housing targets Archives

Red Brick: First, what does the housing crisis look like for people in Brent?

Matt Kelcher: We have many of the same challenges as other parts of London and the country: fundamentally, we need more housing of all different kinds.

We have more than 30,000 households on the housing waiting list, but it’s important to understand what that means. Only a proportion of those households are in priority need. People further down the list are extremely unlikely ever to receive a council home, however long they wait.

I think councils have to be honest about that. Being on a waiting list can give people the impression that if they sit tight for long enough, eventually they’ll get a home. The reality is that’s just not the way it works with the levels of social housing we have available today. The wait can be decades, and that uncertainty can affect decisions about new jobs, where children go to school and how people plan for the future. At Brent, we’ve set up our Find a place you can afford programme to give local people help now to find a private tenancy, rather than leaving them on a waiting list.

The housing crisis in Brent also goes well beyond the waiting list. We’re a young, incredibly diverse borough with strong family and community ties. A lot of people want to live in the borough where they grew up. They don’t want to move miles and miles away from their parents. But often there just aren’t the homes available for them here – whether that’s social housing, private rented housing, shared ownership or housing to buy.

You see young people with decent jobs who can’t move out of their childhood bedroom, young people who want to get on the housing ladder but can’t, and couples living in a one-bedroom flat who want to have children but can’t find somewhere bigger. If you don’t have somewhere secure that you can call your own, it has huge consequences for the way you live the rest of your life. It puts your life on hold. We want to free people from that by delivering secure homes of all types for everyone.

RB: Tell us about your approach to development. What can a Labour-run council actually do to shape development in a borough where much of the building is done by other organisations?

Brent has had a really good reputation for a long time of being somewhere that proactively welcomes development and the regeneration it brings. We are a rare example of a place in London that is managing to exceed our housing and planning targets.

I think being open and positive about development actually allows you to get more out of developers, not less. Development involves risk. If you’re going to spend months or years developing a scheme, but think there’s a significant chance the council will reject it at the end of the process, you either price that risk into the scheme or decide to invest somewhere else.

Brent has built a reputation as somewhere developers can have a constructive conversation with the council and get a fair hearing. That doesn’t mean saying “yes” to everything. It means being clear about what we want and working with developers to see whether they can deliver it.

That certainty makes Brent a more attractive place to invest. And if more developers want to work here, that creates competition for opportunities. If several major developers want to work with us on a regeneration scheme, they have to compete over what they can offer Brent – social housing, shared ownership, social value and other benefits for the community.

So, I push back against the idea we sometimes hear that being pro-development means being soft on developers. If you’re clear about your priorities, create competition and give people confidence that good schemes can actually get built, you can strengthen the council’s hand.

Shillibeer House on the old bus garage in Alperton is a good example. We worked with the private sector on a development of around 450 homes. Three blocks are private, and the fourth has given us 155 council homes. They look exactly the same as the private homes. People who had spent years in temporary accommodation now have a permanent council home. Some of the people who’ve moved in have made videos sharing their stories and the difference a council home has made to them. We couldn’t have delivered that outcome without being prepared to work in partnership with the private sector.

RB: Labour is now running Brent as a minority administration. How do you maintain that confidence when the council’s political position has changed?

There was inevitably some uncertainty among developers after the election. They wanted to know whether Brent’s political direction had changed. My message to them is very simple: it hasn’t.

We’re still the administration and there’s an enormous amount we continue to do. The Leader, the Cabinet and I are completely aligned about the importance of housing and regeneration, and that gives a clear direction to our officers in the planning department. People often want to come and work here , cut their teeth in the sector in Brent and a lot of them stay a long time, because they have the space to see projects through and make a difference.

But we do need to keep providing that certainty externally – maintaining relationships with developers and Housing Associations, being clear that we want growth and demonstrating that Brent remains somewhere where good development can happen.

Housing has also become more politically contested locally. Opposition parties have campaigned against development of all kinds including social housing, so those of us who believe we need more homes have to be willing to make the argument for them.

I do think attitudes are changing, too. On the planning committee we have had young people come along to speak in favour of housing applications because they wanted the opportunity to find a home in the borough where they were born and raised. The housing crisis is increasingly something people can see in their own families and communities.

RB: How do you make sure Brent is building the right homes to meet all those different kinds of housing need?

You have to manage housing delivery as a portfolio across the borough, rather than judge success by one tenure or the affordable housing percentage on one individual development. Our policy aims for 50% affordable housing across development, with 70% of that total to weighted towards social rent and London Affordable Rent products, as that is our area of greatest need. But that doesn’t mean every individual scheme will deliver exactly 50%. Some will provide less and others can provide 100%. What matters is what we’re securing across the programme as a whole.

