Housing associations join private market … “to fund affordable rents”
We know that house prices in London are astronomical; and rents are similarly sky-high. But a new development might bring some relief to hard-pressed renters.
The top fifteen housing associations in London plan to join the private property market in order to help ‘generation rent’ – the people unable to buy or to afford those high rental costs.
They will build 13,000 new affordable homes; but will also let and sell properties at market rates to fund those affordable-home projects.
These housing associations say they want to extend their social housing mission to help the growing number of people who cannot afford to buy in the capital and are “vulnerable to exploitation from unscrupulous landlords.”
13,000 new affordable homes
This so-called G15 group, which houses one in 10 London residents, will build 13,000 affordable homes by 2015 – and will also provide an additional 4,000 properties for rent at market prices and at least 1,100 homes for sale at regular London prices. They will use the profits of the latter to fund the former.
Housing associations have traditionally focused solely on affordable housing for low earners and for key workers. The new strategy is a widening of their scope.
They also promise to grant more secure tenancies than those available on the private market; and intend to allow tenants to settle down for longer with a plan to “kitemark” label better-quality homes for those who rent.
According to a report by the Guardian, “the average home in London costs more than £400,000. That’s 15 times the median income for Londoners – the highest ratio in Britain. Wages are higher in London of course but not nearly high enough to allow most people to meet their own housing needs … younger people are increasingly priced out of home ownership and find renting takes a growing portion of their salaries. Those without access to capital may become lifetime renters.”
Housing associations insist moving into the private market to capitalise on the increasing rental and sale prices in London will not undermine the social purpose of its members – to provide affordable housing for those who can not meet their own housing needs.
Tenant views on the plan
The move is being welcomed by some tenants and staff working to tackle rogue landlords in the capital. Ben Reeve-Lewis, a tenant liaison officer in south London who also rents privately, said he’d be interested in one of the properties himself. “Housing associations don’t have a great record for speed of repairs, but that pales in comparison against the security they provide. In private rent you never know if you’re going to get home and find a note on the doorstep because the landlord is likely to sell.”
Vincenzo Rampulla, who rents in west London, said the exorbitant cost of market rent was (partly) tied up in letting and management agency fees which could be cut out by social landlords. “A lot of the skills that they have developed in managing housing association stock are really needed in the private rented sector,” he said.
WANT TO KNOW MORE?
For more details of the G15 plan, click HERE.
For advice on how to deal with rent arrears, consult Citizens Advice or get my book: click HERE.