The Week in Housing: build, baby, building an unaffordable city with declining nightlife

Good afternoon.

It was another week where it was hard not to conclude that the government seems more concerned with “jacking up developers’ profit margins”, as one sector professional put it, than it is about tackling the affordable housing crisis.

A little more than a week after Inside Housing reported that the mayor of London was considering slashing the 35% affordable target for developments in the capital, a leaked memo circulated within the housing department, which was confirmed in The i Paper and The Guardian, confirmed talks for the target to be lowered to 20%.

In its report, The Guardian picked up on my previous weekly round-up of how the beer-swilling housing secretary Steve Reed skipped into a room of adoring fans at his party’s conference to the tune of We Built This City by Starship.

A song about declining music venues in Los Angeles. In London, one in five bars and clubs have shut since 2020. Build, baby, build.

For the lower affordable figure, the leaked memo said “the key test is that developers welcome the package strongly on the day”.

There is a problem with the housing market. Build costs up, buyer demand, building safety delays. Housebuilding is less profitable. But the top 10 house builders still made a combined profit of around £3.5bn last year.

This is around £700m more than English councils are spending on temporary accommodation. The leaked memo came out a day before the latest homelessness figures revealed that the total number of children in temporary accommodation in England has risen to more than 172,000.

As increasing numbers of families turn to councils for help, the pressure is leaving them facing unsustainable costs. In London alone, research this week revealed a £740m temporary accommodation shortfall.

Councils are at risk of going bankrupt. The country’s biggest developers are not. So they may welcome the affordable target being cut, but the real test will be in construction starts and homelessness statistics.

London is the worst affected area in the country. More than 97,000 children in the city are homeless in temporary accommodation, around one child in every classroom, and nearly half (46%) of all households are housed out of their local area.

Just 347 new affordable homes have been started in the capital since April. So it will take 280 years at this rate to find all those children a permanent affordable home. Let’s also not forget that Sadiq Khan was elected with a promise of a 50% affordable housing target. 

No amount of planning reform or speeding up the buying process, despite what the government appears to think, will do anything to address the fact that an average London home now costs 11.5 times the typical household income, and the average rent in the capital is more than £2,500.

This cost of living crisis is why leaders of 40 groups across the housing sector have called on the government to unfreeze Local Housing Allowance rates for the next year to help reduce homelessness and the use of temporary accommodation.

Councils are not the only organisations under pressure. New research has found that people experiencing homelessness in London are increasingly turning to hospitals for help due to the limited number of councils offering walk-in services.

Inside Housing also sifted through the responses to the Housing, Communities and Local Government Committee’s inquiry into housing conditions across the social, private and temporary accommodation tenures.

These revealed support for backing the extension of “decency requirements” for temporary accommodation, and charities stressing “appalling” conditions in the sub-sector.

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