In a recent press release Sadiq Khan, Mayor of London, called for a £5 billion investment package to ‘increase the supply of new social homes.’
We support the call for 70% (at very least) of new homes built with government grant to be social rented. But unfortunately, when he referred to ‘social homes’, he was talking not about delivering new homes for social rent, but rather the significantly higher London Affordable Rent homes that he introduced as Mayor.
Sadiq Khan’s 2016 election campaign promised delivery of new homes for ‘social rent’. However, upon entering office, London Affordable Rent was introduced because the government’s Affordable Homes Programme wouldn’t permit the Mayor to fund new social rented homes in the capital.
But with Covid-19 leaving renters of all tenures in arrears, and with the Mayor himself anticipating a ‘tsunami’ of evictions when the eviction ban ends next month, now is the perfect time for the Mayor to scrap London Affordable Rent, making a strong case for a return to the only truly affordable rent, social rent.
In cold hard cash, here’s why the Mayor should scrap the London Affordable Rent:
For 2018/19, a London Affordable Rent property would cost you:
£62/week more for a three bedroom home than the average London council rent
The rent for a 3-bedroom London Affordable Rent home in 2018/19 was £62 a week or 59% higher than an average London council rent (£106 a week).
£44/week more than the average London council home, even for a bedsit
Even a bedsit let at London Affordable Rent in 2018/19 cost £44 more per week than the average London council rent property (with that average including one, two, three, four, five and six bedroom homes).
£45/week more than the average housing association rent
The rent for a 3-bedroom London Affordable Rent home in 2018/19 was £45 per week more than an average London housing association rent (£123 a week).
Just £13/week less than the average ‘affordable rent’ home, deemed unaffordable by the Mayor (if the average is a 2-bed for these new homes)
In 2018/19, the rent for an average weekly Affordable Rent home in the capital was £184 (inclusive of service charges). If we add the average weekly cost of a housing association service charge (£12 per week) to the £159 rent for a 2-bed London Affordable Rent home, the total is £171 per week. That’s just a £13 per week difference between an ‘affordable’ home and a ‘genuinely affordable’ home.
Or, just £4/week less than the average ‘affordable rent’ home, if the average is a 3-bed for these new homes
In 2018/19, the rent for an average weekly Affordable Rent home in the capital was £184 (inclusive of service charges). If we add the average weekly cost of a housing association service charge (£12 per week) to the £168 rent for a 2-bed London Affordable Rent home, the total is £180 per week. That’s just a £4 per week difference between an ‘affordable’ home and a ‘genuinely affordable’ home.
All figures are for weekly rents in 2018/19
There isn’t readily comparable data for the Mayor’s benchmark London Affordable Rents and existing council and housing association rents. To give an indication of the difference between the two, we’ve compared the benchmark weekly cost of a 3-bedroom London Affordable Rent home and a bedsit London Affordable Rent home for 2018/19 with the average weekly rent for a London council rent property and a London housing association property in 2018/19.
We’ve also compared the 2018/19 average rents for properties let under the previous Mayor Boris Johnson’s ‘Affordable Rent’ with the benchmark weekly cost of a 2-bedroom and 3-bedroom London Affordable Rent property in 2018/19.
We note that for the years 2016-20 social housing and affordable rent tenants had 1% decreases in rents, while the London Affordable Rent rent benchmark increased by CPI + 1% each year. This means that for the year 2019/20 (data not yet available), the rents of average London council and housing association rents compared to London Living Rent will have widened, while rents for London Affordable Rent compared with Affordable Rent will have further narrowed.
Said London Tenants Federation representative Pat Turnbull; “The Deputy Mayor for Housing argues that rents for new social rented homes are also more expensive than existing social rented homes. However, unlike London Affordable Rent, social housing rents, including new ones, are set locally rather than regionally with wide variations across the capital. Even in instances where the maximum or capped rent for social housing is reached, this was on average £10 a week less than London Affordable Rent in 2018/19 and nearer to £15 a week less this year.”