Tuesday, 05 May 2015

London authority is first to defy government development model

Council rebels over government affordable rent plans

Islington Council has told housing associations it will not support bids for development funding under the government’s affordable rent programme.

The authority is the first in London to rule out allowing associations to let homes at up to 80 per cent of the market rent. Instead it expects new housing to be developed without Homes and Communities Agency money and let at traditional social rent levels.

A document from the council seen by Inside Housing states: ‘Islington considers that the affordable rent product is not affordable for households to whom we owe a housing duty.’

The Labour-run council will ask housing associations to develop social rented housing, with the authority granting them land and around £1 million of the £3.7 million it expects to receive under the new homes bonus.

This could be the first big stand-off between a local authority and the HCA and government over policy. Housing associations could get caught in the potential crossfire

Steve Douglas, partner at consultancy Altair

James Murray, cabinet member for housing, said: ‘While we are being outspoken and robust we are making it clear we are going to give something back in return in terms of land and capital. We realise this is a demand outside the main programme.’

Mr Murray said the council had identified enough land to provide 510 homes, with the potential to provide several hundred more.

Several Labour councils in London, including Hackney and Waltham Forest, have indicated they want family-sized homes to be let at significantly less than 80 per cent rents.

Steve Douglas, partner at consultancy Altair, said: ‘This could be the first big stand-off between a local authority and the HCA and government over policy. Housing associations could get caught in the potential crossfire.’

A total of 29 housing associations currently operate in Islington, including Family Mosaic, which has more than 2,000 homes in the borough.

‘We have been aware of their [the council’s] stance, initially I was worried that they were digging their heels in and would end up with no grant’, said Brendan Sarsfield, chief executive of Family Mosaic.

‘But now it seems they have thought it through. If they are coming up with other solutions to help us deliver homes we will be happy to talk.’

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