By Dave Binder
For those unaware, Trafalgar place is one of the many new housing developments in and around the Elephant & Castle ‘regeneration zone’, an area seemingly pounced upon for development due no doubt to the combination of great location and relatively cheap land (by London zone 1 standards anyway). Wherever you look, skyscrapers and flats are emerging at an ever increasing pace from firms who see the potential for great profit to be made. One such development is Trafalgar Place, an L&Q project in Walworth which will supposedly offer affordable housing to those finding it difficult to make the first step. It will apparently offer affordable housing ‘whoever you are and wherever you’re from.’
Well, it did to me anyway. Having fallen for the charms of Walworth I’d been keeping an eye on this development for quite some time. I knew that shared ownership properties would be available (the only realistic option for many, especially if you haven’t got the bank of mum and dad to back you up and wish to stay in the capital) and like a patient acorn hoarding squirrel I’d been saving up a deposit waiting for the right opportunity. When I received an email earlier recently informing me that prices for the shared ownership properties had been published, I was excited!
This excitement soon turned to disbelief however when I discovered both the price of the ‘affordable’ properties and the quantity available.
There’s no easy way of saying this so I’ll just come out with it, the cheapest price for a modestly sized two bed flat is £605,000.
And this is the cheapest two bedroom property available! I use the singular tense here because this is the number of two bed flats available at this price. That’s right, one. The numbers don’t read much better when you consider that out of the 235 properties available, just 28 have been designated for ‘affordable housing’, working out at a miserly 12 per cent.
Ok, this might just be one development amongst many in the Big Smoke, but the salient points remain. Namely that even when it is possible to buy shares at relatively affordable prices (£150,000 for the above) the full market value of properties on this scheme mean rents combined with the mortgage you take for an initial share of the property are far too unaffordable for many. Indeed, to be eligible for this particular property, you require a minimum income of £61,000 if you live outside the borough of Southwark, and £46.184 within (the former is nearly double the average income in London) and a deposit of £17,500. To put this into some sort of context, if you’re able to save £100 per month, it would take more than 14 and a half years to raise the deposit for just 25 per cent of this property.
To simply say that ‘we’re building more affordable homes’ simply won’t cut it. When developers are required to set aside such pitiful amounts for this type of abode it’s no surprise housing costs (both mortgages and rents) are as high as they are in the capital.
All this begs the question, who is this regeneration in Elephant & Castle actually for? It seems to me the answer is primarily those that can raise the huge deposits for a 90 per cent mortgage (£65,000 on a £605,000 property) with the rest left to squabble over the scraps of affordable housing made available, or failing that be exposed to ever increasing private rents. To borrow a phrase from George ‘The Titanium Chancellor’ Osborne from a time long ago, ‘we can’t go on like this.’
In short, we need many more affordable homes for full purchase, shared ownership and rent, at realistic prices and for all family types, not just for those that can raise huge deposits and sustain a weighty mortgage.
Depressingly, the policy responses offered by the major parties thus far to tackle this problem are wholly inadequate. The Conservatives proposal – building so called ‘starter homes’ falls short in that they can be built instead of affordable homes. This means that this scheme will potentially add nothing to the existing housing stock, and may actually reduce the availability of scarce cheaper shared ownership and low rent properties. Further, the cost of these homes will be from £450,000, more than 10 times the average salary in the capital. Labour’s proposals meanwhile are insufficient in that building 200,000 is 50,000 less than experts say are needed. Moreover, Labour has given no details regarding how much these new homes will cost. Finally, the Liberal Democrats have just announced plans for ‘rent to buy’, allowing young people to make monthly payments equivalent to rent on a home. Yet, there’s no word how much monthly payments, or how many homes the Lib Dems would build either for ‘rent to buy’ or other markers. Our established political parties simply must do better!
As it is, areas like Elephant & Castle are at risk of having their communities, embedded character and diversity decimated. Households that have put down roots and invested in their communities are being forced to move further and further out of they’ve called home for decades as truly affordable property is replaced by expensive new build properties.
Change is clearly needed. Will our politicians finally step up to the challenge?
The Shelter briefing ‘Solutions for the housing shortage – How to build the 250,000 homes we need each year’ sets out some viable ideas as how our housing shortage can be tackled.