 10.5% plus the rate of inflation over 10 years, which may make them unaffordable for those with the lowest incomes.
Developer land banking to increase profits
At the council's budget setting meeting in February, Walsh noted that in Lewisham there are 17,000 "stalled" homes, waiting to be built - the council has given planning permission for development but it has not started.
"Delivery is constrained by market failure, not planning barriers," he said.
Land banking is one of those market failures. Developers get planning permission for a site but delay starting work, waiting for the most profitable market conditions.
"These much-needed homes are ready to be built, yet there is currently no way local authorities can compel developers to do so," Walsh said, "other than considering the use of statutory land assembly powers, which set a very high bar to justify and can carry significant financial risk."
"We look forward to working with government to unlock new powers and new funding, as we work together with fresh determination to get Britain building."
Land banking continues to be a barrier, although the council has hopes that the government will act on it.
Verdict
In part 1, Will Cooper pointed to positive moves from the government on right to buy and the private renters bill and his hopes that this will begin to reduce homelessness across Lewisham. Overall, good progress so far, but much more to do.
In part 2, James-J Walsh and the housing associations echoed this view for housebuilding. Everyone welcomes the government's announcement, but it does not yet translate into social rent homes.
Meanwhile, the government has done nothing to control rising rents in the private market, which are driving increasing numbers of people into homelessness.
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Dorothy Stein
