Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Written Evidence

Memorandum by the London Borough of Camden (AH 93)


  The inquiry into affordability and the supply of housing is an important one and the LGIU encourages affiliates to respond. It is unfortunate that such a short time has been given for responders to put their evidence together, given the issues involved and the scope of the inquiry.

  The terms of reference clearly respond to the key issues in the Barker Review of housing supply and several recent policy statements from the government, such as Planning for Housing Provision. The LGIU will be submitting a response which will focus particularly on testing the assumptions in the Barker Review and set out in government policies, such as the relationship between supply and house prices; whether the government is over-estimating or under-estimating housing supply needs; and what is the correct balance between rented and owner occupied housing and whether current policies will actually deliver housing that people can afford. Camden comments will therefore contribute to this response by providing some local information on a central London situation.


  Two information sources (the Camden Housing Needs Survey 2004 and the Steve Wilcox study Affordability and the Intermediate Housing Market 2005) include data which is relevant to two of the ten issues which will be addressed by the inquiry—benefits of promotion of home ownership and impact on inequality—but not the supply issues (relation between house prices and supply, scale of housing development required to influence house prices, etc) which will be the main focus of the inquiry

2.1  Camden Housing Needs Survey, Fordham Research October 2004

Chapter nine examines the potential for intermediate housing to meet housing need in Camden.

  The main conclusion is that, while there is potential for intermediate housing products to contribute to meeting housing need in the borough, 71% of households in housing need in Camden are only able to afford social rented housing (Table 9.6, pg 83).

  Among existing social renting tenants, the percentage able to afford market or intermediate housing is smaller than for those in other tenure groups.

  A comparison of household income and current estate agent prices shows that:

  98.4% of LBC tenants are unable to afford market housing

  94.3% of RSL tenants are unable to afford market housing

  68.9% of private tenants are unable to afford market housing

  Among households from all tenures who can afford intermediate housing, 31% can only afford to pay a quarter of the difference between social renting and market prices.

  It is likely that the majority of existing social renting tenants who can afford intermediate housing, can in fact only afford to pay a quarter of the difference between social renting and market renting

  Average gross annual income for LBC tenants: £11,611 (Median £7,295)

  Average gross annual income for RSL tenants: £13,255 (Median £7,467)

  Among households needing two or more bedrooms, the percentages in Camden able to afford market housing are considerably lower than among those needing one bedroom properties:

2.2  Affordability and the Intermediate Housing Market: Steve Wilcox for Joseph Rowntree Foundation, October 2005

  This is a national survey of younger working households (20-39 years) in 40 local authority areas in Britain. Key conclusions are that

  Funding for low cost home ownership should be targeted at schemes that assist households that would not be able to access home ownership at the very bottom of the housing market.

  Detailed tables showing size of intermediate housing markets in local authority areas, based on (a) households who can meet a social rent without recourse to housing benefit but who cannot afford to buy at the lowest decile house prices for two and three bedroom dwellings and (b) households who can meet a social rent without recourse to housing benefit, can afford to buy at the lowest decile but cannot afford to buy at the lowest quartile.

  In London 35% of younger working households fall into category (a) and 12.5% fall into group (b). As Camden is a high cost area of London, local percentages are likley to be lower.

  Many IHM schemes in high cost areas will not be affordable for the significant percentage of households in the capital who can afford intermediate housing but are only able to buy in the lowest quartile of houseprices.

  Intermediate housing schemes in high cost areas may still have a part to play in terms, by providing more choice to households who are able to buy anyway, but it is less clear that they are making a significant contribution to meeting housing need as such.

2.3  Camden's Cash Incentive Scheme

  Over the past two and a half years, the Council has received 218 applications for its Cash Incentive Scheme, which offers Camden Council tenants payments towards a home they are purchasing, as the Council can then relet their vacated home. These applications have resulted in 33 grants being made and a corresponding number of properties vacated and made available for reletting. Because the resources available for the scheme have been strictly limited, these figures will certainly understate the demand for the scheme within Camden's housing stock.

  Analysis of the successful applicants shows that the average purchase price was £141,250 and the average grant made was £36,500. This shows that the average applicant can afford to pay £104,750 to move into home ownership. It is interesting to note that not one of the 33 properties purchased was in Camden and only one property has a London postcode.

