Southwark Council has fought vehemently against the Tory-led introduction of affordable rent, i.e. rents of up to 80% market rent.
Southwark has consistently opposed the provision of affordable rent on the basis that it is not affordable for the majority of the borough’s residents and its planning policy is unambiguous in its requirement for social rather than affordable rent:
Extract from New Southwark Plan Oct 2015
In 2015, Southwark conducted an Affordable Rent Study, which concluded that “as market rents are very high in Southwark, significant incomes are required to afford high proportions of market rent, but average incomes of people living in Southwark are low.” The study showed that a working single person on the average median income for Southwark, cannot afford more than 26% market rent and a lone parent working on average income cannot afford more than 14% market rent. Southwark Affordable Rent Study 2015
The same affordable rent study shows that social rent in Southwark reflects these very low incomes; the study data shows us that a social rent in Southwark for a 1-bed flat is £96.88 on average (incl. service charge), which works out to be 25.5% of market rent (£378.79); a 2-bed social rented flat is £110.76 per week (24.2% market rent); a 3-bed is £124.18 pw (22.5% market rent); a 4-bed is £139.69 (19.3% market rent). These figures are a lot lower than the 40-50% of market rent routinely quoted by Councillors, council officers and developers as social rents or their equivalents. To confuse matters further reference is often made to ‘target rents’, which is an ambiguous term as there are ‘target rents’ for both social rented and affordable rented housing. The standalone term ‘target rent’ has no planning policy definition nor is it a term used in the Rent Standard Guidance.
Southwark’s Affordable Rent Study 2015 showing average weekly market and social rents
The main problem with linking affordable rents to market rents is that rents rise in line with market rent increases not wages. This has the obvious result of pricing out those whose incomes cannot keep up with the manic gentrification programme fuelled by Southwark Council’s policies. The result is that teachers and nurses are being forced out of the borough by 20% year-on-year rent increases.
Despite the Council’s policy commitments to social rent, the vast majority of replacement social rented homes on the Heygate were substituted for affordable rent and in March 2015 we discovered that 44 social rented units that were supposed to have replaced 54 council homes demolished at the Bermondsey Spa regeneration, had in fact been provided as affordable rent of 62% market rent - in breach of the planning approval. We also discovered that the high-profile Neo Bankside development had provided 32 social rented homes fewer than the number agreed by the Council’s planning committee.
We later discovered that developers and housing associations across the borough were routinely breaching planning approvals, either by substituting social for affordable rent or simply not providing the number of affordable homes required by individual planning consents.
By cross-checking planning committee reports, section 106 agreements, Land Registry information, the GLA affordable housing outturn dataset and CORE lettings data, we have compiled a long (but by no means exhaustive) list of breaches identified in affordable housing tenure provision. This causes great concern that the Council is opposed to affordable rent only in appearance - not in practice. We believe that the Council’s administration is turning a blind eye to this practice, which helps it make claims to delivering social housing in the borough, which is nothing of the kind.
The list of breaches is by no means exhaustive and we are calling for a borough-wide audit in order to establish the full scale of the problem. We submitted our list to the Council as part of our corporate complaint in December 2015.
In July 2016 we finally received a response from Southwark Council to our complaint. We were very disappointed to discover that the Council hadn’t actually investigated the tenure delivery on the sites we identified (it had merely insisted that the S106 agreement wording for each site is sound). We subsequently referred our complaint the Local Government Ombudsman. After a five month investigation, in December 2016 the Ombudsman published a report showing that the Council conducts no routine monitoring or enforcement whatsoever of the tenure mix delivered via S106 agreements. The Ombudsman said that the Council relied instead on ‘voluntary compliance’ and that as a result, ‘it is hard to know how many social housing units…developers [have] delivered’. As a result of his findings, the Ombudsman directed Southwark to undertake a borough-wide audit of section 106 affordable housing delivery and introduce monitoring and enforcement measures going forward, but this won’t take into account the potentially thousands of social rented homes that have been lost over recent years. Southwark is yet to announce when it will complete its audit.
The following are a few examples of the 43 breaches identified in our list of tenure breaches. In most cases the rents are currently lower than 80% market rent, but still significantly higher than the average £100pw council rents.
This redevelopment of the former Colorama film processing warehouse in SE1 was completed in April 2016. The planning report for the application said that the redevelopment would provide a total of 19 social rented habitable rooms.
However, when the Greater London Authority published its affordable housing outturn data, it showed that the developer had provided affordable rented units not social rented. These range up to 59% market rent and are listed in the GLA dataset as prospective rent levels of £215pw (excl. service charge) for a 1-bed flat, which is well over twice the current average social rent in Southwark (£100 pw).
