Shelter: 49% of Lewisham homes will still be affordable by 2016

Following the debate about how changes to housing policy will affect affordability in London, Shelter has released a study predicting that Lewisham will remain one of the most affordable boroughs in London by 2016, with 81 of its 166 neighbourhoods still expected to be affordable in five years' time. This will make Lewisham the 8th most affordable borough in London.

Areas considered 'largely unaffordable' are those where 75% of two bedroom homes have rents greater than the maximum housing benefit payable for that size of property. Overall, the study predicts that affordability in the capital will have declined significantly by 2016.


Down and out in Chelsea and lewishsm said...

So lewisham will be a ghetto for those driven out of other areas? not good for rich or poor. Is this what they mean b social mobility?

max said...

No, social mobility is not about moving home.
For what Lewisham is concerned it only means that it will still be affordable, and that is good.

B Milton said...

I was struck by a sentence in the summary provided by Shelter which defines "largely unaffordable" as dwellings where "the rents of a large majority – 75% or more – of two bedroom dwellings in that neighbourhood are above the maximum HB payable for that size of property".

In other words, in areas that Shelter has defined as "largely unaffordable" there could be as many as a quarter of the dwellings that are affordable for those seeking housing benefit.

I am totally sympathetic to Shelter's aims but this looks like a wild distortion of facts to suit your end conclusion. Having up to 25% of the flats in an area to choose from doesn't sound like a crisis to me. It sounds like the everyday reality that faces nearly all of us.

Anonymous said...

That's right. Lewisham sounds like it will be OK....westminster however....

Anonymous said...

Lets See if this prediction comes true.

max said...

There are flaws in this analysis but it paints a broad picture that's probably quite correct - areas already pricey will become mostly unaffordable to recipient of housing benefits.
By the way, rents are now going up fast for everyone now just because people can't get a mortgage.

But regarding the analysis, Shelter projects house prices on the basis of the forecast increase in CPI only, and I do wander what the effect of the cap on rents will be.
Landlords can now ask more just because benefits are uncapped, and the study mentions that two thirds of accommodations are already now unavailable to recipients of benefits because of landlords choosing against tenants on benefits, so it is legitimate to wonder how house prices will move in that specific sector of the market rather than on the whole.

Anonymous said...

I believe there is a limit on how much rent can be paid in benefits.A one bed flat is £180 a week at the moment.

DJP said...

I heard a programme on the radio about this last week. It seems highly likely that there will be significant movement of people out of properties they can no longer afford, in places like Westminster (where they based the programme and interviewed people), into areas where properties are within housing benefit limits. There were concerns that they'd end up in places (e.g. Essex end of the Central line) where there are already social tensions, BNP activists etc.

Given that Lewisham is a lot more accessible than Essex, if there are affordable homes then it seems only logical to expect that this will lead to an influx of people on housing benefit.

Anonymous said...

If you want BNP Activists,look no further than Eltham.

max said...

I am not sure about the size of the migration, housing is a finite resource and almost all there is is already occupied.
How can you have any significant influx of people in any area unless you build new homes?

What could happen is that after Lewisham and other affordable places will have absorbed a tiny number of extra claimants lots of people will really find themselves unable to afford anything and the government will then have to U-turn on the policy.
The only way to make a dent in the lack of social hosuing is to build them.

Anonymous said...

I wonder what the figure would be if you excluded Downham and parts of Deptford from the analysis. Lets face it we are lucky to live so close to the centre of London and the countryside of Kent. It is only our invisibility on the tube map until recently, (or the map of civilised world as they think of it north of the river), that has stopped a major invasion of sharp elbowed little Henry and Henriettas, their groans throbbing with the urge to increase and horny for more square footage. Those happy days are coming to an end, though hats off to Lewisham Council for keeping the schools so awful, a sure deterrent to some of the H&H's I'm sure.

@ Max, if you take your eyes off the pavement, as you walk around the borough, you will see that housing is definitely not a finite resource, and that not just your beloved state can create more of it.

Anonymous said...

Can someone explain if that last post is happy or sad that Lewisham could do with some imnprovement?

max said...

@ Anon 14:32
Yes, people build houses privately, and that's good, but they do so in finite numbers and for the requirements of the private market - no one builds houses for people that cannot afford them.

It is a fact our society includes a lot of people that cannot afford a house at market price (including a lot of people in work and alarmingly people in essential jobs like nurses and policemen), and if they're helped to find accommodation in a way that doesn't push house prices up (like publicly built social housing) then it's better for everyone.

Anonymous said...