So there may be circumstances where a development doesn’t achieve the headline percentage, but what it does provide is more three-bedroom family homes. We have to think about the actual benefit to Brent residents, rather than treating every site as interchangeable.

Sometimes the housing debate gets divided into two camps. There are people who focus on liberalising planning and getting the private sector building more, and others who put the emphasis on delivering more social housing.

I don’t think those ambitions are contradictory. We should make it easier to build more homes, because the fundamental problem is that we have far too few of them. And at the same time, we should be ambitious about delivering social housing and ensuring it remains a permanent and important part of mixed communities. For me, being an activist council means using all the tools and partners available to get the combination of homes our residents actually need.

RB: What could national or London government do to help Brent go further?

If I could make one change to support our social housing ambitions, I would end the Right to Buy in London.

RB editor’s note: The Government took early action to reduce Right to Buy discounts in November 2024. The Social Housing Bill currently going through Parliament would further restrict the Right to Buy, though the Bill stops short of ending the programme in England.

We’re building council housing ourselves. At Church End, for example, we’re delivering 99 new social homes. But when we plan new council housing, we’ve had to make assumptions about how many of those homes could subsequently be lost through Right to Buy.

That matters before a single home has been sold. Council housing requires long-term borrowing and investment. If you know that some of the assets you’re building could subsequently be sold at a discount, that affects the risk, the finances and ultimately how much more housing you can build.

And I don’t think Right to Buy has achieved what it was supposed to achieve in London. It was intended to expand home ownership, but many former council homes have ended up being rented out privately at higher rents or lost to the short lets sector. That means people in Brent have to pay those higher rents, which means they can’t save for a deposit, which means they can’t buy their own homes. Therefore, I believe that in London at least, Right to Buy has completely failed on its own terms. That’s why I’d like to see a London-specific policy, in the same way as Wales has ended it.

There is a more fundamental point too. My grandad lived in the same council flat in Sheffield for his whole life. He had no intention of buying it. Why would he? It was his home for as long as he needed it.

Social housing shouldn’t simply be a residual tenure for somebody who happens to be poor at a particular moment in their life. If somebody moves into a council home when they’re young and struggling, then gets a good job, we shouldn’t suddenly think they earn too much to deserve to live in their home or their community.

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On the 6^th August 2020 the Conservative Government announced a change to the standard method for calculating the housing need requirement. The debate had up until this point shifted from the ‘numbers’ question. Towards the ‘how’ and ‘where’. Now the proposed new method seeks to achieve a ‘fair share’ under Boris Johnson’s ‘levelling-up’ agenda. But is this the right approach?

The Government’s housing targets have come under fire for contradicting its ‘levelling-up’ agenda.

Recent claims by the Local Government Association (LGA) argue the proposed new standard method would seriously jeopardise the Government’s ‘levelling -up’ agenda.

While the Campaign to Protect Rural England (CPRE) said “the last thing we need is another ‘mutant algorithm’ – this time deciding where development takes place”. We have seen from the exams fiasco the damage that can be caused by erroneous calculations.

Backlash has also come from within the Conservatives. Neil O’Brien, MP for Harborough (Leicestershire), claims “it would be quite difficult to explain to Conservative voters why they should take more housing in their areas to allow large Labour-run cities nearby to continue to stagnate rather than regenerate”. Neil had written for Conservative Home. He argued the new formula would “level down our cities, not level up”. Yet we know large parts of existing suburbs in England and Wales are providing almost no new homes. Tory shires staying untouched? Evidently delusional.

Analysis by the LGA found under the new formula lower growth in housing stock would be expected in Northern regions. London on the other hand would see a 161% rise in homes built. An increase of 57% is expected in the South East. 39% in the South West. For those in the North East proposed targets are 28% lower. While 8% lower in the North West.

On average the house price-to-earnings ratio across the UK stands at 10.7. However, price-to-earnings ratios are still below their previous 2007 peaks in the North East, North West, Yorkshire and Humber, and Wales. In London, the price-to-earnings ratio has worsened by over 50% since 2008. Similarly, the South East, South West, East, and the East and West Midlands have all surpassed their Pre-Covid19 crisis peak. Surely adopting this approach makes sense for these targets to be reduced. Or does it?

On new projections the housing targets are well below what we really need, and fall short in basic economic terms.

On the new proposed standard method it is estimated to be 337,000 – so an annual increase of 1.4%. Currently the Tory housebuilding target of 300,000 accounts for an annual increase of 1.2%. Compared with the two decades between 1931 and 1951 housing stock grew on average at 2.85% per year.

