Memorandum from G.15 (LH 03)
INTRODUCTION
G.15 is a group of London housing associations
and comprises:
| A2 Dominion Group | Metropolitan Housing Trust
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| Affinity Sutton | Notting Hill Housing
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| AmicusHorizon Group | Network Housing Group
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| Catalyst Housing Group | Peabody
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| Circle Anglia | Southern Housing Group
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| East Thames Group | The Hyde Group
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| Family Mosaic | The L&Q Group
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| Genesis Group | |
G.15 makes a significant contribution to London life. Collectively,
G.15 associations house around one in 10 Londoners and manage
around 410,000 homes. We build over 10,000 new homes every year
and have a strong track record of working in partnership with
the public and private sectors.
We invest over £25 million annually in economic and
community development to create thriving, sustainable neighbourhoods
across the capital—in areas such as employment, skills,
education, health and well-being, volunteering, financial inclusion,
family intervention, welfare benefits support, supporting older
and vulnerable people and engaging younger people.
1. Government policy on the supply of affordable homes
in London, and how that policy is shaping delivery in the public
and private sectors over the coming housing cycles
1.1 We have welcomed the Government's commitment to and
funding of affordable homes over its term, in particular:
— Flexibility and speed of response during the economic
downturn.
— Additional funding to support economic recovery, create
new jobs and apprenticeships and "kickstart" developments
which stalled during the downturn. We have been impressed by the
start made by the London HCA; they have got things moving; been
flexible; and displayed a willingness to work with Registered
Social Landlords ("RSLs") and government to explore
new models of funding and delivery.
We are, however, concerned about future public spending cuts
and the impact this will have on the housing sector and the individuals
and families desperately in need of a home. It is important, even
in these challenging times, to continue to increase the supply
of new affordable homes to avoid the shortage of appropriate housing
which contributes to tensions within our communities.
— A focus on the quality of existing stock through the
Decent Homes programme. This has undoubtedly improved the quality
of housing for a large number of Londoners. We would point out
that, whilst local authorities were able to access public funding,
this was not the case for RSLs. RSLs were not able to increase
rents to pay for this work and have financed it themselves. This
is a significant achievement across the sector.
— Setting targets for the delivery of new homes—they
might slip and, ultimately not be achieved, but they are still
important.
1.2 The economic downturn exposed the frailties of the
model for the delivery of affordable housing. Its reliance upon
cross-subsidy and Section 106 arrangements, has not withstood
economic pressures and it is important that both government and
the sector learn lessons and takes the opportunity to re-evaluate.
1.3 We are not building sufficient numbers of affordable
homes. Demand exceeds supply and we believe we are storing up
problems for future generations.
1.4 We believe that housing is key to achieving the government's
policy outcomes in other areas, eg education, health, employment.
A good home, somewhere that is safe, warm, clean, light, well-maintained
and evokes personal pride, provides a solid foundation for individuals
to build on. Housing needs to move higher up the national and
regional political agenda.
2. Progress towards meeting Government targets
2.1 The impact of the economic downturn has jeopardised
the government's targets of 2 million homes by 2016 and 3 million
homes by 2020. New build programmes slowed; funds have become
more expensive; there has been a lack of capital liquidity to
fund new schemes and acute lack of mortgage finance for those
buying new homes; sales have fallen; and the social housing model,
reliant upon cross-subsidy and s106 arrangements, has not withstood
these pressures.
2.2 G.15's focus is London. Affordable housing targets
in London are set by the Mayor, with approval by the Secretary
of State. The Mayor has committed to delivering 50,000 affordable
homes (30,000 social rented; 20,000 intermediate), now by 2012.
We commend and support this ambition. We do, however, have a concern
that this is at the lower end of the National Housing Planning
Advice Unit's estimates of required supply and is not sufficient
to meet the capital's needs. Waiting lists for social housing
continue to grow and there is a desperate need for more homes.
We are concerned that progress is not quick enough.
2.3 We have welcomed the Mayor's commitment to build
more family homes (42% of new social rented having three bedrooms
or more) and to provide more homes meeting the access, space and
adaptability needs of disabled and older people.
2.4 G.15 maintains that there needs to be consideration
of future challenges:
— Future funding—as referred to in 1.1 above,
we are very concerned about future cuts in public spending. Affordable
housing requires grant, loans and rents to pay for loans. We need
to consider how to balance the equation between grant, equity
and personal subsidy and advocate a new model, as outlined in
3.7 below.