I think your understanding of economics is muddled. Why can't these people be housed in a private market sector? How many nurses and police live in council properties, many have bought and lots rent privately too. If the state got out of the way, the market would provide ample places to live at affordable rents, it is restrictive state bureaucracy that stops this from happening. Also housing benefit has skewed rents in the privated rented sector upward in many areas. The State is not the answer,it is the biggest part of the problem.

Anonymous said...

Yep, the market is the answer to all our ills. The market is great at satisfying demand but not great and satisfying need. No one is preventing private landlords renting to nurses, where is the restriction?

max said...

The restriction is in the pay packet, isn't it? Especially if they have children.
Apparently today the average rent of a one bedroom flat in the UK is £985 per month and a nurse can earn less than £20k, so there's more than half of the wages on rent.
Not to mention those that are for whatever reason unemployed, pensioners on low income or any other not ideal situation.
The market doesn't work for them.

max said...

Sorry that was for a two bedroom.

Anonymous said...

"The market is great at satisfying demand but not great and satisfying need."

Meaningless statement of the day. Demand is just needs, wants, desires if you will, theoretically amalgomated. Markets respond better to need than state committees. People should be given the freedom to maximise the housing stock, by which I mean a clearout of many unnecessary planning laws. More supply would have a positive effect ie downward effect on both the rental and retail markets for housing.

@Max. As you know what happens in the real world is that the nurse shares the flat with a friend or colleague, thus making it affordable. Or maybe you are saying that it is a 'right' of everyone to have a two bedroom flat. Really its lazy thinking to just expect the state to produce the money to solve all problems. It is our money they are spending (or rather using to pay the interest on their massive borrowings). Those days are over. We are all going to have to grow up.

Monkeyboy said...

You lot need to read a bit of political philosophy.... Nozick's Libertarian justice? Rawls Theory of justice? Some other bloke I forgets theory of Distributive justice?

I'm working on my own Monkeyboy theory. The Chineese Buffet, Crispy Duck theory of Aquisition.'s ground breaking.

Lucid When Drunk said...

Political theory applied as an answer to economic problems...that sort of rings a bell MB. It reminds me of the old joke about communists taking over the sahara.

"Ten years of repression were intensified by the beginning of the sand shortages."

Though I'm sure the Crispy Duck thesis has none of the flaws of Messrs Marx and Lenin

max said...

First of all planning laws exist for a variety of reasons, including making sure that houses are fit for humans and appropriate for their context.

Second, it's ok to share accommodation if you're young and fancy free, I've done it myself for many years - when you have a family it's different.

Third, the state does not "produce the money", but can spend in what's appropriate and there's nothing wrong with that. In fact it's reckless not to do it if by failing to do so you create social problems.

Lastly, accusing someone of lazy thinking doesn't make a dogma into an argument, and free-market dogma is the name of the condition you're suffering from.

Alan Greenspan believed in a self-regulating market automatically working towards the best interest of all involved, well, it didn't end well didn't it?
See for yourself what he ended up saying about it...

Tamsin said...

The market is scewed because housing is a finite resource - there is a limited amount of land within the distance of where people need to work, so a cap on the amount of private housing built, and Maggie Thatcher's dogmatism put the stoppers on new council housing to replace that sold off into the private market.

Finite supply and de-regulation of mortgage lending (no longer fixed to the reality of people's earnings) = spiralling house prices, some people and the financial institutions raking it in but misery for many.

And those artificially high capital costs and property values are a part of what pushes up rent. If you were in the buy to rent game you had to charge a rent that could cover your stupid mortgage money.

Anonymous said...

I own two buy-to-rent houses each in a different part of south-east London (I own another two btl properties elsewhere in the country).

In every case, the estate agent who I employed to rent the house told me that the property could be rented privately for £xxx per week but of course “you’d get far more renting to someone on housing benefit”.

They explained to me that all landlords set the rent for social housing at the maximum permitted and the rent was always paid “no questions asked”.

When limits are set to housing benefit in the socially rented sector I would expect rents to fall considerably in most areas excluding Westminster and Kensington as landlords adjust their rents accordingly.

At the moment, too much taxpayers’ money is going straight into the pockets of people like me. It’s been great while it has lasted but now someone’s calling a halt to the scam.

I didn’t vote for the coalition by the way.

Tamsin said...

That's illuninating - and what I thought was probably the case - thanks.

Anonymous said...

I know someone who is renting one of his 3 bedroom houses in Ladywell out to 4 Polish blokes for £1000 a month.

Anonymous said...

"Third, the state does not "produce the money", but can spend in what's appropriate and there's nothing wrong with that. In fact it's reckless not to do it if by failing to do so you create social problems."

Thinking so lazy and dogmatic that it even fails the easy test of being grammatical.

