A model for resolving the housing crisis
Jessica McSweeney, Partner in Carter Jonas’s London office considers the new London Plan’s approach to addressing affordable housing provision.
Affordable housing was once an aspiration that was rarely achieved. Those times are now long gone and over the past decade streamlining the delivery of affordable housing as a meaningful percentage of development proposals has become the responsibility of the planning process and an essential element of development appraisals when new sites are acquired.
The London Plan is responsible for pushing the requirement for affordable housing across the capital. Whilst the ‘strategic target’ has been set at 50% since the first London Plan was published back in 2004, the introduction of the GLA’s threshold approach to viability has sought to increase the delivery of affordable housing and has in turn mobilised local authorities to also require the delivery of policy-compliant affordable housing schemes on those smaller sites which are not GLA referrable.
Affordable housing was one of the big themes in the new London Plan published in March. The strategic target has remained at 50% of all new housing, with a 35% ‘threshold approach’ meaning that schemes which provide 35% affordable housing on private land (or 50% on public sector land) with a policy compliant tenure split are not required to undergo viability testing and qualify for the GLA’s ‘Fast Track’ route. But the detail and criteria for affordable housing products have been made more overt and this now includes a number of alternative forms of accommodation which were previously exempt from affordable housing requirements.
The London Plan is responsible for pushing the requirement for affordable housing across the capital.
About our professionals
Jessica McSweeney
Partner
Jess McSweeney is a Partner in Carter Jonas’ Planning and Development Team, based in our London office. Jess specialises in advising on brownfield regeneration schemes across London with a particular interest in affordable housing and the ‘Alternative Residential’ sector.
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The GLA’s priorities for affordable housing:
Included are Build to Rent (B2R), Purpose Built Student Accommodation (PBSA) and co-living. B2R was the first alternative product recognised by the GLA as a serious contender in the London market, with the potential to distract from the delivery of affordable accommodation. Consequently, the requirement for B2R to deliver affordable housing in the form of Discount Market Rent (DMR) was introduced in the GLA’s affordable housing Supplementary Planning Guidance in 2017 and the new London Plan now requires B2R schemes of over 50 units to deliver DMR in line with market housing requirements. PBSA and large-scale co-living schemes are required to provide 35% affordable housing (50% on public sector land).
As the figures show, the average level of provision across London is significantly lower than 35%. This is partially because the figures include small schemes of under 10 units and also prior approvals, neither of which are required to provide affordable housing. But looking at figures where affordable housing policies apply, still only 27% has been reached.
The London Plan states that the need for affordable housing in London is 43,500 units per year. However, the affordable housing target remains little more than an aspiration: not since 2014/2015 has the capital managed to deliver so much as a quarter of its target.
Will the new London Plan’s requirements for affordable housing in the case of PBSA and co-living, combined with the existing requirement for DMR on B2R schemes, provide a necessary increase in affordable housing? Perhaps, but the Stag Brewery scheme also points to a lack of flexibility in the application of the new London Plan. Balancing benefits in the planning process is subjective and if percentages are at the forefront of the agenda rather than delivery, the Plan has the potential to further exacerbate the housing crisis.
or a threat destined to perpetuate it?
Target: 43,500
2020/2021: 9,051
2019/2020: 7,775
London Affordable Rent (significantly less than 80% of market rents)
London Living Rent (lower rents which vary depending on ward data to help Londoners on ‘average’ incomes save for a deposit)
London Shared Ownership (purchasing a share of a home and paying a low rent on the unsold share of the property).
The London Plan states that the need for affordable housing in London is 43,500 units per year. However, the affordable housing target remains little more than an aspiration: not since 2014/2015 has the capital managed to deliver so much as a quarter of its target.
An unachievable target?
The question remains, why is the gap between the target and delivery so hard to close? The Stag Brewery scheme in Mortlake is a good example. This application sought to deliver 356 affordable homes and received a resolution to grant from the London Borough of Richmond upon Thames’s planning committee, but the resolution was overturned by the Mayor for London on the basis that only 30% of the scheme was affordable. Whilst the affordable offer had been increased during the course of the application (from 17.5%), this was not considered to outweigh the adverse impacts of the development.
Market sale or rent: 78%
Homes approved in London 2018/19:
Affordable rent: 6%
Intermediate sale or rent: 12%
Social rent: 4%
Islington: 35%
London boroughs approving the most affordable units in 2018/19:
Southwark: 32%
Hammersmith and Fulham: 32%
Barking and Dagenham: 33%
Westminster: 31%
The question remains, why is the gap between the target and delivery so hard to close? The Stag Brewery scheme in Mortlake is a good example. This application sought to deliver 356 affordable homes and received a resolution to grant from the London Borough of Richmond upon Thames’s planning committee, but the resolution was overturned by the Mayor for London on the basis that only 30% of the scheme was affordable. Whilst the affordable offer had been increased during the course of the application (from 17.5%), this was not considered to outweigh the adverse impacts of the development.
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