Labour should be attacking the Tories over their lack of ambition. To achieve the levelling-up agenda we need greater supply responsiveness to house prices and housing stock to grow faster than incomes. Only then will we achieve a less volatile housing market. But how could we achieve this?

The Bank of England targets inflation at 2%. As at April 2019 the total number of dwellings was 24.4 million. In effect to ensure growth in housing stock exceeds growth in full-time earnings. Thus, we should be setting the national target closer to 490,000. Somewhat 45% higher than the Tories current level. If we achieved the growth in housing stock at rates seen between 1931 and 1951 this figure would be closer to 696,000.

The average house price-to-income ratio now stands at a whopping 18 times the average salary in London. In London housing supply targets have either been based on land capacity. As seen in the recent Draft London Plan. Or in times gone (and still to date) by projections based on ‘nonsense demographics’.

It makes sense for the Government to require those areas that are seeing the most demand. And demonstrably so in areas that have increasingly high price-to-earnings ratios. Even the North West, North East, and Wales have seen increases in price-to-earnings ratios from their Pre-Covid19 crisis trough. Housing supply should remain an important policy concern for all when considering the ‘levelling-up’ agenda.

It is no surprise why house prices have rocketed in London, the growth in housing stock has not exceeded incomes.

For the period 2009 to 2019 housing in London stock grew by merely 8.6% in aggregate (0.8% p.a.). While full-time earnings grew at 16.9% (1.6%). Almost double the rate. A ten-year target set at the anticipated growth rate in wages, using the inflation rate as a proxy, would see London housing stock need to grow by 2% p.a. or 21.9% in aggregate.

By the end of 2019 London the total number of dwellings across all the tenures reached 3.6 million. London would need 786,700 net additional stock delivered over the following decade. Sadiq Khan would need to increase his original annual target from 65,000 homes per year up to 78,700. This would see London take its fair share of the levelling-up agenda.

London has not seen such levels built, largely by the private sector may I add, since 1935. This is a time that pre-dates the permanent protection of London’s antigrowth local land regulation, namely the ‘Green Belt’. And the tortuous Town and Country Planning Act, which has poisoned London’s well of supply ever since.

Figure 1: New build homes in Greater London, 1871 to 2018

Source: GLA, Housing in London 2019

Sadiq had his own target reduced by the naysayers. An independent review said his small-site target was unachievable. This reduced the original target of 65,000 to 52,000. Still more than Boris Johnson’s 41,882. Yet considerably lower than the proposed new standard method of 93,532. A figure London has never built in its history.

Targets set under the Housing Delivery Test (HDT) over the three years between 2016 to 2019 required one home for every 80 residents on average. Or 38,400 annually. Output would need to increase by 200% to increase housing stock at the same pace as income to hit a target of 78,700. Or 243% to hit the levels set out using the proposed new standard method.

The race to the bottom of build cost and quality is a symptom of a broken land market.

The endemic cladding scandal has left over 3 million in worthless flats. Economic incentives of landowners under the current planning system have led to economic growth and value from cost cutting measures absorbed by land values. The result? A race to the bottom on build quality to pay the highest price.

Our land market has been so constrained that the economic interests driven by the current planning system has seen build quality deteriorate. Literally to the point where basic fire safety has too often become hard to achieve.

Housing targets under the Tories remain a tabula rasa, only Labour has the ambition to level up our nation.

Levelling-up the land market requires planning reform and appropriate housing targets. And densifying cities. Only then will we re-balance the see-saw between land values and build quality. Liberal socialist John Rawls has advocated a move from a broken system of welfare state capitalism, to a property-owning democracy. Where everyone can participate in the productivity gains of a nation.

If every British citizen had a stake in a sizeable amount of property, access to capital and the productive decisions of society, then we can put power in the hands of the many and not the few. In China, the homeownership rate is as high as 90%. We should try to emulate this ambition. And while no silver bullet, revolutionary rent-to-buy schemes such as Rentplus could provide one such solution.

The levelling-up agenda will require a significant amount of homes at social rent levels for those on low-incomes. Particularly in big cities. Labour needs to ensure housing targets are driven on the premise we need to make homes more affordable. This can only be achieved by committing to more supply. And a huge, huge amount of it.

Chris Worrall

Editor of Red Brick. He currently works in land acquisition for Guild Living. Chris currently sits as a Non-Executive Director of Housing for Women and is a member of the Labour Housing Group Executive Committee.

Previously Investment and Finance Manager at both Quintain and Thor Equities. Chris has expertise in developing new residential investment strategies, real estate development finance, and the investment and development of affordable housing. He writes in a personal capacity.

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