  These figures compare interestingly with the Right To Buy figures over the same period. Since April 2003, the Council has received 1,347 RTB applications and made 1,035 sales. The average price paid for these properties was £127,500 and the average discount given was £35,900 (giving an average property value of £163,400).

2.4  Housing Corporation funded House Purchase Grant (Homebuy)

  The Homebuy scheme is where the applicant finds a property of their own choice and make arrangements to purchase 75% of value, either by mortgage or part mortgage/part savings. Origin (SPH/Griffin Homes), Camden's Zone agent with regards Homebuy will facilitate the remaining 25% in the form of a loan.

Applicant to be:

    —  Council or RSL tenant.

    —  On Camden Council's priority needs housing list with at least 60 points.

    —  Have at least £3,500 in savings to cover legal fees, stamp duty, valuation fee and other costs.

    —  No rents arrears for at least 6 months prior to application.

Priority given in following order:

1.  Vacating a family sized home in the social rented sector.

2.  Applicants under occupying a social rent unit.

3.  Couples and single applicants renting an RSL property.

4.  Those on waiting list with at least 60 points.

  A couple or a single person (with no dependents) can purchase up to a two bed property with a maximum value of £160,000. Couples with dependents can purchase up to a three bed property with a maximum value of £200,000 although this was increased in 2004-05 to £240,000 in certain cases.

  For 2004-05 the average purchase price of homes bought under the Homebuy scheme for Camden was £174,399, which meant an average loan of £43,599.75.

  Average income was £31,487 and average savings £6,319. Seven applicants bought in London and six outside London.

2.5  Shared ownership sale of Isokon flats to key workers

  The 25 shared ownership studio flats were sold to key workers, with an average salary of £24, 916. The average full price of the flats was £161,154, and the average equity percentage was 46.15%, which meant an average equity purchase price of £74,048. The flats were sold to nine teachers, eight NHS staff, three Social Workers, and six other key workers.


  3.1  The planning system in highly urbanized boroughs like Camden responds to the demand for housing by ensuring that development plan policies prioritise the provision of housing and where appropriate, allocates sites for housing or for mixed use, including housing.

  3.2  In order to maximize the delivery of housing from development sites, including windfall sites, Camden's adopted and draft replacement UDP policies:

    —  Permit in most circumstances the replacement of office space with housing.

    —  Seek the inclusion of housing as part of a mixed use development in most developments in central London and other town centres.

    —  Encourage the intensification of most redevelopment sites, whilst minimising the impact on the environment.

  3.3  The rate at which sites come forward for development and the amount of additional residential that can be negotiated on any specific site depends on a range of factors, many of which are outside the control of the planning system.

  3.4  The mix of uses in developments coming forward depends on what land uses are most profitable at the time (whether residential, office, hotel etc). This affects the amount of housing coming forward and is a reflection of market changes which are outside of the control of local authorities.

  3.5  Allocating sites in site schedules, preparing planning briefs/area frameworks for sites, as well as meetings with land owners/developers do not ensure that sites are developed. Councils can encourage development but cannot force landowners to develop their land. CPOs may be appropriate for some sites, but this is likely to be resource intensive and time consuming. On sites owned by major institutions, such as the NHS, the Post Office and other public bodies, the use of CPO powers could compromise partnership working.

  3.6  Alternative land use options in central London mean that whilst the Council would wish to see more housing developed on sites, the economics of provision, taking into account alternative use values, the costs of infrastructure provision and resultant affordable housing requirements, mean that many sites will not be viable without housing subsidy or will simply remain undeveloped or developed primarily with non-housing uses as the most profitable option. The regional, national and international importance of uses (eg hospitals, universities, business HQ's, museums, train stations, etc) and the interests/priorities of occupiers and landowners in central London also have a fundamental affect on the ability to identify "developable" land for housing.

