At the Council Cabinet meeting on 26th January, a report from the “Report from the Strategic Director of Regeneration and Growth” headed “South Kilburn regeneration Programme” was adopted. This concerned the approvals needed for the the next stages of redevelopment and regeneration. LINK
One of the recommendations in the document is:
“2.1. That the Cabinet agree to set rent levels for the affordable homes at Gloucester House and Durham Court once complete, at a rent equivalent to the Homes and Communities Agency Target Rent levels.”
The Gloucester House and Durham Court redevelopment involves:
“3.1 The redevelopment of Gloucester House and Durham Court site involves: a. the demolition of Gloucester and Durham and the development of 236 new homes for a mix of market sale (134 new homes) and affordable social rented (102 new homes) accommodation;”
On the rents:
3.5 On 18 July 2011 the Executive agreed to adopt a rent equivalent to the HCA Target Rent levels for affordable developments in South Kilburn until Borough wide rent levels were reviewed. The 18 July 2011 Executive report set out the background to the rent level change and concluded that setting HCA Target Rent levels on phases 2 and 3 and subsequent phases is the only realistic way of affording the South Kilburn regenerationprogramme and avoiding the requirement for large amounts of grant that would not in themselves be certain of being awarded and, if awarded, would require rents to be increased to the new 'affordable rent' levels.
3.6 The Target Rent regime controls rent levels in the social sector. Target Rents are calculated by a formula, the basis of which is set out below. Increases in Target Rent levels are also pegged to inflation and subject to an overall cap.
• 30% of a property’s Target Rent is based on relative property values compared to the national average
• 70% of a property’s Target Rent is based on relative local earnings compared to the national average
• A bedroom factor is then applied so that, other things being equal, smaller properties have lower rents”
“3.7 Between 2010/11 and 2014/15 increases in Target Rent levels and caps have been linked to RPI as set out in the tables below:”
[for tables on caps you will need to refer to the document via above link]
“Last year Government introduced a new rent policy, and for the ten years 2015/16 – 2024/25, increases in rents in the social sector will be limited to CPI +1% and increases in rent caps will be limited to CPI + 1.5%.”
“3.8 It should be noted that new social rented properties being developed in South Kilburn have a higher capital value than existing Council properties and therefore will attract a higher Target Rent under the formula outlined. Inflationary rent increases on these newproperties, whilst governed by the same rent policy and same CPI +1% limit, will therefore also be higher in monetary terms (i.e. in pounds sterling). This is because 1) inflation will be applied to a higher base Target Rent and 2) the Council will sometimes (and more commonly than the Registered Providers managing the new properties in South Kilburn) not apply a full inflationary increase to rents across its own housing stock.
3.9 In line with the Council's commitment to maintaining current HCA Target Rent levels in regeneration areas it is recommended that the Cabinet agree to set the rent levels for the affordable units at Gloucester House and Durham Court and the Post Office Plus Site once complete, at rents equivalent to the HCA Target Rent levels.”
Problem is, of course, that this is fairly impenetrable for those who want to know what this actually means in terms of real rent levels for the “affordable” new flats.
A Councillor helpfully enquired what this actually means and got this response from a Council officer:
“Your enquiry regarding affordable rents has been forwarded to me for reply. I have provided a brief explanation of the position below but please let me know if you would like any additional information or technical detail.
Target rent levels relate to Social Rented Housing, whether owned by a Council or by a Housing Association. These are based on a national formula that takes account of the capital value of the property and a factor for regional (London) earnings. They do not directly reference private rented sector rents. Target rents therefore vary across properties and boroughs. In Brent, as in many authorities current rents are below target rents but have been gradually moved towards them recent years under the government’s rent restructuring formula.
Current average rents for Brent’s council properties (which for larger properties are below target rents) are:
Bedsit - £93.91 / week
1 bed - £107.07
2 bed - £119.43
3 bed - £130.80
4 bed - £141.63
New affordable housing development is typically at Affordable Rents. These are directly based on market rents and are the lower of the maximum Local Housing Allowance (Housing Benefit) rate and 80% of the market rent (including service charge). Brent Council has a published Tenancy Strategy, that housing associations are required to have regard to, which provides guidance on maximum Affordable Rents. These set lower limits in order to support affordability, particularly for households who may be affected by the Overall Benefit Cap. The guideline limits are as follows:
1 bed – 70% market rent
2 bed – 60% market rent
3 and 4 beds – 50% of market rent”
Still with me? So what are local market rents?
This is where an internet search comes in.
To be as fair as possible (?) to Brent Council I’ve restricted myself to flats actually in South Kilburn, i.e. not even Kilburn High Road, Camden Kilburn or Brent Kilburn North of the Watford line and definitely not Queens Park.
1 bed flat, Malvern Road (described by Estate Agents as Queens Park, but then they do that all the time) £260 pw
2 bed flat, Cambridge avenue, £425 pw
2 bed flat, Malvern Road, £385 pw
2 bed flat, Cambridge Gardens, £425 pw,
2 bed flat, Cambridge Avenue, £400 pw
3 bed, Chichester Road, £475 pw
2 bed flat, Canterbury Road, £375 pw,
1 bed flat, Malvern Road, £295pw,
enough, my brain hurts.
Anyway it should be clear from this search of just a small part of one estate agents website what the range of “market rents” is in the area.
Even taking the lowest market rent for each size of flat. this would give the following
1 bed flat Target rent (70% of market) £182pw. current average Brent council rent £107.07
2 bed flat Target rent (60% of market) £225pw, current average Brent Council rent £119.43
3 bed flat Target rent (50% of market rent) £237.50 pw, current average Brent Council rent £130.80
So, it appears that Brent Council aims to charge new tenants double or nearly double current rents. As well as new tenants, these will also apply to those previously in Council accommodation moved in to new properties.
Brent Council has always denied that regeneration amounts to social cleansing, but surely this proves the opposite.:
In addition to the fact that well over half of the new properties are for market sale (and a new 3 bed flat in South Kilburn was recently on sale for £850,000!) this amounts to a massive hike barely affordable for those currently living here.