The requirement for developers to provide affordable housing in London is set to be cut by more than half in a bid to save Labour’s 1.5m new homes target, The i Paper has learned.
Housing Secretary Steve Reed and London mayor Sadiq Khan have held talks over an “emergency reduction” to the Greater London Authority (GLA) target for developers to allocate 35 per cent of new homes as affordable housing.
The move aims to revive flatlining housebuilding levels in London, where just 3,950 new homes were completed in the first half of this year, despite a government target of 88,000 new homes a year.
A memo from government housing officials, shows the target could be slashed to 20 per cent – of which developers will have to pay for 10 per cent, while the other 10 per cent will come from councils. An announcement is expected as early as next week.
A source close to Reed said no decision has been made, but stressed he is particularly concerned about housebuilding in London and that affordable housing would still play “a vital part of our effort to build 1.5m houses”.
However, councils and housing experts have warned that cutting developers’ affordable housing contribution will “be a huge blow for social housing in London” and could have a ripple effect in other areas of the country as developers look to reduce their obligations to build affordable housing.
Janice Morphet, Professor at the Barlettt School of Planning at the University College London (UCL): “This could have long-term implications for the provision of affordable housing in London and could have a ripple effect around the country. That is because this sets a precedent and creates uncertainty about when the requirement would go back to 35 per cent.”
Labour-run Birmingham City Council has already proposed reducing its affordable housing target from 35 per cent to between 20 and 25 per cent. Edinburgh council’s housing convener, Lezley Marion Cameron, sparked controversy last week by suggesting the Scottish capital’s 35 per cent target should be cut.
Alongside changes to affordable housing targets, The i Paper understands ministers have also explored whether to axe Community Infrastructure Levy (CIL) payments to local authorities. These currently support local infrastructure projects such as transport, schools, health services and green spaces.
Affordable homes targets are set by local authorities, who last year were set ambitious housebuilding targets by the Labour government to help reach its target of 1.5m new homes by 2030. If Labour is to meet its target, then around one in four (440,000) would need to be built in the English capital.
“This has become about a number they were never going to be able to deliver,” one housing insider said. “And it’s developers who are laughing.”
Another source added that former Labour Housing Secretary Angela Rayner “pushed back against similar proposals from developers repeatedly.”
It is understood that Ministry of Housing, Communities and Local Government (MHCLG) officials and GLA officials have met with developers, including Barratt and Berkeley Group, in recent weeks to “soft test” alternative affordable housing requirements in London.
A memo from the meeting states that some developers asked for their 35 per cent contribution to be reduced to 5 per cent.
Caption: A requirement to provide affordable homes on new developments could be cut from 35 per cent to 20 per cent in London (Source: Getty Images)Developers have long complained that the 35 per cent target renders schemes unviable. Just last month the Home Builders Federation (HBF), a trade body representing the majority of private sector developers, issued a report calling on 35 per cent affordable housing targets to be cut to 25 per cent.
Steve Turner, executive of the director of the HBF, said developers would welcome the changes being considered, but added “affordable housing levels are not the only reason housing delivery has collapsed.”
He said: “London faces an acute affordability challenge, in particular for first-time buyers, whilst there are huge delays as a result of the Building Safety Regulator.
“Much more needs to be done if we are to reverse the decline in development and get anywhere near the level of supply the Capital needs.”
Under the plans currently being considered by officials, councils could have to fund half of the affordable homes required their by using Right to Buy receipts or Affordable Homes Programme (AHP) money. The latter was specifically earmarked to build new housing as part of Labour’s election pledge to deliver the “the biggest increase in social and affordable housebuilding in a generation”.
London councils are warning they cannot afford to replace developers’ contributions and fear the changes will exacerbate a lack of affordable homes and their reliance on temporary accommodation.
Aydin Dikerdem, cabinet member for housing at Labour-run Wandsworth Council, said: “This would be a huge blow to social housing delivery in London. Every planning permission we already have at 35 per cent will likely be resubmitted at the lower figure with less social and affordable housing; it won’t speed anything up, in fact, it could do the opposite.”
“Land in London is finite; we need to maximise affordable housing on it. Not even (former Tory housing secretary) Michael Gove did this.”
square HOUSING The six areas where 12,000 new homes will be built, confirmed
Read More
Councillor Fleur Donnelly-Jackson, cabinet member for housing at Labour-run Brent Council, said: “Talk of lowering affordable housing targets naturally gives us pause for thought. In Brent, over 800 households approached us as homeless in September alone, so the answer to the housing crisis must be to keep up our ambition for both more affordable housing and a greater pace of delivery.
“We share the Government’s goal of building more homes, but the real obstacles are clear: the sharp increase in the cost of building materials and skilled labour, grant rates that lag behind inflation, and the delays to building safety approvals,” Donnelly-Jackson added.
When Boris Johnson was Prime Minister, the Conservatives considered temporarily lowering affordable housebuilding requirements for developments with under 40 new homes and decided against it.
Housing analyst Neal Hudson warned that cutting affordable housing and CIL contributions alone would not solve the problem of low housebuilding numbers in London or elsewhere.
He said: “What these developers aren’t being transparent about is that what they’re facing in the short term is a crisis of demand.
“It’s not great when affordable housing is the thing that’s being adjusted because it lowers affordable housing delivery in the short term, and it adds a level of uncertainty into the market over the longer term.
Hudson said changes in London could have a knock-on impact in other areas, adding: “This would bake in an expectation that the affordable housing requirement for developers could change.”
The i Paper has been told that some developers are already pausing on planning applications in London while they wait to see if they will soon be able to factor in less affordable housing.
“Developers are emailing and calling us as though this has already happened,” one Labour London councillor who asked to remain anonymous said.
A source close to Reed said any changes which are favourable to developers will come with a clear expectation that they deliver more homes. They added: “We do not comment on leaks. This is advice on which no decision has been made.
“Affordable housing is a vital part of our effort to build 1.5m houses, and one cannot happen without the other. The government has inherited a housing crisis, with London particularly badly affected, and we make no apology for seeking to understand the full range of options available to boost supply.”
Sources close to Khan said any cut to affordable housing ratio would be a temporary measure, but added the existing target may not be realistic in the current economic climate.
A spokesperson for the Mayor of London said: “The disastrous legacy and underfunding from the last Government led to record construction costs, high interest rates, and lengthy delays from the Building Safety Regulator, which created a perfect storm leaving the capital facing the worst conditions for housebuilding in decades.
“Sadiq will always prioritise getting as many affordable homes built as possible – and has shown that by completing more new homes of all tenures in London than any time since the 1930s prior to the pandemic.”
Shadow housing secretary James Cleverly said: “London should be at the heart of tackling the housing crisis. Yet under Sadiq Khan, housebuilding in London has slumped to its lowest level since 2009. The Mayor has totally failed to deliver the housing our capital needs.”
An MHCLG spokesperson said: “The Housing Secretary is urgently working on a ‘building acceleration package’ to move to the next phase of reforms to get Britain building, and will work with the Mayor of London to unlock house building in the capital.”
Hence then, the article about leaked memo reveals labour plan to slash affordable homes target was published today ( ) and is available on inews ( Middle East ) The editorial team at PressBee has edited and verified it, and it may have been modified, fully republished, or quoted. You can read and follow the updates of this news or article from its original source.
Read More Details
Finally We wish PressBee provided you with enough information of ( Leaked memo reveals Labour plan to slash affordable homes target )
Also on site :
- Russia to test all labor migrants for hepatitis
- Skelton: Katie Porter’s meltdown opens the door for this L.A. Democrat
- Xerox set to reduce its workforce after acquiring the company Lexmark