Brent’s Affordable Council Housing – figuring out Cllr. Butt’s reply

 Guest post by Philip Grant in a personal capacity

 

On 14 November, Martin reported the questions which Cllr. Anton Georgiou had asked at the Cabinet meeting about the number of new Council homes Brent has delivered, and the proposal Cabinet was considering about “converting” some homes the Council was building from London Affordable Rent to Shared Ownership. The Leader, Cllr. Muhammed Butt, said the Council would come back to him with a detailed reply. 

 

Cllr. Georgiou has received that reply. He’s passed a copy to me, saying he would be happy for me to share it, as it should be public knowledge. I’ll ask Martin to attach the answers to the questions (prepared for Cllr. Butt by Brent’s Head of Affordable Housing) at the end of this post. At the Cabinet meeting, Cllr. Butt said that he hoped the Council and its Officers were not being accused of deliberately misleading the public. As the information he has supplied may be slightly confusing, I hope this article will provide a bit more clarity.

 

Brent’s Lead Member for Housing emphasising ‘genuinely affordable housing’.
(From the publicity video for Brent’s Clement Close “infill” scheme)

 

Much is made in Brent’s publicity about ‘Delivering 1,000 New Council Homes’ (“NCH”). What does the Council’s housing policy actually say? Brent is committed to there being 5,000 affordable homes built in the borough between April 2019 and March 2024 inclusive. As part of that aim, the Council itself has ‘a strategic target of delivering 1,000 new council homes at genuinely affordable rent by 31 March 2024.’

 

There are two types of “genuinely affordable” rent which can be charged by social housing providers such as Brent. The first is Social Rent (sometimes known as Formula Rent, which is the maximum rent for each size of home, calculated by the Regulator of Social Housing). This is the “rent capped” level which can be charged to existing tenants of social housing provided by local authorities and Housing Associations, or new tenants if the registered provider choses Social Rent as the tenure. These Social Rents can only be increased by a set “formula” each year, so rents paid by existing Council tenants may be less that the maximum “rent cap”.

 

The current maximum weekly Social Rent levels. (Regulator of Social Housing website)

 

The second type of “genuinely affordable” rent, in London, is London Affordable Rent. It was introduced by the Mayor, Sadiq Khan, in 2016, as the genuinely affordable rent level at which new homes built using his “affordable homes” grants could be charged. The weekly amounts are slightly higher than the maximum Social Rent level. (Currently, the annual increase “formula” for both rent types, set by the Regulator, is the previous September’s CPI + 1%, although the cap for increases from April 2023 was recently limited by the Chancellor to 7%).

 

London Affordable Rent levels. (From the GLA affordable housing website)

 

I’ve given this information before examining the answers provided to Cllr. Georgiou’s questions, as I think it will make it easier when I try to explain some of the replies. 

 

Paragraph from the 14 November “Update” report on the success of Brent’s NCH Programme.

 

The item being discussed at the Cabinet meeting was an update on the supply of affordable housing (see my guest blog of 11 November for more details). The Report said that the Council had developed and let 684 NCH. Cllr. Georgiou asked how many of the 684 were at each type of rent level and what types of tenure made up this total. This was the response:

 

Extract from the document sent by Cllr. Butt on 21 November.

 

In the first list, there are 235 new Council homes shown as being at Council (which must mean Social) rent level. There is a reason for this, which was first highlighted in a September 2021 “Life in Kilburn” blog about Brent’s “1,000 New Council Homes” Programme. 209 of those 235 were homes into which existing tenants from the Gloucester and Durham blocks in Kilburn, which Brent will demolish to redevelop, had been transferred. Their rents had to stay at their old Council/Social level, and its possible that the other 26 at that level are for a similar reason.

 

The 253 of 684 at LAR are probably new homes that have been supplied to people on the Council’s waiting list, or similar genuinely new Council tenants. But what about those at ‘London housing allowance rent level’? You will notice that the figure of 149 at that level matches the 149 shown for tenants in temporary accommodation, and 92 of those will be at the Council’s Knowles House development for temporary accommodation in Harlesden.

 

LHA is actually Local Housing Allowance level, a series of scales calculated by the Valuation Office Agency as a way of setting housing benefit entitlements for tenants living in the private sector. It is higher than rent levels that the Council could charge as a social housing provider, so Brent’s temporary accommodation is treated as a sort of semi-private Council housing. 

 

Weekly LHA rates for areas covering most of Brent. (From the VOA’s LHA website)

 

The LHA figures applicable in Brent are those calculated for the Inner North London (basically south of the River Brent) and North West London areas. They are the maximum amounts which the tenant can claim Housing Benefit (or the housing part of Universal Credit) for. In that respect, they can be seen as “affordable”, but it is not the “genuinely affordable rent” which the 1,000 new homes are meant to provide.

 

It will be seen that the 47 “Assisted Living” homes are not included in the rent level breakdown answer, so they are not provided at “genuinely affordable rent” either. And the claim that 488 of the 684 are ‘social rent homes’ is also incorrect. As shown above, only 235 are at Social Rent level. This is yet another example of the misleading descriptions of housing often used by councillors and Council Officers. It would be correct to call the 488 “genuinely affordable” homes “social housing”, or Brent Council social housing, but they are NOT all for ‘social rent’.

