Affordable Housing

MQT on 2015-09-16
Session date: 
September 16, 2015
Question By: 
Tom Copley
Labour Group
Asked Of: 
The Mayor


Can the Mayor update the Assembly on how the Greater London Authority's negotiations with the government are progressing in relation to the housing-related measures announced in July's Budget?

Supplementary Questions: 


Answer for Affordable Housing

Answer for Affordable Housing

Answered By: 
The Mayor

Boris Johnson MP (Mayor of London):  Thank you very much, Tom.  Discussions are obviously going on with the Government now about the various proposals in the [Conservative Party 2015 election] manifesto and indeed in the Budget.  We have to get a deal that is right for London.  We are close to completing a record 100,000 low-cost homes in this mayoralty with 94,526.  We are on track to do the remaining.  Last year 18,000 affordable homes were completed, which is more than in any single year since 1981, which is probably before you were born.  Is that right, Tom?

Tom Copley AM:  It certainly is.

Boris Johnson MP (Mayor of London):  You are lucky now under this Conservative mayoralty to be witnessing the biggest ever output of affordable homes in your lifetime.

Tom Copley AM:  It is easy to produce more affordable homes if you change the definition of what constitutes ‘affordable’, which is what has happened, or if the Government does that as well. 

That is not what I wanted to ask you about first of all.  We had a Housing Committee meeting in July where we looked at the potential impacts of the Government’s new housing policy, specifically the right-to-buy extension to housing associations, funded by forcing councils to sell homes in what it calls ‘expensive’ areas.  It is the forced sale of council homes that I want to discuss first. 

We heard from Islington, Hackney and Kensington and Chelsea, all who said the policy would essentially make new build unviable because the homes would have to be sold off immediately.  Kensington and Chelsea said,

"We also have a vision, even in a small borough like Kensington and Chelsea, to do new build on our estates and we are greatly concerned that the selling of board properties makes even the ambition to do that unviable.”

Your Housing Strategy talks about the need to liberate and free councils if we are to produce the staggering amount of housing that London needs.  Do you not agree that this policy, therefore, is going to be absolutely catastrophic?

Boris Johnson MP (Mayor of London):  It was the former Labour Shadow Chancellor Ed Balls [The Rt Hon Ed Balls MP, former MP for Morley & Outwood] who said he supported the policy, as far as I can remember, in the run-up to the last election.

Tom Copley AM:  Frankly, that is ancient history now, Mr Mayor.

Boris Johnson MP (Mayor of London):  Of course, my dear fellow.  The ‘red dawn’ has broken over the Labour party.  I understand it is all ‘New Labour is dead--'

Tom Copley AM:  I am less interested in what Ed Ball has to say, Mr Mayor.

Boris Johnson MP (Mayor of London):  The ‘Trots’ are in charge now.  I perfectly understand that.

Tom Copley AM:  I am actually here to ask what you think.

Boris Johnson MP (Mayor of London):  Let me tell you.  Tom, you are raising a serious point.

Tom Copley AM:  Thank you.

Boris Johnson MP (Mayor of London):  Like you, I have serious concerns about this policy.  It has to deliver more homes for Londoners.  It has to deliver more low-cost homes for Londoners.  It has to make sure that the funds that are generated by the sale of these properties do not leave London.  That is the single most difficult thing. 

The Government at the moment is determined to use the sales of London properties to fund the right-to-buy policy around the country.  I have to say that that is a perverse outcome given the funding problems we all face.  Where is the housing problem?  The housing problem is not in Newcastle.  Let me not mince my words, the housing problem in this country is in London. 

Tom Copley AM:  Absolutely.  Would you not be supportive of a bill which did not include a ring-fence for that?

Boris Johnson MP (Mayor of London):  I want to see protection for London to ensure that revenues from sales of properties in London are used to build homes in this city.

Tom Copley AM:  Thank you.  Richard Blakeway [Deputy Mayor for Housing, Land and Property] has said that if the policy is ring-fenced for London you believe you could deliver two affordable homes for every one sold.  Could you tell me what the tenure mix of the homes would be?

Boris Johnson MP (Mayor of London):  We should be going very largely for what the public seem to want, which is homes that they can part or wholly buy.  We should be going for starter homes.  Low-cost, cheap, affordable starter homes is the way forward. 

Tom Copley AM:  That is an interesting movement for you.

Boris Johnson MP (Mayor of London):  That is overwhelmingly what people want.  If we can deliver it we should.