Whatever the states spends it can get from one of two sources, taxes or borrowing. Both have more or less reached their limits. You seem to believe that if you ignore reality it will go away. The worst social problems are caused by economic failure, but you seem to think that the government owns a money orchard they can endlessly harvest according to the whims of your bloated social conscience. In reality all they have is our money, plus whatever they can borrow, oh and printing presses. If you had your way those presses would be rolling.

DJP said...

Too many anonymice!

@anon 17.12 that's pretty much what a Westminster landlord said in the programme I heard. He acknowledged he'd done very well out of the housing benefit arrangements and said he'd probably sell his properties once the caps came into effect.

max said...

@ anon 17:57
First, don't delude yourself about your grammar being any better than mine, you're no Shakespeare.

But to go to the meat of the argument, an indication that what you say is nonsense is to be found in what we normally call 'reality', so here's your reality check.
After the longest period of protracted deregulation in the hosing market we now have widespread and increasing unaffordability, stagnation in the building industry and catastrofic market failure that ultimately required enormous support from governments or would have destroyed the world economy as we know it.

The picture is the exact opposite of what you depict, and if we want to have a healthy housing market we must also provide for those that cannot take part to it.

The reason of the lack of housing and the unaffordability of the market prices is in large part to be found in the fact that social housing has not being built for years and those in need have been directed to private landlords and the rents paid for by housing benefits, this has skewed the market.
If you take away the benefits you end up with homeless families and then you'll have to send them to bed and breakfasts in Hastings because there's nowhere to house them.
And where does this leaves us? That we need more social housing.
Of course they must be funded somehow, in fact I've got nothing against raising rents for those that can afford it so to pay for new homes, as the government has planned to do.

Well we can expect a good slump of house prices when all those properties are put on the market at the same time.

Monkeyboy said...

Robert nozick is a political philosopher, he advocates free Market libertarianism, he would make cameron blush But of course you know all that. Politics, juctice and ethics are linked, an understanding of the conflicting theories helps you understand the problems.

My thesis hinges on the right of theindividual to claim the crispy duck through guile, strength and skill with chopsticks. The stupid, weak and clumsy will own the pancakes so redistributing the enabling resourse for roll production.

In that way the Market is satisfied and yet the weak have some power. The crispy duck in this case being the primary social goods, and the pancakes being the means of exchange.

I'm undecided on the slivers of cucumber, spring onion or Ho Sin sauce but it's a work in progress and I'm hopeful of achieving a system of rights and obligations that will maximise the social good.

Anonymous said...

I remember when my kid sister started her A-Levels, Rosseau this, Locke that, couldn't stop telling us all about it.

Anonymous said...

Yes the grammar point was cheap, I apologise.

Where we disagree is over the degree of deregulation, and what relevence the state's provision of housing has ultimately on availability of decent affordable housing.

Firstly as a point of simple logic, people who cannot be part of the housing market, because they don't have the money to buy or rent can have no effect on that market.

There can never be enough of a state subsidised good, because to put it in a nutshell, everyone likes something for nothing. Besides the state has a woeful record at providing housing, as anyone who has visited the Aylesbury Estate can testify, countless billions have been wasted already.

We agree that building more houses is the answer, my argument is that with interest rates as low as they are it shouldn't be difficult to get large companies investing in housing for let, if some of the sillier planning regs were swept aside.

For example,(and now you'll see why I don't want the Broc Soc to know who I am) why shouldn't we allow Victorian housing to be demolished to make way for blocks of flats. A lot of Brockley is a twee waste of space, you could have many more people living here, in largely affordable modern dwellings.

Cheap and plentiful credit has ironically made housing more expensive, but this is because the state restricts supply of houses, and land for new housing in so many ways. So we need less regulation, not more.

max said...

Ok, thanks for the apology.

On your point: "people who cannot be part of the housing market, because they don't have the money to buy or rent can have no effect on that market. "

They do have an effect actually, and a double one. They rent in the market thus reducing the offer and also since they pay through benefits they have a further inflationary effect since as we know the uncapped system leads to higher rents, it's truly perverse.
It's because the social offer relies on the market that they have this effect.

On the point of the market being able to build so much that costs will be lowered to the point that even the poor will be able to afford private hounsing, I'm sorry it sounds a bit like the economy of Dr Pangloss.

As I said at the beginning of our conversation nobody builds houses for those that cannot afford them, there is a point where it's not anymore a viable investment, if really a lot more would get built then cost of built would go up and the price of sale or rent would go down. Investment in housing would therefore stop much before the need is satisfied.

There is then the point about how Chinese style planning would be met by the Brockley Society.
I imagine that they would surely send a strongly worded letter to the Council if a large corporation would propose to flatten half of Brockley to make way for a modern high density heaven.