The scheme (now branded the ‘Chroma Buildings’) has completed and new residents moved in. Needless to say, these won’t number any of those on the Council’s waiting list who are desperately in need of social rented housing.
177-184 Grange Road, Bermondsey (Linden Homes Ltd)
The planning committee report (11/AP/1390) for this development approved 38 new homes, of which 9 were supposed to be social rented units. The GLA data shows that these have been delivered by Leicester Housing Association as affordable rents of up to 52% market rent.
177-184 Grange Road, Bermondsey
32 Crosby Row SE1 3PT
Southwark’s planning committee report (11/AP/0140) approved the demolition of St Hugh’s church on Crosby Row and the construction of 22 new homes, which should have included 5 social rented units. But the GLA dataset shows that these have been delivered by Family Mosaic as affordable rent at up to 57% of market rent.
32 Crosby Row SE1 3PT
St Hugh’s Church on Crosby Row - demolished to make way for the new flats
430 Old Kent Road SE1 5AG - (Family Mosaic development)
This is one of the Neo-Bankside off-site affordable housing sites, which according to Southwark’s planning committee report (11/AP/0138) approved 22 social rented units, but the GLA dataset shows that these have been delivered by Family Mosaic at affordable rents of up to 49% market rent.
430 Old Kent Road
34-42 Grange Road, Bermondsey (Bellway Homes)
Southwark’s planning committee report (11/AP/3251) approved 41 new homes of which 8 social rented, but the GLA dataset shows that these have been delivered by Leicester Housing Association at affordable rents of up to 52% market rent.
143-149 Rye Lane/1-15 Bournemouth Road Peckham - SE15 4ST
Southwark’s planning committee report (06/AP/0995) approved 61 new homes of which 7 should have been social rented units, but the GLA dataset shows that these have been delivered by London & Quadrant as affordable rents of between 74% and 78% market rent.
61 new homes on Rye Lane/Bournemouth Road
Crown St Depot
Southwark’s planning committee report promised that 7 of these 69 new homes would be social rented, but the GLA affordable housing outturn data shows these as being provided by Leicester Housing Association at affordable rents of 40% market rent. Paragraph 74 of the planning committee report also asserted that the developer would refurbish and extend the neighbouring council-owned Bethwyn Road Playgroup Centre. However, these refurbishment and extension works have not been undertaken.
Crown St Depot redevelopment
Rolls Rd/Coopers Rd - (Peabody development)
This is the fourth and final phase of the Coopers Road estate regeneration, which saw a block of 12 family maisonettes demolished. The planning committee report (12/AP/3201) confirms that of the 47 new homes in this development, 9 should be social rent and 2 let at affordable rent. The GLA data shows that the 9 ‘social rented’ units are being let by Peabody as affordable rent at 37% market rent.
Rolls Rd/Coopers Rd development
20-30 Wilds Rents (Sadlers Yard) SE1
The planning committee report (11/AP/0217) confirms that six of the 37 new residential units in this development were to be social rent (5 x 3-beds, 1 x 2-bed). However, the section 106 agreement defines social rent using the affordable rent definition and the GLA data shows these as having been provided at levels of up to 40% market rent.
20-30 Wild’s Rents
126 Spa road - Bermondsey Spa regeneration (Hyde Housing development)
The planning committee report (12/AP/0164) approves 46 units of which 38 private, 7 social rent and 1 affordable rent capped at 65% market rent. However, in the section 106 agreement for this application, the social rented units are described as ‘affordable rent’ and the GLA shows all units as affordable rents of between 27% and 58% market rent. In Jan 2016, Hyde advertised a 3-bed ‘affordable’ unit in this development for rent at £1,849 per month.
Hyde Housing’s 126 Spa Road development on former council land
Bermondsey Spa Site C (Grange Yard)
The planning committee report (14/AP/2102) for this Linden Homes development (on former council-owned land confirms that this site was to provide 167 residential units, of which 34 were to be social rent. However, housing association Wandle’s brochure lists these 34 units as affordable rent.
Linden Homes Grange Yard development
London & Brighton Pub, Queens Rd Peckham (10/AP/3239)
The London & Brigton Pub on the corner of Queen’s Road/Asylum Road in Peckham dated back to 1863. The pub was demolished in 2013 after Wandle housing association was granted planning permission for a development which would provide 12 new homes, of which 6 would be much-needed affordable homes for Southwark residents and 3 of these would be social rent. However, the government’s CORE system for social housing lettings data shows that these 3 homes have been let at affordable rent of up to 80% market rent, rather than social rent.
