It won't surprise you to hear me, a councillor in Islington, saying we don't have enough affordable housing. We need more social housing of all sorts. But in the context of limited resources, larger homes are what Islington needs most. Around 40% of Islington's council housing are bedsits or one bedroom flats, yet the greater relative need is for family-sized dwellings.
We believe it is socially and economically right to make sure low-income families can live in Islington in decent, affordable, and appropriate homes. Over 3,000 families on Islington's housing register live in overcrowded conditions. For them, owner-occupation is out of reach, and private renting is insecure and unaffordable – we want new social-rented homes to meet these and other families' needs.
But the government's affordable rent programme requires housing associations to charge up to 80% of market rent on homes and some re-lets. This is hopeless for us as social rents are currently 30-35% of Islington market rent. Homes anywhere near 80% market rent would leave families facing an insurmountable rent hike, a deep benefits trap, or soon a punitive benefits cap.
Some have suggested family homes could be offered at a lower percentage of market rent, subsidised perhaps by charging 80% for new one-bed homes. But we need more family homes ahead of new one-beds, and consistent rents related to affordability.
Islington has therefore said no to the affordable rent programme, asking housing associations to build new family homes at social rents instead. We are offering those willing to do so a grant from the local authority, in the form of public land at discounted rates and capital from our new homes bonus.
We are also expanding our council new-build programme that will see us on site for 100 homes this year. This programme needs subsidy too – and one way we are raising this capital is through our shared ownership scheme.
In the context of greater relative need for family homes than one-beds, we have been running a pilot to sell 10 one-bed council flats on a shared ownership basis, with the receipts effectively used to build new family-sized council homes. We have designed the scheme to be affordable to households on £24,000 a year, offering 40% shares, and are prioritising applicants on criteria such as living in existing social housing, being on the waiting list, or having a local connection.
The response has been very positive – of the 10 pilot properties, half of the new residents will now have the chance to leave their parents' home. Two of the purchasers are key workers, six live in Islington and the other four either work in the borough or have local family connections.
Initial figures suggest that selling 10 flats through shared ownership has raised £830,000, enough to fund six new family-sized homes. This will represent a net gain in total bedrooms, whilst creating new homes better suited to meeting our housing need.
We are planning to extend this scheme – offering more low and middle earners a chance to stay in the borough and own a home, and raising the much-needed money for our top priority of building more family-sized homes for social rent.
In an environment where government capital for new homes has been slashed, and where there is little chance of the situation improving soon, we are showing what can be done with the assets we have to increase the homes we need.
Councillor James Murray is executive member for housing at Islington council
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