Draft London Plan Examination Affordable Housing: Meeting the Challenge

The session was heavily attended by smaller interest groups representing some of London’s most vulnerable residents who suggested that the Mayor’s draft policies will struggle to deliver the type of affordable housing this group so desperately need, namely social rented tenure. Tenures including shared ownership and discounted market rent will simply not meet the needs or income levels of the many, it was argued.

The deliverability of affordable homes in London has been a long standing challenge, and the GLA recognise that their targets are ambitious. The ‘fast track’ approach set out in draft policy H6 will be heavily relied upon to deliver affordable housing from private development, with the remainder of the 50% target to be topped up by public sector and industrial land. Local Authorities and Registered Providers are expected to deliver schemes with an average of 70% affordable housing, with the GLA stating that that this is how they will meet their 50% target.

And whilst little debate took place over public sector and industrial land, it is clear that stakeholders including the NHS are not happy with the 50% target set out in Policy H6 and that it fails to recognise the overwhelming need for the disposal of such land to fund the provision of new services. With such a high target, there is real concern that the other priorities of the plan cannot be delivered, and the NHS themselves set out that they may well explore more commercially led schemes if the policy is adopted.  The Inspector questioned whether the 50% target would remove any incentive to release land. The GLA response was to set out that the viability route remains, and that the delivery of less than 50% affordable housing is still achievable if it can be sufficiently defended through a viability assessment.

It is clear that since the introduction of the fast track approach that the number of permission granted with the provision of affordable housing has accelerated. As the HBF set out however, this is against the backdrop of falling housing completions and permissions and they set out that the Mayor’s targets will in fact further slow the amount of housing being brought forward in the capital. In the GLA’s mind Policy H6 will in fact add certainty for developers. The fast track route enables applicants to avoid protracted debates on viability, speeds up the grant of permission and has had a very good take up as a result. The aim is that this approach embeds itself in land values, with purchasers allowing for a minimum 35% affordable housing provision from day one and then seeking to use grant to increase delivery beyond this level. The viability tested route will remain for schemes where there are ‘genuine’ circumstances for providing less than the 35% target.

So where does this leave the draft policy? With arguments for and against the current targets, the challenge to meet the demand for affordable housing appears an impossible feat. With the Inspector questioning why the GLA were not planning for the demand set out in the strategic housing market assessment (67% of all new homes to be affordable), the GLA at one point asked what the point of setting such a high target was when they were in no doubt that they would fail to deliver it. The policy as drafted appears to go as far as it can given the limitations on capacity, particularly in central London and the uncertainty over future funding.

A long debate also took place on matters relating to tenure, with a number of speakers objecting to the lack of social rented housing being delivered or being catered for within the draft policies. Criticism was levied at the GLA that they are too focused on the delivery of unit numbers and that their definition of ‘genuinely affordable housing’  (a definition which includes London Affordable Rent, London Living Rent & London Shared Ownership),  fails to cater for the social rented accommodation most needed.  With demand for low cost rent at 47% of all new housing units, there was sustained criticism that the tenure policy does little to cater for those members of society who are in greatest need of genuinely socially rented affordable housing.

In our view there is likely to be little change to the policy as drafted. The GLA are faced with the near impossible task of delivering 66,000 new homes in London against a background of uncertainty over the impact of Brexit on the housing market. The reliance on the 35% fast track approach is clear, but there is much greater uncertainty over how the overall 50% target can be met and whether those units being delivered will meet genuine and current needs.