Brent’s New Affordable Council Homes promises shredded!

 Guest post by Philip Grant in a personal capacity 

 

When I shared my open email to the Council Leader on Morland Gardens in a guest post earlier this week, I drew attention to the “Update on the supply of New Affordable Homes” report, which is going to next Monday’s Cabinet meeting. Now I will highlight some points from that.

 

It’s only a month since I wrote about Brent’s Affordable Council Housing – the promises and the reality, but that reality has got a whole lot worse. Then I was writing about Social Rent, London Affordable Rent (“LAR”) and Shared Ownership (“SO”), which is neither ownership nor “affordable” housing. Now Council Officers want to include some new terms, Open Market Rent (“OMR”) and Open Market Sale (“OMS”) into Brent’s New Council Homes programme.

 

Extract from the “Update” Report for the 14 November Cabinet meeting.

 

They are saying that some (in fact, quite a lot!) of the new homes the Council builds can no longer be for social housing, which is what Council homes are meant to provide. They will have to be for rents that are not genuinely affordable, such as OMR (or Local Housing Allowance level, as it is sometimes referred to), or they will have to be for shared ownership or sold off privately, the same as any other developer would do. 

 

‘What is the point of the Council building new Council homes which are not new homes for rent to Council tenants?’ you might ask. The answer from the Corporate Director, Resident Services, is that you have to “convert” some of those homes to unaffordable homes, or homes for sale, in order to be able to afford to build other homes which are for affordable rent. But the Council, as a social housing provider, can’t offer unaffordable homes to Council tenants, so it has to pass on the OMR and SO homes it is “converting” to someone else.

 

The start of a long list of recommendations for Cabinet to agree on 14 November.

 

The Report recommends that the “conversion” will be done by ‘Officers’. Which Officers? – it doesn’t say (why is that?), but many of the other recommendations delegate the power to make decisions to the Corporate Director, Resident Services (the Officer who signed off the Report, Peter Gadsdon). 

 

As will be seen from my first extract from the Report above, the “conversion” will be ‘via the Council’s wholly owned subsidiary company i4B.’ Because i4B is a separate “legal person”, it can charge higher rents than the Council itself would be allowed to charge. The Council would build the homes to be “converted”, then sell them to i4B (who would pay for them with a loan from the London Borough of Brent), for rent to Brent residents (possibly homeless families). 

 

But as well as making these recommendations, Peter Gadsdon is also a director of i4B, which would benefit from the extra properties in its portfolio. Isn’t that a conflict of interests? And another director of i4B is Cllr. Saqib Butt, the brother of the Council Leader who will chair the Cabinet meeting considering the recommendations. I have raised these potential conflicts of interest with Brent’s Monitoring Officer, and await her response.

 

How many of the New Affordable Homes are likely to be “converted” to unaffordable ones? It could be as many as 50% of them, on the basis of this recommendation from the Report:

 

And it is not just ‘new planning permission applications’ that that are at risk of losing up to 50% of their affordable homes. Windmill Court, which has an “affordable housing” condition in its planning consent specifying that the tenure of the homes must be for no more than LAR, is one of the schemes proposed for “conversion”. The planning consent gave the reason for the LAR condition as: 'In the interests of proper planning.'

 

Extract from the Update Report, including proposals for Kilburn Square and Windmill Court.

 

Also on this particular list (there are others) for “conversion” is Rokesby Place. Regular readers may remember that I have been challenging the action by Brent’s Planning Officers in secretly changing the tenure for those two new 4-bedroom Council houses from Social Rent to the more expensive LAR. Now the Report to Cabinet wants to change things again, and either sell off one of the houses, or transfer it to i4B, to be let out at OMR! 

 

The Rokesby Place  planning application was pushed through, against the wishes of existing residents, on the grounds that the Council had to use any “spare” land on its estates to build genuinely affordable homes for local people in housing need. Now one of the two houses won’t be, despite the Report’s empty words: ‘Large family sized homes at low rent remain a priority for the Council.’

 

 
The Update Report’s section on the Council’s Wembley Housing Zone.

 

Another housing “battle” I’ve been having with Brent, for the past 15 months, is to try to get more genuinely affordable Council homes at their Cecil Avenue development. It’s a vacant, Council-owned site which has had full planning permission for 250 new homes since February 2021. The Report says that since Cabinet approved the project in August 2021, ‘officers have advanced competitive procurement of a delivery partner.’ When there are 250 homes which could be for Brent residents in urgent housing need, that’s very slow progress!

 

The delay has been even longer, because Officers carried out a “soft market testing” exercise in April 2021 (which was so soft that it guaranteed the result they wanted, to justify their recommendations to Cabinet). They could have started the project last year, when the cost of borrowing to build the homes (152 for the “developer partner” to sell for profit, 61 as intermediate housing - SO or OMR – and only 37 for LAR!) would have been much lower. What further cuts to the affordable housing in the Wembley Housing Zone are hidden in ‘(Exempt) Appendix 3’, which the public will never be allowed to see?

