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Why I’m concerned about the government’s London housing package
There is a danger that the pendulum has swung too far towards short-term viability at the expense of long-term community benefit, writes Victor Chamberlain, leader of the opposition at Southwark Council
Victor Chamberlain is a Liberal Democrat councillor at Southwark Council
Why I’m concerned about the government’s London housing package #UKhousingThere is a danger that the pendulum has swung too far towards short-term viability at the expense of long-term community benefit, writes Victor Chamberlain of Southwark Council #UKhousingThe government and mayor of London’s new package of support for housebuilding in the capital has been billed as a major intervention to kick-start a limp housing market and boost supply. Beneath the headlines lie serious questions about the long-term implications for boroughs, communities and genuinely affordable housing.
At first glance, some measures may sound attractive. Developers will be able to bypass viability testing if they commit to 20% affordable housing. There will be grant available for a portion of those homes. Alongside this, there are adjustments to design standards intended to unlock density and a new City Hall Developer Investment Fund to accelerate delivery.
However, there are three major areas of concern.
First, the new fast-track threshold of 20% affordable housing is a significant reduction from the 35% requirement London has been working to (a figure already low but realistic to maintain social mix and cohesion). In practice, the government’s reforms will see fewer than one in eight homes in fast-tracked schemes offered at social rent, with the balance taken up by intermediate tenures.
In my ward, the average one-bed goes for £659,000, an ‘affordable’ intermediate flat sold with a 20% discount still costs over £527,000. That’s 16 times the average salary in Southwark. Completely out of reach for the vast majority.
There is a very real risk that this becomes the new normal. We are likely to see developers currently consented at higher levels return to committee to renegotiate their obligations downwards. These changes run the risk of embedding an unacceptably low bar for affordability.
Second, boroughs stand to lose out on vital infrastructure funding. Community Infrastructure Levy (CIL) set by London boroughs will be halved under the new regime. Yet, the mayoral CIL remains untouched. In reality this means that the boroughs responsible for delivering schools, parks, active travel and safer streets will have less money to invest in the infrastructure that makes new housing viable and sustainable.
In Southwark, £20m of developer contributions has recently been allocated to local projects after years of campaigning (and construction disruption) – helping to demonstrate the value of development to our communities. Halving this revenue will reduce councils’ ability to do just this and undermines public support for new housebuilding.
Third, the subsidy model effectively channels large sums of public money directly into private developments, artificially boosting viability and profitability. Public subsidy needs be used to increase social housing supply, not to underwrite private margins. It is unclear if the ‘gain-share’ mechanism designed to capture some of the upside if schemes become more profitable over time will deliver meaningful returns to the public purse, and certainly not in the timescales we need to see.
What’s also troubling about this package is that it shifts power upwards and centrally. The mayor of London will now be able to call in schemes of 50 homes or more where boroughs are minded to refuse, and will have enhanced powers over development on green belt and Metropolitan Open Land. Effectively taking away local democratic and sympathetic decision-making at a time when public trust in development is already too low.
We all know London desperately needs hundreds of thousands of new homes and at pace – particularly affordable homes. Rising construction costs, interest rate pressures and regulation have all made delivery more difficult in recent years. When combined with the lack of support for councils to deliver homes, we have seen affordable housebuilding shrivel up.
“The government is missing a trick by backing private developers over local government in its earnest desire to deliver new affordable housing”
In seeking to address these barriers, there is a danger that the pendulum has swung too far towards short-term viability at the expense of long-term community benefit and empowerment of local councils.
For those working across the housing sector, the test must be whether these reforms will deliver the homes that Londoners most need: safe, high-quality and genuinely affordable housing, supported by the infrastructure that helps communities to thrive.
This means looking carefully at the unintended consequences of a 20% threshold, monitoring whether already-consented schemes seek to reduce their affordable offer, ensuring boroughs are not stripped of critical infrastructure funding, and scrutinising whether public subsidies are genuinely delivering public value.
Diversifying the housebuilding market with more SMEs and housing associations and empowering councils to build a new generation of council and affordable housing would deliver a more equitable mix than the government’s proposal.
We know our boroughs best, have the long-term desire to deliver for our communities and know how to work sympathetically with existing communities to win support for development. The government is missing a trick by backing private developers over local government in its earnest desire to deliver new affordable housing.
The ambition to get London building again is one we all share. But unless the risks are acknowledged and mitigated, this package could leave us with fewer affordable homes, weaker boroughs and a planning system that looks less accountable to local communities.
Victor Chamberlain, leader of the opposition, Southwark Council
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