Monday, April 19News For London

‘Affordable housing’ another empty Conservative promise…

London’s housing crisis continues to escalate. The reality is with inflated house prices and soaring rents young Londoners are being driven out of the capital.

HousingBill
#killthehousingbill : Protestors in London, 13 March 2016. Photo: Yee-Liu Williams

With a new wave of ‘generation rent’ and controversial social housing issues, more and more Londoners have taken to the streets to express their growing discontent against the government’s new Housing Bill.

‘Affordable housing’ appears a misnomer as new official figures reported that nearly 20 per cent of first time buyers paid record £500,000-plus for the privilege of purchasing a London home.

According to KPMG research, first time buyers in London ‘need to earn at least £77,000’ to get on to the London property ladder that is nearly double the UK average salary.

Payscale.com highlight the average London salary is £27K-£45K and with soaring house prices mean Londoners are stuck renting because they are unable to afford a mortgage.

Hannah Dahl, a 32-year-old graduate freelance production coordinator, lives as a property guardian attempting to survive London’s housing crisis.

For the past two years, Hannah has been living on a tight budget in one of the many empty residential properties in the capital.  “I don’t know what other options there are,” she said.

For Hannah this has been the only viable option that allows her to live a London lifestyle in an ‘affordable’ package.

Mediated by Dot Dot Dot their aim is to offer young professionals affordable housing that includes 16 hours voluntary work per month as part of the agreement.

In the video, Hannah highlights how living as a property guardian could work for young professionals moving to London.

Could this be the life for you?  Be a London Property Guardian:  Hannah Dahl tells how this works for her.  Video:  Yee-Liu Williams

New data from the Government’s English Housing Survey, shows some 898,000 households in the capital are living in privately rented accommodation, more than double the 405,000 households who privately rented homes in 2003/04.

Ellie Hodgin, a married,  part-time student living in rented accommodation in Harrow is doubtful as to whether she will ever be able to buy. She drew parallels of the Housing Bill pledge to help first time buyers to the government’s promise on student tuition fees: “I think this is another such promise and I don’t believe it.”

She is not alone in paying £1,000+ a month rent for a one-bedroom flat in a London suburb. And the minimum cost to buy a 1-bedroom in Harrow is £250,000 upwards. “I struggle financially to survive, let alone put aside £100 per month for any kind of deposit,” she said.

Matt Hutchinson, Communications Director for Spareroom.co.uk, the UK’s #1 flat and house share website, said:  “More and more people are renting as home ownership is harder and harder to achieve. Flat sharing is simply the most affordable option.”

The percentage of private renters exceeds homeowners in the capital for the first time in ten years.

 

Young professionals priced out of London.  London renting and flat sharing is the most affordable option.  Video:  Yee-Liu Williams

 

Help to buy

Emily Davey, Liberal Democrat candidate for the Greater London Authority, and housing solicitor for the last 20 years told Westminster World: “The key here is what is meant by ‘affordable’ for whom and for how long.”

According to Davey, the various Government schemes like the ‘Help to Buy’ is only pushing up house prices even further and not doing anything to help those who really need it.

Even with the various home buy schemes, where the government lends a person money to purchase a house, these have tended to fail, as a person still cannot afford to buy.

Davey highlights that to date, affordable home purchase schemes have tended to centre on “shared ownership schemes” but this comes with their own problems.

She explained when interest rates rise the people owning them are paying more than they would in privately rented properties and if they default on their rent for eight weeks the landlord has a “mandatory right to possession”.

A person runs the risk of losing all the equity in the property and also becoming homeless.

With other discount schemes – at a capped value of £450,000 in London – the first person benefits from ‘Help to Buy’ 20 per cent discount but it takes the property out of the affordable market on the onward sale. The first person gets a windfall but not on subsequent purchases.

Some view the government’s failure on housing is down to the chancellor’s fiscal policy for short-term political gain.

The early signs are that Chancellor George Osborne’s pledge for 200,000 new, affordable ‘starter homes’ is ‘nigh on impossible’ reported by PropertyWeek.com in recent weeks.

As Sadiq Khan, Labour London mayoral candidate commented on Twitter in recent days, it is only the Tory party who is voting against protecting affordable homes.

So what is not clear is whether the government’s new housing policy and “pledge” will be the answer for young Londoners; or whether more and more will be driven out of the capital.