 

 Now, quickly, here are two more recommendations to Monday’s meeting from the Report: 

 

 

What are Modern Methods of Construction (“MMC”)? I would suggest you read a blog article on “Airspace” which Martin published in October last year. ‘A minimum of 25% of all homes’ out of the 700 the latest round of GLA funding will almost certainly include Gauntlett Court in Sudbury, and probably Campbell Court and Elvin Court in Kingsbury. Has there been any genuine consultation with residents of those Council estates yet?

 

 

 

 

The Report is recommending “conversion” of LAR homes the Council proposes to build to SO, when it has no evidence that there is any demand for them! There are already a large number of shared ownership homes built by, or in the pipeline from, private developers on big schemes in Wembley and elsewhere. Those developers are forced to provide a proportion of affordable homes as part of their plans, and they make as much of it as possible shared ownership, because that is recognised for planning purposes as “affordable housing”, even though it is unaffordable to most people in housing need in Brent.

 

There was an interesting Q&A on Council housing, and shared ownership, as part of consideration of Brent’s Draft Borough Plan 2023-2027, at the Resources and Public Realm Scrutiny Committee meeting on Tuesday, 8 November. I’ll end this post with a transcript (from the webcast recording - at around 2hrs 5mins in!) of that exchange. 

 

Cllr. Anton Georgiou (“AG”): Just for complete clarity for the committee, what does Brent Council define as a Council home? Most people define a Council home as being a property owned by the Council that is let at Social Rent.

 

Carolyn Downs, Chief Executive (“CD”): That is what we do as well.

 

AG: From documents that I’ve read, it seems that Brent have extended this to include Shared Ownership, London Affordable Rent, temporary accommodation and assisted living.  

 

CD: Absolutely not. When we talk about one thousand general new Council homes they are Council homes. It is Council housing.

 

 

AG: This isn’t Shared Ownership?

 

CD: We have not ever built a single Shared Ownership. Developers might, we the Council haven’t.

 

Shout from an unidentified person: Not genuinely affordable!

 

Cllr.Muhammed Butt, Council Leader:  Apologies. What you just said there, right, comes under the broad banner of affordable homes, right, but we do actually build Council homes.

 

Cllr. Rita Conneely, Chair: So, I’m going to draw this item to a close.

 

You can make up your own mind, from what was said at that meeting and from the Report, how committed Brent Council are to their promise of ‘genuinely affordable housing for families in Brent’. 

 

My own “Update on the supply of New Affordable Homes”? Far fewer than were promised ahead of last May’s local elections!

 

Philip Grant.

 

Throw out '80% of market rent' definition of affordable, Sian Berry urges Sadiq Khan

Problems with the term 'affordable' regarding both rents and house purchase, have featured regularly on Wembley Matters. Here Sian Berry, Green London Assembly Member, tackles Sadiq Khan's failure to issue clear guidelines. First published on Sian's City Hall website.

Is the Mayor going to break his promise to redefine what ‘affordable’ rent means for the average Londoner?

The importance of setting a new definition of ‘affordable’ rent in London cannot be overstated. In my response to the Mayor’s draft Housing Strategy, just published, I’ve voiced my concerns that the Mayor’s efforts to define a London Living Rent include loopholes that break his promise to sort this out.

These loopholes mean Boris Johnson’s ‘80 per cent of market rent’ definition will still be the norm in most new developments, leaving Londoners out in the cold.

In recent years, under Government policies and those of the previous Mayor, the ‘affordable’ component of many developments has been entirely made up of shared ownership and ‘affordable’ intermediate rented units.

The rents in these homes are able to go up to “no more than 80 per cent of the local market rent,” as defined by the Government in the National Planning Policy Framework (NPPF).

We have uniquely high private market rents in London. Rents here are nearly twice as high as the median for other regions of England (see the chart below, taken from evidence in the draft strategy).

The impact of this runs right through the housing crisis, preventing Londoners saving for deposits and pushing many people into homelessness.

With rent inflation also outstripping wages, the the case for defining affordability in terms of incomes not market rates is overwhelming.

‘No more than 80 per cent of the local market rent’

This year, I have spoken in committees and the Assembly with the Mayor and Deputy Mayor James Murray about strengthening the definition of ‘affordable’ in London.

I have asked them to make the case to Government more strongly that London should be able to set a definition of affordable that is below this maximum and, ideally, defined in terms of wages not market rates.

The Mayor says strongly in his draft strategy that he doesn’t believe the Government’s definition is right for London. He has also defined, as part of his funding programme, a new London Affordable Rent at social rent levels (though these would be higher than the current average paid by social tenants in London) and a new London Living Rent, set at a third of average local household incomes.

However, this strategy and the London Plan will apply not only to homes funded by the Mayor but also to the private developments that are expected to meet most of London’s affordable housing needs, through the contributions they make to gain planning permission.

I am therefore very concerned to see that section 4.22 of the draft Housing Strategy includes the comment: “All intermediate rented homes should provide at least a 20 per cent discount on market rents.” and to see the 80 per cent of market rates definition appear in the glossary. This is the old definition plainly stated when it was supposed to be abolished by the new Mayor.

