Southwark Council has called on the government to “rethink” plans to cut the amount of affordable housing developers are required to build in London.
Cllr Helen Dennis, Southwark’s Cabinet Member for New Homes, said the council had “significant concerns over plans to allow developers to build fewer affordable homes in London, and to cut developer contributions to local communities” and urged the government to “rethink.”
Last year, the Housing Secretary Steve Reed and the Mayor of London Sadiq Khan announced plans to cut the affordable housing threshold that developers need to meet for fast-tracked planning approval from 35 to 20 per cent.
Affordable housing includes properties set at social rent – 50 per cent of market value – and intermediate rent, between social and market rent.
The government also proposed halving the payments developers must make to local authorities when they receive planning permission – money that is used to fund local infrastructure, like new playgrounds and GP services.
The government said the move would kickstart housebuilding in London, which has ground to a halt in recent times.
Last year, there were only 2,158 new home starts in the six months to June in the capital – a long way off London’s target of 88,000 new homes each year.
However, in its full response to the government’s consultation on the proposals, which ended on January 22, Southwark said it did “not agree that affordable housing reduction is the right approach to addressing the issue of affordable housing provision.”
“Delivering genuinely affordable housing, and social rent homes in particular, alongside much-needed investment in infrastructure, must be the priority and the council believes that other methods should be explored before going down this proposed route.”
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The council continued: “We are concerned that a reduction to 20% affordable housing requirements through the new ‘time-limited route’ will risk consented schemes returning as new proposals. It risks impacting land prices and establishing a ‘new norm’.”
The local authority added that rather than slashing affordability requirements, the government should “focus on grant funding and regulatory reform to speed up housing delivery.”
Southwark’s own planning guidance states that developers must ensure that a minimum 35 per cent of their schemes are affordable.
Another of the government’s proposed reforms is to equip the Mayor of London with the power to override local planning decisions, including the ability to ‘call-in’ housing schemes which have been rejected by boroughs.
This suggests that even if the council stands firm by its 35 per cent requirement, as housing campaigners have been calling for, Southwark’s ability to enforce the target in practice could be fairly limited.
In recent months, we have already seen developers opting to bypass Southwark Council’s planning processes to appeal to the Mayor for a decision, after slashing their affordable housing offering.
British Land, the developer behind the Canada Water Masterplan, appealed to the Mayor in December for a decision on the planning application, months after admitting that the proportion of affordable homes it was feasible to build on the site could be as little as 10 per cent. It has since further lowered that estimate to just 3 per cent.
Berkeley Homes similarly appealed to the planning inspectorate after slashing the proportion of affordable homes in its proposed redevelopment of the Aylesham Centre from 35 to 12 per cent.
The 35% Campaign, a local group advocating for more ambitious affordable housing targets, said it feared the “increase in the housing supply will be at the expense of affordable housing”.
Commenting on the government consultation, they stated: “The central question must be whether new developments actually meet London’s needs – these proposals, building higher proportions of private market housing to lower proportions of affordable housing, do not do so.”
They claim that if the 20 per cent threshold is approved, just one in five homes in private developments will be within reach of 93 per cent of households in Southwark who qualify for affordable housing.
The leader of the Southwark Liberal Democrats, Cllr Victor Chamberlain, said: “This is too little too late from a Labour council that has rolled over too many times for developers – from the Canada Water Masterplan and Borough Triangle to Aylesham, this council makes even Sadiq Khan’s capitulation to developers look good; and the result is families being priced out and closing schools.”
The government has said the reforms will “ramp up housebuilding, unlock stalled sites and ensure more affordable homes are being built across the capital.”
The Mayor argued that housebuilding in London was facing a “perfect storm” of factors, including “high interest rates, the rising cost of construction materials, the impact of the pandemic and ongoing consequences of Brexit”, meaning reform was needed.