On the Aylesbury Estate, true, it's a good example of monstruosity, but it's one of those mistakes people have learned from. It was bad planning. That's why good planning is good, and necessary.

max said...

Sorry, another point, if a hypothetical corporation would propose to flatten half of Brockley to build high density heaven, and even imagining that the Brockley Society doesn't object to it, surely they'd have to buy out the thousands that live there already, and if they don't want to move they'd have to evict them.

Now, apart from the fact that this is indeed Chinese style planning, it's also very expensive, so if this was a suggestion for building affordable housing I think it's got a serious flaw.

Anonymous said...

knocking down victorian flats - what a great idea. Because we could really do with more unimaginative, poorly built, rooms the size of a shoe box flats. stick a tesco's metro on the ground floor of every other block - nirvana.

Anonymous said...

knocking down victorian flats - what a great idea. Because we could really do with more unimaginative, poorly built, rooms the size of a shoe box flats. stick a tesco's metro on the ground floor of every other block - nirvana.

Lou Baker said...

The reason there's a shortage of housing is primarily because the population's growing and more people are living alone.

We have plenty of places to live - it's just that the housing stock doesn't match how people want to live.

In an area like this - with loads of young professionals and new families - it makes sense to have smaller flats and houses.

And yet the Telegraph Hill Society, Brockley Society and the like object to things like this on the ground that that's not how they did things in 1857.

These busybodies exist in every part of the country. Whether they object to a few houses being converted or developing on waste land they all create havoc and create artificially high house prices.

Then you've got the government paying over the odds for housing benefits and some claimants demanding to live in parts of the country the rest of us can't afford and you've got a right royal mess.

Cut down the power of the objectors, slash benefit payments and make claimants live in affordable areas. Easy.

Anonymous said...

I'm afraid you are so addicted to the idea of the big state and big solutions that you can't see how people if given freedom could solve these problems.

You are being rhetorical I take it when you suggest that I was talking about knocking down Brockley to replace it with a high rise estate. As you worked out for yourself, the market would not allow this, never mind the relatively more important Brockley Society. But why shouldn't we allow say two large houses to be replaced by a relatively much larger block of flats. Two units replaced by 15 to 20. If you allowed this to happen in 10% of London streets, how many new units would be created.

Anonymous said...

@21.25 Anon

Where are Brockley's Victorian flats? It has lots of bad conversions of houses into flats, but no Victorian flats. The English fetish for the past would have perplexed the Victorians. It is truly the English disease. Maybe the rooms have to be so small because so much of the city is taken up by heritage housing. Clear some of it and perhaps we would get some decent modern homes, and some decent urban densities.

max said...

@ anon 22:06
I believe that every building that is proposed is built unless there are reasonable objections. If unsuitable developments are proposed it is only right that people living near them object to them in the most effective way, and there are many good reasons for apposing large developments that impinge on the quality of life of the existing residents.

There has been an explicit drive towards densification near transport hubs though and it's been going for quite some time, this planning policy is called "sustainable communities" and to see it look no further than the area around Lewisham Station where quite a few large blocks have already gone up and at the end there will be about 4000 new units just in that little area.

People that are fed up with Victorian housing can just buy a flat there.

The long them plan is to increase density throughout Lewisham High Street between Lewisham Centre and Catford.
I think that that's quite enough for Lewisham without having to build obtrusive blocks in nice leafy roads that people paid good money to live in.

But to build this you need people putting money in it and look, the Gateway development is completely stuck and Barratt Homes demanded and received £20.5m of public money to proceed with the Loampit Vale development, a development that in principle should have stood on its own two feet. There's your private housing market. Subsidized by government!

Anonymous said...

I just met someone who has just started renting a house along Hilly Fields Crescent,and was told by the Estate Agent, the reason there rent is so low is because they are knocking those houses down in a couple of years.

Anonymous said...

Luckily the Localism Bill proposes a shake up of the planning laws so that we can all have input into the shape of our neighbourhoods, rather than leaving it the bureaucrats at if the council tries to sneak in gaudy flats into Hilly Fields Crescent in the heart of the conservation area, we should fight it all the way.

Tamsin said...

Most Victorian houses that are large enough to be replaced by seven or so "units" that are large enough to swing a cat or store a buggy are already three or four flats.

The private market developers are not philantropists, they are in it to make money for their shareholders so they will put as many people as possible into the available space. Hence the need for regulation and minimum specifications, and for bodies like the Broc. Soc. and the THS to watch the applications like hawks (the remark about room to store a buggy was prompted by the proposals for 7 "town houses" a while back on the Pepys Road garages site).

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