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A beginners’ guide to affordable housing in London

It is estimated that the population of London will reach 10.8 million by 2041. According to the Mayor of London, around 43,500 affordable homes are required each year in order to meet London’s housing needs. Yet the issue as to how these homes will be delivered is one that remains controversial.

The provision of “genuinely affordable housing” was a key part of the Mayor’s election manifesto and plays a large part in the new London Plan which was issued in draft for consultation in December 2017.

The Examination in Public of the draft New London Plan is now taking place and is set to continue over the next five months. It came as no surprise that the drive to build more affordable housing was an overriding message in the opening remarks of the Deputy Mayor, Jules Pipe.

So, what does the draft Plan say about affordable homes in the Capital? Well, first of all, it says that half of all new homes should be affordable. However, a key part of the draft Plan is the implementation into policy of the threshold approach to viability assessment (Policy H6) which has been named the Fast Track Route.

What is the Fast Track Route? If a developer agrees to provide 35% or more affordable housing, it does not have to provide a viability assessment which usually means that it can secure a planning decision more quickly. This is because the lengthy periods of public and local authority scrutiny of the viability assessment are avoided. The type of affordable housing is also set so that: 30% of the affordable homes should be low cost housing; 30%  intermediate; and the remainder determined by the particular borough’s needs.

The Fast Track Route was first introduced in August 2017 in the Mayor’s affordable housing Supplementary Planning Guidance, so developers have had a while to get used to it. Despite initial uproar, it seems to be working quite well, with some developers appreciating the certainty that it brings to the planning process. However, the draft Plan states that a review of the threshold figure will be held in 2021 with a view to increasing this number, if deemed appropriate. So that’s something to watch out for.

The high cost of both land and labour and the imminent threat of Brexit mean that developing in the Capital is already risky, challenging and costly. In such a climate, the need for a smooth and quick planning system which provides certainty for developers is even more important.   Yes, many more affordable homes are needed, but with limited provision from the public sector, private developers need to be sufficiently incentivised if they are going to deliver the number of homes that the Mayor wants and London needs.

It will be interesting to see how this emotive and highly political issue is dealt with during the Examination in Public, and of course the Panel’s final report, which is expected in Summer 2019.