Low cost home ownership schemes are failing to reach almost a quarter of a million Londoners who are falling through the gap in the capital’s housing market, new figures from Shelter reveal today.
Over 6,100 publicly-funded low cost home ownership properties were delivered in London last year, making up 51 per cent of all affordable housing built. But these have not helped the poorest in the capital to access a decent and affordable place to live.
Analysis by the housing charity, undertaken to coincide with the launch today of its new report ‘The Forgotten Households’, shows that 220,000 low income households in London are unable to afford even the cheapest government home ownership schemes.
The average income of these ‘forgotten households’ is just £18,000, almost half that of those who are accessing low cost home ownership in London. Yet they do not claim housing benefit and are not eligible for social housing, and therefore receive no government help for their housing needs.
Meanwhile, the Greater London Authority is considering proposals to extend low cost home ownership to those earning up to £74,000. With the average London wage currently £28,000, Shelter is warning that raising the threshold could mean those on higher incomes taking up the schemes at the expense of Londoners in greater need.
As the government prepares to devolve control over London’s housing budget to City Hall, the charity is calling on the Mayor to refocus public investment from low cost home ownership towards delivering more social housing and raising standards in the capital’s private rented sector, where the majority of the excluded households live.
Shelter chief executive Campbell Robb said: “Given the huge scale of housing need in the capital, it’s simply unacceptable that government home ownership schemes are failing to help nearly 220,000 Londoners on low incomes, let alone those earning the average London wage.
“We all know how difficult it is to find affordable housing in the capital. That’s why, in the current economic climate, it’s more important than ever that every penny spent on public housing schemes reaches those who are most in need.
“We urge the Mayor to use his new powers to invest in more social housing and improve the private rented sector to help these ‘forgotten households’ access a decent and affordable place to live.”
London has over 350,000 households on housing waiting lists and more than 330,000 children living in overcrowded homes. Independent assessments indicate that in order to meet the capital’s housing need, 80 per cent of all affordable housing should be social rented housing versus 20 per cent low cost home ownership.
Yet last year just 49 per cent of affordable housing delivered was social rented, with the majority (51%) being low cost home ownership.
Campbell Robb continued: “Shelter’s Local Housing Watch shows that 31 out of 33 London boroughs are not meeting the housing needs of their local area, with many focusing on low cost home ownership schemes at the expense of desperately-needed social rented homes.
“In order to redress this balance and deliver the homes London needs it is vital that boroughs prioritise the delivery of social housing.”
1. On Monday 12 July Shelter has launched a new discussion paper titled ‘The Forgotten Households’ which looks at the success of government-funded low cost home ownership schemes across England. For a copy of ‘The Forgotten Households’ please contact the Shelter media office on the numbers below.
2. Low Cost Home Ownership is an umbrella term used to refer to products within the intermediate market that involved shared ownership or shared equity. Low cost home ownership schemes aim to extend home ownership to households who cannot afford to buy in the open market.
3. Affordable housing is an umbrella term which includes social rented housing and intermediate housing. Intermediate housing includes low-cost home ownership schemes, intermediate housing for rent and ‘key worker’ housing
4. Shelter analysis based on Tenants Services Authority CORE data and the Department for Work and Pensions Family Resources survey shows that 219,000 households in London that cannot access social rented housing and cannot afford the cheapest quartile of low cost home ownership schemes.
5. Shelter analysis based on Tenants Services Authority CORE data and the Department for Work and Pensions Family Resources survey shows that the average income of forgotten household in London is around £18,000 per year, whilst the average income of those accessing shared ownership in London is more than £33,000 per year and shared equity around £40,000 (07/08 figures)
6. Data from the Department for Communities and Local Government shows that 6,140 low cost home ownership homes were delivered in London in 2008/09. This is 51 per cent of total affordable housing units delivered.
7. Data from the Department for Communities and Local Government shows that there were 354,389 households on housing waiting lists in London as at end of April 2009.
8. According to the Survey of English Housing there are currently 331,000 children living in overcrowded housing in the capital
9. The 2008 Strategic Housing Market Assessment for London demonstrated that the affordable housing target for London should be heavily weighted towards the provision of social rented homes (80 per cent) over intermediate homes (20 per cent). http://www.london.gov.uk/publication/2008-london-strategic-housing-market-assessment
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