MIPIM UK 2015: Developers have pledged almost £1bn to fund affordable homes in London over the past five years, enough to pay for 20% of all social housing delivered on an annual basis since the start of the decade.
Around £965m has been paid or promised to the capital’s local authorities since September 2010 in lieu of affordable housing provision. On development costs alone this could fund 13,000 homes, according to figures from EGi’s London Residential Research. This is on top of the 40,000 affordable homes built on-site by developers between 2010 and 2014.
The industry has come under increased fire from protest groups over its track record on affordable housing provision. However, affordable housing contributions have rocketed, while councils’ provision of social housing in the capital has dropped by a third.
In total 13,560 affordable homes were provided by local authorities in the year to May 2010, according to the GLA, but the figure fell to 9,230 affordable units in May 2014, the latest time period for which the government has data.
Affordable housing provision as a proportion of total supply has dropped from 31% in 2010 to 28% in 2014. During the same period, payments in lieu of affordable housing provision more than doubled. Westminster, at the top of the contributions table, has amassed almost £400m since September 2010, dwarfing Hounslow at the bottom with £40m.
Newham is the only outer London borough to feature in the top 10, bringing in £107m in the past five years. It was also the biggest provider of social housing last year, delivering 1,350 social units.
“Having seen affordable housing delivery shrink markedly in the capital in recent years, we need to properly ascertain what is happening with the funds provided by developers in lieu of on-site delivery,” said Graham Shone, senior data analyst at Estates Gazette. “With such a large amount pledged over the past five years, and with housing so high on the political agenda, it has surely reached the point at which local authorities need to demonstrate what plans they have for any developer money earmarked for off-site affordable housing – and, indeed, what they have already done.”
Melanie Leech, chief executive of the British Property Federation, said: “The private sector delivers affordable housing as part of large schemes as a matter of course, and these figures show that they deliver a significant number of much-needed homes. Where commuted payments are given, we encourage local authorities to be innovative in order to deliver best value for communities.”
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