— Environmental challenges—the scale of the challenge
to retro-fit existing properties is not to be under-estimated.
Conservative estimates to bring existing homes into line with
the Code for Sustainable Homes through refurbishment, sit somewhere
between £25-30,000 per property. This does not include any
additional costs such as the need to temporarily rehouse tenants
to carry out more invasive works. Solutions will require powerful
partnership working between central and local government, RSLs
and energy suppliers. We welcome the Department of Energy and
Climate Change's Household Energy Management Strategy and proposal
to introduce a new Warm Homes Standard. We await more detail on
how this will be delivered.
— Balancing investment in new homes, existing stock
(maintaining and going beyond Decent Homes) and investment in
our neighbourhoods.
3. Progress on delivery of affordable housing across the
whole of London
3.1 London has contributed 26% of all new affordable
homes over last 10 years (and 23% in 2008-09). RSLs have continued
to deliver during downturn. G.15 organisations made starts on
just over 7,000 homes in both 2008-09 and 2009-10. We have, over
a number of years, delivered large-scale building programmes and
built up an in-depth knowledge of local areas. In a difficult
economic climate, housing associations have been the only delivery
mechanism of affordable housing. We have the resources, access
to finance and skills to continue to do this and to move quickly.
3.2 London has unique characteristics. There are different
markets in different parts of the city. All have different issues
and have been affected by the economic downturn in different ways
and are recovering at different paces.
3.3 The housing market in London is polarised. There
is a wide gap between high and low earners and also those too
well-off for social housing and too poor to buy or rent on the
open market. This makes it particularly important to have a range
of housing options—particularly to cater for those delivering
essential services, key to the capital retaining its status as
a world-class city.
Example: A two bedroom flat in Covent Garden in a
Victorian property: the tenant was paying £75 a week, including
services. Sadly, the tenant died. The new rent that we are allowed
to charge is around £120 a week, including services. The
market rent for that property would be around £500 a week.
3.4 Demand still exceeds supply. Social housing waiting
lists grown in 22 London Boroughs and now cover almost 1 in 9
London families. At the same time, lettings to social housing
have fallen, as turnover has slowed and mobility has not increased.
3.5 The Mayor has changed the mechanism for delivering
affordable homes. It is based around individually negotiated borough
targets, rather than a percentage on each development. We understand
that the Mayor has now agreed targets with each of the London
Boroughs to deliver 40,000 homes by 2011. There is some concern
that this approach may jeopardise delivery of the overall total
and result in affordable homes in geographical areas where there
is already a high concentration.
3.6 The role of local authorities into the future is
very interesting. We believe there are opportunities to make better
use of public land and local authorities have a key part to play
in bringing land forward. There is some concern about the Mayor's
proposed model of "delegated delivery" and the extent
to which boroughs are geared up for and have the necessary resources
and expertise to deliver significant volumes of new homes in a
relatively short time frame. We have some concern that plans announced
recently in the Mayor's housing strategy for London have pre-empted
the results of the pilot in the Boroughs of Westminster, Hackney
and Croydon. This might require new and more innovative partnerships,
structures and ventures between local authorities and housing
associations.
3.7 We question whether the existing housing model will
deliver into the future. We suggest a different model is required,
based around:
— A richer menu of options—more choice at different
rents and shared ownership proportions (at a level people can
afford). This would bring more money into the system and allow
public investment to go further, as well as promoting balanced
communities. The combination of a greater tenure mix and sub-market
rent mix would also increase social mobility and enable people
to move more easily without losing their community ties.
— A secure escalator into intermediate rent or ownership
options (with support) and back if circumstances change.
— Support for and "mainstreaming" of shared
ownership products. We have been disappointed at the lack of lender
support for shared ownership and the apparent misapprehension
about the relatively low levels of risk.
— Recalibration of the delicate balance between grant,
equity and personal subsidy—towards a fairer system.
— More flexibility in lettings policies—not only
to facilitate greater geographical and social mobility, but also
to maintain core stability in communities.
— A stronger private rented sector, which meets the
needs of a greater number of individuals and families and supports
RSLs in creating thriving and sustainable neighbourhoods.
4. Identification of causes of housing need in London
4.1 Housing in London is under severe pressure and there
are many causes of need, in particular:
4.2 Overcrowding—the rate of overcrowding
in London is more than 2.5 times the national rate and 32,000
households are severely overcrowded. In one central London borough,
Tower Hamlets, around 13% of total households, are overcrowded.
