FOI - Kilburn Square Estate [Feb 2023]

Your request

1. Should a project under the 2016-23 grant programme be unable to meet the SOS date of 31 March 2023, is there any flexibility to grant, at the GLA’s discretion, a period of grace? If so, in what circumstances and with what conditions?
2. What are the current London Affordable Rent (LAR) figures for different sized homes applicable to the London Borough of Brent? When were they last reviewed, what is the formula and when might they next be updated? By whom? Do they include service charges, and if not are there any rules on how service charges may be calculated?
3. We understand that, for the purposes of the 2016-23 grant programme, Shared Ownership qualifies as Affordable Housing. Are there in such cases GLA rules or guidance on the financial parameters of such a tenure model? If so, can you please share it? And does the term 'London Shared Ownership' have a specific meaning in this context.
4. Does LAR automatically imply a specific level of security of tenure (or lack thereof), or is that something decided separately?
5. Is it correct that a decision to move some units in a GLA-funded scheme from an affordable tenure (like LAR) to Open Market Sale would not invalidate the grant; but the recipient would simply need to forego, or reimburse, the relevant portion of the grant? Are there constraints on at what stage that decision could be taken and agreed?

Our response

Please note that as with previous correspondence, the information we have provided in response to your request is related to the new development on the Kilburn Square Estate (as referred to on the London Borough of Brent’s website) which we understand your EIR request relates to. Please be advised that we have not included information about any historic schemes on the Kilburn Square estate as we believe this to be outside of the scope of your request.

All projects that are funded in the Homes for Londoners: Affordable Homes Programme 2016-2023 need to have started on site by no later than 31 March 2023.

The current London Affordable Rent (LAR) weekly rent benchmarks are published on the GLA’s website. These apply London-wide; they are not localised.

The LAR benchmark rent levels are reviewed on an annual basis in April, with the increase currently set at CPI for the previous September plus 1%. As detailed in Funding Agreements and the CFG, these benchmark rent level apply are maximum rents; they apply to first lettings, while providers are required to manage rents within tenancies, and with regard to relettings, in line with the social housing rent-setting guidance published by the Regulator.

The benchmark LAR rents do not include service charges which may be charged in addition. The calculation and apportionment of service charges to tenants of social housing is governed by several pieces of legislation which are not under the purview of the GLA. However, the maximum rental level for any Affordable Rent homes (including LAR) should be no more than 80% of gross market rent (inclusive of service charges). In assessing whether the rent is no more than 80% the individual characteristics of the property must be considered, such as its location and size.

The Affordable Rent Tenancy Arrangements, including LAR, are set out from paragraph 3.1.24 of the Capital Funding Guide.

As set out in the Homes for Londoners: Affordable Homes Programme 2016-2023 Funding Guidance, London Shared Ownership is one of the affordable products that the Mayor will fund through this programme. Further details on the parameters of this tenure model are included in the Homes for Londoners: Affordable Homes Programme 2016-2023 Funding Guidance.

There is additional detail included within the GLA’s Capital Funding Guide. 

The principle defining feature of London Shared Ownership is that the Mayor encourages housing providers in London to sign up to the Mayor’s Service Charge Charter.

For the Affordable Homes Programme 2021-26, this is a firm expectation. The majority of GLA funded shared ownership is delivered by providers who have signed up to the Charter.

This depends on the stage at which a scheme reaches, at the point where an affordable home attracting grant is no longer going to be delivered under the tenure on which grant was secured. Grant allocated for affordable homes which ultimately do not manifest (i.e. do not achieve progress such as to trigger a milestone-related payment) will simply remain unclaimed. This would include scenarios where homes progress but the tenure changes (e.g. to open market sale). The GLA should be notified as soon as possible, so that grant can be reallocated to other schemes or other investment partners.

Where grant payments have already been made, a change to an affordable grant funded home from an affordable tenure (like LAR) to an Open Market Sale product would qualify as a Relevant Event under paragraph 8 of the GLA’s Recovery Determination guidance

In the occurrence of a Relevant Event, the grant recipient is required to notify the GLA. Upon notification of the occurrence or discovery of a Relevant Event, the grant recipient must recycle or repay (as applicable) the grant allocated to the relevant property in accordance with the terms of the Recovery Determination guidance. The GLA may direct a grant recipient to add interest to the repayable grant if there is a failure or delay by the grant recipient in notifying the GLA about a Relevant Event.

If you have any further questions relating to this matter, please contact us, quoting reference MGLA131222-5502.