Tom Copley AM:  That is interesting because you have often emphasised in the past social housing.  You are not concerned if a four-bedroom council property let out at social rents is sold in Islington and replaced with a one-bed starter home in Merton?  That does not concern you?

Boris Johnson MP (Mayor of London):  We need far more homes overall.  As you wisely pointed out, the Conservatives built more council homes in one year than Labour did in 13 years.  A very, very good point.

Tom Copley AM:  Judging by this policy we will not be building very many more council properties.  If you are so proud of that and so concerned about the building of council properties you would not support the replacement of a social-rented home with a home to buy.  It is not meeting the same kind of housing need, is it?  If you sell a social home you are not meeting the same kind of housing need if you replace it with a home for sale.

Boris Johnson MP (Mayor of London):  Actually it depends what the tenure type is.  You could have a very generous arrangement with a part-buy-part-rent scheme in which the mortgage was subsidised and people were able to staircase up very gradually into more ownership of the property.  That could be highly attractive to people in London on modest incomes.  That is what we want to achieve.

Tom Copley AM:  I am sure you will accept that a great many of the people - if not the majority - who currently live in social housing in London would not be able to access even this Government’s starter home programme considering that these homes can be sold for up to £450,000.

Boris Johnson MP (Mayor of London):  There will be plenty that will be available for sums much lower than that.  Indeed, the intention will be not be that they should have to pay for the whole lot in one go but that they can staircase up.  You talk to people about what they really want and what their ambitions are, it is to have at least a share in the value of their home.  The Labour Government - when it was in for 13 years - sold off more council homes than Mrs Thatcher [The Rt Hon Margaret Thatcher MP, former Prime Minister].  They sold a huge number and did not replace them by the way.

Tom Copley AM:  So far we have only seen one in eight replaced, despite those promises.  On the issue of the extension of right-to-buy housing association properties: Lord Kerslake, Chair of Peabody of course, has pointed out that Peabody has been in existence for 153 years.  It has only received a government subsidy for 40 years.  Do you think that it is right that the Government should compel Peabody to sell homes that were built before government subsidy was introduced?

Boris Johnson MP (Mayor of London):  I have got the utmost respect for Bob Kerslake and his work.  Frankly, he has told me he has raised the same sorts of concerns about the policy that you and I have raised.  He also understands that if you can keep the funding coming to London, and keep building new homes in London, that will actually be to the benefit of housing associations and to the city as a whole.  What Bob Kerslake said was that he did not want to see - and I think we would agree with this - the money leaving London when it is really in London that you have got the housing crisis.

Tom Copley AM:  He has also said that he did not want homes that were built without grants to be sold.  Do you think it is acceptable to compel a private organisation to dispose of assets that were not built with any government subsidy?

Boris Johnson MP (Mayor of London):  The intention is to give tenants of housing associations the same opportunities as council home tenants.

Tom Copley AM:  Yes, but council homes are built by local government.

Boris Johnson MP (Mayor of London):  That is something that is very widely supported.

Tom Copley AM:  Housing associations are private organisations.

Boris Johnson MP (Mayor of London):  Yes.

Tom Copley AM:  Why should it be compelled to sell homes, particularly homes that were not built with any grant from the government?  Why is that right?  Why should private landlords not also be covered by this?

Boris Johnson MP (Mayor of London):  You are right in what you say about Peabody.  Many housing associations, as you know, basically had their stock transferred to them from the state sector. 

Tom Copley AM:  Some have, yes.

Boris Johnson MP (Mayor of London):  A huge number now.  The intention of the scheme is that the housing associations should be compensated for the subsidy that the right-to-buy buyers are going to get.  That is the rub really.  It is the funds for the compensation that are in question.  Where do we get that money?  If it comes solely from the sale of properties in London then clearly that is going to disadvantage London and make it difficult for us to build what we need.

Tom Copley AM:  Of course.  Can I ask you, finally, given the changes the Government has announced - particularly the impact it could have on the delivery of social housing - is the affordable homes programme currently being administered by the Greater London Authority being reassessed?

Boris Johnson MP (Mayor of London):  As I said just now, the affordable homes programme that we have been delivering continues and will continue as long as I am Mayor.

Tom Copley AM:  It is not being reassessed?

Boris Johnson MP (Mayor of London):  It is delivering, and has delivered, a record number of affordable homes.

Tom Copley AM:  It is not being reassessed?

Boris Johnson MP (Mayor of London):  It is delivering, and will continue to deliver, a record number of affordable homes.  We assess all our policies and reassess them the whole time.  I am not aware of any particular change.

Tom Copley AM:  Thank you, Mr Mayor.