What's in a Word?
What's in a Word?
There have been a lot of figures thrown around last week from the Government emphasising how much they are helping the housing market by building affordable homes. The promise of 400,000 new affordable homes by the end of the decade is really exciting. There was news in Inside Housing this week of 66,640 affordable homes being built this year, the highest since 2010. Again, this is really positive news.
Or is it?
Scratch the surface of these figures and a different picture emerges. Of the 400,000 homes to be built, 335,000 will be starter homes or shared ownership. More will be for market rent, leaving a slice for social rent but not a big one. Of the 66,640 homes built this year, just 9,590 were for social rent. If a London starter home is going to be priced between £250,000 and £450,000 how can they be affordable for low incomes when a median family income is quoted by the GLA as being about £40,000?
The trouble here is the increasing realisation that the use of the word affordable is losing credibility. If a house costs ten times a family’s income, it’s not affordable. The offer of Help to Buy sounds great when read out in Parliament, but how does a prospective first time buyer feel about owing 95% of the value of their home? If the London housing market is coming to the end of a dangerous bubble period, now is the wrong time to be entering into that kind of financial agreement.
So if the option to buy is too expensive for some, the option is there for them to rent. The private rental market in London is the option for most of the younger workforce, usually in flat shares. Rental rates though in nicer traditional rental areas such as Clapham are pushing up close to £1,000 a month for a decent room. Once that is no longer affordable there is the option of moving further out of course, but then you are commuting to work and paying higher rail fares.
The option of applying for social rent was the traditional one for lower income London workers. However, with the pressures on buying and private renting, can there be sufficient rental property to match demand if just 15% of homes built under the affordable banner are for social rent? The danger is that the reality of how bleak the situation is becomes masked for the purpose of creating sound-bites and winning political capital. It delays the start of a meaningful discussion about how we solve the shortage of places for being to live in London that cost a sensible, reasonable amount of money. Perhaps we can start highlighting that by accepting the definition of affordable is no longer the same.
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