In the details of the government’s affordable housing plans there was a section on the allocation of funding to London. There was no fixed quota, but the paper suggested that it would be in line with past allocations of grant, i.e. London would get 27% of what was available.
“Under the 2008-11 Programme, London received funding estimated to deliver around 27% of national outputs. The HCA will seek to deliver a similar percentage of outputs from the new programme in London. The final figure will depend on the relative value for money of offers in London and elsewhere”
If we assume that affordable housing starts will be proportionate to the amount of funding available that means of the (up to) 85,000 new homes being built over the next 4 years, London will build 23,000.
That’s not going to redress the projected collapse of affordable housing in London that Alison Seabeck and Ken Livingstone recently warned of using the HCA’s own figures.
It may be worse than this. Affordable housing is more expensive to build in London, especially larger family homes that Boris Johnson has said will be his priority. They may need more grant per unit to make the finances of new development stack up.
Alternatively, the new affordable rent model does allow housing associations to make far more revenue by increasing rents in London, Increasing ‘affordable’ rents to 80% of market rents represents a very large increase in their income.
But there’s no guarantee that they’ll use that extra revenue to build more new homes in London – many housing associations may choose to build outside of London, where they get more bang for their buck and building is easier.
The future for affordable housing in London looks ever grimmer.