  3.7  The constraints on the funding of infrastructure to support the occupants of additional housing, such as schools, health facilities, recreational facilities can also affect the provision of housing. The "Homes for All" document indicates that much of this funding will be provided through planning obligations. The level of funding needed to provide essential infrastructure is beyond the levels of contribution that might realistically be required through individual new developments in accordance with Circular 05/2005. This needs to be recognised or this requirement will result in further constraints to the provision of additional housing, particularly affordable housing. The direct provision of all these facilities will only ever be a reality in the largest of schemes. Even with opportunities for pooling funds from cumulative smaller developments the quantum of new housing needed to fund a new school, for example, may mean that the essential infrastructure provision may lag years behind the actual supply of housing and increasing populations. This will only exacerbate the lack of local capacity until sufficient funds are accumulated to meet those needs if that position is reached at all.

  3.8  "Homes For All" identifies additional infrastructure funding for Growth Areas, but not for other areas with high levels of housing growth. In high density urban areas it is very difficult and expensive to find sites for the additional infrastructure, such as schools, health facilities and open spaces, required to support the population increase. Scarce land that needs to be identified and allocated to meet these other requirements may also be underutilised/sit dormant for years if funding is not available.


  The Housing Needs survey clearly demonstrates the need for more affordable housing in Camden, and Camden's own data demonstrates this.

  The London Plan's targets for boosting supply are too low to compensate for 25 years of RTB sales. Camden's housing list has been growing year-on-year since at least the mid-1990s and now stands at 16,000. At the same time the number of permanent lets to homeless households has been in steady decline:

  Camden now has over 2,100 homeless households in temporary accommodation:

  The 2004 Housing Needs Survey estimates that for the next five years there is an overall annual shortfall of 5,178 affordable homes in Camden. The shortfall of affordable housing is for all sizes of accommodation, although the main shortfall is for one-bedroom accommodation (2,595 per year). The shortfall relative to supply is greatest for four-bedroom or larger accommodation; 98.8% of households needing four bedrooms would not be able to secure suitable housing in any one year.

Overcrowding by bedroom requirement

Bed size desired

Current beds
1 2345 678 9+Total
054046 10000 000 596
10361 121801 000 491
200 67218430 6120 895
300 0215140 381710 411
400 003525 1013 74
500 0003 400 7
Total:540407 803407205 73324 32,474

Figures show number of applicants desiring larger accommodation by bed size. Figures correct as at 19 September 2005.

  The lack of move-on into larger, family sized accommodation is the main cause in Camden of overcrowding.

  In 2004 the ODPM estimated that Camden has 5000 overcrowded households. ONS estimate that 42.3% of Camden's dependent children are overcrowded. ODPM (2004) and Shelter (2005) research has demonstrated the damaging consequences of overcrowding on health and children's education.

  The London Plan annual target for Camden of 850 new affordable homes is higher than can be met from the development opportunities that arise in the borough, but is far from enough to simultaneously meet the demand for affordable housing and significantly cut the number of overcrowded households.


  Although Camden has not yet conducted research into the frequency of moves of private sector tenants, we know from our experience of delivering front-line housing advice and homelessness services that private sector tenants lead less settled lives and move more frequently than council or RSL tenants.

  Because of the shortage of subsidized housing, leading to longer waiting times, Camden seeks to use the private sector more rigorously—taking action to bring as many of the estimated 1,900 empty properties back into use and devoting resources to research and development to design new private sector schemes for homeless households.

  But even while we do this we know that we run a risk of moving homeless households into a relatively insecure sector where families may be forced to move jobs, schools and GPs if and when landlords take properties back. This does not help our aspirations to create settled and balanced communities In addition, we are also concerned that by moving a greater proportion of our more independent homeless households into the private sector, our housing estates will become more exclusively populated by an ever increasing proportion of socially excluded and vulnerable tenants—thereby making it even harder to regenerate.


  Whilst ownership initiatives have a valuable role to play, the greatest need in Camden is for more affordable housing for social rent, and government investment into new social rent provision, particularly for large family units. High values locally exclude many from the potential benefits of ownership initiatives. Many people locally who cannot access ownership can only afford to pay a small proportion of the market value. Schemes promoting ownership aimed particularly at lower earners are required, but must take account of the risks that ownership can bring to these groups. We will respond to the subsequent inquiry into shared ownership.

  Figures show number of applicants desiring larger accommodation by bed size. Figures correct as at 19 September 2005.

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