Sadiq Khan, best known for being the son of a bus driver but also the mayor of London, wants to do something about the fact that many Londoners pay so much in rent that they can't even afford to go to the pub to forget how much they pay in rent. To that end, he's just announced a "London Living Rent". Essentially, it's a type of affordable housing supposed to help Londoners on average incomes by offering rents below the market average. That's nothing new – "affordable rent" homes are already available, albeit in very small numbers, with rents set at 80 percent of the market rate. Where the London Living Rent differs is that it's pegged to average income, rather than being just slightly below sky-high local rents.
Rents will be based on a third of the average household income in each borough. According to estimates from the mayor's office, the average monthly cost of a two-bed flat in the capital is currently around £1,450. Under the London Living Rent scheme, you could be looking at less than a grand for a two-bed property in Peckham Rye. In large parts of Newham, the cost falls below £700. While the finer details of the scheme are still being confirmed, the homes will be on offer to low and middle-income households – described as those with a combined income of between £35,000 and £45,000. In theory, it opens up the possibility of securing affordable housing to people on a greater range of incomes.
Here's the problem with the plan: we already have the concept of affordable housing. There are a wide range of housing types, tenures and policies dreamed up by politicians and policy wonks to solve the housing crisis. We've got social rent, affordable rent, intermediate rent, and now London Living Rent. For those looking to get on the ladder, there's Help to Buy, Right to Buy, shared ownership, and Starter Homes. But what we need are actual houses. When asked by the BBC how many homes will be available under this latest initiative, Khan said, "it depends on how much land comes forward".
So is there any reason to believe we'll see more homes built because of this policy? "In all honesty, no," says Adam Challis, head of UK residential research at property consultancy JLL. "Delivery in London is challenging, full stop." According to research published by JLL this week, the number of new houses started in the capital in the first half of this year fell by 65 percent compared to the end of last year – and we weren't building nearly enough homes then. "It's really quite concerning," says Challis.
Taking a pessimistic view, London Living Rent is just another category with which to divide the shrinking number of homes we're actually building. Still, some big numbers are being thrown around. The recently elected mayor of Hackney, Philip Glanville, announced: "The London Living Rent will help people who work hard but are getting priced out of our city, which is why I'm proud that my first act as mayor is to pledge that Hackney will be the first borough to see 500 homes built at this affordable level."
During his recent mayoral campaign, Glanville also pledged to double the number of council houses built in Hackney. All very promising. But then, Glanville has been cabinet member for housing in Hackney for the last six years, which begs the question: why has he waited until now? There's no doubting his good intentions, but pledges are one thing and getting houses built is another.
Challis takes an optimistic view: "It feels like we're at least trying to create solutions," he says. "It's a tiny proportion of the overall story but at least it's something." Others want Khan to take much more radical action. Dan Wilson Craw, policy manager at Generation Rent, wants an investigation into rent controls across London, not just a small number of new build homes. He says the new policy is just one small measure among many that will be needed to sort out the shitshow we've found ourselves in. "We need something to help Londoners now," he says. "People can't wait for ten years for rents to start coming down. It's a good idea but we don't think it's enough."
Khan has recognised the problem. During the mayoral campaign, he described the election as "a referendum on housing". In his manifesto, he said the housing crisis was the "single biggest barrier to prosperity, growth and fairness facing Londoners today." A London Living Rent is a promising sign that he's taking his housing pledges seriously. But it's one small step of many. And is it going to make your rent any cheaper in the near future? It's not looking likely.
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