Council housing – Brent’s clarification on London Living Rent homes at Fulton and Fifth development

 Guest post by Philip Grant in a personal capacity

 

East elevation drawing and location plan for Fulton and Fifth development.
(From documents in planning application 22/3123)

 

When I wrote my guest post “Brent’s Council Housing – A Tale of Two Sites” last month, I gave some details of a type of “affordable” housing known as London Living Rent (“LLR”), which the Council will be using for a block of flats it is buying at the Fulton and Fifth development in Wembley Park. 

 

I used details of this type of tenancy given on the GLA website, that ‘it is designed to help people transition from renting to shared ownership.’ I sent a copy of my article to Cllr. Promise Knight, Brent’s Lead Member for Housing, and asked:

 

‘IF Brent goes ahead with letting tenancies at Fulton and Fifth as LLR, what length of LLR tenancy does it plan to award? 

 

What will happen to those LLR tenants when their LLR tenancy comes to an end, if they are unable or unwilling to convert it to a Shared Ownership lease?’

 

I have now received a reply from Brent to that query, and as it clarifies the position (thankfully, these Council homes will not be converted to Shared Ownership!) I am setting out that response here, so that the correct information is available:-

 

‘I’m responding to your email below on behalf of Councillor Knight.

 

Thanks for your questions, your article is based on the assumption the Council is delivering London Living Rent as described by the Greater London Authority.

 

On 06 February 2023, the Council published a Cabinet report outlining the plans for Fulton and Fifth.

 

In this report, we state that Local Authorities can request from the GLA to rent the properties in perpetuity. We can confirm that this permission has been sought and granted and so the London Living Rent homes will continue to be rented at London Living Rent levels rather than there being a requirement to convert to Shared Ownership. This means they are effectively Discount Market Rent homes but will use London Living Rent levels to dictate the levels of rent charged.

 

The Council agrees, social rent and London affordable rent will always be the preference and priority and the scheme includes 176 homes for London Affordable Rent.

 

Best wishes

 

Head of Affordable Housing & Partnerships’

 

 

Extract from the Report on the Fulton Road development to the 6 February 2023 Cabinet meeting.

 

Leaving aside the assurance at the end of the reply, that the Council regards Social Rent and London Affordable Rent homes as a ‘preference and priority’, and the claim in the February 2023 Report that the Fulton Road development will benefit meeting ‘current housing demand’ (the homes are expected to be ready by July 2026), 294 new Council homes for rent is to be welcomed. Here is the split of home sizes for the two blocks, and two rent levels:-

 

 

Extract from the Report on the Fulton Road development to the 6 February 2023 Cabinet meeting.

 

It is a pity that more of these homes could not be at the “genuinely affordable” LAR level, but they should, at least, be cheaper to rent than private rents for similarly sized accommodation. I included a chart in my earlier article, showing what the LLR rent levels are for different sized homes in each of the Wards in Brent. 

 

I will finish by comparing what tenants in each of the two “affordable” housing blocks would be paying in rent, if their tenancy began in April 2024. The figures will be different (higher) by 2026, and they do not include service charges or Council Tax.

 

In block E, they will be tenants of Brent Council, and 2024/25 LAR rents (converted to monthly figures, but with weekly rent shown in brackets) would be:

 

1-bedroom  -  £840  (£193.99 pw)
2-bedroom  -  £890  (£205.39 pw)
3-bedroom  -  £940  (£216.80 pw)

 

In similar sized flats next door in block D, where the tenancies would be from one of Brent Council’s wholly-owned companies (First Wave Housing or i4B Ltd), the 2024 LLR monthly rents would be:

 

1-bedroom  -  £1,080
2-bedroom  -  £1,200
3-bedroom  -  £1,320

 

In theory, the LLR homes are for people who have a higher income (household income of up to £60,000 a year), but it would be interesting to know how the Council will decide who gets offered block D, and who is offered block E. It makes quite a big difference!

 

Philip Grant.

Is Brent Council using Sadiq's or Boris's definition of 'affordable' homes

Brent Planning Committee at its meeting on April 26th will be hearing two pre-application presentations from Quintain and making a decision on two planning applications from them. All contain references to 'affordable' housing.

Over the weekend my attention was caught by a tweet from Sadiq Khan, the London Mayor, publicising his draft affordable housing and viability supplementary planning guidance (November 2016 LINK)

As I have long had a gripe with Brent Planning Officers over their failure to explain what they mean by 'affordable' housing in their reports to Planning Committee (usually 80% of market ents which are not affordable for local residents) I thought it was worth looking at what the Mayor had to say.

The supplementary guidance states:

The Mayor strongly encourages LPAs (local Planning Authorities) to apply the affordable housing threshold approach to applications for sites which are capable of delivering ten or more units. In addition, when developing future affordable housing policy (and other policies on planning obligations and CIL levels) LPAs are strongly encouraged to take account of this Supplementary Planning Guidance (SPG) and the importance the Mayor places on increasing the numbers of affordable homes

Central to this is the London Living Rent capped at one-third of the median gross household income for the borough:

Definition of London Living Rent

London Living Rent is a new type of intermediate affordable housing that will help, through low rents on time-limited tenancies, households with around average earnings save for a deposit to buy their own home. Eligibility for London Living Rent is restricted to existing tenants with a maximum household income of £60,000, without sufficient current savings to purchase a home in the local area.

It is aimed at single people, couples and other households with more than one person, but is unlikely to be suitable for house shares of multiple adults due to the household income limit. Any update to this criteria will be provided through the GLA’s annual monitoring reports. The GLA has calculated ward-level caps for London Living Rent homes based on one-third of median gross household income for the local borough.  

The cap varies from the Borough median by up to 20 per cent in line with house prices within the ward. The caps have further variation based on the number of bedrooms within the home. Registered Providers (RPs) have the flexibility to let homes at lower rents if they wish. 

RPs are expected to actively encourage London Living Rent tenants into home ownership. They will be expected to assess the ability and inclination to save of prospective tenants and, where part of mixed-tenure schemes, offer tenants
the right to purchase their London Living Rent home on a shared ownership basis.  Further information on this product is available in Homes for Londoners: Affordable Housing Programme 2016-2021. As set out in the current annual monitoring report, for intermediate dwellings
 to be considered affordable, annual housing costs, including mortgage (assuming reasonable interest rates and deposit requirements), rent and service charges should be no greater than 40% of net household income.(My emphasis)

Importantly in the light of Quintain's entry into the Build to Rent market the guidance says these should 'preferably' be at London Living Rent levels:

Affordable housing tenure: the pathway recognises the need for all homes on the Build to Rent development to stay under single management and as such will encourage affordable homes on the development to be delivered as discounted market rent (preferably at London Living Rent levels), managed by the Build to Rent provider (or possibly via another designated manager). 

At the very least Planning Committee members should establish with officers whether they are using Sadiq Khan's definition of 'affordable' based on the median borough income or Boris Johnson's 80% of market rent.