A Task Groupn on Affordable Housing will report to the Public Realm Scrutiny Committee on Tuesday that most Brent families cannot afford so-called 'affordable' housing at up to 80% of market rents or the 'shocking' fact that many social rents are already too high for them. The report does not say this but it raises questions about the amount of 'Build to Rent' construction being carried in the Quintain development around Wembley Stadium which is clearly out of reach of the great majorityof local people. As suggested by Wembley Matters in the past, it would be helpful if Brent planners were clear about which definition of 'affordable' they are using in their reports to the Planning Committee. 80% of market rent is not affordable.-->
Affordability in Brent
Brent’s housing market, as with much of London, faces distinct pressures. There is high demand, a shortage of genuinely affordable housing, a diverse mix of households - including large numbers of multigenerational households, above average levels of overcrowding and many households living in temporary accommodation.
To begin to understand “affordability” of housing in Brent, it is necessary to understand the relationship between average income levels and the level of rents locally. To this end Brent Housing Department commissioned Cambridge University to carry out a study in 2017. The report reached some shocking conclusions, most notably that social rents are already too high for a significant proportion of Brent social housing tenants.
The researchers found that over half of current working single people or couples allocated social housing in Brent were struggling to afford Brent rents for 1 bedroom flats, and that 90 per cent of families with 2 children couldn’t afford the rent for a 3 bed property (affordability here being judged by the income that a household requires in order to be able to afford the rent without the need for support from Housing Benefit).
With higher average rents the situation is even worse for tenants renting from Registered Providers.
The report concluded that the council faced a choice in the future between building a smaller number of social rented units (due to factors including the lack of subsidy available, restrictions on and cost of borrowing, and land values) or a larger number of units at “affordable rents” (in this case 65 per cent of market rent) where many more tenants would be reliant on housing benefit support to meet the rent.
We should be mindful here that the landscape has shifted since the 2017 report was commissioned, given the recently proposed lifting of the HRA borrowing cap.
Private sector rents and income levels
In Brent the acute pressures on housing are compounded by high private sector rents combined with relatively low income levels in much of the borough, when compared with London as a whole.
In September 2017 the average private rent in Brent was £1,557 per month, which represents a 15 per cent increase from five years earlier and a figure only 8 per cent lower than the average of £1,685 for London. Whereas full-time workers in Brent earned an average gross weekly pay of £576.20 in 2017, compared with the London average of £692.50, a difference of 20 per cent.
Brent private sector residents therefore face paying rents at a significantly higher proportion of their pay than the London average. Many people in work also need housing benefit to enable them to pay their rent.
The detailed report LINK should be read in full for an explanation of each of the 18 recommendations as well as complex issues such as viability assessmments.
It is worth noting that while private rented housing does not meet the definitions of affordable housing, many tenants that rent from a private landlord can only afford their housing costs because they receive housing benefit. Such households aren’t counted in calculations of the “need” for affordable housing (as housing benefit enables most of them to afford their housing costs), but if housing benefit support was reduced or if there wasn’t sufficient private rented housing available at a price they could afford, then this would inevitably and significantly increase the need for affordable housing.
This highlights the degree to which Government investment in housing has switched over time from capital expenditure on “bricks & mortar” to the housing benefit bill.
Affordable housing targets and viability1. In the new Local Plan for Brent the strategic target of 50 per cent for affordable housing in new developments should be retained, with an expected tenure split of 70 per cent social rent / London Affordable Rent to 30 per cent intermediate affordable housing.2. Brent Council should adopt the Mayor of London’s 35 per cent “fast-track” threshold approach to viability (with 50 per cent on publicly owned land and for industrial sites). Through this the council would forego the requirement for a financial viability assessment and/or a late stage viability review in the event that a developer guarantees delivery of the requisite percentage of affordable housing across the entire development (with the 70 per cent social rent / London Affordable Rent to 30 per cent intermediate tenure split applicable). The policy should be subject to review.3. To help meet the need for larger affordable homes in the borough, Brent should continue to require a minimum of 25 per cent of new affordable rented homes to be three bedrooms or larger, accommodating at least a household of six (2 people per bedroom). However, this approach must be combined with a clear and effective under- occupation strategy, enabling and incentivising down-sizing in order to release more existing larger homes for re-let.4. The council should continue to use the “Existing Use Value Plus” (EUV+) method for determining benchmark land values. Any other uplift in value should be captured for the public.Corporate approach to affordable housing delivery5. Future council policy with regard to the setting of rents for affordable housing should continue to be based on the traditional social rented model (like the mayor’s London Affordable Rent model) and should not be linked to volatile and irrational market rents rather than incomes.6. Brent Council should create a cross-departmental Board of officers, reporting directly into the Corporate Management Team (CMT), to ensure a ‘one council’, joined-up,sustainable approach to the delivery of Affordable Housing. The board should have high level responsibility for programme management and monitoring of an Affordable Housing Action Plan and associated suite of Key Performance Indicators. The Board should include senior officers from Brent’s Planning, Housing, Regeneration, Property, Finance and Legal teams.7. Brent should consider adopting a land assembly, master planner approach, working with key partners and designating Land Assembly Zones in its Local Plan. Where attempts to encourage and incentivise voluntary land assembly do not succeed, Brent should commit to extend its use of compulsory purchase powers in these zones, where the law allows.8. Brent Council should maximise resources available through the mayor’s fund, RTB receipts and borrowing to support direct delivery within its own capital development programme with a primary focus on rented homes at social rent levels and on larger homes (3 bedrooms or larger).9. Brent must adopt a clear policy on access to shared ownership in the borough, making the product accessible to people on incomes that are as low as possible and ensuring the policy is designed to enable keyworkers to take advantage of it.10. All new homes in Brent should be marketed locally first, as per the Mayor of London’s planned “first dibs” policy. Brent should investigate how such a requirement could be implemented.11. Brent Council should explore all the options highlighted in this report for innovative partnering arrangements and delivery models with Registered Providers.Estate regeneration12.Future estate regeneration projects in Brent should use the South Kilburn Regeneration Programme as a model of good practice and make a clear commitment to ensuring there is no loss (in quantum terms) of social rented affordable housing and to resident ballots.Land owned by public authorities13. Brent should actively promote partnership working on publicly owned land with other public bodies, as promoted by the Naylor Review (One Public Estate), e.g. Network Rail/TfL sites such as potential over station and over rail land developments, as part of the Local Plan.Industrial/employment sites14. Brent must adopt a proactive approach to identifying opportunities where surplus commercial space, underused retail sites and car parks may have significant potential for housing development, both strategic industrial land sites and smaller commercial land sites, and in particular where sites have potential for mixed-use developments.Small sites15. The council and its agents should proactively explore partnerships with developers and RPs on small sites to maximise the amount of affordable housing across the borough. Brent should identify potential opportunities and funding mechanisms for increasingdevelopment of small sites, including any further opportunities for infill development. It should be prepared to invest the necessary resources.16. Developers of small sites with capacity for 10 or fewer units should be expected to pay a commuted sum, wherever possible, based on a consistent tariff, to Brent as a contribution to the fund for affordable housing to be built elsewhere in the borough. All affordable housing in small developments should be included in Brent’s periodic performance stats.Community led housing17.Brent should investigate and promote opportunities for community led housing projects, such as “Community Land Trusts” and “Self-Build” projects, which will protect homes and assets at affordable levels in line with local incomes for future generations.18. Brent should explore setting up of a CLT model on publically owned land and encourage developers to do the same.