This impacts on life chances—overcrowding has a major impact
on families and children, causing health problems, high levels
of stress and anxiety, family breakdown and educational underachievement.
It has arisen as a result of sustained under-delivery of larger
homes, a transient population in certain areas, limited supply
and a mismatch between housing stock and demand.
4.3 We welcome the Mayor's commitment to halve severe
overcrowding in London by 2016, but question how this might be
achieved in practice without tight control of delivery targets
and more flexible mechanisms for mobility.
4.4 It is important to note that overcrowding is matched
by a larger number of under-occupied homes. We need strong policies
in this area and many housing associations are doing important
and innovative work in this area, including:
— Adaptations and better use of existing stock to provide
more space (space-saving furniture, balconies)—this can
be a challenge for particular types of stock
— Offers and incentives to under-occupiers (including
more attractive options and schemes for older people)
— "New generation" lettings schemes for adult
children of existing tenants looking to move to independent accommodation
and therefore relieve overcrowding in family homes
— Personalised support and advice for over-crowded families
— Use of community spaces (including clubs for children
to do homework)
— Schemes to link housing and employment, giving tenants
further opportunities to enhance their life chances
— Working more closely with Local Authorities to share
information and make the best use of stock
— Attractive options and schemes for older people, freeing
up under-occupied properties.
A stronger private rented sector and links with trusted private
landlords could help in this area, enabling us to give more opportunity
and confidence to those wishing to move out of social housing.
4.5 Homelessness—London has highest proportion
of homeless households across the country, but this declining
due to successful interventions and programmes, many by our organisations.
G15 has a "Homelessness Offer" which sets out our approach:
— We house homeless households through nominations and
lettings to permanent homes; lettings to temporary homes; making
best use of stock to provide more homes; and initiatives to meet
the needs of vulnerable households.
— We prevent homelessness and tenancy sustainment through
housing advice; family mediation; domestic violence support; and
supporting ex-offenders.
— We work closely with our local authority partners
and other stakeholders through local authority relationship managers.
4.6 London is a growing city and demographic changes
are likely to create and re-shape housing need—in particular,
the number of older people is forecast to grow (over 75s by a
third), as is the number of single person households. This needs
to be balanced against the requirements of London's families.
4.7 Pressures in this area take us back to the requirement
for a new model, characterised by a range of viable and attractive
housing options.
5. Government policy on addressing the housing needs of
families in London
5.1 London needs more family housing. The supply of one
and two bedroom flats has increased at the expense of family housing
(which accounted for just 13% of new homes in 2008-09—less
than half the level of 10 years ago). 39% of social housing requirement
is for homes with four bedrooms or more.
5.2 Lettings policies are not always sufficiently flexible
to allow family members to remain in existing neighbourhoods to
support each other—or to address overcrowding.
5.3 It is important that policies in different areas
support each other and do not, for instance, create disincentives
to work, which might jeopardise the longer-term economic and social
welfare of families.
5.4 As described above, a greater mix of tenures could
encourage more diverse communities and remove some of the barriers
to social mobility.
6. The effect of the credit crunch on the supply of housing
a) in the private sector and b) through section 106 agreements
6.1 The severe downturn in private housebuilding has
in turn had a major impact on the provision of affordable homes
due to the loss of cross-subsidy. During the credit crunch, we
saw private sector sites mothballed; and as land and sales values
fell, developers increasingly found section 106 agreements, impractical
and in need of renegotiation.
6.2 Housing associations performed well and were building
new homes throughout the downturn. This was backed up by a recent
TSA report, which confirmed that housing associations' trading
performance has come through the economic downturn "relatively
unscathed" and praises associations on their swift response
7. Wider Role of Housing Associations
7.1 We would like to highlight the wider role of housing
associations across London.
7.2 The sector invests in hundreds of programmes outside
housing—areas such as employment, skills, education, health
and well-being, volunteering, financial inclusion, family intervention
work, supporting older and vulnerable people and engaging younger
people. This is funded through a variety of sources including
central and local government, Big Lottery and associations' own
funds.
7.3 We provide opportunities and life chances for our
tenants and people in our communities. We are ideally placed to
deliver these services, as we know our customers and have access
to "harder-to-reach" groups.
7.4 Our offer to tenants during the downturn included
employment and training (although job placement is much tougher);
welfare benefits support; debt advice; energy efficiency advice
to avoid fuel poverty; and flexible tenure policies.
17 March 2010
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