The actual policy sections for affordable housing then say the Mayor will be: “supporting a range of other types of intermediate rented homes as long as they are genuinely affordable to Londoners, generally meaning that they should be accessible by those whose household incomes fall under £60,000.”

With the Government’s 80 per cent definition also included in policies in the draft London Plan, I think we’re looking at a broken promise from the Mayor – maintaining a loophole that developers will exploit, and failing properly to move away from the old definition of ‘affordable’.

Redefining ‘affordable’ for London

There are two ways London could seek to set a more realistic upper limit of ‘affordable’ rent that would apply across the board:

1. In the Mayor’s discussions with Government for devolved housing powers, he should seek to allow London to set its own definition of affordable within both our funding programmes and planning policies, based on the very high cost of market rent in London. This would be the most effective way to achieve our goal as any new definition should be set in relation to wages, rather than market rates, and this requires a clear deviation from the NPPF.

2. Through the London Plan, we should define intermediate ‘affordable’ rent at a lower maximum proportion of the local market rate. This would still be compliant with the NPPF, as it would not be above 80 per cent, but there is enough evidence to convince an examiner of the validity of a policy that required a lower limit in London.

Councils are already messing with the definition of Living Rent too

I’m a borough councillor in Camden and there the council has set up its own housing company to rent out some of the new flats it is building on estates. These were promised at a Living Rent but, now the first flats have gone out for renting, it’s clear that these aren’t following the Mayor’s definition of a London Living Rent, especially not for families.

Read more about this on my local website: Camden Council pushes out families with high rents in its new ‘Living Rent’ scheme.

I’ve asked the Mayor in a written question this month what he thinks about councils undermining the term Living Rent in this way. He’s been very vocal about the previous Mayor’s definition of ‘affordable’ being nothing of the kind, and I think he should be standing up against people creating confusion about his new definition so soon after it was established.

NHS market rent demand threatens the future of Brent Advocacy Concern

I asked to speak at the Brent Health and Wellbeing Board  yesterday on behalf of Brent Advocacy Concern who were at another meeting, as were Cllr Butt, Leader of the Council and Cllr McLennan, Deputy Leader.

Chair Cllr Hirani, who has the discretion to allow speakers, refused my request on the ground that I had not given 24 hours notice.

My request was in response to a request from Brent Advocacy Concern, a 25 year old charity in Brent, who work with people with disabilities.

NHS England, through NHS Estates, are now charging 'market' rents on spaces in their property and this is impacting on many charities and voluntary organisations who work on health issues.  As the STP proposals involve working in 'Hubs' bringing together different services, including voluntary organisations, this is clearly an issue.

You cannot have a policy of working with voluntary organisations and then pricing them out.  This impacts on the whole strategy of prevention and out of hospital care.

Brent Advocacy Concern received a letter from NHS England on January 11th, which had been sent to all Clinical Commissioning Groups, including Brent, about the move towards market rents.

John Healy of BAC wrote to me:

In order to stay in our office we know that we will have to pay 'rent' on the space. We will also be required to pay for 'capital costs'. Then comes the 'services charges'. Followed by the 10% Management fee. And finally  another 5% Management fee towards the overall lease. There may be other charges such as VAT but as a charity we might be exempt.

I cannot make it myself tonight, as I am booked for a council meeting at the same time.
Anyway, we will have been providing services in Brent continuously for over 25 years (we became a registered charity in Jan. 1991) but we will have to close down as soon as the NHS ASKS FOR THE MONEY.  So far they have not told us anything but I am expecting 'the bad news' anytime soon.

Maybe you or someone could ask a question as to what help might be offered to help small charities to stay within NHS properties such as The Willesden Centre for Health & Care.

That was the question I wanted to ask as it clearly affects more than just Brent Advocacy Concern. The organisation contacted Brent Healthwatch after the publication of an article outlining their situation on this blog LINK but received no response.  I spoke to Healthwatch at the meeting and gave them more details and hope that this results in some action, or at least a recognition of the problem.

John Healy added today (Wednesday):

At the last Community &Wellbeing Scrutiny Committee meeting on the 23rd of November, 2016 it was resolved that:-

(1) "Brent CCG together with NHS Property Services Ltd. develop 'a social value' policy detailing how to maximise use of void space in NHS buildings by the voluntary sector" Agenda item 5, 'NHS Estate in Brent'.

A RESOURCE THEY MIGHT FIND USEFUL CAN BE FOUND AT:-

How to keep it local--- A 5 step guide for councillors & commissioners.  It covers The Social Value Act

and it can be obtained from

Locality.org.uk

South Kilburn residents face barely affordable rents hike - (if our sums are right)

South Kilburn resident Pete Firmin has been giving himself a headache trying to work out what Brent Council's 'affordable rent' policy really means. In this Guest Blog, after studying Council documents, he give it his best shot. We would be happy to hear from anyone who can show the conclusion is wrong (with workings!).

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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:

“Target 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 regeneration

programme 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%.”

BUT

“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.

Some results:

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.