No-show homes: 33,000 London affordable homes lost in two years

Missed planning targets have led to a shortfall of more than 33,000 affordable homes across London in two years, according to my new research, and I’m urging the Mayor to get tougher with boroughs.

This week I’ve looked into the types of homes borough councils have signed off since 2016 and compared this with what they should have been achieving in planning agreements to meet the existing London Plan targets, set under Boris Johnson.

My report, No Show Homes, reveals a big gap across London between the number of new affordable homes that should have been agreed with developers seeking planning permission and the number actually secured.

With a large number of homes being planned across London, missing out on the affordable homes these developments should provide is a continuing betrayal. In just two years people who could fill a small town are being deprived of the chance to rent a home they can afford.

I found hundreds of no-show homes in every borough, promised by policy but replaced when developments are signed off by luxury flats no-one on a normal wage could possibly own.

Every time developments that fail on affordability targets are signed off by councils, Londoners who need homes at reasonable rents lose out. The arguments about the housing crisis usually focus just on building more homes overall – but that isn’t the answer if what is being built ends up as luxury flats beyond reach for most Londoners.

Shamefully, all boroughs failed to hit the 40 per cent target for affordable homes – this is the proportion of all homes that former Mayor Boris Johnson said in 2015 the capital should provide as part of his London Plan – but my analysis shows some failed more badly than others.

Where the most development is taking place, dropping below Mayor Johnson’s 40 per cent target by even a few percent has a huge impact. While his new London Plan is being developed, Mayor Khan must do more to put pressure on the areas handling larger numbers of planning applications, as these are where the most affordable homes are going missing.

In boroughs with lots of development going on, such as Tower Hamlets, the highest number of new affordable homes was lost (2,281). That borough failed to get its overall average proportion of affordable homes above 23 per cent which, while higher than some other boroughs, has a bigger impact than in boroughs where less development is planned.

Newham should have secured 2,434 affordable homes but, by insisting on an average of just 21 per cent affordable homes in planning permissions, the borough accounted for 2,122 of London’s ‘no show’ homes in just over two years.

Every time boroughs rubber stamp housing developments that don’t hit affordability targets, local people are robbed of the chance to rent or own a home at a reasonable rate. Had London not missed out on 33,424 affordable homes since 2016, tens of thousands of Londoners could have been helped by their council to escape extortionate private sector rents and overcrowded or otherwise unsuitable accommodation.

It gets worse, as the Government and Boris Johnson as Mayor managed to define ‘affordable’ rents at up to 80 per cent of market rent – unaffordable for the average Londoner.

That means social housing is often the only truly affordable housing available in new developments, so I looked at the missing social homes from planning agreements too.

London’s current policy asks for 24 per cent of new homes to be at social rent, but my report found that just 7,451 (less than five per cent) were secured through the planning process – a gap of 29,241 missing social homes in two years.

Even worse is the fact that the 40 per cent target for all types of ‘affordable’ housing that boroughs have failed so badly to meet does not even address the city’s real needs. The evidence base for the new draft London Plan calculates that, to meet London’s actual housing needs in the two years covered by my report, 99,601 of the homes signed off should have been affordable, leaving a gap of 71,732 affordable homes compared with what was given planning permission.

So what steps is the Mayor taking to sort this crisis and get more affordable homes through the planning system?

He introduced a new ‘fast track’ planning policy in August 2017. Developers who agree to provide 35 per cent affordable are given a route to planning permission that avoids having to release viability assessments and justify their shortfall from policy.

My analysis shows that, while this new policy is yet to have a big impact, there are signs that the Mayor may be able to strengthen the threshold beyond 35 per cent in future.

He recently responded to a written question I asked him and his answer appears to commit only to revise the threshold upwards, not downwards, which is positive news.

His housing deputy also reported to the London Assembly Housing Committee (which I chair) that developers began to comply with the condition even before it had been officially announced, saying:

“Do I think it is working? Yes… Even before we had published the draft Supplementary Planning Guidance, we were hearing anecdotally that developers were putting in bids for land on the basis of delivering 35 per cent affordable housing and so they had already priced that into their bids for land.”

I will keep a close watch on new planning permissions to look for any further improvements, but the Mayor should now commit to review his ‘fast track’ policy threshold sooner than the planned date of 2021.

I also asked him about my findings at Mayor’s Question Time this week and you can watch the exchange here (my questions were quite rudely interrupted by the chair, unfortunately):