LONDON MAYOR Sadiq Khan is comparing his record of building new homes in the capital by the record of his predecessor(s) – rather than by housing need across London.
Khan has just released new figures showing that council house building is at a 34 year high and that the number of starts made on building “affordable” homes is also record-breaking. Given the utterly abysmal record of all governments since Thatcher took office in 1979, it is not hard to break longstanding records. Since David Cameron first coined the phrase “affordable rents” it has been clear to many tenants that “affordable rents” are difficult to pay.
Khan says that building started on 14,544 “affordable” homes in the financial year 2018/19 – double the number begun in Boris Johnson’s last year in office as London Mayor. However, Khan goes on to admit that only 3,991 of these were homes intended for renting out at social rent levels and only 1,916 were council homes – implying that tenants in most of the “affordable” homes will be living at the mercy of ramshackle housing associations.
Curiously, Khan says that he is “investing £1 billion in building 14,700 new council homes” (only 11,000 of which will be at social rent) over the next three years. This is roughly £68,000 per dwelling – though it’s not clear whether this is just the cost of building the properties or whether the figure includes the cost of acquiring land too.
As with all “investments”, the money is not so much a gift as a loan. Even the lowest rent on, say, a three bedroomed property (£600) will yield enough returns to pay back those costs after ten years. If only half the rent goes to paying back the costs (with the other half being spent on providing a housing management service), the capital outlay should be recouped in 20 years. After that, the properties should still be habitable and bringing in a profit on top of their management costs.
Estimates of homelessness in London fluctuate, but a conservative estimate would be 150,000. Added to the homeless must be the numbers of people inadequately housed – which could easily double the number in housing need. At a rate of 14,544 affordable homes started per year, there should be enough homes for those currently in housing need in roughly 200 years time. We’ll probably sort out Brexit faster than London’s homelessness crisis on that basis.
Khan should be given credit for building more homes that Boris did – and he does recognise that he needs to do more. He says he is urging the Government to give him greater powers and resources so that he can expand this home-building programme – but is this enough?
A spokesperson for Tower Hamlets Federation of Tenant and Residents Associations said, “it’s good news that Sadiq Khan is building social housing. But now he needs to step up and campaign publicly for a building programme that can meet need. For years public money has been subsidising ludicrously high rents charged by private landlords. It’s time that money was diverted away from private greed and invested in meeting public need.”
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