London's top boroughs built fewer homes for poor - study

by Matthew Ponsford | @mjponsford | Thomson Reuters Foundation
Wednesday, 26 July 2017 17:55 GMT

Grenfell Tower, destroyed in a catastrophic fire, is seen from another area of the Royal Borough of Kensington and Chelsea, in London, Britain July 2, 2017. REUTERS/Peter Nicholls

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Social homes are now the only way for many low-paid workers to afford any accommodation in the capital

By Matthew Ponsford

LONDON, July 26 (Thomson Reuters Foundation) - London boroughs with the highest property prices are failing to build low-cost homes for their poorest residents, according to a report released on Wednesday that further highlights the social divide in the capital's housing market.

A study by GMB, one of Britain's largest unions, found that six out of the capital's 10 most expensive boroughs built below-average levels of low-cost rental housing in the last year.

The study comes a month after a huge fire at a social housing block in one of Europe's richest boroughs revealed the city's gaping rich-poor divide.

In the elegant west London borough of Kensington and Chelsea, where the blaze killed at least 80 people and destroyed 127 apartments, only 76 social homes were built in the last year, according to the council.

The Royal Borough of Kensington and Chelsea council has been criticised by locals and politicians for its slow and ineffective response to the fire, while many accuse the authority of turning its back on social housing.

The borough did not respond to questions about the lack of new housing stock.

Out of 23,250 homes built London-wide between 2016 and 2017, 5,360 were for the below-market "social" housing sector, according to the study.

In London, where house prices have risen 90 percent in the past decade, social housing - built by local governments or non-profit housing associations and rented at a fraction of market rates - has become a flashpoint in the city's housing crisis.

Social homes are now the only way for many low-paid workers to afford any accommodation in the capital, said Warren Kenny, secretary of GMB London.

"The growth in the population in the region combined with the failure... to complete enough new homes has led to sky-high house prices and ballooning private rents. This is not sustainable," said Kenny in a statement.

Mayor of London Sadiq Khan said earlier this month that his growing city needs to build 50,000 homes each year, and aims to deliver 35 percent "affordable" housing - a measure that includes social homes and other reduced-cost schemes.

A spokesperson for the mayor, who was elected last year, said his predecessor had left "outrageously low levels of affordable housing," and Khan's attempts to boost the number built for social rents will be a marathon, not a sprint.

"He has begun by taking important steps to boost the number of new and affordable homes by funding 50,000 new affordable homes to buy and rent, including a third around social rent levels," the spokesman told the Thomson Reuters Foundation.

In London's financial district, the City of London, and in the suburban commuter boroughs of Kingston upon Thames and Harrow, no social homes were built in 2016-2017, said the study.

The City of London said the borough had built 19 homes outside its boundaries, which weren't counted in the research.

Harrow Council said "misguided" policies that allow social tenants to buy their homes had left it with few options to build sustainably.

Such 'right-to-buy' laws force boroughs to sell social homes to tenants for below-market rates and mean total stocks are continually falling, requiring them to build each year to replenish.

Half of all the city's boroughs built fewer than 100 social homes last year, according to the report, which recommended allowing local authorities to borrow more money to build homes.

GMB, which represents workers in retail, healthcare and other industries, has lobbied since 2014 for 250,000 new homes per year to reduce housing costs, including 80,000 social houses. (Reporting by Matthew Ponsford, Editing by Lyndsay Griffiths.; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women's rights, trafficking, property rights, climate change and resilience. Visit http://news.trust.org)

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