Demolished London & Brighton pub replaced by Wandle flats.
Royal Road, Kennington (09/AP/2388)
This development was built on the site of a former old people’s home. The Council sold the site (at cost) to Affinity Sutton housing association as it was designated as a replacement housing site for decanted Heygate tenants. The development was completed 5 years after the last Heygate tenant was decanted and the 76 social rented homes consented were described as ‘affordable rent’ in the S106 agreement. The government’s CORE system is showing only 45 units let at social rents at this site.
BERMONDSEY SPA SITE C5 (10/AP/3010)
This application was made by Notting Hill Housing Trust, for the redevelopment of 54 council homes as part of the Bermondsey Spa regeneration and was approved by planning committee On 21st December 2010. Permission allowed for the demolition of a number of Council homes and construction of 205 new homes, some commercial and community premises and associated works. Our 2015 blog post covers the development in more detail, showing how the 44 social rented homes were provide at affordable rents of up to 62% market rent. This is the one scheme that the Council has responded to in our complaint. It considers the matter resolved, partly through having secured a number of social rented units from Notting Hill Housing Trust at its Manor Place depot development. However, these units were required to meet the affordable housing quota for that site and therefore cannot be used to offset the shortfall at the Bermondsey Spa redevelopment (there remains a net loss of social rented housing across the two sites).
Notting Hill’s “The Exchange” - 205 unit Bermondsey Spa redevelopment
s## Silwood estate regeneration Site 4B (11/AP/0139) Notting Hill Housing was supposed to provide 22 social rented homes as part of its redevelopment of the Silwood estate involving the demolition of 57 council homes and construction of 127 new homes. The the definition of social rented in the section 106 agreement is worded as affordable rent and the CORE lettings data system shows that only 19 units have been let at social rent levels.
Redeveloped Silwood estate
The above examples show that until such time as there has been a borough-wide s106 audit, enforcement action taken and procedures put in place for ongoing monitoring of compliance, then use of the term ‘social’ or ‘target rent’ in Southwark must be assumed to mean affordable rent.
Mayor muddys the waters
Meanwhile, in his draft new planning guidance, London’s Mayor Sadiq Khan has complicated matters further by introducing three additional affordable housing tenures; London Affordable Rent, London Living Rent and Discounted Market Rent.
His new planning guidance also drops any requirement for social rented housing and explicitly enables it to be substited by either Affordable Rent or Discounted Market Rent (in Build-to-Rent developments).
Here’s our detailed response to the Mayor’s consultation outlining our criticisms of his new tenure proposals.
London Affordable Rent
One of the Mayor’s new tenures is ‘London Affordable Rent’, which GLA Assembly Member and Labour housing spokesperson Tom Copley has lobbied to be renamed ‘London Social Rent’.
Tom Copley’s response to the Mayor’s draft new Affordable Housing planning guidance
Tom has argued that London Affordable Rent ‘is effectively social rent’. But we have pointed out that the Mayor’s policy definition says something else; it says that social rent levels are only ‘the starting point’ for setting London Affordable Rent levels and that ‘other rent levels will also be considered’.
Policy definition from the Mayor’s funding programme guidance
A closer look at the legal funding agreement behind the programme raises further concerns; the provision relating to the setting of London Affordable Rent (LAR) rent levels, appears to cover only the initial let:
Extract from the GLA’s Standard Form Funding Agreement
The agreement says nothing about what should happen in the event of a relet and nothing about rent levels being capped in perpetuity. What it does say is that LAR constitutes Affordable Rent for the purposes of the Rent Standard regulations:
Extract from the GLA’s Standard Form Funding Agreement
So what happens subsequent to the initial let at the Benchmark levels, appears to be contracted out, i.e. governed by the regulations of the HCA’s Rent Standard Guidance, which says that Affordable Rent levels can be re-based at up to 80% market rent when a tenancy expires or is reissued:
Extract from the HCA’s Rent Standard Guidance for Affordable Rented tenure
With 17,500 new London Affordable Rent homes proposed in just the first round of the Mayor’s new £17bn deal to build 50,000 ‘affordable’ homes across London, it’s important that the Mayor gets this right. If the small print isn’t amended to make it clear that Benchmark rents apply to relets and in perpetuity, then the Mayor’s new London Affordable Rent may prove to be just a quick and temporary fix that lasts only as long as the fixed term tenancies issued under this new tenure.
As if this wasn’t enough, the Mayor has introduced a draft ‘Good Practice Guide for Estate Regeneration’ which is due to be adopted as policy in early 2018. It says this: