social rented properties rent levels

MQT on 2014-12-17
Session date: 
December 17, 2014
Question By: 
Andrew Dismore
Labour Group
Asked Of: 
The Mayor


Do you agree that social rented properties in London should have rents set at levels within the means of lower income households?


Answer for social rented properties rent levels

Answer for social rented properties rent levels

Answered By: 
The Mayor

Thank you, Andrew.  I do in principle agree that social rented properties should have rents set within the means of lower income households.  That has to be right and I imagine that you, as often, are thinking particularly about the London Borough of Barnet, which you tend to bring up, where they are making a proposal to increase conversions from social to affordable rent.


I would just say that we will have to study those proposals when we get them, in detail.  Obviously the majority of rents in the social sector are covered by Housing Benefit and the question will be whether the switch will simply increase Housing Benefit expenditure or whether it will hit people on low incomes.  Currently I cannot give you an answer to that at the moment but we will have to study the proposals when they come. 


Andrew Dismore (AM):  OK.  If a family had to pay 80% of market rent for a two-bed flat in West Hendon, how much do you think it would be? 


Boris Johnson (Mayor of London):  I am sorry.  I do not have the benefit of a detailed briefing on the cost. 


Andrew Dismore (AM):  I can tell you it would be £280.  What do you think are the average outgoings, excluding housing costs, for a two-parent household with children in the bottom 20%?


Boris Johnson (Mayor of London):  As I say, if you want to ask me detailed questions, I would be very happy to supply you answers later on, Andrew, to any detailed questions you wish to ask about market conditions in Hendon.  What I can tell you about is our attitude towards the conversions or planned conversions from social to affordable rent and their potential impact on the market. 


Andrew Dismore (AM):  OK.  Let me tell you that according to the Office for National Statistics, the figure is £186. 


Boris Johnson (Mayor of London):  The crucial point for us will be whether it leads to more affordable housing or not. 


Andrew Dismore (AM):  If you put £186 together with 80% of market rent with the benefit cap from the Conservatives, it does not leave very much for Christmas presents, does it?  If the Conservatives win the next election, such a family would be minus £24.  It is not just about people in those circumstances because in Barnet we have seen a 71% increase of in-work families on Housing Benefit with over 11,000 now. 


Boris Johnson (Mayor of London):  Yes.  I think ‑‑


Andrew Dismore (AM):  Let me put the question to you.  Just be patient.  To rent a two-bed flat in Barnet, Shelter estimated two years ago that you needed a net income of £40,000.  To qualify for a council flat in Barnet, the maximum gross income you can have is £36,200.  Therefore, the issue is this: as you rightly say, it is about Barnet Council and its plans to increase council rents to 80% of market rent and that is not just for new or re-let properties but for existing tenants, too.  That means that if you put those figures together, for new or re-let properties you cannot both qualify for a property and afford the rent because the rent is above the amount that you can actually qualify to get a property, and for the 10,000-odd existing council tenants they are going to face huge rent increases.  It gets back to our two-bed West Hendon flat.  For example, they would see an increase of £161 per week or £266 per week for a three-bed.  There is no way that the benefit system with a benefit cap is going to make up that difference and people, if they are faced with those sort of increases, are going to have a significantly huge impact on their disposable income such as it is.


The question for you really is whether you think this is fair or sensible.  Will you make representations to Barnet Council or are you going to endorse Barnet Conservative Council’s view of the Head of Housing there, Tom Davey, who said in public that the ones who can afford it, “They are the people we want, good Conservative voters”.  This is about a Barnet Council gerrymander and you should be standing up against it and saying, “This is not affordable.  This is not acceptable”.  Will you do that? 


Boris Johnson (Mayor of London):  Yes.  As I said, we are going to look at any proposals that come in.  Clearly, councils generally limit their rent increases to stay within the Housing Benefit cap.  Most people in London are still surprised to discover that fully one-third of homes in central London are social housing of one form or another and most people are very surprised to discover that the taxpayer does pay very substantial sums that cover the entire cost of the rent of huge numbers of people in the city.  One of the factors that we have to weigh up when we try to build more homes for London is how much the Affordable Housing Programme is actually making it impossible to deliver huge numbers of homes for people on modest incomes but who do not qualify for social housing programmes, and that is ‑‑


Andrew Dismore (AM):  The problem is your so-called affordable housing policy, which, even in that hotbed of revolution, Westminster City Council opposed and not one Conservative council endorsed. 


Boris Johnson (Mayor of London):  I am sorry, that is a key issue and ‑‑


Andrew Dismore (AM):  The fact is you have no idea what it is like to live on these low incomes.  You have no idea what it is like to live on these low incomes. 


Boris Johnson (Mayor of London):  -- we will look at ‑‑


Andrew Dismore (AM):  You are not even supported by Westminster City Council and you will not even come out and say now you will not oppose the Barnet Council’s policy of jacking up council rents beyond what people can afford. 


Boris Johnson (Mayor of London):  Yes.  We will look at it.  There is no need to shout or to go red in the face. 


Andrew Dismore (AM):  You just witter on and do not answer the question. 


Boris Johnson (Mayor of London):  We will look at the proposal and the test for us will be whether it helps or not to deliver more affordable housing.  That is ‑‑


Andrew Dismore (AM):  Not social housing that is affordable to ordinary people.  That is the point. 


Boris Johnson (Mayor of London):  That is what we want. 


Andrew Dismore (AM):  That is the point and you are not going to do anything about it. 


Boris Johnson (Mayor of London):  It is crucial that people understand that we need to satisfy a huge range of objectives.  It is not just for people in social rented accommodation.  We need to be able to build enough ‑‑


Andrew Dismore (AM):  You need to have homes that people can afford and you will not deliver them. 


Boris Johnson (Mayor of London):  -- homes for people ‑‑


Andrew Dismore (AM):  Neither will Barnet Council. 


Boris Johnson (Mayor of London):  -- who do not qualify for their entire rent to be covered by a Housing Benefit or by Local Housing Allowance.  People understand that distinction and they understand the importance of having a balanced approach that delivers a huge number of homes and that is what we are doing. 


Andrew Dismore (AM):  You are not answering my question, as usual.