 

Another clarification that Cllr. Georgiou asked for at the 14 November Cabinet meeting was the difference between the 684 figure, and that given to the Scrutiny Committees when they were jointly considering Brent’s Draft Borough Plan the previous week. When asked how many NCH had been built, the Chief Executive, Carolyn Downs, said around 800. Cllr. Butt cut in to say 768. 

 

From the reply now received it’s clear that those figures included new homes completed in 2018/19, before the start of the five years covered by the “1,000 New Council Homes” pledge. Of the 103 from that year, only 30 were “general needs” homes at LAR. It may just have been a misunderstanding that a higher figure was given at Scrutiny, but the councillors hearing it may have mistakenly believed that was the current progress towards the Council’s target, so the record needs to be put straight.

 

The final part of Cllr. Georgiou’s questions was on the thorny subject of Shared Ownership. In a guest post on 12 October, I made clear that this is actually an “assured tenancy”, which would only become “ownership” if or when the tenant succeeded in purchasing 100% of the home. The information provided by Cllr. Butt showed “0” shared ownership in the rent or tenure details, but then admitted that there were 39 ‘shared ownership homes within the HRA account’.

 

At the Scrutiny meeting on 8 November, Cllr. Georgiou had requested ‘complete clarity for the committee’ on Brent’s Council housing (see transcript at the end of my 11 November “Affordable Council Homes” guest post). When he put to the Chief Executive that Brent appeared to be including shared ownership as part of its Council housing, Ms Downs replied: ‘We have not ever built a single Shared Ownership. Developers might, we the Council haven’t.’ 

 

That reply seems to have been playing with words. The shared ownership homes in Brent’s Housing Revenue Account must include 23 built for Brent Council, by a developer, under a Section 106 planning agreement, as part of the Grand Union development (the other 16 may well have been acquired under similar agreements). But under that same S.106 agreement, 92 of the 253 LAR homes included in the 1,000 NCH count were built, for Brent but not by Brent. This “double standards” treatment could be considered misleading!

 

You will see from the reply attached below that the proposed “conversion” of “genuinely affordable” LAR homes to shared ownership, which Cabinet approved on 14 November, and the commissioning of a report into shared ownership demand in Brent, is explained like this:

 

‘The proposal was therefore to identify new examples of best practice so Brent can be a leading example in any shared ownership homes that it provides ….’

 

Along with the reply to the questions, Cllr. Butt sent two other documents. These were a December 2017 Report by the Cambridge Centre for Housing & Planning Research on “Affordable housing products in Brent and their affordability to target client groups” and some “Shared Ownership data sets” extracted from that report. 

 

Shared ownership affordability for a couple with two children in Brent, from the data sets.

 

The report seems to be the source of much of the data supplied to the later Brent Poverty Commission, which led to this extract from a report to Cabinet in October 2020:

 

Brent Council’s policy on Shared Ownership, as set out in a Cabinet Report, October 2020.

 

That assessment does see the need for some shared ownership homes in the borough. However, an “Update” report to Cabinet a few months earlier, on progress towards meeting the strategic target of 5,000 new affordable homes by March 2024, showed that other shared ownership providers had more than enough such homes “in the pipeline” to meet that need.

 

Table from the July 2020 Update Report on progress towards the new affordable homes target.

 

On the data currently available, it seems likely that there will already be more shared ownership homes in Brent than existing Brent residents, who might be thinking of this “housing product” in order to “get on the housing ladder”, can afford. They are mainly suitable for young professionals, who would like to eventually own their own home and who foresee their income level rising significantly as they gain experience. But they are also the ones most likely to have read about the pitfalls of shared ownership on social media (see this 2020 guest post from a shared ownership tenant in Kilburn)!

 

If you wanted to get on the shared ownership ladder in Brent now, there are plenty of opportunities to chose from. But you can only qualify for this supposedly “affordable” housing option if your annual household income is less than £90k! Then, if you managed to get a mortgage to buy a 25% share of a home, you’d probably have to pay service charges of at least £250 a month, on top of your mortgage payments and rent for the other 75%.

 

A small representative selection of the shared ownership homes in Brent
currently advertised on the internet.

 

At the end of his presentation on 14 November, Cllr. Georgiou urged Brent’s Cabinet to reject the Officer’s recommendation to “convert” LAR homes in the NCH Programme to shared ownership. His plea, and the evidence he’d given to support it, was ignored. He tried to get the Full Council meeting on 21 November to consider a motion calling for Brent to concentrate on delivering genuinely affordable rented homes, and not to make some of the homes it plans to build shared ownership or open market sale. 

 

The attempt at a proper debate on the issue was ambushed by Cllr. Shama Tatler, with a Labour Group amendment, which backbench Labour councillors were “whipped” to support. But I still believe that ordinary residents should have their say, so if you would like to, please add a comment to my guest blog “SHARED OWNERSHIP – Let’s have a debate!”

 

Have I figured out Cllr. Butt’s reply for you? If I’ve done my sums correctly, more than 3½ years into the five year Strategic Target, Brent’s New Council Homes Programme has only delivered 253 genuinely affordable new homes for people on its long waiting list. It has also built 235 genuinely affordable new homes for existing tenants, “decanted” from homes it plans to demolish in order to redevelop the sites for housing in future. That’s 488 in total, out of 1,000.

Philip Grant

 

Councillor Muhammed Butt's reply to Cllr. Georgiou's questions.